captioning performed by vitac simple blood test will be developed that can detect early response or resistance to drug therapy. and a combination of drugs will be tested to see how best to achieve not just a remission but a cure. to put a human face on this, i would like to paint you a forward looking picture of what the precision medicine initiative can deliver for cancer in a few years. consider the hypothetical case of lily, a 52-year-old woman of asian decent. in 2018 after battling bronchitis and a persistent cough for several months, lily

goes to her doctor, who orders a lung ct scan and a new blood test developed through research supported by the precision medicine initiative to look for dna and other biomarkers circulating in her blood. the ct scan detects a tiny spot that could be inflammation from bronchitis or cancer not clear, but the biomarker test clinches the diagnosis, revealing a genetic mutation that occurs only in patients with cancer. in 2015, today her prognosis from this cancer would be pretty grim. but in 2018 that could all change. lily is treated with surgery to remove the tumor and the tumor dna undergoes molecular analysis. based on those results, lily is treated with a targeted drug that was originally developed for skin cancer but has the right properties for her tumor. she also receives a course of immunotherapy designed to kill any tumor cells that may be lurking in her body.

with this treatment a decade later, lily remains cancer free. that's a hypothetical but quite realistic of what the cancer component of this initiative could achieve. as a longer term goal, nih will launch a national research cohort of one million or more volunteers who will play an active role in how their medical information is used to prevent and manage a broad array of diseases. participant participants, some recruited, and some new volunteers, will be centrally involved in the design and implementation of this process. they will be true partners. with appropriate privacy protections they will be able to share genomic data, lifestyle information and samples linked to their electronic health records. participants will be able to have access to their own health related information. new approaches for detects and analyzing a wide array of variables will be tested in small pilot studies. focused both on prevention and

management of disease ultimately the most promising approaches will be utilized in greater numbers of people over longer periods of time to collect valuable data that will be of great benefit to both researchers and patient partners. so let me quickly give an example of how this could benefit a specific participant in the precision medicine initiative, but could also provide evidence for a new strategy for health maintenance that could be extended across the nation. consider the case of 38-year-old precision medicine initiative participant karla. it is 2020. karla feels perfectly healthy. she welcomes the chance to try out a wearable sensor that continuously monitors her pulse blood pressure, physical activity and sleep patterns. but discovers her blood pressure usually runs about 150 over 100 too high increasing her risk of stroke, heart attack kidney failure and other life threatening conditions. carla is not alone. nationwide, about 78 million americans, one out of three adults, have high blood

pressure. many like carla don't even know it. what's worse nearly 50% of those diagnosed with hypertension do not have it under control. carla consults with her doctor who confirms the need for treatment, suggests she takes an inexpensive diuretic drug. she takes her pills on schedule, returning her blood pressure to the normal range avoiding future medical crises. so the precision medicine initiative will also bring many other types of health care monitoring into this new century. current evidence suggests that the venerated annual physical exam and associated screening lab tests may not be as useful as one would hop, but new opportunities to incorporate much more sensitive and specific end cate indicators of health are helping. this will provide a powerful opportunity to assess strategies rigorously to see if they provide clinically valid information and better health outcomes for the american people. so in closing let me emphasize

that the impact of the precision medicine initiative will extend far beyond the individuals who volunteered to participate. it will push the frontiers of discovery across the entire spectrum of biomedical research from basic science aimed at finding new therapeutic targets to translational science intent on moving research discoveries into practice for maximum public health benefit. given the size of the project and its real world nature evidence of improved health outcomes derived from this initiative will be attractive for immediate application across u.s. medical care. with sufficient resources and a strong sustained commitment of time, energy and ingenuity, the future of precision medicine appears very bright. we really look forward to working together to make stories like those of lily and carla a reality. that concludes my testimony. i look forward to answering your questions. >> thank you, dr. collins. dr. desalvo, welcome.

>> thank you, senator alexander and ranking member murray and to the other distinguished senators. thank you for the opportunity to be here today with my colleagues dr. collins and dr. shuren. i'm karen desalvo were the national coordinate at the department of health and human services. when i was a medical student at tulane i could never imagine that in my career i would see medicine on such a track. we are on the cusp of being able to customize treatment for the patient in front of me based on genetic preferences and other key information instead of having to treat them as the average patient. what is more exciting is that precision medicine is not just a theory. it's already changing practice and saving lives in the u.s. we wouldn't be on this cusp but for health information technology which is foundational

to the president's precision medicine initiative. the office of the national coordinator is the federal lead for health information technology. and onc's responsibility is to advance the health i.t. infrastructure for what is six of the u.s. economy health care. we do this work through a mix of programs, meetings and technical assistance aimed at catalyzing the marketplace. we seek to spur and support innovation to help support advancements like precision medicine. at the same time, we want to provide clear and steady direction. onc has responsibility to ensure that all consumers are engaged and their interests are protected. congress created significant in health it when it passed the high tech act in 2009. the act provided funding of the support of adoption of electronic medical records on the front lines as they made the transition to use them. as the result, we're bringing health care into the digital age and we have reached a tipping point.

this strong foundation of health information technology makes it possible to bring to the bedside personalized treatment through precision medicine. the data in electronic health records married with advanced analytics, information from mobile health devices, and other sources of data including patient preferences will provide the fulsome picture of a person's health and needs. this comprehensive data picture is necessary to identify the right prevention and treatment that is not only the most effective, but also most desired by the patient. this is not just a vision about what might come, but a reality already in places like tennessee and maryland, nebraska, florida i could go on. thanks to the tools built into the electronic health record doctors are able to tailor treatment today. i spoke to folks at the university of florida health where a patient's cardiologist can order a test to see if they carry a particular variant of a gene. this test will help the cardiologist know if they are using the best medicine to

prevent a future clot in the patient's heart. this means that at a critical time in someone's life a doctor is choosing the right life saving blood thinner, tailored and specific for them. and though this kind of treatment is exciting it is indeed only the beginning. we have much work to do ahead, to see that this is available to everyone in this country as part of routine care. and onc stands ready to undertake this work. to get there we will need to stay the course in adoption to see that every american has an electronic health record we also need to go beyond the pockets of data exchange and achieve true interoperability as described in our nationwide road map. we will need to establish standards for the most fundamental clinical information that are shared by all we will also need to establish standards for new data necessary for precision medicine including genomics and environmental expo exposures and patient generated information. we will build a trust framework

that trusts privacy and establishes strong security protections. we'll work with the private sector to establish openly available apis, doorways to unlock data. in all of this would we'll remember what i hear consistently from consumers who are our principle customer they want to be able to access and share their health information including the scientists if they wish without blocking or delay. the president's precision medicine initiative is one of the most exciting ways we can bring the right care the right prevention to the right patient. only imagined a few years ago, because of advances like this and the underlying technology that we have to support it that we are on the cusp of realizing better care and health for everyone. onc stands ready to help further precision medicine with colleagues at ahs and congress. thank you, and we look forward to your questions. >> thank you, dr. desalvo. dr. shuren? >> chairman alexander ranking member murray and distinguished members of this committee thank you for the opportunity to

testify regarding fda's role in the administration's precision medicine initiative. the success of precision medicine depends upon having accurate reliable and clinically meaningful tests. because it is the results of the test that determine which patients get which drugs or treatments and whether or not they get them. imprecise medicine results from bad tests. misdiagnosis. you get the wrong treatment you get no treatment at all when you should. and as a result, patients get harmed and health care costs go up. fda's role in the precision medicine initiative is primarily focused on advancing an emerging technology called next generation sequencing or ngs. ngs tests can sequence long segments of the patient's dna or the entire genome. as a result, we're moving awith a i fromaway from the model of one test, one disease, but a test that can identify many different

diseases or the risk of developing that disease. but today there is significant barriers in place for advancing that technology and affects our research, it affects development, it affects our ability to use as optimally in health care. let me tell you what some of the barriers are and what we're doing about it. if you're making a test and want to know, is it accurate reliable and clinically meaningful, two things you need to know are the following. one, does it accurately measure what you're trying to measure? and in this case genetic variants. do i identify the right variants? we call that analytical validity. secondly, you want to know, is there a good relationship between what you measure and the particular disease? if you say it is a test for breast cancer, is that variant in fact associated with breast cancer? we call that clinical validity. today, that's difficult to do for next generation sequencing. here's why. so think about the human genome. you have about 3 million variants. and your genes are made up of

components called base pairs. there are 3 billion of them. now you want to know how accurate is next generation sequencing test to measure all of that. normally you look at each of the variants. you can't assess the accuracy of 3 million variants. it would take forever. there are good standards out there to assess it so people are struggling to make sure are the tests accurate. if you want to know, is it clinically meaningful, well you need data for that. the problem is many of these variants are uncommon. so it is hard to get a lot of clinical data. it is difficult to do clinical studies and that data tends to be siloed in the institutions that are doing the testing. so in december, we propose an entirely different framework for the oversight of next generation sequencing tests, tests we regulated for a long time. we and the developers have struggled on what to do with it. so for analytical validity, we need to have reference standards, essentially sub sets of genetic variants that if you

