to be gained through the Sec. 140 proposal to allow consumers who serve on boards of other health organizations and agencies to be considered as consumers, rather than indirect providers. Many knowledgeable labor and management representatives currently fall into this category.

In addition, the definition of indirect provider needs to be clarified. Current regulations interpreting the law would hold that an individual who receives (directly or through his spouse) more than one-tenth of his gross annual income from entities or associations or organizations composed of entities or individuals engaged in the provision of healthcare or in such research or instruction is an indirect provider. The definition is too broad in that, carried to extremes, it could possibly eliminate many potential labor or management consumer representatives. It would be helpful, in this case, if the entities, associations or organizations were so defined as to classify their employees as potential indirect providers only if a majority of their composing entities or individuals were engaged in the provision of healthcare.

We believe that Sec. 113 which amends Sec. 1512 (b) (3) (c) (ii) to explicitly include nonprofessional health workers as provider members of the HSA governing body is long overdue. It is about time that a group that represents a majority of the healthcare industry labor force had a voice in planning healthcare delivery.

At the same time we feel that consumers should constitute

at least 60 percent of the membership of an HSA governing body. We recommend amending Sec. 1512 (b)(3)(c) appropriately.

Finally, we strongly support Sec. 141 which amends the planning law to broaden State certificate of need requirements to include expensive equipment with a value over $150,000 regardless of location except when such equipment is utilized exclusively for patients of health maintenance organizations. Healthcare costs have been unnecessarily pushed up by the increasing price and proliferation of new technology. The proposed amendment will be of great benefit in discouraging circumvention of the health planning process.

We thank the committee for the opportunity to present our views on the proposed health planning amendments of 1978 and we strongly urge you to consider our recommendations for strengthening the proposed legislation.

7

Senator CHAFEE. Thank you very much.

I see Senator Leahy is here, and if you are ready to go, Pat, we are ready,

We are delighted to have Senator Leahy here. Senator Clark, as you know, has testified previously, and mentioned that you and he had some amendments, and he outlined the six amendments briefly.

STATEMENT OF HON. PATRICK LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT

Senator LEAHY. Thank you, Mr. Chairman.

I had planned to be here at the time when Senator Clark testified, and I apologize for being late. Yesterday morning, my wife and I were in Vermont. We decided to drive back, with a load of things from our home in Vermont to our home here.

I just mention this briefly, because when we left Vermont, the snow on both sides of the drive leading up to our home was piled 10, 15, some places 20 feet high, and the temperature was 20 degrees below zero.

We drove back with absolutely no problem whatsoever. This morning, I drove the 12 miles in from McLean, Va., and I understand that National Geographic is thinking of doing a special on the trip as part of their "High Adventure Series." [Laughter.

I have found that the snow in our part of the world, Mr. Chairmanyours and mine-and the snow down here is of a different nature. Senator CHAFEE. Well, there is no question about that. I think if you left at 7 this morning-I do not know how long it took you to get in

Senator LEAHY. It took a long time.

Senator CHAFEE. Well, we look forward to your testimony.

Senator LEAHY. Thank you, Mr. Chairman. I will put most of it in the record, but I do want to commend you and the members of the submittee and Senator Kennedy for holding these hearings.

Too often, we pass laws and nobody goes back to review them or do oversight on them. These hearings are good, because members of the subcommittee know the health of rural America is not good.

Sixty percent of the medically underserved persons in this country live in rural areas. Nearly one-half of the poor and a disproportionate share of the elderly live in nonmetropolitan America.

Despite these facts, rural America receives a disproportionately small share of the Federal health dollars. I think that it is time they receive a fair share, and that means funding which recognizes the special and unique needs of rural America.

Senator CHAFEE. Senator, I apologize. I have to go over and make a brief statement at 10:45 on the floor, but Senator Javits will be taking over the Chair. I look forward to reading your statement.

Senator LEAHY. Certainly. Thank you very much, Mr. Chairman. I appreciate that. Senator Javits, it is good to see you this morning. [Whereupon, Senator Javits assumed the Chair.]

Senator LEAHY. The bill before the subcommittee, S. 2410, demonstrates an understanding of some of the present inequities in the federally supported planning program.

