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December 7, 2009

Washington Health Policy Week in Review Archive 42a2ae82-5a8b-4abe-85d9-6178151086d5

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CBO Looks at Senate's Health Insurance 'Exchange' Proposal

By Drew Armstrong, CQ Staff

November 30, 2009 -- People buying health insurance under the "exchange" in Senate Democrats' health care bill would pay higher premiums than they would under current law for their plans, but new subsidies would more than offset the increased costs for more than half those people, paying almost 60 percent of their premiums, according to a new analysis.

A Congressional Budget Office (CBO) reading of the bill (HR 3590) also indicates that part of the reason for the higher premium costs would be that, under the proposed regulation in the bill, insurance companies would have to offer a greater level of coverage in the plans they sold.

According to the CBO analysis, once the bill's programs were fully implemented in 2016, people buying insurance plans individually on the exchange would pay 10 percent to 13 percent more per person for them than under current law. But some 57 percent of people on the exchange would get subsidies in the form of tax credits, and on average those people would actually pay 56 percent to 59 percent less for their premiums than they would otherwise.

The average premium for people buying through the exchange would be $5,800 for a single plan, or $15,200 for a family plan. Under current law, in 2016 an individual plan would cost $5,500 and a family plan $13,100.

According to CBO, however, "the majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies . . . would cover nearly two-thirds of the total premium." That means that while premiums cost more, most people required to buy them under the legislation's mandate to have insurance would actually pay far less than they would otherwise.

The new rules would affect companies buying coverage, as well. Policies for companies with fewer than 50 employees would stay roughly the same — between 1 percent more expensive and 2 percent less expensive — but with the premium subsidies for small businesses, the cost of covering a person on the "small group" market would decrease by 8 percent to 11 percent.

The effect on large companies would be negligible, according to the analysis.

The report is sure to cause substantial argument as the Senate opens debate Monday on health care legislation put forward by Majority Leader Harry Reid, D-Nev.

The CBO report was released Monday in response to an inquiry by Evan Bayh, D-Ind., according to a cover letter that accompanied it.

Senate Finance Committee Chairman Max Baucus, D-Mont., crafted many of the financing and cost-control portions of the bill, and hailed the news from CBO.

"The vast majority of Americans will see lower premiums than they would if we don't pass health reform," Baucus said, citing the estimate. "We also learned that the millions of Americans who are underinsured—who don't have enough coverage to prevent them from financial ruin—would be able to purchase significantly more coverage for an affordable price."

But the report also provided plenty of individual data points that could, and likely will, be used by Republicans and Democrats to make very different points. Republicans quickly pointed to the premium cost data to say the bill would drive up costs, even though for many people their actual out-of-pocket costs would not increase.

"The Democrat bill will actually increase premiums for American families," Senate GOP Leader Mitch McConnell of Kentucky said in a statement Monday. "A bill that's being sold as a way to reduce costs actually drives them up."

The CBO analysis is good news for Democrats, who have been seeking assurances that their legislation will in fact lower the cost of health insurance. Because of the new regulations in the bill, according to the report, the cost of providing a specified amount of coverage for people buying insurance on their own would actually go down by 7 percent to 10 percent. The report calls that analysis the "apples-to-apples" comparison, and it seems likely that Democrats will latch on to that figure and others to argue that their proposals will make insurance more affordable for Americans.

The report also concludes that administrative costs—the term for what insurance companies spend on everything but medical care—would decrease. "Compared with the plans that would be available in the nongroup market under current law, nongroup policies under the proposal would have lower administrative costs, largely because of the new market rules," the report reads.

The lower administrative costs are caused by more people entering the market, which creates economies of scale, as well as by requiring standard benefits and other new regulations.

While premiums would be higher because of the increased level of benefits, the report also concludes that competition in the exchanges would help keep them lower than they would be otherwise. In many markets, there is little competition among health insurers. In the exchange, having many plans available would create "additional competition [that] would slightly reduce average premiums."

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Obama Will Add His Weight to Push for Senate Health Care Bill

By Alex Wayne, CQ Staff

December 5, 2009 -- President Obama is heading to the Capitol on Sunday to help Senate Democratic leaders rally their fractious troops behind a compromise version of the health care overhaul bill.

Majority Leader Harry Reid, D-Nev., and his lieutenants have been struggling to put out brushfires ignited by sparks of resistance from the left and right within the 60-member Democratic caucus.