show accuracy in measuring those, it is reasonable to infer you're good at measuring the other variants. we gave $2 million for the national institutes in standard and technology to work with the scientific community to come up with the very first reference standard for the genome and they just released that last week. under this initiative and with additional funding support we will continue to work with nist and the scientific community on developing additional reference standards. as a result, developers wouldn't have to come to the fda to show they're analytically valid they would just meet the standard. for clinical validity we need to leverage databases where we get all of that siloed genetic information and then make sure it is standardized and it is of sufficient quality we can make decisions on it. so we're partnering with francis and his team to take an advantage of a database they have called clinvar and clingen. and working with them and the

scientific community, develop standards and best practices for vk having these databases for dure the cure ration and having interpretation. you can send your blood to different genetic testing labs and get different results. and that's what happens. so it may be because you missed the particular genetic variant or interpret it differently. with those standards in place we can now have consistent accuracy in testing and consistent clinical interpretation and reduce the time and cost to spur research, to advance technology development, and ultimately to achieve better health outcomes. thank you. >> thank you, dr. shuren. we'll now have a round of five minutes questioning. dr. desalvo in 1980, when i was governor of tennessee, i had the big idea that all eighth graders would become computer literate. so i flew to san francisco, met

with steve jobs and bought enough mac computers, big tall things then, to put in all the middle schools. it was a great idea. sounded good. forgot something. i foregot teacher training. so nobody really knew how to do it. i didn't think it all the way through to the end. i think we have something of the same problem with our electronic health care records system. we spent $28 billion a great idea, holds great promise, but it is not working the way it is supposed to. the current standards for meaningful use aren't clear. upgrades are expensive. the systems don't work well enough to share the data. we hear it is expensive to share the data because of the relationships between vendors and doctors. some of the doctors call this data blocking. you just released a report on data blocking describing these concerns. senator murray and i set up a group -- working group to work on this because of the large amount of interest in our

committee on this subject. my question is will you work with us this committee to identify the five or six steps we could take to get our electronic medical records system functioning well enough so that it supports not just the precision medicine effort that we have, but so that it functions and is something that physicians and providers can look forward to using instead of enduring? >> yes senator. very much look forward to working with you all on identifying ways that we can make this work for doctors and others on the ground, on the front lines because that's where it really matters where the work flows are sometimes not the way they ought to be they can be clunky. so we look forward to that. and i can count on our participation very actively. we have some efforts under way as the senator is likely aware. we have been working through our rules for meaningful use for certification, the blocking report and other strategies but we know there is more work to be done and we look forward to

that. >> well, good. what i'm talking about here is actually beginning to get some results. identifying the five or six steps we should take. you should know them better than we, really. dr. casty has personal experience in this he'll give us, i'm sure. and going step by step to get them done. if you can do them by administratist administratiste istist order, terrific. dr. collins 1 million genomes, i mentioned i was visited by the head of philadelphia's children's hospital. they have 250,000 sequenced genomes. and so i have two questions. how -- well, one question how many of these are already out there? i mean, you've -- you want to assemble a million. they have 250,000 in philadelphia. dr. ventner wants to assemble a million. can you get your 1 million

genomes by going to philadelphia children's hospital and using some of theirs? >> that's a great question, senator. we are trying to come up with every possible way to assemble this million strong cohort by taking advantage of things that have already been done instead of having to start from scratch. and we will in fact have a major meeting in your state on may 27-28 with a number of those who have been managing these large scale cohorts gathering together to see if there is a way to put them together in a way that would prevent -- >> you estimate the number of genomes that have been sequenced in -- >> i should be clear. when you say genome sequencing some people are referring to a sampling of some of the base pairs in the genome. a gene type a snip chip is the term used. some are talking about sequencing just the parts of the genome that code for protein. we call that the exome. to do a whole genome sequence is substantially more expensive, but is becoming more affordable.

most of the cohorts that are out there have not yet done whole genome sequencing. the group in philadelphia is doing that with some of their patients, but not with many of them. dr. venter has the intention in his human longevity institute of doing a lot of whole genome sequencing. we believe to get the maximum information you want that. >> let me ask you quickly, senator murray has emphasized the importance of making sure everyone or representative group of everyone is included in this, what about children? i mean, the suggestion was made this morning that sequencing the genome of a child for a genetic defect leading up to a particular disease can be less complicated than for an older person who may have a more complex disease. will you include children in -- and the single gene therapy treatment as part of what you

do? >> that is an active area of investigation by our working group. let mex explain that. we assembled a group of private and public experts on this whole question of this million strong cohort. they have met once last week. they'll be meeting again specifically to talk about what should be the constitution of this cohort. should children be included? what should we do about individuals that may not otherwise be asked to participate. we want to be sure this covers diversity of our population as well. and some of the cohorts that are already out there may not be as diverse as what we need. we will figure this out. i think there is a desire, however, senator, to have this be something that represents the broad swath of our country. and so there will be a strong motivation for many people to include children. >> thank you senator murray. >> thank you again, to all of you for being with us. dr. collins, we heard a lot about how precision medicine is revolutionizing the practice of medicine allowing for development of targeted cures

for individuals. but i'm also interested in the economic impact of this work. we know that precision medicine is not only about treatment but about prevention. and we have a lot to learn about how factors like environment nutrition, impact individual health outcomes. how might these discoveries impact health care costs? >> i do appreciate that question. we all agree that health care costs need to be brought under control and a lot of the concern, i think, about our current system is that it is more a sick care system than a health care system. and if we had had the opportunity to focus more on prevention instead of waiting for illness to strike, we would both improve the health of the nation and save money. the precision medicine initiative aims with this million strong cohort to focus very intensively on prevention and to find out what actually works. i mentioned in my opening statement something about the fact that our annual physicals which many of us sign up for probably don't collect the kind of data that ultimately you

would like to have that might be a tip-off to something that needs attention. and the opportunity to begin to use many of these new tools as well as these wearable sensors that are reporting on the environmental exposures and the body's performance under various situations should put us in a much better situation to monitor individual health before an illness strikes. i don't want to overpromise the value this will result in as far as cutting health care costs and bending that curve that we all want to see start downward again. i think it is a longer term initiative, but i would think over the course of time this is one of the best opportunities we will have to cut our health care costs. >> okay. you know one of the exciting things about precision medicine is that it is an empowering patients and people to participate and be full partners in discovery of new treatments. you mentioned the new mobile and wearable health technologies that are out there that allow researchers to collect data on how participant's behavior

impacts their health outcome. i know that all of your agencies are working hard to find new ways to engage patients on their own health -- in their own health and sustained participation among people involved in research studies. what are the best practices in patient engagement to ensure sustained participation throughout these precision medicine studies? >> another great question. so certainly there are a number of cohorts that have already engathd a lot of patients that we're going to be consulting with about what their experience has been, kaiser permanente has a large cohort, the mayo clinic marshfield has one geisinger in pennsylvania. all of these have done a lot of work to figure out what it is that people are looking for if they're going to participate. i think an important part of what we're trying to do with this initiative is not to think of the individuals who take part as patients they're really partners. they're participants. we want to have them at the table. we'll have a workshop july 1st and 2nd, focused specifically on

trying to get input from individuals about what they're looking for. what we could already say is people expect if they're going to be part of this that their information is going to help people. there is a lot of altruism involved in taking part. but they also would like to get information back about themselves in terms of what in -- what has been learned about their own state of health, and what has the study led to in terms of broader discoveries that might not have happened otherwise. they want to be included and informed and want to be at the table. we promise that is the attitude we will bring to this. >> okay, very good. let me ask you, dr. desalvo we have seen several high profile sophisticated attacks on health care against -- in the last few months. americans expect that health care providers and researchers are taking the necessary precautions to protect their data. that's why i mentioned working with senator alexander on this -- on the current state of cybersecurity in the health care industry. can you tell us what steps onc is taking to help researchers

keep the large amount of genetic and other health information that they are collecting secure? >> thank you for the question, senator. we agree with you. it is a major issue, it is something on top of our mind every day. the steps we are taking most recently, for example, are to require in the electronic health records that data is encrypted at rest and in motion so as you move to interoperability and dwrat is move data is moving across systems, it has to be secure and encrypted. we're working with, for example, the department of homeland security, with the national security council and others to ramp up the additional security expectations because again as data begins to move and be more liquid there is more opportunity for there to be security issues. so it is a top priority, we have taken some actions and we have some additional ones that are under way. >> dr. collins, what is nih doing to protect patient practices? >> we already initiated a genome data sharing policy, which has been in place for several years

because we have been conducting studies as you might know to try to understand genetic contributions to diseases like alzheimer's or schizophrenia or heart disease. and the conditions underwhich then that data can be shared is rather carefully overseen. qualified researchers can apply to see that data because we think much is gained by having it accessible. it has to be overseen in a way to make sure that the individuals who are looking at the data are appropriately signing on to various restrictions like not sharing it with third parties and acknowledging where it came from. that has been very successful over several years. i think we have a pretty good framework there. we think there are things that are needed in order to protect genetic privacy, make sure it is not acquired by individuals who do not have the right to do so that there ought to be something to avoid surreptitious genetic testing without their consent. >> thank you very much. >> thank you, senator murray. senator hatch and then senator

