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Dr. GASTON. Well that is why we know that we will have no trouble with awarding over 400 this year. We know we will get over 1,000 applications again, and we will be able to fund upward of 450.


Senator BUMPERS. Well, Dr. Gaston, I want to say that my primary concern is, if you give a National Health Service Corps grant to a scholar from my State, and they wind up going to Meharry or Howard or any other school outside Arkansas, our chances of their ever coming back to serve Arkansas are slim.

Dr. GASTON. Well, you know, that is another reason that it is important that Arkansas and other States really get involved in our State loan repayment program. At the present time they are not. We are funding 14 States that will provide payment of loans for students in that State to stay in the State, so that this is another key approach to trying to maintain

Senator BUMPERS. Now, what is this program? I am not sure I am following you on this.

Dr. GASTON. This is a new program that is just about 2 years old now. We have 14 States we give money to. They also match, according to a certain percentage, and then they find the students. It is like the Federal loan repayment, except that it is State managed, and our Federal dollars go totally to the State and then go to the student or the provider.

Dr. HARMON. We are working closely with your State health officer, Dr. Elders. We have a cooperative agreement on primary care with your State, and we have funding available for rural health outreach, and also rural health office support. And so these are ways that each State can seek more assistance in designating and filling shortage areas. That is an important growing direction in the Federal/State working relationship.

Senator BUMPERS. Well, you know, the Mississippi delta has sort of become my obsession. Did you know we had 500 kids die in this country last year of diarrhea. And the incidence of death by diarrhea is so much bigger in the delta than almost any other part of the country. A primary reason for these deaths is that people just do not have doctors to go to in that area. And that is the reason I am hot for this program and I am hot to get as many scholarships in Mississippi and Arkansas and that area as I can, in the hope that they will serve that area.


Mr. Chairman, one last thing, and this is for your benefit for the markup on supplemental appropriations as well as to make a record here.

Dr. Harmon, I guess you are the right person to ask about the vaccine injury compensation program. We appropriated $62 million for that program in fiscal year 1991. Now, we have over 4,000 claims of people whose children were adversely affected by a DPT shot, mostly prior to October 1988. As you know, we let all of those people file claims until January 3 of this year, and the flood tide hit.

We now have 4,000 claims. It is estimated the total cost of those 4,000 claims, if all of them were compensated, something like $3.5 billion.

We have a vaccine compensation fund which has, I guess, $200 million or $300 million in it now; I am not sure how much it is. And that takes care of the claims that are filed under this law after October 1988.

But our big problem now is funding those pre-1988 cases. We have got $62 million to pay those claims. We have already spent $18 million, Mr. Chairman, and if we do not put some money in the supplemental, we are going to run out of money probably in the next 60 days, maybe 90 days. And we are not going to be able to pay these claims that are coming through the pipeline.

Now, some people have suggested that we take money out of the trust fund that is being generated now, for those claims from October 1988 forward. But I am opposed to that, because those funds are going to be needed for those pre-1988 claims. And you start depleting that fund, the pharmaceutical companies will conclude that they are going to wind up being liable, and they are going to raise the price of their vaccines. And this is a sort of a one-shot deal. In other words, it is not a continuing thing.

But I am afraid that if we do not appropriate money for that vaccine compensation fund now in the supplemental, we are going to run out of money and we are going to create all kinds of problems for ourselves. What do you say to that, Dr. Harmon?

Dr. HARMON. Well, the Department is currently analyzing the impact of this large number of older claims that have come in. We do not yet know the precise impact of that, and it is going to be a while before we have that available. We also are concerned about how to pay for those claims, and that is a subject of considerable review right now as well. The fund is now approximately $300 million. Fortunately, the rate of claims in the new cases has been below projections.

Senator BUMPERS. Yes.

Dr. HARMON. And so that needs to be monitored carefully.

Senator BUMPERS. How many so-called new claims do we have? Dr. HARMON. I would like to ask Dr. Fitzhugh Mullan, the Bureau Director, to comment on that, Senator Bumpers.

Senator BUMPERS. Dr. Mullan.

Dr. MULLAN. As of March 12, 51 claims have been filed.
Senator BUMPERS. Fifty-one. Yes; a total of 51 claims filed.

Dr. MULLAN. Yes; 51 post-October 1, 1988, claims as of March 12.
Senator BUMPERS. That we have pending right now.

Well, I just want to make this point for the record, and that is, if we do not appropriate money to take care of all these 4,000 plus claims that accrued before October 1988, we are obviously going to be way short at the end of the year and we are going to have a crisis on our hands. I would rather pay it as we go. I do not know how Congressman Waxman feels about it over in the House, but I think we have got a real problem on our hands.

Do you agree with me that if we start tapping that trust fund in order to pay old claims, that we are going to have the pharmaceutical companies trying to raise their prices again?

Dr. HARMON. It is hard to say, Senator. That is undergoing review in the Department right now. It depends on what the future tap will be on the trust fund and, again, fortunately, the rate of claims has been below projections. I believe in the history of this legislation they projected up to 75 claims per year.