Obama's visit at 2 p.m. Sunday could help quell some of the grumbling and dissent from various factions about what is—or isn't—included in the current version of the legislation (HR 3590).

A core group of negotiators from both wings of the party plans to reassemble after Obama's visit in a bid to seal a deal by the end of the day on one key issue — whether and how to create a public option that would compete with private insurance plans in the exchanges, or marketplaces, that the bill would set up to offer health coverage to uninsured individuals and many small businesses. Liberals hope that Obama will side with them against moderates who are trying to change the public option in ways proponents think would weaken it.

"It's pretty clear where the great majority of Congress is and where the great majority of the country is on this bill," said Sen. Sherrod Brown, D-Ohio, a leading public option proponent. "I just want to see the president speaking out and talking to those members who are a little less enthusiastic to support [the bill]."

In an indication of the trouble Democrats have had corralling votes from their own members, a group of moderates met with Republican Olympia J. Snowe of Maine on Saturday. Snowe aides did not respond to questions about the meeting. She is seen as the likeliest Republican vote for the bill, and Democrats may well need her, as Sen. Ben Nelson, D-Neb., has indicated he will oppose the legislation if its restrictions on insurance coverage for abortion are not tightened.

Liberals insist the best way to force private insurers to offer adequate coverage at affordable premiums is to create a public option that would be offered in competition with private plans. But a handful of moderate Democrats refuse to support all but the most limited and constrained versions of a public option.

A group of 10 senators—five from each camp—began meeting privately Friday evening to discuss a compromise. They met again Saturday, after huddling separately, and Sen. Tom Harkin, D-Iowa, a public option proponent, said the goal is to reach an accord on the issue by Monday.

"Maybe by tomorrow, or maybe Monday, somewhere in there we will have a proposal we can all shake hands on," he said. Reid "is ready for a manager's amendment," Harkin added, referring to a comprehensive amendment to the current bill that would incorporate all the changes negotiators have agreed to support.

Several moderates said the group had discussed some sort of arrangement in which the public option would be run by a nonprofit, rather than the government. By late Saturday, however, senators were describing a system in which the federal Office of Personnel Management would administer a public option system consisting of several national, private nonprofit insurance plans competing with each other. OPM already operates the Federal Employees Health Benefits Plan.

"I think we're pretty well set on OPM," Harkin said. That would represent a concession to moderates, who have been concerned about allowing the Health and Human Services Department to operate an insurance plan while also regulating insurance markets. But the plan would still be administered by the government, something important to liberals.

Harkin also said the public option would be a single, national plan, not several state or regional plans — something else liberals have sought.

He said the group had reached "a general agreement on where we're headed on this thing."

White House health adviser Nancy-Ann DeParle spent most of Saturday at the Capitol, along with Health and Human Services Secretary Kathleen Sebelius. At the end of the day's negotiations, DeParle said she was pleased with their progress.

" It's about where it should be at this point in the legislative process ," DeParle said. She added that the administration still expects the Senate will complete the bill by Christmas.

"We're trying to get to yes with 60 votes in a way that the more liberal members of our caucus and the more conservative members of our caucus can agree on," said Sen. Tom Carper, D-Del.

Abortion, Drug Imports
The public option is not the only issue still to be resolved before Reid can move the Senate toward votes on a manager's amendment and final passage.

Also splitting the caucus is the insistence of anti-abortion senators, led by Nebraska's Nelson, that the legislation be changed to mirror curbs added on the House floor to preclude coverage of abortion with any public funds under the bill. Nelson said Saturday that the amendment he intends to press will be "very similar" to the House language, despite the hopes of some abortion-rights advocates that he would agree to soften it somewhat.

Also looming is a floor fight over an effort by Byron L. Dorgan, D-N.D., and John McCain, R-Ariz., to allow importation of cheaper prescription drugs from abroad—a move that is strongly opposed by brand-name drugmakers and their trade group, the Pharmaceutical Research and Manufacturers Association (PhRMA).

"Sen. Reid has committed to myself and to Sen. McCain that I'll be offering my amendment following the disposition . . . of what I believe will be two amendments on abortion. . . . My expectation is my amendment will come up on Monday afternoon," Dorgan said.

Dorgan's amendment would effectively scrap an informal agreement by the White House to limit the amount of cuts in drug spending required by the bill in order to cement support from PhRMA, which has run an advertising campaign to support completion of the bill.