franken. >> thank you. we appreciate the work you're doing. we have been following it for many years and really appreciate -- in utah we have a big database too. i wonder if that could be part of the million person core because we have -- as i recall, let's see -- the utah population database is the largest of computerized family histories and linked with more than 22 public health and clinical records. and the scientists at the university of utah have been able to use this noncommercial resource to identify dozens of genes responsible for diseases. now the utah genome project is harnessing the power of utah's large families so it discovers new disease causing genes and conditions like diabetes, heart disease, obesity and cancer. these large families accelerate the pace of genetic discover by

identifying disease causing genes. by harnessing these advantages, it seems to me that you know, gains for using these large families and large cohorts i think our folks in utah can make significant contributions to what you're trying to do here. and i would just like to know if you think they would be useful and if i can play a role in getting the university of utah and you to -- i think you already are working together but i think you need to work with that group as well. >> we are indeed. and, senator, thank you for the question. utah has been a wonderful place as far as the ability to do remarkable research in human genetics over many decades research i benefitted from collaborating with over decades of my own research career. and, you're right, you have an unprecedented level of depth in terms of family collections. one of the things that we are

going to be wrestling with a bit in terms of this cohort is what ought to be the involvement of multigenerational pedigrees. it does bring considerable strength to the effort. and that will be a topic of discussion also at this workshop later this month in nashville. i would say the inner mountain health care system, which involves lots of folks in utah, i should have mentioned it on my list a minute ago of those who have generated cohorts, they have a strong presence in this as well. so i'm quite sure when the dust all settles this precision medicine initiative will have a utah connection. i saw that wonderful piece this morning in the news talking about some of this and i think there is a lot of excitement across the scientific community and across the country in what this might lead to and i appreciate you volunteering to help us. >> thank you so much. we do want to help you. the university of utah has a genetics department about as good as anybody can have. and in fact we irritated harvard to death by enticing them -- top

resource in utah. i think they like the mountains and the skiing as much as anything but they wouldn't leave once they get there. we love to be of great assistance to you. i personally -- i personally appreciate all three of you. i know a little bit about what each of you do. and have taken a great interest in what you do over these many years. as i'm chairman of the finance committee, i haven't as much time to spend in this committee, which i used to chair, but i want to compliment the distinguished chairman and vice chairman here for the good work that they're doing. they're terrific, terrific leaders in the united states senate. and i just want to personally express that. but, thank you. i appreciate all three of you being here and appreciate the work that you're doing. >> thank you, senator. >> thank you. >> thank you, senator. >> excuse me. >> go ahead. >> thank you senator hatch. almost had to give senator warren equal time there. just so you'll know, the order i'm calling on senators is based

on who was here at the time of the gavel went down, based on that on the republican side cassidy and collins are next and on the democratic side, franken bennett, warren and murphy are next. so senator franken. >> thank you, mr. chairman. thank you to the ranking member for holding this hearing, precision medicine is extremely exciting. those of us in minnesota thank you, dr. collins, because mayo and the university of minnesota have been doing a genomics project funded by you. so very smart on your part. this ishas really been a paradigm shift in the way we think of health care in this country. and in some part due to the health care reform law, health care providers, and insurers are moving more toward person

centered care, and i'm talking about coordinated care medical homes, acos, provide incentives and information that help doctors tailor their practice, their treatments, their therapies, to meet the needs of individual patients. and that's of course what precision medicine is all about. making sure the right patient gets the right treatment. and the right treatment doesn't, as you were saying, dr. collins doesn't necessarily mean it isn't treating people when they're sick. it is about health care not sick care and using personalized medicine should improve prevention and so we are doing health care, not sick care. dr. desalvo i do want to talk to you about -- what you said, we're at a tipping point in the

adoption of medical health records. and electronic health records. and i just want to talk about that for a second. we had a hearing on that not so long ago. and this -- there are some -- been some barriers to adoption by certain medical providers, some resistance, some because of doctors who feel like i get 20 minutes with this patient and i don't want to spend eight of it inputting data. but on the other hand, we are -- this is where we're going. so what are you doing to address that and what are some good models? i heard of things like having a scribe whose job like a medical student who is there with you and who is taking down the information. where -- we need to get there.

what are we doing to get there? >> well, senator, thank you for raising the voice of a lot of doctors in this country. i hear similar things when i travel and talk and from my own family members. and including my husband that there are -- it has been a great advancement, we're going forward, folks want to go there. however, the systems are not a part of the welcome flow in the way that we want or expect in clinical practice. the opportunities there include giving more time for providers to be able to implement the systems on the front lines so senator may be aware that in the last year we have put forward some rules with cms to provide additional flexibility and timing of the adoption of records or upgrading to new ones. and also to propose in this last set of rules giving doctors the option of a more streamlined approach to the kinds of ways that they have to report. so reducing the burden or the expectation on the amount of clicks that they must do to show

that they're functionally using the records. so we're working towards a goal of a shared expectation that this is going to be an enabler and really support them and i'm committed to continuing in that path. your point about successes on the ground, and tools that doctors have used in their office practice that otherwise, is it really important we collect those? there are health it fellows program as an example and share those? it is -- it varies by doc and office what will work for them. sometimes using dictation system and then having some assistance to transcribe over it, sometimes it is a scribe. and sometimes working with the electronic health record, they have had so much time that they have been able to make the systems as seamless as possible for them. in a state like minnesota, it is so far advanced in health it as i'm sure you're aware and had many more years in to make sure the systems are working. so we're not -- >> i don't mean to interrupt you, thank you. we can talk about this for a long time. i just want to -- i have some --

want to get one quick question in to dr. shuren, which is i have a question about how the tests at fda about how -- the tests that they're -- that the fda will be assessing, one thing that concerns me is that some tests may get quite expensive. i want to make sure that i understand how they and the highly personalized care that precision medicine can provide will benefit everyone and won't contribute to health disparities in our country. so my questions are, will these tests be considered diagnostic tests? or preventive tests? and who is going to be paying for them? >> well, in the case of next generation sequencing, they can be used potentially for both diagnosis and for predicting. and therefore prevention

purposes. it all depends upon do you have the data to show that particular test can perform in such a way? in terms of reducing costs there is the opportunity for reducing costs for those technologies to be developed because if we had the standards i talked about and we have those databases of information, it will be a lot less expensive to have the science. so in the past, you do a clinical study to show does your test actually predict or diagnose that disease? but now with the databases, you might be able to point to that data, so essentially it is the clinical community is crowd sourcing the evidence. and we just did that recently with two years ago with a test for sifting fibrosis where first we proved the test based on a subset of variants and secondly that he were able to use data in the database at johns hopkins supported by the cystic fibrosis foundation and didn't have to do a clinical study. dramatically reduce the cost of bringing the test to market. who pays for it? hopefully the insurers will pay

for it at the end of the day. because if you have good technology, it is of no value to patients if they don't have access to it and if they can't afford it, they won't have access. >> there is no question that precision medicine can bring down our costs in certain ways. i don't worry about a brave new world where certain people have access to certain things. i would just -- i'm out of time i just ask unanimous consent to submit a statement from senator klobuchar to the hearing record. >> of course. it will be done. thank you, senator franken. senator cassidy. [ inaudible ] >> dr. desalvo we have had a gao report in the past that the va and the dod needed to do much better to coordinate their records. clearly electronic medical records are critical to precision medicine, both the research and the implementation. now, i hear there is an $11 billion dod contract going out,

and i'm not quite sure that it is coordinating with the va, and we have testimony recently about how there is a lack of interoperability so one of the systems being considered two systems being considered by dod are those mentioned is lacking interoperability. so i feel like we're in a thicket here. and we can't get out. but all we know about the $11 billion on something the va system is not interoperable with. tell me i'm absolutely wrong. >> senator, that is -- the dod's acquisition of a new electronic health record is one of the most important things that will happen on the health it landscape. we're intimately involved in that. the department of defense has embedded staff with us at onc to see we're communicating the department of defense will be -- has agreed to lead the way in pointing to the standards, the senator asked me earlier what are the steps we should take?

