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


                                                        S. Hrg. 108-552



CONSUMER-DIRECTED DOCTORING: THE DOCTOR IS IN, EVEN IF INSURANCE IS OUT

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

                                HEARING

                               BEFORE THE

                        JOINT ECONOMIC COMMITTEE

                     CONGRESS OF THE UNITED STATES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 28, 2004

                               __________

          Printed for the use of the Joint Economic Committee

                        JOINT ECONOMIC COMMITTEE


    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]


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SENATE                               HOUSE OF REPRESENTATIVES
Robert F. Bennett, Utah, Chairman    Jim Saxton, New Jersey, Vice 
Sam Brownback, Kansas                    Chairman
Jeff Sessions, Alabama               Paul Ryan, Wisconsin
John Sununu, New Hampshire           Jennifer Dunn, Washington
Lamar Alexander, Tennessee           Phil English, Pennsylvania
Susan Collins, Maine                 Adam H. Putnam, Florida
Jack Reed, Rhode Island              Ron Paul, Texas
Edward M. Kennedy, Massachusetts     Pete Stark, California
Paul S. Sarbanes, Maryland           Carolyn B. Maloney, New York
Jeff Bingaman, New Mexico            Melvin L. Watt, North Carolina
                                     Baron P. Hill, Indiana



        Donald B. Marron, Executive Director and Chief Economist
                Wendell Primus, Minority Staff Director


                            C O N T E N T S

                              ----------                              


                     Opening Statements of Members

                                                                   Page

Senator Robert F. Bennett, Chairman..............................     1
Representative Pete Stark, Ranking Minority Member...............     2

                               Witnesses

Statement of Dr. Bernard Kaminetsky, M.D., F.A.C.P., Colton and 
  Kaminetsky, Boca Raton, FL.....................................     5
Statement of Dr. Robert S. Berry, M.D., PATMOS EmergiClinic, 
  Inc., Greeneville, TN..........................................     7
Statement of Dr. Alieta Eck, M.D., Drs. Eck, Apelian and Mathews, 
  Piscataway, NJ; Zarephath Health Center, Zarephath, NJ.........     9
Statement of Dr. Robert A. Berenson, M.D., Senior Fellow, Health 
  Policy Center, The Urban Institute, Washington, DC.............    12

                       Submissions for the Record

Prepared statement of Senator Robert F. Bennett, Chairman........    37
Prepared statement of Representative Pete Stark, Ranking Minority 
  Member.........................................................    39
Prepared statement of Dr. Bernard Kaminetsky, M.D., F.A.C.P., 
  Colton and Kaminetsky, Boca Raton, FL..........................    41
Prepared statement of Dr. Robert S. Berry, M.D., President and 
  CEO of PATMOS EmergiClinic, Inc., Greeneville, TN..............    57
Prepared statement of Dr. Alieta Eck, M.D., Drs. Eck, Apelian and 
  Mathews, Piscataway, NJ; Co-founder, Zarephath Health Center, 
  Zarephath, NJ..................................................    80
Prepared statement of Dr. Robert A. Berenson, M.D., Senior 
  Fellow, Health Policy Center, The Urban Institute, Washington, 
  DC.............................................................    91

 
CONSUMER-DIRECTED DOCTORING: THE DOCTOR IS IN, EVEN IF INSURANCE IS OUT

                              ----------                              


                       WEDNESDAY, APRIL 28, 2004

                            United States Congress,
                                  Joint Economic Committee,
                                                    Washington, DC.
    The Committee met at 10:03 a.m., in Room SD-628 of the 
Dirksen Senate Office Building, the Honorable Robert F. 
Bennett, Chairman of the Committee, presiding.
    Senators present: Senator Bennett.
    Representatives present: Representative Stark.
    Staff present: Donald B. Marron, Tom Miller, Leah Uhlmann, 
Colleen J. Healy, Mike Ashton, Wendell Primus, Deborah Veres.

        OPENING STATEMENT OF SENATOR ROBERT F. BENNETT, 
                            CHAIRMAN

    Chairman Bennett. The hearing will come to order.
    I understand that Dr. Berry is in the building and will be 
with us shortly.
    We very much appreciate our witnesses being here this 
morning. We're here to explore how some doctors are finding 
alternatives to the traditional third-party payer health care 
system, and at the same time providing better care for their 
patients.
    Many doctors are frustrated by the state of our current 
health care system, and their patients are, too. Doctors are 
continually faced with third-party entities interfering in 
their practice, pushing them towards a system that focuses on 
arcane regulations rather than patient care.
    Low reimbursement rates require physicians to increase the 
number of patients they see, while shortening the length of 
office visits. And they must also shoulder the burdens of 
increased practice costs, time-consuming paperwork and rising 
medical liability premiums.
    Many patients, particularly those with lower incomes, find 
it difficult to obtain affordable care and to receive it in a 
timely manner. They often feel rushed through brief office 
appointments without having adequate time to address their 
questions and concerns, or adequate help to navigate the 
complex medical system.
    Today's hearing will examine the experiences of innovative 
and entrepreneurial doctors who are responding to gaps in the 
current system by returning to an older style of medical 
practice--a patient-focused approach that used to be the norm. 
By adopting these approaches, doctors are finding ways to spend 
more time with their patients and provide a better quality of 
care.
    We will examine the potential reach of these early trends 
among innovative physicians who deal more directly with their 
patients than do physicians relying predominantly on third-
party insurance mechanisms.
    Now, I recognize that insurance-free medical care may not 
work for everyone. But early evidence of consumer-directed 
doctoring suggests that some physicians and patients are 
reacting favorably to this way of providing care, and in some 
cases, it has produced lower costs.
    In other cases, it has offered a more enhanced level of 
personal medical service. And on occasion, it has delivered 
both. In any case, it means providing better value.
    By studying how these entrepreneurial physicians are 
building their practices, we can learn about the strengths and 
weaknesses of our current health care system and how better to 
address them. By understanding alternatives to the system, we 
may be able to improve medical price transparency, help relieve 
medical liability pressures, and retain highly-trained 
physicians who are increasingly frustrated by the present 
system.
    We'd like to welcome our panelists today, all of whom have 
experience delivering health care through innovative or 
entrepreneurial means, or who have studied the issue in an 
effort to understand the implications of this emerging trend.
    I will wait until after we've heard from Mr. Stark to 
introduce each of the witnesses. But again, we thank you for 
being here and look forward to your testimony.
    Mr. Stark.
    [The prepared statement of Senator Robert F. Bennett 
appears in the Submissions for the Record on page 37.]

        OPENING STATEMENT OF REPRESENTATIVE PETE STARK, 
                    RANKING MINORITY MEMBER

    Representative Stark. Thank you, Mr. Chairman. Excuse me, 
but I certainly am in need of treatment today. If I could 
afford the services of our witnesses, I would probably be 
better off for it.
    This hearing appears to be an installment in your side of 
the aisle's move towards replacing traditional health insurance 
with high-deductible health plans and health savings accounts 
and that sort of thing.
    This time the rationale is that doctors provide cheaper 
health care to patients if we do away with the insurance 
companies and their pesky paperwork.
    Now I'd state right off that I'm certainly not a poster 
child of insurance companies in this world. But I'm not sure 
that they don't provide a service to many of us.
    The frustrations in dealing with insurers have led some 
doctors to accept only cash payments. And the doctors claim 
that they can offer lower prices for office visits and other 
simple procedures because they reduce overhead from all the 
paperwork and the insurance reimbursement and so forth.
    ``Concierge care''--as it's been dubbed--is kind of a new 
country club for us rich folks. And we pay a big premium just 
to belong, and then we're guaranteed access. We don't have to 
sit around with the riff-raff. But we still have to pay for 
each service that we receive.
    I guess the danger is that if a large number of the doctors 
open these types of practices, the health care system will move 
much more quickly into a dual system, with the wealthy paying 
for exclusive access and the poor taking what's left over--
public charity care, whatever.
    Having access isn't quite the same as having health 
insurance. A growing body of literature shows that people 
without health insurance forego even necessary care and don't 
have their care properly managed. They incur the risk of 
serious complications and lower overall quality.
    And I'm particularly amused by the concept of 
``empowering'' consumers to make more choices about their 
health care. The need for health care is unanticipated. We rely 
on our doctors' expertise, not our own, to guide our decision-
making.
    As I often say, we may ask questions of our doctor, but we 
never question our doctor. And the policy of consumer-directed 
doctoring says, basically, ``patient--heal thy self.''
    I guess I've spent the last 20 years of my congressional 
career in the health care policy and I've never known so-called 
``consumer-driven'' or ``consumer-directed'' health care to 
perform well. It seems to shift costs to consumers who pay 
more. Then we get to the HSAs and some of these other programs, 
the high-deductible plans. All I can see is that that's another 
tax shelter, again, for the rich, and it doesn't do much to 
help us select.
    Now I have a personal disclaimer here.
    A number of years ago, I went to Johns Hopkins with 
prostate problems. And probably one of the leading surgeons in 
the world was there and he just looked at me and said, ``I 
don't take insurance, fella. If you want me, it's $5,000 up 
front.''
    And I said, okay, I wanted him, because as many of you may 
recognize, this was delicate surgery and I wanted to come out 
of there with all my moving parts in working order. So I paid 
it.
    Now, I'm not sure that there are a lot of people who could. 
And I found out why he doesn't take insurance. Blue Cross 
kicked in $1,300. That's what they would have paid him. And he 
wanted $5,000.
    So there are people--I guess if you want the best and the 
brightest, you have to pay up for it. Maybe he occasionally did 
it free, but I'm just suggesting that this does go on. I'm not 
sure it should, but it does.
    So I'll be interested in hearing from our panel today and 
see what light they can shed on how to help us all, every 
American resident, receive first-class medical care more 
equitably.
    Thank you.
    [The prepared statement of Representative Pete Stark 
appears in the Submissions for the Record on page 39.]
    Chairman Bennett. Thank you very much. I normally do not 
comment on other Members' comments. But I do feel moved to make 
this one disclaimer. And maybe it's the fact that I'm in the 
Senate and Mr. Stark is in the House.
    But I can assure you, Mr. Stark, that there is no 
conspiracy on our side of the aisle to try to undermine the 
present system.
    There is certainly none on my part.
    Representative Stark. I'm glad, because I don't like any 
conspiracy that I'm not a part of, Mr. Chairman.
    Chairman Bennett. I see. Okay.
    [Laughter.]
    Chairman Bennett. These hearings, and we are doing a series 
of them, are structured simply in an effort to take a fresh 
look at the entire health care system, a simple desire to say 
that nothing is beyond examination. At least from my point of 
view, there are no sacred cows that cannot be looked at.
    It stems from my conviction that the present system, 
however satisfactory it is in many ways, is inadequate, is 
falling short in a large number of ways. And I want to take a 
clean sheet of paper look at every aspect in the health care 
area to see what is working and what isn't, to see if, in the 
end, we can't make a recommendation to the legislative 
committees, on which you sit and I don't--maybe that gives me 
some degree of objectivity, that I'm not on the Finance 
Committee or the HELP Committee. So I have absolutely no 
responsibility.
    Representative Stark. If you were going to become a 
Democrat, you wouldn't, either. Okay.
    [Laughter.]
    Chairman Bennett. That's a step I'm not planning to take.
    [Laughter.]
    Chairman Bennett. As I think I may have said when I became 
Chairman of this Committee, Alan Greenspan once said to me: 
``When Hubert Humphrey was Chairman of the Joint Economic 
Committee, he made it look as if no other Committee in Congress 
mattered, because he said, `you have no legislative mandate. 
Therefore, you can look at everything.' ''
    And I corrected him. I said, ``No, Alan, we do have a 
legislative mandate.'' And he said, ``Oh, what is it?''
    And I said, ``We're required to offer a comment on the 
annual report of the President's Council of Economic 
Advisers.''
    And he said, ``As I said, since you have no legislative 
mandate, you can look at everything.''
    I don't think that there is anything that is affecting our 
economy more than rising health care costs. I hear it from 
corporate executives as their number-one cost problem over and 
over again, one that they cannot seem to contain.
    So I think it appropriate that we look at every conceivable 
aspect of the system to try to understand it better. And at the 
end of the day, I hope that we can make some recommendations to 
the legislative committee.
    But may I assuage my Ranking Member's fears that this is 
not the part of a long-term conspiracy on behalf of the 
Republicans to try to undermine anything or promote anything 
other than, I hope, solutions that can be embraced in a 
bipartisan fashion.
    I'm not naive enough to expect that that will really 
happen, but at least it's a consummation that we can work 
towards.
    If you need an additional rebuttal, I'll be happy to allow 
you that.
    Representative Stark. [Nods in the negative.]
    Chairman Bennett. Okay. With that, let us turn to our 
witnesses, whom I will introduce in the order in which I think 
we should hear from them.
    Dr. Bernard Kaminetsky, from Boca Raton, Florida, operates 
a practice that specializes in concierge care, or retainer 
medicine, where patients primarily seek preventive care, get 
involved with wellness plans and individualized attention and 
24-hour access to a personal physician.
    And then we'd like to go to Dr. Robert S. Berry, who is 
here from the PATMOS EmergiClinic in Greeneville, Tennessee. 
Dr. Berry will talk about his experience building a pay-as-you-
go practice. His office fully discloses its prices up front, 
receives payment at the time of services, and generally does 
not accept any third-party insurance reimbursements.
    Dr. Alieta Eck, a Physician from Piscataway, New Jersey, 
runs a--did I pronounce that city correctly?
    Dr. Eck. ``Pis-cat-away.''
    Chairman Bennett. Piscataway. Okay, I apologize to the 
Piscatawayans who may be offended.
    She runs a charitable care clinic that combines community 
resources with more efficient methods of health care delivery, 
to meet the urgent medical needs of the poor and the uninsured.
    And then batting clean-up, we will hear from Dr. Robert 
Berenson, who is an experienced physician, now a Senior Fellow 
from the Urban Institute here in Washington, DC. He has focused 
on health care policy, particularly Medicare.
    We look forward to each of you.
    Dr. Kaminetsky, we will start with you.

