[Senate Hearing 111-972]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-972
 
DELIVERY REFORM: THE ROLES OF PRIMARY AND SPECIALTY CARE IN INNOVATIVE 
                          NEW DELIVERY MODELS

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

    EXAMINING DELIVERY REFORM, FOCUSING ON THE ROLES OF PRIMARY AND 
            SPECIALTY CARE IN INNOVATIVE NEW DELIVERY MODELS

                               __________

                              MAY 14, 2009

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


      Available via the World Wide Web: http://www.gpo.gov/fdsys/
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              JOHN McCAIN, Arizona
BERNARD SANDERS (I), Vermont         ORRIN G. HATCH, Utah
SHERROD BROWN, Ohio                  LISA MURKOWSKI, Alaska
ROBERT P. CASEY, JR., Pennsylvania   TOM COBURN, M.D., Oklahoma
KAY R. HAGAN, North Carolina         PAT ROBERTS, Kansas          
JEFF MERKLEY, Oregon                 
SHELDON WHITEHOUSE, Rhode Island     

                                       

           J. Michael Myers, Staff Director and Chief Counsel

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)

  
?



                            C O N T E N T S

                               __________

                               STATEMENTS

                         THURSDAY, MAY 14, 2009

                                                                   Page
Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio, 
  opening statement..............................................     1
Thorpe, Kenneth E., Ph.D., Professor of Health Policy, Emory 
  University, Atlanta, GA........................................     4
    Prepared statement...........................................     6
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  statement......................................................    11
Cooper, Richard A., M.D., Professor of Medicine and Senior 
  Fellow, Leonard Davis Institute of Health Economics, University 
  of Pennsylvania, Philadelphia, PA..............................    12
    Prepared statement...........................................    13
Schlossberg, Steven, M.D., MBA, Vice President, Clinical 
  Operations, Hospital-Based Surgical Specialities, Sentara 
  Medical Group, Chair, Health Policy, American Urological 
  Association, on behalf of the Alliance of Speciality Medicine, 
  Norfolk, VA....................................................    18
    Prepared statement...........................................    20
Nochomovitz, Michael, M.D., President and Chief Medical Officer, 
  University Hospitals Medical Practices and University Hospitals 
  Management Services Organization, Cleveland, OH................    24
    Prepared statement...........................................    26
Raulerson, Marsha, M.D., FAAP, Primary Care Pediatrician, on 
  behalf of the American Academy of Pediatrics, Brewton, AL......    31
    Prepared statement...........................................    34
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island, statement..............................................    42

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    American College of Surgeons (ACS), prepared statement.......    57

                                 (iii)

  


DELIVERY REFORM: THE ROLES OF PRIMARY AND SPECIALTY CARE IN INNOVATIVE 
                          NEW DELIVERY MODELS

                              ----------                              


                         THURSDAY, MAY 14, 2009

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:04 a.m. in 
Room SD-430, Dirksen Senate Office Building, Hon. Sherrod Brown 
presiding.
    Present: Senators Brown, Murray, and Whitehouse.

                   Opening Statement of Senator Brown

    Senator Brown. The Senate Health, Education, Labor, and 
Pensions Committee comes to order.
    Thank you for joining us today. Thank you to the witnesses 
especially and to others in the audience, and thank you for 
being here on time.
    For the first time in a long time, there is widespread 
consensus that to improve the health of our people and the 
strength of our Nation, we must act to reform a healthcare 
system that has failed far too many Americans.
    Nearly 50 million Americans, as we hear over and over, are 
uninsured. Tens of millions of others underinsured. With our 
Nation spending more than any other Nation on healthcare, a 
whole lot more, some $2 trillion overall annually. Yet we rank 
below most other developed nations across a broad range of 
health indicators.
    We must not settle. This year, as we move toward real 
healthcare reform, we must not settle for simply improvements 
at the margins. Instead, we must fight for substantial reforms 
that will improve care, that will combat unjustifiable 
spending, and will close the coverage gaps that leave Americans 
without the healthcare they need.
    That is why we are holding this hearing today to examine 
ways in which we can restructure our healthcare delivery system 
so that it better and more fully meets the needs of our 
citizens.
    As this committee has examined our Nation's healthcare 
system over the past year in dozens of hearings, one thing has 
become glaringly obvious. Our healthcare system lacks cohesion. 
It lacks coordination. It lacks cost efficiency. It is a 
patchwork system grounded in good intentions, to be sure, but 
derailed by unjustifiable variations in healthcare utilization, 
unproductive barriers to care coordination, and misaligned 
incentives that compromise effective and efficient healthcare 
delivery.
    For this reason, it becomes imperative that any discussion 
of healthcare reform focuses on how to build a healthcare 
delivery structure that capitalizes on existing strengths like 
our exceptional healthcare workforce, but dispenses with our 
existing weaknesses. Among those weaknesses, I put inefficiency 
at the top of the list because it captures a multitude of 
sins--lack of coordination, lack of information, lack of basic 
standards of care and standards of coverage to become the norm 
across the Nation. And the list goes on and on and on.
    That is why we are here today to discuss the roles of 
primary and specialty care in innovative new delivery models. 
In an effort to address the fragmentation of our healthcare 
system, one policy proposal under consideration is the medical 
home. The concept of the medical home has evolved over some 40 
years since its introduction by the American Academy of 
Pediatrics. It has gone from a specific place to receive care 
for children, if you will, with chronic disease to an entire 
system providing care for all Americans.
    The basic premise of the medical home is that continual 
care managed and coordinated by a personal physician with the 
right tools will lead to better health outcomes. This concept 
shifts the paradigm from episodic acute care to a continuous, 
comprehensive model of care.
    Central to the medical home is the premise that patient-
centered care requires a fundamental shift in the relationship 
between patients and their primary care physicians. The idea 
that there must be a higher degree of personalized care 
coordination, access beyond the acute care episode, and 
identifications, therefore, of key medical and community 
resources to meet the patient's individual needs.
    While there is widespread agreement that the concept of 
medical home is a good one, there are concerns about how best 
to design and implement such a model. For instance, some have 
expressed concern that the medical home, by requiring physician 
referral for specialty services, can sometimes or more than 
sometimes add a costly and needless step to the process of 
linking patients to the right source of care.
    Additionally, some have argued that it might not make sense 
for a primary care physician to always serve as the medical 
home coordinator. For example, many women view their 
obstetrician/gynecologist as their primary care provider and 
would choose that their medical home be based out of their OB/
GYN's office.
    The financing of delivery changes is another issue that has 
drawn significant scrutiny and deserves our attention. 
Reforming our healthcare system is a tall order. The public 
deserves reforms that reduce unnecessary costs, improve the 
quality of care, and increase access so that all Americans have 
meaningful health coverage.
    We must be careful as we undertake this task to evaluate 
each change to ensure that the goals and the means of achieving 
them are, in fact, truly aligned. This is as true for health 
delivery reform as it is for health insurance reform.
    I am confident today's hearings will provide valuable 
insights that will help us reshape health delivery to squeeze 
out wasted spending and build in improved health outcomes. I 
look forward to hearing from our panel of five distinguished 
witnesses, who represent primary care providers, specialty care 
providers, and community-based providers on some of these 
complicated and pressing issues.
    And particularly, I would like to thank Michael 
Nochomovitz, president and chief medical officer, University 
Hospitals Medical Practice in Cleveland. Thank you for joining 
us, especially. I only pick him out because he is the only one 
from Ohio. So don't take that personally, anybody else.
    [Laughter.]
    University Hospitals has worked closely--and it is the one 
I am certainly most familiar with, living in an area served by 
UH--has worked closely with primary physicians and specialists 
to introduce new technologies and quality measures which have 
helped with care coordination in northeast Ohio, the most 
populous part of the State. I look forward to hearing more 
about these successful models and how they can be adopted 
nationwide.
    I would like to thank the witnesses. I will look forward to 
discussing how the patient-centered medical home model can play 
an important role in delivering a reformed healthcare system.
    So I will introduce each of the panelists and then begin 
listening to their opening statements, and then we will do 
questions.
    I will start with Dr. Ken Thorpe, professor of health 
policy at Emory University--where my mother attended, I might 
add--in Atlanta, GA. Dr. Thorpe was Deputy Assistant Secretary 
for Health Policy in the U.S. Department of Health and Human 
Services from 1993 to 1995. In this capacity, he coordinated 
all financial estimates and program impacts of President 
Clinton's healthcare reform proposals for the White House.
    Dr. Thorpe has authored and co-authored over 85 articles, 
book chapters, and books and is a frequent national presenter 
on issues of healthcare financing, insurance, and healthcare 
reform at healthcare conferences and in television and the 
media.
    Dr. Richard Cooper is a professor of medicine at the 
University of Pennsylvania. Dr. Cooper has been a physician for 
50 years whose early career was an academic hematologist, first 
at Harvard and then at Penn. He helped to found a comprehensive 
cancer center and served as the dean of the Medical College of 
Wisconsin.
    Dr. Steven Schlossberg, welcome, is the chair of health 
policy for the American Urological Association, a member 
organization of the Alliance of Specialty Medicine. He is a 
practicing urologist from Norfolk, VA, and part of the 
management team of a 400-physician multi-specialty group 
practice.
    Dr. Michael Nochomovitz--that is pronounced correct? Dr. 
Michael Nochomovitz, right, is the president and chief medical 
officer of University Hospitals Medical Practices at University 
Hospitals Management Services Organization in Cleveland, a 
position he has held for a little more than a decade.
    He is a practicing physician, board certified in internal 
medicine and pulmonary medicine. He is the architect of 
University Hospitals regional multi-specialty physician network 
in northeast Ohio, which is the single, largest portal of entry 
into the system. This network of some 450 medical providers 
includes the largest primary care group in the region, as well 
as 6 urgent care sites and 5 hospitalist programs.
    And Dr. Marsha Raulerson is a graduate of the University of 
Florida College of Medicine, and a fellow at the American 
Academy of Pediatrics. She is a primary care physician who has 
practiced in Brewton, AL, for 28 years and has received many 
awards in recognition of her commitment to the health and the 
welfare of children.
    Thank you, Dr. Raulerson, for joining us.
    Dr. Thorpe, would you begin your opening statement?

  STATEMENT OF KENNETH E. THORPE, Ph.D., PROFESSOR OF HEALTH 
             POLICY, EMORY UNIVERSITY, ATLANTA, GA

    Mr. Thorpe. Well, thank you, Senator Brown. And thank you 
for holding this important hearing.
    I am going to make seven points very quickly. First point, 
I think a central challenge we face in healthcare reform is how 
to build primary prevention and care coordination into the fee-
for-service Medicare program, with the intent that it would 
spill over into other payers.
    Today, if you think about it, about 30 percent of the 
growth in Medicare spending is linked directly to the doubling 
of obesity among Medicare beneficiaries. Ninety-five percent of 
what we spend in Medicare is directly linked to chronically ill 
patients.
    And I may add, in addition to my Emory position, I am also 
the executive director of the Partnership to Fight Chronic 
Disease. We just held a press event this morning with Senator 
Harkin where we had most of these facts in our almanac, and we 
will be sharing this with you and your colleagues.
    There are six conditions in Medicare driving most of the 
growth in spending--diabetes, hypertension, hyperlipidemia, 
asthma, back problems, and depression. Those are all conditions 
that are largely ambulatory based and require medication 
therapy. And in the traditional fee-for-service program, most 
of that is completely unmanaged.
    Second point, the performance in the program is suboptimal. 
We don't coordinate care in it. So, as a result, admission 
rates are high. Re-admission rates within 30 days are 20 
percent. We can do a lot better if we really build some type of 
a formal coordination program into Medicare.
    Third point, there is some good news here. We have a lot of 
data in randomized trials and examples of systems that work 
effectively in managing Medicare patients. Intermountain 
Healthcare, Geisinger--you have heard of these examples. They 
are largely large integrated group practices.
    And in those settings, they can reduce admissions by 25 
percent and reduce re-admission rates to 6, 7, 8 percent within 
30 days, not 20 percent, which is the norm in fee-for-service 
Medicare.
    The problem is, those things are not easy to replicate and 
scale. While the large integrated group practices that work, we 
can't build them everywhere in the country.
    So one of the things that we have been talking about as a 
proposal is to let us look at what they do well. What is it 
about the functions of those systems that really make them 
effective? Let us see if we can't find ways to build them into 
community settings to work with smaller physician practices so 
that we can scale it and replicate it nationally quickly.
    And if you think of the functions that work well, it is 
formal transition care, close integration of care coordination 
with the primary care physician's practice, having community-
based primary care prevention programs available, and having 
care coordinators working directly with patients at home to 
make sure that they are executing the care plan effectively.
    The dilemma we face, I think, in terms of building care 
coordination into the program is that 83 percent of physician 
practices are in groups of one or two. That is about 40 percent 
of primary care physicians.
    While the medical home vehicle is a great vehicle, and we 
should continue to encourage it, most Medicare beneficiaries 
don't get their care through these large integrated systems. So 
I think the challenge is to figure out how can we find the good 
elements of those programs, replicate them, and scale them?
    The fourth point is, we can do this through what some 
States like Vermont, North Carolina, Rhode Island are already 
doing, using community health teams. A community health team is 
a collection of care coordinators, nurse practitioners, mental 
and social health workers, community outreach workers that work 
hand-in-hand with primary care practices to help patients 
execute the care plan that is put together by the primary care 
physician.
    The community health teams have all the functions that are 
built into the successful programs like Geisinger and 
Intermountain Healthcare, including the transitional care 
models, close integration with that practice, and so on. We 
have seen in North Carolina in the Medicaid program, this has 
saved between 5 and 15 percent relative to unmanaged care since 
2003.
    Fifth point is that if we make a modest investment 
nationally to take this community health team concept and make 
it available everywhere to work with Medicare fee-for-service 
patients and spend 0.6 percent of Medicare on it, I think, 
based on the data, that it is not unreasonable to expect not 
only better outcomes and better quality, but a return in terms 
of savings of anywhere from 3 to 7 percent, based on published 
data that we have seen.
    So I think, in closing, we face a choice. We are either 
going to not do care coordination and traditional fee-for-
service Medicare, or we have got to find a way to scale it and 
replicate it in a way, building on the best elements of the 
medical home model but recognize its limitations in terms of 
replication and scalability. But a community health team 
approach to doing this is one that I think holds much promise.
    I look forward to working with you and the committee and 
would be happy to answer any questions at the end of the 
remaining testimony.
    [The prepared statement of Mr. Thorpe follows:]

             Prepared Statement of Kenneth E. Thorpe, Ph.D.

    Good morning, Senators. Thank you for inviting me here today to 
discuss the urgent need to reform health care delivery in the United 
States and the pivotal role that primary care providers must play in a 
changed system. I am Ken Thorpe, chairman of the department of health 
policy and management at Emory University. I also lead the Partnership 
to Fight Chronic Disease, a national coalition of patients, providers, 
community organizations, business and labor groups, and health policy 
experts that are working with State partnerships to prevent chronic 
illness and reform how we deliver care to patients.
    I believe a central challenge we face in health reform is how to 
integrate effective primary prevention and care coordination into the 
traditional fee-for-service (FFS) Medicare program. Success in 
integrating these care delivery components into Medicare will surely 
have spillover effects in how Medicaid and the private sector work to 
prevent and manage chronic illness as well. The following six facts 
highlight the nature of the challenge we face and provide insights 
about the design of a successful solution to the problem.

    1. The majority of all U.S. medical practices (83 percent) are 
composed of just one or two physicians.\1\ More than a third of primary 
care physicians (36 percent) work in these small practices.\2\ Most 
Medicare patients are not treated through larger integrated group 
practices.
    2. Eighty-one percent of Medicare beneficiaries are enrolled in 
traditional FFS Medicare, and they account for about 79 percent of the 
program's overall health care spending.\3\ Today, there is no care 
coordination in the program, leading to high rates of preventable 
hospital admissions, re-admissions, clinic and emergency room 
visits.\4\
    3. In 2010, we will spend about $395 billion in the traditional FFS 
Medicare program. Over 95 percent of total spending in Medicare is 
linked to chronically ill patients.
    4. Multiple morbidities among these patients are common: More than 
half of Medicare beneficiaries are treated for five or more chronic 
conditions yearly.\5\ On average, the top spending 5 percent of 
Medicare beneficiaries account for roughly half the FFS program's 
costs.
    5. Over 30 percent of the recent rise in Medicare spending in the 
last 10 years is associated with the persistent rise in obesity in the 
Medicare population. (Exhibit 1, graphically depicts rising rates of 
overweight--obesity, and two associated chronic conditions, diabetes 
and hypertension--in the United States over the last 40 years.)
    6. The increase in obesity-related chronic diseases among all 
Medicare beneficiaries and particularly among the most expensive 5 
percent is a key factor driving growth in traditional FFS Medicare.\6\ 
Six medical conditions--all related to obesity: diabetes, hypertension, 
hyperlipidemia, asthma, back problems and co-morbid depression--account 
for most of the recent rise in spending in the Medicare population. 
Treatment for these patients is largely uncoordinated, and relies 
largely on therapeutic interventions in ambulatory care.\7\



    Today, Medicare spends nothing to help coordinate health care in 
the traditional fee-for-service program. As a result, Medicare spending 
is higher than it would be if care were coordinated. For instance, 20 
percent of Medicare patients are re-admitted within 30 days of leaving 
the hospitals. Well-managed and coordinated plans such as Geisinger, 
Puget Sound, and others have re-admissions rates of half this amount. 
Moreover, since they manage and coordinate care their hospital 
admission rates are about 25 percent lower than unmanaged Medicare.
    Nationally, the private sector and the Federal Government (through 
Medicaid) currently spend approximately 2.5 percent of total spending 
to invest in care management. Well-managed programs have been 
associated with savings of 5 to 7 percent--well over a 2 to 1 return on 
investment. To generate these savings, private plans, Geisinger, and 
others invested in new technology, transition care programs, and other 
care management tools.
    Medicare spends nothing on care management--and so generates no 
savings from it. If Medicare took the best practice approaches with 
proven results from the private sector (formal transition care model, 
integration of the care management function and the physicians' office, 
financial and payment incentives) and made it available nationally in 
FFS Medicare, the program would save money.
    The challenge is most of the good care management models are large 
clinics such as Mayo, Geisinger, Cleveland, and Marshfield. Their 
approach to preventing and managing disease has proven effective. 
However, these models are not replicable or scalable nationally.
    As an alternative, the key design features of these successful 
integrated system prevention and care management programs could be 
identified and incorporated into community settings to work with 
smaller physician practices. These community-based health teams would 
provide care coordination and prevention using the same tools and 
approaches used successfully in larger integrated practices like 
Geisinger. This approach would allow Medicare to quickly replicate 
these effective practices nationally.
    The community health team concept is an approach already used in 
Vermont, North Carolina, Rhode Island and soon West Virginia and 
Pennsylvania. According to several evaluations from Mercer Consulting, 
North Carolina has saved between 5 to 15 percent annually in their 
Medicaid program with these models.
    In Vermont and elsewhere, CHTs work with primary care practices, 
patients, and their families to prevent and manage chronic illnesses. 
These teams variably include care coordinators, nutritionists, 
behavioral and mental health specialists, nurses and nurse 
practitioners, and social, public health, and community health workers. 
These trained resources already exist in many communities, working for 
home health agencies, hospitals, health plans, and community-based 
health organizations. To better leverage their systemic impact, 
dedicated teams are needed to work seamlessly with small primary care 
practices in communities across every State.



    The CHT model is replicable and scalable nationally and quickly, 
unlike other approaches. Like other payers, Medicare must make a very 
modest investment to coordinate care if it ever hopes to generate 
savings, reducing admission and re-admissions in the program. A $2.5 
billion per year investment--or 0.6 percent of total Medicare FFS 
spending, and about 50 percent less than other payers currently invest 
to generate savings in their programs--would allow CHTs to work 
nationally with Medicare FFS patients.
    Community health teams have the potential to reduce spending in the 
program and working in tandem with other health reform proposals 
(hospital bundled payments and penalties for high re-admission 
policies) should generate savings higher than already scored by CBO. 
The Medicare program's fragmented benefit design and reimbursement 
policies discourage care coordination and disease management. At the 
same time, these very same conditions present opportunities for 
prevention, better care, and long-run cost savings.\8\ Health reform 
should seek to reduce the rate of rise in targeted chronic conditions 
(primary prevention) and implement evidence-based care management 
(secondary and tertiary prevention), starting with current FFS Medicare 
beneficiaries.
    The most recent evaluation of the Medicare Coordinated Care 
Demonstration (MCCD) and several other randomized controlled trials 
substantiate the importance of five care elements that CHTs should 
provide: (1) monthly (or more frequent) in-person contact with 
patients, (2) targeting the right patients (treatment-control 
differences were concentrated entirely in the highest severity 
enrollees), (3) patient education on medication adherence and other 
self-care, (4) transition care coordination to avoid preventable re-
admissions, and (5) close collaboration between care coordinators and 
physician practices.\9\
    To realize fully both health gains and potential cost savings, each 
patient should have a care coordinator who works closely with primary 
care providers in executing the care plan developed by the primary care 
physician collaboratively with the patient. Depending on the patient's 
constellation of illness, several members of a CHT may be involved in 
working with the patient to execute the individualized care plan. Care 
plans should be developed for at-risk populations (pre-diabetic, 
overweight and obese, tobacco users) as well as patients with one or 
more diagnosed chronic conditions.
    A critical CHT focus must be transitional care. Potentially 
avoidable re-admissions have been identified as a major quality and 
spending problem in Medicare: About 18 percent of admissions result in 
re-admissions within 30 days of discharge, accounting for $15 billion 
in spending each year. Not all of these re-admissions are avoidable, 
but some are, potentially as much as $12 billion worth.\10\ The CHT 
care coordinator would track patients as they enter the hospital or 
skilled nursing facility, conduct an on-site visit, and, most 
importantly, work with the patient and admitting physician at 
discharge. The care coordinator would provide information and input to 
make sure the discharge plan and medication reconciliation for the 
patient are completed.
    CHTs are a vital link to community-based prevention programs that 
can deliver effective primary prevention to avert disease as well as 
programs to detect and mitigate existing conditions and avert 
complications (secondary and tertiary prevention). Each team should 
have a public health practitioner familiar with effective community-
based lifestyle, exercise, diet/nutrition, smoking cessation, and other 
risk-reduction programs (e.g., substance abuse and mental health). An 
emerging example of the value of these community-based resources is the 
replication of the diabetes prevention program (DPP) and other 
protocols shown through randomized trials to reduce dramatically the 
incidence of diabetes among pre-diabetics and other at-risk 
populations.
    Absent an investment to prevent and manage disease, Medicare has no 
workable tools for slowing the growth in spending and will save less. 
Cutting provider payments may save money in the short term, but could 
drive spending up in the longer term, as fewer physicians accept 
Medicare patients and those with chronic illnesses are untreated and 
their diseases unmanaged.
    Chronic illnesses--mostly preventable--take an increasing toll on 
Americans' health, productivity, and quality of life. Reversing or at 
least slowing the rise in incidence and prevalence is critical to 
better health and reduced health spending over the long term. The 
stimulus bill endows a national ``Prevention and Wellness Fund'' with 
$1 billion, including $650 million for ``evidence-based clinical and 
community strategies that deliver specific, measureable health outcomes 
that address chronic disease'' in title VII.
    Reforming the way in which the U.S. health system provides care to 
chronically ill patients is also essential. Episodic, uncoordinated 
care is ineffective and inefficient for patients like most Medicare 
beneficiaries who have multiple, chronic comorbidities. Reforming the 
traditional FFS Medicare program would go a long way in spurring needed 
transformation in health care delivery. The United States leads 
industrialized nations in per capita and total health spending, but is 
last in preventable mortality. Preventing disease, particularly chronic 
illness, and providing better care for those with life-long illness, 
along with how we finance and pay for care, must change.
    Thank you again for the opportunity to discuss these vital reforms. 
I'm happy to take your questions.