if i could for a second -- >> i only have three and a half minutes. >> one of the most important things is to move away from proprietary standards getting in the way of the systems being able -- >> there is some open source bidders, but epic is one of them, so is serna they are not open source, correct? >> those vendiers will have to agree to use the standards that the department of defense wants to use, the ones that onc has published. so we're very pleased we're all moving in the direction to have a core set of standards that everyone will agree to so we don't run in a problem where -- >> you're telling us the va will be able to share records or that the local hospital will be able to share records with the dod? >> so the va and the dod is a separate issue because they have a different kind of technology. but, yes sir, the goal is that that becomes not only exchange, but interoperability. >> now, again, i'm, you know, i talked to medical students all the time and i don't mean to offend. when you mention the goal, i accept that it is the goal but

how likely is it to happen because it seemed like you left some wiggle room that indeed the va has a different system, it may not yet communicate yet with dod. >> but the va and dod have done now is found a slungsolution to exchange information. so you can see records from the va and the dod. they have taken the first step. the integrating of the data has the same core elements, so there is a technology issue, which is solvable. there is also a policy and culture issue, which honestly is generally the harder one and what we're facing in circumstances like information blocking which is one of the things getting in the way of interoperability and the broader community. >> you spoke of the open source. that seems by definition not to include information blocking. so who is blocking the info? >> so information blocking can happen sometimes from technology, but what we're seeing commonly is that the vendor systems will -- >> i accept that. we have had those hearings about how the vendors are blocking, so now let's take it back where we

started. my fear is that the very vendors blocking data are the ones bidding but you mentioned it is open source but return to the fact there could be blocking. so i guess i'm not clear, will the final $11 billion project be something that i at our lady of the lake in baton rouge can access data or will there be a problem with vendor blocking? >> i would need the dod to confirm the answer if you would -- however, what i would share with you is that since we described blocking and since we put out the report, the vendors have begun to pull down the fees to make the problem start to go away and we have to keep putting on the pressure. i do not think the work is done. >> i apologize. i'm already over time. if i can ask one more -- i'm almost out of time. but i guess is it part of the initial rfp that they cannot block and that the va has to be able to share as does the community hospital? >> yes that is the intention of the dod. yes, it is correct. >> it is the intention but is

it part of the rfp? >> yes. that's where they're going. >> now -- >> but that is what i understand from our -- what we have recommended as onc to the dod. so i would have to defer to the dod. >> i sometimes find recommendations are not adopted. >> i can get back with you on that. >> and i'm almost out of time, but i yield back. >> thank you. >> thank you senator cassidy. senator bennett. >> thank you, mr. chairman. i thank the witnesses for your testimony. you're fortunate to be on the cutting edge of all of this stuff. dr. shuren as i know you know, there is a thriving movement of innovation and molecular diagnostics under way thanks to human genome project and investment over the past decade. there are a number of colorado companies like core genetics and others which are developing remarkable new advanced diagnostic scenarios like ebola,

cardiovascular disease and lung cancer. the fda recently leased a draft framework to regulate lab developed tests as i wrote in a letter to you a couple of weeks ago, as always we need to balance both innovation and safety to ensure we create a fair and workable process. and there is some concern that the draft framework could require the fda to register and approve thousands of labs or minimum thousands of tests. and i wonder if you could speak to this a little bit given the size and scope of the issue. do you think -- do you intend to propose more formal regulations in this space or open to congressional action here? would that be useful? how do we get a handle on this? and create predictability. >> laboratory developed tests play an important role in our health care system today. we want to make sure we're both

facilitateing innovation and that the tests are accurate, reliable and clinically meaningful. under our proposal we try to strike that balance. i don't know we'll actually receive thousands of tests because what we heard from the lab community is that a lot of the tests they make are to address unmet needs. one thing we put out in our proposal is to say look you're making a true laboratory developed test. your health care facility your health care system is doing this and treating patients. there isn't a test out there like that that fda approved or cleared. you don't come in the door for premarket review. we'll address that unmet need. if subsequently someone has that test, send us the data, we look at it it turnses out we know with test works, our expectation is other people making that test should do the same. we now have data that that test in fact is accurate, reliable and clinically meaningful. i don't know we'll actually receive thousands. that said, we received a lot of comments on the proposal. we're working on it. and we will be making changes

before we have the final policy. >> if there is legislative work that needs to be done around this, i hope you'll let the committee know. i'm sure you will. i wanted to turn also to one other topic around innovation. dr. collins mentioned earlier how important mobile technologies have become here. really in the blink of an eye this is all changing the way doctors practice medicine and patients monitor their own well-being and as you know, probably senator hatch and i reintroduced the med tech act yesterday to ensure that the lower risk medical mobile apps are not regulated by the fda. i think we share the same goals on this. and i want to thank your team for giving us technical advice all the way through. can you talk a little bit about fda's thinking in this area? >> well, first, let me thank you and senator hatch and your staffs for the opportunity to work together on the med tech

act. we agree as we look at the space, we were looking at functions, device functions that we had been regulating for a long time. and now some of them are being put on mobile platforms. and when we found is we looked at it is that some of these lower risk functions we made better serve by no longer actively regulating them. and spur a little bit more innovation, but there is sufficiently low risk, we don't need to provide that additional fda oversight. instead, focus on higher risk medical device functions in this space. that is a nice balance on that facility innovation, but still assure a good patient safety. >> thank you. i don't know dr. collins, if you have anything you would want to add? >> only that i think your point about mobile health technologies is extremely well taken. the proliferation of really exciting opportunities is happening all around us and we certainly see this precision medicine initiative as a great opportunity to test those out because you not only want to have an application that is kind of cool, it gives you interesting information, you

want to know does it actually improve health change outcomes. and if we have a million individuals who are excited about participating in research, or essentially volunteering to become users of these kinds of technologies, whether it is next version of a watch that measures all kinds of aspects of your body's physiology or something that is detecting in the air around you what kind of exposures you're having, this would be a great opportunity to find out what works, what actually improves health care, and then what ought to then be extrapolated and oututilized across the country. >> thank you. thank you, mr. chairman. >> thank you, senator bennett. senator collins? >> thank you very much, mr. chairman. dr. collins, just this morning i met with some advocates from maine who are pushing for more research into brain cancers, such as glioblastomas. you mentioned in your written

testimony that oncology is the clear choice for enhancing the near term impact of precision medicine. and that important advances have already been made in this area.area. so i very much look forward to sharing your testimony with this group of people from main who are concerned about such devastating brain cancers. i'm wondering if you also see a role for precision med sip in neurodegenerative diseases like alzheimer's, parkinson's, als? our investments in these important areas also being considered as part of the precision medicine initiative? >> thank you, senator collins, for the question. absolutely.

we are learning disjen inging these conditions happen begin to an individual, and we know of 35 individual places in the genome where variations place an individual at higher risk and we know about one or two where individual variations actually are protective which is an even more potentially actionable finding because you want to understand that in order to develop the next generation of preventative strategies for people not so lucky as to inherent the preventative genetic variation. there is especially for any disease that's common enough that you're going to have thousands of individuals in your 1 million strong cohort an opportunity to study those at a scale that's not previously been possible, and to try to put together all things we can learn about genetic inheritance and environmental exposures, and

everything we can on the electronic health record and using mobile health. ways to come up with better detection systems of trouble in terms of cognitive changes? that's very much an intention of this. i think one of the exciting aspects of having this very large cohort is that it does not have to be just about heart disease or just about diabetes or just about alzheimer's disease. it can be about all those things because it will have the scale to do so, and we have waited a long time to reach the point where the technology would make that possible and the time is now. we've really reached a remarkable inflection point in the potential of medical research, and we should not let this moment pass. >> i could not agree more. i think it truly is so exciting. despite the federal support that you mentioned in your testimony i continue to hear from smaller health care providers about the

barriers that they face with electronic health record implementation. just yesterday i met with a physician from bangor, maine, who shared with me that putting in place a comprehensive electronic data collection system for his small practice was going to cost in excess of $230,000. this was just for the software, not for the hardware. that's no small amount particularly for a smaller independent practice that is not hospital owned. two to access information about individuals to improve diagnosis, treatment, and prevention of diseases, you discuss the important role the absolutely essential role of health information technology and interoperateact and the

standards needed. as they work to build health i.t. systems for precision medicine how can we assure that we're not leaving out rural america, smaller practices health clinics because of the cost? >> senator collins thank you for the question and particularly spotlighting one of the challenges of small practices and rural. as the center may be aware that was a particular focus we had early on in the high-tech funding part of rejoining the administration, but that team really wanted to see that rural america was not left behind, and there was great success, actually, in the adoption in many communities across the country in partnership with usda as an example. they are facing example of upgrading technology, and because of challenges we were having that we put out a

flexibility rule to give them more time to advance the cause you are describing. that physician sounds fairly exorbitant, and i'm happy to follow up with you and your staff and that physician to see what's happening there and perhaps regional extension centers in the communities that could follow up. you're correct. it's critical. critical nobody's left behind and we have to find a way to make it successful for everyone. ? thank you very much. i'm going to take you up on that offer. >> okay, thank you. >> thank you, mr. chairman. >> thank you senator, coallinlinscollins. senator warren. >> thank you, mr. chairman. this initiative could be a step forward for targeted therapies for a number of conditions m i think it's a great idea. we should have started years ago. dr. collins, you first advocated for a national genetics study to see how people's genes and environments contribute to diseases over a decade ago,

