[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




                HEALTH CARE REFORM IN THE 21ST CENTURY:
                  A CONVERSATION WITH HEALTH AND HUMAN
                  SERVICES SECRETARY KATHLEEN SEBELIUS

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

                                HEARING

                               before the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 6, 2009

                               __________

                           Serial No. 111-18

                               __________

         Printed for the use of the Committee on Ways and Means


                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       DAVE CAMP, Michigan
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM MCDERMOTT, Washington            SAM JOHNSON, Texas
JOHN LEWIS, Georgia                  KEVIN BRADY, Texas
RICHARD E. NEAL, Massachusetts       PAUL RYAN, Wisconsin
MICHAEL R. MCNULTY, New York         ERIC CANTOR, Virginia
JOHN S. TANNER, Tennessee            JOHN LINDER, Georgia
XAVIER BECERRA, California           DEVIN NUNES, California
LLOYD DOGGETT, Texas                 PATRICK J. TIBERI, Ohio
EARL POMEROY, North Dakota           GINNY BROWN-WAITE, Florida
MIKE THOMPSON, California            GEOFF DAVIS, Kentucky
JOHN B. LARSON, Connecticut          DAVID G. REICHERT, Washington
EARL BLUMENAUER, Oregon              CHARLES W. BOUSTANY, JR., 
RON KIND, Wisconsin                  Louisiana
BILL PASCRELL JR., New Jersey        DEAN HELLER, Nevada
SHELLEY BERKLEY, Nevada              PETER J. ROSKAM, Illinois
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
DANNY K. DAVIS, Illinois
BOB ETHERIDGE, North Carolina
LINDA T. SANCHEZ, California
BRIAN HIGGINS, New York
JOHN A. YARMUTH, Kentucky

             Janice Mays, Chief Counsel and Staff Director

                   Jon Traub, Minority Staff Director

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 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
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further refined.





                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 29, 2009, announcing the hearing...............     2

                                WITNESS

The Honorable Kathleen Sebelius, Secretary, U.S. Department of 
  Health and Human Services......................................     5

                       SUBMISSIONS FOR THE RECORD

Amy Kaplan, statement............................................    65
Claire H. Altman, statement......................................    66
Clark Newhall, M.D., J.D., statement.............................    68
Congressman Patrick J. Kennedy, statement........................    69
Larry Frazer, statement..........................................    71
Marvin J. Southard, letter.......................................    72
Patricia Ryan, statement.........................................    73

 
                HEALTH CARE REFORM IN THE 21ST CENTURY:
                  A CONVERSATION WITH HEALTH AND HUMAN
                  SERVICES SECRETARY KATHLEEN SEBELIUS

                              ----------                              


                         WEDNESDAY, MAY 6, 2009

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

    The Committee met, pursuant to notice, at 10:10 a.m., in 
room 1100, Longworth House Office Building, Hon. Charles B. 
Rangel (Chairman of the Committee), presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
April 29, 2009

                 Chairman Rangel Announces a Hearing on

                Health Care Reform in the 21st Century:

             A Conversation with Health and Human Services

                      Secretary Kathleen Sebelius

    House Ways and Means Chairman Charles B. Rangel (D-NY) announced 
today that the Committee will hold a hearing to welcome the Secretary 
of the Department of Health and Human Services Kathleen Sebelius. This 
is the fifth hearing in the series on health reform in the 111th 
Congress. The hearing will take place at 10:00 a.m. on Wednesday, May 
6, 2009, 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 the invited witness 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:

      
    The U.S. spends twice as much per person for health care as any 
other country in the world, and yet continues to lag behind other 
countries in terms of coverage and quality. There are nearly 46 million 
uninsured people in America, and millions more have inadequate 
coverage. The U.S. has lower life expectancy rates than all other 
industrialized countries, including Japan, Germany, Australia and 
Switzerland. Lack of health insurance coverage, rising costs and lower 
quality are intimately intertwined.
      
    The uninsured crisis affects cost and quality for families with 
coverage, as well as those without. A recent report from the Institute 
of Medicine found negative ``spillover'' effects that occur for people 
with health insurance who are in communities with a large uninsured 
population. These effects for the insured include decreased access to 
both primary care physicians and specialists, strained emergency 
services, and less access to state-of-the-art treatments. Widespread 
lack of coverage also increases health care costs for providers, plans, 
and those with health insurance through cost-shifting.
      
    President Obama has said that health care reform is both a moral 
and fiscal imperative. His principles for reform and the plan he 
proposed during the campaign envision a uniquely American system that 
assures affordable, quality health care for all Americans.
      
    This hearing will be the first post-confirmation hearing before the 
Congress for Health and Human Services Secretary Kathleen Sebelius.
      
    ``President Obama has shown great leadership on health care 
reform,'' said Chairman Charles B. Rangel. ``Secretary Sebelius brings 
enormous expertise and wisdom to the table on these issues, and I look 
forward to working closely with her on health care reform and other 
health and human services issues.''
      

FOCUS OF THE HEARING:

      
    Health and Human Services Secretary Kathleen Sebelius will appear 
before the Committee to discuss the President's principles for health 
care reform.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
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by close of business Wednesday, May 20, 2009. Finally, please note that 
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questions, or if you encounter technical problems, please call (202) 
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noted above.

                                 

    Chairman RANGEL. The Committee on Ways and Means will come 
to order. Will staff, visitors, stakeholders please take their 
seats at this time.
    This is, what, the fourth meeting that we are having on 
health reform, and we haven't finished yet. But this morning we 
will pause the hearing forum to welcome the new Secretary of 
Health and Human Services. We are just so pleased that she has 
been selected to guide us through what most all of us feel is 
one of the most historic and meaningful measures before this 
Congress: To make certain that all Americans have access to 
affordable health care.
    For those of you that were fortunate enough to monitor her 
confirmation hearings, I am thoroughly convinced that, 
Republican or Democrat, we have been so impressed of the 
dedication almost all of your life to public service and that 
the talents that you have acquired over those years are so 
very, very important to this Congress and to this Committee to 
reach the goals that the President has established for all of 
us.
    I want you to know, Madam Secretary, that there are really 
sharp differences of opinion on this Committee as to how we 
achieve near-universal health care. But I also want you to know 
that Ranking Member David Camp and I have reassured each other 
that, to our constituents, there are no Democratic 
beneficiaries or Republican beneficiaries, there are just 
people in need of a solid health plan.
    And because we try so hard to work together, I am asking 
you to use your good offices, since you have a history of 
working with Republicans and Democrats and coming up with 
legislation and programs that you and the people you work with 
can be proud.
    You should know that, next week, Congressman Camp and I are 
working out a caucus just for Members of this Committee, so, 
without cameras and microphones, we can come together and see 
what differences we have and what differences can be worked out 
so that we can give you a bipartisan bill. So there may be a 
lot of good reasons why people would oppose this legislation, 
but it will not be because we have not attempted in good faith 
to work out those differences.
    And so I would like to yield to the Ranking Member and 
publicly thank him, not for promising anything except an 
honest, good attempt to see what we can do in working together.
    Mr. Camp.
    Mr. CAMP. Well, thank you very much, Mr. Chairman. I 
appreciate those comments.
    And welcome to the Committee, Secretary Sebelius, to the 
Ways and Means room. I think this is a place we will meet 
often. And as much as I respect this room and what happens 
within its walls, I think we both readily admit that the 
Leelanau Peninsula, an area I represent and I know your family 
has come to know, is a much nicer meeting place.
    But I know your time is short, so I will get straight to 
the point. I have read your testimony and agree with much of 
it. And so I ask whether we will focus on developing a plan 
that features policies we can agree on--lowering costs for 
families, businesses, and the American taxpayer; insuring no 
family is bankrupted by their medical cost, choice of doctors; 
being able to keep your current coverage, among others--or will 
we focus on what divides us. And I think if it is the former, I 
think we can find a path to bipartisan health reform. If it is 
the latter, we may not be as successful. So I am hoping for 
success in that regard.
    And, as we continue this conversation on health care 
reform, I ask that you make yourself available to this 
Committee, its Republican and Democratic Members, and that you 
and the President truly be open to our ideas and working across 
party lines to make health care reform a reality.
    And since your time with us is short, I just want to make 
sure Members have as much time as possible to ask questions and 
discuss with you. And I yield back the balance of my time.
    Chairman RANGEL. Thank you.
    Madam Secretary, you will be given 5 minutes to present 
your remarks, and we are going to try to be extremely liberal 
in that. But I want you to know that I have been persuaded to 
convince Republicans and Democrats to reduce their questioning 
from the 5 minutes that we are used to to 2\1/2\ minutes. It 
may not seem like much to you, but I want you to know that is a 
big deal to us. And so we hope you will take that into 
consideration when we ask you to come back when your time is 
better, doing so.
    At this time, I welcome you on behalf of the full Committee 
and the Congress, and I look forward to your testimony. You may 
proceed.

 STATEMENT OF THE HONORABLE KATHLEEN SEBELIUS, SECRETARY, U.S. 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Secretary SEBELIUS. Thank you, Mr. Chairman and Ranking 
Member Camp and Members of the Committee.
    As the Chairman has already said, this is my first 
opportunity, outside of the confirmation hearing process, to 
have an opportunity to have a discussion in Congress and my 
first time before a House Committee. And I am pleased to be 
here with the House Ways and Means Committee and Members. And I 
know today is just the beginning of what I hope will be a 
robust and frequent conversation as we move toward the goal of 
health reform and health coverage for all Americans.
    I am pleased that Ranking Member Camp has already 
recognized that, actually, I am one of his constituents. I pay 
property taxes, I might say too many property taxes, in your 
district. But I think it is an opening of bipartisanship 
demonstrated from the outset. I am not Chairman Rangel's 
constituent; I am Representative Camp's constituent.
    Given the time shortage, Mr. Chairman, you have my printed 
testimony, and I am going to highlight a few things and then 
talk a little bit about a couple of the reports that I spoke 
about today with the Nurses Association because much of what is 
in the testimony this Committee is well familiar with: The need 
to provide health coverage, particularly because the costs of 
the current system are unacceptable and unsustainable for 
businesses, for families. What we have seen is the situation 
getting worse; costs continue to escalate, and more and more 
Americans lack coverage. I share the President's conviction 
that health care reform cannot wait and will not wait another 
year.
    Many steps have been taken by Members of this Committee and 
others in the first 100 days to set a platform: Insuring 4 
million more American children; providing resources in the 
Recovery Act for a variety of initiatives, health and wellness 
programs, funding the pipeline for new workforce efforts, 
making sure that the resources are there for implementation of 
health information technology, which can be an underpinning to 
moving the health system in a new direction.
    I share the President's belief that reform must guarantee 
choice of doctors and health plans, including a choice between 
a public and private plan option, that no American should we 
forced to give up a doctor they trust or a health plan they 
like. And comprehensive reform shouldn't force any Americans 
who are satisfied with their coverage to make changes. But 
covering every American, including access to high-quality 
health care, is so important.
    The two reports that I am issuing today, as the new 
Secretary of Health and Human Services, I think highlight some 
of the underlying issues that we are facing. Today we are 
releasing the National Health Care Quality Report and the 
National Health Care Disparities Report.
    Both of these reports underlie troubling findings about the 
status quo of our health care system. The disparities report, 
again, highlights that severe and pervasive disparities in care 
continue to persist in this country. Minority patients still 
receive proportionately poor care compared to their Caucasian 
neighbors. The quality report highlights that 40 percent, 4 out 
of 10 health care patients don't receive recommended care. And 
that is an ongoing situation.
    And, again, prevention measures are too often lacking. Half 
of the obese adults and children who see a doctor are never 
given advice to exercise more frequently and eat a healthy 
diet.
    And most troubling is the decline in patient safety 
measures, identified in the quality report, that have worsened 
every year for the past 6 years. When you look at the 
underlying causes, patient safety is down because the number of 
patients acquiring health-care-associated infections has gone 
up. Patients come to the hospital to get well, and 
unfortunately too many of them are acquiring potentially fatal 
infections.
    It has become one of the top 10 leading causes of death in 
the United States. And the infections are thought to cause 
about $20 billion--$20 billion--a year in additional health 
care costs. So we are challenging the health care providers to 
work with us on attempting to fix this problem.
    Thanks to your support, the Recovery Act now includes $50 
million to help prevent health-care-associated infections. And, 
as of today, the Department is prepared to begin to release 
those funds. Forty million dollars is aimed at States to expand 
their infection prevention teams and educate and collaborate 
with patients and hospitals to keep patients safe. An 
additional $10 billion is supporting increased inspections of 
ambulatory surgical centers, which are all too frequently a 
site of these lethal infections.
    We know that one particularly common and dangerous 
infection is the Central Line-Associated Bloodstream Infection. 
It strikes tens of millions of American patients every year, 
and that number increases year-in and year-out. But there is a 
relatively easy cure. Research has found that the hospital 
checklist protocol, if implemented uniformly and on a daily 
basis, dramatically reduces these results. Medicare has been 
studying this in 10 States. We want to expand that protocol to 
all States.
    So today, Mr. Chairman, as part of this effort to begin to 
transform the underlying system, I am issuing a challenge to 
hospitals across America to commit to using the patient safety 
checklist in all hospitals and reduce the serious bloodstream 
infections in intensive care units by 75 percent over the next 
3 years. That is what our data tells us can happen. If the 
checklist is used, infections will go down.
    We want to include every hospital in every State. This 
morning I spoke to the Nurses Association and asked them to 
join in this effort. And we will be putting this challenge out 
to hospital administrators across the country.
    So, Mr. Chairman, I know you and Members of this Committee 
share my concerns about the quality of care and the need for 
comprehensive health reform. I want to thank you in advance for 
the hard work that has already been done to set the platform 
for this historic moment. I want to assure you that I will do 
everything I can to work closely with this Committee and others 
here in the House and, across the Rotunda, in the Senate to 
make sure that we take advantage of this opportunity.
    And, with that, Mr. Chairman, I would stand for questions.
    [The prepared statement of Secretary Sebelius follows:]
         Prepared Statement of the Honorable Kathleen Sebelius,
        Secretary, U.S. Department of Health and Human Services
    Chairman Rangel, Ranking Member Camp, Members of the Committee, 
thank you for this opportunity to join you for a critical conversation 
about health reform in America. Health reform has advanced thanks to 
your work and willingness to move forward together with other House 
committees. We appreciate your hard work to enact reform. It is 
urgently needed.
    Health care costs are crushing families, businesses, and government 
budgets. Since 2000, health insurance premiums have almost doubled and 
health care premiums have grown three times faster than wages. Just 
last month, a survey found over half of all Americans, insured and 
uninsured, cut back on health care in the last year due to cost. And 
behind these statistics are stories of struggles for too many American 
families. Families who face rising premiums--now over $12,000, when it 
was $6,000 a decade ago. Parents choosing between health insurance and 
their mortgage because they can't make ends meet because their paycheck 
is standing still but health care costs are rising much faster than 
inflation. Today health care costs are the big squeeze on middle class 
families and these challenges are growing as the economic picture 
worsens. And on top of all of this, in the last 8 years an additional 7 
million Americans have become uninsured.
    And we know that during this recession, hundreds of thousands of 
people are losing health insurance as they lose their jobs.
    Even families who do have some coverage are suffering. From 2003 to 
2007, the number of ``under-insured'' families--those who pay for 
coverage but are unprotected against high costs--rose by 60 percent.
    Still, we have by far the most expensive health system in the 
world. We spend 50 percent more per person than the average developed 
country. The U.S. spends more on health care than housing or food.
    And the situation is getting worse. The United States spent about 
$2.2 trillion on health care in 2007; $1 trillion more than what was 
spent in 1997, and half as much as is projected for 2018.
    High and rising health costs have certainly contributed to the 
current economic crisis. Rising health costs represent the greatest 
threat to our long-term economic stability. If rapid health cost growth 
persists, the Congressional Budget Office estimates that by 2025, 25 
percent of our economic output will be tied up in the health system, 
limiting other investments and priorities.
    This is why I share the President's conviction that ``health care 
reform cannot wait, it must not wait, and it will not wait another 
year.'' Inaction is not an option. The status quo is unacceptable, and 
unsustainable.
    We are already on our way to making health reform a reality. In 
just over 100 days, this President has made great strides to advance 
the goal of reducing costs, guaranteeing choice and assuring quality, 
affordable health care to all Americans.
    Within days of taking office, the President signed into law the 
reauthorization of the Children's Health Insurance program. This 
program's success in covering millions of uninsured children is a 
hallmark of the bipartisanship and public-private partnerships we 
envision for health reform.
    The President then signed the Recovery Act, which includes 
essential policies that will protect health insurance for the American 
people, support groundbreaking research, and make important investments 
in our health care infrastructure.
    And just last week, Members of Congress passed a budget that 
includes an historic commitment to health reform.
    Delivering on this commitment and enacting comprehensive health 
reform is one of my top priorities. The Obama administration is focused 
on passing health reform legislation that will end the unsustainable 
status quo and adhere to eight basic principles.
    First, we believe that reform must reduce the long-term growth of 
health care costs for businesses and government. The high cost of care 
is crippling businesses, who are struggling to provide care to their 
employees and remain competitive. It is driving budget deficits and 
weakening our economy. We must pass comprehensive reform that makes 
health care affordable for businesses, government, and families.
    Second, we must protect families from bankruptcy or debt because of 
health care costs. Today, too many patients leave the hospital worried 
about paying the bills rather than returning to health. They have 
reason to be concerned. In America, half of all personal bankruptcies 
are related to medical expenses. It's time to fix a system that has 
plunged millions into debt, simply because they have fallen ill.
    Third, we will guarantee choice of doctors and health plans. No 
American should be forced to give up the doctor they trust or the 
health plan they like. If you like your current health care, you can 
keep it.
    Fourth, we will make sure that Americans who lose or change jobs 
can keep their coverage. Americans should not lose their health care 
simply because they have lost their job.
    Fifth, we must end barriers to coverage for people with pre-
existing medical conditions. In Kansas and across the country, I have 
heard painful stories from families who have been denied basic care or 
offered insurance at astronomical rates because of a pre-existing 
condition. Insurance companies should no longer have the right to pick 
and choose. We will not allow these companies to insure only the 
healthy and leave the sick to suffer.
    Sixth, we must assure affordable, quality health coverage for all 
Americans. The large number of uninsured Americans imposes a hidden tax 
on other citizens as premiums go up, and leaves too many Americans 
wondering where they will turn if they get sick. A system that leaves 
millions of Americans on the outside of the doctor's office looking in 
is unjustifiable and unsustainable.
    Seventh, we must make important investments in prevention and 
wellness. The old adage is true--an ounce of prevention truly is worth 
a pound of cure. But for too long, we've sunk all our resources into 
cures and shortchanged prevention. It's time to make preventing illness 
and disease the foundation of our health care system.
    And finally, any reform legislation must take steps to improve 
patient safety and the quality of care in America. Our country is home 
to some of the finest, most advanced medicine in the world. But today, 
health care associated infections--infections caught in a hospital or 
other settings--are one of the leading causes of death in our Nation. 
Ninety-eight thousand Americans die each year as a result of these and 
other medical errors--more than car accidents, breast cancer, or AIDS. 
These numbers are not acceptable for the world's richest Nation. We 
must sharply reduce the number of medical errors, keep patients safe 
and ensure all Americans receive high-quality care.
    As we work to enact policies that adhere to these principles, the 
President is committed to hearing from people in communities across the 
Nation and on both sides of the aisle. In March, he held a White House 
health care forum and several regional forums in places like Michigan, 
Iowa, Vermont, North Carolina and California. There, bipartisan forums 
brought together people from all perspectives--across the political 
spectrum and representing all people with a stake in the system--to 
focus on solutions.
    I look forward to continuing this bipartisan process and I am eager 
to work with this Committee and your colleagues in the House and Senate 
to deliver the reform we so desperately need.
    Again, Mr. Chairman, thank you for the opportunity to participate 
in this conversation with you and your colleagues. I look forward to 
taking your questions.

