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



 
                           THE INSTABILITY OF

                       HEALTH COVERAGE IN AMERICA

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


                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 15, 2008

                               __________

                           Serial No. 110-78

                               __________

         Printed for the use of the Committee on Ways and Means



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                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM MCDERMOTT, Washington            DAVE CAMP, Michigan
JOHN LEWIS, Georgia                  JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts       SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York         PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee            JERRY WELLER, Illinois
XAVIER BECERRA, California           KENNY HULSHOF, Missouri
LLOYD DOGGETT, Texas                 RON LEWIS, Kentucky
EARL POMEROY, North Dakota           KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio          THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California            PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut          ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois               JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon              DEVIN NUNES, California
RON KIND, Wisconsin                  PAT TIBERI, Ohio
BILL PASCRELL, JR., New Jersey       JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama

             Janice Mays, Chief Counsel and Staff Director

                  Brett Loper, Minority Staff Director

                         SUBCOMMITTEE ON HEALTH

                FORTNEY PETE STARK, California, Chairman

LLOYD DOGGETT, Texas                 DAVE CAMP, Michigan
MIKE THOMPSON, California            SAM JOHNSON, Texas
RAHM EMANUEL, Illinois               JIM RAMSTAD, Minnesota
XAVIER BECERRA, California           PHIL ENGLISH, Pennsylvania
EARL POMEROY, North Dakota           KENNY HULSHOF, Missouri
STEPHANIE TUBBS JONES, Ohio
RON KIND, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
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                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 15, 2008, announcing the hearing...............     2

                               WITNESSES

Diane Rowland, Sc.D., Executive Vice President, Kaiser Family 
  Foundation.....................................................    29
John Z. Ayanian, MD, Professor of Medicine and Health Care 
  Policy, Harvard Medical School, Boston, Massachusetts..........    49
Michael O'Grady, Senior Fellow, National Opinion Research Center, 
  University of Chicago, Chicago, Illinois.......................    61
Stan Brock, Founder and Volunteer Director of Operations, Remote 
  Area Medical, Knoxville, Tennessee.............................    79
Stephen Finan, Associate Director of Policy, American Cancer 
  Society........................................................    81

                       SUBMISSIONS FOR THE RECORD

American College of Physicians, Statement........................   103
Edward M. Burke, Statement.......................................   106
George Stone, Statement..........................................   108
Jonathan B. Weisbuch, Statement..................................   108
Karen Hawes, Statement...........................................   110
March of Dimes Foundation, Statement.............................   110
National Congress of American Indians, Statement.................   112


                           THE INSTABILITY OF



                       HEALTH COVERAGE IN AMERICA

                              ----------                              


                        TUESDAY, APRIL 15, 2008

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:00 a.m. in 
room 1100, Longworth House Office Building, Hon. Fortney Pete 
Stark (Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                            SUBCOMMITTEE ON

                                 HEALTH

                                                CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
April 08, 2008
HL-23

             The Instability of Health Coverage in America

    House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) 
announced today that the Subcommittee on Health will hold a hearing on 
the instability of health coverage in America. The hearing will take 
place at 10:00 a.m. on Tuesday, April 15, 2008, in the main committee 
hearing room, 1100 Longworth House Office Building.

    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing.
      
BACKGROUND:
      
    There are nearly 47 million uninsured people in this country and 
their ranks have been growing rapidly in recent years. Those without 
health insurance have worse health outcomes than those with insurance, 
often pay more out-of-pocket for services when they do seek care, and 
increase costs to the entire health care system. Additionally, there 
are millions of people who have private health insurance but have 
trouble affording and accessing care.

    The inadequacy of current coverage options forces many people to 
forgo needed medical care because of the costs associated with seeking 
care. A 2005 study by The Commonwealth Fund \1\ estimated that nearly 
16 million non-elderly individuals (12 percent of the insured 
population) were ``underinsured'' in 2003. Despite the fact that they 
have insurance coverage, underinsured individuals can be exposed to 
significant out-of-pocket costs in the form of higher premiums, 
deductibles and co-pays relative to more adequately insured 
individuals. They also can have trouble accessing doctors, obtaining 
prescription drugs and getting their insurance to pay for needed care 
because the insurance that they can afford does not cover the treatment 
that they need.
---------------------------------------------------------------------------
    \1\ http://www.commonwealthfund.org/publications/
publications_show.htm?doc_id=280812.
---------------------------------------------------------------------------
      
    In announcing the hearing Chairman Stark said, ``America's health 
system is broken. Every year more and more people join the ranks of the 
uninsured. Even those who have insurance are discovering the inadequacy 
of their coverage, all the while their premiums and cost sharing 
continue to rise. I am pleased to hold this hearing. It is important we 
understand the problems of today's system as we prepare to embark on 
health care reform.''
      
FOCUS OF THE HEARING:
      
    The hearing will focus on the instability of health coverage in 
America, examining the problems facing those with and without health 
insurance.
      
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
      
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noted above.

                                 

    *Chairman STARK. The Subcommittee will begin its hearing, 
and the Chairman will make outstanding introductory remarks, if 
he can find them.
    Thank you for attending today and I hope to be brief.
    We are going to depart a little from our standard 
procedure. We'll show a short video that deals with the issues 
many Americans who are uninsured and are underinsured are 
facing. We know that there's a lot of discussion in the 
campaign and in the press, and everyplace else, about 
healthcare reform.
    It's been some years since the last large attempt at 
system-wide reform and the failure to be able to come to a 
conclusion with it. In this election year, candidates on all 
sides are talking about healthcare with different approaches 
and philosophies, but I think each candidate recognizes that 
there have to be some changes in the system of delivery of 
medical care.
    The number of uninsured is increasing. Middle class 
Americans are having trouble paying their premiums, paying 
their cost-sharing. They just announced the other day they're 
going to charge us more for expensive drugs; and, we all know, 
I think, that the medical care delivery system is in need of 
change; and, before we rush into solutions, I think we should 
develop an understanding of where we are. What is the problem? 
Can we identify the problem we are trying to fix?
    Hopefully, Mr. Camp and I can come to some kind of 
agreement on that. We may not agree on what the fix ought to 
be, but hopefully, we don't have to argue about what the 
problem is, and that's the purpose of today's hearing.
    I'd like to defer on mentioning our first witness for a 
moment, but after we do hear from our first witness, we will 
hear from a panel of witnesses who will describe the 
instability of health coverage and the availability. After a 
second, I am going to recognize Mr. Camp. We will then go off 
the record and view a ten- or twelve-minute clip that comes out 
of a sixty-minute program in February; and, it features the 
work of one of the witnesses that we will hear from later 
today.
    I want to thank the witnesses and my colleagues for being 
here as we try to lay some groundwork for what may face us in 
the coming months and years ahead.
    Mr. Camp?
    Mr. CAMP. Thank you, Mr. Chairman. I want to thank our 
witnesses for being here today as well. The laws and 
regulations governing the U.S. health system can prevent from 
between 25 to 45 million Americans from having health 
insurance, and that's wrong. Every American should have access 
to quality healthcare.
    Before we can solve the problem, we need to ask why so many 
Americans lack health insurance. One of the most immediate 
causes has to be the skyrocketing cost of healthcare and health 
insurance. Since 2000, employer-based insurance premiums have 
increased by about 100 percent, and that's four times the rate 
of inflation. These spiraling costs are driving increasing 
numbers of employers to drop health insurance coverage for 
their employees. At the same time, over-regulated state 
insurance markets are failing to provide affordable health 
insurance for many American families.
    We also need to identify who is uninsured. Approximately 
two-thirds of the uninsured are in families with incomes below 
200 percent of poverty, or about $40,000 a year. In the 
current, difficult, economic times, it shouldn't come as a 
surprise that these individuals do not have the resources to 
purchase private health insurance. That does not mean, however, 
that they cannot have private health insurance. Every uninsured 
person in this country shares one common characteristic: they 
receive no assistance under the Federal Tax Code to help them 
purchase health insurance.
    At the same time that costs for health insurance are 
soaring, our Tax Code affirmatively discriminates against the 
uninsured. If we were to simply equalize the tax subsidies that 
we provide, millions more Americans would be able to get health 
insurance.
    The generosity of the American taxpayer should not only go 
to those with employer-purchased health insurance, it should 
apply to individuals, small businesses, and large corporations 
alike. To do that, we must make sure those Americans who 
already have insurance keep it, and we must help those who 
don't have coverage get it.
    I want to thank Mr. Stark for calling this hearing to give 
us all the opportunity to examine this issue. I hope that in 
exploring this issue, we can begin to identify solutions to 
reducing the number of uninsured without further burdening 
existing entitlement programs that are already facing 
insolvency.
    Thank you, Mr. Chairman, and I yield back.
    [The prepared statement of Mr. Camp follows:]

    [GRAPHIC] [TIFF OMITTED] 46779A.001
    
    [GRAPHIC] [TIFF OMITTED] 46779A.002
    
    [GRAPHIC] [TIFF OMITTED] 46779A.003
    

                                 

