[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





  YOU CAN'T ALWAYS GET WHAT YOU WANT: WHAT IF THE FEDERAL GOVERNMENT 
                COULD DRIVE IMPROVEMENTS IN HEALTHCARE?

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON CIVIL SERVICE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 13, 2004

                               __________

                           Serial No. 108-280

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
98-746                      WASHINGTON : 2005
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
TODD RUSSELL PLATTS, Pennsylvania    JOHN F. TIERNEY, Massachusetts
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida              DIANE E. WATSON, California
EDWARD L. SCHROCK, Virginia          STEPHEN F. LYNCH, Massachusetts
JOHN J. DUNCAN, Jr., Tennessee       CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia                 LINDA T. SANCHEZ, California
CANDICE S. MILLER, Michigan          C.A. ``DUTCH'' RUPPERSBERGER, 
TIM MURPHY, Pennsylvania                 Maryland
MICHAEL R. TURNER, Ohio              ELEANOR HOLMES NORTON, District of 
JOHN R. CARTER, Texas                    Columbia
MARSHA BLACKBURN, Tennessee          JIM COOPER, Tennessee
PATRICK J. TIBERI, Ohio              BETTY McCOLLUM, Minnesota
KATHERINE HARRIS, Florida                        ------
------ ------                        BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

         Subcommittee on Civil Service and Agency Organization

                TIM MURPHY, Pennsylvania, Vice Chairman
JOHN L. MICA, Florida                DANNY K. DAVIS, Illinois
MARK E. SOUDER, Indiana              MAJOR R. OWENS, New York
ADAH H. PUTNAM, Florida              CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia                 ELEANOR HOLMES NORTON, District of 
MARSHA BLACKBURN, Tennessee              Columbia
------ ------                        JIM COOPER, Tennessee

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Ron Martinson, Staff Director
                Shannon Meade, Professional Staff Member
                            Reid Voss, Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 13, 2004...............................     1
Statement of:
    Blair, Dan G., Deputy Director, U.S. Office of Personnel 
      Management.................................................     8
    Feinstein, Dr. Karen Wolk, Chair, Pittsburgh Regional 
      Healthcare Initiative; Dr. Neil M. Resnick, director, 
      University of Pittsburgh Institute of Aging; and Dr. Alan 
      Axelson, medical director, American Academy of Child and 
      Adolescent Psychiatry......................................    26
Letters, statements, etc., submitted for the record by:
    Axelson, Dr. Alan, medical director, American Academy of 
      Child and Adolescent Psychiatry, prepared statement of.....    46
    Blair, Dan G., Deputy Director, U.S. Office of Personnel 
      Management, prepared statement of..........................    11
    Davis, Hon. Tom, a Representative in Congress from the State 
      of Virginia, prepared statement of.........................     7
    Feinstein, Dr. Karen Wolk, Chair, Pittsburgh Regional 
      Healthcare Initiative, prepared statement of...............    29
    Murphy, Hon. Tim, a Representative in Congress from the State 
      of Pennsylvania, prepared statement of.....................     4
    Resnick, Dr. Neil M., director, University of Pittsburgh 
      Institute of Aging, prepared statement of..................    36

 
  YOU CAN'T ALWAYS GET WHAT YOU WANT: WHAT IF THE FEDERAL GOVERNMENT 
                COULD DRIVE IMPROVEMENTS IN HEALTHCARE?

                              ----------                              


                       MONDAY, SEPTEMBER 13, 2004

                  House of Representatives,
          Subcommittee on Civil Service and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Pittsburgh, PA.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
the City Counsel Room, Greentree Municipal Building, 
Pittsburgh, PA, Hon. Tim Murphy (vice chairman of the 
subcommittee) presiding.
    Present: Representatives Davis and Murphy.
    Staff present: Ron Martinson, staff director; B. Chad 
Bungard, deputy staff director and chief counsel; Shannon 
Meade, professional staff member; and Reid Voss, clerk.
    Mr. Murphy. The Subcommittee on Civil Service and Agency 
Organization will come to order.
    I would like to welcome everyone here today and offer a 
special thank you to those who traveled to Pittsburgh 
specifically to participate in this hearing.
    We are here today to look at how the Federal Employee 
Health Benefits program can enhance its service to the Federal 
employees and serve as a model for improving the performance of 
the U.S. health care system as a whole. The FEHB program which 
has often been cited as a model for employers' sponsored health 
insurance programs has room for improvement. In improving its 
service to employees, the FEHB program, as one of the largest 
buyers of health care with about 8\1/2\ million participants, 
is in a position where it can positively influence the quality 
and efficiency of the health care sector throughout the United 
States.
    The U.S. health care system faces major challenges and the 
FEHB program must lead by example. As health care costs 
continue to climb by double digits each year, it is clear that 
we cannot continue to do the same thing and expect different 
results. Open ended fee for service did not work. Managed care 
became managed money and that did not work. We need to make 
fundamental changes in the health care delivery system paragon. 
These changes would lower costs, improve efficiency and not 
just give people what they want, but indeed give them the 
health care they need. Because the Federal Government is the 
largest purchaser of health care, we have the opportunity and 
responsibility to take the lead in driving these changes.
    A recent news report began ``Scott Wallace's dog Samatha 
has computerized health records, his car does too, but he does 
not.'' While an individual may get computerized treatment 
information on his 14 year old Buick LaSabre, personal 
computerized health records that accurately and securely keep a 
patient's medical history are simply not available.
    The same report told the story of a man whose heart stopped 
due to a ``adverse drug event'' after one specialist prescribed 
medication that conflicted with what another specialist had 
already given him. It took a third doctor to figure out what 
the first two had done. Unfortunately, this kind of preventable 
accident is not an anomaly under the current system. It is time 
for the health care industry to catch up with grocery stores, 
banks and auto repair shops and provide individuals with their 
own computerized health records.
    Earlier this year President Bush unveiled his welcomed 10 
year goal of getting most Americans a personal computerized 
health record. The President's new national coordinator for 
health information technology noted that with the adoption of 
such information technology no longer will up to 100,000 people 
die each year from medical errors and no longer will we spend 
up to $300 billion a year on inappropriate treatment or up to 
$150 billion a year on administrative waste.
    The benefits of computerized health records are 
substantial. Such technology will improve the quality of care, 
reduce the redundancy of testing paperwork, virtually eliminate 
prescription errors, prevent adverse effects from conflicting 
courses of treatment, significantly reduce medical errors and 
reduce administrative costs.
    In announcing his 10 year goal the President admonished the 
Federal Government has to take the lead. FEHB program is no 
exception and should leverage its buying power to support these 
goals.
    As the Institute of Medicine's President Dr. Harvey 
Fineberg stressed in his testimony before the subcommittee in 
March, he said ``The FEHB program could promote data standards 
and appropriate deployment of information technology 
providers.''
    There are many other areas where the FEHB program can lead 
by example. One area is to expand and enhance high value 
services. These types of services, such as comprehensive care 
management, coordination of care, preventative services and end 
of life care provide a high benefit at a relatively low cost.
    First Health, which administers the largest plan in the 
FEHB program, has offered one such high value service, 
comprehensive care management. In the program since 2002 and in 
the private sector since 2000 First Health testified before the 
subcommittee in March that there has been decreased annual 
claims filed for patients enrolled in care management and a 
2003 First Health survey revealed significant levels of 
satisfaction with the care management program along with 
increase in the patient's understanding of conditions, self 
management and productivity.
    By adopting aggressive high value services the FEHB program 
can serve as an example to the private sector but reaping the 
rewards for its participants.
    I am pleased to hear about OPM launching of its new 
HealthierFeds campaign and Web site earlier this year, which is 
designed to educate and support Federal employees in making 
health care decisions. Health literacy is important at 
preventing illness, equipping the patient with valuable 
knowledge when questioning a doctor, nurse or pharmacist or 
when trying to obtain health information from other public and 
private sources. The FEHB program should continue to explore 
ways to increase health literacy and set the standard for the 
health care sector.
    I look forward to the discussion from all the witnesses 
this morning about the various ways of the Office of Personnel 
Management through the FEHB program can assume its leadership 
position in driving improvements to the U.S. health care system 
as a whole.
    I would also like to thank chairman of the Committee on 
Government Reform Tom Davis for traveling all the way to 
Pittsburgh to participate in this hearing. Also, thanks to all 
of the witnesses from Pittsburgh who are going to give us their 
wisdom throughout the morning as well.
    And I would now like to recognize Mr. Davis for an opening 
statement. Mr. Chairman.
    [The prepared statement of Hon. Tim Murphy follows:]

    [GRAPHIC] [TIFF OMITTED] T8746.001
    
    [GRAPHIC] [TIFF OMITTED] T8746.002
    
    Mr. Davis. Well, thank you, Chairman Murphy.
    As all of us here recognize the importance of the FEHB 
program to the Federal Government. It is one of the primary 
recruitment and retention goals that the FEHB covers over 8.6 
million individuals including 2.3 million Federal and postal 
employees, 1.9 million Federal annuitants and 4.5 million 
dependents. The program provided approximately $24 billion in 
health care benefits last year alone.
    We also recognize it is one of the Nation's largest 
purchasers of health care services. The Federal Government can 
and should lead by example to drive improvements in health care 
for all Americans.
    Market orientation and consumer choice have been hallmarks 
of the program's success, allowing consumers to tailor their 
health care coverage through individual needs and enabling them 
to compare the cost benefits and features of different plans.
    Health care premiums have increased by an average of well 
over 10 percent a year since 1998, a trend which promises to 
continue into the near future given the increased costs of 
prescription drugs and outpatient care. The time for action is 
here.
    There are many areas where the Federal Government can 
promote high quality, affordable, flexible, responsible health 
care for all Americans through the FEHBP, and it must do so 
particularly through the hearing today and the issues of 
promoting preventative care and the use of health information 
technology to reduce costs and medical errors.
    I commend this subcommittee for taking a look at this issue 
today. I look forward to hearing the testimony of our 
distinguish panelists. I look forward to working with all of 
you as we continue to explore how the Federal Government can 
leverage its unique abilities to see how the FEHBP cannot only 
continue to be a model for employer provided health care 
coverage, but also serve as a model for improving health care 
for all Americans.
    Thank you.
    [The prepared statement of Hon. Tom Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T8746.003
    