STATEMENT OF DR. BERNARD KAMINETSKY, M.D., F.A.C.P., COLTON AND 
                   KAMINETSKY, BOCA RATON, FL

    Dr. Kaminetsky. Thank you, Mr. Chairman, Mr. Stark.
    I am a 51-year-old, board-certified internist presently 
practicing as an MDVIP-affiliated physician in Boca Raton, 
Florida. I affiliated with MDVIP because of the inability of 
the current health care environment to accommodate the 
necessary emphasis on wellness and prevention that is essential 
to perform comprehensive preventive care. Instead, current 
practice, because of time constraints, focuses predominantly on 
acute care. I am honored to be able to discuss my career, and 
my decision to provide my patients with the choice to obtain 
the preventive care and early detection services that they have 
requested and deserve.
    I had always aspired to be a doctor, even from the age of 
six, as my mother could tell you. I attended Albert Einstein 
College of Medicine in New York, where I was elected to 
membership in Alpha Omega Alpha, the national medical honor 
society. I completed my training at New York University-
Bellevue Hospital Center, where I served as chief resident in 
medicine and was responsible for the continuing medical 
education of the house staff. My Bellevue experience was 
certainly unique. I cared for addicted single mothers, Park 
Avenue matrons, the homeless and suburban entrepreneurs. 
Following training, I stayed on as a faculty member at the New 
York University School of Medicine.
    During my career, perhaps the greatest change in primary 
care has resulted from the rapid growth of managed care, 
especially in the realm of Medicare HMOs. Reimbursement, as we 
all know, became lower than traditional fee-for-service 
Medicare, but doctors essentially had no choice.
    Capitation--in other words, accepting fixed payment per-
patient per-month--held the potential to be very remunerative, 
because whatever was not spent on the patient accrued to the 
doctor.
    However, such an arrangement was never acceptable to myself 
or my partners because of the obvious inherent conflict of 
interest. In that setting, a doctor is incentivized to order as 
few tests and as little medication as possible in order to 
improve the bottom line.
    Moreover, that approach to care emphasized treatment of 
acute problems with diminished emphasis on prevention.
    Concomitant with declining reimbursement, we faced an 
increase in our overhead on a continual basis. The health care 
costs for our employees continually rose. Malpractice insurance 
has skyrocketed, especially in crisis states such as Florida.
    We attempted to cut staff, but that caused untenable 
delays. And we became more and more constrained in our efforts 
to be pro-active with regard to health care and became more and 
more reactive.
    It seemed there was only one way a practice could promote 
prevention and still maintain its financial viability, and that 
was by seeing more patients. But the reasoning was clearly 
circular--more patients would mean less time for prevention, 
while a solution mandated more time, not less.
    As a profession, we all had great ideas, but we were 
lacking in the ability to implement any meaningful change. I 
was very seriously contemplating leaving clinical medicine.
    Last June, the New England Journal of Medicine documented 
that only 55 percent of recommended preventive care is 
administered. Only 52 percent of recommended screening is 
performed.
    It's been estimated that a doctor with a typical patient 
load of 2,500 patients, if he were to comply with the 
recommendations of the U.S. Preventive Services Task Force, he 
would spend 7.4 hours of each day on prevention only--
obviously, only a tiny fraction of the day would then be 
devoted to acute care.
    In a similar vein, if one planned on performing 
comprehensive preventive exams of even an hour in length for 
each of the 2,500 patients in a typical practice, that would be 
2,500 hours, or one entire year solely for annual exams, with 
no time whatsoever for acute care.
    In contrast, if a practice is limited to 600 patients, such 
as my current practice, then 12 hours a week, or even 18 hours, 
is devoted to annual preventive exams with ample time available 
for routine and urgent care.
    Hence, my decision to join MDVIP, a program which is 
focused on annual preventive care, physical exams, 
individualized wellness planning tailored specifically to a 
patient's needs.
    I make prevention the foundation of my practice rather than 
a set of often ignored recommendations. My practice style 
allows me to dwell on exercise, nutrition, weight loss, smoking 
cessation, curtailment of alcohol use. I provide detailed 
analyses for the patients of their medical and family history, 
nutritional, psychological and fitness screenings, cardiograms, 
comprehensive labs, imaging studies.
    And all of this is supported with electronic documentation 
that is given to the patient to carry on a CD in their wallet.
    My practice is limited to 600 patients by necessity. In 
order to offset the decline in revenue associated with the far 
smaller practice size, the patients pay an annual fee to 
receive these preventive care services which are not covered by 
Medicare or commercial insurance.
    Early analysis suggests that the scope of care that is 
delivered in a practice such as mine results in enhanced 
patient outcomes. Preliminary studies using a modified HEDIS 
survey of MDVIP-affiliated practices in Florida have yielded 
results that far exceed the national quality of care averages.
    Moreover, these same practices have experienced 
approximately 30 percent fewer hospitalizations relative to 
national averages, a highly significant difference.
    Who are my patients?
    The demographic make-up of my current practice very closely 
mirrors that of my former practice. My patients range in age 
from 18 to 101, and come from all socio-economic backgrounds, 
including patients on fixed incomes and those whose incomes 
qualify them as upper middle class.
    Those patients who chose not to avail themselves of the 
benefits of the MDVIP prevention program remained in my former 
practice and a new internist was hired to join the group, take 
my place, and ensure continuity of care for all patients.
    For myself, for my patients, the clock has truly been 
turned back. The practice environment of the past is like it 
used to be. I really feel like I'm a doctor again, a confidant, 
an advisor.
    I'm in a position to incorporate the newest recommendations 
regarding prevention. It's a win for the patients. It's a win 
for the doctors. It's a win for the insurers because of the 
reduced hospitalizations.
    I can't imagine anything could be better. Thank you.
    [The prepared statement of Dr. Kaminetsky appears in 
Submissions for the Record on page 41.]
    Chairman Bennett. Thank you very much. We appreciate that.
    Dr. Berry.

 STATEMENT OF DR. ROBERT S. BERRY, M.D., PATMOS EMERGICLINIC, 
                     INC., GREENEVILLE, TN

    Dr. Berry. Mr. Chairman, Mr. Stark, thank you for inviting 
me to testify before this Committee today.
    I am grateful that our leaders want to know what is 
happening at the grassroots level and you are willing to 
consider a perspective of an ordinary primary care physician 
like me when deliberating health care policy.
    I'm Dr. Robert Berry. My background is primary care 
internal medicine and emergency medicine. As a physician in a 
private practice that does not take any insurance, I believe I 
might be able to offer you fresh insights on some of the 
seemingly insurmountable problems we face in health care today.
    Over three years ago, I left ER medicine to start a clinic 
primarily for the uninsured in my community. I thought I might 
be able to help them avoid unnecessary expensive visits to the 
ER.
    My motivation was simply to try and flesh out in my own 
life an answer to the age-old question--``who is my neighbor?'' 
Of course, I don't refuse other patients willing to do payment 
at the moment of service. In fact, because this seemed to be 
the unifying theme of our practice, I chose its acronym--
PATMOS--as the name for the clinic.
    PATMOS is similar to charity clinics such as Dr. Eck's in 
that it serves many patients falling through the cracks of our 
broken health care system, except that we don't receive any 
taxpayers' funds, either directly as subsidies or indirectly as 
a tax-exempt organization.
    It is similar to boutique clinics such as Dr. Kaminetsky's 
in that it contracts directly with its patients, except that 
most of our patients don't have insurance.
    The prices for medical services at our clinic are quite 
reasonable--$35 for a sore throat, $95 for a simple laceration.
    I can keep my fees this low and, thus, affordable to the 
uninsured and patients with high deductibles, because I avoid 
the crushing overhead and hassles of processing relatively 
small medical claims, a service from which they clearly do not 
benefit.
    Mine is only one of many non-boutiques, cash-only clinics 
in this country. There is a growing movement of physicians like 
me who offer affordable quality medical care by refusing to 
sign insurance contracts.
    We are no longer willing to tolerate anyone intruding into 
the once-sacred doctor/patient relationship. And the mainstream 
media is catching on.
    Last November, The Wall Street Journal featured our clinic 
on the center of its front page in an article entitled, ``Pay 
As You Go MDs--The Doctor Is In, But Insurance Is Out.''
    Just several weeks ago, the AP News ran a story on Simple 
Care, a network of cash-only clinics, which was picked up by 
CNN and many local media throughout the country.
    National news programs have highlighted other cash-only 
clinics as well. The media is tapping into a rich vein of 
frustration and fear, frustration with costs escalating and no 
end in sight, while medical care is becoming less accessible 
and less personal.
    Fear that we might end up with a single-payer system where 
delays for treatment can be inhumane.
    Clinics like ours offer hope that there are doctors out 
there today who care, and who don't cost an arm and a leg.
    In Canada, the median time from a mammogram to a mastectomy 
is 14 weeks. Personally, I don't think I could look a woman in 
the eye, inform her that her mammogram was suspicious for 
cancer, and then have to tell her that the cancer might have 
spread before she can receive treatment.
    Of course, in Canada, I wouldn't be put to that test, 
because clinics such as mine are currently illegal there.
    The issue before you now, it appears, is very simple--who 
will control health care dollars?
    The government? No. Medical decisions are much too complex 
and personal to entrust to distant bureaucrats, many of whom 
lack basic medical knowledge.
    How about the patients, then?
    In my opinion, the most cost effective and humane solution 
to many of our health care problems is to allow ordinary 
Americans to manage their own routine medical care by giving 
them control over health care dollars. They can do this now 
with pre-taxed, tax-deferred personal and family medical 
accounts within consumer-driven health plans and spend them at 
clinics like ours.
    It is, after all, their money and their health. They should 
control both.
    Ronald Reagan once again said, ``There are no easy 
solutions--just simple ones.'' All that is required is being a 
neighbor.
    [The prepared statement of Dr. Berry appears in Submissions 
for the Record on page 57.]
    Chairman Bennett. Thank you very much.
    Dr. Eck.