2004, is that right? >> in fact that is exactly right, and it landed with a thud at that point. that's actually the article up there on the screen that i published in 2004, and i, in retrospect retrospect, this was ahead of its time because we did not have the technology at the point where this was affordable or practical, but it is now. >> glad to hear it is now, although if we started pushing and funding back then we could only wonder how much further we'd be ahead right now, you know, congress did not make those investments, and in fact, over the past decade, nih funding has not kept pace with inflation, and that means we are years behind in doing this work. if we are serious about improving health and long term costs, we start by investing in nih. there is a proposal called 2 st

century cures to accelerate biomedical innovation, and when first released by the republicans months ago, it did not include a single dime of new nih funding for congress. last week's bill is moving in the right direction with $2 billion for funding at the nih every year for five years, and i applaud house republicans for acknowledging what newt gingrich and the drug industry said for years, nih funding is critical to accelerating cures. but much less we have to build the future that we need. dr. collins, in the late 1990s, they doubled the budget of nit r and agency funding was left to

shrink back down, if congress never doubled the budget of nih and simply kept pace, where would the budget be today? >> i have a graph in front of me about this very question and it's up on the screen because this is documentation of the problems we are now facing. what you see there the yellow line is our purchasing power for research, it's appropriation adjusted by the effects of the inflation. the dotted green line is trajectory we were ongoing back to 1970 until 1998 when we had a wonderful doubling, but we've been getting undoubleed ever since. follow the dotted green line and we stayed on the smoother trajectory, we would be over $40 billion. >> just to get back on track and to reverse the damage of the

last decade, nih, if i read it right, would need more than $12 billion in just the first year, and the house proposal does not even put that much in over the space of five years. let me just ask based on what you got here in your expert judgment, what's the annual rate of increase that nih needs to get back on track on its funding? >> let me say, we were thrilled also to see what's in the 21st century cures, mandatory, a great jolt of excitement and relief to a community that's been stressed over the past 12 years as we lose ground but to get back on a stable trajectory that results in a healthy biomedical research ecosystem, which our country depended on over great success over 50 years, i estimate in my professional judgment we need in the space of inflation at 4 to 5% a year.

that's the dotted line a year at at.at 3 3 3.7%, that was a great way to ensure this country where we led the world for decades is sustained, encouraged and innovation can go forward in the ways we want it to. >> thank you, dr. collins, $it billion for five years is better than nothing, but let's not pretend a small temporary investment that falls billions of dollars short of what we're going to need to do the job. there is a gaping hole in the nih budget, and we need a serious plan to fix it. there are many ways to make that happen, i have a medical innovation act for example, that adds another $6 billion a year. wouldn't cost taxpayers a dime but whatever we do this committee has to get serious about medical innovation, and we have to do better than the house proposal on this. thank you, mr. chairman. >> thank you, senator warren.

>> senator whitehouse. >> thank you, mr. chairman. let me start by echoing the chairman's interest in having a review on where we are on health information technology, and i read with interest the "wall street journal" piece by your predecessor, david braylor and i think it makes a lot of sense and provides, i hope, some bipartisan foundation for us to work forward. i think that the meaningful use program is obsolete and needs to be tuned up to meet the new challenges that the progress over the last year since it was past now present to us so thank you for agreeing to work with the chairman and committee on the four or five key goals we have to achieve and i urge you to think big in accomplishing

that. let's not tweedle around the edges. let's get it right. dr. collins, to follow-up a little bit on what senator warren was saying, interested you have been able to document by way of consequences for failures to adequately fund our scientific and medical research. it strikes me that you can probably tell me that there is a return on investment from the research that we do and if we don't fund the research, relosewe lose that return on investment and strikes me also that you is examples of human benefits from the scientific research, which fore gone become human costs, and you probably also pay some

attention to the country's global competitiveness in this field so if you could comment in those three areas on what you think is the payback for investment in scientific research, or to put it contrarily the cost theof not funding scientific research. >> i very much appreciate the opportunity to talk about some of those consequences. putting up another graph that in many ways reveals difficulties that are present in this country to get back in 2003. what i'm showing you there is the opportunity that an investigator who comes to nih with their best ideas has it getting funding, and those researchers in the finest innovation, and this is the main place where the work gets done and for most of the history, that's been in the space of this

is one in three, that's one-third sent away. now it's one in six. unhealthy. we look what happens when we fund up to 30 %, and there's a lot of great science that falls in the space between the 16th percentile and 30th percentile. we're not funding that. half of what we should be supporting by historical trends is left on the table and so we don't know what we're missing in that regard. the next great idea about cancer may have been one of those things that did not quite make the cut. in terms of your question about medical consequences, i'm a physician. why i love being at nih and love what we do is to hope this changes things for the better for people's health and our track record there is striking in terms of what happened in terms of longevity and disease and it's devastating we are going more slowly.

when the directors and i sit around the table to see what to do in the constrained circumstances, we still strain to push forward, just more slowly. we need advancements in cancer and all those things. we could be going faster than we are right now. in terms of the financial return on investment, that's documented over and over again. a dollar of nih grant money returned $2.20 to the local economy because of the goods and services generated as a result. we support 400,000 jobs directly across the country in all 50 states on the basis of the grants given out high quality jobs, and you asked about global kpe competitiveness, we were the leader in the world until recently. that's no longer to be taken for grant granted. we are losing ground to china, singapore, korea upping their investments in double digits. >> when they make those increases in investments, do they have an eye on us as a

target to try -- >> you bet they do. >> or are they just doing this? a general way? >> it's a little of both. they basically read our playbook from 20 years ago and saw what it did for america's economy and the spinning off of small businesses that come out of the effort, and they want to do what we did, and so i don't know if you'd say they are gunning for us, but they are basically trying to learn from our experience and recreate that in their environment. one statusistic that particularly renders this very serious. last year china filed more pa tents in bioscience than the united states did. that was not a close competition years ago and they now jumped ahead of us. those patents result in claims that are ultimately going to spin off new businesses. we have to take that more seriously. >> thank you chairman. >> does that mean china will start respecting patents more?

[ laughter ] >> i don't think i should comment on that. ? don't get the man in trouble. >> thank you, senator whitehouse. >> i appreciate you holding the hearing, giving us the opportunity to learn more about the administration's precision medicine initiative. we're excited about it because it's life saving potential, we're excited about it because it's breakthrough potential, and i'm excited about it having the honor of representing a state that's. a leader in setting the stage for some of the things we're talking about today in precision medicine from the isolation of the first end breembryonic stem cells to repeat polymorphisms at the clinic that is a major discovery that had a big impact on the

study of human genetics, and the clinic such developed very significant genetic biobank. one of the larger ones with information from over 20000 central wisconsin residents. dr. collins, i know you've been asked reiterations of the question before by my colleagues on the committee but if you have more to add, i would like to hear more about how you'll utilize the existing data like the data just described that was collected by the clinic and real world clinic health data. how will you use those and share in new ways to create personalized therapies? >> that's a great question. yes, march fooelfield is a wonderful leader in the field, and the person there overseeing their large cohort there precision

medicine effort is somebody that i think we are all looking to for his experience to share with us and he was at the white house when the president announced this on january 30th. in this workshop we're going to hold at the end of this month at vanderbilt vanderbilt, we'll look hard in the ways in this marchfield mayo, and perhaps the million veterans project as well could, in fact, be assembled into a synthetic cohort, not doing all the work from scratch, but making the whole greater than the sum of the parts because this kind of initiative really builds power by numbers. that is a reason we are excited to say that word, million, which is not in the vocab of people planning these things until fairly recently. we want to take every opportunity to build on the experience that's already been obtained in places like marchfield; and what they've

done, by the way, is found individuals by looking at their dna sequence ought to be sick, but they are not. >> right. >> they have a resilience. there's some called genetic heros, something about them we need to understand because they have resistance to disease we could learn more about and learn to share with other people by development of new therapeutics. that's one insight they have a start on but if you had a million people, you could find a lot more. >> i want to follow up on a discussion that you had just had about the research work force. you were talking about funding and the reducing percentage of research grant applications that are actually funded, and i'm curious to know what impact this initiative may have on the changing nature of the research work force. it sfriektrikes me that doctors happened on discoveries of novel

therapies in the course of treating patients, but others may not know that there are parties unique reaction that holds potential for a breakthrough in this field. what opportunities for you and nontraditional researchers are presented through this initiative? >> oh, senator, another great question, and i'm glad you brought that up because this precision medicine initiative will not reach its full potential if it does not lure and recruit all kinds of people from different disciplines to get together to work on this. i think of a parallel here with the human genome project that i had the privilege of leading where it was such a historic opportunity that people who never really thought of themselves working in that space decided to make it their passion. the same can happen here. we want computational experts with large data sets, world of big data in the best way. we want technology developers of all sorts to figure out ways not only to look at the dna

sequence but all the memetabolisms in your system, and we can look at those and there's still opportunities with mobile health and physicians who figure out how do you take this data and implement that in a real world setting in order to improve health outcomes? you know i have to say when i look at the way we practice medicine today compared to when i was a resident medicine in 1979 or 80 it's not that different. we have such a long way to go here in terms of really incorporating all the new technologies coming along. this is going to be a wonderful laboratory for all kinds of people to get involved and figure out what kind of discoveries are made and what use we can put to them. i hope it's filled with that innovative talent. >> i appreciate that. mr. chairman with your indulgence, a quick question, you can answer for the record,

but, doctor, there's incredible potential in what we're talking about, but it also strikes me that there's incredible potential for fraud, for folks as this develops, offering, selling fraudulent interventions that claim to be personalized medicine, and i would like, again, it can be after the hearing to hear more from you about how the fda works to prevent fraud and ensure patients' safety in the age of precision medicine. >> i'll take a quick moment just to -- if it's okay? just to say -- >> senator murray and i would like to know the answer too, so -- >> beyond having a test out there that does not work that's being sold, this is one of the impetous and deciding to regulate the subset of in-vitro

