[Senate Hearing 113-314]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-314

 
  30 MILLION NEW PATIENTS AND 11 MONTHS TO GO: WHO WILL PROVIDE THEIR 
                              PRIMARY CARE

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

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON PRIMARY HEALTH AND AGING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                         EXAMINING PRIMARY CARE

                               __________

                            JANUARY 29, 2013

                               __________

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


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington             MICHAEL B. ENZI, Wyoming
BERNARD SANDERS (I), Vermont         RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania   JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina         RAND PAUL, Kentucky
AL FRANKEN, Minnesota                ORRIN G. HATCH, Utah
MICHAEL F. BENNET, Colorado          PAT ROBERTS, Kansas
SHELDON WHITEHOUSE, Rhode Island     LISA MURKOWSKI, Alaska
TAMMY BALDWIN, Wisconsin             MARK KIRK, Illinois
CHRISTOPHER S. MURPHY, Connecticut   TIM SCOTT, South Carolina    
ELIZABETH WARREN, Massachusetts      
                                     
                    Pamela J. Smith, Staff Director

                 Lauren McFerran, Deputy Staff Director

               David P. Cleary, Republican Staff Director

                               __________

                Subcommittee on Primary Health and Aging

                 BERNARD SANDERS, (I) Vermont, Chairman

BARBARA A. MIKULSKI, Maryland        RICHARD BURR, North Carolina
KAY R. HAGAN, North Carolina         PAT ROBERTS, Kansas
SHELDON WHITEHOUSE, Rhode Island     LISA MURKOWSKI, Alaska
TAMMY BALDWIN, Wisconsin             MICHAEL B. ENZI, Wyoming
CHRISTOPHER S. MURPHY, Connecticut   MARK KIRK, Illinois
ELIZABETH WARREN, Massachusetts      LAMAR ALEXANDER, Tennessee (ex 
TOM HARKIN, Iowa (ex officio)        officio)
                                       

                     Sophie Kasimow, Staff Director

               Riley Swinehart, Republican Staff Director

                                  (ii)

  
?

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                       TUESDAY, JANUARY 29, 2013

                                                                   Page

                           Committee Members

Sanders, Hon. Bernard, Chairman, Subcommittee on Primary Health 
  and Aging, Committee on Health, Education, Labor, and Pensions, 
  opening statement..............................................     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming..     4
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................     6
Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin..     6
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....     7
Murphy, Hon. Christopher S., a U.S. Senator from the State of 
  Connecticut....................................................     8
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of 
  Pennsylvania...................................................     9
    Prepared statement...........................................     9
Hagan, Hon. Kay R., a U.S. Senator from the State of North 
  Carolina.......................................................    10
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    11

                               Witnesses

Mullan, Fitzhugh, M.D., Murdock Head Professor of Medicine and 
  Health Policy at the George Washington University School of 
  Public Health and Professor of Pediatrics at the George 
  Washington University School of Medicine, Washington, DC.......    12
    Prepared statement...........................................    14
Kuenning, Tess Stack, CNS, MS, RN, Executive Director, Bi-State 
  Primary Care Association, Montpelier, VT.......................    19
    Prepared statement...........................................    21
Decklever, Toni, MA, RN, Government Affairs, Wyoming Nurses 
  Association, Cheyenne, WY......................................    25
    Prepared statement...........................................    27
Wilper, Andrew P., M.D., MPH, FACP, Acting Chief of Medicine, VA 
  Medical Center, Boise, ID......................................    30
    Prepared statement...........................................    32
Reinhardt, Uwe, Ph.D., James Madison Professor of Political 
  Economy and Professor of Economics and Public Affairs, 
  Princeton University, Princeton, NJ............................    37
    Prepared statement...........................................    39
Fegan, Claudia M., M.D., CHCQM, FACP, Chief Medical Officer, John 
  H. Stroger, Jr. Hospital of Cook County, Chicago, IL...........    51
    Prepared statement...........................................    52

                                 (iii)
                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    American Academy of Family Physicians (AAFP).................    66
    American Academy of Physician Assistants (AAPA)..............    69
    American Association of Colleges of Osteopathic Medicine 
      (AACOM)...................................................    73
    Association of American Medical Colleges (AAMC)..............    75
    Society of General Internal Medicine (SGIM)..................    81
    The American Occupational Therapy Association, Inc. (AOTA)...    83


  30 MILLION NEW PATIENTS AND 11 MONTHS TO GO: WHO WILL PROVIDE THEIR 
                             PRIMARY CARE?

                              ----------                              


                       TUESDAY, JANUARY 29, 2013

                                       U.S. Senate,
                  Subcommittee on Primary Health and Aging,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m. in 
Room 430, Dirksen Senate Office Building, Hon. Bernie Sanders, 
chairman of the subcommittee, presiding.
    Present: Senators Sanders, Casey, Hagan, Franken, 
Whitehouse, Warren, Baldwin, Murphy, and Enzi.

                  Opening Statement of Senator Sanders

    Senator Sanders. Let's begin our hearing, which is going to 
cover, I believe, an enormously important issue.
    I want to thank Ranking Member Mike Enzi for his work. He 
and I have worked together on a number of issues over the 
years, and I look forward to a productive working relationship. 
Vermont is a rural State. I know something about rural 
problems. His State is a lot more rural, so we will see how we 
can go forward together.
    Let me thank all of our panelists for being here. We have a 
great set of panelists from all over the country, and we very 
much appreciate them being here, and we thank them for the work 
they do every day, providing health care and doing research.
    In our country today, I think as many people know, we spend 
almost twice as much as do the people of any other country per 
capita on health care. That is about 18 percent of our GDP, and 
yet our health care outcomes in terms of life expectancy, 
infant mortality, and disease prevention are not particularly 
good in terms of international comparisons.
    One of the reasons for that is that we have a major crisis 
regarding primary health care access, which results in lower 
quality health care for our people and greater expenditures. 
Lower quality health care, and yet we end up because of the 
crisis in primary health care, spending substantially more than 
we should.
    Today, 57 million people in the United States, 1 in 5 
Americans, cannot see a doctor when they need to. Lack of 
access to a primary care provider is a national problem, but 
those who are most impacted are people who are low-income, 
minority, seniors, and people who live in rural communities 
whether it is Vermont or Wyoming.
    As we have seen time and time again with dental care, 
mental health, and other health care issues, the groups that 
need health care the most are the least likely to receive it.
    The good news is that just 11 months from now, we will be 
providing health insurance to 30 million more Americans through 
the Affordable Care Act. The bad news is that we don't know how 
we are going to be providing primary health care to those 
Americans who now will have health insurance.
    Let me just rattle off some statistics that, I think, 
should be of concern to the Congress and, in fact, to all 
Americans.
    Not widely known, but maybe Dr. Wilper will talk about this 
when he testifies, approximately 45,000 people every single 
year die in the United States of America because they do not 
have health insurance and they do not get to a doctor on time; 
45,000 Americans.
    According to the Health Resources and Service 
Administration, we need 16,000 primary care practitioners to 
meet the need that exists today with the ratio of 1 provider to 
2,000 patients. Over 52,000 primary care physicians will be 
needed by 2025.
    In 2011, about 17,000 doctors graduated from American 
medical schools despite the fact that over half of patient 
visits are for primary care, only 7 percent of the Nation's 
medical school graduates now choose a primary care career; 7 
percent. Nearly all of the growth in the number of doctors per 
capita over the last several decades has been due to a rise in 
the number of specialists. Between 1965 and 1992, the primary 
care physician to population ratio grew by only 14 percent, 
while the specialists to population ratio exploded by 120 
percent.
    The average primary care physician in the United States is 
47 years of age, and one-quarter are near retirement.
    In 2012, it took about 45 days for new patients to see a 
family doctor, up from 29 days in 2010. In other words, even if 
you can find a provider, it often takes a lot longer than it 
should to see him or her.
    Only 29 percent of U.S. primary care practices provide 
access to care on evenings, weekends, or holidays as compared 
to 95 percent of physicians in the United Kingdom. In other 
words, our culture is, ``Don't get sick on Saturday, Sunday, or 
at night. 9 o'clock to 5 o'clock works pretty good.''
    Half of emergency room patients would have gone to a 
primary care provider if they had been able to get an 
appointment at the time one was needed. In other words, we are 
wasting billions of dollars because people end up in the 
emergency room for non-
urgent care because they cannot find a primary health care 
physician.
    In my view and, I think, the view of all of the experts who 
have studied the issue, primary care is intended to be, and 
should be, the foundation of the U.S. health care system. In 
2008, Americans made almost 1 billion office visits to the 
doctor, 50 percent of those visits were to primary care 
doctors; half. According to virtually every study done on this 
issue, access to primary health care results in better health 
outcomes, reduced health disparities, and lower spending by not 
only reducing emergency room visits, but when you get people to 
the doctor when they should, they don't get sicker than they 
otherwise would be and end up in the hospital at great cost.
    The problem we are discussing is clearly a national problem 
existing in 50 States in the country, but it is even worse for 
particular geographic regions. The ratio of primary care 
doctors in urban areas is 100 per 100,000 people, double the 
ratio in rural communities where it is 46 per 100,000. So urban 
communities clearly have problems, rural communities have even 
greater problems.
    Of primary health care professional shortage areas, 65 
percent are in rural counties. In my own State, we do much 
better than the rest of the country in terms of primary health 
care providers per 100,000. And yet, I can tell you that in the 
State of Vermont, people often have difficulty getting to the 
primary care provider they need. Although 20 percent of 
Americans live in rural areas, only 9 percent of physicians 
practice there.
    One of the significant differences between the U.S. health 
care system and the health care systems of other highly 
developed countries--which could significantly explain why we 
spend so much more than other countries around the world--is 
the ratio of primary care physicians to specialists. In the 
United States, roughly speaking, 70 percent of our 
practitioners are specialists, 30 percent are primary health 
care providers. Around the rest of the world, that number is 
exactly the opposite, about 70 percent of their practitioners 
are primary health care providers, 30 percent are specialists.
    What can Congress do to address this very serious issue? 
Let me just rattle off a few points, and give the microphone 
over to Senator Enzi.
    First and foremost, clearly, we must address the issue of 
primary care reimbursement rates. Specialists earn as much as 
$2.8 million more than primary care providers for their 
lifetime of practice. So if you are going into medicine, if you 
are a specialist, you can earn throughout your lifetime almost 
$3 million more than a primary care practitioner. Radiologists 
and gastroenterologists, for example, have incomes more than 
twice that of family physicians.
    The system for setting physician reimbursement in this 
country is largely determined by the 31 physicians who sit on 
the American Medical Association Committee called the Relative 
Value Scale Update Committee, generally called the RUC. The 
RUC, whose payment recommendations are accepted by the Centers 
for Medicare and Medicaid services over 90 percent of the time 
and are adopted by many private insurers, is dominated by 
specialists. So specialists sitting on the committee determine 
reimbursement rates. We have to look at that issue.
    Medicare has promoted the growth of residencies in 
specialty fields rather than primary health care by providing 
significant sums, $10 billion each year to teaching hospitals, 
without requiring any emphasis on training primary care 
doctors; a serious issue.
    Third, unlike other nations which provide significant 
financial support for medical school education we, by and 
large, do not do this in this country, and the result is the 
median debt for medical students upon graduation is more than 
$160,000 and almost one-third of medical school graduates leave 
school more than $200,000 in debt. Now, if you are leaving 
school $200,000 in debt, what are you going to do? You are 
going to try to figure out how I make as much money as possible 
to deal with that debt, and you are going to gravitate toward 
those fields which pay you higher incomes.
    If we are going to attract young people into primary health 
care, we must make that profession more financially attractive. 
In other words, we must address the issue of how reimbursement 
rates are set for Medicare, which impacts reimbursement rates 
for all physicians.
    In recent years--and I have worked on this issue, other 
members have worked on this issue--we have greatly expanded 
community health centers around the country, and community 
health centers provide very good quality, cost-effective health 
care. We need to do more than that. We have made progress. We 
need to make more progress.
    In addition, we have significantly increased funding for 
the National Health Service Corps, which says to somebody that 
if you are graduating medical school $200,000 in debt, we are 
going to help you address that debt and help you pay it off if 
you practice in underserved areas. It is working. It has 
worked. We have made progress. We need to make more progress in 
that.
    Teaching Health Centers: studies have shown that residents 
trained at community health centers or rural communities are 
more likely than those trained in other settings to make a 
career practicing in underserved or rural areas. The THC 
program was an important new investment in graduate medical 
education in the Affordable Care Act, and the 5-year funding 
was only $230 million. We have got to expand that concept.
    We have also got to take a hard look at the role of allied 
health providers, nurse practitioners, and others. How do we 
better utilize those people in the provision of health care?
    We have a very, very serious problem; the lives of 
thousands of people depend upon what we do. I am very excited 
about the wonderful panelists that we have at this hearing.
    Now, I would like to hear from Senator Enzi, who has done 
so much work in this area.

                   Opening Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman. Thank you for 
holding this hearing, and I am glad to be joining you for my 
first hearing as Ranking Member of this subcommittee, and I 
look forward to working with you.
    I would also like to thank the witnesses for taking time 
out of their schedules to be with us. I would particularly like 
to welcome Toni Decklever from Cheyenne. She has worked with me 
and my staff on health care workforce issues for a number of 
years, and I appreciate that she made the long trip across the 
country to be here. It is a pleasure to welcome all the 
witnesses to our hearing.
    The issue of improving access to primary care services, and 
aligning our health care workforce, is one that is important to 
all of us, but one that is especially significant given the 
obstacles that people face in Wyoming.
    Nearly the entire State is considered a frontier or rural 
county. Forty-seven percent of the population lives in a county 
with fewer than six residents per square mile. According to the 
Wyoming Department of Health, approximately 200,000 residents 
live in health professional shortage areas with inadequate 
access to primary or dental care.
    There are serious access challenges in Wyoming that require 
creative solutions to resolve. We have one hospital that is 
served by a physician that, every time we lose that physician, 
the hospital closes. To that end, the State has developed a 
number of programs that are tailored to meet the specific needs 
of a frontier State where distance presents the biggest barrier 
to accessing a doctor. We say that we have miles and miles of 
miles and miles, and recruiting health care professionals to 
live and work there is an ongoing challenge.
    The Wyoming Department of Health operates its own Health 
Professional Loan Repayment Program along with a Physician 
Recruitment Grant Program. These programs work to reduce the 
high cost of health professional graduate and training 
programs, which is often a deterrent to working in primary care 
or other lower income medical fields. The Wyoming Health 
Resources Network represents another innovative approach to 
improving access and reducing primary care workforce shortages.
    This collaborative arrangement between the major medical 
and health professional societies, the University of Wyoming, 
and other key partners maintains an extensive data base on 
Wyoming health care facilities and their need for 
professionals. Sharing information more effectively allows for 
a better allocation of resources and manpower at a time when 
the fiscal climate limits our ability to spend money on the 
problem.
    There is more that can be done to better align Federal 
programs to meet the needs of rural and frontier States. The 
criteria that determine eligibility for Federal funds to 
support rural health programs are based on factors that make it 
difficult to prove the needs of the underserved in rural and 
frontier areas. For example, one provider for 3,500 people in 
New York City is entirely different than 3,500 people living in 
Fremont or Campbell County.
    In addition, we need to think more creatively about how to 
use technology services to improve telemedicine capabilities, 
so that where a person lives has less impact on the level of 
care they are able to receive. The advancement of more powerful 
wireless technology has substantial potential to remotely link 
individuals across the country to deliver health care in more 
accessible settings. We have had quite a bit of success with 
that with some of the veterans outreach clinics, where they use 
telemedicine extensively with nurse practitioners being in 
charge of handling the equipment and a doctor on the other end 
of the telemedicine.
    I hope this hearing will make it clear that we need to 
think more creatively and figure out ways in which all 
Americans can better access primary care services, and ways to 
ensure health care professionals are employed where they are 
most needed.
    I look forward to hearing from our witnesses on what needs 
to be done to solve these problems at the Federal, State, and 
local level.
    Again, I want to thank the witnesses for their 
participation. I want to thank the Chairman for his great list 
of suggestions on things that need to be done. And I am sure 
that we have the capability to come up with some solutions 
through this committee.
    Senator Sanders. Senator Enzi, thank you. Thank you very 
much.
    Senators will get 5 minutes. Senator Warren was here first.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. I just want to thank you very much for 
holding this hearing, Mr. Chairman.
    I am very interested in the question about how we equalize 
access for all of our citizens, and particularly interested in 
the question about how we make the right investments to lower 
the overall cost of health care. I think the Chairman said it 
best when he said,

          ``What we are looking for is better outcomes at lower 
        costs, and that that is the peculiar role that the 
        Federal Government can take if it makes the right up 
        front investment.''

