March 24, 2003
Washington, D.C.

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Good afternoon.  I am delighted to be here again with the members of the National Association of Community Health Centers to share with you HRSA’s perspectives on issues and to explain our policies and how they affect the vital work you do.
 
Your agenda for this meeting reads like a checklist of the issues that confront us—the health center expansion initiative; treating uninsured and vulnerable populations; fighting chronic illnesses; concerns about Medicare, Medicaid and State Children’s Health Insurance Program; prescription drugs for seniors—the list goes on.   Your issues are our issues.
 
Before I talk about HRSA’s programs, I’d like to second Secretary Thompson’s decision to bolster Medicare, to improve seniors’ access to prescription drugs, fight chronic illness and reduce health disparities.
 
This 10-year, $400 billion plan will give seniors the choice of three distinct Medicare options.   If legislation is passed this year, all seniors by 2004 would get more benefits, specifically greater access to discounted drugs through Medicare-endorsed prescription discount cards.  And low-income seniors would be entitled to an additional $600 per year to help buy prescription drugs.   The President and Secretary are on the right track with this framework—it would give seniors more choices and greater benefits.
 
Let me just add here that I am aware your concern about the 100 or so federally qualified health centers that are currently awaiting Medicare certification. We are working closely with the Centers for Medicare and Medicaid Services to break the logjam and get these FQHCs certified. Deputy Administrator Dennis Williams is taking the lead with CMS and we expect to have a resolution before April 15.
 
Secretary Thompson also talked about working to build support for the President’s plan to reform the nation’s medical liability system.   He proved his awareness of this thorny issue by winning an increase in this year’s budget of about $25 million (to almost $40 million) to cover federal tort claims in health centers – this will bring us current on existing claims and should cover the 2003 additions.
 
Nationwide, the cost of malpractice insurance has skyrocketed in recent years as huge sums were awarded in malpractice cases.   Health professionals in trauma centers, surgeons and obstetricians especially have closed their practices or moved to states where premiums are more affordable.  The result: patients have trouble accessing vital health care.
 
The President’s plan would permit injured patients to get quick, unlimited compensation for  “economic losses,” but would limit non-economic damages to a $250,000.  His plan also would reserve punitive damages to limited cases and then limit those damages to a reasonable amount.
 
All of us know that the current system is broken and that it discourages doctors and other health care providers from doing what they do best—caring for patients. President Bush’s plan would bring some sense and sensibility to the malpractice arena.
 
Under the President’s direction, Secretary Thompson has made a major push to close what he calls the “health gap” in minority communities by promoting prevention initiatives meant to reduce chronic illness in minority communities.  The strategy is sound.  Because rates of diabetes, asthma, obesity, heart disease and stroke, HIV/AIDS and other chronic diseases are, in general, far worse among minority populations than for the nation as a whole, the best way to improve minority health is to fight chronic disease.  Here’s some of what the Secretary has done to implement his strategy:
 

• In November of 2001, he launched “Closing the Health Gap,” a health education and information campaign that used urban radio stations to target communities of color.
• He has strongly promoted the President’s “Healthier US” initiative to encourage Americans to be physically active, get preventive screenings, eat a nutritious diet, and avoid behaviors, like smoking, that are known health risks.
• Last September, HHS sponsored “Take a Loved One to the Doctor Day” events across the country to encourage people to take a family member or friend in for preventive checkups.
• Just two weeks ago, the Secretary announced a new HRSA initiative: the launch of our "Su Familia" National Hispanic Family Health Helpline to give Hispanic families access to basic health information that will help them prevent and manage chronic conditions.  And tomorrow, as part of National Diabetes Alert Day, Secretary Thompson will ask Hispanics to commit to preventative steps against diabetes and toward a healthier future. He is taking this action because Hispanic rates of diabetes are the fastest-rising element of a growing national epidemic.

The Secretary also has moved to expand coverage of S-CHIP, the State Children’s Health Insurance Program.  More than 4.6 million children who otherwise would not have had access to health care are now covered under S-CHIP.
 
But the initiative with perhaps the greatest potential impact to limit the spread of chronic diseases and improve the health of U.S. minorities is, of course, the President’s Health Center Initiative.
 
By now you know the plan: 1,200 new or expanded health centers and clinics, an increase in the number of people served annually from about 10 million in 2001 to more than 16 million – ultimately doubling the number of patients served.
 