Dorgan said he had insisted on having a vote quickly, in the hope of seizing momentum from a recent Congressional Budget Office analysis that concluded the proposal would save about $19 billion over 10 years, by prodding manufacturers to lower drug prices in order to compete with drugs reimported form Canada.

White House Role, GOP Criticism
Obama, a former senator (2005-09), has stressed repeatedly the need for compromise. He has been careful not to draw lines in the sand about what he would or would not accept in the legislation, even as he has maintained pressure for action this year.

Although Democratic leaders in Congress originally hoped to have a bill to Obama's desk by year's end, the substantive complexity of the legislation, growing concerns over its cost at a time of record deficits and the delicate political dynamics among Democrats in both chambers have slowed progress. Now, the goal is to win Senate passage before Dec. 31.

The president's diffidence has drawn some criticism from Democrats who want him to weigh in more directly and consistently. But the president has been deferring to Reid on when and how he should get involved.

Administration aides are frequently seen at Reid's office, but it is not clear to what extent they are influencing negotiations.

"I think they're meeting with people," Brown said. "Their fingerprints are on a few things."

Republicans, meanwhile, said they were happy to wait out the Democrats.

"I think the majority leader believes that somehow if we stay in on weekends the Republicans are going to blink," said Minority Leader Mitch McConnell, R-Ky. "And I can assure him we're not going to blink. We'll be here and we'll be voting, and in my view, the longer we discuss this with the American people, the more unpopular it becomes."

— Alan K. Ota and Greg Vadala contributed to this story.

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Cuts in the Senate Overhaul Bill: Nips, Tucks or Knife to the Heart of Medicare?

By John Reichard, CQ HealthBeat Editor

December 4, 2009 -- When senators cast their final votes on a health care overhaul, one of their biggest considerations will be what shape they'll leave Medicare in if hundreds of billions of dollars are cut from the popular program.

The idea is that Medicare spending would be reduced to find dollars to help fund coverage of 31 million uninsured Americans.

To hear Republicans tell it, the typical senior—"Grandma," as they described her in Senate floor debate Dec. 1—is in serious trouble in the next decade if the cuts do occur. And Grandma's mad.

"We are receiving incredible and overwhelming response from seniors all over America who feel that the benefits that they paid in to are now in jeopardy," Sen. John McCain, R-Ariz., told reporters.

On Dec. 3, senators rejected, 42-58, a McCain motion to send the bill back to committee, an effort to strip the Medicare cuts out of the Democratic overhaul bill currently on the floor (HR 3590).

Democrats have the muscle to block such amendments, more of which are pending. But they will have to live with the consequences—including the judgment of elderly voters next fall.

Harvard University Professor Robert Blendon, who tracks public opinion and health policy, notes that seniors turn out in large numbers in off-year elections. "They have been the most negative all the way along" about a health overhaul, he observes. "And I've felt all the way along, it's around the size and perception of the Medicare cuts."

Both sides are acutely aware of the political power of this issue and have been using their Senate floor speeches and working the news media to shape their messages and gain the upper hand.

Republicans point to the assessment of Medicare's respected actuary, Richard Foster, who warned that comparable cuts in the House-passed bill (HR 3962) over time could cause hospitals, nursing facilities and home health agencies to drop out of Medicare because the rates may be based on overly optimistic assumptions about productivity gains in health care. The cuts could be modified to keep providers in Medicare, but savings would then be smaller, Foster said. He also predicted a plunge in enrollment in Medicare's private health plan program, Medicare Advantage, In 2014, he said, that program would have 4 million enrollees, not the 13 million projected under current law.

Some $200 billion in Medicare Advantage cuts in the House bill would lead to less generous benefits, which provide extras such as vision or dental care, and reduce some out-of-pocket spending, including premium payments for drug coverage and doctor care.

But taking money away from Medicare doesn't mean it would be lost to the providers who treat seniors.

Democrats point out that hospitals have already agreed to Medicare cuts because fewer uninsured people would mean hospitals would spend less in treating them. And they say having more paying customers will make Medicare cuts tolerable in other health care sectors as well.

Looking at Trade-Offs
Democrats also note that Medicare has weathered larger cuts without cutting benefits. According to White House Office of Health Reform Director Nancy-Ann DeParle, the 1997 balanced-budget law led to a much bigger percentage drop in Medicare spending than is projected to occur under the current Senate bill. Because of cuts in the 1997 law, Medicare spending was 12 percent lower than it was otherwise projected to be in the following decade, according to the analysis by the left-leaning Center on Budget and Policy Priorities. The Senate bill is projected to result in Medicare spending 6 percent lower by 2019 than current projections.