So I am looking forward to hearing from each of the panelists.
    I also want to thank the Ranking Member. I think the 
comments about access, and the reminder that it is very 
different in a large city than it is from a very rural area are 
comments that are well-taken and one for us to remember 
carefully.
    Also, the reminder that that can have very different 
consequences, even in a State like Massachusetts where, 
obviously, we have very extensive health care services in some 
areas, but it still leaves us with parts of the population in 
Massachusetts, with difficulties in accessing care. Sometimes 
distance is less the challenge, but costs can remain the 
challenge and transportation, even within close areas, can be a 
serious challenge. So I appreciate the reminder of the 
diversity of issues that we face in making sure that all of our 
citizens have good access.
    Thank you, Mr. Chairman.
    Senator Sanders. Thank you very much, Senator Warren.
    Senator Baldwin.

                      Statement of Senator Baldwin

    Senator Baldwin. Thank you, Mr. Chairman.
    I will not use the allotted time in its entirety, and 
apologize to the panel that I am going to have to sneak out to 
attend another committee meeting and return, I hope, for the Q 
and A. But I appreciate, Mr. Chairman, your focus on this 
broad, but very critical, issue that has so much relevance 
seeing through the implementation of the Affordable Care Act.
    I represent a State that has urban concentrations as well 
as, perhaps not as large spaces of rural areas as Vermont, but 
certainly has the array of challenges that are the subject of 
this hearing, and I appreciate the attention that is going to 
be focused on it.
    One of the things that I hope that we will hear some 
elaboration on, aside from issues that compensation plays in 
this, is the question of lifestyle for primary care 
practitioners; things like the differences between the amount 
of time that somebody might be on-call as a specialist versus a 
primary care physician. As we look at larger payment reforms, 
how the flexibility in their practice of being able to spend 
the adequate time with a patient, for example, with multiple 
chronic conditions that is necessary versus seeing folks in 15-
minute increments, et cetera. What impact will those policy 
changes have on the number of primary care practitioners in 
this country?
    Mr. Chairman, thank you for focusing attention on this 
issue, and I hope to return to hear more from the witnesses and 
ask my questions.
    Senator Sanders. Thank you very much.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman, for this 
incredibly important hearing.
    We will have 30 million more Americans covered, we hope, if 
Medicaid expansion is adopted by the States, leaving some 
people still uninsured. I read the testimonies last night, and 
it is very clear that when you insure people their health care 
outcomes are better. It actually costs us money when people 
aren't insured.
    Sometimes you hear, ``Well, we have health care in this 
country. You can just go to the emergency room.'' Well, that is 
the most expensive health care and it doesn't mean that you get 
treated after the emergency room. It doesn't mean that you get 
what you need to treat a chronic condition. All of your 
testimonies put the lie to that, and I appreciate that.
    In Minnesota, we do health care, relative to the rest of 
the Nation, extremely well. HHS has rated us No. 1 in high 
quality health care. And we, like Wisconsin, have kind of a 
combination of urban centers and not the miles and miles of 
miles and miles, but we have miles and miles. The Ranking 
Member, who I would like to welcome to this subcommittee and I 
am looking forward to his partnering on this. I admire his work 
on rural health, which is so important in my State because 
there are people that are underserved.
    One of the things that the Chairman talked about was the 
student loans and graduating from medical school with a typical 
loan debt of $160,000 sometimes more. And then talking about 
the tendency for doctors who have just graduated to say, ``How 
am I going to make this money?''
    And we have MedPAC, and this is an issue that you talk 
about in your testimony. In our country, we pay specialists a 
ratio more than primary care physicians than they do in other 
countries that do their health care very successfully, and 
cheaper, and less expensively than we do.
    One of the things about student loans, to me, is that there 
is nothing good about the high cost of college and of graduate 
school in my mind, except that the only probably good thing is 
that it creates some tool for us to motivate people to go into 
the things that we need. One question that I would like the 
panel to think about is--I know you are going to give your 
testimony, and we are going to do the questions--what is the 
return on investment?
    If we say to doctors graduating medical school, we are 
offering some loan forgiveness. We are especially offering loan 
forgiveness for primary care physicians in a rural area or an 
underserved urban area. But what would be the return on 
investment if we really, really encouraged--by loan 
forgiveness--doctors to go into primary care? In other words, 
what is the calculus there? What is the equation? If we say, 
``My goodness, it is such a benefit to society and such a cost 
benefit to have a higher ratio of primary care physicians,'' 
that if we said, ``For anybody who goes into primary care 
medicine we will, it's $100,000 right there.'' Boom. What is 
the cost benefit there?
    It is good to see you, Dr. Reinhardt. Dr. Reinhardt and I 
have talked a number of times. He is a health care economist, 
so maybe that is something you can mull over.
    Thank you, Mr. Chairman, for this unbelievably important 
hearing. Thank you.
    Senator Sanders. Thank you, Senator Franken.
    Senator Murphy.

                      Statement of Senator Murphy

    Senator Murphy. Thank you very much, Mr. Chairman.
    I am excited to be a member of this committee and excited 
to be here with a fantastic panel. I will get out of the way, 
so that you can provide us with your testimony.
    Let me just say this. Having chaired the health committee 
in the State legislature in Connecticut for years, we grappled 
with this problem year after year. I remember specifically one 
meeting that I had with about maybe 15 or 20 medical students 
at the University of Connecticut. At some point in the meeting 
we were, I think, talking about the Affordable Care Act and how 
it could help medical students. We were talking a lot about 
this issue of the high level of indebtedness.
    I asked them, ``How many of you are considering, not 
committed to, but considering going into primary care?'' And of 
the 15 students around the table, one of them raised their 
hand. Only one was even considering it.
    Then we started to examine this question as to why they 
didn't even have it on their mind, and certainly the dollars 
were the first thing that they mentioned. All of them are going 
to have extreme levels of indebtedness, even coming out of a 
State university. They just really could not figure out how 
they were going to make that work with the salary that they 
were going to make as a primary care physician.
    But as you started to tease a deeper answer out from each 
one of them, the second thing that came up was prestige. That 
they didn't feel that there was real prestige any longer in 
being a primary care physician. That if you really wanted to 
practice cutting edge medicine that you had to go into the 
specialties, and they all had an ego to them that wanted to put 
them on the frontlines of new medicine.
    I hope that that's part of our hearing as well today, how 
do we put the practice of medicine back into primary care? How 
do we allow them to be more than just gatekeepers? I think that 
there is a perfect opportunity as we start to rollout these new 
delivery system models, as we envision a world where 
accountable care organizations and interconnected 
multispecialty practices are the rule rather than the exception 
while we invest in things like medical home models. You allow 
for primary care physicians to, once again, control a lot more 
medicine than they used to control. The prestige comes back, 
maybe not so much in the medicine that they are practicing, but 
in the control they have over the health care system writ 
large.
    So I think that as we build a new delivery system it is an 
opportunity not just to address what I think is still the most 
critical question which is, how do they just make their 
family's budget work, if they decide to go into primary care, 
but how do they get to feel really good about the medicine that 
they are practicing, and the value that they are adding to 
their profession? Because that has been lost as well over the 
years, as the prestige has moved to the specialists rather than 
the primary care doctors, and I imagine we will examine that 
topic today as well.
    Thank you very much, Mr. Chairman.
    Senator Sanders. Thank you, Senator Murphy.
    Senator Casey.

                       Statement of Senator Casey

    Senator Casey. Mr. Chairman, I will submit a statement for 
the record.
    I just want to thank you for calling this hearing. It is a 
critically important issue, and we are grateful that you did 
the work.
    I guess the one quick comment I would make is when we go to 
the Attending Physician as Members of Congress, we have a 
doctor available to us here in the Capitol, and that doctor, in 
a sense, is our quarterback who can make determinations about 
our health and can refer us to all kinds of specialists and 
others that help us.
    And we hope that one of the conclusions that results, or 
one of the goals here I guess is a better way to say it of all 
this work in this hearing and otherwise, is that everyone has 
that primary care doctor, that quarterback in their life who 
can treat them, but also get them access to specialists and the 
best care.
    Thanks.
    [The prepared statement of Senator Casey follows:]

                  Prepared Statement of Senator Casey

    I want to thank Chairman Sanders for scheduling this 
important hearing today and for his work in this area, 
especially around Community Health Centers. His commitment to 
guarantee that health care is available for everyone is a model 
for all of us. I would also like to welcome our new Ranking 
Member, Senator Enzi, and I look forward to working with him.
    Ensuring an adequate health care workforce is an issue that 
is important to Pennsylvania and one of the key aspects of this 
issue is having a strong primary care workforce. The Health 
Resource Services Administration estimates that 16,000 primary 
care practitioners are currently needed today in shortage areas 
around the country and 52,000 additional primary care 
physicians will be needed by 2025. To meet these needs we must 
not only protect our current training programs, but also look 
for new and creative ways to provide primary care training.
    In 2011, the baby boom generation started turning 65 and by 
2030, all 78 million will have reached that age. Guaranteeing 
our older citizens have access to primary care is a key part of 
ensuring we have the workforce to care for an aging America. 
The Affordable Care Act ensured every Medicare beneficiary 
could have an annual physical. For our older citizens, having 
the medical home a primary care provider affords is paramount 
to staying healthy and active. And this is our responsibility. 
We must ensure this generation that fought in our wars, worked 
in our factories, taught our children and who gave us life and 
love are cared for. This will require an investment in the 
health care workforce that was begun under health care reform 
and must continue into the coming decades.
    Another area I have spent time working on is the pediatric 
workforce and the role of freestanding children's hospitals and 
the Children's Hospital Graduate Medical Education (CHGME) 
program. Prior to the enactment of CHGME, the number of 
residents in children's hospitals' residency programs had 
declined over 13 percent. The enactment of CHGME has enabled 
children's hospitals to reverse this trend and to increase 
their training by 35 percent. Pediatricians are the primary 
care providers for our children who we must nurture and care 
for as they are our future. Accordingly, we have an obligation 
to work to ensure this program continues and remains strong.
    I look forward to hearing from our witnesses today on where 
we are and what more we must do to ensure we have the workforce 
we need and to continuing to work on this important issue.

    Senator Sanders. Thank you very much, Senator Casey.
    Senator Hagan.

                       Statement of Senator Hagan

    Senator Hagan. Thank you much, Mr. Chairman and Ranking 
Member Enzi. Thank you for holding this hearing today.
    I think this is a critical issue facing our country today. 
I know that in my State of North Carolina, we have more than a 
million people who don't have access to primary health care 
because of a shortage of providers. I know that when patients 
can see a primary health care doctor, they frequently end up 
getting care, obviously. But what happens when they don't have 
that access, they go to the hospital and that is where 
emergency care and treatment is so expensive, and it is 
currently helping to drive up the cost of health care. Also, if 
you have a chronic disease and you can manage that disease, it 
is much less costly, because otherwise they will develop into 
acute care episodes.
    I know that there are innovations going on in this area, 
and one of them is in North Carolina: the Blue Ridge Community 
Health Services, which is a community health center in the 
western part of our State. It received a grant just this past 
November under the Teaching Health Center Program. In the Blue 
Ridge, they have served 20,000 patients last year through 
70,000 encounters with two primary care sites, four school-
based health centers, and one dental center, and they do 
outreach at a local domestic violence shelter.
    This funding that they were given has allowed them to 
increase the number of residents at this facility in 
Hendersonville. I think those new residents are really critical 
to helping with providing more primary health care physicians. 
Blue Ridge is one of 34 federally qualified health centers in 
North Carolina that do provide that high quality, cost-
effective care to so many people across our State.
    I know that there is another provision that is important, 
and that is the Rural Physicians Pipeline Act that was included 
in the Affordable Care Act. It gives the medical schools the 
resources to recruit students from rural communities. So much 
of this primary care access is lacking in our rural 
communities. If we can train physicians from those rural 
communities, they tend to stay in rural communities, which I 
think is certainly a highlight of this provision. So programs 
like that, I think, have a significant role to play in 
relieving this current primary care shortage.
    I am delighted to have this committee hearing. I look 
forward to hearing the testimony of all of our witnesses today.
    Thank you.
    Senator Sanders. Thank you, Senator Hagan.
    Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thanks very much, Senator Sanders, for 
holding this hearing. You have drawn a big crowd, I think, 
because it is an important issue.
    We are all gearing up here in Washington for ``Son of 
Fiscal Cliff,'' which is going to be coming in a couple of 
weeks. With that looming, we are beginning to hear the usual 
refrain about how important it is to cut Medicare benefits, and 
to limit access to Medicare for seniors, and that that is the 
responsible thing to do to save money; which, of course, is a 
preposterous and ill-informed idea, particularly in the context 
of a health care system that is 100 times more expensive than 
it was in 1960.
    If you look at the graph, it is an accelerating curve of 
upward costs. When you look at a $2.7 trillion annual 
expenditure on health care that is probably 50 percent higher 
because of the inefficiency of our health care delivery system; 
there is a 50 percent inefficiency penalty that we pay in the 
United States compared to all of our industrialized 
competitors. Our most inefficient industrialized competitor 
spends 12 percent of its GDP on health care; we spend 18 
percent of GDP on health care. It is $800 billion a year spent 
unnecessarily.
    You look at the scope of this, you look at the 
accelerating, skyrocketing pace of the increase and you think 
you are going to solve that by cutting Medicare? It is simply 
not right. As the CEO of Kaiser Permanente, George Halvorson 
said, ``That is an inept way of thinking about health care.'' 
He said, ``It's not just wrong, it's so wrong, it's almost 
criminal.''
    Hearings like this point out that there really is a problem 
with costs and with the delivery system in the United States, 
and that we really have to address that problem if we are not 
going to misdiagnose what we have. Once you have a 
misdiagnosis, you usually don't get the right cure.
    It is really important that we not throw seniors and 
Medicare under the bus because we have failed to address the 
real problem in health care, which is wild inefficiencies and 
skyrocketing costs that aren't just in Medicare. Indeed, 
Medicare is probably the most efficient deliverer of health 
care in our health care system.
    If we get this right, 40 percent of the savings will come 
back into the Federal budget, but the rest will go to Kaiser, 
to Blue Cross, to United, to businesses and families all across 
the country.
    We have a real fight on our hands to try to make sure we 
steer this in the right direction. And I hope this hearing 
helps make sure we make the right choice.
    Senator Sanders. Senator Whitehouse, thank you very much.
    I want to remind members of the Senate and viewers on C-
SPAN that the report that we have done, ``Primary Care 
Access,'' is available at my Web site www.Sanders.senate.gov.
    Panelists, you have been extremely patient, but the good 
news is that what you have seen today is that there is an 
enormous amount of interest in this issue. We are delighted 
that you are here and we thank you, again, for the work that 
you do.
    Let's begin with Dr. Fitzhugh Mullan. Dr. Mullan is the 
Murdoch Head Professor of Medicine and Health Policy at the 
George Washington University School of Public Health, and 
professor of pediatrics at the George Washington University 
School of Medicine.
    Dr. Mullan, thanks so much for being with us.

