17 March 1998

Mr. Chairman, Members of the Committee, I am Denise Ferris, President of the NATIONAL ASSOCIATION  OF WIC DIRECTORS, NAWD, and WIC Director for the State of West Virginia. I thank you for the opportunity to present testimony on Reauthorization of the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC.

NAWD is a non-profit voluntary organization  representing the nation's nearly 1900 state and local agency WIC Programs who together are committed to maximizing WIC Program resources through effective management practices and to making the WIC Program more responsive to the nutrition and health needs of women, infants (defined by WIC as 12 months of age and under) and children (defined by WIC as ages 1 to 5 years).

The mission of NAWD is to provide leadership to promote quality nutrition services,  serve all eligible women, infants and children  and, assure sound and responsive management of the Special Supplemental Food Program for Women, Infants and Children.

The WIC Program is the nation's premier public health nutrition program. It has gained this reputation and garnered strong bipartisan support because of its cost-effective, scientifically documented health successes.

WIC is a short-term intervention program designed to influence lifetime nutrition and health behaviors in a targeted, high-risk population. It is the "Gateway to Good Health," providing quality nutrition education, breastfeeding support, health care and other services in 9000 clinics administered by 1800 Local Agencies in 87 State WIC Programs.

Participation Requirements and NAWD's Position

WIC's monthly food prescription, tailored to meet the specific nutritional needs of our clients, is provided to over 7.4 million participants, including over 1.6 million pregnant, breast-feeding and postpartum women, over 1.8 million infants, and over 3.8 million children. To participate, WIC requires that clients have one or more documented nutritional risks and incomes less than or equal to 185% of the poverty level. Roughly 95% of all WIC participants are at income levels below 150% of the poverty level.

NAWD is committed to ensuring program integrity and supports states' efforts to provide for adequate levels of income documentation for those clients who do not automatically meet the income requirements for participation in WIC by virtue of their participation in Food Stamps, Medicaid or TANF. NAWD opposes the use of income documentation as an eligibility tool for those cases where individuals are homeless, pregnant teens, or other equally unique circumstances.
 
NAWD joined last fall with USDA/FNS in the comprehensive review and revision of nutrition risk criteria and is pleased to point to the success of our joint effort and the planned implementation of revised criteria for the program in Fiscal Year 1999. NAWD will continue to play a role in advising USDA/FNS on the importance of state flexibility within a framework of national nutrition risk criteria.

NAWD is committed to promoting access to WIC for working women. NAWD encourages states to adopt a variety of strategies including offering the convenience of scheduled appointments; allowing designated persons to pick up food instruments and nutrition information for participants; issuance of vouchers for multiple months; offering lunch hour appointments and where safety permits, expanded evening and early morning hours of operation; and expedited clinic visits which allow working women to accelerate their clinic visits; and the location of clinics at sites responsive to client needs.

WIC Promotes Successful Birth Outcomes

One of every five pregnant women in the United States is enrolled in WIC. Studies have shown that pregnant women who participate in WIC have longer pregnancies leading to fewer premature births; have less low and very low birth-weight babies; experience fewer fetal and infant deaths; seek prenatal care earlier in pregnancy and consume more of such key nutrients as iron, protein, calcium and Vitamin C.

It costs less than $600 during the term of her pregnancy for a woman to participate in WIC. By contrast, it costs $22,000 per pound to raise a low (less than 5.5 pounds) or very low (less than 3.25 pounds) birth-weight baby to normal weight (7 pounds). WIC prenatal care benefits reduce the rate of very low birth-weight babies by 44%. WIC participation reduces Medicaid costs on average between $12,000 and $15,000 per infant for every very low birth-weight prevented.

WIC Breastfeeding Successes and Suggestions to Enhance Those Successes

WIC promotes breast-feeding as the preferred method of infant feeding. Breast-feeding helps mothers feel close to their baby. Breast milk contains all the nutrients infants need to grow and develop. Breast-fed infants tend to be healthier because they receive antibodies from the breast milk, which protects them against infection. Despite an environment which generally does not support a women's choice to breast-feed, in 1994 WIC mothers increased their breast-feeding initiation rates to 44%, from 34% in 1990.

NAWD proposes two changes to the WIC Program that will enhance this critical effort. First, to allow states to use food funds for the purchase of breast pumps. Breast pumps are a food aid. They assist breastfeeding mothers provide breastmilk for their infants when they are at work, school, or separated from their children. Although breast pumps are the means to provide this specific form of WIC food benefit, they are allowable only as an NSA cost and compete for funds with direct services costs including staff time for counseling and assessment and computer systems. Second, to allow the certification of breastfeeding women for up to a year after delivery or until they stop breastfeeding. Currently, infants may be certified until the first birthday, but breastfeeding mothers must undergo eligibility re-determination at the infant's six month birthday. This creates a barrier for working mothers who must take time off work, discouraging them from breastfeeding.