I would strongly endorse the proposal for changing the funding mechanism of HSA's. Greater per capita funding for less populated HSA's recognizes the increased efficiencies of economies of scale.

I also support the efforts to broaden the representation and educational functions on the various boards established by the act.

But I do not think that S. 2410 goes far enough to remove the bias against rural areas. The amendments which Senator Clark and I will introduce go a few steps further in reducing the inequities of the present system.

Our amendments focus on providing a fair share of funding, adequate representation, and program administration which considers the special circumstances of rural areas.

I strongly support the funding proposal. But I feel that special consideration should be given to HSA's with difficult planning problems posed by medically underserved areas.

I would like to concentrate on one of these provisions, the encouragement of subarea councils in HSA's covering large land areas.

At present, the act authorizes but provides no funds for subarea councils. These subarea councils expand participation through location in different places in the HSA.

Let me give you some examples of the present problem. Montana has a single HSA for the whole State, 145,000 square miles. Yet, it receives approximately the same funding as nearby Montgomery Country, which encompasses only 495 square miles.

Mississippi has one HSA and is 50 times larger than the HSA in Oakland, Calif., but both have the same size budget.

The State of Vermont covers almost 10,000 square miles, and is 200 times the size of Hudson County, N.J., yet both have one HSA, and Hudson County has a budget six times the size of Vermont's health planning buget.

I think it would be fair to say that it costs more to establish and effectively run an HSA with large geographic size than with a single county or city.

In fact, transportation costs alone make a significant difference. For example, in Wyoming, a whole State HSA, staff and board members of the HSA must use air travel as a primary means to conduct business and consequently uses a large portion of their budget merely for these transportation costs.

Therefore, not only does a large geographic size mean less accessibility for the people who might want to participate in the planning process, but it also means higher costs.

Because of that, those in geographically isolated areas, mostly the rural residents, are totally left out of the decisionmaking process.

So, Senator Clark and I have suggested a grant program for assisting in the establishment, development, and support of the subarea councils.

What we saw in the past year was a total disregard for the special needs of rural areas, when HEW published their first set of guidelines on hospitals. It was only after 55,000 letters from all across the country, cajoling from Members of Congress included, that HEW became -ensitive to the problem.

Therefore, to insure that such a situation will not be repeated and o sensitize HEW to rural America, we propose an amendment which would require the Secretary of HEW to include separate guidelines for rural areas when it was determined that the needs of the rural areas are not adequately addressed by national guidelines.

These amendments that Senator Clark and I are going to present have been developed in response to the concern of many involved in rural health care.

Mr. Chairman, I would ask that my whole statement be included as part of the record.

Senator JAVITS. Thank you, Senator. Your complete statement will be inserted at the conclusion of your testimony.

We have already heard from Senator Clark, in a very eloquent plea for relief for the rural areas under the health planning bill. We are delighted to have your statement, and to welcome the support and advocacy which you give. I can assure you, Senator, we will take it most seriously.

Now, you were going to have the amendments reported to the committee which you are putting in, I gather?

Senator LEAHY. Yes, Senator, we are.

Senator JAVITS. So that they will be before us in printed form?
Senator LEAHY. Yes; they will be.

Senator JAVITS. I assure you they will have the utmost consideration. And any supporting documents which you wish to submit, we will distribute to the members of the Health Subcommittee so they can read the backup for it, as well as your testimony.

Senator LEAHY. We will be happy to do that. As I say, the concept is an extremely good one. The problem arises, of course, when we get into rural areas, sparsely populated, a long distance between populations.

I think that perhaps your own State is the best example of how we can change from very concentrated areas such as New York City itself to areas nearer my own State, like upstate New York, where you go into some extremely rural areas.

Senator JAVITS. Right. Now, is there any cost factor which is associated with these amendments?

Senator LEAHY. There will be, depending upon what is done. Senator Kennedy, as you know, has proposed a varying formula for reimbursements. We add to that a formula which Senator Clark, I understand, has described, which varies the formulas slightly again, with recognition of special problems of transportation and so forth of rural areas.

It makes a very, very slight additional increase to that of Senator Kennedy's proposal which is already before the committee. Senator JAVITS. Fine. Thank you so much, Senator.

Senator LEAHY. Thank you.

[The prepared statement of Senator Leahy follows:]