Testimony
Before House Budget
Committee
Tommy Thompson, Secretary, HHS
President�s FY 2003 HHS Budget
February 28, 2002
Good Morning Chairman Nussle, Congressman Spratt and
members of the Committee. I am honored to appear before
you today to discuss the President�s FY 2003 budget for
the Department of Health and Human Services.
I am confident that a review of the full details of our
budget will demonstrate that we are proposing a balanced
and responsible approach to ensuring a safe and healthy
America.
The budget I present
to you today fulfills the promises the President has made
and proposes creative and innovative solutions for meeting
the challenges that now face our nation. Since
the September 11th attacks we have dedicated
much of our efforts to ensuring that the nation is safe.
HHS was one of the first agencies to respond to the September
11th attacks on New York City, and began deploying medical
assistance and support within hours of the attacks. Our
swift response and the overwhelming task of providing
needed health related assistance made us even more aware
that there is always room for improvement. The FY 2003
budget for the Department of Health and Human Services
builds on President Bush�s commitment to ensure the health
and safety of our nation.
The FY 2003 budget places increased emphasis on protecting
our nation�s citizens and ensuring safe, reliable health
care for all Americans. The HHS budget also promotes scientific
research, builds on our success in welfare reform, and
provides support for childhood development while delivering
a responsible approach for managing HHS resources. Our
budget plan confronts both the challenges of today and
tomorrow while protecting and supporting the well being
of all Americans.
Mr. Chairman, the total HHS request for FY 2003 is $488.8
billion in outlays. This is an increase of $29.2 billion,
or 6.3 percent over the comparable FY 2002 budget. The
discretionary component of the HHS budget totals $64.0
billion in budget authority, an increase of $2.4 billion,
or 3.9 percent. Let me now discuss some of the highlights
of the HHS budget and how we hope to achieve our goals.
PROTECTING THE NATION
AGAINST BIOTERRORISM
Mr. Chairman, as you
know, the Department of Health and Human Services is the
lead federal agency in countering bioterrorism. In cooperation
with the States, we are responsible for preparing
for, and responding to, the medical and public health
needs of this nation. The FY 2003 budget for HHS bioterrorism
efforts is $4.3 billion, an increase of $1.3 billion,
or 45 percent, above FY 2002. This budget supports a variety
of activities to prevent, identify, and respond to incidents
of bioterrorism. These activities are administered through
the Centers for Disease Control and Prevention (CDC),
the National Institutes of Health (NIH), the Office of
Emergency Preparedness (OEP), the Substance Abuse and
Mental Health Services Administration (SAMHSA), the Health
Resources and Services Administration (HRSA) and the Food
and Drug Administration (FDA). The efforts of this agency
will be directed by the newly established Office of Public
Health Preparedness (OPHP).
In order to create a blanket of preparedness against
bioterrorism, the FY 2003 budget provides funding to State
and local organizations to improve laboratory capacity,
enhance epidemiological expertise in the identification
and control of diseases caused by bioterrorism, provide
for better electronic communication and distance learning,
and support a newly expanded focus on cooperative training
between public health agencies and local hospitals.
Funding for the Laboratory Response Network enhances
a system of over 80 public health labs specifically developed
for identifying pathogens that could be used for bioterrorism.
Funding will also support the Health Alert Network, CDC's
electronic communications system that will link local
public health departments in covering at least ninety
percent of our nations� population. Funding will be used
to support epidemiological response and outbreak control,
which includes funding for the training of public health
and hospital staff. This increased focus on local and
state preparedness serves to provide funding where it
best serves the interests of the nation.
An important part on the war against terrorism is the
need to develop vaccines and maintain a National Pharmaceutical
Stockpile. The National Pharmaceutical Stockpile is purchasing
enough antibiotics to be able to treat up to 20 million
individuals in a year for exposure to anthrax and other
agents. The Department is purchasing sufficient smallpox
vaccines for all Americans. The FY 2003 budget proposes
$650 million for the National Pharmaceutical Stockpile
and costs related to stockpiling of smallpox vaccines,
and next-generation anthrax vaccines currently under development.
