March 28, 2006
Washington, D.C.

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I’m going to spend some time telling you about President Bush’s FY 2007 budget request for health centers.  In a constricted budget environment for the agency, the President’s support for the work of the nation's health centers is unwavering.
 
I also want to talk about:

• the health disparities collaboratives and HRSA’s vision for quality throughout the health center network;
• our efforts to make sure that health centers along the Gulf are eligible to receive compensation for the extra medical care they provided following last summer’s hurricanes; and
• the threat posed by pandemic influenza and our responsibility to prepare for the possible arrival of bird flu in the United States.
• our talks with the Center for Medicare and Medicaid Services over the Medicare Drug Plans;
• and much more.

But first let me discuss the fallout at HRSA from the FY 2006 appropriations.
 
You probably know by now that the health center budget for 2006 increased by some $50 million, after a 1 percent rescission was imposed governmentwide. That was far below the $304 million increase the President had sought, but it will allow us to continue to implement the President’s Health Center Growth Initiative while exercising the fiscal discipline needed to cut the Federal deficit in half by 2009.
 
The health center program, of course, fared far better than most in our FY 2006 appropriation. Ten HRSA grant programs in several bureaus were zeroed out and significant reductions were made in seven other programs. As a result, HRSA cannot issue new or continuation awards to those grantees. In Primary Health Care, funding for the Healthy Communities Access Program was eliminated.
 
HRSA senior staff and I are working hard to determine the best use of appropriated funds and the best way to redeploy employees working in the affected areas.
 
To create a positive and seamless transition to the reality created by the new budget, I assembled a high-level team to communicate with affected grantees and employees. The team, headed by Becky Spitzgo, is working closely with me, union representatives, and human resources to develop a process for reassigning affected employees.
 
Let me move now to FY 2007. President Bush’s budget for HRSA next year asks for almost $6.4 billion. That includes an increase of $181 million for health centers, the largest single increase requested for a line-item program in the agency’s budget.
 
The additional $181 million would raise the health center budget to just under $2 billion, up from about $1.2 billion when the President took office.
 
The increased funds are intended to complete the commitment the President made early in his first term to create new or expand existing access points in 1,200 communities. The funds also would launch a more recent Presidential initiative to establish new health centers in America’s poorest counties.
 
If approved by Congress, the FY 2007 funds would create new or expand existing health centers in 300 medically underserved communities. $48 million of the $181 million increase would create 80 new sites in poor rural and urban counties, consistent with the President’s goal of establishing new health centers in the nation’s poorest counties. Another $4 million would go for planning grants for poor counties interested in creating access to primary care services.
 
By the end of FY 2007, under the President’s budget request, 4,015 health center sites across the country would treat 15.8 million patients.
 
The latest count I have on the expansion puts the number of new or expanded sites right now under the President’s initiative at 865. And our latest estimates are that all of you will serve 14.6 million patients in 2006. Both of those numbers represent astounding growth over the last 5 years, and a lot of hard work, sweat and dedication. I congratulate you.
 
Why are health centers one of only two programs listed for support in next year’s budget? Because the budget reflects the President’s consistent support for HRSA programs that:

• provide direct health care services;
• that serve the neediest Americans; and
• that can verify successful performance.

Using these criteria, health centers are HRSA’s top-performer. Under the Administration’s rating of Federal programs – which anyone can access at www.expectmore.gov – the health center program receives the highest possible ranking: Effective.
 
Programs rated “Effective,” according to the Office of Management and Budget, “set ambitious goals, achieve results, are well-managed and improve efficiency.”
 
The profile of the health center program at the expectmore.gov web site says that it “is designed to have a unique and significant impact,” and that “evaluations indicate the program is effective at extending high-quality health care to underserved populations.”
 
Expanding access to care at health centers is a key part of the President’s strategy to eliminate health disparities among U.S. population groups. Improving the quality of that more-accessible care is another key. The work that we’re doing in implementing and expanding the health disparities collaboratives may be less visible than the new sites, but it’s equally important.
 