                               References

    1. Government Accountability Office, Medicare Physician Payment: 
Care Coordination Programs Used in Demonstration Show Promise, but 
Wider Use of Payment Approach May Be Limited (GAO-08-65), Washington, 
DC: GAO, 2008. http://www.gao.gov/new.items/d0865.pdf (accessed October 
28, 2008).
    2. A. Liebhaber and J.M. Grossman, ``Physicians Moving to Mid-
Sized, Single-Specialty Practices,'' Journal of General Internal 
Medicine 20, no. 10 (2005): 953-957.
    3. P.R. Orszag, Director, Congressional Budget Office, ``The 
Medicare Advantage Program: Enrollment Trends and Budgetary Effects,'' 
Testimony before the Committee on Finance, U.S. Senate, April 11, 2007.
    Centers for Medicare and Medicaid Services (CMS), ``National Health 
Expenditures 2007 Highlights,'' http://www.cms.hhs.gov/
NationalHealthExpendData/downloads/highlights.pdf (accessed April 7, 
2009).
    4. B. Starfield, L. Shi, and J. Macinko, ``Contribution of Primary 
Care to Health Systems and Health,'' Milbank Quarterly 83, no. 3 
(2005):457-502.
    Medicare Payment Advisory Commission (MedPAC), Report to the 
Congress: Promoting Greater Efficiency in Medicare (Washington, DC: 
MedPAC, 2007).
    Medicare Payment Advisory Commission (MedPAC), Statement of Mark E. 
Miller, Executive Director (September 16, 2008), http://www.medpac.gov/
documents/20080916_Sen_percent20Fin_testimonypercent20final.pdf 
(accessed April 1, 2009).
    5. Centers for Disease Control and Prevention (CDC), ``Chronic 
Disease Overview,'' 2005, http://www.cdc.gov/nccdphp/overview.htm 
(accessed April 1, 2009).
    6. G.F. Riley, ``Long-Term Trends in the Concentration of Medicare 
Spending,'' Health Affairs, May/June 26, no. 3 (2007): 808-816.
    7. K.E. Thorpe and D.H. Howard, ``The Rise in Spending Among 
Medicare Beneficiaries: The Role of Chronic Disease Prevalence and 
Changes in Treatment Intensity,'' Health Affairs Web Exclusive, 2006: 
w378-w388.
    8. P.R. Orszag, April 11, 2007.
    Congressional Budget Office (CBO), High-Cost Medicare Beneficiaries 
(Washington, DC: CBO, May 2005), http://www.cbo.gov/ftpdocs/63xx/
doc6332/05_03_
MediSpending.pdf (accessed April 7, 2009).
    Institute of Medicine, Rewarding Provider Performance: Aligning 
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    Senator Brown. Dr. Thorpe, thank you.
    Senator Murray, welcome. You don't want an opening 
statement or are you----
    Senator Murray. Mr. Chairman, I just really appreciate the 
opportunity to have this hearing, and I will submit my opening 
statement for the record.
    So thank you.
    [The prepared statement of Senator Murray follows:]

                  Prepared Statement of Senator Murray

    Thank you Senator Brown for holding this hearing.
    I am pleased that we are discussing ways that we can reform 
our health care delivery system.
    This is such an important issue--especially now as we work 
to reform the health care system to reduce costs, make care 
more affordable, and ensure that all Americans have access to 
high quality health care.
    I go home to Washington State almost every weekend and 
spend a lot of time talking to families and business owners 
about the challenges they face.
    And one thing I hear from them again and again is that they 
are deeply concerned about health care, and they desperately 
want meaningful reform.
    They tell me that especially now--as jobs are being lost 
across the State, and families are worried about their economic 
future--they want a health care system that they can count on--
that they know will be there for their families when they need 
it.
    They tell me that they want a modernized health care 
system--and affordable, accessible health care for every single 
American.
    We all know our health care system is broken and it needs 
real reform. And we have an historic opportunity to finally 
tackle this challenge. These investments are not luxuries--they 
are essential to our future strength.
    I was very encouraged to see President Obama stand with 
representatives from across the medical community this week as 
they committed to bringing down health care costs by $2 
trillion over 10 years.
    This was a big step--but the work to reform the delivery 
system is going to be just as important.
    We need to alter the payment structure in health care to 
ensure that there is true coordination across medical 
disciplines.
    Models that encourage this coordination of care--like the 
medical home model--benefit the overall system by:

     Encouraging disease management--particularly of 
chronic diseases;
     Focusing on prevention and wellness;
     And cutting down on duplicative and repetitive 
tests and treatments.

    And while we encourage these new and innovative ways to 
deliver health care, we also need to remember that not 
everything can be prevented and planned, and we still need to 
ensure that trauma centers continue to be there for anyone who 
needs life-
saving care.
    I believe that all Americans deserve high quality health 
care that reduces costs and makes care more affordable--and I 
know that delivery reform is going to be a big part of that.
    I thank our witnesses for coming in to speak with us. They 
are on the front lines of health care in America--and I look 
forward to hearing from them.

    Senator Brown. Thank you, Senator Murray.
    Dr. Cooper, welcome. Thank you for joining us.

STATEMENT OF RICHARD A. COOPER, M.D., PROFESSOR OF MEDICINE AND 
  SENIOR FELLOW, LEONARD DAVIS INSTITUTE OF HEALTH ECONOMICS, 
          UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PA

    Dr. Cooper. Thank you, Senator. Thank you so much for 
allowing me to be here today, and thank you for your 
introductory remarks, which certainly dramatically frame the 
problem.
    My message today is simple and direct. The problem that we 
are facing is that there are currently too few physicians, and 
we are training too few for the future.
    There is more to say about how this occurred and much more 
to say about how these shortages will affect physician 
practices and the models of practice. But the fundamental 
problem is too few physicians, too few generalists and too few 
specialists--too few physicians overall.
    These shortages actually began more than 5 years ago, but 
they were initially limited to certain specialties, including 
urology and some of the others represented here, and to certain 
locales. But because they were limited, they largely escaped 
public attention. Now that they have spread to engulf primary 
care, the secret is out. There are too few doctors.
    When concerns were raised in the past about too few primary 
care physicians, the strategy was to shift the balance of 
training from specialist to generalist. But this time, the 
problem is not one of balance. There aren't enough physicians 
overall.
    This problem is further complicated by the fact that 
although we need more physicians today, we can't get more for a 
decade or more. The math is easy. It will take several years to 
expand medical schools and residency programs, 4 years for 
students to complete medical school, 3 to 6 years of residency. 
And then it is 2025, and the Nation will be coping with 
shortages far more severe than today.
    These facts make it important to work doubly hard. Medical 
school expansion has begun, but it needs help. And it won't 
yield more physicians unless residency programs are also 
expanded. And for that to happen, Medicare's caps on graduate 
medical education will have to be lifted. That is one place 
Congress can help.
    But Congress must be aware that healthcare reform is 
occurring in a new era of physician shortages. No one alive 
today has carried out healthcare planning under such 
conditions.
    When we projected these shortages more than a decade ago, 
we cautioned that if steps were not taken to correct them, the 
medical profession would be forced to redefine itself in ever 
more narrow scientific and technological spheres while other 
disciplines evolve to fill important gaps. And that is what is 
happening now.
    Specialists are necessarily concentrating their efforts on 
technologically advanced care, on the care of patients with 
major acute disorders and complex chronic diseases and, of 
course, on advanced diagnostic services.
    Some specialists are trying to organize their practices to 
serve as the principal physicians for patients with chronic 
disease and, to do that, they are relying heavily on nurse 
practitioners and physician assistants to provide general care.
    The specialties are narrowing, and the overlaps among them 
are decreasing. That presents challenges of the very sort you 
spoke of Senator Brown--challenges for the coordination and 
communication among physicians, which makes information systems 
even more critically important.
    There is a great deal of innovation, and we have heard a 
little bit about it already from Dr. Thorpe. Lots of ways to do 
it, and there will be more. No one model will fit every 
circumstance, and the circumstances will be more complex as the 
physician shortages deepen.
    Generalists, too, are gravitating to services with a higher 
average acuity and complexity. Some are now serving as 
hospitalists. Some concentrate--some continue to practice in 
rural communities, where a whole range of services are needed. 
Many are continuing to care for patients with uncomplicated 
chronic illness and for older patients with multiple 
infirmities. And like specialists, many are partnering with 
nurse practitioners, PAs, absolutely key to the success of such 
efforts.
    But the important point for consideration as one plans 
ahead is that fewer will be available for front-line primary 
care. Generalists instead will have to serve as consultants to 
nonphysician primary care providers. This is not a matter of 
taste. This is not a matter of desire. This is a matter of 
reality.
    It is a matter of choices. This is democracy. You represent 
the people. You can choose what physicians will do. Will they 
be neurosurgeons, or will they involve themselves in smoking 
cessation? These are very important choices.
    So these various transitions that are occurring naturally 
will allow physicians to do more than physicians normally do if 
there are enough physicians to do it. But there still won't be 
enough.
    So my message to you is simple and direct. Open the gates 
for residency training so that physician supply can be 
increased and free physicians to develop innovative approaches 
to clinical practice of a great variety of ways.
    Ultimately, high-quality care depends on the autonomous 
exercise of clinical judgment by competent and empathic 
physicians. We need to be sure that there will be enough for 
everyone in the future.
    Thank you.
    [The prepared statement of Dr. Cooper follows:]

             Prepared Statement of Richard A. Cooper, M.D.

    Mr. Chairman and members of the committee, I very much appreciate 
the opportunity to provide testimony to the committee as it undertakes 
this important inquiry into the critical role that physicians will play 
in a reformed health care system. It is a topic that I feel deeply 
about.

                                OVERVIEW

    The problem that we are facing is that there are worsening 
shortages of physicians. I will say more about these shortages and 
about how physician practices are likely to evolve because of them, but 
it is important not to lose sight of the fundamental problem: too few 
physicians to serve the needs of the Nation. Too few generalists and 
too few specialists. Too few physicians.
    This problem will have to be addressed in two ways. The first is by 
expanding the capacity to train more physicians. Although difficult to 
accomplish, the ways to accomplish it are generally known. The second 
is more elusive. It is through innovative practice arrangements among 
physicians and between physicians, hospitals and nonphysician clinician 
(NPC) providers. There are infinite numbers of such arrangements, and 
infinite regional and local circumstances in which they will be carried 
out. Innovation is key. While some believe that the ``true'' way can be 
known and applied generally through practice incentives or otherwise, 
that approach is fraught with danger. Experiences can be shared, but 
practices cannot be shaped by widely-applied incentives or regulations. 
In health care, as in politics, everything is local.
    These two lines of thinking come together when it is appreciated 
that no one has carried out health care planning in the context of 
physician shortages of the magnitude that are now developing. At times 
like this, it is best to work toward minimizing long-term shortages, 
make efforts to assure that disadvantaged populations do not bear the 
brunt of the problem, and sustain an atmosphere that is conducive to 
practice innovation.

                               BACKGROUND

    I come to this after almost 50 years as a physician. My early 
career was as an academic hematologist, first at Harvard and then at 
Penn. While at Penn, I also helped to found a Comprehensive Cancer 
Center, which I later directed. After almost 15 years there, I was 
drawn back to Milwaukee, the city of my birth, to serve as dean of the 
Medical College of Wisconsin. It was toward the end of that tour of 
duty that the Clinton Health Plan was in the making. I was attracted to 
these deliberations by the notion that there would be a vast surplus of 
physicians by Century's end.
    In examining the way that the Bureau of Health Professions 
projected these surpluses, it quickly became apparent that outmoded 
census data had been used. When correct data from the Census Bureau's 
were substituted, a very different picture emerged. It was not one of 
mounting surpluses but of a ``turn of the century bulge'' in physician 
supply followed by increasing shortages as the new Century unfolded--
which is what is happening now.
    The view that shortages would develop was very unpopular at the 
time, but it has proven to be correct. Sadly, rather than beginning 
then to prepare for an expansion of medical education now, the 
consensus was to stop any further expansion of physician training by 
freezing the number of residency positions. That was accomplished in 
the Balanced Budget Act of 1997, which capped Medicare funding for 
graduate medical education (GME) at its 1996 level. And that is why we 
are here today.

                       DEFINITION OF THE PROBLEM

    As I stated at the outset, the Nation is producing too few doctors 
for its current and future needs. As my colleagues and I forecasted a 
decade ago, economic and demographic trends, combined with insufficient 
training capacity, are leading to deepening shortages of physicians. 
But now there is a second part to the forecast. Because so much time 
has passed, a further deepening of physician shortages cannot be 
avoided. Regardless of how much effort is made to add training capacity 
now, it will not be possible to correct the problem soon enough or 
fully enough to avert still worse shortages over the next decade. And 
that makes your deliberations doubly important, for they concern not 
only the need for adequate numbers of physicians but the need for 
innovative models of practice in this coming era of physician 
shortages. This is uncharted territory. There is no time in the past 
when the United States has had shortages of physicians of the magnitude 
that are now developing. Innovation is the operative word, both for 
expanding training capacity and structuring the practice of medicine.
    The shortages that are now being experienced are not new. They 
began to appear 7-8 years ago, even earlier than we had anticipated. 
But they were limited to certain specialties, such as cardiology and 
urology, and because they were limited, they largely escaped public 
attention. However, they were noticed by national organizations. 
Following our initial projections a decade ago, the Council on Graduate 
Medical Education adopted a similar planning model and made similar 
projections, and these were confirmed by a series of follow-up reports 
from the Association of American Medical Colleges. With these 
projections and early evidence of shortages in many specialties and 
many communities, most major medical organizations called for expanding 
physician supply. They included the American Medical Association, the 
American Osteopathic Association, the Association of American Medical 
Colleges, the American Association of Colleges of Osteopathic Medicine 
and the Association of Academic Health Centers. More than 20 specialty 
societies and an equal number of State medical and hospital 
associations joined this chorus. Yet, it was largely ignored. However, 
now that the shortages have spread to engulf primary care physicians, 
whose care is sought by most patients, even when they are healthy, the 
secret is out. Everyone knows. We don't have enough physicians.
    On past occasions when there was concern about too few primary care 
physicians, the strategy was to shift the balance of training from 
specialists to primary care. But this time the problem is not simply 
one of balance--it is global--there are too few physicians across 
specialties. Unlike the past, there's no ``robbing Peter to pay Paul.'' 
The only solution is to train more physicians and allow them to 
distribute among the various specialties where they are needed.
    The problem is further complicated by the fact that, although we 
need more physicians now, we really can't get any more for a decade or 
more. This is because, even with sufficient financial support, it will 
take several years to increase medical school output and expand 
residency training capacity, and then it will take 4 years to educate 
medical students and another 3 to 6 years for these graduates to 
undergo residency and fellowship training. And by then it will be 2020, 
and the Nation will be coping with shortages far more severe than 
today.

                      EXPANDING MEDICAL EDUCATION

    The fact that future shortages are unavoidable is not a reason to 
do nothing. It is a reason to work doubly hard to minimize them. In 
response to that need, many medical schools have already begun to 
increase class size, and a small number of new schools are in various 
stages of development. The pace of both is commendable, but it is too 
slow and not enough, and without national support, it is unlikely to be 
sufficient. Medical schools need financial help in this endeavor.
    But most of all, residency programs must be expanded. Medicare's 
caps on residency positions must be lifted, and support must be made 
available to assist existing training programs to expand and to help 
hospitals that are capable of starting new programs. And that is where 
Congress can help.
    Why is expanding graduate medical education so important? It is 
because, regardless of where physicians are schooled (U.S.-M.D. 
schools, U.S.-Osteopathic schools, U.S. citizens trained abroad or 
foreign nationals trained abroad), physicians must receive residency 
training in the United States in order to be licensed for practice in 
the United States. This limitation does not hold for most other 
countries, which allow the entry of practicing physicians, albeit with 
some restrictions. However, in the United States, GME is the portal to 
practice. It's a good portal, one that enhances the quality of care.

                  HOW MANY MORE PHYSICIANS ARE NEEDED?

    Estimating the future demand for physicians requires a consensus 
about the future dimensions of health care. Over the past several 
decades, health care spending has grown at an annual rate approximately 
2 percent higher than the rate of GDP growth (which averaged 3 
percent). The 2 percent differential was not because no more health 
care was desired, but because desire encountered downward pressure, and 
2 percent became the equilibrium point. Even if downward pressure is 
greater in the future, it seems unlikely that health care spending 
would grow more slowly than the economy overall. It also is unlikely 
that its growth could exceed GDP growth by as much as 4 percent, double 
the historic level. So the range of predicted spending is rather 
narrow.
    President Obama's announcement earlier this week concerning 
proposals by major health care providers to rein in the annual growth 
of health care spending is in line with projections of growth within 1-
2 percent of GDP growth, a level that would cause health care's portion 
of GDP to reach 20 percent by 2020 or shortly thereafter.
    Long-term trends also indicate that spending will not be the same 
everywhere--more prosperous States spend more, not only on health care 
but on other social services. And they have better outcomes when their 
diverse sub-populations are taken into consideration. While it is 
difficult to predict the future, and there are extreme views in both 
directions, it seems prudent to make long-term plans for facilities and 
personnel based on these estimates.
    Historically, as health care spending has grown, the supply of 
physicians has grown much slower, while other health care workers 
undertook important tasks. During the 1920s, physicians accounted for 
25 percent of health care workers, but now account for fewer than 7 
percent. This trend has been associated with new technical disciplines, 
a vast expansion of nursing and a progressive increase in the number of 
nonphysician clinicians (NPCs), principally nurse practitioners (NPs) 
and physician assistants (PAs), reflecting the greater complexity of 
the tasks that physicians now delegate or defer to others.

                           WHAT IS POSSIBLE?

    The illustration below depicts the trends in physician supply and 
demand over the past several decades, expressed in per capita terms. It 
also shows how demand will change over the coming years, assuming a 
slowing of spending growth, as indicated above. And it shows that, if 
the rate of training is not increased appreciably, there will be as 
many as 200,000 too few by 2020, 20 percent of the projected demand, 
and larger shortages thereafter.



    The illustration also shows what could happen if the number of 
entry-level residency positions were increased by 10,000 over the next 
decade, from approximately 25,000 to 35,000, a 40 percent increase. 
While such an increase is seemingly large, it is equal to the expansion 
of residencies that occurred in the 1960s and 1970s, the last major 
effort to expand supply. Such an expansion would clearly lead to 
meaningful increases in physicians long-term. But, because of the long 
lead-times, little will occur until after 2020, and a gap between 
supply and projected demand equivalent to 100,000 physicians will 
continue well into the future.
    Thus, there are two problems. A near-term shortage, about which we 
can do very little, and a long-term shortage, which we can work to 
ameliorate, recognizing that it will be impossible to correct 
completely. But it is essential that Congress act quickly to aid in 
that process. Helping medical schools is important, but increasing the 
number of residents trained annually is the key.
    While there is a tendency to want to use the funding for residency 
training as a lever to influence specialty mix, it is difficult to 
anticipate the precise roles that physicians will serve 20 and 30 years 
hence, which is the timeframe during which current efforts to increase 
the supply will come to fruition. Therefore, it is hazardous to attempt 
detailed adjustments to the specialty mix of trainees. Physicians will 
have to be trained to deal with the changing knowledge base of 
medicine, and they will have to distribute in a manner that is 
consistent with medical care in that somewhat distant future.

                      REDEFINING PHYSICIANS' ROLES

    In 2002, we prophesized that:

          ``shortages of physicians will force the medical profession 
        to redefine itself in ever more narrow scientific and 
        technological spheres while other disciplines evolve to fill 
        important gaps.''