                                 

    Chairman RANGEL. Thank you, Madam Secretary.
    First of all, for the most part, Democrats support the 
President's plan. We are anxious to have dialogue with others 
that have different plans. You may not hear it today, but we 
will be discussing these things off-camera in the back room and 
trying to find out where we can publicly agree.
    Having said that, and without them saying it, those who 
oppose the plan, it seems like one of the most controversial 
issues is the public plan. I know the President supports it, 
but I would hope that you will be able to share with us your 
views on why public plans should not be fearful that the 
government is going to undercut them and put the for-profits 
and public plans out of business.
    It just seems to me that if we have a public plan, that 
this would monitor the private system, and the private system 
would look competitively at the public system, and at the end 
the standards of all of the plans would be the best ones to 
attract people who have no insurance.
    People who have insurance and are happy with what they have 
will not be affected. But I think we are going to have to 
concentrate, and I will need your help, on the question of why 
do you and the President think that a public plan is so 
important in providing quality care at lower, competitive 
prices.
    Secretary SEBELIUS. Mr. Chairman, as you are aware, part of 
my background is shared with colleagues in the Senate, where I 
was an insurance commissioner for 8 years in Kansas, and so my 
charge was to regulate the insurance market.
    And what I am a believer in, and certainly the President is 
a believer in, is that competition often is a very healthy 
component of any market situation. And I think that competition 
helps promote innovation, it helps promote best practices, and 
also can help to lower costs. So, in the design of a health 
insurance exchange, which is really what we are talking about 
and what the President discusses, a choice of a variety of 
options is often critical.
    In many parts of the country, including in my home State of 
Kansas, there are lots of areas in the State where there are 
not choices of private carriers for many citizens. And it is 
why, in our design of the State employee health insurance plan, 
for instance, we created a side-by-side public and private 
option so that it helped to promote a network. About 30 States 
have done similar things. I know in many States, in their 
design of the Children's Health Insurance Plan, a public plan 
is a side-by-side option with private carriers.
    The underlying issues are: What are the rules? What are the 
actuarial issues going into the design of a plan? Is there a 
level playing field? I can assure you, Mr. Chairman, and some 
who have voiced opposition or at least, at best, skepticism 
about a public plan option that the President is committed to 
and I am committed to the fact that the design needs to level 
the playing field.
    And it is on two fronts. First, a public plan option should 
not undercut the private market, tilt the playing field in one 
direction. The private market, on the other hand, should not be 
able to cherry-pick the least costly patients. So, getting rid 
of some of the pre-existing medical condition barriers that 
allow a skewed marketplace I think is important.
    But having an option for individuals, having a choice for 
the Americans who don't currently have coverage, and having 
competition to drive the best practices, the best cost-
efficiencies, the best protocol, I think, can be very positive 
in the long run.
    Chairman RANGEL. Thank you.
    Mr. Camp.
    Mr. CAMP. Thank you, Mr. Chairman.
    Many have suggested limiting the amount of health insurance 
that can be excluded from an employee's taxable income as a way 
to lower the cost of health care, help finance reform, 
particularly to those at lower income levels for individuals 
and families.
    And I would like to hear your views on the idea of capping 
or repealing the tax exclusion for employer-sponsored care to 
help address inequities in the health care system.
    And then, second, is there any timetable for the 
Administration to release a specific legislative proposal on 
health care to the Congress? And if there is, could you shed 
some light on that?
    Thank you.
    Secretary SEBELIUS. Certainly, Representative Camp. I 
appreciate those questions.
    As you know, the issue of the tax exemption for benefits 
was discussed in a robust way during the campaign season, and 
the President made it very clear that he did not support an 
elimination or capping of the benefit package. And I think a 
fundamental reason for that was the underlying fear that it 
could destabilize the private insurance market.
    And, as the President repeated over and over again, he 
thinks a fundamental component of moving forward is to ensure 
Americans who are satisfied with their coverage, whose 
employers are currently providing coverage that is beneficial 
to themselves and their families, that they won't lose that. 
And with almost 180 million Americans in the private market, 
eliminating the tax writeoff, which was a component of 
encouraging employers to offer coverage in the first place, has 
a huge potential of destabilizing the private market and 
leaving more Americans uninsured.
    Having said that, I do know that the President understands 
that that conversation is under way here in Congress. But it is 
not part of his proposal that he made during the course of the 
campaign. But he is willing to look at all serious discussions 
coming forward.
    President Obama has made a commitment that he believes 
health reform has to engage the Congress in a meaningful way. I 
can tell you, during the course of my confirmation hearings, I 
met with a number of Senators who asked a similar question to 
your specific proposal question, believing that, there is a 
plan that has been written in great detail and eventually will 
be pulled out of the drawer and presented. What I can assure 
you is that does not exist, and it is not part of the 
President's plan moving forward.
    What he hopes will happen--and it started, I think, in his 
early days in office, with the health care summit at the White 
House, a very bipartisan effort, not only among Members of 
Congress, but bringing in business leaders and providers and 
insurers, various stakeholders, and will continue through this 
process where the Senate Committees are very much engaged. The 
three primary House Committees are clearly very engaged in this 
dialogue. And his charge to me, as the new Secretary, is to 
work closely with Committees as proposals are being developed 
around the principles, frankly, that you primarily outlined in 
your opening statement. But the specific legislative language, 
the framework of exactly what the benefit package ultimately 
looks like, what the exchange may or may not look like, will be 
a collaborative effort but primarily engaged in by Congress.
    The President also, in his blueprint budget proposal, 
included a set-aside of $630 billion, which he sees as a 
downpayment for health reform, half of which are on the revenue 
side, half of which are on the savings side. And I think the 
recognition is that you can't fully cost out a plan until you 
know what you are paying for. So part of the effort going 
forward, in conjunction with Congress, is not only crafting the 
specific legislation, but also crafting the specific package to 
provide the revenue over a 10-year period of time to pay for 
health reform.
    Mr. CAMP. Thank you.
    Chairman RANGEL. Madam Secretary, you may not see Chairman 
Stark here, but we well know that he is monitoring these 
hearings, as he recuperates, on television, and he has all of 
his staff monitoring all of us.
    So, Pete, everything is going okay.
    I yield to Mr. Levin.
    Mr. LEVIN. Thank you very much.
    A special welcome.
    Your reference to patient safety, Madam Secretary, I think 
will hit a very, very warm note in Michigan, which has been 
trying to tackle this issue, and I think with some success.
    Let me ask a question, and maybe Pete Stark would ask it. 
With your unique experience as a Governor and insurance 
commissioner, why is it essential that we act this year?
    Secretary SEBELIUS. Representative Levin, I think it is 
clear that the current situation is unaffordable, 
unsustainable, and unacceptable.
    The costs of health care are crushing businesses and 
families. Our industries are becoming less and less competitive 
with their global partners and struggling under the high cost 
of care. Too many families are in dire financial straits 
because of a health-related incident that they did not have the 
insurance to provide coverage and a safety net system.
    And way too many Americans, close to 50 million, have no 
access to the high-quality care that some of us enjoy in this 
country. And so they come in through the doors of emergency 
rooms with more serious conditions and end up with the least 
effective, most expensive care because they didn't get the 
preventive care, they don't have a health home. And all of us 
pay for that.
    So I think that any economic prediction that is done 
underlies the fact that, unless we get a handle on health care 
costs, unless we can bend the cost curve--and one of the only 
ways to do that is shift the system toward prevention and 
wellness, make sure that all Americans have a health home, and 
begin to provide adequate coverage for all Americans, which 
provides a healthier workforce, students who can actually learn 
in school, making sure that they are ready to go as the workers 
of the future.
    And now is the time to do that. As we are fixing the 
economy, we have to fix health care as part of that overall 
economic strategy.
    Mr. LEVIN. Thank you. Well said.
    Thank you.
    Chairman RANGEL. The Chair would like to recognize Mr. 
Herger from California.
    Mr. HERGER. Thank you, Mr. Chairman.
    And, Madam Secretary, I want to thank you for your 
testimony.
    I believe there is a great deal of potential for finding 
bipartisan common ground on the principles you and the 
President have outlined. One of them, which I very much agree 
with, is that people who like their current health care should 
be able to keep it.
    We have heard testimony in this Committee that creation of 
a new government-run health plan could result in 120 million 
Americans losing their current coverage, partly due to 
increased cost shifting by providers that would drive up the 
cost of employer-based coverage. We have also heard testimony 
from a health policy expert who supports creating a public 
option but does not think people should be able to keep their 
current coverage.
    Madam Secretary, are you concerned that proposals to expand 
government-run health care could run counter to the President's 
principle that if you like your current health care you can 
keep it?
    Secretary SEBELIUS. Representative Herger, I think it is 
always a concern. And, again, it may have more to do with the 
overall plan design than the philosophical principles moving 
forward.
    I can assure you that those two principles--Americans 
keeping their health coverage if it is satisfactory and serves 
them and their family well, and having a choice within an 
insurance exchange for a public plan option--are not mutually 
exclusive. It isn't either/or.
    Mr. HERGER. How do they compete? How does a private plan 
compete with a government plan, which can be subsidized, which 
perhaps could start off innocently but be changed at any time 
to where a private plan could not compete? How could they ever 
coexist?
    Secretary SEBELIUS. I think, Congressman, the examples of 
that, again, are in place across the country. Thirty of the 
States have State employee health plans where there is public 
option for State employees side by side with a variety of 
private openings, created largely to give those State employees 
in a State like mine, in Kansas, a choice. Because much of our 
State only had one private provider, and we felt giving 
employees a choice for themselves and their families, a 
competitive choice, was important.
    A number of States have constructed their CHIP programs, 
the health insurance plans for children, in exactly the same 
way, where there is a side-by-side option of a private provider 
and a public provider.
    What I can assure you is that it can be done as a level 
playing field. It is about the rules that are established in 
the beginning. And the President and I are committed to working 
with Members on this Committee and Members in Congress to make 
sure that the playing field is level.
    And, as I said, the private insurers currently have, in 
fact, I would say, a tilted playing field in way too many 
areas, where cherry-picking on the market is a strategy to make 
a profit, so that the ability to underwrite individuals' 
medical conditions to either make insurance unaffordable or 
unavailable is a current private-market strategy. I think that 
measure doesn't work well in a health insurance exchange any 
more than a measure which would give government huge advantages 
and huge subsidies doesn't work well.
    So I think if the rules are the same, so individuals who 
have lower income, who are not insured, have a subsidy benefit 
as they come into the health exchange and can choose between a 
public and private plan option with the same kind of rules, I 
think it can work as a very important competitive situation 
where it will help drive--where people will be competing, 
public and private will be competing, not on underlying price 
or on unfair government subsidies, but really on practice and 
protocol, on lowering overhead costs, on lowering 
administrative costs, and driving benefits to their incoming 
enrollees.
    Chairman RANGEL. Dr. McDermott.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Welcome, Governor.
    My Subcommittee handles unemployment insurance and foster 
kids and welfare, TANF. We will be back talking about that next 
year, but I want to talk about health care at the moment.
    Wichita, Kansas, has 90 specialists per 100,000 people, 
whereas Boston has 180 specialists per 100,000 people. Everyone 
who has looked at these situations knows that that doesn't mean 
they have better health care in Boston than they do in Wichita. 
What it reflects is the lack of enough primary care physicians 
in the Boston area, which they found out when they started 
Mass-Care. They couldn't provide primary care physicians for 
everybody who was asking for one.
    I have made a proposal that we have all public medical 
schools be free, with the requirement that the students, when 
they come out, would serve 4 years in primary care in the 
State.
    And one of the things that the Dartmouth University study 
has shown is that there is clearly no connection between how 
many specialists you have and the quality of health care or 
anything except where people want to live, in terms of where 
they practice. Now, if you train them in Kansas and they move 
to San Francisco, the people of Kansas have nothing. Washington 
State is part of WWAMI, so we have Washington, Alaska, Montana, 
Idaho, and Wyoming. We train all the doctors in one medical 
school, but they doesn't necessarily go back to the rural 
areas.
    With that kind of provision--and I hope that what will come 
out tomorrow when the President puts out his additional 
provisions is a commission that looks at workforce--a permanent 
commission for workforce planning. Right now, we have a 
graduate medical commission, but that only deals with 
specialists. It does not deal with the broader issue of how you 
get enough private practitioners to go into the whole area of 
primary care.
    And I would like to hear your ideas, having been a 
Governor, delivered a State where you have operated way below 
the national average, actually one-half. There are only two 
cities that have less than Wichita: Sioux City, Iowa, and Mesa, 
Arizona. So I would like to hear how you did it.
    Secretary SEBELIUS. Representative McDermott, I am not sure 
that that was a design strategy, to lower the number of 
specialists. But I can tell you there were a number of efforts 
at the State level to increase the number of primary care 
providers, recognizing that the pipeline is very thin. And, 
certainly, as we look at 50 million additional Americans 
accessing a health home, having an opportunity to have regular 
preventive care, the pipeline issue is very important.
    Congress made a major step, along with the President, when 
he signed the Recovery Act with a half-billion-dollar 
investment in workforce initiatives and more nurses, more 
primary care doctors. There is a proposal in the budget to 
increase the Commissioned Corps, again, providing health care 
providers in underserved areas. And one could argue that, in a 
lot of areas, primary care is underserved.
    I share your interest in figuring out how we can encourage 
more medical students to actually look at primary care and 
preventive medicine as a choice going forward, because I want 
to make sure that, as we shift this system to a wellness 
system, we have providers that are capable of making that 
shift.
    Having said that, I think it is important that we do not 
undercut the specialty initiatives that are so important. I 
mean, frankly, if I need neurosurgery, I would like to know 
that there is a neurosurgeon at least in the proximate area 
that I can call upon.
    So I think there are ways to begin to shift payment 
incentives to more appropriately reward primary care doctors 
without disadvantaging the specialty care. If we begin to have 
payments based on outcomes, if we recognize that dollars spent 
on wellness pay huge dividends to lower health care costs on 
the other end, then I think we can have a system where more 
medical students--not only more people will be coming into 
medical school, but more medical students will be choosing 
general practice and primary care and family practice, as 
opposed to specialty care, as the way that they can be 
successful.
    Chairman RANGEL. Madam Secretary, you are going to have to 
help us, because everyone wants----
    Secretary SEBELIUS. Okay.
    Chairman RANGEL [continuing]. At least to have some 
dialogue with you, and we are doubling up, notwithstanding the 
restrictions. So, I know it is difficult to give short answers 
to such complex questions, but since this is really just an 
initial introduction and we will be getting involved in those 
things, I ask you to help us out, too, as I recognize the hero 
of the Committee, Congressman Sam Johnson from Texas.
    Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate it.
    Welcome aboard.
    You know, I think our goal is to try to get Medicare or 
medical insurance to every individual in America. And I know it 
is something that Congresswoman Schwartz has inquired about in 
previous hearings, but do you think moving health care benefits 
from opt-in to opt-out with businesses might increase the take-
up rate among employees, as it did for 401(k)s in the past?
    Secretary SEBELIUS. Businesses moving to an opt-in 
strategy?
    Mr. JOHNSON. That is what I wonder, if we should mandate 
that.
    Secretary SEBELIUS. The sort of pay-or-play--I am not sure 
I understand the question. I am sorry.
    Mr. JOHNSON. Well, the way it works is every individual who 
works for a company would have to take insurance, health 
insurance from the company, and the only way they don't is they 
opt out.
    Secretary SEBELIUS. I understand.
    Certainly, I think there is discussion under way for an 
individual mandate for health insurance. And it was not part of 
the President's proposal, except for parents who had children; 
they would be required.
    But I think, as the proposals are developed here in 
Congress, that is one of the initiatives. Should everyone have 
a personal responsibility, whether it is through your employer 
or in the private market, to provide health coverage? And I 
look forward to working with Congress in figuring that out.
    Mr. JOHNSON. Thank you.
    And, second, I have talked a number of times about 
physician-owned hospitals, and it seems like everybody wants to 
torpedo them. And, you know, we have our best docs, our best 
nurses, and the best medicines in those physician-owned 
hospitals because they are specialty hospitals.
    And I wonder what your thoughts are on that and whether you 
oppose their development or not. And, previously, CBO scored it 
differently from what HHS scored it, and I would like to know 
your feelings on that.
    Secretary SEBELIUS. Congressman, The President and Congress 
have tried to clarify the hospital ownership exception 
currently in place. And it really is aimed, I think, at some 
troubling data about physician-owned hospitals producing 
numerous additional tests and additional protocol for patients 
that then directly benefit the owner/provider.
    And I think that issue is one that is very serious, as we 
look at costs in the future. What Congressman McDermott may not 
know is Wichita, Kansas, has one of the highest per capita 
levels of specialty hospitals of anyplace in the country. I 
know Texas has a significant number.
    So there are certainly some benefits to patients, but I 
think looking at the cost issues and certainly looking at the 
potential conflict issues are ones that are very serious.
    Mr. JOHNSON. Thank you.
    Thank you, Mr. Chairman.
    Chairman RANGEL. The Chair recognizes Mr. Lewis.
    Mr. LEWIS. Thank you very much, Mr. Chairman.
    Madam Secretary, thank you for being here today.
    I agree with you, very much so, that we cannot wait any 
longer before we pass comprehensive health care for all of our 
citizens. I happen to believe, as so many others, that health 
care in our country is a right and it is not a privilege and 
that all of our citizens and every person that dwells in 
America should have adequate and affordable health care.
    I would like to know from you, is the President committed 
to passing health care reform this year?
    Secretary SEBELIUS. Yes, sir.
    Mr. LEWIS. That is all I need to know.
    Thank you very much, Madam Secretary.
    Thank you, Mr. Chairman.
    Chairman RANGEL. Thank you, Mr. Lewis.
    Mr. LEWIS. Less than 2\1/2\ minutes.
    Chairman RANGEL. You are good, you are good.
    The Chair recognizes one of the rising stars of our 