About 10 days ago many of the people working hardest to test and implement health disparities collaboratives at health centers across the nation met for a two-day session in Crystal City, near Reagan National airport.
 
There they shared information on ongoing efforts to improve the quality of care through collaboratives:

• Through the Access Redesign Demonstration, for example, some health centers have cut no-show rates dramatically. In one case, no-show rates fell from 35 percent to 7 percent. These improvements let practitioners see more patients and increase the number of revenue-generating visits, make follow-up visits more effective, and improve patient-flow satisfaction and efficiency.
• The Fiscal Redesign Pilot has made significant improvements in the financial viability of the health centers involved in the effort. One improved cash flow by more than half a million dollars per year.
• The Diabetes Prevention Pilot has greatly reduced the time required to translate scientific gains to practice, has improved the success rate of treating pre-diabetic patients, and has reduced the bad consequences of not successfully treating pre-diabetic patients.
• The Cancer Prevention Dissemination and Scale-Up Demonstration has significantly improved collaboration between health centers, CDC-supported Cancer Prevention Public Health Officers, and NCI-supported cancer hospitals.
• And the Perinatal and Patient Safety Pilot has improved patient safety by improving communication and building better, stronger relationships among health centers, hospitals, and the communities they serve.

As OMB confirmed in its rating of the program, substantial data confirm the quality of care health centers deliver. A User/Visit Survey from 2002, for example, found that health center patients experienced no significant racial or ethnic outcome disparities in:

• access to mammograms;
• screening for colorectal cancer;
• dietary counseling of obese persons;
• annual eye exams for people with diabetes and
• patient counseling on management of asthma.

To deepen this lively culture of quality at health centers and reinforce efforts to promote patient safety, about 170 centers in 37 states have enrolled in our Web-based, Clinical Risk Management Resource project.
 
At that website, health center clinicians can register and participate in as many as eight professional education courses. The courses provide the latest evidence-based information on improving patient safety and integrating risk management into office-based practices.
 
We plan to expand these Web-based risk management resources to all health centers to maximize our efforts to promote patient-safety activities.
 
How does HRSA plan to proceed in the future to promote quality and patient safety? We’ll do these things:

• We will include “quality” in all aspects of the health center program.
• We will continue to work with PCAs, PCOs and partners like NACHC to provide technical assistance to health centers.
• We will continue to collect and disseminate best practices and lessons learned and provide technical assistance and quality improvement training to grantees.
• We will continue to use malpractice claims data to identify health centers at particular risk of incurring additional claims, or who have had high numbers of reported incidents. For these centers, we will apply evidence-based, performance improvement interventions designed to reduce adverse events.
• And finally, we propose to track quality health outcomes. We all believe that health centers are providing quality care. Tracking patients’ health outcomes – which health centers have learned to do through the collaboratives -- will add weight to existing evidence that health centers deliver quality care which improves the health and lives of the underserved.

Besides expansion and quality care, two other issues are sure to be on the front burner for health centers for years to come – the growing number of elderly patients and staff recruitment and retention.
 
The first issue – service to seniors – is evident to anyone who reads a newspaper or turns on the network news. As "baby boomers" enter the ranks of elderly Americans, their demand for health care will grow. UDS data already show an increase in the number of older persons served by health centers, as well as a small increase in the over-all percentage patients 65 and older. Establishing a "Health Home" -- a “Medical Home” -- for these individuals will improve their well-being and help them avoid preventable disease.
 
I encourage all of you to increase your outreach to the elderly. Local Area Agencies on Aging, of which there are more than 600 nationally, could be a critical referral agency for you. The "Triple A's" can steer elderly residents needing care to health centers, and they can help you serve the elderly better by locating transportation, meals on wheels, and other essential services they’ll need. HRSA works closely with HHS's Administration on Aging, and I encourage you to work closely with your local Aging programs as well.
 
The other hot issue involves the recruitment and retention of health care staff.  We've heard anecdotal reports that participation in quality improvement initiatives such as the Collaboratives benefits recruitment and retention; that obtaining accreditation through organizations such as JCAHO helps attract new staff; and that adding clinicians to health center leadership teams also makes a difference.
 
