[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]




                               BEFORE THE

                            SUBCOMMITTEE ON

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                             JULY 17, 2007


                           Serial No. 110-90


         Printed for the use of the Committee on the Judiciary

      Available via the World Wide Web: http://judiciary.house.gov

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California

            Perry Apelbaum, Staff Director and Chief Counsel
                 Joseph Gibson, Minority Chief Counsel

           Subcommittee on Commercial and Administrative Law

                LINDA T. SANCHEZ, California, Chairwoman

JOHN CONYERS, Jr., Michigan          CHRIS CANNON, Utah
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
ZOE LOFGREN, California              RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts   TOM FEENEY, Florida
MELVIN L. WATT, North Carolina       TRENT FRANKS, Arizona
STEVE COHEN, Tennessee

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel

                            C O N T E N T S


                             JULY 17, 2007


                           OPENING STATEMENT

The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................     3
The Honorable Chris Cannon, a Representative in Congress from the 
  State of Utah, and Ranking Member, Subcommittee on Commercial 
  and Administrative Law.........................................     4
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, Chairman, Committee on the 
  Judiciary, and Member, Subcommittee on Commercial and 
  Administrative Law.............................................     6


Ms. Donna S. Smith, Health Care Activist, Aurora, CO
  Oral Testimony.................................................    12
  Prepared Statement.............................................    15
Mr. Todd J. Zywicki, George Mason University School of Law, 
  Arlington, VA
  Oral Testimony.................................................    20
  Prepared Statement.............................................    22
Mr. Clifford J. White, III, Director, Executive Office for U.S. 
  Trustees, U.S. Department of Justice, Washington, DC
  Oral Testimony.................................................    41
  Prepared Statement.............................................    43
Ms. Elizabeth Warren, Harvard Law School, Cambridge, MA
  Oral Testimony.................................................    50
  Prepared Statement.............................................    53
Mr. Mark Rukavina, Executive Director, The Access Project, 
  Boston, MA
  Oral Testimony.................................................    71
  Prepared Statement.............................................    73
Mr. David U. Himmelstein, Harvard Medical School, Cambridge, MA
  Oral Testimony.................................................    83
  Prepared Statement.............................................    86


Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, 
  Chairman, Committee on the Judiciary, and Member, Subcommittee 
  on Commercial and Administrative Law...........................     8
Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Member, 
  Subcommittee on Commercial and Administative Law...............    10

               Material Submitted for the Hearing Record

Additional Information Submitted by Mark Rukavina, Executive 
  Director, The Access Project, Boston, MA.......................   131
Bankruptcy Forms Submitted by the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, 
  Chairman, Committee on the Judiciary, and Member, Subcommittee 
  on Commercial and Administrative Property......................   197
Post-Hearing Questions Submitted to the Witnesses................   240
Answers to Post-Hearing Questions from Todd J. Zywicki, George 
  Mason University School of Law, Arlington, VA..................   248
Answers to Post-Hearing Questions from Clifford J. White, III, 
  Director, Executive Office for U.S. Trustees, U.S. Department 
  of Justice, Washington, DC.....................................   251
Answers to Post-Hearing Questions from Elizabeth Warren, Harvard 
  Law School, Cambridge, MA......................................   255
Answers to Post-Hearing Questions from Mark Rukavina, Executive 
  Director, The Access Project, Boston, MA.......................   265
Answers to Post-Hearing Questions from David U. Himmelstein, 
  Harvard Medical School, Cambridge, MA..........................   275



                         TUESDAY, JULY 17, 2007

                  House of Representatives,
                         Subcommittee on Commercial
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 1:15 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable Linda 
Sanchez (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Sanchez, Conyers, Johnson, 
Lofgren, Delahunt, Watt, Cohen, Cannon, Jordan, and Franks.
    Staff present: Susan Jensen-Lachmann, Majority Counsel; 
Daniel Flores, Minority Counsel; and Adam Russell, Professional 
Staff Member.
    Ms. Sanchez. The Subcommittee on Commercial and 
Administrative Law will come to order.
    Without objection, the Chair is authorized to declare a 
recess at any point.
    Before we begin with today's agenda, we have some 
unfinished business from our hearing, last Thursday, regarding 
Ms. Harriet Miers. Having reviewed the pertinent part of the 
transcript from the hearing, reviewed relevant precedents, and 
consulted with the parliamentarian, the Chair is prepared to 
reconsider her ruling regarding the words of the gentleman from 
North Carolina.
    Without objection, that hearing is hereby reconvened, and 
the Chair's ruling is vacated.
    I recognize the gentleman from Utah, our distinguished 
Ranking Member, to identify the words he believed to be 
unparliamentary. Mr. Cannon?
    Mr. Cannon. Thank you, Madam Chair.
    The Committee has provided a transcript. I think the 
easiest way to identify the words is by identifying the lines 
in the transcript, which I think should be sufficient for our 
    So on page 51 of the Committee transcript, beginning with 
line 1205 and continuing down through line 1224, and then on 
the following page, beginning with line 1239 and continuing 
through line 1242.
    Mr. Watt. Madam Chair?
    Ms. Sanchez. I would recognize the gentleman from North 
Carolina and ask if he wishes to ask unanimous consent to 
withdraw those words.
    Mr. Watt. I do ask unanimous consent to withdraw the words 
identified by Mr. Cannon.
    Mr. Cannon. Madam Chair, resuming the right to object.
    Mr. Watt. He has shown me the words, and I have reviewed 
them. So I ask unanimous consent to withdraw them.
    Ms. Sanchez. Thank you. The gentleman asks unanimous 
    The gentleman from Utah is recognized under his 
    Mr. Cannon. Thank you, Madam Chair.
    First of all, I would like to thank you and also the staff 
for doing a remarkably thoughtful job on resolving this 
    Let me say that I really appreciate the passion of Mr. 
Watt. He has been a dear friend. We have worked together on 
many, many issues, including protecting voice-over protocol or 
voice on Net from regulation. I think he is actually the father 
of the fact that we can do Internet telephony without 
regulation and that through the Committee or his Ranking Member 
he had the courage to bring an amendment. And so, I reluctantly 
objected to his words the other day and appreciate him as a 
    This is an issue that has encouraged a great deal of 
passion. And I understand that. I just hope as we continue that 
the majority will consider the evidence and proceed with calm 
rationality, which I personally expect will mean that we move 
on to other issues relatively soon.
    Thank you, Madam Chair. And I withdraw my reservation.
    Mr. Watt. Mr. Cannon?
    Mr. Cannon. I yield to the gentleman.
    Mr. Watt. Will the gentleman yield for a second?
    Ms. Sanchez. The gentleman yields time.
    Mr. Cannon. I would be pleased to yield.
    Mr. Watt. I just wanted to say a few words, if it is okay 
with the gentleman.
    Mr. Cannon. Certainly.
    Mr. Watt. First of all, I appreciate the spirit in which 
the gentleman has proceeded. And I appreciate the spirit in 
which the Chair of the Committee has proceeded. I operated in a 
legal framework for 22 years before I came to this Committee. 
And there are certain rules that applied there.
    And I have been in this context for 15 years. And there are 
certain rules of process that apply here. Once I became aware 
that the parliamentarian had decided that--had ruled or found 
that the words I used were unparliamentary, I certainly didn't 
hesitate to seek to withdraw those words.
    There is one by-product of this that I wanted to comment on 
and actually apologize for because some people have interpreted 
what I said, although having reviewed the words that I said, I 
never said what people have interpreted as.
    Some people have interpreted what I said to be that I said 
that the President of the United States was a liar. I want to 
make it clear that that is not in the transcript, first of all.
    And if it were in the transcript or to the extent that 
people interpreted what I had to say as saying that the 
President is a liar, I want to make sure I apologize to the 
President for that because the President is a personal friend 
of mine. And I don't want anybody left with the impression that 
I think the President in general terms is a liar.
    So I appreciate the gentleman yielding. And I will yield 
back to the gentleman.
    Mr. Cannon. I thank the gentleman.
    And let me point out that having known the gentleman for 
years and having had many, many courtesies on this Committee 
extended to me by the gentleman, I want to reaffirm his words 
that his intentions were not, as has been characterized in some 
    And, Madam Chair, I would also like to make just one other 
point. That is that a Member of the full Committee who is not a 
Member of this panel, Dan Lungren, got engaged in this issue 
early and with some intensity. And I think his intentions were 
to maintain the integrity of this body.
    I think he acted honorably. And I just want it to be clear. 
There was an article in the newspaper that suggested I did 
things that he actually did. And those are thoughtful things. 
And I thought he ought to be credited with his position.
    The fact is this is a complicated environment that we live 
in. The rules are complicated. And unparliamentary speech 
differs from one person to another. And I appreciate, again, 
the very gentle way you have handled this issue and would yield 
back the balance of my time.
    Ms. Sanchez. I thank the gentleman.
    And I thank the gentleman from North Carolina also for his 
thoughtful remarks.
    Hearing no objection, the words of the gentleman from North 
Carolina that the gentleman from Utah has identified are 
    And, without objection, those words are struck from the 
transcript and the record.
    The Chair would remind all our Members that as we debate 
the important and sensitive issues that come before this 
Subcommittee we must all take care not to misdirect the strong 
feelings that these issues can bring about toward our House and 
Senate colleagues or toward officials in the executive branch. 
I thank the Members for their time and their patience.
    And with that, the continuation of the Subcommittee hearing 
on Commercial Administrative Law from last week is adjourned. 
And we will now move on to today's hearing.
    Pursuant to notice, this hearing of the Committee on the 
Judiciary, Subcommittee on Commercial Administrative Law will 
now come to order. I will now recognize myself for a short 
    Today's hearing will focus on one of the most critical 
challenges facing hard-working American families, namely the 
financial consequences of medical debt and how it all too often 
leads to bankruptcy. Although our Nation is among the 
wealthiest in the world, the United States is one of the few 
industrialized countries that do not provide health care for 
all of its citizens, unlike most other industrialized nations.
    Medicare and Medicaid cover only the elderly and indigent. 
Everyone else is responsible for finding their own insurance, 
the cost of which has skyrocketed in recent years.
    Sadly, many American families cannot afford to pay for 
their health insurance. Some simply earn too much money to 
qualify for public health insurance but earn too little to 
afford private insurance coverage. They are effectively caught 
in a catch-22, putting many at risk of financial ruin.
    As a result, many Americans are going without insurance. In 
2005, for example, approximately 45 million or 15 percent of 
Americans had no health insurance. Even the insured face 
possible economic disaster. Excessive premiums and deductibles, 
low coverage caps, and uninsured medical conditions are just 
some of the reasons why families that have health insurance 
risk financial ruin should somebody get sick.
    How is this crisis treating American families? Well, not 
very well, I think. Studies show that many are skipping 
recommended treatments, not filling critical drug 
prescriptions, postponing doctor appointments, and cutting back 
on other essentials like food.
    We know, particularly based on this Subcommittee's last two 
bankruptcy hearings, that Americans file for bankruptcy relief 
for a vast variety of reasons. We learned, for example, that 
when a major airline shirks its pension responsibilities and 
cuts wages, the employees and retirees face possible financial 
    This past May, we learned how the sub-prime mortgage 
industry is pushing more and more American home owners into 
bankruptcy. Today we will hear about a watershed study 
examining the role of illness and other medical factors 
contributing to bankruptcy. One of the shocking findings of 
this study is that nearly 50 percent of consumer debtors have 
had a major illness or health problem that propelled them into 
    I would be remiss if I did not recognize the leadership of 
Chairman Conyers in drawing attention to this important issue 
and thank him for his efforts to bring about legislative 
change. It is my sincere hope that today's hearing will help us 
better understand the extremely serious consequences of medical 
debt and serve to galvanize us to work toward finding 
    To help us learn more about this important issue, we have 
six witnesses with us this afternoon. We are pleased to have 
Professor Elizabeth Warren, Leo Gottlieb professor of law at 
Harvard Law School; Ms. Donna Smith, health care activist; Dr. 
David Himmelstein, associate professor of medicine at Harvard 
Medical School; Mr. Clifford White, director of the Executive 
Office for U.S. Trustees; Professor Todd Zywicki, George Mason 
University School of Law; and Mr. Mark Rukavina, executive 
director of the Access Project.
    I look forward to hearing today's testimony.
    And at this time, I would like to recognize my colleague, 
Mr. Cannon, the distinguished Ranking Member of the 
Subcommittee, for his opening remarks.
    Mr. Cannon. Thank you, Madam Chair.
    I would like to extend a warm welcome to all of our 
witnesses and appreciate your being here today. We also have 
many people in the audience that have deep concerns about these 
issues. And I talked with some of them a little earlier. And we 
hope that some of their questions will be answered here today 
as well.
    The question of whether the medical debt is causing, pardon 
me, many of the bankruptcies in the country is one that has 
been stirring since we passed the Bankruptcy Abuse Prevention 
and Consumer Protection Act in 2005. At that time, Professors 
Warren and Himmelstein published results of their study on this 
    According to them, up to 54.5 percent of personal 
bankruptcies were caused by medical issues. But those alleged 
results have been hotly debated since publication. For example, 
Professor Dranove of the Kellogg School of Management at 
Northwestern University along with his co-author, Michael 
Millenson has argued that the Warren and Himmelstein study 
failed to demonstrate a causal relationship between medical 
spending and anything even approaching half of bankruptcies.
    By Dranove's and Millenson's analysis, the study's data 
does show a causal link to medical expenses in only 17 percent 
of personal bankruptcies. They further suggest that even in 
that 17 percent of cases, the study had not established that 
medical debt was the most important cause of bankruptcy.
    Dranove and Millenson also highlighted that the Warren and 
Himmelstein's preferred solution, that is, national health 
insurance, was actually unlikely to quell any crisis in medical 
debt bankruptcy. Other academics, including Professor Zywicki 
of George Mason University School of Law and Professor Heriot 
of the University of San Diego School of Law also questioned 
the positions of Professors Warren and Himmelstein.
    I look forward to hearing more about this debate from 
Professors Warren and Himmelstein and Zywicki. I also look 
forward to hearing from the executive office of the United 
States Trustees. To my knowledge, the executive office has not 
directly criticized the Warren or Himmelstein study, but the 
executive office does have data of its own based on its review 
of official bankruptcy numbers.
    I look forward to hearing about that data and whether the 
executive office believes the bankruptcy reform law is working 
for debtors with medical debt. I hope that it suggests that the 
BAPCPA is working, given the flexibility we left in the 
bankruptcy code for courts to take into account special 
circumstances such as medical conditions.
    I have to admit I am skeptical of figures claimed by 
Professors Warren and Himmelstein, and I doubt that the 
information we hear today will definitively resolve the debate. 
But this is a very important issue to me and to America.
    I would like to understand better the degree to which 
bankruptcy code may or may not be adequately serving the 
families and individuals beset by medical debt, which is an 
absolutely clear problem, whether it is 17 percent or less or 
50 percent or more. The fact is that medical debt is a 
significant problem in America.
    This is not, I don't think, the environment to deal with 
national health care. Although I understand there is some 
strongly held opinions on that issue. Rather, this is a place 
where we need to look at the bankruptcy act and see what can be 
adjusted or done to accommodate the needs of Americans, 
whatever the percentage of causality is. And certainly, health 
care is a significant issue.
    I might just say that in America on the broader issue 
rather than the narrow issue of bankruptcy that in America we 
are undergoing a most amazing process of transformation in the 
medical industry, something akin to what happened in the 
telecommunications industry a few years ago.
    And when we join that broader debate about national health 
care, we need to be thinking about not just what is hurting 
families or what families can afford, but rather where we are 
going with medical care and with innovation in medicine, which 
will profoundly change--it has profoundly changed over the last 
couple of years and will continue to profoundly change 
everything about the way we practice medicine, how we find the 
cures and how we get cures to people in America and throughout 
the world.
    And with that, Madam Chair, I yield back.
    Ms. Sanchez. I thank the gentleman for his statement.
    I now would like to recognize Mr. Conyers, the 
distinguished Member of the Subcommittee and the Chairman of 
the Committee on the Judiciary for his opening statement.
    Chairman Conyers. Thank you, Madam Chairperson and the 
Ranking Member.
    And Trent Franks is with us, as well as Zoe Lofgren, Bill 
Delahunt, Mel Watt, Steve Cohen. And sitting silently with us 
is Dr. Steve Kagen from Wisconsin, whose interest in this 
subject matter has brought us here.
    Members of the Committee and to our distinguished panelists 
and those of you who have come in to witness this hearing, it 
is really very difficult to separate the health care crisis in 
this country from the particular subject matter of medical 
bankruptcy because they are very much tied together. Because we 
start off with something that I got from Paul Farmer, a doctor 
and anthropologist whose book, ``Pathologies of Power,'' has 
just come to my attention.
    And what he suggests is that there is a violence more than 
guns and personal physical. There is a thing called structural 
violence. That is that you are in a system where things are so 
bad that the statistics and the outcome are going to be quite 
bad as well. And you can't get out of it. The odds are very 
strong that it won't change much, except for a very brave few.
    I mean, you think of a few people, Oprah Winfrey. I mean, 
she was against the odds and succeeded. And there are other 
examples. The former owner of BET comes to my mind.
    But mostly, you are trapped in where you find yourself. And 
so that the bad statistics on health care, longevity, birth, 
death at birth, the birth rate. All these things come in on 
    And what happens is that I am beginning to take the 
attitude that medical bankruptcy is one of the consequences in 
America, not just of being poor because--as Michael Moore 
established and Donna Smith can tell us more about that--the 
people he was talking with were people of middle-income level 
who had health insurance. And so, we are beginning, or at least 
I am beginning, to look at this from a little bit different 
    Health care should be a human right for everybody certainly 
in this country, the wealthiest in recorded history. And yet 
because the way the system is set up, a broken health care 
delivery system, bankruptcy, not only which tears up families 
and creates stress and suffering, but then we begin to find 
that there are a lot of people too courageous that don't go 
into bankruptcy and then they experience another setback of 
    And so, we have, for example, in Michigan we have people 
now being hit by health care experiences that could have never 
been anticipated. They were working at one of the big three 
automobile companies. They had health care.
    As a matter of fact, I used to have people tell me that 
H.R. 676, Universal Health Care, is great, except I am with UAW 
and Ford, so, I mean, quite frankly, we got a pretty good deal. 
Well, they are not saying that any more.
    As a matter of fact, their unions are endorsing the measure 
because the name of the game is when you go into--you start 
negotiating--and where did they ever get these contracts 
where--have you ever entered into a contract where after a year 
or so you come back to the person that you made the agreement 
with and say, ``Well, that contract is off, my friend. We have 
got a--we have got a--things went bad, very bad this year. Our 
bottom line is hemorrhaging. And so, you have got to rewrite 
that contract''? Why, you would be laughed at.
    And yet, our automobile companies in Michigan are doing 
that to our workers saying, ``If you don't, we will go before a 
bankruptcy judge,'' Mr. White, ``and we will end up giving--he 
will end up giving you a much worse situation, a worse deal 
than we would give you. We will have then cut your health care 
benefits, your pension benefit, the whole works, plus you will 
be out of a job to boot because we are planning to relocate 
somewhere else and not have to worry about the United 
Automobile Workers.''
    And so, I am looking at bankruptcy from that light. And I 
look forward to hearing from the witnesses because, as my 
friend said, this is the first hearing on that subject. And we 
are looking at how bankruptcy affects people and also how not 
going into bankruptcy also has a harmful effect on people.
    And I just close with this example here. Whenever the 
companies start shutting down and closing up and threatening 
bankruptcy, why is it that the executives always get a bonus? I 
mean, it is puzzling. Here is United Airlines. The chief 
executive received compensation worth $39.7 million in 2006 
just after the airlines emerged from 3 years of Chapter 11 
bankruptcy protection, which during the course of the 
bankruptcy they terminated the pensions of 120,000 workers, 
shifted $5 billion in pension obligation to the pension trust 
fund, BPGC, resulting in one of the largest pension defaults in 
the history of the United States.
    These inequities and unfairnesses aren't because somebody 
got sick. These unfairnesses exist because the system we have 
to deal with people getting sick needs to be examined much more 
closely than it ever has in Congress. And I think we can do a 
lot about it, particularly in the Judiciary Committee.
    And so, I thank you for holding these hearings, Chairwoman 
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
  in Congress from the State of Michigan, Chairman, Committee on the 
 Judiciary, and Member, Subcommittee on Commercial and Administrative 
    America's health care system is on life support. It is a broken 
system that is pushing millions of hardworking families into 
    Here are just a few distressing statistics:

          48 million Americans lack health insurance;

          5 million Americans filed bankruptcy since 2000 as 
        the result of serious medical problems;

          80 million more Americans facing overwhelming medical 
        debt could have filed for bankruptcy, but did not out of sense 
        of pride or for other reasons; and

          an estimated 58 million Americans are at risk of 
        incurring medical bills they may not be able to afford. This 
        includes 17.6 million adults with private health insurance.

