Let me start off. You indicated in your profession that cost is still a major barrier, but if cost is a major barrier, why is it that we've achieved immunization levels well above 95 percent when children are five, but we haven't when they're two? Assuredly, it is just as expensive for parents of 4 year olds as it is for 18 month olds.

Mr. SATCHER. Let's make one thing clear. When parents get ready to enroll their children in school, different States have guidelines for what's required, and in many cases what you see are people lining up at public health clinics to, in some cases, get one shot in a series like DTP, because that is all that is required in order for the child to get into school.

We're not talking about that. We are talking about completely immunizing children at the age of 2 so that they don't get illnesses between 1 and 5. So let me say to you that we're not talking about the same thing.

Mr. KLUG. But if cost is a barrier at 2 it should be a barrier at 4. The difference is that there is a requirement for the parents to do it at 4.

Mr. SATCHER. Cost is not the only barrier. We make that very clear, and that is why I pointed out to you the five points of this initiative. Cost is a very important barrier. There is a different situation at entering school.

There is not the requirement of all 11 vaccines. There are State requirements in terms of what it takes to get into school.

Mr. KLUG. The GAO indicated in its testimony that there were four studies done for the Center for Disease Control and Prevention that were never published that essentially rejected the central thesis of this entire program that cost is the major barrier. Do you agree or disagree with GAO?

Mr. SATCHER. I totally disagree. Those four studies looked at four different cities in terms of what happened in public, and, in some cases, private encounters. It started with Medicaid patients. Basically, what it pointed out was what we've said before, cost is not the only barrier. Even for people who have Medicaid, there are barriers because there are some private physicians with Medicaid who would prefer not to purchase the vaccine under Medicaid and wait 6 to 9 months to get reimbursed.

But the point of that study was not to say that cost was not a barrier. It was to say that we need to define other barriers that result in children not getting immunized when they see physicians even if they have Medicaid. We are trying to deal with that in a comprehensive program.

Mr. KLUG. Why not simply take this money and give it to the States and say if you need to spend it to buy shots, do it; but if you want to hire more public health nurses, do it; if you want to keep clinics open late at night; do it.

Why is it that we've essentially targeted $450 million already only to do one thing when even you admit that's not the only thing that stops kids from being immunized?

Mr. SATCHER. Right. And I don't want to get into the politics of this, but I will give you my opinion about the $450 million.

We spend right now $120 billion every year treating infectious diseases. It is a very good investment spending $450 million and more to immunize. In fact, one of the major problems we're facing

in this country today is, even when we treat children with antibiotics, many of the organisms are becoming resistant.

So if you have a choice between immunizing children and preventing infection as opposed to spending $120 billion a year to treat infectious diseases, then I don't think there is any compari

son.

So from our perspective, the immunization program is a very good investment, and I would think it would be ridiculous not to implement it fully.

The second thing I want to say is when it comes to the States, I think this is a Federal/State relationship. I don't believe that there is any other example that we have before us that is a better working relationship between the Federal Government and the States.

Now, on the one hand, GAO is criticizing us for not micromanaging at the State level; we don't want to micromanage this program. We want the States the manage this program and we want to support them.

Mr. KLUG. May I read you a letter from the State of Maryland dated February 10, 1995, "Dear VFC Provider, we have found serious problems with overestimates of eligible children. The combined estimates of eligible children from the currently enrolled VFC Maryland Provides indicate there are 185,000 eligible children under the age of one, or twice the number of children born in the State of Maryland every year."

Mr. SATCHER. I think there are still problems at the State level. You just illustrated a State level problem, and there are problems at the local level, and there are still problems at the Federal level in terms of issues of eligibility.

I mean, there is a very confused system when it comes to who is eligible for what.

This program was intended to try to deal with this problem. I think the State of Maryland has done a good job in many ways. I think the incentive program is an excellent one, so I am not knocking that, but that statement doesn't take away from the validity of this program.

