[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 HEALTHIER FEDS AND FAMILIES: INTRODUCING INFORMATION TECHNOLOGY INTO 
             THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON THE FEDERAL WORKFORCE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 4859

TO AMEND CHAPTER 89 OF TITLE 5, UNITED STATES CODE, TO PROVIDE FOR THE 
   IMPLEMENTATION OF A SYSTEM OF ELECTRONIC HEALTH RECORDS UNDER THE 
               FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

                               __________

                             MARCH 15, 2006

                               __________

                           Serial No. 109-130

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform

                                 _____

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                             WASHINGTON: 2006        
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
------ ------

                      David Marin, Staff Director
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on the Federal Workforce and Agency Organization

                    JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida                DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia                  MAJOR R. OWENS, New York
DARRELL E. ISSA, California          ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas                    Columbia
PATRICK T. McHENRY, North Carolina   ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   CHRIS VAN HOLLEN, Maryland

                               Ex Officio
                      HENRY A. WAXMAN, California

                     Ron Martinson, Staff Director
                  Chad Bungard, Deputy Staff Director
               Chad Christofferson, Legislative Assistant
          Mark Stephenson, Minority Professional Staff Member



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 15, 2006...................................     1
Text of H.R. 4859................................................    10
Statement of:
    Gingrich, Hon. Newt, former Speaker of the House.............    26
    Powner, David A., Director, Information Technology Management 
      Issues, U.S. Government Accountability Office; Jane F. 
      Barlow, M.D., MPH, MBA, IBM Well-Being Director, Global 
      Well-Being Services and Health Benefits, the IBM Corp.; 
      David St. Clair, founder and chief executive officer, 
      MEDECISION, Inc.; Paul B. Handel, M.D., vice president and 
      chief medical director, Blue CrossBlue Shield of Texas (a 
      Division of Health Care Service Corp.); Jeannine M. Rivet, 
      executive vice president, UnitedHealth Group; and Malik M. 
      Hasan, M.D., chief executive officer, Healthview, retired 
      chief executive officer, Health Net........................    57
        Barlow, Jane F., M.D.....................................    80
        Handel, Paul B., M.D.....................................   114
        Hasan, Malik M., M.D.....................................   132
        Powner, David A..........................................    57
        Rivet, Jeannine M........................................   119
        St. Clair, David.........................................    93
Letters, statements, etc., submitted for the record by:
    Barlow, Jane F., M.D., MPH, MBA, IBM well-being director, 
      Global Well-Being Services and Health Benefits, the IBM 
      Corp., prepared statement of...............................    82
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................   154
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............   156
    Ewen, Dr. Edward, Jr., prepared statement of.................   146
    Gingrich, Hon. Newt, former Speaker of the House, prepared 
      statement of...............................................    30
    Handel, Paul B., M.D., vice president and chief medical 
      director, Blue CrossBlue Shield of Texas (a Division of 
      Health Care Service Corp.), prepared statement of..........   116
    Hasan, Malik M., M.D., chief executive officer, Healthview, 
      retired chief executive officer, Health Net , prepared 
      statement of...............................................   134
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................     6
    Powner, David A., Director, Information Technology Management 
      Issues, U.S. Government Accountability Office, prepared 
      statement of...............................................    60
    Rivet, Jeannine M., executive vice president, UnitedHealth 
      Group, prepared statement of...............................   122
    St. Clair, David, founder and chief executive officer, 
      MEDECISION, Inc., prepared statement of....................    96

 
 HEALTHIER FEDS AND FAMILIES: INTRODUCING INFORMATION TECHNOLOGY INTO 
             THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

                              ----------                              


                       WEDNESDAY, MARCH 15, 2006

                  House of Representatives,
      Subcommittee on Federal Workforce and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:18 p.m., in 
room 2154, Rayburn House Office Building, Hon. Jon C. Porter 
(chairman of the subcommittee) presiding.
    Present: Representatives Porter, Norton, Cummings, Van 
Hollen, and Clay.
    Staff present: Ronald Martinson, staff director; Chad 
Bungard, deputy staff director/chief counsel; Chad 
Christofferson and Alex Cooper, legislative assistants; Patrick 
Jennings, OPM detailee/senior counsel; Mark Stephenson, Tania 
Shand, and Adam Bordes, minority professional staff members; 
and Teresa Coufal, minority assistant clerk.
    Mr. Porter. Good afternoon. I would like to bring the 
meeting to order, and I certainly appreciate all of you being 
here today. A quorum being present, the Subcommittee on the 
Federal Workforce and Agency Organization will come to order.
    This will be the first of two hearings that focus on a bill 
that I and Representative Lacy Clay from Missouri have 
introduced, namely, H.R. 4859, the Federal Family Health 
Information Technology Act. In the past decade, information 
technology has exploded onto the scene and revolutionized the 
way we do business in every industry. Companies from every 
sector of the marketplace have made huge investments in 
technology development and are reaping the benefits tenfold.
    For example, last month, General Motors announced that it 
would be awarding a $15 billion contract for information 
technology development. Analysts are saying that this is the 
single largest information technology contract ever awarded 
through a bidding process. If information technology is so 
pervasive in every industry from automotive to financial 
services, why has it seemingly bypassed one of the largest 
industries in the United States--health care? The answers to 
that question are many, but the good news is that the barriers 
blocking health information technology from growing are rapidly 
crumbling. People are working harder than ever to see that 
health information technology is not simply something that a 
few companies are using, but is a reality for all Americans.
    As health information technology systems are developed, I 
believe that not only will the quality of health care delivery 
improve dramatically, but so will the quality of health care 
overall. Some have estimated that over 90 percent of the 
activity spent on delivering health care depends on the 
exchange of information. Information flows constantly from 
patients to doctors to carriers to pharmacies and others, yet 
we are still using the processes of yesterday. With health 
information technology, we will not only decrease the amount of 
time it takes to exchange this information, but we will greatly 
increase the accuracy of the information that we exchange.
    One of the sad realities in the industry today is that 
medical errors are a major problem. The Institute of Medicine 
estimates that medical errors account for approximately 45,000 
to 98,000 deaths each year in the United States and over 
770,000 injuries due to adverse drug events, many of which 
could have been prevented through the use of information 
technology. If listed among deadly diseases, medical errors 
would be considered among the leading causes of death, even 
outpacing highway accidents, breast cancer, and AIDS. This is 
no slight to our medical professionals, who are the best in the 
world, but rather is an indictment of the antiquated technology 
they rely on.
    The use of technology will reduce medical errors by making 
health information more accessible to both patients and 
providers no matter where the patient is receiving the care. 
For example, the Boston Globe recently reported a senseless 
preventable death of a 79-year-old retired chemist who died 
after doctors at Massachusetts General Hospital treated him for 
a stroke when he really was having an insulin reaction. It is 
easy to see how an electronic medical record could have 
assisted the physicians in correctly diagnosing this patient. 
In a world where our cars, our pets, and our checking accounts 
have their own computerized record, it is time for every 
American to benefit from the same technology.
    Back home in Nevada, I spend a lot of time with foster 
kids. Unfortunately, health records for these children are 
scarce, which leads to needless multiple tetanus shots and 
other inoculations and multiple exams, and putting these 
children at risk for encountering a medical error because their 
prior medical histories are not always known. With the 
technological advances that we have made, this is unacceptable. 
And as you know, technology today is in dog years. For every 1 
year, it is 7. Technology is changing rapidly, becoming more 
and more efficient and more and more accessible.
    As chairman of this subcommittee, I have been working 
closely with leaders from government and industry to develop 
legislation to bring health information technology to the 
health plans the Federal Government offers to its own 
employees. We have a wonderful opportunity to improve the 
quality and delivery of health care for the over 8 million 
participants in the Federal Employees Health Benefits Program 
and at the same time serve as a model to effect change 
elsewhere. Passing this up would be a huge mistake--a mistake 
we cannot afford since many lives would be unnecessarily placed 
at risk, especially since the solution is literally at our 
fingertips.
    The bill that I have introduced is based on very successful 
demonstration projects around the country, and we will hear 
from several individuals who were involved in those 
demonstrations this afternoon. The bill does recognize that 
there are three basic components of a complete electronic 
health record: No. 1, the carrier-based electronic health 
record; No. 2, the personal electronic health record; and, No. 
3, the provider-based electronic health record. And recognizing 
this, the bill will establish a carrier-based electronic health 
record and personal electronic health record and provides 
incentives for creating a provider-based electronic health 
record.
    The first component of the bill will require all carriers 
participating in the Federal plan to create a carrier-based 
electronic health record for each of the participants. This 
piece of electronic health record will provide each participant 
and his or her providers with the information maintained by the 
member's carrier in a format useful for diagnosis and 
treatment. This claim-based component of the electronic health 
record can provide valuable information by leveraging the data, 
technology, and capabilities of health plans to improve health 
care decisions by patients and providers. This information is 
already there, and to ignore it would cause innocent people to 
unnecessarily suffer injury or death.
    Hurricanes Katrina and Rita serve as stark examples of the 
value of carrier-based electronic health records. When 
Hurricane Katrina hit, many medical records were destroyed or 
were not immediately available for patients, potentially 
putting some patients at great risk. Hoping to avoid the 
medical disasters associated with Hurricane Katrina, Blue 
CrossBlue Shield of Texas extracted data on its members who 
lived in the areas that were evacuated before Hurricane Rita 
hit. To help physicians care for Hurricane Rita evacuees, Blue 
Cross took its carrier based data for 830,000 members and 
converted it into an electronic health record available to any 
treating provider and did it in 4 days--830,000 members were 
converted into an electronic health record in 4 days. Those 
records contain historic and current data such as lab results, 
pharmacy information, and basic medical history.
    The second component of the bill requires a carrier to 
create a personal electronic health record at the request of an 
individual and would allow each individual to participate in 
his or her own health care by enabling the individual to input 
information into the electronic health record, such as personal 
health history, family health history, symptoms, over-the-
counter medication, living will information, diet, exercise, or 
other relevant information and activities. As our guest today, 
Speaker Newt Gingrich, will mention, it will provide for 
ownership for health care, for individuals to have ownership 
over their own information and their health care.
    The third major component of the bill provides for a 
creative mechanism for individual providers to obtain funding 
for health information systems in their offices. Specifically, 
the funding would be available to providers to implement an 
interoperable electronic provider-based records system. The 
bill would establish a trust fund at the Office of Personnel 
Management that would accept private contributions. OPM will 
then issue grants from the fund to participating carriers to be 
distributed as performance incentives to their contracting 
health care providers to implement the provider-based 
electronic health records. Now, to tie all these components 
together, the bill will require that within 5 years of passage, 
each participant will have his or her own electronic health 
record contained on a portable digital medium.
    I would also like to quickly address three additional 
issues surrounding the bill. First is privacy. Privacy is 
always at the top of the list of concerns, and for the many 
groups that I met with, it was always the No. 1 issue that was 
brought forward, so rightfully so, it needs to be taken care 
of. There is nothing more personal and private than a person's 
medical information. Under my bill, we will ensure that 
participants' medical information is kept private and secure by 
requiring compliance with the Health Insurance Portability and 
Accounting Act. In addition, there are some great minds at the 
Department of Health and Human Services thinking long and hard 
about this important issue, particularly through the work of 
the Health Information Security and Privacy Collaboration.
    Second, I would also like to address interoperability. The 
administration has gathered the Nation's leading experts in 
this area to develop standards that everyone can work under. 
The bill that I will be introducing will follow the standards 
being developed by the Department of Health and Human Services. 
I am not interested in creating a system of electronic health 
records that will be obsolete or incompatible with other 
systems.
    Third, and finally, we must deal with the issue of cost. 
Under the bill, the Federal Employees Health Benefits Program 
rates should not increase and insurance carriers will not be 
burdened with paying the administrative costs to implement the 
requirements in the bill. The bill includes provisions to 
ensure that electronic health records are implemented over a 
number of years and that participating insurance carriers can 
tap into existing funds dedicated for administrative purposes 
being held by OPM during the implementation stages.
    Additionally, there are significant savings that can be 
seen with the implementation of health information technology 
in the Federal Employees Health Benefits Program. In my own 
State of Nevada, Health Plan of Nevada has done a tremendous 
job of implementing the HIT system. Their transition from paper 
records to electronic records has saved them nearly $1.7 
million, resulting from a more than 50 percent reduction in 
medical records, staff, and paperwork, and certainly the 
errors. The think tank Rand Corp. estimated that, in addition 
to the saving of lives, the U.S. health care system could save 
as much as $162 billion annually with the widespread use of 
health care information technology.
    Making electronic health records available for patients is 
the SMART thing to do, and SMART serves as a perfect acronym to 
demonstrate the strengths of the health information system. 
``S'' is very simple; it stands for Significantly reducing 
medical errors. ``M'' stands for Making prescription errors 
extinct. ``A'' represents the prevention of Adverse effects 
from conflicting course of treatment. And the ``R'' stands for 
Reducing redundancy of testing and paperwork. And ``T'' stands 
for recognizing that it is Time to improve the quality and the 
delivery of health care in the United States for every American 
citizen.
    The bottom line is simple: the technology is there to save 
lives and improve the quality of health care. It would be a 
colossal error to not take advantage of using technology to 
turn valuable claims data, for instance, into electronic health 
records. There are many, many successful HIT demonstration 
projects throughout the country that have shown us that this 
can be done. The Federal Employees Health Benefits Program 
cannot afford to wait any longer.
    I look forward to the discussions today from our experts 
and from all the witnesses.
    [The prepared statement of Hon. Jon C. Porter and the text 
of H.R. 4859 follows:]