    While we in the United States pride ourselves as representing the 
``First World,'' sadly our health system equals that in certain Third 
World nations. To quote Amartya Sen:

        The situation does, of course, vary from region to region, and 
        from one group to another. But unnecessary suffering, 
        debilitation, and death from preventable or controllable 
        illness characterize every country and every society, to 
        varying extends. As we would expect, the poor countries in 
        Africa or Asia or Latin America provide crudely obvious 
        illustrations of severe deprivation, but the phenomenon is 
        present even in the richest countries. For example, African 
        Americans in some of the most prosperous U.S. cities (such as 
        New York, Washington, or San Francisco) have a lower life 
        expectancy at birth than do most people in immensely poor China 
        or even India. Indeed, location alone may not enhance one's 
        overall longevity.

    Unfortunately, those in our society who are the most vulnerable are 
also among those who are suffering the most as a result of our health 
care system. As Paul Farmer observes, ``The correlation between 
poverty, inequality, and increased morbidity and mortality is 
massive.'' This helps explain why death rates in parts of Harlem among 
certain age groups rival those in Bangladesh. In both places, according 
to Dr. Farmer, the leading causes of death in young adults are 
infections and violence.
    Disparities based on race are particularly evident in our Nation's 
health care system. The infant mortality rate for African American 
infants, for example, continues to be unacceptably high. African 
American infants were 2.6 times more likely to die in the City of 
Detroit than a white infant in the state of Michigan, according to a 
2005 report by the Detroit Department of Health and Wellness Promotion 
and the Wayne County Public Health Department.
    According to these agencies, the infant mortality rate that same 
year for black babies was 18.1. Translated into real life terms, this 
means that 202 African American babies never saw their first birthday. 
Wayne County black infants died at rates more than twice that of white 
infants, according to these agencies.
    Tragically, this drastic difference in the death rate of African 
American babies is also a national trend and a significant health 
disparity that demands action. The health care system in our Nation is 
simply stacked against poor people of color.
    As today's hearing will show, our Nation's current health care 
system is literally bankrupting hardworking American families with 
medical problems, including many who already do have insurance.
    Keep in mind that bankruptcy is no panacea either, especially in 
light of the 2005 amendments to the Bankruptcy Code. These amendments 
force debtors to go through and pay for usually meaningless credit 
counseling, to file excessive documentation justifying their finances, 
and to complete onerous forms.
    But, worst of all, is the burdensome means test by which debtors 
have to essentially prove that they are eligible for bankruptcy relief. 
One means test form alone requires a debtor to answer 57 questions 
about his or her financial circumstances.
    Certainly, Americans are gravely concerned about our Nation's 
health care system. A recent Gallup Survey reported that roughly half 
of all respondents said that they were worried about paying medical 
costs if they become seriously ill or have an accident.
    We should all be concerned about overwhelming medical debt. It is 
not just a problem that afflicts the uninsured.
    Many families who have insurance are still driven into bankruptcy 
by inadequate coverage, combined with rising deductibles, co-pays and 
premiums. The problem is compounded when industries--such as the 
automobile manufacturers in my home state--lay off thousands of their 
employees, trim or cut the health benefits of their retirees, and force 
others to accept reduced medical insurance benefits. It's estimated 
that total job losses in the automobile industry since 2000 is about 
250,000 jobs.
    At the same time as hundreds of thousands of Americans are losing 
their jobs, the top executives almost always get bonuses. Here's just 
one example. The chief executive officer of UAL Corporation, the parent 
of United Airlines, received compensation worth $39.7 million in 2006, 
just after UAL emerged from three years of Chapter 11 bankruptcy 
protection. During the course of its bankruptcy, however, UAL 
terminated pensions for 120,000 workers and shifted $5 billion in 
pension obligations to the PBGC, resulting in one of the largest 
pension defaults in the history of the United States, according to the 
Associated Press. These inequities are astounding.
    Then, to make matters worse, families--already severely traumatized 
by their health problems--are pushed by our Nation's health care system 
into financial distress. In addition to dealing with their health 
concerns, they must also fend off harassing calls from debt collectors 
and struggle just to make ends meet. The emotional burden of serious 
medical debt cannot be understated.
    Sadly, these families often become prey for predatory lenders, 
which only exacerbates their financial distress. Their damaged credit 
ratings cause them to have to pay higher interest rates when they 
refinance their mortgages or obtain loans. Surely, we can see how such 
circumstances drive American families further into an economic downward 
spiral into bankruptcy.
    Then, the need to pay medical debt forces many families to forego 
other necessary expenditures, such as required medical procedures, 
prescription drugs, and even food. Americans should not be required to 
choose between their health care and food.
    Indeed, everyone suffers when Americans, even those with full 
insurance, cannot pay their medical debt. Hospitals and other medical 
service providers must pass along the cost of bad debt to those who can 
pay, resulting in higher prices being charged for goods and services. 
This is a crisis that touches everyone.
    In the recent movie SiCKO, filmmaker Michael Moore brings the 
medical debt crisis to life by sharing real stories of Americans who 
become bankrupt as the result of unpaid medical bills. His film makes 
the tragic human consequences of our broken health care system 
impossible to ignore.
    I am pleased to welcome Donna Smith, who shared her story of 
sickness and financial ruin in that movie. Thank you, Donna, for 
turning the pain of your family's crisis into a galvanizing force for 
fundamental reform so that no other family will have to go through what 
you did.
    Regrettably, this Administration has done little, if anything, in 
response. My bill, H.R. 676, the ``United States National Health 
Insurance Act,'' would go a long way toward resolving this national 
crisis. It would establish a program giving Americans free health care 
coverage for all medically necessary procedures as well as for primary 
care and prevention, prescription drugs, emergency care, and mental 
health services.
    H.R. 676 would create a single payer national health insurance 
program in America by expanding and improving Medicare. Nobody in 
America would ever receive a medical bill, and therefore, no American 
would ever have medical debt or have to declare bankruptcy because they 
got sick. No American would ever be turned away from a hospital, 
dentist, pharmacy, or a doctor's office because they had unpaid medical 
    Remember that medical debt and medical bankruptcy are uniquely 
American phenomena that are a byproduct of our for-profit employer 
based health care system. Medical debt and bankruptcy are simply non-
existent in the rest of the industrialized world.
    As we begin deliberations in Congress about how to provide health 
care to all Americans, we must ensure that we do not create a universal 
health insurance program that simply expands the current flawed system, 
in which medical debt and bankruptcies are the inevitable outcome of a 
patchwork of unaffordable, non-comprehensive coverage. If we just 
expand this broken system, it is logical to conclude that millions more 
Americans could be subject to medical bankruptcy or ruined credit due 
to medical debt. We certainly do not want to go down that road.
    H.R. 676 is an important first step in helping to resolve the 
undeniable health care crisis in our Nation, but it is not the only 
    Today, as Chairman of the Judiciary Committee, I have issued a 
request to the Government Accountability Office to help us answer the 
following critical questions:

          How many Americans each year go bankrupt due to 
        unpaid medical debt, and how many had insurance at time 
        bankruptcy was declared?

          How many Americans each year have medical debt placed 
        on their credit score?

          How much do hospitals and physician offices spend 
        each year to pay for debt collection agencies to contact 
        delinquent patient accounts for payment?

          How many Americans each year are denied a mortgage, 
        or denied follow up medical care as the result of medical debt?

As policymakers, we need answers to these questions so that we can we 
address the core problems in an efficient and meaningful way.
    My other goal is to right the many wrongs inflicted by the 2005 
Amendments to the Bankruptcy Code. Individuals with serious medical 
conditions should not be forced to take credit counseling when all the 
credit counseling in the world will not make one iota of difference in 
their financial lives. Individuals with serious medical conditions 
should not have to file reams of unnecessary paperwork to prove their 
eligibility for relief. For 25 years since the enactment of the 
Bankruptcy Code, the system worked perfectly fine without these 
    Most importantly, I plan to devise a way to exempt these 
individuals from the onerous means test requirements that plainly are 
designed to catch the unwary, but unfortunate debtor. Obtaining 
bankruptcy relief should not be more completed than filing a tax 
return, but regrettably it is and we need to fix this problem.
    Yet another proposal that I intend to discuss with my good friends 
and colleagues on the Financial Services Committee--Barney Frank and 
Maxine Waters--is one that would except medical debt from credit 
    Our goal as lawmakers should be to once and for all end the medical 
debt crisis through common sense and pragmatic policies so no patient 
in this country will ever suffer financial consequences for getting 
    I very much look forward to hearing form our distinguished 
witnesses today. Let's get to the bottom of the medical debt crisis and 
come up with concrete public policy options that will protect the 
American people from the powerful economic and financial forces that 
are causing millions to needlessly suffer financial hardships just 
because they got sick.
    No American should have to suffer the indignity of being evicted, 
not being able to buy groceries, or having to delay needed medical care 
because of medical debt. I think we can all agree that it is wrong, 
immoral, and un-American to allow theses conditions to continue in the 
wealthiest nation in the world.

    Ms. Sanchez. I thank the gentleman for his statement.
    Without objection, other Members' opening statements will 
be included in the record.
    [The prepared statement of Mr. Cohen follows:]
 Prepared Statement of the Honorable Steve Cohen, a Representative in 
   Congress from the State of Tennessee, and Member, Subcommittee on 
                    Commercial and Administative Law
    It is a national shame that millions of Americans are being forced 
into personal bankruptcy because of illness combined with either a lack 
of health insurance or insufficient health insurance coverage. In a 
2005 study by Professor Elizabeth Warren and Dr. David Himmelstein, 
both of whom will be testifying before us today, 46.2 percent of 
consumer bankruptcy debtors filed for major medical reasons. Prior to 
entering bankruptcy, many of these debtors had no health insurance, and 
many were forced to forgo other life essentials, including food, 
telephone service, needed doctor and dentist visits, and prescription 
drugs, because of their medical debt.
    The fact that the cost of health care could be so high as to force 
someone to choose between medical care and eating is unacceptable in 
any civilized society, but especially so in the wealthiest nation on 
earth. That is why I am a cosponsor of H.R. 676, the United States 
National Health Insurance Act, which would create a universal health 
insurance program. Contrary to the claims of critics, this is not 
``socialized medicine.'' Rather, it is our fulfillment of a basic 
obligation to each other as Americans to ensure that no one in our 
society is denied the health care they need because they are poor or in 
difficult financial circumstances. I hope today's hearing will 
highlight the need for universal health care and the consequences of 
failing to act.

    Ms. Sanchez. And, without objection, the Chair will be 
authorized to declare a recess of the hearing at any point.
    I am now pleased to introduce the witnesses on our panel 
for today's hearing. Our first witness is Ms. Donna Smith, a 
health care activist who has tirelessly campaigned for a 
universal health care system. Ms. Smith resides in Aurora, 
    Our second witness--you guys changed your order on me--is 
Professor Todd Zywicki. Professor Zywicki teaches in the areas 
of bankruptcy and contracts at George Mason University School 
of Law. Professor Zywicki was a visiting professor of law at 
the Georgetown Law Center for the 2004-2005 academic year. And 
in 2003, he served as director of the office of policy planning 
at the Federal Trade Commission.
    Our third witness is Clifford White, director of the 
Executive Office for U.S. Trustees. Mr. White has previously 
served as an assistant United States trustee and a deputy 
assistant attorney general at the Department of Justice and as 
assistant general counsel at the U.S. Office of Personnel 
Management. Mr. White was recognized with a presidential rank 
award for meritorious executive in 2006.
    Our fourth witness is Professor Elizabeth Warren. Professor 
Warren joined the faculty of Harvard Law School in 1992 and 
became the Leo Gottlieb professor of law in 1995. She is co-
author of the article, ``Illness and Injury as Contributors to 
Bankruptcy,'' in MarketWatch and as well numerous award-winning 
books and case books. Professor Warren also serves as the vice 
president of the American Law Institute and is on the executive 
committee of the National Bankruptcy Conference.
    Our fifth witness is Mark Rukavina. Mr. Rukavina is the 
executive director of the Access Project, a national resource 
center. Mr. Rukavina manages multiple aspects of the national 
program providing technical assistance, information, consulting 
services, and financial support to community-based efforts to 
expand health care access and coverage. Prior to that position, 
Mr. Rukavina was a program director for the Summerbridge 
community health partnership.
    And our final witness is Dr. David Himmelstein. Dr. 
Himmelstein is associate professor of medicine at Harvard 
Medical School and practices primary care internal medicine. He 
serves as a chief of the division of social and community 
medicine at Cambridge Hospital in Cambridge, Massachusetts. Dr. 
Himmelstein is also co-author of the ``Illness and Injury as 
Contributors to Bankruptcy'' in MarketWatch and has published 
more than 70 scientific papers, books, and articles.
    I want to thank you all for your willingness to participate 
in today's hearing.
    And, without objection, your written statements in their 
entirety will be placed in the record. So we are going to ask 
you to limit your oral testimony to 5 minutes.
    You will note that we have a system of lights that starts 
with a green light. That is your signal to proceed. At 4 
minutes, it will turn yellow, which is warning you that you 
have a minute to conclude your testimony. And then when your 
time has expired, it will turn red.
    When your time is up, we will ask you to just finish the 
current thought that you are on and wrap up the testimony so 
that we may move on to the next witness and each witness can be 
    After each witness has presented his or her testimony, 
Subcommittee Members will be permitted to ask questions subject 
to a 5-minute limit.
    Ms. Smith, are you ready now to proceed with your 
testimony? Okay, you are recognized for 5 minutes. And you may 