WIC Children's Health Successes and the Need for Improved Blood Work Coordination

WIC helps to assure children's normal growth, reducing levels of anemia, increasing immunization rates, improving access to regular health care and improving diets. Forty-seven percent of all infants born in the United States are on WIC. Nearly one out of every five children in the United States are on WIC. Children are eligible for WIC up until they reach their fifth birthday. At certification, 87% of all children have at least two nutrition risk factors.

Low-income children not enrolled in WIC have a higher prevalence of anemia than those who are enrolled. After analyzing CDC's Pediatric Nutrition Surveillance System data from 1980 to 1992, the anemia rate among children at the WIC six-month recertification was 16% lower than the rate at the WIC initial screening.

Four and five-year-olds whose mothers participated in WIC during pregnancy had better vocabulary test scores than children whose eligible mothers had not received WIC benefits. Children who participated in WIC after their first birthday had better digit memory test scores than children who did not participate in WIC.

NAWD proposes that WIC coordinate its blood work requirements with other approved child health periodicity schedules. WIC blood-work testing is currently required on schedules which are completely unrelated to the usual schedule of well-child pediatric care visits. This results in both undue enrollment delays for infants and children with other known risk factors as well as duplicative testing to meet arbitrary processing time-lines. This is not consistent with good medical practice.

Challenges Affect WIC's Ability to Make the Best Use of Existing Funding

The WIC Program's well-documented successes earned WIC strong bipartisan support for expansion. Both Presidents Clinton and Bush demonstrated their commitment to WIC by moving the Program toward full funding. Congress supported the WIC Program with increased appropriations between Fiscal Year 1993 and 1996 and again in Fiscal Year 1998.

Of the federal appropriation, less than 9% of the WIC grant to states is allocated for program administration. Sixteen percent (16%) is allocated for direct care activities needed to assess eligibility, provide nutrition education, folic-acid education, breast-feeding support and promotion, screen immunization status, provide for prenatal and pediatric health care referrals, alcohol and substance abuse, child and spouse abuse referrals, issue food benefits, register voters and provide other mandated or necessary client services. The remaining 75% of the WIC grant is allocated for food benefits.

Key to the success of WIC is the combination of WIC nutrition services and the provision of supplemental foods. WIC nutrition services resources, provided through Nutrition Services and Administration (NSA) funding, are allocated to each state agency by USDA's funding formula. Last year and early this year, NAWD and USDA joined together to develop revised funding formulae for both the food and nutrition services/administrative grants to states. While this may remedy some formula related issues, spending constraints and operational limitations in WIC policies and regulations limit States' ability to maximize the use of Program resources. These constraints result from policies governing the management of the WIC federal grant and policies governing the use of funds obtained through rebate or other sources.

The WIC Program has a long history of reducing or maintaining food costs through the competitive procurement of foods; competitive procurement of retail vendors; food brand and container size limitations that do not affect the nutritional value of the food benefits; and aggressive fraud and abuse control. State-initiated and operated rebate programs currently function in all state and most Indian Nation WIC Programs. Last year, infant formula rebates saved over $1.1 billion for federal tax payers - 25% of the program's total appropriation - thereby funding services for 1.5 million  women and children. WIC's cost-containment measures are among the most effective to be found.

The savings from all these proactive efforts accrue to the food portion of the WIC grant. Funds available for direct services to the additional caseload made possible by these efforts, lag or do not exist. The bottom line - states contain or reduce costs only to be forced to return the savings to USDA because there are inadequate NSA resources to assess and certify participants, provide nutrition education, assess and refer for a host of mandated, but unfunded health and social needs, and issue food benefits.

Since 1992, states have lost millions of dollars in in-kind services. Where WIC clinic space was provided at no cost, free space is no longer available. Rents in some states have increased by as much as 300%. Salaries have increased by as much as 24%. NSA fund shortfalls prevent states from addressing infrastructure needs including new clinics, extended clinic hours to serve working women, updated management information systems and adequate staffing levels to ensure the integrity of health and nutrition services.
 
 

Proposal to Remedy Funding Challenges

To maximize resources, NAWD proposes to allow states to allocate a portion of their rebate savings or revenues to ensure appropriate levels of nutrition services and administration. Additional caseload made available by cost-containment efforts requires both food and direct services resources. States need to be allowed to use cost-savings revenues in the same way as grant funds or other program income. Identifiable and predictable food cost savings could be considered as funds returned to the entire WIC grant and not just the food grant. States would then be able to direct a portion of these funds to either food or NSA services to meet operating needs. Conversions could be capped a preset rate such as the current NSA grant ratio. In addition,
cost savings could be used to bring states up to "parity" or "potential" NSA formula grant levels. The NSA to food ratio for conversion could be adjusted when appropriations cannot fund full NSA grants.