   STATEMENT OF DR. ALIETA ECK, M.D., DRS. ECK, APELIAN AND 
           MATHEWS, PISCATAWAY, NJ; ZAREPHATH HEALTH 
                     CENTER, ZAREPHATH, NJ

    Dr. Eck. Good morning. Thank you for the opportunity to 
speak before this Committee and share some of my experiences as 
a private practicing physician, in the trenches, so to speak.
    I have prepared a written testimony, which you have. So I'm 
just going to try to summarize.
    Chairman Bennett. It will be part of the record.
    Dr. Eck. I was a registered pharmacist before I became a 
physician. I graduated from St. Louis University School of 
Medicine, did a residency in internal medicine at Robert Wood 
Johnson University Hospital in New Jersey. I'm board-certified 
in internal medicine.
    I live and practice in New Jersey, but I participate in a 
health benefits reform message board. Experts from across the 
country--we've been discussing the different problems related 
to health insurance. New Jersey is considered the poster child 
with what can go wrong with how government can mess things up 
so badly.
    In 1992, they created an individual health coverage program 
to ensure that people that didn't have private insurance or 
government-sponsored insurance could purchase insurance. So 
they standardized plans.
    The state was attempting to make it easier for people to 
understand the plans and comparison shop. But the net effect 
was a staggering increase in premiums and an equally staggering 
increase in the number of people who are uninsured.
    So New Jersey is really ripe for change.
    There were 220,000 individual policies in 1996; 90,000 now, 
and they're going down quickly.
    As you'll look up on the web site, you'll find that an 
individual policy for $1,000 deductible, 30 percent co-pay, is 
now about $4,000 a month.
    They actually publish these rates in New Jersey.
    The reasons are many. But it's government. The government 
has told people that the insurance companies have to have a 
community rating. They have guaranteed issue. They have a $300 
mandated amount that they have to pay for check-ups. All kinds 
of government mandates in each insurance policy. They limit the 
level of the deductible. And there's intense political pressure 
to avoid change.
    I've outlined all of the reasons for this in my prepared 
comments.
    I even asked our Senator, Jon Corzine, I said, please, let 
us buy health insurance across state lines. But that's not 
legal in New Jersey, or I don't know if anywhere else. It 
certainly wouldn't be against the commerce clause of the 
Constitution and it would allow a lot less people to be 
uninsured.
    Anyway, I have two practices. I have a private practice 
with four physicians. And there, we have cut things way down so 
that we have two full-time employees, about six part-time 
employees. Very efficient. We don't do any HMOs. We don't do 
any private insurance.
    And this keeps our costs way down and our prices are very 
reasonable there. We earn a living there.
    We participated in one non-capitated HMO. But they looked 
at our charts and decided that we had charged a higher level 
than we should have. And therefore, they wanted a claw back. 
They wanted to take back some of the money that they had given 
us for services that we had rendered.
    We got out in a hurry. And that was the last HMO that we 
were in.
    We found that, in a hospital conference, they gave us a 
graph and they showed us a horizontal line was where how long 
people stayed in a hospital. And the vertical line was how much 
we spent.
    And they told us if we were in the upper right-hand corner, 
we were bad doctors. Lower left-hand corner, we were good 
doctors.
    In other words, our whole training was being compromised by 
how much we spent, and that was really the most important 
thing, as Dr. Kaminetsky had noted.
    Well, there is a problem of access for the poor. So 
although our prices are reasonable, we also want to help people 
who are struggling and have nothing.
    We have fascinating stories of people that we have helped 
in the other practice that we have, called the Zarephath Health 
Center. We've been in existence for 6 months now and we've been 
able to take care of people in a very personal way. Not a 
bureaucratic way, not a one-size-fits-all way.
    But you get to know these people and you say, well, how can 
I help? And how can I make a difference?
    There's a little building that was given on our church 
property for us to use. Our overhead is about $500 a month. We 
have all volunteers taking care of people. And they come in. 
And I want to tell you about a couple of these people that 
we've been able to take care of.
    A 28-year-old woman came. Her father had died from a long 
illness. She had been the primary caretaker and became very 
depressed. She lost her apartment. She had no job and needed 
$230 worth of medicine.
    She went to the local social service agency and they looked 
at their lines and they filled in what she needed. She said, 
``You know, the way you could get help is to just get 
pregnant.''
    Well, she was smart enough to realize that wouldn't really 
help her. So she wound up coming to us. We helped her access a 
pharmaceutical program where she could get $230 worth of this 
medicine, a three-month supply. And after that, they wouldn't 
repeat it until she got a letter from the social services 
agency that said why they had turned her down. They wouldn't 
write it.
    So we just called around. We found out how much the 
medicine cost, wrote her a check and bought her her medicine.
    It's a tax-deductible gift that people had given to us to 
help take care of the poor. We helped her. Now she's getting a 
job. She's not going to need us any more. That's the kind of 
person we're helping.
    Another, a 52-year-old woman is taking care of her 54-year-
old sister dying of breast cancer. She has no insurance. Her 
family has no insurance. She went to the local hospital where 
she thought she could get reasonable care. They charged her 
$495 for a physical and blood work. They then gave her a 
prescription for a mammogram.
    Now she has no money, no anything. She came to us. We said, 
wow, we could have done that for a whole lot less. But we gave 
her the money for a mammogram. And she got it and thankfully, 
she's okay.
    Interestingly, her sister was just told that she can get on 
to Medicaid as of July 1st. And she'll be dead by then. So she 
has really no help. We'll help her, too.
    The bureaucratic systems just don't really help, when you 
really get down to the bottom to where people are struggling.
    Just to summarize. I love being a physician. It's the most 
rewarding of professions. But we're struggling because a lot of 
government mandates--the malpractice situation is extremely 
difficult. That makes it harder and harder for us to provide 
reasonably-priced care.
    There are 15,000 retired doctors in New Jersey who can't 
even help in our clinic because they can't buy the mandated 
health insurance. Or aren't interested in paying a lot for 
health insurance.
    Those doctors----
    Chairman Bennett. You mean malpractice insurance, don't 
you?
    Dr. Eck. I'm sorry. Malpractice insurance, yes. That's an 
army of people who could serve the poor in our very 
personalized way if they were just freed up from that kind of a 
liability.
    Anyway, we have to hurry because there are a lot of 
Americans that are being hurt. The obstetricians and 
neurosurgeons aren't able to do what they do best because of 
the malpractice situation.
    To summarize, that's basically it. We just need less 
government pressure on us and more freedom to practice the way 
we were trained.
    Thank you.
    [The prepared statement of Dr. Eck appears in Submissions 
for the Record on page 80.]
    Chairman Bennett. Thank you very much.
    Dr. Berenson.

 STATEMENT OF DR. ROBERT A. BERENSON, M.D., SENIOR FELLOW, THE 
                URBAN INSTITUTE, WASHINGTON, DC.