Another important aspect of preparedness is the response
capacity of our nations hospitals. Our FY 2003 budget
provides $518 million for hospital preparedness and infrastructure
to enhance biological and chemical preparedness plans
focused on hospitals. The FY 2003 budget will provide
funding to upgrade the capacity of hospitals, outpatient
facilities, emergency medical services systems and poison
control centers to care for victims of bioterrorism. In
addition, CDC will provide support for a series of exercises
to train public health and hospital workers to work together
to treat and control bioterrorist outbreaks.
Today, the United States has one of the world's safest
food supplies. However, since the September 11 attacks,
the American people have a heightened awareness about
protecting the nation's food imports and food supply at
home. The FY 2003 budget supports a substantial increase
in the number of safety inspections for FDA-regulated
products that are imported into the country. Physical
examinations of food imports will double in FY 2002 over
the previous year, and double again in FY 2003. We anticipate
further progress as new staff become fully productive.
The FY 2003 budget also includes $184 million to construct,
repair and secure facilities at the CDC. Priorities include
the construction of an infectious disease/bioterrorism
laboratory in Fort Collins, Colorado, and the completion
of a second infectious disease laboratory, an environmental
laboratory, and a communication and training facility
in Atlanta. This funding will enable the CDC to handle
the most highly infectious and lethal pathogens, including
potential agents of bioterrorism. Within the funds requested,
$12 million will be used to equip the Environmental Toxicology
Lab, which provides core lab space for testing environmental
samples for chemical terrorism. Funding will also be allocated
to the ongoing maintenance of existing laboratories and
support structures.
INVESTING IN BIOMEDICAL RESEARCH
Advances in scientific knowledge have provided the foundation
for improvements in public health and have led to enhanced
health and quality of life for all Americans. Much of
this can be attributed to the groundbreaking work carried
on by, and funded by, the National Institutes of Health
(NIH). Our FY 2003 budget enhances support for a wide
array of scientific research, while emphasizing and supporting
research needed for the war against bioterrorism.
NIH is the largest and most distinguished biomedical
research organization in the world. The research that
is conducted and supported by the NIH offers the promise
of breakthroughs in preventing and treating a number of
diseases and contributes to fighting the war against bioterrorism.
The FY 2003 budget includes the final installment of $3.7
billion needed to achieve the doubling of the NIH budget.
The budget includes $1.7 billion for bioterrorism research,
including genomic sequencing of dangerous pathogens, development
of zebra chip technology, development and procurement
of an improved anthrax vaccine, and laboratory and research
facilities construction and upgrades related to bioterrorism.
With the commitment to bioterrorism research comes our
expectation of substantial positive spin-offs for other
diseases. Advancing knowledge in the arena of diagnostics,
therapeutics and vaccines in general should have enormous
impact on the ability to diagnose, treat, and prevent
major killers-diseases such as malaria, TB, HIV/AIDS,
West Nile fever, and influenza.
The FY 2003 budget also provides $5.5 billion for research
on cancer throughout all of NIH. Currently, one of every
two men and one of every three women in the United States
will develop some type of cancer over the course of their
lives. New research indicates that cancer is actually
more than 200 diseases, all of which require different
treatment protocols. Promising cancer research is leading
to major breakthroughs in treating and curing various
forms of cancer. Our budget continues to expand support
for these research endeavors.
BUILDING UPON THE SUCCESSES OF WELFARE REFORM
President Bush has said that American families are the
bedrock of American society and the primary source of
strength and health for both individuals and communities.
Our budget includes a number of new initiatives that support
this principle by targeting resources to strengthen our
nation's families. We look forward to working with Congress
in considering the next phase of welfare reform and other
elements of the President's proposals to help America's
low-income families succeed.