 STATEMENT OF FITZHUGH MULLAN, M.D., MURDOCK HEAD PROFESSOR OF 
MEDICINE AND HEALTH POLICY AT THE GEORGE WASHINGTON UNIVERSITY 
  SCHOOL OF PUBLIC HEALTH AND PROFESSOR OF PEDIATRICS AT THE 
GEORGE WASHINGTON UNIVERSITY SCHOOL OF MEDICINE, WASHINGTON, DC

    Dr. Mullan. Thank you, Chairman Sanders, Senator Enzi, and 
colleagues. It is a great privilege to be here.
    As a primary care physician and pediatrician who was in the 
first class of the National Health Service Corps in 1972, 
subsequently ran the National Health Service Corps, it is not 
only a privilege but an astounding development in history to 
hear a committee of the U.S. Senate speak with such clarity 
about the often orphan issues of primary care and service 
delivery in poor, rural, and underserved communities. So if I 
can get over my daze, I will try to be cogent, but thank you so 
much for convening and for the thought that has gone into this.
    I am going to run through. Chairman Sanders, you gave my 
talk. I was supposed to be the expert. You are clearly the 
expert, so I will stint on some of the things that I was going 
to bring up, but try to focus on the issues of education and 
system-building around primary care.
    The demand clearly is in front of us--the aging of the 
population, the advent of the Affordable Care Act and the 
terrific entitlement that it provides, but that does present us 
with a challenge. Just a few demographics.
    We have about 280 physicians per 100,000 in the United 
States, which puts us in the middle, roughly, of the developed 
world. UK and Canada have less; Germany and France, for 
instance, have more. But we are roughly in the middle.
    We have about 800,000 physicians, but additionally, we have 
190,000 nurse practitioners, physician assistants, and 
certified nurse midwives. So we have almost a 25 percent add-on 
of providers that did not exist 30 or 40 years ago. And a point 
on that, important to remember, when our workforce was lean, I 
am talking in the 1960s and 1970s, we were very short. And 
everybody including the U.S. Congress agreed and began a 
variety of programs that have lived on very powerfully today.
    Among those were the development of the nurse practitioner 
and the physician assistant that did not exist before, and the 
National Health Service Corps. Lean is not necessarily bad in 
terms of how we function, if we want a more efficient system. 
There are systems that are used to the payments that they 
currently get, and they are not going to change until there is 
a real sense of need, and we are at that point. While I am not 
for holding where we are now, I think we need to think about 
the advantages, perhaps, and the creativity that can come from 
this period.
    In terms of the primary care challenge, I look at it in two 
ways. One is within the factory, the medical school, the 
teaching hospital, and the other is in the market. Clearly, we 
have had eloquent testimony as to the pay parity gap that 
exists. In simple general terms, a specialist will make twice 
what a generalist makes, a generalist being a pediatrician, 
family doctor, general internist, and other disciplines that 
are generalist in nature and poorly paid. That is a huge 
problem.
    While education and training is very important, what I do 
believe in, is that you can do the best education and training, 
and if you put them out in the market with those kind of 
incentives, you will get what we are getting now. We have got 
to deal with that.
    Speaking on the educational side, the challenges are both 
at the medical school level and the residency level. As you 
know, this prolonged adolescence we call residency is very 
important, and also very influential, in the nature of the type 
of physician and the location of the physician that comes out 
of the education pipeline.
    There is in medical schools a culture that is heavily, at 
this point in time, specialty focused; a natural dominance of 
the more research-oriented and the subspecialty sciences, which 
are well represented for good reasons, in medical school. But 
the primary care culture is often put in the back of the bus, 
and you will not find a primary care physician who hasn't been 
told at some point in their training career by a professor, 
``You're too intelligent. You're too smart to go into primary 
care.'' That culture is toxic, and it is out there, and we need 
to worry about it.
    The young doctor today is, as suggested, drawn to lifestyle 
specialties. This is a problem too, with limited hours, clear 
and rather refined knowledge requirements, and a predictable 
life. One can understand those draws, but we need to work on 
that.
    Then finally, you have the sense of social purpose and 
social mission. Our medical schools have been well-treated by 
the NIH that provides about $17 or $18 billion a year to 
research in medical schools; by Medicare, which provides $10 
billion a year to teaching hospitals for residency programs, 
$10 billion a year about $100,000 per resident; very, very 
strong influence with no requirements in terms of workforce 
product at the other end. And given those two pay streams, we 
put about $300 million into primary care, family medicine, 
nurse practitioners, PAs, and about $300 million into the 
National Health Service Corps.
    So you have $27 billion on one side that is generally 
specialty-oriented and about $600 million that is promoting 
primary care careers. A huge imbalance, again, not surprising 
the outcome that results from that.
    The teaching health centers, which have been referenced, a 
very important innovation; it moves the paradigm out of the 
hospital into the community. And importantly, it needs to 
guarantee a pay stream. You cannot run a residency without 
predictability. That is a very, very important outcome and it 
is something that needs attention.
    The nurse practitioner, PA, is a very important asset. As I 
say, almost 190,000. We need more. They are more nimble. They 
are more easily trained in larger numbers, and that is a very, 
very important feature as we look at scaling up quickly our 
workforce.
    Finally, data and planning. We have a National Health Care 
Workforce Commission finally voted in through the ACA. It has 
not been funded. It has not met. We need a better brain in our 
somewhat anencephalic system; our system without a good brain 
to lead it. That would be very helpful.
    In conclusion, we have a moral triumph in the ACA in the 
entitlements that it brings, but also a technical challenge. In 
terms of legislative issues, the main permanence of the THCs is 
important. The full funding and greater funding of the National 
Health Service Corps will be essential. Bringing the National 
Health Care Workforce Commission to life is important. And 
perhaps most important, is Medicare GME, we need to get a 
handle and use that $10 billion in a more constructive, pro-
primary care fashion.
    Thank you.
    [The prepared statement of Dr. Mullan follows:]

              Prepared Statement of Fitzhugh Mullan, M.D.*

    My name is Fitzhugh Mullan. I am a professor of Health Policy and a 
professor of Pediatrics at the George Washington University. The first 
23 years of my medical career were spent as a Commissioned Officer in 
the United States public health service, beginning as a National Health 
Service Corps physician in a community clinic in northern New Mexico. 
Subsequently, I served as Director of the National Health Service 
Corps, Director of the Federal Bureau of Health Professions, and 
Secretary of Health and Environment for the State of New Mexico. In 
recent years, I have studied and written about medical education, 
health professions workforce, and health equity. I am pleased to be 
here today to talk about the challenges of primary care as set within a 
changing health care system. I will address health workforce adequacy, 
the National Health Service Corps, Teaching Health Centers, nurse 
practitioners, physician assistants, certified nurse midwives, and 
workforce data and planning.
---------------------------------------------------------------------------
    * The author wants to thank Hannah Wohltjen, MA, for her assistance 
in the preparation of this testimony.
---------------------------------------------------------------------------

   GETTING IT RIGHT: CHALLENGES TO BUILDING A STRONG HEALTH WORKFORCE

    We are facing a period of enormous challenge in building our health 
care system to improve access and quality while managing costs. All 
evidence points to the demands on the current system rising appreciably 
based on the aging of our population and the extension of health 
insurance to 30,000,000 Americans under the Affordable Care Act. What 
does this mean for our health care workforce and where do we stand now?
    The United States has about 280 physicians/100,000 people, which 
puts us in the middle ranks of developed nations--somewhat above Canada 
and the UK and somewhat below Germany and France. Roughly one third of 
our physicians work in primary care, which makes us disproportionately 
specialist-heavy as compared to many other developed nations (Figure 
1).



    Additionally, and importantly, we have approximately 106,000 nurse 
practitioners, 70,000 physician assistants, and 13,000 certified nurse 
midwives providing clinical services side-by-side with 835,000 
physicians.\1\ \2\ \3\ This means that for every four physicians we 
have one non-physician clinician providing services as well--a rich 
asset that no other nation enjoys. A critically important and much 
debated question today is whether we have an adequate number of 
clinicians to meet our national needs. There has been a lot of 
scholarly debate on this issue. In my judgment, we have a reasonable 
range of clinical providers (physicians and non-physician clinicians) 
to address our current needs. These needs will increase slowly as our 
population grows and ages and there will clearly be an appreciable 
increase in demand for service in 2014 when the insurance provisos of 
the ACA kick in. All of these challenges will call on us to be 
resourceful and strategic in the use of our current resources and will 
require us to consider new and different strategies to address 
educational and practice needs to build our future clinician workforce. 
Toward that challenge, we should plan gradual and thoughtful growth in 
our physician workforce aiming to increase the number of physicians 
entering practice in high need specialties.
---------------------------------------------------------------------------
    \1\ AHRQ. Primary Care Workforce Facts and Stats No. 2. October 
2011. Retrieved from http://www.ahrq.gov/research/pcwork2.htm.
    \2\ American Midwifery Certification Board, http://www.midwife.org/
Essential-Facts-about-Midwives.
    \3\ Kaiser Family Foundation. Total professionally active 
physicians, November 2012. Retrieved from http://
www.statehealthfacts.org/comparemaptable.jsp?ind=934&cat=8.
---------------------------------------------------------------------------
    However, well-established evidence points to the fact that pure 
increases in physician numbers are associated with higher costs and not 
associated with better distribution of physicians or improved patient 
outcomes. In fact, our national experience points to certain benefits 
of a ``leaner'' physician workforce. Examples of this include the 
development of the physician assistant and nurse practitioner 
professions as well as the legislative birth of the National Health 
Service Corps during earlier periods of physician shortage. Moreover, 
the experience of organized health systems, ranging from Kaiser 
Permanente to the Mayo Clinic that employ significantly fewer 
physicians per population than the national average, suggest that 
excellent care can be provided by better practice organization and 
payment incentives.

      THE PRIMARY CARE CHALLENGE--MEDICAL SCHOOL REFORM NECESSARY 
                           BUT NOT SUFFICIENT

    The education and maintenance of a strong primary care sector is 
important to all aspects of excellence in health care--access, quality, 
and affordability. Robust and consistent data from the United States 
and global studies affirm the association of strong primary care 
systems with better outcomes, lower costs, and better patient 
satisfaction.
    The United States has traditionally undervalued primary care in 
both education and practice, which is a core problem that needs 
resolution as part of overall health care reform. Our current physician 
reimbursement system is effectively hard-wired to Medicare payment 
policies--policies that compensate specialists (on average) twice as 
much as primary care physicians. The culture of medical education is, 
likewise, tilted toward specialties, both because of Federal funding 
streams and the predominance of specialists on faculty. Primary care 
physicians report time after time that, when they were medical 
students, faculty members told them they were ``too smart to go into 
primary care.'' Ten of our elite medical schools yet today do not have 
family practice departments despite the panoply of specialties 
represented on their campuses.\4\
---------------------------------------------------------------------------
    \4\ Krupa, C. (2012, December 17). Will physician shortage raise 
family medicine's profile? American Medical Association American 
Medical News. Retrieved from http://www.ama-assn
.org/amednews/2012/12/17/prl11217.htm.
---------------------------------------------------------------------------
    In addition to the lower pay for primary care work, many medical 
students and young physicians consider primary care practice hard work 
and are opting in large numbers for what are euphemistically called 
``lifestyle specialties.'' These are medical specialties that have 
predictable hours, well-bounded knowledge requirements, and good pay.
    The challenges that bedevil primary care--pay equity, medical 
school culture, and ``lifestyle'' preferences--represent long-term 
problems that will not be corrected by a single reform or strategic 
initiative. Rather, there will need to be a variety of approaches 
undertaken at a governmental level as well as at institutional and 
individual levels in an effort to rebalance our provider complement and 
maintain a strong primary care presence. This cannot be done in medical 
schools alone. Pro-primary care reforms in medical schools will not be 
sufficient if the ``pay equity gap'' in practice is not narrowed. In 
the United Kingdom, for instance, where specialists and general 
practitioners have similar career earnings, there are no problems 
filling the ranks of the Nation's general practitioners. The advent of 
the Affordable Care Act and the aging of the baby boom generation 
represent a challenge to the Nation--but also an opportunity for 
medical educators to revisit the mission of their institutions, 
examining opportunities to promote primary care and the general social 
mission of medical education. There are a number of established 
features of medical schools that are associated with recruiting and 
graduating physicians who are more likely to work in shortage areas, to 
choose primary care careers, and to address issues of prevention and 
population health. A commitment by the Nations' medical schools and 
teaching hospitals to promote the social mission of medical education 
and practice would launch more graduates into careers dedicated to the 
oncoming problems of access, quality, and affordability.

   TEACHING HEALTH CENTERS--INNOVATION IN GRADUATE MEDICAL EDUCATION

    The Teaching Health Center Program (THC), initially enacted in the 
ACA, is a new residency model that will promote better training of more 
physicians in community-based primary care settings. The principal 
funding source for residency programs has been Medicare Graduate 
Medical Education (GME) payments, which are paid to hospitals based 
largely on the number of residents that they train. Not surprisingly, 
hospitals recruit residents who fulfill the needs of the hospitals. 
This tilts residency heavily toward medical and surgical specialties 
and subspecialties. The vast majority of trainees spend little or no 
time outside of the walls of the hospital. Studies have demonstrated 
that only 1 percent of patients are hospitalized in major teaching 
hospitals in any 3-month period and yet that is where virtually all 
teaching and role modeling take place.
    THCs are community-based. Residents are recruited to community 
health centers that, in turn, arrange teaching rotations in regional 
hospitals. The teaching program itself, the clinical training provided, 
and values imparted are all community-oriented. THCs are funded through 
modest, dedicated ACA support for 5 years. To date 22 THC residency 
programs training 140 residents are up and running. Another 17 health 
centers have recently received awards and it is anticipated that THCs 
will soon be graduating almost 200 community-trained primary care 
physicians annually. However, despite enormous interest and major 
reform implications, the THC program, as currently legislated, is 
effectively a demonstration program whose funding ends in 2014. The 
absence of Medicare or Medicare-like permanent funding jeopardizes this 
small but enormously important new model of primary care education. 
This is a critical, near-term legislative challenge.

       NATIONAL HEALTH SERVICE CORPS--TRIED, TRUE, AND ESSENTIAL

    The National Health Service Corps, enacted in 1970, has proven to 
be a powerful instrument for primary care career development and a 
brilliant example of service learning in the national interest. Using 
scholarships and loan repayments as incentives, the program has been 
able to match large numbers of primary care clinicians to shortage-area 
delivery sites, year after year. Thanks to the leadership of Senator 
Sanders and the ACA, the NHSC has doubled its annual appropriation from 
$150,000,000 to $300,000,000 (Figure 2) and, as we speak, deploys 
almost 10,000 physicians, nurse practitioners, physician assistants, 
social workers, mental health workers, and others in thousands of sites 
in every State in the Nation.



    In return for educational debt relief, National Health Service 
Corps health care workers are ``doctors'' to resource-poor communities 
all over the country. The 40,000 clinicians who have served in the NHSC 
over 40 years is a tribute to good legislation and good will.\5\ With 
the advent of the ACA, the program will need to expand its clinical 
participants and communities served.
---------------------------------------------------------------------------
    \5\ National Health Service Corps. Retrieved from http://
nhsc.hrsa.gov/corpsexperience/aboutus/index.html.
---------------------------------------------------------------------------
    NURSE PRACTITIONERS, PHYSICIANS ASSISTANTS, AND CERTIFIED NURSE 
                                MIDWIVES

    Nurse practitioners (NPs), physicians assistants (PAs), and 
certified nurse midwives (CNMs) are key providers of health care in 
general and primary care in particular throughout the country. 
Currently, as noted above, there are estimated to be 190,000 of them 
working clinically throughout the country. It is estimated that 52 
percent of NPs and 43 percent of PAs work in primary care.\6\ CNMs are 
important providers of women's health in general. Scope of practice 
laws and prescriptive authority have expanded over time in most States 
with the result that NPs and PAs can provide, augment, and supplement 
services that were previously limited to physicians. This availability, 
as well as the spectrum of clinical capabilities within these groups of 
clinicians, makes them extremely important resources in service 
delivery in all settings. Moreover, the length and expense of their 
training is less than that of physicians and they are able to choose 
and modify their career courses in a far more nimble fashion than 
physicians. Their presence, skills, and numbers are an important 
contribution to primary care today and the ability to expand their 
educational programs quickly will make them crucial players over the 
next decade as the demand for services increases. As documented above, 
the majority of PAs and a growing number of NPs are working in 
specialty settings. I believe this to be an important asset for the 
health system and not, as some believe, an abdication of their 
``primary care role.'' If we are to develop a balanced workforce where 
specialty services are used appropriately, NPs and PAs are positioned 
to support specialists and perform clinical tasks in a way that 
attenuates the need to train larger numbers of specialty physicians. 
This will be an important contribution to recalibrating the specialist/
generalist mix of the workforce of the future.
---------------------------------------------------------------------------
    \6\ AHRQ. Primary Care Workforce Facts and Stats No. 2. October 
2011. Retrieved from http://www.ahrq.gov/research/pcwork2.htm.
---------------------------------------------------------------------------
                  THE WORKFORCE WILL NOT MANAGE ITSELF

    Generalist and specialist physicians as well as NPs, PAs, and CNMs 
require lengthy basic education, including graduate level practice-
focused training. Key clinicians such as these cannot be produced 
quickly, and their education and training require educational 
``infrastructure'' (schools, specialized classrooms and labs, faculty, 
and clinical training sites) and substantial educational financing (for 
schools, faculty, and students). Public policies relating to practice 
are also important and, often, intricate. New practice models (Primary 
Care Medical Homes and Accountable Care Organizations), reimbursement 
policies, scope of practice laws, and loan repayment options--to name a 
few--have an impact on career choices and service patterns of 
physicians and other clinicians.
    While many career decisions will be made by individuals and will 
call on them to use their own financial resources, public policy at the 
Federal and State level will contribute greatly to individual choices 
about where and how to practice. The pressures of the system in the 
near future will reinforce the importance of the public role in health 
workforce policy. However, the history of public planning in the area 
of health workforce is spotty at best. No senior agency of government 
is charged with policy planning in this area. Data on health 
professions workforce is limited and dispersed among Federal agencies 
(HRSA's National Center for Health Workforce Analysis, the Bureau of 
Labor Statistics, the Veterans' Administration), private associations 
(AMA, AAMC, AACON), and State boards of nursing and medicine.
    As a first step to providing better Federal leadership in health 
workforce planning, the ACA enacted a National Health Care Workforce 
Commission charged with the responsibility of drafting and promulgating 
periodic reports on the workforce as a whole and specific workforce 
issues in particular. It was to bring focus to the many issues of 
health workforce analysis and planning. The State of that endeavor is 
that Commissioners were appointed but no funds have been appropriated 
to allow the commission to meet or function. The continued absence, 
then, of any focal effort in workforce planning at the national level 
will only become more problematic as the challenges of access, quality, 
and cost continue to increase as the demographics of the country evolve 
and the programs of the ACA come into play.