    Dr. Berenson. Thank you, Mr. Chairman, Mr. Stark, and the 
other witnesses. I appreciate the opportunity to speak here 
today.
    I've provided testimony or a statement for the record. I'm 
going to divert from that because yesterday evening, I had an 
opportunity to read the testimony of the other witnesses and 
found it very interesting and wanted to comment briefly on some 
of what I read and heard this morning.
    Chairman Bennett. Your full statement will be included in 
the record, as is the case with all of the witnesses.
    Dr. Berenson. Thank you very much. And I actually found I 
had a lot to agree with in the testimony and the statements of 
the other witnesses.
    I think, in composite, they are painting a picture of an 
increasingly dysfunctional health care system, where primary 
care physicians, in particular--and I guess we're all, I'm an 
internist, also, a board-certified internist. I think in 
particular feel that the system is not working very well for 
ourselves or for our patients.
    I certainly think in aggregate, the other witnesses 
presented a good picture of the symptoms of our current system 
and I fully understand their responses, how they've tried to 
cope with the problems in their own way.
    I was actually in a similar situation about a decade ago to 
Dr. Kaminetsky, where I was working harder trying to just stay 
afloat.
    I think the best year I ever had practicing internal 
medicine was making about $35 an hour on a full-time basis, 
making $75,000.
    I took time with my patients. Insurance didn't reward me 
for taking time with my patients. And I wound up, instead of 
doing what Dr. Kaminetsky did, moving on to more of the policy 
side of health care to try to see what we could do about 
improving the system.
    So I'm quite sympathetic to what they have described.
    However, I think I disagree with some of the proposed 
approaches, or at least where the physicians suggest the 
solutions lie.
    Dr. Berry made some very compelling comments about how a 
patient has a choice between going to a busy, crowded emergency 
room, spending hours, getting a huge bill and not terrific 
service. And he was providing an alternative to that.
    And indeed, all of the physicians described sort of the 
growing impersonality and bureaucracy that characterizes 
medicine.
    Let me briefly tell you a story of my wife, who a few years 
ago was traveling in a city where she didn't know any 
physicians. She was on a trip, developed a fever of 103, felt 
terrible at about 6:30 at night, and decided she needed to get 
some medical attention.
    She went across the street to a pharmacy that was open. Got 
the name of a physician to call. Called, a man answered. She 
said, ``Can I speak to the physician?'' He said, ``I'm the 
physician.'' She had expected to be going through a whole array 
of people, actually expected to be talking to an answering 
service.
    Described her problem. The physician said, ``I'll be right 
over.''
    In half an hour, had seen her, diagnosed her, given her a 
prescription, and billed her for $40, which she paid on the 
spot.
    That's the way medicine should be practiced.
    That was in France. That was not the United States. That 
was in a social health insurance system. In Belgium, physicians 
make as many home visits as they do office visits. In other 
words, just the fact that there is social health insurance does 
not mean that we have to have a bureaucratic, impersonal, 
costly health care system.
    There are clearly examples of problems. The UK is under-
funded. There are long waits. Canada is having a problem. Other 
systems have problems. But to equate bureaucracy with 
government, I think, is a mistake.
    In my opinion, the kinds of problems that we have don't 
call for moving towards high deductible plans that put even 
greater financial burdens on individuals to seek care, but 
actually should be addressed by dealing with the problems of 
uninsurance and under-insurance, by the huge waste and 
inefficiency that we have because of, in particular, the 
individual and small group insurance market, which does not 
work very well and extracts 40 cents on every dollar. These 
dollars are not going to patient care and this insurance market 
creates some of the confusion that physicians and patients 
experience.
    And I think we have a continuing problem that has not been 
adequately addressed by the Medicare Resource-Based Relative 
Value Scale or by private insurance, which tends to follow the 
RBRBS, in which we over-reward procedures and tests and doing 
things to patients and under-reward the activities that 
physicians are trained to do, but are not compensated for 
doing.
    So I think there are lessons in what these doctors have 
described for changes in public and private insurance 
companies. But doing away with front-end insurance coverage, I 
do not think is the solution.
    Specifically, on the issue of health savings accounts, I 
think they actually exacerbate some of the problems. The 
healthy and wealthy would be able to do reasonably well with 
high-deductible plans. But those with chronic diseases, which 
are an increasing percentage of the population, who would 
immediately go through their deductible and be in the 
catastrophic part of the insurance, would be worse off because 
of adverse selection.
    And so the premiums would go up more and more for those 
with illnesses, and those who are healthy and wealthy would be 
able to essentially opt out of the insurance pool.
    Similarly, I would argue that the costs in health care 
which are driving government budgets and private premiums 
through the roof, are associated with a small percentage of 
patients who generate a huge percentage of costs.
    Virtually anywhere that you look, whether it's in Medicare 
or in private insurance plans, about 5 percent of patients 
generate about 50 percent of the costs.
    In Medicare, patients with four or more chronic diseases 
represent about 79 percent of spending in the Medicare program.
    To provide some incentives for people to use their own 
money to shop more carefully might feel good. It might reduce 
some marginal, discretionary services. It would not make a dent 
in what's driving our health care spending, which is really 
spending for the very sick.
    And then the thing that would bother me the most, and 
picking up on some of the remarks that Dr. Kaminetsky made, is 
that people with high-deductible plans who are not affluent 
would be making choices about whether they should forego early 
prevention and early diagnosis and treatment, which should 
forestall health problems down the road and reduce spending 
down the road.
    I don't think we have any evidence base to suggest that 
people, basically being asked to be their own doctor, know how 
to make those kinds of choices.
    I certainly would not go there based on what we know right 
now.
    So let me conclude by saying I look forward to our 
discussion. I think the physicians are on to something when 
they describe the problems in the health care system.
    I just don't think that moving more towards a market 
solution is the way we want to go.
    Thank you very much.
    [The prepared statement of Dr. Berenson appears in 
Submissions for the Record on page 91.]
    Chairman Bennett. Thank you very much. I look forward to 
discussion with all of you.
    If I might, Dr. Berenson, picking up on your example of 
your wife. If I understood Dr. Eck correctly, the physician in 
France that you talk about would not be permitted to do that in 
the State of New Jersey. Is that correct?
    Dr. Eck. I don't think he'd be permitted to do that in 
Canada. But in New Jersey, they could do that. Cash practices 
are okay in New Jersey.
    It's just that if you wanted to have health insurance, the 
mandates are all in the health insurance policies, which makes 
the price of the insurance policies go up. But, yes, cash 
payments are okay in New Jersey.
    Dr. Berenson. I'm not aware specifically of New Jersey, but 
there have been developments of physicians starting activities 
to do home visits.
    I actually think it's sort of a mechanical thing. In some 
countries, patients pay at the point of service and then get 
reimbursed from the social security system. In other places, 
they send the insurance through up front.
    I don't think that--we do not have to have all of the 
overhead associated with the current practice of U.S. medicine 
in a well-insured health care system, is the point that I want 
to make.
    Chairman Bennett. Yes. And I find agreement there between 
what you're saying and the experience that's being demonstrated 
here.
    Now, Dr. Kaminetsky, respond to Dr. Berenson. By the way, I 
never mentioned health savings accounts in establishing this 
hearing.
    It's interesting that that's where the conversation goes 
because that's where the conversation has been.
    As I said in my response to Congressman Stark, I'm not 
carrying water at this point for any particular solution. We 
just want to find out what will work to make physicians, as 
these physicians have indicated, get excited about practicing 
medicine again.
    Increasingly, I hear that physicians want to get out of it, 
that the bureaucracy, whether it be private or government, is 
intolerable.
    Among physicians, I don't get any division between the 
bureaucratic heavy hand of an insurance company or the 
bureaucratic heavy hand of the government. It isn't an anti-
government kind of thing.
    It's a revolt against the idea that a third party, whoever 
it may be, is constantly injected into the equation.
    So let's go back to understanding where we are.
    Now, Dr. Kaminetsky, will you respond to Dr. Berenson and 
talk about what----
    Dr. Kaminetsky. When you raised the point, which is, of 
course, on the principal reasons we're here, discussing 
physician dissatisfaction and why doctors have chosen to make 
changes in the nature of their practice.
    The premise underlying the question or the criticism of 
what I do is the assumption that were I not doing what I'm 
doing, I would just be back on the treadmill the way I was, 
seeing 30 people a day, dealing with acute care, but paying 
little, if any, emphasis to prevention.
    That's a flawed premise, because I was certainly on the 
verge of leaving the practice. I had done enough investigation 
to actually be very seriously contemplating signing a contract 
with a pharmaceutical company. And of course, many physicians 
have, unfortunately, left the profession because of the 
frustrations involved. And sadly, their skills are being lost.
    Concerns--Dr. Berenson touched on many different aspects. 
What I do is a solution. It's certainly a niche product. To 
quote from the AMA's report of the Council on Medical 
Services--``The phenomenon of retainer medicine is inherently 
self-limiting. The more physicians charge for their services, 
the smaller the demand for their services. These economic 
realities limit any potential for widespread adoption of 
retainer practice.''
    In terms of access, I also want to emphasize that affording 
oneself of the opportunity to concentrate on preventive 
services and, as a patient in a smaller practice, reap the de 
facto benefits of being a patient in a smaller practice, is a 
matter of choice.
    Certainly, for those patients, of my former patients who 
were not capable of making the choice because they truly would 
find that $1,500 prohibitive, those patients are still my 
patients.
    We call them scholarship patients. There's absolutely no 
differentiation between the preventive services they receive 
and any other patients.
    So, I do not believe that access is limited by the nature 
of an MDVIP affiliated practice because of it being a niche 
product, and because those patients who truly are not capable 
of making the choice are accommodated, nonetheless.
    Chairman Bennett. Any other comment before I turn it over 
to Mr. Stark on this?
    [No response.]
    Chairman Bennett. Okay. What I'd like to do, Mr. Stark, if 
it's all right with you, is for you to take a round and then I 
would hope that the six of us could have a roundtable kind of 
conversation rather than the traditional your turn, my turn, my 
time, your time.
    Let's interrupt each other and interact with each other, if 
that's acceptable to you.
    Representative Stark. It certainly is. Thank you. That's 
generous of you, Mr. Chairman.
    Like Dr. Berenson, I haven't heard anything this morning 
that gets me terribly upset. I have to look at the Stark 
family.
    I like the idea of what we call the ``boutique.'' I'm just 
enough of a snob that I'd just as soon be able to call the 
doctor at home and do a whole lot of things that--now, the 
Senator and I have available to us, courtesy of the United 
States Navy, a whole clinic full of doctors who are available 
24/7. And we don't wait. I mean, we really don't. And they're 
high-class physicians.
    And it is a form of medical care delivery that this country 
could not afford.
    But we know what the boutique of the boutiques is like. And 
it's pretty nice. And I have some of my colleagues who have 
retired who get out into the real world and miss that very 
much. They could afford and would go to a physician.
    We changed with our three little children pediatricians. 
Same reason. We just got sick of being shuffled. They ran maybe 
three offices and had 15 physicians. And that got to be just 
more than we could deal with until we found a physician who 
would deal with the children and we could contact her. So I 
think that's instinctive.
    The trouble with it, I suspect, is if everybody went that 
way, we would get into much more of a two-class system than we 
have.
    Let's assume that the 40 million uninsured are one class 
and those who enjoy medical payment systems are in another 
class.
    So I have no quarrel there.
    Dr. Eck, first of all, you're to be commended for 
formalizing your commitment to treating people without charge. 
I have often suspected that when I hear physicians, and I hear 
a lot of physicians every year, complaining about how poorly 
Medicare pays them and how much time they spend on pro-bono 