Temporary Assistance for Needy Families
As a former governor, I can tell you that the Temporary
Assistance for Needy Families program - or TANF - has
been a truly remarkable example of a successful Federal-State
partnership. States
were given tremendous flexibility to reform their welfare
programs and as a result, millions of families have been
able to end their dependency on welfare and achieve self-sufficiency.
Since 1996, welfare dependency has plummeted. As of September
of 2001, the number of families receiving assistance,
which represents the welfare caseload, was 2,103,000 and
the number of individuals receiving assistance was 5,343,000.
This means the welfare caseload and the number of individuals
receiving cash assistance declined 52
percent and 56 percent, respectively, since the
enactment of TANF. Between January and September of last
year national caseloads actually declined about 2 percent,
and while the July to September statistics indicate a
slight increase, the figures are still well below the
previous year's caseload levels. The general trend suggests
the national caseloads are not rising but, instead, have
stabilized.
In New York City, where we are understandably most concerned
about job opportunities, the City has achieved more than
53,000 job placements for welfare recipients from September
through December 2001. While the number of TANF recipients
increased briefly directly because of the tragedy on September
11, by December there were about 15,000 fewer TANF recipients
on the rolls than there were in August. Indeed, in December
the City had its lowest number of persons on welfare since
1965.
Some other positive outcomes we have seen since the law�s
passage include:
- Employment among single mothers has grown to unprecedented
levels.
- Child poverty rates are at their lowest level since
1978. Overall child poverty rates declined from 20.5
percent in 1996 to 16.2 percent in 2000. The poverty
rate among African American children declined from 39.9
percent to 30.9 percent - the lowest level on record.
The poverty rate among Hispanic children declined from
40.3 percent to 28.0 percent - the largest four-year
drop on record.
- The rate of births to unwed mothers has not increased.
But even with this notable progress, much remains to
be done, and States still face many challenges. Last year,
I held eight listening sessions throughout the country
to discuss the state of their TANF systems and understand
the new challenges they are facing. The States overwhelmingly
support this program. While keeping the basic structure
and purpose of the program, States, administrators, recipients,
employers, and advocates have provided valuable insight
into where we could make the program even more responsive
to the needs of families.
Our reauthorization proposal embraces the needs of families
by maintaining the program's overall funding and basic
structure, while focusing increased efforts on building
stronger families through work and job advancement and
adding child well-being as an overarching goal of TANF.
Our budget proposes $16.5 billion each year for block
grants to States and Tribes; $319 million a year to restore
supplemental grants; $2 billion over five years for a
more accessible Contingency Fund; and a $100 million a
year initiative for research, demonstration and technical
assistance primarily to promote child well-being through
strengthening family formation and healthy marriages.
In addition, our proposal will call for modification of
the bonus for high performance to reward significant achievement
in promoting employment of program participants.
We maintain State flexibility, but include important
changes to improve the effectiveness of the program. We
will also expect States to engage all families they serve
and help them make progress toward their highest degree
of self-sufficiency � even those cases that may appear
hard to employ. We will eliminate the separate two-parent
work participation rates and give States more flexibility
in designing productive self-sufficiency activities while
ensuring that the participation rate requirements are
meaningful. We will also ask States to set performance
goals for their TANF programs and report on their progress
toward meeting these goals.
I look forward to working with Congress on reauthorization
of this hallmark program. I am confident that together
we will witness even greater achievements under the TANF
program.
Other Programs Supporting TANF Goals
The President�s Budget also includes funding for several
other programs at the State and community level that work
to support the goals of TANF. The Job Opportunities for
Low-Income Individuals program (JOLI) provides grants
to non-profit organizations to create new employment and
business opportunities for TANF recipients and other low-income
individuals. Our budget provides $5.5 million to continue
this valuable program. The Individual Development Account
(IDA) demonstration program similarly seeks to increase
the economic self-sufficiency of low-income families by
testing policies that promote savings for post-secondary
education, home ownership, and micro-enterprise development.