    Ms. Smith. Good afternoon, Madam Chair Sanchez and 
Committee Members. My name is Donna Smith. And I live in the 
6th Congressional in Colorado. Representative Thomas Tancredo 
is my congressman.
    I commend Representative Conyers on bringing this issue 
before you once again and ask that you try and walk a mile in 
my shoes. It has been a long time since I felt that any of my 
congressional representatives understood what the current 
health care crisis is doing to Americans like me.
    The last elected official who tried to help was Senator Tom 
Daschle of South Dakota who spoke about us on the floor of the 
United States Senate in the spring of 2004 and later offered a 
sense of the Senate resolution proffering that every American 
should have access to the same health care coverage as every 
American and every Member of Congress. The full Senate did not 
agree. And Americans like me languished onward in a seriously 
flawed private health care system.
    My family's story is included in Michael Moore's new movie, 
``Sicko.'' And though Mr. Moore took just 6 or 7 minutes in the 
film to outline our financial collapse, I can assure you that 
the health and economic disasters that made us perfect fodder 
for the film unfolded much more slowly and painfully than 
depicted on the movie's screen.
    I want you to fully consider the plight of families like 
mine, the hard-working people you purport to represent here in 
the people's house. I know many of you receive substantial 
financial support from the health care and pharmaceutical 
lobbies. But I am asking you to remember that you also received 
substantial funds from me and all of my fellow American 
taxpayers through your salaries and benefits.
    We the people are your employers. How did this body so 
remove itself from the reality of the people?
    My family is part of a grim statistic in America. Our 
health care issues and costs drove us to bankruptcy. Yet we 
were always covered by medical insurance.
    The shame of financial failure and bankruptcy should not be 
the end result of heart and artery disease and cancer. It is 
enough to fight those hellacious health battles without also 
fighting for our financial lives. And tonight thousands of 
Americans will not rest well because they sit on the edge of 
financial disaster, not because they are slackers or welfare 
cases or poor people with poor ways.
    They sit on the edge because they are sick and you have 
failed to act on their behalf. I urge you to read my written 
statement for more detailed information on our medical and 
financial march to bankruptcy.
    My husband, Larry, and I have been married for 31 years. We 
have six children and 13 grandchildren. For most of his adult 
life, Larry was a machinist. I stayed at home with our little 
ones until our youngest was two. And then I went back to work.
    Unhappy working minimum wage jobs, I enrolled in college at 
the age of 31 while working full-time as a bank teller and 
caring for my family. I earned my bachelor's degree cum laude 
and phi beta kappa from Colorado College. I believe in the 
value of hard work. And my parents, including my World War II 
veteran father, instilled in me a strong work ethic.
    My husband and I always maintained health insurance 
coverage for ourselves and our children. But our health did not 
hold up. Larry developed serious coronary artery disease, and I 
developed uterine cancer.
    We struggled against the darkness of bankruptcy for years 
until there was no other reasonable course. We even carried 
disability insurance, but that coverage excluded Larry's 
arteries and heart issues. So it proved of little value in the 
worst situation.
    But over the next several years, health premiums, out-of-
pocket expenses, medicine, and doctor visit co-pays combined 
with a steep reduction in our income forced us into bankruptcy. 
Our medically-related expenses topped $1,000 each month by the 
year 2003.
    Debt collectors, especially the medical collectors, became 
rabid. Our bankruptcy in 2004 was the only way to stop the 
garnishments and the calls. My shame and my depression was 
difficult to endure.
    It was not only medical debt in that bankruptcy. Over the 
years and months leading to that point we did whatever we had 
to do to stay afloat. We put food and household items on 
    We borrowed against older cars. We ordered needed goods 
from high-interest, high-price mail order firms. So when we 
reached the point of bankruptcy, all of those debts had to be 
included. No one was spared.
    We tapped out family and friends, begged for community 
benefits, received food, toothpaste, and toilet paper from a 
local food pantry. And I was working full-time the whole time.
    The worry was exhausting. And the stress did not help the 
situation. Finally, Larry was fired from his job in the spring 
of 2004 on his return from surgery at the Mayo Clinic because 
his employer, the Gold Dust Casino in Deadwood said they could 
not accommodate his post-surgical lifting restrictions.
    The Mayo Clinic wrote, too, and said they were forgiving or 
writing off the $6,000 left on Larry's bill after insurance 
payments, but that if we ever wanted to return, we would have 
to bring the cash up-front for our portion of the cost. Larry 
hasn't been properly evaluated for his peripheral artery 
disease since.
    I took Larry onto my group health insurance, and he began 
the application for Social Security disability. His application 
was approved, but he went 6 months with absolutely no income 
and had to wait 2 years to qualify for Medicare health 
coverage. So our financial condition continued its decline.
    Congress should also act to fix that deficiency. If an 
American is found to be too ill to work, making that person 
wait 2 years for Medicare coverage is cruel and just plain 
    I even tried opening a small local business with the help 
of a small amount of local economic development funds while I 
continued my full-time work at the newspaper. But the business 
didn't take off quickly enough. It seemed as if our last hope 
of saving ourselves was doomed.
    Larry got sicker and in February 2006 was told he would 
need yet another heart surgery. This time it took 12 hours to 
complete the quadruple bypass at Rapid City Regional Hospital. 
Larry was in intensive care for days and then home to heal. But 
that certainly pushed our deductible and out-of-pockets right 
back out of sight and reach for my income and his Social 
Security benefits. We were going under all over again just 2 
years after bankruptcy.
    Finally, we moved in with our grown daughter in Denver. The 
life we worked so hard to build and the life we fought to save 
was lost. We had failed. The health care system had crushed us.
    Let me say again we are not in ``Sicko'' because our story 
is so unique. We are in this film because we are not unique. We 
represent what is happening to so many other Americans.
    I want the Members of this Committee to know that if H.R. 
676, Medical for All, had been in place for us, we would have 
weathered that storm. We are hard working people who under 
normal conditions make sound money decisions. But placed under 
the strain of mounting premiums, co-pays, deductibles, and out-
of-pockets, we did whatever we had to do to stay alive.
    I am so angry with you. I lived the American dream as my 
father taught me and his father taught him. I worked. I 
educated myself. I voted. I bought a home and then moved into a 
better home.
    I raised my children responsibly. And I served in my 
community. And you left me broken and battered because you 
failed to act on health care reform.
    Just as I have come out of the shadows of economic ruin and 
shame, so, too, will others come forward to hold you 
accountable. Remember the hard-working people who elected you. 
Their bankruptcy shame, my bankruptcy shame due to medical 
crisis really is your shame. You are the body that could have 
acted and have yet not done so.
    The current course of inaction takes no courage whatsoever. 
And I know each of you has shown courage in stepping up to 
serve this Nation. I just think many of you lost your way in 
remembering who elected you and who needs your bravery now.
    Please do not ignore those of us who elected you. Please 
help reduce the bankruptcies filed in this Nation by fixing the 
broken health care system. We will all be better off, 
individuals and businesses.
    And I dedicate this testimony to that of my brave husband, 
Larry, and three other Americans who gave me the courage to 
tell this story to millions with the conviction that it will do 
some good; to my late father, Howard Boyles, who proudly served 
his Nation in the United States Army during World War II and 
who told me that people have died to protect my right and my 
responsibility to speak up; to Senator Tom Daschle, who took an 
interest in my family and who spoke up in spite of political 
consequences; and to an eagle scout from Flint, Michigan, named 
Michael Moore, who restored my dignity and my voice on a movie 
screen in Manhattan and is keeping his scout's promise to 
better his community and his Nation.
    Please hold real hearings on H.R. 676 and pass universal 
single payer health care for every American. It is not humane 
to do otherwise. And your constituents deserve your recognition 
of their humanity.
    Thank you very much.
    [The prepared statement of Ms. Smith follows:]
                  Prepared Statement of Donna S. Smith
    Good afternoon, Madam Chair Sanchez and committee members.
    My name is Donna Smith. I live in the 6th Congressional District in 
Aurora, Colorado. My Congressional representative is Thomas Tancredo.
    But it has been a long time since I have felt that any of my 
Congressional representatives or my U.S. Senators truly understood what 
the current health care crisis is doing to Americans like me or acted 
with courage to correct a crisis that is permeating every facet of the 
American economy.
    The last elected official who took my situation seriously and tried 
to help was Sen. Tom Daschle of South Dakota who spoke about us on the 
floor of the U.S. Senate in spring of 2004. He would later offer a 
``sense of the Senate resolution'' proffering that every American 
should have access to the same health coverage as every member of 
Congress does at the same cost or better. Unfortunately, Sen. Daschle's 
sense was not that of the full Senate or of the House. And Americans 
like me languished onward in a private health care system that is 
driven by profit not health needs.
    Recently, filmmaker Michael Moore visited Washington, D.C., to 
share with some of you the issues and problems featured in his newest 
film, SiCKO. My family's story is included in SiCKO, and our story 
represents a horrific set of circumstances unfolding in middle class 
families across this nation.
    Though Mr. Moore took seven or eight minutes in his film to outline 
our financial collapse, I can assure you that the health and economic 
disasters that made us perfect fodder for film unfolded much more 
slowly and painfully than depicted on the movie screen. Mr. Moore and 
his production staff did not know much of what is shared in this 
testimony, and I offer it now so that you might more fully consider the 
plight of middle-class American families--the hard-working people you 
purport to represent here in the people's House.
    And being a part of this film project did not change the cruel 
reality for us or for any of the others in SiCKO. We were not paid, and 
the conditions we faced before the film are in most cases very similar 
to the conditions each of us face today. In order for our story to mean 
something you must act on our behalf.
    I know many of you receive substantial financial support from the 
health care and pharmaceutical industries, and you may feel hard-
pressed to look at any plans that could put those funds at risk. But I 
am asking you to consider that you also receive substantial funds from 
me, my neighbors and all of my fellow Americans through your salaries 
and benefits funded by taxpayer funds and you hold office because we 
voted for you. We the people are your employers.
    I find it unacceptable and even difficult to comprehend how you can 
sit here and apparently not understand the severity of the problem. How 
did this body so remove itself from the reality of the people? I 
commend Rep. Conyers on bringing this issue before you once again and 
ask that you imagine yourselves walking a mile in my shoes.
    My family is part of a grim statistic in America. Our health care 
issues and costs drove us to bankruptcy as it has driven an estimated 
half of those filing bankruptcy to that point. And we were always fully 
covered by medical insurance. By sharing our story and our path to 
bankruptcy, it is my hope and it is my prayer that each of you will 
have the courage you must have to act on behalf of your fellow 
citizens, your constituents and your nation to pass meaningful health 
care reform.
    If you had made HR676 law when it was proposed back in 2003, I 
would still have my home, my dignity and better health.
    Instead, I come to you today, imploring you to act for the 
thousands like me who elected you and who count upon you to do what is 
best for our nation. In the course of human events today, bankruptcy 
should not be the end result of heart disease and cancer. It is enough 
to fight those hellacious health battles without also fighting for our 
financial lives. The shame of financial failure and bankruptcy should 
not be the end result of needing health care in America. If you think 
it couldn't happen to you or to your family, think again. And tonight 
when you lay yourselves down to rest, know that hundreds of thousands 
of Americans will not rest well because they sit of the edge of 
financial disaster not because they are slackers or welfare cases or 
poor people with poor ways. They sit on the edge because they are sick 
and because you have failed to act on their behalf.
                               our story
    My husband Larry and I have been married for 31 years, and we have 
six children and 13 grandchildren. For most of his adult life, Larry 
was a machinist. I stayed at home with our little ones until our 
youngest was two and then like so many other American families, we 
needed the income I could earn and I went back to work.
    Unhappy working minimum wage jobs, I enrolled in college and at the 
age of 31 while working full time as a bank teller and caring for my 
family, I earned my bachelor's degree, cum laude and Phi Beta Kappa, 
from Colorado College in Colorado Springs. I believe in the value of 
hard work, and my parents--including my World War II veteran father--
instilled in me a strong work ethic.
    Throughout our early years together and at all times thereafter, my 
husband and I always maintained health insurance coverage for ourselves 
and our children. It was never our expectation that others care for us. 
We both stayed well-informed and exercised our right to vote. We owned 
our own home and stayed actively involved in every aspect of our 
children's lives.
    For you to understand, you must realize that the health-related 
financial trauma we experienced does not happen overnight. Good, hard-
working Americans like us struggle against the darkness of bankruptcy 
for years until there is no other reasonable course.
    Brewing in my husband's body were the bad arteries that also 
plagued his father. And at age 46, Larry suffered his first significant 
heart-related difficulties, and he underwent his first heart bypass 
surgery in January of 1990 at Mercy Hospital in Miami. His recovery was 
remarkable at first but then quickly reversed. He was wasting away, and 
by July of 1990, another heart surgeon had concluded that Larry's first 
heart surgery had been botched. His artery bypass had been placed too 
``proximal'' to the initial site of blockage and as his body built scar 
tissue, the newly opened vessel quickly closed again.
    His original doctors did not tell him this. He was told the bad 
news by Dr. Jack Greenburg, also of Miami, who then performed another 
coronary bypass on Larry in July of 1990 just six months after his 
first. The bills were awful at that time, but we managed to argue with 
some of the docs that since the second surgery was due to error in the 
first, perhaps it wasn't quite right to bill us twice for the botched 
work. We recovered financially from that only after years of argument 
and bartering. No lawsuit was ever filed for the bad operation since 
Larry recovered and lawyers didn't see a multi-million dollar case or a 
sizeable enough cash retainer from us to proceed.
    I consider the current argument that medical malpractice insurance 
rates are driving the current crisis as ludicrous and only to be 
believed by simple minds with simple ambitions--to protect the powerful 
and the wealthy by keeping average people from suing. Fixing the health 
care system for the top tier is as morally wrong as ignorance of the 
problem, but that's an argument for other, brighter minds than mine.
    My husband did recover from those early heart surgeries, though he 
wasn't nearly as strong. His work would suffer due to his health status 
in the mid-1990s, but we slowly worked our way back from the brink. He 
had to give up the physically demanding work of machining and worked 
more menial jobs--pizza delivery, light maintenance and eventually 
cashiering. What a decline of dignity for my proud and able husband. 
Yet he worked doing what he had to do to help support our family.
    I was staying relatively healthy although I had been diagnosed with 
sleep apnea and had to use breathing support at night with both a C-PAP 
machine and oxygen. But I always worked full time too. And I often took 
on extra projects or part-time efforts to supplement our income.
    But in 1998, Larry's chest pains returned, and he would begin the 
spiraling downward that ultimately led him to several cardiac 
procedures, stent placement and another heart bypass surgery (the most 
recent in February of 2006). Our health insurance premiums were paid 
through our separate employers based on the most economical and 
comprehensive coverage we could purchase through these years, 1990-
2003. Monthly premiums ranged from $150 to $250 for each of us and 
though the cost seemed high based on our wages, we paid. In the 
meantime, his need for daily medications was also increasing.
    Late in 1999, I reluctantly went to my nurse practitioner with what 
I thought was early-menopausal symptoms. She was going to prescribe 
some hormonal therapy to control severe bleeding but then decided I 
should be seen by an OB/GYN. Thank God her intuition told her to take 
that course. Within a couple of weeks, I was diagnosed with uterine 
cancer. It was off to surgery and treatment for me. And I lost weeks of 
work with no way to recover the income. Friends and co-workers donated 
money to help us, but by now our medical problems were taking a heavy 
financial toll.
    Just weeks after cancer surgery, I returned to work where I was 
caring for developmentally disabled young people in a group home 
setting. I knew I couldn't afford to lose more time from work, and I 
absolutely could not risk losing my health coverage, so I went back to 
the heavy lifting (some of the youngsters weighed more than 100 pounds 
and needed full assistance with basic life functions). It was way too 
soon to return to that sort of work, and though I wore an abdominal 
brace and a back belt to hold my gut together, I developed a huge 
abdominal hernia in my cancer surgery incision site and was back to 
surgery by the summer of 2000.
    This time I didn't dare miss much time from work. Just six days 
after my release from the hospital, and against medical advice, I bound 
my now-surgically-meshed belly together and returned to work. I simply 
could not lose the pay and benefits.
    In the meantime, Larry's artery problems had extended from already 
serious coronary artery disease requiring intervention nearly every six 
months or so to include peripheral artery disease. He was still working 
full time as a cashier in a Deadwood casino named Gold Dust. Because 
western South Dakota did not at that time have vascular specialty 
groups capable of performing the tests Larry needed and because our 
insurance carrier, DakotaCare, had a contractual arrangement with the 
Mayo Clinic in Rochester, Minn., that's where Larry was sent for 
further evaluation.
    Because I could not afford to miss any more work, he went alone the 
first time--driving more than 600 miles alone to see the doctors who 
could potentially treat him. I tracked his progress by watching ATM 
transactions on our bank account as he went from place to place on his 
journey. We had no cell phone or way to contact each other without 
incurring more expense.
    During this period, our insurance premiums mushroomed (in part 
because we were a part of our employers' group health risk pools). We 
also now needed several prescription medications each month, and our 
deductibles and out-of-pocket exposure soared to thousands every year.
    By fall of 2003, we had already sold our modest home to fund our 
loss of income due to Larry's absences from work and to pay off some of 
our growing debt. We netted only $8,000 from the sale. And our monthly 
health costs (health insurance premiums, medicine co-pays, out-of-
pocket expenses and transportation) swelled to over $1,000.
    We borrowed money from friends and family, sometimes launching our 
own benefit campaigns. It was sickening to beg for money, though folks 
generally helped without judgment.
    When we left for our second trip to the Mayo Clinic, all of our 
worldly goods went into storage, we had no permanent home and we knew 
only that if Larry was to live, we needed to do whatever necessary to 
make that happen. We spent Thanksgiving of 2003 alone in Rochester, 
Minn., waiting for Larry's first of two surgeries on his iliac 
arteries. We left the Mayo Clinic just six days after his surgery and 
drove home to South Dakota to get me back to work. He was so ill during 
the drive that we stopped at nearly every rest stop and then made a 
local hospital the first stop back home before checking into a motel 
where we would live during his recovery.
    By now, Christmas of 2003, debt collectors had become rabid. They 
called me at work, they demanded sums I could not pay and even with 
explanations of our medical situation, they pursued me very 
aggressively. When a collector representing a Rapid City doctor
    who had already been paid thousands by my insurance company served 
me with garnishment papers; I thought I would die of humiliation and 
terror. My husband was very ill. I needed to keep up his insurance and 
medications, and if I were garnished, I would not be able to meet that 
obligation to the man I love.
    We sought the advice of a local attorney to see if we could 
negotiate something with this doctor, but to no avail. Bankruptcy was 
the only way to stop the garnishment. Even as quickly as the attorney 
moved to complete his work, one pay period's worth of garnishment 
payment was collected from my check. I was horrified as I was now the 
local newspaper editor, and being garnished was simply not good on many 
levels. But the bankruptcy went through in the spring of 2004, and the 
calls stopped--at least until the next round of medical issues and 
until the bills begin building again.
    It was not only medical debt in that bankruptcy. Over the years and 
months leading to that point, we did whatever we had to to stay afloat. 
We put food and household items on credit, we borrowed against older 
cars, we ordered needed goods through high-interest, high-priced mail 
order firms. So when we reached the point of bankruptcy, all of those 
debts had to be included. No one was spared. So our problems with 
extreme medical costs and the resulting bankruptcy hurt a wide variety 
of businesses and individuals. Collateral damage of the national health 
care crisis, I suppose.
    We had tapped out family and friends, begged for community 
benefits, received food from a local food pantry and yet we were still 
working. Every available amount of expendable income went to medical 
needs--even rent, utilities and food took a back seat. Larry tried his 
hardest to keep going. His employer followed only the absolute letter 
of law in terms of Family Medical Leave time off for illness and did 
nothing to help him. It was very clear that they wanted Larry off of 
their group health insurance sooner rather than later. The worry was 
exhausting, and the stress did not help the situation. My sleep 
diminished to just two or three hours each night as I worried myself 
sick about what would happen and how I could possibly keep Larry from 
feeling what I felt.
    In April 2004, we returned to the Mayo Clinic for the third and 
final time. Larry had surgery yet again. This time he was told he could 
return to work in six weeks but no heavy lifting was allowed. Without 
any prior notification as is required by the law and on the exact date 
when his 12-week Family Medical Leave for 2004 was exhausted, and by 
way of a certified letter, Larry was fired from his job. They said that 
to accommodate his lifting restriction would be too tough for them.
    We sobbed together. The end of a working man's life was reduced to 
a letter full of lies delivered on Memorial Day 2004.
    In the meantime, the Mayo Clinic wrote too and said that they were 
writing off or forgiving the $6,000 left on Larry's bill after the tens 
of thousands in insurance payments but that if we ever wanted to 
return, we would have to bring the cash up-front for our portion of the 
costs. That ended our ability for Larry to return to that fine 
facility, and he hasn't been properly evaluated for his peripheral 
artery disease since.
    I took Larry onto my group health insurance, and he began the 
application for Social Security Disability. His application was 
approved, but he went six months with absolutely no income and had to 
wait two years to qualify for Medicare health coverage, so our 
financial condition continued its decline. Congress should also act to 
fix that deficiency. If an American is found to be too ill to work, 
making the person wait two years for Medicare coverage is cruel and 
just plain dumb.
    I even tried opening a small local business (with the help of a 
small amount of local economic development funds) while I continued my 
full time work at the newspaper, but the business didn't take off 
quickly enough. It seemed as though our last hope of saving ourselves 
was doomed. But we aren't quitters, and we sure gave it our all in 
every way we could think of to pull ourselves out of the financial 
    Larry got sicker still and in February 2006 was told he would need 
yet another heart surgery. This time it took surgeons 12 hours to 
complete the quadruple bypass at Rapid City Regional Hospital. Larry 
was in intensive care for days and then home to heal. But that 
certainly pushed our deductible and out-of-pockets right back out of 
sight and reach for my income and his Social Security benefits. We were 
going under all over again just two years after our bankruptcy.
    One of our grown children offered to have us move into her home in 
the Denver area, and we decided that we had to throw in the towel once 
and for all.
    The life we worked so hard to build and the life we fought to save 
for the past few years was lost. We had failed. The health care system 
had crushed us.
    Michael Moore's film crew came to South Dakota and documented our 
move. And they did so because they felt we represented middle class 
Americans who though fully insured can still lose everything because of 
health crisis. We packed up our stuff and the dog and drove to Denver. 
I left the editing and reporting I loved and the beautiful Black Hills 
of South Dakota.
    Let me say again, we are in SiCKO not because our story is so 
unique. We are in this film because we are not unique--we represent 
what is happening to so many others Americans. That is sad for us all. 
I worry every night that somewhere out there sits a woman like me who 
is at the end of her rope and has nowhere to turn. She works, so she 
earns too much for government-based help that do not allow for extreme 
medical emergency, but her pay after paying her insurance premiums is 
not enough to support her family. And tonight she'll sit alone and 
hurting, not knowing that I pray for her and for her strength to face 
another day.
    I want the members of the committee to know that if HR676, Medicare 
for All, had been in place for us, we would have weathered the storm. 
We are hard-working people who under normal conditions make sound money 
decisions. But placed under the strain of mounting premiums, co-pays, 
deductibles and out-of-pocket costs, we did whatever we had to do to 
stay alive.
    I am so angry with you. I lived the American dream as my father 
taught me and as his father taught him. I worked, I educated myself, I 
voted, I bought a home and then moved up into a better home, I raised 
my children responsibly and I served in my community--and you left me 
broken and battered because you failed to act on health care reform.
    And out there today are hundreds of thousands of people struggling 
to make ends meet at the same time they are dealing with cancers and 
heart attacks and all manner of terrible personal health crisis and yet 
you still fail to act. These people are average, middle class Americans 
like me who want nothing more than to live a good and decent life 
surrounded by friends and family in a modest home with enough income to 
make ends meet.
    I am also a Christian. And I do not know what type of Christianity, 
if any, the current system represents. I hear a lot about family values 
and respect for human life, but are those just empty words said to 
placate the religious right voting block or the powerful pro-life 
lobby? Other good and decent Christians might not share your blind 
devotion to those points of view. The Christ I learned about as a child 
attending Arlington Heights First United Methodist Church in Illinois 
and the Christ I continue to hear about in Sunday services at Cherry 
Creek Wesleyan Church in Colorado would not allow this to happen to the 
sick. In fact, I don't think I've heard of any religious group that 
would allow the sick to be so deeply wounded--and especially not at the 
hands of other believers. I am asking you to value life and to value it 
outside the womb too.
    And my lobby group will be growing more powerful too. Just as I 
have come out of the shadows of economic ruin and shame, so too will 
others come forward to hold you accountable. My faith demands that I 
love God with all my heart, and to do that I must love my neighbors and 
care enough to speak up for those too downtrodden to speak for 
    But I can only speak here today. You have the power to carry this 
onward to action. I ask you to search you hearts and your own value 
systems. Remember hard-working people, put yourselves in the shoes of 
your constituents and act accordingly. Their bankruptcy shame due to 
medical crisis really is your shame. You are the body that could have 
acted and has not. Move forward now, and please do not wait for a new 
president or for favorable political winds. That course takes no 
courage whatsoever, and I know each of you has shown courage in 
stepping up to serve this nation. I just think many of you have lost 
your way in remembering who elected you and who needs your bravery now.
    I dedicate this testimony to my brave husband and three other 
Americans who gave me the courage to tell this story to millions and 
the conviction that it can do some good:
    To my late father, Howard Boyles, who proudly served his nation in 
the United States Army during World War II and who told me that people 
have died to protect my right and responsibility to speak up; to Sen. 
Tom Daschle, who took interest in my family and who spoke up in spite 
of political consequences; and to an Eagle Scout from Flint, Michigan, 
named Michael Moore who restored my dignity and my voice on a movie 
screen in Manhattan and is keeping his Scout's promise to better his 
community and his nation.
    And I am asking each of you to honor these Americans with me. Honor 
them by pushing this House to action. Please do not ignore those of us 
who elected you. Please help reduce the bankruptcies filed in this 
nation by fixing the broken health care system. We will all be better 
off--individuals, small businesses and even your corporate friends.
    Please hold hearings on HR676, and pass universal, single-payer 
health care for every American.
    Thank you.