Groups that traditionally defend Medicare are also defending the Senate bill. It "properly focuses on provider reimbursement reforms," the seniors lobby AARP said in a letter to Senate Majority Leader Harry Reid, D-Nev. "Most importantly, the legislation does not reduce any guaranteed Medicare benefits."

William Vaughan, senior policy analyst for Consumers Union, says the bill would help Medicare by improving the health of Americans before they become eligible for the program. It also would goad hospitals into avoiding sloppy care by cutting payments in cases involving avoidable infection or preventable readmissions, he said.

The New York City-based Medicare Rights Center adds that the bill would improve care by fully covering annual physicals, colonoscopies, mammograms, and bone density measurements.

As for Medicare Advantage, cuts to the program would not threaten core benefits. The Senate bill would cut payments by $120 billion—a big slice, but less than in the House bill. And it's not enough to slash enrollment, according to the Congressional Budget Office. CBO says today's enrollment of 10.6 million would grow slightly to 11.3 million in 2019.

As for the politics, Blendon says polling isn't available yet on the impact of the floor debate on seniors' opinions. But Republicans are watching, and the longer the bill lingers, the more doubts they can raise. "I am quite convinced seniors can be made nervous," he says. "If this drags out longer, the Republican strategy may have an effect on some Democratic members in the Senate who will want to modify some of those cuts before they raise their hands."

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Orszag Rejects Criticism That Overhaul Bill Is Too Lax on Costs

By John Reichard, CQ HealthBeat Editor

December 2, 2009 -- Like a goalie deflecting pucks at hockey practice, White House Office of Management and Budget Director Peter Orszag shrugged off a wide array of criticisms Wednesday that the Senate health care overhaul bill misses a historic opportunity to get at the roots of rising health costs.

Rather than taking a blunt approach to cutting costs, the proposal (HR 3590) would create new mechanisms to streamline the health care delivery system and to tackle soaring Medicare entitlement spending, Orszag insisted in an hourlong meeting with reporters sponsored by the policy journal Health Affairs.

Orszag outlined—and rejected—two main and self-contradictory lines of attack on the bill: that it's too timid in terms of cost control and that its Medicare cuts are too deep to be politically realistic. "It would have been easier just to do a blunt savings and coverage expansion bill – that is not what is happening here," he said.

Even with the Congressional Budget Office declining to score big savings from "delivery system reforms," congressional budget analysts estimate the bill would reduce the deficit by $130 billion after a decade and by more than $500 billion in the second decade, Orszag noted.

But he said the measure paves the way for more fundamental change through new types of payment that involve compensation for a "bundle" of services rather than paying for individual components of care, as is the case now. Other examples include "accountable care organizations" that receive payment incentives to coordinate doctor and hospital care more efficiently; payment penalties for hospital readmissions that occur because of sloppy care; and incentives to prevent costly infections acquired in the hospital, Orszag said.

Critics deride the provisions as a bunch of pilot programs that lack real teeth. But the OMB chief said that criticism overlooks the need to test new approaches and provisions in the bill before moving them into widespread use if they pan out.

"Given the lack of attention to this key problem—rising health care costs and inadequate attention to quality in the past—we don't know enough to move to scale immediately," he said.

"We don't know exactly how to create the proper financial incentives to reduce unnecessary hospital readmissions, or to bundle payments—exactly which conditions should be covered, how should the payment structure work. Or with regard to accountable care organizations, exactly the parameters that should apply.

"Even if we knew a lot now, you would want a system in which you're trying things and then you have a mechanism in place to move to scale as you're learning what works and what doesn't. The existence of the Innovation Center and the Medicare Commission in the Senate bill gives you that mechanism, where you can go out and try bundled payments, you can try incentives for quality and a whole variety of other things," Orszag said.

The center would test new payment approaches through pilot programs and the commission would have the power to make payment recommendations that lawmakers could not easily block from taking effect.

Critics who say the bill makes cuts that lawmakers would erase in the future often cite the "SGR"—the Medicare "sustainable growth rate" payment formula—as an example, Orszag also noted. The formula requires cuts that Congress has blocked repeatedly in recent years. But the comparison isn't apt, Orszag said, because the bill addresses underlying "drivers" that raise costs not only through delivery system changes but also through a "continuous feedback loop."