Committee, Mr. Ryan.
    Mr. RYAN. What?
    Chairman RANGEL. Unless you want to yield to him.
    Mr. RYAN. Well, no, but Mr. Brady is in front of me, so I 
thought----
    Mr. BRADY. Go right ahead.
    Mr. RYAN. And I would submit Mr. Brady is also a rising 
star.
    Mr. CAMP. That is right. He has already risen.
    Chairman RANGEL. The seniority system is alive and well.
    Mr. RYAN. He is in front of me.
    Mr. Brady, really, you are in front of me, so you should 
go.
    Mr. BRADY. Okay. My ego has taken a huge hit this morning.
    Madam Secretary, thanks for coming here.
    You just got on the job, but have you had a chance to 
examine the way we reimburse physicians under Medicare?
    It is truly a mess. We drive good doctors out of the 
system, away from our seniors. And it is embarrassing to have 
to have them come up here every year to beg for a 1 or 1.5-
percent increase in their reimbursements when their nursing 
costs have gone up, technology has gone up, operations have 
gone up.
    Have you had a chance to take a look at the way we do that?
    Secretary SEBELIUS. Well, Congressman, I haven't had a 
chance to do the global examination in the budget, but I 
certainly am aware of that situation, having been in the State 
of Kansas.
    Mr. BRADY. I would encourage you to examine it, to weigh in 
on a truly sustainable fix for reimbursement. I would encourage 
you to take a look at if you can administratively remove the 
part B drug costs from that formula. They don't belong in 
there, and I think it creates a false cost within that system.
    And, finally, the reason I encourage you to take a look at 
it, one of the reasons many of us are scared about rationing of 
health care under a government-run system is that the physician 
payments are a prime example of how we ration care today. 
Physician cost-of-living increases aren't determined by what 
the cost of providing those services are within their office. 
Basically, MedPAC takes an accumulation of physician 
practitioner services, estimates what that amount should be, 
and then, if actual services are above that, they lower the 
reimbursement. That is why doctors face a 21 percent cut in 
reimbursement. When you take a number, ration the care and the 
reimbursement from it, you get bad results. That is an area 
that produces it.
    Madam Secretary, if you get a moment, I think that would be 
an important thing for you to weigh and, I think, important as 
we go forward.
    Secretary SEBELIUS. Representative Brady, let me assure 
you, that the 21 percent cut that is looming right over the 
horizon is totally unacceptable. And nothing could be more 
disruptive to the health system and that will underpin moving 
forward on health reform is losing providers. When people talk 
about choice, they are not talking about choosing their 
insurance company; they are attached to their doctor and their 
health care provider.
    So I share your concern. Let me assure you that the 
Administration and I look forward to working with Congress to 
address not only the current crisis that is right around the 
corner, but a long-term sustainable coverage to make sure that 
seniors and our most disabled population who rely on Medicare 
services keep the doctor that they want and need and keep the 
health services vital.
    Mr. BRADY. Thank you, Madam Secretary.
    I thank the Chairman.
    Chairman RANGEL. The Chair recognizes Chairman Richard 
Neal.
    Mr. NEAL. Thank you, Mr. Chairman.
    Madam Secretary, childhood obesity, I think we all 
acknowledge that it is growing more common in America. And it 
is being diagnosed in more people at a younger age, as well.
    Great emphasis in this plan is going to have to be placed 
upon the whole notion of prevention. And would you maybe 
outline for us some of the thoughts that you have about how 
some investments in prevention and wellness might change the 
entire health care system? It seems to be a recurring theme in 
our discussions.
    Secretary SEBELIUS. Thank you, Congressman Neal.
    There are, I think, a couple of strategies that can work 
together. First of all, the expansion of the CHIP program, 4 
million more American children, is a piece of that puzzle. We 
have to do that well. We have to make sure that we drive a 
wellness message, along with expanded coverage.
    In addition, in the Recovery Act, the Department of Health 
and Human Services was given a billion dollars to focus on 
wellness and prevention. And that discussion is well under way 
with providers and experts across the country to determine what 
is the best possible strategy for not only using our resources 
but leveraging those resources with some private-market care.
    There are a number of efforts that we know are successful. 
Working, as we did in Kansas, with school groups on everything 
from vending machines to more PE in school to doing a body mass 
index for every child and driving that information home to 
parents is an effective strategy.
    But I share your concern that we have the first generation 
of American children who may actually have shorter lifespans 
than their parents, ever in history. That is a pretty 
frightening place to be. And even if you just look at it as a 
workforce issue, we need every child to be healthy and acquire 
the skills they need to be competitive in the future. So this 
is an issue which is not just a health care issue; it is a huge 
economic crisis looming in this country.
    Mr. NEAL. Thank you, Madam Secretary.
    Thank you, Mr. Chairman.
    Chairman RANGEL. The Chair yields to Mr. Ryan, unless he 
wants to yield to----
    Mr. RYAN. No, I am good now. I thank the Chairman.
    Nice to see you, Madam Secretary. This is the first time I 
am having a chance to meet you.
    The rhetoric coming from the Administration sounds good; it 
sounds familiar. If you like what you have, you can keep it. We 
are going to have more choice and more competition in health 
care. Those are the principles I think most of us all agree 
with.
    But when you look at what is being advocated here, in 
particular the public plan option, it just seems to me that 
actuarially speaking you are embracing contradictory 
principles. You are embracing faulty premises that collide with 
one another.
    And what I mean when I say that is, if the public plan 
option will reimburse at Medicare rates, as it has been 
advocated, as most of the plans that are out there already do, 
and as your budget rests upon, then how do you escape the 
conclusion that reputable actuarial firms, like The Lewin 
Group, suggest 120 million people will lose their private 
health insurance and be thrust upon the public plan option? 
Seven out of 10 workers who get health care from their jobs 
will, in fact, lose that as they go into the public plan 
option.
    That is question number one. Since we are short, I will 
just put it all into a question now.
    Question number two is, where are you going to pay for all 
of this? The budget carves out $646 billion. About half of it 
comes from provider cuts, from Medicare, MedPAC 
recommendations, things like that. The other half comes from 
revenues. Chief among that is the limit on charitable 
deductions, which I think will have a hard time passing here, 
or at least in Senate Finance.
    You have already said that the Administration is opposed to 
capping the exclusion, which I think that ought to be 
revisited. There is an issue there, I think, that both sides 
would agree needs to be addressed.
    But where are going to come up with the money, number one?
    Number two, looking at these plans, it is going to take you 
about another $600 billion on top of what you have already put 
in the budget, and that has been acknowledged by the 
Administration, as well. So if we are going to have about a 
$1.2 trillion or $1.3 trillion plan, you have already 
identified $646 billion--some of that which probably won't 
materialize--where is the other $600 billion-plus going to come 
from to make this work?
    And how do you escape the conclusion that if you have a 
public plan alongside the government plan, the way I see it, it 
is kind of like my daughter's lemonade stand competing against 
McDonald's. It is having the referee, the government, also be a 
player in the same game. And, actuarially speaking, it is 
almost impossible to make that a fair game.
    Secretary SEBELIUS. Again----
    Chairman RANGEL. Unfortunately, Mr. Ryan has used up the 
time allotted for you to answer in his question. However, I am 
certain----
    Mr. RYAN. Go figure.
    Chairman RANGEL [continuing]. That you will be able in 
writing to give some response to his very complicated but 
interesting inquiry.
    And the Chair would now like to recognize Mr. Becerra, who 
is not here.
    Mr. Doggett.
    Mr. DOGGETT. Thank you, Mr. Chairman.
    Madam Secretary, thank you.
    Three issues to ask you to respond to at once.
    First, our colleague, Debbie Wasserman Schultz, has an 
excellent bill based on the experience she has had in a 
struggle with breast cancer that so many Americans face that 
would focus on education of young women. And I hope that it can 
be included in any health care reform legislation. It is 
supported by the Komen Race for the Cure and a number of other 
groups.
    Second, I applaud the bipartisan cooperation that the 
Administration has sought, to get all stakeholders at the 
table. But I think that some of those who have successfully 
blocked health care reform for decades have not changed their 
goal to thwarting reform, only their tactics. And I think it is 
vital that any reform offer the uninsured the option of a 
public insurance plan and that our goal must continue to be 
getting access to health care for all Americans, not getting 
all to agree to a plan that will not provide access to all 
Americans.
    Third, I believe that health care reform must address the 
soaring cost of prescription drugs. One report I saw on a 
particular class of drugs last year showed an increase in 1 
year of 3,000 percent on the cost of some of the drugs. Those 
soaring costs bankrupt individual families. They can present 
great problems to us in trying to have the taxpayer pay for it. 
And we know what to do about that, but Congress hasn't had the 
political will to deal with it.
    Could you respond?
    Secretary SEBELIUS. Congressman Doggett, let me assure you, 
I look forward to working with you and with Rising Star Ryan on 
the issues that you have outlined.
    Chairman RANGEL. Madam Secretary, your response, because of 
the length of the question, will be limited to 40 seconds.
    Secretary SEBELIUS. I just responded, Mr. Chairman, to 
both.
    Chairman RANGEL. It is embarrassing for me, as Chair, to do 
this, but the Secretary has gone out of her way to make certain 
that the first Committee that she reports to is our Committee. 
And we graciously accept that. But, rest assured, Mr. Camp and 
I have reason to believe the Secretary will have more time to 
spend with us, and we appreciate that.
    So I guess most of us want you to hear how bright we are, 
and we will then get responses to make certain that we are 
correct in our thinking.
    And if you yield back, then the Chair will recognize Mr. 
Linder for 2\1/2\ minutes.
    Mr. LINDER. Thank you, Mr. Chairman.
    Thank you for being here, Madam Secretary.
    When President Johnson gave his ``Great Society'' speech, 
he said, ``We know from using easily quantifiable user 
statistics that, by 1990, Medicare will cost us $9 billion and 
Medicaid will cost us $1 billion.'' But he was wrong, it was 
$108 billion and $76 billion respectively, because people 
overuse something they think someone else is paying for.
    We are proposing to increase the number of consumers in 
health care by 17 percent. And we are increasing the number of 
doctors per year by 1 percent. And the number of nurses has 
been flat for 5 years in its increase, just flat.
    Who is going to treat these people?
    Secretary SEBELIUS. Congressman Linder, I think that is a 
huge issue, and the looming shortage of providers--particularly 
nurses, but primary care doctors are shortly behind the 
nurses--is huge. States have been trying to work on the 
pipeline issue for a number of years.
    I was pleased that, in the Recovery Act, there is a half 
billion dollars for workforce issues. And I look forward to 
working with those of you here in Congress on a long-term 
strategy. It has been suggested that we have an ongoing 
workforce commission.
    We need to focus payment--we need to shift payment to 
appropriate protocol. A lot of people, frankly, overuse the 
system because it is often recommended that they have 
procedures that aren't necessarily the best health outcome, as 
our quality report, issued today, will indicate.
    So I think there are ways to address this from the 
workforce system, but also to begin to shift the payment system 
to look at outcomes and not necessarily contacts with a health 
provider.
    Mr. LINDER. And we are going to have bureaucrats make those 
decisions?
    Secretary SEBELIUS. Ideally, the health providers make 
those decisions with informed information about best practices, 
which currently are in place in some parts of the country but 
are not uniformly driven throughout the system.
    Mr. LINDER. Thank you.
    Chairman RANGEL. Thank you.
    The Chair recognizes Earl Pomeroy.
    Mr. POMEROY. Thank you.
    And, Madam Secretary, I know I speak for Senator Ben Nelson 
and Senator Bill Nelson, both former insurance commissioners 
like myself and you, in acknowledging at least someone in the 
former insurance regulatory ranks has gone on to make something 
of their lives, and we congratulate you.
    The White House this week had a roundtable on rural health 
care, in particular, and released a report called ``Hard Times 
in the Heartland,'' reflecting that in rural areas you have 
higher rates of poverty, mortality, uninsurance, and limited 
access to primary care providers.
    As former Governor of Kansas and insurance commissioner of 
Kansas, you have seen the difficulties of keeping proximate 
access to care in sparsely populated areas. It is 
excruciatingly difficult.
    I believe part of our rural health care system is being 
under-reimbursed by Medicare. You see Medicare reimbursement at 
half per capita rates reflecting more urban areas. That also 
includes much higher utilization trends in urban areas, but 
also, I believe, underpayment for rural services.
    I am wondering about your thoughts, as you assume your new 
responsibilities, relative to this unique dimension of 
America's health care, in rural areas.
    Secretary SEBELIUS. Congressman Pomeroy, as you said, you 
and I share a lot of background, not only in our insurance 
commissioner days, but in dealing in a very rural State.
    So this is a huge issue. The disparities in Medicare 
reimbursement is a big issue. I just want to assure you that I 
look forward to working with Congress to reduce those 
disparities.
    Part of it is a shift toward outcome and away from 
geography. So we look for protocol that will reward outcome and 
begin to have the Medicare system focus more on prevention and 
wellness, which reduces cost.
    But it is an issue I take very seriously and one I look 
forward to working on.
    Chairman RANGEL. The Chair recognizes Mr. Nunes.
    Mr. Tiberi.
    Mr. TIBERI. Thank you, Mr. Chairman.
    As the only Ohioan on this panel, Madam Secretary, I want 
to give you a Buckeye welcome----
    Secretary SEBELIUS. Thank you.
    Mr. TIBERI [continuing]. From your native State and wish 
you well in your job. As Ranking Member Camp said earlier, the 
principles that you outlined I think we all agree on.
    In my district, in Columbus and central Ohio, we have a 
Medicare Advantage plan called MediGold that is very, very 
popular, that I have had family members actually talk to me 
about the popularity of it. Anyhow, a very popular, very well-
defined program in my district. And I have talked to many, many 
seniors that enjoy that program.
    MediGold's principles are very similar to what you outline 
in terms of the principles that you see going forward with 
respect to health care reform. How do you see their plan, 
MediGold, their Medicare Advantage plan, playing out with 
respect to your proposals and the Administration's proposal on 
health care reform?
    Secretary SEBELIUS. Congressman Tiberi, first of all, I 
appreciate the Buckeye welcome.
    I know that there are some very popular and well-run 
Medicare Advantage plans, and there are some that I think have 
not provided the additional benefits that would be estimated to 
be provided with a 14 percent additional payment over 
traditional Medicare.
    So I think what is important going forward is to make sure 
that, again, there is a kind of level playing field that we are 
paying for the benefits and the outcome, and that the 
information provided to seniors, the numbers of plans--I mean, 
there are literally dozens and dozens of Medicare Advantage 
plans which have a very small number of enrollees, which are 
very confusing, in my experience for seniors to try and 
identify what the best plan is. But I think in the situation 
that you have described, the health reform plan ideally will 
not tamper with the kind of coverage and benefits that your 
family is currently enjoying.
    Mr. TIBERI. Thank you. Look forward to working with you. 
Yield back.
    Chairman RANGEL. Because there is such an outstanding 
number of Democrats, Majority Members waiting, I will now try 
to do two of them at a time to try to level this off, and 
recognize Mike Thompson of California.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Madam Secretary, congratulations, and thank you for being 
here.
    I, too, want to chime in on your rural experience and how 
important that is for someone with a district such as mine. I 
think a lot of our success in health care reform hinges on 
providers, making sure we have the number of providers 
necessary, especially in rural areas where it is so hard to get 
not only primary care, but all the specialties. I don't think 
we can do it unless we address that issue. And at the same 
time, we have to do it in a way where it is affordable to small 
businesses, and that is something that I hear about constantly. 
And so I appreciate your experience in this regard, and look 
forward to working with you on those two areas in particular. 
If you have something you want to add, fine. If not, I yield 
back.
    Secretary SEBELIUS. Look forward to it.
    Chairman RANGEL. Thank you so much for your cooperation. 
Believe me, we will make up for this embarrassing moment.
    Mr. Becerra.
    Mr. BECERRA. Thank you, Mr. Chairman.
    And, Madam Secretary, great to see you here. Thank you. We 
look forward to further opportunities.
    Without spending time on it, because we don't have time, I 
would like to mention that I appreciate that you mentioned the 
reports that you are issuing, especially the one on 
disparities. I would love to follow up, because as we know that 
there are disparities in the quality of health care dispensed 
to Americans. I hope that you will take a look at your agency, 
your Department, to make sure that there aren't disparities 
within your own personnel ranks when it comes to being able to 
meet the needs of all Americans. And you have a diverse 
workforce that can address those disparity issues that we have 
in America.
    On health care, you said some interesting things, and I 
want to follow up on them, and perhaps later on we will have an 
opportunity to discuss them more fully.
    In response to the question about whether or not a public 
health insurance option could really compete, this notion that 
there is no way the government could compete, I appreciate that 
you mentioned that today we have a track record of public 
health insurance options competing, and competing on a playing 
field that is level through the 30 States that currently do 
that.
    I think it is also important to note that Medicare, which 
is, in essence, a public health insurance plan, offers 48 
million seniors in America the options and the opportunity to 
have health care coverage. And by the way, 95 percent of all of 
America's doctors participate in Medicare. And so, clearly, it 
becomes obvious that you have quite a bit of choice within a 
public health insurance option in terms of doctors if 95 
percent of today's doctors participate in Medicare.
    And I am wondering if it is your sense, as you said before, 
that a level field can be created in this health care reform so 
that we can remove any doubts that any type of option that 
gives Americans the most choices can be constructed so that at 
the end of the day what we have done is we have left consumers 
with the option and the choice of what plan they will use, and 
not have the government or private insurance companies make the 
choices for consumers.
    Secretary SEBELIUS. Representative Becerra, I think you 
have just outlined and articulated very well the strategy of a 
public plan. Clearly, you could have a situation where it would 
be unfair and lack the competition element for private 
insurers. But I can assure this Committee that the President 
and I believe strongly that we want to stabilize the private 
insurance market, not undermine the private insurance market, 
because millions of Americans rely on their private coverage 
and feel it is very satisfactory for themselves and their 
families.
    So the rules of a public plan within a health insurance 
exchange are to offer choice, offer competition based on what 
are the best practices, how to lower costs, not with an unfair 
advantage, but who is doing the best job for their patients, 
because wellness, frankly, costs less than sickness does. So 
keeping patients healthy is part of the competition we are 
eager to have plans engage in.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Chairman RANGEL. Mr. Davis of Kentucky.
    Mr. DAVIS OF KENTUCKY. Thank you Mr. Chairman.
    Madam Secretary, one question that I would like to ask, or 
follow a request. I would like to submit two questions 
regarding community pharmacy efforts to get detailed answers in 
writing that I am sure will exceed the 2\1/2\-minute limit 
here. We will provide those to staff.
    But the question that I have, and it concerns me greatly, 
on the national connector model. We have tremendous local 
solutions that are being developed. In particular, a gentleman 