    Mr. Murphy. Thank you Chairman Davis.
    I ask unanimous consent that all Members have 5 legislative 
days to submit written statements and questions for the hearing 
record and that any responses to written questions provided by 
the witnesses also be included in the record. Without 
objection, it is so ordered.
    I also ask unanimous consent that all exhibits, documents 
and other materials referred to by Members and the witnesses 
may be included in the hearing record, and that all Members be 
permitted to revise and extend their remarks. Without 
objection, it is so ordered.
    On the first panel we're going to hear from the Honorable 
Dan Blair, Deputy Director of the U.S. Office of Personnel 
Management. Let me just give a little bio here first.
    He is the Deputy Director since December 2001. Prior to 
this he served as senior counsel to Senator Fred Thompson of 
the U.S. Senate Committee on Governmental Affairs. He was also 
a staff director for the House of Representatives Subcommittee 
on the Postal Service and minority general counsel for the 
House of Representatives Committee on Post Office and Civil 
Service Reform.
    Coming from Joplin, Missouri. He received a bachelor of 
journalism degree from the School of Journalism at the 
University of Missouri--Columbia and his juris doctorate from 
the School of Law at University of Missouri--Columbia in 1984.
    And now he lives in Washington, DC.
    As you know, it is a standard practice for all who testify 
before this committee to take an oath. So if all the witness 
today could please stand including those who may be answering 
questions later, I'll administer the oath.
    [Witnesses sworn]
    Mr. Murphy. Let the record reflect that the witnesses have 
answered in the affirmative. And we are ready to proceed.
    Well, Mr. Blair, thank you for joining us today. You are 
recognized for 5 minutes. Please proceed.
    You know how the lights work; green means continue, yellow 
means windup and red means--well, we will see if we can 
continue.
    Thank you, Mr. Blair.

  STATEMENT OF DAN G. BLAIR, DEPUTY DIRECTOR, U.S. OFFICE OF 
                      PERSONNEL MANAGEMENT

    Mr. Blair. Thank you, Chairman Davis, Chairman Murphy. I am 
glad to be here this morning in Pittsburgh.
    I would also like to introduce you to Anne Easton. Anne is 
our Senior Policy Analyst in OPM's Strategic Human Resources 
Policy division and will assist me should I get any technical 
questions. So, I would indulge the committee to help me rely on 
her as well.
    I am pleased to be here on behalf of Kay Coles James and 
the Office of Personnel Management [OPM] to comment on the role 
of the Federal Employees Health Benefits Program [FEHBP] in 
relation to cutting edge health care issues that could impact 
the delivery of health care services across the Nation.
    I have a written statement. I ask that be included for the 
record. I'm happy to summarize.
    To provide a context of our discussion, I want to give you 
a little background on the FEHB Program and the role of OPM as 
Program Administrator.
    The FEHB Program provides for the offering of health 
benefits for Federal workers, much like large employers' 
purchasers in the private sector. More than 8 million Federal 
employees, retirees, and their dependents are covered by the 
program. OPM administers the Program by contracting the private 
sector health plans, offering more than 200 choices to Federal 
consumers. OPM does not, however, contract the providers. We 
don't process claims, nor do we do independent clinical 
research or mandate specific program initiatives. Those 
functions are carried out by the private sector health care 
plans.
    OPM has consistently encouraged those plans to be creative 
and responsive to consumer interests and to be innovative in 
developing plan-specific programs that would benefit the 
patients while controlling costs. By working closely with the 
health plans to improve the quality of services they offer, we 
have moved the program forward without locking the health plans 
into predetermined solutions.
    You have asked me today to focus on six cutting edge issues 
in the health care arena. I want to highlight our activity in 
each area. We are closely monitoring these issues, and we work 
in these areas by encouraging and collaborating with our health 
plans and our other purchasers of health care services.
    First, let me talk about preventive services and chronic 
care. Our plans offer excellent preventive services and chronic 
care benefits. In the recent year our annual call letters to 
the carriers has stressed the importance of both preventive 
services and comprehensive care for chronic conditions. For 
example, in our call letter last year, we strongly encouraged 
carriers to provide coverage for the full range of screenings 
for colorectal cancer, and the carriers' responses were 
overwhelmingly positive.
    My written statement details some of our collaborative 
efforts with the health care community, both Government and 
private sector, to encourage initiatives on preventive 
services. One particular collaboration is with the Centers for 
Medicare and Medicaid Services and Johns Hopkins University to 
assess the needs of patients with multiple chronic conditions.
    Let me talk about the impact of good health practices on 
premiums. At OPM, we believe that Federal employees and their 
families are intelligent health care consumers, and it is to 
everyone's benefit to provide them with sound information. 
Educating Federal consumers leads to more patient involvement 
in health care decisionmaking and subsequently more consumer 
responsibility and awareness of costs. To paraphrase a popular 
advertising line, ``an educated health care consumer is our 
best customer.''
    As one way to achieve this goal, OPM last year launched the 
HealthierFeds Campaign in support of President Bush's 
HealthierUS Initiative. The campaign places emphasis on 
educating Federal employees and retirees on healthy living and 
best treatment strategies. It established a consumer Web site 
aimed at providing information on nutrition, physical fitness, 
avoidance of risky behavior, and prevention. We also operate 
wellness programs.
    One cutting edge issue we would like to talk about today is 
pay for performance. Many health plans who participate in the 
FEHB Program engage in techniques that encourage high standards 
of quality. Our written statement details a few examples of 
this work. However, since FEHB law does not allow for premium 
differentials and since OPM contracts with health plans, not 
providers, we have no mechanism to reward providers directly 
for superior performance. However, we will continue to monitor 
and encourage developments in the industry and will consult 
with health plans as they evaluate various approaches and begin 
to assess best practices.
    In your opening statement today you referenced President 
Bush's Executive order for health information technology. In 
response, OPM issued a report expressing our intent to explore 
a variety of options to speed the nationwide phase-in of health 
information technology or HIT. These options are detailed in my 
written statement.
    Finally, I would like to talk about measuring efficacy and 
value of alternative treatments. As I've mentioned, OPM is a 
large purchaser of employee health benefits, but we do not 
perform clinical research. We do, however, work with health 
plans and others and support their efforts. We do not preclude 
FEHB plans from voluntarily participating in studies, and we 
encourage them to include our Federal members in such studies. 
OPM relies on other Federal agencies for medical research. For 
example, for benefits coverage such as drugs and biologicals, 
we rely on the Food and Drug Administration.
    Further, OPM continues to stress health literacy by 
encouraging FEHB enrollees to become more informed about their 
health care. We provide information on our Web site and 
participate in various groups that stress health literacy, such 
as the National Quality Forum and the Quality Interagency Task 
Force.
    In summary, while the primary role of OPM as administrator 
of the FEHB program is to contract with health plans to provide 
health care coverage for Federal employees, retirees, and their 
families, we have used our leverage as a major purchaser to 
facilitate meaningful efforts by the health plans to improve 
the quality of services they provide. Within the framework of 
this mission, we believe we can and should contribute to the 
overall efforts to make and keep the American health care 
system among the best in the world.
    Thank you again for your invitation to testify. I am happy 
to answer any of your questions.
    [The prepared statement of Mr. Blair follows:]

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    [GRAPHIC] [TIFF OMITTED] T8746.011
    