services, that the only time I think they really mention pro-
bono services is when I see them in my office.
    But that's a skepticism that you certainly disprove.
    As for cash only, I have this experience. Near Annapolis, 
where we live, there's a doc-in-the-box person who doesn't 
require an appointment and is near our home. And often, either 
our nanny or my wife or I will go there when we're pretty sure 
what we need. We're pretty sure it's an ear infection and we 
need an antibiotic, or whatever.
    And she's very accommodating. She takes cash, but we can 
send her bill on to Blue Cross. And sometimes they'll pay us 
some and sometimes they won't, depending on what she writes 
down that she's done to us. This physician serves a real 
purpose in our community.
    There's a nighttime pediatrics that now takes adults as 
well. It's a community organization mostly of pediatricians and 
a couple of family practice physicians. And they're open 6:00 
till midnight and Saturday afternoons and some Sundays for the 
time that children mostly seem to get sick. And they will take 
adults.
    So I had an experience there, and this is what troubles me.
    I was waiting to register my son to go in, probably with an 
earache. A woman was next to me and they were saying how much 
she had to give them her insurance card or her credit card. 
They did not take her insurance. She had a young child with her 
and the child was quite obviously in some pain. They wanted 
$65.
    She had driven, for those of you who know the area, from 
Kent Island all the way to Annapolis. So this wasn't just in 
the neighborhood. They made some effort to bring this child 
some distance. And she couldn't afford the $65.
    So she left with the child and hopefully went to the 
Annapolis Medical Center and waited around the emergency room 
for a while.
    And there are people--and it's hard for many of us who are 
more comfortable to understand where $65 is a real barrier to 
getting the kind of attention that we think, as patients, that 
we'd like at the time. And that's a problem I have.
    I wanted to ask because I want to talk about the free 
market in a minute.
    In each of your practices, for the primary care patients--
and I don't know how many of you provide other services than 
primary observation and referral. But give me what you think 
would be the median dollar amount that your patients spend. Not 
including your fee.
    But what does a patient on your books spending a couple of 
thousand, three thousand, two thousand, one thousand, what's 
the median of people who you see?
    But before you get to that, my concern is, and I think in 
your testimony, Dr. Berenson, you presented this to some 
extent.
    I don't think that we as lay people--and the Senator may be 
better at this than I am--I don't think that we're able to shop 
for medical care or services.
    I can go out and shop, with the help of Consumer Reports, 
for automobiles and tell you how to get the best deal on a 
Camry or a Lexus or whatever you're looking for, and we know 
about that.
    And my wife can tell you where to go to get the best 
produce, whether it's best at Fresh Fields or Giant and what 
days the fish is fresher, where.
    But we are absolutely clueless as to what it costs or what 
kinds of things to go shopping for in terms of medical 
services.
    And I had my staff, just for the heck of it, shop in your 
hometowns earlier this week. It took four of them about 3 hours 
apiece. And I would just ask--and it was two things--a head CAT 
scan and a colonoscopy.
    And I don't know if you found a bargain colonoscopy, if 
you'd like to run out and get one right away. But let me just 
ask Dr. Berry.
    In Greeneville, Tennessee, do you know what the range of 
colonoscopy charges--now they all said about $2,500 for 
anesthesiology and the facility fee.
    Dr. Berry. Do you want to know the doctor's fee or the 
hospital's fee?
    Representative Stark. What would you guess the range is?
    Dr. Berry. The doctor's charges versus what he's 
reimbursed--the doctor's charges I think run between $600 and 
$800. The hospital charge to the uninsured----
    Representative Stark. We said that we were uninsured.
    Dr. Berry. Uninsured.
    Representative Stark. The ranges we got were $900 to 
$1,500.
    Dr. Berry. Okay.
    Representative Stark. Dr. Eck, what do you think----
    Dr. Berry. The hospital, by the way, sir, would be about 
$1,500 for the uninsured.
    I know that because I have a copy of a bill from someone 
who came in.
    Representative Stark. That's okay. I'm just trying to----
    Dr. Berry. And his wife's insurance was----
    Representative Stark. What do you think they are in 
Piscataway?
    Dr. Eck. Piscataway. It's an Indian name.
    Representative Stark. Just the doctor's fee. What do you 
guess?
    Dr. Eck. I'd say about $1,200 to $2,000.
    Representative Stark. You'd pay too much. $600 to $1,200 is 
what we got.
    Dr. Kaminetsky, do you want to take my test? What would you 
guess?
    Dr. Kaminetsky. I would hazard a guess of about $800 for 
the doctor's fee.
    Representative Stark. Well, we got $500, $900, $650 and 
$1,100 in Boca Raton where we called.
    So, I guess the only reason I say this is that it took us 
forever and a day. And if you need a head CAT scan, you're 
probably not in shape to be spending a couple of hours calling 
around to get the best price. We don't shop for that. You tell 
us to take a test. We take it and hope we pass. And we go where 
you send us.
    Dr. Eck. If you're going to save several hundred dollars, 
you would shop around. That's not that hard.
    Representative Stark. Well, Doc, I want to tell you that 
there are times when various malfunctions hit you and you're in 
no mood to shop around.
    Dr. Eck. Well, that's different.
    Representative Stark. And my sense is that----
    Dr. Eck. Then what you need is a general contractor who 
knows the system who can help you out.
    Representative Stark. I'd just point out that it's 
difficult for us----
    Dr. Berry. I've done the shopping, Mr. Stark, and I've 
gotten discounts from hospitals and from other--not for 
colonoscopies. I've tried. I haven't been able to do that. But 
for an MRI, for example, cash payment to our clinic would be 
$530, and that includes the interpretation. If they want to put 
it on their credit card, $550.
    Representative Stark. But you're doing that.
    Dr. Berry. I've done that for a lot of tests.
    Representative Stark. What I'm suggesting is that that's 
fine, and that's as it should be.
    But we as patients----
    Dr. Berry. That's why you come to me.
    Representative Stark. Precisely.
    Dr. Berry. Because I've done that work.
    Representative Stark. And what I'm trying to suggest is 
that that's what's wrong with these high co-payments--we as 
patients don't know how to do that. We don't know what we're 
looking for.
    Dr. Berry. Well, what happens out in the real world is that 
patients talk among themselves and they find out which doctors 
they can trust.
    Chairman Bennett. Right.
    Dr. Berry. And that's why more and more patients are coming 
to me.
    Chairman Bennett. Yes. If I can intrude my personal 
experience in this.
    I don't shop for dollars, but I shop for doctors. And if I 
can give you a somewhat parallel example. You talk about 
automobiles.
    I am as clueless when it comes to car repair as I am 
medical repair. I have no idea whether I'm getting ripped off 
by a----
    Representative Stark. You are.
    Chairman Bennett. Okay.
    [Laughter.]
    Representative Stark. Go into the repair shop with that in 
mind and you'll be right.
    [Laughter.]
    Chairman Bennett. I have found in my lifetime repairmen, 
auto repairmen who are willing to talk to me. And you spend 
some time talking to them, they'll tell you who in the 
community gives you good service and good prices and who 
doesn't.
    And usually, I take the coward's way out and simply take 
the car back to the dealer, which may or may not be the right 
thing to do.
    But when I'm worried about money and I've got an old car 
that I've got to deal with, I'll talk to a mechanic who will 
tell me who the other mechanics are.
    Now, do the same thing with doctors. And doctors break the 
code of silence if you get to know them and they'll say, ``the 
question is, all right, doctor, if you had a problem, where 
would you go?''
    And inevitably, in one area, and I won't identify it, 
because I don't want anybody listening to this to start to go 
down the trail. But in one area in my family, we've had a 
particular problem that has occurred in several members of the 
family.
    We have asked doctors--``Okay, if you had this problem, 
where would you go?'' And the same name has come up every time.
    And by careful activity, every member of our family that 
has had that particular problem has gotten in to see that 
doctor.
    I don't think it's just because I'm a Senator that I can 
make a phone call and say, ``Will you see my grand-daughter?'' 
And have him say ``yes.''
    The network is out there. One of the great frustrations 
with managed care is that you can't do that. Indeed, when I was 
CEO of my company picking plans for my employees, I picked the 
plan that made the most economic sense, which is what the 
incentive is.
    And then when I looked at the particulars, I said, ``Wait a 
minute. I don't want this plan,'' because the doctor with whom 
I had a relationship was not on the list of doctors.
    I got around it by going to a doctor who was on the list 
whom I knew and said, ``Will you please accept the assignment 
of my primary physician and immediately refer me to the doctor 
that I want?''
    And he knew the doctor that I wanted. He agreed with me 
that it was a very good choice and said, ``sure.''
    So we gamed the system by my signing up with this plan and 
worked it around so that I never ever saw the doctor who was on 
the list as my primary care physician.
    Dr. Eck. You know, it's interesting. The very best 
specialists you won't find on any plan because they can name 
their price.
    Chairman Bennett. That was the case with the doctor that I 
wanted.
    Dr. Eck. They can name their price, they're so good. Who do 
you want to go to when you need that neurosurgery? I'd rather 
go to the best and pay more than go to the doctor on my plan. 
That's why I'm not in any plan.
    Representative Stark. I just wonder if I could get the 
numbers real quick and then I'll yield.
    Have you guys thought about what the median patient spends 
for primary care in your practice each year?
    Dr. Berry?
    Dr. Berry. At my clinic?
    Representative Stark. Yes.
    Dr. Berry. I know what they spend per visit.
    Representative Stark. No. Well, what would you guess they 
spend in a year?
    Dr. Berry. I don't know that, sir, because I don't keep 
those kinds of records.
    But they spend $51 per visit, which includes the 
professional fee, the labs, whatever tests that I order and 
whatever medicines I provide there or dispense from the clinic. 
That's the total visit.
    Representative Stark. Any idea, Dr. Eck?
    Dr. Eck. The average person? Again, I don't have those 
kinds of records, either. I'm just imagining.
    Some of them like to come a lot. They feel better when they 
see me a lot. So they might pay $500 or $600 a year, if they're 
not very, very sick.
    Representative Stark. All right.
    Dr. Kaminetsky, other than the fee, what's your average?
    Dr. Kaminetsky. As Dr. Eck said, a lot of patients like to 
come a lot. And one of the old complaints about Medicare, of 
course, is that there's no disincentive for a patient to come 
for a very trivial complaint.
    But I'd say the vast majority of my patients are either 
paying for their Medicare supplement, which is several thousand 
dollars a year, plus medications, depending on what their needs 
may be in terms of relative health.
    My non-Medicare patients, their main expense would be the 
cost of their health insurance, which would vary. I think 
single with children--for my family of five, I pay $1,300 a 
month.
    Representative Stark. Most of your patients have insurance. 
And that covers most of what you would bill them for, your 
procedures.
    Dr. Kaminetsky. The vast majority, yes.
    Representative Stark. Okay. Thank you.
    Dr. Kaminetsky. Can I take the opportunity?
    Chairman Bennett. Sure.
    Dr. Kaminetsky. I just want to respond to Mr. Stark's 
anecdote about changing to the pediatrician. And of course, you 
change because you are frustrated by the lack of access.
    Chairman Bennett. You shopped.
    Dr. Kaminetsky. The prevention program, the emphasis is 
truly prevention.
    For example, numerous studies have shown that what is most 
effective in getting patients to stop smoking is doctor-patient 
intervention. Not Nicorette gum, not nicotine patches, not 
Welbutrin, but doctor-patient intervention.
    When I have a smoker and I'm trying to get him to stop, 
it's almost like a game. But he knows that a designated day of 
the week, every week, he's going to get a phone call.
    That's prevention.
    With 2,500 patients, I couldn't possibly do it. Now it is 
true, again, a de facto benefit of being in a smaller practice, 
as when you're competing with 600 people for an appointment 
versus competing with 2,500. It's different. But the emphasis 
in the program is prevention.
    And as far as the concern about creating tiers, well, 
medicine is tiers. We've got HMOs. We've got PPOs. A Medicaid 
patient can't see a doctor who is not a participant in 
Medicaid. And a Medicare HMO patient cannot see a doctor who is 
not a participant in that HMO.
    This is another product in a very pluralistic market which 
offers many different options for patients. And the AMA's 
Council on Ethical and Judicial Affairs, specifically referring 
to retainer practices, has endorsed the concept that, ``the 
patient has the freedom to select their health care on the 
basis of what appears to them to be an acceptable trade-off 
between quality and cost.''
    Representative Stark. I have no quarrel with it at all. I 