Mr. KLUG. You are indicating there is a well-defined partnership between the CDC and the States, and here is a letter from a State saying the regulations and guidelines are so confusing they've essentially double counted all the kids born in the State.

Mr. SATCHER. I don't think Maryland was saying that was a CDC problem. I think you're misreading that.

Mr. KLUG. My interpretation is different than yours, obviously. Mr. SATCHER. Yes. CDC does not define eligibility, because the legislation defines eligibility.

Mr. KLUG. My time is up, and I will stay on the schedule to give my colleagues an opportunity to ask you questions. I may come back and follow-up some more.

Mr. Waxman?

Mr. WAXMAN. Thank you very much. Dr. Satcher, we just heard from the GAO a recommendation that we re-target VFC funding to pockets of need throughout the country based on the fact that under immunization tends to occur primarily or exclusively in very specific identifiable areas. Do you agree with this?

Mr. SATCHER. No, I don't. I think as long as you have over 30 percent of the children in this country not being appropriately immunized by the age of two, you have a nationwide problem, and it is not just a problem for the children who are not immunized; it is a nationwide problem.

That is why we spend some time and effort in Sub-Saharan African and South East Asia with the immunization program, because we realize that it is a global problem when people are not immunized.

Once we get to the 90 percent immunization level, and that is a strategy here, then more effort would be toward targeting those pockets of need but not when you have 32 percent of children across the country not appropriately immunized.

Our goal is to get 90 percent of children fully immunized. Then people ask, well, what about the other 10 percent?

Well, most of our studies suggest that once you get the 90 percent then your focus can be on targeting pockets of need.

Mr. WAXMAN. This question of cost. GAO seems to rely quite heavily on the fact that they think cost is not that much of a factor. You are a physician yourself and you've talked to other physicians. What is your view of the relative importance of cost compared with other factors that influence whether children are immunized or not?

Mr. SATCHER. I think cost is very important, and that is what we hear from physicians who practice in these communities. As some of you know, I started my career in the Watts community, not only practicing there, but while a Clinical Scholar at UCLA did an extensive study on what the barriers were to access to care. That was published in 1980 in the Journal of Family Practice, and very clearly showed that working parents especially who could not afford insurance, but who wanted to have private physicians viewed, No. 1, immunization as the most important aspect of health care. No. 2, the most important thing was to be able to go to your own family physician or pediatrician and get that service, and all other primary care services. Anything that prevents a parent from having a relationship with the physician, and that physicians being able to provide comprehensive primary care to his or her patient is not only important, it is critical, and that is what the VFC program attempts to address.

Mr. WAXMAN. We've heard arguments that the VFC program costs too much and is not cost effective. Would you please tell us exactly how much you're spending on this program this year, and describe for us the payoff in terms of the cost savings associated with the immunizations that are provided with the funds under the program.

Mr. SATCHER. Well, in 1994 we spent $572 million total, not for the VFC, but for the section 317 program, including $193 million for vaccine purchase. In addition, a total of $270 million was spent for Medicaid vaccine purchases. Medicaid was then not able to get the vaccine at the contract price. States spent another $109 million in 1994 before the VFC program started.

We estimate that in 1996, when all of the Medicaid program is under VFC, we'll spend about $365 million for vaccine purchase for the Vaccines For Children program. States will continue to spend

$109 million. We will also continue to support State's vaccine purchase infrastructure with $165 million. That's about a 12 percent increase from 1996 over 1994.

And the reason that there is such a small increase even with making a new program available is by bulk ordering and negotiating at the discounted Federal vaccine contract price, we're able to get the vaccines at a lower cost.

States are benefiting tremendously from this because they don't have to, therefore, pay for the Medicaid vaccine price component. So the States are benefiting from this program.

But the interesting thing is that we're talking about a 12 percent increase after this program is fully implemented in 1996.

Now, as times goes on there will be new vaccines, and one of the beauties of the VFC program is that it encourages research because companies know if they produce new vaccines there will be a way of paying for them.