    Mr. Murphy. Thank you.
    I will defer now to Chairman Davis for some questions.
    Mr. Davis. Mr. Blair, let me ask, health care savings 
accounts are something that the Congress has now put into 
application to a limited extent in the private sector. I know 
that OPM has been looking at this. One of the arguments against 
it, that I hear from some of my Federal employee groups and 
particularly the retired Federal employees, is that this takes 
people that are paying into a larger pool out and their dollars 
would be out of that, which would raise costs to other people. 
Obviously, to the government workers and the like and it offers 
a great opportunity for some savings. What are your feelings 
and what have we done with that?
    Mr. Blair. We feel that health savings accounts offer a 
viable alternative and a good option for Federal enrollees. In 
our call letter this year we encouraged plans to look at those 
and to come up with plans to offer something like that.
    We believe that if adverse risk selection should occur that 
we could minimize it by adjusting benefits and looking at this 
over time.
    Federal employees do not migrate dramatically from one plan 
to another. So I think should adverse selection occur, we can 
take steps over the plan period to minimize anything like that. 
But again, I think that this is an example of responding to 
developments in the health care field. It would improve the way 
that enrollees utilized their own health care dollars. I think 
it makes good sense for enrollees to look at something like 
that. It is an option that is being encouraged in the private 
sector and we should not deny Federal enrollees that 
opportunity either.
    Mr. Davis. Given that the idea of pay-for-performance is 
beginning to catch on regarding the quality of centered 
programs, how can the FEHBP use its leverage to encourage plans 
to develop innovative approaches to improve it quality?
    Mr. Blair. Well, it is beginning to catch on. It is a 
relatively new concept in the health care field. There are 
really no standardized metrics out there.
    In addition, since we contract with the insurance plans who 
then in turn pay the providers, we really have an indirect 
impact on this. However, it is not an insignificant one, and it 
is something that we need to continue.
    What I think we want to look at is what works best in the 
field right now.
    A number of the plans out there already have some 
initiatives underway in which pay for performance is being 
utilized. I believe Blue Cross/Blue Shield has about 20 
initiatives out there. And I want to say that a Blue Cross/Blue 
Shield affiliate in this area, Highmark, is engaged in a 
similar program. CMS is engaged in looking at pay for 
performance. And they are a direct provider. They are a direct 
reimburser of health care providers as well.
    So, I think that there is a lot of activity in this field. 
There are no standardized metrics, however, and this is 
something that, while we are certainly encouraging plans to 
move in this direction, we want to take note of what the best 
practices are before we would standardize anything.
    Mr. Davis. With regard to quality measures and critical 
areas in hospital care, such as heart attacks, heart failure, 
diabetes, how can the FEHBP ensure that such data on providers 
is in the hands of every plan member?
    Mr. Blair. Well what we do is urge our plans to get 
accredited. I am told that almost three quarters of plans do 
receive accreditation.
    In addition, we do consumer surveys. But I think that what 
we need to do in this area is really move toward what President 
Bush's vision is, and that is an electronic patients' data file 
that will be easily accessible by providers as well as by 
patients. That Executive order was issued last spring. And this 
past summer OPM issued a report on how we can help the 
President achieve that vision over the next decade. And we came 
up with a number of interesting ideas.
    One of the things that we suggested that we look at is how 
can we increase the use of what is called inter-operable health 
care technology or health information technology [HIT]. And 
there are ideas such as giving incentives so that when the 
doctor writes a prescription, that he or she writes that 
prescription on a hand-held device which is then transmitted to 
the pharmacy, which is probably an online pharmacy, and then 
have the prescription filled and delivered to the employee. But 
you would also want to have other health care providers have 
access to that information.
    You certainly have privacy concerns with this. But as 
Chairman Murphy referenced in his statement, it is certainly an 
area that we need to go in if we are going to practice medicine 
in the 21st century in the right way.
    Mr. Davis. The chairman did note that. It is an information 
and transaction process intensive industry. But we choose to 
spend less on information technology in health care than in 
almost any other sector of the economy. It is not true that it 
is OPM's fault, but how can we make the FEHB Program better? 
How can we promote this health information technology? What 
else can we do at the congressional level?
    Mr. Blair. Well, I think that what we use here is the 
information that we have, the ability that we have when we 
manage the program. For instance, from our report we would 
strongly encourage health plans to adopt systems that are based 
on Federal health architecture standards. We would encourage 
those plans to highlight provider directories to indicate 
individual provider HIT capabilities.
    We had about nine recommendations, and I would like to 
include those for the record. But basically what we want to do 
is provide incentives for health plans to better utilize health 
information technology.
    Right now the fee structure is based such that maybe 
providing incentives in the profit area for something like 
this. Again, this is not taking place overnight, but this is a 
direction that we are going. It is a very exciting area, and I 
think that it can lead to better health care delivery for 
everyone.
    Mr. Davis. OK. Thank you very much.
    Mr. Chairman.
    Mr. Murphy. Thank you, Chairman Davis.
    Mr. Blair, let me followup on a couple of these issues 
here.
    On the information technology, I have a bill H.R. 4805 
which tries to get electronic prescribing just for Medicare 
alone with estimates it would save about $27 billion a year 
plus thousands of lives. It seems to me we need to be doing 
some of these things, that the Federal Government can help fund 
some of these startups. The purpose of this hearing, of course, 
recognizing if we have 8.5 million enrollees just in FEHBP 
enrollment, we should be the juggernaut that is really driving 
some change in the Federal Government.
    But let us see this information technology issue. What do 
you see are the practical barriers out there in the health care 
delivery system that is preventing them from doing this 
naturally? We are talking about saving lives, saving money by 
doing these things, but what are the barriers that the Federal 
Government is going to encounter in trying to enact some of 
these?
    Mr. Blair. The FEHB program itself contracts with the 
health care plans. We need to encourage the health care plans 
to encourage those providers to have access and learn and 
develop and utilize such technology. I would not call that a 
barrier, but that is the direction that we would start to 
encourage the plans to move.
    We work with a number of organizations that have both 
public and private sector affiliation; the National Quality 
Forum, the Quality Interagency Coordination Task Force. All 
these are areas in which better technology is being utilized 
and which advocate for better use of technology.
    The other barriers would be, you know, what do providers on 
their own have to do? You know, what do doctors, what are 
hospitals, what do nurse practitioners, the whole wide range of 
health care providers, have out there now, and what access do 
they have to technology and how can that technology talk to one 
another? I think that would be the challenge in making sure 
that we have a system which is truly interoperable and that can 
benefit the patient.
    Mr. Murphy. One of the things we will have from our next 
panel and one of the reasons we are doing this hearing in 
Pittsburgh, is that we have some local experts who are moving 
in some of these areas and I hope you will be able to stick 
around to hear that.
    But I want to go back to a point here about the pay-for-
performance. Can you give me an example specifically how that 
works? Now particularly again, thinking here that we are trying 
to move 8\1/2\ million people as being the force behind getting 
a physician's office, hospital, etc., to move toward this, can 
you give me an example, or walk me through a patient care and 
how that would work?
    Mr. Blair. I can, and why do I not provide that for the 
record as well. But I have here a Highmark Blue Cross/Blue 
Shield, and they had a performance based incentive program. And 
what they have done is that they have tried to encourage 
quality care by reducing variation in care. They share 
information with physicians which helped them provide care 
based on accepted clinical standards, while reducing variations 
in care. Each physician practice has a designated plan, a 
medical management consultant who are experts skilled in 
process, development and improvement.
    They estimate that costs for the performance incentive 
program members did not increase as fast as the network, and 
they saw an average savings of more than $22 million.
    And so you can see where although this is still in its 
infancy, that pay-for-performance does have the potential for 
driving better health care delivery to patients and to 
Americans across the country.
    Mr. Murphy. Well, let me also ask this technical question. 
I know when I was a member of the State Senate and wrote the 
patient bill of rights we have now in Pennsylvania, one of the 
barriers we saw happen with managed care was it was supposed to 
operate this way. A medical practice or hospital would see the 
lump sum of money to cover 5 or 10 or 50,000 enrollees with the 
idea being that if they took good care of those patients, they 
would save money and there was an incentive with that, and then 
otherwise they would reap the benefits. It is supposed to be, I 
guess, a quasi thing of moving in this direction of pay-for-
performance, but you are talking about something entirely 
different. It is not just if you do not spend, you get to keep 
it, you are talking about a whole different area of almost a 
rewards system for----
    Mr. Blair. Well, there are financial rewards. But again, in 
this area I am told that the metrics are not there yet. And so 
that is why before you would want to encourage plans to adopt 
something, you want to make sure that there are some 
standardized metrics across the board.
    This area does have a potential benefit for everyone, but 
when you are moving in this area you need to be mindful of the 
physicians' injunction to first ``do no harm,'' and that you 
want to make sure that encouraging adoption of any standard 
that might be national, while we would not want to mandate 
anything like that, we would want to encourage plans to do what 
is right. And before we do that, though, it seems like there is 
quite a bit in this field, there is quite a bit of innovation 
that people are going in different directions. But this is 