    That transition is now occurring, as physicians gravitate to higher 
complexity services that only they can provide. Faced with deepening 
shortages, this trend seems certain to continue. The following 
scenarios describe ways that physicians are likely to distribute 
responsibility. Implicit in all of them is an interdependence among 
physicians and between physicians and NPC. But most important is 
innovation. The processes of restructuring physician practices will be 
very fluid and will undoubtedly include characteristics that are not 
evident today. It would be a mistake to favor any particular form of 
organization.
    Specialists will increasingly concentrate their efforts on 
technologically advanced care and on the care of patients with major 
acute disorders and complex chronic illnesses, and, of course, on 
advanced diagnostic services. The degree of overlap among specialties 
has decreased over time, as each has evolved to encompass a special 
body of knowledge, and this seems certain to continue, which brings 
interdependence more sharply into focus. Many specialists who care for 
patients with chronic disease will organize their practices to serve as 
``principal physicians'' for these patients, sharing the responsibility 
for general care and care coordination with NPCs within their own 
practices and with generalist physician colleagues. Relationships like 
these will also facilitate the ability of some specialty practices to 
retain the continuing responsibility for patients whose chronic 
illnesses are quiescent or ``cured.'' Innovation and experimentation 
will be important. No one model will fit every circumstance.
    Generalists, too, will serve a variety of roles, but the hall marks 
will be greater acuity and complexity. One is their comparatively new 
role as hospitalists, an example of generalist physicians gravitating 
to higher complexity care. A second is the collaborative care of 
patients with complex chronic illness, as mentioned. Third, is the 
traditional role of generalists in caring for patients with 
uncomplicated chronic disease and multiple co-morbidities, 
responsibilities that they will increasingly discharge in partnership 
with NPCs. And fourth are areas with special needs, such as rural 
communities, prisons and the military.
    Generalist physicians have traditionally been major providers of 
front-line primary care, including wellness care, patient education, 
prevention and the care of acute self-limited disease. However, the 
lack of sufficient numbers of physicians, combined with the decreased 
interest of young physicians in such tasks and the doubtful wisdom of 
committing such highly-trained professionals to this purpose, predicts 
that more such care will be provided by NPCs and, through the use of 
the Internet and other resources, by patients themselves. While some 
have argued that this spectrum of responsibilities should be retained 
by physicians and provided through physician-directed ``medical 
homes,'' it seems improbable that there would be sufficient numbers of 
such physicians, even if the model were ideal everywhere and for 
everyone. Rather, the provision of primary care services will have to 
be responsive to particular regions and subpopulations in each and to 
the spectrum of providers who are available to participate. Retail 
clinics, some in cooperation with hospitals or health plans, are only 
the most recent innovation. As generalists relinquish their roles in 
front-line primary care, they will be called upon to serve as 
consultants for these various primary care systems. And they must be 
appropriately compensated for the higher average acuity and complexity 
of the patients they serve.

                            DOES IT MATTER?

    This analysis of the need to expand physician supply and encourage 
innovation in physician practices stands against a set of beliefs that 
more physicians and more health care may not be good for the Nation and 
that primary care should supplant specialty care for patients with 
chronic illness. In fact, the preponderance of data do not support 
these conclusions. Moreover, when the studies underlying them are 
exposed to scrutiny, it becomes evident that some were confounded by 
the anomalous distribution of family physicians in the upper Midwest; 
some suffered from the error of aggregation and averaging; some relied 
on statistical permutations rather than measures of actual physicians; 
and many relied exclusively on analyses of Medicare spending, which is 
not a proxy for health care spending overall. As an example, 
Mississippi and Nevada, where quality is low, do not have high health 
care spending, nor do they have an abundance of specialists, as 
portrayed. They devote the least resources to health care, and have 
corresponding outcomes.
    Most important in understanding regional comparisons is an 
understanding of the interplay between communal wealth and individual 
income in determining health care utilization and outcomes. Viewed in 
that light, more physicians, both specialists and generalists, and more 
health care spending are associated with better outcomes. Simply 
stated, ``more is more.'' The Nation may not be able to afford all of 
the health care that would be beneficial, but it would be a mistake to 
assume that spending less, or limiting physician supply in order to 
spend less, would be beneficial. Rather, it seems prudent to base the 
future demand for physicians on realistic projections of health care 
spending, to respond to that demand by training as many physicians as 
is practical, and to foster innovations in practice structures that can 
aid in meeting needs as they evolve. Ultimately, high quality care 
depends on the autonomous exercise of clinical judgment by competent 
and empathic physicians who are accountable to their patients and 
society.

                          Selected References

    1. Cooper RA. Forecasting the physician workforce. In Papers and 
Proceedings of the 11th Federal Forecasters Conference. (Washington: 
U.S. Dept of Education), 2000, PP. 87-96.
    2. Cooper RA, Getzen TE, McKee HJ, Laud P. Economic and demographic 
trends signal an impending physician shortage. Health Affairs 2002; 
21(1): 140-54.
    3. Cooper RA. There's a shortage of specialists. Is anyone 
listening? Academic Medicine 2002; 77: 761-66, 2002.
    4. Cooper RA. Weighing the evidence for expanding physician supply. 
Annals of Internal Medicine 2004; 141: 705-14.
    5. Cooper RA. It's time to address the problem of physician 
shortages: Graduate medical education is the key. Annals of Surgery 
2007; 246: 527-34.
    6. Cooper RA. States with more physicians have better-quality 
health care. Health Affairs. 2009; 28(1): w91-102 (published online 4 
December 2008) http://content
.healthaffairs.org/cgi/content/full/hlthaff.28.1.w91/DC1.
    7. Cooper RA. States with more health care spending have better 
quality health care--Lessons for Medicare. Health Affairs. 
2009;28(1):w103-15 (published online 4 December 2008) http://
content.healthaffairs.org/cgi/content/full/hlthaff.28.1.w103
/DC1.
    8. Physician shortages in the U.S.: Commentaries and controversies. 
http://buzcooper.com/.

    Senator Brown. Thank you, Dr. Cooper.
    Dr. Schlossberg, welcome.

  STATEMENT OF STEVEN SCHLOSSBERG, M.D., MBA, VICE PRESIDENT, 
   CLINICAL OPERATIONS, HOSPITAL-BASED SURGICAL SPECIALTIES, 
     SENTARA MEDICAL GROUP, CHAIR, HEALTH POLICY, AMERICAN 
UROLOGICAL ASSOCIATION, ON BEHALF OF THE ALLIANCE OF SPECIALTY 
                     MEDICINE, NORFOLK, VA

    Dr. Schlossberg. Mr. Chairman and members of the committee, 
I am the chair of health policy for the American Urological 
Association, a member of the Alliance of Specialty Medicine, 
which I am here to represent.
    As a practicing urologist and part of the management team 
of a 400-physician multispecialty group, I am keenly aware of 
the necessity of collaboration between primary care and 
specialists. Currently, I am responsible for hospital-based and 
surgical specialists within our medical group, which includes 
hospitalists, pulmonary critical care, general surgery, 
neurology, vascular surgery, and urology.
    Therefore, effective partnerships between specialty care 
and primary care are absolutely essential to the delivery of 
high-quality, cost-effective patient care. Through the 
dissemination of clinical guidelines, offering of continuing 
medical education courses, and innovative collaborations among 
primary care and specialty practices, specialties educate 
primary care providers and ensure timely and appropriate 
referrals and resource use.
    Not everything can be prevented. People get sick. They need 
specialists. They need surgeons, and they need hospitalists and 
emergency rooms. Primary care will not always be the most 
efficient and effective provider for every condition and 
disease. In fact, evidence indicates that specialists achieve 
better outcomes in the treatment of their specialty area 
compared to primary care providers and other specialists.
    An article in the American Journal of Medicine looked at 
the treatment of arthritis, rheumatic, and musculoskeletal 
conditions and found that primary care providers often lack 
adequate rheumatologic training. They are less skilled in the 
diagnosis and management of these diseases and may order more 
diagnostic studies, drugs, and consultations. Rheumatologic 
care for these conditions provides better patient outcomes and 
is less costly.
    To foster collaboration, Congress should not divide 
medicine and strive to strengthen primary care at the expense 
of specialty care, whether through budget neutral changes to 
reimbursement or by limiting access to specialists.
    Congress must address the underlying physician payment 
problem. Without a long-term solution to the flawed Medicare 
payment formula, our healthcare delivery system cannot truly be 
reformed. When the Government programs do not provide stable 
and fair reimbursement, it equally impacts the private 
insurance programs and leads to discrepancies in the true cost 
of care.
    One of the innovative delivery models being discussed is 
the medical home. A key feature of this concept, as you have 
said, is a personal physician responsible for overseeing all of 
a patient's healthcare and coordinating care. Unfortunately, 
the current medical home models do not include all qualified 
physicians able to provide medical homes and may, in fact, 
result in limiting access to some specialists.
    The design of the CMS-proposed medical home excludes many 
specialties, including surgery. Urology is a surgical 
specialty, and a urologist may be the most appropriate medical 
home for patients with certain chronic urologic conditions, 
such as prostate cancer and bladder problems.
    These patients often have long established relationships 
with their urologist and have trust and confidence in their 
care. Arbitrary severance of this relationship through the 
exclusion of surgical specialties does not serve the goals of 
this program. We should think in terms of having a principal 
provider and not assume it is always the primary care provider.
    Rather than having the Government decide which providers 
are most appropriate, let individual physicians in consultation 
with their patients together decide if they want to 
participate. Many may not.
    Finally, Congress should not move forward with innovative 
delivery system models that have not been fully tested. 
Implementation of the medical home is scheduled to begin next 
year. Before the program is made permanent, Congress should 
fully analyze the data from the demonstration project.
    Finally, a couple of thoughts on information technology. 
Certainly, HIT, or health information technology, has the 
potential to increase collaboration, efficiency, and quality of 
care and to lower healthcare costs. The alliance strongly 
supports the development of an electronic health information 
network that is both reliable, interoperable, secure, and 
protects patient privacy.
    The specialty community is appreciative for the 
opportunities available for physicians to receive enhanced 
Medicare payments to support the adoption and effective 
utilization of HIT. I currently am doing e-prescribing, PQRI, 
and using electronic medical record.
    However, the alliance is concerned that many surgical 
physicians will not be able to take advantage of the enhanced 
payments. Therefore, the alliance urges you to consider 
amending the current HIT bonus and penalty timelines.
    Finally, a thought on quality. Each of the alliance's 
specialty association members has been actively engaged in the 
process of developing evidence-based and clinically relevant 
quality measures and establishing data registries. While much 
progress has been made, it takes time to develop the extensive 
quality infrastructure needed for quality improvement and 
simply is not yet established for the majority of physicians. 
That makes participation in quality measurement and improvement 
efforts very different from other providers.
    Finally, just to amplify Dr. Cooper's comments about the 
workforce, specialists are an integral part of American 
medicine, and we cannot take for granted that specialists will 
always be there. The Council on Graduate Medical Education 
reported that in rural areas, there is a clear need for 
specialty care and although primary care would be an essential 
area of medical service and training, subspecialty and surgical 
disciplines are also sorely needed in underserved areas.
    It is important to consider workforce issues as you 
consider healthcare reform because it takes 12 years to produce 
a specialist. Like many specialists, urology requires training, 
extensive training--4 years of college, 4 years of medical 
school, and 5 years of residency.
    As a professor of urology at Eastern Virginia Medical 
School, I caution you against going too far in discouraging 
young physicians from entering specialty medicine. By the time 
a true crisis is visible, we will be unable to correct it.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Schlossberg follows:]

          Prepared Statement of Steven Schlossberg, M.D., MBA

    Mr. Chairman and members of the committee, thank you for inviting 
me to testify regarding the role of specialty care.
    My name is Steven Schlossberg from Norfolk, VA. I am the chair of 
Health Policy for the American Urological Association, a member 
organization of the Alliance of Specialty Medicine, which I am here to 
represent. The Alliance was founded in 2001 and its mission is to 
develop sound Federal health care policy that fosters patient access to 
the highest quality specialty care and improves timely access to high 
quality medical care for all Americans. As patient and physician 
advocates, the Alliance welcomes the opportunity to be here today and 
participate in the national health care reform debate.
    I am a practicing urologist and part of the management team of a 
400 physician multi-specialty group practice. This makes me keenly 
aware of the necessary collaboration between primary care and 
specialists.
    Effective partnerships between specialty care and primary care are 
absolutely essential to the delivery of high quality, cost-effective, 
patient-centered care. Through the dissemination of clinical 
guidelines, offering of continuing medical education (CME) courses, and 
innovative collaborations among primary care and specialty practices; 
specialties educate primary care providers and ensure timely and 
appropriate referrals and resource use. Not everything can be 
prevented. People get sick. They need specialists. They need surgeons. 
They need hospitals and emergency rooms.
    Primary care will not always be the most cost efficient and 
effective provider for every condition and disease. In fact, evidence 
indicates that specialists achieve better outcomes in the treatment of 
the diseases they focus on than primary care providers and other 
specialists. For example, an article in the American Journal of 
Medicine looked at treatment of arthritis, rheumatic and 
musculoskeletal conditions and found that primary care providers often 
lack adequate rheumatologic training. They are less skilled in the 
diagnosis and management of these diseases and may order more 
diagnostic studies, drugs, consultations and follow-up visits than 
rheumatologists, making the care they provide lower quality and more 
costly. Rheumatologic care for these conditions provides better patient 
outcomes and is less costly to the health care system.\1\
---------------------------------------------------------------------------
    \1\ Katz JN, Solomon DH, Schaffer JL, Horsky J, Burdick E, Bates 
DW. ``Outcomes of care and resource utilization among patients with 
knee or shoulder disorders treated by general internists, 
rheumatologists, or orthopedic surgeons.'' American Journal of Medicine 
Jan 2000: 108 (1) PP. 28-35.
---------------------------------------------------------------------------
    A recent article in the Journal of the American Medical Association 
(JAMA),\2\ directly relates subspecialty training to improved patient 
outcomes. This particular case looked at outcomes for implantable 
cardioverter-defibrillators (ICD) and used cases submitted to the ICD 
Registry. The study confirms that specialized training enables 
physicians to lower risk of complication and select the most 
appropriate treatment for the patient's unique needs.
---------------------------------------------------------------------------
    \2\ Curtis JP, Luebbert JJ, Wang Y, Rathore SS, Chen J, Heidenreich 
PA, Hammill SC, Lampert RI, Krumholz HM. ``Association of Physician 
Certification and Outcomes Among Patients Receiving an Implantable 
Cardioverter-Defibrillator.'' Journal of the American Medical 
Association Apr 22/29 2009--Vol. 301, No. 16, PP. 1661-1670.
---------------------------------------------------------------------------
    To foster collaboration, Congress should not divide medicine and 
strive to strengthen primary care at the expense of specialty care--
whether through budget neutral changes to reimbursement or by limiting 
access to specialty care.

                             REIMBURSEMENT

    Congress must address the underlying physician payment problem. 
Without a long-term solution to the flawed Medicare payment formula, 
our health care delivery system cannot truly be reformed. When the 
government programs do not provide stable and fair reimbursement, it 
equally impacts the private insurance programs and leads to 
discrepancies in the true cost of care. Nor should Congress rob Peter 
to pay Paul. The Alliance recognizes the importance of improving access 
to primary care and strengthening the role of primary care providers. 
The Alliance can not support proposals that would provide additional 
payments to primary care physicians at the expense of specialists, 
e.g., through budget neutral adjustments in payments made to 
specialists.

                       INNOVATIVE DELIVERY MODELS

    One of the innovative delivery models being discussed is the 
Patient-Centered Medical Home--a healthcare delivery model intended to 
promote patient-centered, longitudinal, integrated care. A key feature 
of Medical Home is a personal physician responsible for overseeing all 
of a patient's health care and appropriately coordinating care with 
other qualified professionals to enhance access, improve integration, 
and increase safety and quality.
    Unfortunately, the current Medical Home models do not include all 
qualified physicians able to provide Medical Homes and may, in fact, 
result in limiting access to some specialists. Through the Tax Relief 
and Health Care Act of 2006, the Center for Medicare and Medicaid 
Services (CMS) was directed to launch a Medical Home demonstration. 
However, the design of the CMS-proposed Medical Home excludes many 
specialties such as surgery. Urology is a surgical specialty and may be 
the most appropriate Medical Home for patients with certain chronic 
urologic conditions, such as prostate cancer or bladder control 
problems. These patients often have long-established relationships with 
their urologists and have trust and confidence in their care. Arbitrary 
severance of this relationship through exclusion of surgical 
specialties does not serve the goals of this program. We should think 
in terms of having a ``principal'' provider and not assume it always 
will be a primary care provider. Rather than having government decide 
which providers are most appropriate, let individual physicians, in 
consultation with their patients, together decide if they want to 
participate; many may not. I believe that will foster the patient-
centeredness care around which this program is built.
    Finally, the Alliance requests that Congress, before enacting 
Medical Home as a permanent model, fully analyze the data after the 
completion of the demonstration to determine if Medical Home 
significantly improved care coordination, was patient-centered, 
delivered improved patient outcomes and saved money. Currently, 
implementation of the demonstration project is slated to begin January 
2010.
    If Medical Home or other innovative delivery systems are to 
succeed, there must be collaboration between primary care and specialty 
medicine. Specialists are working with primary care physicians to 
ensure appropriate referral and promote continuity of care. For 
example, the American Urological Association has spearheaded a free 
continuing medical education (CME) update tailored exclusively to 
primary care practitioners on major urologic conditions, reaching out 
to the American Academy of Family Physicians (AAFP) and the American 
College of Physicians (ACP).
    The North American Spine Society/National Association of Spine 
Specialists (NASS) is unique in that it encompasses multi-specialty 
care including non-operative and surgical care from entry into the 
healthcare system through all phases and types of care, thus demanding 
routine coordination among a range of practitioners, including primary 
care providers. NASS provides specific evidence-based guidance to spine 
care providers in the form of clinical guidelines to benefit patient 
care, helping them diagnose, treat, and properly manage, among other 
conditions, back pain.
    The American Gastroenterological Association (AGA) provides 
educational materials for primary care providers on such highly 
prevalent GI conditions as appropriate management/evaluation of 
diarrhea, Gastroesophageal reflux Disease (GERD), colorectal cancer 
screening and polyp/cancer surveillance. Additionally, some larger 
gastroenterological practices are working closely with primary care 
practices to develop clinical care protocols for four areas: pediatric 
chronic diarrhea, adult chronic diarrhea, acute abdominal pain and 
chronic abdominal pain. These protocols include, for example, what 
diagnostic steps should occur at the primary care level and then what 
should be included in the information transfer. Having electronic 
medical record (EMR) interface will help with the proper information 
flow and the development of future protocols.
    These are just a few examples of the kinds of essential exchange of 
clinical knowledge and practice expertise that specialists are 
proactively providing to primary care professionals to promote cost-
effective, timely, efficient and clinically appropriate patient care. 
Other Alliance member organizations also have developed similar tools 
for primary care physicians. We ask that such fruitful and functional 
partnerships be explicitly recognized and actively fostered by 
supportive government policies that unite diverse segments of medicine 
around the patient as the center of attention, rather than 
artificially, through divisive payment policies and arbitrary 
definitions, perpetuate dysfunctional silos of care that both patient 
and physician must struggle to navigate. Specialty care is and can 
continue to be an effective, knowledgeable contributor to a reformed 
healthcare system and is able and willing to do so.

                  HEALTH INFORMATION TECHNOLOGY (HIT)

    Health information technology (HIT) provides a building block for 
innovation and the delivery systems of the future. It has the potential 
to increase collaboration, efficiency and quality of care, and to lower 
health care costs significantly. The Alliance strongly supports the 
development of an electronic health information network that is 
reliable, interoperable, secure, and protects patient privacy. Congress 
made significant strides towards the implementation of HIT with the 
passage of the ``American Recovery and Reinvestment Act of 2009'' 
(ARRA)(PL11-5), and the specialty community is appreciative for the 
opportunities available for physicians to receive enhanced Medicare 
payments to support the adoption and effective utilization of HIT.
    My practice has moved forward in this area. We viewed this as a 
shared responsibility. The only reason my practice was successful is 
because we had the resources to do this. If I was in a small or solo 
practice, I could not have done it. Smaller physician practices, which 
include the majority of the physicians practicing medicine in this 
country, continue to face barriers to purchasing HIT systems. In 
addition, for those practices that manage to adopt HIT, it takes a 
further investment of significant time and resources to use their 
systems to the fullest capacity.
    However, the Alliance is concerned that many specialty physicians 
will not be able to take advantage of the enhanced payments to purchase 
HIT because of the ambitious bonus and penalty timelines and the fact 
that current specialty systems lack certification and interoperability 
standards. Further, the current certified HIT systems have been 
developed for primary care settings and have not yet been fully adapted 
for specialty or surgical care. The financial incentives and penalties 
are based on the adoption and ``meaningful use'' of certified HIT 
systems and will have a profound impact on our members and their 
ability to adopt and become meaningful users. Physicians are hesitant 
to make the considerable investment until certified systems are 
available that meet their unique needs.
    I call your attention to the fact that there are surgical 
specialties that have made significant accomplishments toward achieving 
interoperable HIT solutions for their members and have been placed on 
the Certification Commission for Health Information Technology (CCHIT); 
the only recognized certification body, roadmap for HIT Certification. 
However, due to the obstacles that must be overcome to be identified by 
CCHIT as one of the planned expansion areas, and the lack of CCHIT 
financing and staff, most specialties are not even in the pipeline. In 
addition, even those who are on the roadmap are facing challenges in 
the timelines that have been outlined by the Commission.
    As a result, and under the current timelines, it will be virtually 
impossible for the majority of surgical specialty physicians to 
purchase certified systems that are designed for their specialty, 
become meaningful users, and qualify for the majority of the vitally 
necessary financial incentives. Specialty medicine continually strives 
to provide quality care, and the Alliance recognizes that HIT can play 
an important role in achieving and maintaining high performance. 
Therefore, the Alliance urges you to consider amending the current HIT 
bonus and penalty timelines.