    *Chairman STARK. Well, as the Committee knows, when it 
comes to introducing witnesses we draw straws; and, this 
morning, Mr. Ramstad, our colleague from Minneapolis drew the 
short straw, and I'd like to recognize him at this point.
    Mr. RAMSTAD. Well, thank you very much, Mr. Chairman, and 
I'm very pleased today that our Subcommittee will hear from one 
of our country's most respected leaders in healthcare policy, 
former Minnesota Senator, Dave Durenberger.
    I would also like to recognize another distinguished 
Minnesotan in the audience, Hennepin County Commissioner, Randy 
Johnson, who at the county level has worked long and hard on 
extending access to healthcare for Hennepin County residents.
    My good friend, Dave Durenberger, served as Minnesota 
Senior Senator from 1978 to his retirement in 1995. In the 
Senate he was highly respected for his mastery of healthcare 
policy and his ability to work with people from both sides of 
the aisle to find solutions. He brought some of Minnesota's 
most innovative and successful ideas to Washington.
    Dave Durenberger served on the two Senate Committees with 
jurisdiction over health policy, the Finance Committee and 
Labor Committee, and also chaired the Finance Health 
Subcommittee. Senator Durenberger left his mark on every major 
piece of healthcare legislation through the 1980s and into the 
90s. He also authored ``Prescription for Change,'' a book on 
healthcare reform through consumer choice.
    Since his retirement, I know firsthand, Senator Durenberger 
has not slowed down one iota. In addition to teaching graduate-
level courses in health policy, and I understand his graduate 
students from St. Thomas University are here today with him, he 
formed the National Institute on Health Policy, a joint effort 
between the University of St. Thomas and the University of 
Minnesota.
    Senator Durenberger also started the Medical Technology 
Leadership Forum, and also serves on the Medicare Payment 
Advisory Commission. Of course, most significant to me 
personally, Senator Dave Durenberger has been a close friend, 
mentor, confidant for 30 years.
    We would be here all day if I listed all of Dave 
Durenberger's credentials, but let me just say I deeply 
appreciated your expertise, David, and your friendship over the 
years. This Subcommittee certainly looks forward to your 
testimony. We appreciate your collaboration on what I believe 
is one of America's most pressing problems. Thank you again for 
being here, and thank you to all the witnesses.
    I yield back, Mr. Chairman, thank you.
    *Chairman STARK. Thank you, and I'd like to join you.
    It is my pleasure to welcome Dave here. He and I worked 
together since, I guess, 1985, on issues with Medicare and 
other issues on healthcare and look forward to your testimony, 
following which we will view the video.
    Go ahead and enlighten us.
    *Mr. DURENBERGER. Thank you, Mr. Chairman, Mr. Camp, 
Members of the Committee, but especially Jim Ramstad, because 
as Jim said he has been a very close friend for a long period 
of time. I had mixed feelings when Jim announced that he was 
retiring, as many of you had too. On the one hand, I was happy 
for him. On the other hand, I was unhappy for the rest of you, 
because of the contribution that he has made to not just good 
health policy, but a good policy in so, so many ways.
    Each of us is reflective in a way of the people that we 
represented, the places we were raised, how we were educated, 
and so forth. Jim did this better than most people. As I see 
from some of the people that I know here like Mr. Camp and his 
part of Michigan, and Mr. Kind and his part of Wisconsin, we 
much more alike than we differ.
    That certainly is true of health policy as well. It was an 
honor for me to serve Minnesota for three terms in the Senate. 
It was always a challenge, I must say, to go to conference near 
the end of each of those 16 years with the chair of this 
Subcommittee and the chair of the energy and Commerce 
Committee, because they always insisted on winning. I'm really 
honored, Mr. Chairman, to have been asked to testify here 
today.
    I do so in the spirit that for most of those years 
characterized our relationships and our effort to make national 
health policy; and, particularly, to improve the health system 
of this country by changing the financing incentives for 
providers in the Medicare Program. One of the things you learn 
fairly early on in this process is we don't have a national 
health system; and, Mr. Camp alluded to that, I think, in his 
comment.
    But, what we do have, because we know this from our 
personal experiences in the communities we represent, we have a 
series of systems and the work at Dartmouth explains that to us 
quite clearly. But my job is not to talk to you about the 
health system or the specific challenge of the uninsured. I was 
asked to reflect on my experience in doing health policy. 
First, let me say that not since the Presidential campaign 1992 
have Americans been as concerned about their financial well-
being as they are this year.
    Most Americans know they can't afford the rapid rise of 
health insurance premiums, especially when it is currently 
accompanied by the escalation and the cost of so many other of 
their basic needs; so it's a big challenge. But it isn't just 
health policy; and, you know this better than I. Public opinion 
polls reflect this in strong support for proposals to guarantee 
access for all, the health and medical services for all 
Americans through some system of health insurance.
    But, clearly, the same polls will tell you that there's no 
consensus on how to do it as both of you have pointed out. The 
debate, as it always has been, is between universal coverage 
and cost containment; and, it's also between social insurance 
systems and private insurance. For example, Senator Clinton 
advocates a universal coverage path that can utilize a form of 
what we might call Medicare for persons under 65.
    Senator Obama, same party, advocates using the model of the 
Federal employee health benefits plan. Senator McCain advocates 
cost containment through greater tax subsidies for private, 
major medical insurance. Interestingly, each advocates similar 
cost containment measures through realigning financial 
incentives to produce better quality, outcomes, effectiveness 
and efficiency from the delivery system. Similar battles, as we 
know only too well, are being waged at the state level--in 
part, coverage; in part, quality and value.
    So it has always been. Unfortunately, critics of the 
Democratic proposals characterize them as socialized medicine; 
and, critics of the Republican proposal criticize them as doing 
nothing to meet the issue of affordability which was driving up 
the numbers of uninsured and underinsured. That will probably 
get us nowhere.
    As policymakers, we have always followed a two-path course 
to universal coverage. It is most obvious in the Medicare 
Program, where we have been making most national health 
insurance policy, since I became active in health policy reform 
in the early 1970s. We have used both social insurance and 
private insurance in our financing policy changes, aiming 
ourselves at expanding access coverage and cost containment. 
The test for high value health insurance is how well it does 
for people when they are sick, seriously injured, or 
chronically ill. It's the 80-20 problem.
    Twenty percent of the people present us with 80 plus 
percent of the cost challenge. So the real test, choosing an 
insurance course to universal coverage is how well does the 
plan do in that regard. How many benefits a plan has or how 
little people use a deductible is not the measure. The value 
test for both social insurance and private insurance is how 
well each does to consistently pay for quality, for outcomes, 
for effectiveness, and for efficiency.
    That has been our challenge since I started doing this sort 
of thing. How do you move both social and private insurance in 
that direction? For example, the Federal F benefit plan has 
always been a model for consumer choice of private health 
plans, and the impact of that choice was important in creating 
health insurance competition, community by community, using 
Federal employees and retirees to accomplish that.
    My first health legislation proposal was the Consumer 
Choice Health Plan of 1979, when some of you were born, 
probably. The purpose of it was to require choices similar to 
the HBP in the private employment in exchange for the employer 
tax subsidy.
    So, Medicare always used private insurance: first in its 
benefit design and its implementation through Blue Cross/Blue 
Shield carriers and intermediaries, and then, on my watch in 
cost have HMOs, and in a major national test of HMO, in HMO 
risk contracting starting in 1985. These were hugely successful 
in areas of the country where they were tried and where medical 
practice in relations with community and state-based health 
insurance guaranteed their success.
    For example, in our part of the country which always brags 
about being the low cost area, we were one of the high cost 
areas. We were in the upper quartile in the Hennepin County, 
St. Paul area, and in North Dakota and places like that. Within 
two and a half years of the start of this experiment with 
private HMOs, we went to the bottom quartile; and, 
unfortunately, we're still there; principally because we didn't 
share there savings.
    We in the Medicare Program did not share the savings with 
the people that made them possible, who are the physicians, the 
hospitals, and the local health plans. The rest of the country 
chose to follow the path of hospital DRGs which we instituted 
at the same time, but on another vehicle. By 1989, of necessity 
we adopted the prospect we payment system to physician position 
payment and created lots of other problems, none of which I 
endorse that you repeat.
    The mistake we made, of course, was not to leaving more of 
the financial savings, for changing the overuse of medical 
services with the care professionals, and the hospitals, and 
the plans that were responsible for doing it. The mistake the 
medical industry made was to take these community-based 
examples of physician-hospital cooperation national, and to 
take the local managed care organization national as well.
    For example, United Health Group in our own community 
became the largest health insurer in the country through merger 
and acquisition of lots of local HMOs all over America. 
Likewise, Wellpoint became the largest insurer in the country 
through the conversion of lots of local and state blues plans 
to for-profits, and their subsequent merger and acquisition. 
This new national private insurance phenomenon was very 
successful for a while in driving down healthcare costs, and 
their premiums and profits made them Wall Street darling.
    But, by the end of the 1990s, the same plans were in 
national industry playing by either state rules or no rules in 
the employer self-insured market because of ERISA. Congress in 
1997 authorized private plans to do what markets are supposed 
to do, determine through price competition for basic benefits, 
what's the real cost of a basic set of medical services in a 
community-by-community across the country.
    The industry refused to play. The managed care industry, 
slowly but surely, adopted itself to the realities of consumer 
demand for freedom of choice, access, innovation and 
expectations. This is unfortunate. They did that particularly 
in areas in which physician groups and hospitals had the power 
to make sure that sort of thing happened. So, in effect, we've 
lost some of the benefit and the potential that exists in 
private insurance. That's the point I'd like to make. Not that 
it's wrong--it's very right--it's been our course from the 
beginning. The question is what are we trying to achieve?
    At the Medicare Payment Advisory Commission, on which I 
served until last week, we simply asked the public policy 
question that Members of Congress like me have been asking 
since 1982 when Senator John Hines put the privatization 
amendment on the tougher risk contract. If traditional Medicare 
is less effective in achieving performance improvement than 
private insurance, then how do we structure the value 
proposition in the relationship between Medicare and private 
health insurance?
    Paying financial bonuses to Medicare Advantage Insurance 
plans for simply adding service benefits to the Medicare 
Program is probably something you could do as a congress. But 
it's not the right thing to do without clear evidence that 
those services have value added over existing insured services, 
this makes us to issues around comparative effectiveness, which 
I won't dwell on, because you've heard plenty of that.
    So, let me conclude by saying there are many reasons why 
universal coverage is important. Many of them relate to the 
vastly improved economics of reducing or eliminating cross-
subsidies from paying to non-paying services in hospitals 
especially. I have now lived long enough with the consequences 
of our National failures to secure financial access to needed 
healthcare services for all Americans that I believe a 
commitment of the next president to this goal is important to 
my vote. I do not believe it is possible in a Federal system 
for each of the 50 states to accomplish this goal on their own. 
Their fiscal capacity, their populations are just too 
disparate.
    This is a matter of income security policy for the nation 
of which we are all citizens. We have no income security policy 
and we have a bunch of aging entitlement programs, and Mr. Camp 
pointed this out. We have a bunch of aging entitlement 
programs, which are bending and sometimes breaking under the 
weight of population health and aging and the cost of medical 
technology and providers.
    It would be an appropriate challenge for this Committee, 
the full Committee, to take the lead in going beyond reforming 
programs that were enacted in the 1930s for the 30s and the 60s 
for the 60s in developing an income security policy in this 
country. A good place to start would be as we recommended in 
the Pepper Commission, get long-term care out of the welfare 
program and convert it into a combination social and private 
insurance program. That would make your challenges a lot more 
simple.
    I have no reason to believe that as Republicans or 
Democrats we have much disagreement about the need to agree 
quickly on how to do the work of data gathering, measuring 
performance, motivating better outcomes, and rewarding the 
first-rate performers in the business of an informed consumer 
in as many communities as possible. I am also pleased to have 
been afforded this opportunity.
    Much is expected of each of you in an area that is too 
complex to be understood by any one of you, but challenging 
circumstances always bring out the best. I hope that I may 
continue to serve whatever interest you may take in health 
coverage and reform.
    *Chairman STARK. Thank you, Senator. Dave, thank you very 
much. As you know, you and I have a great difference in this 
problem of the underpayment of the Minnesota, North Dakota 
Wisconsin area, representing a district that is drastically in 
your opinion overpaid. I've always said, swell, let's just cut 
the payments to California down to the level that we're paying 
in Minnesota and think of all the money we'll save.
    I'm not so sure that that's the most popular approach to 
this solution in your part of the country, and it sure wouldn't 
be very popular in mine. But it occurs to me that that's one 
way to do it. I just want to ask one question, and that is one 
of the issues that we are going to be faced with--and I'm not 
sure any of us as yet have an answer in the reimbursement 
program for physician services--is what we do about volume. I'm 
sure that in redesigning that system as I think we all agree it 
must be redesigned.
    We are going to have to deal with that issue, and my 
question is will you come back and help us with it?
    *Mr. DURENBERGER. Well, I'd be glad to, and I'm going to 
connect the two, just very, very briefly. The disparities exist 
in payment across the country, but it is largely because there 
are disparities in performance, and whether you look in Mr. 
Camp's district, or you look in my district, or you look at La 
Crosse, Wisconsin.
    By the way, Congressman Kind is a doctor from Gunderson out 
here in the MBA class as well. If you compare measurable, 
quality outcomes performance for the dollars that are spent in 
your district, in his district, in my district, and so forth, 
it is a bargain for the rest of the country. But it's also a 
model for the rest of the country to be followed. Unless you 
can design a payment system that begins to reward high 
performance in some way appropriately, we are going to continue 
to have these problems. The key to that is physician payment 
reform.
    We've talked about accountable care organizations. We talk 
about bundling. We talk about a variety of approaches, and I 
would be happy to come back and be helpful.
    *Chairman STARK. Look forward to it.
    Mr. Camp?
    Mr. CAMP. Thank you, Mr. Chairman, and thank you, Senator 
Durenberger.
    *Mr. DURENBERGER. You are welcome.
    Mr. CAMP. You made a number of good points.
    I appreciate you outlining really sort of the background on 
Medicare that it always has had a private insurance component 
to it. Tell me, what do you think of some of the proposals that 
have been introduced either in the Senate or the House that are 
attempting to use the Tax Code, either a tax credit or a tax 
deduction, or a combination thereof to really create an 
individual insurance market.
    Tell me, and also what you might think about the question 
of mandates, if you have time.
    *Mr. DURENBERGER. I'll again try to be brief. Number one, 
we just had the benefit yesterday of having both Ron White and 
Bob Bennett speak to our class. So, I'm fresh from the ideas 
that are out there.
    First, with regard to the proposal for the tax subsidy, 
they have this increase. Everybody pays, like $10,000, and then 
make them pay with their insurance. That, like President Bush's 
proposal, has been needed for the 35 years that I've been 
involved with this. It's the question of getting from here to 
there that is always the challenge. So, I think on the 
appropriateness of the tax subsidy for individuals, that is so 
much better than any other approach that has been taken.
    The challenge, I think, in this concept that we can blend 
the universal coverage of the Democrats with the market ideas 
of the Republicans is whether have real markets. I will start 
with something simple, like insurance.
    You will not have real markets in health insurance until 
you have national rules by which all health plans have to pay. 
The idea that we should just stay with 50-state regulation and 
you can go shopping around the country for a good deal just 
will not work. It won't protect consumers. But the idea of 
having a set of national rules by which both national and state 
plans can truly compete is really a great idea, and that's been 
presented as value-based benefits. It's been presented as a 
guaranteed issue and renewal, and some of the other things that 
I know that this Committee is familiar with, but I think that 
is critical to getting the best out of private insurance.
    After that, the issue becomes the same with regard to 
doctors and hospitals and we talked about that in terms of 
what's quality, what's good outcome, how do you measure it, how 
do you get consensus, and a lot of progress is being made on 
that. But, again, and like the secretary's ideas on value 
exchanges and things like that, focusing on local communities 
and finding out who are the people that are already ahead of 
the curve is critically important.
    When you get the market working, you've got all the 
information you need. People are informed and they are getting 
their information from reliable sources. They've curbed their 
own expectations about having the sun and the moon and the 
stars and everything else. Then the only way a national system 
works most effectively is through everyone having an ownership 
of that insurance. Long term care insurance, as we've analyzed 
many times, is basically supportive services for elderly 
people. If we were able to sell disability insurance to 
everybody in this country when they were young, you know, you 
wouldn't have to worry about meeting long-term care insurance, 
because people can use it at various times through this system. 
Same thing applies to health insurance.
    Mr. CAMP. Just quickly before my time, what do you think of 
the individual mandate, some proposals think that's essential. 
Others don't.
    *Mr. DURENBERGER. Yeah, again, you have to tie it together 
with the insurance reform in my book before you even consider 
it. You also have to tie it together with some other reforms. I 
think in the end at some point you are going to need it. I 
would not start with an individual mandate on whether it's at 
the state level or the Federal level.
    There are other ways, I think, to explore the problem 
that's created by freeloaders or whatever the economists call 
it, the free somebody or others on the system.
    Mr. CAMP. All right. Thank you very much.
    *Mr. DURENBERGER. You are welcome.
    *Chairman STARK. Mr. Doggett, would you like to inquire?
    Mr. DOGGETT. Thank you very much for your testimony.
    Does any other country provide us a model of any aspect of 
what we should be striving for here, or is our predicament so 
unique that we have to strike out on our own?
    *Mr. DURENBERGER. The policy models have been tried in one 
form or another, although we've had some discussion about 
what's the appropriate policy model to get from here to there.
    One of the challenges that you face as a Subcommittee and 
the larger Committee on Ways and Means is there's already by 
most people's assumptions a lot of money in the system, and a 
lot of it is being spent on tax subsidies that are not doing. I 
mean, they are benefiting wealthy people rather than lower 
income people. However, you might consider this. Long term care 
going into a welfare system rather than being in it's an 
insurable event and we ought to be having insurance for it.
    There's all kinds of money out there, the inside buildup on 
tax subsidized savings and things like that, so there's plenty 
of money in the system, but there's no policy to guide you as a 
Committee. There's no policy to guide you to get from here to 
there, which is why I made the argument about income security. 
Thinking about it as income security policy, and I know along 
time ago, I think it was the 25th anniversary of Medicare or 
something, I made the statement that Medicare and Medicaid are 
not health programs. They aren't. They are income security 
programs.
    If you think about that long enough, you realize we've got 
this whole series of programs built for various purposes at 
various times that are not working today for the benefit of the 
people that need them the most. That is an enormous challenge 
for you in terms of cost reduction or cost containment. Let's 
take Medicare Advantage, because I just heard this yesterday 
from Abbey Block who runs the Medicare Advantage program at 
CMS.
    She didn't know there was going to be somebody in the 
audience from La Crosse, Wisconsin, so she says the difference 
in the value to a Medicare beneficiary in Dade County, Florida, 
and the amount of money that you are spending on her services 
in Miami, Florida, versus La Cross, Wisconsin, and this is what 
I heard from her, is 248 percent. More money being spent on the 
same beneficiary in Dade County for no reason, you know, other 
than part of the policy design and the practice design.
    Mr. DOGGETT. I certainly agree with you that these tax 
credits by their very nature are very blunt instruments and 
they are very costly for what they produced. They are not the 
most efficient way, sometimes, of getting health coverage where 
we need it, and I certainly concur in your comments about how 
costly some of them are for what the y produce.
    Do you believe that it's possible for some type of 
government insurance program to co-exist with private insurance 
to address this problem?
    *Mr. DURENBERGER. It does now to the potential advantage of 
both. This is America. We're a pluralistic society and we ought 
to build on that and that's why I made the point, that we've 
always followed two paths. The question is have you set the 
goals correctly?
    I mean, is the goal to be paying for the sick, the severely 
injured?
    I mean is that the purpose of insurance?
    Also, is part of the purpose of insurance to facilitate the 
rewards for quality outcomes and efficiency and things like 
that?
    So, if you set the policy goals right, there might be some 
circumstances, some populations, for which social insurance 
works much better and others for which private insurance works 
better.
    Mr. DOGGETT. Thank you so much.
    *Mr. DURENBERGER. Thank you, Lloyd.
    *Chairman STARK. Mr. Thompson? You pass?
    I think Ms. Tubbs Jones. Would you like to inquire?
    Ms. TUBBS JONES. Thank you Mr. Chairman.
    Good morning, Senator. I don't think I have ever had the 
chance to meet you, and it is my pleasure.
    *Mr. DURENBERGER. It has been my pleasure.
    Ms. TUBBS JONES. I would like to focus for a moment and ask 
you about healthcare disparities.
    Today, the Congressional Black Caucus is hosting their 
annual healthcare disparity conference at a hotel here in 
Washington, D.C., and I had to choose between which I could 
attend. So, I decided to be here with you. I wondered that in 
the work that you have done around healthcare, have you had any 
focus in on health disparities as it involves the delivery of 
healthcare to minorities and majority. If so, what your 
experience has been and what your recommendation would be to 
this Committee as we walk down the road of trying to repair the 
healthcare delivery system in this country.
    *Mr. DURENBERGER. Thank you very much for the question, and 
I will give you two brief reactions.
    There are communities in this country where because of 
state efforts to provide universal coverage. Mine is one. You 
have heard about Massachusetts. You can see a group of states 
in this country that have gone the extra mile to finance access 
for as close to 100 percent of their population as you possibly 
can; and, so, in varying ways we, have relied traditionally on 
the states to provide the initiative for financing access for 
people who are disadvantaged by income, by education, for 
whatever reason. Those states are on most charts of health, 
access and so forth are going to be ahead of states that have 
taken different courses, and have not chosen either through the 
way they practice healthcare deliver or the way they organize 
their systems or the way they finance them to accomplish it.
    One of the ways you can consider to broaden access to the 
financial insurance side of this, of course, is to think about 
it in terms of income related subsidies for either private 
insurance or for some other form of access. The transition to 
getting from here to there would involve taking long-term care 
out of Medicaid particular thing. But, the second, and maybe 
more important comment to make, is about a hearing on cultural 
and other disparities, economic and other disparities today.
    That same discussion is taking place in every community in 
this country, and the link that organized medicine broke 
between public health and medicine 80 years ago is now being 
reattached in many of our communities. In Texas, for example, I 
can point to Parkland Hospital in Dallas and some of the 
leadership there to involve the communities. When the 
legislature is unwilling to provide the financing of access, 
the leadership at that very public, very challenged hospital, 
is out in the community, reaching out to the gang leaders and 
other leaders to try to bring the community into the delivery 
system.
    One of the values of not-for-profit hospitals is the 
community benefit tax exemption for contributing to bringing in 
the access, not just through insurance, but access to services. 
It is happening in many communities around this country and it 
is a wonderful thing that it's happening. We reconnect public 
health, personal responsibility and, you know, the insurance 
programs for medical care services and fostering that in some 
appropriate way.
    Ms. TUBBS JONES. Thank you.
    I would just put on the record another question about how 
do we increase the availability of healthcare delivery 
personnel, nursing being one of the huge things that one of the 
areas professions that we were in such deep need for. One idea 
is that you don't have time to give me the answer today, but I 
would be interested in what you might think how we might 
address that issue.
    *Mr. DURENBERGER. Well, in 28 seconds, I am going to tell 
you to start financing the students, and stop financing the 
institutions that educate them. I mean, you look at where all 
the Medicare money is going, for example. It is going to large 
academic medical centers and they are overpaying for indirect 
medical education, benefits, and so forth.
    My sort of conservative side says I'd rather finance the 
consumer of education than to continue to finance the 
establishment.
    You are welcome.
    Ms. TUBBS JONES. Thank you.
    *Chairman STARK. Thank you.
    Mr. Ramstad, would you like to inquire?
    Mr. RAMSTAD. Thank you, Mr. Chairman.
    Thank you for your excellent testimony, Senator. Thank you 
Mr. Chairman for inviting this witness to lead off this 
important hearing. I don't think anybody frames the issues 
better than Senator Durenberger.
    Senator, you have often pointed out that Minnesota does a 
lot of things right when it comes to healthcare delivery. We 
all know that. We were recently ranked as the healthiest state 
in the nation. We have the lowest rate of uninsured. We have a 
long history of delivering high quality, efficient care at a 
low cost. Yet, as you pointed out, as we all know on this 
Subcommittee, every Federal program seems to punish Minnesota 
for doing the right thing.
    We get low Medicare fee for service and Medicare Advantage 
reimbursement because of our history of low cost. I don't know 
how many times I have copied your illustration comparing Dade 
County vis-a-vis Hennepin County in my district. We can't use 
SCHIP funds to cover children because we were already covering 
kids through Minnesota Care before SCHIP was ever created. Our 
state high risk pool for the uninsurable gets low Federal 
funding, because our state has done a good job of covering the 
uninsured.
    How in your judgment can Federal incentives be realigned so 
we are actually paying for quality and value instead of 
inefficiency and utilization as you put it?
    *Mr. DURENBERGER. Well, thank you for the question and 
thank you for the self-serving comments about Minnesota. We 
could say the same thing about Mr. McDermott's constituency, 
and I've said that about Mr. Kind and Mr. Camp. There's 
probably others on this Committee that I am not aware of. The 
short answer is we tried it already.
    I mean we tried using what was then called the HMO and 
managed care to do our work for us, basically to identify all 
of the poor quality areas that were just costing us a lot of 
money, and they performed well. They continue to perform well.
    The Virginia Mason Clinic, for example, in Seattle, is one 
of the leaders in this country on efficiency and effectiveness, 
and issues like that. Inter Mountain Healthcare is probably one 
of the best places to go to get healthcare in this country. 
There are places in the Chairman's district as we know, some of 
the Kaiser programs, and so forth.
    So, it isn't possible, I'd say, for the Committee or the 
Subcommittee to start designating who do you like and who do 
you not like. You almost need an intermediary to do that for 
you, and that's why I make an argument for changing the rules 
and changing the goals and the requirements for both public and 
private.
    If you are going to pay extra money for private insurance 
to go out there and find the most effective places to spend 
money, then you ought to do the same thing for traditional 
Medicare and enable the doctors and the hospitals to be 
regarded for their outcomes and their quality as well.
    Mr. RAMSTAD. Well, first of all, I should thank you for 
being less parochial than I am.
    *Mr. DURENBERGER. That's because I'm here and you are 
there.
    Mr. RAMSTAD. Yeah, but I am not running for re-election, 
either.
    [Laughter.]
    *Mr. DURENBERGER. Somebody you'll be just like me.
    Mr. RAMSTAD. I mean don't we really have to get rid of--I 
mean, there's not enough money in the system or the Federal 
treasury for that matter to equalize things through the AAPCC 
formula. I mean, we really need a new system. Don't you agree?
    *Mr. DURENBERGER. Yes. But the design of that system will 
probably vary from one place to the other. I mean your tasks is 
to reward quality. This is where Med-Pac was going, you know, 
with bundling payments, with defining accountable care 
organizations. That's where some of the people in the 
professions are going with the concept of medical home.
    We had a regional medical home application under the 646 
demonstration program. We had the entire region from Montana to 
Wisconsin. The medical group at the University of Wisconsin was 
part of it and a six-doctor group out in Western South Dakota 
was part of it, just to demonstrate, if we had the authority to 
demonstrate it, from CMS, to demonstrate that paying for 
quality saves money. There's a variety of those ways that can 
be chosen, most of which are going to relate to physicians.
    Mr. RAMSTAD. Those criteria are much more important than 
geographic criteria. Some have suggested moving to a regional 
system, but wouldn't we still have some of those same 
geographic in equities?
    *Mr. DURENBERGER. You have the same problems within some of 
our systems that you have nationally. I mean, you can go to one 
of the Fairview hospitals, or whatever it is in Minneapolis-St. 
Paul area, and you are going to find disparities there. That's 
why the physician becomes so important. Physician payment 
becomes important, and the Chairman has already pointed that 
out.
    Mr. RAMSTAD. Thank you, Senator. Thank you, Mr. Chairman.
    *Chairman STARK. Thank you.
    Mr. Becerra, would you like to inquire?
    Mr. BECERRA. Mr. Chairman, other than to acknowledge the 
Senator for all his work and to thank him for taking the time 
to be here, I very much appreciate it and with that Mr. 
Chairman I will yield back and say that I hope we are able to 
move forward with some of the ideas that the senator has 
articulated and more importantly just recognize it. More and 
more people are saying that it is time to do something.
    So, thank you for your testimony and thanks for being here.
    *Mr. DURENBERGER. You are very welcome.
    *Chairman STARK. Mr. Kind?
    Mr. KIND. Thank you, Mr. Chairman.
    Just for the record, Senator Durenberger's testimony today 
is not a paid advertisement on behalf of myself, Mr. Ramstad 
and Mr. Camp. Although I'm sure we are all nodding in strong 
agreement with the statements and it is good to have you back, 
and it is good to hear from you again.
    I really appreciate the effort you have made too in 
reaching out with so many of the providers in my own 
congressional district to have this type of conversation 
ongoing. I couldn't agree with you more that there is going to 
be tremendous savings had within the Medicare system if we can 
get to out outcome or performance-based type of reimbursement 
system. But that, of course, will follow the huge investment in 
HIT which will be important in establishing the standards and 
inoperability and everything that is taking place right now.
    I don't know if you have had an opportunity to pick up 
Shannon Bromley's book, ``Overtreated,'' at all. If you have 
read that, many people have. Her basic thesis is that there is 
huge disparity, obviously, in utilization, and that is backed 
up with the Dartmouth Atlas study every year. If we look at how 
the utilization is taking place from region to region, there 
could be tremendous cost savings.
    One of the points that she made, I had a chance to talk to 
her a little bit more about, is the crucial, six-months, end of 
life care, and the tremendous spending that goes on there. Her 
point was if we get back to listening to the patient a little 
more closely, because again there is vast differences in 
utilization and what type of hospital stay is recommended or 
tests that are ordered in those final months or weeks of life.
    There could be tremendous cost savings there, not through a 
major reform with healthcare treatment, but just by listening 
to the patient. She says, invariably, patients don't want to be 
in the ICU for weeks and weeks and weeks and having multiple 
tests ordered and multiple drugs administered, and that 
generally patients are more conservative than a typical 
provider and they just like pain management and have a chance 
to be at home in those final days of life.
    If we get back to that, listening to the patient, there 
could be not only greater satisfaction with the patient and the 
family but also a tremendous change in the healthcare system. 
One of the bills that I've been working on through a period of 
years, and you know it modeled closely what you were advocating 
when you were still serving in the Senate, is trying to set up 
that national purchasing pool.
    Of course, we have had the ongoing debate about associated 
health plans and Federal preemption of State mandates; but, I 
also agree with you that we do need a set of national rules, 
national standards.
    My question to you is how do we get there? What would the 
process look like? One of the things I have been toying with in 
the legislation would be a small business and family farm 
health act modeled after the Federal employee purchasing pool 
concept, because when you look at the 47 million uninsured, 
most of them are working Americans, either in small business or 
on farms, who just can't afford to provide any healthcare 
coverage.
    But part of the key to the success, obviously, is getting 
away from the 50 different rules and mandates that are 
established from state-to-state, which would make it easier for 
the plans to come in that and be able to compete in the 
national pool. One of the ideas I had forming this commission 
perhaps represented strongly by the various state health 
insurance commissioners to see if they can reach some type of 
agreement on what minimal standards should look like and 
therefore have a national template.
    I don't know if you have any thoughts, or I'm sure you do.
    *Mr. DURENBERGER. Right. Just two comments on what you 
said: first with regard to the role of the patient in the last 
6, 12, and 24 months of life, which Dr. Wennberg has 
demonstrated for us. Jack Wennberg has always been focused on 
the relationship between the doctor and the patient. He started 
with shared dialog. He moved to all of this data that Dartmouth 
grinds out; and, today, he sent a recommendation to you to 
consider changing the legal standard for liability in 
healthcare to informed patient choice.
    Informed patient choice means there is an obligation on the 
doctor to access all available information that relates to that 
patient's condition, to provide that to the patient, and then 
have the patient make the choice and take the responsibility 
for that choice. On the second point, Jeff Bingaman from New 
Mexico, and I think it was '91 or '92 introduced the health 
insurance purchasing cooperative bill.
    Unfortunately for us that got picked up in Mrs. Clinton's 
health plan, and like so many good things that were in Mrs. 
Clinton's health plan, it died an unfortunate death. Nobody 
brings it up anymore except folks who want to talk about 
association health plans, which is a very different approach. 
So, I would recommend to you to look at that, Health Insurance 
Purchasing Cooperative, because it is basically a local way in 
which to do large group purchasing and it serves the individual 
and the small group market as well.
    Mr. KIND. Just to stop you there, real quick. In fact, 
we've got some pilot programs taking place in Wisconsin right 
now targeting family farmers throughout the state. It was the 
health insurance cooperative, and allowing them to pool 
together, and it has been tremendously popular and just a 
backlog of waiting lists developed right now. May just decided 
to participate. There are like six or seven plans right now 
participating in this program, and may just decided to 
participate as well.
    Thank you, Senator. It was good to hear from you.
    *Mr. DURENBERGER. You are welcome. Thank you, very much.
    Mr. KIND. Thank you, Mr. Chairman.
    *Chairman STARK. I want to thank the gentleman from 
Wisconsin, but I do want to suggest a political implication.
    When he starts talking about this end of life savings, 
you've got to remember that Senator Durenberger and I are very 
concerned about turned indicators, satellite radio, two-tone 
paint, little motorized scooters; and, if I thought you were 
going to take that away from us.
    Mr. KIND. It's a dangerous subject, Mr. Chairman.
    *Chairman STARK. I'd tread carefully there.
    Mr. Johnson, would you like to weigh in on that issue?
    Mr. JOHNSON. Yeah, I'd love to have one of those motorized 
deals.
    [Laughter.]
    Mr. JOHNSON. Thank you for being here Senator.
    Let me just ask one thing. It seems to me the companies 
that provide insurance for their employees do it with pre-tax 
dollars, and yet individuals or small companies that can't 
provide insurance have to buy it with after-tax dollars. This 
Committee has an opportunity to fix that, and I wonder what 
your thoughts are on that subject.
    *Mr. DURENBERGER. I think you ought to fix it and there are 
proposals around.
    We talked earlier in the morning about the proposal that 
Senator Wyden and Senator Bennett had put forward. We talked 
about President Bush's proposal, which is an excellent one. 
Thirty years I've been asking the same question you've been 
asking and we haven't gotten to the point of changing it. I 
think in my opinion, these are two good ways to change it.
    One of the things I don't agree with in some of the 
proposals is getting rid of the employer. I think the employer 
is a vital part of the purchase and whole lot of other things. 
This whole effort to go to health fitness and health management 
and helping people become more productive persons, and so 
forth, is really being driven by employer involvement in the 
healthcare system.
    You know, everybody walks around with no contribution from 
their employer. It's too expensive to get any kind of coverage 
unless you can keep those people involved.
    Mr. JOHNSON. No, I think you are on target.
    Thank you sir, I appreciate you being here.
    Thank you, Mr. Chairman. I yield back.
    *Chairman STARK. Thank you.
    Mr. Emanuel, would you like to inquire?
    Mr. EMANUEL. Thank you, Senator.
    *Chairman STARK. You are welcome.
    Mr. EMANUEL. That's all I got to say. Actually, I do want 
to pick up with Ron and on the end of life.
    I mean, if you look at healthcare, five Presidents have 
tried universal care: Truman, Johnson, Nixon, Carter, and 
Clinton. We're 0 for 5, but we've universalized care for 
segments of the population: Medicare, Medicaid, Veterans. SCHIP 
was an attempt at that.
    You are always torn between trying to just do the system 
and get it right, because I want to associate it myself with 
what your comment is. There's a lot of money in the system. We 
spent $2 Trillion on 300 million people and have life 
expectancy of 73. The EU, which is similar population, spends a 
trillion dollars yes and has life expectancy of 75.
    If you were doing this smartly, you would just say ``we 
ain't gettin' our bang for the buck'', if that's one 
measurement. I'm always torn between just doing the whole 
thing, hopin' for hope, that the six times a magic number, we 
are then taking steps here that you have outlined. One is the 
end of life. We do spend a preponderance of dollars on the last 
six months of life.
    Two, something Dave and I are working on, which is getting 
people earlier in life, that is early retiree, 55, 65, 
participating in a chronic illness management before they get 
into Medicare, and they get reduced co-pays for every illness 
or year they spend, whether it's smoking, diabetes, heart 
blood, etcetera.
    So, you reward the right type of behavior, and that's one 
option to look at. The other thing is to invest in the IT and 
get to the national standards you talked about and then 
allowing people to compete once that kind of floor and 
boundaries were set up.
    Based on what you've seen in the history of reform where it 
has succeeded and where it hasn't, what would guidance be given 
the next congress and the next presidents. Go for the whole 
thing, or try to make significant reforms, kind of early 
retiree buy-in to Medicare and then alter that? I mean, take 
kind of the piece-meal approach, or go for the ``Hail Mary'' 
pass and see if this time is different than the last 50 years.
    *Mr. DURENBERGER. Back in 1988 long-term care financing was 
the big political issue, and Claude Pepper wanted to create a 
commission to deal with long-term care. Danny Rostenkowski said 
right after we lost the Medicare Catastrophic Act, a step in 
the direction of making some sense out of the Medicare program, 
``No. It's got to be a commission for long-term care and 
everything else.''
    Out of that came the employer mandate. It did not come to 
the answer to your question. We came with a solution. The 
Republicans voted against it, but the AMA person and the 
Democrats including Pete voted for it. Excuse me, Mr. Chairman. 
Out of it came the employer mandate, which was, you know, it 
was a solution or an answer, but it wasn't the answer to your 
question.
    We've always had this kind of debate between cost 
containment. What belief about 2009 is the importance of the 
President. It doesn't make any difference whether its 
Republican, Democrat, or which Democrat. It is critical that 
the President begin by giving all Americans a view of what is 
possible in a country as rich as ours, as varied as ours, with 
the entrepreneurship that we see in healthcare and medicine.
    With a vision like that, people like you all can accomplish 
a lot. Because with no vision, the status quo, you have, the 
old business of what is one person's income is somebody else's 
cost, or the reverse of that. So, I think leadership right now 
is the biggest factor in getting to all this other stuff.
    There's a lot of things we can talk about, but unless the 
people are on board this thing, you know. You aren't going to 
make it or you are going to lose it at some point, so that 
leadership issue is my answer.
    Mr. EMANUEL. I'd add one point and then I'll end, Mr. 
Chairman.
    The difference between the 90s and now, vis-a-vis household 
income, where we saw a $6,000 rise in the nineties and an 
$1,100 drop in median household income, all related to 
healthcare. In fact, Americans got a raise in the last six 
years. The problem is it all went to the health insurance 
industry.
    When you get healthcare costs for a family of four going 
from 6,000 to 12,000, median income is dropping by 11,000. They 
got a raise; it just went to the healthcare system. It didn't 
go to their bottom line to meet other needs. Unless we do 
something about this, we just double it again.
    Thank you.
    *Mr. DURENBERGER. You're welcome.
    *Chairman STARK. Again, Dave, thank you very much. We are 
going to take you up on your generous offer to help us as we 
grind through this next year.
    I appreciate you sharing your thoughts with us today.
    *Mr. DURENBERGER. Thanks to all of you, Mr. Chairman.
    *Chairman STARK. We will now in just a moment, we'll go off 
the record for about 10 or 12 minutes and observe a video. 
Perhaps while we are doing that, if the second panel would like 
to come on up, I think you will be able to see the video from 
the witness stand. Why don't we just start the video.
    [Video.]
    *Chairman STARK. Without, we will go back on the record. We 
have a print script of that, and without objection, I ask that 
we put the script in the record.
    [A transcript of the video follows:]
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    *Chairman STARK. We will proceed with our second panel, and 
they include Dr. Diane Rowland, who is familiar to all of us. 
Diane has testified many times. She is vice president of the 
Kaiser Family Foundation, which I am told to remind people has 
nothing to do with Kaiser Permanente in my district, which 
provides hundreds of thousands of people with medical care.
    Dr. Ayanian, who is a professor of medicine and healthcare 
policy at the Harvard Medical School.
    Dr. Michael J. O'Grady, who is a senior follow of the 
National Opinion Research Center at the University of Chicago.
    Stan Brock, who we saw displayed just a few minutes ago; 
and Stephen Finan, the associate director of policy for the 
American Cancer Society.
    Each of you have submitted testimony which will without 
objection appear in the record in its entirety and we will ask 
you each to summarize or expand upon your testimony in any 
manner that you are comfortable.
    We will start with Dr. Rowland.