diagnose not ticks of laboratory tests. there's great tests out there, but other bad tests out there. for example, one in the precision medicine space and there's several though. something called kip 6 used for predicting people having coronary heart disease and their response to treatment. this is a test where we had seen data on it. we saw the test did not work, but laboratory developed tests are selling it. there was an analysis of 19 clinical studies, test does not work. there was a controlled study on over 18,000 patients, the test doesn't work. when this was reported out at 2010, at that point over 150,000 people got that test. we estimate the cost to the health care system was upwards of $2.4 billion, and that test is still available today. that does not serve parties well, and it does not serve precision medicine because that

underminds our effort to make sure we have accurate, reliable, and clinical meaningful tests out there and get the right treatment to the right patient. >> senator murray -- thank you, senator baldwin, do you have any further remarks? >> yeah. how are consumers supposed to know that? >> right now, they don't. they can't. you don't have oversight for some of the tests for knowing if they are -- >> does that mean there's no oversight for this? >> we have the authority, and what we proposed is it's time to exercise it. years ago when we set up the program, laboratory tests were simple. they were used locally, often rare conditions, and in setting up the the program, we use end forcement discretion subject to requirements not enforcing them, but over time without our being there, these tests are increasingly more complex, use the nationally relied on for

health care decisions and as a result of that and seeing some of the bad tests out there is why we move forward to regulate them, but i tell you, this question came up since the 1990s. we had nih then, department of energy saying the fda needs involved. institute of medicine came out in the 2000s to say that two advisory committees to the secretary of health and human services. we've. trying to move forward since 2007. there was a guidance to say we can regulate a subset, and the lab community said, don't chip away at this, put out a frame work, risk based and phase in implementation. we held a public meeting in 2010. we got that input. the guidance we put out frame work put out late of last year was our attempt to do that, risk based program, try to balance innovation with patient safety and phase it in over a period of time, and right now, we're addressing comments. we're still working with the community on what that right policy should be, and so -- >> you're engaging providers and patient groups as you work

through that? >> yes. got a lot of feedback on it. for example, the american cancer society said they have seen tests where they are incorrect. patients are getting diagnosed with cancer when they do not have it, and people who have cancer told they do not have cancer, and they said too we need better oversight we need accurate tests and tests do what they claimed too. >> important question. i have one more question. dr. cocollins why is 1 million the right number? >> well, a great question, and there's nothing magic for 1 million other than it's a nice round number to aim for. i actually will admit i would love to go beyond that. as i said a minute ago with conversation with senator baldwin, this is all about numbers. that's where you get power of analysis to find out what works. million is very ambitious, but a goal for ourselves to try to achieve, but given the fact we already know there's cohorts out

there that collectively have enrolled more than a million people, if we figure out how to do it, we'll figure out how. >> just listening over the last few weeks every one of our states -- we have fred hutch in my state that's developing a data base, so i don't know how you're going to work through all of this to get your cohort, but again, diversity, making sure that -- >> yes. >> representing everybody is really important. looking forward to how you do that. >> totally agree with you on that because if we just tact together existing cohorts we would not have the kind of representation that we need of the country. >> okay. thank you, thank you, mr. chairman. following up on senator baldwin and senator murray, that was the high risk low risk difference you talk about in the laboratory tests. you're focusing attention on higher risk areas is that right? >> well the high risk, lower

risk talked about earlier was on mobile -- on mobile technologies, and here, too, we try to put a focus on when we implement this to focus first on higher risk tests as we fade that in. >> oh i see, as you phase it in. any of your enforcement is it all prior approval or is it where you might be acting on a complaint? in other words, to let the marketplace run for a while on the lower risk items and police it in effect? >> yes. so for the lower risk tests, we would not enforce requirements on them other than tell us what they are and if there's problems reported. we did not force requirements on tests for rare disorders, and, again, some tests were unmet needs as well. >> okay. well this has been very universityuseful and as i said to senator murray

this is like going back to college, very interesting and we're very privileged to be students in a classroom with such distinguished teachers and witnesses on a subject that's so important one one that the president, the house of representatives, and this committee are all committed to work on. is my hope and senator murray and i will work on exactly how we will do this but it was my hope we can finish our work on our innovation initiative this year, and report it to the full senate early next year to be acted on. some schedule like that. we've got some other things to do as well but the precision medicine proposal by the president would be incorporated with that so it would be a part of all of it. we -- i did -- we did not talk about privacy today. who is going to figure that out?

>> very important question. onc and nih and the white house ostp have been engaged in this. we'll have a deep conversation about this july 1st and 2nd with the participants workshop coming. >> what we're talking about going to have a million participants or more and you use all their data and you got to figure out some way that -- to protect that. >> and we are deeply serious about doing that in the most high-tech capable way, again, with a fair amount of experience to build on but we have to take that with great seriousness. >> and i think you heard from a variety of senators our interest in helping you figure out what the -- what the steps are to actually improve the electronic medical record system, see some real results, coordinate properly with whatever the defense department is doing.

a lot of work to do there. we're not trying to catch anybody here. we're just trying to fix a problem, and we'd like to work with you to do that and to do it -- to do it soon because it -- it affects many many physicians, many many hospitals, and as we've heard today in a couple important ways it's absolutely essential to the precision medicine initiative, so there's no other -- i have a page to read. the hearing record remains open, submit information for the record in the time you'd like, i thank senator murray for the way she's conducted and help us do this in a bipartisan way learning more. next health hearing is tomorrow on higher education the committee will stand adjourned.

today marks 70th anniversary of the end of world war ii in europe. dignitaries and veterans mark the anniversary with a ceremony at the national world war ii memorial at the national mall in washington, d.c. former secretary of state albright, white house national security adviser susan rice, and author and world war ii

historian, alex kershaw will speak. there will be a flyover over the mall of dozens of world war ii aircraft. our live coverage on c-span shorts shortly at 10:30 eastern time. to mark the 60th anniversary of the air force academy michelle d. johnson will speak about the academy and role for providing future leadership for the air force, and general johnson is the first female head of the economy. live coverage from the national press club begins at 1:00 p.m. eastern here on c-span3. next, a hearing on challenges faced by health care patients and providers in rural communities. officials from the centers for medicare and medicaid services and health resources and services administration testify along with ceos and specialists from health facilities in missouri, mississippi,

washington, and kansas who talk about obstacles and opportunities facing rural hospitals. >> so the appropriation subcommittee on labor health, human services and education related agencies will come to order. glad to have all of you this morning. i want to thank the witnesses for appearing before the subcommittee today to discuss unique health care needs that face rural communities. we have two panels this morning, members should know i expect to call up the second panel around 11:00 a.m. so we have adequate time to hear from both, and, of course if for some reason we're done with the panel earlier than that, we'll go to the second panel quicker, but try to get to the second panel no later than 11:00. and we're glad everyone came today to help us talk about the issue, and certainly one of the priorities of the committee, and

one of my priorities in congress is to ensure that all americans have access to quality and affordable health care in the local communities regardless of where they live and the obstacles faced by rural health care patients and providers in rural communities are unique and significantly different than those in urban aeros albeit i'll be at the truman medical center tomorrow in kansas city, but they have another set of problems, unique problems, and inner city hospitals and rural hospitals have challenges that are unique to them. in rural health care, issues range from a lack of access to simple primary care physicians to difficulty finding a specialist. as a result, many parties have to drive long distances to receive care or simply just may not seek care until it's too late. this creates unnecessary disparities in health care not found in other parts of the

country, and ultimately costs taxpayers more in medicare expenditures than if we'd provided access in a better way. i think it's critically important that washington recognize that health care access is essential to the survival and success of rural communities across the country. i'm concerned that some of the proposals within the department's budget and recent regulations issued would disproportionally jeopardize rural health care and you affect the survival of small towns. medicare payment system fails to recognize unique circumstances of rural or small hospitals, and this administration has appeared, in my view to target rural hospitals in particular. for example, the department, once again proposed to decrease reimbursement rate for critical access hospitals and eliminate

critical access hospitals within ten miles of any other hospital. the department proposed that change for years but recently able to provide details to the congress about which hospitals would be eliminated if we look at that new mileage standard. the department has continuously issued regulations that affect small and rural hospitals more than the larger urban counterparts. cms's abrupt enforcement of the 96 hour payment of critical access hospitals and direct physician supervision rules and recovery audit contractor audits not only hinder care of patients, but consume significant amounts of medical staff time and resources to comply with those rulesment finally, begin given the fact the department requested $4.1 billion increase for the fiscal year, it's more surprising or maybe not so surprising that the

office of rural health received a $20 million cut in the proposal that the administration issues the administration, in fact, has never once asked for an increase in rural health programs. more than 46 million americans live in rural areas and rely on rural hospitals and other providers as their lifeline to care. they face ongoing challenges in assessing proper medical treatment while rural health care providers are overwhelmed with federal rules. certainly senator murray and i both have app interest in this and i look forward to working with her and the rest of the committee to ensure that all americans, regardless of where they live, have access to affordable health care and, senator murray? >> well, thank you, mr. chairman, for calling this hearing on such an important topic, and i'm very pleased to welcome all witnesses here today, but i'm particularly excited to welcome julie