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    Mr. Porter. I would now like to recognize Eleanor Holmes 
Norton. Would you like to----
    Ms. Norton. Thank you, Mr. Chairman. I am pleased to speak 
for this side.
    I want to thank you for this initiative. This is a very 
important initiative because you are getting into some of the 
really important issues if one is serious about this matter. I 
want to thank my good friend and former Speaker of the House, 
Newt Gingrich, and welcome him back and recall our fond days of 
working together. The former Speaker and I worked together 
closely on many projects affecting the District of Columbia and 
always on a win-win basis. We did not agree on many subjects, 
so we got together and figured out how to do it on a basis that 
we could agree. And in that spirit, I think we should approach 
this matter because, Mr. Chairman, if I may say so, the one 
thing I don't think we have to do is to convince people of the 
necessity of finally applying technology to the medical sector. 
Indeed, the medical sector is well nigh primitive as compared 
with virtually every other major sector in American life, and I 
really don't think it is because the various components of that 
sector are ignorant of the advantages of technology.
    As I say, one has to live in the technology age perhaps a 
few hours, only a few hours, considering how far we have come 
to understand what the advantages would be. And, therefore, as 
with any intriguing issue like this, the way to approach it is 
only, frankly, with respect to the hard questions. The easy 
ones are settled as far as I am concerned.
    It is not what to do. It is how to do it that has received 
so little, if you will forgive me, of the gray matter that it 
will take to finally bring the medical sector into the same 
part of the 21st century that the rest of America is in. And 
considering how much of our resources they eat up, we better 
figure out how to do that.
    I certainly believe it is quite appropriate, Mr. Chairman, 
that the Federal sector, even Federal employees, should always 
lead the way. We ought to be the best sector when it comes to 
health care. Would that we were, we ought to be the best sector 
when it comes to showing the private sector how to do it so we 
are all on the same page.
    I may have a little disagreement with some who speak first 
and foremost--as you do not, Mr. Chairman--about the importance 
of technology in the medical field as saving money. So I think 
we ought to put that aside. Sure, it will save money over 
years. But as with everything, we ought to say to everybody 
there are up-front costs of investment and you have to 
understand that if you want the advantages. And some of the 
advantages you cannot do without. We should not play that down, 
and those up-front costs cannot come from the cost of health 
care, which is already in such great ascendancy that nobody can 
find it. And if I may say so, Mr. Chairman, I think it has 
something to do with the reluctance of the medical sector to 
bite off this issue at all. So you have wisely tried to find a 
way to deal with that matter.
    It is not, frankly, costs and I would never try to sell it 
to the American people and certainly not to this Congress this 
way. Neither the American people nor the Congress of the United 
States believes in the notion that you invest and the more you 
invest and the more wisely you invest, you get a yield. We are 
a country that believes in instant yield. You invest a little 
and you get a whole lot out. So you invest a little in 
education and everybody comes out, you know, going to college 
and you are at the top of the list instead of at the bottom. 
Not in the private sector. We understand that you do not get a 
benefit for a long time. You do not look at how a company is 
doing by finding whether there is a profit yet, if it goes for 
years and years without a profit, you understand that.
    In selling this, we have to make clear people understand 
what they do get out of it, that they are going to have to 
invest, and that gradually this will pay off. What will pay off 
almost immediately, if we do it right, it seems to me, is the 
terrible price we pay in mistakes in the health care system in 
an utterly mobile country, in not even knowing or remembering 
who the health care providers were, what the medications were, 
forgetting perhaps or having no paper trail to vital 
information that affects your health, a world in which 
pharmaceuticals are able to do more and more for you, but you 
got to have a lot of information before they do what they are 
supposed to do. No question in my mind we got to do that. The 
more advanced medical science gets, the more we need medical 
technology to help us matriculate through all that is now 
available to us.
    This issue raises profound problems. The way in which you 
propose to fund this matter, Mr. Chairman, would probably raise 
some problems for lots of folks. The notion of the use of 
reserves in any way would have to be looked at very carefully. 
I take no opinion on it now, but I do note that even some of 
the private sector carriers have raised questions about that 
kind of use.
    Questions of liability go, of course, to privacy, but well 
beyond that, carriers themselves begin to raise the notion that 
even if you get the kind of security that most people do not 
trust, frankly, the technology system to give us, with 
firewalls and everything else you can talk about, whether or 
not they want to be responsible for having the medical records 
of everybody in there, you know, Members of Congress, people 
with security clearances, people whose identity is not supposed 
to be known at all--I mean, it is the hard questions that 
interest me, not whether or not, you know, my next-door 
neighbor and I can go in and I cannot get his and he cannot get 
mine. It is the hard questions. And it is some of the questions 
that technology has not even now begun to deal with in the 
ordinary course.
    I am the last one to say they cannot deal with it. This may 
be the way in which there is a real incentive to deal with 
these questions. But they have to be dealt with.
    I will not say anything about privacy except this one 
thing, Mr. Chairman. I think that the Federal work force is an 
appropriate guinea pig to experiment on--that is to say, if, in 
fact, you have willing guinea pigs. Now, if you are going to 
put people's medical records out there in the great cyberspace 
beyond, just let me say right here don't go to--as your 
counsel, as the one who went to law school----
    Mr. Porter. Actually, you are my Congresswoman. Remember, I 
live in your district here part-time. [Laughter.]
    Ms. Norton. As your Congresswoman for the period during 
which you are in Washington, as your counsel, do not even 
consider everybody is in it and you have to opt out. You cannot 
start with even a small pool of people are in it unless you opt 
out--not when you are dealing with people's medical records, 
not when you are dealing with that one group of records that 
people most fear getting beyond whom they want to get--not when 
even if your doctor gets it and it is online or your doctor or 
the hospital that you move to, you don't now if it is the clerk 
there, if it is somebody else, other than the professional who 
gets it. You have to deal with the hard questions, I say.
    Let me leave you, Mr. Chairman, with this one phrase: 
``Medicare prescription drug program.'' If you keep that in 
your head the whole time and all of the glitches that came from 
throwing all those people out--and, by the way, we told the 
poor people, you all are in so you do not even have to worry 
about it, until all over the country people said that we cannot 
find the names.
    If we are going to do this--and I would very much 
countenance our doing it--we should take a very small pool of 
the willing and test it. They will be all around us. There will 
be the computer nuts who want to be in this small group. There 
will be people who are intrigued and want their records in the 
same place. They may live in the same place. There are a whole 
bunch of them. We have 3 million folks who work for the Federal 
Government. It would be lovely if they could all be in the same 
kind of unit. And part of the art of this will be figuring out 
who should try it out, making sure that they are willing, and 
again, as your counsel, I say make sure they sign that they 
have been willing. And then let us go for it and see what we 
can find out, just as I expect to find out much from hearing 
from our witnesses today.
    Thank you again, Mr. Chairman.
    Mr. Porter. Thank you, Congresswoman. I appreciate your 
comments.
    Next I would like to introduce my cosponsor, Mr. Clay.
    Mr. Clay. Thank you. Thank you, Mr. Chairman, and 
especially for calling today's hearing on ways we can improve 
the use of information technology in our health care delivery 
system, and also thank you for inviting me to sit on the panel 
today on the Federal Workforce and Agency Organization 
Subcommittee. I appreciate that.
    I especially want to express my gratitude to you for our 
mutual efforts in developing health IT legislation that can 
benefit our public health infrastructure for generations to 
come. And as you mentioned earlier, the Rand Corp. recently 
estimated that the implementation of a nationwide health care 
information network that is utilized by 90 percent of providers 
will produce an annual savings of approximately $162 billion 
while reducing the number of adverse patient drug reactions in 
hospitals by more than 2 million per year.
    The only way to achieve these outcomes, however, is through 
the leadership of the Federal Government, and I am a proud 
cosponsor of Chairman Porter's Federal Family Health 
Information Technology Act of 2006. This bill utilizes the 
market power of the Federal Government by establishing a 
process for the development of electronic health records for 
all Federal employees by utilizing our Federal Employees Health 
Benefits Program for EHR purposes. We are creating a model for 
consumers, employers, and insurers to build comprehensive 
electronic health records for all individuals.
    In addition, I have recently introduced H.R. 4832, the 
Electronic Health Information Technology Act of 2006, along 
with Chairman Porter. H.R. 4832 seeks to accomplish two major 
goals: first, it will codify the office of Dr. Brailer and 
strengthen his role as the leading health information 
technology standard-setting authority in the Federal 
Government; and, second, the bill seeks to partner with the 
private sector through grants and a direct loan program that 
will provide key economic assistance for institutions seeking 
to expand their EHR capabilities.
    If we continue our pursuit of utilizing IT through the 
health care delivery system, we are sure to experience shorter 
hospital stays, improved management of chronic disease, and a 
reduction in the number of needless tests and examinations 
administered over time. The creation of such a network will 
prove far more efficient in both economic and human terms.
    This concludes my remarks, Mr. Chairman, and I ask that 
they be included in the record.
    Mr. Porter. Without objection.
    Mr. Clay. Thank you.
    Mr. Porter. We have some procedural matters, and I ask that 
we have unanimous consent that all Members have 5 legislative 
days to submit written statements and questions for the hearing 
record; that any answers to the written questions provided by 
the witnesses also be included in the record. Without 
objection, so ordered.
    I also ask unanimous consent that all exhibits, documents, 
and the materials referred to by Members and the witnesses may 
be included in the hearing record; that all Members be 
permitted to revise and extend their remarks. And without 
objection, it is so ordered.
    It is also the practice of this subcommittee to administer 
the oath to all witnesses, so if you would all please stand, I 
would like to administer the oath, and please raise your right 
hands.
    [Witnesses sworn.]
    Mr. Porter. Let the record reflect that the witnesses have 
answered in the affirmative. Please be seated.
    We are honored today to have a very special guest who is a 
leader in many areas of our country on many issues, but one in 
recent history, in combination with, I believe, Senator 
Clinton, he has become a champion on moving health information 
technology forward.
    Mr. Gingrich, Honorable Newt Gingrich, understands that 
health care is only as good as its weakest link, and a weak 
link is that of information flow and some of the current 
technology. I believe that Mr. Gingrich also understands that 
we have some of the best doctors and health care professionals 
in the world, but we need additional information technology 
available.
    So, Mr. Gingrich, we welcome you today and look forward to 
your comments, and you are now recognized for 5 minutes.