 STATEMENT OF DIANE ROWLAND, SC.D., EXECUTIVE VICE PRESIDENT, 
                    KAISER FAMILY FOUNDATION

    *Ms. ROWLAND. Thank you, Mr. Chairman, and Members of the 
Subcommittee.
    I am pleased to be here today and will try to put some 
numbers to go with the very human experience you just saw in 
the video.
    Health insurance coverage can provide a valuable lever to 
help gain access to primary and preventive healthcare services, 
as well as piece of mind and financial security for many facing 
serious healthcare problems. Yet, our latest statistics show 
that nearly 47 million Americans were without health insurance 
coverage in 2006.
    Whether or not one receives healthcare coverage in the U.S. 
today depends on a variety of factors: age, income, workplace, 
and state of residence. For those over age 65 and those with 
permanent disabilities, Medicare provides health insurance 
protection. Slightly more than half of all Americans receive 
employer-based coverage and about five percent purchase 
coverage through the non-group or individual market.
    Together, Medicaid and SCHIP play a critical role for the 
low income population covering 29 million children and 24 
million non-elderly adults and people with disabilities. This 
leaves, however, one in six Americans, 16 percent of our 
population, uninsured.
    The 47 million uninsured Americans include 9 million 
children primarily coming from low-wage, working families. 80 
percent of the uninsured are from families with a full- or 
part-time worker and two-thirds have incomes below 200 percent 
of poverty or roughly $40,000 for a family of four.
    Most work in places where health insurance is not offered 
through their job, and the rising cost of health insurance 
premiums, now over $12,000 for a family, means that if coverage 
is offered, the employee's share of the premium is becoming 
more and more unaffordable for working families.
    Take for example one of the families participating in our 
study on family budgets. Sam is uninsured and has just gotten a 
job in a home improvement store. His wife, Carmen, is at home 
with their three children. Once he becomes eligible for 
employer-sponsored coverage, he will be required to pay $400 
per month in his share of the insurance premium, which is a 
quarter of his $1600 monthly take-home pay. Today, nearly 90 
percent of the family spending already goes to basic 
necessities, leaving little room in their budget, roughly $150 
a month, for additional spending that could be used for 
healthcare or to pay deductibles and cost sharing for the 
health plan.
    Yet, having health insurance matters. It affects how and 
when people use the health system, and ultimately their health 
and financial well being. The uninsured are much more likely to 
postpone or forego care due to costs than those with coverage. 
When they seek care, they are often billed full charge and left 
to pay what they can, sometimes accumulating large medical 
debts that can lead to bankruptcy.
    Leaving 47 million Americans without health coverage 
affects not only the uninsured, but also puts a growing burden 
on our healthcare system and adds additional strain on the 
economy. In 2006 it is estimated that some 22,000 Americans 
died prematurely as a consequence of being uninsured, and the 
lost productivity of the uninsured had an annualized, economic 
cost of between 100 and 200 billion dollars.
    As the availability, affordability, and scope of insurance 
decrease, both insured and uninsured Americans are now dealing 
with budget-consuming medical bills and debt. In 2004 some 45 
million Americans were in families that had a high financial 
burden for healthcare, i.e. spending more than 10 percent of 
disposable family income on healthcare services and insurance 
premiums. This financial burden provides a measure of 
underinsurance.
    Individuals at high risk for these levels of financial 
burden include those 55 to 64 who are not yet eligible for 
Medicare, those in fair or poor health, and especially those 
with diabetes, stroke, heart disease, and other chronic 
illnesses. It is clear that for many health insurance alone is 
no longer a guarantee of financial protection from the cost of 
healthcare and financial stress when illness strikes.
    Health insurance is an important source of financial 
security for families when illness strikes and helps to promote 
access to healthcare services that can often stave off more 
serious illness.
    As Congress moves forward to address the growing uninsured 
population and the impact of rising healthcare costs for 
America's families, promoting improved access to affordable 
healthcare and adequate health coverage for all Americans, will 
be an important but challenging objective.
    I appreciate the opportunity to testify before you today 
and will welcome your questions at the conclusion of the panel.
    Thank you.
    [The prepared statement of Diane Rowland follows:]

 Prepared Statement of Diane Rowland, Sc.D., Executive Vice President, 
                        Kaiser Family Foundation
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    *Chairman STARK. Dr. Ayanian?

 STATEMENT OF JOHN Z. AYANIAN, M.D., PROFESSOR OF MEDICINE AND 
           HEALTH CARE POLICY, HARVARD MEDICAL SCHOOL

    *Dr. AYANIAN. Thank you, Chairman Stark, Representative 
Camp, and the Members of the Subcommittee on health for 
inviting me to testify on the health consequences for Americans 
who lack insurance and on the persistent problem of racial and 
ethnic disparities in the U.S. healthcare system. These topics 
are of vital importance to our Nation.
    My name is John Ayanian, and I am a professor of medicine 
and health care policy at Harvard Medical School. Over the past 
16 years, I have studied the adverse effects Americans 
experience when they lack health insurance, as well as racial 
and ethnic disparities in healthcare.
    From 2000 to 2004 I served on the Institute of Medicine 
Committee on the Consequences of Uninsurance. I am also a 
practicing physician at Brigham and Young Women's Hospital in 
Boston, where I have seen first-hand how patients lives are 
affected when they lose their insurance.
    Uninsured Americans are much more likely than insured 
Americans to avoid seeing a doctor because of the cost. Among 
those in poor health, 50 to 70 percent of uninsured adults go 
without needed medical care, compared with only about 20 
percent of insured adults in poor health. Uninsured adults are 
less likely to receive high quality primary care and important 
preventive services, such as cholesterol testing and 
mammograms. As a result, they are often unaware of their major 
health risks, such as high blood pressure, high cholesterol, 
and those with curable cancers such as breast cancer or colon 
cancer, are diagnosed at a more severe stage of disease.
    Because of their unstable and sporadic medical care, 
uninsured adults have a much greater risk of dying at younger 
ages than insured adults. The Institute of Medicine has 
estimated that 18,000 Americans died prematurely in 2000 
because they lacked health insurance. Sadly, many of these 
premature deaths occur among people with conditions that are 
readily treatable, including high blood pressure, HIV 
infection, and breast cancer.
    The instability of insurance coverage in the United States 
has especially harsh effects for adults who are uninsured or 
erratically insured between ages 55 and 64. About four million 
adults in this age group were uninsured in 2006. For those who 
have lost their coverage, finding insurance in the individual 
market is often prohibitively expensive, if not impossible, 
when they have pre-existing medical conditions.
    As a physician, I see that people who receive good medical 
care in their 50s and early 60s live longer and healthier 
lives; however, recent research by our group and others has 
shown that the health of uninsured adults declines more rapidly 
in middle age than the health of insured adults. These declines 
in health are associated with a 40 percent greater risk of 
death for uninsured adults. This risk is concentrated among 
uninsured adults with high blood pressure, diabetes or heart 
disease, precisely the conditions for which we know good 
medical care makes a difference.
    But the evidence on this topic is not all grim. If 
uninsured adults survive to age 65, Medicare improves their 
access to physicians, medical tests and effective treatments. 
In our most recent research, we have found that differences in 
health between uninsured and insured adults with cardiovascular 
disease or diabetes at age 65 are reduced by half after five 
years of Medicare coverage. Our research also shows that after 
these uninsured adults gain Medicare coverage, they experience 
fewer heart attacks, less heart failure, and less severe chest 
pain.
    The status quo masks hidden cost to the Medicare Program 
when millions of uninsured adults enroll in Medicare. Uninsured 
adults, particularly those with chronic medical conditions, 
have fewer visits to physicians and fewer hospitalizations than 
insured adults in similar health before age 65. After becoming 
eligible for Medicare, uninsured adults have a rapid increase 
in physician visits and hospitalizations that persists for at 
least seven years after age 65.
    Their care in the Medicare Program is thus more costly, 
because they reach age 65 in worse health and have more 
immediate and expensive medical needs than if they had been 
insured and well-treated in their fifties and sixties. If all 
adults in this age group had insurance coverage, the cost of 
covering them could be off-set by better health and potential 
savings for the Medicare program.
    The instability of insurance coverage in the U.S. is also 
an important factor contributing to racial and ethnic 
disparities in healthcare and health outcomes. Rates of 
coverage very widely across racial and ethnic groups in the 
United States with the highest rates of uninsurance among 
African Americans, American Indians, and Hispanic Americans. 
Without consistent insurance coverage, many minority Americans 
receive fewer preventive services and less effective treatment 
for many medical conditions.
    In the latest national healthcare disparities report, three 
key themes have emerged since 2001. First, overall disparities 
in healthcare quality and access are not getting smaller. 
Second, some progress is being made, but many of the biggest 
gaps in quality and access have not been reduced. Third, the 
problem of persistent uninsurance is a major barrier to 
reducing disparities.
    In conclusion, as you consider the instability of health 
coverage in the United States, the financial challenge of 
achieving universal coverage may appear daunting, but the human 
and economic consequences of the status quo are substantial. To 
put it bluntly, uninsured Americans live sicker and die quicker 
because they receive too little medical care that often comes 
too late to prevent avoidable complications and death.
    Thank you for inviting me to speak with you today about 
this important problem for our Nation.
    [The prepared statement of John Ayanian, M.D. follows:]

 Prepared Statement of John Z. Ayanian, MD, Professor of Medicine and 
   Health Care Policy, Harvard Medical School, Boston, Massachusetts
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    *Chairman STARK. Thank you.
    Dr. O'Grady?

STATEMENT OF MICHAEL J. O'GRADY, PH.D., SENIOR FELLOW, NATIONAL 
         OPINION RESEARCH CENTER, UNIVERSITY OF CHICAGO

    *Mr. O'GRADY. Mr. Chairman, Members of the Subcommittee, my 
name is Michael O'Grady, and I am a senior fellow at the 
National Opinion Research Center at the University of Chicago.
    Previously, I was the assistant secretary for planning and 
evaluation at the Department of Health and Human Services. I 
have also served on the professional staff of the Senate 
Finance Committee, the Joint Economic Committee, and the 
Congressional Research Service. In all of those roles I have 
studied the problem of the uninsured.
    First slide, please?
    [Slide.]
    *Mr. O'GRADY. An important point I urge you to keep in mind 
is the uninsured are not one single population. Consider the 
following: more than half of the uninsured who are of working 
age are full-time workers. It is not only the unemployed who 
lack insurance.
    Second, those who work in small firms are far less likely 
to have coverage than those in the larger firms.
    Third, the uninsured are found at all income levels, but 
most notably the poor and the near poor.
    Four, the uninsured are found at all ages, except for 
seniors, because of Medicare. Youth, 18 to 24, are the least 
likely to be insured, and sometimes by their own choice.
    Hispanics are the last likely to have insurance, followed 
by blacks, Asians, and then whites. About 20 percent or 10 
million people of the uninsured living in the United States are 
not U.S. citizens.
    Other than being uninsured, these individuals often have 
very little else in common. Designing and evaluating proposals 
to expand health insurance coverage is remarkably complex. It 
is made even more difficult in the event that budget 
constraints require tough choices about who will be assisted in 
what way.
    I offer two suggestions. First, consider coverage options 
along several key policy dimensions. Second, consider the mix 
of coverage tools for providing coverage to this very diverse 
population.
    Next slide please.
    [Slide.]
    *Mr. O'GRADY. The first dimension I recommend is the desire 
for coverage. It can be broken down into at least three groups. 
First, people who are desperate for coverage, such as the 
chronically ill and are willing to pay almost any price if it 
was only available. Second, those who seek coverage, but are 
priced out of the market. They just can't afford it. Third, 
people who do not seek coverage, even if it is available and 
affordable.
    Traditional definitions of universal coverage: provide 
coverage to everyone, regardless of an individual's desire to 
be covered. For example, the single, healthy, young adult who 
isn't interested in health coverage at this point in life. On 
the other hand, those following a phased approach might rank 
some groups of the uninsured as a higher priority than others. 
For example, they may be more concerned about an uninsured, 55-
year-old diabetic with complications than a young, healthy, 
recent college graduate.
    The second dimension I'd suggest is time without coverage. 
The data on coverage indicates that the longer a person is 
uninsured, the longer the potential gap in needed services. In 
this example, higher priority might be given to those uninsured 
for the longest period of time. For example, more than two 
years.
    The third dimension is citizenship status. There may be 
neither the political consensus nor the budget to extend 
coverage to all the people living in the United States. A 
likely scenario might have coverage first off to citizens 
before coverage would be considered for non-citizens, either 
legally or illegally in the country. This chart provides a 
visual way to think about the interactions among the three 
policy dimensions I've just outlined.
    People falling into the highest priority on all three 
dimensions are assigned the highest overall priority of one. 
While policymakers may differ on the assignment of priorities 
or on the dimensions they wish to consider, this provides a 
common framework on which to base decisions. In addition to 
those policy dimensions, different policy tools may be needed 
to meet the needs of these very different subpopulations.
    For small business with moderate income employees, the 
successful solution might include access to both purchasing 
pools, so they have the same options as larger firms, and an 
improved tax advantage to help them offset the cost of 
coverage. For the uninsured without employment-based coverage, 
it could be made more affordable if they had access to the same 
tax advantages as employer-based coverage.
    For immigrants, legal or illegal, that same combination of 
incentives would probably not be as nearly as effective. Also, 
especially for the illegal immigrants, it would seem unlikely 
that expanded government programs would prove effective, asking 
illegal immigrants to interact with government intake and 
eligibility officials is unlikely to generate much trust or 
compliance.
    This subpopulation may be better served through a clinic 
approach, which insures care, if not coverage, and is closer to 
the model of care found in many of their home countries. 
Policymakers will need to carefully consider the circumstances 
of the subpopulation involved to judge which type of design 
will be the most successful. The systematic examination of the 
composition of the uninsured, a prioritization of those who 
receive insurance assistance, and a review of the mix of tools 
available to help the uninsured gain access to health care will 
prove useful in shaping a scientifically sound and viable 
policy for the future. Thank you.
    [The prepared statement of Michael J. O'Grady follows:]

Prepared Statement of Michael O'Grady, Senior Fellow, National Opinion 
       Research Center, University of Chicago, Chicago, Illinois
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    *Chairman STARK. Thank you very much, doctor.
    Mr. Brock, what can you add to the wonderful program, which 
we just viewed? Please.

  STATEMENT OF STAN BROCK, FOUNDER AND VOLUNTEER DIRECTOR OF 
     OPERATIONS, REMOTE AREA MEDICAL, KNOXVILLE, TENNESSEE

    *Mr. BROCK. I'll try. Thank you, sir.
    Remote Area of Medical, often referred to the acronym, RAM, 
was formed in 1985 as a tax-exempt 501(c)(3) publicly supported 
organization headquartered in Knoxville, Tennessee. Its intent 
was to provide airborne medical and veterinary relief for the 
Wapishana indians, with whom I had lived for many years in a 
remote area over the upper Amazon. However, observations at our 
U.S. base in the heart of Appalachia revealed a substantial 
need for RAM free services here at home. The need is massive 
and it touches all regions of America, both rural and urban. 
It's not limited to the homeless, unemployed, and uninsured. It 
affects the working class and those who have insurance. Health 
care in America has become a privilege of the wealthy and well-
insured.
    More than 15 percent of America's population are uninsured, 
and there are millions more who have insurance inadequate to 
meet the needs of a catastrophic medical event or visits to the 
dentist or eye doctor.
    The RAM experience in hundreds of thousands of cases proves 
huge numbers of Americans cannot afford routine dental care and 
simply neglect their teeth. RAM data showed that our volunteer 
dentists extract an overwhelming number of teeth that are 
beyond repair. People tell us they face thousands of dollars of 
dental work, and when we look in their mouths, we see cases as 
bad as any discovered among the Amazonian tribal groups.
    The state of vision care among those who visit RAM clinics 
is no better. They can't afford an eye exam and if they had 
one, can't afford the prescription glasses. No wonder hundreds, 
sometimes a thousand people line up throughout the night before 
a RAM-free clinic in an effort to get their teeth fixed and 
obtain a free pair of glasses from us.
    Services for children under the age of 18 usually are 
covered by state programs, but access can be difficult. Toping 
the list of reasons is government reimbursements are too low, 
and paperwork too cumbersome to make it worthwhile.
    Once people transition into adulthood, they are on their 
own for dental and vision care, unless they're able to pay 
large insurance premiums. I received a call last Sunday from a 
38-year-old working mother of four in Kentucky. All five of the 
family have serious dental problems. She has insurance through 
her employer, but it has a $50 deductible, and when the plan 
pays, she has to cover an unaffordable 20 percent co-payment. 
Her 17-year-old needs his wisdom teeth extracted, but the plan 
does not cover the $700 for the anesthesia. The mother needs 
her own teeth extracted so she can get dentures. Oh, and the 
family cat needs to be spayed. I told her to come to the RAM 
clinic at Lincoln Memorial University at the end of May and 
would fix everybody's teeth, and a RAM volunteer vet would spay 
the cat, all free.
    Why does the United States, the richest country on our 
planet, have a health care system ranked No. 37 out 190 
countries by the World Health Organization? We have the most 
advanced technology accessible only to those who can afford it.
    America's poor and the not-so-poor, who have some type of 
insurance are suffering debilitating pain and health risk from 
diseased teeth and are handicapped with vision problems that 
are correctable, but not affordable.
    When Britain was at war in 1941 the government realized 
that they needed a national health care system, and in 1944 
gave the minister of health and Aneurin Bevan a mandate to 
develop it. I'm not advocating that the United States follow 
Britain, France, Canada, Germany, or any other developed 
country which has some form of national health care system; 
however, I am convinced that the RAM experience with the 
hundreds of thousands of patients we have seen that America 
does need to provide free care for the millions who cannot 
afford it, and free dental and vision care for the adults must 
be included.
    In closing, I would like to stress that a great impediment 
to providing free care in this country is that willing 
volunteer health care providers holding licenses in one state 
are not allowed to provide free care in another.
    Tennessee changed this in 1995 with the enactment of the 
Volunteer Health Care Services Act. Under that law, any 
charitable organization can bring volunteer medical workers and 
vets licensed anywhere in the U.S. into Tennessee to provide 
free care. House concurrent resolution No. 69 was introduced to 
Congress in 1997 to encourage national adoption of the 
Tennessee model. To our knowledge, it never got out of 
Committee. If practitioners were allowed to cross state lines 
to provide free care for those in need and had protection from 
frivolous malpractice suits, the system of free care that RAM 
has developed and proven throughout all these years, could be 
replicated throughout America.
    I'd like to thank the Committee for inviting me today, and 
thank you, CBS, 60 Minutes, for dramatically focusing on this 
national problem.
    [The prepared statement of Stan Brock follows:]