peterson, the executive officer of medical center in washington, and through her work at pmh and leadership across the state, joule julie makes sure rural communities get the help they need. thank you for coming all the way out here to testify today. over the last few years we took significant steps to make our health care system work better for our families, but i believe strongly there's more to do we can do to continue to improve affordability, access, quality and building a health care system that works for women families, seniors and puts their needs first. in washington, we're one out of every five residents that live in a rural area. a critical part of the work makes sure families can find the doctors they need right in their own communities regardless of whether they live in crosser or seattle. this is true in many other parts of the country as well. this is a serious challenge i've

been focused on for a long time and proud washington state is doing so much to tackle it head on. washington state recently received a federal grant to explore the role of community paramedics in providing home follow-up care. this approach could reduce emergency room visits and avoid costs and inconvenience of leaving home to get care. i hear about the number of new patients through the affordable care act across my state, for example, four clinics in park county reported a 43% increase in patients last year. that's great news, but it also means we need to think carefully about how to make sure there are enough doctors and other health care providers to treat all of the patients. i'm glad top have the opportunity today to talk about investments we need to make so we can build on that progress. the agreement the president recently signed into law to fix the broken sgr system took

important steps to support access to health care in rural areas including funding for health centers and national health service core each playing a critical role in expanding access to primary care for struggling families especially in the rural areas, and sgr legislation extended funding for teaching health center residencies. my home state of washington was the leader in setting up these training programs and now primary care providers are trained in communities with a shortage of health care providers from spokane to yakima to our tribes. we know that training in rural areas is critical to keeping providers with an interest in rural practice in our high need communities. i'm pleased we were able to agree in a bipartisan way to sustain those investments and i hope to be able to do more moving moving forward. i'm pleased the president's budget maintains investments in other key programs that support rural health. the 340 b drug pricing program

for example, provides drugs to eligible health care providers at lower costs. 26 out of my state's 39 critical access hospitals, that provide crucial support for rural communities participate in that program. similarly, they continue to support payment for rural health clinics and centers. in my home state and many others, these facilities make sure when, for example, a parent needs to take a sick child to the doctor or a senior needs follow-up care, it's easy to get treatment in their own community. we have to ensure they have resources they need. i want to express concern that the budget proposes to cut the rural flexibility program. that program sustains and helps hospitals in the most difficult to reach communities including ten hospitals in my home state. i believe we absolutely need to seek continuous strong support in the investment for the health

and safety of families in rural communities. finally, i know rural health access is a priority all of us here care about. is the president's budget able to sustain investments as well as supporting education infrastructure to defense because it responsibly replaced harmful cuts now set to kick back in. i'm proud that last congress republicans and democrats were able to come together to reach an agreement that rolled back sequestering for fiscal years 2014-15, and now with the deal set to expire, let's build on the bipartisan foundation and prevent harmful cuts to investments in families, jobs, and our economy including critical support for the rural health care. i look forward to working with all our colleagues on this in the coming weeks and months and, again, i thank all the witnesses for being here, and, mr. chairman, thank you for holding this important hearing. this is a topic that means a lot to the people of my state. >> thank you, senator murray.

two witnesses on the first panel, shaun kav gnaw, and tom morris, associate administrator for the federal office of rural health policy health resources and services administration. we're pleased you are both here. we'll listen to your opening statements. >> okay. mr. chairman, members of the committee, i want to thank you for the opportunity to testify today on behalf of the health resources and services administration in the federal office of rural policy on the topic of rural health. pleased to discuss not only the challenges that you outlined, but also some of the accomplishments of our programs. across the department of health and human services there's a range of programs and resources that support rural communities. in to2014, this was $11 billion in grant funding that went to rural communities. my office is the focal point with improving access to care.

today, nearly 50 million people living in rural areas, that's 15% of the population spread across 80 % of the land mass in the united states. individuals in rural communities often travel further for their care, and this can impact their health care jutoutcomes. new research shows over the past 20 years life expectancy in rural areas is bigger and issen wide ping. there's a variety of initiatives like supporting health centers, building a strong health care work force and expanding the use of tele health. they focus on capacity buildings in rural communities, and fund offices of the health program ensuring there's a focal point for rural health in each of the 50 state, the flexibility grant program, and small hospital improve. grant program working with hospitals on quality improvement and stabilizing finances.

first, it supports the outreach program to provide funding for pilot programs. and they are, obviously, in central component of the delivery system because they provide accessible affordable and efficient care in underserved communities. there's nearly 1300 health centers supported nationally with 9,000 health center service sites and 50% of those service sites serve rural communities. they announced 164 new access point grants for new community health centers, 74 of those in rural communities totaling $45 million in investments going to improve access to care in rural communities. the training programs work to increase access in care by ensuring there are providers in underserved areas. the payment and scholarships for primary care providers, almost half the providers that we support located in rural communityies communities, and fy2014 health

students supported by hrsa went to 11,000 training sites in communities, and we invest in community based rural residency training and work with training tracks around the country. telehealth plays an important role in extending its reach, and hrsa funds projects in 230 rural and underserved communities and 48 critical areas including mental health. we've seen them pilot new initiatives like the emergency care and esu services and we have 14 telehealth resource sent centers that provide free information to start with telehealth or advance what they are doing in telehealth. they benefitted from the work of the council created in july 20 is 1 and the council's focus on getting federal agencies and departments to work together to coordinate and serve rural communities better and i know in our case, this led to ongoing partnership between my office and u.s. department of

agriculture and veteran affairs on a number of projects. one example is to expand to critical access hospitals. i thank you for the opportunity today to talk about rural health issues and thank you for the support of hrsa programs and i look forward to answering any questions you might have. >> chairman blunt, ranking member murray and members of the subcommittee, thank you for the tumpbt to talk about preserving access to quality health care for beneficiaries in rush areas. providing high quality care to the quarter of those living in rural areas provides unique challenges. they sl fewer physicians and hospitals, and beneficiaries reside a significant distance from the nearest provider. medicare beneficiaries represent a i higher number of the providers, making organizations particularly sensitive to changes in medicare payment policy. at cms, we have a number of steps to improve rural

beneficiaries, and created numerous opportunities for stake holders to engage with cms to understand concerns and challenges. cms has rural health coordinators at each regional office who meet monthly with central office staff and with representatives from the hrsa office of rural health policy to discuss emerging issues. cms offers rural health open door forums to provide information on cms programs, answer questions, and learn about emerging rural health issues. we're trying to remove regulatory barriers for rural health providers. last year cms reform medicare regulations identified as unnecessary, obsolete, or burden p some saving providers over the next five years. they reduced burdens on rural health care providers, for example, a key provision reloses clinics and fqhcs eliminating the requirement that a physician held to a prepgs schedule for

being on site. this provision recognizes improves to provide care at lower costs while maintaining high quality care. we are expanding care through the use of technology. medicare's telehealth benefit allows services normally requiring a patient and practitioner to be in the same location to be delivered via interactive communication system. there's physician, physician assistants, nurse practitioners and this requires that they pay for professional consultation, office visits, and psychiatry services. each year, cms solicits comments on additional services that could be billable under the benefit through the annual medical fee schedule rule making progress. in 2015 we added wellness visits psychotherapy, and prolonged enm services and exploring how to end prove the current benefit. the centers for medicare and medicaid innovation is testing

pilot programs to bring additional services to rural communities. for example the health care initiative has awarded a grant to help link now and they are pairing aspects of telemedicine and tele sigh jie try with health specialists to serve patients with behavior healths in frontier and rural conditions in wyoming, montana, and washington state. we announced the next generation aco model, currently accepting applicants to start next year and that tests expanded use of telehealth services as well. as you know, critical access hospitals serve communities that otherwise lack access to in-patient care. medicare reimburses at 101% of the reasonable cost rather than rate set by the perspective payment systems. there's more than 1300 in the united states, and here i pause just to thank congress also, for extending the medicare

dependent hospital program in the sgr repeal legislation that you recently passed. the rural health clinic program increases supply of physicians and non-physician practitioners serving in rural areas, approximately 4,000 rhcs nationwide provide access to primary care services in rural areas, and finally innovation centers is uniquely positioned to test and evaluate new models to improve access and quality care for rural communities. for example, the center is testing two models designed to support acos in rural areas. the advance aco model helps smaller practices and rural providers with less access to capital and help them get into the medicare shared savings program, and similarly the aco investment model is a new model of prepared savings to encourage new acos to form in rural and underserved areas. cms recognizes challenges faced by beneficiaries and providers in rural areas, and i look forward to working with hrsa and

congress to deliver quality care to beneficiaries regardless of location. thank you again, and i'm happy to answer your questions. >> thank you, both. i have to ask a couple questions, and we'll do five minute rounds here. on mr. morris, the department -- the budget the administration submitted would have cut your budget by $20 million did you ask for that cut? >> mr. chairman we support the president's budget and requests that came forward. we think it supports the key programs for our office and includes cometed fund edcontinued funding for program for our policy and research activities and we any that those can be most effective in meeting needs. >> so where are you going to spend $20 million less than you are spending this year? >>