    Ms. Sanchez. Thank you, Ms. Smith, for your courage in 
coming here today to testify. I know it is painful, but we are 
very mindful of the message that you are bringing.
    At this time, I would like to invite Mr. Zywicki to begin 
his testimony.

                       LAW, ARLINGTON, VA

    Mr. Zywicki. Madam Chairwoman and distinguished Members, it 
is my pleasure to testify today on the subject of medical debt 
and bankruptcy. I commend this Subcommittee for seriously 
studying this question.
    Medical debt, medical problems, and the rising costs of 
health care are a source of concern for many families today. 
And sadly these problems sometimes land them on the steps of 
America's bankruptcy courts. It is precisely to deal with these 
sorts of misfortune and temporary financial setbacks that we 
have our honored American tradition of the fresh start to allow 
workers and families to get back on their feet.
    At the same time, we are all aware of the economic impact 
that bankruptcy can have on those conscientious doctors, 
nurses, hospitals, and other health care providers who deliver 
our babies and even save our lives and those of our loved ones 
in times of crisis. They are entitled to be paid for their 
valuable services that they provide.
    Although it is just and appropriate to preserve the fresh 
start for those overwhelmed by health problems and medical 
costs, we should keep in mind that when some are unable to pay 
their medical debts, those costs must be passed on somewhere 
else within the health care system, either to insurers and 
patients through higher costs for services or through lower 
quality care, innovation, and choice. There is no free lunch.
    Consider that every $100,000 discharged in bankruptcy may 
make the difference between a hospital being able to afford an 
additional nurse for a year or improved patient treatment. 
Indeed, elementary economics suggest that on a macro-economic 
level, an increase in uncollectable medical debts may 
exacerbate the problem of rising health care costs in the 
    Addressing the issue of health care and bankruptcy thus 
requires striking a delicate and complicated balance between 
the needs of innocent families who find themselves in dire 
straits because of medical problems on one hand and the claims 
of innocent doctors, nurses, and hospitals that provide needed 
and even lifesaving health services on the other.
    At the current time, there is little evidence that medical 
bankruptcies are creating some sort of crisis for the 
bankruptcy system or that the frequency of medical bankruptcies 
has been rising over time. Current data is sparse and provides 
a tenuous basis for sweeping reforms. And further research is 
needed. But current data does suggest a few tentative 
    First, some medical data is present in many bankruptcy 
cases, perhaps approximately half of cases.
    Second, in a relatively small number of cases, large 
medical debts are the primary cause of bankruptcy filings.
    Third, in some cases, medical debts combined with other 
debt such as mortgage, automobile or credit card debt to lead 
to a bankruptcy filing.
    Fourth, in the overwhelming majority of cases, there is 
either no medical debt at all, or the amount of medical debt 
present is relatively small and unlikely to be the proximate 
cause of the debtor's bankruptcy.
    Fifth, bankruptcies are insured in general at the same rate 
as the general population.
    Finally, although medical problems theoretically can also 
contribute to bankruptcy by leading to unexpected job loss or 
income interruption, empirical studies suggest that this is not 
a significant cause of bankruptcies and the number of 
bankruptcies attributable to this cause does not appear to be 
growing over time.
    Current law strikes an appropriate balance of these 
competing concerns between innocent doctors and innocent 
patients. Two years ago this body enacted the Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2005 by a bipartisan 
70 percent majority. BAPCPA should be given an opportunity to 
prove itself before Congress once again reopens the question of 
bankruptcy reform, especially in light of the lack of any 
concrete evidence to indicate a pressing problem.
    Under the means testing provisions of BAPCPA, low-income 
debtors, including those who are unable to work because of 
health problems, are entitled to file bankruptcy and discharge 
their unsecured debts, whether medical or otherwise. High-
income debtors who can repay a substantial portion of their 
debts without significant hardship are required to enter a 
Chapter 13 plan and repay as much as they can of their 
unsecured debts as a condition for filing bankruptcy, whether 
40, 60 or 80 percent of their outstanding unsecured debt.
    Moreover, in calculating the debtors' income available to 
repay debts in Chapter 13, the law permits a deduction for 
health insurance and other health expenses. Finally, a judge 
retains discretion to permit an otherwise ineligible debtor to 
file a Chapter 7 if she can show special circumstances such as 
notably a serious medical condition.
    In short, current law adequately accommodate the claims of 
those debtors laid low by medical problems and expenses and 
other innocent parties who are affected by bankruptcy, 
including health care professionals and other health care 
consumers. It asks debtors to pay what they can and health care 
providers, consumers, and insurers to absorb the remaining 
    Although BAPCPA seems to be accommodating these concerns, 
it has been in operation for less than 2 years. Future research 
may suggest propriety of reconsideration of the issue.
    Finally, we should note that as a result of BAPCPA, the 
bankruptcy filing rate has been cut about in half, at least 
temporarily. To the extent that BAPCPA has succeeded in weeding 
out fraudulent and abusive filings, which it appears to have 
done, it would be expected that a greater percentage of cases 
today than in the past would involve true medical bankruptcies, 
even if the absolute number of such filings has not increased. 
Indeed, the primary effect of BAPCPA appears to have been to 
reduce the denominator on the filings ratio thereby leading to 
an increased percentage of legitimate filings, including 
medical bankruptcies.
    In conclusion, allow me to offer that if this Committee's 
true concern is not with medical bankruptcies, but with the 
cost or quality of health care in America in general, an issue 
on which I express no opinion today, it seems obvious to me 
that tinkering with the bankruptcy code is one of the least 
effective ways imaginable for dealing with those issues.
    Thank you.
    [The prepared statement of Mr. Zywicki follows:]
                 Prepared Statement of Todd J. Zywicki


    Chairman Conyers. [Presiding.] Well, thank you for your 
testimony, sir.
    Director Clifford White is the next witness. He oversees 
bankruptcy matters in the Federal court and supervises the 
means tests that are administered as part of that process.
    Welcome to the Committee, sir.


    Mr. White. Thank you, sir. Chairman Conyers and Members of 
the Subcommittee, I appreciate the chance to be here today to 
discuss the role that medical expenses play in consumer 
bankruptcy filings.
    The U.S. trustee program is that component of the Justice 
Department with the mission to enhance the integrity and the 
efficiency of the bankruptcy system. And our responsibilities 
range from consumer bankruptcy cases to reorganizations of 
large corporations.
    I would like to address three aspects of the topic of the 
hearing this afternoon. First, as the Chairman mentioned, one 
of the most significant changes made in the bankruptcy reform 
law was the establishment of a means test. And under the means 
test, individual debtors with income above their State's median 
income level are allowed to deduct expenditures set forth in 
the statute. Most medical expenditures may be deducted.
    If the debtor has income above allowed expenses, the debtor 
may be presumed abusive and the case subject to a motion to 
dismiss by the U.S. trustee. A debtor may rebut that 
presumption by demonstrating special circumstances such as a 
serious medical condition.
    As of June 30, 2007, about 8 percent of debtors who filed 
Chapter 7 petitions after enactment of the means test had 
income above the State median income level and thus were 
subject to the full means test. Of those debtors, approximately 
12 percent were presumed abusive. But the U.S. trustee declined 
to file a motion to dismiss in about 22 percent of those 
presumed abuse cases. And the reason for about one out of every 
five of those declinations was high medical expenses or loss of 
income from illness or injury.
    So Congress established an objective system for determining 
eligibility but also resided in the U.S. trustee discretion to 
decide whether to seek dismissal, whether a dismissal would be 
appropriate. Accordingly, debtors who have incurred high 
medical debt or anticipate significant future medical 
expenditures or who have lost income due to medical conditions 
may be entitled to Chapter 7 relief irrespective of the means 
test formula.
    My second point is that the U.S. trustee program does not 
have definitive data on the amount of medical debt owed by 
consumer debtors who seek bankruptcy relief. In 2003, however, 
we did review a sample of 5,000 cases utilizing data from 
official records of Chapter 7 cases closed between the years 
2000 and 2002.
    In general, those data revealed that about 5 percent of 
total general unsecured debt was medical related. Forty-six 
percent of the debtors listed medical debt. Of those debtors 
who listed medical debt, about 80 percent reported medical debt 
of less than $5,000.
    Fewer than 1 percent of the cases accounted for more than a 
third of the medical debt. And less than one out of 10 cases, 
about 10 percent of the cases, represented about 80 percent of 
total reported medical debt. Now, for the most part, this 
accounting would not have identified medical debts that were 
charged on credit cards, placed with collection agencies or 
paid prior to a bankruptcy filing.
    Third and finally, the need for bankruptcy data that is 
readily accessible was recognized by the Congress in Section 
604 of the reform law, which provides that the bankruptcy court 
should make data publicly available in an electronic format. 
This presumably would include financial information contained 
in schedules, statements, and other documents filed by debtors 
in bankruptcy court.
    Although medical debt is difficult to identify with 
precision on the current official forms, there may be ways that 
such data can be made more accessible for policy makers, for 
administrators, and researchers. The U.S. trustee program, for 
example, has been working with the administrative office of 
U.S. courts and the Judicial Conference of the United States on 
an automation solution which entails the tagging of data on 
bankruptcy forms. The resulting data-enabled, or so-called 
smart forms, among other things, would allow a computer system 
to automatically aggregate and simplify review of data.
    Data-enabled technology would allow researchers and others 
to more easily identify cases with high medical expenses and 
other features. In addition, much of the means tests which we 
perform could be done through data tagging allowing the program 
to perform its duties more effectively and allowing debtors to 
know earlier in the process whether the program will deem their 
case to be presumed abusive.
    The courts adopted a jointly developed technical standard 
for data tags about 2 years ago but has postponed their 
widespread use pending further study. If the courts ultimately 
adopt this new technology as a mandatory standard, then 
bankruptcy administration will be streamlined and policy makers 
will have more information to evaluate the effectiveness of the 
    In sum, the U.S. trustee program is committed to improving 
consumer bankruptcy case administration for the benefit of 
debtors, creditors, and the public. And this will include the 
exercise of appropriate discretion in evaluating bankruptcy 
cases that exhibit substantial medical debt.
    I would be happy to answer any questions from the 
Subcommittee. Thank you.
    [The prepared statement of Mr. White follows:]
              Prepared Statement of Clifford J. White III


    Chairman Conyers. Thank you very much.
    Well, we have had Donna Smith already. We now go to 
Professor Elizabeth Warren of Harvard.
    We are so glad to have you here. And you may proceed with 
your testimony.


    Ms. Warren. Thank you. And thank you, Congressman Conyers, 
for inviting me here to talk today about an important problem 
facing hard-working Americans.
    No family wants to file for bankruptcy. Bankruptcy is an 
unmistakable sign of failure. It is an indelible mark that will 
be remembered long after the creditors have moved on and the 
court records have been archived.
    It is costly financially and also often costs families 
their dignity. Moreover, it doesn't solve the problem. As Ms. 
Smith pointed out, the medical bills can still stack up post-
bankruptcy. And yet Congress in its wisdom has decided to 
lengthen the time before a family can file for bankruptcy a 
second time.
    For a family facing bankruptcy in the aftermath of a 
medical problem, the pill is especially bitter. Whether the 
problem was one of chronic disease or sudden accident, the 
typical family is already exhausted when it tries to cope with 
unpaid bills, indecipherable charges, a maze of insurance 
payments and denials, and time lost from work. Financial 
problems piled on top of health problems can be overwhelming.
    For too many hard-working middle class families, a single 
diagnosis or accident can mean financial ruin. Even a 
relatively routine problem such as an appendectomy or long-term 
care from diabetes can be enough to over-stretch a family 
budget. I will focus today on data that my coauthors and I have 
developed about families that file for bankruptcy and briefly 
note several other studies that have similar sorts of results.
    But I want you to keep one thing in mind. When we look at 
bankruptcy, we are looking at the tip of a very large iceberg. 
Economists estimate that for every family that goes into 
bankruptcy, there are another 16 families who would benefit 
financially from filing if only they were willing to do so. How 
many more families are struggling beyond that? We are getting a 
peek at different pieces of the data. And I will try to mention 
some of those near the end.
    So let us start with the numbers. About half of all the 
families filing for bankruptcy do so in the aftermath of a 
serious medical problem. Here is the breakdown.
    We start with families' own description. That is we ask the 
families, and they tell us. Forty-six percent of the families 
filing for bankruptcy tell us, as Ms. Smith did, that medical 
problems were at least a part of what drove them into 
bankruptcy. That is the first, the pale blue, bar on the figure 
on the chart on the left.
    We also looked at the financial impact of medical problems 
from other perspectives. We saw there that about one in five 
debtors, 21 percent of the debtors from the core sample, 
indicated that they had lost at least 2 weeks of income because 
of a medical problem. Sometimes it was the worker who was ill 
or injured. Sometimes it was parents who had to lose time to 
deal with children who were ill or with elderly parents of 
their own.
    Some filers mortgaged their homes in order to pay off 
medical debts, 2 percent of the total sample, about 4 percent 
of all of the home owners. There are many overlaps among the 
categories, but the bottom line is the dark blue bar on the 
right. If we count those categories together, self-report, 
mortgaging a home to pay for medical bills, and missing at 
least 2 weeks worth of work, we end up with 56 percent of the 
families in bankruptcy in the aftermath of a serious medical 
    Now, we could take even more perspectives on this. Two 
percent of the sample identified that alcohol and drug problems 
were a reason for filing. For parents who explained that they 
had bankrupted themselves putting teenage children through 
substance abuse rehabilitation programs, this would seem to be 
an appropriate inclusion.
    One percent of the families identified a family member's 
gambling problem as a reason for filing. Recognizing that 
families get left behind financially when a spouse or parent 
goes on a gambling binge, loses the house, and leaves everyone 
deep in debt. Twenty-six percent of the core sample reported 
having unpaid medical bills at the time of their filing in 
excess of $1,000. The median debt was over $11,000, very close 
to Ms. Smith's $1,000 a month.
    If we included this measure, then the proportion of 
families filing for bankruptcy would rise from about half to 
about two-thirds. Different people may have different opinions 
on whether to include them. I am simply trying to get all of 
the data out there.
    I should point out that our data are not inconsistent with 
other studies. For example, a study that may be particularly 
interesting to Congressman Cannon, a new study from Utah 
reported just 2 weeks ago reports that 61 percent of families 
file bankruptcy in the aftermath of serious medical problems. 
That follows-up on an earlier Utah study showing that 60 
percent of the families were in bankruptcy following serious 
medical problems, an especially poignant point in Utah, since 
Utah has one of the highest bankruptcy filing rates in the 
    A Delaware study concludes that based on court record data 
alone that large medical bills led to a 50 percent increase in 
the likelihood of filing for bankruptcy. An Illinois study 
shows that 58 percent of bankruptcy filings involved medical 
debt. Researchers specifically noted this number does not 
include medical debt that was paid with credit cards or by 
borrowing from a loan company.
    An upstate New York study found 58 percent of the families 
in bankruptcy were dealing with medical debt. Some of the 
research has focused on particular illnesses. For example, 
those with cancer indicate that their bankruptcy filing rate is 
about 3 percent, much higher than the national average.
    I just want to point out a little larger context and then I 
will stop. And that is the data in bankruptcy are there because 
of the data in the population generally. I just pick a few.
    Seventy-seven million Americans aged 19 and older, that is 
two out of every five adults, 37 percent of the population, 
report that they have difficulty paying medical bills and have 
accrued medical bills they cannot pay. Twenty-one percent of 
non-elderly adults have been contacted by a collection agency 
over a medical bill within the past 12 months. Forty-four 
percent of medical debtors had credit card debts higher than 
    Forty-six percent of those in a Baltimore study report 
currently owing money from medical debts they cannot pay. 
Forcing families into bankruptcy is not an answer.
    Just last week, Bill Novelli, the CEO of AARP, cited a 
Gallop survey across the country in which he noted that almost 
half of all Americans are worried about paying medical costs if 
they become seriously ill or have an accident. Mr. Novelli 
urges the millions of AARP members to make health care reform 
their number one issue in the 2008 elections.
    Like Ms. Smith, I ask Congress to act to protect American 
families from the financial fallout of our current health care 
    [The prepared statement of Ms. Warren follows:]
                 Prepared Statement of Elizabeth Warren


    Chairman Conyers. Thank you so much.
    Mark Rukavina, the executive director of Access, a national 
resource center. And before that, he was program director for 
the Summerbridge Community Health Partnership in Massachusetts.
    We welcome you to this hearing.