  Prepared Statement of Stan Brock, Founder and Volunteer Director of 
         Operations, Remote Area Medical, Knoxville, Tennessee
    Remote Area Medical, often referred to by the acronym, ``RAM,'' was 
formed in 1985 as a tax exempt 501c3 publicly supported organization 
headquartered in Knoxville, TN. Its intent was to provide airborne 
medical and veterinary relief for Wapishana Indians with whom I had 
lived for many years in a remote area of the upper Amazon.
    However, observations at our U.S. base in the heart of Appalachia 
revealed a substantial need for RAM free services here at home. The 
need is massive and it touches all regions of America both rural and 
urban. It is not limited to the homeless, unemployed and uninsured. It 
affects the working class and those who have insurance. Health care in 
America has become a privilege of the wealthy and well-insured.
    More than 15 percent of America's population are uninsured and 
there are millions more who have insurance inadequate to meet the needs 
of a catastrophic medical event or visits to the dentist or eye doctor.
    The RAM experience in hundreds of thousands of cases proves huge 
numbers of Americans cannot afford routine dental care and simply 
neglect their teeth. RAM data show that our volunteer dentists extract 
an overwhelming number of teeth that are beyond repair. People tell us 
they face thousands of dollars of dental work and, when we look in 
their mouths, we see cases as bad as any discovered among the Amazonian 
tribal groups.
    The state of vision care among those who visit RAM clinics is no 
better. They cannot afford an eye exam and, if they had one, cannot 
afford the prescription eyeglasses.
    No wonder hundreds--sometimes a thousand--people line up throughout 
the night before a RAM free clinic in an effort to get their teeth 
fixed and obtain a free pair of eyeglasses from us.
    Services for children under the age of 18 usually are covered by 
state programs, but access can be difficult. Topping the list of 
reasons is government reimbursements are too low and paperwork too 
cumbersome to make it worthwhile. Once people transition into 
adulthood, they are on their own for dental and vision care unless they 
are able to pay large insurance premiums.
    I received a call last Sunday from a 38-year-old working mother of 
four in Kentucky. All five of them have serious dental problems. She 
has insurance through her employer but it has a $50 deductible and, 
when the plan pays, she has to cover an unaffordable 20 percent co-
payment. Her 17-year-old needs his wisdom teeth extracted but the plan 
does not cover the $700 cost for the anesthesia. The mother needs her 
own teeth extracted so she can get dentures. Oh, and the family cat 
needs to be spayed. I told her to come to the RAM clinic at Lincoln 
Memorial University at the end of May and we would fix everybody's 
teeth and a RAM volunteer veterinarian would spay the cat--all free.
    Why does the United States, the richest country on our planet, have 
a health care system ranked number 37 out of 190 countries by the World 
Health Organization? We have the most advanced technology accessible 
only to those who can afford it.
    America's poor, and the not-so-poor who have some type of 
insurance, are suffering debilitating pain and health risk from 
diseased teeth and are handicapped with vision problems which are 
correctable but not affordable.
    When Britain was at war in 1941, the Government realized they 
needed a national health care system and in 1944, gave the Minister of 
Health, Aneurin Bevan, a mandate to develop it. I am not advocating 
that the United States follow Great Britain, France, Canada, Germany or 
any other developed country which has some form of national health care 
system. However, I am convinced by the RAM experience with the hundreds 
of thousands of patients we have seen that America does need to provide 
free care for the millions who cannot afford it and free dental and 
vision care for adults must be included.
    In closing, I would like to stress that a great impediment to 
providing free care in this country is that willing volunteer health 
care providers holding licenses in one state are not allowed to provide 
free care in another state. Tennessee changed this in 1995 with the 
enactment of the Volunteer Health Care Services Act. Under that law, 
any charitable organization can bring volunteer medical workers and 
veterinarians licensed anywhere in the United States into Tennessee to 
provide free care. House Concurrent Resolution No. 69 was introduced to 
Congress in 1997 to encourage national adoption of the Tennessee model. 
To our knowledge, it never got out of committee.
    If practitioners were allowed to cross state lines to provide free 
care for those in need, and had protection from frivolous malpractice 
suits, the system of free care that RAM has developed and proven 
throughout all these years could be replicated throughout America.

                                 

    *Chairman STARK. Thank you, Mr. Brock.
    Mr. Finan, would you?

   STATEMENT OF STEPHEN FINAN, ASSOCIATE DIRECTOR OF POLICY, 
                    AMERICAN CANCER SOCIETY

    *Mr. FINAN. Good morning, Mr. Chairman, Mr. Camp, and 
distinguished Members of the Committee. Thank you for inviting 
the American Cancer Society year to testify today. The American 
Cancer Society is a nation-wide, community-based voluntary 
health organization dedicated to eliminating cancer. The 
Society and its sister advocacy organization, the American 
Cancer Society Cancer Action Network, are working together to 
elevate the issue of access to care and its impact on cancer 
patients and their families.
    I would like to begin my discussion of inadequate health 
insurance by sharing Doreen's story with you. Doreen, a 57-
year-old former medical office receptionist, was diagnosed with 
stage IV breast cancer in the fall of 2005. The cancer spread 
to her spinal column, liver, lungs, and left femur.
    Doreen's husband is a retired New York policeman, and she 
has health insurance through his retirement plan. Her plan 
limited her to thirty outpatient visits a year, a number Doreen 
quickly exceeded. Her plan had other restrictions as well, 
including a limit that initially prevented her from getting a 
stent for her chemotherapy. She was ultimately allowed to have 
the procedure for the stent, but only after a delay. She also 
learned of some of these restrictions from her plan, only after 
she had exceeded them. As a result, in less than a year Doreen 
and her husband owed more than $100,000 to the hospital for 
various treatments. These significant restrictions resulted in 
delays in treatment and great emotional stress that further 
jeopardized her health.
    As defined by the Society, adequate health insurance 
insures timely access to the full range of evidence-based 
health care services necessary to maintain health, avoid 
disease, overcome acute illness, and live with a chronic 
condition. These services include the complete continuum of 
evidence-based cancer care for preventing treatment and support 
needs, including clinical trials.
    Doreen is one of 16,000 people who have called the American 
Cancer Society because she had problems with her private health 
insurance. The primary problems we have identified among those 
with inadequate health insurance include annular life-time 
dollar limits or restrictions on necessary services, like 
Doreen experienced; no or limited coverage within the plan for 
out-of-network specialists, limiting the patient's ability to 
access care; no or limited coverage within the plan for 
prescription drugs.
    But the biggest single issue we see is related to cost 
sharing. Nearly two-thirds have trouble meeting deductibles, 
paying their co-insurance for prescription drugs and treatment, 
and covering costs for necessary services not covered by their 
plan.
    Let me illustrate the cost-sharing problem with Martha's 
story. Martha, a 63-year old retired woman, was diagnosed with 
stage I breast cancer in November of 2007. Martha's cancer 
treatment included surgery followed by radiation. Martha has 
health insurance but the policy is inadequate. For example, the 
insurance paid $100,000 of a $10,000 hospital bill for her 
surgery. Her accumulated deductibles and co-pays for various 
medical services have left her with $28,000 in medical debt and 
the hospital is threatening her with a collection agency.
    Co-pays and deductibles may be reasonable or routine care, 
but when a person has a serious medical condition like cancer, 
the accumulated expenses can become very significant. Today 
Martha is struggling with keeping her head above water 
financially.
    Some of the most disheartening kinds of stories we hear are 
from people who have had to interrupt their treatment because 
of inadequate coverage. We logged nearly 900 such cases last 
year. Please think about this for a minute. These are people 
who have stopped treatment for a deadly disease because they 
cannot afford to pay for additional necessary care.
    For them a decision to delay treatment is often a life-or-
death decision, but if they proceed, they risk breaking 
themselves and their families financially.
    More formal studies support our experience. For example, 
nearly 1 in 3 cancer patients who are insured have out-of-
pocket costs that exceed 10 percent of their family income. 
More than 1 in 9 cancer patients with insurance have out-of-
pocket health costs that exceed 20 percent of their family 
income. Twenty percent of cancer patients with insurance use 
all or most of their savings when dealing with their financial 
costs of cancer. And 10 percent of medical bankruptcies are 
from people who have had a cancer diagnosis.
    The problem of under-insurance is very difficult to 
measure, but we know the problem is very real for many cancer 
patients. This should be a concern to everyone, because cancer 
can touch us all. Slightly less than 1 in 2 men will have 
cancer in their lifetime, and slightly more than 1 in 3 women 
will.
    Although I've focused on the issue of adequacy of 
insurance, the American Cancer Society is also greatly 
concerned about the problems of the uninsured which the other 
witnesses this morning have addressed. We believe that the 
science and the knowledge exist to provide quality care for all 
Americans, but we must work together to restructure our 
coverage and delivery systems to achieve that goal. Your 
hearing today is a valuable contribution to that discussion.
    Thank you, Mr. Chairman.
    [The prepared statement of Stephen Finan follows:]

  Prepared Statement of Stephen Finan, Associate Director of Policy, 
                        American Cancer Society
    Good morning, Mr. Chairman and distinguished Members of the 
Committee. My name is Stephen Finan, Associate Director of Policy for 
the American Cancer Society. The American Cancer Society is a 
nationwide, community-based, voluntary health organization, dedicated 
to eliminating cancer as a major health problem by preventing cancer, 
saving lives, and diminishing suffering from cancer through research, 
education, advocacy, and services.
    Thank you for inviting the American Cancer Society to testify. As 
you may know, ACS, and its sister advocacy organization the American 
Cancer Society Cancer Action Network (ACS CAN) are working together to 
elevate the issue of access to care and its impact on cancer patients 
and their families by educating the public and policymakers about 
problems in the health care system and the need for change. We look 
forward to working with this Subcommittee as you work toward solutions 
to improve and expand access to quality care.
    This morning you are listening to other speakers on the panel 
describe the problem of availability of health insurance. Although we 
fully share that concern, I would like to take this time to shed light 
on the under-appreciated, and at times overlooked, problem of adequacy 
of insurance. I would like to paint a picture--all too common in 
America--of how cancer patients and survivors with inadequate insurance 
face barriers and financial burdens in getting the quality health care 
they need to fight their dreadful disease.
Doreen's Struggle With Inadequate Insurance Coverage
    Let me begin our discussion of inadequate insured by sharing 
Doreen's story with you. Doreen, a 57-year-old former medical office 
receptionist, was diagnosed with Stage IV breast cancer in the fall of 
2005. The cancer metastasized to her spinal column, liver, lungs, and 
left femur. Doreen and her husband, a retired New York City police 
officer, have health insurance through his retirement plan. The 
insurance covers 30 outpatient visits a year, a number Doreen quickly 
exceeded after beginning treatment for her cancer. After she reached 
this annual limit, she was billed $5,000 a week for chemotherapy 
treatments. In less than a year, Doreen and her husband owed more than 
$100,000 to the hospital for her treatment. By the time Doreen's 
insurance company informed her that she had exceeded her maximum number 
of outpatient visits, she had already made additional visits the plan 
would not cover. Fortunately for Doreen, she spoke at an American 
Cancer Society event about her inadequate insurance and the story ran 
in the Long Island Newsday. Upon reading the article, the insurer 
reversed the decision and paid Doreen's medical bills in full. While 
Doreen's story turned out well, countless others are not as fortunate 
to have a platform to share their story.
    It was stories like Doreen's and the countless stories of uninsured 
Americans' struggle with this dreadful disease that brought the 
American Cancer Society to the conclusion that we had to enter the 
broader national debate about access to care.
Defining Adequate Health Insurance
    As defined by the Society, adequate health insurance ensures timely 
access to the full range of evidence-based health care services (i.e., 
rational, science-based, patient-centered)--including prevention and 
primary care--necessary to maintain health, avoid disease, overcome 
acute illness, and live with chronic illness. These services include 
the complete continuum of evidence-based cancer care for treatment and 
support needs including clinical trials. Coverage should be 
comprehensive and protect the individual from incurring catastrophic 
expenditures.
Little Help Available for Those With Inadequate Insurance
    The stories we are giving you come from our Health Insurance 
Assistance Service (HIAS), which is a service offered through the 
American Cancer Society's National Cancer Information Center (NCIC). 
HIAS is a free resource that connects callers with health insurance 
specialists who work to address their needs. The specialists at NCIC 
handle inquiries about health insurance, coverage dynamics, and state 
programs--all specific to the caller's needs. To date HIAS has captured 
almost 16,000 cases from 32 states, with plans to expand the program to 
other states.
    The volume and type of calls received are captured as part of an 
internal database that allows for analysis of trends and emerging 
issues. While the database is not systematic or representative of all 
Americans, the volume and type of calls we receive identify serious 
problems that exist in our insurance system today. A recent analysis of 
the cases in the database revealed interesting information about cancer 
patients who have inadequate health insurance. In general, the Society 
is able to assist 1 in 6 cancer patients who contact HIAS about their 
health insurance problems. In the cases where we were unable to help 
the cancer patient, we can identify barriers in the current health 
insurance system facing cancer patients.
    HIAS receives calls from individuals who are uninsured, those who 
are transitioning between plans, and cancer patients who are currently 
insured. Many of these callers are people who have been recently 
diagnosed or who are in treatment for cancer.
    The problems we have specifically identified among those with 
inadequate insurance include:

      Annual or lifetime benefit limits within the plan that 
results in the patient not being able to access further cancer care 
without incurring medical debt.
      No or limited coverage within the plan for out-of-network 
specialists, limiting the patient's ability to access quality cancer 
care.
      No or limited coverage within the plan for prescription 
drugs or treatments.
      Mounting, affordable co-pays or co-insurance.