So even though there are problems with research and development, and I certainly am concerned about that, there are also incentives in this program for that.

Mr. WAXMAN. Let's say we took this program and put it in a block grant of Medicaid. Can we assure ourselves and everyone else that the chicken pox vaccine or other new vaccine-that we'll know that there will be a national commitment to immunizing children?

Mr. SATCHER. No, I don't think we can. I think States have had real problems. They've had real problems with the Medicaid program. They've implemented it at different levels. I don't believe a Nation can afford to leave something as important as immunization as a burden for States in isolation, and I don't believe the States feel that way.

My impression is that, not only on a national level but an international level, we have a responsibility when it comes to immunization. It is just like protecting your water so that you don't have, as we had in Milwaukee in 1993, 400,000 people getting infected with cryptosporosis. That's a Federal problem. It is not just Milwaukee's problem. We can't afford to have a water supply system in this country that is not safe. We can't afford to have children that are not immunized because it is not just that State's problem. If a person gets measles, a person in the next State can get measles. We've have several examples of that. We had an outbreak in Las Vegas. Before it was over, people in Colorado and California and elsewhere had measles from this outbreak.

So we are not talking about an isolated State problem; we're talking about a national problem, and there has to be a national approach, and I think States agree with that.

Mr. WAXMAN. Thank you very much.

Mr. KLUG. Thank you.

Mr. Burr?

Mr. BURR. Thank you, Mr. Chairman. Dr. Satcher, let me say that we certainly respect the work of CDC. I think what we are here debating today is how we increase the level of immunization in children versus whether we immunize children.

I just want to set that straight. Certainly, I would be one who would vote for CDC maybe to look at military procurement and other things if, in fact, we have become that proficient at purchas

ing drugs, because it will be the first thing that I've found that the Federal Government actually would negotiate the best price versus the private sector.

Let me head in a different direction for a second. You, in your testimony—and I'm on page 2 of your written testimony-you talk about the initiatives included in five interrelated strategies to address many difficult reasons why children do not receive their immunization. One, improve the quantity and quality of vaccination delivery services.

How many children, based upon that strategy being implemented, are immunized?

Mr. SATCHER. I'm not going to play games. I don't think anybody can answer that question. You can pretend or GAO pretends that if you launch a nationwide strategy that a few months later you can tell somebody exactly how many children have been benefited.

There is no program in this country where you can do that.

I think what we can do is survey populations, and over a period of time we can look at the outcome of comprehensive strategies. I am not going to pretend that we can dissect out every strategy and say for a given strategy how much this part had in it and how much that part had in it, and I don't think we have the facilities to do that in any program in this country.

But I do think we can monitor what is happening to children, and we can look at different States and different localities, and we can see if we're making progress.

We can also compare strategies because some States, as you pointed out, have initiated one strategy. Like one State had their clinics open at night. Another State even used the National Guard, for example, and this comes under that initiative that you just described.

Mr. BURR. Understand, Dr. Satcher, what I'm trying to do as an individual is determine how CDC judges success in immunization. Mr. SATCHER. Well, I'd be happy to answer that question.

Mr. BURR. Let me go a little bit further, if I could, because I was going to ask you on all five of the initiatives that you've set up because you've said they are crucial.

Let me just go to the end of the paragraph. It says, "Taken together, these five strategies were put in place a sustainable system to protect our youngest and most vulnerable Americans." I guess my question would be if you can't gauge the steps individually of their success based upon an immunization number, then can you tell me what basis you use to reach that conclusion.

Mr. SATCHER. Let me make sure, Congressman, that I'm clear. I did not say we could not gauge the steps. You said could I tell you how many children are immunized. I don't think that is the only way to gauge the steps, and I speak as—I think most public health experts would agree

Mr. BURR. Let me go back to a GAO conclusion, and you tell me whether you disagree with that.

Mr. SATCHER. Okay.

Mr. BURR. One of the conclusions of their study was that in most cases we were above or close to the 90 percent goal of immunization prior to the implementation of VFC.