We know that many health centers are making it work. In our visits to health centers, we have seen substantial evidence of folks who are doing a really good job of retaining their recruits. I encourage those of you who have enjoyed success in this area to please share those stories with your colleagues. Let them know what worked for you.
 
A key factor in recruitment and retention issues, of course, is the National Health Service Corps. This year HRSA celebrates the NHSC’s 35^th anniversary.
 
Since its creation, more than 27,000 NHSC health professionals have provided quality health care to millions of Americans, many of them, of course, at health centers. Today, more than 3,900 NHSC clinicians deliver primary health care in federally designated Health Professional Shortage Areas nationwide.
 
HRSA is very proud to be the NHSC’s home agency. Last week at the PCO meeting, I congratulated them for contributing mightily to the NHSC’s work, and today I thank you, members of the health center movement, for your many contributions. Thank you.
 
NHSC clinicians pride themselves on providing high quality, community-responsive, culturally competent health care. And their retention rate in the communities they serve reflects the satisfaction they feel. Almost four out of five NHSC clinicians stay in the communities they serve after their term of service is over – proof positive of their enduring commitment to their patients.
 
So throughout 2006 we will mark this 35-year anniversary by highlighting at every chance the contributions of this dedicated and committed corps of health care professionals. To all of you in this hall who are or have been NHSC clinicians, I thank you and a grateful nation thanks you, too.
 
Now I’d like to discuss some issues that may be just off the radar screen for some health centers, but are of great interest to many of you.
 
One has to do with our efforts in working with the Centers for Medicare and Medicaid Services – CMS – to see that health centers are eligible to access part of the $2 billion in funds approved by Congress and signed last month by President Bush to cover uncompensated medical care in the wake of Hurricane Katrina.
 
Last Friday, HHS Secretary Leavitt announced that $1.5 billion of the $2 billion total was being sent to 32 states to help offset the medical costs of caring for Katrina evacuees. Included in that amount were special grants to states that took in the largest number of evacuees. Those grants will reimburse providers who cared for people who were ineligible for Medicaid but were unable to pay for medical care.
 
Health centers in the eight states eligible for payments for uncompensated care – Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina, Tennessee and Texas – saw some 60,000 additional patients. Conservative estimates put the cost to health centers for this additional care at more than $10 million.
 
Health centers that delivered uncompensated care from the 8 states should work closely with their State Medicaid offices to determine the procedures for appropriate reimbursement.
 
The situation for health centers in the areas of greatest destruction in Louisiana and Mississippi remains difficult and uncertain, in part because no one knows how much of the pre-Katrina patient base will return to their home communities. We have sent teams of consultants to help destroyed health centers in those two states refine their recovery plans. In some cases, we are helping displaced health centers deliver services in alternate locations. That is the case with the Excelth health center in New Orleans, for example, which now operates out of Baton Rouge, where many of their patients are living.
 
A second issue deals with an upcoming change in the HPSA score needed for facilities applying for a J-1 waiver. The new policy – which becomes effective on April 3, six days from today – states that the Department will now process an application for waiver from a facility in or with a HPSA score of 07 or higher.
 
As in previous years, the policy states the Department will only accept an application from a facility in a HPSA that is either a health center, a rural health clinic, or a Native American and Alaskan Native tribal medical facility.
 
You asked for this. We did it.
 
After Hurricanes Katrina and Rita devastated so much of the Gulf, we learned how beneficial it is to have strong working partnerships that reach across federal, state and local lines. In those emergencies, our PCA and PCO partners allowed us to “see” the situation in their states in ways that would have been impossible from here in Washington. Their advice and counsel helped us avoid duplication of effort and gave us greater assurance that we were targeting our resources to locations where the need was greatest.
 
What became clearer than ever during and following the hurricanes is that we need each other to be successful because we bring different assets to the table. These days, all of us face great challenges in finding the best way to utilize scarce resources. To make the best of this situation, HRSA and our PCA and PCO partners simply must continue to work closely together.
 