  STATEMENT OF HON. NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE

    Mr. Gingrich. Well, thank you very much for inviting me to 
this very important hearing, and I am delighted to see a 
bipartisan effort such as this by Chairman Porter and by 
Congressman Clay, and it is something I very strongly support 
as a general direction. I am also delighted to be back with my 
good friend, Congresswoman Norton, who has done just a 
tremendous job representing the city, and under very difficult 
circumstances at times, and has been stunningly effective.
    I also want to note that you have a very, very good series 
of panels. Dr. Malik Hasan, who has been a pioneer for many 
years in this area and who at HealthTrio has developed a 
SNOMED-based language approach that is very sophisticated and 
the next generation, Dr. Jane Barlow of IBM, and others are all 
going to be, I think, very helpful to you.
    I do think bipartisan efforts in this area are useful. That 
is why Senator Clinton and I actually met launching a House 
bill. Congressman Tim Murphy and Congressman Patrick Kennedy 
introduced a bill in this general area, and we shocked 
everybody by showing up together to say we were for it. But I 
think this is an area where we can save lives and that is very 
important.
    I start with a very simple premise. Paper kills. Paper 
prescriptions increase medication error; 8,000 to 9,000 
Americans a year die from medication error. Paper records in 
hospitals make it much harder to have accurate, quality 
systems; 44,000 to 98,000 Americans a year die from errors in 
hospitals. If we had a pandemic, whether it was the avian flu 
or an engineered biological attack, the losses because of the 
absence of personal electronic health records could be in the 
millions.
    I would also point out that personal health records are not 
a radical new idea. The Veterans Administration, an area where 
Government has truly pioneered, has been a leader and now has 
over 13 million electronic health records. PeaceHealth in 
Oregon, Washington, and Alaska has about 1,400,000 people with 
electronic health records. The Mayo Clinic in Jacksonville has 
been paper-free since 1996. Kaiser Permanente has about 13 
million people with electronic health records. And TRICARE, the 
Defense Department health system, is beginning to roll out an 
electronic health record. So the capability is real.
    We at the Center for Health Transformation believe that the 
Federal Government can dramatically improve the health of all 
Federal workers with personal health records, and I agree with 
Congresswoman Norton's observation that it is better to get 
into this by volunteerism and incentives than it is to try to 
coerce everybody. But let me just point out that 93 percent of 
the country believes they should have the right to quality and 
cost information before making a health decision; 90 percent of 
the country believes you should mandate electronic prescribing 
in order to avoid medication error. There is a huge potential 
market that will sign up for this if given a chance, and it has 
an impact both in saving lives and in saving money.
    The Indiana Heart Hospital, for example, reported an 85-
percent reduction in medication error by going to electronic 
records. PeaceHealth in a pilot project in Eugene, Oregon, 
using a GE Healthsystem model, indicated an 83-percent 
reduction in medication error, a 40-percent improvement in 
diabetes control, and a 100-percent improvement in LDL control 
for cholesterol. So these are important things.
    I would urge--and I believe your bill captures this--
individuals should own their own personal health record. This 
is about their life. Doctors can keep a copy for legal and 
administrative and medical reasons. Hospitals or labs can keep 
a copy. But the core universal document should belong to the 
individual, and current privacy laws protecting personal health 
information clearly apply to electronic data as well.
    Let me go a step further and say you should in passing 
recommend to your friends on the appropriate subcommittee that 
Medicaid needs to change its law so when people leave Medicaid, 
the information could actually be transferred to their job or 
business. It currently is not. It is technically blocked. And 
it strikes me as an anachronistic and actually a destructive 
provision.
    The individual's right to know, I would urge the committee 
to look at myfloridarx.com and floridacomparecare.gov. These 
are two Web sites developed by Governor Jeb Bush, and the 
Federal Employees Health Benefits Plan should offer exactly the 
same service nationally for all Federal employees. 
Myfloridarx.com, you can actually go online, put in your Zip 
code, the drug you want to purchase, and every drug store in 
your area shows up with its price. And it turns out in one 
neighborhood within 2 miles, there is a 100-percent difference 
to buy a particular drug. At one drug store it is $101. In 
another drug store, it was $203. And as you can imagine, people 
rapidly talk to each other when that price differential is that 
big, and so it is a big, powerful tool to give citizens the 
power to make choice to save their own money to lower costs.
    The floridacomparecare.gov actually lists number of 
procedures done by a hospital, quality of the outcome, and 
price, and is already having a substantial effect in informing 
Floridians.
    I would also suggest you look at the Humana and Blue 
CrossBlue Shield of Florida joint venture called Availity, 
where they are now going to connect at least a third of the 
State, and if they add Medicaid, over half of Florida will 
begin to have medication and other records online.
    I would also point out, as Congressman Clay noted, I think 
with legitimate pride, that in addition to the work you are 
doing, which is exactly right, there is effort underway with 
Congressman Clay's H.R. 4832, with the bill that Chairwoman 
Johnson and Chairman Deal introduced, H.R. 4157, with 
Congressman Gingrey's H.R. 4641 creating a tax deduction for 
doctors who want to buy equipment. I would strongly urge you to 
encourage your associates to reform Stark and anti-kickback law 
so that hospitals can provide electronic health records, 
because if you combine that with this bill, you won't have to 
have any kind of trust fund. The fact is if you modify Stark 
and anti-kickback rules, the hospitals of this country will 
save so much money by having electronic transfer of information 
rather than paper transfer that they will provide virtually 
every doctor in the country with an electronic health record 
capability at no cost. They are today blocked from that by an 
essentially obsolete law.
    Let me also suggest that we need an accurate scoring 
caucus. Fred Smith of FedEx was the first person who got me to 
think about this because he pointed out that he could never 
have invented FedEx with Congressional Budget Office scoring, 
because they cannot distinguish investment from cost and they 
do not understand market effects. You are about to see this 
with Medicare because the market effect of the new drug benefit 
is going to come at least 30 percent under the projection in 
cost because it turns out competition is driving down the cost, 
and we are actually driving down the cost of prescription drugs 
for America's senior citizens.
    Central Utah Multi-Specialty Clinic invested in electronic 
health records. They believe they will save $14 million over 5 
years. I do not believe the Congressional Budget Office would 
score a penny.
    The Henry Ford Health System in Detroit has introduced 
electronic prescribing. They believe for a $1 million 
investment they saved $3.5 million the first year in the cost 
of drugs as doctors prescribe less expensive medication, and 
they believe they are saving 3 hours a week per nurse for not 
having to sit online talking to a pharmacist. I do not believe 
the Congressional Budget Office would score a penny.
    If we could take the $4.4 billion a year in waste that the 
New York Times estimates for New York State Medicaid alone, if 
you could take the fraud and waste out of the current system, 
and if you could take the inaccuracy and paper out of the 
current system, I think we could afford to cover with a very 
large tax credit every single citizen and have a 300-million 
payer system.
    I give you this as background because you cannot get there 
as long as the Congressional Budget Office has an obsolete, 
reactionary, bureaucratic model of scoring that denies the 
power of the market and denies factual evidence from the 
private sector. That is important for this project because one 
of the things I want to suggest to you is that you consider 
introducing as part of this--and I like your bill very, very 
much. But consider something we did to get hospital quality 
reporting. In the Medicare bill, we said hospitals that report 
quality will get 0.1 percent more from Medicare, and hospitals 
that fail to report quality will get 0.1 percent less. That 
happened to score out at zero under CBO rules.
    I would urge you to consider that by the 3rd year the 
Government will pay more if you have an electronic health 
record and less if you have a paper model. And the analogy I 
will give you is electronic ticketing. Electronic ticketing for 
airlines is not more expensive. It is cheaper. And it is so 
much cheaper that Continental Airlines 2 years ago announced 
that for 1 year they would give you a paper ticket but charge 
you $50 for the paper ticket, and at the end of 1 year they 
would never give you a paper ticket. You could print out your 
own at home, but they were simply never again going to deal 
with having to have paper.
    Now, this is the direction of the future. I very strongly 
support this bill, and I will close with this observation 
because I think this is a very intelligent bill moving in 
exactly the right direction. And I particularly like, Chairman 
Porter, your point that this would not--as I understand your 
interpretation, this would not have OPM creating an entire new 
pattern of standards but, rather, would have OPM looking to HHS 
to adopt and follow the leadership of Secretary Leavitt, who I 
think is doing an extraordinary job in this general area.
    The reason I really like your bill so much is that you are 
the first folks I have seen who are directly using the power of 
the Government as a purchaser--not as a regulator, not as a 
controller, but just simply saying, look, if you want to come 
and provide insurance for the largest single private purchasing 
of insurance in the world, which is the Federal Employees 
Health Benefits Plan, terrific; we just want you to migrate 
toward making sure that any Federal employee that wants it can 
have an electronic health record for themselves and their 
family.
    Using the Federal Government's purchasing power will change 
the health system faster than any possible regulatory regime, 
and I think this bill is a very, very important step in the 
right direction, and we would certainly do anything we could--I 
would personally--to try to be helpful in making sure that this 
bill gets a full hearing, and I would only hope it is signed 
into law this year.
    [The prepared statement of Hon. Newt Gingrich follows:]