something to continue to monitor. I think there is great 
potential for cost savings, but more so there is better 
potential for better patient care, and that is what we want to 
drive.
    Mr. Murphy. And how about this area of using health 
education and healthy choices and good health care practices? 
Again, past barriers have been health care plans have sometimes 
thought well the average enrollee may have that plan for 18 
months or so and then move on into another plan, although here 
in the Pittsburgh region we have two carriers, basically, the 
dominant forces in the marketplace. But many times it seems the 
plans really have not wanted to make investments in prevention 
and health choice and health education. How would that work in 
what you are saying?
    Mr. Blair. Well, we certainly encourage that through our 
call letters. And I think that we have seen good preventive 
care plans offered by a wide range of FEHB plans.
    Also, each year in the Federal sector we have what is 
called an Open Season that you can change plans. And during 
this Open Season you have Web-based information, you have plan 
brochures, you even have the private sector getting in on this 
by offering comparisons to other plans.
    Again, it is up to the individual enrollee to educate him 
or herself, but there is information out there that can help 
them place which health care plan would probably be best to fit 
their needs. We encourage that. We think it is a good idea.
    Plus, the HealthierFeds Program that we have implemented to 
support President Bush's initiative is another way and we have 
a Web site devoted to that.
    Underlying this whole concept, though, is taking and 
assuming responsibility for your own health care. That the 
patient's relationship with his or her doctor, assuming those 
responsibilities for your health care, making health care 
lifestyle changes are all part of an overall move that you have 
to assume responsibility for yourself and educate yourself. The 
choices are out there. We want to encourage the best education 
out there. Individual plans will help in this upcoming Open 
Season and you'll see health fairs around the country. There 
will be health fairs in individual agencies. I think we even 
have one up in the Cannon Caucus Room each year in which the 
plans are up there educating Members and staff on what might be 
the best choices. But again, I think that's the hallmark and 
one of the high points of the Federal system is this idea of 
choice. The idea is that this choice is to be an educated one, 
and we provide members with that kind of education to make 
their best choices.
    Mr. Davis. Mr. Chairman, just to followup.
    There has been a lot of talk about extending the principles 
of FEHBP nationally. One of the problems I have had, 
representing a district of 50,000 Federal employees, is if you 
open the current FEHB Program to everybody, it just changes the 
whole mix. Federal employees tend on average to take better 
care of themselves than others, and all those things change. 
But do you think this model could be used nationally, maybe 
with separate programs, or not?
    Mr. Blair. Well, I think that is a big question. I am not 
sure I am prepared to answer that. I would say that the 
principles underlying the program are something that could 
stand as a foundation nationally. And, I think the principles 
are choice and competition, no mandates, but encouraging plans 
to exercise the dynamic of the marketplace, the dynamic of the 
health care arena in which new and innovative things are taking 
place on a daily basis and channeling that to keep costs at a 
minimum while providing the broadest range of benefits.
    So I think the principles behind the FEHBP certainly can 
stand as a foundation for other reforms.
    Mr. Davis. I mean one of the problems came when the 
prescription drug benefit plan was passed. As you know, we 
wanted to ensure that FEHBP remains available for our retired 
Federal employees. Currently retired Federal employees are 
treated differently than active Federal employees in the sense 
that they can't deduct the cost of their health insurance from 
their taxes. That is a differentiation, and there is a great 
fear that with the current plan that was passed by Congress 
that somehow this benefit would disappear for retired Federal 
employees. Well, we will just use the prescription benefit 
plan. That puts us contrary to the philosophy of what we 
passed, which is we are trying to keep the private plans in 
existence. If the Federal Government has to pick up the tab for 
everybody in prescription drugs, the costs are going to 
skyrocket, whereas if we can maintain current plans being able 
to pick up a portion of those costs, do you have any thoughts 
on that?
    Mr. Blair. Well, as you know in our plan offerings right 
now we have a self and family option. We do not discriminate 
between retirees or active employees. Everyone is together in 
this insurance pool, and it operates quite well for us and we 
have no intention of separating employees from retirees at any 
point that I am aware of.
    Mr. Davis. So that would not happen at least from your 
perspective?
    Mr. Blair. I am not aware of any plans in the works to do 
anything like that.
    Mr. Davis. We passed that.
    Mr. Blair. I am sure we would hear from you folks as well.
    Mr. Davis. Well, we passed a bill in the House that 
basically said we wanted to take a look at this benefit for 
Federal employees and retired Federal employees. It is sitting 
in the Senate. It did not include any overall bill because the 
criticism that somehow Congress was getting, is that most of 
the Members of Congress who retire do not use FEHBP, but there 
are some that do. And you are set up with the argument that 
there are those who oppose the prescription drug benefit plan 
for different reasons, and you know Congress wants their own 
plan, this is not good enough for them.
    I just wanted to touch on that and get your assurances, and 
I appreciate it.
    Thank you, Mr. Chairman.
    Mr. Murphy. Thank you.
    What I want to get into, and I do not know if you know the 
technicalities of this, but it has to do with as we are driving 
some of these changes, preventive health care and pay-for-
performance, health education, and managing diseases before 
they reach the chronic state or the emergency room access 
state, which is very, very expensive when you're doing that, 
you said there are open enrollment times for Federal employees, 
so they can go from plan to plan. What are the rules with 
regard to dealing with preexisting conditions? Because some of 
the complaints I get, for example, in my office, not from 
Federal plans but from other ones, are that people say I have 
to hang on to the insurance company I have even though the 
rates are going through the roof because I have a preexisting 
condition and no one else will accept me. What happens in the 
Federal plans when that problem exists?
    Mr. Blair. Ann, correct me if I'm wrong on this. But we 
have no preexisting condition exclusion.
    Mr. Murphy. There's no barriers?
    Mr. Blair. You can go from plan to plan to plan. That said, 
in the Federal sector you do not see migration between and 
among plans very often. It is a pretty stable insurance pool 
out there in that you see most people, although we encourage 
innovation, encourage the competition, but most employees stay 
with the plan that they are familiar with and do not change 
every year.
    I think I can provide for the record how many do. And that 
is one of the arguments that we have always said that with the 
health savings accounts that generally speaking the Federal 
population is a conservative population, not so much 
politically, but as in lifestyle choices in terms of not 
changing things. And, so when we offer these new benefits, 
people stand back and wait and see how they operate.
    And, we think that new benefits are important. We think 
innovations are important. At the same time, we have a very 
stable population which usually stays with the plan that they 
know and are most familiar with.
    Mr. Murphy. It probably helps that they look at exclusions 
from preexisting conditions. In the general marketplace I 
really think that is one of the things that I hope to achieve, 
because when you can exclude preexisting conditions, there is 
not much incentive for insurance companies to get out there and 
really work on patient education as much if someone does leave 
a plan, because costs are going up and nobody else has to take 
them. So that is probably one of the good things we have going 
for us, and I hope we can continue to help the rest of the 
Nation do as well.
    I know often times politicians are out there saying that 
everybody should have the Federal plan, too. We should make 
note that this is not free for employees, including Members of 
Congress.
    Mr. Blair. Exactly.
    Mr. Murphy. We also have to pay for it. I just want the 
record to show that.
    Mr. Davis. Let me also note that even for the use of the 
Capitol physician we pay extra on top of FEHBP for that.
    Mr. Murphy. I also want to make sure the record notes that.
    I do not have any further questions. Chairman, do you?
    Mr. Davis. Well, I do not either. We have testimony coming 
in, and I hope you will be able to stick around and hear that 
and review that, because there is some very interesting ideas 
about how we can improve not just FEHBP but the total health 
care system. And I think that holds some promise for us.
    So, I thank you very much.
    Mr. Blair. Thank you.
    Mr. Murphy. I look forward to this afternoon, you are going 
to make announcements about the premium rates?
    Mr. Blair. It is my understanding that Kay will be making 
announcements sometime this afternoon, and your staffs are 
being briefed as well.
    Mr. Murphy. OK. Thank you very much.
    While we are getting ready for the next panel to come up 
here, let me go over some of their background so we have that 
information.
    Let us take a couple of minutes while we are getting ready 
here.
    First, we will hear from Dr. Karn Wolk Feinstein. Dr. 
Feinstein is the Chair of the Pittsburgh Regional Health 
Initiative. They have been doing great work to improve health 
care in Pittsburgh.
    Dr. Neil Resnick, M.D. is a Chief of the division of 
medicine at the University of Pittsburgh, co-director of the 
aging there at the University of Pittsburgh Medical Center. He 
leads one of the largest and most innovative geriatric programs 
in the country. He has more board certified geriatricians than 
any other programs in the country, I believe.
    His medical degree is from Stanford. He has an impressive 
list of credentials there, too, and I am excited to have you on 
board.
    And finally, Dr. Alan Axelson, a psychiatrist, founder and 
president of Intercare, and for the sake of disclosure I should 
say I used to be one of his employees, too, prior to coming 
here. But I asked him here because of his innovative concepts 
and things that he is going to be describing to us.
    He is a member of the American Psychiatric Association's 
Managed Care Committee, the American Academy of Child and 
Adolescent Psychiatry Work Group on Managed Care. In these 
capacities he has participated extensively in the development 
of level care criteria for these two psychiatric organizations.
    Also a well known and renowned writer and public speaker on 
various managed care related topics.
    I believe we will go with Karen Feinstein. I want to refer 
to you as doctor today, we will keep it formal.