                                QUALITY

    Likewise, quality improvement programs cannot be one-size-fits-all. 
Each of the Alliance's specialty association members has been actively 
engaged in the process of developing evidence-based and clinically 
relevant quality measures and establishing data registries through 
initiatives within their own specialty and/or through the AMA's 
Physician Consortium for Performance Improvement. While much progress 
has been made, it takes time to develop the extensive quality 
infrastructure needed for quality improvement which simply is not yet 
established for the majority of specialty physicians. That makes 
participation in quality measurement and improvement efforts very 
different from other providers to whom most physicians are readily 
compared. Since many times the private market follows Medicare's lead, 
I would like to share the Alliance's concerns with implementation of 
the Physician Quality Reporting Initiative (PQRI).
    Process of care measures may be more relevant for primary care, but 
we need to move to a quality system that focuses also on clinical 
outcomes. For the program to succeed, it first needs to extend the 
timeline for full implementation so that physicians can catch up to 
other providers, some of whom have had decades to create, test, and 
report on measures; it must provide physicians with access to their 
data in a timely manner and it must have a reasonable appeals process. 
Also, the information should be verified before it is made public and 
quality reporting should be voluntary, not punitive. Congress should 
consider establishing a public private partnership to provide long-term 
support for clinical data registries and measure development currently 
undertaken solely through the limited resources of medical specialty 
societies. Additionally, the PQRI program could reward physicians who 
report clinical data to such registries. Finally, Congress must 
recognize the increased cost to report quality measures and should 
provide physicians with adequate funding to implement reporting 
requirements.

                          PHYSICIAN WORKFORCE

    Specialists are an integral part of American medicine. As a Nation, 
we pride ourselves on having the best medical care has to offer. 
Regardless of what insurance product people have, Americans want to 
know they may see their doctor of choice when needed. However, we can 
not take for granted that those specialists will be there.
    The Council on Graduate Medical Education (COGME), reported that: 
``In rural areas, there is a clear need for specialty care.'' \3\ The 
report goes on to say that: ``Though primary care would be an essential 
area of medical service and training, subspecialty and surgical 
disciplines are also sorely needed in underserved areas.'' \4\
---------------------------------------------------------------------------
    \3\ COGME 18th Report: ``New Paradigms for Physician Training for 
Improving Access to Health Care,'' Sept 2007, page 5.
    \4\ Ibid, page 13.
---------------------------------------------------------------------------
    The Bureau of Health Professions (BHP) has cited significant 
workforce challenges across the surgical specialties. Between 2005 and 
2020, BHP projects an increase of only 3 percent among practicing 
surgeons--with projected significant declines in a number of surgical 
specialties. Over the same time period, BHP projects that the number of 
practicing primary care physicians will increase by 19 percent.
    The Association of American Medical Colleges (AAMC) published an 
updated physician workforce study demonstrating essentially equivalent 
shortages between primary care and surgery. Specifically, the study 
projects physician supply and demand through 2025 and finds that: ``in 
terms of the general projected shortage of 124,000 FTE physicians, 
while 37 percent of the shortage will be in primary care [46,000], 33 
percent will be in surgery [41,000] . . .'' In addition, the study 
projects a shortage of 8,000 medical specialty physicians.\5\
---------------------------------------------------------------------------
    \5\ The Complexities of Physician Supply and Demand: Projections 
through 2025, Michael J. Dill and Edward S. Salsberg, Center for 
Workforce Studies, Nov. 2008.
---------------------------------------------------------------------------
    It is important to consider workforce issues as you consider health 
reform because it takes more than 12 years to produce a specialist. 
Like many specialists, urology requires years of training. In my case, 
4 years of undergraduate education, 4 years of medical school, 5 years 
of urology residency; some then also do an additional 2 or 3 years of 
Fellowship training. As a professor of urology at Eastern Virginia 
Medical School, I caution you against going too far and discouraging 
young physicians from entering specialty medicine. By the time a true 
crisis is visible, we will be unable to quickly correct it. Already, 
there are shortages in many specialty areas and as I mentioned earlier, 
the projections are that the problem gets worse.
    Mr. Chairman, thank you again for including the Alliance of 
Specialty Medicine. I'm happy to answer any questions.

    Senator Brown. Thank you, Dr. Schlossberg.
    Dr. Nochomovitz, welcome again.

  STATEMENT OF MICHAEL NOCHOMOVITZ, M.D., PRESIDENT AND CHIEF 
  MEDICAL OFFICER, UNIVERSITY HOSPITALS MEDICAL PRACTICES AND 
    UNIVERSITY HOSPITALS MANAGEMENT SERVICES ORGANIZATION, 
                         CLEVELAND, OH

    Dr. Nochomovitz. Senator Brown and distinguished members of 
the committee, it is an honor to speak to you today about the 
role of primary and specialty care physicians in current and 
proposed healthcare delivery models.
    Senator Brown, I am particularly pleased to be here as a 
physician from Ohio. Thank you for inviting me to testify.
    I am a practicing physician and lead a 450-member physician 
provider organization, which is the community arm of University 
Hospitals System in Cleveland.
    Our organization includes the largest primary care network 
in northeast Ohio composed of specialists, seven urgent care 
centers, and five hospitalist programs. 2008 saw 1.2 million 
office visits at more than 100 locations in 42 communities, 
serving 650,000 patients, and producing more than 1 million 
electronic prescriptions.
    I am acutely aware of the challenges daily faced by our 
primary care physicians. Our model is structured with local 
physician authority and responsibility, similar to private 
practice, but with the leverage of our organization's 
technologies, economies of scale, funded quality programs, and 
self-funded malpractice insurance. We are a microcosm of 
healthcare delivery in the heartland of our country.
    Our overall success, however, masks the daily struggles by 
primary care physicians to navigate the complexity of the 
healthcare system despite our enhanced resources. Suburban, 
rural, and urban populations have a myriad of healthcare 
coverages with varying access to services, causing physicians 
to spend significant time in unreimbursed activity.
    We deal daily with issues of complex healthcare plan 
structures interfering with medical decisionmaking, overly 
complex regulatory requirements, inadequate reimbursement for 
cognitive work and disease management, pressures to practice 
defensive medicine, and provision of care to the uninsured or 
working poor. These factors discourage medical trainees from 
specifically considering primary care careers, and that trend 
is compounded by the magnitude of educational loans and the 
stresses on earning opportunities in primary care.
    Our ideal future State must have seamless access to 
coordinated care, utilizing primary and specialty care 
providers as well as allied health professionals. This is not a 
unidimensional concept. Major public and private wellness 
initiatives should become the norm, and this will take years.
    Cost reductions will be driven by quality, and outcome-
based bonus payments to providers based on evidence-based 
quality and outcome measures. Simpler Federal rules governing 
safe harbors are required to encourage the development of real 
or virtual delivery networks, such as accountable care 
organizations, which would include independent and employed 
physician constituencies, hospitals, and other providers, all 
incentivized to participate.
    There are a number of significant risks to consider as we 
restructure. We must not damage what works well, and we must 
not disrupt existing doctor-patient relationships. Cutting 
costs to pay for reform must not result in the creation of new 
shortages in essential services. The concepts will fail without 
appropriate technological infrastructure for timely quality and 
performance reporting.
    The exclusion of physicians and organized medicine from any 
component of the planning and implementation process will 
severely limit the chance of success. The selection of 
appropriate quality measures are always key in making the most 
significant impact on cost and outcome. We can't do everything.
    In our organization, we were early adopters of e-
prescribing and one of the five national sites selected by CMS 
for its demonstration project. We funded an American Diabetes 
Association self-management program at six regional sites, in 
addition to pursuing recognition for all our primary care 
physicians by the National Committee for Quality Assurance, 
NCQA, in diabetes. And we recruited six full-time 
endocrinologists for the community.
    We have opened seven urgent care centers for patients to 
access care in a low-cost environment after hours or as an 
extension of their physician's office rather than present at an 
emergency room, and more complex diagnoses can be done in those 
facilities because of the capabilities we have.
    Irrespective of the initiatives, primary care disciplines 
clearly need help. Multi-year increases in reimbursement with 
immediate change in the sustainable growth rate methodology 
will avoid reductions in reimbursement and worsening of the 
situation. Reimbursement for care management will result in 
reduction of admissions to hospital.
    Reimbursement methods which recognize realistic practice 
costs for physicians and health professionals will avoid the 
current situation in reimbursement. The lifting of the Medicare 
resident cap and enhancement of Government-sponsored loan 
options and loan repayment programs that target primary care 
and selected specialists in underserved areas are needed.
    Finally, the fundamental issue of healthcare coverage and 
its components with methodologies to include all Americans must 
be addressed through a combination of existing payers, 
employment-based coverage, and expansion of safety net 
Government programs.
    Thank you again for the opportunity to address you today. I 
welcome any questions you may have.
    [The prepared statement of Dr. Nochomovitz follows:]

            Prepared Statement of Michael Nochomovitz, M.D.

    Senator Brown, Ranking Member Enzi and distinguished members of the 
committee, it is an honor to speak to you today about the role of 
primary and specialty care physicians in current and proposed health 
care delivery models. Thank you for inviting me to submit this 
testimony.
    I am Michael Nochomovitz, the President and Chief Medical Officer 
of University Hospitals Medical Practices (UHMP) and its associated 
Management Services Organization (UHMSO) in Cleveland, OH.
    I am a practicing physician and lead a 450-member multi-specialty 
physician network in northeast Ohio. This includes the largest primary 
care network in the region, complemented by a diverse group of 
specialty practices, seven urgent care centers and five hospitalist 
programs.
    I have led the development of these organizations through the last 
decade. The enterprise has evolved into a regional force that in 2008 
provided 1.2 million office visits at more than 100 locations in 42 
communities. The network cared for 600,000 patients requiring more than 
1 million electronic prescriptions.
    I am acutely aware of the challenges primary care physicians face 
in attempting to coordinate care and also am cognizant that the optimal 
and most cost-effective health care cannot rely on one single specialty 
or service.
    UHMP is the largest portal of patient entry into the University 
Hospitals system and accounts for more than 50 percent of the patients 
utilizing system services.

                           PRIMARY CARE FOCUS

    From the outset, primary care has been the foundation of the 
organization. There always has been a clear vision of the critical 
nature of primary care physicians in the delivery and coordination of 
care. This view was unrelated to considerations of health care reform 
but rather to the practice of medicine and the vision of University 
Hospitals.
    The organization has grown largely by merger of key established 
primary care practices into the organization in many diverse 
communities. Within UHMP, we are fortunate to count numerous examples 
of the finest-trained and seasoned physicians in all primary and many 
specialty care disciplines. The care provided by our primary care 
physicians associated with regional multi-service ambulatory facilities 
translates into an exceptionally high level of continuity of care. This 
is, indeed, the type of care any of us in this room would want.

                              LIMITATIONS

    Our success does not tell the entire story. Despite the enhanced 
infrastructure and resources available to the physicians in our 
University Hospitals (UH) system, the challenges of coordinating care 
on a daily basis remain formidable. We all are familiar with the 
patchwork of components that make up our current health care system and 
the potential obstacles to patient and physician satisfaction. Our 
organization spans northeast Ohio and includes suburban, rural and 
urban locations each with varying levels of access to the full scope of 
physician and allied health services. In the best situations, there are 
still significant limitations on physicians who seek to provide 
comprehensive services and continuity of care. The limitations include 
our overly complex administrative and payer system, inadequate payer 
recognition for cognitive work of primary care physicians, pressures to 
practice defensive medicine, a shortage of new primary care providers 
to replace the mature workforce, and the challenge of providing 
necessary care to the uninsured and the working poor.
    The lessons learned from our specific experience are cogent, as our 
model, despite physician employment, has unique features to meet 
physician and local community needs. Our model gives the local 
community primary care physicians unique authority and responsibility 
for managing their practices and staff in a manner akin to private 
practice. We utilize our resources to grow these practices, provide the 
leverage of the integrated delivery system and ensure replacement for 
any attrition. The model is characterized by unusual physician 
empowerment and autonomy and has promoted significant physician 
engagement and physician satisfaction. Their alignment with University 
Hospitals has allowed us to introduce new technology and quality 
measures, which would have been impossible in the current private 
practice environment. The pressures in recent years on human and 
financial capital and lack of leverage with payers have impeded 
progress in many ways in traditional models for the majority of 
physicians in the United States.
    We have a real life experience in diverse communities that 
represent a microcosm of regional health care delivery in the heartland 
of the country.

               THE SCOPE OF AN INTEGRATED DELIVERY SYSTEM

    The University Hospitals system was founded upon its academic hub, 
University Hospitals Case Medical Center and Rainbow Babies & 
Children's Hospital. Its physician network has become the backbone of 
this system. These institutions were created more than a century ago to 
serve the community and to serve as the teaching and research hospitals 
affiliated with the Case Western Reserve University School of Medicine.
    Today, UH has expanded to include seven hospitals, which consist of 
critical access hospitals, suburban hospitals, a long-term care 
hospital and skilled nursing facility, a children's hospital, and a 
900-bed adult academic medical center. Currently, UH has two new 
hospitals under construction: a free-standing Cancer Hospital and a 
community hospital. In addition to the community-based physician 
practices, UH also employs its full-time academic physicians, the Case 
Western Reserve University School of Medicine faculty, in an integrated 
practice plan. These physicians, who include national and international 
leaders in their fields, serve the tertiary and quaternary needs of our 
regional system at UH Case Medical Center. This tertiary and quaternary 
component is a critical part of the ultimate continuity of care to 
which we all aspire.

                        THE MEDICAL HOME CONCEPT

    Many hearings have addressed the glaring gaps and weaknesses in 
health care coverage in our country, as well as the dislocation and 
fractionation of care that many citizens experience, whether insured or 
uninsured. The idea of continuity of care provided through a Medical 
Home with access and comprehensive services is under substantial 
discussion. These concepts cannot be grounded in jargon, but need to 
address the substance of patient care delivered appropriately in an 
evidence-based fashion in the appropriate setting for an affordable 
cost. The Medical Home is likely to be a methodology within a more 
global approach to continuity of care.

  HEALTH CARE REFORM: QUALITY OF CARE, COORDINATION OF CARE AND COST 
                                CONTROL

    There will be critical success factors to change the direction of 
health care in the decades to come. Some of the critical success 
factors include:
Wellness
    It is a truism that our health care must be grounded in the 
lifelong pursuit of wellness and prevention.\1\ The latter 
realistically is a more difficult long-term challenge as it involves 
population behavioral change. Major impacts on population behavior will 
require both public and private programs to promote wellness as an 
integral part of our society. Incentives for employers to promote 
wellness in the workplace will need to be instituted.
---------------------------------------------------------------------------
    \1\ Ross DeVol and Armen Bedroussian, et al., An Unhealthy America: 
The Economic Burden of Chronic Disease, The Milken Institute, 2007: 4-
5.
---------------------------------------------------------------------------
The Role of Primary Care
    It is on this background that primary care providers evaluate 
symptoms and abnormal findings for evaluation and diagnosis. 
Subsequently, the best treatment will result in either cure or the 
transition into chronic disease management. The latter accounts for a 
significant percentage of our health care costs and offers the most 
opportunity for the care coordination provided access to the necessary 
resources are made available and reimbursement for care management is 
provided in an unequivocal manner.\2\
---------------------------------------------------------------------------
    \2\ Ibid, 184.
---------------------------------------------------------------------------
    It should be apparent that this ideal State will not be 
unidimensional and will require a multi-disciplinary approach that 
involves access to coordinated, convenient, affordable and humanistic 
care for an array of medical providers. These will include primary care 
physicians, specialists, and a wide variety of allied health 
professionals who cover the entire spectrum of care from cradle to 
grave.

Structures of Care Delivery
    There will not be one solution that meets the needs of every 
community and all constituencies of patients and providers.
    We will need to create vehicles for integrated care that could 
affect the necessary changes in all our communities. These would 
provide opportunities for participating providers to be eligible for 
quality and outcome-based bonus payments as well as benefit from more 
global savings. Accountable Care Organizations (ACO) and existing 
structures such as integrated delivery systems could be empowered to 
manage the continuum of care.
    The consolidation of health care in recent years could turn out to 
be a distinct advantage in many communities in terms of building on 
existing infrastructures to deliver coordinated care. Further modeling 
will no doubt result in a variety of unique public and private vehicles 
which would be evaluated in demonstration projects. In some areas we 
should anticipate a growth in community health centers, and an 
expansion of the National Health Service Corps locations, as well as 
the optimal use of the Veterans Administration Health System and the 
Indian Health Service.
    There are a number of significant risks that must be called out:

     We must not damage what already is working well.
     We must not remove patient choice or disrupt existing 
doctor patient relationships.
     All physicians should have an opportunity to participate 
on the basis of standards to be determined.
     The imperative of cutting costs to pay for reform could 
result in creating new shortages.\3\
---------------------------------------------------------------------------
    \3\ Elliott Fisher, M.D., MPH, ``Building a Medical Neighborhood 
for the Medical Home,'' New England Journal of Medicine 359 : (2008) 
1202-5.
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     The infrastructure for quality and performance reporting 
will likely be more expensive and challenging in implementation than 
predicted.
     The reporting methodology for quality measures must be 
timely and accurate.
     Health care is a local phenomenon and there will be unique 
regional and community specific challenges, which may or may not be 
associated with cost-differentials.
     The cost to expand coverage may exceed the projected 
savings in the early years.
     The exclusion of physicians from any component of the 
planning implementation process is likely to limit the effectiveness of 
implementation.

        LESSONS LEARNED FROM THE UHMP EXPERIENCE: MAKING CHOICES

    In our own experience, we have created a large, regional network 
built mostly on aligning the best physicians in local communities who 
were previously in traditional private practice. We have taken these 
physician practices empowered them to succeed by investing in an 
enhanced infrastructure and the ability to introduce new technologies, 
quality measures and outcome evaluation which would not have been 
possible in their former States.
    Over the last few years despite the presence of incentives we have 
chosen to make significant expenditures to position the physicians in 
their local communities for quality measurement and outcome evaluation. 
In a growing organization which was merging physicians from the private 
practice environment we were required to make choices to achieve in our 
mind the maximum impact on patient care.
    The following were areas of focus:

a. Electronic Prescribing
    We targeted electronic prescribing 5 years ago, as the most useful 
technology for a primary care physician office. We were early adopters 
long before health information technology incentives were a reality. 
Indeed, we created our own incentives by affording those physicians who 
utilized e-prescribing a discount on their malpractice insurance. The 
cost was borne by UH because we felt that it was a critical technology 
to enhance quality of patient care. We subsequently were one of the 
five national sites selected by CMS for the e-prescribing demonstration 
project to develop foundation standards for the current program. In the 
past year our physicians submitted more than 1 million electronic 
prescriptions and the number continues to grow. This has greatly 
increased patient satisfaction and assured increased awareness of drug 
interaction and oversight on dosage and compliance.

b. Chronic Disease Management: Diabetes
    We also embarked on an ambitious program targeting diabetic care as 
a prototype for chronic disease management. We funded the necessary 
initiatives for the following components:

     Adopted the American Diabetes Association Diabetes Self 
Management Programs.--We obtained ADA certification for six regional 
locations to deliver educational/instructional programs with diabetic 
nurse educators working closely with primary care physicians and 
endocrinologists. Particularly in the management of diabetes, there is 
a need for collaboration among primary care providers, specialists and 
allied health professionals. We have recruited six full-time 
endocrinologists to our network to provide the specialty services 
needed by the primary care physicians and their patients, and to 
complement the work of diabetic nurse educators, podiatrists, 
nutritionists and other professionals. This is an excellent example of 
what some might call a ``Medical Home'' for diabetic patients and it 
relates to the establishment of an appropriate continuity of care for 
diabetic patients in any setting or structure.
     National Committee for Quality Assurance (NCQA).--We have 
systematically worked with our adult primary care physicians to obtain 
recognition from NCQA for diabetic care. This was achieved through an 
extended and ongoing educational program for physicians and their 
staffs. We hired additional staff to audit medical records through our 
document imaging system which has been an outstanding transitional 
modality for establishing a paperless workflow and preparing physicians 
and practices for our new University Hospitals electronic medical 
records.

c. Alternative Sites of Care
     Urgent Care Centers.--UH has established a total of seven 
regionally based Urgent Care centers to provide care for patients who 
need urgent but not emergent care in convenient locations, as well as 
care after regular hours. We have instituted a national model for an 
urgent care Fellowship program. This is done in collaboration with the 
Department of Family Medicine at Case Western Reserve University at 
University Hospitals Case Medical Center.
    These regionally based centers serve as an extension of the primary 
care physicians' office as well as a site where non-emergent 
presentations are evaluated in a more sophisticated fashion and at 
lower cost than an emergency department.
    We have introduced a variety of system-wide protocols that can be 
delivered in this low-cost environment. These include management of 
dehydration, asthma, fracture care, minor trauma as well as a protocol 
for chest pain which includes measuring serum troponins, a diagnostic 
indicator for heart attacks, which may be positive in the presence of a 
normal EKG. We also are able to rule out other serious conditions like 
pulmonary embolism with the appropriate care paths established.

                             RETAIL CLINICS

    We also are investigating and evaluating the prospects for retail 
clinics staffed by nurse practitioners linked directly to our urgent 
care centers for both incidental care and work-related health care. As 
more payers recognize this environment as a site of care, there should 
be ongoing reporting of the outcomes of this model and its cost-
effectiveness as part of a broader continuum.

                    PRIMARY AND SPECIALTY CARE NEEDS

    The primary care disciplines do need help. They will be the 
backbone of any cost-effective health system provided they have the 
resources to provide necessary care for their patients. There are also 
specific specialty shortages that significantly impact the provision of 
cost-effective care in our communities.
    Support for these deficiencies could come in a variety of methods 
including:

    a. Increase reimbursement for primary care physicians, with 
appropriate change to the Medicare SGR methodology. Increases in 
reimbursement must be guaranteed as increments to the current base over 
the next number of years and not be subject to SGR-related cuts. The 
methodology must recognize realistic practice costs for physicians and 
other health professionals. These increases should not be at the 
expense of other physicians' reimbursement.
    b. Reimbursement for care coordination and management for selected 
chronic disease beyond the confines of the office encounter and the 
acute hospitalization.
    c. Lift and expand the Medicare resident cap, established in 1998. 
Achieving an increase in the physician supply requires lifting 
residency training caps as well as increasing medical school 
enrollment.
    d. Enhance government-sponsored loan options and loan repayment 
programs to increase the supply and retention of primary care 
physicians, nurses, mid-level providers and practitioners who will be 
critical in ensuring better coordination of patient care. Loan 
forgiveness should be offered in exchange for true long-term commitment 
to primary care practice in any location.
    e. Early identification of medical students interested in primary 
and selected specialty care that could make long-term commitments to a 
clinical career. Increase funding for the National Health Service Corps 
(NHSC). The number of NHSC awards should be increased by at least 1,500 
per year to help more physicians practice in underserved areas while 
enabling more new physicians to practice primary care.