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    Mr. Porter. Thank you very much for your kind comments and 
certainly the insights.
    You know, a challenge is the provider side. I am old enough 
to remember my doctor that carried the little bag and actually 
made house calls. And the doctors of today are under a lot of 
pressure, a lot of challenges, from Federal regulations, you 
know, the file cabinet police that they are concerned that they 
are going to be put out of business, privacy, also medical 
liability. And I would like to ask you a question about the 
providers, but also add a comment to that.
    A companion to this bill I am going to be proposing is a 
medical liability insurance incentive for the providers that 
take part in using appropriate technology, that there be an 
incentive to reduce some of their costs. Because you know 
medical liability cost are literally putting health care 
professionals out of business. We have had signs in Nevada at 
OB/GYNs on their buildings that say ``For Rent'' because they 
are concerned about liability, the point being that we have had 
some improvements in Nevada as of late, but the medical 
liability is not in my jurisdiction, Mr. Speaker. Of course, it 
is a different committee. But my plan is to add that as another 
part of this to make sure that providers have another 
incentive, because it will save lives and reduce the cost of 
insurance.
    But to my question: Do you have any other thoughts on 
encouraging the doctors--and the doctors, bless them, are not 
necessarily always good business people, do not always get 
along with each other because they are very independent, and 
they are specialists. Do you have any additional ideas?
    Mr. Gingrich. Well, let me make three points about this. 
You have put your finger on a very key reason, and I think this 
is part of what Congresswoman Norton was saying when she was 
saying lots of people tell us where we need to go, but they 
don't necessarily tell us how to get there. And it is the how 
to get there sometimes that stops us, even when we are all in 
agreement. So I want to say three quick things.
    First of all, I want to go back to a line I started with. 
Paper kills. Any major purchaser who is allowing the system to 
continue to deal with the people that they care about with 
paper is risking the lives of those people. We know technically 
this is true, so I would start by saying any doctor or any 
hospital that is not migrating to health information technology 
is, in fact, saying that they are not seriously concerned about 
killing people. It is literally that direct.
    Second, the University of South Florida has a program they 
are developing that I would commend to you where, if you use 
the electronic health record, it includes an entire section on 
informed consent, and they designed this to meet your point, 
which is how do I get my doctors to think this is worth their 
while. And what they figured out was if they could design, 
working with both trial lawyers and defense attorneys, an ideal 
model of informed consent so that the doctor knew they had the 
minimum liability risk, the doctor would suddenly have a very 
direct interest in having that as part of their health record. 
And so I would strongly recommend the University of South 
Florida program as something you would want to look into.
    Third, you might have to add this on the floor because of 
committee jurisdiction again, but I just want to go back to 
what I said earlier both about Congressman Clay's bill, about 
the earlier work that was done by Congressman Murphy and 
Congressman Kennedy and by the very important bill introduced 
by Congresswoman Johnson and Congressman Deal, and that is, you 
should provide somewhere that providers, whether hospital or 
doctors, who are engaged in serving Federal employees ought to 
have Stark and anti-kickback waived for the purpose of allowing 
the hospitals to provide the electronic health records. This is 
an enormous savings for the system. It allows us to avoid the 
Federal Government getting in the middle of it, and our 
estimate is that you would have virtually 100 percent coverage 
of doctors. But if you added that provision in, I think you 
would find that most of the electronic health record problems 
would disappear within 2 or 3 years.
    Mr. Porter. Thank you.
    Congresswoman, questions?
    Ms. Norton. Thank you, Mr. Chairman, and thank you again, 
Mr. Speaker.
    I wanted to--I am reading your testimony. I wondered if we 
may be talking past each other. Maybe, because I haven't seen 
the wording of the bill, on page 16, the way the bill is 
worded, you indicate in your testimony on page 16 that--of 
course, the standards have to come from the industry. What in 
the hell do we know--excuse me. What in the world does OPM or 
anybody in Government know? You say, ``The data standards 
embedded into any personal health record through the FEHBP 
should be determined by health information technology experts, 
not health benefits experts.''
    I have to assume that H.R. 4859, to which you refer, which 
gives responsibility on data standards for interoperability to 
OPM, simply means that the Government does not say that the 
private sector can do anything it wants to do without anybody 
on our side looking to see whether it basically conforms to 
status. You know, to use an analogy, the Government puts, you 
know, contracts out. One of the great--although this obviously 
is a huge contract, but I will give you what is more typical. 
It has a gazillion contracts out. Nobody monitors the 
contracts. And so, you know, you are on your own, contractors.
    Well, this, of course, is something very special, and 
somebody in Government--I am not sure who--would have to have 
some final say if FEHBP is involved over what those who have 
the expertise design as standards.
    So I wonder if this is even a matter of disagreement here, 
but the way in which you pose it in your testimony makes it 
look as though it may be.
    Mr. Gingrich. Well, let me say first of all, I may have not 
been clear, and I apologize to the gentlelady if I was not 
clear. I strongly believe that the Department of Health and 
Human Services, which is a Government agency, has a primary 
role in helping develop standards for interoperability in terms 
of health records nationwide. And Secretary Leavitt has 
organized an American Health Information Community, which has 
been meeting regularly, and I think Secretary Leavitt is moving 
in that direction. My only observation--I think it was 
conforming with what the chairman said in his opening remarks--
is I think OPM is better directed to follow the lead of HHS and 
allow HHS to be the primary standard setter for the whole 
country rather than to have a second electronic health record 
standard program being developed at OPM, which I think would be 
redundant and, frankly, not nearly technically as competent.
    But within that framework, you and I are on the same road. 
I am a Theodore Roosevelt Republican. Theodore Roosevelt 
decided, after reading Upton Sinclair's ``The Jungle,'' which 
has a scene in which a man falls in a vat and gets turned into 
sausage, which he supposed read shortly after breakfast, and he 
sent up the Food and Drug Act of 1903 as a consequence. I like 
the idea that any free market restaurant I go into anywhere in 
America has drinkable water. I like the Government guaranteeing 
that minimum. Now, they can compete on price and quality and 
food, but they have to get up to drinkable water before they 
get to play. They have to get up to edible food.
    So I agree with you. There are certain standards--and I 
mention in here, for example, I think the Government should 
make clear that electronic health records are ultimately the 
property of the patient. They are not the property of the 
insurance company. They are not the property of the doctor or 
the lab. They belong to the person about whom they are 
developed. It is a very important distinction from where we 
have been in the past. And so I agree, Congresswoman Norton, I 
think your point there is well taken. And my only observation 
was to not have redundancy between two Government agencies.
    Ms. Norton. We do not need to be regulators here. We need 
to just make sure the standards are what they say they are.
    On page 12 of your testimony, first of all, let me say I am 
pleased to see that you agree that the guinea pigs should all 
be willing. We are both enough of libertarians to understand 
that, that we do not want to get into new controversy when we 
are trying to get out of it with this--when we begin this.
    I would like your views, frankly, Mr. Speaker, on how this 
should be begun. I mean, I agree with you, here is a group of--
a rather closed group at that--people who use the same 
insurance companies and the rest. You know, it is a very large 
group, very varied group. They are a group of very high 
political and educational consciousness, and they all work for 
the Federal Government.
    If you wanted to begin with the Federal Government, have 
you given any thought to how you would approach the notion of 
getting employees of the Federal Government to be those who 
first cast out this notion with their own health care plans?
    Mr. Gingrich. Well, let me say first of all that I think if 
you look at what the Veterans Administration is experiencing, 
they will tell you that they are very, very excited and happy 
with the electronic system they have. They want to improve it 
and upgrade it, but they really do believe it has been a 
remarkable breakthrough, and it is a place where the Federal 
Government has been a real leader in creating the technology--
--
    Ms. Norton. But those are the veterans, not the employees, 
I take it.
    Mr. Gingrich. Right. But I think everybody who works with 
it who is a Federal employee would tell you, they are for 
having that kind of record. They have seen the power of that 
kind of a record system. I think at TRICARE--and these are 
Federal employees--Defense Department employees are now going 
to have a, everyone eligible for TRICARE is going to end up 
with an electronic health record. That is happening.
    So in a sense, what you are doing is extending into the 
private sector and into the private market for the civilian 
Federal employees, something which is absolutely happening for 
the Defense Department, for those people who are eligible for 
TRICARE.
    Third----
    Ms. Norton. But many of those are veterans and their 
families, right?
    Mr. Gingrich. That provides active duty military, 
reservists and retirees.
    Ms. Norton. They always can make you do what they want to 
do, but when you are dealing with a civilian work force where--
--
    Mr. Gingrich. No. My only point is that these--again, I 
agree with your point. I would certainly be inclined at this 
stage to make it available, not make it mandatory. But I think 
because the Federal employee work force is actually a pretty 
smart work force, you are going to see an amazing number who 
say, ``Yes, I want that,'' particularly when they look at 83 
percent reduction in medication error. I mean the Federal work 
force is not stupid. And they look at, OK, I can improve my 
chance of not getting the wrong medicine by 83 percent. I can 
improve my chance of managing my diabetes by 40 percent. I can 
improve my change of managing my cholesterol by 100 percent. I 
mean these are numbers from real studies in real medical 
facilities around the country. So I think you will see a very 
rapid migration in this direction.
    I would hope that looking at this hearing, and looking at 
conversations that I know that the Director of the Office of 
Health Information Technology at HHS, Dr. Brailer, has had with 
OPM, I would hope that when OPM issues their letter, I think 
April 15th or so, asking for next year's bids, that they will 
have provisions that are very parallel with this bill, that 
they will be following carefully the leadership of Chairman 
Porter and Congressman Clay in looking at how to make the--and 
I would certainly hope they will take your advice, 
Congresswoman, and do it in a positive way.
    My experience has been, when I talk to people in the 
consumer care area who are in the private sector, that 
somewhere between a third and 90 percent of the work force in 
blue collar factories choose electronic health records once 
they understand the option, and that it grows very rapidly as 
people talk to each other about why it is an advantage.
    Maybe I am too optimistic, but as you know, that has always 
been one of my weaknesses. But I am very happy to make it 
voluntarily initially, make it incentivized, encourage them to 
do it, and I think it will grow much faster than people expect.
    Ms. Norton. I couldn't agree with you more. I don't think 
you are being overly optimistic. I think you would have a 
confluence of the young people in the work force, and the older 
people in the Federal work force, for very different reasons, 
and if anything, you would have more people perhaps than any 
pilot of this kind could use.
    Finally, let me say that I very much agree with you that if 
we can find a way to deal in a bipartisan way, take the privacy 
matters, take the technology matters, and feel comfortable with 
them, that they--and Stark and anti-kickback laws removed or 
considerably reformed, would do exactly what you say they would 
do. From the point of view of the hospital, now having to 
communicate with physicians in ways that hark back to the early 
part of the 20th century, I do believe that the incentive for 
them would be greater than the incentive for us.
    So I thank you very much for all of the hard thinking you 
have done in this area. It is typical of you, Mr. Speaker.
    Mr. Porter. Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman.
    Let me echo too what my colleague has said. I appreciate 
Speaker Gingrich's efforts and leadership in a national health 
IT infrastructure, and helping to make that a reality.
    Let me ask you about the Federal Government. Since we 
administer the Medicare and Medicaid programs, what lessons can 
be learned by the entire health care industry in terms of 
improving the quality and efficiency of care provided to the 
general population? Are we becoming more effective in 
implementing programs that demonstrate positive results in both 
public and private health care settings? And you also mentioned 
to Delegate Norton that the VA has a model program as far as IT 
and electronic health records. Maybe you want to expound on 
that a little.
    Mr. Gingrich. That is a very good question. Let me say that 
probably the two largest pioneers at personal health records 
were the Veterans Administration and Kaiser Permanente. Both of 
them have very sophisticated systems. The VA system is now 
based on a relatively old software, and so is the Kaiser 
Permanent system, about a 15-year-old software. But there is no 
question that it has worked and that it has provided a dramatic 
improvement in quality of care.
    The biggest lesson I think you learn out of this is that 
when you can gather--two things happen--when you can gather 
data about individuals, you can provide them much better 
prevention, a much better chronic disease management, and they 
take better care of themselves because they know their status 
better, and the doctor can take care of them better.
    Second, when you gather enough data on a depersonalized 
level, you begin to see patterns. There is no accident that it 
was the electronic health record at Kaiser Permanente that 
first indicated Vioxx was a problem because they saw enough 
different records simultaneously electronically that their 
expert systems could say, wait a second, we have more people 
showing up with heart problems than should be. So you suddenly 
had them saying, wait a second, here is an early warning, that 
in a paper-based system might have taken 3 extra years.
    So it is the combination of more accurate information about 
you personally and a better ability to survey the whole system 
that really leads to these dramatic improvements. And I do 
think, as a conservative who is often very critical of 
Government, I do think you have to give the Veterans 
Administration a lot of credit for dramatic pioneering in an 
area that is very, very important.
    Mr. Clay. Are we in a position today to quickly detect and 
respond to major public health emergencies such as SARS and 
cases of bioterrorism, given the challenges that remain in 
health IT, and have the standards established through Dr. 
Brailer's office brought better response capabilities to those 