    Mr. Rukavina. Thank you, Mr. Chairman.
    I would like to thank Chairwoman Sanchez and the Chairman 
for the invitation to speak at this hearing today on such an 
important issue, the issue of medical bankruptcy. Far more 
common than medical bankruptcy, however, is the problem of 
medical debt. And I am going to focus my comments today on the 
prevalence and the consequences of medical debt.
    Year after year, the Nation's health care spending outpaces 
the consumer price index. Health care costs now consume 16 
percent of our gross domestic product. This spells trouble for 
the American public. Consumers are expected to pay nearly a 
quarter of $1 trillion this year in out-of-pocket payments. And 
this is on top of the health insurance premiums that they pay. 
For many these costs will convert to medical debt.
    Professor Warren mentioned the number of Americans with 
medical debt. It might come as a surprise to people that nearly 
two-thirds of these people with medical debt have health 
insurance. Every fifth insured American carries medical debt.
    It seems many Americans are being sold faulty products. In 
the automobile or airline industry, this level of product 
failure would not be tolerated by consumers or regulators.
    Medical debt has implications. It is a barrier to care. The 
Access Project has conducted a study of uninsured patients 
treated at safety net providers. These are providers with a 
commitment to serve uninsured and under-served populations.
    And we have found that nearly half had unpaid medical 
bills. And of those with medical bills, a quarter of them 
expressed reluctance to go back to those providers in the 
future because of the debt that they had.
    When it comes to health access, medical debt trumps health 
insurance. Research from the Kaiser Family Foundation found 
that medical debt itself is a risk factor in terms of access. 
Insured people with medical debt have care-seeking patterns 
similar to the uninsured. They are less likely to fill a 
prescription, see a specialist. They are more likely to skip 
treatments or forego ordered tests.
    But medical debt also has financial consequences. It 
depletes savings, destroys credit, and it threatens the 
American dream of home ownership.
    We conducted a study of clients who were seeking services 
at a consumer credit counseling service. Two in five were there 
because a medical incident contributed to their debt problem. 
The commonwealth fund research on medical debt found that for 
those with medical debt, Americans with medical debt, one 
quarter could not pay for other basic needs because of this 
    Nearly two in five used all or most of their savings trying 
to pay off their medical debt. And another quarter charged 
their medical debt on credit cards. People are trying to pay 
these bills. They simply can't afford to do it.
    We conducted another study of people seeking tax 
preparation assistance at volunteer income tax assistance 
sites. This was done in early 2005. We found that nearly half 
of this population had medical debt. And of those with debt, 
more than a quarter reported housing problems as a result of 
this debt.
    Much of what we have learned about this issue we have 
learned from people like Donna Smith, people who call us for 
assistance in resolving the medical debt that they have. And 
what we see is that these bills pile up. They are bills for 
ambulance, hospital, physicians, prescriptions, lab services.
    On a credit report, all of these bills, each individual 
bill is a potential strike against them. If unpaid, it can 
linger for years often long after being written off by the 
health care provider is bad debt.
    In conclusion, I would like to suggest that these problems 
can be solved if America were to adopt the universal system 
that provided Americans with affordable, comprehensive access--
or access to comprehensive benefits. While this may be years 
off, there are other steps that can be taken in the short run.
    For example, standards for insurance companies could be 
established that protects people when they get ill. And cost-
sharing obligations should be tailored to people's ability to 
pay. There are other steps that can be taken that address the 
issue of ruined credit for people who have medical debt.
    Too many Americans are healed by our fine medical 
institutions only to be harmed by the bills that they are 
unable to pay. Credit reports marred by medical debt can have 
all sorts of effects far beyond the medical system. It can 
drive up the cost of homeowners insurance, automobile 
insurance, limit people's employment opportunities, and block 
access to affordable credit.
    Involuntary medical debt should not be allowed to tarnish 
people's credit. Medical providers and their agents should be 
prohibited from reporting this debt to collection agents.
    In closing, I would like to thank the Committee for this 
opportunity to speak and be happy to answer questions when the 
time is appropriate.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Rukavina follows:]
                  Prepared Statement of Mark Rukavina


    Chairman Conyers. Thank you for your very interesting 
    The only thing not said about Dr. Himmelstein when he was 
introduced by Subcommittee Chair Sanchez is that he is the co-
founder of the Physicians for National Health Plan, some 20 
years or more ago, where we now have tens of thousands of 
doctors who are looking at the same issue that this 
Subcommittee is looking forward to.
    And we commend you for your staying power in this, Dr. 
Himmelstein, and welcome you.


    Mr. Himmelstein. Thank you, Mr. Chairman. Thank you to 
Members of the Committee.
    I would just say, when we started that organization, a 
reporter told us that Physicians for National Health Program 
sounds like furriers for animal rights. But it is now the 
fastest growing medical organization in the United States.
    I am a primary care doctor for 25 years. I have taken care 
of patients at the public hospital in Cambridge, Massachusetts, 
and served on the faculty of Harvard Medical School. Caring for 
patients is tremendously gratifying. But our health financing 
system constantly thwarts my efforts to help my patients and 
inflicts financial suffering that I am powerless to alleviate.
    I have seen patients die because they have delayed care for 
diabetes, chest pain, high blood pressure fearing the costs of 
that care. This needless suffering has motivated me to 
undertake both the advocacy that you spoke of and the research 
that I am going to talk about today.
    I want to start by saying that health insurance is a little 
bit like a hospital gown. And for those of you who aren't 
familiar with our gowns--I know the nurses in the audience will 
be--I brought along an example. It looks from the front like it 
covers a lot. But around back, there is a lot left uncovered. 
And that coverage hangs from a tenuous thread.
    Most Americans think they are covered, but few of us are 
really shielded from the financial ravages of illness. This is 
the key finding of our bankruptcy study. We went around the 
country and interviewed nearly 1,800 people in bankruptcy 
courts. If all we had to do was to look at court records, it 
would have been a much simpler study. And the problem with 
those court records, as has been mentioned, is that things like 
credit card debt hides, in fact, medical debt.
    When people take out a second mortgage on their home to pay 
a medical bill, that doesn't appear in the court records as 
medical debt. And Mr. Millenson and Mr. Dranove's findings that 
the Ranking Member, Mr. Cannon, spoke of ignore that fact and, 
in fact, fail to take in account that ours is the only study 
that actually asks people directly the question, ``What caused 
your bankruptcy?"
    One can only dismiss our finding by saying that people like 
Ms. Smith when they tell us that medical care or medical bill 
caused their bankruptcy--one has to say, ``No, it didn't,'' in 
order to dismiss our study. Ours is not just a statistical 
finding, but one taken from actually talking to people.
    I want to emphasize three lessons from our work. First, 
medical bankruptcy is a middle-class problem. People who file 
for bankruptcy in the wake of illness are average Americans who 
did one thing wrong. They got sick.
    Most of the three-quarters of a million families bankrupted 
by illness or medical bills each year are middle-class. Fifty-
six percent had gone to college. Fifty-seven percent had owned 
a home, at least until the financial crisis hit. Eighty percent 
worked in occupations that social scientists tell us are 
middle-class or above.
    Second, most people bankrupted by illness and medical 
bills, as has been said here before, had insurance. And that is 
important for us to know. This is a system that not only fails 
to work for the uninsured, it fails to work for those with 
    In our study, more than three-quarters had coverage at 
least when they first got sick. Sixty percent had private 
insurance. But a third of those lost it in the course of their 
    Often illness caused job loss and with it, loss of 
coverage. It is like an umbrella that stops functioning once 
the rain begins.
    According to the Wall Street Journal, 27 percent of 
employers stop health benefits immediately when a worker is too 
sick to continue working. Twenty-four percent more stop 
benefits within a year. In many cases, debtors whom we 
interviewed maintained their insurance but were bankrupted by 
medical bills because their coverage had gaping holes, co-
payments, and deductibles of the kind that Ms. Smith talked 
    The third point I want to emphasize is that the quality of 
health insurance coverage is deteriorating leaving more and 
more Americans vulnerable to financial ruin. It has been said 
that we don't have good trend data. In fact, we have some trend 
data on this.
    Back in 1981, a study asked debtors what caused their 
bankruptcy. And at that time, 8 percent of the 312,000 
bankruptcy filers said that medical problems caused their 
bankruptcy filing. At the time of our study, somewhere between 
46 and 63 percent of the 1.4 million bankruptcy filers in the 
United States said medical problems or medical bills caused 
their bankruptcy filing.
    In that 20-year period, therefore, we had at least a 23-
fold increase in the rate of medical bankruptcy in the United 
States. We have trend data.
    And recent moves by employers to raise co-payments and 
deductibles under the deceptive rubric of consumer-directed 
health care are putting many more working families at risk. 
Under such plans, many families must pay deductibles of $5,000, 
sometimes even more, before insurance kicks in at all. 
Personally, I have trouble fathoming calling such coverage 
consumer-driven, unless perhaps one uses it in the sense that 
one would say cattle are driven.
    Our findings on medical bankruptcy are apparently just the 
tip of the iceberg, as has been said here before. About 729,000 
families are bankrupted by illness and medical bills each year. 
But many more are under severe financial duress.
    Commonwealth fund surveys that have been alluded to tell us 
that 18 percent of Americans are paying off medical debt over 
time. Eight percent of insured Americans received a collection 
call in the past year. Thirty-nine percent increase in American 
families paying off medical bills over time, over the past 5 
    The situation is particularly dire for those with serious 
illnesses. Among those under 65 who have diabetes, heart 
disease, high blood pressure or arthritis, more than three out 
of 10 spend at least 10 percent of their income on health care. 
Among insured cancer patients, 22 percent say that medical 
bills consumed virtually all of their savings.
    A study of terminally ill patients in ICUs found that the 
terminal illness caused a moderate or severe financial problem 
for at least 39 percent of families. And virtually all of those 
families had coverage.
    In sum, our health financing system is failing. Tens of 
millions are uninsured. Tens of millions more pay for insurance 
only to find that what they bought in good faith was a 
defective product. Health insurance is not working.
    At doctors' offices and hospitals around our Nation the 
first question patients face is how will you be paying for 
this. In Canada where medical bankruptcy is rare and in Sweden 
and in France and in the rest of the developed world, the first 
question is how can I help you. These differing questions 
reflect not only the inhumanity of our care, but also its 
    We waste hundreds of billions annually on the paperwork 
required by our complex and redundant private insurance system. 
Diverting these dollars from bureaucracy to care would allow us 
to extend coverage to all Americans and to eliminate co-
payments and deductibles without increasing health spending. 
Indeed, our government already spends more per capita on health 
care than any Nation with national health insurance.
    National health insurance such as that that you, Mr. 
Chairman, have proposed would wipe out medical debt. And 
nothing short of that will work.
    I thank you for your attention.
    [The prepared statement of Mr. Himmelstein follows:]
               Prepared Statement of David U. Himmelstein