    For these callers, there is seldom help available to solve their 
problems. Unfortunately, there are few safety net options for the 
under-insured.
    The biggest single issue is related to cost-sharing being too high. 
Nearly two-thirds (63 percent) stated cost-sharing as their primary 
reason to call HIAS. These callers had trouble meeting deductibles, 
paying their co-insurance for prescription drugs and treatment, and 
covering costs for physician visits and non-network specialty care.
Martha's Financial Struggle With High Cost-Sharing
    I would like to share a story from HIAS of a cancer patient who was 
insured and struggled financially because of the high cost-sharing for 
covered benefits. Martha, a 63-year-old retired woman, was diagnosed 
with Stage I breast cancer in November 2007. For her cancer treatment, 
Martha had surgery followed by radiation. Martha is now post-treatment, 
but still needs periodic follow-up visits to her oncologist to monitor 
for recurrence. Martha has a health insurance policy, but the policy is 
inadequate for her needs. For example, the insurance paid $1,000 of a 
$10,000 hospital bill for her surgery. Martha said she is $28,000 in 
medical debt due to her cancer diagnosis, and the hospital is 
threatening her with a collection agency. Martha lives in a state that 
has a medically underwritten individual insurance market, so it is 
unlikely she would be offered another policy. Martha beat her cancer, 
but now she is struggling with keeping her head above water 
financially.
Patients Interrupting Treatment Because of Inadequate Coverage
    Some of the most disheartening kind of stories we hear come from 
people who have had to interrupt their treatment because of inadequate 
coverage. Nearly 900 of the cases logged in the last year have involved 
cancer patients interrupting their treatment, meaning they elect to 
stop their treatment before it has been completed. Please think about 
this for a moment--these are people who stop treatment for a deadly 
disease because they cannot afford to pay. The consequences of this 
decision could be detrimental to their health and may very well be a 
life or death situation.
    Another common problem we see involves pre-existing condition 
restrictions on coverage. Although this is an access problem, it can 
also be viewed as an adequacy issue. If the caller has a current cancer 
diagnosis or a history of cancer, insurers may limit their coverage by 
imposing a pre-existing exclusion period. These exclusions eliminate 
all coverage for cancer-related health care for the duration of the 
exclusion period--usually 6-12 months, but sometimes permanently, 
depending on the coverage type. Pre-existing condition exclusion 
periods are a leading reason why HIAS callers do not enroll in coverage 
options available to them. They cannot afford to pay for premiums 
without receiving coverage for their cancer.
    Let me share a story illustrating the adequacy problems related to 
the exclusion of pre-existing conditions. Thomas, a 35-year-old married 
father of three, was diagnosed with testicular cancer in March 2004. At 
the time, he was insured and able to get the appropriate care to 
successfully treat his cancer with surgery and radiation. Thomas' wife 
called HIAS because Thomas was without insurance and needed follow-up 
care to ensure his cancer remained in remission. Thomas could not 
receive the follow-up tests, which cost more than $2,500, without 
insurance or a means to pay. Since his remission, Thomas started his 
own business and lost his previous coverage. He attempted to get 
coverage in the individual market, but due to medically underwriting he 
was denied several insurance policies. Thomas was eligible for the 
state high risk pool; however, Thomas said the 12-month pre-existing 
exclusion period renders this option not viable. Thomas remains 
uninsured and unable to access the follow-up care to monitor his 
health.
Cancer and the ``Under-Insured''
    The problem of paying costly medical bills affects middle-class 
families, particularly those with chronic diseases such as cancer. 
Often insurance policy deductibles, co-payments and limits on health 
services may leave cancer patients without access to the timely, 
lifesaving treatment they need. Cancer patients may have to deal with 
major financial burdens because of out-of-pocket costs in addition to 
their cancer diagnosis. We receive calls everyday from cancer patients 
with these problems and published research is available that supports 
these problems of inadequate and unaffordable insurance as illustrated 
through the HIAS stories.
    A recent study analyzing data from the Medical Expenditures Panel 
Survey (MEPS) shows the breadth of this kind of financial problem.\1\ 
The MEPS household survey, sponsored by the Agency for Health Care 
Research and Quality (AHRQ), collects information from the non-elderly, 
non-institutionalized U.S. population. The survey asks American 
families questions about health insurance coverage, health care 
utilization, and health care expenditures. In this study, the 
researchers defined ``under-insured'' as people with insurance spending 
10 percent or more of their tax-adjusted family income on health care 
services, including insurance premiums. Nearly 1 in 3 (28.8 percent) 
cancer patients who are insured have an out-of-pocket health care 
burden that exceeds 10 percent of their family income. More than 1 in 9 
cancer patients with insurance have out-of-pocket health care burdens 
exceeding 20 percent of their family income in health care 
expenditures.
---------------------------------------------------------------------------
    \1\ Banthin JS, Bernard DM. Changes in financial burdens for health 
care: National estimates for the population younger than 65 years, 1996 
to 2003. JAMA 2006; 296: 2712-19.
---------------------------------------------------------------------------
    Cancer patients who have inadequate coverage have higher medical 
costs and must deal with the additional stress of financial 
instability. A survey of cancer patients and their families found that 
one in five cancer patients with insurance uses all or most of their 
savings when dealing with the financial costs of cancer.\2\ Another 
study found that more than one in five people with chronic conditions 
have problems paying medical bills. Furthermore, the incidence of 
burdensome out-of-pocket spending among low-income, privately insured 
people with chronic conditions is rising dramatically.\3\
---------------------------------------------------------------------------
    \2\ USA Today, the Kaiser Family Foundation, the Harvard School of 
Public Health. National survey of households affected by cancer, August 
1-September 14, 2006.
    \3\ Tu HT. Rising health costs, medical debt, and chronic 
conditions. Center for Studying Health System Change Issue Brief No. 
88, September 2004.
---------------------------------------------------------------------------
    Medical debt has been an important cause of bankruptcy filing in 
the U.S. An analysis of national survey data found nearly six of ten 
adults who had current-year difficulty paying medical bills and 70 
percent of those reporting medical debt said they were insured at the 
time their problems began.\4\ Another study examined the causes of 
bankruptcy and found that 1.9-2.2 million Americans experienced 
bankruptcy related to medical problems in 2001.\5\ Among those with 
illnesses that led to bankruptcy, their out-of-pocket costs average 
$11,854 and three-quarters had insurance at the time of their 
diagnosis.
---------------------------------------------------------------------------
    \4\ Doty MM, Edwards JN, Holgren AL. Seeing red: Americans driven 
into debt by medical bills. The Commonwealth Fund, August 2005.
    \5\ Himmelstein DB, Warren E, Thorne D, Woolhandler S. Illness and 
injury as contributors to bankruptcy. Health Aff 2005; Web exclusive: 
63-73.
---------------------------------------------------------------------------
    Despite having insurance, many cancer patients and survivors 
experience major financial burdens. The situation of the ``under-
insured'' is difficult to measure because wide variation exists among 
health insurance plans and people do not realize they are ``under-
insured'' until they have a health crisis such as cancer. Furthermore, 
studies like the one I previously mentioned use a narrow definition to 
measure the number of ``under-insured''--that is, they do not include 
those who stop or delay treatment because they will not be able to 
afford it. While we use these studies to talk about the ``under-
insured,'' they do not fully capture the nature and extent of the 
problem.
American Cancer Society's Commitment to Access to Care
    Our testimony this morning focused on the issue of adequacy, but 
the American Cancer Society is also greatly concerned about the 
problems of the uninsured, which the other witnesses this morning are 
addressing.
    We have made significant progress in recent years in addressing the 
cancer problem. Cancer death rates have decreased by 18.4 percent among 
men and 10.5 percent among women since the early 1990s. Despite this 
significant progress, the American Cancer Society realizes that its 
long-term goals of reducing the incidence and mortality of cancer 
cannot be achieved unless the gaps that exist within the current health 
care system are addressed. The challenge lies in the fact that our 
health care system is not up to the task.
    A recent American Cancer Society study of 12 types of cancer among 
more than 3.5 million cancer patients dramatically demonstrates the 
problem of access today for uninsured cancer patients.\6\ The study 
found uninsured patients were significantly more likely to present with 
advanced stage cancer compared to patients with private insurance. The 
study found consistent associations between insurance status and stage 
at diagnosis across multiple cancer sites. Compared to patients with 
private insurance, uninsured patients had significantly increased 
likelihoods of being diagnosed with cancer at more advanced stages. The 
greatest risk for diagnosis with moderately advanced cancer (stage II) 
instead of the earliest stage (stage I) was in colorectal cancer, while 
the highest risk for diagnosis at the most advanced stage of cancer 
(stage III/IV) was in breast cancer. The study shows that too many 
cancer patients are being diagnosed too late, when treatment is more 
difficult, more expensive, and has less chance of saving lives.
---------------------------------------------------------------------------
    \6\ Halpern MT, Ward EM, Pavluck AL, Schrag NM, Bian J, et al. 
Association of Insurance Status and Ethnicity with Cancer Stage at 
Diagnosis for 12 Cancer Sites: A Retrospective Analysis. Lancet 
Oncology 2008; 9:222-31.
---------------------------------------------------------------------------
    We know that individuals and families who are uninsured or have 
inadequate insurance often go without preventive care despite research 
showing that early detection and timely treatment are effective in 
improving outcomes.
    We know that cancer patients who are uninsured or have inadequate 
insurance often do not receive necessary and appropriate treatment in a 
timely manner, and that they have worse health because of these 
problems.
    And we know we cannot meet the American Cancer Society's goals of 
reducing cancer mortality by 25 percent and cancer incidence by 50 
percent by 2015 if we don't achieve greater improvements in our 
nation's coverage and health care delivery systems.
    The recognition of these problems for cancer patients led the 
American Cancer Society to decide to enter the broader national debate 
on health care reform. Last year, the Society developed evidence-based 
principles defining meaningful health insurance to be adequate, 
available, affordable, and administratively simple without regard to 
health status or risk. These guiding principles, known as the 4As, are 
essential to any health care reform. (The principles are attached as 
Appendix A.)
Conclusion
    Cancer death rates are decreasing and we know what we must do as a 
nation to defeat cancer. Much of the public debate today is about the 
need to cover the 47 million uninsured, and the American Cancer Society 
fully shares that concern. However, we need to recognize more fully the 
very significant problem of underinsurance. Health plans vary 
enormously in their deductibles, co-pays, benefits covered, and 
exceptions. Insurance plans are written in very detailed legalistic 
language that very few lay people can begin to comprehend, and the 
summary plan documents that are provided to enrollees almost never 
begin to convey the adequacy of coverage. Put another way, if you were 
to look at an array of plans that might be available to you as a 
consumer, and you were to ask, what would be the adequacy of your 
coverage if you were to be diagnosed with cancer or some other serious 
disease, you would probably conclude that you have no idea whether the 
plan would be adequate. As we see all too often in our HIAS cases, 
people often discover after their diagnosis what their plan really 
means--and that is a point where for most patients it is virtually 
impossible to change coverage. As an appendix to my testimony, I am 
including additional stories that highlight the problems of the 
inadequately insured. (The stories are attached as Appendix B.)
    In adopting our principles for meaningful health insurance--our 
4As--we said that adequacy should cover the full array of necessary 
services, from early detection through treatment and survivorship, but 
we did not attempt to define the specifics of an adequate plan. Rather, 
our goal is to stimulate a public discussion that will lead to a broad 
consensus. We want to raise the issues through the campaigns this year 
and carry the discussion forward at the Federal and State level as 
legislative reform efforts are developed. We believe the science and 
the knowledge exist to provide quality health care for all Americans, 
but we must work together to restructure our coverage and delivery 
systems to achieve that goal. Your hearing today is a valuable 
contribution to that discussion.
    Thank you.
Appendix A:
American Cancer Society Statement of Principles on What Constitutes 
        Meaningful Health Insurance
    The American Cancer Society is the nationwide community-based 
voluntary health organization dedicated to eliminating cancer as a 
major health problem by preventing cancer, saving lives and diminishing 
suffering from cancer, through research, education, advocacy, and 
service. The American Cancer Society has set ambitious goals for 
significantly reducing the rates of cancer incidence and mortality 
along with measurably improving the quality of life for all people with 
cancer.
    ``The ultimate conquest of cancer in America is as much a public 
policy aspiration as it is a scientific and medical challenge. There 
are many stakeholders in the cancer fight actively doing their part to 
defeat this disease, but it cannot be done without the sustained 
leadership and strong commitment of government. We are poised to make 
gains so substantial that we now can talk about a time when cancer is 
no longer a killer and is instead just a chronic condition, or even 
better, a disease for which a cure is a realistic, frequently achieved 
goal. Our nation's current health care system is not up to this 
challenge. If we are to ultimately conquer cancer our system must 
ensure that all Americans have access to high quality care.'' \7\
---------------------------------------------------------------------------
    \7\ Dr. John Seffrin, American Cancer Society CEO, Statement to ACS 
Board of Directors during January 2006 meeting.
---------------------------------------------------------------------------
    Improving the nation's health care system requires a new 
partnership for the nation that will facilitate the coverage and 
delivery of quality evidence-based cancer care and work to eliminate 
disparities and inequities in the current system. This will require a 
commitment from the private, public, and not-for-profit sectors and 
individuals. Stakeholders in the health care system, from doctors, 
hospitals, and insurers, to employers, and not-for-profit 
organizations, all have critical roles to play. All Americans have an 
obligation, as well, to take responsibility for their own health to the 
extent possible, by pursuing healthy lifestyles, and educating 
themselves about their health needs, including ways to prevent and 
detect cancer.
    A critical aspect of improving the health care system is to define 
and ensure access to meaningful public or private insurance. This 
includes adequate financing. Our nation has had much conversation on 
the insured and uninsured and less on what it means to be meaningfully 
insured. Below is the statement of the American Cancer Society on what 
constitutes meaningful health insurance.
                        Statement of Principles
It is a fundamental principle of the American Cancer Society that 
        everyone should have meaningful public or private health 
        insurance.
Meaningful health insurance is adequate, affordable, available and 
        administratively simple.
Adequate health insurance means:
      timely access and coverage of the complete continuum of 
quality, evidence-based healthcare services (i.e., rational, science-
based, patient-centered), including prevention and early detection, 
diagnosis, and treatment
      supportive services should be available as appropriate, 
including access to clinical trials, chronic disease management, and 
palliative care
      coverage with sufficient annual and lifetime benefits to 
cover catastrophic expenditures
Available health insurance means:
      coverage will be available regardless of health status, 
or claims history
      policies are renewable
      coverage is continuous
Affordable health insurance means:
      costs, including premiums, deductibles, co-pays, and 
total out-of-pocket expenditure limits, are not excessive and are based 
on the family's or individual's ability to pay
      premium pricing is not based on health status or claims 
experience
Administratively simple health insurance means:
      clear, up-front explanations of covered benefits, 
financial liability, billing procedures, and processes for filing 
claims, grievances, and appeals are easily understood and timely, and 
required forms are readily comprehensible by consumers, providers and 
regulators
      consumers can reasonably compare and contrast the 
different health insurance plans available and can navigate health 
insurance transactions and transitions
Appendix B: Stories from Cancer Patients on the Adequacy of Health 
        Insurance
    Since 2005, the Society has documented real stories from cancer 
patients who have had trouble accessing adequate coverage. These case 
studies reflect actual cases of cancer patients who called the American 
Cancer Society National Cancer Information Center for advice navigating 
the health care system and solving coverage problems.
Randy, 63 years old, Pennsylvania
    Following his diagnosis with Stage IV esophageal cancer, Randy had 
surgery to remove his esophagus and stomach. Radiation and intense 
chemotherapy followed. Randy quickly reached the $100,000 lifetime cap 
on his major medical coverage and now receives no further benefits. He 
has paid out of pocket for follow-up scans and labs to monitor his 
condition. Because he had 18 months of continuous, creditable coverage, 
Randy would've been eligible by Federal law for a policy with no pre-
exclusionary period. However, he wasn't aware of the option until after 
it had expired. Meanwhile, Randy and his wife are ineligible for 
AdultBasic or Medicaid, and he is unlikely to get private insurance due 
to medical underwriting. Randy's only option, a guaranteed issue 
policy, includes a pre-existing condition exclusionary period of up to 
three years. The policy allows for riders that could modify the 
benefits and conditions of his coverage. Ultimately, Randy will have to 
wait two years to become Medicare eligible. He has no other choice.
Valerie, 34 years old, Georgia
    Valerie, a mother and wife, is a contract worker for a small 
staffing agency. Her husband, Jeff, is a car salesman. The family's 
income fluctuates based on her workload and his commission. Valerie was 
recently diagnosed with Stage IV breast cancer and is currently 
undergoing treatment. She has employee-sponsored insurance through the 
staffing agency, but she quickly met the plan's $10,000 yearly maximum 
benefit. She now owes $6,000 in bills to her oncologist's office and is 
responsible for the cost of her treatments moving forward. Those 
treatments include three more rounds of chemotherapy and potentially 
radiation or surgery. Valerie doesn't want to change insurance, largely 
because the other members of her family are covered under her plan. 
Jeff doesn't have access to employee-sponsored insurance at his job. 
Valerie will likely be denied insurance in the individual market 
because of medical underwriting. Therefore, she can't buy a 
supplemental policy to cover her chemotherapy. She will continue paying 
her considerable treatment costs out of pocket.
Kay, 61 years old, Florida
    Kay works part time at a large department store earning $13,000 per 
year. She has insurance through her employer but quickly exceeded the 
plan's $25,000 annual maximum following her diagnosis with Stage II 
breast cancer. She has received eight cycles of pre-operative 
chemotherapy, had a lumpectomy with auxiliary lymph node dissection, 
and now needs radiation. Kay already has $40,000 in outstanding medical 
bills from various diagnostic tests that were not covered. Now she's 
been told that she cannot begin radiation unless she plans to bring 
$115,000 with her to the first appointment. Kay's Medicaid application 
is pending; it will take months before she learns if help is available. 
Meanwhile, she will likely be denied private insurance because of 
medical underwriting. Kay has no adequate insurance options.
Bettie, 57 years old, Florida
    Bettie works at a toll both in Florida. She exceeded the $50,000 
annual maximum on her employer-sponsored insurance within six weeks of 
her breast cancer diagnosis. Bettie had a lumpectomy followed by 
auxiliary dissection of her underarm lymph nodes. She has been unable 
to start radiation treatments and is now uninsured; her plan was 
terminated when her employer changed parent companies. Bettie has been 
told that she cannot enroll in the new employee-sponsored plan until 
she returns from short-term disability. She is currently caring for her 
husband, a double amputee, and spending many hours searching for a way 
to afford her radiation treatments.
Andrew, 19 years old, Rhode Island
    Andrew was recently diagnosed with Hodgkin lymphoma. He is on leave 
from his landscaping job and receives $641 per month in unemployment 
compensation. Andrew's outstanding medical bills currently total 
between $15,000 and $20,000. He has private insurance but his 
treatments sometimes exceed the policy's limit of $1,000 per day for 
chemotherapy. The insurance also does not cover many of his hospital 
costs. Andrew's boss has offered him a different insurance policy once 
he returns to work. Andrew will elect the new coverage option when the 
time comes. However, his medical debt will remain.
Donna, 45 years old, Ohio
    Donna has two children. She works full time, and her annual income 
is $27,000. She was recently diagnosed with breast cancer. Donna does 
have health insurance, a major medical individual policy that she 
purchased after her company ended its group plan. However, she quickly 
met the $10,000 limit on outpatient services under her new plan. 
Donna's treatment, including 15 chemotherapy sessions, has left her 
with more than $100,000 in outstanding medical bills. Donna is 
uncertain how she is going to pay the debt and handle future out-of-
pocket costs. She had been supplementing her income through a second, 
part-time job but had to give that up once her chemotherapy began. 
Donna's hoping she can get one of Ohio's guaranteed issue policies, 
which are limited by enrollment caps. The plans are only available 
during an annual 30-day open enrollment period, so Donna will wait to 
see what happens. She has no insurance options otherwise.

                                 