And you, of course, know that almost two-thirds of all health center patients – 64.3 percent in 2001 – are minority Americans.  Expansion of the system means an expansion of service to these populations.  That will result in greater minority access to health care, leading to improved health outcomes.
 
And because your care targets the prevention and treatment of chronic diseases, especially through the health disparities collaboratives, the impact of the President’s initiative on minority health will go far beyond increased access alone.   In other words, the expansion of the health center system is at the very core of strategies devised by this President and this Secretary to improve Americans’ health and reduce health disparities.
 
Thanks to the solid working partnership between you and HRSA, the expansion is proceeding ahead of schedule.  In 2002 we exceeded our targets by funding 170 new health center access points and expanding capacity in 131 centers.  And we recently received our 2003 appropriation of $1.47 billion to continue the expansion.
 
HRSA has worked hard with our new appropriation to ensure that our FY 2003 funds will fully execute the President’s commitment to expand the health center program.  We are pleased that our funds will allow us to use $53 million to establish 90 new sites; $31 million to invest in expanding existing sites; and $13.5 million to expand capacity and services.  Today the Secretary announced the second installment in 2003 of that expansion – 31 new centers at a cost of $16 million.  That follows a December announcement in December of 20 new sites worth $8.3 million.  These FY 2003 announcements bring the total of health center sites to 3,500 – on the way to 4,400 sites in 2006, with services ultimately doubling our original 10 million annual clients.
 
As we parsed the 2003 appropriations, we kept your need for base adjustment front and center in our thinking.  Here’s what we found: Out of an appropriation of more than $1.5 billion, the Congress rescinded $10 million, took out $40 million for tort coverage, and assessed a tap of more than 2 percent to fund other expenses in the Department, including evaluation.  This was assessed on all programs except counter-terrorism.
 
When we figured in the cost to extend existing centers, contracts, cooperative agreements and such, as well as the expansion initiative, we had $44 million available.  We will use $37 million of that for base adjustment and $7 million to fund two information technology initiatives to further the Secretary’s dream of health centers “as technologically advanced as the grocery store.”  $35 million of the $37 million will be “cash on the barrel head” for centers that meet great need with great effectiveness.  The other $2 million of the $37 million will be used to fund the operating costs of the networks, a new authority we are delighted to have.  We’ll be working on the methodology for using these dollars with all of the groups involved, with an eye toward using the latest possible data – the UDS figures from 2002 will be out in May – and making awards in June.
 
This remarkable growth in the health center safety net is, of course, accompanied by the President’s initiative to expand and reform the National Health Service Corps, which will be the source for many of the health professionals we need to staff the new and expanded health centers.  The NHSC’s 2003 budget of $171 million is an increase of about $26 million over last year, and will pay for hundreds of new health care professionals.  And the President’s budget for 2004 requests yet another increase, this time of $42 million.
 
Let me here encourage health centers and community clinics to get on the NHSC’s vacancy list.  We are targeting the vacancy list as the place to go for health professionals who want to serve the underserved.  Right now there are about 3,500 vacancies; we plan to fill those with about 1,500 NHSC scholars and loan repayors.  Health centers now are automatically designated as HPSAs (Health Professional Shortage Areas), which increases by 50 percent the number of centers available to be placed on the list, so we urge you to take advantage of this new opportunity.
 
A few weeks ago, I had the great pleasure of welcoming our first group of the NHSC’s Ready Responders to the Washington area for training. Like other NHSC clinicians, they have dedicated their talents to delivering quality health care to underserved populations.  But they have made an extra commitment to train and stand ready to respond to our nation’s call in times of emergency.
 
The idea for the creation of the Ready Responders was born in the terrible hours following the 9-11 attacks on New York and Washington .  In the weeks and months after the attacks, we at HRSA looked at ways we could improve our response to disasters in any corner of the nation and, at the same time, provide more direct health care to our neediest fellow Americans.
 
Fortunately, with the NHSC, we had the structure in place to get health care professionals to areas of greatest need; we just needed a new framework that would enable us to rush clinicians to regional or national disasters, whether natural in source or induced by the cruel natures of those who hate freedom.
 