utilizing electronic health information systems and records?
    Mr. Gingrich. I am probably more adamant about this than 
almost anything we talk about, and I appreciate you asking the 
question. I believe, if you look at the disaster of Katrina, 
and the failure of the city of New Orleans and the failure of 
the State of Louisiana, and the failure of the U.S. Government, 
all three of which failed the people of that area--I say this 
as a graduate of Tulane and my younger daughter was born in New 
Orleans--I believe that there is no reason to believe that the 
Federal Government today, or the State and local governments 
today, are any better prepared for a major catastrophe of a 
biological nature, an avian flu pandemic or an engineered 
biological attack than they were prepared after Katrina.
    I think that people are kidding themselves. Every day that 
we don't have a 21st century virtual public health service that 
ties together 55,000 drug stores electronically, every 
veterinarian in the country, every dentist in the country, 
every nursing home in the country, every doctor, every 
hospital, and every retired doctor, nurse, pharmacist, 
veterinarian and dentist, because if you had a real crisis you 
would have to surge all of those assets in real time, and every 
day you failed people would die.
    Second, after you look at a 1,100,000 paper records--I 
spoke to the American College of Cardiology on Monday in 
Atlanta at their annual meeting. And they got a briefing about 
New Orleans. We lost 1,100,000 paper records in the Gulf Coast, 
1,100,000. Now, somebody who is getting chemotherapy for their 
cancer suddenly had no records. And the fact that we are 
sitting here a half year later and do not have a Federal bill 
to create as a national security matter--remember, in 1955, 
President Eisenhower said we needed a National Defense Highway 
Act so we could build interstates so if we had a nuclear war 
people could evacuate the cities. It is a dual use system. 
Middle class people travel all over America. Trucks use it 
every day, but it was originally designed as a national defense 
matter.
    The fact that we do not have today a national defense 
health information infrastructure act, I think is an enormous 
mistake. And if we get unlucky, we will lose several million 
Americans for not having built the system. So I appreciate you 
asking me that question.
    Mr. Clay. Let me, just in closing, Mr. Chairman, out of 
curiosity, if we eliminate all of this paper, what kind of 
pushback do you think we will get from the paper mill industry 
and logging industry? [Laughter.]
    Mr. Gingrich. I have a number of friends in the paper 
industry, and I want to assure you that they are confident that 
the Government of the United States will find enough new ways 
to generate paper. [Laughter.]
    That none of them think they are going to become endangered 
by the elimination of medical records. But I appreciate your 
concern for them.
    Mr. Clay. Thank you, Mr. Speaker.
    Mr. Porter. Thank you.
    Mr. Cummings, do you have any comments or questions?
    Mr. Cummings. First of all, good afternoon, Mr. Speaker, 
good seeing you again. I was just listening to you talk about 
Katrina, and I thought about the will to do something like 
this, the will to do this. You talk about the highways. It 
sounds like this is a good start to do something that is very 
positive, but I think what happens--and maybe you can help me 
with this--is do you think the Congress does not have the will 
to do these make-sense kinds of things that--I mean when we 
look at Katrina and we see how bad off our emergency systems 
were and are, when we consider September 11th and I guess we 
all pretty much assumed that we were in a better position than 
we were on September 11th, and we really don't see much 
improvement since September 11th. And this is in no way 
knocking Republicans or Democrats. I am just throwing this out 
as a general concept. It just seems to me that we--somebody 
told me, I will never forget, when I first ran for office, he 
says--I was down like 15 or 20 points within 3 weeks of the 
election, and this guy told me, he said, ``Look, I'm not the 
campaign manager.'' He says, ``Most people know what to do to 
win, but they don't have the will to do it, and they don't do 
it.''
    I think we know what we need to do, the things we need to 
do, but it just seems like there is so much going on that 
distract us--just like we were able to build a highway system, 
probably some folks said full sped ahead, and got it done. I am 
wondering, you know, how much faith do you have even if we put 
something like this on the books, that it would happen?
    Mr. Gingrich. Let me say first of all, I appreciate that 
question more than you can imagine. I think it is very 
thoughtful and I think it captures the great difficulty that I 
had the 20 years I was serving actively. I think every 
Government class in the country ought to read what you just 
said, because you just captured the dilemma of the American 
system. Let me break it into a couple parts.
    First of all, the Founding Fathers wanted to avoid 
dictatorship, and so they consciously designed a machine so 
inefficient that no dictator could force it to work. 
[Laughter.]
    They did such a brilliant job we can barely get it to work 
voluntarily, and they would look down and say, ``That is 
exactly right.'' This is part of--days when I am about to go 
crazy, I just laugh and remind myself, Washington and Franklin 
and Madison and all those guys are really happy because this is 
really hard.
    Second, we are at one of the great turning points in 
American history, and you nailed it just now. And I would 
immodestly suggest if you go to my personal Web site, Newt.org, 
there are two papers there. One is on 21st century 
entrepreneurial public management, and the other is on 
transforming the legislative branch. The point I make there is 
exactly your point at a core level. The system is broken. I 
describe it as that we have inherited this box, and this box is 
an 1880 male clerk sitting on a wooden stool with a quill pen 
and an open ink well. That is the Civil Service Act. It is 125-
years-old. Modified by a 1935 New Deal bureaucracy, where you 
use a manual typewriter with carbon paper.
    I was telling the administration just last summer--because 
I developed this model originally looking at Iraq and the 
global war on terror, and I was going around before Katrina 
saying, ``We are going to have a catastrophe,'' because this 
box doesn't work.
    I would say to you, if you look at FEMA's total failure, 
you look at the current SBA problems, and you look at the Corps 
of Engineers, the fact that the Congress is not doing 
aggressive oversight--and let me say this as a Republican--I 
don't care if we have a Republican President, our Constitution 
is designed to have very aggressive oversight by the 
legislative branch because it is the only way the system works, 
just as, by the way, I think the President should occasionally 
veto things because it is the only way you retain balance. The 
system is designed for this conflict. But you all should be 
right now taking apart FEMA and rebuilding it. You should be 
taking apart the Small Business Administration and rebuilding 
it. You should be taking apart the Corps of Engineers and 
rebuilding it, because, I mean, how much more evidence do you 
need than the last 6 months? So I think you and I are close 
together.
    What I am intrigued with is these things take time. 
Remember, I cited the Eisenhower 1955 proposal for an 
interstate highway system. Eisenhower wrote a book called ``At 
Ease: Stories I Tell My Friends,'' and in one of the stories he 
had in that book, he said in 1919 he led the Army's first 
transcontinental truck expedition. And he remembers sitting 
on--actually in your State, Congressman Porter--he remembered 
sitting under the stars in Nevada, having crossed a stream, 
imagining to himself what it would be like to have highways 
that connected the whole country. 36 years later, as President, 
he proposed that system.
    These things sometimes take time. I am up here, cheerfully 
optimistic, because I think with your leadership we are going 
to get electronic health records for Federal employees, and 
that is going to be a major break in the system. And by the 
way, by the time you take care of the hospitals and doctors and 
take care of Federal employees, you just took care of 50 
percent of the doctors and hospitals in the country, and from 
the standpoint that legitimately I would hope a number of you 
have for the disparities and outcomes, you get to an electronic 
health record--and we worked very closely with Morehouse 
Medical School and Dr. David Sacher, Dr. Elizabeth Ofili on 
this. We are going to dramatically reduce the disparities and 
outcomes if we have electronic health records. I mean these are 
a big breakthrough.
    So what you are doing may be a building block toward a 
dramatically bigger future, but that was a great question and a 
great observation, and you put your finger on a big deal.
    I will say one last thing. I had a great honor yesterday. 
The State of Florida, the House of Representatives down there--
they only have a 9-week session--they took an entire day off to 
have a workshop for all their members on transforming health in 
Florida, and it was very interesting how they did it. It was a 
very powerful moment of everybody stopping, you know, no packed 
fundraiser, no running off to constituents, no 205 other 
assignments. And we had a ton of members of the Florida 
Legislature deeply engaged in learning and talking and 
thinking. It was a very encouraging moment.
    Mr. Cummings. Thank you.
    Mr. Porter. Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman. First, let me 
thank you, Mr. Chairman, for introducing this piece of 
legislation because I do think it is a very important 
conversation to start. The conversation has begun, but this is 
an example of something we can maybe move forward on as an 
example from the Federal Government. As I told you yesterday, I 
think using the Federal program to begin to push others in the 
country in the right direction is a good idea, and, obviously, 
the details need to be worked out and there are a lot of 
important details to be worked out.
    Let me also thank you, Mr. Gingrich, for your many ideas 
you have had in the area of health care recently. I don't 
always agree with every one, but I have to tell you, the more 
ideas that are churning out there, the better off we will be as 
a Nation, because I think this is an area, as I know you have 
said, where we can have dramatic improvements going forward. I 
agree that Congress needs to be more aggressive in its 
oversight in a whole range of areas, and I think the question 
of competence is something that the American people are going 
to come to value even more highly than they already do, and as 
a Government, whether it is Republican or Democrat, we owe them 
a higher degree of competence than we have seen in many recent 
instances.
    Let me ask you, with respect to just some of the--and I 
don't know if you have had an opportunity to look at the 
details of the bill--but one of the issues is whether or not 
you are going to allow people to voluntarily opt into this 
system, or whether you are going to set it up so they are 
required to automatically be enrolled, and given the fact that 
the Federal Government is launching an experiment in this area, 
and the fact that a lot of people are concerned about the 
privacy implications of electronic records, do you have a view 
on that question?
    Mr. Gingrich. I was earlier associating myself with 
Congresswoman Norton's position because--and I say this at a 
practical level--if we try to impose, and we arouse all the 
privacy advocates and we arouse all of the Federal employee 
unions, that will slow this bill down so much, that if we can 
get it to be voluntary in Phase I, I think we will actually 
have more people signed up in the length of time it would take 
to fight the bill through if you have a lot of opposition. So I 
would rather make it a voluntary system. I did suggest the 
incentive of saying to the plans we would pay slightly more in 
the 3rd, 4th and 5th year if it is an electronic record and 
slightly less if it is a paper record, and that would 
incentivize the plans to encourage people to join.
    But I think you are going to get--if you look at e-
ticketing nowadays at airports, you know, Americans aren't 
stupid. As Americans learn--and I said it earlier, examples of 
83 and 85 percent reduction in medication error, that saves 
your life; 40 percent improvement in diabetes management, that 
saves your life; 100 percent improvement in cholesterol 
management. These are case studies in places that have used 
these records. Federal employees are smarter. They are a very 
smart group collectively, as you know, and I think they will 
talk to each other. Within 3 or 4 years it will be in the high 
90's. And I think, frankly, if the last 3 percent would rather 
have paper and risk dying, that is their prerogative as a free 
people.
    Mr. Van Hollen. Thank you. I think you are right. I think 
the amount of resistance you are going to get is not worth the 
effort, and I think that people will see this as a good thing 
and voluntarily do it.
    We don't have a lot of time. What is going on--and I 
apologize, Mr. Chairman for being late. We had a briefing in 
the Judiciary Committee.
    But in the private sector, to what extent is there 
movement? How rapid is the movement in this area, and where do 
you predict that going, and how important do you think it is to 
move forward in this area in order to get the rest of the 
market to move?
    Mr. Gingrich. You are asking the right question. First of 
all, there is enormous movement in this area. There is a 
tremendous new program at the University of South Florida, 
which I was just getting briefed on yesterday in Tallahassee. 
There is a big project by Humana and Blue CrossBlue Shield of 
Florida called Availity, which will cover a third of the people 
of Florida, and if they had Medicaid will be over half the 
people of Florida. Kaiser Permanente has 13 million health 
records nationwide that are electronic. The Veterans 
Administration has about 13 million health records that are 
electronic. As you go around the country, Peace Health in 
Oregon, Washington State and Alaska, has about 1,400,000 health 
records that are electronic. So as you go around the country 
you just see the momentum beginning to build in that direction.
    One of the things I am passionate about is modifying Stark 
and anti-kickback so that hospitals can provide free health 
information technology equipment to doctors they are legally 
barred today from doing. They can't even provide it to each 
other. So, for example, the largest hospital in western 
Michigan would probably provide health information technology 
to all the small rural hospitals in the upper peninsula, but it 
is currently illegal under Stark and anti-kickback. Well, that 
is utterly irrational.
    The Federal Government, unfortunately, is not going to pay 
for it. As a national security matter I would have the Feds pay 
for it and get it done in 2 years. If they are not going to pay 
for it, the easiest source of sophisticated capital is the 
hospitals. They actually save enough money, if patients are 
transferring in electronically rather than in paper, they save 
a lot of money on unnecessary labs that don't need to be taken. 
So I would encourage you to look at that as a major component 
of this.
    Mr. Porter. Thank you very much. Mr. Speaker, we appreciate 
you being here. Once again, it was an honor to have you here. 
We look forward to working with you. Thank you.
    Mr. Gingrich. Thank you.
    Mr. Porter. In the element of time I am going to combine 
actually the second and third panel, so if both panels will 
come forward, please, we will have a chance to get the table 
set up.
    We will start with Mr. David Powner, who is Director of 
Information Technology Management Issues, Government 
Accountability Office. We will then have Dr. Jane Barlow, Well-
being Director, Health Benefits Operations with IBM; then have 
Mr. David St. Clair, founder and CEO of MEDecision, Inc. Dr. 
Edward Ewen, Jr. was going to be with us, but had to take care 
of a patient. Dr. Paul Handel will be next, who is vice 
president and chief medical officer, Texas Division, HCSC; 
Jeannine Rivet, executive vice president of United Health Group 
and then Dr. Malik Hasan, who is CEO, Health View, retired CEO 
of Health Net. So we will start with Mr. Powner.