    Chairman Conyers. Thank you so much.
    I want to thank all of the witnesses. This has been very 
important. It has caused Chris Cannon and myself to begin to 
think about ways that we can come together to put some of the 
corrections that are so badly needed.
    And before I recognize him, I just wanted everyone to know 
that Tim Carpenter from Massachusetts is at this hearing. And 
the head of Healthcare-NOW, Marilyn Clement from New York, is 
at this hearing and, of course, Courtney Farr from the 
California Nurses Association.
    And Members of the Committee, all of those folks with the 
red jackets on are members of the Nurses Association, except 
Courtney Farr. She decided to wear white today.
    And so, I am pleased now to turn these proceedings over to 
Mr. Chris Cannon.
    Mr. Cannon. Thank you, Mr. Chairman.
    One of the pleasures of working on this Committee is that 
the Chairman is very clear in his views of the world and his 
principles, as am I. We differ on many of those, but being 
clear means you can actually work together. So he is not 
exaggerating when he says that there are things we would like 
to do.
    And, frankly, you know, I started out thinking about how 
Ms. Smith was really the only interesting witness. And, of 
course, we had people to her right who made that clear. And the 
people to the left actually were interesting.
    There was some humor in the process. The guys to the 
right--we actually appreciate your information because it will 
go in the report to some degree.
    But I am going to ask the Chair's indulgence here to 
actually move away just a little bit and then talk about H.R. 
    And I think, if you wouldn't mind, Ms. Smith--in fact, let 
me just quote Mr. Rukavina, who pointed out that much of what 
he and his organization has learned has been talking to people 
like you. I suspect that by talking about--I know this is very 
difficult for you. I apologize in advance. Let me just say many 
of us have had really rotten experiences with the medical 
system. So I realize it is a little bit difficult.
    But I would actually like to talk through with you some of 
the problems of what happened to you and why and try and inform 
the larger debate that we are going through here because while 
it is true that people take money from various different 
sources and certainly, pharmaceutical companies and others, the 
American Medical Association, give a lot of money, the fact is 
they don't buy loyalty, by any means.
    And the concern that we haven't done anything, I think, is 
unfortunate. I don't see it as a matter of shame. I see it as a 
very complex problem. And I hope that by walking through some 
of the things that have happened to you we can help inform that 
    And so, going through your story, ``Brewing in my husband's 
body were bad arteries that also plagued his father.'' So we 
start off with a genetic problem.
    This is not a problem of--I think, Dr. Himmelstein, you 
talked about diabetes several times. Actually, several people 
did. At least Type II Diabetes is often self-inflicted by 
people who indulge themselves.
    And, in fact, Mr. Conyers, you said earlier that you 
believe that health care is a human right for everybody. And I 
have done a little poll of doctors. So this is not scientific, 
not something I should be criticized on.
    But their conclusion, generally speaking, when I talk to 
doctors--I have done numbers of these--is that 75 percent of 
our health care costs are self-inflicted. If people would take 
care of diabetes, if they wouldn't smoke, if they wouldn't 
drink to excess, if they would eat reasonably, if they would 
exercise, perhaps as much as 75 percent of our health care 
costs would disappear. If that happened, then we could afford 
not only to take care of everybody in America, but everybody in 
the world and help them have the kind of health care that I 
think human beings are entitled to, largely through their own 
    But in the case of your husband, he did not have--this is 
not a problem that he inflicted upon himself. This is a problem 
that was largely genetic, I take it.
    Ms. Smith. That is correct. Even the doctors at Mayo Clinic 
talked about the genetic predisposition for his family to 
coronary and peripheral artery disease. Throughout his body his 
arteries are not great.
    He has, for whatever reason, the cholesterol-making 
capacities that are in high gear and deposit cholesterol 
throughout. And he is sitting right behind me, always been a 
tall--this is my husband, Larry, sitting right here--tall, 
slender man.
    And if you looked at the two of us and wanted to decide 
which one might be plagued by some problems with heart issues, 
it might be me who tends to overeat occasionally and have 
problems with things I shouldn't do. He has always been a very 
active, tall, slender guy.
    Mr. Cannon. I am neither tall nor slender, but I am blessed 
with wonderful cholesterol.
    Ms. Smith. That is all----
    Mr. Cannon. With the other burdens I carry through life, 
that is just--it happens genetically. And you, on the other 
hand, had uterine cancer.
    Ms. Smith. That is correct.
    Mr. Cannon. Geez, the time is just not long enough to deal 
with these issues. I am frustrated because the time is almost 
    But your disease was not something you inflicted upon 
yourself through lifestyle. It is either genetic or something 
in the environment that affected you. So there is really 
nothing you--you are not like an overeating person that brings 
on diabetes and smokes and drinks and causes huge costs in our 
health care system. You really are a typical, normal middle-
class American who was smashed in a system.
    Ms. Smith. Yes. I would like to just--I know this is really 
an aside. But one of the other things for me because Larry was 
having so many significant health problems and I was so worried 
about the $60 it would cost me to go to the doctor, I put off 
going, even though I knew there probably was something going on 
with me. I wrote it off to this must be pre-menopausal system--
it must be something else and waited.
    And then I had a cancer diagnosis. And I would like to urge 
every woman, whether she is here or listening somehow, even if 
it is $60, go get checked.
    Mr. Cannon. You know, we held a hearing in Government 
Reform on that topic. And I think we actually passed that bill 
that encourages public awareness of uterine and other female 
cancers for that very reason.
    Ms. Smith. Absolutely.
    Mr. Cannon. And, in fact, your point--I am just going to 
follow up. You point out that Larry's surgery was botched. And 
on the other hand, you refer to, I think, the intuition, I 
think you refer to, of your doctor who sent you to an OBGYN.
    Ms. Smith. Absolutely. It was a dichotomy for us. His 
    Mr. Cannon. You sort of got blessed.
    Ms. Smith. I was blessed with a nurse practitioner who 
    Mr. Cannon. Yes.
    Ms. Smith [continuing]. Who was ready to write me a script 
for hormonal therapy thinking that I was having pre-menopausal 
symptoms at the age of 45 or 46. And she was ready to write 
that script. And she stopped and turned around and said, ``I 
just don't like the sound of this.''
    And I said, ``What would you do if it was you.'' She said, 
``I would go have a D&C done.'' I said, ``Well then, that is 
what we have to do, if I can get it paid for.'' And 
fortunately, my insurance company said yes. And thank God, or I 
might not be sitting here today to testify.
    Mr. Cannon. Mr. Chairman, my time is expired. Can I make 
one short comment? And then if we have a second round, I would 
like to pursue this topic.
    That is we have a doctor in the InterMountain Health Care 
System named Brent James who has done some really interesting 
things in particular that go to helping avoid botched 
operations and intuition, which is helpful on occasion. But if 
somebody is only riding on intuition, we are likely to see 
serious other kinds of problems. And that, I think, is one of 
the areas where we will agree that there is terrific 
opportunity for progress.
    And with that, I yield back hoping that we will have a 
second round.
    Chairman Conyers. Thanks, Chris Cannon.
    Let me review my notes here.
    A 2-year wait for Medicare--who made that statement?
    Ms. Smith. That was my husband. When he applied--that is 
what the law is right now.
    Chairman Conyers. Now, that is something the Congress can 
do between your Committee, other Committee, and this Committee, 
and Ways and Means Committee, we want to take care of that.
    Then somebody talked about a long wait to even get to 
bankruptcy after you file. Was that Attorney Warren?
    Ms. Warren. I was the one who mentioned that one of the 
important changes in the recent bankruptcy amendment was to 
lengthen the time between bankruptcies, how soon a family could 
file again. And that for families with medical problems, we 
have to remember one of the reasons that bankruptcy is not a 
solution is that the medical bills continue.
    You know, I hate to say this. But the advice that I am 
often called on to give for families facing serious medical 
problems is wait until you are sure that the medical problem is 
entirely over. And frankly, that may mean the death of whoever 
is seriously ill before it is that you file for bankruptcy 
because once you file, there is a minimum of 6 years before you 
will be able to come back again, no matter how serious your 
problem and no matter what the reason is.
    Mr. Cannon. And, Mr. Chairman, would you yield just for the 
clarification of that? In the BAPCPA--really, we should have 
put another noun in there. Did we lengthen the time between the 
filings for insurance, do you recall?
    Ms. Warren. I thought you had. Although I am willing to 
yield in the--Professor Zywicki, have I got this wrong?
    Mr. White. There is a time between discharge that goes from 
six to eight, if I may, Mr. Cannon.
    Ms. Warren. Yes, we added 2 years.
    Mr. White. But the basic issue with regard to if one has an 
ongoing substantial debt situation that was something pre-
BAPCPA or post-BAPCPA that would have existed in the bankruptcy 
system going back from decades.
    Ms. Warren. Right. But basically----
    Chairman Conyers. Yes, that is 6 to 8 years----
    Ms. Warren. That is right.
    Chairman Conyers [continuing]. Before the date of the 
filing of the petition.
    Ms. Warren. That is right. An increase of 2 additional 
years for families who are hard-pressed and regardless of the 
    Chairman Conyers. Two years.
    Mr. Rukavina, you made suggestions about what insurance 
companies might be able to do to make this system a little bit 
more palatable. And we want to put that into the record that 
you can elaborate on it whenever you want. But just note that 
this Committee wants to get some specifics from you on that.
    Now, it just occurred to me I was thinking that a lot of 
people are too embarrassed, they are too proud to go into 
bankruptcy. Bankruptcy used to be something that you don't tell 
the neighbors about. I am beginning to think it has become so 
common now that that stigma is wearing off.
    But one thing isn't wearing and accounts for why people 
don't file is that they might lose their jobs when their 
employers find out that you have gone into bankruptcy. Is that 
correct? Some people say yes.
    Professor Zywicki says no. I yield.
    Mr. Zywicki. Under Section 525 of the Code, you don't lose 
your job if you file bankruptcy.
    Chairman Conyers. Well, what if you get fired and then you 
tell your employer that under Section 525 of the Code that you 
don't lose your job?
    Ms. Smith. Representative Conyers, I would like to mention, 
too, from someone who had to move from South Dakota to Denver, 
many employers now do a credit check to find out whether or not 
they want to hire you as an employee. So they now make a 
decision on me whether or not they want to employ a woman who 
would work very hard for them and do a lot of good for their 
company or their organization based on the fact that I got sick 
and my husband got sick and we declared bankruptcy.
    Chairman Conyers. I hold in my hand 21 forms that are 
required to be filled out now. The very first one contains 57 
questions dealing with means test calculation. The other is a 
voluntary petition. The next one, list of creditors holding the 
20 largest unsecured claims, a summary of schedules for the 
bankruptcy court itself, statistical summary of certain 
liabilities and related data referencing 28 United States Code 
Section 159, real property.
    This is just to get into the bankruptcy door. Now, we have 
to examine one very important thing before we leave here today. 
Is it convenient, or is it as smooth as some of my friends here 
at the witness table have alluded? Or is this a burdensome 
administrative chore, daunting, maybe stress-inducing?
    I mean, you have to really want to do something real bad to 
fill out all of this stuff. Even though you don't want to go 
into bankruptcy, but this is what you have got to do.
    What do you say, Professor Warren?
    Ms. Warren. Congressman, what has happened is that with the 
2005 amendment we have simply driven up the cost of filing for 
bankruptcy. The attorneys fees have gone up.
    Chairman Conyers. That is right.
    Ms. Warren. The length of time, the schedules, the 
information that a debtor has to bring. You generously do not 
read some of the questions that are there. They are not only 
impossible for most ordinary families to understand, frankly, 
they are impossible for many lawyers to understand, even though 
specializing in the field.
    When we drive up the cost of filing for bankruptcy, we 
don't drive them up just for those who abuse the system. We 
drive them up for every single family. We drive them up for Ms. 
Smith and her husband, everyone has got a medical problem, 
everyone who has lost a job, every single mother who has had 
somebody walk out and leave her with $50,000 worth of debt.
    We have taken a system that was inadequate to deal with the 
fallout from our health care system and we have taken that 
bankruptcy system and we have made it more expensive, narrowed 
the doors and made it an even less useful remedy for families 
that are in serious financial trouble.
    Chairman Conyers. Dr. Himmelstein, there is this concept in 
the civil rights movement that civil rights organizations are 
now looking at human rights. They kind of expanded from what 
the NAACP when it started in 1909.
    But is health care now being re-examined by doctors and the 
AMA and health care providers and nurses and professional 
people in the industry and teachers? Is health care being 
examined as a basic human right that ought to be available, 
certainly to everybody in this country? And if so, is that 
concept growing, or are things getting worse?
    Mr. Himmelstein. I will address that in two ways. One is to 
say that, of course, the U.N. declaration of human rights 
includes health care as one of the fundamental human rights. 
And the rest of the developed world has already recognized that 
as one of the fundamental human rights that is an entitlement 
of everybody in those other Nations.
    If you ask Americans that question--and it has been asked 
by many polling organizations over the years--the American 
people are overwhelmingly in accord with that concept as well. 
I ask this of my medical students in a very specific way.
    I say to them our bank that was robbed in Harvard Square 
some few years ago--one of the bank robbers was accosted 
shortly after leaving the bank and shot. And I asked them do 
you believe that he should have been cared for for his wounds. 
And I have yet to find a student who says that we should have 
left that bank robber to die on the streets of Cambridge.
    And what I then ask them is if a bank robber who has just 
robbed $50,000 from our local bank should be entitled to 
medical care, should we then deny that to a child with leukemia 
in our city. Should we deny it to an elderly person with high 
blood pressure? So I think by every standard in the civilized 
world today we should, and most of the world does, recognize 
this as a fundamental human right.
    Chairman Conyers. But does that mean we have more work to 
do in this country to get more people to recognize it?
    Mr. Himmelstein. Well, the Institute of Medicine of the 
National Academy of Sciences tells us that at least 18,000 
adults die each year because they cannot access medical care 
because they have no health insurance. So we are a long way 
from recognizing this as a human right. In fact, we have the 
number of deaths of 9/11 every 2 months in this country from 
lack of health insurance. And yet, we take that as a 
commonplace and have done nothing about it for a generation.
    Chairman Conyers. The gentleman from Arizona, Trent Franks?
    Mr. Franks. Well, thank you, Mr. Chairman.
    And thank all of you for coming to testify today.
    Mr. Chairman, I might start out by just saying how deeply I 
sympathize with people who have medical challenges. I have the 
memory of being a child born with some significant--I don't 
remember when I was born, but dealing with some of the 
significant issues of being born with full cleft. And this was 
devastating to my family as far as the costs and things 
associated with that.
    And so, I want you to know that my sympathies are there and 
very sincere and very real.
    That said, I was reading the other day, Mr. Chairman, about 
a new process by which they inject a substance into a cancer 
patient. And this substance goes into every cell in the body 
within about 48 hours, even passes the blood/brain barrier, 
goes into the spinal areas. And essentially it is present in 
some form of some concentration in every cell in the body.
    And then they leave it for another 48 hours or so, and it 
dissipates in all of those cells, completely leaves, except in 
cancer cells where it is retained. And then they subject the 
patient to a certain bright light. Now, this is certainly 
experimental. It is just hopeful that this is going to occur.
    And that light turns that substance poison and kills only, 
only the cancer cells in a person's body. In other words, it 
would be a fundamental cure for almost all types of cancer. And 
the hard cost would be $2,000 or $3,000 once it is done in the 
long run.
    That kind of innovation is a byproduct of a competitive 
system in America that has given us the most effective health 
care system, I believe, in the world. And today there has been 
a lot of discussion on national health care with very little on 
bankruptcy reform. And I am afraid that we are trying to make 
bankruptcy reform deal with a fundamental issue that is not 
really bankruptcy-related.
    And I think the challenge here, what we all want to do is 
to make health care and all of these innovations and all of 
these things that can give people the qualify of life that we 
so desperately want to give to all of God's children available 
and accessible in as cost-effective way as possible. And if one 
just glances at history in the background a little bit, the 
highway of history is littered with the wreckages of Nations 
who thought that they could manage productivity and innovation, 
the governments that thought that they could do that better 
than the market and the private sector and the free enterprise 
    And I hope that we don't make this problem far worse by 
nationalizing health care. I can't think of a worse thing that 
we could do to patients that are in a crisis situation than 
taking away the innovation that has the potential someday to 
deal with all these things.
    Much of the advantages that we have today are because our 
free enterprise mechanism has given us such innovations. And I 
think that nationalized health care would be the ultimate 
destruction of innovation in America in terms of health care 
innovations. And without those innovations, with the growing 
health care crisis and the growing issues that are related to 
it, it occurs to me that it is going to be hard to meet that 
circumstance in any frame unless we come up with some major 
innovations, especially with the top five killers.
    And those are, you know, like cancer and heart disease and 
diabetes and such. I think we need major innovations in those 
areas or we are going to have a very difficult time as an 
American family and certainly as even a human family in dealing 
with these in the long run.
    With that said, it kind of gives you the direction I am 
going in. I just think that nationalized health care is a 
terrible way to handle this issue. I think it will make the--if 
you think health care is expensive now, wait until it is free.
    With that, Professor--I am going to have a hard time--
Zywicki, could you give me some idea of your own opinion that 
what negative or perverse economic consequences for health care 
in bankruptcy systems are of trying to solve a medical debt 
bankruptcy crisis through the institution of national health 
care? Do you think national health care is the way to solve a 
bankruptcy issue?
    Mr. Zywicki. Congressman, I share your concern and all 
those here about the percentage, you know, the people who are 
hurt, who are unable to pay their substantial health care bills 
today. I can't imagine how you could hook those two up.
    It just seems to me that for precisely the reasons that you 
describe what we are talking about here are a relatively small 
number of people who have very serious problems. The bankruptcy 
system today deals with those situations quite adequately, not 
perfectly. But no system is perfect.
    I think that to try to solve that particular problem 
through the bankruptcy system would not only interfere with the 
smooth functioning of the bankruptcy system, but, as you just 
suggested, might have very serious unintended consequences for 
health care affordability and availability as well.
    Mr. Franks. Mr. Chairman, my time is expired. Might I just 
add the comment that I am afraid that national health care 
would have the compassion of the IRS, the efficiency of the 
post office before we increased its competition, and the cost 
of the Pentagon.
    So thank you very much.
    Chairman Conyers. Thank you.
    Would the gentleman allow me to grant him an additional 
couple of minutes so that Dr. David Himmelstein can comment on 
one his comments?
    Mr. Franks. Certainly. I am sure he has a perspective.
    Mr. Himmelstein. Well, the issue of medical innovation and 
the national health insurance system is one particularly close 
to my heart. My father was the surgeon on the team that 
developed cardiac catheterization that won the Nobel Prize for 
that innovation in 1956. It was a team funded by the National 
Institutes of Health.
    And virtually every major medical advance of the last 50 
years has been, in fact, funded by the National Institutes of 
Health. And we are now facing a crisis in medical innovation in 
our country with the drug companies having adopted a 
commercialized drug development process, which is now yielding 
a distressing paucity of innovation in that field. We are told, 
in fact, there is even a commercial crisis of the drug industry 
because they are not developing important new drugs at a 
reasonable rate for their investors and concern that drug 
stocks may be falling because of it.
    So we, in fact, have very substantial evidence that 
innovation in medical science the public sector is an 
extraordinary leader. And we also have that from real world 
experience. I mean, insulin is, of course, a development from 
Canada. The C.T. scanner comes from the United Kingdom, the 
angioplasty, which is the product of a German physician, all of 
those places with national health insurance.
    And while we have a superb cadre of scientists in this 
country--and I certainly would defend my colleagues medical and 
scientific excellence--the process that we now have in place is 
clearly beginning to stunt the development of medical science, 
not further it.
    And in terms of cost, it is very clear that our privatized 
health care system is by far the most costly and least 
efficient in the world. We spend nearly twice per person what 
Canada does, and a good deal of that excess spending is on the 
bureaucracy needed to keep our private health insurance in 
    Just to give you one example, more people work for Blue 
Cross Blue Shield in my home State that insures 2.5 million 
people than work for the entire Canadian national health 
insurance system that insures 30 million people.
    So with due respect, Mr. Franks, I do think that we would 
be both furthering innovation and efficiency in moving to 
national health insurance. And I would respond to your concerns 
about the IRS and the post office, that if we had a post office 
that was like our health insurance company, they would be 
saying to us things like we are not going to deliver you the 
mail. You are too far from the post office or get too many 
    Mr. Franks. They do that in my district sometimes.
    Mr. Chairman, the only thing I could add to that, in all 
sincerity to the gentleman, I appreciate his comments. But I do 
think that the case is very strong that those areas and those 
nations who have at least a modicum of enterprise and free 
market system clearly outpace those in innovation that do not. 
Otherwise, I just don't think Canadians would come here for 
heart operations. They would stay there.
    Chairman Conyers. Well, I can tell you, sir, that I met 
Americans in Canada when I was holding hearings who were told 
by their doctors to go to Canada because there was no way that 
they could be accommodated under our health care system.
    Mr. Himmelstein. Indeed, a few years back a Member of 
Congress went to Canada for his medical care because the 
leading specialist in that unusual lung disease were, in fact, 
in Toronto. And when Paul Tsongas was running for president 
some years ago, he expressed his concern that he wouldn't have 
gotten the bone marrow transplant that he believed lengthened 