named Chris Goddard, who runs Healthpoint, a community health 
center network in northern Kentucky, developed a plan working 
with small businessowners that will remove the majority of our 
uninsured or underinsured in northern Kentucky entirely off the 
grid of the Federal system, providing a physician home, 
providing preventive dental and medical services and some acute 
care, not catastrophic, but at the cost of about $50 per 
employee per month. And I would like to hear your thought on 
having solutions like that that are locally driven, have the 
accountability in the network that is key for success in health 
care, as opposed to the one-size-fits-all plan that we have 
heard so much about over the last couple of months.
    Secretary SEBELIUS. Congressman Davis, let me assure you, 
there is no one-size-fits-all plan. There is no national health 
plan that has been developed or written. In fact, the more 
strategies that are successful at the local and State level, 
the more people will have coverage that they enjoy and benefits 
themselves and their families, then the more provider support 
there will be. The effort for health reform is aimed at 
stabilizing just that market, so if you have a strategy that is 
working in Kentucky that is insuring previously uninsured 
folks, I think that not only will it not be disruptive, but, 
hopefully, will help lower the additional costs that those 
individuals, those Kentuckians, are paying for the uninsured 
care that is currently coming through emergency room doors and 
stabilize that market.
    This effort is primarily aimed at either those individuals 
who are paying out of their own pocket for catastrophic 
coverage, have no prevention care, for those 50 million 
Americans who have no access to health insurance at all, and 
for a system, frankly, where the costs continue to rise.
    Mr. DAVIS OF KENTUCKY. I think in that case, Madam 
Secretary, it will be well served both for the country and I 
think would be illuminating. I would like to invite you to 
personally come to northern Kentucky, to Covington, and to see 
some creative solutions that have been developed out of that 
old saw, the greatest source of inspiration is desperation.
    Secretary SEBELIUS. I would be glad to do that. And, you 
know, Cincinnati is my hometown, birth town, with my dad and 
sisters still there, so any opportunity to visit Covington 
provides a trip home.
    Chairman RANGEL. The Chair would like to recognize Mr. 
Lawson and then Mr. Blumenauer.
    Mr. Lawson.
    Mr. LAWSON. Thank you, Mr. Chairman.
    Chairman RANGEL. If I could interrupt. The record will be 
open for those people that would want to submit questions to 
the Secretary.
    Chairman RANGEL. Mr. Lawson.
    Mr. LAWSON. Thank you, Mr. Chairman.
    Again, thank you, Madam Secretary, and thank you, with very 
little notice, and having just been confirmed, to come before a 
joint caucus conference of the House Democrats and House 
Republicans last week to address H1N1, commonly referred to--
but Mr. Etheridge won't let me say it, so I won't. So I want to 
thank you for that.
    I just have one question I would like to follow up with you 
on, and especially given your experience as an insurance 
commissioner, in your estimation does the current private 
health insurance market do an adequate job of providing 
affordable health insurance? And what do we need to do to 
improve access and create affordable coverage?
    Secretary SEBELIUS. I think, Congressman, there are 
certainly lots of Americans who have coverage that they think 
is terrific, and it is very good. Others, I think, are really 
struggling with underinsurance or struggling in a situation 
where they have been underwritten because of a medical 
condition or are limited where the cost is exorbitant because 
they have recovered from a heart attack or have diabetes. So 
there are the best and the worst, if you will, currently in 
place. And I think working on the strategy moving forward, 
getting rid of some of the rules which allow insurers to make 
health decisions instead of providers--I know there is a lot of 
talk about not having bureaucrats make health decisions, but I 
think it is equally important not to have private insurance 
companies make health decisions overruling protocol recommended 
by health providers. And part of health reform is to change 
those underlying rules, to have major insurance reform along 
with this effort.
    Mr. LAWSON. Thank you, Madam Secretary.
    Chairman RANGEL. Mr. Blumenauer.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    Madam Secretary, coming from one of those low-cost, high-
quality regions in Oregon, I hope to work with you on 
fundamental payment reform that encourages the outcome we want 
in one specific area, end of life, where most of us spend most 
of our lifetime supply of health care dollars, and we are 
finding that people are too often unprepared. And Medicare 
doesn't even recognize a consultation with a patient and their 
family to be able to deal with these complex choices that they 
face to help guide them through as worthy of a specific 
reimbursement.
    Now, I introduced some legislation to try and remedy that 
on a specific area, but I wonder if you see this counseling 
initiative, end of life empowerment of patients and families, 
as an area to be dealt with in comprehensive reform, and maybe 
even something that we might be able to make some adjustment 
sooner to give patients and families the support they need at 
this difficult time.
    Secretary SEBELIUS. Congressman, I can assure you on a 
personal basis I share your concerns. I am not familiar with 
your specific legislation. But my mother spent the last 10 
weeks of her life in three different hospitals and an army of 
health providers, and frankly, the help and support needed by 
families to not only make medical decisions, but end-of-life 
decisions is really essential and something I take very 
seriously. So I look forward to working with you on strategies 
moving forward to not only lower what are often exorbitant 
costs that are not necessarily as patient-friendly or direct 
the patient outcome, but to help family members make tough 
decisions at an earlier point.
    Mr. BLUMENAUER. I appreciate that, and I appreciate your 
emphasis. Yes, it may end up saving us money in the long run, 
but, most important, it is giving the sort of tools so that 
families' needs are met. And I appreciate your words and look 
forward to working with you.
    Thank you, Mr. Chairman.
    Chairman RANGEL. Thank you.
    Mr. Reichert, you may inquire.
    Mr. REICHERT. Thank you, Mr. Chairman.
    Welcome, Madam Secretary.
    My background is in law enforcement, so I am really 
interested in fraud, waste and abuse and safety, and you have 
touched on the safety issue. I am glad to hear that you are a 
proponent of the safety checklist, which will save lives.
    I am going to try to run real quickly here two questions 
together. GAO has estimated that Medicare wastes $13 billion a 
year. It has paid out to $92 million just this year in part B 
providers who have deceased, are deceased.
    Then I want to shift real quickly to interoperability, so 
that waste, fraud and abuse kind of shifts over to 
interoperability; $35 billion in the stimulus package ready to 
go out the door. I don't think we are ready for it. Health 
providers have said they don't need it yet. They don't know how 
to spend it yet. There aren't providers that they believe are 
interoperable and that it can work with now. There is no 
national standard. I am afraid we are going to be wasting some 
money here if we don't have a plan in place.
    Secretary SEBELIUS. Let me try to first assure you, I very 
much am interested in waste, fraud and abuse. Every dime stolen 
from the health care system is money we can not apply to 
appropriate care and quality care for Americans. So that is an 
effort I will look forward to working with you and the 
Committee on cracking down in any way we can.
    On the interoperable standards, as you know, Dr. David 
Blumenthal has now been appointed. He is charged with the kind 
of protocol that you are suggesting. There is a Committee at 
work right now to develop a national platform. I couldn't agree 
more that having--just shifting our paperwork onto computers 
doesn't save any money and is totally ineffective unless our 
technology can talk to one another. So protecting privacy on 
one hand and moving forward as rapidly as we can with a system 
that eliminates paperwork, eliminates the duplication, lets 
health care providers not fill out dozens of forms, but focus 
on medical care is what the shared goal is, and that is very 
much on the way. But dollars are not going to leave before 
there is a platform ready to go.
    Mr. REICHERT. That is good to hear. Thank you.
    Chairman RANGEL. Thank you.
    Mr. Kind and Mr. Pascrell.
    Mr. KIND. Thank you, Madam Secretary. Thank you for being 
here. And I agree with the President. I think that health care 
is one of those reforms, is one of those building blocks that 
we have got to get done at the end of the day if we are going 
to have prolonged, sustainable economic growth in the country.
    Here are my concerns. At the end of the day, we have got to 
figure out a way of how we bend the cost curve in all this, but 
we also need to figure out a way to deal with the affordability 
of health care for small businesses, family farmers throughout 
the country.
    With the cost curve issue, I, too, come from one of those 
low-cost, low-reimbursed, high-quality care areas of the 
country in western Wisconsin, a lot of innovation taking place. 
That is why I am a big believer in the importance of HIT 
buildout, but also comparative effectiveness studies. As you 
said, best practices, I think, are going to show us the way for 
greater cost savings, while improving outcomes and quality of 
care at the end of the day.
    The Economic Recovery and the Investment Act had about $1.1 
billion in there to go forward on comparative effectiveness 
studies. I know you are relatively new to the position, but I 
am wondering if you gave any thought about whether that money 
is going to be sufficient to get us where we need to go, or if 
it is just the beginning of more of what needs to be done to 
find out what works, what doesn't, so we can, as Mr. Blumenauer 
indicated, revamp the reimbursement system so we are rewarding 
quality at the end of the day, as opposed to more quantity or 
just more consumption in the health care system.
    Secretary SEBELIUS. I think that the effectiveness 
research, comparative effectiveness research is a strategy that 
we know can help inform providers, empower consumers, and drive 
best practices. That is the goal at the end of the day. It is 
prohibited by law to use that research to make Medicare cost 
decisions. But certainly, empowering and driving best practices 
and highlighting what we know works is an effective strategy. 
And as the quality report says today, we know 4 of 10 Americans 
do not receive the care that is recommended, so that bends the 
cost curve.
    Mr. KIND. And I am a small business friend. Tomorrow I am 
going to be introducing a bipartisan bill called the SHOP Act, 
which establishes purchasing pools for small businesses, family 
farmers, with ratings reform, administrative fees, tax 
incentives that Senators Durbin and Snowe have been carrying on 
the Senate side, too, and we think this could be a commonsense 
piece to the overall health reform that addresses needs in the 
small-business community and family farmers throughout the 
country. So we will look forward to supplying some more 
information to you and your team over there to take a closer 
look at the SHOP Act. Thank you for being here.
    Mr. PASCRELL. Madam Secretary, just one quick question on 
the end of life. Would you consider a mandatory--that all 
Medicare recipients must have an end-of-life directive?
    Secretary SEBELIUS. Congressman, it is something that I 
certainly would be glad to take a look at. I am not quite sure 
what that means in terms of individual mandates.
    Mr. PASCRELL. I want to continue what my good friend from 
Wisconsin was talking about, and that is cost. We have got to 
get folks on the Hill, as well as the folks, our constituents, 
to understand that the costs of health care have to be 
contained, or else we cannot come up with enough money to 
sustain a universal health care plan. I don't care what anybody 
says. There isn't enough money out there. If that is true, if 
you accept that premise, that we can't continue to do business 
as we are doing--otherwise I guess we wouldn't be here, would 
we--what policy options hold the greatest promise for 
systemically slowing the growth of health care costs? And as 
part B of that question, would you prefer to pay for 
performance, a value-based purchasing system and/or a public 
plan option? If you had to make a choice amongst those three, 
what would you do?
    Secretary SEBELIUS. My sense is, Congressman, we do all of 
the above.
    Mr. PASCRELL. So they are all possible.
    Secretary SEBELIUS. Absolutely. And I think that part of 
what is happening in America is that we pay more than any 
country on Earth, and our health results are poorer than many 
of the countries who have coverage. So we clearly don't have to 
substitute quality for cost. They are not paying for quality 
right now. We need to begin to pay for outcomes.
    Mr. PASCRELL. If we don't do these things, Madam Secretary, 
will we have to begin to ration health care?
    Secretary SEBELIUS. Essentially it is going on right now; 
50 million Americans have rationed care. We have people who, 
because of their gaps in their coverage, are cutting their 
pills or not taking their protocol that is recommended. 
Hospital stays are often cut short, not because it is the 
provider's recommendation, but because the insurance plan only 
covers a limited stay. So we are essentially in a situation 
where providers' recommendations are often compromised by what 
dollars are available.
    Mr. PASCRELL. Thank you, Madam Secretary. Good luck to you.
    Chairman RANGEL. Mr. Boustany from Louisiana.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    Welcome, Madam Secretary.
    As a heart surgeon with over 20 years' experience 
clinically, and as somebody who has deep concerns about quality 
and cost in health care, I have to say that I have concerns, 
and I am certainly well aware of the problems in the private 
insurance and in current existing government health care 
programs. But I would like to ask you, if we can build off the 
current insurance system, private insurance system, make it 
truly competitive, make it truly accessible for coverage, are 
you willing to entertain this, or are you purely wedded to a 
government option?
    In other words, I mean, are you--is this an exclusionary 
foregone conclusion that the Administration wants a government 
option at the expense of real bipartisanship to solve a very 
complex problem?
    Secretary SEBELIUS. Congressman, I would say that the 
Administration is committed to working with Congress and has 
every hope that this will be a bipartisan effort, and hopes 
that all serious ideas are on the table from both sides of the 
aisle, that it isn't exclusionary on one side or the other. So 
as we move forward, what I know from my experience is that if 
the public plan option is opposed because it is seen as 
uncompetitive, it is seen as the way to drive private insurers 
out of the market, there are plenty of examples around the 
country to indicate that that is not the case.
    Mr. BOUSTANY. Reclaiming my time, I would submit to you 
that some of the biggest culprits with regard to lack of 
emphasis on prevention, screening, early detection are our 
existing government programs.
    Secretary SEBELIUS. And I would certainly share that notion 
that we have to change that. One of the building blocks for 
health reform is the assets, frankly, the programs run right 
now in the Department of Health and Human Services, both 
Medicare and Medicaid. And changing our system, our underlying 
system, and the dollars that are already available in the 
public program and focusing more on prevention and wellness is 
a huge part of this effort.
    Mr. BOUSTANY. Thank you, Madam Secretary. We certainly hope 
you will work with our side of the aisle on those very 
difficult issues. Thank you.
    I yield back, Mr. Chairman.
    Chairman RANGEL. The Chair recognizes on our side Mr. 
Crowley. He is not here.
    Madam Schwartz from Pennsylvania. Thank you. I am so sorry.
    Ms. Berkley.
    Ms. BERKLEY. I thank you very much, Madam Secretary, for 
joining us today. I know there is a great deal resting on your 
shoulders. This is such an important issue. I believe that 
Congress and the Administration have a once-in-a-generation 
opportunity to make important reforms to our country's health 
care system. We have done quite a bit already with the SCHIP 
program and our health IT infrastructure, bringing it into the 
21st century, increasing COBRA benefits for those who lose 
their jobs. I also would like to see us increase health care 
and provide health insurance for the 50 million of our fellow 
citizens that do not have health care or health care insurance.
    I was very, very pleased to hear you emphasize prevention 
and wellness programs. I have often said in these hearings that 
the way we deliver health care in this country is ``bass 
ackward.'' We spend a fortune in end-of-life care, not enough 
money in early detection and prevention of illness.
    Also, the fact that we need to educate our fellow citizens. 
We contribute to our own sicknesses and illnesses. If we would 
moderate our liquor consumption, moderate exercise, watch our 
diets and stop the cigarette smoking, I think we would be much 
healthier, and we would save billions of dollars.
    I am concerned about the lack of enough health care 
providers that currently exist in this country, including, as 
we all know, we don't have enough primary-care physicians. 
Coming from Las Vegas, I can tell you we don't have enough 
specialties either.
    There are things we can do, and I am wondering what your 
opinion is on increasing the GMEs and better distribution of 
them so some of the States in the Western United States could 
take advantage of that program.
    Also, loan forgiveness. My own stepdaughter started 
practicing primary-care medicine in September with a $190,000 
debt.
    And also SGR. I know the President's budget provided for a 
permanent fix, but we are hearing from the other side of the 
dome in the Senate that they are more willing to kick that 
problem, that can down the road. That would be a disaster. What 
do you think?
    My time is up.
    Secretary SEBELIUS. All of the above.
    Chairman RANGEL. I hope that you share your answers with 
all of us, because those are questions that she asked that we 
are all concerned with.
    Congresswoman Schwartz from Pennsylvania.
    Ms. SCHWARTZ. Thank you, Madam Secretary. Congratulations 
and welcome. You have a very full plate, and I wish you well. I 
know you are well positioned to be successful.
    There has been a lot, two issues I wanted to raise. One you 
have heard a good bit about, so I will--and you have answered, 
so I won't--it is just to say that I do have a bill I am 
introducing tomorrow to create incentives for primary-care 
physicians and nurses. And I would just ask you to take a look 
at that. It addresses many of the issues that you have heard 
today, and I would ask you to take a serious look at that.
    And I also know that you have been looking at market 
reform, and I am also working on legislation. A number of these 
pieces have been talked about, both by the insurance companies, 
the Insurance Federation. Of course, many of us have been 
looking at them for a number of years. One is, of course, 
ending the preexisting condition exclusions, getting to a 
guaranteed issue, being able to go to community rating, 
stopping gender discrimination in rating as well has been 
talked about, ending waiting periods for employees are all 
important.
    I did want to follow up on Mr. Johnson's reference to 
legislation I am working on that he is in agreement on, which 
is nice to have a bipartisan start, and that is to really do 
what we did under 401(k) plans, which is to just change the way 
employees opt in. And basically what I am saying is that they 
should be presumed to be in the health benefits package plan 
that their employer offers. They can opt out, but instead of 
potentially failing to sign up and then never being able to 
sign up even if you are employed for years seems really 
unconscionable in this day and age.
    So we really want to make it easier. We think that there 
has to be transparency to make sure the employee knows what 
they are doing, but would ask you to take a look at that and 
see what you think is a way to encourage those who do have 
available insurance coverage to take it. So I wanted to have 
your reaction to that, and just say I look forward to working 
with you on all of these issues so that we do actually get to 
coverage for all Americans in an affordable way for the 
government and for them.
    Secretary SEBELIUS. Congresswoman Schwartz, I look forward 
to working with you. And I know that the kind of autoenrollment 
strategies that you are talking about are often looked at as in 
many cases as effective and in some cases more effective than 
mandate strategies. So I look forward to looking at your 
legislation and moving forward.
    There are lots of people who have eligibility right now in 
a variety of programs who, for one reason or another, are not 
enrolled, and I think we need to take that very seriously as an 
underpinning to cut down on the number of uninsured Americans.
    Ms. SCHWARTZ. Actually that is a great point. I know we saw 
that in CHIP, for example. Thank you.
    Chairman RANGEL. Mr. Heller.
    Mr. HELLER. Thank you, Mr. Chairman, and Governor, thanks 
for being here. Look forward to working with you. I have 
noticed a theme from both sides, and that is talking about 
rural care and the concern that we have for rural care. I 
represent a district that is 105,000 square miles, and if you 
live in central Nevada, and you need a blood test taken, in 
most cases--or you can't find a primary-care physician, 
needless to say you obviously can't find a specialist either. 
So your choice is to travel 200 miles to Reno or another 200 