                               CONCLUSION

    This is an exciting time. We are at the brink of expanding the 
benefits of health insurance to most of those currently uninsured in 
our population. This is a moral triumph but also a technical challenge. 
Meeting this need will require educational and clinical resourcefulness 
and both public and private investment. There are a number of areas in 
which Federal legislative action will be needed including the 
conversion of the THCs to a permanent program, extending and expanding 
the NHSC, operationalizing the National Healthcare Workforce 
Commission, funding HRSA's National Center for Health Workforce 
Analysis so that it becomes the robust center that is required for 
incisive public policymaking. A serious examination of Medicare GME is 
overdue in regard to what can be done to make the program more 
accountable and responsive to national physician workforce needs.
    I hope that these remarks have helped to point out the 
opportunities and challenges that face us. I very much appreciate the 
chance to testify today, and would be happy to be of assistance to you 
and the committee in any way I can in the future.
    Thank you.

    [Note: The author wants to thank Hannah Wohltjen, MA, for her 
assistance in the preparation of this testimony.]

    Senator Sanders. Thank you very much, Dr. Mullan.
    In order for us to have a good, vigorous question and 
answer period, if people could keep their remarks to 5 or 6 
minutes, that would be appreciated.
    The next witness is Tess Kuenning. She is the executive 
director of Bi-State Primary Care Association, whose members 
include the Federally Qualified Health Centers in Vermont and 
New Hampshire.
    Ms. Kuenning, thanks very much for being with us.

   STATEMENT OF TESS STACK KUENNING, CNS, MS, RN, EXECUTIVE 
  DIRECTOR, BI-STATE PRIMARY CARE ASSOCIATION, MONTPELIER, VT

    Ms. Kuenning. Chairman Sanders, Ranking Member Enzi, and 
distinguished members of the subcommittee.
    My name is Tess Kuenning, and I am the executive director 
of Bi-State Primary Care Association located in Montpelier, VT 
and Concord, NH. On behalf of the entire health center 
community, including more than 22 million patients nationwide, 
and the National Association of Community Health Centers, I 
want to thank you for the opportunity to testify on the role of 
community health centers in addressing our Nation's pressing 
primary care access needs.
    As the committee is aware, two important events have 
significantly altered the health care financing and delivery 
systems of our Nation, the Patient Protection and Affordable 
Care Act, and the Supreme Court's decision about the same.
    As a result of these events, it is estimated that as many 
as 30 million Americans will gain coverage through Medicaid 
and/or the health insurance exchange. Yet another 30 million 
will still remain uninsured.
    We strongly support these coverage expansions, which open 
the door to a broader health care system for many of our 
patients. However, we know well that coverage alone does not 
equate to access. It is access to regular care that makes 
coverage meaningful.
    We also believe to achieve a truly reformed health system, 
our Nation needs sustainable solutions to increase our primary 
care capacity, lower and manage our health care costs, and 
assure quality outcomes. It is for this reason, in my view, 
that any efforts to increase access to insurance must grow and 
expand our primary care infrastructure.
    Community health centers offer a unique and proven solution 
to these challenges. By statute and mission, community health 
centers are located in medically underserved areas, and serve 
medically underserved populations and care for everyone 
regardless of your ability to pay. Community health centers 
also are directed by patient majority boards insuring care is 
locally controlled and responsive to each individual 
community's needs.
    It might surprise you to learn that the Community Health 
Center of Burlington in Burlington, VT provides translation for 
patients from the Sudan, Bosnia, Somalia, Burundi, Tibet and 
Nepal, Bhutan and Burma, to name only a few. The ability to 
receive care in one's native language removes a major access 
barrier and improves the health of these families and our 
communities.
    From my years of clinical practice as a nurse in Nepal, I 
am able to speak Nepali with our increasing immigrant and 
refugee population from Nepal and Bhutan, and I see firsthand 
the benefits of this type of enhanced provider-patient 
relationship can yield.
    Without access to primary care many people, including these 
families, might delay seeking treatment until they are 
seriously ill and require hospitalization or care in the 
emergency room at a much higher cost to themselves and to the 
health care system.
    The literature backs up these real world experiences. For 
example, ``The Journal of Rural Health'' article found that 
counties with a community health center had 25 percent fewer 
emergency room visits. Other data demonstrates that the 
community health centers save the entire health system, 
including government and taxpayers, approximately $24 billion 
annually by keeping patients out of these costlier health care 
settings.
    Fortunately Congress, with the leadership of this 
subcommittee's Chair, had the foresight to include mandatory 
funding to expand the reach of the Nation's community health 
centers in the Affordable Care Act to ensure that the promise 
of coverage was met with the reality of care. We believe that 
seeing this plan through is essential. Unfortunately, the 
community health center expansion is not currently on-track.
    A recent HRSA solicitation for New Access Point grants 
anticipates spending only $20 million of the $300 million in 
new fiscal year funding for fiscal year 2013. The 
administration has instead proposed spreading out the community 
health center growth over a much longer period of time, and we 
urge that the full Affordable Care Act provided increase for 
fiscal year 2013 be immediately extended to care for 2\1/2\ 
million new patients as Congress intended.
    The demand for community health centers continues to 
outpace the growth, and more than 60 million Americans still 
lack access to primary care. In Vermont and New Hampshire in 
the near term, all of our 19 health centers have identified 
needs in their areas.
    I would be remiss if I failed to cite another vital program 
that supports the goal of creating medical homes for 
underserved Americans and that is the National Health Service 
Corps. The Corps places trained health professionals in health 
shortage areas and remains a key partner in ensuring that 
community health centers can meet the demand for primary care 
that is looming just around the corner with the ACA 
implementation.
    Community health centers around the country are ready, 
they're willing, they're able to be leaders in reforming our 
health system community by community from the ground up.
    We appreciate your leadership and look forward to your, and 
the committee's, continued support as we work to provide 
meaningful health care access to all.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Kuenning follows:]

         Prepared Statement of Tess Stack Kuenning, CNS, MS, RN

                              INTRODUCTION

    Chairman Sanders, Ranking Member Enzi, and distinguished members of 
the subcommittee, my name is Tess Kuenning, and I am the executive 
director of Bi-State Primary Care Association located in Montpelier, 
VT, and Concord, NH. On behalf of the entire health center community, 
including more than 22 million patients served by Community Health 
Centers, as well as the National Association of Community Health 
Centers, I want to say thank you for the opportunity to testify today 
before the committee on the efforts of Community Health Centers to 
provide and expand access to primary care services in medically 
underserved communities.

           PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010

    Two important events have radically altered the health care 
financing and health care delivery systems of our Nation: The Patient 
Protection and Affordable Care Act (ACA) which was signed into law on 
March 23, 2010; and the Supreme Court's June 28, 2012, landmark 
decision about same. It is estimated that 30 million people will gain 
public coverage through Medicaid and/or the Health Insurance Exchanges. 
There will be increased coverage through a number of mechanisms, but 
another 30 million will remain uninsured.
    In my view, any efforts to increase access to insurance must also 
include investments to grow and expand the primary care safety net 
infrastructure. Primary and preventive care must be central to any 
efforts to achieve its goals of increasing 
access, managing total patient costs and producing quality patient 
outcomes.
    As this committee is aware, the ACA created significant Federal 
investments in expanding public coverage and private insurance reforms. 
However, coverage does not equate to access. It is access that makes 
coverage real. We need sustainable 
solutions to increase our primary care capacity, lower and mange our 
health care costs and assure quality outcomes, patient satisfaction and 
patient accountability.
    Community Health Centers are the Nation's primary and preventive 
health care safety net. Community Health Centers hold the promise to 
fulfill access to care for our Nation's communities. Community Health 
Centers historically have, and will continue to care for all patients 
in their community, but will extend their expertise in caring for our 
most vulnerable; the uninsured and the Medicaid population.

                   HEALTH CENTERS--GENERAL BACKGROUND

    Community Health Centers are community-owned non-profit entities 
providing primary medical, dental and behavioral health care. In 
addition, many Community Health Centers also provide pharmacy and a 
variety of enabling and support services. To date, there are over 1,200 
Community Health Centers located at more than 9,000 urban and rural 
locations nationwide serving as patient-centered medical homes for more 
than 22 million patients. For over 45 years, the Nation's Community 
Health Center infrastructure has grown.
    In 2000, Vermont had only 2 Community Health Centers with 7 sites 
serving just over 18,000 patients. Currently, Vermont has 8 Community 
Health Centers with 43 clinical sites in 12 counties caring for the 
whole family from prenatal care to pediatrics, to adult and elder 
health care, providing a medical home over the past 3 years to more 
than 158,000 Vermonters. Vermont Community Health Centers have a 
significant market share serving one in four Medicaid, one in four 
uninsured, one in five Medicare enrollees and one in eight commercially 
insured Vermonters. Over the past 10 years in New Hampshire, Community 
Health Centers have grown to 12 organizations across the State serving 
approximately 76,000 patients in underserved areas.
    By statute and mission, Community Health Centers are located in 
medically underserved areas or serve a medically underserved population. 
Community Health Centers see patients regardless of their ability to 
pay or insurance status and offer services based on a sliding fee 
discount; thereby, easing one of the greatest barriers to care, the 
financial burden.
    Community Health Centers are also directed by patient-majority 
boards. This unique model ensures care is locally controlled, 
responsive to each individual community's needs and, at the same time, 
reducing barriers to accessing health care through various services. In 
some communities, Community Health Centers provide or arrange for 
transportation to ease the geographic barriers. In other communities, 
Community Health Centers provide care targeted to reduce various cultural 
barriers by providing culturally competent care including translation 
services.
    At the Community Health Centers of Burlington in Burlington, VT, 
they provide translation for patients from the Sudan, Bosnia, Somalia, 
Burundi, Tibet, Nepal, Bhutan and Burma to name a few. At the 
Manchester Community Health Center in Manchester, NH, of their 8,000 
patients, only 51 percent speak English. There are 62 languages spoken 
and 49 require interpretation. My training as a nurse and my various 
roles in clinical practice has allowed me a greater appreciation to 
understand a successful patient/clinician relationship. From my years 
of clinical practice in Nepal, I am able to speak Nepali with our 
increasing immigrant and refugee population from Nepal and Bhutan. I 
have found myself in Community Health Center waiting rooms speaking 
Nepali to children, teens, parents and grandparents. They greet this 
with wonderment and genuine gratitude that someone knows their 
language. All care at Community Health Centers is tailored to assure 
patients are welcome and treated with respect.
    Community Health Centers are more than a safety net, they have a 
demonstrated track record of improving the health and well-being of 
their patients using a locally tailored health care home model designed 
to coordinate care and manage chronic disease. This distinctive model 
of care has enabled us to save the entire health 
system, including the government and taxpayers, approximately $24 
billion annually by keeping patients out of costlier health care 
settings, such as emergency departments.\1\ As a result of their timely and 
appropriate care, Community Health Centers save $1,263 per person per year, 
lowering costs across the delivery system--from ambulatory care settings to 
the emergency department to hospital stays.\2\ Nationally, approximately 39 
percent of Community Health Center patients are covered by Medicaid and 
another 36 percent are uninsured.\3\ In return, Community Health Centers bring 
significant value to the Medicaid program, serving 14 percent of Medicaid 
patients for only 1 percent of Medicaid spending.\4\
    In addition to reducing health care costs, Community Health Centers 
can also serve as small businesses and economic drivers in their 
communities. In 2012, Community Health Centers employed 153,000 
individuals \5\ and in 2009 generated $20 billion in total economic 
benefits in poor urban and rural communities.\6\ Vermont Community 
Health Centers employed 753 individuals and generated nearly $108 
million in total economic benefits; while New Hampshire Community 
Health 
Centers employed 537 individuals and generated over $77 million in 
total economic benefits in their communities.

 COMMUNITY HEALTH CENTERS CAN IMPROVE HEALTH CARE OUTCOMES AND REDUCE 
                           HEALTH CARE COSTS

    Numerous published studies over many decades have demonstrated that 
Community Health Centers are a proven cost saver. Studies have also 
proven that Community Health Centers improve the health status in 
communities, reduce emergency room use and eliminate barriers to health 
care.
    A recent Journal of Rural Health article entitled: Presence of 
Community Health Center and Uninsured Emergency Department Visit Rates 
in Rural Counties, written by Dr. George Rust, et al., found that 
counties with a Community Health Center site had 25 percent fewer 
uninsured emergency department visits.\7\ Without access to primary 
care, many people delay seeking health care until they are seriously 
ill and require inpatient hospitalization or care at an emergency room 
at a much higher cost. Community Health Centers can help reduce those 
unnecessary costs by serving as health care homes for the underserved.
    Barriers to care make it difficult for individuals to access 
primary care and the demand for primary care far exceeds the supply 
across the Nation, but Community Health Centers can play a role in 
solving this crisis. The National Association of Community Health 
Centers (NACHC) recently released a report entitled: Health Wanted, the 
State of Unmet Need for Primary Health Care in America (``Health 
Wanted''),\8\ which states that barriers to accessible care include 
affordability, accessibility and availability can diminish access to 
primary care. Health Wanted shows when Community Health Centers are 
located in these medically underserved areas, communities are able to 
overcome these barriers to care and are able to improve health care 
outcomes, as well as reduce health care costs. However, the demand for 
Community Health Centers continues to outpace growth. Health Wanted 
also highlights the fact that at least 25 percent of U.S. counties in 
greatest need do not have a Community Health Center.
    Underserved communities all across the country are seeking 
competitive Federal grant support to build or expand their primary care 
infrastructure. In Vermont, there are three communities that are fully 
poised to apply for competitive Federal funding to bring medical, 
dental and behavioral health services to communities in need. As well, 
of the eight current Vermont Community Health Centers, seven of them 
have plans to further expand their medical, dental and behavioral 
health services to either their existing sites or to new towns if only 
there were sufficient Federal funding. This scenario plays out the same 
in New Hampshire, in that each of the 12 Community Health Centers could 
expand their primary and preventive services to thousands more patients 
if resources were available.

             GROWTH OF THE COMMUNITY HEALTH CENTER PROGRAM

    Community Health Center expansion, championed by Members of 
Congress and Presidents of both parties, has improved access to primary 
care in rural and urban medically underserved communities in every 
State and territory and brought enormous economic value and improved 
health to the entire system. Since 2002, Community Health Centers have 
expanded care from 11 million patients to 22 million patients through 
the efforts of both Republicans and Democrats. Despite the growth of 
the Community Health Center program over the years, more than 60 
million Americans still lack access to a primary care provider.\9\
    Our most recent expansion under the Affordable Care Act (ACA) was 
championed by the distinguished Chairman of this subcommittee, Senator 
Sanders. The Health Center Trust Fund provides $9.5 billion in funding 
to support the expansion of Community Health Centers across the country 
to reach and serve an additional 40 million people.\10\ The expansion 
of the Community Health Center program to new sites and for expansion 
of services at existing locations will continue until 2015. The goal of 
the Trust Fund is to ensure that existing Community Health Centers are 
thriving and new Community Health Centers are ready to provide primary 
care access to the newly insured in 2014.
    We believe the continued expansion of Community Health Centers is 
essential to ensuring access to primary care in medically underserved 
communities. Unfortunately, efforts to continue that expansion have 
faltered recently. The President's proposed fiscal year 2013 Health 
Resources and Services Administration (HRSA) budget provides $1.58 
billion in discretionary funding for the Community Health Centers 
program. Together with the $1.5 billion in fiscal year 2013 mandatory 
ACA funding available, Community Health Centers could receive a net 
increase of $300 million in total programmatic funding for fiscal year 
2013 equaling total funding of $3.1 billion.
    We strongly support the President's proposed funding level of $3.1 
billion for Community Health Centers, but we are concerned about the 
Administration's proposal to hold back $280 million of the total 
proposed increase of $300 million and instead spread out health center 
growth over a longer period of time.
    HRSA's January 16, 2012 solicitation for New Access Point grants 
will only expend $20 million of the $300 million in available funding under 
the ACA to establish 25 new Community Health Centers and only expand care 
to 60,000 new patients. Instead of holding back funding, we propose that the 
entire increase be used immediately to provide for the expansion of care to 
2.5 million new patients. This planned minor expansion will fall far 
short of addressing the pressing need for primary care services that 
has clearly been demonstrated in communities nationally and will not 
provide the access to primary care that was promised in the ACA. Next 
year, when several critical provisions of the ACA begin, we should do 
all we can to assure we have a strong, stable and growing primary care 
infrastructure with additional sites for patients to access care.
    I would be remiss if I failed to cite another vital program that 
supports the goal of creating medical homes for underserved Americans, 
the National Health Service Corps (NHSC). The NHSC, which places 
trained health professionals in Community Health Centers and other 
settings located in shortage areas, continues to serve 
as a vital partner to the Community Health Center program. Half of the 
approximately 10,000 health professionals placed by the NHSC are at 
Community Health Centers. That program, too, was expanded in the ACA 
thanks to your leadership, Mr. Chairman, with $1.5 billion provided to 
it over 5 years, enough to train and place some 17,000 health 
professionals by 2015. And even though it also 
suffered a reduction in funding last year, the NHSC has been, and 
remains, a key partner in the expansion of care in preparation for the 
coming coverage expansions under the ACA.