The President�s Budget calls for $25 million to support
IDAs. More broadly, the Social Services Block Grant (SSBG)
provides a flexible source of funding for States to help
families achieve or maintain self-sufficiency and provide
an array of social services to vulnerable families. The
President�s Budget request for SSBG is $1.7 billion.
The President's Budget extends the Transitional Medical
Assistance (TMA) program which provides valuable health
protection for former welfare recipients after they enter
the workforce. This important program allows families
to remain eligible for Medicaid for up to 12 months after
they are no longer eligible for welfare because of earnings
from their new job. TMA is an important stepping stone
in helping workers and their families successfully transfer
from welfare to work without fear of losing vital health
coverage.
Child Care
Child Care has played an important role in the success
of welfare reform by providing parents the support they
need to work. The President's Budget recognizes this critical
link and maintains a high level of commitment to childcare.
Continuing the substantial increase in funding that Congress
has provided over the last several years, the President's
Budget includes a total of $4.8 billion in childcare funding
in conjunction with our request to reauthorize the mandatory
and discretionary funding provided under the Child Care
and Development Block Grant and the Child Care Entitlement.
States will also continue to have significant flexibility
under the TANF program and under the Social Services Block
Grant program to address the needs of their low-income
working families. These additional funding opportunities
have substantially increased the amount of resources dedicated
to child care needs. For example, in FY 2000 States transferred
$2.3 billion in TANF funds to the Child Care and Development
Block Grant.
Child Support Enforcement
The Child Support Enforcement program offers another
vital connection to families� ability to achieve self-sufficiency
and financial stability. The President's Budget proposes
to increase child support collections and direct more
of the support collected to families transitioning from
welfare. Under our proposal, the Federal government would
share in the cost of expanded State efforts to pass through
child support collections to families receiving TANF.
Pass through payments enhance a family's potential for
achieving self-sufficiency while also creating incentives
for non-custodial parents to pay support and custodial
parents to cooperate in securing support. Similarly, States
would be given the option to adopt simplified distribution
rules that ease State administration but, more importantly,
benefit families that have transitioned from welfare by
directing support otherwise retained by the State and
Federal governments to these families.
Overall collections would be increased by expanding our
successful program for denying passports to parents owing
$2,500 in past-due support, requiring States to update
support awards in TANF cases every three years, and authorizing
States to offset certain Social Security Administration
payments when they determine such action would be appropriate
to collect unpaid support. Our child support legislative
package would also impose a minimal annual processing
fee in any case where the State has been successful in
collecting support on behalf of a family that has never
received assistance.
Strengthening Families
The FY 2003 budget contains funds for four competitive
grant programs, targeted at community and faith based
organizations, to assist in delivering innovative services,
to strengthen families and help change lives. The Compassion
Capital Fund, at $100 million, will expand the capacity
of groups and organizations willing to step up and help
provide these critical social services. $20 million is
included to promote responsible fatherhood by providing
competitive grants to organizations that work to strengthen
the role that fathers play in their children�s and family�s
lives. The budget also supports $25 million in new authority
for the mentoring children of prisoners initiative first
proposed last year. Finally, young pregnant mothers and
their children will be provided safe environments through
the $10 million included for Maternity Group Homes.
Promoting Safe and Stable Families
The President�s Budget would increase the funding level
for this program to $505 million, fully supporting the
increased authorization included in the new law. These
funds will be used to help promote and support adoption
so that children can become part of a safe and stable
family, as well as for increased preventive efforts to
help families in crisis.
This landmark legislation also authorized a new program
to provide vouchers to youth who are aging out of foster
care so that they can obtain the education and training
they need to lead productive lives. The President's Budget
includes $60 million for these vouchers, bringing the
total request for the Foster Care Independence Program
to $200 million.