    *Chairman STARK. Thank you. I had agreed that I would yield 
my first chance to inquire to Mr. Thompson. Would you like to 
inquire, Mr. Thompson?
    Mr. THOMPSON. Thank you very much, Mr. Chairman. I 
appreciate your generosity, and thank you to all of the 
witnesses who are here today. Mr. Finan, I'd like to pick up 
where you left off. I'm a huge proponent of preventive care, an 
area where I see there is a huge problem is the barriers that 
seniors face in regard to getting preventive care in the form 
of cancer screenings and such. It seems to me that someone's a 
senior in many instances their disposable income numbers are 
going down, and right now sadly at the same time that the costs 
for food and gasoline and energy and everything else is going 
up, I'm concerned that copayments and co-insurance payments are 
having an impact, a negative impact, in providing a barrier to 
these preventive services. That's had an impact on things like 
cancer screening, which costs us more money in the long run. 
Anything you want to add to that? Push your button, please.
    *Chairman STARK. Your mike please, Mr. Finan?
    *Mr. FINAN. Yes, I would. First of all I want to thank you 
very much for your continued support on this issue. We totally 
agree with you that it is a significant problem, and we are 
totally supportive of your legislative efforts in this area.
    I'd like to point out that there was an article recently in 
the New England Journal of Medicine that looked at the issue of 
co-pays and preventive services among the Medicare population; 
and they found that even a co-pay as little as $10 resulted in 
about an 8 percent decline in the number of women who sought 
mammograms. So, it does suggest that there's enormous price 
sensitivity among the elderly to these kinds of services.
    Mr. THOMPSON. Then we pay for it at the other end, when it 
becomes an acute problem.
    *Mr. FINAN. Exactly. Here for $10 we see a decline in women 
getting the mammograms, and yet, as you just point out, the 
cost if they're not getting them could be extraordinarily high.
    Mr. THOMPSON. Thank you. Dr. Ayanian? Thanks. On the other 
end of the spectrum, on the other end of the age spectrum, the 
issue of preventive care for children. When I was in the state 
legislature, I had success with legislation that required all 
providers to provide health care for kids, preventive health 
care for kids from birth to 18 years of age. One loophole in 
that legislation was the ERISA loophole. Its my feeling that 
that is, in fact, a true loophole, and I know we can save a lot 
of money and a lot of lives and a lot of anguish if we can 
catch problems early in kids. It's everything from keeping kids 
out of the hospital and hospitalization for kids is more 
expensive than adults, and it's longer than adults. Then also 
if we can deal with these things when they're preventable, 
rather than when they're acute, we're building a more healthy 
Medicare population in the future, should we close that ERISA 
loophole.
    *Dr. AYANIAN. It's clear that investing in the health of 
children is a very worthwhile endeavor, and anything we can do 
in a cost-effective manner to achieve that goal is very 
important. We this at the issue Institute of Medicine regarding 
the consequences of uninsurance and the importance of 
consistent coverage for children as well as their parents. It 
was clear that the evidence is that children are more likely to 
get the care they need when they have coverage and it's 
consistent across different plans; and particularly also when 
their parents are covered the parents use the health system 
more effectively for their children. We get long-term benefits 
from that. So, yes.
    Mr. THOMPSON. Then, lastly, Mr. Brock, thank you for being 
here and thank you for all of the work that you're doing. 
That's pretty fascinating.
    Ten percent of the doctors practice in rural areas, and I'm 
told about 25 percent of the patients are in rural areas, so 
there's a real disparity. Representing one of those rural 
areas, I hear all the time about the trouble that we get to 
attract physicians to our areas and keep physicians in our 
areas, and we share the same health care problems as under-
served areas, be they rural, urban, or otherwise.
    How much of the lack of access to health care in rural 
areas can be attributed to the lack of providers?
    *Mr. BROCK. Well, thank you for asking that question. A lot 
of the problems do stem from the fact that there are programs 
to help some of these people, but the paperwork requirements 
and the reimbursement rates unfortunately are not attractive 
enough for many of the providers to be willing to accept the 
patients.
    The other problem that we are continually faced with and 
actually it doesn't matter whether we're in a very, very rural 
area of Appalachia or whether we're in a downtown urban area, 
the number of patients that are going to show up for our 
services are about the same. As a small turnout, there are 
going to be 5 or 6 hundred patients turn out. At a large RAM 
event, there are going to be several thousand that turn up. It 
doesn't matter whether they're living in an urban area or a 
rural area.
    The biggest problem really in providing this kind of care 
for these people is that we have found over many, many years 
now that the local physicians, dentists, and eye doctors really 
don't want to deliver the care to these people in their 
hometown. Those same doctors are very, very willing to travel 
hundreds of miles with us, perhaps to Eagle Butte, South 
Dakota, to provide the care, but they're really not interested 
in providing the care in their own home districts. For that 
reason, we are strongly hoping that rules will change, so that 
doctors can cross state lines from all over the country and 
alleviate this very, very serious problem.
    Mr. THOMPSON. Thank you. Mr. Chairman, Mr. Doggett, thank 
you both for yielding me the time.
    *Chairman STARK. Mr. Camp?
    Mr. CAMP. Thank you, Mr. Chairman. Dr. O'Grady, you 
testified that of the uninsured population that 22 percent are 
non-citizens. What percentage of the total uninsured population 
are eligible for Medicaid and other programs, but are not 
enrolled?
    *Mr. O'GRADY. I don't have that figure right off the top of 
my head, but I can certainly get it for. Although it is one 
that is under some considerable kind of discussion of figuring 
out what the right figure is--and part of it has to do with the 
interactions between these eligibility questions--so if some of 
these kids, given immigration laws, would not be eligible as is 
true for the legal immigrants, that you're not eligible in the 
first five years for either Medicaid or S-CHIP, exactly who's 
eligible or not is certainly somewhat of a bone of contention. 
Although one of the nation's best experts in this is right 
across the street at the Congressional Research Service. So, 
candidly, I'm going to go and pull that, and get back to you on 
it.
    Mr. CAMP. All right. If you could get back to the Committee 
with your----
    Mr. Rowland. Mr. Camp, if I could----
    Mr. CAMP. I just have a short time. I'm not done with him 
yet.
    Mr. Rowland. I was going to just answer----
    Mr. CAMP. All right. If you could submit that in writing, 
that answer, I'd appreciate that.
    What percentage of the uninsured lack coverage for just a 
short period of time, say less than three months or less than 
six months?
    *Mr. O'GRADY. Well, we tend the see this pattern. Again, 
I'll get back to you with the exact figure. But what we see is 
we see there's points in your life where you are more 
vulnerable. Some of these vulnerabilities we worry about more 
than others. So, you do--I gave the example in the oral 
testimony about the kid who leaves college, and before they 
start that first real job and get coverage, that is, certainly 
they're uninsured, we would certainly prefer to have them 
insured, but we don't really worry about them quite as much as 
we do about the chronically ill and these people who have been 
uninsured for years.
    So, it is this idea of where I've tried to introduce this 
idea of thinking about how you might triage this problem, 
because the likelihood of having enough money and political 
consensus to do everything for everybody might just not be 
there, in reality.
    Mr. CAMP. Do you know, and can you tell us what percentage 
of the uninsured elect not to purchase health insurance, even 
if it's offered to them?
    *Mr. O'GRADY. There are certain ways we sort of back into 
that question. There is not good data. What we do know and 
you'll see in the written testimony is we know that the 
offering rates, especially among once you're over about 500 or 
a thousand employees in a firm, that almost all those firms 
offer. But you still see perhaps 10 percent in both those 
categories as being uninsured.
    Now we know they're offered. We don't know exactly whether 
they are, like I said, what we tend to jokingly call the young 
immortals, who sort of as long as they don't fall off their 
motorcycle, they really don't see much need for insurance. Is 
it that category?, or is it someone who is in a position where, 
you know, coverage is being offered, but whatever their share 
of the premium, their share of the cost-sharing going on makes 
it unaffordable for then. Splitting those two kinds of groups 
is--I don't know anyone who's done it well yet.
    Mr. CAMP. Difficult to do?
    *Mr. O'GRADY. Yeah.
    Mr. CAMP. There's been a lot of debate around the question 
of an individual mandate to buying health insurance. Do you 
have any opinion on whether there should be a mandate, and what 
would be the pros and cons of imposing a requirement that an 
individual is to buy insurance, even if they feel they don't 
need it.
    *Mr. O'GRADY. Yeah. An individual mandate is a tough issue 
in terms of you have these situations in the last generation of 
these sort of proposals we heard an awful lot about employer 
mandates, and in some today we hear about matching of employer 
and individual. The individual mandate does get to the point of 
where we talked about before, my young immortals. The idea of 
should you be in a position where you in effect force them to 
have coverage? Now that's much of the discussion that's gone 
on, on the campaign trail between Mrs. Clinton and Mr. Obama. 
Mr. Obama sort of wondering once you're out of children, once 
you're at a certain age, you want to make it as affordable as 
possible; do you actually want to take that extra step to 
mandate?
    Mr. CAMP. Okay.
    *Mr. O'GRADY. It is true, the term that the Senator was 
searching for before is ``free rider.'' So, when these folks do 
fall off their motorcycle and all of a sudden need the health 
care system, they are going as bad debt on the rest of us; 
there's no doubt about that.
    Mr. CAMP. All right. I noticed in the tape we saw that--
well, let me just say there are 23 federally qualified health 
centers in Tennessee, and from what I understand, they have a 
list of services that are required, including emergency medical 
and dental services, among a list of other services. Can you 
tell me why individuals would not be able to be also attending 
the federally-qualified health centers that have a mandate to 
see anyone who comes in?
    *Mr. O'GRADY. Right. They do have a mandate, they certainly 
serve the uninsured. They serve the underinsured, Medicaid 
population, and even a few, just because of locale, regular 
insurance people. All the evaluations I've seen is they scored 
very high on what they do; they have--this was brought up 
before about health information technology--they have one of 
the best systems in the country right now--whether it's poor 
outreach or just a nod of allowing them to know, but I know of 
no structural barrier of why folks can't seek out those 
clinics.
    As you may have remembered, the President a few state of 
the unions ago, made the push to have a clinic in every poor 
county, and from what I saw when I was at the Department of 
Health and Human Services, they took that seriously. Especially 
in those areas like in the, you know where Katrina hit, 
especially poor.
    Mr. CAMP. All right. Thank you very much. Thank you, Mr. 
Chairman.
    *Chairman STARK. Mr. Doggett, would you like to inquire?
    Mr. DOGGETT. Thank you, Mr. Chairman and thanks to each of 
you for your insightful remarks. Of course, Mr. Brock, what 
we've seen that you've accomplished is incredibly impressive, 
and yet it is an indictment of the failings of our public 
health system in this country that those serious needs are 
there, demanding the extraordinary effort you've undertaken.
    One of the issues that I noted from the 60 Minutes clip is 
the difference between providing a one-stop or a periodic kind 
of service like eyeglasses or dental care versus the need for 
continuing treatment, continuing care, like the young woman who 
had had cervical cancer. Is there any way through your program 
that you can provide someone a primary health care home for 
that type of continuing care?, or what happens to the person 
who requires the periodic checkup, whether it's for cervical 
cancer or for maintaining their blood pressure or their 
cholesterol, or whatever, on a repeat visit basis?
    *Mr. BROCK. Well, I think that that question is admirably 
demonstrated at our clinic that we do every year in Wise 
County, Virginia. In Wise County, Virginia, for 2\1/2\ days, 
people come at the rate of twelve hundred people a day, and 
they wait eight, ten, fifteen hours for the service.
    Now we provide all of the services that you've just 
mentioned. Not only do we have about a hundred dentists there 
and dozens and dozens of eye doctors, but we also have 
cardiologists and we have cancer experts, we do mammograms and 
we do Pap smears. The whole gamut. The interesting thing is--
and again this goes back to the fact that so few of these state 
and Federal programs address the dentistry and the vision 
care--so here you have twelve hundred people who arrive at one 
of our clinics, and wait many, many hours. When they get in the 
door, they want to see the dentist so bad because their teeth 
are just in agony and they want a pair of eyeglasses because 
they can't see to read the paper or they can't qualify to get a 
job. We are constantly, with the hundreds of other 
practitioners that we've got there, saying, ``Save your place 
in line. You need to come down here and you need to have a 
diabetic check-up. You need to have a check-up for high blood 
pressure'', and so on and so forth.
    It is extremely difficult to get those people motivated to 
do that. So, if some of these programs were addressing and 
enabling people to get their teeth fixed, those immediate 
problems, then we would find it easier to get them to see the 
other specialties that they need.
    When you look at the cross-section of the thousands of 
people that we see, it's largely self-induced problems. They're 
all smoking and they're all eating the wrong things; they're 
largely overweight, and of course there's an educational factor 
in there too.
    But the services are there, but they're so hung up on the 
teeth and the eyes, that's it's very difficult to get them to 
take advantage of the rest of it.
    Mr. DOGGETT. Thank you. Dr. Rowland, and Dr. Ayanian, 
you've touched on this issue, but really the lack of insurance 
is a matter of life and death, and I have seen one recent study 
in the state of Texas, which is notable for having more 
uninsured children proportionally than any other state in the 
nation, tragically, that about seven working-aged Texans die 
each day because of a lack of health insurance. I suppose if 
the death certificate were amended to show the true cause of 
death along with the physical cause as being a societal 
disability, that we would see lack of health insurance on that 
death certificate on a pretty regular basis. It would be up 
perhaps as high as deaths from diabetes.
    Could you just comment again on what you see as the life 
and death cost of the failings of this Congress and this 
administration to see that there is access to health insurance 
for more of our citizens?
    *Ms. ROWLAND. Well, clearly we see from all of the research 
that when you don't have health insurance, you make decisions 
that are contrary to your health. So, as we saw in the film so 
graphically, people delay care, and as a result of delaying 
care they come at a later stage of diagnosis, where treatment 
options are fewer and where the outcomes are worse therefore 
mean this means that on their death certificate they may die 
from a cancer, but the cancer could have been treated if caught 
in an earlier stage.
    Dr. Ayanian's work has really helped to really the impact 
of lack of insurance by looking at specific conditions, so I'll 
let him comment in addition.
    *Dr. AYANIAN. I would just add that we all know that 
effective insurance coverage is the gateway to the health care 
system for most people in our country, and when people lack 
that, they don't have the good primary and specialty care that 
we know makes a difference. In many ways we just defer the 
costs. Effective primary care can be very cost-effective. 
Preventive care screening tests, and care of chronic diseases 
like high blood pressure and diabetes. If we don't take 
measures to provide coverage and provide access to care for 
people at those early stages of disease, then we end up with 
more costly complications of heart attacks, kidney failure, 
advanced cancer.
    *Chairman STARK. Mr. Johnson, would you like to inquire?
    Mr. JOHNSON. Thank you, Mr. Chairman. For any of you first 
three over there, you know, I believe one way to increase 
access to health care for more Americans in this country is to 
decrease the cost, and if there's one thing America has proven, 
that it's competition is the best way to drive down the cost. 
Health care is no different.
    There's two initiatives I think are critical in achieving 
this goal: Health savings accounts, and association health 
plans. You know, over 4.5 million Americans have chosen HSA 
type insurance, and some studies show that as many as one-third 
of them were previously uninsured, and almost half have incomes 
below $50,000.
    Concerning HPs, estimates indicate that at least 60 percent 
of the working uninsured work for small businesses. I think we 
can't have a conversation about the uninsured in this country 
without talking about a way to allow small businesses to pool 
their resources in order to provide health insurance for their 
employees. Would you all discuss that for me?
    *Ms. ROWLAND. When you look at the problems facing our 
health care system, rising costs from the increases that we've 
seen in premiums over the last few years have taken a real toll 
on both employers' ability to offer coverage as well as on 
employees' ability to pay their share of those premiums.
    However, I think one of the things that's important when 
you look at the low-income, uninsured population, is that two-
thirds of the uninsured come from families with incomes below 
$40,000 a year. How much they can they afford for the premium, 
how much would you subsidize that premium, and also how much 
they are able to pay out of pocket. One of the concerns we have 
stems from some of the research we've done is looking at the 
liquid assets of individuals at these lower income levels. We 
see that they have relatively few savings. As a result, if they 
have a health care policy that requires a fairly high 
deductible, they may not have the resources to be able to pay 
those co-payments and deductibles, which in the end could end 
up having them behave more in their interaction with the health 
system, like an uninsured person rather than like someone with 
health insurance coverage.
    So, I think one really needs to look at the availability of 
income and the availability of assets to be able to meet 
obligations as one assesses the adequacy of health insurance 
coverage. Work that the Department of Health and Human Services 
has done, looking at financial burden, finds many families, 
especially those with higher deductible plans, as end up 
spending much more of a share of their income on health 
insurance coverage than people with more comprehensive plans, 
especially those offered now through the employer sector.
    *Mr. O'GRADY. Yes. There are a couple of things you brought 
up which were very good. One thing to keep in mind is that 
making this more affordable is essential. At the same time it 
is that value proposition that was being discussed earlier 
about we have the baby boomer retiring, we have these other 
pressures that are coming, so it's more spending smarter, not 
more, not--and how we're going to control that, and how we're 
going to determine whether we're really getting--most of us 
don't mind spending more if we think we're getting that 
breakthrough drug or that breakthrough device that's going to 
really make a difference. But we mind spending more for 
something that seems wasteful and is just nicer cars for 
physicians. That sort of thing.
    So, when the chief actuary came in, I assume a week or two 
ago, and showed those trends in Medicare, those same trends 
exist for employers trying to offer coverage, Medicaid. They 
just don't have a trustee's report that you get every year.
    So, all that money being absorbed there is more money being 
taken off the table for the uninsured. So the notion of how you 
ease up on that cost pressure to give yourself enough leeway to 
start to think about expansion and doing it in a fiscally 
responsible way is vital.
    There was a piece done a few years ago by a researcher at 
the University of San Diego, that looked at those small firms, 
and in years when premiums were going up very fast, they either 
had to drop their coverage, or for the firms that were looking 
to add coverage, not in a 10 percent premium increase here. In 
the slower years, that's when people either held their own in 
terms of offering coverage, or were able to expand. So, it's 
very important. HSAs fill a niche, a very important niche in 
terms of affordability. Because by changing the structure of 
the health benefit, moving it to the more serious, more 
catastrophic things, they definitely lower the premium.
    Now I have one personally. I've had it for about three 
years now. I like it very much. I have a chronic illness. It 
works because it means also that account I can go to whatever 
provider I want to, whether they're in the network or not, or 
participating with my plan or not.
    So, it works very well on the affordability, but certainly 
it is putting financial pressures on folks for that up-front 
cost. There's no denying that. Again, none of these particular 
solutions that people put forth, me or anyone else you'll hear 
from, are going to be totally pain-free. Also, you'll help on 
affordability but you'll hurt on cost-sharings on the 
beneficiary.
    But back to your first notion about bringing down this 
overall growth in spending, you know, that's where you can have 
it cost less for both the employer and the worker, for the 
government and the beneficiary is by slowing that growth in 
overall spending.
    Mr. JOHNSON. Yeah. They get to pick their hospital. That's 
important.
    Thank you, Mr. Chairman.
    *Mr. BROCK. Is it possible that I can just in the half-
minute light on unemployment insurance thing from a statistic 
that we came up with last Saturday?
    *Chairman STARK. Certainly, Mr. Brock.
    *Mr. BROCK. Two hundred and fifty people showed up at a 
rural area in Tennessee and 124 of them were prepared to answer 
the following questions. It turned out that 73 percent of them 
were unemployed; 18 percent were employed part time; and 10 
percent were employed full time. Of the full-time employed, 
only 18 percent had any kind of insurance. Of those employed 
part time, 58 percent of them had insurance; and of the 
unemployed of which there were 73 percent of them were 
unemployed, 46 percent of them had insurance. So, from this 
non-scientific but carefully done study last Saturday, if you 
were unemployed you were more likely to have some kind of 
insurance.
    *Chairman STARK. Mr. Becerra, would you like to inquire?
    Mr. BECERRA. I don't know if I should be more depressed now 
after hearing that.
    [Laughter.]
    Mr. BECERRA. Thank you all for your testimony. I think you 
are reiterating much of what we've heard or experienced. I wish 
we knew how to crack this nut that keeps us from having 
universal coverage; but perhaps I can try to whittle my 
thoughts here down to a couple of questions.
    I was wondering, Mr. Brock, if you'd give me just a quick 
sense of what your understanding or what your sense is of an 
individual mandate, the proposals to require that individuals 
purchase insurance in order to obtain access to health care 
that rather than require an employer, or rather than do it 
through a system like Medicare, which is government-financed, 
that we put the burden of obtaining the insurance on the 
individual and by requiring everyone in the country to have 
insurance, then we will end up having that universal coverage 
that we need.
    *Mr. BROCK. I think----
    Mr. BECERRA. Your microphone. You need to turn your 
microphone on.
    *Mr. BROCK. I think that in light of the fact that 73 
percent of the people that show up are unemployed, this would 
demonstrate that those people could not afford to buy 
insurance. So, that presents us with a very difficult problem.
    Mr. BECERRA. Another question. Give us again a very quick 
sense, because I know my time is limited--what are some of the 
comments you hear from some of the caregivers, the doctors, the 
dentists, the other providers, that volunteer to be part of 
these clinics that you set up? What's their sense? They 
obviously go back to their paying job later on, where they're 
providing health care, but what's their sense of where we have 
to go, where a solution lies?
    *Mr. BROCK. Well, they want coverage for malpractice. The 
first question that doctors ask us when they volunteer is, ``Am 
I covered for malpractice?'' The answer unfortunately is not, 
they are not. So, that's something that needs to be fixed. 
Again, going back to--we really need to allow these doctors and 
dentists who are willing to provide the service to cross state 
lines and provide free care anywhere in the country as long as 
they can prove that they are a doctor in good standing. The 
Tennessee Volunteer Health Care Services Act, it's as simple as 
this: The doctor shows up, even without any notice. ``Hey, I 
heard you're holding a clinic. I'm from Iowa, here's my 
license, I'm not under any judicial review.'' ``Sign that 
statement, roll your sleeves up, and go to work.''
    Mr. BECERRA. Let me ask--my question is more--I imagine the 
doctor from Iowa who goes to Tennessee can only do that once in 
a while. My question goes more to the point of: What do they 
see as a longer-term solution to this crisis that causes 
hundreds if not thousands of people to show up on a weekend to 
try to receive the care you offer?
    *Mr. BROCK. Well, I think that they would like to see some 
type of national coverage for people who are in a certain 
economic strata, whether it's twice the poverty line or three 
times the poverty line, that people in that group need some 
kind of national health care coverage, and people who are above 
that economic group let's not mess with the system that we've 
already got, which is fabulous as long as you can afford it.
    Mr. BECERRA. Dr. Rowland, let me see I can ask you 
something. I find what Mr. Brock does inspiring and 
demoralizing at the same time: inspiring because you have 
people who are willing to volunteer, the good Samaritans who go 
out there, professionals who provide this care; demoralizing 
because hundreds and thousands of people have to rely on a 
weekend opportunity to get a tooth taken care of.
    In all these studies that have been done, in all the work 
that we've had come before us for presentation, I still don't 
see that the American public is any more angry and prepared to 
take us to a place where we, then, as policy-makers feel that 
we could go and provide that type of coverage that gets the 
universality that I think most of us would like to see for the 
American public.
    So I guess my question to you is: Do you see any further 
movement in the eyes of the American public--not so much the 
policy-makers, but the American public, in having the outrage 
to having their policy-makers move in a universal direction?
    *Ms. ROWLAND. As we do our work in public opinion, we ask 
the public about the uninsured and about their access to care, 
and one of the startling things from our research is that 
people say, ``Well, the uninsured get the care they need; they 
just may get it a little later.'' I think we still have a real 
burden of educating the public on the facts. I think things 
like the 60 Minute documentary is very important about to show 
that if you're uninsured, you make different choices and you 
may not get the care you need. As John and others' work shows, 
the consequences on your health and on our society's health are 
really monumental.
    But I think it really is a lack of understanding--we think 
that we have the best medical care system in the world, and 
that if anyone really gets sick, they can show up at an 
emergency room and they can get the care they need. Yet we know 
they don't even show up often at the emergency room, and the 
consequences of not getting preventive and primary care are 
overwhelming.
    Mr. BECERRA. Thank you. I appreciate your testimony, all of 
you, and look forward to having you back again. Thank you very 
much. Mr. Chairman, thank you.
    *Chairman STARK. Ms. Tubbs Jones, would you like to 
inquire?
    Ms. TUBBS JONES. Mr. Chairman, thank you very much, and to 
all the witnesses, thank you for appearing here today.
    I think the public is actually saying to policy makers like 
us and legislators that they do want and need health care. I 
think the dilemma is that the United States has been so 
reluctant to focus on preventive care that we tend to be a 
country that focuses on acute and chronic care versus 
preventive care. That's my little piece of it.
    But I want to focus for a moment, if I can, with you, Dr. 
Ayanian, if I'm saying your name appropriately. As I said 
earlier before this panel came, the Congressional Black Caucus 
Foundation is doing a health disparities session at a hotel 
here yesterday and today, and I'm hoping to get over there this 
afternoon. But I see that in your report--and I don't recall 
that you had enough time in your 5 minutes to really delve into 
what we need to focus in around disparities. There were seven 
things that I just had in front of me, and I lost them. So, why 
don't you go back through that again for me, and if you had to 
prioritize the 1 through 7 factors around health care 
disparities, would you give them to me in that order?
    *Dr. AYANIAN. Sure. You're referring to a set of what have 
been described as voltage drops in the health care system from 
the basic essential of having insurance coverage to ending up 
with high-quality care and the seven steps in which we can lose 
voltage, and people not get the care and the quality of health 
outcomes that we're looking for.
    Clearly insurance coverage is an important part of the 
health care disparities we see for different racial and ethnic 
groups and economic groups in this country, and so that's one 
of the most important factors. We have a safety net. In many 
areas safety net providers are doing very important and 
effective work. But it leaves too many people outside the 
boundaries of our health care system, who are not coming in 
until their illnesses are too far advanced.
    We also know that health care providers that serve 
predominantly minority communities, low-income communities tend 
to be less well-supported, and less access to appropriate 
specialty care. If primary care is available, it's not 
consistently available to all in the community.
    So, I think we also need to focus on the providers, the 
health care organizations, hospitals, community health centers, 
and medical groups, that care for disproportionate shares of 
minority patients, and make sure that they're well supported, 
that their staff are highly qualified, that they have the 
services that are needed, and relationships within their 
communities.
    I think one of the points that was touched on in the first 
panel discussion was the need for communities and states to 
understand the presence of health care disparities in their 
midst and develop their own local and state plans. We're seeing 
some promising evidence about this work in Chicago, trying to 
address racial disparities between African American women and 
white women, and breast cancer mortality, where community 
health centers, breast cancer survivors, community leaders, 
leaders of the major medical centers, are coming together and 
really working on access to mammography, access to effective 
treatment, and then the quality of care that people get.
    So, I think those are some of the highest priority areas, 
and I think it's very important at a national level through 
tools like the National Health Care Disparities Report, to pay 
close attention to what progress or lack of progress we have on 
this front; and then also to use data and resources to support 
local communities in addressing the health care needs, where 
they're well understood.
    Ms. TUBBS JONES. I remember that as a kid in the public 
school systems, there were at least a school nurse and a 
dentist that fell through at least every once in a while. I 
can't understand why we can't get back to some of that service. 
There's less schools, there are less students in many of the 
schools. Because to me it would be the broker for other 
services for folks at every level, and hopefully begin a 
process of working with young people with the vision of what 
prevention really means, because that is what's ultimately 
going to be the concept.
    I don't have time to allow the rest of you to respond to 
that particular issue, but I think it's something we need to 
think about, how do we marry an education and then an education 
about preventive care within the system?
    Mr. Brock, I want to applaud you for the work you're doing, 
and I think I'm going to be in Knoxville on Friday, and 
depending on my schedule, I may try to catch up with you, if I 
can get a number or an address.
    *Mr. BROCK. I'd be delighted to see you, madame.
    Ms. TUBBS JONES. Thank you. Mr. Chairman?
    *Chairman STARK. Thank you. Dr. Rowland, you were going to 
add an answer or a comment to Mr. Camp's question relative to 
the make-up of the uninsured. Would you like to?
    *Ms. ROWLAND. It's roughly 20 percent of our uninsured 
population are children. When we look at uninsured children, we 
think that about two-thirds of those children are actually 
eligible today for either the Medicaid or the S-CHIP program, 
but have not been enrolled, partially because they may be 
unaware of their eligibility or their family may not have taken 
them in. About half a million children who are uninsured have 
an immigration status that prohibits them from being eligible 
for either Medicaid or S-CHIP, although their incomes are below 
the 300 percent of poverty.
    *Chairman STARK. Thank you. Further, can you comment on 
what's happening to the projections of the growth in uninsured 
Americans, and this question of citizenship or documentation 
unhappily will come up and for those who are more xenophobic 
than others, it's a great political stance to suggest that--I 
don't know of other countries that deny coverage to people who 
happen not to be citizens--but how big a part of our problem is 
that?
    *Ms. ROWLAND. Well currently, about 22 percent of our 47 
million uninsured are non-citizens; however, the majority of 
them are legal and not illegal, and we estimate that about 10 
million people therefore out of the 47 million are non-
citizens, many of them waiting for eligibility for citizenship. 
About 4 million are from the illegal immigration population and 
therefore currently ineligible for anything except for 
emergency care in the U.S.
    *Chairman STARK. So, can I infer from that, that if we 
think there are 12 million undocumented workers here and there 
are only 4 million of the 12, at least with about 8 million who 
have some form of insurance, even though they are not 
documented, is that fair?
    *Ms. ROWLAND. Correct.
    *Chairman STARK. Okay.
    *Ms. ROWLAND. In fact most of the growth we see in our 
uninsured population comes growth among citizens, who makes up 
about 80 percent of the growth each year, since the number of 
illegals is still small in comparison to the total population.
    *Chairman STARK. Okay.
    I want to ask both you and Dr. Ayanian, in your testimony, 
doctor, and I think Diane as well, you've talked about hidden 
costs. Dr. Ayanian points out that if--I think if I remember 
correctly--if I'm uninsured before I mature into Medicare for 
the next 7 years, 65-72, I'm apt to be more expensive than 
those who have a continuum of medical--which one presumes means 
they were insured.
    Then there's the issue of the local emergency room. I'd 
like to think, although I'm not positive, that we don't let 
people bleed to death on the streets, so if they end up in an 
emergency room, they're at least stabilized if they're treated, 
somebody pays for that, either those of us who are paying for 
insurance pay through higher premiums, or the local community 
pays through taxes to subsidize care.
    Then there is the issue of benefit caps, in other words, 
whether it's the people who sell these association plans that 
generally don't meet decent standards in terms of providing 
care that is covered by most insurance commissioners or other 
reasons--can we get--I think Commonwealth did a study that 
deals with the social costs. Productivity is kind of an elusive 
issue. You know, is General Motors going to make less money 
because of productivity, or is the dry cleaner in the shopping 
going to make less money because their workers may be absent 
more than others--are there many studies, and any of you I'd 
appreciate the answer, seriously--it's kind of hard for us to 
quantify that. I mean how much more do we spend on Medicare?, 
can we find out?, because of the uninsured who mature into 
Medicare? Is there a number out there that would available to 
us without extensive research?
    *Dr. AYANIAN. I'd have to say at this point there is not a 
definitive number, but it's something that we're actively 
working on, and working with Medicare data to try to understand 
that better. From some of the work that I discussed earlier, we 
found that people in their late fifties and early sixties who 
are uninsured use 15 percent lower levels of services in the 
presence of heart disease and diabetes, so this is a group 
clearly that should be in care and where we know health care 
makes a difference.
    Then almost immediately after they turn 65, we see a sort 
of flipping of that, and the people who are previously 
uninsured use about 15 percent more services after they enter 
the Medicare Program. So, we're now moving forward to try and 
understand exactly what services. Some of them may be fairly 
expensive, like people needing coronary bypass surgery. Other 
aspects may be fairly basic, like seeing primary care physician 
for diabetes care. Another issue that we're pursing is to what 
extent might those savings be available to the Medicare Program 
if we did a better job of covering people in their 50s and 60s 
before their conditions became more severe.
    *Chairman STARK. Okay. It would be helpful, I'm sure to all 
of us if we could, at least as we have to wind our way through 
this, we could in fact quantify those areas, because there are 
a lot of people who on both sides of the aisle that unless we 
can assure them that we're not wasting a lot of money, we're 
going to have trouble. It's one thing to talk in generalities; 
it's another thing to say, ``Hey, this costs X bucks'' to 
Medicare. That makes our job a bit easier.
    Mr. Brock, I just want to commend you as well for the 
efforts of your organization, and I hope you'll keep it up. I'm 
concerned that many of the services that you suggest are not 
insurable, insofar as I know, the American Dental Society is 
not very anxious to see dental insurance made available by any 
kind of mandate, and so without their help, I'm not sure it 
will ever happen.
    Speaking of mandates, which is an issue that was brought 
up, I'd be remiss if I didn't suggest that Governor Romney and 
Governor Schwarzenegger, whom I have not ever seen at any of 
our progressive caucuses, or any other liberal groups, both 
suggested mandates as part of their state plans, and I don't 
think to their political disadvantage. I think they both felt, 
as I feel, that there was no way they were going to get 
universal coverage without somehow ``mandating'' it. I just 
don't think that whether it's the youngsters who think they're 
invincible, who won't buy it if they're not told to, but at 
some point I think mandate--if we would like to see universal 
coverage, I don't know how we're going to avoid that.
    My commentary on that. I appreciate, Mr. Finan, the work 
that American Cancer Society does to try and save us from 
ourselves, and what happens the somebody diagnosed with cancer 
with no insurance, no money? You're a male and when you get 
prostate cancer, if you're uninsured you go to the emergency 
room. Prostate cancer generally doesn't present itself except 
for maybe an urgency to go to the bathroom that you can't 
satisfy, but other than that. What happens to that person? What 
happens to the woman who says, ``Oh, oh, I've got a lump, but I 
don't know whether that's breast cancer or not.''--and they 
virtually don't have access to a systematic medical protocol--
what do they do?
    *Mr. FINAN. Well, you're correct, Mr. Chairman. These 
people in those situations typically show up at the emergency 
room. At that point they probably have an advanced stage of a 
cancer. It obviously becomes much more expensive to treat at 
that point. That cost is being borne more widely by society 
because they're uninsured.
    *Chairman STARK. Do they get treated, though? I mean if 
they show up, do they get surgery or radiology or chemo, which 
could be a long and expensive procedure. Is that----
    *Mr. FINAN. It depends on the state of the condition, 
actually. Where they happen to go into the emergency room. I 
think it varies considerably by the facility and where they 
are, and what kind of charity is available. But the fact is we 
know that some recent research was done by some of my 
colleagues in the Society shows that for those who are 
uninsured, they tend to be diagnosed much later and are much 
less likely to survive, or they have less chances of 
survivorship for the uninsured.
    So, insurance makes a huge difference.
    *Chairman STARK. Okay. Well, I can't conclude this hearing 
without commenting that the one thing--and Dr. O'Grady, I hate 
to tell you, but you failed me--I know coming from the ``Let 
them eat cake'' school of social consciousness that you'd like 
to find ways to provide care like public clinics, but with all 
your perspicuity and intellectual curiosity, you blew it. The 
Stark solution for these people who are truly uninsured, be 
they citizens with document or people without documentation--
how you could have missed the chance that I have suggested for 
every uninsured American, who under the Constitution, all they 
have to do is walk out of this room, step out there on the 
corner, and kick a cop. You'll end up in jail, where the 
Constitution will require us with the medical care you deserve. 
So I've always suggested, if you don't have medical care any 
place else, go hit a cop, you'll get all the medical care--
you'll probably need a little extra when you're done--but 
please add that to your testimony because you really haven't 
done the job that I think your position requires.
    [Laughter.]
    *Mr. O'GRADY. I stand corrected.
    *Chairman STARK. Having said that, I want to thank the 
witnesses and the Members for starting at least on this road to 
seeing whether we can identify the problem that faces us.
    Thank you all very much for being with us today.
    *Mr. BROCK. Can I just add a 10-second thing--that comment 
that you made a moment ago?
    *Chairman STARK. Certainly, Mr. Brock, you may.
    *Mr. BROCK. About the state of Massachusetts. I have here 
as a result of the 60 Minutes piece a request from the Campaign 
for a Better Tomorrow in Massachusetts, saying to us, ``We are 
proposing a convoy of 300 southeastern Massachusetts residents 
via school bus for treatment by Remote Area of Medical in 
Tennessee.'' Does this mean, then, that one of the richest 
states in the Union is going to be sending patients to us, at 
one of the poorest states in the Union? But I found it rather 
interesting. If they show up, we'll treat them.
    *Chairman STARK. You're very kind. Thank you very much, and 
the hearing is adjourned.
    [Whereupon, at 12:37 p.m., the hearing was adjourned.]
    [Submissions for the Record follow:]
              Statement of American College of Physicians
    The American College of Physicians (ACP) is the largest medical 
specialty society in the United States, representing 125,000 doctors of 
internal medicine, residents and medical students. ACP commends 
Chairman Pete Stark for holding this hearing to better understand the 
problems of today's health care system so that we may achieve effective 
health care reform. The College advocates that all Americans should 
have affordable health insurance coverage.
    To determine how to achieve a high performance health care system 
with universal health insurance coverage, the College examined the U.S. 
health care system and compared it to health care systems in other 
countries.\i\ The analysis revealed lessons that could be 
learned from high performance health care systems in other 
industrialized countries. Based on these lessons, ACP proposes 
recommendations to achieve a more efficient, better functioning health 
care system in the USA with health insurance coverage for all.
---------------------------------------------------------------------------
    \i\ American College of Physicians. Achieving a High-Performance 
Health Care System with Universal Access: What the United States Can 
Learn from Other Countries. Annals of Internal Medicine. 2008;148:55-75 
(accessible at http://www.annals.org/cgi/content/full/0000605- 
200801010-00196v1)
---------------------------------------------------------------------------
    The U.S. health care system spends far more on health care than any 
other country. Costs continue to rise at a faster pace than spending in 
the rest of the U.S. economy. Yet, an estimated 47 million Americans 
(15.8 percent) lack health insurance protection.\ii\ These 
Americans are much less likely than those with insurance to receive 
recommended preventive services and medications, are less likely to 
have access to regular care by a personal physician and are less able 
to obtain needed health care services. People without health insurance 
live sicker and die younger.\iii\ Even among those with 
health insurance coverage, wide variations exist in terms of cost, 
utilization, quality and access to health care services. Rising costs 
are creating financial burdens for individuals, government and 
employers, resulting in reduced access to care, and adding to the 
number of uninsured.\iv\
---------------------------------------------------------------------------
    \ii\ Organization for Economic Co-operation and Development. Total 
Expenditures Per Capita, June 2006.
    \iii\ U.S. Bureau of the Census. Income, poverty, and health 
insurance coverage in the United States: 2006. U.S. Deptartment of 
Commerce (P60-233). August 2007.
    \iv\ American College of Physicians--American Society of Internal 
Medicine. No health insurance? It's enough to make you sick. 
Philadelphia: American College of Physicians--American Society of 
Internal Medicine; November 1999.
---------------------------------------------------------------------------
    Additional problems in the U.S. include disparities in health care 
based on race, ethnicity and geography; an insufficient supply of 
primary care physicians for an aging society; a dysfunctional system 
for paying physicians; and excessive administrative and regulatory 
costs.
    Our analysis of health care systems in twelve other industrialized 
countries included an overview of each country's healthcare system, its 
advantages and disadvantages, and possible lessons to be learned for 
the USA. Criteria developed by the Commonwealth Fund were used for 
measuring the performance of health care systems.
    Although many individuals in the United States receive exemplary 
health care, international comparisons on most key indicators of the 
public's health have shown that the United States has poorer health 
outcomes in the aggregate than many other industrialized countries. 
Major improvements are needed in the health care system in the United 
States to achieve performance levels attained by health systems in 
other countries.
    The following lessons and recommendations were identified for 
improving health care in the United States:
    Lesson: Well-functioning health systems guarantee that all 
residents have access to affordable health care. Some countries achieve 
universal coverage with a system funded solely by the government. Most, 
however, have opted for models that include a mix of public and private 
sources of funding.
    Lesson: Global budgets can help restrain health care costs but do 
not provide incentives for improved efficiency unless they are set 
reasonably and targeted to small enough groups.
    Lesson: The use of government power to negotiate prices can achieve 
cost savings but may result in shortages of services subject to price 
controls, delays in obtaining elective procedures, cost-shifting, and 
creation of parallel private sector markets.
    Recommendation: Provide universal health insurance coverage to 
ensure that all people within the United States have equitable access 
to appropriate health care without unreasonable financial barriers. 
Health insurance coverage and benefits should be continuous and not 
dependent on place of residence or employment status. ACP calls on 
policymakers to consider adopting one of the following two pathways to 
achieve universal coverage:
    A single-payer system in which one government entity is the sole 
third-party payer of health care costs. The advantages of single-payer 
systems are that they generally are more equitable, have lower 
administrative costs, have lower per capita health care expenditures, 
have high levels of patient satisfaction, and have high performance on 
measures of quality and access than systems using private health 
insurance. The disadvantages of this system include potential shortages 
of services subject to price controls and delays in obtaining elective 
procedures.
    A pluralistic system in which government entities as well as for-
profit and not-for-profit organizations ensure universal access while 
allowing individuals the freedom to purchase private supplemental 
coverage. The disadvantages of this system are that it is more likely 
to result in inequalities in coverage and higher administrative costs. 
Pluralistic financing models must provide a legal guarantee that all 
individuals have access to coverage and sufficient government subsidies 
and funded coverage for those who cannot afford to purchase coverage 
through the private sector.
    Lesson: Cost-sharing designed so that low-income individuals pay no 
or nominal amounts can help restrain costs while assuring that poorer 
individuals are still able to access services.
    Recommendation: Create incentives to encourage patients to be 
prudent purchasers and to participate in their health care. Patients 
should have ready access to health information necessary for informed 
decision-making. Cost-sharing should be designed to encourage patient 
cost-consciousness without deterring patients from receiving needed and 
appropriate services or participating in their care.
    Lesson: Societal investment in professional medical education can 
help achieve a health care workforce that is balanced, well-trained, 
and in sufficient supply. Investment in primary and preventive care can 
result in better health outcomes, reduce costs, and may better assure 
an adequate supply of primary care physicians.
    Recommendation: Develop a national health workforce policy that 
includes sufficient support to educate and train a supply of health 
professionals that meets the nation's health care needs. To meet this 
goal, the nation's workforce policy must focus on ensuring an adequate 
supply of primary and principal care physicians trained to manage care 
for the whole patient. The Federal Government must intervene to avert 
the impending shortage of primary care physicians. A key element of 
workforce policy is setting specific targets for producing generalists 
and specialists and enacting policy to achieve these targets.
    Lesson: Effective physician payment systems include support for the 
role of primary care physicians, incentives for quality improvement and 
reporting, and incentives for care coordination. Establishment of 
performance measures, financial incentives, and active monitoring of 
performance can encourage higher quality of care. Countries that 
organize care around the relationship between a primary care physician 
and the patient through a patient-centered medical home have better 
outcomes at lower cost.
    Recommendation: Provide financial incentives for physicians to 
achieve evidence-based performance standards. The United States should 
revise existing volume-based payment systems to create care 
coordination payments for physicians working with health care teams to 
provide patient care management and maintain a fee-for-service 
component for separately identifiable visits. Redirect Federal health 
care policy toward supporting patient-centered care and the patient-
centered medical home.
    Lesson: Uniform billing systems and electronic processing of claims 
improve efficiency and reduce administrative expenses.
    Recommendation: Support with Federal funds an inter-operable health 
information technology infrastructure, create a uniform billing system 
for all services, and reduce regulatory burdens.
    Lesson: Insufficient investments in research and medical technology 
result in reliance on outdated technologies and medical equipment, and 
delay patients' access to advances in medical science.
    Recommendation: Encourage public and private investment in medical 
research and assessments of the comparative effectiveness of different 
medical treatments.
Conclusion
    The American College of Physicians appreciates the opportunity to 
provide the Health Subcommittee with this summary of our views on 
health system reform. We recognized that although we can learn much 
from other health care systems, any solution for the United States must 
be unique to our political and social culture, demographics, and form 
of government. Many factors make it unlikely that we can simply adopt 
systems used by other nations, particularly those that involve a 
substantial expansion of the power of the Federal Government to 
regulate health care. Nevertheless, we believe our examination of the 
evidence identified several approaches that are more likely than others 
to be effective in achieving a well-functioning health system that 
could be adapted to the unique circumstances in the U.S.
    Additional information on ACP's analysis and proposals for 
improving access to health care can be found on our website at: http://
www.acponline.org/advocacy/where_we_stand/access/#access.
    The American College of Physicians would welcome an opportunity to 
provide further details of our findings and recommendations or to 
answer any questions.