miles the other way to Salt Lake City. And I just want to 
emphasize my concern for that.
    Veterans that Need Help, which is another government-run 
program, find similar accessibility problems in rural areas. 
Those that are on Medicaid and Medicare have accessibility 
problems in the rural areas.
    I guess my question for you is, how would another 
government-run program like we are discussing today solve these 
accessibility problems?
    Secretary SEBELIUS. Congressman, first of all, I don't 
think anybody is talking about a government-run program. I 
think the goal is to have most Americans without health 
coverage in a health insurance exchange run by the private 
market to stabilize the current private market where we see 
employers, frankly, dropping coverage every day because they 
can't sustain the cost of insuring their employees. None of 
that solves the workforce issue that you are addressing, and 
particularly the underserved rural areas that are very common.
    There is a proposal by the President to double the 
Commissioned Corps. That will provide some incentives. There is 
a half billion dollars in the recovery plan to help fill the 
pipeline for nurses and doctors. I think there are a series of 
strategies, frankly, using health technology, and at least it 
has been my experience in our State that health providers are 
more likely to choose and stay in an isolated and more rural 
area if they have access to specialist consultation through 
telemedicine, if they can tap into advice and consult and 
support.
    So I think there are underpinnings of this underway. I 
don't have all of the answers of the workforce issue, but it is 
huge, and I think looking at incentives, looking at forgiveness 
of medical loans, a variety of strategies that, frankly, have 
been proven successful at the State level, are things we should 
examine at the Federal level.
    Mr. HELLER. Look forward to working with you.
    Chairman RANGEL. Mr. Davis of Illinois and Mr. Etheridge of 
North Carolina. Mr. Davis, you may inquire, and the time, as 
you may have heard, is 2\1/2\ minutes.
    Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.
    Madam Secretary, welcome. A few minutes ago you and 
Representative McDermott talked about the need and desirability 
of increasing primary-care providers. My question is, would you 
see increasing community health centers and networks with 
built-in home visiting programs as a way of doing that?
    And in the Recovery and Reinvestment Act, there are 
provisions for some hospital-based physicians to receive 
incentives, but then the act specifically states that some will 
not be eligible.
    Could you tell us how you would go about looking at or 
determining which ones would be eligible and which ones would 
not?
    Secretary SEBELIUS. Congressman Davis, you make a great 
point about the community health centers. And again, the 
Recovery Act had resources to double the number of health 
centers, and that will certainly provide a health home to 
millions of Americans who currently don't have that health 
home. There also is an expansion of the Commissioned Corps for 
providers who work in underserved areas.
    And I think what we have to look at is a series of 
strategies. Incentive payment is one. Shifting the payment to 
reward outcome and not contact with doctors is another. Looking 
at the ways that Medicare can be an innovator and an 
opportunity to lead the way in terms of how the payment system 
can begin to incentivize additional primary care docs is 
something that again, I know is a major challenge and look 
forward to those of you who have worked on this issue for a 
number of times, and having some dialogue and figuring out ways 
that we can use the Department's assets to move in the right 
direction.
    Mr. DAVIS OF ILLINOIS. Thank you very much. And I would 
just like to say I also have a great deal of interest in long-
term care and the needs of people with disabilities, and look 
forward to working with the Department on those issues.
    Chairman RANGEL. Bob Etheridge from North Carolina.
    Mr. ETHERIDGE. Thank you, Mr. Chairman.
    Thank you, Madam Secretary for being here.
    And coming from a State that has some great hospitals and 
institutions, but in North Carolina, in the past 2 years, the 
uninsured has jumped 22.5 percent, the biggest increase in the 
Nation. Nationwide about 22 percent of adults do not have 
insurance, and in my home State, that is now about 25 percent 
of adults, and an additional 9 percent are underinsured. And 
that is being compounded by the fact that our unemployment rate 
has more than doubled in the last year, making us the fourth 
highest in the Nation.
    And I set that stage to say a lot of the people who had 
insurance have lost it. Those who don't have it are looking for 
care. And so they are moving to the community health centers, 
who are stepping in to help fill some of these gaps.
    So my question is this: Following Congressman Davis' 
question, CACs in turn are seeing their reimbursement rate 
stretched because of the people who are coming to them, and 
they are really stretched hard.
    As we work to reform health care, I ask you to consider, 
and if you have time to comment on how we are going to make 
sure that the rural areas, and really some of our low-income 
areas, many are more in rural areas, have access to quality 
care because I think that is a critical piece in this whole 
issue.
    Secretary SEBELIUS. Congressman, just let me assure you, it 
is a piece I take very seriously, and stabilizing the existing 
system where it is effective. I think community health centers 
have been very effective in delivering care. So we don't want 
to destabilize, by either lack of resources or overdemand, any 
piece of this system. So figuring out strategies to make sure 
that the community health system continues to serve the 
population it is serving effectively right now is something I 
look forward to working on.
    Mr. ETHERIDGE. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman RANGEL. Mr. Roskam of Illinois.
    Mr. ROSKAM. Thank you, Mr. Chairman.
    Madam Secretary, we have seen eight dot points that have 
come out of the Administration, and the fifth one is really the 
one that folks are tending to focus on today, the public plan, 
and the assurance and confidence that there is not an erosion 
of the choice for folks.
    It is interesting to me, there are two groups that are out 
there, or two entities that are out there that think you are 
wrong or sort of think you are wrong.
    Secretary SEBELIUS. I am sure there are more than that.
    Mr. ROSKAM. Right. But sort of wrong in the underlying 
premise. And you have demonstrated a certain amount of humility 
on we have got to get it right, and I respect that. But it is 
interesting, the Lewin Group, in a study that I am sure you are 
familiar with, says it is not going to happen, and 120 million 
folks are going to be out of that public--out of a private 
plan.
    And the other is one of my colleagues from my delegation, 
Representative Jan Schakowsky. Let me read a quote, and I am 
interested in how you reconcile these two views in the brief 
time that we have.
    This is Representative Schakowsky's quote on April 18 
speaking to a group of single-payer advocates. She said, ``I 
know many of you here today are single-payer advocates, and so 
am I. And those of us who are pushing for a public insurance 
don't disagree with this goal. This is not a principle fight. 
This is a fight about strategy for getting there, and I believe 
we will.'' In other words, this part of the plan is part of a 
prelude toward ultimately a large single-payer plan.
    Can you debunk that? Can you reconcile those?
    Chairman RANGEL. That is very difficult, Madam Secretary, 
for you to respond to a statement attributed to a Member, but I 
am certain that the question could be reframed without 
responding to a Member and asking whether or not she believes 
that this is the beginning of single-payer. But I don't think 
it is fair, since the Congresswoman is not here, to say whether 
or not she ever said it.
    Mr. ROSKAM. Okay. That is fair enough.
    Is it a prelude?
    Secretary SEBELIUS. I don't think so, Congressman. Again, I 
would point to the fact that these competitive strategies are 
effectively in place across the country. They are not a prelude 
to anything other than offering consumers choice and driving 
competition based on practice models. So it is determined by 
the plan design.
    Can you construct an unlevel playing field with a public 
option unfairly competing with private options? You bet. Is 
that the intention of the Administration or the Majority in 
Congress when they talk about it? I don't think so at all.
    So it can be designed any number of ways if you have the 
right actuarial support. If you design the rules so there 
really is a level playing field that private insurers don't 
have the advantage of cherry-picking the market, and the public 
plan doesn't have the advantage of undercutting the costs and 
driving everybody out, it can work very effectively and does 
work very effectively across this country.
    Chairman RANGEL. Ms. Sanchez of California will be followed 
by John Yarmuth of Kentucky.
    Ms. Sanchez.
    Ms. SANCHEZ. Thank you, Mr. Chairman.
    And thank you, Madam Secretary for being with us this 
morning.
    I have been a strong supporter of employer-based coverage, 
and for those who have union jobs or a college education or 
work for big corporations, the employer system, based system, 
works quite well, and people generally, according to surveys, 
are satisfied with their plans if they are lucky enough to have 
them through their employer.
    But those who are not as satisfied with the current system 
include not only those that don't get coverage through their 
workplace, but also those who lose coverage when they lose 
their job. And I routinely get letters from constituents. A 
constituent recently wrote me about the struggles that she has 
gone through as a cancer patient after losing her job and the 
health insurance that went with it. And I know that COBRA 
coverage exists, and for some people that is an option, but for 
a lot of unemployed people, they can't even afford COBRA, so 
they can't afford to extend their health care benefits.
    I am interested if you could please share with us a little 
bit about how we might reform the system so that losing a job 
doesn't mean that you lose high-quality, affordable coverage, 
even if we retain the current employer-based system. For 
example, how we might--the newly unemployed access the health 
insurance exchange to obtain or maintain their health insurance 
benefits.
    Secretary SEBELIUS. Those are great questions. I think that 
the Congress appropriately recognized in the Recovery Act that 
unemployed Americans can't afford COBRA. It is hard for 
unemployed folks to have COBRA coverage because you are 
suddenly paying 100 percent of the cost, 103 percent, as 
opposed to having an employer contribution. That is really the 
issue. And if you have lost your job, there is no way you are 
going to be able to come up with a 100 percent benefit. So the 
Recovery Act provided additional Federal assistance as a stream 
of money so people could afford COBRA.
    I share your concerns about stabilizing the current system. 
The opportunity, though, in a reform of the future would be you 
would have a system where that individual who has lost his or 
her coverage through the job would, first of all, be able to 
continue coverage in an exchange program, would not lose 
coverage based on job loss. I think that is one of the issues 
facing way too many Americans today.
    Ms. SANCHEZ. Thank you.
    I yield back, Mr. Chairman.
    Chairman RANGEL. Mr. Yarmuth of Kentucky.
    Mr. YARMUTH. Thank you, Mr. Chairman.
    Welcome, Madam Secretary.
    We have heard, I think, pretty much what--a broad 
acceptance of the fact that we are all trying to find a way to 
insure every American. Although we haven't specifically heard 
that from some people here, I think everybody on our side of 
the aisle and certainly the President has expressed that. As 
far as I can tell, there are three ways of doing it. One is to 
create a single-payer plan, one is to create the hybrid plan 
that is under discussion with a public option, and the third 
way is to rely strictly on the private insurance industry.
    Mr. Ryan earlier gave an assessment as to the budgetary 
problems that might be inherent in developing a coverage for 
everybody using the public option. Could you give an assessment 
of what the budgetary implications would be of trying to shove 
everybody into the private system without a public option? 
Would that be more or less affordable than doing it with the 
public option?
    Secretary SEBELIUS. I think that the current system is 
unsustainable in terms of cost. What we have to look at is not 
only transforming the underlying payment incentives, but 
changing what the payment incentives do. I think this will help 
encourage different kinds of behavior. So if we want a wellness 
and prevention system, we have to pay differently at the end of 
the day. And I think both public and private plans can be 
effective doing that.
    We have to change the underlying Medicare directives and 
opportunities for provider incentives, and they can be a leader 
in this. We can shift the system around. I don't think it is 
can this work in either the public or private; it has to work 
in both places. And dismantling the private market and having 
an entirely public option, the single-payer system, I think, is 
not something that the President supports. He supports moving 
forward and filling the gap, not disrupting the entire 
marketplace.
    So we have got to stabilize the private market with a 
different set of rules, hopefully, that will make it more 
accessible to more Americans, and encourage competition moving 
forward.
    Mr. YARMUTH. But my question, I guess, was in relation to 
Mr. Ryan's statement earlier. The budgetary problems inherent 
in insuring everyone who is right now--every citizen--are not 
going to be diminished by relying strictly on the private 
sector.
    Secretary SEBELIUS. I would say that is fair.
    Mr. YARMUTH. Thank you very much.
    Chairman RANGEL. Thank you.
    It looks like we have made the deadline. We have 
Congresswoman Brown-Waite, who has been patiently waiting to 
inquire, and then we will be followed by Mr. Tanner, Mr. 
Higgins and Mr. Davis of Alabama.
    Congresswoman Brown-Waite.
    Ms. BROWN-WAITE. Thank you very much.
    Welcome, Madam Secretary. I look forward to working with 
you on health care reform that I think all Americans do want. I 
think we may differ in how it is formulated, but we look 
forward to working with you. And congratulations again.
    Representative Anna Eshoo and I introduced a bill on 
additional funding for pancreatic cancer research. The bill 
number is H.R. 745. We have 130 cosponsors. And last year I 
found out, tragically, how quickly pancreatic cancer can take a 
life because my husband finally succumbed to it 6 months after 
he was diagnosed.
    The bill also addresses other hard-to-find cancers that 
have a very--that, once diagnosed, people have a very short 
lifespan. So it is not just about pancreatic cancer. I would 
certainly welcome your views on it and your support. We are 
gathering more and more cosponsors every single day, and I 
would appreciate your support on that bill.
    I think we agree--and this is on another subject--I think 
that we agree that we should get individuals involved, 
everybody who is eligible for Medicare, Medicaid and SCHIP. How 
do you propose that we enroll the 11 million Americans who are 
currently eligible for these programs, but are not yet enrolled 
in Medicare and SCHIP?
    I know hospitals tell me all the time that parents bring 
children in for care, and when they go over the fact that they 
don't have insurance, many of them are eligible for SCHIP or 
Medicaid. So how do we encourage those individuals to sign up 
for the programs already in effect? I look forward to hearing 
your views on that.
    Secretary SEBELIUS. Thank you, Congresswoman. First of 
all----
    Chairman RANGEL. Madam Secretary, you have 30 seconds to 
respond, and the rest of your response we will be glad to 
receive in writing.
    Secretary SEBELIUS. We need to look for best practices of 
enrollment. It is very clear that there are strategies out 
there, and some States have had huge success. We did pretty 
well in Kansas with SCHIP. Other States haven't begun to do 
that. So best practices.
    Working with you on cancer initiatives is certainly 
something I will look forward to, and I am sorry for your loss.
    Ms. BROWN-WAITE. Thank you very much. And I yield back my 
time.
    Chairman RANGEL. We have five Members left, Madam 
Secretary. We recognize that you have extended your time here. 
So I am going to ask Mr. Tanner, Mr. Higgins, Mr. Davis of 
Alabama, Mr. Van Hollen and Mr. Meek of Florida to greet you 
and to share with you how grateful they are that you committed 
yourself to attend our Committee first, and they will be 
submitting questions to you. And we know you will respond.
    But since they are here, I am certain that they would want 
to greet you. And so, Mr. Tanner, say hello to the Secretary.
    Mr. TANNER. I understand that, Mr. Chairman. You called on 
probably the Member who can talk as slow as anyone here. So I 
will just say, Madam Secretary, it is great to see you. I have 
a couple of questions about rural delivery of health care with 
regard to competitive bidding of durable medical equipment and 
the pharmacy requirements for the surety bond and the 
accreditation. But we will talk about that later. Thank you.
    Chairman RANGEL. Mr. Higgins of New York.
    Mr. HIGGINS. Thank you, Madam Secretary. I am just 
interested in the issue of the cancer treatment and cancer drug 
reimbursement. And my concern is that the reimbursement 
paradigm hasn't kept pace with the science. And I think we are 
at the dawn of a cancer treatment revolution with smart drugs, 
Avastin for lung cancer, Herceptin for breast cancer, and there 
are so many smart drugs that are in the pipeline toward 
discovery, and I would just hope that the Administration would 
take a very serious look at cancer drug reimbursement within 
the context of health care reform.
    Secretary SEBELIUS. That is a great point.
    Chairman RANGEL. Mr. Davis of Alabama.
    Mr. DAVIS OF ALABAMA. Thank you, Madam Secretary. And 
obviously, I have to be brief, too, but I would just invite you 
to personally take a look at an issue that has been affecting 
my State and could have significant consequences going forward. 
The 10-second version of it is we have been embroiled, the 
State of Alabama been embroiled, in a decades-long dispute with 
CMS over how we finance our Medicaid system. As a former 
Governor, you know that the issue of intergovernmental transfer 
has been a very important one. And unfortunately, unless there 
is a change in course in CMS' current position, unless there is 
a change in course, Alabama could have to make dramatic cuts to 
its acute care services, and potentially many of our safety-net 
hospitals could have to literally close their doors; not cut 
back services, but literally close their doors. I would urge 
you, as the new Secretary and as a former Governor who knows 
these issues intimately, to personally engage this question and 
to look at a resolution on behalf of my State.
    Chairman RANGEL. Mr. Van Hollen from Maryland.
    Mr. VAN HOLLEN. Thank you, Mr. Chairman.
    And congratulations and welcome, Madam Secretary. We all 
look forward to working with you and the President to get 
health care reform done this year.
    We have talked today about some of the ways we can both 
reduce costs and improve quality of care. One of the areas I 
think we need to look into within the Medicare system is 
changing the incentives with respect to multiple chronic 
diseases.
    Right now under Medicare there is really no incentive to 
better manage those diseases. You have people going to 
individual specialists, and, again, payment is made just on 
number of contacts, and there are very few incentives within 
the system to better manage that care to, number one, to get a 
better health care outcome, but also to drive down an area of 
costs in an area where we have lots of payments and costs. So 
it seems to me that is an area that is ripe for again meeting 
our twin objectives of improving care and reducing costs. And I 
look forward to working with you in that area. Thank you, Mr. 
Chairman.
    Chairman RANGEL. Mr. Meek of Florida.
    Mr. MEEK. Thank you, Mr. Chairman.
    Madam Secretary, again, congratulations, and looking 
forward to working with you.
    My line of questioning was going to go along the future. 
And in a State like Florida, right now we are one of very few 
States especially under a 2006 waiver as it relates to 
Medicaid. We have a senior population and an issue of 
uninsured, especially among service workers, a very, very 
important issue to us, and also the utilization of community 
health centers. And I look forward to talking with you and 
working with your Department as we move forward.
    Florida, as you know, we are special in many ways. And when 
it comes down to health care and delivery of health care for 
seniors and for indigent and for giving some relief to small 
businesses, incentivizing best practices so that they don't 
have a mountain of health care issues is paramount. So I look 
forward to talking with you in the future. Thank you.
    Chairman RANGEL. Madam Secretary, I want to thank you for 
giving this Committee the courtesy of your first congressional 
hearing.
    I want to apologize to the Members for curtailing their 
ability to follow through in their questions. And I want to 
thank you also for making yourself available to us, if not 
necessarily in hearings, but when we have our Democrats and 
Republicans together, that you would come in an informal way 
and try help us out with some of the questions.
    We again congratulate you for your appointment. We look 
forward to working with you. Thank you so very, very much. And 
the Committee stands adjourned, subject to the call of the 
Chair. Thank you so much.
    [Whereupon, at 12 p.m., the Committee was adjourned.]
    [Questions for the Record follow:]