am a little uncertain as to how it deals with extra billing 
relative to Medicare. But that's a very technical problem for 
another day. But other than that----
    Dr. Berry. To answer your question, though, all you have to 
do is multiply, say, the patient sees me 4 times a year for 
hypertension. That would be about $200.
    Representative Stark. One of the problems we have, and then 
I'll get out of this, what I was leading up to is that, on 
average, and averages are bad. We spend $7,000 a year on a 
Medicare patient.
    Now, most of that is spent on those beneficiaries who are 
very much older than I am. But nonetheless----
    Chairman Bennett. And in the last 30 days, isn't it?
    Representative Stark. Yes. But I think even if you took the 
20 percent at the right hand of the curve and lopped it off, 
we'd still be at $2,000 or $3,000, anyway that would be spent, 
again, on average, by these 40 million Medicare beneficiaries.
    And I don't know that they could get insurance, absent 
community rating and forced across the country and a whole lot 
of other things that they could afford if we didn't have it.
    Now you may not like it as the best system, but many of us 
think it's pretty efficient. And prior to 1965, I was active in 
finding insurance for my grandparents and my parents and it was 
impossible.
    So for those people who remember back that far, it was a 
great burden that was removed from the worries of seniors as to 
what they were going to do about paying for health care.
    And in those days, it wasn't as expensive. There weren't as 
many sophisticated techniques and tests and things to pay for. 
But it was still a concern for people.
    Dr. Eck. Do you remember what the cost of a hospital bed 
was per day back in 1965?
    Chairman Bennett. It's under a $100.
    Representative Stark. I'm going to guess, in the 
neighborhood of $100 and change.
    Dr. Eck. In New Jersey, it was $39. But once all those 
dollars came infusing in, that was part of the reason for the 
medical inflation that has occurred.
    Representative Stark. You could buy a Mercedes for $2,000 
in 1965, too.
    Chairman Bennett. A Mustang, maybe.
    Representative Stark. A Mercedes.
    [Laughter.]
    Representative Stark. A Mustang was $900.
    Dr. Eck. Medical inflation is higher than Mercedes 
inflation.
    Chairman Bennett. Yes.
    Dr. Berenson, get into this.
    Is there any evidence that concierge care or insurance-free 
medicine of the kind that we're talking about here which Mr. 
Stark has endorsed as something he'd like to see survive--the 
Canadian system clearly says, no, we will not allow this to 
survive.
    Is there any evidence that this has contributed 
significantly to the escalating health care costs? Hasn't the 
orthodox insurance and medical practice been able to escalate 
entirely on its own without any help or upward pressure from 
this kind of thing?
    Or is, in fact, this a threat to the now more traditional 
kind of financing?
    Dr. Berenson. I guess a couple of responses.
    First, we're combining to some extent apples and oranges 
here, because as I understand what Dr. Kaminetsky is doing is 
he's got a separate subscription for a certain kind of 
additional service.
    Chairman Bennett. We deliberately tried to get three 
different kinds of examples instead of the same one all 3 
times.
    Dr. Berenson. So, in a sense, I think people are paying 
extra out of their pocket, without tax-subsidization for this 
special attention. And it probably marginally increases overall 
costs. But it's so small, that I don't think it's anything to 
worry about.
    And it might actually have benefits, as he points out, in 
promoting early diagnosis and treatment.
    Again, these other approaches, whether it's having special, 
cash-only emergi-clinics or physicians who are starting home 
visit services and getting paid, that's not where the money is 
in the health care system. And so----
    Chairman Bennett. When you say the money, you mean the 
costs.
    Dr. Berenson. The costs. I mean, that's not what's driving 
health care costs.
    So, again, as sort of niche activities, certainly a free 
clinic is a worthwhile activity that's taking care of 
uninsured. So I don't think what we're talking about today as 
sort of niche activities is a threat or driving up health care 
costs.
    What I get concerned about is seeing this become part of a 
philosophy of moving away from the important social role of 
insurance pooling risk. To think that we can take these few 
examples and build it into something bigger is what bothers me.
    Chairman Bennett. Well, let's pursue that. Let's not talk 
about philosophy. Let's just talk about the market.
    Suppose this catches on and a lot of people decide they 
want to do it. You consider--in other words, there's a 
threshold, if I understand what you're saying--as long as they 
remain small and scattered and not very many, you're not going 
to worry about it.
    But is there a threshold at which point the Dr. Berrys and 
the Dr. Ecks and the Dr. Kaminetskies multiply where you say, 
``Wait a minute, this does become a threat.'' And at that 
point, you're going to come to the Congress and say, ``You've 
got to take action to stop it.''
    Dr. Berenson. I guess my concern is, if we develop--if at 
some point we're developing specialized services that attract 
the healthy and the affluent into a separate sort of risk pool 
that they benefit from, we just drive up the risks for those 
who have no choice but to have comprehensive insurance.
    And so, we may save a few dollars on some reduced 
discretionary services--if somebody doesn't need an MRI because 
they're a weekend tennis player and they're going to have to 
pay out of pocket and they make a decision not to have it, that 
might reduce some expenses, if it's purely discretionary and 
it's something that somebody doesn't want to pay for out of 
pocket.
    But the problems created for those who are in the basic 
comprehensive insurance pool, I think, are not worth that sort 
of marginal savings.
    Chairman Bennett. So there is a point at which you would 
draw the line and say, by government fiat, we're going to say 
``no more?''
    Dr. Berenson. I'm not sure that I know where that line is, 
because these are very diverse kinds of activities.
    Chairman Bennett. Well, I'm not looking for the line. But 
philosophically----
    Dr. Berenson. Philosophically, I think that's right. I 
think we don't want to go too far down this road.
    Chairman Bennett. Okay.
    Dr. Eck, do you serve the wealthy and draw people away from 
insurance?
    Dr. Eck. No, I believe in insurance. I just believe that 
the insurance model has to be correct.
    I believe in high deductible insurance. I don't want people 
trying to run through their deductibles so that they can get 
into insurance where everything is covered and then over-spend.
    So that's why I like the idea of high deductible and then 
paying for their services via health savings accounts for the 
lower things.
    Representative Stark. Can I add to that?
    Chairman Bennett. Sure.
    Representative Stark. I would assume that all four of you 
feel that whatever the plan, at some amount, $2,000 or $3,000, 
there ought to be a catastrophic benefit for people who need 
surgery or severe--do all of you feel like that?
    Dr. Berry. I have that kind of insurance.
    Representative Stark. Yes.
    Chairman Bennett. And I agree with that, too.
    Representative Stark. Just the first thousand or two. And 
beyond that, whoever they are, they ought to have some 
coverage.
    Dr. Eck. It just has to be properly designed. My family, 
since 1997, has not had health insurance, and I'll tell you 
why.
    Because we live in New Jersey, it was way too expensive and 
it's not worth the money.
    But we were able to get into a Faith Christian group where 
they could put restrictions on our behavior that would lower 
the cost of health care for all. And therefore, we pay $215 a 
month to be covered for catastrophic events that exceed $900. 
And it's extremely reasonable, and it works, and it's covered. 
It's not insurance. Therefore, it doesn't get under the 
department's banking and insurance.
    Representative Stark. Do they provide that for warlocks? 
Have you ever heard?
    [Laughter.]
    Dr. Eck. They'd have to have their own.
    [Laughter.]
    Representative Stark. I can't find any. That's why I ask.
    [Laughter.]
    Dr. Berry. That's because their behavior is so high risk.
    [Laughter.]
    Dr. Kaminetsky. My practice is entirely compatible with 
insurance. It does not supplant insurance in any way. And 
certainly, my patients are far from being cherry-picked as 
being healthy and wealthy.
    It's because of the nature that many of them have chronic 
illnesses and they would like to forestall getting more 
seriously ill, that they put the emphasis on our preventive 
products.
    So, certainly, if anything, though it's a small sample, our 
preliminary data, as I said, shows a 30 percent reduction in 
hospitalization rate. I am convinced that we are saving 
insurance companies money.
    Chairman Bennett. But your comment there seems to be 
counter to what Dr. Berenson says, because you say that you're 
getting the sicker rather than--that is, people who have 
chronic problems that they want to deal with.
    Dr. Kaminetsky. No, I have an entire spectrum.
    Chairman Bennett. Okay.
    Dr. Kaminetsky. The point I was trying to make is that it's 
not just getting young, affluent, healthy people who want to 
live longer than 50.
    Chairman Bennett. Okay. In other words, there is no adverse 
selection.
    Dr. Kaminetsky. Absolutely.
    Chairman Bennett. All right.
    Dr. Berenson, you want to say something?
    Dr. Berenson. Well, simply that they have their full 
insurance coverage. And in addition, they are purchasing some 
additional services. I think we should actually do the study 
that's implied here.
    A lot of the best physicians I know in Washington where I 
practiced for many years, and from what I understand from 
around the country, practice a different style, which is 
spending lots more time with their patients--these are primary 
care physicians, often internists. And because they are doing 
that, they believe that they are reducing unnecessary referrals 
to other specialists. They think they are reducing tests and 
procedures and saving money.
    This should be subjected to some real testing, and if it 
demonstrates, in fact, that that's what the effect is, I don't 
know why insurance companies within their insurance products 
are not rewarding Dr. Kaminetsky for doing exactly that kind of 
thing.
    I don't know why we have to have this to be extra 
insurance, I guess is what I'm saying. Why shouldn't Medicare, 
as I've suggested, and other payers, actually pay additional 
fees for the coordination activity that primary care physicians 
should be doing, but don't have time to do for their patients 
who may have seven doctors and take 35 medications in a year. 
They're not paying for any of that kind of coordination. And so 
important care falls through the cracks.
    So I guess what I'm saying is I haven't heard anything here 
today that's not compatible with insurance products, whether 
public or private. I think there have been some misguided 
decisions by insurance companies, public and private, about 
what they're paying for.
    Chairman Bennett. Okay. That's getting----
    Dr. Berry. May I say something here?
    Chairman Bennett. Sure.
    Dr. Berry. I think that actually the low co-pay, low 
deductible so-called ``insurance,'' which is not really 
insurance at all, is, in fact, increasing the cost of care for 
a number of reasons. And I don't think that the government 
should encourage that with their tax policy, because right now, 
it's open-ended. A company can write as an expense $10,000, 
$20,000. And the rest of the country is paying for that, 
including the uninsured.
    They're effectively subsidizing these low co-pay, low-
deductible insurance policies.
    What I'm for is payment at time of service for routine 
health care. And he says that it's not going to reduce costs 
much. I don't know. But there are about a half billion patient-
doctor interactions or encounters per year in primary care.
    Now you change the mindset of people. Instead of their 
asking, ``Doc, don't you think I need that MRI or some blood 
work on this?''--they will be asking, ``Doc, do you really 
think I need to have that test done?"
    Let me tell you, that changes the whole equation. And I 
suspect that once you translate that cost savings per 
encounter, you would see significant cost savings. I don't know 
what the numbers are. Policy people can probably churn those 
out. But you don't get visits at $51, including all that I 
provide, without doing some penny-pinching.
    Chairman Bennett. Dr. Eck.
    Dr. Eck. In May, we're going to have ``Cover The Uninsured 
Week.'' That's a big publicity event where I think what we're 
saying is that people who have no money, somehow we have to 
come and cover them. And by covering them, we have to buy them 
health insurance.
    I would disagree with that, because the whole idea of 
health insurance is not necessarily health care and it's 
phenomenally expensive.
    There's a little center in New Jersey that is a lot like 
ours, only it is 4 years old. It sees 6,000 people a year who 
have no money, and it's all volunteers. It's a lot like what we 
do, volunteer doctors and physicians. Their budget is $500,000 
a year for 6,000 people. That translates to $83 a year per 
person.
    Now these people get health care. So do they have coverage? 
No. But they get health care. They get referred. The hospital 
takes care of them if there's a problem. The community that's 
working that's getting health care to people.
    Everybody's happy. Patients love it. They get personal 
care. The doctors feel good. They're volunteering their time. 
It's not a big, expensive, bureaucratic--actually, it was 
covered on ``20/20,'' and I think it's a real solution to take 
care of the poor.
    Is it a two-tiered system? I suppose. They're not paying. 