                                 
                      Statement of Edward M. Burke
    Hello, my name is Edward M. Burke and I am a 49-year-old individual 
with hemophilia. I want to share my concern with you about the 
increasingly unobtainable and unaffordable health insurance coverage 
for Americans, especially the unemployed, the disabled and vulnerable 
youth. Therefore I am submitting for the record the following 
statistics:
    Health insurance costs continue to climb and will probably rise 
again next year according to the survey released by the Kaiser Family 
Foundation, a health care research organization that annually tracks 
the cost of health insurance.\(1)\ Traditionally health care premiums 
rises between 9-14 percent per year, challenging the standard of income 
increase. Although health insurance is a priority issue in American 
lives and amongst political candidates no new significant advance or 
major change has been applied in years.
---------------------------------------------------------------------------
    \(1)\ Health Insurance Costs Climb; Workers Pay \1/4\ of Premiums 
Emily Fredrix, The Associated Press, Page 9
---------------------------------------------------------------------------
    The largest uninsured population of the U.S. are the young people 
between 19-30. The reason they do not have health insurance is because 
most have jobs that do not offer it or because they only make average 
annual incomes of less than $26,000. If they were to pay premiums they 
would require approximately $3,600 which would be 13 percent of their 
income before taxes and other expenses.
    Here is an example at $26,000 ($2,166 monthly):
    Monthly Income:
    $2,166 per month
    Monthly Expenses:


------------------------------------------------------------------------

------------------------------------------------------------------------
$375 per month                                4,500 Taxes 15% of income
------------------------------------------------------------------------
$300 per month                                3,600 Health Premiums 13%
                                                              of income
------------------------------------------------------------------------
$900 per month                                       Rent 38% of income
------------------------------------------------------------------------
$400 per month                                   Transportation--18% of
                                                                 income
------------------------------------------------------------------------
$250 per month                                      Food--11% of income
------------------------------------------------------------------------
$150 per month                                  Utilities--7% of income
------------------------------------------------------------------------
$100 per month                                     Debt--4.5% of income
------------------------------------------------------------------------
$2,475 per month
------------------------------------------------------------------------


    ($309) Monthly Debt with health insurance(2)
---------------------------------------------------------------------------
    \(2)\ UCLA Center for Health Policy Research, California Budget 
Project, August 2007, ``What Does It Take For a Family to Afford to Pay 
for Health Care'', David Carroll, Dylan H. Roby, Jean Ross, Michael 
Snavely, E. Richard Brown, and Gerald F. Kominski
---------------------------------------------------------------------------
    It is clearly evident from an economic standpoint that the younger 
uninsured population cannot afford health insurance. There is nothing 
to scale down unless you expect this population to live in section 8 
housing, ride bicycles to work, live off of soup and crackers, and heat 
their homes with dangerous space heaters. Many in this population would 
rather ``roll the dice'' of chances than live in debt, given the fact 
that they are already living from ``hand to mouth''. The strategy for 
this population is, ``if I need medical attention, I will just go to an 
emergency room and either the state or government will pay for it. . . 
. not me.''
    Now that we have looked at the livelihood of a relatively health 
young adult population, let's assume there is a small population within 
this population who have expensive chronic illnesses. Suddenly the $309 
monthly debt would significantly increase to an additional $500 to 
$1,000 per month in co-payments. Me, having hemophilia and being one of 
these young people would have to not only incur a debt of $300 per 
month so I can stay insured, but I would have to incur an additional 
monthly debt of $2500 per month until my out-of-pocket was met or it 
would be a recurrent monthly debt for all 12 months if I were on 
Medicare totaling $30,000. And you wonder why people who are uninsured 
flock to the emergency rooms?!
    Our health care system does not provide affordable coverage, 
plummets working tax-paying citizens into public assistance programs 
(which incurs cost to the govern-

ment), and removes any incentive to better oneself or even maintain a 
work environment. Why not just live off the State and Federal 
Governments?
    In all due respect, many legislators are not understanding the 
economics livelihoods and capabilities of their constituents. There 
seems to be a loss of reality between those making the laws and those 
trying to live the laws.
    The Factor Foundation would like to propose two solutions to 
provide an incentive for helping young people afford health insurance 
and helping people maintain health insurance. The first is simply to 
negotiate with health plans to offer more affordable premiums that 
would provide at least catastrophic coverage for injuries, 
hospitalizations, and necessary tests and surgeries. The second would 
be the elimination of lifetime health insurance caps.
    ``Sixty (60) percent of all individuals affected by hemophilia have 
private health insurance and approximately 3,000 people in the U.S. 
exceed their lifetime cap each year,'' (3)
---------------------------------------------------------------------------
    \(3)\ www.HemophiliaGalaxy. About Lifetime Caps, Page 1
---------------------------------------------------------------------------
    ``The average cap for hemophilia A is around $1.4 million.'' 
(4) Since this chronic disease state can incur from $100,000 
to $2,000,000 per patient per year health insurance coverage is a 
constant concern for families with hemophilia. In 1970, the cap of 1 
million dollars was set by the insurance industry. ``The same coverage 
today would equal $18 million.'' (5)
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    \(4)\ www.HemophiliaGalaxy. About Lifetime Caps, Page 1
    \(5)\ www.hemophilia.org, Lifetime Insurance Caps, Page 1
---------------------------------------------------------------------------
    Eliminating or raising lifetime caps would be of the utmost benefit 
to chronic disease states such as hemophilia. Other disease states like 
Cancer, Cystic Fibrosis, Fabry Disease, Parkinson's and Multiple 
Sclerosis as well as so many others would also benefit.
    ``In 1995 Price Waterhouse found that eliminating the lifetime cap 
would save the Medicaid program alone more than $7 billion over seven 
years. These savings are likely more in today's dollars. A study from 
the American Academy of Actuaries, also in 1995, found that eliminating 
the lifetime cap would increase premiums as little as $8 a year. 
Eliminating lifetime caps would allow individuals with manageable, but 
high costs such as those with bleeding disorders to maintain their 
private insurance.'' (6)
---------------------------------------------------------------------------
    \(6)\ www.hemophilia.org, Lifetime Insurance Caps, Page 2
---------------------------------------------------------------------------
    Further, as per the research of Mr. Jack Rodgers, then Director of 
Health Policy Economics at Price Waterhouse in 1995, Mr. Rodgers 
stated, ``based on our preliminary calculations, we estimate that 
removing lifetime insurance caps on medical care would result in an 
annual savings of $440 million to the entire Medicaid program for 1995 
and increasing to roughly $1.3 billion in year 2002. The cumulative 
estimated Medicaid savings for Federal and State/local governments for 
years 1995 to 2002 is approximately $7 billion. Of the $440 million 
Medicaid savings in 1995, we estimate that approximately $250 million 
would go towards Federal Medicaid savings and $190 million would go 
towards State/local Medicaid savings.'' (7)
---------------------------------------------------------------------------
    \(7)\ Jack Rodgers, November 8, 1995, Research Letter, Page 7
---------------------------------------------------------------------------
    In 2001 Price Waterhouse estimated about 2,500 patients per year 
reached their insurance cap. The Price Waterhouse report prepared in 
1995 as Congress was considering legislation to require higher lifetime 
caps, estimated that State and Federal health programs could save $1.3 
billion in 2002 if lifetime caps were completely removed.
    Eliminating lifetime caps would allow the Federal Government and 
State governments to experience cost savings to ever increasing 
challenged budgets, and avoid costly utilization of emergency rooms and 
hospitalizations due to the chronically ill being uninsured and limited 
by lifetime caps. Making health insurance minimal and more affordable 
to fit a young persons budget illustrated above would also provide cost 
savings to the Federal Government.
    I thank you for the opportunity to present this information to you 
and would be willing to provide you with the documented resources that 
support this statement. Thank you for your interest and concern.
    Additional information provided by Dana Kuhn, PhD, President and 
Founder of Patient Services Incorporated.

                                 

                       Statement of George Stone
    Thank you for looking into the rising cost of health insurance in 
this country. I retired about 6 years ago and since that time the cost 
of my health insurance has gone up dramatically while my income has 
not.
    Without help controlling those health care costs I will be joining 
the ranks of the uninsured.

            Retired Firefighter/Paramedic

                                 