Let me switch gears here and talk about the specter that hangs over the entire globe – the threat to public health inherent in the spread of avian influenza – the bird flu.
 
As of today, the H5N1 avian flu virus has spread to 37 nations on three continents. 175 people have been infected; 96 have died. Most of the dead were exposed to infected poultry. There has been no sustained human-to-human transmission of the disease, but the rapid spread of the virus concerns us all.
 
Experts warn that it is only a matter of time before we discover H5N1 in birds in America, probably in Alaska, since that state shares migration patterns of wild fowl with Asia, where the virus has made its strongest impact.
 
The arrival of bird flu in America should not be cause for panic. It should, however, motivate us to pick up the pace, to renew preparations at every level.
 
Secretary Leavitt and the Department are intensely involved in making sure the nation is prepared when bird flu does arrive. Various elements of the Department are:

• monitoring the spread of the disease;
• developing vaccines and vaccine production capacity;
• stockpiling antivirals;
• enhancing outreach and communications planning; and
• coordinating federal, state and local preparation activities.

That last point is where health centers come in.
 
Of the $3.8 billion Congress appropriated last December to help the nation prepare for bird flu, $3.3 billion was allocated to HHS. $350 million of those funds will be shared this year with local and state governments to improve preparedness. The Department is awarding $100 million to states right now, and the remaining $250 million will be distributed later, after benchmarks are established to measure progress.
 
Secretary Leavitt is asking governors to make sure their pandemic influenza plans integrate into and coordinate effectively with the National Response Plan and the National Incident Management System. He also is asking governors to establish a Pandemic Preparedness Coordinating Committee that represents all relevant stakeholders in their jurisdiction.
 
That, of course, includes health centers -- all of you.
 
These coordinating committees will help states build strategies to develop and implement plans to fight the pandemic. I urge you to become players in these coordinating committees and to maintain close contact with your state and local health departments on this issue.
 
And for the latest news from the Federal government on the spread of the virus and our efforts to combat its spread, go to www.pandemicflu.gov.
 
Most of you know very well the challenges that seniors, providers, pharmacies and Prescription Drug Plans have had in the early days of implementation of the Medicare Prescription Drug Program.  HRSA is aware of the Feb. 17 letter that NACHC and the Public Hospital Pharmacy Coalition sent to CMS detailing their concerns. I assure you that HRSA has been working diligently with CMS to identify and overcome impediments to safety-net providers participating in the new program. And we continue to do so.
 
CMS has been most cooperative with us and, with our help, they are learning about and understanding more intimately the needs of the health centers and other 340B safety-net pharmacies.  We are working together to find creative ways, within the law’s constraints, to meet the needs of the safety-net, Medicare-eligible patient population.
 
The safety-net sites serve many low-income patients, especially those who are considered to be dual-eligibles.  CMS has worked with Medicare Drug Plans to ensure that safety-net pharmacies can successfully participate in the Medicare prescription drug program.  These sites may have had difficulty, during the initial phase of implementation, in contracting with Plans.
 
As I said, we are continuing to work with CMS. We want to make sure that one or more Plans will contract with these safety-net clinics and hospitals so that their low-income patients can be served under the new program.
 
HRSA also has reached out to the private sector to see that 340B safety-net providers participate effectively in Medicare Part D.  My deputy, Dennis Williams, together with our Office of Pharmacy Affairs, has worked closely with MemberHealth, a pharmacy benefits manager, to make sure that health centers that participate in 340B are not at a disadvantage compared to retail pharmacies.
 
Like us, MemberHealth wants health center patients to be able to continue their medical care in the familiar surroundings of their “medical home.” We thank MemberHealth for working so closely with HRSA to help our health centers and Part D succeed.
 
Let me end, again, by thanking all of you for the invitation to speak with you today.
 
I thank you, too, for your dedication to the medically underserved, low-income patients you treat at our country’s health centers.
 
America is a better nation because of the work you do. Thank you.