                               CONCLUSION

    Without their local Community Health Center, many communities and 
patients would often be without any access to primary care. Community 
Health Centers have proven time and time again that access to a health 
center translated to improved health outcomes for our most vulnerable 
Americans and reduced health care expenditures for this Nation. Continued 
expansion of our program will result in the ability for Community Health 
Centers to reach a sizable portion of the medically underserved individuals 
who would otherwise be forced to seek care in emergency departments, or delay 
care until hospitalization is the only option.
    Mr. Chairman, we stand ready to meet the demand among those in need 
of primary care. However, Community Health Centers can only meet these 
primary care demands if we can provide access to care. This means 
leveraging the funds available under the ACA to expand the number of 
Community Health Centers throughout the country to ensure we are able 
to address the Nation's primary care shortage.
    We look forward to working with you and the other members of this 
subcommittee to accomplish our shared goal of improving access to 
primary care while reducing overall health care costs across the 
country.
    Thank you, Mr. Chairman.

                               References

    1. Ku L, et al. Strengthening Primary Care to Bend the Cost Curve: 
The Expansion of Community Health Centers Through Health Reform. Geiger 
Gibson/RCHN Community Health Foundation Collaborative at the George 
Washington University. June 30 2010. Policy Research Brief No. 19.
    2. Ku L, et al, 2010.
    3. Ku L, et al, 2010.
    4. Hing E, Hooker RS, Ashman JJ. Primary Health Care in Community 
Health Centers and Comparison with Office-Based Practice. Journal of 
Community Health. 2010
    5. Bureau of Primary Health Care, Health Resources and Services 
Administration, DHHS. 2011 Uniform Data System.
    6. Capital Link. Community Health Centers as Leaders in the Primary 
Care Revolution. August 2010. www.nachc.com/research-data.cfm.
    7. Rust George, et al. ``Presence of a Community Health Center and 
Uninsured Emergency Department Visit Rates in Rural Counties.'' Journal 
of Rural Health Winter 2009 25(1):8-16.
    8. National Association of Community Health Centers and the Robert 
Graham Center. Help Wanted: The State of Unmet Need for Primary Care in 
America. March 2012. www.nachc.com/client//HealthWanted.pdf. 
www.nachc.com/client//Health
Wanted.pdf.
    9. National Association of Community Health Centers. Primary Care 
Access: An Essential Building Block of Health Care Reform. March 2009. 
http://www.nachc
.com/client/documents/pressreleases/PrimaryCareAccessRPT.pdf.
    10. National Association of Community Health Centers. Community 
Health Centers: The Local Prescription for Better Quality and Lower 
Costs. 2011.

    Senator Sanders. Thank you, Ms. Kuenning.
    Senator Enzi is going to introduce our third witness.
    Senator Enzi. Thank you, Mr. Chairman.
    It is my pleasure to introduce Miss Toni Decklever. She is 
a resident of Cheyenne, which is our biggest city. It is 66,000 
people. We have 259 towns, but we only have 14 towns where the 
population exceeds the elevation.
    [Laughter.]
    She is familiar with all of those, and she currently wears 
several different professional hats. She is the Government 
Affairs Liaison for the Wyoming Nurse's Association, and has 
visited Washington, DC previously to advocate for her fellow 
nurses.
    Ms. Decklever is the State director for SkillsUSA, helping 
improve the country's workforce by recruiting and preparing 
individuals for careers in trade, technical, and skilled 
service occupations including health occupations.
    Finally, she is an independent consultant who helps train 
individuals in CPR, first aid, medication administration, and 
how to become first responders.
    She has a Bachelor of Science degree in Nursing from the 
University of Northern Colorado in Greeley, and is a certified 
EMT. She has received a number of awards for outstanding 
service on behalf of Wyoming's nurses and workforce development 
groups, and we are pleased to have her here today. And I know 
from my weekly trips to Wyoming, that it took 13 hours in 
airplanes and airports for you to be able to get here.
    Senator Sanders. Ms. Decklever, thanks very much for being 
with us.

   STATEMENT OF TONI DECKLEVER, MA, RN, GOVERNMENT AFFAIRS, 
            WYOMING NURSES ASSOCIATION, CHEYENNE, WY

    Ms. Decklever. Good morning, Chairman Sanders and Ranking 
Member Enzi, members of the committee. Thank you for the 
opportunity to testify today.
    As Senator Enzi stated, I do represent the Wyoming Nurses 
Association. I have been a registered nurse for almost 30 
years, and I have worked in acute care, long-term care, 
education, and administration.
    Wyoming is the ninth largest State in the United States 
with almost 100,000 square miles of land, but population is the 
smallest in the Nation with just a little over half a million 
people. Wyoming's frontier and rural environment impacts our 
health care system. Wyoming has 25 hospitals with 16 designated 
as critical access hospitals, 25 beds or less. There are also 
two veteran's hospitals, and 16 rural health clinics. Wyoming 
has eight community health centers, three are special 
population health centers, and three are satellites of larger 
health care centers.
    When dealing with the expanded number of patients and the 
barriers to care for these patients, several components need to 
be considered. One is the ability for providers to be able to 
practice to the full scope of their education and licensure. 
Another is addressing the shortage of providers due to 
retirement, and a shortage of qualified faculty to educate new 
providers. Others include the perception of quality of care and 
support funding for rural areas.
    With Baby Boomers turning 65 at the rate of 10,000 a day, 
there will be an increase in the demand for health care in 
traditional acute care settings along with expansion of 
nonhospital settings, such as home health care and long-term 
care.
    Wyoming's Nurse's Practice Act allows Advanced Practice 
Nurse Practitioners to practice independently in our State. 
This ability helps nurses provide patients in rural areas 
access to primary care. Unfortunately, some Federal laws and 
regulations limit the nurse's ability to practice at their full 
scope.
    A quirk in Medicare law has kept APRN's from signing home 
health plans of care and from certifying Medicare patients for 
a home health benefit. In areas where access to physicians is 
limited, this prohibition has led to delays in home health 
services. Moreover, the delays in care inconvenience patients 
and their families, and can lead to increased costs to the 
Medicare system. This occurs when patients are unnecessarily 
left in institutional settings or readmitted after discharge 
because they did not receive proper home care.
    A sufficient supply of nurses is critical in providing our 
Nation's population with quality health now and into the 
future. Registered nurses and Advanced Practice Nurses are the 
backbone of hospitals, community health clinics, school health 
programs, home health, and long-term care programs, and serve 
patients in many roles and settings.
    According to the 2008 National Sample of Surveyed 
Registered Nurses, over 1 million of our Nation's 3.1 million 
nurses are over the age of 50 with one-quarter of these nurses 
over the age of 60. Much like world populations and that of 
Wyoming, the provider population is aging and near retirement 
age. This runs counter to the increasing need of growing older 
population and a regional or sporadic growth of younger 
populations. Studies have identified the retirement of 
providers as one of the obstacles to providing comprehensive 
care.
    Wyoming responded to the increasing need for nurses by 
creating a funding stream that would assist nurses to continue 
their education and work as faculty at the community colleges 
and university. This allowed the nursing programs to increase 
their enrollment numbers and thus educate more registered 
nurses. RN's are encouraged to continue their education into 
the Advanced Practice Nursing level.
    Wyoming has a small amount of State incentives and loan 
repayment money for students, but the dollar amounts do not 
meet the demand through each biennium. To fill this void in 
funding, some students are able to receive funds from title 
VIII and title VII.
    The perception that health care also is delivered in bigger 
health centers equals quality is not easily overcome. Many 
residents are using health services in surrounding States who 
could have been served in Wyoming. To address this issue, one 
report suggested ways to re-characterize the system by:

    (1) having a stable supply of primary care providers,
    (2) have appropriately located tertiary centers,
    (3) integrate services at the point of care--medical home 
concept--collaborative planning and policy implementation,
    (4) effective use of pooled financial services or 
resources,
    (5) shared reasonability for achieving goals for individual 
health, and
    (6) organized leadership that keeps the State responsive to 
changing needs.

    Federal designations provide eligibility for Federal 
programs like HRSA 330 funding and enhanced reimbursements to 
rural health clinics. Health provider shortage areas, medically 
underserved areas, and medically underserved populations are 
based on factors that make it difficult to prove the needs of 
the underserved in rural and frontier areas. As noted by 
Senator Enzi, one provider per 3,500 people in an urban setting 
is entirely different than 3,500 people living in a county that 
is almost 10,500 miles of land mass.
    Wyoming's economy is based primarily on energy production, 
coal, natural gas, oil, uranium, and even wind making it a boom 
and bust economy. Many people working in the energy industry 
make a sufficient salary when they work, but in some cases, 
these salaries are significant enough that it can skew the 
average income for families based on statewide data. Though 
some families do very well financially, there is still a number 
of people struggling to make ends meet. This income disparity 
can be another challenge to meeting designation guidelines.
    Committee members, thank you for your time and attention to 
this very, very important matter, and I look forward to any 
questions you may have.
    [The prepared statement of Ms. Decklever follows:]

              Prepared Statement of Toni Decklever, MA, RN

    It is well known that Wyoming is the eighth largest State in the 
United States with almost 100,000 square miles of land, but has the 
Nation's smallest population of a little over half a million people. 
Wyoming's frontier and rural environment impacts our health care 
systems. The State is a patchwork of rural health clinics, county-owned 
critical access hospitals, for-profit hospital networks, and a handful 
of community health centers. Wyoming does not have a medical college at 
the University, but through partnerships with other State education 
programs, medical students can receive their education. In terms of 
other healthcare educational opportunities, Associate, Bachelor and 
Advance Practice nursing programs are offered through the Wyoming 
Community College network and the State's only university.
    Wyoming has 25 hospitals, with 16 designated as critical access 
hospitals. There are also 2 veteran's hospitals and 16 rural health 
clinics--half of which are associated with hospitals in their 
communities. Wyoming has eight community health centers, three are 
special population health centers and three are satellites of larger 
health centers. Even with these safety-net providers, many small towns 
and huge areas of Wyoming are without access to primary care.
    Distance to medical care is one of the biggest barriers of access 
to care for many people in the State. This also includes the 
considerations of terrain and weather. For instance, Sweetwater County 
is the largest county, having 10,490 square miles within the county 
lines. This is approximately the same size as the entire State of 
Massachusetts. There are two major towns of over 10,000 people, and 
more than 10 ``tiny towns'' (population under 200) in this county. 
These residents have to travel, over some 120 miles to reach healthcare 
services from a town closest to the eastern border of the county.
    Many of Wyoming's residents who live in these small towns have the 
same issues of needing to travel to care. A small town near the 
Colorado border had a rural health clinic with an automated pharmacy 
that provided medications for the common problems like providing 
antibiotics for ear infections. The residents of this community were 
used to traveling to a larger Colorado town for care beyond the basics. 
Last summer the road washed out, resulting in longer travel to other 
Wyoming towns to access care. The road was under repair for many 
months.
    Wyoming's health care system is fragile. Outmigration of medical 
care to larger regional medical centers within Wyoming and to 
neighboring States is a common occurrence. A report done for the 
Wyoming Health Care Commission in 2007 by the Rural Policy Research 
Institute (RUPRI) Center for Rural Health Policy Analysis stated:

          ``One of Wyoming's advantages in health care delivery is an 
        adequate array of facilities offering inpatient services, 
        hospitals and skilled nursing facilities (nursing homes). 
        Despite the availability of these institutional services and 
        the presence of qualified clinical personnel, our analysis 
        shows that many Wyoming residents are using health services in 
        [surrounding states] who could have been served in Wyoming. We 
        recommend convening a health care provider group to assess 
        patient migration patterns and implement a plan to achieve 
        optimal use of services in Wyoming (including across locations 
        in the state).''

http://www.wyominghealthcarecommission.com/images/reports/07-24-
07RUPRI%
20Summary%20Report%20Final%20July%2019,%202007.pdf.

    The perception that health care delivered in bigger health centers 
equals quality is not easily overcome. That should not stop leaders at 
all levels of government from examining ways to support health care 
systems internal and external to State borders.
    As the only non-legislative coalition to address comprehensive 
health issues in the State, the Wyoming Health Care Commission was 
legislatively founded in 2003 and sunsetted in 2009. The Commission 
compiled volumes of research by national experts and heard hours of 
discussion and testimony by State leaders and stakeholders on important 
facets of healthcare including patient safety, provider recruitment and 
retention, including specific nursing shortages, and expanding health 
insurance coverage in rural health settings. In spite of this work, not 
one policy recommendation from the Health Care Commission became law.
    In spite of many analysts' recommendations that the research and 
coalition work continue to make Wyoming stronger and more efficient, 
the Wyoming Legislature has again taken its place as the only 
organization to tackle health care issues. Wyoming's citizen 
legislature meets as a body only 60 days in the biennium and has some 
interim study opportunities. As a result, it should not be surprising 
that many individual legislators work from a piecemeal understanding of 
health care. If they do not have the opportunity to serve on a health 
committee or attend national health-focused conferences like National 
Council of State Legislatures, they often do not understand the 
complexity of this system.
    In the RUPRI report, the following (in order) was suggested as ways 
``to re-characterize the State's health care delivery system by 2030:

     A stable supply of health care professionals to support 
primary and secondary care everywhere in the State (including dental, 
behavioral, and geriatric health providers).
     Appropriately located tertiary care services in Wyoming 
that are preferred (as compared to the same services in neighboring 
States) by residents of the State.
     Integration of services at the point of care; all 
providers involved in any episode of care are fully informed of the 
actions of other providers and disparate services are bundled for 
purposes of patient-centered care and reasonable payment.
     Collaborative planning and policy implementation within 
regions of the State that include all services affecting health, 
including but not limited to education, criminal justice, 
transportation, economic development and land use planning.
     Effective use of pooled financial resources to extend 
financial access to all citizens.
     Shared responsibility for achieving goals for individual 
and population health among public and private organizations and with 
individuals who are responsible for their own health.
     Organized leadership, through a public-private 
partnership, that keeps the State responsive to changes in national 
policy, health care practice, and the demographics of the State.'' 
http://www.wyominghealthcarecommission.com/images/reports/07-24-
07RUPRI%20Summary%20Report%20Final%20July%2019,%202007.
pdf.

    Across the State, there is a shortage of primary care providers. 
Using Sweetwater County as an example, the large majority of people who 
qualify for Medicaid and/or who have Medicare have no access to 
providers within the county. Much of the research completed by the 
Wyoming Health Care Commission is still on the Commission's Web site, 
but efforts like the statewide Health Professionals Database have not 
been updated since 2009. The database was one of the first efforts to 
quantify the availability of providers in each of the 23 counties 
undertaken by the Commission and is crucial to any ongoing decisions 
about recruitment and retention of health care providers. Many 
legislative and ad hoc discussions have centered on what would help 
small Wyoming communities recruit physicians and mid-level 
practitioners.
    Much like all rural populations and that of Wyoming, the provider 
population, is aging and nearing retirement age. This runs counter to 
the increasing needs of a growing older population and a regional or 
sporadic growth of younger populations. Studies have identified the 
retirement of providers as one of the obstacles to providing 
comprehensive care. According to a study by the National Rural Health 
Association, ``nonmetropolitan areas typically can neither afford the 
duplication necessary to bridge an expected transition in health 
workforce, such as the retirement of a provider, nor the fluxuation or 
innovation of new service requirements.''

http://www.ruralhealthweb.org/index.cfm?objectid=153C1CCF-3048-651A-
FEB0361
2F7316078.

    Wyoming has a small amount of State incentive and loan repayment 
money, and the dollar amounts do not meet the demand through each 
biennium. It is less than effective for recruitment when the Web site 
announcing the grant program becomes inactive in the second year of 
biennium because the funds have been expended. Federal incentives for 
recruitment and retention that focuses on rural States could help in 
this area.
    The Health Care Commission studied nursing staffing issues and in a 
report in 2008 projected nursing demand:

          ``Assuming no changes to the current policy scenario, R&P 
        projections show that Wyoming's health care industry will need 
        a total of 3,307 more nurses by 2014 than were employed in 2006 
        (estimated at 3,145) to fill the projected demand. This 
        represents more than double the number of RNs working in health 
        care between 2006 and 2014. Assuming that growth as a result of 
        recent staffing pattern trends can be held constant at current 
        levels through policy changes, Wyoming's health care industry 
        will need only an additional 2,935 nurses by 2014 to fill 
        projected demand. The policy change scenario represents a 
        savings of approximately 400 nurses.''

http://www.wyominghealthcarecommission.com/images/reports/
nursing_demand_08.pdf.

