Corps should be given the authority to turn this equipment over to

community projects, either through grant, sale, or lease.

CON AMENDMENT:

etc.

area.

There are already rules governing the disposal of Federal property which permit surplus property transfers,

The Corps should not be given a separate authority in this

RECOMMENDATION: Amend the Act:

RATIONALE:

There are very few parallels to the situation of the withdrawal of Corps assignees from communities. A simple method of

dealing with this situation in the context of the Corps' authority would alleviate an unfortunate situation if equipment necessary to provide medical services were withdrawn.

Approved:

Comment

84-847 O-72-5

Disapproved:

Senator KENNEDY. The next witness we have is Dr. Robert L. Nolan, M.D., Secretary, National Advisory Council on Health Manpower Shortage Areas.

STATEMENT OF ROBERT L. NOLAN, M.D., J.D., SECRETARY, NATIONAL ADVISORY COUNCIL ON HEALTH MANPOWER SHORTAGE AREAS

Dr. NOLAN. Senator Kennedy, it is a pleasure to appear here today in support of S. 3858 and S. 3867.

I am appearing as a member of the National Advisory Council on Health Manpower Shortage Areas to present my individual views based upon my participation in the program's development and as a member of the Council.

I want to express again my appreciation to you and your staff and to Senator Stevens and his staff for the interest displayed through these proposals, to reaffirm a commitment to this important model program. The National Health Service Corps, and to provide amendments to strengthen its performance and insure its vitality.

Under the leadership of the present director and a capable staff that has been assembled, the National Health Service Corps is in the process of developing programs to fulfill the objectives of the Emergency Health Personnel Act of 1970 (Public Law 91-623). The amendment proposed in section 329 to give statutory recognition to the National Health Service Corps as originally proposed by Senator Magnuson in S. 4106, will enhance the stability of the Corps and the Public Health Service as a whole, and give the program recognition to which it is entitled.

Mr. Chairman, there have been administrative delays, discriminatory policies, and a narrow, strict, rigid construction of the statute. which have hampered the development of this unique effort.

An overriding problem has been the disinterest and lack of support by the present administration for the improvement of health services intended by the statute.

I think it is significant that the administration has suggested today that Congress not act on this bill.

Two years ago the administration took exactly the same position on a similar bill, which later became law, they did not want the Congress to act on the bill at that time.

It is difficult to square that posture with a positive commitment to the program. Furthermore, I do not know how we can resolve the problems in this country, unless we have the courage to speak honestly and candidly about them.

Personally, I think that is largely what the First Amendment is all about.

Section 329 (b) provides needed additional authorization for the program to designate areas determined to have critical health manpower shortages, provides assistance for persons seeking programs and personnel under the Corps and conducts appropriate dissemination of information concerning this important model program.

Under the present statute, administrative practices, and limitation of funds, and other considerations have precluded the important additions provided by this new section.

Communities without funds to develop a proposal are presently unable to guide an effort through the initial stages required for consideration. Even the most modest proposal development requires both local community resources in the form of technical assistance, funds for local travel, and communications, which poverty areas simply cannot generate by themselves.

Section 329B makes an important contribution in remedying that need by authorizing the dissemination of information concerning the National Health Service Corps.

The present practice of identification of areas for critical health manpower shortage requires the initiation of an application before the area is evaluated for qualifications under this statute.

As an area with critical health manpower shortage and for qualification under the statute, so that at present, this has to be an application before the Department investigates the question of whether it is a critical shortage area, and then the application itself is considered.

Those communities you will be hearing about later this morning and this afternoon, or communities that have been designated only after an application has been submitted, nationwide.

The nationwide identification of critical health manpower shortage areas, independent of applications per se, both urban and rural, would make an important national contribution to health planning for a wide variety of programs, including those administered by the Federal Government.

While it is no small undertaking to develop such identification, it is an effort for which the National Health Service Corps is uniquely qualified by virtue of current law and program activity.

Therefore, I would urge that the language in section B be strengthened to request the Secretary to designate all such areas of critical health manpower shortages in the United States and its possessions, irrespective of the submission of applications from communities for personnel under this Public Law 91-623, as amended, and within a particular period of time as determined would be reasonable.

Although certainly not intended by the present law, the program is now required to limit itself primarily to areas and people with some financial resource or payment mechanism.

I was quite pleased to see the chairman draw out that issue in the earlier testimony.

It is my own personal opinion that the section in the regulations that was cited by the chairman has been placed there in a manner which represents an abuse of executive authority and violation of the law.

First, there is budget pressure from administrative sources, particularly OMB, requiring the National Health Service Corps to generate, through the collection of fees from patients, at least half the program cost during the present fiscal year and requirement that the program become fully self-supporting via fees for services next fiscal year.