Child Welfare/Foster Care/Adoption
Our budget framework includes resources for a number
of additional programs targeted to protecting our most
vulnerable and at-risk children. Foster Care, Adoption
Assistance, Adoption Incentives and Child Welfare Services
are designed to enhance the capacity of families to raise
children in a nurturing, safe environment. The President�s
Budget provides resources to help States provide safe
and appropriate care for children who need placement outside
their homes, and to provide funds to States to assist
in providing financial and medical assistance for adopted
children with special needs who cannot be reunited with
their families, and to reward States for increasing their
number of adoptions. At the same time, the budget also
supports Child Welfare Services programs with the goal
of keeping families together when possible and in the
best interest of the child.
The budget provides nearly $4.9 billion for Foster Care,
$1.6 billion for Adoption Assistance, and $43 million
in Adoption Incentive funds. In addition, the President�s
Budget seeks almost $300 million in funding for child
welfare services and training. Together, these funds will
support improvement in the healthy development, safety,
and well being of the children and youth in our nation.
Abstinence Education
The President�s Budget proposes to reauthorize $50 million
in mandatory funding for abstinence education grants to
States. These resources complement the proposed $73 million
in abstinence education grants to community-based organizations
and Adolescent Family Life�s CARE grants ($12 million).
Both grant programs will continue to support the message,
through mentoring, counseling and adult supervision, that
abstinence from sexual activity is the only sure way for
teens to avoid out-of-wedlock pregnancies and sexually
transmitted diseases.
Repatriation
Finally, our commitment to supporting America�s families
does not stop at our borders. The President�s Budget seeks
$1 million in funding for the Repatriation program to
assist U.S. citizens and their dependents returning from
foreign countries under extreme circumstances.
INCREASING ACCESS TO HEALTHCARE
The issues that have confronted the nation in the past
six months will have far reaching effects. Of all the
issues confronting this Department, none has a more direct
effect on the well-being of our citizens than the quality
and accessibility of health care. Our budget proposes
to improve the health of the American people by taking
important steps to increase and expand the number of Community
Health Centers, strengthen Medicaid, and ensure patient
safety.
Community Health Centers provide family oriented preventive
and primary health care to over 11 million patients through
a network of over 3,400 health sites. The FY 2003 budget
will increase and expand the number of health center sites
by 170, the second year of the President�s initiative
is to increase and expand sites by 1,200 and serve an
additional 6.1 million patients by 2006. We propose to
increase funding for these Community Health Centers by
$114 million in FY 2003. Our long-term goal is to increase
the number of people who receive high quality primary
healthcare regardless of their ability to pay. With these
new health centers we hope to achieve this goal.
The Medicaid program and the State Children�s Health
Insurance Program (SCHIP) provide health care benefits
to low-income Americans, primarily children, pregnant
women, the elderly, and those with disabilities. The FY
2003 budget we propose strengthens the Medicaid and SCHIP
programs by implementing essential reforms, such as the
extension of expiring SCHIP funds.
As a first step, we propose to develop legislative proposals
that build on the Health Insurance Flexibility and Accountability
(HIFA) demonstration initiative, which would give states
the flexibility they need to design innovative ways of
increasing access to health insurance coverage for the
uninsured. In addition to HIFA, the Administration's plan
would allow those who receive the President's health care
tax credit to increase their purchasing power by purchasing
insurance from plans that already participate in their
State's Medicaid, Children�s Health Insurance, or State
employees' programs. This could help keep costs down and
provide a more comprehensive benefit than plans in the
individual market.
We also need to make an effort to narrow the drug treatment
gap. As reflected in the National Drug Control Strategy,
Substance Abuse and Mental Health Services Administration
estimates that 4.7 million people
are in need of drug abuse treatment services.
However, fewer than half of those who need treatment actually
receive services, leaving a treatment gap of 3.9 million
individuals. Our budget supports the President's Drug
Treatment initiative, and to narrow the treatment gap.