                        INTEGRATED CARE DELIVERY

    It is necessary to reiterate the paradox that for those in a stable 
health care delivery environment in the United States, we have arguably 
the most advanced and refined health care in the world. The lack of 
uniformity, the exclusion of many and the spiraling costs are mandating 
change for what is not sustainable.
    Medicine does not have simple metrics and most complex conditions 
are multi-
factorial. The current luxury and advantage derived by those who have 
access to strong stable and supported primary care would be an 
important component of our health care reform but not a sole solution. 
We must target the development of a new ``Continuum of Care for 
America'' which would achieve the goals of necessary care for all our 
citizens and optimal utilization of resources while maintaining 
international leadership in specialty innovation and advancements.
    This approach could include concepts such as value-based 
purchasing, bundling of hospital and physician payments, and 
Accountable Care Organizations (ACO). Each of these efforts would need 
to be substantiated with voluntary demonstration projects for 
validation before any system-wide expansion. The substantive background 
for many relates to the commonsense components of access, prevention, 
acute care management, chronic disease coordination and prudent use of 
the full spectrum of specialty services needed to practice evidence-
based medicine and meet the needs of our patients.
    Remove legal and regulatory impediments to delivering coordinated 
care:

    a. Make targeted changes to laws and regulations to allow 
physicians, hospitals and others to work together as teams, and to be 
able to use financial incentives to reduce cost and improve care.
    b. Establish a simpler, consistent set of Federal rules for how 
hospitals, physicians and others may structure their financial and 
contractual relationships.
    c. Provide clearer guidelines under Federal antitrust law to enable 
clinical integration and joint hospital-physician contracting with 
payers to ensure aligned performance incentives and to facilitate 
continuity of care, particularly in light of electronic health record 
technology.
    d. Provide a simple and meaningful ``safe harbor'' under Federal 
laws and regulations to encourage the development of real or virtual 
delivery ``networks'' (such as Accountable Care Organizations).
    e. Ensure HIPAA continues to enable providers to share information 
to enable patients to receive higher quality, safer care. 
Misunderstanding HIPAA requirements has led to reluctance among 
providers to share information, even though doing so is in the best 
interest of patient care.

    There are numerous critical success factors for the massive 
undertaking of health care reform. In recent days, numerous major 
provider organizations and associations have petitioned our 
congressional leaders with their concepts and concerns relating to 
health care reform implementation.
    As these ideas relate to primary and specialty physicians, there 
are a number of key recommendations that I will highlight.

    1. Ensure health care coverage for all Americans through a 
combination of existing payers, employment-based coverage, and 
expansion of safety-net government programs.
    2. Drive the introduction of physician and patient-friendly 
technologies to facilitate care and the physician practice environment.
    3. Drive cost-reduction through evidence-based quality and outcome 
measures, which are established through federally sanctioned quality 
organizations, national specialty societies and organized medicine.
    4. Eliminate unnecessary administrative complexity and cost through 
the establishment of uniform, interoperable technologies that promote 
both clinical and administrative data-sharing.
    5. Reduce the impact of malpractice claims on defensive medicine 
through Federal tort reform.

    Thank you again for the opportunity to address you today. I welcome 
any questions you may have.

    Senator Brown. Thank you very much, Dr. Nochomovitz.
    Dr. Raulerson, your testimony? Thank you.

    STATEMENT OF MARSHA RAULERSON, M.D., FAAP, PRIMARY CARE 
PEDIATRICIAN, ON BEHALF OF THE AMERICAN ACADEMY OF PEDIATRICS, 
                          BREWTON, AL

    Dr. Raulerson. Yes, thank you, Senator Brown. And I thank 
you so much for the opportunity to testify before this 
committee.
    I am Marsha Raulerson. I am a pediatrician, and I am 
representing the American Academy of Pediatrics, an 
organization of over 60,000 primary care pediatricians, 
pediatric medical subspecialists, and pediatric surgical 
specialists. We are all dedicated to the health, safety, and 
well-being of infants, children, adolescents, and young adults.
    I am a pediatrician. I have been in private practice in the 
same town for my entire career--Brewton, AL. It is a town of 
approximately 10,000 people in the pine forests in beautiful 
lower AL.
    The closest large city is Pensacola, FL, which is over 60 
miles away and not in my State. The closest children's hospital 
is in Mobile, AL, which is over 90 miles away, and our large 
children's hospital for the State of Alabama is in Birmingham, 
200 miles from my home where I practice.
    So I want to talk to you a little bit about what it is like 
to be a primary care doctor in a rural area with no 
subspecialists close by. Seventy percent of my practice is 
Medicaid, about 25 percent private insurance, and about 5 
percent Children's Health Insurance Program.
    In 2006, my practice did not break even for the first time. 
At that time, I lost my office manager, who went back to school 
to become a nurse because I could not pay her an adequate 
salary. I lost my head nurse because I could no longer pay her. 
And my own salary was less than the physician's assistant who 
has worked with me for the last 6 years, and I knew that I had 
to make some changes.
    I had been able to change to a rural health clinic, but it 
took 1\1/2\ years to do the paperwork and work through the 
Government regulations to become a certified rural health 
clinic, which I finally was able to do in July 2007 and, once 
again, have a viable practice that could pay for the services 
that we needed to run an office seeing approximately 2,000 
children a year from a large rural area in lower Alabama.
    I want to tell you a little bit about what it is like to 
have a medical home. I was very fortunate when I started my 
training as a pediatrician. The medical home concept was just 
starting. It started with an idea of providing comprehensive, 
coordinated care to children with special healthcare needs, and 
that is what I learned at the University of Florida.
    But as the concept has developed, the medical home, as 
aspired to by the American Academy of Pediatrics, is not just a 
place, but it is a coordinated effort led by a physician to 
provide the best care for all children, adolescents, and young 
adults. So that they get not only care for illnesses when they 
are acute or chronic illnesses, but they also get the 
preventive care that they need to be healthy adults.
    You know, most adult diseases start in childhood, and we 
feel that it is our responsibility to try to prevent many 
diseases that adults have.
    I want to tell you about a few of my patients. I work very 
closely with specialists in pediatric care in Mobile and in 
Birmingham.
    Several years ago, a cardiologist from Mobile called to 
tell me about a young girl who lived in a small rural area 
north of me about 30 miles who was dying of congenital heart 
disease. He said she was a beautiful child. He had done 
everything that he could for her. She needed some special 
surgery that could only be done in one place in the United 
States, and he got a door slammed in his face when he tried to 
refer her there.
    The problem was she had Medicaid. She had no other private 
insurance. She needed to go to San Francisco to have a very 
special procedure done by a cardiac surgeon who specialized in 
children.
    I was president of my State pediatric chapter at that time, 
and I called the chapter president in California, discussed 
this child with her. She got very excited about it and said she 
knew the surgeon and she knew that he would want to do the 
surgery.
    Her cardiologist in Oakland Children's Hospital called me, 
and he got the records from Dr. Mayer in Mobile. Soon the 
community raised the money to send the child and her parents to 
California, where she had the surgery, and the surgery was 
performed at Oakland Children's Hospital. She was there for 3 
weeks, came home, and has not been hospitalized since. That was 
4 years ago.
    She still has a lot of chronic problems, but she is pink. 
She is no longer blue, suffering from severe congenital heart 
disease.
    Also, as my practice has aged, I have taken on more and 
more children with chronic health problems who live in rural 
Alabama. I have two children in my practice with heart 
transplants. One of them born with congenital heart disease, 
and the second one had a virus that destroyed his heart when he 
was a year old.
    I manage these patients with the help of pediatric surgeons 
and cardiologists in Birmingham, 200 miles away. My feeling is 
that the medical home should be able to coordinate the care of 
all the children in our area, that we should have access to 
specialists. There are some specialists that I can't reach.
    Pediatric psychiatry is one of those areas. So 5 years ago, 
Dr. Vaughan, a full professor of children's psychiatry at UAB 
in Birmingham, and I began to work on a telemedicine project 
where he sees approximately 15 children a month with serious 
psychiatric illness from rural Alabama through telemedicine.
    He e-mails me immediately his workup. I write the 
prescriptions. I coordinate the counseling services through our 
local mental health. Also, most of the children in my practice 
have to receive part of their healthcare at school because that 
is where they are. They spend their day at school.
    Just yesterday, I wrote three care plans for school nurses 
who live in two different cities in my area--medications and 
what to do if the child has a problem or has a seizure at 
school. Two of the children have asthma, and one of them has 
insulin-dependent diabetes. So I work on those care plans, and 
at least once or twice a week, I talk with school nurses.
    Another thing that I do in coordinating the care of 
patients, which I think is important, is I conference not only 
with school nurses, mental health workers, and other people 
like this, I also have to have time spent with the parents when 
the child is not there. And are you aware that we are not paid 
for that time?
    This week, already I have had conferences with three sets 
of parents. One of the mothers came in because we had 
discovered as her child was going through puberty that she was 
developing a significant chest wall deformity. I referred her 
to a pediatric surgeon in Birmingham. He saw the child and said 
that she was going to need a number of things, and he sent 
paperwork to the mother.
    The mother came to my office, and we sat down and went 
through the child's chart and wrote down every illness that she 
had had since birth. And then the mother began to talk about 
the problems she was having with her teenage rebellion and the 
fact that her chest wall deformity was causing a lot of social 
problems and things that she was even more concerned about, 
that the child had no friends at school. She came home at night 
and went in her room and shut the door.
    Mom and I spent a long time talking about that child's 
emotional well-being and some services that we could find in 
the local community to help her right away. When the mother 
left, she told my receptionist, ``This is the best office visit 
I have ever had. I need to come by myself more often.''
    The problem is pediatricians are not paid to see parents 
and conference with them, and I have had three of those 
conferences this week. With the medical home, there needs to be 
a different way of paying for services. There needs to be a way 
for us to coordinate the care of our patients and work with our 
subspecialists that are available to us to provide for the 
child the best care that that child can receive.
    I have to also speak about the problems with workforce, 
which has already been raised here. There are not enough 
primary care pediatricians for every rural community like mine 
in the Nation. And perhaps there never will be.
    But I have difficulty, when a child has a seizure disorder, 
finding a pediatric neurologist who can see that child now and 
not 6 months from now. When I have a child who has some form of 
arthritis, and I have several of those in my practice, there is 
only one pediatric rheumatologist in my State, and getting an 
appointment there is very difficult.
    Also, one of the other problems that we have, we do not 
have mass transportation in Alabama. I have to also work the 
transportation system to see that my child who has an illness 
and his family can get 200 miles one way to Birmingham.
    I also have to take care of children when they come home 
from those tertiary care centers and they get in trouble. Last 
year, we had a newborn who came to our office, who was seen by 
my physician's assistant.
    She came and grabbed me and said, ``Come, see this baby. 
Something is terribly wrong. Mom says her stomach doesn't look 
right.'' I went in and palpated the little baby's belly and 
felt a huge mass in her stomach. We immediately got an 
ultrasound that showed she had a liver tumor.
    I called the surgeon in Birmingham. He said, ``Send her 
now.'' And I said, ``Well, it is Friday afternoon. Do you 
really want her on Friday afternoon?'' ``Well, not really on a 
Friday afternoon.''
    So mother made arrangements to take a leave of absence from 
her teaching assistant's job and on Monday morning traveled to 
Birmingham, where the diagnosis was made of a hepatoblastoma, 
which is a type of liver cancer. This beautiful little baby 
underwent treatment for the next year. She had radiation 
therapy. She had chemotherapy, and then she had surgery and 
removal of the tumor.
    I saw her 2 weeks ago, and she has hair for the first time 
in her life. And we are so proud that she is doing well.
    Well, why did I mention this child? She got the most 
significant care that I could not give her at a wonderful 
children's hospital 200 miles away. But when she came home and 
her central line got infected, I was the first person to see 
her, to diagnose this, to stabilize her, and send her away.
    When my heart transplant patient last summer came in trying 
to die from hemolytic uremic syndrome that we thought how could 
somebody with a heart transplant have this other horrible 
disease? It turned out to be a reaction to one of the rejection 
drugs that he was receiving for his transplant.
    I had to type and cross him in my rural hospital and get 
blood hanging to save that child's life and then send him by 
helicopter to Birmingham.
    That is what it is like to be a rural physician. But I 
could not do it if I did not have my specialists--that they 
were not available to me by e-mail or by telephone--in an 
emergency situation.
    I thank you very much for letting me testify, and I would 
be glad to answer any questions about what the medical home 
means to me as a primary care physician.
    Thank you.
    [The prepared statement of Dr. Raulerson follows:]

           Prepared Statement of Marsha Raulerson, M.D., FAAP

    Good morning. I appreciate this opportunity to testify today before 
the Committee on Health, Education, Labor, and Pensions on Primary and 
Specialty Care. My name is Marsha Raulerson, M.D., FAAP, and I am proud 
to represent the American Academy of Pediatrics (AAP), a non-profit 
professional organization of 60,000 primary care pediatricians, 
pediatric medical sub-specialists, and pediatric surgical specialists 
dedicated to the health, safety, and well-being of infants, children, 
adolescents, and young adults.
    I am a pediatrician in private practice in Brewton, AL; I serve as 
a member of the AAP's Committee on Federal Government Affairs. I have 
been taking care of children and adolescents in Brewton since 1981. In 
the 2000 census, Brewton had a population of 5,498. The largest close 
city is Pensacola, FL and the closest Alabama hospital specializing in 
children is 90 miles away in Mobile. Brewton is located in the piney 
woods of Alabama and its major industry is pulp wood. My practice, 
Lower Alabama Pediatrics, is 70 percent Medicaid and we do our best to 
provide a medical home to all of the children we can reach.
    In 2006, I did not break even in my practice because Medicaid 
patients require so many services and payments are so low. I had to dip 
into my own savings to keep my practice afloat. Nevertheless, I believe 
that I have a calling to provide these services to this population, 
many of whom are children who have severe and long lasting health 
needs. I have since converted my practice to a rural health clinic.

                        WHAT IS A MEDICAL HOME?

    AAP believes that every child, regardless of health status, should 
have a medical home. A medical home is a place, a process and people 
who partner to improve health outcomes and the quality of life for 
children and families. In a medical home, care is delivered or directed 
by competent, well-trained physicians who provide primary care, 
managing and facilitating all aspects of pediatric care: preventive, 
acute and chronic. The Academy has led the development of a body of 
literature surrounding the medical home, including dozens of studies 
that examine the impact of care coordination on patient outcomes.\1\
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    \1\ The U.S. Department of Health and Human Services' Healthy 
People 2010 goals and objectives state that ``all children with special 
health care needs will receive regular ongoing comprehensive care 
within a medical home,'' and multiple Federal programs require that all 
children have access to an ongoing source of health care.
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    Children and adolescents deserve a high performance health care 
system that includes medical homes to promote system-wide quality with 
optimal health outcomes, family satisfaction, and value. A medical home 
offers families full service high quality health care and provides 
comprehensive, coordinated, compassionate, culturally competent care 
for children.

                        HISTORY OF MEDICAL HOME

    The Academy first pioneered the concept of the medical home in the 
1960's as a way to describe the ``gold standard'' of primary care for 
children--particularly children with special health care needs.
    In March 2007, the AAP joined with the American Academy of Family 
Physicians, American College of Physicians and the American Osteopathic 
Association to publish a set of joint principles for the patient-
centered medical home. This consensus statement describes the 
principles of a patient-centered medical home: personal physician, 
physician-directed medical practice, whole person orientation, 
coordinated care, quality and safety, enhanced access, and appropriate 
payment. In addition to these important concepts, the specific needs of 
pediatric populations also include:

     Family-centered partnership: A medical home provides 
family-centered care through a trusting, collaborative, working 
partnership with families, respecting their diversity and recognizing 
that they are the constant in a child's life.
     Community-based system: The medical home is an integral 
part of the community-based system. As such, the medical home works 
with a coordinated team, provides ongoing primary care, and facilitates 
access to and coordinates with, a broad range of specialty and related 
community services.
     Transitions: The goal of transitions is to optimize life-
long health and well-being and potential through the provision of high-
quality, developmentally appropriate, health care services that 
continue uninterrupted as the individual moves along and within systems 
of services from adolescence to adulthood.
     Value and Payment: To assure optimal quality of care for 
all children, the health system must provide appropriate payment for 
medical home services. A high-performance health care system requires 
appropriate financing to support and sustain medical homes that promote 
system-wide quality care with optimal health outcomes, family 
satisfaction, and cost efficiency.

    MAKING A MEDICAL HOME AVAILABLE TO ALL CHILDREN: FINANCING THE 
                              MEDICAL HOME

    Medical homes do not just happen. Transforming a medical practice 
into a medical home has been described as trying to rebuild a bicycle 
while riding it. But change cannot just be limited to the willingness 
of the doctor--everyone in the health care system has a role to play. 
Thus, AAP calls for partnerships among private and public payers, 
employers, clinicians, and families and patients to ensure that medical 
home payment reforms are implemented in ways that assure quality, 
financial sustainability, and equity among payers and providers that 
assure children and youth receive all recommended and needed services.
    These reforms should be based on the medical home joint principles 
and the payment structure should encompass recognition of relevant 
payment codes, expanded care coordination responsibility, new quality 
improvement activities, and up-front investments and support for 
infrastructure. AAP recommends the following:

      All private and public payers should adopt a 
comprehensive set of medical home payment reforms that include three 
components:

          A contact or visit-based fee component that 
        recognizes and values evaluative/cognitive services and also 
        preventive counseling based upon Bright Futures.
          A care coordination fee to cover physician and non-
        physician clinical and administrative staff work (telephone 
        care, on-line communication, conferences with the ``care 
        team'') linked to the delivery of medical home services.
          A performance or pay-for-performance fee for 
        evidence-based process, structure, or outcome measures and paid 
        as a bonus. This bonus should take into consideration the 
        complexity of the patients who are in the panel of the 
        practice. In return for this bonus, physicians should assist 
        payers in addressing such cost centers as emergency department 
        utilization and unnecessary hospitalization.

     Vaccines and their administration costs must be adequately 
paid for to exceed total direct and indirect expenses and updated when 
new vaccines are adopted into recommended schedules or when vaccine 
prices increase.
     Payments should be closely tied to evidence-informed 
medicine, and methods used for payment should consider the child's age, 
chronicity, and severity of underlying problems, and geographic 
adjustment.
     Payment policies should recognize and reward systems of 
care that promote continuous and coordinated care ``24/7'', including 
care coordinated between generalists and specialists, population-based 
prevention, and should discourage the use of clinics that provide 
episodic care only for minor conditions.
     Competition should be structured so that practices are 
rewarded for providing access, service, and quality; cheaper care is 
probably not better care.
     The Centers for Medicare and Medicaid Services should 
update the Resource-Based Relative Value Scale to take into account the 
value of the complex and comprehensive nature of cognitive care and 
practice expenses associated with the medical home model of care, 
provide health information technology support, and create incentives 
for continuous quality improvement.
     Congress should sponsor ongoing, large-scale Medicaid 
medical home pilot projects for children and youth. It should also 
support an all-payer pilot project of the medical home model for 
children and youth. Congress should evaluate current State Medicaid and 
CHIP programs and share information among the States about State 
programs that are providing good medical homes for children.

 MAKING A MEDICAL HOME AVAILABLE TO ALL CHILDREN: ENSURING SUFFICIENT 
                   WORKFORCE TO MEET CHILDREN'S NEEDS

    Meeting the health needs of America's 80 million infants, children, 
adolescents, and young adults and providing them with a medical home 
will require a strong and stable pediatrician workforce comprised of 
appropriate numbers of well-trained pediatricians, pediatric medical 
subspecialists, pediatric surgical specialists, and other child health 
professionals and specialist physicians. Moreover these professionals 
will be needed where children are--in all rural, suburban and urban 
communities.
    Workforce shortages exist in pediatric medical subspecialties and 
pediatric surgical specialties. I previously stated that the nearest 
locus of comprehensive specialty care is 90 miles away. This specialty 
shortage has real impacts in my community and in urban areas as well. 
Initiatives are needed to recruit medical students and residents into 
specific pediatric disciplines and to underserved geographic regions. 
These initiatives must address the comprehensive needs of children and 
adolescents.
    Federal policies should address and improve the uneven geographic 
distribution of the physician workforce, including pediatrics, enhance 
the delivery of culturally effective health care and include mechanisms 
to educate and train an appropriate supply of pediatric medical 
subspecialists and pediatric surgical specialists.
    Congress should consider the extension of student-loan deferment 
until the completion of residency education, and make educational loans 
tax deductible. In addition, federally sponsored student loan deferment 
and forgiveness programs and other incentives for residents and 
pediatricians should be expanded to ensure a health care workforce that 
is adequate to meet patients' needs. These incentives also should 
support pediatricians pursuing academic research careers or practicing 
in designated underserved communities.

                               CONCLUSION

    In conclusion, on behalf of the American Academy of Pediatrics and 
the children and adolescents I take care of in Alabama, I would like to 
urge the committee to keep children foremost in mind while you consider 
reforms to our health care system. This is a unique moment on our 
country's history and an opportunity for us to finally place children 
first.
    Providing all children with health care designed for them--a 
medical home--that emphasizes their healthy development and prevents 
illness when possible is an investment in our country's future. This 
investment coupled with needed improvements in health care financing 
and a strong primary and specialty workforce will provide all children 
and adolescents the greatest chance to lead long and healthy lives.
    Thank you again for the opportunity to testify. I look forward to 
your questions.