Although there is no matching fund requirement in the law, communities are being required, even in the face of poverty, to raise matching funds for NHSC projects.

In addition, regulations and guidelines of the programs give priority and preference to programs, places, and people with a way to pay for their health care, irrespective of health manpower shortages in those

areas.

The proposed amendments make an important contribution in clarifying that there shall be no discrimination with regard to ability of residents to pay for health services.

In addition, I believe the language would be strengthened in section 329B, paragraph 2a, by clarifying that the prohibition against discrimination applies both to the approval of projects and the assignment of personnel.

Additional language provided to insure that communities and areas will not be discriminated against because of their economic status.

Another requirement that tends to discriminate against the poor is the statutory one involving certification of need in the area by professional bodies.

Unfortunately, this has been further restricted by regulations which link the certification of area need to its specific applications, as I mentioned before.

Professional organizations have thus far varied in their response to the program. In some of the most needy areas, these organizations have expressed their opposition to a particular application by refusing to acknowledge the most self-evident shortage.

This veto power by such private vendor associations is not only undesirable, but may involve unconstitutional delegation of power to a private group.

This power has also, in my judgment, a chilling effect upon submission of an application, hence, I doubt we really know how many communities and how many applications have never reached the processing stage because of local professional opposition.

In one community the dental society refused to certify need partly because the subsidized National Health Service Corps dentists would be required to set fees for service patients. rather than concentrate on the unmet dental needs of the poor.

This requirement was seen as placing the Federal dentist in direct competition with a local practitioner for the limited pool of patients with funds.

In other cases, refusal to certify obvious and compelling shortages of health services has deprived the poor in those areas of needed services under this law.

I am pleased to see in these amendments your provision to continue consultation with appropriate professional bodies, but shift to the National Advisory Council the requirement for the assignment of personnel.

Furthermore, I would recommend strengthening the language in the proposed amendment to clearly require Council approval of individual projects. The National Advisory Council has strong professional membership as well as some public representation. I believe it is eminently qualified to assure the selection of programs and the assignment of personnel in situations that will produce the most effective response to the legislative mandate.

An issue that has absorbed both the staff and the Council in considerable discussion and remains unresolved at this time, is the method for calculating cost to reimburse another agency for services provided under this program.

The Bureau of Health Insurance of the Social Security Administration, for example, insists that cost is to be interpreted as net cost to the

National Health Service Corps. Hence NHSC services would be treated in a different way than services by other agencies, community organizations, or private practitioners.

This tends to defeat the development of permanent programs by establishing a cost basis that a private practitioner could not compete with or continue after a program is transferred to community operation independently.

To clarify and resolve that problem, it is suggested that cost in paragraph c, section 329, be defined as the reasonable cost applicable in the area to other providers.

In addition, there is a definite need for greater flexibility in methods of payment of fees and reimbursements under this program so that other methods of payment or reimbursement could be developed subject to approval of the Secretary, without being tied specifically to the narrow terms "cost" or "fees" for services.

In addition, there should be a clear separation of collection of fees and reimbursements from program support, so that there will be no question that the program will not be dependent upon the generation of fees, reimbursement or other payments. Clear language prohibiting such dependence, I believe, is still needed.

These amendments make an important contribution by inclusion of the Public Health Service hospitals and outpatient facilities as available resources to the National Health Service Corps program.

The Public Health Service facilities have been unjustly attacked. They are a valuable national resource which should and can be correlated with this program.

In addition, these facilities will be strengthened by their involvement in programs administered by the National Health Service Corps to help relieve the critical health manpower shortages in surrounding

areas.

The new section 225 proposes a scholarship program providing not in excess of $5,000 per student per academic year for those who make a commitment to join the Public Health Service.

The scholarship program described is clearly not competitive with the military scholarship program, which now pays between $8.000 to $12.000 per year, depending upon seniority in the program itself.

However, I believe that Senator Stevens' proposal for a Public Health Service scholarship program more closely follows the military medical scholarship program and offers greater assurance of recruitment for professional positions in the National Health Service Corps and the Public Health Service as a whole.

My own experience with the Navy medical scholarship program has shown me that the program can be a major incentive for drawing individual professional students into Government service. However, it is imperative that the medical scholarship program linked to the Public Health Service offer the same benefits available, for example, in the Navy's program.

This means that the entering rank would be 0-1, the advancement to 0-2 would occur after 15 months in the program, and finally advancement to 0-3 after 3 years in the program, and in the senior year the individual would serve as an 0-3 during his senior year in medical school, his fourth year in the program, and be paid at above $12,000 per year based upon current salary rates.