But it's getting the job done. And I think that we should look 
into that as a way to get health care to the poor rather than 
the big government programs.
    Chairman Bennett. Mr. Stark.
    Representative Stark. Well, I think we're--let me just try 
this. We don't think boutique medicine is inherently bad. All 
of us----
    Chairman Bennett. Say that again. I didn't hear you.
    Representative Stark. We do not think----
    Chairman Bennett. You do not think. Okay.
    Representative Stark. We don't think it's inherently bad.
    Chairman Bennett. You said it quickly enough that I heard, 
``we all think.''
    Representative Stark. Now all of us want better access. But 
not everyone has the type of access that we are able, either as 
professionals or politicians or wealthy people--we're in a 
class distinct from, say, the family of four with $25,000 of 
income or less, they don't have the advantage.
    Chairman Bennett. Unless they live in Dr. Eck's 
neighborhood, and then they do.
    Representative Stark. They may. But they don't as a matter 
of practice. So, obviously, there are perverse incentives in 
the fee-for-service area to do more to get paid more. That's an 
incentive that we've had to deal with a lot, and I'm sure the 
physicians recognize.
    But there's also the reverse of that incentive, is when you 
don't have any insurance. There's a big of an incentive to 
postpone perhaps getting treatment because your tolerance for 
pain may go up as your pocketbook gets thinner.
    And I think if we could figure out somewhere in between, 
Mr. Chairman, how we can be sure that the person who has to 
come up out of pocket--now in Dr. Eck's area, there are non-
governmental organizations that provide. There aren't in a lot 
of areas. I mean, your neighborhood--and your neighbors are to 
be commended--but that doesn't exist universally.
    So if we could be sure that the people at the lowest income 
scale, let's just suggest, had access as any of you would 
suggest they need for either primary care, for preventive care, 
to do all the things that you'd recommend, and also then, for 
those of us at the other end, are somehow prevented from 
abusing the system by over-indulging our whims to chat with you 
nice professionals whenever we get the urge or sneeze, that's 
the middle ground that perhaps we're all pushing towards. I 
don't know what the answer is. There may be different 
approaches.
    Dr. Berry. I think part of the answer is doing payment at 
the time of service for routine health care.
    Representative Stark. What if you don't have any money?
    Dr. Berry. The administrative overhead for doing----
    Representative Stark. What if you're homeless and don't 
have any money? How do you pay at the time of service?
    Dr. Berry. That's a separate and small issue, I will admit. 
There's no question about that.
    But let me say this, that when I was working in the ER, 80 
percent of TennCare patients who came, adult TennCare patients, 
smoked cigarettes.
    Assuming $1,000 a year, that would be 20 office visits at 
my clinic. They need to be made accountable as well. They need 
to be acting neighborly as well. And they don't need to be 
driving Toyota Sequoias. They don't need to own vast tracts of 
land. Some of the people's net worth on TennCare is much higher 
than mine will ever be. So there's something wrong with that.
    Representative Stark. I think you're quite right. I just 
think that we don't have a system--I noticed in Colorado 
recently, it was in the press yesterday or the day before, the 
emergency rooms are, many of them, trying to triage now to keep 
the burden of unnecessary visits----
    Dr. Berry. They could come to our clinic.
    Representative Stark. I beg your pardon?
    Dr. Berry. Our clinic is ideal for that. And they're not 
willing to forego a $1,000-a-year cigarette habit----
    Representative Stark. If they have any money.
    Dr. Berry. Their problem is with priority, not with my 
price.
    Dr. Eck. There are 32 volunteers in medicine clinics across 
the country.
    Representative Stark. You have a clinic that can handle it.
    Dr. Eck. There are 32. And they just need to be encouraged. 
And I think that army of retired physicians that I was speaking 
about, if we could relieve them of the malpractice burden so 
that if they donate their time, they're not liable for anything 
that might have a bad outcome, we can make a big difference.
    Representative Stark. You're getting close, Doc. If we 
relieve them of the malpractice burden and maybe the tax 
burden, we're really paying you. And I have no quarrel----
    In other words----
    Dr. Eck. They're not getting paid. These doctors aren't 
getting paid. They wouldn't be getting paid. They would be 
giving free service. You take care of the poor. Just relieve 
them of the malpractice burden so that they're free to do this.
    Representative Stark. What do we do in areas where there 
aren't any nice guys like that?
    Dr. Eck. They're all over the country. There are 15,000 in 
New Jersey.
    Representative Stark. Send everybody who can't afford to 
New Jersey.
    [Laughter.]
    Chairman Bennett. No, let's not send them to New Jersey.
    [Laughter.]
    Dr. Eck. So there must be a lot in other states. That's 
what I'm extrapolating.
    Chairman Bennett. One of the issues that this panel has 
highlighted that gets ignored a great deal in the discussion of 
health care is the number of doctors who are voting with their 
feet and walking away from medicine.
    And that has to say to us that there's something wrong with 
the current system if it is driving away its most qualified 
practitioners.
    At the risk of opening another area, and I'll shut it off 
very quickly if indeed this does inflame a lot of comment:
    When I got involved in looking at education, I discovered a 
very interesting thing. Education is the only area where people 
will accept a lower price for the privilege of not teaching in 
public schools.
    Private schools pay lower salaries than public schools and 
teachers will voluntarily walk out of the public school for the 
privilege of teaching in an environment that they consider more 
conducive to education.
    Now I'll quickly shut that door, having opened it.
    But it does represent a signal that there's something wrong 
that has to be dealt with. And we find some of the best 
teachers refuse to go into public education, and they go 
elsewhere.
    I know that because I used to run a company that was 
basically an education company and we had wonderful teachers, 
none of whom would have any interest in teaching in public 
schools, and the public schools were the poorer for that.
    So if we are in fact seeing ``hamster health care,'' which 
is the phrase I use with physicians on the treadmill all the 
time, and therefore, physician satisfaction going down, and as 
I've talked to physicians and I think what you're saying here, 
it's not financial. It's not because they're not earning enough 
money that they decide that they have to get out of medicine 
because they can make more money someplace else.
    It's what you have said here, they are feeling that they 
cannot perform what they were trained to do, and so they're 
leaving health care.
    Dr. Eck. A lot of them are leaving the HMOs and that frees 
them up.
    Chairman Bennett. Okay.
    Dr. Eck. That frees them up tremendously. And I think most 
of us sitting here enjoy practicing medicine.
    Dr. Kaminetsky. But the problem you just touched on is a 
very serious one. I don't know if anyone might have seen, not 
this past Sunday, but the week before, The New York Times 
Sunday Magazine, Lisa Sanders at Yale, a primary care professor 
talking about the declining applications every year to primary 
care.
    We're all primary care-givers. And the national residency 
match program, every year there's been a decline in internal 
medicine and family practice.
    So with the numbers of primary care-givers going down, at 
the same time that the population is getting older and 
demographically, the need for internists is going up. 
Furthermore, there are more reasons to see a doctor now.
    For instance, as an example, someone who might have had 
congestive heart failure 10 or 15 years ago would have been 
treated with just Digoxin and a diuretic.
    Now there are many other modalities of therapy. There are 
many new drugs. There are inhibitors, ARBs, and so forth. 
There's more reason to see the doctor. There's an older 
population and there are fewer primary care-givers.
    Now part of the problem realistically is not because--
you're right. I agree with you. It's about being a doctor and 
giving care.
    However, when you graduate with $175,000 of debt, you're 
not immune to a respected mentor saying, ``You know what? Don't 
go into medicine.''
    So one of the potential solutions is maybe there needs to 
be more government intervention and subsidizing private medical 
school education in return for encouraging people to go into 
primary care subsequently.
    Dr. Berry. I'm not so sure about that. But it seems that 
society doesn't value the services of a physician today quite 
so much.
    Had I graduated from the University of North Carolina 
business school in 1992 instead of graduating from the medical 
school in 1989, I would be making more than I would be if I 
were still practicing emergency medicine, a considerable sum.
    So that shows--if you're a senior or junior college student 
and trying to decide what you're going to do with your life, 
why would you go into medicine? You're going to get paid less. 
You have long hours. You've got incredible risk. People's lives 
are in your hands. Why do it? I think that that's a legitimate 
question to be asking.
    Dr. Berenson. I'd like to add, I think we sometimes lump 
all docs together. And what's I think the serious problem right 
now is the lack of training in the primary care fields. In the 
same article that Dr. Sanders wrote in The Times, there was a 
reference to Alan Goroll, who is a professor at Harvard who is 
a friend of mine. I was in his class at college.
    He told me that last year's graduating class at Harvard 
Medical School, of about 160 graduates, 20 were going into 
internal medicine. But of those 20, 15 were going into 
cardiology and gastroenterology and perhaps 5 were becoming the 
kinds of doctors that you call at 2:00 in the morning.
    That's something we haven't talked about, everybody getting 
a doctor with whom we can have a relationship as the way to get 
their basic primary care.
    There was another article I saw in The Times surveying 
graduates of some medical school. 40 percent of them wanted to 
go into dermatology because the pay was better, the hours were 
better, there was no night call. I don't think they're so 
unhappy, frankly, the dermatologists of the world. I do think 
that practicing primary care right now is very difficult. And a 
lot of doctors I know are giving up HMOs. They're giving up 
Medicare.
    Medicare patients are complicated. They have four, five or 
six problems and many medications and it's hard work. And we're 
not rewarding them and compensating them appropriately or 
giving them sort of the kind of nonrenumerative support that I 
think they need.
    And I would offer a policy opinion on this one. Because in 
the Medicare statute, we have control over expenditures for 
physicians, the Congress, CMS, Medpac, don't look at where 
we're spending that money because we control expenses.
    So the fact that we are sending huge signals about what 
specialties to go into, and those signals are don't go into 
primary care, is not anything that has gotten policy-makers' 
attention. I think it needs to be focused there.
    Representative Stark. Are you familiar with the German 
system? Do you like it?
    The only people on fee-for-service in Germany are the 
primary care docs. You go to the hospital and it's a flat-rate 
per day, whether you've got a plantar wart to be removed or a 
heart transplant, the same amount. And all hospital-based 
physicians, which are all surgeons, are paid a salary, except 
if you're the chairman of a department at a university. Then 
you can charge a fee on top. And it just turns our system on 
its head.
    In other words, you maybe get three pfennings for a Xerox, 
but you get a long Chinese menu of things that you can charge 
as a primary care doc. And they do much better than their 
counterparts, unless they happen to head a department.
    Dr. Berry. Well, I think I would be doing much better if I 
could see, instead of three patients an hour, four patients an 
hour. I would be almost making as much as that MBA from 
Carolina.
    The problem is that, besides the government subsidizing low 
co-pay, low-deductible insurance, they make it very difficult 
for doctors to do this kind of practice. They require basically 
doctors to opt out of Medicare. If I did not opt-out of 
Medicare, I would have to refuse Medicare beneficiaries showing 
up at my clinic asking to be seen, willing to pay me $35 out of 
pocket. Quite frankly, I'm not willing to discriminate against 
Medicare beneficiaries in my community.
    So that is one policy that you could look at, is to roll 
back this crazy opt-out clause, because I can't find physician 
coverage for my clinic. I had to shut down the clinic today. 
Nobody's going to work at my clinic because everybody still 
takes Medicare. I've opted out.
    Chairman Bennett. Any other comment on that?
    [No response.]
    Chairman Bennett. Well, let's wrap this up. This has been 
enormously helpful, and I'm very grateful to the four of you.
    Dr. Eck. Can I just say one more topic we haven't touched 
on? And that is the plight of the uninsured.
    In New Jersey, I know, they get charged 300 percent of what 
Medicare pays for a hospital visit. If a hospital visit costs 
$10,000, the uninsured get charged $30,000. Tremendous. And 
these are the people who presumably really can't afford it. And 
so then liens get put on their house and the whole thing.
    What we have found out is that if you go to a little island 
in the Caribbean that is not the United States, there are 