his life, which was a surprise to the doctors in Toronto who 
developed that procedure and who do it in larger numbers per 
capita than we do in Boston.
    Chairman Conyers. The distinguished gentleman from Georgia, 
Hank Johnson?
    Mr. Johnson. Thank you, Mr. Chairman.
    The Bankruptcy Abuse Prevention and Consumer Protection Act 
of 2005 was indeed a misnomer. It probably should have been 
named the Creditor Relief Act of 2005.
    And I say that because it made it more difficult for 
consumers to obtain bankruptcy relief, either Chapter 7 or 
Chapter 13. And it acted to protect the creditors who many 
times were credit card issuers. And those were the primary 
lobbyists seeking a change in the bankruptcy laws at the time.
    There were not consumers down here in hoards saying that we 
need consumer protection and abuse protection under the 
Bankruptcy Act. It was the creditor, i.e., the credit card 
issuing companies.
    And with that in mind, Mr. Zywicki, I would like to find 
out whether or not you know that in the schedules that people 
file for bankruptcy relief that the Chairman displayed the 
voluminous copy of that lists so many details of the person's 
life--but one of the things that is listed is the creditors, 
information about creditors. And so, you list the types of 
creditors. It could be a second mortgage on the home. Or it 
could be voluminous or an outrageous amount for credit cards.
    When you did your study in determining that medical debt 
was not really a major causal factor in bankruptcy filings, did 
you take into consideration that sometimes people borrowed 
money on their houses and on credit cards and paid the medical 
debts with those and then declared bankruptcy on the debt that 
was owed on the credit card or on the second mortgage?
    Mr. Zywicki. Thank you, Congressman. That is a very good 
question that goes to the difficulties of trying to untangle 
what exactly the medical bankruptcy----
    Mr. Johnson. Now, when you start dancing on me instead of 
answering the question it makes me think that perhaps the 
answer is no.
    Mr. Zywicki. Well, the reason why it is difficult is 
because different variables cut different ways. So, for 
instance, you are exactly right. Some of the debt that people 
incur with respect to medical expenses are for credit cards, or 
home equity loans, that sort of thing.
    On the other hand----
    Mr. Johnson. Well, there was no way of in your study of 
differentiating between what portion of the credit card debt 
and second mortgage----
    Mr. Zywicki. That is correct. What I have been trying to 
say is----
    Mr. Johnson. It is either medical or----
    Mr. Zywicki [continuing]. A summary of other people's 
studies. I have not done an independent study. I have looked at 
the United States trustee study, which I commend is a very good 
study. I have looked at other studies that have been done 
through the years. All of them note this particular problem.
    On the other hand, you have got other difficulties. So, for 
instance, medical debt is typically unsecured debt, which is 
dischargeable in bankruptcies. So what we also know--and if you 
talk to any lawyers, what you know is that in the period 
preceding bankruptcy, people will pay down non-dischargeable 
debt or secured debt like their mortgage and choose not to pay 
debt that is dischargeable in bankruptcies.
    So that is----
    Mr. Johnson. But you have caught them both ways on----
    Mr. Zywicki [continuing]. Cuts both ways.
    Mr. Johnson [continuing]. The bankruptcy, though. Chapter 7 
made it more difficult for the straight discharge. And Chapter 
13 made it more expensive, you have got more paperwork to fill 
out. The filing fees are higher, just a more onerous burden on 
people to file Chapter 13s as well, so hitting them both ways.
    And is there any way that you can point to a cost reduction 
for the creditors because of the burdens, the increased burdens 
that were put on the consumers in filing Chapter 7 and Chapter 
13? In other words, has it saved or made money for the 
    Mr. Zywicki. Sure. What we know----
    Mr. Johnson. Is that yes or a no?
    Mr. Zywicki. Empirical studies support exactly what 
economic theory suggests.
    Mr. Johnson. Well, is that yes or no?
    Mr. Zywicki. Which is that the more risky lending is, the 
more--all consumers have to pay for credit.
    Mr. Johnson. So is your answer that the creditors have made 
off like bandits while the consumers have been left with the 
surgical robe that Dr. Himmelstein pointed to and the Vaseline 
on the table next door? I mean, that is--I mean, your backside 
is definitely showing, I think, throughout all of this.
    Mr. Zywicki. I have not seen any evidence that indicates 
that at this time.
    Mr. Johnson. That indicates the use of Vaseline. Thank you.
    Chairman Conyers. The Committee will stand in recess until 
we have disposed of the votes that summon us to the floor.
    Chairman Conyers. Will the witnesses take their seats so 
that we can conclude this hearing?
    The Chair sees no other Members present in the chambers. 
And he would like--wait a minute. We do have Jim Jordan of 
Florida, who said he would be back. And he is back. And he will 
be our final witness interrogating--distinguished Member of the 
Judiciary Committee is recognized.
    Ohio--I stand corrected.
    Mr. Jordan. That is right.
    And let me just ask a question. Let me get your response, 
too. Does the United States of America have the best health 
care in the world, not health care financing, but health care?
    We will start at this end and maybe just--I am just kind of 
curious. And I apologize. I was not here for your testimony. I 
apologize--the meeting. But go ahead and respond.
    And we can start with the professor.
    Mr. Zywicki. It seems that way to me.
    Ms. Smith. I do not know the answer to that 100 percent. I 
know that I received some fine care when I went to Cuba with 
Michael Moore's staff. I know that I have received some 
wonderful care here, as has my husband received some wonderful 
care here in the United States. But because I am just an 
average American, I haven't traveled everywhere to compare 
every system.
    Mr. Jordan. Well, I understand. But as an average 
American--I mean, frankly, we politicians should listen to 
average Americans a little more often, I think, than other 
    Ms. Smith. I would agree.
    Mr. Jordan. But just if you just had to like just hazard a 
    Ms. Smith. I would say--I have chatted with Senator Tom 
Daschle about this not long ago. And he said he would describe 
our system as islands of excellence in a sea of mediocrity.
    And I think that I have been--I think that my husband has 
been blessed, I will say that, in seeing some of those islands 
of excellence in his care, or he would not be alive today. So I 
believe we have some outstanding doctors and facilities and 
care providers in this Nation.
    Do we have the best in the world? I think we could. I think 
we have a great start on that. But I think we have some trouble 
with infant mortality rates and some other things that we 
really need to work on.
    Mr. Jordan. Professor Warren?
    Ms. Warren. I would say it is excellent for those who 
receive it. But it is certainly not excellent for those who are 
closed out of the system.
    Mr. Jordan. Let me just ask a quick follow-up then of you.
    Ms. Warren. Sure.
    Mr. Jordan. Who is closed out of the system?
    Ms. Warren. Well----
    Mr. Jordan. I mean--and I don't mean that to sound, you 
    Ms. Warren. No.
    Mr. Jordan [continuing]. Trite or anything. I am just--you 
know, because I don't know of anyone who ultimately is denied 
care. It could be a hassle. And we have heard the compelling 
story from the lady beside you.
    But who ultimately is denied care in the----
    Ms. Warren. Well, it is basically two groups that are 
denied care. It is those who have no health insurance and 
cannot pay and actually are denied care. It is also those who 
are so deeply ashamed that they cannot pay for their health 
care who are in debt and who won't go back to the doctors.
    Mr. Jordan. Okay.
    Ms. Warren. And I should add remember the details of Ms. 
Smith's story. Part of it was that her husband could not 
receive follow-up care because although the Mayo Clinic--we can 
name one of the finest health care institutions in this 
country--said we will give the care, we have forgiven the debt. 
But if you ever plan to come back and get any follow-up, come 
with--was it $6,000 cash--in your pocket.
    Mr. Jordan. Okay.
    Ms. Smith. They told us whatever our portion would be we 
needed to bring cash first.
    Ms. Warren. I call that denial of health care.
    Mr. Jordan. Let me move to the next--next to you.
    Go ahead.
    Mr. Rukavina. I live in Boston. And we have some of the 
finest medical institutions in the world. I am happy to live 
there. And I agree with Professor Warren. I think there is 
uneven access to care in the United States.
    Mr. Jordan. Okay.
    Mr. Rukavina. And we have done studies. Others have done 
    Mr. Jordan. Okay.
    Mr. Rukavina. Individuals with medical debt, a significant 
number of them have been asked to pay before they are able to 
schedule a follow-up visit with a provider.
    Mr. Jordan. Doctor?
    Mr. Himmelstein. It is a topic that has concerned me for 
many years from the time that I was an intern and did the first 
study of so-called patient dumping in this country in 1981 and 
found that about 300,000 Americans are denied care in emergency 
rooms in hospitals each year because they can't pay for it, 
clearly, sub-standard care. We also have a substantial 
population that financial incentives in our system--excuse me--
give doctors and hospitals incentives for excessive and often 
even assaultive care so we know that something like 70 percent 
of the stints put in in this country do our patients no good 
and may actually harm them.
    The systematic answer I would give you is my colleagues and 
I published this spring a study looking at every study ever 
published comparing quality of care in U.S. and in Canada. And 
what we did was we searched the world's literature, queried not 
only computer databases, but colleagues to come up with every 
study ever published. We then had a librarian go through and 
blackout the results of each study so that we could not tell 
which had favored U.S. or Canada before deciding whether the 
study should be included in our systematic analysis.
    We then summarized all of the evidence. And the best 
evidence comparing insured Americans with the average Canadian 
is the death rates are about 5 percent lower. Mortality rates 
are about 5 percent lower in Canada than in the U.S. for 
patients with comparable illnesses treated in Canadian as 
compared to U.S. care.
    Statistically that is not a significant difference, we 
thought. So we said indistinguishable though the trend favors 
Canada. And I think that that probably comes from what was 
referred to as islands of excellence in a sea of mediocrity in 
the U.S. But I hasten to add that virtually all of those 
studies in the U.S. situation were of insured patients and 
excluded those who were receiving the most sub-standard care.
    So I would say the fairest answer to your question is if 
you are insured in the U.S., you get care about comparable to 
that of the average Canadian. If you are uninsured, the quality 
of your care is substantially worse in the U.S.
    Mr. Jordan. Mr. Chairman, it took a little longer to get 
through that with six panelists than I anticipated. But I see 
my time is expired.
    Chairman Conyers. Thank you, Jim Jordan of Ohio.
    Mr. Jordan. Yes, there we go.
    Chairman Conyers. We appreciate it.
    Ladies and gentlemen, this has been very instructive. I 
would like to leave the panel--well, let me ask Professor 
Zywicki: What have you learned? What do you recommend? Where do 
we go from here, the Committee, if you wanted to give us some 
free advice?
    Mr. Zywicki. With respect to bankruptcy?
    Chairman Conyers. Yes.
    Mr. Zywicki. With respect to bankruptcy, as I said, the 
fundamental challenge is balancing the needs of innocent 
individual debtors with the needs of those doctors and 
hospitals that provide health care service. And they are 
innocent, too. And I believe that the current system balances 
those interests appropriately based on what we know today.
    BAPCPA has only been in effect for less than 2 years. It 
may be that future real data comes up that tells us that this 
is a serious problem. For the time being, though, it seems to 
me that it is a complicated balance, but it seems to me, it 
strikes the balance between those two innocent groups of people 
with respect to bankruptcy. So I don't see any need to change 
the bankruptcy system right now.
    Chairman Conyers. Thank you. And you do not feel that the 
21 different forms that I am putting into the record, which 
total into hundreds of questions of some detail, don't need 
some scrutiny and review and reduction?
    Mr. Zywicki. Well, Congressman, I think that we need to 
continue studying how BAPCPA is actually working. This body 
looked at BAPCPA for 7, 8 years before it went into effect. 
There was one clear lesson we learned from that, which is that 
we tried the honor system with respect to bankruptcy.
    We tried a system with few safeguards, few tools for 
studying fraud, looking for fraud and abuse and that sort of 
thing. And it turns out, human nature being what it is, that 
the honor system didn't work, just like it wouldn't work if we 
had a tax system without an IRS. We could say pay as much tax 
as you want, and we know that wouldn't work.
    We found that that was going on with bankruptcy. So we 
tried to--this body tried to put in safeguards, tried to put in 
mechanisms to increase the accountability and the protections 
against fraud and abuse. And I think that it is absolutely 
imperative that this body continue to look at whether or not we 
have struck the right balance, whether or not the system is 
working as intended to try to ferret out fraud and abuse while 
preserving the fresh start for those who need it.
    So far from what I can tell, the system seems to have 
struck the--BAPCPA seems to have struck the right balance. 
Although around the margins, obviously, with respect to things 
like credit counseling, for instance, we may want to look and 
see whether or not it has been a cost effective reform from a 
cost-benefit analysis.
    Chairman Conyers. Does your memory go back far enough to 
recall how long the credit card companies had campaigned for 
bankruptcy reform? I have been here several decades, so I 
remember. Do you?
    Mr. Zywicki. I don't. I didn't really pay that much 
attention to the lobbyists. I mean, I haven't received--my 
research is not sponsored by any consumer creditors.
    Chairman Conyers. I see.
    Mr. Zywicki. I haven't received a dime from any bankruptcy 
groups like bankruptcy judges or any of those sorts of people 
who think that--who want more bankruptcies. I am just, you 
know, an independent professor who thought that the bankruptcy 
system could use some reform. And so, I didn't really pay 
attention to----
    Chairman Conyers. But it didn't come to your attention as a 
professor or as a citizen?
    Mr. Zywicki. Sure, absolutely. Yes, Congressman. I mean, 
when I said there were----
    Chairman Conyers. I mean, you know what I know about how we 
got to the law.
    Mr. Zywicki. Absolutely. What I saw was there were a lot 
of--there were consumer creditors who wanted reform. There were 
a lot of bankruptcy lawyers and members of the bankruptcy 
industry who spent a lot of money and flying around here all 
the time trying to lobby against them.
    Chairman Conyers. Year after year.
    Mr. Zywicki. So----
    Chairman Conyers. Exactly. Okay. Now your memory is coming 
    Mr. Zywicki. Right. So special interests lobbying on both 
sides. And, you know, I don't know--the final result, according 
to at least the empirical studies I have seen suggested that 
congressmen and senators voted for or against bankruptcy reform 
based on whether or not they thought it was good or bad policy, 
not based on special interest influence.
    And that was my impression, that those who voted against it 
did so sincerely. Those who supported it in this House did so 
sincerely. And I see no reason to doubt that.
    Chairman Conyers. Mr. Jordan? I yield to the gentleman.
    Mr. Jordan. Thank you. If I could, Mr. Chairman. I 
appreciate you yielding.
    Just one question for Professor. You know, last week I met 
with a group of doctors in our district. And, you know, they 
would all agree with, I think, your assessment, which they 
believe we have the finest health care system in the world. And 
I know the panel was mixed on that.
    But they would agree with that. But they are very 
frustrated with the financing system. I mean, so much so that a 
few of them--the majority said no. But a few of them were 
saying single payer, government-run system can't be worse than 
dealing with the insurance companies like we are dealing with 
    I mean, I am very nervous about going in that direction. I 
think Congressman Franks when he talked about the government 
running and making decisions about health care--I think it is a 
scary thought. And I am certainly not for it.
    But I was somewhat surprised at the frustration from 
providers. I mean, great doctor, surgeon, everything. And I 
related to them it seems to me every single health care 
decision you have got so many players in the game: the doctor, 
the patient, the insurance company, the employer, the 
government, the pharmacist, the pharmacy benefit manager, and 
the band plays on.
    And the complication of the whole--and I know this is a 
longer thing. But just real quick, what is it, in a general 
thing? And I know this is off the bankruptcy topic. But I am 
searching for where we have to go to make it work better, the 
best system. And, you know, that is a huge question at the end 
of a Committee hearing, I understand. But it is what I wanted 
to try to get to. And I appreciate the----
    Chairman Conyers. But a very appropriate one, sir.
    Mr. Zywicki. I agree. I mean, I don't have any particular 
answers, other than that I can restate the question as a 
bankruptcy question, which is one that I am more familiar with. 
And this isn't directly on health care.
    But when I was working on the bankruptcy reform legislation 
and being involved in that process, at one meeting I sat down 
next to a fellow who ran a--a father and a son who ran a small, 
family-owned lumber store in Southern New Jersey. And I said, 
``I don't understand. Why are you here? Why do you want 
bankruptcy reform?"
    And he said, ``Well, listen, Professor, it is this simple. 
Two years ago, a Home Depot opened up in the next town over, 
and we are already having trouble making ends meet. So let me 
tell you, somebody comes in, and, you know, we give them a 
credit to borrow $1,000 to build a deck or something. The next 
thing you know, they file bankruptcy, and we don't see any of 
that money.''
    ``And let me tell you it is hard enough to make ends meet 
competing against a store like Home Depot to not have to deal 
with $1,000 or $5,000 or $10,000 or $20,000 or $30,000 of 
bankruptcy losses every year. And that is why we want 
bankruptcy reform.'' That is a small-business man.
    I suspect and, you know, my observation is that a lot of 
doctors, for instance, are fundamentally small-business people. 
And we have heard today that for one reason or another, a lot 
of medical bills are not paid either because they can't be paid 
or they aren't paid. And I can understand why a health care 
provider, for instance, may want to get rid of the complexity 
of trying to collect on bills, may want to get rid of the risk 
of not being able to collect on bills.
    You know, if somebody discharges $50,000 of bills, you 
know, that could be your bonuses for your salary. I mean, you 
could imagine sort of where that money goes.
    Chairman Conyers. Right, right.
    Mr. Zywicki. So one could imagine why health care providers 
may seek a more secure and a more systematic way of being paid. 
How to bring that about is not my area of expertise. I can just 
sort of identify that I understand the problem that he has in 
    Chairman Conyers. Could I just ask the witness, who is very 
articulate, do you believe health care is a human right?
    Mr. Zywicki. Congressman, I----
    Chairman Conyers. And you can say no if you really don't 
believe it.
    Mr. Zywicki. Well, I am trained as an economist.
    Chairman Conyers. Sure.
    Mr. Zywicki. And I am trained to look at the world through 
a lens of scarcity. And so----
    Chairman Conyers. Of dollars and cents, cost-benefit.
    Mr. Zywicki. That there are tradeoffs. And obviously, 
ideally I would like to have great health care for everyone. I 
would like to have great education for everyone. I would like 
to have the safest cars and the safest houses for everyone.
    Chairman Conyers. Right.
    Mr. Zywicki. Now, there is a lot----
    Chairman Conyers. There is a lot of things that you would 
    Mr. Zywicki [continuing]. Of things I would like.
    Chairman Conyers. But the 18,000 people that I have never 
heard disputed that die because they don't get health care--
what do we give them, a cost-benefit analysis? Or----
    Mr. Zywicki. Well, thank you for allowing me to clarify my 
    Chairman Conyers. Sure.
    Mr. Zywicki. I mean, obviously the tradeoff--I am not an 
expert in this field, but just as somebody who has followed it 
loosely as a citizen, the tradeoff seems clear, which is to say 
that trying to increase access to everybody, it has been 
argued, leads to rationing, leads to wait lists for people 
having to wait to see a doctor and that sort of thing.
    I personally don't have the expertise to say how we should 
trade off questions like choice, whether somebody should be 
able to choose their doctor rather than be assigned a doctor, 
how long somebody should have to wait to see a doctor for 
different types of----
    Chairman Conyers. So you assume a universal health care 
proposal would assign doctors? It would take the private right? 
And that is one of the things I wanted to get in the record, 
that universal health care, as is proposed in the Congress, is 
not government-run. It is privately run, but government 
financed, which it is a great deal right now. It is just that 
the systems are not working very well.
    Mr. Zywicki. Congressman, I present some data in my 
testimony which is very surprising to me, which is, for 
instance, the observation that the decline in insured rates 
seems to be primarily among immigrants. Over the past 13 or 15 
years, the insurance rate for natural born Americans has 
actually risen.
    Now, why do I say that now? Well, mainly just because this 
is obviously, as every congressman who has spoken today has 
observed, this is a very, very complicated, complex question of 
how to deliver to people the right combination of choice, 
quality, cost, and that sort of thing. Obviously, there are a 
lot of other big social issues wrapped up in there, which may 
be issues of immigration, for instance.
    What the best way to bring that about I will leave to other 
people to try to decide.
    Chairman Conyers. Thank you so much.
    Mr. Clifford White, do you have any parting comment?
    Mr. White. Well, the only observation I would make, Mr. 
Chairman, is that there is no information or data that we have 
identified that would show that the bankruptcy reform law has 
had an adverse impact on those who have filed bankruptcy 
because of high medical debt. So just a couple of factual 
observations that some of which were in the testimony.
    The major change in the bankruptcy law and the consumer law 
that would potentially affect such filers would be the means 
test. More than 90 percent of filers are not affected largely 
by the means test. And of the stack of forms that you pointed 
to, the large stack of forms, almost all of those forms were 
required pre-BAPCPA, one major exception being the means test 
form, which more than 90 percent of the filers just fill out 
the income portion, the first 15 lines.
    So in our observation, the means test is not having an 
adverse impact. And we understand both in applying the formula 
to make sure it takes into account health care costs and also 
in exercising discretion where the form may not take into 
account job loss, for example, that we exercise discretion in 
taking into account special circumstances which the law allows 
us to do so that we do not in our enforcement activities take 
any steps that are unnecessarily adverse to debtors.
    That is a responsibility, a discretion we are given by the 
Congress. And we have been very energetically trying to carry 
that out.
    Chairman Conyers. Thank you so very much.
    Ms. Smith?
    Ms. Smith. One thing I wanted to--I wanted to thank you 
first of all, Congressman, for letting me speak as I don't 
think very many Americans get the opportunity to do what I did 
here today. And I deeply appreciate that.
    I do want to correct just one thing that you said. I don't 
think that the stigma of bankruptcy is gone at all. I think 
there is still a huge stigma to bankruptcy, certainly, for any 
of us who were raised with middle-class values, those of us who 
were raised to work hard and do the right thing and go to 
church and be good, faithful members of our communities.
    Bankruptcy is failure. Bankruptcy is horrible. And anything 
that makes that more difficult is hard to imagine that we 
wouldn't want to remove medical debt from that process.
    And the other thing I hope I can say to all of you because 
I appreciate an economist's point of view, I appreciate a 
trustee's point of view and all the other people. But I know 
that if we had to go strictly by the numbers, way back when 
when we formed this Nation, we never would have fought the War 
of Independence.
    We never would have fought to be in this room today if we 