We propose to increase funding for the initiative by $127
million. These additional funds will allow States and
local communities to provide treatment services to approximately
546,000 individuals, an increase of 52,000 over FY 2002.
STRENGTHENING MEDICARE
The FY 2003 budget dedicates
$190 billion over ten years for immediate
targeted improvements
and comprehensive Medicare modernization, including a
subsidized prescription drug benefit, better insurance
protection, and better private options for all beneficiaries.
Last year, President Bush proposed a framework
for modernizing and improving the Medicare program that
built on many of the ideas that had been developed in
this Committee and by other Members of Congress. That
framework includes the principles that:
- All seniors should have the option of a subsidized
prescription drug benefit as part of modernized Medicare.
- Modernized Medicare should provide better coverage
for preventive care and serious illness.
- Today�s beneficiaries and those approaching retirement
should have the option of keeping the traditional plan
with no changes.
- Medicare should make available better health insurance
options, like those available to all Federal employees.
- Medicare legislation should strengthen the program�s
long-term financial security.
- The management of the government Medicare plan should
be strengthened to improve care for seniors.
- Medicare�s regulations and administrative procedures
should be updated and streamlined, while instances of
fraud and abuse should be reduced
- Medicare should encourage high-quality health care
for all seniors.
The improvements the President and I have proposed include
not only a subsidized drug benefit as part of modernized
Medicare, but also better coverage for preventive care
and serious illness. Thus, we propose that preventive
benefits have zero co-insurance
and be excluded from the Part B deductible.
We must make these
improvements to more effectively address the health needs
of seniors today and for the future.
Let me assure you, the President remains committed to
the framework he introduced last summer, and to bringing
the Medicare program up to date by providing prescription
drug coverage and other improvements. We cannot wait:
it is time to act. Recognizing that there is no time to
waste, the President�s Budget also includes a series of
targeted immediate improvements to Medicare.
As you know, last year
the President proposed the creation of a new Medicare-endorsed
prescription drug
card program to reduce the cost of prescription drugs
for seniors. This year, HHS will continue its work on
a drug card program, which will give beneficiaries immediate
savings on the cost
of their medicines
and access to other valuable pharmacy services. The President
is absolutely committed to providing immediate assistance
to seniors who currently have to pay full price for prescription
drugs.
Assistance, however,
will not come only through the prescription drug card
program. The budget proposes several new initiatives to
improve Medicare�s benefits and address cost.
This budget
proposes additional federal assistance for comprehensive
drug coverage to low-income Medicare beneficiaries up
to 150% of poverty � about $17,000 for a family of two.
This policy would eventually expand drug coverage
for up to 3 million beneficiaries who currently do not
have prescription drug assistance, and it will be integrated
with the Medicare drug benefit that is offered to all
seniors once that benefit
is in place.
This policy helps to establish the framework necessary
for a Medicare prescription drug benefit and is essentially
a provision that is in all of the major drug benefit proposals
to be debated before Congress. That is, the policy provides
new Federal support for comprehensive prescription drug
coverage for low-income seniors up to 150 percent of poverty.
And in all the proposals, the Federal government would
work with the States to provide this coverage, just as
we are proposing with this policy.
Recently, I announced
a model drug waiver program�Pharmacy Plus�to allow States
to reduce drug expenditures and expand drug only coverage
to seniors and certain individuals with disabilities with
family incomes up to 200 percent of the federal poverty
level. This program is being done administratively. The
recently approved
Illinois initiative
illustrates how states
can expand coverage
to Medicare beneficiaries in partnership with the federal
government. The Illinois
program will
give an estimated 368,000 low-income seniors drug coverage.
The model application I have announced is easy to understand
and use, and the Centers for Medicare and Medicaid Services
is working with numerous States�at least 12�that have
already expressed interest in this program. Making it
easier for States to take similar steps to help their
citizens who need help the most is the goal I believe
we all share.