little hospitals there that can take out a gall bladder and 
they would charge $1,000.
    Compare that with $30,000 in New Jersey, $1,000 in the 
Caribbean.
    And so we're looking into that. And we're just saying, what 
would happen if Americans came down and had an operation done 
there? Maybe we could even bring our surgeons down. And they're 
very positive. The surgeons are saying, ``Hey, we would do 
that. We would do it for free if you gave us a week in the 
Caribbean.'' So we're looking into it and I'll keep you posted.
    Dr. Berry. Well, the front page of The Wall Street Journal 
shows a Canadian citizen going to India to pay for a hip 
replacement that costs about $5,000. He would have had to have 
waited a year-and-a-half for it in Canada. And the $5,000 is 
about a quarter of what he would have been charged in the 
United States.
    Dr. Berenson. If I could, I think, though, that Dr. Eck's 
comment is something that I wanted to address about sort of 
this alternative approach of low-cost, often what has been 
called ``charity'' care. I worked in a free clinic. I also saw 
patients who didn't have insurance. I'm sure all of these 
physicians provide uncompensated care.
    But I remember an experience I had. I had a patient I was 
seeing for nothing who needed a chest x-ray. So I called the 
head of my hospital where I admitted and said, ``Can I get a 
free chest x-ray?'' And the guy said, ``I'd love to help you 
out, but I don't have anything to do with the x-ray department. 
That's owned by somebody else, a separate radiologist 
company.''
    The point is that medicine, health care is a very complex--
there are many people who have to provide services. So the 
physicians providing cut-rate and good services perhaps, but 
the hospital is then charging 3 times more for that same 
patient or the radiology group is not discounting their MRI 
rates or might actually be price discriminating more against 
the person who has poor insurance or no insurance. And so, I 
commend approaches to fill gaps and to provide some services in 
a lower cost way.
    But I think it's pretty clear from the studies that are 
being done by--some by my colleagues at the Urban Institute--
that people do better with insurance. It does drive up costs 
some, but their health care is better. And there are some cost 
offsets.
    And an alternative of non-insurance, second-class, ``we do 
the best we can for you,'' I don't think is something that we 
as the United States should be looking to as the major way we 
provide health care to the uninsured.
    Chairman Bennett. I haven't heard anybody here say this 
morning that we should get rid of insurance.
    My concern is that insurance ought to be insurance. Now 
I've used this before and it's an imperfect analogy, like every 
analogy is, but I use it again to make the case.
    I have homeowner's insurance. I would be foolish not to 
have homeowner's insurance. It's a wonderful policy. If the 
house burns down, they not only replace the house. They replace 
the paintings on the wall. They replace the carpets on the 
floor. They replace the silverware in the drawer in the kitchen 
and the clothes in the closet. Everything.
    It's just terrific.
    But try as I might and read the fine print as often as I 
can, I can't find anything in the insurance policy that will 
reimburse me for mowing the lawn or painting the front door 
when the dog scratches it, which the dog does quite often. Or 
used to when we had a dog.
    Insurance is for the issues that I cannot handle in the 
every day experience. And I pay to have the lawn mowed. I pay 
because I'm in Washington and can't be there, the guy who mows 
the lawn, also takes care of the garden. And that's just part 
of the expense of having to maintain two homes.
    I guess when we live there, we'll plant our own tulips. But 
at the moment, my wife likes to go home to see tulips and I pay 
for that. I cannot file an insurance claim to pay for the 
tulips.
    Dr. Kaminetsky. By way of analogy, if the branch falls on 
your roof and it's damaged and the adjuster comes and says, 
``Well, we're going to fix this area over here,'' you're not in 
a position to say, ``Well, you know, that's really not going to 
look nice. I want the whole roof.''
    By way of analogy, there is no reason why an adult child 
can't say with regard to their 92-year-old mother with 
metastatic carcinoma, ``I want her in the ICU, doctor.''
    I'm not proposing more bureaucratic oversight of Medicare. 
But these are types of real-life issues that come up every day 
where, as we all know, half the Medicare dollars are spent in 
the last 6 months of life, and there's essentially no oversight 
about appropriateness of care and whether the dollars should 
perhaps be reapportioned, which is obviously a very weighty 
issue with a lot of ethical and moral considerations, but one 
which has been too long ignored.
    Chairman Bennett. Thank you for that addition. I'll use it 
from now on.
    [Laughter.]
    Chairman Bennett. This is the point. If we can, in fact, 
make insurance truly insurance by incentivizing people to be in 
the businesses that these three are in, I think it's absolutely 
inevitable that the cost of insurance will come down and come 
down quite dramatically. Particularly if they practice the kind 
of medicine that Dr. Kaminetsky focuses on, and I assume the 
other two do as well, which is the way to keep costs down is to 
keep people healthy.
    There is no incentive in a pure insurance program to keep 
anybody healthy. It's all focused on acute care and not focused 
on prevention.
    And there have been fairly significant studies, case 
studies of folks who spent a whole lot more time on prevention, 
having produced the enviable result of having lower costs and 
higher satisfaction on the part of the people that are in the 
insurance pool. We've had testimony on that in previous 
hearings.
    So the problem with the poor is a clear problem. But, quite 
frankly, the insurance system, whether it's government or 
private, is part of the problem.
    And I now repeat to you a conversation I had with a woman 
in Utah who heard me give a brilliant luncheon speech on this 
subject and came up afterwards and said, Senator, you haven't 
the slightest idea what you're talking about.
    And I said, Okay. Teach me.
    And she's a woman who spends almost all of her time dealing 
with the homeless and the poor. And she said, the primary 
problem with the homeless and the poor is not that they don't 
have any money. And it's not that they don't have access.
    They cannot navigate the system.
    The rules are so overwhelming, the bureaucracy is so 
daunting, that they can't navigate the system. And she said, 
you should be spending more time on community health centers--
and I've been to the community health center in Salt Lake, 
where, when you walk in, the first thing that happens to you is 
somebody approaches you and becomes your navigator and says, 
Okay, this is where you can go. This is where you can go.
    Medicaid, charitable activity, the Shriners Hospital, 
whatever it might be, there is a mentor or navigator that knows 
about those things, which the person on the street who is 
homeless has no clue. Even though in the law he may have access 
to or eligibility for, in his own capability, he can't navigate 
the system.
    So I want to encourage community health centers of that 
kind that will help the poor and the homeless with their real 
problems rather than their perceived problems as we sit behind 
this dais and make judgments about them.
    We are spending as a society plenty of money on health 
care. But, in the language of the west, we are not seeing the 
water get to the end of the ditch.
    There's plenty of water in the irrigation reservoir. But 
when we pull up the gates, the water is not getting to the end 
of the ditch. And we've got to do something to see to it that 
the percentage of GDP that we are spending on health in this 
country produces the kind of result that that money could, in 
fact, buy.
    Dr. Berenson, I'm not sure that there is a level where I 
would cut off what these people are doing. I would hope that we 
could devise some kind of a system, and the government's got to 
do it, because the tax code drives the health care system. The 
tax code drives what employers do. And then the government 
steps in with Medicare and Medicaid and that's, what, 40 
percent of the dollars.
    I end with the way I began. I'm hoping that we can find a 
clean sheet of paper solution that takes the very best of these 
entrepreneurial activities that are producing at least in the 
populations that they serve better health care at a lower price 
with, if Dr. Kaminetsky is correct, an impact on the insurance 
system because it makes fewer demands on the hospital structure 
and other things that the insurance system is using.
    This is not an either/or. This is not ``we want to kill the 
insurance system by a purely market system.'' But at the same 
time, we don't want to kill the market entrepreneur system by 
the Canadian model that says, you've got to do it our way or 
you can't practice medicine.
    Okay. That's the end of my oration.
    Representative Stark. I'm just curious. In thinking about 
the problems of primary care, do any of the three of you have a 
code--Medicare doesn't quite cover it yet--for what I would 
call disease management?
    You come close, Dr. Kaminetsky, in your practice. But let's 
say that a diabetic comes in. Would you charge them $100 a 
month or $50 a month and say, ``I'll send you out for the 
tests?'' Do any of you have that?
    Dr. Berry. Well, if somebody wants, say, 30 minutes of my 
time, that would probably cost $100, if they really wanted to 
sit down----
    Representative Stark. No. But would you proactively say, 
``I'll call you. I'll be after you.'' You talk about it in 
maybe stopping people from smoking. One of you mentioned that.
    But we're looking at disease management as a procedure, if 
you will, for primary care docs to be the interlocutory between 
a variety of providers and the patient. And I just wondered if 
any of you were doing that in your practices now?
    Dr. Eck. Diabetes a great example. It's very education-
intensive. People just have to understand their disease and be 
reminded and don't do this and do this and check your sugars. 
It's very complicated.
    You try to make them make a little list of their sugars and 
what they ate and that type of thing. I like to see diabetics 
once a month. But some of them are very, very smart and very 
good at it and they don't need to be seen that often.
    It depends on the person. It's not a one-size-fits-all type 
of management.
    I don't do insurance. So if it's a long visit and if 
they're high-maintenance, they get charged more.
    Representative Stark. But you don't set up an annual 
program where you would get after them.
    Dr. Eck. I don't tell them. Every year you check their----
    Dr. Berry. They've got to see an ophthalmologist.
    Dr. Eck. Yes.
    Representative Stark. Pardon?
    Dr. Berry. They've got to see an ophthalmologist every 
year, make sure you're looking at their feet.
    Dr. Eck. There are certain things that you make them do 
routinely--check their eyes, check their micro-albumin, the 
urine. See if they're developing that. A good foot exam.
    Those type of things, we just do without telling them. But 
this is part of their program.
    Representative Stark. Thank you, Mr. Chairman.
    Chairman Bennett. The kind of thing that the Capitol 
physician does for you and me.
    Representative Stark. Gets after us.
    [Laughter.]
    Chairman Bennett. And we pay for it.
    Representative Stark. Yes, we do.
    Chairman Bennett. Anybody else have a last burning comment 
you want to make before we leave? We've held you here all 
morning.
    Representative Stark. Thank you.
    Dr. Berry. Let insurance manage risk and patients manage 
care.
    Chairman Bennett. That's a pretty good bumper sticker.
    [Laughter.]
    Dr. Eck. There you go. The real answer is to allow 
individuals to deduct the health insurance just as the 
employers do.
    And therefore, the employers should be relieved of having 
to buy the health insurance policy. Just like the employers 
don't buy our car insurance policy, our homeowners insurance.
    That would make a phenomenal difference.
    And then I think if people were spending their own money, 
they wouldn't pay for HMOs, and that would be the end.
    Chairman Bennett. Well, if they were, the HMOs would change 
dramatically.
    Dr. Eck. Absolutely. If people had to buy their own 
insurance, they'd really buy it in value.
    Chairman Bennett. Again, I'm sorry. But my market 
orientation comes in here. If I go to an HMO and I get treated 
badly, I get disrespected, I get shuffled off, I have to wait a 
lot, and I control the money that's paying for that HMO, and I 
can say, ``Look, if I don't see the doctor in another 5 
minutes, I am out of here and my money is out of here with me. 
I'm going down the road to another HMO that's run by Dr. Eck.'' 
The HMO concept is not a bad concept, except as it is run for 
the economic and financial benefit of the people who own it 
because their customer is the third party who doesn't care how 
I get treated.
    Dr. Eck. That's right.
    Chairman Bennett. But if the person who is running the HMO 
is dependent upon my patronage, just the way that the person 
who is running any other business is dependent on my patronage, 
why, the waiting times will go down, all kinds of marvelous 
things will happen.
    I don't want to leave it just that we trash HMOs and we 
want to eliminate HMOs. But if we give the customer the 
economic power to determine what's going to happen in the HMOs, 
I think the three of you, and maybe if you can lure Dr. 
Berenson back into the practice of medicine, the four of you, 
might some day open an HMO based on the concepts that you're 
practicing here.
    Thank you very much. The hearing is adjourned.
    [Whereupon, at 11:55 a.m., the hearing was adjourned.]


                       Submissions for the Record

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