    Senator Brown. Thank you, Dr. Raulerson.
    My guess is you know the names of most of the 10,000 people 
in Brewton, AL. So thank you.
    I want to ask one question that all of you take a shot at, 
and then I will turn it to Senator Murray for her questions. 
Then I will come back and ask each of you some specific 
questions.
    The one question generally is, as we discuss--and I will 
just start with you, Dr. Thorpe, and work your way down, and 
each take a couple of minutes to answer it, if you would. As we 
work on healthcare reform and we look at the inefficiencies 
that you all pointed out very well, I thought, the 
inefficiencies of having some Americans insured and others 
uninsured, talk through, if you would, how or if ensuring that 
every American has meaningful health coverage will have an 
impact on the efficiency of this system.
    How covering everybody will increase the efficiency. How do 
we make that happen? And Dr. Thorpe, if you would start?
    Mr. Thorpe. Covering everybody is certainly a necessary 
condition to make the system work efficiently, both in terms of 
the premium base. So if we can change the whole nature of how 
health plans set premiums and how competition in the health 
insurance market works and move it away from competing on risk 
selection to have it compete on better metrics like outcomes 
and cost, that is a step in the right direction.
    So I think there is no question that we need to move to 
universal coverage in order to increase and improve the 
functioning of the health insurance system.
    On the care delivery system, one of the problems that we 
face with uninsured folks is that they come to the system too 
late and at the wrong time, at the wrong place. And so, to the 
extent that we have a system in place that is more geared 
toward early diagnosis, early detection, and then appropriate 
treatment in the right setting, that is also a plus.
    So we know from all kinds of data internationally that 
early detection and primary care, getting to patients earlier 
to prevent disease, and if they are sick, getting treatment to 
them earlier makes a big difference in terms of their 
healthcare outcomes.
    Senator Brown. Dr. Cooper. Oh, I am sorry.
    Mr. Thorpe. Just in closing, again, as I started out, I 
think our challenge here is that we have a system that works in 
thousands of unconnected silos. And I use Medicare as sort of 
an opening to try to make a change here, but the type of model 
I am talking about really applies to everybody. It is not just 
a Medicare model. It is a model that we should have for all 
Americans, and it is one that really is building integration in 
the system between care coordination, primary care physicians, 
specialists, hospitals, and community-based resources. I think 
healthcare reform can play a major role in building those 
integrated links that you have heard that are not as functional 
today as they could be.
    Senator Brown. Thank you.
    Dr. Cooper.
    Dr. Cooper. Well, I won't repeat what Dr. Thorpe said. I 
think it is well appreciated that insuring everyone is a matter 
of fairness, and it will have its major effect on efficiency at 
sort of the--picture a pyramid, a pyramid where there is a lot 
of very inefficient early care, and patients who aren't insured 
don't have access easily to that care.
    But as the pyramid goes up, utilization goes down because 
there are a lot of relatively healthy people or people who 
aren't very sick who need care. But they don't use a lot of 
resources.
    There are very few people at the top, but then it is an 
inverted pyramid. The people at the top who are the sickest use 
the most resources.
    There is an overlap because the people at the top who use 
the most resources of all are poor. Many poor people are 
uninsured. And so, one has to sort of differentiate in this 
notion of adding efficiency or what causes inefficiency, 
uninsurance and poverty.
    The major source of inefficiency--and I hate to apply that 
particular word to this circumstance, but the major source of 
inefficiency is poverty. Poor people, as low as 15 percent on 
the economic scale, use double the healthcare resources that 
more affluent people do.
    They are the people who are re-admitted. That is 
inefficiency. And they are the people who have recurrence of 
disease, and that is inefficient. The real inefficiency is the 
disorganized life and health and care among the poor.
    So, yes, have expectations that insurance will add fairness 
to the system and will spread the responsibility for costs more 
fairly. All of that is very important for efficiency. But the 
real inefficiency, if it all was perfect in every other way, if 
we had an absolute single- payer system and everybody was the 
same, the poverty problem won't disappear. And that is the 
major inefficiency in healthcare today.
    That has to be addressed in some of the ways that we heard 
in rural areas and others, systems that cope specifically with 
the poor. It is not going to be through physicians alone. But 
poverty is the major source of inefficiency.
    Senator Brown. Thank you, Dr. Cooper.
    Dr. Schlossberg.
    Dr. Schlossberg. Yes, thank you, Senator Brown.
    I think the inefficiency--as you call it, and certainly if 
we fix the financing mechanism--I don't think we will 
necessarily fix the inefficiency through the system because I 
think, just as Dr. Raulerson said, all of us experience the 
hassle factor. It took her 2 years to bring up the rural health 
clinic.
    We all suffer from a system where you walk into the office, 
you buy the service, and somebody tells you 60 days later how 
much you are going to get paid, if you are going to get paid, 
and what is going on. As we think about fixing the system and 
doing the financing, there are probably some other things we 
should do as well, which is maybe real-time adjudication for 
insurance reform when a patient walks in the door.
    Certainly, as specialists, we don't want to see end-stage 
disease. It is a lot more work for all of us. It is terrible 
for the patient. And so, I think getting people in earlier is 
also helpful.
    I think the other thing--as I see it, and I experienced it 
this weekend when I was on call--is I don't see much 
conversation about personal responsibility for all of us.
    I think of it as healthcare being a right, but we should 
treat it as a privilege. And when people have a privilege, they 
protect it. I don't hear that conversation in Washington. Maybe 
that is a difficult political conversation?
    This weekend, I was on call, and there was an older 
gentleman. He was a Medicare patient who, unfortunately, has 
bad bladder cancer. One of my partners operated on him, and his 
right kidney is blocked. So he has got a tube in his back. And 
as it just so happens, he can't urinate. So he is going to have 
a tube in his bladder with two bags.
    And the daughter was in the room, and somebody said, 
``Well, home health will not take him with two bags. That is 
their rules.'' So, therefore, he has to stay in the hospital.
    So I turned to the daughter, and I said, ``What do you 
think? '' I looked at both of them, and I said, ``What do you 
think? '' They said, ``No, we can take care of this. We are 
going to go home.''
    Well, they were responsible. They didn't feel the 
entitlement, and they were willing to participate in their 
care. And I think whether it is through public service or other 
things, we need to fix the financing mechanism. We need to 
decrease the hassle factor. But ultimately, I think we need to 
change the personal responsibility quotient in this country.
    Thank you.
    Senator Brown. Thank you, Dr. Schlossberg.
    Dr. Nochomovitz.
    Dr. Nochomovitz. Thank you, Senator Brown.
    I think I would make five points as it relates to 
inefficiency. As far as the universal coverage is concerned, I 
think that that is a matter of public policy, and I agree with 
everybody else in terms of its necessity and the fact that we 
have reached a point where we just must do that.
    One of the major areas of inefficiency can be improved by 
administrative simplification. On the payer's side, there could 
be uniform documentation and uniform approaches to 
credentialing of doctors, to payment procedures, to the method 
that payments are made. And technology can really assist from 
the doctor's office or from the clinic's office in introducing 
that degree of administrative simplification, which is now a 
Byzantine collection of potpourri that is very difficult to get 
one's arms around.
    The third point would be related to information technology, 
where true interoperability, which is not easy to achieve, 
would prevent duplication of tests. We have a lot of 
duplication of tests because people don't know what the patient 
has had. And when a doctor sees a patient in the emergency 
room, the patient may have had all sorts of diagnostic tests a 
week earlier, but they are just not available to the physician.
    The fourth point relates to coordination of care, and that 
would be different in different communities. This is not a one-
shoe-fits-all issue. Concepts like the medical home certainly 
have a place, but it is not a one-shoe-fits-all issue. You have 
different issues in coordination of care in rural communities, 
as so eloquently described. You have got different issues of 
coordination in suburban communities or in urban communities.
    I think we need to create the necessary structures and 
build on existing structures, whether they be large or small, 
incorporating all constituencies to provide this coordination 
to create the efficiencies.
    And last, one must reiterate that there has to be a focus 
on practice guidelines, evidence-based medicine, that we can 
stop doing redundant tests. And we need to call upon the 
physicians of this country, whether they be in organized 
medicine, specialty societies, academic centers, to step 
forward and assist us in creating these guidelines that are not 
necessarily all available and not necessarily self-evident.
    But whatever we do will go a long way toward reducing waste 
and improving efficiency and cutting costs.
    Senator Brown. Thank you, Dr. Nochomovitz.
    Dr. Raulerson.
    Dr. Raulerson. I have three points I would like to make. 
First, having insurance coverage is not the only thing that you 
need. As I mentioned, Alabama has done an excellent job of 
covering children through Medicaid, the Children's Health 
Insurance Program, and Blue Cross Blue Shield's Caring 
Foundation.
    But with children in my practice, even with insurance, I 
still went in a hole. A lot of it had to do with the way 
Medicaid pays and the fact that they would be on again, off 
again. And sometimes I would see them for 3 months, and I 
wouldn't get paid for those 3 months. And then they would be 
back on, and trying to get paid was really a hassle. So that 
was a problem.
    The second thing, when my patients turn 19, in Alabama, 
they lose their Medicaid, and they have no hope of insurance. A 
19-year-old who is in school or who has a job at Wal-Mart 
cannot afford insurance. And so, I have a lot of 19- and 20-
year-olds in my practice with asthma, with diabetes, with other 
kinds of problems, who have no health insurance when they turn 
19.
    And finally, it is not just the people in poverty because 
sometimes an illness makes you in poverty. I have a family in 
my practice whose child was born with a problem that she has 
outgrown. She is 5. She is starting to kindergarten this year, 
and she is a healthy little girl.
    But she had a severe, life-threatening disease the first 
few months of her life. Her mom, who is a college graduate, had 
to quit her job and stay home and take care of her. Her dad, 
who is also a college graduate and has a pretty good job, was 
trying to pay the health insurance, trying to pay for their 
travel to go to Mobile and to go to Boston, where she got some 
of her care. And they actually ended up on Medicaid because 
they went broke.
    And now that she is 5 and doing so well and over her 
illness and is going to be a beautiful, healthy child, they are 
still paying on medical bills and will be for a very long time.
    Senator Brown. Thank you, Dr. Raulerson.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    An excellent hearing, and I really appreciate all of you 
coming and giving us your very important time to help us 
understand these issues.
    Dr. Cooper, I wanted to ask you, you talk in your testimony 
a lot about innovation and how we should deal with both the 
long-term and short-term healthcare workforce shortage. I agree 
it is really important to make some investments so that we can 
have people in the pipeline, but it is going to be a while 
before they get there.
    So I have a question about the short term. What do we do in 
the short term? You talked in your written testimony about 
innovative practice arrangements. Can you talk to me about how 
you think perhaps other primary care workforce providers, nurse 
practitioners, or physician assistants could be helpful?
    Dr. Cooper. Well, they are going to be absolutely helpful 
and absolutely necessary. And you will hear a lot of 
discussion, of course, of whether a physician can do it better 
or a nurse practitioner can do it better. And they are 
interesting conversations to have, but they become irrelevant 
because there aren't enough people.
    We don't have that choice. We don't have the opportunity to 
choose from column A or column B. We either get column A or 
column B.
    Not only in primary care, but in specialty care offices, 
nurse practitioners and physician assistants (PA) are very 
effective in giving and providing the general care of specialty 
patients and the vast majority of care that we consider primary 
care.
    Most acute self-limited disease, wellness, patient 
education, prevention, all of those skills are commonplace 
among nurse practitioners, and many of them are commonplace 
among physician assistants. And increasingly, physicians, 
whether they are in generalist or specialist practices, are 
seeking to work in consort with a nurse practitioner or a PA to 
even urologists or general internists, either one, to do those 
tasks that a physician doesn't have to do.
    If you put this in a historic context, in the 1920s, 25 
percent of healthcare providers were physicians. Now it is 
about 7 percent. When I was an intern, the nurses all had pink 
stethoscopes, and I couldn't exactly figure out why that was. 
They worked just as well as my stethoscope. In fact, I had to 
use theirs because mine broke, and I couldn't afford to get a 
new one.
    Only later did I find out that they were pink because in 
the years before I was an intern, the AMA insisted that nurses 
couldn't take blood pressures. It was too technical a task. And 
therefore, nurses didn't have stethoscopes.
    [Laughter.]
    You laugh today, but they will laugh 20 years from now 
about things we are arguing about today. And so, nurses, of 
course, take blood pressures today.
    But they couldn't have--it was unacceptable professionally, 
politically unacceptable like what we are dealing with. To be 
objective about primary care is politically unacceptable. To be 
objective today, just as being objective about nurse 
practitioners doing blood pressures was politically 
unacceptable then.
    It has been a moving process, but with the process, the 
educational level of those to whom work has been delegated has 
risen from nurses to nurse practitioners, now to doctoral-level 
programs. From brief training for a physician assistant, to 
longer training, to specialty certificates.
    We need that workforce. It is not large enough. I didn't 
have time in my comments to comment on it. But the number of 
nurse practitioners graduated annually has plateaued at about 
8,000, up a little bit last year. Unclear where it is going. It 
has been that way for more than 5 years. That whole population 
of practitioners is aging, and the supply will plateau. The 
same for PAs.
    The answer is, they play an integral partnership role--that 
is No. 1--with a practitioner, generalist or specialist. And in 
primary care, in that spectrum of primary care services, they 
are quite capable of practicing independently with a collegial 
relationship, distant supervision, and accomplishing the vast 
quantity of services that otherwise would have to be given by a 
physician.
    I would view that as a real step in the direction of 
efficiency, and we see it, on the one hand, happening and, on 
the other hand, being fought back by those just the same ones 
who tried to fight back in the 1950s about nurses taking blood 
pressure.
    But the world is moving, and that is where it is moving, 
and that is what they have to do.
    Senator Murray. OK. Very helpful.
    My time is up, but I just want to mention, Mr. Chairman, 
that we do have to look at the short term, and I hope we look 
not just at healthcare reform in dealing with these issues, but 
in some of the things we already have in place, like graduate 
medical education.
    We also have the National Health Service Corps that 
provides scholarships and loan repayments for doctors and 
nurses and healthcare professionals. Dr. Nochomovitz, I think I 
saw it in your testimony, talking about the National Health 
Service Corps and the importance of that.
    I have been working very hard on the Budget Committee to 
try and increase those numbers for access to those programs. In 
fact, this Administration increased the National Health Service 
Corps, too. But those are some of the things I hope we don't 
say we will have to wait until healthcare reform passes. We 
have got to focus on a lot of this in our current budget and 
appropriations process.
    But my time is out, and I really appreciate all of your 
testimony today.
    Thank you.
    Senator Brown. Thank you, Senator Murray.
    Dr. Cooper, thank you for your answer. I want to pursue 
that after Senator Whitehouse.
    Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thank you, Chairman.
    This is a happy occasion for me, not just because such a 
distinguished panel is here and not just because a fellow 
member of my class of 2006 is chairing a significant hearing in 
the Senate, but because this is my first opportunity to speak 
as a new member of the HELP Committee.
    Perhaps a temporary member, I have been warned. But 
nevertheless----
    [Laughter.]
    Nonetheless, happy to be here for that.
    Senator Brown. My guess is after Senator Whitehouse's 
performance today, we will want him on permanently.
    Senator Whitehouse. My timing certainly could not be 
better. If you are going to be a temporary member, this is the 
time to be a temporary member. And it is a great honor for me 
to serve on this committee while Senator Kennedy chairs it, 
given his long and distinguished career of interest and 
struggle on these issues.
    It is a great lesson for a new Senator to see Ranking 
Member Enzi and Chairman Kennedy work together on issues. The 
HELP Committee has a wonderful model of bipartisan cooperation 
that I think is a testament to both of their characters.
    Of course, the work ahead of us is daunting. I hope, Dr. 
Cooper, that when people look back at the struggles we are 
having 20 years from now, they actually laugh and not weep. If 
they laugh, we will have succeeded.
    This hearing is important. In Rhode Island, we have a story 
board that I have put up on my Web site. I do community 
dinners, and I go around the State. Rhode Island is a small 
enough State I can actually invite pretty much everybody to 
dinner.
    [Laughter.]
    That is a bit of an exaggeration, but we have regular 
community dinners. And people come, and they talk about 
different issues.
    Healthcare is the one that most captivates people because 
you have stories like your young lady in Alabama who, through 
no fault of her own, became ill as a child. And the result of 
that was the bankruptcy of her family. Her family was 
financially ruined because of that through no fault of their 
own because our system is so poorly managed.
    We have hundreds of people who have come in across that 
story board and told their stories. And while many of them are 
stories that come out of the finance, access, and coverage 
failures of our healthcare system, equally as many and, indeed, 
I would say probably more come out of the delivery system 
failures. And we are really not as experienced yet in getting 
our hands around those.
    That finance, access, and coverage fight is a mature 
political fight here. It goes back to the Clinton struggles of 
1993 and 1994. We know less about the delivery system issues.
    My question to all of you--just picking out some of the 
things that have been said--there has been a reference to the 
Byzantine billing and approval systems that be-devil practices 
across the country, the need to move from just having equipment 
on doctors' desks to true interoperability of HIT and the 
establishment of health information exchanges to do that.
    About how you establish meaningful guidelines for 
practitioners with consequences so they don't just go gather 
dust on the shelf someplace, but without getting to the point 
where you have Government dictating what medicine should be 
practiced or not.
    How you cure the interruption of the risk and reward 
feedback loop that is the fundamental premise of capitalism and 
entrepreneurship, which is broken in the healthcare system, 
particularly for quality investments and prevention 
investments, where the party who has to take the trouble and 
take the risk and put out the funds and retrain their folks and 
actually assume the risk of getting it done gets a very small 
sliver of whatever the reward is from that.
    So we are built in to drastic underinvestment in quality 
and prevention unless we fix that. And then there are all the 
organizational questions about accountable care organizations 
and medical homes and what the different models should be.
    Given that array of issues, and I have just touched on a 
few that have come up during the course of this hearing, a 
question I would like your thoughts on is whether you think 
that in our structure of Government right now we have the 
authorities and the power in place, the accountability in place 
to manage a delivery system reform that has to take all of 
those questions on in an interlocking way, because they affect 
each other. There are virtuous cycles that emerge, and there 
are problems that emerge if it is not done in a consistent way 
across many issues.
    And if not, and we have had CBO testify that that authority 
does not exist in Government, I would like to get you thinking 
a little bit about what steps we need to take to make sure we 
can manage this transition before the healthcare system finally 
falls in around our ears.
    Mr. Thorpe. Well, that is quite a macro----
    [Laughter.]
    Mr. Thorpe [continuing]. But it is a good question. I will 
just sort of try to highlight a couple of things. I do think 
the good news is that there are good models out there in our 
healthcare system today that we should study closely, try to 
replicate and scale them. And the lessons from those models, 
one is in North Carolina's Medicaid program. One is in the 
State of Vermont. One is starting to evolve in your own State--
what Chris Kohler and others are doing in Rhode Island.
    The lessons from those models are that if you look at the 
successful approaches--the Geisingers, the Mayos, the 
Intermountain Healthcares--those are great case studies. Our 
challenge is we can't replicate and scale those. We can learn 
from why they work and how they work and see if we can't pull 
those functions out and start building more integration into 
the system.
    You build more integration and coordination into the system 
by doing two or three things. One is through payment reform. So 
you have got to align the financial incentives with the 
delivery system incentives. And so, much of what is being 
talked about in terms of hospital bundled payments, focusing on 
high re-admission rate hospitals really starts to move us down 
the path of getting to think about the relationships and the 
transitions as patients move from hospitals back into the home 
and community and so on.
    So I think we have got to change the payment environment.
    Senator Whitehouse. I guess my question that I tried to ask 
is can you do something like that--can we do it, something like 
that just once in a piece of legislation and walk away?
    Or is it too dynamic a forward-going environment not to 
have to establish some continuing authority that can look at 
where the payment is going and moderate it as new things are 
learned? That can look at how HIEs are developing and moderate 
that as new things are learned that can go through these issues 
and not just sit here like a mortar and launch a trajectory 
that you know is going to land someplace but understand that it 
is a more dynamic environment, and you have to fly it like an 
aircraft. And somewhere, somebody has to be doing some 
piloting.
    Mr. Thorpe. No, I think that is right. I think you have to 
focus on the payment side. I think you have got to build, as I 
have been talking about, a chronic care infrastructure that 
deals with the fact that most of healthcare is balkanized 
smaller physician practices. We don't have the types of care 
coordination built into our system.
    We can do that, and then we can align them with financial 
incentives to make a difference. So I think we can go in the 
right trajectory, but you need feedback and study and 
improvement as you go along the way. So it is not going to be a 
one-shot deal, where you just sort of do the legislation and 
then walk away and think we have got it done.
    One of the----
    Senator Whitehouse. Mr. Chairman, I know I am over the time 
at this point, and I apologize. And maybe what I should do is 
invite anybody who wishes to add to the doctor's remarks to do 
so for the record----
    Senator Brown. Well, you have as much time as you need. So 
if you want everyone to answer, unless you keep interrupting 
each one and asking three additional questions of each one.
    [Laughter.]
    I don't know if he acts like this in his other committees, 
but take what you need, Senator Whitehouse.
    Senator Whitehouse. I am taking liberties. I am taking 
liberties because of my friendship and affection for the 
distinguished Senator who is chairing this hearing.
    Dr. Cooper. I think you raise a very important issue. And 
as I heard you describing it, I couldn't help but think of the 
NIH. What the NIH does, it enables. What is very clear is we 
don't have the answer. There isn't one answer. And in fact, the 
medical home, which barely exists, if we were using medical 
effectiveness techniques to evaluate the medical home--I mean, 
the medical home is like a new drug that has been tried on four 
people.
    It is an anecdote that we are now going to have the FDA 
approve a drug that was used on four people. So it makes no 
sense whatsoever. But it happened to appear, and whatever.
    As I commented in my opening remarks, nobody has ever 
organized medicine, organized the practice of medicine under 
the circumstances that we are entering. That is why there is 
all this talk about Marcus Welby primary care because people 
know about that from the 1960s. I mean, the students don't even 
know about Marcus Welby. It was too long ago.
    So the NIH is the example. I would say don't build, but 
enable. I would say I don't know how to say this politely. I am 
too old to be polite. Get out of the way and let it happen. Let 
the hundreds of Geisingers and hundreds of rural communities 
and many specialties figure out what to do and learn from 
themselves.
    You know, medical effectiveness wasn't invented yesterday. 
I mean, we have actually, as physicians--you may not believe 
this. We have actually been concerned about doing the right 
thing.
    I mean, there have been textbooks. Osler wrote about how to 
do things well. It wasn't called the ``Osler book of medical 
effectiveness,'' but that was the authority. We look to those 
authorities, Conn's Current Therapy, clinical trials.
    I mean, Congress didn't invent medical effectiveness. We 
actually--I know this will surprise everyone. We actually have 
been concerned about this as long as I have been in medicine, 
which is half a century.
    So let us do it. Enable us. Fund medical effectiveness. 
Fund ways that people can actually do the sorts of things you 
heard about in a rural community. Here, I want to do an 
experiment in my rural community, but where can I go for the 
money for infrastructure, the very thing you refer to in your 
comment.
    Where can I get some money to see if maybe this would work? 
I would have to do it out of my practice funds. No, but if I 
could go someplace. And then there would be a clearinghouse, as 
there is for the NIH.
    I say look to the NIH. If the NIH had done in the 1950s 
what is being talked about for healthcare reform today, we 
would be a Third World country in medical research.
    I think we all have a lesson to learn, and that is, really, 
I know it is popular not to trust physicians. They are bad. You 
can succeed in life by saying physicians churn the system and 
so forth. Honestly, we are not all that bad. We are actually 
rather good, and most of us are really quite wonderful. Trust 
us a little bit.
    [Laughter.]
    Trust us a little bit, and I think you will find that 
without all of the machinations and all of the strangleholds 
that we have to get ourselves out of, to do the very job we 
want to do, we'll probably do it better.
    Dr. Raulerson. Could I speak a little bit about the medical 
home? Because in pediatrics, medical home is more than just for 
patients. I actually have been working in the medical home 
concept for over 30 years now, and I feel that my practice is a 
medical home and has been for a very long time.
    But I think all of us are in a continuum. We are somewhere 
along the pathway of doing the best thing we can for our 
patients. I look to the experiments that have been done in 
North Carolina, and I wish that Alabama could model our medical 
home system after North Carolina.
    What they have done, with the guidance of the American 
Academy of Pediatrics and what we call Bright Futures, which is 
what healthcare should be for children, they have used this 
model in North Carolina. And they are providing excellent care 
for children there, and they have shown that it is financially 
very sound. And they are saving that State's Medicaid program a 
great deal of money by providing a medical home using 
pediatricians, along with their nurse practitioners and their 
physician assistants, to take care of children from the get-go 
and to prevent things before they get to be big problems.