We are also monitoring the science of this issue as far as what is the real cause and effect going on here. It could be that as we learn more, we will be able to adjust the vaccine injury table. That needs review. Just because we have awarded so far at the rate of 70 percent of claims does not mean it will always be that way.

HRSA's role in this is to medically review the claims and work with the Justice Department in the court so that only those_claims that are justified are paid. And we are dedicating ourselves to doing that in the best way possible.

Senator BUMPERS. Well, we have paid out $18.1 million so far out of the $62 million. I may be an alarmist. Maybe it is not as big a deal as I think it is, but I think it is pretty serious.

Dr. HARMON. Well, no. There is cause for concern, the statute states that if at any time there are insufficient funds to pay all of the claims payable under subtitle 2 of title XXI of the Public Health Service Act for 180 days, such subtitle shall cease to be in effect until sufficient funds to pay all of the claims under such subtitle become available. This could force us back into litigation.

Senator BUMPERS. I think that would be the worst thing that could happen to us.

Dr. HARMON. We tend to agree with that, so we do need to seek a solution.

Senator BUMPERS. Thank you, Dr. Harmon.
Mr. Chairman, thank you very much.


Senator HARKIN. Thank you, Senator Bumpers, for raising the issues, especially the Public Health Service or National Health Service Corps in rural and underserved areas. The questions you ask are right to the point. On the loan repayment program, again, that happens after you are finished. You have got to get through first. It is not a bad program; it is a fine program. But the States are strapped, too, in providing those up-front moneys for those loans to get those kids through school.

Senator BUMPERS. Incidentally, Mr. Chairman, do you pay tuition plus a stipend, or just tuition on the National Health Service Corps?

Dr. HARMON. Plus stipend.

Senator BUMPERS. Depending on the location and so on?

Dr. HARMON. Right. Tuition varies quite a bit, of course. I wanted to comment also, Senator Bumpers and Senator Harkin, I spent 4 years between your States as the Missouri State health officer, and so I worked with both your State health officers. I know the delta, because the bootheel of Missouri is part of that, and I have observed those problems and agree with you. We have some challenges on our hands and need to work harder.

Senator HARKIN. The other thing about the scholarships and these kids going to schools outside of Arkansas, a lot of them are going to private schools. It seems to me that it would be cheaper

if they went to some of our State schools also and save us a little bit of money, aside from the factor that if they are there, they tend to stay there. And you are right, once they leave they do not come back.

And that is why we need to encourage the scholarship program, and we are going to take another look at this, specifically, because last year we reauthorized the National Health Service Corps. And we specifically changed the law or wrote into the law under the authorizing committee, Senator Kennedy's subcommittee, to make sure that we specified underserved areas. We did not focus on urban areas or anything else like that. We focused on underserved


And, quite frankly, I am concerned that the Department is going off in a different direction than what we clearly put in the law last year. And so I just want you to know, Senator Bumpers, on the record, that we are going to take a close look at these scholarships and make sure that we start getting them out to those rural areas out there and not just to the urban areas.

Dr. HARMON. Thank you, Mr. Chairman.


Senator HARKIN. Thank you very much, Dr. Harmon, and we will be in touch as the year goes along. There will be some additional questions from various Senators which we will submit to you for your response.

[The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:]



The Office of Technology Assessment issued a comprehensive report last September called "Health Care in Rural America." The report notes that rural health care is no better today than it was 20 years ago, and says "the future prospect for rural health care in the absence of intervention is grim."

The OTA calls for a massive expansion of the National Health Service Corps to increase the supply of health professionals to rural areas.

Question. Are the Department's current policies regarding scholarship awards likely to have a significant impact on rural areas? If not, what are ways to bring many more health professionals to rural areas, both through the National Health Service Corps and other Federal programs, such as Medicare


Answer: Yes, the expansion of the National Health Service Corps scholarship and loan repayment programs which began last year will provide substantial numbers of new obligors for both rural and urban areas, although the immediate impact will be limited to increases in the number of Federal and State loan repayment obligors. Increasing the number of scholarship obligors available for service will require several years while the current awardees complete their training. The scholarship mechanism is an effective mechanism for attracting providers to the more difficult to fill sites, especially the remote rural sites. It is hoped that the State loan repayment program, for which a large increase will be provided in FY 1991, can become an effective source of health care providers for rural States. Funds are also included for the support of State cooperative agreements to facilitate the identification of areas within States that are in need of Federal assistance and also to assist States in being more effective in obtaining Federal assistance for their primary health care programs.


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Question. If the FY 1992 budget request is approved, how many health professionals of which disciplines would be placed through NHSC scholarship and loan repayment programs?

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Answer. In FY 1992 it is projected that 285 loan repayment obligors will be recruited and placed including physicians, nurse practitioners, nurse midwives, and physician assistants. Approximately 500 scholarships are projected for FY 1992, although the placement of individuals supported from these awards must await the completion of their training which, for physicians, takes from 6 to 7 years following the initial year of support. About 175-180 of these will be non-physicians for whom the training period is much shorter. We expect to place fewer than 50 scholarship obligors in FY 1992 available as a result of awards made in previous years.

Question. How many additional HPSAs would be eliminated as a result of the program expansions? What proportion of the HPSAs

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