The President�s Budget
also includes an increase in funding to stabilize and
increase choice in the Medicare+Choice program by aligning
payment rates more closely with overall Medicare spending
and paying incentives for new types of plans to participate.
Over 500,000 seniors lost coverage last year because Medicare+Choice
plans left the program. Today over
5 million
seniors choose to receive quality health care through
the Medicare+Choice program. Because it provides access
to drug coverage and other innovative benefits,
it is an option
many seniors like, and an option we must preserve. The
President�s Budget also proposes the addition of two new
Medigap plans to the existing 10 plans. These new plans
will include prescription drug assistance and protect
seniors from high out-of-pocket costs.
Some of these initiatives
give immediate and tangible help to seniors. But, let
me make clear: these are not substitutes for comprehensive
reform and a universal drug benefit in Medicare. They
are immediate steps we want to take to improve the program
in conjunction with comprehensive reform, so that beneficiaries
will not have to wait to begin to see benefit improvements.
I want to pledge today to work with each and every member
of this Committee to fulfill our promise of health care
security for America�s seniors-
now and in the
future.
This budget proposes a $1.50 charge for submitting paper
or duplicate claims as an incentive for providers to submit
electronic claims one time only. These proposals will
help reduce claims processing costs and ultimately speed
up payment of claims. I recognize that a few health care
providers in disadvantaged circumstances may have to submit
a paper claim. This proposal will allow me to waive this
requirement for providers in rural areas or those providers
whose special circumstances make it difficult to comply
with submission requirements. Together, these fees generate
$130 million in FY 2003. The Paper claims fee is expected
to produce $70 million in FY 2003. In future years, we
expect the amount of the fee collected to decrease as
more providers submit electronic claims. The Duplicate
and unprocessable claims fee is expected to produce $60
million in FY 2003. The effective date for each proposal
is March 1, 2003 to allow time for CMS to modify systems
to incorporate this change. Each proposal amount represents
7 months of fee collections.
SUPPORTING HEALTHY COMMUNITIES
The FY 2003 budget includes $20 million
for a Healthy Communities Innovation Initiative
- a new interdisciplinary services effort that will concentrate
Department-wide expertise on the prevention of diabetes
and asthma, as well as obesity. The purpose of the initiative
is to reduce the incidence of these diseases and improve
services in 5 communities through a tightly coordinated
public/private partnership between medical, social, educational,
business, civic and religious organizations. These chronic
diseases were chosen because of their rapidly increasing
prevalence within the United States. In addition there
is $5 million for related activities in CDC.
More than 16 million Americans currently suffer from
a preventable form of diabetes. Type II diabetes is increasingly
prevalent in our children due to the lack of activity.
In a recent study conducted by NIH, participants that
were randomly assigned to intensive lifestyle intervention
experienced a reduced risk of getting Type II diabetes
by 58 percent. HHS plans to reach out to women and minorities
to help make this initiative a success.
IMPROVING MANAGEMENT
AND PERFORMANCE OF HHS PROGRAMS
I am committed to being
proactive in preparing the nation for potential threats
of bioterrorism and supporting research that will enable
Americans to live healthier and safer lives. And, I am
excited about beginning the next phase of Welfare reform
and strengthening our Medicare and Medicaid programs.
Ensuring that HHS resources are managed properly and effectively
is also a challenge I take very seriously.
For any organization
to succeed, it must never stop asking how it can do things
better, and I am committed to supporting the President�s
vision for a government that is citizen-centered, results
oriented, and actively promotes innovation through competition.
HHS is committed to improving management within the Department
and has established its own vision of a unified HHS --
One Department free of unnecessary layers, collectively
strong to serve the American people. The FY 2003 budget
supports the President's Management Agenda.
The Department will
improve program performance and service delivery to our
citizens by more strategically managing its human capital
and ensuring that resources are directed to national priorities.