    Wyoming responded to this by creating a funding stream that would 
assist nurses wanting to continue their education and work as faculty 
at the community colleges and university. This allowed the nursing 
programs to increase their enrollment numbers, and thus educate more 
registered nurses. RN's are encouraged to continue their education into 
the Advanced Practice Nursing level. The Wyoming Nurse Practice Act 
does allow Advanced Nurse Practitioners to practice independently in 
the State, which helps with access to primary care. However, there are 
still underserved areas and many people that still struggle to find a 
primary care provider.
    Wyoming's population and demographics do not adequately represent 
health care barriers when measured by practices, certifications and 
Federal designations. For example, in the report on recruitment and 
retention by the National Rural Health Association, quality 
measurements and Patient Centered Medical Home certifications are 
different in rural communities:

          ``One component of health quality is dependent upon the 
        entirety of the system and is particularly interwoven in a 
        collaborative nature in rural systems. This may be particularly 
        amplified in rural areas due to the relative lack of 
        duplication of services and the coexisting relationships among 
        the local health care providers themselves. For this reason, 
        providers find natural collaboration within models that may 
        look similar to modern concepts such as the Patient Centered 
        Medical Home while the administration of such models may appear 
        different. Creativity and flexibility have been necessary to 
        develop what works best in individual community circumstances 
        while serving similar purposes.''

http://www.ruralhealthweb.org/index.cfm?objectid=153C1CCF-3048-651A-
FEB0361
2F7316078.

    The Wyoming Integrated Network (WY-ICN) is one effort to network 
health care systems and is a hospital and provider driven effort that 
offers patients in Wyoming information about cost and quality of 
primary care. This ongoing effort recently received Federal funding 
through the Health Care Innovation grant to expand efforts across the 
State by educating communities about the Medical Home model. It is 
anticipated that initial outcomes will provide useful information to 
our State and other rural States.
    Federal designations that provide eligibility for Federal programs 
including HRSA 330 funding, enhanced Medicare and Medicaid 
reimbursement like Health Provider Shortage Areas, Medically 
Underserved Areas and Medically Underserved Populations are based on 
factors that make it difficult to prove the needs of the underserved in 
rural and frontier areas. For example, one provider (physician or mid-
level) per 3,500 people in an urban setting is entirely different than 
3,500 people living in Sweetwater County, which is over 10,000 square 
miles of land mass.
    Wyoming is also not ethnically diverse as measured by the Federal 
guidelines. Only one county, which is home to the Wind River 
Reservation, has a large number of non-white residents. Based on how 
grants are scored, this would prevent Wyoming from meeting these 
guidelines.
    Wyoming's economy is based primarily on energy production, coal, 
natural gas, oil, uranium, and even wind, making it a ``boom and bust'' 
economy. Many people working in the energy industry make a sufficient 
salary when they work. In some cases, these salaries are significant 
enough that it can skew the average income for families based on 
statewide data. Though some families do very well financially, there 
are still a number of people struggling to make ends meet. This income 
disparity can be another challenge to meeting designation guidelines.
    Additionally, younger retirees have an impact on the overall 
income, which is a measure of underserved designations. Working with 
rural organizations to better define ``rural'' as it applies to health 
care and eligibility for Federal designations would be one way to more 
effectively provide safety-net care.
    These are some but not all of the current and past efforts to 
address access to health care for all Wyoming residents. Considerable 
time has been put forth to create programs and provide funding in an 
attempt to meet the needs of the citizens of Wyoming. Progress has been 
made in some areas and the work continues in many others. The 
geographical terrain accompanied by the low population is challenging, 
but not impossible. Wyoming will continue to develop programs and 
interventions that will provide our citizens with the care they need.

    Senator Sanders. Miss Decklever, thank you so much for 
being with us, and thanks for your testimony.
    Our fourth witness is Dr. Andrew Wilper, he is the acting 
chief of medicine at the VA Medical Center in Boise, ID. Dr. 
Wilper is a practicing general internist. He is the associate 
program director for the Boise Internal Medicine Residency 
program and the assistant director of the Boise VA Center of 
Excellence in Primary Care Education.
    Dr. Wilper, thanks very much for being with us.

STATEMENT OF ANDREW P. WILPER, M.D., MPH, FACP, ACTING CHIEF OF 
             MEDICINE, VA MEDICAL CENTER, BOISE, ID

    Dr. Wilper. Thank you, Chairman Sanders, Ranking Member 
Enzi, and members of the committee. It is a great honor to be 
able to testify here today.
    I was asked by Senator Sanders about my insight, two 
insights specifically. One about the lack of health insurance 
in the United States and its effect on health and health care 
outcomes, and also to share my thinking on practical solutions 
to the primary-care physician workforce shortage that we face.
    To start off, there is an enormous literature that has 
accrued over decades demonstrating that a lack of health 
insurance is associated with decreased access to health care 
and worse health outcomes.
    The Institute of Medicine summarized these findings in a 
six-
volume series earlier this century and the conclusions were 
quite clear. Subsequent work has built on this evidence, 
including some of my own that Senator Sanders mentioned in his 
opening statement, specifically, a paper we published in 2009 
in ``The American Journal of Public Health,'' linking lack of 
insurance to nearly 45,000 deaths among adults in the United 
States annually. The research is consistent: health insurance 
leads to significant benefits and is good for your health.
    Gaining health insurance does not guarantee access to 
medical care, which is the second part of my testimony, nor 
does it control costs. And perhaps the singular intervention 
that we could make at the national level to reduce costs and 
improve outcomes in our country with regard to health is to 
bolster our primary care workforce.
    Now, there is an additional massive body of literature 
supporting the idea that primary care improves all sorts of 
health outcomes and lower costs. Nevertheless, we have not seen 
systematic changes to alleviate the shortage of PCP's in the 
United States in decades.
    I will talk a little bit about three policy levers that I 
see that this committee could consider to increase the number 
of physicians entering into the primary care workforce, some of 
which have been referred to by Professor Mullan.
    First, at the medical school level, this is the period of 
time after which people graduate from college and are in their 
undergraduate medical training. We could introduce additional 
educational debt reduction, change Federal funding streams to 
emphasize primary care, and increase funding for the National 
Health Service Corps. In addition, we could direct support to 
community health centers to incentivize third and fourth year 
medical students to enter into primary care careers.
    Second point would be the area of graduate medical 
education. First, title VII funding as specifically earmarked 
to go toward primary care programs. These are continuously 
under threat of congressional cut, and have been cut 
dramatically in the past 10 years. Reemphasizing that funding 
would be an important step.
    Another piece would be direct payment by Medicare to 
teaching hospitals to offset the expense of training 
physicians. As we have heard today, nearly $10 billion is spent 
by the Federal Government to support these hospitals, but 
currently we have no planning in place to actually meet the 
needs of our population in the United States with regard to a 
physician workforce.
    Medicare should direct funding to residency programs for 
education, instead of directing it through hospitals. Medicare 
should also require assessments of community and regional 
physician workforce for hospitals to qualify for this funding.
    In its current form, graduate education is run by teaching 
hospitals to meet their own staffing needs or their historical 
staffing needs, and graduates select their field of practice 
based on their personal interests, to emphasize a point that 
Senator Murphy made moments ago. I have been personally told by 
a residency director that his concern is the professional 
desires of his trainees rather than population health needs.
    Perhaps the most important policy reform that we could make 
to reinvigorate primary care would be to address the pay 
disparity between primary care physicians and specialists. This 
could be done by raising primary care physicians' pay or by 
decreasing that of specialists, and I feel that it is really 
the disparity that is the driving force in this workforce 
problem that we are facing today. Indeed, the American 
Association of Medical Colleges has declared that education and 
training cannot overcome the intense market incentives that 
influence physician choices.
    A focal point for payment reform has been mentioned: a 
subcommittee of the American Medical Association called the 
Relative Value Scale Update Committee. This is a secretive 
group of doctors that wields tremendous influence over Medicare 
reimbursement rates and CMS adopts nearly all of their 
recommendations.
    At a minimum, the public deserves transparency in 
decisionmaking from the RUC. Better yet, we should establish a 
process for rate-setting that is not encumbered by conflicts of 
interest and does not favor narrow specialties. A rational 
observer might conclude that the Federal Government and AMA are 
colluding to bring an end to the primary-care physician 
workforce in the United States.
    In summary, it is eminently clear that health insurance 
affords better health outcomes including a decreased risk for 
death. Despite this, our current reform efforts through the 
Affordable Care Act will leave 30 million uninsured.
    In closing, I have worked for over a decade in medical 
education as a student, resident, fellow, and now faculty 
member hospital and residency program leader. And it is my 
conviction that publicly sponsored training should be planned 
to meet the health care needs of our population rather than the 
staffing needs of hospitals or the lifestyle preferences of 
young doctors.
    Thank you.
    [The prepared statement of Dr. Wilper follows:]

        Prepared Statement of Andrew P. Wilper, M.D., MPH, FACP

    My name is Andrew Wilper. I am a practicing primary care physician 
(PCP) and researcher. In addition, I have substantial experience in 
medical education and care for the underserved. I am grateful to have 
been asked by Senator Sanders about my insights into the lack of health 
insurance in the United States and its effect on access to health care 
and health outcomes. I have also been asked to share my thinking on 
practical solutions to the primary medical care workforce shortage. I 
have divided my testimony into two parts. First, I will address the 
evidence that lack of health insurance impedes access to health care 
and degrades health outcomes. Second, I will discuss the primary care 
physician shortage in the United States and strategies to increase the 
number of primary care physicians.

I. THE EFFECT OF LACK OF HEALTH INSURANCE ON ACCESS TO CARE AND HEALTH 
                     OUTCOMES IN THE UNITED STATES

    For decades, researchers have demonstrated the ill effects of the 
lack of health insurance on access to medical care. This body of 
literature is enormous, and the signal is clear; lack of insurance is 
definitively associated with decreased access to medical care and 
poorer health for those without such access. The Institute of Medicine 
(IOM) summarized these findings and their implications in a six-volume 
series in the early part of this century, identifying three mechanisms 
by which insurance improves health:

    1. Getting care when needed.
    2. Having a regular source of care.
    3. Continuity of coverage.\1\ \2\ \3\ \4\ \5\ \6\

Research by myself and others has built on this work. The evidence 
continues to paint a clear and unambiguous picture. Lack of health 
insurance is associated with worse health status, decreased likelihood 
of having a usual source of medical care, and death.\7\ \8\ \9\ \10\ In 
a 2009 article, we updated an older estimate produced by the IOM, 
linking 44,789 deaths in 2005 with lack of insurance, more than were 
estimated to die that year as a result of renal failure. Contrary to 
the popular notion that most uninsured are young and healthy, we found 
that roughly one-third of the uninsured had a chronic medical condition 
that would require medical care, and that the uninsured are more likely 
to suffer undiagnosed, and therefore untreated, chronic illness.\8\ 
\11\ The uninsured are more likely to go without needed care than the 
insured, and to be admitted to the hospital for illness that could be 
prevented.\12\ \13\ The data also supports the notion that when 
previously uninsured individuals gain coverage through Medicare, their 
decline in health reverses.\14\ \15\ The research is consistent: health 
insurance leads to significant benefits and is good for your health.
    These findings are borne out in my clinical practice. I have cared 
for many patients who delayed care as a result of lack of insurance. 
Perhaps the most poignant case was Mr. A, who worked as a delivery man. 
He was also a diabetic. I cared for this gentleman while I was in my 
residency training in Portland, OR. He was admitted to the hospital for 
a hypertensive crisis, which is usually the result of longstanding 
hypertension that has not been adequately treated. His blood pressure 
was so high that he bled into his eyes. The damage extended to his 
kidneys. We were able to stabilize and send him home with new 
medications. It turned out that his employer had dropped his coverage 
prior to our meeting in the hospital. As a result, he could no longer 
afford to go to his primary care doctor. He had been ordering his 
insulin from Canada, which would arrive by mail. He was using this 
without proper supplies or monitoring, and was without his blood 
pressure medications. This led to our meeting. Ultimately, his kidney 
function became so compromised that he needed permanent dialysis. As 
you know, this is an extremely expensive treatment, costing 
approximately $80K per year. What I find so shocking about this story, 
is that as a society we were willing to pay for his dialysis treatments 
through the Medicare End Stage Renal Disease program, but were not able 
to treat his chronic conditions that likely would have allowed us to 
avoid dialysis in the first place. This case drove home the fact that 
even routine treatments are out of reach for people who are uninsured. 
Mr. A. was not simply the victim of bad luck, nor was he an outlier. 
His situation was a result of policies that have left millions of 
Americans without insurance and access to medical care.

                 II. PRIMARY CARE IN THE UNITED STATES

Background
    Good evidence supports the myriad benefits of a robust primary care 
workforce. Within the United States, States with larger proportions of 
specialists actually have lower quality care.\16\ Others have 
demonstrated that increased proportions of PCPs are associated with 
significant decreases in health care costs.\17\ Primary care is also 
linked to lower all-cause mortality, infant mortality, fewer low-birth 
weight babies, improved self-reported health, decreased costs, and 
decreased racial disparities.\18\ Studies suggest an association 
between the availability of primary care and decreased emergency 
department (ED) use. Many patients using the ED report that they would 
be willing to use another source of care were one available. 
Nevertheless, we have not seen systematic changes to alleviate the 
shortage of PCPs in the United States. This is in spite of widespread 
calls for reform. Indeed, in 2006 the American College of Physicians 
predicted that without comprehensive reform by Congress and Centers for 
Medicare and Medicaid Services (CMS), primary care, the backbone of the 
U.S. Health care system, may collapse.\19\
    The proportion of U.S. physicians practicing in primary care is low 
compared to other industrialized nations. The Kaiser Family Foundation 
estimates a total of 834,000 practicing physicians in the United States 
in 2012.\20\ The proportion of physicians practicing in primary care in 
the United States is approximately 40 percent, with the remaining 60 
percent practicing in sub-specialties. This specialist-dominated 
distribution has been linked to the high costs and poor health outcomes 
in the United States. This misdistribution occurs in the context of 
what many describe as a physician shortage. The Association of American 
Medical Colleges (AAMC), American College of Physicians, and the 
Council on Graduate Medical Education all estimate current shortages in 
the tens of thousands, and predict that these will continue to 
grow.\21\ \22\ \23\

Medical School
    Numerous strategies exist to increase the number of medical 
students entering primary care. These include educational debt 
reduction, changes in Federal funding streams to emphasize primary 
care, and increased funding to the National Health Services Corps. In 
addition, direct support for Community Health Centers participating in 
teaching medical students would support our Nation's most vulnerable 
populations while training future PCPs.

Graduate Medical Education
    Graduate medical education (GME) has been the focus of many 
federally supported programs to increase the primary care workforce. 
Funding for title VII programs, which support training for PCPs, is 
continuously threatened by congressional cuts. Only the title VII 
programs provide money directly to primary care training programs. 
Remarkably, for every title VII dollar there are about $1,000 Medicare 
GME dollars, and these Medicare GME dollars push training efforts 
toward inpatient and subspecialty care. Medicare spending for GME is 
directed toward hospitals, which is heavily tilted toward hospital-
based specialty care.\24\ Medicare should direct funding to residency 
programs for education instead of directing it through hospitals. 
Medicare should also require assessments of community and regional 
physician workforce for hospitals to qualify for GME funding. In 
effect, Medicare should begin requiring accountability in its 
subsidization of teaching hospitals. Remarkably, the Federal Government 
spends nearly $10 billion annually to produce a physician workforce 
without a workforce plan. As part of his testimony before the House 
Energy and Commerce Subcommittee on Health, Dr. Fitzhugh Mullan called 
for ``requir(ing) teaching hospitals to undertake community or 
regionally oriented analyses of physician workforce needs and make 
application for training positions based on a fiduciary responsibility 
to train a complement of residents that corresponds to agreed upon 
regional needs.'' \25\ In its current form, GME is run by teaching 
hospitals to meet their own staffing needs, and graduates select their 
field of practice based on their personal interests. I have been 
personally told by a residency program director that his concern is the 
professional desires of his trainees, rather than population health 
needs. Given the annual income of certain physician types, Medicare 
could consider limiting or defunding training programs that do not meet 
population needs, or that could be reasonably funded via trainee loans 
given future income expectations.