    


    [Submissions for the Record follow:]
                        Statement of Amy Kaplan
    My congratulations to AHIP and the other stakeholders for coming to 
the table. Their cooperation is essential . . . if only for self-
preservation. Please, however, do not allow them to sabotage the 
`public/exchange' option.
    After perusing Sen. Baucus' and the guidelines proposed by some of 
the citizens-for-reform groups, all seem excellent preparation for the 
inevitable haggling over details. One point they all stress is making 
insurance more readily available and affordable. But two critically 
relevant points seem to have been overlooked. The first, that:

IMPROVING ACCESS TO HEALTH INSURANCE IS NOT THE SAME AS PROVIDING 
HEALTH INSURANCE COVERAGE AND AUTHORIZING ESSENTIAL TREATMENT

    And, second, is the existence of a sidelined third category, beyond 
the oft-considered uninsured and underinsured:

THE FALSELY INSURED

    The falsely-insured are those people who have purchased individual 
policies from private insurers, but are routinely denied benefits when 
a major (expensive) health catastrophe occurs. This happens all too 
often because the language of individual policies is intentionally 
arbitrary, ambiguous, contradictory and evasive.
    Surely it is ironic that as Karen Ignagni and AHIP now seek 
national regulations to expand access, they have yet to concede any 
responsibility, accountability, let alone culpability, for rectifying 
the circumstances of their falsely-insured clients.
    Case-in-point: What qualifies as ``Durable Medical Equipment that 
we determine to be covered?'' This exact phrase, never clarified in my 
2 years of dialogue with Assurant Health (whose CEO sits on the board 
of AHIP) was used to deny a medically-necessary pediatric power 
wheelchair for my grandson, born with Type II Spinal Muscular Atrophy 
(SMA), a genetic degenerative disease. (When my daughter first 
challenged their denial she was told, ``You should have read your 
policy more carefully before giving birth to this child.'')
    While AHIP now says they will abandon ``pre-existing conditions'' 
as an exclusionary category, what about their recission and denial 
practices based on their subjective interpretations of language and 
their various definitions of ``fraud?''
    ``Fraud'' is claimed to deny coverage:

     . . . when a policyholder doesn't know that he/she had at 
condition at the time they were approved and purchased their individual 
policy (specifically for HIV/AIDS)
     . . . when a policyholder failed to correctly comprehend the 
catch-all categories on the medical history forms. How should one 
answer the question ``Have your ever had . . .'' when epilepsy and 
headaches are in the same question? (Specifically, failure to 
acknowledge a headache is ``fraud'' for later coverage of a brain 
tumor.)
     . . . when a policyholder has minor lapses of memory. 
(Specifically, failure to mention a hospitalization at age 6 for a 
tonsillectomy is later designated as fraud for the treatment of 
cancer.)

    No doubt all the above, and more, can be construed as claimant-
fraud, but is it not also fraudulent for insurers:

     . . . to imply that a consumer's timely payment of premiums buys 
them health care insurance?
     . . . to pay bounties to low-level claims agents for identifying 
the legal loophole by which benefits can be denied?
     . . . after denying benefits, to offer the claimant a convoluted 
grievance procedure stacked in the insurer's favor? (This process only 
further victimizes the claimant, particularly when the insurer includes 
use of an outside arbitrator but then, in writing, says the insurer is 
not bound by the findings of such an arbitrator.)
     . . . to have such influence that a State Insurance Commissioner 
can tell his employee, ``Drop the case. You're making too many waves.'' 
(The case manager handling the dispute of Assurant's denial of the 
power wheelchair.)

    And should a disgruntled claimant take his/her case to court and 
win, it is merely a victory in one case, in one State, against one 
company; and the industries' access to denials via fraud are not 
compromised.
    At this moment in time, private insurance companies rightfully fear 
competition from a government sponsored public/exchange plan.
    But until that industry, with guidance and oversight from Congress 
and the other stakeholders, agrees on binding legislation that ends 
their legal and egregious denial of benefits, no private health care 
consumer, despite purchasing a ``competitive plan,'' can be assured of 
buying anything more than improved access--without necessarily improved 
coverage.
    Private policies must be regulated as if they were a tangible 
product; one that, should it prove either ineffective or dangerous, 
could be pulled from the market and its manufacturers held accountable. 
To be equitable, private policies must include the guarantees of 
coverage that stand behind all Federal plans: Government worker plans, 
Medicare and Medicaid, the VA, and even private employer-sponsored 
group plans.
    While it is not the job of the government to act as big-brother to 
individual Americans, at this moment of increased vigilance and pending 
change, the government must protect consumers from existing practices 
which put it's individual citizens at risk.
    Thank you and please share these thoughts with anyone more 
influential than I.

            Sincerely and persistently,

                                                         Amy Kaplan

                                 
                     Statement of Claire H. Altman
To:
           Hon. Charles Rangel, Chair, House Ways and Means Committee
From:
           Claire H. Altman, Director of Capital Projects, HealthCare 
Chaplaincy
Re:
           Proposal to Develop a National Strategy for End-of-Life Care 
That Reduces Cost and Increases Quality of Care
Date:
           April 16, 2009
Summary
    The United States health care system is poorly organized to address 
end-of-life care. This brief will make the case for a new national 
strategy to reduce cost and increase quality of care. End-of-life care 
is one of several major areas in health care where the status quo both 
raises costs to the system and decreases consumer service and 
satisfaction. Patients, families, and staff often agree the patient is 
best served by less aggressive medical intervention, but inertia, lack 
of education, and reimbursement structures in the system push 
powerfully for continued treatment. An urgent need exists for a 
coordinated, systemwide approach to providing end-of-life care that 
focuses on quality of care for individuals and their families while 
avoiding extraordinary costs--often for unwanted and unnecessary 
interventions. The United Kingdom issued a ``Strategy for End-of-Life 
Care'' in July 2007 that could serve as a guide for a U.S. plan.
Background
    Dying has been viewed as a medical event in American hospitals, a 
mind-set that limits the capacity of the health care system to provide 
optimum quality of care and to contain costs. End-of-life with dignity, 
however, is a profound spiritual event for patients, families, and 
oftentimes staff. If handled well, the spiritual dimension of ``une 
belle mort,'' a good death, can reduce costs and emotional suffering.
    In addition to the need to provide end of life care that is more 
responsive to patients' needs and desires, there is an opportunity for 
significant cost savings. Twenty-five percent of the annual Medicare 
budget of $627 billion is spent on care for persons in the last year of 
life, with 40% of that number spent in the last 30 days. Medical care 
at the end of life consumes 10-12% of the Nation's total health care 
budget.\1\ These numbers have not changed significantly over the last 
10 years despite the fact that in-patient, residential and home hospice 
care services are less costly and underutilized--and provide higher 
quality service. Existing data (mainly from the 1980's) suggest that 
hospice and advance directives can save between 25 and 40% of health 
care costs during the last month of life, with savings decreasing to 
10-17% over the last 6 months of life.\2\ The Congressional Budget 
Office forecasts that the cost of long term care will reach $207 
billion in 2020 and $346 billion in 2040.\3\
---------------------------------------------------------------------------
    \1\ Emanuel, EJ, ``Cost Savings at End of Life. What do the data 
show?'' JAMA, Vol. 275, No. 24, 6/26/96.
    \2\ Hogan, Christopher, et. al., ``Medicare Beneficiaries' Cost of 
Care in the Last Years of Life,'' Healthaffairs.org/cgi/content/
abstract/20/4/188, 2001.
    \3\ ``Redefining and Reforming Health Care for the Last Years of 
Life,'' RAND Health Research Highlight, 2008.
---------------------------------------------------------------------------
    Exploding health care costs and unnecessary patient suffering will 
only accelerate with the exponential growth in the population over 65 
that will live longer, have more chronic diseases, and require more 
care in their last years.\4\ People 85 years of age and older--those 
most likely to need expensive long term care--were 1.7% of the U.S. 
population in 2005 but are expected to grow to 2.2% in 2020--an 
increase of 38% only 11 years from now.\5\
---------------------------------------------------------------------------
    \4\ Ibid.
    \5\ ``The New York Long-Term Care Compact Proposal: Update, 
Analysis, and Recommendations,'' Stephen A. Moses, President, Center 
for Long-Term Care Reform, 2008, p. 2.
---------------------------------------------------------------------------
    Poor quality and high end-of-life care costs have many causes, 
which include:

      The challenges of dealing with death for health care 
professionals, who often do not know about their patients' preferences 
for end-of-life care.\6\
---------------------------------------------------------------------------
    \6\ ``End of Life Issues and Care,'' Issues of Access and 
Variability in Health Care at the End of Life,'' http://www.apa.org/pi/
eol/access.html.
---------------------------------------------------------------------------
      Patients and their families not understanding their 
choices at end-of-life.\7\
---------------------------------------------------------------------------
    \7\ Valente, Sharone, and Bill Haley, ``Culturally Diverse 
Communities and End of Life Care, American Psychological Association.
---------------------------------------------------------------------------
      Focus of medicine on curing disease and viewing death as 
the enemy or as a failure.\8\
---------------------------------------------------------------------------
    \8\ Ibid.
---------------------------------------------------------------------------
      Most insurance plans do not cover services that are 
necessary for good quality end-of-life care. Traditional health 
insurance favors high-tech/high-cost services and inpatient hospital 
care.\9\
---------------------------------------------------------------------------
    \9\ Raphael, Carol, PPA, Joann Ahrens, MPA and Nicole Fowler, MHSA, 
``Financing end of life care in the USA,'' Journal of the Royal Society 
of Medicine, v. 95(9), Sept. 2001.
---------------------------------------------------------------------------
      Health coverage is often linked to site of care provided, 
rather than the person, and by time limits not by the amount of service 
needed.\10\
---------------------------------------------------------------------------
    \10\ Ibid.
---------------------------------------------------------------------------
      Many dying patients may be better served with comfort 
care and interventions that help families deal with forgiveness, 
reconciliation, and other topics that arise at the end-of-life.
      Issues around access: Medicare beneficiaries who die in 
low income areas have higher end-of-life costs, are less likely to use 
hospices, and are more likely to die in a hospital than the general 
population.\11\
---------------------------------------------------------------------------
    \11\ Hogan, et. al.