STATEMENTS OF DAVID A. POWNER, DIRECTOR, INFORMATION TECHNOLOGY 
MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; JANE 
  F. BARLOW, M.D., MPH, MBA, IBM WELL-BEING DIRECTOR, GLOBAL 
 WELL-BEING SERVICES AND HEALTH BENEFITS, THE IBM CORP.; DAVID 
  ST. CLAIR, FOUNDER AND CHIEF EXECUTIVE OFFICER, MEDECISION, 
 INC.; PAUL B. HANDEL, M.D., VICE PRESIDENT AND CHIEF MEDICAL 
DIRECTOR, BLUE CROSS BLUE SHIELD OF TEXAS (A DIVISION OF HEALTH 
    CARE SERVICE CORP.); JEANNINE M. RIVET, EXECUTIVE VICE 
PRESIDENT, UNITEDHEALTH GROUP; AND MALIK M. HASAN, M.D., CHIEF 
EXECUTIVE OFFICER, HEALTHVIEW, RETIRED CHIEF EXECUTIVE OFFICER, 
                           HEALTH NET

                  STATEMENT OF DAVID A. POWNER

    Mr. Powner. Chairman Porter and members of the 
subcommittee, we appreciate the opportunity to testify on 
health care information technology. As we have highlighted in 
several recent reports completed for Chairman Davis of the full 
committee, significant opportunities exist to use technology to 
improve the delivery of care, reduce administrative costs, and 
to improve our Nation's ability to respond to public health 
emergencies. This afternoon I will briefly describe the 
importance of information technology to the health care 
industry, discuss key Federal leadership efforts to bolster the 
adoption of IT, and highlight key aspects of your proposed 
legislation, Mr. Chairman, that are critical to achieve the 
President's goal of a nationwide implementation of 
interoperable health care systems.
    Information technology can lead to many benefits in the 
health care industry that we have reported on over the past 
several years. For example, using bar code technologies and 
wireless scanners to verify the identities of patients and 
their correct medications can and has reduced medical errors. 
In addition, surveillance systems can facilitate the timely 
collection and analysis of disease-related information to 
better respond to public health emergencies. Its standards-
driven electronic health records have the potential to provide 
complete and consistent medical information necessary for 
optimal care.
    Just last month, the Select Committee that investigated 
Hurricane Katrina concluded that the lack of electronic health 
records contributed to difficulties and delays in medical 
treatments to evacuees. Fortunately, several efforts led to the 
development of a Web-based portal to access prescription 
information for these evacuees. This highlights the importance 
of electronic records with even limited information, which was 
made possible when commercial pharmacies, health insurance 
programs and others made accessible key prescription data.
    Several major Federal health care programs, including 
Medicare, Medicaid and OPM's Federal Employees Health Benefits 
Program provide health care services to over 100 million 
Americans. Given the Federal Government's influence over this 
industry, Federal leadership can lead to significant change, 
including the adoption of IT. Given this, in April 2004, 
President Bush called for the widespread adoption of 
interoperable electronic health records within 10 years, and 
established the position of the National Coordinator for Health 
IT.
    Although the coordinator has issued a framework, 
established working groups of industry experts and awarded 
contracts to define a future direction, we have testified and 
recommended that the National Coordinator: one, establish 
detailed plans and milestones to carry out the President's call 
for interoperable health care records; two, complete detailed 
plans with private sector input for defining standards to 
enable interoperability of data and systems; and three, to 
fully leverage the Federal Government as a purchaser and 
provider of health care.
    Turning to your proposed legislation, Mr. Chairman, I would 
like to commend your action to leverage the Office of Personnel 
Management as one of the largest purchasers of electronic 
health benefits to advance the creation of electronic health 
records. The Federal Employees Health Benefits Program has over 
8 million beneficiaries and advancing electronic health records 
to this critical mass would be significant. Your focus on 
electronic health records is critical since they are a central 
component of an integrated health information system. In 
addition, they have the potential to reduce duplicative tests 
and treatments, and could lead to reductions in medical errors.
    Another key aspect of your proposed legislation, Mr. 
Chairman, is its focus on adopting standards that are 
consistent with the National Coordinator's efforts. IT 
standards are critical to enable interoperability of data and 
systems, and it will be especially important if carrier-based 
records are to be interoperable with provider-based 
information.
    We remain concerned about the development of such standards 
and highlighted these concerns before Chairman Davis at a full 
committee hearing last fall. Although the identification of 
standards continues to be one of the major focus areas for the 
National Coordinator, to date, the standard-setting processes 
have resulted in conflicting and incomplete standards, and the 
consensus on the definition and use of standards remains a work 
in progress.
    Hopefully, the standard-setting initiatives will gain 
momentum in the near future so that provisions of your bill 
calling for these standards can be carried out.
    In summary, Mr. Chairman, efforts like your proposed 
legislation that provide tangible solutions to jump start 
adoption rates of electronic health records, and that leverage 
Federal programs and resources are critical to carrying out the 
President's goal.
    This concludes my statement. Thank you, Mr. Chairman, for 
your leadership in driving this much-needed technology.
    [The prepared statement of Mr. Powner follows:]

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    Mr. Porter. Thank you very much.
    For those who are here for the first time at a 
congressional hearing, understand that Members will come and go 
for different committee hearings happening at the same time. We 
may even be called to vote on the floor here at some point. But 
know that your testimony is very valuable and is a part of the 
record being scrutinized by a lot of folks. So we appreciate 
you being here. The number of people here today is not a 
reflection of the importance of this issue. It is just the 
process with multiple committees happening at the same time.
    Dr. Barlow, welcome.

               STATEMENT OF JANE F. BARLOW, M.D.

    Dr. Barlow. My name is Jane Barlow. As well as being 
Director for IBM's Health Benefits Operations, I am responsible 
for the delivery of $1.7 billion in health care to over 500,000 
IBM beneficiaries in the United States each year. I appreciate 
the opportunity to testify on behalf of IBM in support of this 
important legislation.
    IBM's strategy in health benefits is simple. We focus on 
health people for high performance. This strategy underscores 
investment in health to realize the productivity and innovative 
potential of our employees. The personal health record is 
critical to achieving this goal.
    In 2005, IBM announced that it would provide personal 
health records to its entire U.S. work force. To set up the 
records, employees enter information in a secure Web site. They 
input such things as medical conditions, family history, 
medications and allergies. Later this year, their personal 
health record will automatically import their medical and 
prescription drugs claims history. The ultimate goal is to 
enable all types of health information to flow into the record 
to form a comprehensive portable portrait that the patient can 
access when they desire and share with their provider when they 
choose.
    Since we rolled out personal health records late last year, 
over 45,000 IBM employees have signed up. It is important to 
note we are not creating new information. The carriers have 
always collected claims data. It is how they pay bills. But the 
personal health record will allow our employees to look at 
their comprehensive claims history, many for the first time. I 
believe electronic health records will drive two changes in 
health care. First, they will increasingly make health care 
organize around the patient; and second, electronic health 
records and their related systems will improve our employees' 
interaction with their doctor.
    Let me explain. The personal health record empowers 
consumers with the information they need to actively manage 
their health and health care. As a result of the personal 
health record, our employees are asking more questions about 
cost and quality. With this broader personal health history, 
they are able to have a collaborative relationship with their 
physician that extends beyond the day's illness to address the 
most important health needs for that individual. This informed 
relationship with their provider is critical to improving 
health care quality and reducing costs.
    With the aid of electronic health records and the tools to 
support them, providers will have all the information about a 
patient and can focus on the most important health issues for 
that patient across the continuum of care.
    Let me give you an example of feedback I received from a 
happy employee. This employee reported suffering depression for 
most of her adult life. As a result of participating in our 
disease management program, she was able for the first time, to 
work with a provider who had a comprehensive view of her 
medical history and other personal factors. They were able to 
identify a successful treatment plan for her, and she reported 
that this had totally changed her life, and for the first time 
in 18 years she felt fully alive and productive.
    My hope is that the personal health record will afford this 
opportunity for every patient.
    Provider adoption of personal health records is key. While 
the legislation establishes some incentives, reforms and 
reimbursement and additional sources of funding will have a 
dramatic impact on the adoption and value of the electronic 
health records created by the act. Finally, this bill will help 
lead the critical transition to digital health care by allowing 
the exchange of health information in standard electronic 
formats.
    IBM strongly supports the use of standards. We believe 
standards are critical and necessary to ensure providers and 
patients have the information they need.
    In summary, personal health records will drive a more 
innovative and efficient patient-centric system. Personal 
health records are the foundation of a standardized 
infrastructure for the electronic exchange of health care 
information, one that enhances the ability of providers to 
deliver high-quality care.
    Finally, improving the health and wellness of a work force, 
whether at IBM or across the Federal Government, is a strategic 
investment that can pay substantial dividends, promoting 
greater economic competitiveness and capacity to innovate.
    Thank you.
    [The prepared statement of Dr. Barlow follows:]

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    Mr. Porter. Thank you, Dr. Barlow.
    Next we will have Mr. St. Clair, founder and CEO of 
MEDecisions.

                  STATEMENT OF DAVID ST. CLAIR

    Mr. St. Clair. Good afternoon, Mr. Chairman. Thank you for 
inviting me to testify before this subcommittee today on what 
we consider to be a very important topic.
    As you said, I am David St. Clair, Founder and CEO of 
MEDecision. We are the recognized market leader in 
collaborative care management solutions for the health care 
industry. Our clinical systems are used nationwide to help 
coordinate care for about one in every six insured people in 
this country, including millions of Federal employees and their 
families.
    I am here today representing two other organizations as 
well. I am here on behalf of HIMSS, the largest trade 
association for health information technology, and I am here as 
the spokesman for the CollaboraCare Consortium, an alliance of 
16 innovators in the emerging regional health information 
market.
    We believe that electronic health records will really 
improve the way health care is delivered in this country. Using 
technology to facilitate collaboration among health care 
stakeholders will result in the right information reaching the 
right people at the right time, which can improve lives, 
indeed, save lives, and make health care more affordable in the 
process.
    We need not wait until physicians and other providers fully 
embrace the use of electronic medical record systems in their 
practices. Sharing information that already exists within payer 
repositories, with individuals and their care team can improve 
health care outcomes.
    For these reasons, MEDecision, HIMSS and the CollaboraCare 
Consortium, enthusiastically endorse the Federal Family Health 
Information Technology Act of 2006.
    There are just a few points I would like to emphasize in my 
testimony today, and as you will hear, many of them really 
speak to the notion that of the things that are called for in 
the proposed legislation are already well under way in the 
private sector.
    My first point is, our success at creating and deploying 
carrier based health records, which we call the payer-based 
health record [PBHR], has already demonstrated the value of 
those records at the point of care. In his written testimony, 
Dr. Ed Ewen, a practicing physician with the Christiana Care 
Health System in Delaware, and their head of Clinical 
Informatics, underlines his belief that the information in the 
Blue Cross Blue Shield of Delaware PBHRs, being used in the 
Christiana Care Level 1 Trauma Center, has, one, improved the 
quality of care being delivered to patients in need. For 
instance, they found that the PBHR gave them substantially 
more--their quotes--medication information 48 percent of the 
time than they had through any other means. And two, that 
effort has decreased the cost of that higher quality care.
    The key to understanding the value of carrier-based health 
records is illustrated in the graph on my left. We have laid 
out the population. This data is from the 3.7 million health 
records we created last month for the Blue Cross Blue Shield of 
Illinois population. We have laid them out based on their 
relative burden of illness. As you can see on the left, the 
sickest 5 percent of the population, which represents, by the 
way, over 40 percent of the total health care spent for this 
population, have, on average, 11 different medical conditions, 
including three chronic care conditions, and those individuals 
have taken 13 different classes of medications and seen 9 
different providers of care within the past year.
    This population, more than any other, is in need of 
assistance in bridging the information gaps or the information 
chasms evident in the medical community today. Just one of 
these patients generates raw claims data that fills 60 pages 
that I have in my hand here today. What we have as a technology 
challenge and clinical challenge is to reduce that to the four-
page summary that we are using today in the State of Delaware, 
and soon in the State of Illinois.
    My second point, the technology we use have been creating 
valuable information from payer data for over 10 years. In 2001 
we started using the PBHR to support case and disease managers 
as they worked with those individuals with the chronic 
diseases. For instance, Blue Cross Blue Shield of Massachusetts 
uses the payer based health record to drive their disease 
management programs both through telephone contact and tailored 
correspondence.
    Third, if you direct your attention to the second graphic 
here, our belief, since I started the company 18 years ago, is 
that we need to be able to share a composite view of a 
patient's history with all members of the care team, the 
patient themselves to help with their own decisionmaking, with 
the clinical staff who are actually treating the patient, and 
with the care managers, the case managers and disease managers 
who are helping coordinate their care. While there will still 
be decisions to make and perhaps disagreements, at least we are 
all starting with the same basic information.
    Fourth, last year, in anticipation of the destruction of 
Hurricane Katrina, we partnered with Blue Cross Blue Shield of 
Texas, and created 830,000 payer-based health records for the 
potential evacuees along the Texas Gulf Coast in 4 days. When 
Rita stormed ashore, Blue Cross Blue Shield of Texas was ready.
    This year we have created 3.7 million payer-based health 
records for the membership of Blue Cross Blue Shield of 
Illinois in 4 weeks. We will be extending that capability 
across the populations for Blue Cross Blue Shield of Texas, New 
Mexico and Oklahoma, all for their parent company, Health Care 
Services Corp.
    We and the physician executives of HCSC--and you will be 
hearing from Dr. Handel in a few minutes--will be working with 
the provider communities and consumer advocates to roll out 
secure access to these records by the members and by the 
physicians who treat them. Our success with the project in 
Delaware we replicated on a much broader scale with 10 million 
records available nationally. I want to point out that 
represents 3.3 percent of the U.S. population who will have 
electronic records available from one payer in 1 year.
    Finally, that brings me to the last point, access and cost. 
The PBHR, whether enhanced by PHR data or not, will improve the 
quality and safety of health care for virtually everyone who 
participates. We strictly adhere to HIPAA privacy and security 
regulations and allow individuals to opt out of the program if 
they have privacy concerns. In addition, we implement data 
filters that respect State law, prohibiting the sharing of 
certain classes of information. The key for adding a voluntary 
PHR--and we have five such partners in the CollaboraCare 
Consortium--is it will allow consumers who wish to share all 
their data, some of their data, or none of their data to 
control that process at a granular level.
    The technology and delivery infrastructure is very 
inexpensive when used across a broad population. Based on our 
experience in Delaware, we would project that the PBHR and PHR 
programs being called for in the legislation will cost well 
under $1 per member per month for that coverage, which 
represents a very small fraction of the monthly premium for 
those particular individuals.
    Thank you very much for the opportunity to testify before 
the subcommittee today. I am prepared to take any questions you 
may have.
    [The prepared statement of Mr. St. Clair follows:]