The Ready Responders are our answer. To our mind, everyone benefits from this program:
 

• Hospitals, health centers and clinics in the most underserved parts of the country get free health care professionals on site because we hire them as Commission Corps officers and pay them their salaries.
• HRSA puts more health professionals in direct service to America without increasing our budget, because we funded them by tightening up administrative expenses.
• Ready Responders gain invaluable new training and expand their professional capabilities.
• And the nation is assured that its government can respond to the worst possible events by sending in the best-trained, most-qualified health care experts available anywhere.

 
We pray, of course, that the disaster preparedness training these clinicians receive will never need to be tested.  But America will be more secure, more confident and better able to confront the challenges of the 21st century because these individuals are ready to respond.
 
The Ready Responders emerged from a perceived need and a determination by me and other HRSA leaders to address it.  We have moved in the same determined manner to address opportunities we found in the areas of grants management and field operations.
 
The rapid expansion of the health center network presents an enormous management challenge for the Bureau of Primary Health Care and HRSA as a whole.  In response – and after thorough consultations with community and health center leaders across the country – we have adopted a new management structure for BPHC that will improve our ability to meet the goals set for us by the President and Secretary Thompson.
 
The new structure – which Dr. Shekar will tell you more about -- will help BPHC concentrate its resources more directly on the essential elements of the President’s Health Center Initiative.  Those elements are:
 

• creating new sites and expanding existing centers;
• improving management capabilities;
• strengthening the quality of services;
• investing in state and community partnerships; and
• managing and analyzing data.

These are not the only changes we’ve made to improve operations at HRSA.  Early on in his term, Secretary Thompson asked all HHS agencies to focus their attention on accountability improvements to make sure taxpayers get full value for the funds we invest on their behalf in health and human services.  And we wanted to spread the best practices far and wide to all of our grantees.
 
So we took a close look at how HRSA manages the money that Congress entrusts to us.  In other words, we looked at how we manage the grant dollars we distribute and the way we monitor grants from our field offices.  In doing so, we found:

• that the grant process was too complicated for potential applicants;
• that duplication needed to be weeded out of the system and standardization built in;
• that monitoring of grantees should focus not only on problems but also on how well they manage their grants; and
• that technology should be used more effectively.

 
Finally, we realized that we needed to reform the grants process because our workload has increased, but our staff has not.  HRSA distributes about 6,500 grants each year across 80 programs.  Besides the health center and NHSC expansions, our new hospital preparedness and emergency response responsibilities alone have added more than 100 grantees to our workload.
 
On January 7 of this year I signed a Federal Register notice that put our plan to “refocus” operations into effect.  Since then, we have moved rapidly to implement it.
 
In the area of grants management, we have moved to:
 

• expand the use of technology to promote efficiency, and
• simplify the grant process by centralizing project officer functions to give the public a single point of contact on specific grants.
  

Additionally, we will fully scrutinize the financial integrity of applicants prior to award, and we will assure regular reviews for all grantees in all programs.
 
In the field, our renamed Office of Performance Review will refocus the work done in HRSA’s regional offices on monitoring and program accountability.  These changes will improve face-to-face contact by OPR employees with grantees by increasing grantee performance reviews to 60 percent of the work of OPR staff, up from 30 percent currently.  We also will increase technical assistance and community-level assessments and we will make sure that regional staff recommendations are strong components of our national program and policy initiatives.   No field offices will be closed as a result of these changes.

All of these changes have been reviewed by many groups, individuals and institutions.  We recognize that we have a responsibility to manage for today and to position the agency for the increasing demands in the future within the continuing constraints of tight administrative budgets.  We will all need to pull together on this.  So this year we will hold a nitty-gritty working meeting in the summer with all primary care grantees, PCOs and PCAs, with a focus on improving our ability to work together for the good of our constituency.  We are asking several organizations to help with a nuts-and-bolts agenda – NACHC has agreed to help – and we believe we will lay the foundation for improved service to the public through this effort.   Please plan to come.
 
Let me conclude now with a summary.
 
First -- The health center and NHSC expansions are at the core of a broad Federal strategy to improve Americans’ health and reduce health disparities by doing two things: increasing access to health care and targeting resources on fighting chronic diseases.  That is a compliment to the work all of you have done over the years.
 
Second – We are confident that the operational changes we are implementing at HRSA will give us the best chance to reach these ambitious goals in an environment of tight resources and growing responsibilities.
 
Third – If we continue to work together and consult with each other, we can fulfill the vitally important missions that President Bush and Secretary Thompson have entrusted not just to HRSA – but also to you.
 
Thank you for listening.