Development of a National Strategy for End-of-Life Care
    It is critical to identify the barriers and incentives to moving 
larger numbers of dying patients, earlier in their disease paths, from 
acute treatment to comfort care into environments that are 
characterized by sensitivity and respect. Conceptual and ethical 
challenges are inherent in this topic, but research can identify 
innovative, cost-effective solutions in the best interests of patients, 
State and Federal Governments, and hospitals.\12\ New thinking is 
needed about the management of death and dying. New frameworks are 
needed that utilize the most effective intervention points by which to 
move the health care culture toward an approach to end-of-life care in 
which the whole person is served with medical and spiritual tasks 
better balanced than they are today.
---------------------------------------------------------------------------
    \12\ End of Life Care Strategy, United Kingdom, July 2008.
---------------------------------------------------------------------------
    The national health reform effort needs to include a national 
strategy for end-of-life care. This could be accomplished within 6-12 
months with the immediate appointment of a National Panel of the 
leaders in end-of-life care to: inventory the challenges and innovative 
programs nationwide; propose new policy frameworks at the Federal and 
State level; and propose critical demonstration projects.
    Some of the issues to be addressed include:

      Identifying communication and cultural competency 
problems that impede the ability of health care professionals to 
communicate effectively with patients and their families about death 
and dying, thereby limiting patients' abilities to make informed 
choices;
      Identifying innovative approaches to educating health 
care professionals about death and dying;
      Documenting issues related to culture, communication, and 
dying that lead to unwanted and unnecessary treatments;
      Recommending financial incentives to hospitals for 
discussing advanced directives with every patient and her family (if 
applicable) and for obtaining signed advanced directives; and
      Authorizing Medicare demonstration programs to provide 
reimbursement for assisted living programs for persons with serious 
progressive illness and/or terminal diagnoses to test the hypothesis 
that this care option might be preferred by individuals and be more 
cost effective than the current pattern of frequent hospitalizations 
and high-tech interventions in the last year of a patient's life. 
Individuals might choose compassionate care over acute care or skilled 
nursing care; if reimbursement were available (reimbursement might be 
limited to those with annual incomes of less than $100,000).\13\
---------------------------------------------------------------------------
    \13\ Assisted living offers an option that is half the cost of 
skilled nursing care and a fraction of the cost of acute hospital care. 
Current regulations in New York State, for example, permit assisted 
living residences that apply for an enhanced assisted living license to 
care for residents through the end of life, bringing in necessary 
skilled nursing and hospice care. Persons facing serious progressive 
illness and end-of-life want an environment that offers autonomy, 
independence, and privacy. Assisted living communities are organized so 
family members can spend time with the individual in a non-medicalized 
but supportive setting, in which basic care (assistance with activities 
of daily living) are provided. This ensures the ``peace of mind'' that 
family members need and want without the institutional model of a 
hospital or nursing home.

    HealthCare Chaplaincy is committed to working with other 
organizations that share these goals to assist the Health Reform 
movement to achieve a coordinated, integrated strategy for quality end-
---------------------------------------------------------------------------
of-life care.

                                 
                 Statement of Clark Newhall, M.D., J.D.
    We don't have a health care problem. We don't have a health care 
crisis. What we have is a health care famine. I realized this when a 
friend told me that she was not in favor of universal health insurance. 
She was opposed to paying for health care for all. She has a little boy 
with cancer. She was afraid that universal health care would mean her 
little boy would not be able to get an appointment with the oncologist. 
``But all those other children with cancer deserve treatment too don't 
they?'' I asked. ``I guess so'' she grudgingly admitted, ``but I have 
to worry about my little boy.''
    Too many other people's children would be trying to get 
appointments and treatment. Too many other people would be competing 
for a scarce resource--the time of a doctor.
It Is a Health Care Famine
    Perhaps you know the story of Jacob, who predicted 7 years of 
plenty and 7 years of famine. When famine came, he was prepared with 
full granaries. His brothers, who had sold him into slavery, begged him 
for grain for their starving families and he gave them grain. We are 
like Jacob's brothers in the famine, begging for health care. But for 
us, there is no Jacob. There is only the for-profit medical-industrial 
complex, ``gate-keeping'' us out of the health care system.
    When too many people are fighting to get the scarce stuff to stay 
alive, whether the scarce stuff is food or health care--that is a 
famine.
    When those of us who have barely enough are willing to sacrifice 
those others of us who have too little or none at all--that is a 
famine.
    When our own situation is so desperate that we turn a blind eye to 
the more desperate situation of others--that is a famine.
    When `dog-eat-dog' surpasses `do unto others' as the Golden Rule--
that is a famine.
    A famine never strikes everyone equally. In a famine, the `have-
nots' become the `have-nothings' while the `haves' become the `have-
barely-enough.' And as always, the wealthy survive, even thrive, even 
profit, from the shortages that are killing others.
    This famine is not new--it has been slowly building for years.
    The price of our privately-run, profit-driven medical-industrial 
complex has caused this famine. About one-third of every dollar going 
to health care pays for administrative costs--for utilization 
reviewers, for computer programmers, for advertising, for sales 
managers, for executives of all kind, for billing clerks, for coding 
clerks, for CEO bonuses in the millions and hundreds of million--and 
for profits.
    We are not talking about government waste. We are not talking about 
the cost of actually treating the sick and nurturing the healthy. We 
are talking only about the cost of running our profit-making health 
insurance industry.
    One-third of the health care dollar--that amount is far more than 
enough to give excellent medical care to everyone in the Nation. It is 
far more than enough to fund the (privately-owned) surgical centers and 
imaging centers and Lasik centers that sprout up on every corner. It is 
even more than the amount we have given to Wall Street to bail out 
financiers and bankers from their hubristic near-demise.
    The famine has grown while insurance companies charge higher 
premiums and reduce coverage, while employers cut their contribution 
and increase deductibles, while legislators reduce Medicaid and CHIP 
budgets, and on and on.
    We are in a health care famine. Millions of us are suffering and 
millions more will suffer soon. More than 20,000 people die each year 
in this famine because they cannot afford the price of for-profit 
health insurance.
    The famine will not end until, like Jacob, we open the granaries 
and give aid to the starving. The health care famine will not end until 
we end the money hoarding that health insurance companies call 
`reserves' and `administrative cost' and `profits.' It will not end 
until we open our blind eye and see the plight of our neighbor. It will 
not end until we learn that tolerating a profit-making middleman in the 
health care system builds a wall between patient and doctor. It will 
not end until we learn that good things for everyone can only be 
accomplished by the will of everyone. It will not end until we pay for 
health care in the same way that we pay for everything else that we 
value highly--our security, our freedom, our laws. It will not end 
until we have a national health care system that covers everyone 
equally and is paid for by everyone equitably. It is time for national 
single payer health insurance. It is time to remove the profit-making 
middleman from medical care. It is time to see health care for the 
public good that it is and not for the profitable business it has 
become. Support Medicare For All.

                                 
              Statement of Congressman Patrick J. Kennedy
    The World Health Organization defines health as ``a state of 
complete physical, mental and social well-being, and not merely the 
absence of disease or infirmity.'' As we reform and re-incentivize our 
health care system, this must be acknowledged. Health care reform must 
be a whole body initiative, recognizing that mental health is integral 
to overall health, and that optimal overall health cannot be achieved 
without this.\1\ Integration, as a strategy, is meant to be as broad 
and over-arching as a whole body approach to health care, and as 
specific as ensuring that new policies, such as health information 
technology, integrate mental health. The integration of primary care 
and mental health is a national priority that was not only identified 
in the recommendations of the New Freedom Commission on Mental Health, 
but is recognized in programs and activities of 11 Federal agencies 
that have initiatives to integrate services to improve access, 
services, and outcomes.\2\
---------------------------------------------------------------------------
    \1\ ``Mental health'' as defined in this paper, includes substance 
abuse disorders and related conditions.
    \2\ Compendium of Primary Care and Mental Health Integration Across 
Various Participating Federal Agencies, January 2008. www.samhsa.gov/
Matrix/MHST/Compendium_Mental%20 Health.pdf.
---------------------------------------------------------------------------
    According to the Institute of Medicine, together, mental and 
substance-use illnesses are the leading cause of combined death and 
disability for women of all ages and for men aged 15-44, and the second 
highest for all men. When appropriately treated, individuals with these 
conditions can recover and lead satisfying and productive lives. 
Conversely, when treatment is not provided or is of poor quality, these 
conditions can have serious consequences for individuals, their loved 
ones, their workplaces, and the Nation as a whole.\3\ Tragically, 
individuals with serious mental illness have a life expectancy of 25 
years less than general population.\4\ In order to effectively combat 
this and create a sustainable health care system which embodies the 
concept of whole body care, the following principles must be 
incorporated into health care reform.
---------------------------------------------------------------------------
    \3\ Institute of Medicine, Improving the Quality of Health Care for 
Mental and Substance-Use Conditions, Committee on Crossing the Quality 
Chasm: Adaptation to Mental Health and Addictive Disorders, Washington, 
D.C.: The National Academies Press (2006).
    \4\ NASMHPD, 2006.
---------------------------------------------------------------------------
    Primary and coordinated care. Health care reform must make changes 
to the delivery system to provide incentives for models of care which 
treat the whole person. Health care reform policy should support and 
encourage practices that fully integrate mental health into primary 
care. All providers, and in particular primary care doctors, must be 
trained and adequately reimbursed, for providing comprehensive and 
coordinated care--care which approaches health as a whole body 
initiative. Primary care physicians must be given the resources needed 
to adequately address the mental health needs of their patients. 
Innovations, like medical homes, are working to improve quality and 
contain cost, but the primary care workforce is not sufficient to meet 
the country's needs. Over the last two decades, fewer medical students 
are choosing primary care for a number of reasons, including 
reimbursement issues. Payment policies do not adequately compensate 
doctors for the time it takes to coordinate care, provide case 
management, or address mental health and substance abuse issues in the 
primary care visit. Specialty providers and other physicians must 
likewise have training on mental health and substance abuse problems 
and be trained to provide collaborative care and case management, and 
be reimbursed accordingly.
    Coverage. For the 45.7 million Americans without health insurance 
(a number which has grown due to the recent economic downturn), we must 
create an affordable, quality health care system in which all Americans 
are covered. Providing coverage alone, as it exists now, is not a 
solution unto itself however. The coverage we provide for all Americans 
must include the full spectrum of evidence-based mental health care, 
including both treatment and prevention services. Mental health 
coverage should not be subject to restrictive or prohibitive limits 
when formulating coverage determinations on the frequency or duration 
of treatment, cost-sharing requirements, access to providers and 
specialists, range of covered services, life-time caps, and 
reimbursement practices.
    Access. The expansion of insurance coverage is not the same as 
ensuring access. Lack of insurance is only one of the many barriers to 
care for those seeking mental health services. Those with coverage also 
face financial barriers to care due to prohibitive cost sharing 
requirements, limited access to providers, and denials of coverage for 
mental health conditions. Once all Americans have health insurance, 
coverage must provide for access to affordable, high-quality care. 
Current barriers to care within the health insurance system must be 
eliminated, and mental health coverage must include access to the full 
spectrum of evidence-based care for both prevention and treatment of 
mental health conditions. This includes, but is not limited to, access 
to and choice of doctors who approach health as a whole body 
initiative.
    Standardized rules for payment. Instituting rules for standardized 
payments, as done in Medicare, would save significant time and cost. 
Many large hospitals carry numerous plans, all of which have different 
rules for payment submission. Time spent determining how to process a 
claim, as well as how much a claim is worth, is time that raises the 
cost of health care, and time that could be spent on patient care.
    Clinical necessity. Clinical necessity should be the determinant of 
patient care. All patients have the right to have their medical 
decisions made by a doctor, rather than what an insurer chooses to 
reimburse. Coverage must include treatment deemed clinically necessary 
to treat symptoms, as well as treatment to prevent more serious mental 
illness, or to prevent relapse.
    Community rating. Replacing underwriting with a ``community 
rating'' system would set premiums based on age and location instead of 
the health status of the individual. This would bring down the cost of 
insurance for higher risk populations and guard against radical changes 
in premiums from year to year. Thus, people with pre-existing 
conditions would not be subject to discriminatory premiums, nor would 
females be charged higher premiums than males.
    Transparency. Any denials of coverage must be transparent and 
subject to a meaningful and independent review process. A review 
process should enable individuals to effectively understand the grounds 
for denial and include clear direction on how to appeal the decision.
    Prevention and wellness. Our current ``sick-care'' system must be 
transformed into one which is patient-centered, collaborative, and 
focused on prevention. Coverage and access policies must reflect this. 
Half of all people with a mental health diagnosis first experience it 
by age 14, but will not receive treatment until age 24.\5\ Early 
detection and treatment is essential for ensuring positive health care 
outcomes. Prevention, especially in behavioral health, is given a mere 
fraction of the attention as treatment. Prevention and wellness 
programs must also promote and incentivize mental health prevention 
programs as part of an improved approach to treating health care as a 
whole body initiative. This includes promoting and reimbursing for 
brief interventions and screening and mental health check-ups, along 
with the full integration of mental health into primary care settings. 
This also includes investments in research aimed at determining 
effective prevention strategies.
---------------------------------------------------------------------------
    \5\ Kessler R.C., Berglund P., Demler O., et al., Lifetime 
Prevalence and Age-of-Onset Distributions of DSM-IV Disorders in the 
National Comorbidity Survey Replication, Arch Gen Psychiatry, 2005; 
62:593-602.
---------------------------------------------------------------------------
    Health information technology. Health information technology is an 
essential aspect to improving the coordination and quality of health 
care. As we continue to build and advance this aspect of our health 
care system, it is essential that these efforts integrate mental health 
consumers and providers, and continue to place high value on consumer 
privacy and protection.
    Outcome measures. High-quality health care relies on the 
implementation of evidence-based practices. In order to achieve this, 
existing behavioral outcome measures must be improved so that the 
effectiveness of prevention and treatment programs can produce 
functional standards. Health care reform should require the regular use 
of standardized, objective, and uniformly applied clinical outcome 
measures. Outcome measures should also be benchmarked, in an effort to 
establish best practices.
    Workforce development. To effectively achieve full integration of 
mental health into health care, workforce training in mental health is 
necessary. All health care providers must have more inclusive health 
care training which includes behavioral health, including cross-
training for co-occurring health conditions. Behavioral health must be 
given fuller weight in medical training, continuing education, and 
required examinations for all medical specialties. Further, in some 
areas of the country there are shortages of mental health providers and 
some mental health specialties. Federal grant or loan repayment 
programs that include students of behavioral health should continue to 
be expanded. Graduate Medical Education can also be expanded to further 
support mental health professionals.
    Improved coordination among sectors. In order to achieve optimal 
health, mental health services must be more fully integrated into non-
traditional settings such as schools, juvenile justice settings, early 
childhood programs, community-based programs, housing and welfare 
programs.
    New post for behavioral health. To achieve full integration of 
mental health into health care reform, a new position may need to be 
created, either at the White House or at a Federal agency, which has as 
its responsibility the oversight of the coordination between behavioral 
health and overall health care. This position would bring with it the 
expertise and authority necessary to achieve integration and would 
represent the commitment by Congress and the President that optimal 
mental health is essential to achieving optimal overall health.
    Single-payer. In order to truly achieve the above stated 
principles, we need health care reform that addresses the underlying, 
systemic issues in our current system. We are the only industrialized 
country that treats health care like a market commodity instead of a 
social service. Thus care is not distributed according to medical need 
but rather according to ability to pay.\6\ Cost savings cannot be 
discussed without acknowledging that 31 percent of all health care 
expenditures in the U.S. are administrative costs. The average overhead 
for private insurance in this country is 26 percent, compared to 3 
percent for Medicare.\7\ The majority of doctors and Americans support 
a single-payer health care system, yet this option has been dismissed 
by many policymakers as unrealistic.\8\ As elected representatives of 
this democratic system, we are responsible for representing the views 
of the public. Therefore, it is imperative that we keep this option in 
the discussion of health care reform.
---------------------------------------------------------------------------
    \6\ Marcia Angell, MD. CMAJ  October 21, 2008; 179(9). First 
published October 6, 2008; doi:10.1503/cmaj.081177.
    \7\ Journal of American Medicine, 2007.
    \8\ A CBS News/New York Times poll published in February 2009 
reported that 59% say the government should provide national health 
insurance (up from 40% 30 years earlier). A study published in the 
Annals of Internal Medicine concluded that 59% of physicians 
``supported legislation to establish national health insurance'' while 
9% were neutral on the topic, and 32% opposed it. CBS NEWS (Sunday, 
February 1, 2009). CBS NEWS/NEW YORK TIMES POLL. Press release. http://
www.cbsnews.com/htdocs/pdf/SunMo_poll_0209.pdf. ``Americans are more 
likely today to embrace the idea of the government providing health 
insurance than they were 30 years ago.''
    Carroll AE, Ackerman RT (April 2008). ``Support for National Health 
Insurance among U.S. Physicians: 5 years later.'' Ann. Intern. Med. 
148(7): 566-7. PMID 18378959.