Practice and Payment Reform
    Payment reform is the most critical element of change needed to re-
invigorate primary care. Remarkably, it is explicit Federal Government 
policy to direct oversized payment toward specialists and thereby skew 
workforce statistics. Efforts to reform the payment system in an effort 
to address the maldistribution of physicians by specialty have failed. 
The resource-based relative values scale has grossly distorted relative 
physician reimbursement since 1992. Now PCP compensation is 30 percent 
to 60 percent less than subspecialists.\24\ Without payment reform, it 
is unlikely that efforts targeting medical students and residents will 
succeed in bolstering the primary care workforce. Indeed, the AAMC has 
declared that ``education and training cannot overcome the intense 
market incentives that influence physician choices.'' \25\ The income 
disparity could be addressed by increasing PCP reimbursement or by 
decreasing that of subspecialists.
    A focal point for payment reform is a committee of the American 
Medical Association called the Relative Value Scale Update Committee, 
known as the RUC. This group of 31 doctors wields tremendous influence 
over physician pay in the United States, with CMS following nearly all 
of its recommendations. One estimate has the RUC directing $54 billion 
in Federal spending annually. Yet the group has no government 
oversight. This opaque group benchmarks reimbursement rates for 
physician services in the United States and does so in a way that 
favors surgeons and specialists. Only three seats on the committee are 
designated for primary care specialties.\26\ Critics argue that RUC 
decisions are based on suspect data leading to systematic overstatement 
of time and work that favors surgery and subspecialty physicians. \27\ 
\28\ The playwright George Bernard Shaw commented that ``any sane 
nation, having observed that you could provide for the supply of bread 
by giving bakers a pecuniary interest in baking for you, should go on 
to give a surgeon a pecuniary interest in cutting of your leg, is 
enough to make one despair of political humanity.'' \29\ We have gone a 
step beyond what Shaw feared by allowing physicians to set their own 
rates. At a minimum, the public deserves transparency in decisionmaking 
from the RUC. Better yet, we should establish a process for rate 
setting that is not encumbered by conflicts of interest and does not 
favor narrow specialties.
    Expanded patient access to PCP services could be achieved through 
strategies that reform current practice models. Expanded insurance via 
the Affordable Care Act will stress primary care supply. In the 2 years 
following health reform in Massachusetts, waits to see PCPs increased 
by 82 percent.\30\ This has been linked to a mismatch between the 
supply and demand for primary care services. Policy efforts to 
implement the Patient Centered Medical Home will focus on risk-adjusted 
capitated payments, non-traditional visits such as telephone and email 
care, in addition to delegating physician decisionmaking to non-
physician team members. This will require changes in our reimbursement 
system, workforce and the culture of medicine.
    In summary, it is eminently clear that health insurance affords 
better patient outcomes, and that it has been associated with decreased 
risk of mortality. Despite this, our current reform efforts in the 
Affordable Care Act will leave as many as 30 million uninsured. The 
physician pipeline recommendations above have been made for years by 
health policy and workforce experts. Nonetheless, efforts to increase 
the number of PCPs have been frustrated by the funding mechanisms for 
medical education in the United States. This current system of funding 
is at best inefficient, meeting the needs of a narrow group of teaching 
hospitals and subspecialists. At its worst, the current GME funding 
stream acts as a principal driver for a workforce that meets the 
interests of physicians and hospitals rather than the health needs of 
the population. In addition, Medicare's grossly unequal fee payments to 
specialists and PCPs continues to discourage trainees from primary care 
careers. I have worked for over a decade in medical education as a 
student, resident, fellow, faculty member and residency program and 
hospital leader. My conviction is that publically sponsored training 
should be planned to meet the health care needs of our population 
rather than the staffing needs of hospitals or the lifestyle 
preferences of young doctors.
    Thank you.

                               End Notes

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Recommendations. Washington, DC: The National Academies Press; 2003.
    5. Coverage Matters: Insurance and Health Care: Principles and 
Recommendations. Washington, DC: The National Academies Press; 2001.
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and Recommendations. Washington, DC: The National Academies Press; 
2003.
    7. Finkelstein A, Taubman S, Wright B, et al. The Oregon Health 
Insurance Experiment: Evidence from the First Year. NBER Working Paper 
No. 17190. Issued July 2011.
    8. Wilper AP, Woolhandler S, Lasser KE, McCormick D, Bor DH, 
Himmelstein DU. A national study of chronic disease prevalence and 
access to care in uninsured U.S. adults. Ann Intern Med. 2008 Aug 
5;149(3):170-6.
    9. Wilper AP, Woolhandler S, Lasser KE, McCormick D, Bor DH, 
Himmelstein DU. Health insurance and mortality in U.S. adults. Am J 
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    10. Sommers BD, Baicker K, Epstein AM. Mortality and access to care 
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13;367(11):1025-34.
    11. Wilper AP, Woolhandler S, Lasser KE, McCormick D, Bor DH, 
Himmelstein DU. Hypertension, diabetes, and elevated cholesterol among 
insured and uninsured U.S. adults. Health Aff (Millwood). 2009 Nov-
Dec;28(6):w1151-9.
    12. Lurie N, Ward NB, Shapiro MF, Brook RH. Termination from Medi-
Cal-does it affect health? N Engl J Med. 1984;311:480-84.
    13. Weissman JS, Gatsonis C, Epstein AM. Rates of avoidable 
hospitalization by insurance status in Massachusetts and Maryland. 
JAMA. 1992;1992;268:2388-94.
    14. McWilliams JM, Meara E, Zaslavsky AM, Ayanian JZ. Health of 
previously uninsured adults after acquiring Medicare coverage. JAMA. 
2007;298:2886-94.
    15. McWilliams JM. Health consequences of uninsurance among adults 
in the United States: recent evidence and implications. Milbank Q. 2009 
Jun;87(2):443-94.
    16. Baicker K, Chandra A. Medicare spending, the physician 
workforce, and beneficiaries' quality of care. Health Aff (Millwood). 
2004 Jan-Jun;Suppl Web Exclusives:W4-184-97.
    17. Kravet SJ, Shore AD, Miller R, Green GB, Kolodner K, Wright SM. 
Health care utilization and the proportion of primary care physicians. 
Am J Med. 2008 Feb;121(2):142-8.
    18. Starfield B, Shi L, Macinko J. Contribution of primary care to 
health systems and health. Milbank Q. 2005;83(3):457-502.
    19. American College of Physicians. The Impending Collapse of 
Primary Care Medicine and Its Implications for the State of the 
Nation's Health Care: a report from the American College of Physicians. 
January 2006.
    20. United States: Physicians. The Kaiser Family Foundation. http:/
/www.statehealthfacts.org/profileind.jsp?cat=8⊂=100&rgn=1, accessed 
January 24, 2013.
    21. American Association of Medical Colleges. Physician Workforce 
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304026/data/2012aamcworkforcepolicyrecommendations.pdf, accessed 
January 24, 2013.
    22. How Is a Shortage of Primary Care Physicians Affecting the 
Quality and Cost of Medical Care? A comprehensive Evidence Review. 
American College of Physicians, 2008 http://www.acponline.org/advocacy/
where_we_stand/policy/primary_shortage.pdf, accessed January 24, 2013.
    23. Physician Workforce Policy Guidelines for the United States, 
2000-20. Council on Graduate Medical Education. January 2005. http://
www.hrsa.gov/advisorycommittees/bhpradvisory/cogme/Reports/
sixteenthreport.pdf, accessed January 24, 2013.
    24. Thomas Bodenheimer, M.D., Kevin Grumbach, M.D., and Robert A. 
Berenson, M.D.A. Lifeline for Primary Care. N Engl J Med 2009; 
360:2693-96.
    25. Mullan, Fitzhugh. Testimony before the House Energy and 
Commerce Subcommittee on Health. http://sphhs.gwu.edu/departments/
healthpolicy/dhp_
publications/pub_uploads/dhpPublication_14EBB1B9-5056-9D20-3D27A281209
EB378.pdf, accessed January 24, 2013.
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    Senator Sanders. Thank you very much, Dr. Wilper.
    My understanding is that Senator Franken has to leave, and 
you wanted to ask a brief question of Dr. Wilper, is that 
correct?
    Senator Franken. Thank you, Mr. Chairman. You are talking 
about compensation. You probably heard my comment earlier about 
the return on investment in terms of loan forgiveness for 
primary care physicians. What would that look like? I know we 
do some loan forgiveness in ACA. We do it for people serving in 
underserved communities. What would that look like, and how 
could you compute that in terms of what value you would get 
back over the course of a physician's career? If you said, 
``OK. If you're a GP, boom, $100,000 off of your loan.'' Have 
studies been done to do that? Has that been looked at?
    Dr. Wilper. Senator Franken, thank you for the question.
    To my knowledge, there is no systematic review of that 
specific question. I know in my State of Idaho, which is a 
neighbor to Wyoming and also exceptionally rural, we do have 
programs in place to help offset educational debt related to 
medical education, and those have been somewhat successful.
    I would defer to my panelist to my left, Dr. Reinhardt, who 
may be able to comment on that question.
    Senator Franken. Dr. Reinhardt, since you are a medical 
economist, may I ask you that?
    Dr. Reinhardt. If you have more primary care physicians, 
that will improve access. And the Institute of Medicine's 
studies that were cited shows that that will produce better 
health and life years, and we economists can covert that into 
quality adjusted life years. And usually, the assumption is a 
value is imputed to that.
    Normally, I know David Cutler and others use $100,000 just 
to put a value on it. And then say by having more physicians in 
that field and providing better access, how many ``qualies'' 
have you produced, life years saved, or better quality of life, 
and you would get the return. I suspect it would be fairly 
high.
    Senator Franken. I would love if that could be done.
    Dr. Reinhardt. It would be a nice senior thesis. I will ask 
a student.
    Senator Franken. Since I just have 2 minutes left, then I 
will just go.
    Senator Sanders. That's all you have left anyhow.
    Senator Franken. That's what I meant.
    Senator Sanders. You're not doing us a great favor here.
    Senator Franken. I was making the same point. I would like 
those 3 seconds back.
    I would like, to Senator Murphy's question or comment about 
the status, I think your status is partly determined by your 
salary. So I do think that the Relative Value Board that you 
were talking about, I cannot remember the name right off, in 
other countries what is the compensation like in terms of 
general practitioner to specialist? Is it different? Is it 
lower? I mean, is the ratio higher from GP to specialist in 
other countries versus here?
    Dr. Reinhardt. Specialists do earn more I know, for 
instance in Germany, but not as much as they do here. So GP's 
generally do have lower pay and occasionally protest about 
that. It happens over there. But I don't think the ratio is 
quite as large as it is here.
    Senator Franken. Yes.
    Dr. Reinhardt. There's also a huge----
    Senator Franken. They have lower health costs and as good 
outcomes, if not better, right?
    Dr. Reinhardt. Yes, about half, yes.
    Senator Franken. The health care costs. OK. I just wanted 
to do this.
    Senator Murphy, again, brought this up, Accountable Care 
Organizations, which we have a lot of in our State and health 
care homes, medical homes, would they elevate the role of 
general practitioner in that model? In the sense that they 
would be sort of organizing this team that does the care?
    Does anybody have an opinion on that?
    Dr. Wilper. Specifically with regard to ACO's, unless fee 
for service payment mechanisms are changed, and there is a 
proposal to do that in these new medical home models to move to 
a capitated system, there is some chance that that would move 
the needle in terms of primary care physician reimbursement.
    I would caution, however, I know this research fairly well. 
There is very limited evidence that patient-centered medical 
homes are actually going to reduce costs. I think that that 
intervention, while worthy--and we are working on it at the 
State level and within the VA--is still, in my view, 
experimental.
    Senator Sanders. OK.
    Senator Franken. Well, OK. I'm sorry. Thank you, rather, 
Mr. Chairman for that. And I just wanted, just one last thing.
    Miss Decklever, I thought it was really off-base for the 
Ranking Member to use your willingness to come here to testify 
to moan about his weekly commute.
    [Laughter.]
    Senator Sanders. Let me introduce a man who has already 
spoken--reintroduce him--and that is Dr. Uwe Reinhardt. He is 
the James Madison Professor of Political Economy, and professor 
of economics and public affairs at Princeton University, and 
contributing writer to ``The New York Times'' economics blog.
    Dr. Reinhardt, thanks very much for being with us.

 STATEMENT OF UWE E. REINHARDT, Ph.D., JAMES MADISON PROFESSOR 
  OF POLITICAL ECONOMY AND PROFESSOR OF ECONOMICS AND PUBLIC 
          AFFAIRS, PRINCETON UNIVERSITY, PRINCETON, NJ

    Mr. Reinhardt. Thank you, Mr. Chairman for inviting me to 
this committee. I am very honored by it.
    I should have added to my CV that I was delivered by a 
midwife and, of course, my mother. I once told that to a member 
of the American Medical Association and he said, ``Well, it 
shows.'' And I'm not sure what he meant.
    I divided my written statement into three parts. First, is 
our current workforce efficiently used? And I think you have 
already heard from the panel; the answer is no.
    The second is, what public policy levers does the Congress 
have given that we want more primary care physicians to move 
them into that field and also to the practice where they are 
needed?
    Then the third question is, to what extent can financial 
incentives be used, which you have already answered and talked 
about.
    The traditional model of workforce forecasting has been the 
focus on physician population ratios, as if all the other 
people who work in the primary care team didn't matter. My 
whole career has been to say we should use non-physician 
workers far more imaginatively and let them practice 
independently in full competition with physicians. That was 
very controversial many years ago, less so now. Many States 
actually already allow that.
    Congress has played a very large role in innovating in this 
field by funding the training of nurse practitioners and 
physician assistants, and also creating community health 
centers in other settings where they have very, very 
effectively been used.
    There are issues of licensing that Congress could address. 
Usually licensing is excused, professional licensing, with an 
appeal to a patient's safety and quality. Usually the violins 
come out when I hear that. I think it is mainly over economic 
turf. It always has been.
    I remember the fight over whether optometrists could dilate 
pupils. I think it was settled years ago, but those were the 
issues. It is almost like an insurgent war that has to be 
fought. I think Congress should simply make sure that licensing 
is driven by clinical and patient quality, and not by economic 
turf.
    There is an issue of the SOP's, Scopes of Practice, which 
now States dominate and there are huge variations in that. I 
believe there should be. I agree with the nursing profession, 
there should be a standard SOP for the Nation which, in my view 
as I said, should allow nurses to practice independently. 
Physicians Assistants, by their nature, actually are supervised 
by physicians.
    On the second question of how can you drive physicians to 
the extent you definitely need them in these teams into primary 
care, there is the issue of prestige; Senator Murphy mentioned 
that.
    My view on that is the new models of primary care, medical 
home, the ACO's, et cetera, will quite naturally enhance the 
professional power. It is not just money, it is also power 
because they are not gatekeepers, but they are, nevertheless, 
traffic cops. And I think in those settings their prestige will 
rise.
    I told that to our daughter, who is an internist, 
yesterday. I said, ``I would be very excited to be a primary 
care physician now.'' The entrepreneurial opportunities are 
limitless there; much less in other specialties.
    On the final point, I had some probably controversial 
things. Compensation is clearly an issue. Mr. Chairman, you 
mentioned that over a lifetime, a specialist gets $2 to $3 
million more. Actually, it is such a small sum when you think 
of a Goldman managing director, if that were the annual bonus, 
they would be offended by it. But that probably would do 
something because it sort of signals value to people.
    Debt forgiveness, I think, that should definitely be done. 
It is really sort of like the National Health Service Corps. I 
would say for every year you practice--or you could say, ``If 
you go into a specialized field in primary care, we'll forgive 
you, say, $80,000 up front. And then for every year you 
specialize in a location that we would like you to go, we'll 
forgive you $20,000,'' sort of to have that incentive out 
there.
    Finally, I thought when I think that we are actually 
allowing private equity managers to take what is really just 
earned income, a commission, and get capital gains taxes on it, 
carried interest, I said, ``Why don't we honor primary care 
physicians in America as we honor private equity managers, and 
give them the same rate if, say, they go to rural areas?'', et 
cetera. The precedent exists. Congress says, ``Well, carried 
interest. We want to encourage capital formation.'' Well, that 
is capital. Physicians are human capital, and we want to 
encourage them.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Reinhardt follows:]

             Prepared Statement of Uwe E. Reinhardt, Ph.D.

    My name is Uwe E. Reinhardt. I am the James Madison Professor of 
Economics and Public Affairs at the Woodrow Wilson School of Public and 
International Affairs and the Department of Economics of Princeton 
University, Princeton, NJ.
    My research over the last several decades has focused primarily on 
health economics and--policy, although I also teach or have taught at 
Princeton University general economics, financial accounting and 
financial management. Throughout my career, I have had an interest in 
issues surrounding the health workforce.
    I would like to thank you, Mr. Chairman, and your colleagues for 
inviting me to testify before this committee on a matter of importance 
to the successful implementation of the Affordable Care Act (ACA) of 
2010--the ability of our health system to absorb the additional demand 
for health-care services likely to be triggered by the extension of 
health-insurance coverage to an estimated 30 million or so Americans 
who would otherwise have remained uninsured.\1\
---------------------------------------------------------------------------
    \1\ Association of American Medical Colleges. The Impact of Health 
Care Reform on the Future Supply and Demand for Physicians Updated 
Projections Through 2025 (June 2010).
---------------------------------------------------------------------------
    That challenge should prompt us once more to explore the following 
questions that have hovered over workforce issues in this country for 
at least half a century, to wit:

    I. Is our current health workforce--especially in primary care--
used as effectively and efficiently as it could be?
    II. What public-policy levers are there to influence the choice of 
physicians on:

      a. what medical specialty to enter, and
      b. where to practice?

    III. To the extent that financial incentives play a role in the 
choice of specialty and location, what policy levers are there in this 
respect?

    I will order my remarks along this outline. Before proceeding, 
however, I would like to summarize here my various recommendations.