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    Mr. Porter. Thank you very much.
    Next we have Dr. Paul Handel, who is the vice president and 
chief medical officer Texas Division, HCSC. Welcome.

               STATEMENT OF PAUL B. HANDEL, M.D.

    Dr. Handel. Chairman Porter, thank you very much for 
inviting Health Care Service Corp. to submit formal testimony 
on the electronic health record.
    I am Paul Handel. I am a doctor with approximately 40 years 
of clinical experience in caring for and caring about patients. 
At the present time I am vice president and chief medical 
officer, Blue CrossBlue Shield of Texas, a division of Health 
Care Service Corp. My testimony today will reflect the position 
of Health Care Service Corp. I am not representing the Blue 
Cross Blue Shield system in any fashion.
    HCSC is a non-investor owned company that operates through 
four divisions in Illinois, Texas, New Mexico and Oklahoma. We 
cover approximately 10 million lives, and we are now the fourth 
largest carrier in the country. We firmly believe that 
electronic health records can benefit health care in the United 
States by increasing the accessibility to quality care and 
making health care more affordable.
    The record, the electronic health record, as your own 
experience that you related about your mom, and David talked 
about a few moments ago, really looks toward our elderly 
population and the sickest part of our population, which 
consumes the vast majority of our health care resources. These 
people are invariably unable to give concise histories because 
of either age, underlying conditions or perhaps even their 
medications. They also have a team of physicians that are 
caring for them. They have multiple ancillary providers that 
are involved, and their histories become relatively unclear. 
Without a question, collating the data for these people will be 
instrumental in improving their health care.
    Additionally, the connectivity that we are envisioning here 
will facilitate the education and the provision of preventive 
services to all of our population, and, candidly, in the big 
picture, that will address what I think is a graver, much 
larger issue, and that is the spiraling increase in our health 
care costs.
    We have a large data base of electronic information. We 
realize the value this data has on the development of 
electronic health records, and for our own members in 
particular. We have already begun to focus on providing claim-
based personal health records to our members because we believe 
it is an extremely effective way to positively impact their 
outcomes.
    I want to emphasize that we are just now beginning to learn 
what information is useful, and how do we educate consumers, 
physicians and other providers as to the value of the 
electronic health records. The flexibility to continue to 
innovate is absolutely imperative.
    We have heard a fair amount of discussion today from 
everyone concerning Katrina. I can tell you that in Texas, we 
lived through over 300,000 people coming to Texas as refugees 
without any health care information. Most of them could tell 
their doctors they were taking a blue pill, a yellow pill, they 
had received treatment for cancer, but they didn't know what 
drugs they were taking. It was a real debacle.
    As we prepared for Rita, we prepared within 4 days time, 
from a Thursday morning to Monday morning, patient clinical 
summaries on 830,000 patients across the Gulf Coast, and into 
western Louisiana. We partnered with the Texas Medical 
Association, and on Monday morning, 4 days after starting our 
efforts, we were able to put forth an 800 number by either e-
mail or blast fax to over 40,000 Texas doctors, a contact point 
where they could get the patient clinical summaries if anybody 
had been displaced and showed up in their practices.
    Our success in creating the electronic plan-related health 
records for the hurricane victims really pushed us forward to 
roll out our records to all of our members in HCSC. We will 
start the program in Illinois with approximately 3.7 million 
members, and continue to roll that out through the remaining 
divisions over the course of the year.
    The core reason why we began to implement a health record 
like this for our members is that we will not consider saving 
money or reducing medical errors, but on a higher level, to 
ultimately improve the accessibility to quality and affordable 
health care for all, and parenthetically, in the process, we 
will probably save money and reduce medical errors.
    In conclusion, I would like to stress the importance of 
allowing health plans to continue to create innovative products 
with the flexibility to make changes that meet local customer 
needs and market demands. We agree with the need to utilize 
technology to establish uniform standards for health data, 
facilitating interoperability, efficiency of communication and 
safety. We believe that implementing a payer-based health 
record is the right thing to do. We will continue to pilot 
projects for developing various means of electronic 
transmission of plan-related health information in this way. We 
feel that other carriers will find the most successful features 
to create value and usage for the personal health records.
    Thank you very much.
    [The prepared statement of Dr. Handel follows:]

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    Mr. Porter. Thank you very much, doctor.
    Next is Jeannine Rivet. I hope I pronounced your name 
right. Executive vice president, UnitedHealth Group. Welcome.

                 STATEMENT OF JEANNINE M. RIVET

    Ms. Rivet. Good afternoon, Chairman Porter. I appreciate 
the opportunity to share with you our experiences in offering 
personal health records to the consumers that we serve. I am 
Jeannine Rivet, executive vice president of the UnitedHealth 
Group, a diversified health and well-being company, dedicated 
to helping people achieve improved health and well-being 
through all stages of their lives.
    UnitedHealth Group's family of businesses offers a broad 
spectrum of products and services to approximately 65 million 
individuals nationwide, everything from commercial health plans 
to Medicare offerings such as Part D drug plans, Medigap, 
Medicare Advantage Plans, Medicaid services, health analytics 
and informatics, and specialty solutions such as nurse triage 
services, centers of excellence, dental, vision plans and 
behavioral coverage.
    To our UnitedHealth business we also offer health benefits 
to Federal employees and annuitants under the Federal Employees 
Health Benefits program, 14 States and the District of Columbia 
with more than 322,000 members enrolled in our various plans. 
At UnitedHealth Group we have invested heavily in technology as 
part of our efforts to advance the quality of care provided to 
individuals and to improve the efficiency of our health care 
system. Our investment in technology allows us to provide our 
plan members with comprehensive information about the cost and 
effectiveness of different treatment options, as well as to 
help them find the highest quality providers. This type of 
information, we believe, is critical to improving outcomes and 
to enabling consumers to maximize the value they receive for 
their health care dollar, and to more easily manage their 
health care.
    One of the primary ways we provide this type of information 
to our members is through our consumer Web site, myuhc.com. 
Members can log onto UnitedHealth's Web site and find top-
performing providers who meet objective quality and efficiency 
criteria, or find information on hospital quality for more than 
150 procedures. They can order prescription refills and they 
can compare the cost of drug alternatives, and receive monthly 
statements providing explanation of benefits for all services.
    Last spring, we expanded our Web site capabilities by 
integrating a personal health record that gives consumers 
greater access to and control over their health care data so 
that they can make informed decisions. Through myuhc.com, which 
is a secure Web site that protects the privacy and security of 
members' data with user names and passwords, our members can 
use their personal health record to view their full history 
based on claims data, store information on their medical 
histories, as well as contacts with health care practitioners 
and upcoming appointments, receive condition specific alerts 
and appointment reminders, enter and track clinical data such 
as glucose levels and blood pressures, as well as their own 
information and lifestyle behaviors such as weight and sleep 
habits, and they can enter notes, reminders and personal 
observations.
    In addition, members have the option of giving their 
physicians and family members access to their personal health 
records including access to their personal health summary, 
which is a printable health summary, detailing the most recent 
conditions, medications, procedures and lab results, which is 
viewable online or through swipe card technology.
    Currently, about 4\1/2\ million consumers have access to a 
personal health record through our Web portal. We too have a 
Hurricane Katrina example regarding the impact and positive 
results from having a personal health record. Within the 
greater New Orleans area we were a critical resource to our 
members. They use their personal health records to reestablish 
health care records including medical, lab, pharmacy and 
immunization records with their physicians' offices since many 
of the physicians were dislocated, or their offices were 
flooded and the data was lost.
    As part of our effort to design a responsive personal 
health record, we conducted a number of in-depth telephone 
interviews and focus group sessions with consumers, physicians 
and employers. We gathered some very helpful information 
through these efforts. Some common themes were: accessibility, 
portability and convenience are key benefits of a personal 
health record. Primary concerns, not surprisingly and already 
noted, were Internet security, privacy and accuracy of data. 
And everyone felt that the personal health record would enable 
the patient-physician interactions. Consumers had a very 
positive response to the concept and were open to using 
personal health records. Physician awareness was mixed. Once 
the personal health record concept was explained, physicians 
responded favorably. However, noted concerns regarding the cost 
of the personal health record and the possibility that patients 
may be able to block out information from the health care 
provider.
    Their concerns over the cost of personal health records 
verified the need for incentives for adoptions such as the one, 
Chairman Porter, that your bill contains. Employers have 
limited awareness or experience with a personal health record. 
However, again, once explained they saw value, primarily for 
their employees, but less value for themselves as the employer. 
And all consistently recognized the need for further education 
on ease of use, benefits, security and confidentiality.
    Based on our experience and research, we continue to refine 
our direction, focusing on enhancing the consumer position 
relationship. Also we have identified a number of requirements 
for facilitating widespread adoption that you may wish to 
consider as you move forward with your efforts to expand use of 
personal health records in the FEHB program. Most important, a 
strong and consistent information and education campaign that 
clearly shows the value of using a personal health record, as 
Ms. Norton referenced earlier. Also a tailored consider 
experience, which is organizing data and features in a manner 
that makes it easy to navigate and access information of 
choice, with health information displayed and described in ways 
that are easy to understand.
    Secure and private infrastructures and processes are 
critical. Accurate and timely information will build trust and 
credibility. Flexibility is needed to address consumer needs, 
preferences and desires. Fully integrated records to create 
easy access for the individual. And we agree with you, Chairman 
Porter, interoperability with provider office technology is 
necessary.
    In closing, let me say that at UnitedHealth Group we are 
confident that the use of appropriately designed personal and 
electronic health records will make a significant difference in 
improving health outcomes for individuals, and will make it 
easier for them to manage their health care effectively. That 
is why we have invested considerable time and resources.
    Chairman Porter, we appreciate your leadership on this very 
important matter, and thank you for the opportunity to share 
our experiences with you today, and I would also be happy to 
answer any questions you may have for me.
    [The prepared statement of Ms. Rivet follows:]

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    Mr. Porter. And we thank you for being here. We appreciate 
it.
    Next, Dr. Malik Hasan, CEO of HealthView, and retired CEO 
of HealthNet. Welcome.