>>. >> there is a decrease yes, sir. >> what programs will you decrease? >> no request in the small hospital improvement program or no request in the rural access to emergency devices program. in the case of these program and administration's request, these are challenging budget times and require tough choices and the budget reflects a request for the program that we think are effective and that we need. in the case of small hospital improvement programs we have rural hospital flexibility grant program with a $25 million request for that. that program focuses on what we see as the most vulnerable of the rural hospitals sector, the critical access hospital and there's going to be 25 million requested to support quality improvement and performance improvement working to improve states and their activities. in the case of the rural access emergency devices program, we -- this is a program that places

automatic external defib laters in rural communities, and we think the need is largely met in that program not only through federal funding, but through state and private sector funding, but we do allow people to come in through our outreach funding to get at the same issue. they could come in for outreach funding or network funding for a request in the budget and do the same thing in the sense they can develop a program that seeks to purchase supplies and put them in the communities. the remaining need out there, it can be met through the outreach program. >> and the hospital improvement program you'd continue is a $25 million program? >> yes, sir. >> that in the current year spending 25 and preparing another 25 next year? >> correct? >> the 20 this year for similar purposes goes away in the president's budget? >> yes. the program, there's no request for that, funded historically at

15 million and the other 5 million is request for emergency devices program. >> what are the -- what obstacles do you see in telehealth. we have people telling us there are still issues they are trying to work through with your department in telehealth. what do you say are the top obstacles to move forward? >> one of the issues we're trying to get at for telehealth is the issue of cross state license, and you may have providers located in one state but providing services in another state. the congress provided funding through the t lerkshealth program and we have grants with the federation of state medical boards and state and prosychology boards and working with licensing boards so that if a psychologist was practicing in missouri while providing services in another state rather than having complete two

completely different license applications, they can adopt a common license so it's easier to practice across state lines and protects patient safety in terms of licensing and credentialing for that provider. that's one way we are trying to get at it. we have been investing in telehealth for a number of years. we know it improves access to care, and a challenge is finding out what applications have the best clinical outcomes, and so evidence base for telehealth could be expanding. what we did this past year is put money into a tele-emergency based program, and we are trying to understand how do outcomes from emergency care compare to the services face-to-face? that's a question any insurerments to know about, and the more we learn about evidence base and what works best in telehealth, we can target investments moving forward. >> may we move forward with that even with the next panel there.

senator murray? >> mr. morris, i'm a strong supporter of hrsa's work force health care training programs, in particular the critical support to physicians and other providers that agree to work in our rural and under served areas, and i want to recognize your agency's important role in documenting work force shortages through the national center analysis, and i wanted to ask you, what are the current projections -- what do the current projections say about our national health care work force shortage? >> sure. demand is expected to increase for primary care services through 2020 due to the effect of the population is ageing, growing, and then there are also impacts that you referenced earlier in terms of folks having coverage results in them seeking more services, and so the national center has done some pr projection work and they estimate a shortage of 20000

full-time equivalent kwgss physicians by 2020. this is mitt kated if we take advantage of nurse practitioners and use not a service in rural communities, but even some rural communities have challenges in terms of the allied health work force and regular nursing, and so those are all challenges that they face.

they increase the national service and advantage of that is right now, we fund the service scholarship down to the level of funding available based on how under served they are. basically, what the score is in the health professional shormg area and more funding available and that in the president's budget would allow us to fund more clinicians to be supported in the community, and so that would, you know lower and rural communities have access to it. it's been a lifeline for rural communities as i noted before 50%, under 50% of the placements have real communities, and rural represents 17% of the population. >> okay.

how can we continue to leverage the health center programs to ensure residents stay in rural areas? anything we can learn from the program to attract other specialists specialists? talk to me about that? >> one of the big lessons is you can do residency training. so much of the training takes place in large academic health centers. get them exposed to training, you know the hope is they'll be interested in that training. and that would include rural communities. we know also from some of the work we do with the rural training tracks, which started in your stale in colville, washington, this is a unique model where they do one year in an academic health center and two years in a rural setting. 70% of the graduates end up practicing in rural communities. i think the evidence is strong

that if we do more community-based training, we'll meet the needs better. the teaching health centers are a first step towards it, and i think the president's request is another step toward that. >> yeah, i completely agree. i've seen this working in my state. where you practice and do your residency really makes a difference on where you stay. and when we have such a need in our rural community, having those residents in those rural communities, doing their residency, it works really well. so i hope we can continue to build on that. and i thank you. >> senator cochran? >> mr. chairman, thank you for convening this hearing on the challenges that we're facing in our rural communities throughout america in making available health care services, some of which are partially paid for by federal government agencies. and we hope to learn from this hearing ways to provide the needed resources up to the point where we are authorized to do

so. it's been brought to my attention that the health resources and services administration has released a grant notice regarding the intent to provide funding for a telehealth focused research center cooperative agreement. could you tell us more what that is and what are you looking for in an applicant and what are the goals that would be funded by this cooperative agreement? >> yeah, i think this builds on the comment i made earlier that, again, i think we know telehealth improves access. and i think the real challenge is finding out what the impact of that increased access is.

what we're hoping to do with this research center is to help build the evidence base for finding out which applications work best and deliver the best outcomes. and so what we're looking for are experienced researchers who can do comparative outcome research. so we can look at you provide a telehealth service and here is the outcome. how does that compare to whether you had it face-to-face. i think that will really inform the evidence base. >> are you encouraged by the results of your applications and those who are petitioning the government to choose them? >> we've gotten a lot of calls on this funding opportunity, just in the week it's been out there. >> mr. cavanaugh, i understand the centers for medicaid and medicare services restrict reimbursement for telehealth based on geographic locations. how do you administer that? how do you choose which urban areas, for example, are more eligible than others for telehealth reimbursement? >> thank you for the question, senator. in this statute, it gives us instruction to allow telehealth

to be provided in certain geographic areas. pleased that with help from our colleagues at the office of rural health policy a few years ago, we changed our regs to expand the definition of rural areas that qualify. but the geographic restrictions really originate in the statute. the good news is through the innovation center, which congress created, we're able to move beyond those barriers and test new models of telehealth without regard to the geographic barriers and some of the other statutory restrictions. we have a number of very interesting telehealth models that are being tested currently, including the health link model i mentioned in my testimony. >> thank you very much. >> senator moran? >> mr. chairman, thank you very much. thank you for you and senator murray having this hearing. a very important one certainly from a senator from kansas, but really for the country. let me start with mr. morris. tell me what statistics are there that demonstrate over a period of time how many rural hospitals are closing or being -- in addition to that are threatened to close. i've seen an ap story just in

the last few days indicating that 50 rural hospitals have closed, that expectations for more -- a total of 50 hospitals in the rural u.s. have closed since 2010, according to the ap. and the pace has been accelerating with more closures in the past two years than the past ten. this is according to the national rural health association. i've also seen the study from the north carolina research agency, organization indicating 47 i think is the number of hospitals that have closed. my question is do you consider those numbers accurate? and what kind of study analysis do you have about cause? what are the -- what can we pinpoint the cause for those closures? and what is your expectation for that trend in the future? >> yeah, mr. moran, thank you for that question. this is an issue we've been tracking, and those numbers align with what we've found in our and we're working with the university of north carolina.

they're one of our rural health research centers. and their work is very solid. you know, i think that we're trying to get a better handle on what is driving the closures. i don't think that there is one single factor behind it. i think what is it's very community specific sort of issue. in some cases, it may be that the community has lost population and may not have the volume to support a full service hospital. but there are also a variety of other market pressures that may be having an impact on it. it's certainly something that we're going to continue to study further, and the university of north carolina center will probably lead those efforts. we'll be happy to share with you all those findings. they are looking at a study that we hope to have out next year that looks at what happens in a community after a hospital closes. just doing some informal calling around to get a handle on this. in some communities, the hospitals close and we see a

situation where another provider can step in and still provide a broad range of ancillary was services. maybe they have expanded their telehealth. maybe they expanded the clinic hours so they're not just open 9:00 to 5:00. and the community seems okay. in other cases there is a definite gap when a hospital closes, specifically around emergency services. but with the 34 hospitals that have closed since 2013, that is an uptick from the previous two years. what is interesting is the same number of hospitals have closed in urban areas, but i think as you know, when a hospital closes in a rural area, it's a little different than when it closes in an urban area. so this is going to be a real priority for us from a research perspective over the next couple years. and we'll certainly work with our colleagues at cns and across the department to better

understand and see what other resources can be brought to bear. >> mr. morris, i'd be interested in knowing the research outcome of what happens to a community following a hospital closure, but i also would encourage for that research or -- for research to be conducted that would indicate what steps could we have taken to have prevented the closure in the first place. i'm pretty certain in most instances the research will demonstrate significant consequences, often pretty dire to a community and to patients. i think that we ought to be more prospective is how do we avoid this? what are the precipitating causes. i agree with you it's not one thing. population and demographics is something maybe we can't control here. but certainly the regulatory environment, the cost structure is important to those hospitals. physician and other health care provider recruitment, retention. and then the reimbursement rate. and on that topic, i wanted to ask you about the idea of cost-based reimbursement. what is the evidence that when we say we're reimbursing costs at 101% of costs that that has