    Senator Brown. Dr. Schlossberg, would you like to continue 
on Senator Whitehouse's question?
    Dr. Schlossberg. Sure. It is always hard to follow Dr. 
Cooper, but I am not sure it will be quite----
    Senator Brown. Dr. Raulerson actually just did it pretty 
well.
    [Laughter.]
    Dr. Schlossberg. Yes, I will do it poorly, I will tell you 
that. I would offer two threads.
    One is related to health information technology and how you 
change that because I think you talked about change. And so, a 
month ago, we brought up at our health system, which is seven 
hospitals, our tertiary care hospital, 600 beds, 1 day, big 
bang. So all the systems went live with physician order entry 
documentation.
    It was a 4-year journey that started 3\1/2\ years ago 
because we created a vision. We created a culture of shared 
responsibility, and it was going to be event-driven. And we 
said to the medical staff, ``If you do this, we will do that.''
    We brought people along slowly. We communicated. We 
participated with the medical staff in doing it. So, what I 
think maybe the Congress could do is develop that vision that 
says we are not going to tolerate this, this, and this. 
Whatever the 80 percent is that people can agree on up here, 
and pick the vision of what people want to do.
    Then the specific thing you brought up, I guess, was around 
guidelines? The American Urological Association is very active 
in guidelines. We have been doing them for 10 years. The 
problem with guidelines at the point of care is they are not 
absolute.
    They are not absolute for two reasons. They are not 
absolute because at times the medical evidence doesn't allow us 
to be. And again, sorry for an unpopular comment, but they are 
not absolute because we don't have any malpractice protection 
if we don't do something.
    So if we sit across from a patient, and we said the 
guidelines--you don't need the CT scan, or you don't need the 
ultrasound. Or you are 82-year-old, you don't need the PSA. And 
they say, ``Sorry, I want it. Order it, and Medicare will pay 
for it.'' What do we do? We order the PSA. We order the CT 
scan. We order the ultrasound.
    I had that ultrasound conversation yesterday with a lady 
about a renal mass that probably didn't need another 
ultrasound. So somehow at the point of care, we don't have that 
protection to try to do the right thing, even though a lot of 
us want to do it.
    So I think the answer is I think Congress could 
strategically help us with some of those things. And as Dr. 
Cooper said, then maybe let us solve some of the problems.
    Senator Brown. Thank you.
    Did you want to add something, Dr. Nochomovitz?
    Dr. Nochomovitz. Yes. I think that the Federal Government 
clearly can and is going to do something, and it does have 
substantial power, which will influence a lot of things. 
Because historically, whatever gets done in Medicare tends to 
trickle down into the commercial markets, and that is a very 
serious responsibility that our leaders and legislators have.
    Because even if it is a mortar shell that is going, landing 
somewhere, it does have an enormous trickle-down effect, and we 
all have to live with it. And I think whatever is done will 
immediately snowball throughout this country because of that 
impact.
    Now what the ongoing stewardship of that is what I think 
you were asking, I think that is where we do need to look at 
the different provider constituencies for help, and it is not 
exclusively--with respect to Dr. Cooper--it is not exclusively 
academic. It may be rural. It may be inner city. It may be 
urban.
    There are a lot of people who should participate in this, 
organized medicine, the trade associations, because basically 
what you are trying to look at is you are trying to look at 
three things. You are looking at access, continuity, and 
coordination.
    So to the extent that what we do can impact in different 
communities and different settings access, continuity, and 
coordination, we are winning. And the guideline issue will just 
be a work in progress forever.
    Senator Brown. Thank you, Senator Whitehouse, for your good 
insight and your incisive questioning.
    I am going to ask each member one or two questions or each 
panelist one or two questions to conclude the hearing. And if 
Senator Whitehouse wants a second round, I suppose we can do 
that.
    I will start with Dr. Thorpe. I will just work my way. Dr. 
Thorpe, you had some part of your testimony about the issue of 
community health workers. And in my hometown of Mansfield, OH, 
I had my first exposure to what community health workers can 
do.
    I did a roundtable, which Senator Whitehouse takes his 
constituents to dinner. I serve them water.
    [Laughter.]
    In a roundtable of 15 or 20 people, and I had one in----
    Senator Whitehouse. Not bread and water?
    Senator Brown. Not bread and water. Just water.
    In one of the poorest areas of Mansfield, and it is an area 
that is mostly African-American, bordering on an Appalachian 
white community. And they had the highest rate, by far the 
highest rate of low-birth weight babies of anywhere in the 
area, about four times the national average.
    They use community health workers, young white and African-
American women, high school graduates or G--I was going to say 
GME--GED. Sorry, there is a difference, I understand, Dr. 
Cooper.
    Dr. Cooper. Not as big a difference as you think, but there 
is a difference.
    [Laughter.]
    But nonetheless, they were dispatched to their 
neighborhoods where they lived, and they talked about 
nutrition. They brought them in to OB/GYNs, pregnant women, and 
they dropped the low-birth weight baby rate almost to the 
national average over about a 3-year period.
    I met with some of these women, and they had great 
accomplishments in their lives at the age of 22 or 23. I would 
also add, partly, Dr. Cooper, your comments about getting 
people into the business of medicine and other ancillary 
healthcare services that some of these women will be so 
empowered from this experience, I would bet they will be nurses 
and doctors, even though they have had little opportunity in 
their lives to this point.
    Without belaboring this too much, the community health 
worker designation has only been in Ohio for 5 or 6 years. I 
believe they are licensed by the State nursing board. So talk 
to me about how we scale this up. And we are working on the 
healthcare bill, particularly with Senator Harkin because this 
is all about prevention, and he is, at least on this committee, 
working that piece of it, if you will.
    But how we scale this up in terms of training, in terms of 
bringing them, these kinds of workers into the medical home 
model, how we can do this nationally in a way better than the 
pockets that we have seen it in places that you acknowledged 
earlier?
    Mr. Thorpe. Well, I think you look at the good case studies 
of places that are doing this right now. North Carolina has 
been mentioned. Vermont does this statewide for all patients. 
And the challenge is building a primary care infrastructure. We 
don't have a primary care infrastructure that really does 
primary prevention such as, when somebody has five, six, seven 
different chronic conditions, particularly in Medicare, and 
working with patients outside the physician's office to manage 
and execute the care plan.
    So the vision here is to have a team of care coordinators--
nurse practitioners, nurses, social workers, mental health 
workers, community outreach workers--many of the types of 
community health team workers you were talking about 
collaborate and, in fact, really fully integrate themselves 
with smaller physician practices to build a primary care 
infrastructure that does both primary prevention and care 
coordination.
    North Carolina does this statewide. They have been doing it 
since 2003. Again, Vermont does this for all their patients in 
three sites, and it does it very successfully. You build the 
primary care infrastructure. You build referral patterns 
appropriately to specialists. You are really building 
integration in the system in a way to make it more functional.
    I just go back to my basic statistics on it. You know, if 
you have got 30 percent of the growth in spending in Medicare 
nationally linked to a doubling of obesity, and if 75 percent 
of spending is linked to chronically ill patients, these same 
type of diabetic hypertensive patients, we have got to find a 
way to build a primary care infrastructure and a better way of 
managing them.
    I think the way you do it is pretty simple. You look at the 
functions that make the multispecialty clinics, that we have 
seen work well, effective. It is having a formal transition 
care model. We have seen it at Penn this model, a nursing-led 
model for years. It has been very effective.
    Geisinger does this very effectively. So you build 
transition care into it. That is just simply a care coordinator 
working with a patient as they go into a nursing home or a 
hospital, doing an in-site visit, and working with the 
admitting physician at discharge to do medication 
reconciliation and make sure that the care plan is followed.
    They have got to be closely integrated with the smaller 
physician practice, whether it is a specialty practice or 
primary care practice, but that collaboration is critical. And 
having that close interaction with patients, working with them 
at home.
    So you build the functions in. We know the types of people 
that we are looking for. It is nurses, nurse practitioners, who 
do a great job of delivering primary health care. And if 
Medicare wants to get into the game, just like Medicaid does 
today in the private sector, we have to make a modest 
investment to build that infrastructure to work with Medicare 
fee-for-service patients. But it will spill over to work with 
other patients as well.
    So as I mentioned in the testimony, we are looking at 
something about $2.5 billion a year when it is up and running 
fully. It would provide nationally the capacity to have 
community health teams everywhere in every hospital referral 
area in the country. That if physicians wanted to work with 
them or collaborate with them, they could be community health 
centers, small physician practices, bigger physician practices. 
You are building that infrastructure out there so that we can 
do a better job of prevention and managing chronic disease.
    And as I have said, if you look at the data on this in 
terms of how well-functioning systems work, whether it is 
Intermountain Health, Geisinger, Marshfield--you can go down 
the list of them--if you can't save 2 percent in terms of the 
cost structure, then we have got it set up wrong.
    So I think that is the way you do it. I think it is easy to 
scale it. You are focusing on the effective functions, but we 
have got to make a modest investment to make it available 
nationally.
    Senator Brown. Thank you.
    Dr. Cooper, taking a bit, connecting with that, you talked 
about the shortage of physicians. And with your conversation 
with Senator Murray, I thought that shed some light on some of 
the next steps.
    And while you talked about the training of physicians over 
a 
10-, 12-, 15-year period, you are precisely right on that, of 
course. There are functions that are--or I guess the question 
is are there functions that physicians now perform that other 
healthcare workers can do?
    Because without causing fights between the nurse 
anesthetists and the anesthesiologists, I don't want to weigh 
into that, or between a specialist and a general practitioner. 
I am looking more for do we, along Dr. Thorpe's ideas and 
models, is there a way--because in large part, we can train. We 
can train community health workers and nurse's aides and the 
physician's assistants and PTs and OTs and a whole lot of other 
people. We can train them more quickly. There are different 
educational levels, different training levels.
    Is there a way to integrate using the, I guess you would 
say the much deservedly maligned medical home model--but is 
there a way of doing this, to answer your both criticisms and 
prescience perhaps down the line by finding ways to bring that 
together better perhaps than we have, if that is clear?
    Dr. Cooper. Well, you know, you have to differentiate the 
rhetoric of what should happen, like a medical home, for 
example, and what is actually happening. What are primary care 
or generalist physicians or specialists actually doing? And 
what they are actually doing is along the lines of your 
question, so that they are jettisoning things that they don't 
have to do.
    I couldn't help but remember being in Washington about a 
decade ago. And as I was about to give a talk to the 
ophthalmology association, the president said to me, as he was 
putting the microphone on my tie, ``You know, 70 percent of 
what we do is optometry.'' And in fact, that has been 
jettisoned to optometrists.
    The dentists jettison things to hygienists, dental 
hygienists. So the physicians are always in the process of 
offloading or delegating things that people can otherwise do. 
And yes, I think one thing that is necessary for where this 
rocket lands is to be sure there are enough physicians out 
there. If we don't increase physician supply, they will, 
Senator Whitehouse, cry rather than laugh.
    It will be a disaster. It is almost a disaster already. We 
can have this conversation about how to fill in for a little 
while, but after all--after a little while, we will have 
exhausted that ability. We will not have community health 
workers. We will not have nurse practitioners and PAs, and now 
physicians are backed into the corner doing what only 
neurologists or neurosurgeons, urologists and oncologists can 
do, and there aren't enough of them.
    So your question really is, as we back them in the corner, 
who can pick up what is left? And yes, encourage the nurse 
practitioner programs. They need help. They are not being 
developed fast enough. Be supportive of all the other kinds of 
workers that Dr. Thorpe talks about within these community 
networks.
    Build the infrastructure. But don't look to physicians to 
run that infrastructure. Look for them to participate in the 
infrastructure as physicians.
    Senator Brown. Fair enough. Yes, I, first of all, don't 
want to back you into a corner. It might be a very dangerous 
thing to do.
    [Laughter.]
    But I do--I wonder, and this is maybe idealizing a little 
too much. If we did the community health workers right and we 
did the nurse practitioners right and we did the optometrists, 
ophthalmology/optometrist construct right, would the shortage 
of physicians you cite or you predict be so acute?
    Dr. Cooper. The answer is yes. The answer is the way we 
trend this is back to the 1920s, and we assume that this 
offloading process is continuous. And we don't build into our 
projections that physicians will be the primary taker of blood 
pressures, for example.
    So as we project forward, it is the changing role of 
physicians as they delegate. When we project the physician 
workforce forward, it is a much slower rate than the healthcare 
labor force overall. The assumption is that tasks will continue 
to be delegated to others and that physicians will be able to 
do what physicians do.
    Our problem is that those trends can't continue with the 
number of physicians we have. We don't have enough physicians 
even if they delegate to community health workers and nurse 
practitioners and so forth. And so, now we have to figure out 
how to make it possible for even more, and that means having 
other people enter into areas of care that they might otherwise 
not have done.
    Senator Brown. But I----
    Dr. Cooper. Therefore, there are the doctoral-level nurse 
practitioner programs, as an example. I am sorry.
    Senator Brown. No, no, that is all right. I interrupted 
you.
    I would also argue if we do the community health workers 
right and we do the nurse practitioners right, there will be, 
in fact, fewer cases of diabetes and low-birth weight babies.
    Dr. Cooper. Oh, yes.
    Senator Brown. And fewer need for the specialists to take 
care of those low-birth weight babies. I mean, that goes 
without saying.
    Dr. Cooper. I would agree with you entirely. And I would 
say if it turns out, then let us start planning to expand the 
physician workforce. Let us start building, and we will build 
toward a target. We can always turn off the spigot if you see 
this great success.
    I am too old to share your great optimism that we are going 
to prevent diabetes.
    Senator Brown. But you are also wise enough to share my 
optimism.
    Dr. Cooper. But I do think we can cut those low-birth 
weight babies down.
    Senator Brown. I am going to have to cut you off and go to 
Dr. Schlossberg next. Sorry. Because I could talk to you a long 
time, Dr. Cooper. And I know Senator Whitehouse is probably 
waiting even more, too.
    So a bit of a more pedestrian question perhaps for Dr. 
Schlossberg. You talked about rural providers and how difficult 
it is to attract specialists to rural America, and almost every 
one of our States, almost every one has some shortage of rural 
providers. Give me prescriptively, if you will, some thoughts 
about attracting specialty providers in underserved areas. And 
not just rural, but also inner-city areas that also suffer from 
shortages.
    Dr. Schlossberg. Yes, I mean, that is a tall order that 
people have been trying to solve. I think if you look at why we 
got there, I think we are there because of the complexity of 
specialty medicine.
    So if you look at urology, for example, a functional 
urology group is probably, at a minimum, three or four people 
because of the medical science that goes with it. When you have 
this shortage, people seek a job that they think is in their 
best interest. And so, why should I go work in a rural area if 
I can work with three or four other physicians?
    I think the other thing that drives the lack of specialists 
in the rural hospitals is the business of medicine, the 
complexity of medicine, and something we haven't talked about, 
which is ER call. And I am dealing with today in my job trying 
to fill emergency room call for specialists because we are 
trying to recruit pulmonary critical care physicians to a 
smaller hospital, and none of them want to come because that 
means, ``How much call do I have to do? And how is that? ''
    As you look at the rural communities, one of the things 
that they struggle with is staffing the emergency rooms and 
staffing the acute nature of what happens. I think we do 
personally need to have a lot more innovative solutions, like 
Dr. Raulerson talked about, whether it is telemedicine or other 
things.
    I think we may need to reset the expectations of some of 
these rural hospitals that says we need every specialty. We 
need every procedure. In my specialty, it is robots and robotic 
prostatectomies and laparoscopic stuff. It is complicated 
stuff.
    Should that happen at all these places? What kind of 
specialty care do you need at all these places? I think we need 
to look at those creative mechanisms.
    Senator Brown. Thank you.
    Dr. Nochomovitz, talk to us in some detail, if you will, 
about the structure of the UH model in terms of primary care, 
working into your answer preventive medicine, preventive care. 
If there are ways that you could suggest nationally for us, for 
a national model of how to use less-educated, less-trained 
people like community health workers and others for preventive 
care, and especially in light of dealing with the disaster that 
diabetes will bring people individually and society 
collectively in the next generation.
    Dr. Nochomovitz. I think that is a good segue for me to 
begin with a comment about some of Dr. Cooper's testimony. I 
think that one of the questions we should all ask ourselves 
here for the sake of transparency is who are our doctors? The 
people in this room and people sitting at this table.
    We probably all do have a fine internist or fine primary 
care doctor who coordinates care for us. This doesn't detract 
from the need for allied health professionals. But I think, as 
a specialist, I think there has been somewhat of an 
understatement here of the value of a well-trained, efficient, 
primary care physician who can coordinate care, advise, 
counsel, engage, navigate. And we shouldn't forget that, and 
this needs to be reiterated.
    That goes into--that is a good segue for me into the model 
that we have used. And what we have done is we have taken, 
first of all, what we have perceived to be the best physicians 
in local communities and brought them into a structure that 
gives them significant independence, authority, and autonomy 
but allows them to leverage the resources of a larger 
organization.
    Had they not become aligned with our organization, the 
quality guidelines, the technology, the e-prescribing, the 
electronic office wouldn't have been possible for these 
physicians. So therein is a story that is both positive and has 
a negative side to it.
    The positive side is that larger organizations, many of 
whom have been cited, have the ability to bring in the 
necessary technology, support to look at guidelines, to look at 
coordinated care, to provide comprehensive diabetes programs 
across a region with diabetic nurse educators and 
endocrinologists and primary care doctors.
    But we do need to look to the 60 percent of physicians 
practicing in small practices, and again, how Dr. Thorpe is--
how do you scale that? And it might be that those parameters 
need to be provided in alternate structures, some of them that 
have been alluded to. And perhaps the accountable care 
organizations, perhaps spin-offs or extensions of integrated 
delivery systems, spin-offs or extensions of new, even from the 
private sector of integration of independent doctors, hospitals 
that have incented in the payer mechanism to provide these 
services with some guidelines that are associated with reward.
    Now there will have to be wholesale changes to some of our 
regulatory laws as far as Stark, anti-kickback, and other 
things if you are going to have these kinds of structures. But 
I think the idea of--healthcare is a local phenomenon. So one, 
first of all, needs to build on what one has. The easiest way 
to build is to build on existing structures that can implement 
these quality programs, technology, etc.
    What we have done is we have gone even to smaller 
communities, some rural communities associated with critical 
access hospitals. We have organized physicians in clusters and 
given them the infrastructure to do the diabetic care, the 
urgent care, the after hours care in a low-cost--and we did the 
urgent care to create the low- cost environment, even though we 
were not essentially 100 percent fee-for-service environment.
    But we anticipate the need for this, and we think it is the 
right thing to do.
    Senator Brown. Thank you.
    Dr. Raulerson, what can we do in this healthcare 
legislation, or what can the Federal Government do generally to 
help you and other pediatricians at your medical homes provide 
better preventive care? Again, especially about diabetes, but 
preventive care generally for the children whom you serve.
    Dr. Raulerson. One of the things that comes to mind 
immediately is our entire vaccine program for children. The 
vaccine program, I would say, is the A-plus of preventive 
diseases. It certainly changed my practice.
    When I started out in the wintertime, I would see one or 
two children a week who needed a spinal tap because they might 
have meningitis, and I don't see that anymore because of 
vaccines.
    When I was young, I was critically ill with the measles, 
and I will never forget that illness when I was bedridden for 
many weeks. We don't see measles anymore.
    Vaccines are very complicated. In the first year of a 
child's life, I give vaccines that add up to 30 different 
vaccines in that first year of life. It is an extremely 
expensive program, and payment for vaccine always lags the cost 
for vaccines.
    Right now, I am paid $8 for every shot that I give a 
Medicaid patient in my office. It costs me somewhere between 
$17 and $27 to give that vaccine, but I am paid $8. So I think 
immediately something needs to be done about our vaccine 
program for children. That is the No. 1 thing.
    The second thing is, help us with technology. Don't expect 
every small doctor in a rural area to come up with his own 
electronic medical record and e-prescribing.
    I have to laugh when I hear about technology. My very 
closest best friend is a retired math professor and a computer 
guru. She came and spent a month with me while we tried to get 
my e-
prescribing system working. At the end of the day, we would 
just fall apart laughing because of all of the problems.
    Send it, it goes. My computer, my PalmPilot says it went. 
Then the Indian reservation calls and says we don't have the 
technology here to get what you sent so you will have to write 
it. Well, OK. I can't call it in if it is a drug for ADHD. You 
have to have a written copy. So now I have to mail it to you.
    OK. So I send one to the pharmacy that is 200 yards from my 
office. They got it 4 hours later.
    So if my small rural practice or the practice of doctors 
where there is two or three physicians together, if we are 
going to have IT and it is going to be effective, someone else 
has to help us do it.
    There has to be a systematic way. And I am so afraid that 
all of this money is going to go into a system where I get an 
electronic medical record that is 14 pages long, and I just 
want to know if the kid got his blood transfusion or not. And I 
don't have time to read 14 pages to find out if this child got 
his blood transfusion before he left Birmingham.
    Senator Brown. Thank you very much, Dr. Raulerson. Well 
said.
    Senator Whitehouse has one brief question that we are going 
to close with.
    Senator Whitehouse. One brief question. I would like to 
mention first that President Obama's Economic Recovery Act has 
in it a, I call it ``geek squad'', for HIT. We modeled it on 
the Agricultural Extension Service because people in rural 
areas are very familiar with that and even very conservative 
Members of the U.S. Senate are also very familiar with that. 
And they know that the program works. So it is hard to devil it 
as unwelcome Government intervention.
    And so, people, doctors and hospitals who are installing 
HIT will have access to the HIT extension help, and that is 
already in the bill. It is passed. It is just a question of 
standing it up.
    So to your specific concern, it is very real. But I hope 
help is on the way. Certainly, the infrastructure is in place 
to begin to deliver it.
    I would love to go back, while I have got you, to one piece 
of what I asked, which is the--let me ask it this way. If you 
are a doctor and you invest in electronic health records for 
your patients, if you are a hospital and you invest in a 
quality improvement plan for your intensive care units to 
minimize infections and complications, if you are a community 
health center and you invest in a prevention program for the 
clients that you service, in all of those cases, there is a 
common problem, which is that you have to put all the money 
out. You have to take all the risk. You have to adapt your 
practice to whatever the new regime is. And yet you get very 
little, possibly even none of the reward of that investment.
    We often hear in the Senate that if Government would just 
get its hands out of the healthcare system, then the market 
would work, and it would solve all these problems gloriously. I 
am delighted to see every head just shook no in response to 
that question because I couldn't agree with you more.
    I think we have an infrastructure problem of some kind that 
we have to solve, and then the market can take off. But right 
now, when the fundamental risk-reward loop is broken, you are 
just never going to get that investment.
    If you have thoughts on how we solve that problem, because 
there is an enormous amount of initiative and entrepreneurship 
and innovation that can be brought to bear on this problem. 
Once that is solved, a halfway measure is to say, OK, 
Government is just going to pay for it in the meantime.
    A better way would be to figure out how to close that risk-
reward loop so that people could actually win the benefits of 
their savings, and then they are incented to keep looking and 
keep digging and the machinery begins to work in the right 
direction.
    Dr. Cooper. If I could respond, I think you answered the 
question, for me at least, in asking the question. And it 
reminds me to go back to my comment about the NIH model.
    Empower the community health workers in a little town in 
Ohio to create a system and a demonstration project and a grant 
structure. Give them access to the resources to do it, and you 
will have thousands of minds creating thousands of ways to do 
it.
    But they won't bear the financial risk, and the reward will 
be their system is better, and they will be rewarded in 
nontangible ways as well. That is the NIH model--Enable.
    Pre-suppose that we have geniuses in America, because we 
do, who are much smarter than anyone in this room, and they 
will come up with the really good ideas. But just empower them. 
Don't think that we here can collectively figure out what to do 
and then say, OK, here is some money. Now you go do it.
    The NIH doesn't do that, and I would really encourage the 
kind of a mild shift in thinking that says, ``Look, we don't 
think the market can do it in the usual market way.'' But the 
market, also the pharmaceutical market wouldn't have invented 
all of the pharmaceuticals if the NIH hadn't supported all this 
fundamental research that underpins it.
    So the analogy obviously breaks down very quickly, but 
there is a certain superficial analogy that comes across to me, 
at least, in your question, Senator.
    Senator Brown. Anyone else, or that is it?
    Thank you, Senator Whitehouse. And thank you, Dr. Cooper, 
for that answer.
    As in all hearings, the record will stay open for 7 days. 
If anyone wants to add any comments or thoughts or any other 
kind of additional information to any of the comments or 
questions made by each other or by Senator Murray or Senator 
Whitehouse or me, feel free to submit that to the committee. We 
appreciate that.
    Special thanks to Keith Flanagan for his help, and to 
Jessica McNease for her very good work on this hearing and on 
my staff, and Eleanor Dehoney and David Mitchell, and also 
David Bowen on the committee majority staff.
    So the committee will adjourn. Thank you very much.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