The loop's components include "digitizing" medical data, funding research to identify "what works" in medicine, and payment incentives to reward higher quality care, he said. Health information technology and research comparing medical treatments—both of which are funded by the economic stimulus law—will help build knowledge of which treatments are most effective, churning out a continuous stream of data to educate doctors about the findings and reduce medical errors and inefficient types of care, he suggested.

Orszag went on to say the criticism also overlooks the fact that Congress has made large cuts in Medicare spending in the past that have largely remained in effect, citing the 1997 balanced budget law.

In addition, the new Medicare commission "provides a strong counterweight to any forces to loosen" payment curbs in the future. The commission "is always going to be putting forward proposals to improve quality and reduce costs over time." In addition, "we now have pay-go provisions that are in force and that are being obeyed in the House and Senate. If you wanted to undo legislation that was enacted this year in the future, under the pay-go rules you would have to offset the cost of doing so."

Orszag also addressed criticism that the bill doesn't do much about the deficit, saying those critics typically cite CBO estimates and when pinned down on what more should be done, cite medical liability revisions and the ability to buy coverage across state lines. But to be consistent, one should look at CBO scoring of those provisions as well—and they do not show large savings, he said.

Insurers say penalty provisions in the bill are too weak to ensure that young people who are good insurance risks will enter insurance exchanges, providing premium dollars that make coverage more affordable to older and sicker enrollees. But Orszag said "the Econ 101 approach . . . is just wrong" in predicting human behavior simply based on financial terms.

Penalties in Massachusetts for failing to buy coverage have worked because they've helped create a "social norm" in the state that one should have insurance, Orszag said, predicting a similar pattern nationally if the Senate bill passes.

He also brushed aside doubts about controlling costs through justifying treatments based on research of medical evidence. Some analysts say the recent furor over mammography recommendations by the U.S. Preventive Services Task Force show that science-based recommendations to limit care won't fly.

But Orszag said that while there are areas in which evidence on treatment practices exists but is "ambiguous," the bigger problem is "there's lots of areas and too much health spending where we simply have no evidence whatsoever about whether what's being done is beneficial."

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MedPAC Looks Afresh at Regional Variations in Levels of Care

By John Reichard, CQ HealthBeat Editor

December 1, 2009 -- One of the more intriguing aspects of U.S. health care is how much it varies by region of the country. Because of evidence that regions with lower levels of treatment in the Medicare program do not have lower quality care, policy analysts see great hope for lowering national spending growth by bringing levels of service down in some parts of the country.

Much of the excitement stems from looking at variations in Medicare spending. However, a new study by the Medicare Payment Advisory Commission (MedPAC) shows that those regional variations aren't as great as analysts thought — if one looks at actual differences in levels of the use of health care services as distinct from spending variations.

"Regional variation in service use is not equivalent to regional variation in Medicare spending," the study emphasized. "The two should not be confused."

The commission's conclusion: "Although service use varies less than spending, the amount of services provided to beneficiaries with similar resource needs still varies substantially." The study says that "we found an approximately 30 percent difference" when comparing areas at the 90th percentile of service use to those at the 10th percentile.

Spending itself isn't an accurate measure of service variation because it reflects other factors such as regional differences in payment rates and differences in the health status of Medicare beneficiaries. Payment levels, for example, can vary because one area has many teaching hospitals, which are paid higher rates, and others don't; or because of regional differences in wages.

In their study, MedPAC analysts adjusted for differences in payment rates and the health status of patients. It found that "regional variation in the use of Medicare services reflects only differences in the volume and intensity of services that beneficiaries with comparable health status receive," the commission said. The "intensity" of service refers to the difference, for example, between a sophisticated type of imaging such as an MRI scan and a simple x-ray.

Looking at the most extreme variation, the study found a nearly two-fold difference between Miami-Dade County, the area with the greatest service use, and the area with the least service use, non-metropolitan Hawaii. The low service use in Hawaii may reflect lower levels of hospital, skilled nursing facility and hospice care, the study said.

The way doctors practice medicine may account for the high levels of service use in Miami, as well as "beneficiaries' predilection for care." But another factor was also at work in Miami-Dade County: per capita spending on durable medical equipment, which includes such items as wheelchairs and hospital beds, and home health care "were both more than seven times the national average." These patterns "raise concerns about fraud and abuse by some providers."