   STATEMENTS OF DR. KAREN WOLK FEINSTEIN, CHAIR, PITTSBURGH 
 REGIONAL HEALTHCARE INITIATIVE; DR. NEIL M. RESNICK, DIRECTOR 
   UNIVERSITY OF PITTSBURGH INSTITUTE OF AGING; AND DR. ALAN 
   AXELSON, MEDICAL DIRECTOR, AMERICAN ACADEMY OF CHILD AND 
                     ADOLESCENT PSYCHIATRY

    Dr. Feinstein. And I refer to you as Representative.
    Just for disclosure, I do want to say that then Senator now 
Representative Murphy was part of the Pittsburgh Regional 
Health Care Initiative from its inception.
    The Pittsburgh Regional Healthcare Initiative is a group of 
stakeholders from our area. 42 hospitals, most major purchasers 
all four insurance companies who are doing business here now, 
the attorney general, Representative Murphy who came together 
around a certain proposition that: Better health care is 
available at lower costs; that it requires work design or 
redesign at the point of service to eliminate waste, 
inefficiency and error; it rewards evidence-based best 
practices; it requires good information on cost and quality, 
requiring financing, accounting and clinical measurement 
systems that are far superior to what we have in operation 
today; that providers could compete on value and would 
therefore deliver value; and, it was founded on a truism: What 
is good for the patient is good for the payer.
    So we started to test out our proposition, our value 
proposition, our hypothesis. We started testing it out in a lot 
of clinical settings working with providers, mostly in hospital 
but also ambulatory.
    Let me just take one quick example, central line associate 
blood stream infection. We have found that in intensive care 
units where people are diligent, we're not talking about high 
tech technology doing anything that is state-of-the-art, just 
basic care, we can bring central line associated blood 
infections down almost to zero. How are we doing it? Simply 
following protocol vigorously. And, as you know, the estimates 
of the cost to this country of central line infections is up to 
$1 billion; 25 to 50 percent of the people who get them die.
    We have also found that when you break down the costs, 
which by the way is a lot of work because of the cost 
accounting systems we have now in health care, you find that 
the provider never makes money on a central line infection. 
They lose anywhere from $500 a patient to $42,000 depending on 
the insurer and the nature of the patient's health. But also we 
found that insurance companies are picking up a large amount of 
the cost on an almost avoidable occurrence, which is central 
line infection. So we believe that our proposition seems to be 
playing out.
    And we started out focusing on providers. We are looking at 
the point of service. We are looking at people who deliver 
care. But we realized we had made a mistake not attending to 
the role the payers play, the incredible role that payers play 
in bringing about a cascading effect to drive this kind of 
improvement at the point of service in the quality of care 
delivered in units by the people who deliver care.
    So we have been collecting examples of perverse payments 
within health insurance, which are really quite astounding and 
we intend to present to Chairman Davis and Representative 
Murphy some more background on this. It is really pretty 
astonishing how many things we pay for that reward bad behavior 
and preventable error and not good practice.
    We think that, obviously, FEHB could vastly change the 
extent to which our value proposition is realized. These are 
just some ideas.
    Plans should be required to pay providers for good and safe 
care, and on the other hand not to reward errors and waste such 
as central line associated blood stream infection. Since we 
have found in almost all units where we have attacked this 
issue, that it can be brought down to zero, it seems to me that 
if we were not paying for these infections, if the insurers 
were not picking up a lot of the cost to providers, people 
would just eliminate them since we can give you evidence to 
suggest this is very doable.
    Plans need to provide members with available outcome data 
and really drive the information flow to their members about 
the differential outcomes in a way that is much more effective 
and direct than we have now. Having members even just go to a 
Web site and look it up we think is too indirect. That it 
should be something that is made easily accessible because we 
do have proof, as you know from PacifiCare and their quality 
index, 6\1/2\ percent of their members moved to the higher 
performing providers every year. If you start adding that up 
year after year, you're going to get a movement, a reward for 
those who are providing good care.
    We are looking at outcomes here, not processes. I think 
that is very important. I do want to suggest this distinction 
which is important. People will use different processes to get 
better and learn from one another.
    Plans should be required to accompany the outcome 
information with cost comparisons and highlight the high 
quality low cost providers. As you know, again, with PacifiCare 
they have had a lot of success doing that.
    One challenge remains. Most hospital accounting systems do 
not account the best information and allow you to easily 
extract this information, as the physician to my left can tell 
you. But if this were required, believe me, they would have 
activity-based cost accounting systems that would allow them to 
know what its costs to provide care correctly and what it costs 
to introduce error and waste.
    And overall, you should be, we hope, rewarding plans that 
reward value. That we should pay more for those who give us 
more value. And we believe that will actually prove our value 
proposition that the more you increase quality and safety the 
lower you are going to find your costs.
    [The prepared statement of Dr. Feinstein follows:]

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    Mr. Murphy. Thank you.
    We'll save questions until the end.
    I think that Dr. Resnick, you are next.
    Dr. Resnick. As a geriatrician I've been asked to focus on 
issues relevant to the concerns of the roughly half million 
older retirees in the FEHB, and that's a wonderful opportunity 
for someone who spent their life trying to care for older 
people in group care, to actually get to talk to people who can 
effect such a change is a huge honor.
    It is probably important to put the issue in context. 
Everybody knows that there is an explosion of older people, but 
what is less well appreciated is that chronic disease is the 
dominate issue in these people and that, second even less well 
appreciated, is that several features of chronic disease differ 
in older people compared with younger adults. Few physicians 
are trained to deal with these conditions in the elderly. That 
the number of such physicians is declining at the time the 
number of old people is increasing. Many features of the health 
care system, which is largely optimized for acute care, will 
ill suit the needs for older people with chronic conditions.
    I'd like to start just saying why chronic disease in older 
people differs from that in younger people.
    First, older people with chronic disease generally suffer 
from more than one concurrently, making the detection and 
diagnoses and treatment of the new disease more difficult.
    Second, the generally used approach to a given condition 
may be contraindicated by the other conditions or by the 
multiple medications that a patient uses to treat them.
    Third, while scientific evidence for chronic disease 
management is limited, it is far more limited for chronic 
disease in older adults and this impedes development of 
appropriate guidelines.
    Fourth, chronic disease in older adults often occurs in 
patients who also have mental impairment or depression. And the 
impact of these is exacerbated by the fact that many older 
adults do not have a spouse or an advocate and these factors 
hinder the physician's ability to complete an adequate 
evaluation or to ensure adherence to therapy.
    Fifth, older patients have much shorter life expectancies 
which requires putting risks and side effects in a very 
different perspective.
    Sixth, considering to the issues just mentioned as well as 
to ageism, older adults often have different values and goals.
    When you put all this together with the multiple possible 
combinations of coexisting chronic conditions that could occur 
in an older person, it's easy to understand that application of 
the type of disease management models currently being developed 
and advocated at present will be very difficult at best. But 
it's worse than just the problems with chronic illness. Despite 
the complexity of chronic illness in older adults, despite the 
spiraling increase in their numbers, the number of physicians 
trained to deal with this has gone down. There are a variety of 
reasons, and they're in my testimony, but it's important to 
note as well that the number of students are not going into 
geriatrics as well. Less than 3 percent of U.S. medical 
students are enrolled in any geriatric course at the present 
time.
    It has been estimated that if we forced every medical 
student to take geriatrics today, that it would take 40 years 
to have enough physicians, to educate all the physicians who 
need to take care of older people in this country. So we need a 
way to get out to the practicing physician, and unfortunately 
that's not happened. Fewer than 1 percent of practicing 
physicians have any experience in geriatric care, and it's not 
going up for the reasons that are outlined in my testimony.
    But it is more than just the complexity of chronic disease 
and the lack of access to physicians. Access to appropriate 
care for older patients with chronic disease also reflects lack 
of access to institutions. Hospitals often seek to avoid 
admissions of such patients, especially those who are frail 
since such patients have a higher risk of complications, longer 
stays and nonreimbursed readmissions.
    Reimbursement issues also leave many nursing homes to try 
to avoid admitting patients who cannot pay privately. Home care 
programs are closing nationwide. Insurers are eliminating their 
HMO Medicare programs, and in the current fee-for-service 
environment there is little ability or incentive to coordinate 
care. The resulting fragmentation of care and competing 
incentives increase the difficulty in managing chronic disease, 
particularly for older patients who have the most concurrent 
chronic conditions and the least ability to survive inadequate 
care.
    The result is is a common scenario for older patients, that 
is to be referred to one patient physician after another, each 
of whom adds a test or a medication which in turn engenders 
another symptom so that the cycle continues until the patient's 
status deteriorates and results in an acute event. The patient 
is then sent by ambulance at high cost to an emergency 
department at higher cost, and hospitalized at still higher 
costs.
    The hospitalization is generally longer than for younger 
patients, more often includes complications and is more often 
followed by the need for intensive care, subacute or chronic 
care. The final result is an increased likelihood of the worst 
of everything: An outcome that neither the patient nor the 
physician will desire and at a cost that neither the patient or 
society can afford.
    But the situation is far from hopeless. Studies show that 
students who begin medical school are attracted to caring for 
older adults and the geriatricians are among the most satisfied 
of medical specialists. Moreover, while the high complications 
rates among older adults generate high utilization, neither one 
of these is inevitable.
    In addition, not only are many of the solutions to improve 
geriatric care relatively inexpensive, but implementing them 
could decrease the number of emergency department visits, the 
number and length of hospitalizations, the number of 
medications and which in turn make these interventions at least 
revenue neutral, if not substantially cost saving.
    What are some potential strategies? Well, in the short term 
one recommendation that's in this paper is to convene a task 
force of experts and stakeholders in geriatric care. I think it 
would be quite easy to assemble what's already widely known 
about ways to improve geriatric care. It could be integrated 
into a coherent system.
    The second recommendation would be because this kind of 
health modification is not going to be easy and not going to be 
straightforward and its stakes are high, it is certainly going 
to be worth evaluating. And so my second recommendation would 
be to consider funding a demonstration project, at least one if 
not more. For several reasons that are outlined in the 
testimony, the University of Pittsburgh Medical Center is very 
well positioned to do that, both because of the high proportion 
of older people in our region, the high proportion of 
geriatricians who are available to care for them, one of the 
country's largest portfolios of research expertise and the fact 
that we also have an insurance plan so that we can identify 
every cost of the care and all of the outcomes.
    In conclusion, the need is great. The number of retirees in 
the FEHBP is roughly half a million and growing quickly. And 
the impact is even greater than the numbers would suggest since 
the costs are growing more rapidly than the number of retirees 
and they soon eclipse the ability of the FEHBP or its current 
employees to afford.
    In addition, the lack of appropriate chronic care infringes 
on the productivity of current workers who must take time off 
to help their parents deal with this.
    Your goal is laudable. We will do everything we can to help 
you with that. Clearly, I hope that this has helped cast some 
degree of light on what some of the potential solutions are to 
what has been a vexing problems for all of us to solve.
    Thank you.
    [The prepared statement of Dr. Resnick follows:]