      Prepared Statement of the American College of Surgeons (ACS)

    The American College of Surgeons (ACS) commends the Senate 
Committee on Health, Education, Labor, and Pensions for holding this 
important hearing on ``Delivery Reform: The Roles of Primary and 
Specialty Care in Innovative New Delivery Models.'' On behalf of its 
more than 74,000 members, the ACS is grateful for this opportunity to 
present a statement describing the surgical specialty perspective on 
delivery system reform.
    Reform of our Nation's health care system includes a range of 
important issues, from covering the uninsured, to ensuring patient 
access to trauma and emergency care, to improving the quality of care 
to containing the growth of our Nation's rising health care costs. A 
myriad of problems and challenges calls for not one but many steps and 
solutions to put us on the path to extending the possibility and 
promise of quality health care to all Americans.

                   INNOVATIVE DELIVERY SYSTEM MODELS

ACS Trauma Care Delivery System
    An important area of health care delivery that is often times 
overlooked comes through the emergency and trauma care delivered in our 
Nation's hospitals and trauma centers. Sadly, the emergency health care 
system in America is in crisis. Traumatic injury is the leading cause 
of death for Americans aged 1 through 44. Medical evidence has shown 
that the care and treatments delivered within the first hour of a 
severe injury, known as the ``golden hour,'' are likely to mean the 
difference between temporary and permanent disabilities, as well as 
between life and death. Studies of conventional trauma care show that 
as many as 25 percent of trauma patient deaths could have been 
prevented if optimal acute care had been available. In addition to 
saving lives, restoring function, and preventing disabilities, ensuring 
appropriate trauma care also can serve an important role in the larger 
goal to contain the growth of health care costs. According to a report 
published by the Agency for Healthcare Research & Quality (AHRQ), 
trauma injuries were the second most expensive health care condition in 
2005, costing approximately $72 billion. This includes money spent for 
doctor visits, clinics, emergency room visits, hospital room stays, 
home health care, and prescription drugs. The cost of trauma-related 
emergency room visits alone was $7.8 billion. The National Safety 
Council's 2005-2006 edition of Injury Facts found that the total cost 
of unintentional injuries for 2004 was $574.8 billion, with $298.4 
billion in wage and productivity losses and $98.9 billion in medical 
expenses alone.
    Trauma systems provide for effective and efficient use of scarce 
and costly community resources. Yet, only one in four Americans lives 
in an area served by a trauma care system. Both the Institute of 
Medicine (IOM) and the Emergency Medical Treatment and Labor Act 
(EMTALA) Technical Advisory Group have documented significant gaps in 
our trauma and emergency health care delivery systems, showing that 
hospital emergency departments and trauma centers across the country 
are severely overcrowded, emergency care is highly fractured, and 
critical surgical specialties are often unavailable to provide 
emergency and trauma care. The IOM found that a coordinated, 
regionalized, accountable system based on the current trauma care 
system model must be created. Unfortunately, the most consistent 
element among the States is the lack of uniformity regarding system 
development. As a result, the quality of care a trauma patient receives 
largely depends on the quality of the regional and local system in 
place to respond to emergency and trauma situations.
    Since 1976, the ACS Committee on Trauma (COT) has developed 
criteria to categorize hospitals based on the level of trauma care 
available. These guidelines are now used by States to certify some 
hospitals as trauma centers and many hospitals seek certification to 
become a trauma center from the ACS COT. In addition, in 1989, the ACS 
COT collaborated with emergency medical organizations, governmental 
agencies, trauma registry vendors, and other interested parties to 
develop the National Trauma Data Bank (NTDB), which contains over 2 
million cases from over 600 U.S. trauma centers and is the largest 
aggregation of trauma registry data ever assembled. The goal of the 
NTDB is to inform the medical community, the public, and decisionmakers 
about a wide variety of issues that characterize the current state of 
care for injured persons in our country. The information contained in 
the data bank has implications in many areas including epidemiology, 
injury control, research, education, acute care, and resource 
allocation. Finally, the ACS COT plans to develop a trauma quality 
improvement program.
    To ensure patient access to emergency and trauma care, we recommend 
that Congress support:

     Regionalization of Emergency Care by including legislation 
like the Improving Emergency Medical Care and Response Act, legislation 
introduced in the 110th Congress by then-Senator, now President Barack 
Obama (D-IL) and Representative Henry Waxman (D-CA), in health care 
reform to ensure a regionalized emergency and trauma care system that 
provides patient access to prompt definitive care when they need it. 
The Improving Emergency Care and Response Act would authorize multi-
year grants to support demonstration programs aimed at designing, 
implementing, and evaluating a regionalized, accountable emergency care 
system. In fact, President Obama's fiscal year 2010 budget request 
includes $10 million for the Emergency Care Systems program that would 
support the development of the Emergency Care Coordination Center 
(ECCC) and two of its main programs: (1) the regionalization of 
emergency care services; and (2) national standards on emergency care 
performance measurement.
     Improved Reimbursement for Emergency Services by: (1) 
providing physicians a tax deduction equal to the amount of the 
Medicare fee schedule payment; (2) providing a 10 percent added bonus 
payment through Medicare to all physicians, including on-call 
specialists, who provide EMTALA-related care to Medicare beneficiaries; 
(3) allowing all Medicare participating hospitals to include stipends 
paid to physicians providing emergency on-call services on their cost 
reports; (4) providing necessary funding to trauma centers that are at 
serious risk of closing due to the continual increase of uncompensated 
and charity care costs; and (5) establishing a dedicated Federal 
funding source for payments to providers for uncompensated emergency 
health care services.
     Medical Liability Protections by: (1) requiring any 
lawsuits against physicians who provide EMTALA-mandated care be brought 
under the Federal Tort Claims Act; and (2) providing immunity or 
limited liability for certain medical personnel involved in the 
evacuation or treatment of patients during a declared state of 
emergency.

ACS National Surgical Quality Improvement Program (NSQIP)
    Health system reform starts from an important and appropriate 
premise that patients receive their care in a large system of care 
rather than from one physician or health care provider. It is this same 
premise that has been the foundation for the ACS's successful surgical 
quality improvement efforts. For example, the ACS National Surgical 
Quality Improvement Program (NSQIP) started with a successful effort 
within the Department of Veterans Affairs, which decreased VA post-
surgical mortality by 27 percent and post-operative complications by 45 
percent over 10 years. ACS NSQIP is a prospective peer-controlled, 
validated database that quantifies 30-day risk-adjusted surgical 
outcomes and allows for comparisons among all participating hospitals. 
ACS NSQIP does not merely examine care the surgeon provides in the 
operating room, but rather it captures data regarding the range of pre-
operative, intra-operative, and post-operative care that the surgical 
patient receives over the 30 days following the surgery. After a pilot 
to test NSQIP in three non-Federal hospitals in 1999, the ACS applied 
for a grant from the Agency for Healthcare Research Quality in 2001 to 
expand the program to 14 hospitals. Based on its successful application 
in these hospitals, the ACS has spearheaded the effort to implement ACS 
NSQIP in private hospitals across the country, with ACS NSQIP currently 
in place in 220 hospitals nationwide. The program has received wide 
recognition as a successful model for surgical quality improvement and 
the Joint Commission acknowledges the value of participation in ACS 
NSQIP and includes a Merit Badge next to the profile of all ACS NSQIP 
hospitals.

ACS National Cancer Data Base
    In the field of cancer care, the American College of Surgeons 
Commission on Cancer (CoC) is a pioneer in measuring performance. The 
more than 1,400 hospitals and free-standing cancer treatment facilities 
approved by the CoC report clinical data to the National Cancer Data 
Base (NCDB) and receive evidence-based benchmark comparison reports 
based on accepted standards of care for breast and colorectal cancers. 
These measures are endorsed by the National Quality Forum. Since 1995, 
it has captured over 21 million cancer cases and includes data on about 
70 percent of all newly diagnosed malignant cases of cancer nationwide 
annually. To provide better ``real-time'' feedback, the CoC has also 
developed a new reporting system that could link into an interoperable, 
nationwide health information technology (HIT) system, which received 
significant support in the recently enacted American Recovery and 
Reinvestment Act of 2009 (H.R. 1). This prospective electronic 
reporting system, which is called the Rapid Quality Reporting System 
(RQRS), monitors evidence-based performance measures in real-time, 
alerting providers when standards of care for select cancers are not 
being met. The ACS believes RQRS could ultimately play an important 
part in any new, outcomes-based payment models.
    Through these efforts, the ACS has demonstrated a commitment to 
delivery reform that both includes and extends beyond the care that the 
surgeon provides to his or her patients. In addition, these efforts are 
based not simply on doing more for the patient but on doing what is 
most clinically appropriate for the patient. The ACS recognizes that 
surgical care is provided through a surgical team in the operating room 
and through a team of health care professionals, including the surgeon, 
who treat and monitor a patient's progress before and after an 
operation.

                ENSURING PATIENT ACCESS TO SURGICAL CARE

Addressing Workforce Shortages
    The number of surgeons trained in the Nation's graduate medical 
education system has remained static for the past 20 years. Today, U.S. 
population growth has far outpaced the supply of surgeons and as a 
result, the United States is beginning to see signs of an emerging 
national crisis in patient access to surgical care.
    Patients need access to safe, high-quality and affordable surgical 
care, whether the surgery is planned or unplanned. However, many 
aspects of the current health care system contribute to workforce 
shortages that threaten patient access to surgical care. Unlike many 
other medical specialties, there are no good substitutes or physician 
extenders for a well-trained general surgeon or surgical specialist. 
Surgical training is vastly different from other physician training 
programs. Mastery in surgery requires extensive and immersive 
experiences that extend over a substantial period of time. Whereas non-
surgical residencies can be completed in as few as 3 years, surgical 
residencies require a minimum of 5 years and often several more for 
specialties such as cardiothoracic surgery. As a result, ensuring 
patient access to surgical care will take many years to address.
    Workforce shortages affect nearly all surgical specialties and 
occur in both rural and urban areas. According to 1996 and 2006 data on 
workforce numbers produced by the Dartmouth Atlas, general surgery, 
urology, ophthalmology, and orthopaedic surgery declined 16.3 percent, 
12 percent, 11.4 percent, and 7.1 percent, respectively. In addition, 
the Archives of Surgery published an analysis last April that showed a 
decline of more than 25 percent of general surgeons between 1981 and 
2005 in proportion to the U.S. population. Looking to the future, 
between 2005 and 2020, the Bureau of Health Professions projects an 
increase of only 3 percent among practicing surgeons, with declines 
projected in thoracic surgery (^15 percent), urology (^9 percent), 
general surgery (^7 percent), plastic surgery (^6 percent), and 
ophthalmology (^1 percent).
    There are many reasons for the surgical workforce shortage 
including prospects of reduced payment combined with higher practice 
costs, bigger liability premiums, and the heightened threat of being 
sued; a crippled workforce leading to demands for more time on call; 
heavier caseloads with less time for patient care; and a U.S. health 
care delivery system that is in flux. Given the rigors of a surgical 
residency, these challenges can deter would-be surgeons from making the 
extra sacrifices necessary to enter the surgical workforce and create a 
dim long-term outlook for the profession.
    Compounding the crisis, large numbers of aging, established 
surgeons are either decreasing their workloads or retiring. According 
to the American Medical Association's Physician Characteristics and 
Distribution in the U.S. (2007 edition), approximately one-third of the 
surgical specialists who are key to ensuring adequate emergency call 
coverage are age 55 or older (general surgeons, 32 percent; 
neurosurgeons, 34 percent; and orthopaedic surgeons, 34 percent). 
Hence, it is critical that our Nation's medical schools and training 
institutions start producing more surgeons in these specialties.

                           POSSIBLE SOLUTIONS

     Preserve Medicare funding for graduate medical education 
and eliminate the residency funding caps established in the 1997 
Balanced Budget Act;
     Fully fund residency programs through at least the initial 
board eligibility;
     Include surgeons under the title VII health professions 
programs, including the National Health Service Corps program, and make 
them eligible for loan assistance;
     Promote rural/underserved care through loan forgiveness 
programs that stipulate work in those areas;
     Extend medical school loan deferment to the full length of 
residency training for surgeons;
     Allow young surgeons who qualify for the economic hardship 
deferment to utilize this option beyond the current limit of 3 years 
into residency;
     Increase the aggregate combined Stafford loan limit for 
health professions students;
     Create a new health professional shortage area (HPSA), 
separate from the traditional primary care HPSA, with bonus payment 
structures for surgeons who provide services in designated areas;
     Provide tax relief and liability protections to surgeons 
who perform EMTALA-related care, especially when that care is 
uncompensated;
     When hospitals pay stipends to surgeons who take emergency 
calls, have Medicare recognize these costs, as is currently done for 
critical access hospitals; and
     Expand the Federal Tort Claims Act to include surgeons who 
provide services to patients who are referred through their primary 
care physician at a community health center.

Payment Reform
    As the committee studies the important issue of delivery reform, it 
is critical not to lose sight of the fact that no delivery system, no 
matter how ingenious, can survive if those who are caring for patients 
are not being appropriately reimbursed, and the most immediate 
challenge for patient access to surgical care is the precarious 
reimbursement situation confronting surgeons and surgical practices. As 
the committee is well aware, Medicare payments to physicians will be 
cut 21.5 percent on January 1, 2010 if Congress does not act. The ACS 
calls on Congress to take action to stop this cut, to provide an 
increase in Medicare payments for all physicians in 2010, and to 
initiate reform for Medicare's physician payment system this year. The 
ACS greatly appreciated the leadership of Chairman Kennedy and others 
on the committee to enact the Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA) last July that reversed the 10.6 percent 
cut in Medicare physician payments. In addition, MIPPA included the 
largest Medicare payment increase for physicians since 2005 by 
replacing a scheduled 5.4 percent cut in 2009 with a 1.1 percent 
increase this past January. MIPPA also made changes to how work was 
valued under the Relative Value Scale, increasing payments for some 
surgical services. In spite of these important measures, Medicare 
payments for many surgical procedures have been reduced significantly 
over the past 20 years and, in some cases, have been cut by more than 
half from reimbursement levels in the late 1980's.
    In discussing delivery system reform, many often highlight the 
importance of measures to promote primary care to both prevent illness 
and disease as well as to manage the conditions that a patient may 
already have. To this end, some, most notably the Medicare Payment 
Advisory Commission (MedPAC), have proposed financing increased 
reimbursement for primary care by simply cutting reimbursement for care 
provided by other physician specialties. Such proposals, while seeking 
to promote efforts to help Americans better manage their care, would 
only exacerbate the workforce challenges described earlier and 
establish a reimbursement structure that would ultimately undermine 
patients' ability to access the life-saving acute care services that 
only surgeons are qualified to provide. The ACS supports efforts to 
prevent disease and to manage patient care not only because it is in 
the best interests of the patient and health care system but also 
because, when these patients need surgery, they are much less likely to 
encounter complications and much more likely to recover quickly from 
the operation. However, regardless of how well patients' care is 
managed, acute situations requiring prompt and definitive access to 
surgical care will continue to occur. A better alternative would be 
reforms that recognize the important roles that different specialties 
play in caring for the whole patient.
    Much attention has been paid to the need to provide more Americans 
with access to health care coverage, to increase Americans' access to 
care, and to improve the value of care delivered in our health care 
system. Expanding coverage to more Americans and improving the quality 
of care will mean little if Americans are not able to access the care 
they need--particularly in potentially life-threatening situations due 
to the lack of qualified surgical practitioners. Before adopting any 
proposed steps or solutions, we must carefully consider what unintended 
consequences may result. So while our present situation calls for 
change and health system reform, we must proceed deliberately and 
thoughtfully to ensure that the policy changes we make today do not 
lead to unintended consequences that could undermine Americans' access 
to quality care.
    The ACS looks forward to working with this committee to reform our 
Nation's health care system and to preserve and improve Americans' 
ability to access high quality surgical care and health care services.

    [Whereupon, at 11:50 a.m., the hearing was adjourned.]

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