                                 
                       Statement of Larry Frazer
    Committee Members, it's time to take action on behalf of America 
and its citizens.
    The Congress has to step up to the plate and provide some 
leadership for America. The Obama administration is demonstrating its 
lack of experience and naivete in their role in the White House. The 
stimulus spending is not working, the economy is trying to recover but 
the Federal Government keeps knocking the slates out from under it.
    We don't need more taxes, to support Obama's health care proposal, 
in a time of economic recession. You don't take money out of people's 
pockets with more taxes to satisfy a misguided President's desire to 
destroy the health care system for 95% of the population for the 
benefit of only 5% of the population. Yes, that's right, only 5% would 
benefit from Obama's proposed health care plan while 95% will get 
higher taxes and poorer quality health care.
    Furthermore, Obama's numbers are fraught with errors and 
falsehoods. He projected GDP at growth rates higher than has ever been 
achieved, reduction of his massive deficit spending in his current term 
(based on inflated GDP numbers), which the White House Budget Office 
has already increased projected deficit amounts before the ink dries. 
No other Federal agency outside of White House influence uses such 
inflated projections for GDP.
    Under his proposals the American taxpayer (that's you and me by the 
way) will accumulate debts greater than the sum of all Administrations 
before this one. We don't have the money!
    Obama through his naivete is sending this country down the 
proverbial river without a paddle!
    The CONGRESS must stand up, do the right thing and provide much 
needed national leadership. Stop this runaway spending and don't raise 
taxes. Allow the economy to recover, and facilitate it don't hobble it!
    Health care changes may be required but NOBODY has performed an 
objective analysis and assessment of the ``Health Care Process'' in 
America to determine what the cost drivers are or where the real 
problems are. I haven't seen any numbers from creditable sources, just 
hallucinatory shouting from the Administration and other noncreditable 
sources. The Congress must obtain creditable factual information from 
nonpartisan sources before developing a policy direction. The current 
and apparent Obama policy direction spells disaster for Americans.
    Obama, I guess from his ``community organizer'' experience, thinks 
he can look at the situation from 30,000 feet and see the problems. I'm 
sorry, but he does not have the knowledge or visibility to determine 
the problems and solutions. But I am sure that he is getting advice 
from special interest groups/persons who will stand to make ``big 
bucks'' from Federal intervention.
    The FIRST TENET of a lobbyist, consultant or service ``for hire'' 
provider is to create (or proclaim) situations (or conditions) to 
ensure employment opportunities regardless of the need or 
justification.
    The CONGRESS must take the reins and perform an OBJECTIVE analysis 
to determine the right course of action before taking any action. 
America's health care system, even with its problems, is the best in 
the world; DO NOT destroy our health care system to appease poor 
leadership from the White House. There is no manmade system on earth 
that cannot stand improvements from constructive justifiable changes.
    Be vigilant and frugal with MY money; stop allowing it to be thrown 
away.
    We have some far bigger problems looming, look at Social Security 
(which begins paying out more than it takes in by 2016 and will be 
bankrupt by 2037) and Medicare (will pay out more than it takes in this 
year, 2009, and begin drawing down trust fund assets). (Ref: http://
www.ssa.gov/OACT/TRSUM/index.html). If Congress doesn't take some 
action here we won't have just 5% of the population with problems 
you'll have 20% of the population with problems.

                                 

                     Los Angeles County Department of Mental Health
                                                        May 6, 2009

Hon. Charles Rangel, Chairman
Committee on Ways and Means

Dear Chairman Rangel and Committee Members:

    As the Director of Los Angeles County Department of Mental Health, 
I wanted to express concern and interest as progress toward health care 
reform continues. Los Angeles County Department of Mental Health is the 
largest public mental health service provider in the Nation and we 
serve a multi-ethnic population with a myriad of needs. In California, 
as in 70% of the jurisdictions nationwide, health care services are 
provided by county government. We believe and our experience has shown 
that individuals present with a complex set of interrelated needs; we 
are very certain that there can be no real health care reform without 
the inclusion of mental health in this discussion and planning effort.
    We in California believe that it is important to adopt certain 
basic core principles for any health care reform plan. The principles 
are:

    (1)  Good health care is holistic and integrated in that it is 
inclusive of all facets of the individual's well-being. There is no 
health without mental health. Physical and mental health care issues 
are integrally linked and must be treated in an integrated fashion.
    (2)  The lack of a cohesive Federal health care policy has led to 
an inefficient and costly method of health care delivery in the U.S. 
that is crisis driven. Prevention and early intervention are key 
components to a cost effective health care delivery system.
    (3)  Equal access for all U.S. citizens and residents remains an 
unresolved issue. Individuals who do not have private insurance or who 
have insurance with limited coverage continue to present in emergency 
rooms throughout the country for treatment. These people do not get 
early, non-emergency treatment but rather present in the emergency 
rooms for treatment that is much more costly. Standard coverage for 
U.S. citizens and residents alike will result in long term savings as 
the emphasis of the health care system moves from crisis or emergency 
intervention to the less costly prevention and early intervention 
model.
    (4)  Our fragmented, ``de facto'' health care delivery system 
results, at best, in duplication of multiple services and wasted 
resources as individuals are pushed from one provider to another to 
have health care needs met. In the worst case, it results in confusion 
and in a lack of compliance for many people with disabilities as the 
system is too complex and difficult for them to navigate without 
assistance. Individuals with mental illness die on average 25 years 
earlier than individuals that do not have mental illness. Simplify the 
system with (a) full service provider sites that can deliver multiple 
appointments on the same day and (b) give each individual a ``medical 
home'' or case manager to assist with followup for improved results.
    (5)  There is an increasing body of evidence as to what treatments 
and services produce the best outcomes for treatment of mental illness. 
Health care payment and finance programs should be revamped to support 
evidence-based treatments. Documentation, recordkeeping, billing 
submission and payment of claims processes should be simplified. Audit 
processes should be combined and simplified.
    (6)  The mechanism for record sharing and information sharing 
should be less cumbersome between health and mental health agencies. 
Treatment would be improved with collaboration and there would be cost 
efficiencies. Implement the electronic health record with inclusion of 
health and mental health information so it can be shared by all county 
agencies involved in providing health care services.

    In Los Angeles County, we have identified our 250 highest cost 
users of health and mental health services and have found that we can, 
in fact, coordinate services and control costs with good case 
management services. We have implemented numerous programs here locally 
with integrated physical health care and mental health care services 
with great success. Our Skid Row Project 50 has saved more public 
funding that the actual project cost in 1 year. We would love to share 
our experience with the Committee.

            Respectfully,

                                         Marvin J. Southard, D.S.W.
                                          Director of Mental Health

                                 
                    Statement of Patricia Ryan, MPA
   Executive Director, California Mental Health Directors Association
                   Health Reform in the 21st Century
    Thank you for the opportunity to offer to this Committee the 
perspective of California's county mental health/behavioral health 
directors on health care reform.
    My name is Patricia Ryan, and I am the Executive Director of the 
California Mental Health Directors Association (CMHDA), which 
represents all 58 county (and two city) mental health and/or behavioral 
health directors. CMHDA's mission is ``to ensure the accessibility of 
quality, cost-effective, culturally competent mental health care for 
the people of the State of California, and to provide the leadership, 
advocacy and support to county and city mental health programs for 
quality care necessary to meet our vision and values for the public 
mental health system.'' The core principle underlying all of the work 
we do is to advocate for social justice and the needs of persons with 
mental illness in California, especially those who are served or in 
need of services by the public mental health system.
    I am also a member of the Board of Directors of the National 
Association of County Behavioral Health and Developmental Disability 
Directors (NACBHDD). As such, this testimony also reflects many of the 
principles adopted by NACBHDD related to national health care reform.
    Counties in California are responsible for managing the public 
community-based system, including the Medi-Cal (Medicaid) Specialty 
Mental Health Managed Care program. Collectively, counties manage a 
system that totals over $4 billion Statewide (including State, county 
and Federal revenues).
    County governments are an integral part of America's current health 
system, and in many ways are leaders in determining what is most 
effective in addressing the diverse health and mental health care needs 
of our communities.
    Below is CMHDA's perspective on the importance of ensuring 
recovery-oriented, person centered, culturally competent services for 
individuals with mental illness and substance use disorders in any 
health care reform proposal. How we handle these issues in the context 
of health care reform is critical to our ultimate success, and to the 
optimum health of our communities.
Behavioral Health Care is Essential to Health Care Reform
    CMHDA endorses the Campaign for Mental Health Reform's 
``recognition that there can be no health without mental health, that 
prevention of and recovery from many health care conditions rests on 
mental wellness in each individual.'' (William Emmet, Director, 
Campaign for Mental Health Reform, September 10, 2008).
    As health care reform evolves in Washington, DC, across the Nation 
and in individual States, it is critical to focus on enhancing and 
preserving systems of care that serve people with mental illnesses and 
substance use disorders. Any discussion of health care reform must 
include the importance of access to and coverage of recovery-oriented, 
person centered, culturally competent services for individuals with 
mental illness and substance use disorders. We must ensure the 
integration of behavioral health services as a fundamental component of 
any comprehensive reform plan that is developed, enacted, and 
implemented.
    Behavioral health issues must be addressed because it makes no 
policy or fiscal sense NOT to. Consider that:

      One in four adult Americans has a mental disorder, 
substance use disorder, or both.
      Mental illness is the leading cause of disability in 
North America for people between the ages of 15 and 44. The burden of 
disease from mental health disorders exceeds those from any other 
health condition.
      Adults with serious mental illness die, on average, 25 
years sooner than those who do not have mental illness due to a lack of 
primary care for physical conditions such as heart disease, pulmonary 
diseases, high blood pressure, diabetes and other conditions.
      In 2005 alone over 32,000 individuals in this country 
took their own lives. Suicide was the third leading cause of death for 
young people aged 10-24 in 2004. According to the World Health 
Organization, mental illnesses, including alcohol and drug abuse, have 
the greatest negative impact on society in terms of lost days of 
healthy productive life, of any disease, accounting for 21% of the 
total.
      Almost one in four stays in U.S. community hospitals 
involves depression, bipolar disorder, schizophrenia or other mental 
health and substance use disorders.
      Treatment for mental health and substance use disorders 
is effective. Recovery rates for mental illness are comparable to and 
even surpass the treatment success rates for many physical health 
conditions. Relapse rates for drug/alcohol treatment are less, and 
compliance is higher, than those for hypertension and asthma; they are 
equal to diabetes relapse and compliance rates.
Coverage Does Not Guarantee Access
    Adults with serious mental illness are a medically vulnerable 
population. Many will not access needed physical health services or 
comply with medical treatment without significant support. Any health 
care reform plan must recognize the need for specialized mental health 
and social services--including case management--to enable this 
population to benefit from health care coverage and eliminate the 
disparities in health outcomes for those with serious mental illness.
    Further, while we applaud the recent enactment of mental health 
parity laws at the Federal level, we must also ensure that private 
health plans include coverage for the types of person-centered recovery 
and resiliency-oriented behavioral health services that work, and that 
they provide access to those services. In California, which adopted a 
mental health parity law approximately 9 years ago, health plans have 
found many ways to make it difficult for their beneficiaries to access 
needed care. Individuals with severe mental illnesses must have access 
to the range of rehabilitation services that enable them to function. 
As with other chronic ailments such as asthma or diabetes, they may 
require lifelong management; but those who have these disorders can 
live full, healthy, and productive lives in the community with the 
proper support. Coordination between private health plans and public 
mental health sector services should also be encouraged for this group.
System Accountability and Outcomes
    A reformed health care system should be informed by those who are 
being served, and be accountable based on measurable outcomes. 
Establishing a consensus of specific and measurable criteria as to what 
constitutes positive outcomes is an essential element of a reformed 
U.S. health system.
Prevention and Wellness Strategies Are Essential
    Health care reform must include a public health effort to identify 
health risks and prevention strategies that address the emotional, 
psychological, and neurological development and wellness of all, and to 
inform and educate the public about these strategies.
    In California we are finally beginning to make prevention in the 
area of behavioral health care a reality with funding from our voter-
approved Mental Health Services Act (Proposition 63, enacted November, 
2004). The theory behind the Act is that we must move from a ``fail 
first'' system for those with serious behavioral health disorders, to 
one that recognizes and addresses the early signs of potentially severe 
and disabling mental illnesses. The Mental Health Services Act (MHSA) 
combines prevention services with a full range of integrated services 
to treat the whole person, with the goal of self-sufficiency for those 
who may have otherwise faced homelessness or dependence on the State 
for years to come. We are already beginning to see phenomenal results. 
For example, in Los Angeles County, nearly 40,000 individuals living 
with mental illness have been served through the MHSA. In one program 
alone, individuals on Skid Row served by MHSA-funds showed an 83% 
decrease in homelessness, a 40% decrease in jail time, and a 
significant decrease in hospitalizations.
Integration of Behavioral Health and Physical Health Services is 
        Critical
    To be successful, health care reform must ensure that individuals 
have access to both physical health and behavioral health care 
services. Strategies for integration should be based on principles that 
recognize and embrace a person-centered approach; family involvement; 
cultural competency; evidence-based/practice-based approach; and multi-
systemic frameworks.
    Specifically, CMHDA believes health care reform should:

      Address and enhance access to care that embraces a 
holistic approach to care, centered on the person's strengths and 
integrates care which is person directed.
      Incorporate behavioral health care screenings, 
assessment, and treatment in physical health care settings through 
collaboration with behavioral health providers, for children, adults 
and older adults.
      Incorporate access to physical health care services in 
behavioral health settings to help address the 25 year lifespan deficit 
for individuals with serious and chronic mental illness and/or 
substance use disorders who would be at risk for increased morbidity 
and mortality due to an inability to access physical care.
      Prioritize and recognize the provision of physical health 
services; oral health services; and behavioral health services in 
school settings for children and adolescents.
      Assure parity in benefits and coverage provisions for 
diagnostic categories of behavioral health services in order to 
eliminate disparities in care.
      Support adequate reimbursements for delivery of 
behavioral health services that take into account the locus of 
delivery, recognition of evidence-based practice, intensity of care, 
and level of provider.
      Recognize publicly funded behavioral health organizations 
as eligible ``safety net'' providers and ``medical homes'' with 
pathways to primary and specialty care.
      Provide the social services and supports that encourage 
recovery and resiliency, especially for persons with severe or chronic 
psychiatric disabilities and substance use disorders/addictions.
      Address the workforce shortages of psychiatric specialty 
providers and specially trained behavioral health staff.

Recovery Principles Are Essential
    Recovery principles must guide any behavioral health services 
reform. The fundamental principles of a recovery-based service system--
including self-direction, individualization, strengths-based approach, 
peer support and hope--have proven necessary to achieving mental health 
recovery. The Federal Substance Abuse and Mental Health Services 
Administration's (SAMHSA) 2006 consensus statement on mental health 
recovery is as essential a guide today as it was then: ``Recovery must 
be the common, recognized outcome of the services we support.'' (SAMHSA 
Administrator Charles G. Currie, 2006).
Cultural Competency
    A culturally and linguistically competent service system is 
essential in order to eliminate disparities in access, and in the 
quality of services for all members of the community. The design, 
implementation and evaluation of programs that are responsive to the 
cultural and social contexts of all individuals are critical to the 
achievement of system reform, and to promote recovery of individuals 
with behavioral health disorders.
Mental Health Workforce Development
    Vitally important to the success of any comprehensive health care 
reform is assuring that an adequately trained workforce is available to 
deliver the necessary range of services. A shortage of qualified mental 
health clinicians is prevalent across the Nation, and constitutes a 
serious barrier to the expansion, enhancement and/or improvement of the 
existing mental health service delivery infrastructure. It will also 
impede implementation of reform proposals no matter how well designed. 
Attention must be given to finding ways to develop a workforce 
reflective of the cultural and linguistic diversity of our communities, 
and to equip these mental health clinicians with skills that 
incorporate the principles of recovery and cultural and linguistic 
competency into their everyday practice. Schools of higher education 
need to update their curricula to emphasize recovery and cultural and 
linguistic competence principles and models, and experienced clinicians 
should be offered continuing education credits for receiving training 
in these recovery principles and treatment approaches that may not have 
been part of their education.
Health Information Technology (HIT) Must Include Behavioral Health
    The accurate capturing of health information is critical. Our 
reformed health system must build on the increasing availability of 
health information technology (HIT) to provide a system of electronic 
health records (EHRs) that is universally available, affordable, 
accessible to large and small providers nationwide, and provides for 
capturing both physical and behavioral health information. EHRs allow 
the sharing of information across providers and facilitate care 
coordination, while also enabling national and regional data collection 
to monitor and measure access to and cost effectiveness of care. To 
maximize the value of these tools, we need to adopt a uniform language 
and format, and ensure that consumers retain control and ownership of 
their health data.
Summary and Future Hopes
    In summary, CMHDA believes that any universal health care system 
must be an integrated system of prevention, assessment, early 
intervention, treatment, wrap-around services, care management and 
long-term supports. Beginning with prenatal care and ending with 
improved end-of-life care, the new system must be person-centered, 
providing the mix of physical and behavioral health care services each 
consumer requires. Silos between physical health care and behavioral 
health care must be eliminated; both types of care must be available to 
consumers whether their ``medical home'' is a physical care setting or 
a behavioral health care setting. Electronic health records and other 
health information technology (HIT) innovations must be included, in 
order to facilitate care coordination, reduce errors and lower costs.
    Financing for the new system should be shared among Federal, State 
and local governments along with significantly improved third-party 
private sector reimbursements and services. Public behavioral health 
systems must be designed at the local level, tailored to the 
geographic, demographic, ethnic and cultural needs of the service 
population. Multiple Federal funding streams should be available to 
support local systems of care, but be braided in a manner that allows 
reimbursements for clinical care, social services, supportive housing, 
supported employment, job training, transportation subsidies and other 
essential services.
    If we can accomplish all of this, we see a future where individuals 
with mental illness and substance use disorders are able to live and 
work in their communities with proper supports; and where jails, 
prisons, skilled nursing facilities and hospitals are no longer 
inappropriately housing persons with serious mental illness and 
addictive disorders because they will be able to access and afford the 
care they need to move to recovery and live productive, rewarding 
lives.

                                 
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