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    Mr. Murphy. Thank you, Dr. Resnick.
    Dr. Axelson.
    Dr. Axelson. Thank you.
    I am Alan Axelson. I am building on the previous two 
presenters because I work with Karen Feinstein at Pittsburgh 
Regional Healthcare Initiative and am very concerned.
    I do see patients every week, and I am speaking from 30 
years of experience in health care systems. Also, I should say 
that I am consultant to Highmark for the past 3 years, the Blue 
Cross/Blue Shield franchise carrier in this area.
    The thing I want to emphasize is innovative approaches to 
behavioral health care as part of it, and then I want to 
present a little bit of data. So I have a PowerPoint 
presentation. I tried to get the appropriate music, but the 
Rolling Stones were aging and could not make the trip to 
Pittsburgh, and it is too hard getting the electronic 
permission.
    Traditional behavior health treatment is often considered a 
separate category of illness, treated separately by a group of 
specialty practitioners, often only partially treated through a 
series of incomplete patient encounters rather than a full 
comprehensive treatment plan. And many patients with 
psychiatric illnesses are presenting in primary care offices 
and are not identified and effectively treated.
    Psychiatric disorders often co-occur with medical illnesses 
and complicate effective and efficient treatment of those 
medical illnesses. The issue is, what is the impact and what 
can be done about it.
    We have heard about the retirees, and certainly that is a 
major issue. But the focus is also on the employees. This is 
the difference in the average cost of the annual cost of the 
employee both with depression and without depression. And you 
can see that the costs are about double. And some of those are 
in direct costs, some are in prescriptions and certainly in 
lost productivity.
    When you look at depression and the cost of medical 
illnesses; back pain, diabetes, headache, migraine and heart 
failure all increase substantially in costs when there is 
complicating depression, particularly when that depression is 
not appropriately treated.
    The Pittsburgh Regional Healthcare Initiative is 
particularly focusing on the co-occurrence of diabetes and 
depression and looking at ways to comprehensively treat them.
    The treatment of chronic illnesses is a major opportunity 
for system improvement. In contrast to the inpatient care we 
have been hearing about, this is primarily an outpatient 
process and is very high volume. So you have to do things that 
can apply to large numbers of patients and large numbers of 
physicians.
    Unless treatment is part of an integrated, comprehensive 
continuing treatment plan, higher costs and sub-optimal 
outcomes will be the result. It occurs more frequently in 
patients that have diabetes so that you have almost a third 
that have depressive symptoms. Patients with a psychiatric 
history, the blood evidence of control of their diabetes shows 
that it's not in control. Then the thing that's very 
interesting is if you treat the depression, the diabetes gets 
better, and there are reasons for that have been hypothesized.
    The annual costs incurred by employers on patients, 225,000 
patients, there's 57 percent increase in the annual medical 
costs depending on whether there is both diabetes and 
depression or just without the depression.
    We have the same situation with complications with post-
myocardial infarction. We have done a lot to improve the care 
of myocardial infarction, but the emphasis has been a lot on 
various aspects of reducing stress, regular exercise, 
medication compliance. And this is what is happening in terms 
of these things in the average patient.
    When you look at the patient that is depressed, they fall 
down in every area so they are just really not able to follow 
the treatment plans that their physician prescribes. This has a 
direct implication. This is a very interesting connection 
between the depression inventory, a sign of the issues of 
depression, and you can see when they are not depressed, these 
are the cardiac deaths. When you add depression, this is the 
outcome; huge increases in cardiac deaths.
    So depression is undertreated, and we have problems with it 
here in therapy. What do we suggest? Innovative programs.
    The wrong kind of competition has made a mess of the 
American health care system. The right kinds can straighten it 
out. This is from Harvard Business Review. We should support 
systems that are integrated, innovative, information driven and 
incentive based.
    Integrated primary care physicians must effectively connect 
with psychiatrists, psychologists and other mental health 
professionals receiving timely consultations and support. It is 
just not in the way the systems are organized today.
    Treatment guidelines must be integrated into the daily 
system of office-based care. Information about provider 
performance should be trustworthy and transparent, available to 
purchasers and consumers.
    Information driven. We need electronic systems and 
information shared with imbedded systems of decision support so 
that we can use the systems. The information that we have, it 
is very well supported in medical literature and accepted in 
terms of treatment guidelines to be able to have that right 
there when we are treating the patient and prompt us to order 
the tests and to communicate with our other colleagues.
    And it must be incentive based. Physicians are too busy and 
have gone through too many ``just do this one more thing.'' We 
have to find systems, pay-for-performance systems, that really 
do pay and really get physicians' attention so that the 
compensation is related to participation and the development of 
quality programs and the effectiveness of service delivery.
    So structuring the Federal benefits program to support 
these things would be very helpful, and we would certainly 
encourage you to do this so that it motivates physicians and 
helps them get on the bandwagon, so to speak, to do the best 
that they know that they can do.
    Thank you.
    [The prepared statement of Dr. Axelson follows:]