The study also looked at geographic variations in the growth of service use as distinct from levels of service use. "Regions that have high levels of service use are not always the regions with high growth rates," it found. MedPAC researchers also uncovered variations in service use not only between regions, but between parts of the same state and even parts of the same metropolitan region.

Pioneering research at Dartmouth College in Hanover, N.H., found Medicare spending variations wider than the service level variations reported Tuesday by MedPAC.

But Dartmouth researcher Elliott Fisher said in an interview that follow-up work at the college on levels of health care use is consistent with the MedPAC findings.

"The MedPAC study is highly consistent with our own research findings," he said. "They found substantial variations in service use across U.S. regions after taking account of differences in illness and payment adjustments—as did our published research.

"Our research went further, however, and examined the kinds of additional care provided in regions with high service use. In the high spending regions, the additional spending was largely due to greater use of the hospital—for similar patients—greater use of medical specialists, and more frequent diagnostic tests and procedures."

Fisher added that "we also found that the outcomes and quality were just as good—if not better—in the lower spending regions, after accounting for any initial differences in health.

"The implications for health care reform remain unchanged: if all regions could avoid unnecessary hospital stays and treatments as effectively as the lower spending regions, Medicare spending could be reduced by 20 percent or more."

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Witnesses Say Primary Medical Care for Uninsured and Poor Katrina Victims in Jeopardy

By Anne L. Kim, CQ Staff

December 3, 2009 -- A federal grant intended to boost primary care services for residents of the New Orleans region in the aftermath of Hurricane Katrina has proved successful, especially for low-income and uninsured patients, witnesses told a House panel Thursday. But with funding for the grant slated to end in September 2010, the future of the clinics that provide these services could be in jeopardy, witnesses said.

Under the three-year, $100 million grant, many low-income and uninsured people, who previously sought treatment from hospital emergency rooms, received treatment from primary care clinics. But with a shortfall in funding for primary care services expected when the grant ends, the region's health care system could fall back to what it was before Hurricane Katrina, witnesses said at the House Oversight and Government Reform hearing on the New Orleans region's post-Katrina health care system.

"I'm not really sure that anyone is able to identify how we are going to keep this going," said Roxane A. Townsend, Louisiana State University Health Systems' assistant vice president for health systems.

The grant's end is anticipated to cause a $30 million shortfall, said Cynthia A. Bascetta, director of health care for the Government Accountability Office.

The Primary Care Access and Stabilization Grant has distributed, as of June 2009, $80 million to clinics which together provide care to more than 160,000 patients in the region, nearly half of them uninsured, said committee Chairman Edolphus Towns, D-N.Y.

Karen B. DeSalvo, executive director of Tulane University Community Health Centers, said in her written statement that most of the health centers' patients are the working poor who don't have insurance — few Louisiana businesses provide medical insurance—and do not qualify for Medicaid in the state.

"That's where the rubber hits the road in terms of sustainability," Bascetta said about the higher-than-average uninsured rate in New Orleans and its effect on the clinics' outlook for future sustainability.

Anticipating a shortfall in funding, Tulane's community clinics have worked to improve efficiency and have looked to other organizations to share best practices, but that can only go so far—the gap will need to be filled, DeSalvo said.

Other administrators of institutions that received grant money who testified at the hearing said they have looked to the philanthropic community and fundraising efforts and have started to require patient payments on a sliding scale.

But with 72 percent of his patients uninsured, it will be difficult to find a replacement for these funds until an expansion of Medicaid eligibility, said Donald T. Erwin, CEO of the St. Thomas Community Health Center.

He later said that he hopes for a potential expanded eligibility for Medicaid recipients in Louisiana, but that such an expansion would be two years away.

"We really are gaining stability, but we're still pretty fragile," Townsend said, describing a comment from a local doctor.

And although Hurricane Katrina occurred years ago, the health care infrastructure, which was especially hard-hit, has not fully recovered, said the committee's ranking Republican, Darrell Issa of California.

"Hospitals remain shuttered. Physicians remain in short supply," Issa said in his opening statement.

Towns said that the region's public hospital, Charity Hospital—which particularly served the working poor and uninsured—was destroyed during by the flooding and has not yet been rebuilt, Towns said.

Bascetta urged the committee to move quickly to decide whether to continue to the grant; otherwise, she said, providers will start to worry about job security and patients will start to become anxious.

DeSalvo also suggested allowing more flexibility in other funding sources to be redirected not just to hospitals but also to community-based centers.

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