went strictly by the numbers and said this is the way it should 
play out. But we didn't do that because we believed there could 
be a better way to run government. And I am still going to 
implore all of you to please listen to the people who elected 
you and make this a better system for us. Thank you.
    Chairman Conyers. Thank you very much.
    Professor Warren?
    Ms. Warren. I will just be very brief and say that I agree 
that the old system didn't work before the 2005 amendment, not 
because there was evidence of fraud and abuse. There was never 
evidence of fraud and abuse. These were stories, frankly, that 
people just kept repeating.
    But the only hard data we had was that there was not 
substantial fraud and abuse in this system. The reason it 
didn't work, bankruptcy never was a good substitute for having 
health care insurance that really worked. It is a poor 
    The reason we see families in bankruptcy in the aftermath 
of health care problems is because there is no place else for 
them to go. They didn't turn to bankruptcy because they said, 
``Man, lucky me, I have got $25,000 in medical debt and so this 
must be my lucky day. I can file for bankruptcy.'' It is that 
they scramble and look.
    It is not option two or option 10. It is option 500 on the 
list of selling your goods and having garage sales and put 
second mortgages against your house and put a second lien 
against your car and every other thing you can do to try to 
scratch to make it to the next pay day without having to go see 
a lawyer and declare bankruptcy. So we had a system that was 
broken. Yes, sir, we did. And, frankly, Congress just broke it 
    They drove up the costs of filing for bankruptcy. They 
didn't separate out and say we are going to drive up the costs 
just for families that abuse it. We are going to drive up the 
costs for everybody. And they made access-tougher, tougher for 
everyone. We used the 8-year example as just one of those.
    So if you ask the question around health care and 
bankruptcy, I have to say you took a bad system and you made it 
worse. But I will say one more thing about why it is relevant 
for this Committee. You are the voice of families like Ms. 
Smith's, families who have been forced into this bankruptcy 
system. You are the voice for the rest of the Congress.
    If you will not tell the story of the bankruptcy families 
to the rest of Congress, then their story is lost. It stops 
here, and it stops today.
    So if you ask for those last two pieces of advice, as you 
did, one is please don't make this bankruptcy system even 
worse. Please consider making it better. But secondly, please 
take these stories into the larger debate about what we are 
going to do with health care in the United States.
    Chairman Conyers. Do you think reviewing the sub-prime 
consideration in the bill or the means tests would be good 
starting places?
    Ms. Warren. Congressman, I think there are so many good 
starting places in that bill it is almost hard for me to 
answer. I think those would be fine points of entry, sir.
    Chairman Conyers. Director Rukavina?
    Mr. Rukavina. Chairman Conyers and distinguished Members of 
the Committee, I would like to thank you for the opportunity to 
speak before you today. I am not an expert on personal 
bankruptcy. I have far too much experience working directly 
with individuals who have medical debt, however. And I know 
what happens with those individuals.
    That debt is contagious. It is passed on to other family 
members. That debt is converted to other forms of debt. People 
take medical debt, medical bills, put it on credit cards. They 
take out loans. They do take out second mortgages.
    As a result of having medical debt, liens are put on 
accounts that they have on homes. Wages are garnished. All of 
these are things that are terrifying for someone who is trying 
to get access to health care.
    I don't know that I have much to suggest in terms of the 
bankruptcy law and what should be done. It doesn't seem, from 
my anecdotal information and the research I have read, that 
much has improved for people with medical debt since the 
    However, I am wondering if there is some information that 
can be mined. One of the previous speakers mentioned credit 
counseling. We worked with a credit counseling service looking 
at reasons for people seeking those services. And when we did a 
survey several years ago, the counselors themselves were 
surprised to learn that two out of every five people seeking 
their services were there because of a medical incident.
    And I am wondering if this Committee can mine the 
information that exists in the credit counseling services. 
These are services that is the new requirement under the 
Bankruptcy Reform Act. And I am wondering if it is possible to 
look to see whether there is information there that might 
inform future decisions that this Committee will be making.
    Chairman Conyers. Thank you so much.
    Dr. David Himmelstein?
    Mr. Himmelstein. I am no expert in bankruptcy and cannot 
advise the Committee on the bankruptcy laws at a general level. 
On medical bankruptcy we are in the process of going into the 
field for a second round of our study and seeing what the 
recent changes have wrought in the population. But we don't yet 
have those results. So what whereof one does not know, thereof 
one should not speak. And I will not speak further of that.
    But what I will address briefly is a health care system 
which has cost without benefit at this point so that when we 
say we weigh the costs and the benefits, the business structure 
of our health care system is a cost without a benefit. Where we 
take wonderful colleagues of mine like Jack Rowe, who is a 
superb geriatrician making $250,000 a year at Harvard and 
instead we say go to AETNA and there, Dr. Rowe, you can make 
$250,000 a day each day, including weekends and holidays if you 
turn from being a doctor to being a businessman.
    Chairman Conyers. How is that done?
    Mr. Himmelstein. Jack Rowe was the CEO of AETNA after 
leaving Harvard where he was chief of geriatrics. And as CEO of 
AETNA, his payment amounted to $250,000 each day. That was 
money drained from our health care system.
    We have a debt collection system and a billing system which 
drains enormous resources from our health care system and which 
turns doctors into businesspeople. And I guess what I would ask 
of this Committee and of the Congress is to return us to the 
calling of our profession and allow us to take care of patients 
and not worry about the enormous profits to be made off the 
health care system and not to be burdened by paperwork.
    When the honorable gentleman from Ohio spoke of the 
physicians whom he met with in his district and his surprise at 
seeing the relative support there. It is not just that they 
were small-business men who were struggling. We have actually 
surveyed colleagues on this.
    Most doctors are prepared to give up income, give up income 
if we relieve them of the paperwork burden. More than half of 
doctors in this country say they would give up 10 percent of 
their gross income if we would relieve them of the paperwork 
burden that our insurance system inflicts on them.
    So what the Congress can do is stop us from being 
businesspeople. And, in fact, most of us would be perfectly 
happy to make a little less if we could just take care of our 
patients. We make good livings. But let us take care of our 
patients, and let us not be part of inflicting further 
suffering on our patients, which all too often we do today.
    So I guess the poet laureate of Kentucky said years ago 
that rats and roaches live under the laws of the jungle and 
supply and demand and it is the privilege of human beings to 
live according to the laws of justice and mercy. And that is 
what most of us went into medicine hoping to be part of. And 
help us to return to that. Thank you.
    Chairman Conyers. Thank you so much.
    Chris Cannon, the last word?
    Mr. Cannon. Thank you, Mr. Chairman. I actually have some 
questions. Do I have enough time to ask?
    Chairman Conyers. Yes, of course.
    Mr. Cannon. You know, this is a fascinating hearing. It 
goes beyond bankruptcy. I appreciate some of the comments that 
may be helpful as we look at bankruptcy again.
    But as we look as a country at what we do with our health 
care system, it seems to me that you guys, at least a couple of 
you, are peculiarly postured to help us understand a couple of 
things that I am thinking, particularly Ms. Smith because you 
have been through some of these things.
    And, Dr. Himmelstein, I think you are the only medical 
doctor on the panel. Right?
    And this is our last panel. So thank you.
    And tap me or something if I bore you. But----
    Chairman Conyers. You are never boring. I don't always 
agree with you, but we certainly listen carefully to each 
    Mr. Cannon. Thank you. And with some facts on the table, I 
think there are some places we can go.
    Chairman Conyers. Absolutely.
    Mr. Cannon. In the first place, though, the world has 
radically changed about medicine.
    I would like, Dr. Himmelstein, for you to respond to a 
couple of things. In the first place, the current X prize. The 
last X prize was for Burt Rutan who won the prize by going into 
sub-orbital space twice. And the X stands for 10 as in $10 
    The next X prize is for the company that can decode an 
individual's DNA for $1,000. Are you familiar with that? And we 
are actually getting close. We are not there. I mean, it is a 
long way. But we are a lot closer to $1,000 than we were from 
the amount of money we started at when we did the original 
decoding of the DNA.
    That seems to me to be profound for how we look at the 
future of health care. Is that not the case, do you think? In 
other words, the fact that we can get your DNA--suppose we 
could do it for $1,000 today. You could have your DNA decoded. 
I could have mine decoded.
    If we both have a problem, we treat the problem with the 
same medicine. You get better. I get worse. We look at our DNA 
to find out what the difference may be.
    Mr. Himmelstein. Yes, we are a ways from doing that and 
from the practical implications that one would dream about from 
that. But at some point that will clearly have a profound 
impact on our health care system.
    Mr. Cannon. But we are down to the point where, you know, 
if you take the HapMap that was recently completed--and the 
University of Utah played a big part of that--that, at least a 
HapMap can be done for less than $30,000, I think, now for an 
individual. So----
    Mr. Himmelstein. Right. And what it is doing essentially is 
breeding very important research leads. And we are still quite 
a ways from being able to take advantage of results from those 
research leads.
    Mr. Cannon. Let us pursue that, what it means to be quite a 
ways away. And, you know, we now have these computers that have 
massive multiple processors that do trillions and trillions of 
transactions a second.
    When you combine DNA with lifestyle choices and personal 
information and start looking at the effects of different 
protocols, that is a complex system of statistics rather than a 
double blind study, doesn't that have a tendency to open up 
radical new ways to look at results and back from that, into 
    Mr. Himmelstein. We hope so. We don't have proof of that, 
certainly, at this point. And we are, I would suspect, quite a 
ways from that.
    On the other hand, we have enormous untapped known 
potential for improving health. So we know----
    Mr. Cannon. I am going to get to that point as well. But I 
just want to create kind of--I don't know why you are--it is 
going to take the time it takes. But what we have today is a 
relative cheap process of decoding DNA, which allows us to do 
radically more than we could do 2 years ago.
    Mr. Himmelstein. Absolutely.
    Mr. Cannon. And we have computers which are radically more 
powerful than they were 2 or 3 years ago.
    Mr. Himmelstein. Absolutely. But I would tell you when I 
was a resident in 1978 I wrote a paper about how computers were 
going to revolutionize medicine in the next 5 years.
    Mr. Cannon. But they did to some degree. Now, the 
profession didn't adopt them in the ways that I think you were 
talking about a moment ago that would help us implement----
    Mr. Himmelstein. I would invite you to most clinics around 
this country--and what was said by the Committees in 1978 about 
what computers were going to do are still being said by the 
Committees today. And the timeframe they are predicting is the 
same 5 years from now.
    Mr. Cannon. But it is a dramatically different--it is a 
different environment, you would grant that, would you not?
    Mr. Himmelstein. Absolutely.
    Mr. Cannon. That is important as we look at what our policy 
is going to be because I personally believe, after having 
consulted with some of the really brilliant people in America 
on this issue, that we could increase our understanding of 
disease and causation 50-fold with the money we are investing 
right now just based upon changing a few things.
    Let me get to what I think is a final point because there 
is a lot we could talk about here. But are you familiar with--I 
think you smiled earlier when I mentioned Brent James' name at 
IHC. Are you familiar with Brent?
    Mr. Himmelstein. Yes.
    Mr. Cannon. He is----
    Mr. Himmelstein. We are speaking at a conference together 
in August.
    Mr. Cannon. Interesting. He is one of the more interesting 
people I have met because he points out that a doctor can only 
understand seven or eight or nine variables at any given time. 
And so, you may get radically different instructions from a 
doctor from morning to night in caring for the same patient 
with little change in the condition.
    And so, he has come up with a system in the case of--well, 
various systems--but in the case of diabetics, he has taken the 
average diabetic that is being served and by taking a complex 
system and tracking complex data, he has been able to reduce 
the average blood sugar with the AC1 or whatever you call it, 
whatever that test is.
    Mr. Himmelstein. A1C.
    Mr. Cannon. A1C, right--from nine to under seven. And if 
you are under seven, you don't have the complications with 
diseases with feet. And this really gets back to the problem 
that your husband had, was a botched job or the intuitive nurse 
that gets you the right kind of treatment. And there is a great 
deal of intuition which can be helpful or fail in the system.
    And what Dr. James is doing is helping create an 
environment where we use systems to control the variables so 
that we can enhance the likelihood of having good outcomes. 
That seems to me to have a terrific potential for how we--and 
this, I think, was the point you were making about how there 
are a lot of things we can do now. Do you want to elaborate on 
those kinds of things we can do today that allow us to improve 
health care?
    Mr. Himmelstein. Well, I mean, at many levels I think from 
quality improvement efforts in hospitals and out-patient 
practices around the country, which Don Berwick and Brent James 
and others have really been leaders and I am follower of theirs 
in this field. We could probably save tens of thousands of 
lives each year by upgrading quality.
    I think it is also clear that a more consistent and 
rational funding system would give us a better base for doing 
that quality improvement work. And that is why Don Berwick, who 
was actually knighted by the queen for his work on this and is 
generally recognized as the quality improvement leader, is one 
of the supporters of single payer national health insurance in 
this country.
    But clearly, there is that kind of improvement we could 
make. There is also improvement in prevention that we could 
clearly make. And I would say this is not just individual 
    It is not that tens of millions of Americans have decided 
all of a sudden to start making irrational decisions about 
eating hamburgers and smoking cigarettes and killing 
themselves. It is that we have developed a toxic food 
environment and a toxic non-exercise environment in our 
    And we need to reverse those with some of the things the 
Chairman talked about at the outset, really changing the water 
in which we swim to change tens of millions of Americans. It is 
not just that I like hamburgers that is the problem.
    Mr. Cannon. Right.
    Mr. Himmelstein. It is that hamburgers are available 
cheaply at every street corner and delicious fruits and 
vegetables are not in many communities and that we have 
    Mr. Cannon. In any community, with all due respect. In this 
community you can't get--you can get an apple, one of those 
green ones that don't taste very good down in the cafeteria.
    Mr. Himmelstein. I mean, I think we absolutely know there 
are many things we can do in our society to improve health and 
ranging from public health activities to more consistent 
application of science and system science and delivery of care, 
and many of them facilitated by national health insurance as 
    Chairman Conyers. But could I merely interject that--and 
turn it back to you, Chris Cannon, that we have been joined by 
Hilda Solis, the gentlelady from California, who is a supporter 
of a universal health concept. But more immediately, she is 
bringing a group of Members of Congress plus people who work in 
the field to San Diego, California this weekend. And I think it 
was out of that interest of the distinguished panel of 
witnesses that she came by. And we are so happy to have her 
    I yield back.
    Mr. Cannon. Thank you.
    In talking about prevention, we were talking earlier about 
the difficulty in predicting the timeframe for the benefits 
from massive computers and DNA. But if we just made more 
information available to individuals in a way that they could 
rely on it--is that not one way that we could actually enhance 
people's ability to do prevention on their own?
    Mr. Himmelstein. It is an attractive hypothesis as yet 
unproven. I mean, we just had a paper published this past week 
looking at the quality of care in practices using electronic 
health records versus those not using electronic health 
records. And we all thought that that was going to show a 
markedly positive benefit and, in fact, showed no benefit 
whatsoever. So I would say it is as yet an unproven but 
attractive hypothesis.
    Mr. Cannon. My point doesn't go to electronic health 
records so much as an individual having access to information 
to understand what is good for him so he could make better 
    Mr. Himmelstein. Right. We would certainly like to think 
that is true.
    Mr. Cannon. And to the degree that he can have personalized 
understanding of what would help him or her, you would expect--
    Mr. Himmelstein. But if you can't buy fruits and 
vegetables, you still can't eat them.
    Mr. Cannon. That is exactly right. But if people understand 
what that will do to their health, it will increase. The market 
will respond to that.
    Mr. Himmelstein. I hope so.
    Mr. Cannon. I am not sure the congressional market will 
respond to that, or at least not at the cutting edge.
    But let me just touch on one other topic, if the Chair will 
indulge me. Today the FDA bases its review of drugs on toxicity 
and efficacy. You have to understand toxicity is a very complex 
subject. And I don't want to move into that very much. But 
efficacy is how it works. And couldn't the market decide that?
    In other words, one of the things that I think should free 
up doctors--and I have talked to many about this--is if they 
had the--and doctors do have the ability to prescribe any drug 
that they want for any problem. Their problem is that if 
somebody gets cured on what is not a standard protocol and 
others come to him, he could end up being called a quack. Or on 
the other hand, you could end up with a prosecution like 
happened with Merck here 6 or 8 months ago where they pled 
guilty to promoting an off-label use.
    Couldn't we do something with efficacy in the FDA? Say a 
doctor comes up with a protocol and says to the FDA, ``I would 
like to do this. I would like other people to do it as well. 
Would you call it not dangerous so we could proceed with that 
    And then doctors would be encouraged to do different 
protocols. They preempt being called quacks, on the one hand. 
On the other hand, if things worked and doctors now used their 
genius to figure out what might work, or drug companies or 
others, you end up with information about drugs that is not 
available currently, given the protocol or the process that we 
use at the FDA. Does that make sense to you, Dr. Himmelstein?
    Mr. Himmelstein. Well, if we add information of high 
quality, then it makes sense. I fear that much of the 
information that we are actually adding in the drug review 
process at this point is of such low quality as to be virtually 
useless, other than its propaganda for the drugs.
    Mr. Cannon. Right. Exactly, which, by the way--I mean, the 
difficulty with what is useful information really then devolves 
to the physician who has got the training to make decisions and 
to advise and counsel his patients, which is something I would 
dearly love to see. That is physicians driven by an interest in 
the health of their patients instead of seeing their patients 
as money machines that they pull the lever on and pay.
    Mr. Himmelstein. Well, and we should recognize that at this 
point the vast majority of drug education in this country of 
physicians is carried out by the drug companies.
    Mr. Cannon. Right.
    Mr. Himmelstein. The drug companies' budget for mis-
educating physicians is larger than the teaching budgets of all 
the medical schools in the United States combined.
    Mr. Cannon. Yes.
    There are many, many more things to talk about, Mr. 
Chairman. I appreciate your indulgence. Let me say this is an 
issue of enormous importance to me. As I said earlier, 
virtually every family in America has had a tragedy. We 
certainly have had tragedies around my family. That is a 
personal issue. And I would love to see an environment where we 
shift from--I think, Dr. Himmelstein, you talked about this--
toxic environment of drugs.
    Perhaps that was you, Mr. Chairman--this toxic environment 
where all the incentives are distorted and the result is these 
kind of horrible tragedies that compound within a family, 
destroy a family.
    Well, you haven't been destroyed, with all due respect, Ms. 
Smith. I appreciate the fact that you are here. But much of 
your life, much of what you anticipated for your life to 
become--because of a series of issues, some of which may not 
have been controlled. But with all due respect, I am more 
optimistic than Dr. Himmelstein. And I have been around some of 
the downside of this for a very long time.
    I believe that if we are thoughtful in Congress we can 
create an environment where people can make healthier choices, 
where the market will respond to those choices by providing 
better services and where doctors can get away from a system--I 
will just tell you that in many cases, in my experience, you go 
to a doctor. He looks at you like a lever, a monkey in a cage, 
has the lever. He pulls the lever, a banana comes out.
    You walk into the doctor's office, the monkey pulls the 
lever, and he gets the payment. That is toxic. It is only a 
small portion of the whole system, but it is destructive to the 
doctor as much so as it is to the patients.
    So the most educated people in America, the people that 
spent the most time as a group on education, end up being 
monkeys pulling levers instead of people who help us be 
healthier. I think there is something profoundly wrong. The way 
we have done this historically or the way we have let the 
system evolve is profoundly wrong. And bankruptcy is a minor 
problem in this much larger problem.
    And so, I appreciate, Mr. Chairman, you having this hearing 
and going beyond, I think, the simple bankruptcy issues to 
those issues that are behind that. And with that, I yield back 
the balance of my time and thank the panel for your being here.
    Chairman Conyers. Thank you so much.
    We usually give 5 days for Members to get any questions to 
you and to get them back to us. And then we have 5 days for us 
to submit any additional materials into the record that we 
    This has been an extraordinarily long but meaningful, might 
even become historic because there is so much to study and 
examine. The witnesses have been tremendous.
    And we are delighted that so many of our Subcommittee 
Members and other Members were here to share this afternoon 
with us.
    With that, the Subcommittee on Commercial and 
Administrative Law hearing is concluded. Thank you so much.
    [Whereupon, at 4:44 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X


               Material Submitted for the Hearing Record

     Additional Information Submitted by Mark Rukavina, Director, 
                     The Access Project, Boston, MA



   Bankruptcy Forms Submitted by the Honorable John Conyers, Jr., a 
   Representative in Congress from the State of Michigan, Chairman, 
Committee on the Judiciary, and Member, Subcommittee on Commercial and 
                        Administrative Property



           Post-Hearing Questions Submitted to the Witnesses



        Answers to Post-Hearing Questions from Todd J. Zywicki, 
          George Mason University School of Law, Arlington, VA



    Answers to Post-Hearing Questions from Clifford J. White, III, 
   Director, Executive Office for U.S. Trustees, U.S. Department of 
                        Justice, Washington, DC



       Answers to Post-Hearing Questions from Elizabeth Warren, 
                   Harvard Law School, Cambridge, MA



         Answers to Post-Hearing Questions from Mark Rukavina, 
           Executive Director, The Access Project, Boston, MA



     Answers to Post-Hearing Questions from David U. Himmelstein, 
                 Harvard Medical School, Cambridge, MA