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    Mr. Murphy. I thank the panelists.
    Chairman Davis, you want to go first?
    Mr. Davis. I will try. Probably be a couple of rounds on 
this.
    Dr. Resnick, let me start with you on the geriatric side 
because we are all moving to a higher percent of the population 
being geriatric. That is just a fact. The baby boomers come of 
age and it puts tremendous strains on our retirement systems, 
our health care systems and it sounds like the medical 
community really at this point is not getting ready for it.
    Dr. Resnick. Your opening remark made me think that of the 
line that becoming an older person is the only minority of 
which we will all become a member.
    You are exactly right. We do not yet have the tools at hand 
to be able to deal with chronic disease in older people. We are 
just beginning, we are at the infancy of our ability to deal 
with chronic disease in nonolder people, which occurs generally 
as a single condition, and we have very few pieces of evidence 
in which doing what you heard about works. It does seem to work 
for depression. It does seem to work for heart failure. It does 
seem to work for diabetes and asthma. You have heard from Dr. 
Feinstein how it works for central line infections. The problem 
is in older people you aggregate all of those together at one 
time.
    Mr. Davis. Everything breaks down?
    Dr. Resnick. That is correct. So, for instance, if you have 
chronic lung disease, the guideline says do not use this drug. 
If you have heart disease, it says you must use that drug. 
Well, old people generally have both so what is the physician 
to do. He cannot comply with both of the guidelines.
    Mr. Davis. It is a lawyer's dream, is it not?
    Dr. Resnick. Well, it is, but it is a physician's nightmare 
and a patient's nightmare. So the physician cannot do what the 
few guidelines available say. Most guidelines are not developed 
for the diseases old people have. All of them are unwieldy 
because they are way too much in the hectic pace of primary 
care, and the physician cannot figure out what to do.
    The bigger problem is the patient cannot figure out what to 
do because when the physician says here is what I want you to 
do, the patient says, ``well, let us see, you told me to do 
this for this disease and this for this disease and that for 
that disease and my other doctor told me.'' Then the patients 
who are doing this are scared. Often they have mental 
impairment. They have depression. You put it altogether and it 
is way beyond the ability of medicine as it is currently 
structured to exist. And that is why we think that a new model 
would be quite useful. But we believe that a new model, that 
the elements for a new model are already at hand and all they 
need to be is integrated into a coherent way and tested out. We 
do not think we have to start all over from scratch.
    Mr. Davis. But there is a supply and demand issue. You just 
do not have that many physicians that understand this, that are 
going into this and you have a rising number of patients?
    Dr. Resnick. That is correct. And that is why the approach 
that we advocate is instead of trying to train more 
geriatricians, which is useful but will never happen, we need 
to change the health system in a way that every doctor in 
American can now apply. And we think that we can form a model 
literally within a year that every doctor in American could 
then follow to take better care of older patients. In other 
words, we bring geriatrics into the mainstream of medicine 
rather than dragging medicine into the mainstream of 
geriatrics.
    Mr. Davis. Do the Medicare reimbursements play a role in 
getting people out of this business basically?
    Dr. Resnick. Major. The Medicare reimbursements.
    Mr. Davis. And they have paid in some cases when you get 
into some of the nursing homes?
    Dr. Resnick. Yes. Yes. And in fact, they conflict with each 
other, too. Let me give you an example.
    A patient is in a nursing home paid by Medicaid. They have 
urinary incontinence and they do not have the staff to deal 
with it. They put a tube into the bladder. That tube increases 
the risk of infection. Now the patient gets an infection. Well, 
that is no problem for the nursing home because they are going 
to get transferred to the hospital for that care. And that is 
on Medicare. But everybody loses.
    The patient could die in the process. They certainly have 
their care disjointed and worse, and it is because there are 
conflicting incentives.
    In terms of the amount of reimbursement, huge problem. For 
the last 3 years prior to the current one, the care was 
ratcheted down and you almost certainly know that the AMA has 
documented the proportion of doctors who participate in 
Medicare. And it was at a high of 96 percent, and if the last 
one had gone through this last time, it would have been down to 
75 percent. That is just participating.
    And furthermore, much of what doctors do in Medicare is not 
paid for. Some of it is denied. And there is no payment for 
what patients most need. There are barriers built in.
    For instance, if a doctor wants to get a patient into a 
nursing home, you have to put them in the hospital for 3 days 
even if they do not need a hospitalization.
    Now, in the hospital they can get infections and get drugs 
and get all sorts of bad things. The cost to society is huge. 
There is no point to that. That is from another era.
    There are other things. Care coordination is huge, 
preventive services are huge, proactive chronic care management 
is huge. None of that is paid for by Medicare. Neither is 
telephone management.
    Mr. Davis. We are starting to move in that direction 
getting some preventive care in Medicare.
    Dr. Resnick. There are for procedures, but the limitations 
at present are that nobody asks the patient what you want. So 
we will pay for your colonoscopy, but nobody talks to the 
patient about what we will do if we find a cancer. And then 
what we have is the unfortunate situation where the patient and 
the doctor are faced with a cancer there, and the patient says 
what, you mean you are going to have to open up my belly and 
take this out. I do not want that. I do not have enough time to 
live. I do not want to have 6 months recovery. And the doctor 
says I would not do it anyway because you have trouble with 
your heart and your lungs, and you would not withstand that 
surgery. So we have paid for a procedure that had no point in 
being done. So we expended resources and caused everybody 
anxiety because we are not paying for the counseling and 
determination of the values and goals the patient has.
    Mr. Davis. We will come back.
    Mr. Murphy. Thank you.
    Let me followup on something here. This is really pretty 
incredible testimony you have, and unfortunately it is so often 
what happens in health care. What I hear a lot of, similar to 
Chairman Davis, the people say my health care plan is too 
expensive, let the Federal Government take over. And I am sure 
you have heard that in psychology and psychiatry, that insanity 
is doing the same thing over and over again and expecting 
different results. And it seems to be that it is absurd to 
think just have the Federal Government pick the tab and 
continue the way we are doing things.
    Dr. Feinstein, you have a chart with you, a totally 
incomprehensible chart, which I love.
    Dr. Feinstein. Yes.
    Mr. Murphy. To get the patient the first dose of 
medication, some 700 steps involved with this?
    Dr. Feinstein. Yes.
    Mr. Murphy. All of which can result in some error?
    Mr. Murphy. This was documented at Deaconess-Glover 
Hospital outside of Boston. And a team from Harvard Business 
School went in.
    This is what happened when one patient's medication did not 
come on time. One medication did not come on time. The work 
around on the part of the nursing staff and the unit staff to 
get from the pharmacy the pill that never arrived.
    And we wished this was funny, but if you would show this to 
any nurse, they will just nod their head, oh absolutely, yes. 
And that is why we talk a lot about safety and evidence-based 
practice, both of which are safe practices, evidence-based 
practices are very important. I do not think most people 
outside of health care, particularly anyone that has ever been 
to business school, would even believe the chaos that is 
involved in the administration of health care at the point of 
service. None of these professionals have had an hour of 
systems theory, work process improvement training other than 
maybe something they get stopped on in their job and it is 
hardly ever followed through until the next new idea comes 
along.
    But the inefficiency and waste in health care also 
contributes very much to the high cost. It also contributes to 
error and bad practices.
    Mr. Murphy. I know I have worked at several area hospitals 
in Pittsburgh and each one had some different procedure for 
doing the same thing. Whenever I raised the question, the most 
common response is that just the way we do things here. It's 
absurd that they have adapted to that sort of practice.
    Dr. Axelson, your testimony it is absolutely incredible in 
terms of untreated depression, which first of all has a higher 
incidence among these chronic illnesses and yet when it is not 
treated, the morbidity and the mortality rate go through the 
roof. I mean, several times I think the costs were double you 
said?
    Dr. Axelson. Yes. And particularly with myocardial 
infarction. Some people say it is more important to treat the 
depression than to put the patient on aspirin and beta 
blockers, that the outcomes in terms of death in the 6 months 
following myocardial infarction is so high.
    And the problem is that the general wisdom of the physician 
is, yes, no wonder you are sort of sad. Anybody would be sad if 
you have this kind of disease.
    Mr. Murphy. I mean you just talking about----
    Dr. Axelson. We are talking about the depression, yes. We 
are talking about depression and what we are doing with 
physicians is educating them to make the diagnoses of 
depression and differentiate that from just distress. That the 
patient that is depressed needs active treatment for depression 
by the primary care physician because similar to the geriatric 
situation, you are not having psychiatrists in growing numbers 
being available to care for these patients, and the patients do 
not migrate very well. So the emphasis needs to be on 
developing the skills of the primary care physician and then 
having just in time consultation for them so they treat the 
patients with diabetes and with heart disease and with lung 
disease who also have depression and anxiety. Otherwise, you 
get this manifold number of tests, bad outcomes, patients are 
not satisfied and the physician is frustrated.
    Mr. Murphy. So we add these together. Most health costs 
come from those who are chronically ill. And among those who 
are chronically ill, most of their health care costs come from 
not treating the whole patient with regard to their multiple 
diagnoses.
    Dr. Axelson. Yes.
    Mr. Murphy. In this, I am sorry we were trying to track 
this down, we could not get it in terms of knowing what the 
copayment is for mental health treatments within the Federal 
system. I know with Medicare one of the concerns I have if it 
is for infections or heart disease, etc., it is at 80 percent 
that the insurance picks up on many of these doctor visits, but 
only 50 percent for mental health services.
    Dr. Axelson. That is correct.
    Mr. Murphy. So within that the system is doomed to failure. 
And if that same thing exists within Federal employees' 
benefits, I don't know what is, for example, postal employee 
etc.; but it is doomed to failure because we have set up a 
system that operates against getting comprehensive treatment.
    Dr. Axelson. Yes. My experience is that the copays are not 
to discriminatory in the Federal system. There are some 
problems with that. The copays are higher than they are for 
medical illnesses, but the Medicare is certainly something that 
is a great discrimination. And physicians, primary care 
physicians do not code psychiatric diagnoses because of this 
concern that they will get the 50 percent reimbursement. And so 
you get a situation where they are not paying attention because 
not only are they not getting paid, they are getting paid less. 
And so changing that; I was very disappointed. I know that came 
up in the legislation about the pharmacy benefit, that was a 
missed opportunity there.
    You cannot get physicians to change their way of practicing 
if they think the system is cynically designed to work against 
them. And that is what I hear from primary care physicians all 
the time is you are not paying us for this stuff, you know, 
nobody wants to hear about it. If we do bring it up, we and our 
patients get discriminated again.
    So you really need to in bold letters say the FEHB Program 
wants behavioral illnesses treated as part of the total system 
of health care and not as some very separate system that is 
handled a discriminatory way.
    Mr. Murphy. And I know my time's up, and we will get back 
to this. But let me just followup. In terms of the data you 
were presenting here in terms of these morbidity and mortality 
and costs being double or so, is this being done comprehensibly 
with any other, for example, private business who has made this 
move toward treating this comprehensibly, or would any of you 
know and are they seeing any savings both in terms of the extra 
cost of health care dollars that increase productivity?
    Dr. Axelson. The best company I'm aware of is Bank One in 
Chicago that really looks at particularly productivity and 
treatment of psychiatric illnesses. And they have showed 
dramatic improvements in both reduced disability costs, 
patients being at work and patients doing more work when they 
are at work; a thing called presenteeism. And so it is just 
beginning to get down into the employer system.
    The figures I was giving were for employees, because that 
is part of the message to employers. Encourage their employees 
to take better care of their health and to expect better care 
when they go to the physician.
    Mr. Murphy. Thank you.
    Chairman Davis.
    Mr. Davis. I'm intrigued on the geriatric thing. I guess as 
I get older I start thinking about these things. The good news 
is that people are getting older later, is that not true? 
People are physically taking care of themselves better?
    Dr. Resnick. Well, it is a mixed picture. One of the 
biggest threats to health is decreased exercise and increased 
weight. And both are a problem in older people.
    Exercise programs are not widely used, even among the 
elderly and the middle aged. And the weight of this country is 