HHS will reduce duplication of effort by consolidating
administrative management functions and eliminating management
layers to speed decision-making. The Department plans
to reduce the number of personnel offices from 40 to 4;
centralize the public affairs and legislative affairs
functions; and consolidate construction funding, leasing,
and other facilities management activities. These management
efficiencies will result in an estimated savings of 700
full time equivalent positions, allowing the Department
to redeploy staff and other resources to line programs.
HHS continues to be
at the forefront of the Government-wide effort to integrate
budget and performance. We were one of the first Departments
to add tables to its GPRA Annual Performance Reports that
provide summary tables that associate resource dollars
and performance measures HHS-wide. Although we work in
a challenging environment where health outcomes may not
be apparent for several years, and the Federal dollar
may be just one input to complex programs, HHS is committed
to demonstrating to citizens the value they receive for
the tax dollars they pay.
By expanding our information
technology and by establishing a single corporate Information
Technology Enterprise system, HHS can build a strong foundation
to re-engineer the way we do business and can provide
better government services at reduced costs. By consolidating
and modernizing existing financial management systems
our Unified Financial Management System (UFMS) will provide
a consistent, standardized system for departmental accounting
and financial management. This "One Department" approach
to financial management and information technology emphasizes
the use of resources on an enterprise basis with a common
infrastructure, thereby reducing errors and enhancing
accountability. The use of cost accounting will aid in
the evaluation of HHS program effectiveness, and the impacts
of funding level changes on our programs.
HHS is also committed
to providing the highest possible standard of services
and will use competitive sourcing as a management tool
to study the efficiency and performance of our programs,
while minimizing costs overall. The program will be linked
to performance reviews to identify those programs and
program components where outsourcing can have the greatest
impact. Further, the incorporation of performance-based
contracting will improve efficiency and performance at
a savings to the taxpayer.
GOVERNMENT PERFORMANCE
AND RESULTS ACT
HHS is committed to
continual improvement in the performance and management
of its programs and the Administration's efforts to provide
results-oriented, citizen-centered government. The budget
request for FY 2003 is accompanied by annual performance
plans and reports required by the Government Performance
and Results Act (GPRA). The performance measures cover
the wide range of program activities essential to carrying
out the HHS mission. Some notable FY 2001 achievements
include:
--Reducing
Erroneous Medicare Payments: CMS has continued to
reduce the payment error rate from 14 percent in FY
1996 to 8 percent in FY 1999, 6.8 percent in FY 2000,
and 6.3% in FY 2001. CMS, with the assistance of the
Office of the Inspector General, is committed to further
reducing the error rate to 5 percent by FY 2002.
--Moving
Families Toward Self-sufficiency: ACF reported that
42.9 percent of adult recipients of TANF were employed
by FY 1999. This is a primary indicator of success
in moving families toward self-sufficiency. It improves
on the FY 1998 baseline of 38.7 percent and exceeds
the target of 42 percent.
--Families Benefiting
from Child Support Enforcement: The Child Support
Enforcement program broke new records nationwide in
FY 2001 by collecting $18.9 billion, one billion over
FY 2000 levels. In one such initiative in FY 2000,
the government collected a record $1.4 billion in
overdue child support from Federal income tax refunds,
and more than 1.42 million families benefited from
these collections.
These are just a few
of the dozens of impressive success stories found in the
13 performance plans and reports. GPRA has been and will
continue to be an important part of our effort to improve
the management and performance of our programs.
WORKING TOGETHER
TO ENSURE A SAFE AND HEALTHY AMERICA
Mr. Chairman, the budget
I bring before you today contains many different elements
of a single proposal; what binds these fundamental elements
together is the desire to improve the lives of the American
people. All of our proposals, from building upon the successes
of welfare reform, to protecting the nation against bioterrorism;
from increasing access to healthcare, to strengthening
Medicare, are put forward with the simple goal of ensuring
a safe and healthy America. I know this is a goal we all
share, and with your support, we are committed to achieving
it.
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revised: March 6, 2002