The General Accounting Office, in its Report to the Chairman of the House Budget Committee, advises that " to encourage further implementation of WIC cost containment initiatives, the Secretary of Agriculture should direct the Administrator of FNS to work with the states to identify and implement strategies . . . to reduce or eliminate the obstacles that may discourage such initiatives . . . [which] include modifying policies and procedures to allow the states' to use cost containment savings for the program's support services . . . ."

States must have a real opportunity to develop the infrastructure, staffing and outreach capacities needed to bring WIC services to the eligible women and children who could be served through the states' creative food cost savings initiatives.

WIC and Management Information Systems, MIS, and Electronic Benefits Transfer, EBT, Technology

WIC depends on increasingly sophisticated technology to provide benefits efficiently and assure the integrity of Program services. There are limited funds available to support and strengthen basic WIC infrastructure. States absorb technological development and upgrades from operating costs. This detracts from preventive vendor monitoring, breastfeeding promotion, and clinic expansion. Infrastructure funds provided by FNS are not equitably available to states. This year, nearly 50% of these funds were diverted to prototype Electronic Benefits Transfer, EBT, development.

NAWD has invited USDA/FNS to join with us in the development of a national plan, including the identification of funding mechanisms, for WIC Management Information Systems, MIS, development, WIC EBT development and for full WIC MIS and EBT implementation. We urge the Committee to support this effort. More than fifteen geographical states do not have computers at the clinic level. Other states need major equipment and programming upgrades. Small states face disproportionate software development costs that cannot be absorbed from operating funds. Electronic card services for delivering WIC benefits will reduce fraud and error and increase the efficiency of vendor payments. Potential costs or means of funding EBT development activities must be evaluated and realistic proposals for achieving these gains developed.

Other Funding Challenges

States are aware that a major concern has continued to be the amount of carryover funds projected into the next fiscal year. It is not possible, nor is it prudent management, for WIC to expend all of its appropriated resources in a given fiscal year. WIC managers have typically experienced carryover margins of between 3% and 4% of the total WIC grant. This is well within the operating margins of the nation's fortune 500 companies. Similarly, operating margins for the nation's premier trade, professional and non-profit associations more typically, according to the American Society of Association Executives, range from between 7% and 10%. It is critical that State WIC Directors not overspend their WIC grants and therefore are cautious to spend less than 100 percent of their funding allocations.

Voucher redemptions which occur late in the fiscal year are redeemed through a state's financial system after the close of the fiscal year making it difficult for managers to predict exactly what their voucher redemption rates will be. This results in delayed information regarding the exact value of redeemed vouchers. As food costs vary over the course of the year, exact values can not be determined until vouchers are redeemed or otherwise accounted for. Financial estimates require margins that will protect the state program should actual food costs exceed available WIC funds.

Cost containment contracts make it difficult for states to expend all available appropriated funds. As in the case of vouchers, rebate transactions late in the fiscal year do not accrue to a state until early in the next fiscal year. This results in carryover monies from the previous fiscal year when rebate checks received from formula vendors are not fully utilized to cover expenses incurred in the previous fiscal year.

For these reasons, states must conservatively estimate expenditures in any one fiscal year, preventing them from spending 100 percent of their federal WIC grant. On average, states will expend roughly 97% of their grant to ensure a sufficient margin of safety in the management of the program and prevent caseload disruptions.

States have made every effort to prudently reduce the level of carryover funds available in the program, voluntarily advising USDA of available recoveries, and rendering resources available for reallocation to those states most in need of resources.

The grant management process is equally inflexible. States must target resources within 1% of their grant while lacking control over factors potentially influencing final expenditures. The lack of flexibility to respond to external conditions in a planned and orderly fashion results in unspent funds which could be used to serve more participants. Expansion requires planning, projecting, facility and staff changes, management information system's network building and customer base building. WIC's funding and fiscal year constraints impair its ability to effectively use its resources to reach people in need of the Program.

NAWD's Funding Formula Committee and USDA/FNS have negotiated changes to both the food and NSA grant formulas which are hoped to address some of these issues. It is expected that a regulation implementing negotiated changes will be published in the near future.

Again, Mr. Chairman and Members of the Committee, I thank you for this opportunity to present testimony on behalf of the NATIONAL ASSOCIATION OF WIC DIRECTORS, NAWD, and remain available along with the Association's Executive Director, Douglas Greenaway, to answer any questions you may have.