                   Statement of Jonathan B. Weisbuch
    Thank you for the opportunity to submit a statement to your 
informational hearing, Health Subcommittee Advisory No. HL-23. Since my 
graduation from NYU Medical School in 1963, this country has struggled 
to provide health care to all its residents. Medicare and Medicaid were 
initial steps, but continue to leave huge gaps that have not been 
closed. Now is the time to make the major changes that will set the 
system right.
    Plans currently promoted by Senators Clinton and Obama are 
insufficient. Their plans rely on an insurance industry which profits 
by denying care, and a Medicaid program for ``medically indigent'' that 
promotes the myth that a health system for the poor can be separate, 
but equal.
    Preserving a profit system continues the benighted notion that 
medicine operates under the rules of Adam Smith, Milton Friedman and 
the economics of the market place. This cultural error produces waste, 
inefficiency, and unnecessary human morbidity and mortality. It 
encourages the outright greed we now find in hospitals, physician 
practices, the medical equipment and pharmaceutical sectors, and the 
insurance industry. The business model is driven by profits and 
competition; a medical system should focus on preventing disease, using 
science to diagnosis and treat patients, and providing humane care when 
cure is no longer possible. Profit does not enter the equation. Quality 
care and profits frequently conflict; nothing in the business 
vocabulary speaks to serving human needs where no economic benefit 
accrue to the corporation. The cultural misconception that medicine is 
a business, not a profession, must be eliminated from any reform.
    Similarly, Medicaid, focused on serving the ``medically indigent,'' 
has produced 50 state systems, all of which are different. Eligibility 
is variable, coverage is not transportable; individuals are subject to 
means tests, and may lose coverage for themselves or their children 
when income exceeds a minimal level. States invariably have difficulty 
covering their medical costs, reducing eligibility, services, and the 
fee schedule. A special system for the poor must be eliminated. 
Congress must adopt a universal program that assures that everyone has 
coverage that is equitable and accessible in every region of the 
country; is based on common standards of care, practice and quality; 
and is reimbursed by fees agreed upon by all parties. Administration 
costs should be a low percentage of total expenditures.
    The one program in the United States that could meet these 
objectives, if expanded and modified, is Medicare. It is true that the 
VA system provides the highest quality care at the lowest cost of any 
large system in this country; but proposing a program, fully owned by 
government, is inconsistent with the independent nature of medical 
practice. The VA should be preserved until the new health reform 
achieves the level of quality, cost and patient satisfaction that 
exists in the VA. Until that time, however, the Medicare model will 
suffice for non-veterans. The New Medicare should eliminate Parts C and 
D, and modify Part B in lieu of a service model that expands primary 
care and prevention, supports quality improvement, and spreads all 
costs across the entire system. The New Medicare should pay hospital 
costs on a per diem rather than a DRG basis; and should encourage the 
use of high technology only when clear outcome improvements to health 
are demonstrable. The differences in care and cost that exist between 
regions are unconscionable. The New Medicare should also include mental 
health and dental services, rehabilitation, and community care.
    Expanding Medicare to include everyone can be accomplished in three 
years. The age for eligibility for adults could be lowered annually by 
15 year increments; for children, providing coverage for those 0-1 in 
year one, then up to 10 in year two, and to 20 in year three would 
achieve universal coverage with minimal strain to the current system. 
Patients now covered by insurance would maintain their current patterns 
of care; those without coverage or a medical home, would be given the 
opportunity to choose one. Adding 16 percent to every primary care 
practice in the country might be a short term burden to the system; but 
if primary providers were given a large increase in their fee schedule, 
they could be willing to add one hour to their day to meet the demand. 
Over three to five years, the increased primary care fees might draw 
physicians into primary care specialty training, helping to equilibrate 
what is now a disproportionate number of specialists in the American 
system.
    A significant outcome of this change, apart from the fact that 
everyone will be covered, is that all providers will know the fee 
schedule for a particular service. Today, insurance carriers all have 
different fees, Medicare and Medicaid differ, and fees paid to some 
providers of care differ from those paid to others for the same 
service. This promotes inefficiency and efforts to beat the system; it 
encourages dishonesty. Adjustment in the fee schedules will take time, 
hard work; and must include representatives from all segments of the 
system to be equitable and acceptable.
    Payment for the new program will require transferring premium 
dollars now paid by employers for private insurance into the Medicare 
Trust Fund, as each eligible age group moves from private insurance 
into the New Medicare program. The coverage for pregnant women and 
children would be paid in part by transferring the family coverage 
premiums into the Trust Fund, and the rest from the Federal monies now 
used by Medicaid for deliveries and other pediatric programs like 
SCHIP. The New Medicare should allow states to retain their portion of 
Medicaid dollars, a benefit of nearly $200 billion, funds sorely needed 
by the states.
    Under this scenario, the insurance industry will remain active for 
three years, diminishing in size each year. Corporate costs for health 
benefits will remain approximately the same, since the monies now 
purchasing private insurance for each age group will be transferred to 
the Trust Fund as that age group becomes eligible. Family coverage will 
be transferred to the Trust Fund. As premiums shift to the Trust Fund, 
corporate staff now used to choose insurance programs, examine 
utilization, determine benefits, and respond to personnel complaints, 
can be reassigned. Other insurance costs that cover worker health 
benefits will decline over time: Workers' Compensation, vehicle 
insurance, pension health benefits, etc.
    Corporate premiums will not cover all health costs, however, since 
current costs also include patients' out-of-pocket costs. These point-
of-service fees will be eliminated for patients, but will have to be 
covered by a small increase in personal income taxes.
    No new finances will be required to pay for the New Medicare, 
sufficient funds already exist in the system to meet the $2.3 trillion 
cost. Corporate premiums generate about $900 billion. Out-of-pocket 
costs today approximate $1,500 per individual, or $450 billion. The 
payroll tax going into the Medicare Trust Fund to cover the elderly, 
approximately $500 billion, will continue; and may decline in time as 
the system becomes more efficient in preventing the morbidity of those 
entering the 65 year old window. The Federal portion of the $350 
billion now spent by State and Federal general revenues for Medicaid 
will be added to the Trust Fund, and the state portion retained by each 
state. Most of the categorical funding now coming from HHS, such as 
Ryan White, Maternal and Child Health funds, special disability monies, 
etc. will all be rolled into the Trust Fund. These monies will allow 
the New Medicare to operate without a means test, without exclusions 
for pre-conditions, without the need for annual state legislative 
action, without the need for any definition of eligibility based on the 
Federal Poverty Line, and without the 30 percent overhead and profits 
now drained from the system. The only new ``tax'' is the income tax on 
individuals to offset the out-of-pocket costs now paid at the point of 
service. The New Medicare program will function as did the old, with 
minimal administrative overhead, saving clinicians and hospitals 
hundreds of billions of dollars in billing costs now required to keep 
up with the current paperwork.
    In three years everyone in the U.S. will be covered. Preventable 
deaths in the uninsured, failure to use preventive services, individual 
bankruptcies for catastrophic illness, and the failure to provide 
adequate health care to prisoners, will all be eliminated. Initially, 
everyone will be covered under the same rules now governing Medicare; 
but these rules will have to change, so that by year 5, the entire 
system will have common service guidelines. Some service exclusions 
will exist, including cosmetic surgery, experimental treatments and 
those without scientific justification; but, the approved set of 
services will include all the care needed to promote health, to cure 
and care for disease. Profits will no longer drive the process, rather 
the care giving concept outlined by Hippocrates 2500 years ago will 
prevail. The pharmaceutical industry, the medical equipment industry, 
private transport services, etc., will provide services to the program 
under competitive bids. Fees and reimbursements will be based upon the 
cost to provide care and a relative value scale. Incentives may be used 
to encourage providers to work in underserved areas. And the system 
should cover public health costs up to 3 percent of the gross health 
expenditures; allowing PH to meet its legislative mandates and be 
prepared for mass events.
    HB 676 submitted by Congressman Conyers, and over 100 cosigners, 
would achieve these objectives. Everyone would be included, the states 
would be relieved of their Medicaid burden, companies providing health 
benefits would experience a decline in their costs.
    Medicare Trust Fund problems would be resolved as large additional 
revenues from individuals and corporations are added, increasing the 
risk pool with large numbers who use limited medical services. With an 
entire nation covered by one common payer, the actual cost of care per 
individual will decline as many exploit prevention services, utilize 
early diagnosis and treatment, and reduce inappropriate use of hospital 
emergency services.

                                 

                        Statement of Karen Hawes
    Speaking one's mind is what we should all be doing, in healthy 
debates and not heated arguments. When 47 million Americans is quoted 
as the number of people adversely affected by our present-day, health-
scare system, the numbers game can be flipped and dissected to support 
any argument, even using the same numbers. However, knowing/seeing much 
of the impact firsthand, alongside comparisons with what is provided in 
other countries, the U.S. is not the leader when it comes to caring for 
its own. We may have many technological advances, but they are limited 
to the select few--this does not translate to being great as a nation; 
other nations, with perhaps fewer or less-fantastic advances, but who 
provide necessary care to their people, provides a greater national 
advancement than any bleeding-edge technology. The rhetoric does not 
reflect the reality, when it comes to our health care system.
    Some mention that there are millions in America who choose to go 
without health care coverage. For those who are choosing to go without 
healthcare coverage, it's most likely because of cost, not because of 
choice. We all want quality care, not all of us can afford it; 
especially when you have families who have to choose between paying the 
rent or paying for ever-inflating insurance--for coverage that may not 
pay for your medical needs (due to multiple loopholes and contractual 
fine print). So, people gamble with their lives, in order to keep 
afloat and provide what they know is needed: food, shelter, etc. I 
think that every American should volunteer at one of these health 
clinics, at least once a year, to see it first-hand and at the front-
line who ``these people'' are and how it is that things got this way 
"for them". It's a lot different than what's covered in the sound-bytes 
of our news sources. There are more people than we're being shown, who 
are frightened to death, no pun intended, about getting sick. This also 
reflects the factoid that well over half of Americans who file for 
bankruptcy have done so as a result of a major medical illness. When in 
America, it often is ``your money or our life.''

                                 

                 Statement of March of Dimes Foundation
    The March of Dimes is pleased to submit testimony on the importance 
of health insurance coverage for women of childbearing age, infants and 
children on behalf of its over 3 million volunteers and 1500 staff. As 
you may know, the March of Dimes is a national voluntary health agency 
founded in 1938 by President Franklin D. Roosevelt to conquer polio. 
Today, the Foundation works to improve the health of mothers, infants 
and children by preventing birth defects, prematurity and infant 
mortality through research, community services, education, and 
advocacy. The Foundation is a unique collaboration of scientists, 
clinicians, parents, members of the business community, and other 
volunteers affiliated with 51 chapters in every state, the District of 
Columbia and Puerto Rico.
    The March of Dimes thanks Chairman Stark and Members of the 
Subcommittee for holding a hearing on the topic of the instability of 
health coverage in America. According to the Institute of Medicine, 
health coverage is the single most important factor in determining 
whether a child receives medically-needed care. The IOM has also found 
that health coverage plays an important role in access to maternity 
care, and pregnant women without health insurance receive fewer health 
services and report greater difficulty in obtaining needed care than 
women with insurance.
    Given the Foundation's history with the polio epidemics and our 
current focus on preterm birth, the March of Dimes is equally committed 
to ensuring that all women of childbearing age, infants and children 
have coverage for preventive services as recommended by the American 
College of Obstetricians and Gynecologists (ACOG) and the American 
Academy of Pediatrics (AAP) and that high risk pregnant women and 
medically compromised children, such as those born preterm or with 
birth defects, have comprehensive coverage for special health care they 
require.
    The March of Dimes has worked with Members of Congress, other 
Federal officials, and numerous states on efforts to improve, expand 
and protect both private and public coverage. Specifically in regard to 
private coverage, in 2006, the March of Dimes commissioned a report 
from the Georgetown University Health Policy Institute entitled, 
``Health Insurance Regulation by States and the Federal Government: A 
Review of Current Approaches and Proposals for Change.'' This report 
found that numerous states have enacted laws to ensure that individuals 
covered by state regulated insurance plans received access to certain 
important benefits. For example, 19 states have requirements regarding 
maternity coverage, 27 states have requirements regarding the screening 
for and treatment of phenylketonuria (PKU), and 13 states have 
requirements that address coverage for the treatment of cleft lip/
palate malformations. These measures provide access to critical care. 
As the Subcommittee considers healthcare reform proposals, the March of 
Dimes urges Members to recognize the importance of these mandates to 
pregnant women, children with birth defects, and their families.
    The need for continued efforts to expand access to health coverage 
is clear. According to Census Bureau data prepared for the March of 
Dimes, in 2006, 9.4 million--12 percent--of the nation's 78 million 
children under age 19 lacked health insurance coverage. Some 61 percent 
of these children lived in families with incomes below 200 percent of 
poverty and may have been eligible for Medicaid or the State Children's 
Health Insurance Program (SCHIP). In fact, public programs like 
Medicaid, SCHIP and Medicare are a critical source of access to care 
for many low income women of childbearing age, infants and children. 
Medicare finances approximately 10,000 births annually, and Medicaid 
financed 41 percent of hospital births in 2002. Medicaid also covered 
nearly 30 million children in 2004, and SCHIP covered approximately 6 
million. The March of Dimes is dedicated to continuing to work with 
Members of the Subcommittee to ensure a swift reauthorization of SCHIP 
that will provide states with the tools and resources necessary to make 
significant gains in enrolling eligible pregnant women, infants and 
children. The Foundation is also eager to work with Members to ensure 
that the specific healthcare needs of women of childbearing age, 
infants and children are addressed in any healthcare reform efforts.
    The March of Dimes supports access to comprehensive insurance 
coverage for all women of childbearing age, especially those who are 
pregnant, that covers the full scope of maternity care benefits 
recommended by the American College of Obstetricians and Gynecologists 
(ACOG) and the AAP. Women who receive maternity care are more likely to 
have access to screening and diagnostic tests that can help identify 
problems early; services to manage developing and existing problems; 
and education, counseling and referral to reduce risky behaviors like 
substance use and poor nutrition. Such care may thus help improve the 
health of both mothers and infants. In addition, postpartum care helps 
women appropriately space pregnancies, thus reducing the risk of 
preterm birth.
    While maternity care is crucial, research increasingly shows that 
women who have regular access to health care before becoming pregnant 
have healthier pregnancies and better birth outcomes than women who 
begin care after they become pregnant. In fact, ACOG now recommends 
that women receive preconception care, defined as, ``the identification 
of those conditions that could affect a future pregnancy or fetus and 
that may be amenable to intervention.'' Such care includes tobacco 
cessation counseling and pharmaceuticals, nutrition and folic acid 
counseling, and controlling pre-existing medical conditions that could 
impact a pregnancy (such as diabetes or hypertension). For these 
reasons, the March of Dimes believes that all women of childbearing age 
should have access to comprehensive health coverage to improve their 
chances of receiving these services.
    Once again, the March of Dimes thanks Chairman Stark and Members of 
the Subcommittee for holding this important hearing and for providing 
us with this opportunity to submit testimony. The Foundation looks 
forward to working closely with Subcommittee Members to improve access 
to comprehensive health coverage for women of childbearing age, infants 
and children.
    Submitted by Marina L. Weiss, Senior Vice President, Public Policy 
and Government Affairs
    Contact: Amanda Jezek, Deputy Director, Federal Affairs

                                 

           Statement of National Congress of American Indians
    On behalf of the National Congress of American Indians (NCAI), we 
are pleased to present testimony to the House Committee on Ways and 
Means, Subcommittee on Health for the hearing on the Instability of 
Health Coverage in America.
    NCAI is the oldest and largest American Indian organization in the 
United States. NCAI was founded in 1944 in response to termination and 
assimilation policies that the United States forced upon the tribal 
governments in contradiction of their treaty rights and status as 
sovereign governments. Today NCAI remains dedicated to protecting the 
rights of tribal governments to achieve self-determination and self-
sufficiency.
American Indian and Alaska Natives Face Massive Disparities\1\
    Throughout America, health care is a top priority. It is widely 
accepted that high-quality health care is a necessity, not a luxury. In 
Indian Country, even the most basic health care is a luxury and high-
quality health care is usually not even an option. Most tribal 
communities cannot easily access health care services and, even when 
services are available, they are often subject to decades-old, outdated 
practices and services.
---------------------------------------------------------------------------
    \1\ Results from the 2006 National Survey on Drug Use and Health: 
National Findings
---------------------------------------------------------------------------
    Across every indicator, American Indian and Alaska Natives face 
massive disparities in health:
Life Expectancy
      Life expectancy of American Indian and Alaska Natives is 
nearly six years less than any other race or ethnic group in America--
72.4 versus 77.8 for the general population.\2\
      The life expectancy for males on the Pine Ridge 
Reservation is 56 years old. The life expectancy for males from Iraq, 
Haiti, and Ghana is higher at 58, 59, and 60, respectively.\3\
---------------------------------------------------------------------------
    \2\ National Vital Statistics Reports, U.S. States Life Tables, 
2003. Available from http://www.cdc.gov/nchs/data/nvsr/nvsr54/
nvsr54_14.pdf. (accessed April 2008).
    \3\ United Nations, Department of Economic and Social Affairs, 
Population Division (2007), World Population Prospects: The 2006 
Revision. CD-ROM Edition--Comprehensive Dataset (United Nations 
publications, forthcoming); supplemented by official national 
statistics published in United Nations Demographic Yearbook 2003 and 
Demographic Yearbook 2004, available from the United Nations Statistics 
Division website, http://unstats.un.org/unsd/demographic/products/dyb/
default.htm (accessed Dec 2007); and data compiled by the Secretariat 
of the Pacific Community (SPC) Demography Programme, available from the 
SPC website, http://www.spc.int/prism/social/health.html (accessed Dec 
2007). http://unstats.un.org/unsd/demographic/products/indwm/tab3a.htm
---------------------------------------------------------------------------
Diabetes
      American Indians and Alaska Natives have the highest 
prevalence of Type 2 diabetes in the world and the incidence of type 2 
diabetes is rising at 2.6 times the national average among American 
Indian and Alaska Native children and young adults.\4\
---------------------------------------------------------------------------
    \4\ National Center for Health Statistics, Health, United States, 
2007, With Chartbook on Trends in the Health of Americans.
---------------------------------------------------------------------------
      The American Indian and Alaska Native diabetes death rate 
of 36.3\5\ per 100,000 \6\ places Indian Country 17th out of 191 World 
Health Organization Member States.
---------------------------------------------------------------------------
    \5\ Adjusted to compensate for miscoding of Indian race on death 
certificates.
    \6\ Trends in Indian Health 1998-1999. Indian Health Service. 
http://www.ihs.gov/PublicInfo/Publications/trends98/trends98.asp.
---------------------------------------------------------------------------
Heart Disease
      The leading cause of death among American Indian and 
Alaska Natives are heart diseases--at 133.5 \7\ per 100,000 \8\--a 
higher rate than found in the general population.
---------------------------------------------------------------------------
    \7\ Adjusted to compensate for miscoding of Indian race on death 
certificates.
    \8\ Trends in Indian Health 1998-1999. Indian Health Service. 
http://www.ihs.gov/PublicInfo/Publications/trends98/trends98.asp.
---------------------------------------------------------------------------
Suicide
      Native people ages 15-34 make up 40 percent of all 
suicides within AI/AN populations.
      As a recent example, in the past 12 months there have 
been 213 suicide attempts on the Rosebud Sioux reservation. At least 
one suicide attempt every other day.
      Fetal Alcohol Syndrome (FAS) 1.5 to 2.5 Native children 
per 1,000 live births are afflicted with FAS.
By Comparison, the general U.S. population is 0.2 to 1.0 per 1,000 live 
births.
Substance Use
      19 percent of the Native population aged 12 years and 
over are substance abuse dependent.
      By Comparison, the general U.S. population is 9 percent 
of those aged 12 years and over are substance abuse dependent.
      2 percent of the Native population currently abuses 
methamphetamine.
      By Comparison, the general U.S. population is 0.07 
percent currently abuses methamphetamine.
Mental Health
      30 percent of Native adults have had a serious 
psychological distress.
      By Comparison, the general U.S. population is 11 percent.
Health Insurance Coverage in Indian Country
    American Indians and Alaska Natives have limited health care 
options. Because of higher rates of poverty and economic insecurity, 
American Indian and Alaska Natives are less likely to have continuous 
health insurance, and as a result, less access to healthcare resources. 
In 2003, 45 percent of American Indians and Alaska Natives have private 
health insurance coverage, 21.3 percent relied on Medicaid, and 30 
percent had no health insurance--this compares to the 8.8 percent of 
uninsured in the majority population.\9\
---------------------------------------------------------------------------
    \9\ Henry J. Kaiser Family Foundation Issue Brief, February 2004 & 
Income, Poverty, and Health Insurance Coverage in the United States: 
2005.
---------------------------------------------------------------------------
    Indian Health Service (IHS), the agency tasked to uphold the 
Federal Government's obligation to provide health care to American 
Indians and Alaska Natives, largely provides primary, onsite treatment. 
Coverage varies widely among Indian health programs and should not be 
assumed to be equivalent to the defined benefits packages of private 
insurance.\10\ In fact, according to the U.S. Census Bureau's Current 
Population Survey, individuals who solely report IHS health coverage 
are classified as uninsured.
---------------------------------------------------------------------------
    \10\ Zuckerman et al., American Journal of Public Health, Volume 
94, Number 1, January 2004.
---------------------------------------------------------------------------
    Uninsured American Indian and Alaska Natives, which includes those 
receiving health care thought IHS, are less likely to see a physician 
than those with insurance coverage. Uninsured Americans are also less 
likely to get screened for cancer, more likely to be diagnosed with an 
advanced stage of the disease, and less likely to survive that 
diagnosis than their privately insured counterparts.\11\ Strong 
evidence suggests that having a usual source of care produces better 
health outcomes, reduced disparities, and reduced costs.\12\ 
Considering the staggering health disparities faced by American Indians 
and Alaska Natives, it is clear that action must be taken to improve 
the health and well-being of our tribal communities.
---------------------------------------------------------------------------
    \11\ American Cancer Society report February 2008 issue of CA: A 
Cancer Journal for Clinicians.
    \12\ De Maeseneer JM, De Prins L, Gosset C, Heyerick J. Provider 
continuity in family medicine. Ann Fam Med 2003;1:144-8.
---------------------------------------------------------------------------
Indian Health Care Improvement Act
    The United States has a longstanding trust responsibility to 
provide health care services to American Indians and Alaska Natives. 
This responsibility is carried out by the Secretary of the United 
States Department of Health and Human Services through the Indian 
Health Service. Since its passage in 1976 the Indian Health Care 
Improvement Act (IHCIA) has provided the programmatic and legal 
framework for carrying out the Federal Government's trust 
responsibility for Indian health.
    The need for this reauthorization is clear. The American Indian and 
Alaska Native population is the most negatively impacted by health 
disparities and suffers from chronic diseases and other illnesses at a 
rate disproportionate to that of the mainstream population.
    The statistics provided accurately illustrate the deplorable health 
conditions of the American Indian and Alaska Native population at 
large. Many of these diseases and illnesses could be treated and/or 
prevented with adequate funding and proper care. While the health 
services delivered to American Indians and Alaska Natives have improved 
over time, the current service level is not adequately addressing the 
chronic need in the American Indian and Alaska Native population.
    Reauthorizing the IHCIA would allocate funding to address the 
current needs in Indian health and provide Indian people with the same 
modernized and technologically advanced health care delivery systems 
and services that are already afforded to mainstream America.
    Nationally, health care has progressed to provide in-home care and 
to focus on disease prevention and health promotion. The IHCIA 
addresses these progressive approaches to health care delivery and will 
help move Indian health care into the 21st Century.
    The reauthorization of the IHCIA is critical to ensuring healthy 
Indian communities nationwide. It is necessary to modernize the 
outdated health care delivery system and services that are currently 
found throughout Indian Country. Indian people must be given the 
opportunity to access health care that is up-to-date and directly 
addresses their needs. Indian people deserve to live in a world where 
their health care is as cutting edge as their fellow Americans.
Tax Treatment of Health Care Coverage
    In light of these shattering disparities, tribal governments have 
been trying to be creative in addressing the health care challenges in 
their communities. Some tribes have met this challenge by providing an 
affordable healthcare plan for all their citizens regardless of need. 
This type of universal health coverage is similar to Medicare. However, 
some IRS agents--in examining specific tribal governments for their 
compliance dating back to 2002 or 2003--are asserting that this type of 
coverage, when provided by a tribal government, should be treated as a 
taxable benefit unlike Medicare which is another government benefit 
health plan that is not viewed as taxable to those eligible for 
coverage.
    By virtue of this IRS action, Tribes are being penalized for 
providing creative solutions to their healthcare challenges. The 
penalty asserted is substantial: Withholding tax equal to 30 percent of 
the entire expenditure for tribal health care, IRS reporting penalties, 
possible negligence penalties, and interest--amounts totaling several 
millions of dollars each year. In the interim, no IRS guidance has been 
issued. The justification given by these IRS agents is that (1) 
government provided health plans do not have the benefit of a statutory 
exclusion (unlike employer-provided health care), (2) exclusion under 
the general welfare doctrine is not available where the coverage 
provided is universal (i.e., not restricted to low-income members), and 
(3) healthcare benefits, when funded with gaming revenues, are 
considered to be deemed per capita distributions by a Tribe. This 
justification fails to recognize the basic function of a government 
which is to provide for fundamental citizen needs.
    NCAI encourages the committee to begin oversight of this important 
issue in Indian Country. Guidance is needed at the highest level to 
ensure that Tribes who are diligently working to address the health 
needs in their communities are not subject to tax disincentives. If 
necessary, NCAI would support legislative action consistent with the 
sovereign power of governments to provide health care for their 
citizens.
Conclusion
    The Federal Government's constitutional and treaty responsibility 
to address the serious health needs facing Indian Country must be met. 
We at NCAI urge you to make a strong commitment to meeting the Federal 
trust obligation in passing the Indian Health Care Improvement Act, 
investigating the tax treatment of health care coverage in tribal 
communities, and fully funding Indian Health Service. Such a 
commitment, coupled with continued efforts to strengthen tribal 
governments and to clarify the government-to-government relationship, 
truly will make a difference in helping us to create healthy 
communities in Indian Country.

                                  
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