going up. And what happens is as you get older, much of what 
happens is replicated in younger people who weigh too much. So 
when you combine obesity with age, you actually end up getting 
the ravages of both, and it could backfire that we could be in 
worse shape than we would otherwise.
    What is happening now when you say that we are getting old 
later, that is a reflection of the fact that we are getting 
better at treating heart disease and recognizing risk factors 
such as high blood pressure. So because we are more aggressive 
at treating those, people then do not get the strokes and the 
debility that they used to get. Second, we now know that the 
debility they used to get are not aging, but diseases. So we 
look for the cause and treatment.
    If people as they age still do not exercise as they should 
and gain more weight than they ever have before in the history 
of this country, then that could undue much of the benefit.
    Mr. Davis. You are probably right. I hang around with a 
group that works out. And I see a lot of older people running, 
more than I think I would have seen 10 or 20 years ago. But you 
are right, a lot of people do not do that.
    Dr. Resnick. That is right. And the other issue is that----
    Mr. Davis. And they tend to be more of a burden on the 
system, are they not?
    Dr. Resnick. That is right. That is right.
    Mr. Davis. Let me ask, Ms. Feinstein, you talked about 
paying for bad behavior not just in the health care system, but 
do you not do that with individuals as well, people who choose 
bad diets, who are obese, sometimes who smoke. I mean there is 
discrimination, I guess, in terms of what they pay, what health 
insurance companies charge them. You know the smokers and 
nonsmokers get different insurance rates in some of these 
areas. But in some of these other areas you get treated the 
same when you take care of yourself or not. Is that appropriate 
incentive?
    Dr. Feinstein. Well, I have a personal opinion on that. Not 
just speaking for the Regional Health Care Initiative.
    Mr. Davis. That is fine. I would be glad to hear your 
opinion. I would like to hear everybody's personal opinion.
    Dr. Feinstein. This is personal. I do not see why we would 
not take that into account as well. I think that there is a 
contract mutual responsibility for the cost, the high cost of 
care in this country. And certainly there is a consumer role in 
protecting their own health. You could take it down a chain 
and, you know, you could require more and more and more of the 
consumer. And I think that for some of the tiered consumer 
directed health plans, consumers are expected to choose the 
best outcome, lower cost option or they pay for it. I think 
that's the beginning of a responsibility that could spread to 
other areas.
    Mr. Davis. Yes. I should not say this. I ended up watching 
the Jerry Springer Show late one night. There was nothing else 
on. The ball games were over. It does not happen very happen. 
He brought these tremendously huge people on there that just 
are, you know, 400 or 500 pounds. Probably had depression. They 
probably had a whole lot of things. But I am just saying, that 
is where my health insurance might be.
    You have a small group of people eating up most of the 
money, and is there not some way to get some incentives to 
help. Treatment for depression would certainly be part of that. 
I think that you made the case on that. And, sometimes before 
we get back, we are going to do some talking about this. But 
also people who make poor choices ought to be paying more and 
the people who make right choices, we ought to be able to get a 
discount and build that into the system as well, it seems to 
me. It is individual. The same way with health care plans as we 
look at that.
    Dr. Feinstein. It is hard as an employer to know that you 
are picking up the cost of people who are taking a smoke break 
every half hour.
    Mr. Davis. Right. Right.
    Dr. Feinstein. You are picking up the health costs.
    Mr. Davis. Of course you have the labels on those things 
for 40 years and they still sue the companies and blame the 
companies for it. So nobody wants to take responsibility for 
anything, and we are moving in that society. And yet the 
foundation of freedom is that people take responsibility for 
their own actions and their bad decisions.
    We get divided in Washington. You know, does the government 
know what is best for people do or should people be allowed to 
make their own decisions? And I always come down the side 
people should make their own decisions. But a lot of times they 
make stupid decisions, and there should be some follow on 
penalty. If not penalty, not reward for making those decision. 
That is what freedom is all about.
    Dr. Feinstein. Well, and there are some health plans that 
are saying if you choose a low volume, poorly performing and 
high cost provider, you pick up the difference. You know, we 
are not. And that's a beginning. That is a beginning of a 
challenge to consumer responsibility.
    Mr. Davis. I just know sometimes people can do everything 
right and things can go wrong. And I had two melanomas. And I 
did not spend a lot of time in the sun, but I am more of your 
opinion. I reviewed and caught it early enough each time. One 
doctor the first time I had it said, ``You just saved yourself 
30 years by finding it. If it had gone on much later, you know, 
this moves, it is very, very nasty.''
    So, you know, educating people is a critical part of this. 
You talk about savings in the system, that is probably the best 
place where you can start; educating people to make smarter 
decisions, identify this earlier. You are right, none of these 
systems really take that initiative.
    I just want to ask one other question. I had asked this in 
the previous panel. There is a movement to bring the health 
care savings accounts into the Federal system, the FEHBP. My 
retired Federal employees really are nervous about that because 
they think at this point that is going to raise their premium 
costs because basically the folks that would opt for the health 
care savings account tend to be the younger workers who are 
paying into the system and not using much. Any thoughts on 
that? It is an ongoing debate in Washington, and I favored 
these at the national level. Interested in your comment.
    Dr. Feinstein. Well, I would say it is moving in a 
direction that you were kind of going down the road about 
consumer responsibility; what is the consumer's responsibility 
to the point that they can control their demand for health 
care, and there are areas where they can control it, there are 
areas where they cannot.
    My only concern with HSAs is they kind of break the social 
contract. I mean, they distract from what I think is our, and 
obviously this is a biased one because the Pittsburgh Regional 
Care Initiative is founded on that, but I think our basic 
responsibility right now is to deliver the best care and only 
the care that is required by a person's health situation. And 
to do that the stakeholders have to work together. And the HSA 
distracts from that.
    To that extent, you know, if you could convince me that it 
was an important driver of quality and delivery at the point of 
care, I would be enthusiastic. But it seems to me a bit of a 
distraction right now.
    What the Federal health plan could do, is have a program to 
produce this kind of transparency. Even when the consumer wants 
to do the right thing for their health, they lack information. 
There is an extraordinary lack of information. They do not even 
know what procedures cost. In fact, it is kind of scary, the 
plans often do not know what procedures cost. Nobody knows what 
procedures cost.
    As an example, we are in so many ways paying for 
preventable bad practice. And to get the information that would 
allow us, the clinical and accounting measurement systems that 
would allow us to bring that information to the consumer, to me 
is kind of a first step, the most important step.
    And so, you know, not distracting it, I do believe that 
consumers need to be engaged and need to make decisions. HSAs 
encourage that, but I worry that if we do not get the 
information to people, really good information, they will not 
be able to make the right decisions; do they need care, do they 
not need care, where should they get care and what are their 
options to, say, surgery, hospitalization and expensive care.
    Mr. Davis. OK. Let me ask Dr. Axelson, let me ask you 
another question, too.
    Mental health parity is something that has come before 
Congress. It has really never come before the House. It has 
come before the Senate. Every member supports it, you know, 
signs on the bill but they try to keep it from voting because 
of the rising costs. But your testimony really says there is a 
limit in terms in some of these areas between regular health 
care and what we would call the physical health care costs and 
being able to control the other side. Can I hear your thoughts 
on that?
    Dr. Axelson. As soon as we get untangled.
    I think that parity is essential. I still would make the 
same statement. I think parity for mental health benefits is 
essential and the separation in treating them in a 
discriminatory way is really not supported economically.
    Many people get health care and get reimbursed for paying, 
they get payment for behavioral health services just by not 
putting the diagnoses down in terms of primary care 
particularly. When you have parity you begin to make sense of 
the system.
    The costs that I work to save everyday is not so much the 
direct costs in terms of psychiatric care. It is the indirect 
costs in terms of inefficient medical care. Because the patient 
that has an anxiety disorder is getting a huge cardiac workup 
or the patient that needs very thoughtful care in terms of his 
diabetes, just does not have the emotional energy to 
participate in the diabetic care plan because they are 
depressed. So we need to address parity.
    I talked to Congressman Murphy about it, oh, every month or 
so and say what are you doing?
    Mr. Davis. He talks. He brings it up.
    Dr. Axelson. Oh, I know he brings it up.
    Mr. Davis. But the other side of it is you get efficiencies 
in other areas. Maybe not the health care system or in the 
economic system by having people alert and on the job----
    Dr. Axelson. Absolutely.
    Mr. Davis [continuing]. That kind of stuff that you cannot 
measure directly but there is obviously data from the charts 
and from what everybody has said, that is an important.
    Dr. Axelson. The idea of psychiatric care being costly is 
15 to 20 years old. We have moved systems. There was a time 
when, yes, there was----
    Mr. Davis. If you just left it in the box?
    Dr. Axelson. Yes. But even now----
    Mr. Davis. Even in the box it is costly. It is more money 
out than you get in.
    Dr. Axelson. But even now that box really is not very 
constant. Other measures have been put into place that control 
those costs. And so what we need to do is just make a part of 
the overall system.
    Mr. Davis. Right. Thank you very much.
    Thank all three of you very, very much. It has been very 
helpful to me.
    Mr. Murphy. Thank you.
    I have a couple of things I want to know. Dr. Feinstein, is 
this, the chart, the 700 steps, is this part of a published 
report?
    Dr. Feinstein. Yes. It is a Harvard Business School case. 
It is called the Deaconess-Glover case. And I am not allowed to 
hand it out, but----
    Mr. Murphy. But if you could give us a reference, I would 
like to include it in our record, please?
    Dr. Feinstein. It is Harvard Business School. They have a 
whole case series. And this is called Deaconess Glover.
    Mr. Murphy. OK.
    Dr. Feinstein. Part A.
    Mr. Davis. Chair, I would then ask unanimous consent that 
be put in the record. That the staff can find it and put that 
in. I think it would be helpful.
    Mr. Murphy. And without objection, so ordered.
    Similarly, I would like to ask that we include in the 
record this article provided by Dr. Axelson from the Harvard 
Business Review, June 2004 in terms of Redefining Competition 
in Health Care by Porter and Tiesberg. And without objection, 
so ordered. We will include that in as well.
    I know we are just about out of time here. I just want to 
really thank the panel for your comments here. Again, it 
distressed me every time we see someone come up and say health 
care costs so much, let us have the Federal Government pick up 
the tab. And I am fond of saying the Federal Government can 
provide whatever you want as long as you let us raise your 
taxes so we can pay for it. And providing health care the way 
it is is not really health care as much as it is just paying 
the bill for a system that is broken and extremely expensive. 
It is not the answer. And in this election year, like any other 
time, people are out there saying we are going to take your 
costs off your shoulders and have the government pay for it, 
have somebody else do it. We really need to have a tremendous 
bottom to top, top to bottom innovations in this system which 
is actually going to save a lot of lives, keep people out of 
hospitals and make them healthier and more accountable on every 
level. And it is the very things that the three of you brought 
up, whether it is for the elderly and how we need to look at 
them comprehensively and recognizing at least on the Federal 
level half a million people out there can have their health 
improved is helpful, as well as the many employees that 
whatever the level they are in the Federal Government to look 
as such things that we think are so simple by keeping 
infections down in hospitals. There are a lot of things that we 
are paying for and everything. Looking at the comprehensive 
aspect of behavioral health is tremendous, too.
    So I thank all of you for this. You may have some staff 
back in touch with you to get other information for this. We 
will make sure to send it to Members of Congress and help them 
understand that the issue of saying you cannot always get what 
you want is a barrier to us, but if I can just continue off the 
metaphor of this sung, if you try sometimes you might just find 
you get what you need. Because we have to change the system to 
get people what they need and stop this system that pays for 
inefficiency and ill health. And that is what we're going to 
continue to do.
    Dr. Feinstein. Thank you, Representative Murphy. We like to 
hear that.
    Mr. Murphy. Keep up the good work.
    And if Members have additional questions for our witnesses, 
they can submit them for the record.
    I would like to again thank everybody who was here today.
    And this hearing is now adjourned.
    [Whereupon, at 11:30 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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