                    STATEMENT OF MALIK HASAN

    Dr. Hasan. Thank you, Mr. Chairman, and let me thank you on 
two counts: first, for allowing me to present my view; and, 
second, I am also your constituent and voted for you. 
[Laughter.]
    And it seems like I voted right. I am very happy with my 
vote.
    Mr. Porter. I may ask you to say that again someday, so 
don't forget that, OK? Thank you.
    Dr. Hasan. As you will notice from my bio, I have had a 
very diverse experience in the delivery of health care in the 
United States. I have firsthand observed the flow of 
information and the current limitations in physician offices--
because I used to run a physician office--hospitals, because I 
was involved in the operation of a hospital, also the free-
standing facilities, and was the founder and operator of a 
major health plan. The experiences allowed me to observe the 
gaps in care. Such gaps result in poor coordination of care 
with the resultant poor and expensive care. Resources are very 
poorly utilized.
    The introduction of the electronic health record, as 
envisaged in this bill, will start bridging those gaps and 
commence the transformation of the health care delivery system 
which is sorely needed, because it is not just the Federal 
employees. Once the carrier starts a process for Federal 
employees, they will also extend it to their other employee 
groups and other members, thus starting a snowballing effect.
    The features of the electronic health record as described 
in this bill are essential to achieve the goals which are 
envisioned in this bill. The bill allows the creation of a 
longitudinal record, starting with the carrier's input and 
entries by the consumer and additional information imported 
from the provider's EMR, thus providing ultimately a very 
complete medical record which is important for the continuing 
care of the patient. This will also provide prompt and accurate 
access to a medical record in an electronic format to the 
patients and, more importantly, also the providers who are not 
familiar with the patients, with better understanding of the 
problems and their management. This electronic record provides 
a record which, as I mentioned above before, is going to be 
very important for the continuing care of the patient.
    In addition, the integration of the SNOMED--and this 
alphabet soup stands for Systematized Nomenclature for 
Medical--I am blocking on the full name. But it is in my 
written testimony--allows the information to be encoded as 
opposed to being just text. And it allows for its proper 
arrangement and organization within the record. It also 
enhances the privacy feature because the information is 
encoded. You can basically rifle-shoot which information should 
be available to whom as determined by the patient, rather than 
giving full access to the record.
    The encoding of data through SNOMED is described more fully 
in attachment two. It will take too much time for me to go over 
that here. It would in the future also allow outcome 
measurements leading to standards for evidence-based practice 
of medicine, population-based studies, profiling the providers, 
and making it much easier and cheaper to conduct drug trials.
    One of the problems with the drug trials is that the FDA 
considers that anytime they are going to approve something, it 
is going to be in the public domain and, so to speak, can be 
withdrawn, nobody is going to look at it. On an electronic 
record, you can survey, keep on the surveillance, and pull out 
the medicine as soon as some red flag arises.
    SNOMED also allows the patient to have full control over 
the records and fully protect the privacy. So far, any attempts 
at reforming health care have invariably centered around the 
reform of health care financing rather than addressing the root 
causes of poor and expensive care. This legislation is a joint 
step toward elimination of the barriers to the high-quality, 
cost-effective care.
    We are fortunate to have the finest physicians and 
hospitals, but this advantage is compromised because of a lack 
of electronic health record. The absence of an electronic 
health record creates an environment that prevents proper 
coordination of care, allows ignorant care, and even worse, 
inappropriate care, which is duplicative, wasteful, and allows 
serious errors. This legislation will go a long way in 
eliminating all those sins of commission and sins of omission.
    Thank you, Mr. Chairman, and I am prepared to answer any 
questions.
    [The prepared statement of Dr. Hasan follows:]

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    Mr. Porter. Actually, you are all going to be lucky because 
we are going to be called to vote here shortly, so there is not 
time for a whole lot of questions. But we are going to be 
giving you questions, if you could submit within 5 days some of 
the responses.
    I want to make a comment, and then I am going to ask a 
question. I met with a veteran the other day, and I know we 
have talked about the Veterans Administration here really at 
length today. He is probably in his mid to late seventies, and 
he actually was here with the Veterans of Foreign War, as they 
traditionally come this time of year to talk about veterans 
issues. And one of his colleagues was a doctor, and I just 
happened to mention this bill that we are talking about today. 
And the gentleman that I am referring to that was in his late 
seventies, he had a huge smile on his face. And he said, ``You 
know, I am now receiving care through the Veterans 
Administration,'' and he started bragging about the personal 
health record. He went on and on and on, on how he could 
communicate with his doctor, he could read it, he knew 
exactly--and as Speaker Gingrich said, he had ownership. It was 
a tremendous example of what I am hoping every American will be 
able to have to take advantage, hopefully with this bill's 
passage, moving it along much faster than originally 
envisioned.
    But having said that, I wanted to share that with all of 
you, that this is a real person, a real veteran with real 
health problems, that is just so excited to break down these 
barriers and have ownership of his own health care. But with 
the limited time, I would like to ask Mr. St. Clair a question. 
We talked about the system being voluntary or an opt-out. Would 
you comment, with your expertise in this area, on that 
particular portion for the participant, please?
    Mr. St. Clair. Certainly, Mr. Chairman. I was interested in 
Speaker Gingrich's remarks around the notion of voluntary 
participation in systems like this, particularly when he also 
mentioned the fact that disaster recovery, responding to 
crises, was a very important goal of his.
    Our view is that basic transport of clinical information 
that follows the HIPAA regulations is the most appropriate way 
to respond to the crisis in quality of care and patient safety 
and to crises of different sorts in this country. So we need to 
be able to mobilize data that exist within the walls of payers 
to benefit the patient through treatment in an opt-out 
environment, in our opinion.
    However, having said that, the use of personal health 
records is truly a voluntary act, and we believe that one of 
the real benefits of implementing both the payer-based health 
record and the personal health record systems at the same time, 
or essentially at the same time, is that the personal health 
record lets those early adopters who want to make sure that all 
of their information can be sent to their doctors in emergency 
rooms and others when they are seeking treatment control that 
process and put more information in and make corrections. But, 
on the other hand, it also allows those who really don't want 
it to happen to opt out very, very easily. We currently allow 
opt-out procedures for folks who are having their information 
processed in our systems and delivered on behalf of our 
customers, but we think that the trickle of records that would 
come in would prevent the vast majority of providers, 
physicians and others in this country, from ever changing their 
work flow to adapt to the presence of records.
    The fact that we can go into the State of Illinois with 3.7 
million records really makes it so that the hospitals, the 
emergency rooms, the physicians there will automatically build 
into their work flow the notion that those records are 
available. If only 5 percent of that 3.7 million opt in and we 
are not allowed to distribute the rest, no hospital, no doctor 
will bother to do that, other than those on a very, very sort 
of early adopter phase. So we think it is really an issue of 
proving to the Nation that, in fact, this basic kind of 
information should be delivered unless people say they do not 
want it to be delivered.
    Mr. Porter. And this question is to whoever would like to 
respond. As I have been meeting with the different insurance 
companies and the providers that have instituted this new 
technology, and they all brag about the advantages, but to an 
organization, they have talked about the challenges of a 
cultural change within the business, not only for the doctors 
but also everyone up and down the food chain.
    My goal with the trust funds, or whether we can fix it 
through Judiciary and other means, is to also have some of 
these funds available to help in training and transition, 
because at Sierra Health Services of Nevada, Health Plan of 
Nevada, we spent a lot of time looking at their system. And I 
spoke of it earlier in my opening comments on how successful it 
has been.
    But they said one of their biggest challenges was the 
cultural change, and in my prior life, I did work for an 
insurance company, and we went through major technological 
changes--I date myself--in the 1980's and the 1990's and 
transitioning. I know that there was a challenge. But do you 
have any insights on this change of culture once the hardware 
and the software is in place on encouraging this change more 
rapidly?
    Dr. Hasan. Edison invented the electric bulb, which is a 
very obvious and a very easy thing to use. It took over 30 
years to be integrated in the usual life and the work flows and 
work processes. The PC, we are seeing the benefit of the PC 
revolution, which started in late 1970's, early 1980's, now. So 
we will have to be patient and make it available, going back to 
the issue of whether it should be mandatory or whether it 
should be voluntary. For the carriers it should be, in my 
opinion, mandatory. For the membership, it would be--by nature 
of it, it would be voluntary, whether they use it or not, but 
it has a negotiating effect. Once people start using it, get 
the benefit, like you spoke to that person from the Veterans 
Administration, people have that experience, they go out, talk 
to their friends, speak to their acquaintances--that is how you 
will see the culture change. Culture is not going to change by 
mandate. Culture is not going to change by legislation. But 
what legislation can do is to make it available for the people 
to change their habits and their culture.
    Mr. Porter. Yes?
    Dr. Handel. I think Dr. Hasan is on target. The other thing 
we realize is if we can integrate what we are doing into the 
normal work flow of offices and hospitals, that is going to 
make a big difference also. If this is looked upon as yet 
another hurdle to overcome, another major problem, I think we 
will have resistance. But the experience that we have had in 
Delaware already, where the emergency room doctors initially 
did not want to use it, but now they understand how valuable it 
is, has created a whole new culture very rapidly. And I think 
our job as the industry, if you would, is to make this as easy 
and as integrated into the work flow as possible.
    Mr. Porter. Yes?
    Dr. Barlow. Chairman Porter, I would like to suggest that 
there are actually two cultural changes that need to take place 
here. One is the change to move from thinking about health care 
in a provider-centric model to one that is moving to thinking 
about health care in a patient-centric model. And what I mean 
by that is care today and the information that we have in order 
to deliver care centers around the provider and what they have 
and what they can effectively get from other individuals to be 
able to support that patient.
    Giving the patient more information to give their provider 
helps to change the provider's focus to a more patient-centric 
model, but we really need to get where we can totally organize 
data around that patient so that any provider, anyone who 
interacts with the system thinks about it in terms of the 
patient, not themselves and what they have. I think that is 
key.
    Mr. Porter. If I can interrupt, you know, in Las Vegas, we 
have 40 million visitors a year. Think about that. You know, 
the State is only 2.2 million people, but we have 40 million 
visitors. And as I have visited the hospitals and the emergency 
rooms and the trauma center and talked about health care 
delivery to our visitors, one of the major--the largest 
hospital in Las Vegas that is part of Humana, they said 8 or 9 
percent of all their emergency room visits are by visitors from 
somewhere else, and how frustrating in trying to deliver health 
care when they cannot find out any information. They are not 
sure of the meds. Sometimes they cannot communicate. And I 
think you are absolutely right. It has to be driven from the 
patient, and that is an example where if you travel anywhere in 
the world, you should have access.
    I am going to conclude the meeting because we are going to 
vote here shortly, but I just want to leave you with one 
thought. I started the meeting today talking about a foster 
child. You know, these foster kids do not have the advantages 
of the latest technology, and they do not have the latest in 
health care in many respects and many times do not have a 
loving home to take care of other than a foster parent trying 
to be their parents.
    I firmly believe, as I said in my opening comments, that by 
working with a first-class system, which we have as Federal 
employees--we have the best in the world, and making it even 
better--we will truly help those least among us in this 
country. And in combination with the funds we passed in 
December, $150 million to help with Medicaid and health 
information technology to transition, I believe that not only 
do we have the best system today, we will have a far better 
system in the future.
    So thank you all very much for your testimony, and I look 
forward to working with you in the future. The meeting is 
adjourned.
    [Whereupon, at 5:19 p.m., the subcommittee was adjourned.]
    [The prepared statements of Hon. Wm. Lacy Clay and Hon. 
Elijah E. Cummings follow:]

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