    1. As an economist I have long favored the independent clinical 
practice of primary care by properly trained nurse practitioners 
without supervision by a physician, either in free-standing, nurse-led 
clinics of the sort pioneered by Mary Mundinger \2\ or, better still in 
clinically integrated settings where the idea ``supervision by a 
physician'' would be replaced by ``collegial collaboration with a 
physician.''
---------------------------------------------------------------------------
    \2\ Mary O. Mundinger et al. ``Primary Care Outcomes in Patients 
Treated by Nurse Practitioners or Physicians: A Randomized Trial,'' 
Journal of the American Medical Association (January 5, 2000) 
283(1):59-68. http://jama.jamanetwork.com/
article.aspx?articleid=192259#qun
defined.
---------------------------------------------------------------------------
    2. I endorse the idea put forth by the Advanced Practice Nurse 
Practitioners (APNP) Consensus Working Group and the National Council 
of State Boards of Nursing to develop for use by the States a national 
scope of practice (SOP) for the nursing profession, to limit or perhaps 
even eliminate the current variation in SOPs across the States.
    3. Evidently, the standardized national SOP should reflect the 
expertise of both, physicians and nurse practitioners. But, to avoid 
the inherent economic conflicts of interest both professions have in 
the matter, the standardized SOP should be developed by a carefully 
selected board that is not dominated by either nurse practitioners or 
physicians, and that has significant representation by patients and 
those who pay for health care, including public payers.
    4. As even the authoritative Medicare Payment Advisory Commission 
(Medpac) could not find a theoretical foundation for the existing 
payment differentials for identical primary care services rendered by 
primary care physicians and by non-physician primary care givers, I 
support calls for eliminating these differentials in public insurance 
programs and for calling upon private health insurers, whose clients 
also lament a shortage of primary care physicians, to recognize the 
role of non-physician primary care givers and to eliminate the payment 
differentials as well.
    5. If Congress sincerely believes that there is and will be an 
acute shortage of primary care physicians, it should realign the levels 
of compensation of physicians under Medicare and Medicaid more in favor 
of primary care physicians. If Congress would like to see that 
realignment, it has no choice but to lead the way, as individual 
private insurers would find it difficult to effect the realignment by 
themselves.
    6. Congress should fund experiments with rewarding the choice of a 
career in primary care, or to practice in an area with an acute 
shortage of primary care physicians, by forgiving for every year the 
physician works full-time in primary care part of the debt medical 
graduates have accumulated during their education and training.
    7. As long as carried interest paid from long-term capital gains is 
accorded the dubious tax preference Congress has accorded it, Congress 
should extend that privilege also to primary care professionals, at 
least for some time of their careers.

         I. EFFECTIVE AND EFFICIENT USE OF THE HEALTH WORKFORCE

    Primary health care is still thought of among the laity as the 
health care rendered by a particular subset of physicians who tend to 
serve as the patient's primary contact with the health-care system. It 
naturally leads to hand-wringing over projected physician-population 
ratios for physicians in primary care.
    A much superior definition of primary care has been offered by the 
Institute of Medicine in a report ``Primary Care: America's Health in a 
New Era \3\:
---------------------------------------------------------------------------
    \3\ Molla S. Donaldson, Karl D. Yordy, Kathleen N. Lohr and Neal A. 
Vanselow, eds. Primary Care: America's Health in a New Era (1996). 
Washington, DC: Committee on the Future of 
Primary Care, Institute of Medicine, 1996. http://www.nap.edu/
openbook.php?isbn=03090
53994.

          Primary care is the provision of integrated, accessible 
        health care services by clinicians who are accountable for 
        addressing a large majority of personal health care needs, 
        developing a sustained partnership with patients, and 
---------------------------------------------------------------------------
        practicing in the context of family and community.

    This definition undoubtedly leans on the even more expansive 
definition offered in the World Health Organization's Declaration of 
Alma Alta of 1978:

          Primary health care is essential health care based on 
        practical, scientifically sound and socially acceptable methods 
        and technology made universally accessible to individuals and 
        families in the community through their full participation and 
        at a cost that the community and country can afford to maintain 
        at every stage of their development in the spirit of self-
        reliance and self-determination. It forms an integral part both 
        of the country's health system, of which it is the central 
        function and main focus, and of the overall social and economic 
        development of the community. It is the first level of contact 
        of individuals, the family and community with the national 
        health system bringing health care as close as possible to 
        where people live and work, and constitutes the first element 
        of a continuing health care process.\4\
---------------------------------------------------------------------------
    \4\ World Health Organization, Declaration of Alma-Ata 
International Conference on Primary Health Care, Alma-Ata, USSR, 6-12 
September 1978. http://www.who.int/publications/
almaata_declaration_en.pdf.

    I recite these definitions of primary care--presumably very well 
known to members of this committee--to highlight the fact that the 
provision of primary care in a community and in the Nation should be a 
team effort, ideally within an organizational structure that encourages 
teamwork and the efficient delegation of tasks among members of the 
team.
    Physician-Population Ratios: Research over the years has shown that 
there is actually much more flexibility in the substitution among types 
of health professionals than has traditionally been presumed among 
health workforce planners who think in terms of ideal physician-
population ratios.
    Indeed, it is remarkable how widely physician population ratios 
vary among advanced economies and even within countries. Figure 1 
illustrates this phenomenon for the United States with data published 
by the American Association of Medical Colleges (AAMC) in its report 
2011 State Physician Workforce Data Book.\5\
---------------------------------------------------------------------------
    \5\ American Association of Medical Colleges (AAMC). 2011 State 
Physician Workforce Data Book. Washington, DC: AAMC, November 2011. 
https://www.aamc.org/download/263512/data/statedata2011.pdf.



    The map overleaf, taken directly from the AAMC report, illustrates 
the geographic pattern of the ratio of primary care physicians to 
population. Evidently, the northeastern States are relatively much 
better endowed with primary care physicians than are many of the 
southern States. Yet in these States one also constantly hears laments 
over a prevailing or impending physician shortage.
    Figure 2--Map of Primary-Care Physicians per 100,000 population, 
2010



    The AAMC data raise the following question. If the ideal endowment 
with primary care physicians is to be gauged by some ideal physician-
population ratio, which of the many different ratios across the United 
States should it be? How should one arrive at the answer?
    I addressed myself to this question years ago in my doctoral 
dissertation with the now politically incorrect title Physician 
Productivity and the Demand for Health Manpower, at a time when the 
earlier enactment of Medicare gave rise to laments of a serious overall 
physician shortage.\6\ Using a cross-section data base on medical 
practices, I found that the feared shortage could be substantially 
mitigated through more judicious task delegation from physicians to 
support staff with clinical training short of a physician's, but also 
with much lower costs per hour of work.
---------------------------------------------------------------------------
    \6\ Uwe. E. Reinhardt, Physician Productivity and the Demand for 
Health Manpower. Boston, MA: Ballinger Publishing Company, 1975.
---------------------------------------------------------------------------
    In the meantime, modern technology and improved training of non-
physician clinical personnel has made possible even more extensive task 
delegation. Most prominently mentioned among the non-physician health 
professionals are advanced practice nurse practitioners (APRNs or 
simply NPs) and physician assistants (PAs). A more comprehensive 
definition would include pharmacists providing pharmaceutical care 
services and certified nurse midwives. Some would include even 
dentists.
    The Growing Role of Non-Physician Primary-Care Professionals: The 
consensus in the literature \7\ is that the traditional primary care 
model relying almost exclusively on primary care physicians is a thing 
of the past.\8\ It had physicians perform many task for which, in 
effect, they were overqualified, as has been vividly described by 
primary care physician Lawrence P. Casalino in his ``A Martian's 
Prescription for Primary Care: Overhaul the Physician's Workday.'' \9\
---------------------------------------------------------------------------
    \7\ For syntheses of this literature, see Robert Wood Johnson 
Foundation, Primary care workforce in the United States. Policy Brief 
No. 22. July 2011, or Julia Paradise, Cedrik Dark and Nicole Bitler, 
Improving Access to Adult Care in Medicaid: Exploring the Potential 
Role of Nurse Practitioners and Physician Assistants. Washington, DC: 
Kaiser Commission on Medicaid and the Uninsured. March 2011, http://
www.kff.org/medicaid/upload/8167.pdf or Mary D. Naylor and Ellen T. 
Kurtzman, ``The Role of Nurse Practitioners in Reinventing Primary 
Care.'' Health Affairs. (May 2010) 29(5): 893-99.
    \8\ David Margolius and Thomas Bodenheimer, ``Transforming Primary 
Care: From Past Practice to the Practice of the Future.'' Health 
Affairs. (May 2010) 29(5): 779-84.
    \9\ Lawrence P. Casalino, ``A Martian's Prescription for Primary 
Care: Overhaul the Physician's Workday.'' Health Affairs (May 2010) 
29(5): 785-90.
---------------------------------------------------------------------------
    The traditional model is being replaced by new models of primary 
care in which advance practice registered nurses, physician assistants 
and other professionals will play a much larger role. Some authors have 
recently argued that the perceived primary care shortage could be all 
but eliminated through the use of primary care teams relying heavily on 
non-physicians and modern electronic communication.\10\
---------------------------------------------------------------------------
    \10\ Linda V. Green, Sergei Saving and Yina Lu, ``Primary Care 
Physician Shortages Could Be Eliminated Through the Use of Teams, 
Nonphysicians and Electronic Communication.'' Health Affairs. (January 
2013). 32(1): 11-19.
---------------------------------------------------------------------------
    In fact, non-physician primary care professionals have been by far 
the fastest growing component of the primary care workforce in this 
country. During 1995-2005, for example, the number of primary care 
physicians per capita grew by only 1.1 percent per year while that of 
nurse practitioners grew by 9.4 percent and that of physician 
assistants by close to 4 percent. To be sure, physicians still made up 
three-quarters of the primary care workforce by 2005,\11\ but only 
about 60 percent by 2009.\12\ That fraction is bound to fall further in 
the decades ahead as models relying on non-physician primary care 
professionals develop further and proliferate, especially in areas less 
popular with primary care physicians. In those areas non-physician 
primary care professionals already make up a greater share of the 
primary care workforce.\9\
---------------------------------------------------------------------------
    \11\ A. Bruce Steinwald, Primary Care Professionals: Recent Trends, 
Projections, and Valuation of Services. Washington, DC: General 
Accountability office, February 12, 2008: Table 1, p. 7.
    \12\ Julia Paradise, Cedrik Dark and Nicole Bitler op. cit.: 3.
---------------------------------------------------------------------------
    Although the barriers to greater reliance on non-physician primary 
care professionals do not strike me as overwhelming, there remain some 
that could and should be removed by government. These barriers are (a) 
State-regulated scopes of practice (SOPs) and (b) differential payment 
levels.
    Scope of Practice (SOP) Restrictions: Like any other health 
professionals, nurse practitioners, physician assistants and other non-
physician professionals working in primary care--e.g., pharmacists 
providing a valuable service called ``pharma-care'' or ``pharmaceutical 
care services (PCS) \13\--are subject to formal scopes of practice 
(SOPs) that require a specified content of education and training, 
prescribe limits on the scope of services the professional may deliver 
and also dictate whether or not they may practice independently of a 
physician or must be supervised by a physician.\14\
---------------------------------------------------------------------------
    \13\ Carole W. Cranor, Barry A. Bunting and Dale B. Christensen, 
``The Asheville Project: long-term clinical and economic outcomes of a 
community pharmacy diabetes care program.'' Journal of the American 
Pharmaceutical Association. (May-April 2003) 43(2): 173-84. http://
healthmaprx.com/yahoo_site_admin/assets/docs/Cranor31.90105431.pdf.
    \14\ American Medical Association, AMA Scope of Practice Data 
Series. (October 2009). http://www.tnaonline.org/Media/pdf/apn-ama-sop-
1109.pdf.
---------------------------------------------------------------------------
    Society has traditionally granted licensed physicians an 
extraordinarily wide SOP, including the off-label prescription of 
potentially harmful drugs that have not been approved for these off-
label indications by the Food and Drug Administration.
    The SOPs for non-physician primary care givers are reasonably 
narrower than those granted physicians--as the former undoubtedly would 
be the first to agree. But for reasons that evidently have much more to 
do with a penchant for protecting economic turf and the political power 
of State medical societies than with safety standards of patient care, 
the SOPs for non-physician primary care professionals still vary 
considerably among States \15\--and that in the land that originally 
invented and grew powerful on the idea that ``one-size-fits-all'' 
(think of McDonalds, the Holiday Inn, and the many other national and 
now global franchises for which America is famous.) Furthermore, in 
some States these restrictions are narrower than they need to be.\16\
---------------------------------------------------------------------------
    \15\ Joanne M. Pohl, Charlene Hanson, Jamesetta A. Newland and 
Linda Cronenwett, ``Unleashing Nurse Practitioners' Potential to 
Deliver Primary Care and Lead Teams.'' Health Affairs. (May 2010): 
29(5): 90-905.
    \16\ Mary D. Naylor and Ellen T. Kurtzman, ``The Role of Nurse 
Practitioners in Reinventing Primary Care.'' Health Affairs. (May 2010) 
29(5): 896.
---------------------------------------------------------------------------
    The most contentious issue in this regard is the clinical 
independence of nurse practitioners. The conceptual model for the work 
of physician assistants has always been to work with and under the 
supervision of a physician, and the profession seems comfortable with 
that restriction. Nurse practitioners, on the other hand, could and do 
practice independently of physicians and in quite a few States as can 
be seen in this map taken directly from the previously cited Kaiser 
Commission on Medicaid and the Uninsured.\9\



    The foregoing leads me to the following recommendations:

          As an economist I have long favored the independent clinical 
        practice of primary care by properly trained nurse 
        practitioners without supervision by a physician, either in 
        free-standing, nurse-led clinics of the sort pioneered by Mary 
        Mundinger \17\ or, better still in clinically integrated 
        settings where the idea ``supervision by a physician'' would be 
        replaced by ``collegial collaboration with a physician.''
---------------------------------------------------------------------------
    \17\ Mary O. Mundinger, et al. ``Primary Care Outcomes in Patients 
Treated by Nurse Practitioners or Physicians: A Randomized Trial,'' 
Journal of the American Medical Association (January 5, 2000) 
283(1):59-68. http://jama.jamanetwork.com/
article.aspx?articleid=192259#qun
defined.
---------------------------------------------------------------------------
          I endorse the idea put forth by the Advanced Practice Nurse 
        Practitioners (APNP) Consensus Working Group and the National 
        Council of State Boards of Nursing to develop for use by the 
        States a national scope of practice (SOP) for the nursing 
        profession, to limit or perhaps even eliminate the current 
        variation in SOPs across the States.
          Evidently, the standardized national SOP should reflect the 
        expertise of both, physicians and nurse practitioners. But, to 
        avoid the inherent economic conflicts of interest both 
        professions have in the matter, the standardized SOP should be 
        developed by a carefully selected board that is not dominated 
        by either nurse practitioners or physicians, and that has 
        significant representation by patients and those who pay for 
        health care, including public payers.

    Payment for Non-Physician Primary-Care Givers: Most economists 
probably would subscribe to the principle that the same price should be 
paid for identical goods or services, regardless of who produced it. A 
truly competitive market of textbook fame would actually yield that 
result.
    The available research suggests that the quality of the care 
rendered by nurse practitioners--measured along several dimensions, 
including process, clinical outcome and patient satisfaction--is as 
good as that rendered by primary care physicians for the services 
allocated to nurse practitioners under existing SOPs.\18\ That 
circumstance suggests that nurse practitioners should receive for the 
services they render the same fees paid to physicians for those same 
services.
---------------------------------------------------------------------------
    \18\ Julia Paradise, Cedrik Dark and Nicole Bitler, op cit.: 3-4.
---------------------------------------------------------------------------
    In fact, however, the current practice has been to pay nurse 
practitioners less. Medicare and Medicaid, for example, pay them 75 to 
85 percent of the comparable physician fee, unless the nurse 
practitioner practiced under the direct supervision of a physician in 
which the payment is 100 percent.
    Could such a differential in payment be defended? The only 
explanation I can think of is that with a visit to a physician, the 
patient purchases two things: (a) the delivery of the service in 
question and (b) a conveniently available stand-by capacity in the form 
of the physician's wider technical competence in health care. The 
higher fee paid physicians thus could be construed as payment for that 
stand-by capacity. This may not be a convincing argument, but it is 
that, that presumably has driven the differential payment.
    Do private insurers have a more sophisticated approach in this 
regard? On the contrary. According to the literature, many of them 
erect much higher financial barriers to nurse practitioners by refusing 
to recognize and credential them as primary care providers or, if they 
do credential them, paying them less than they pay physicians.\19\
---------------------------------------------------------------------------
    \19\ Tine Hansen-Turton, Ann Ritter and Rebecca Torgan, Insurers' 
Contracting Policies on Nurse Practitioners as Primary Care Providers : 
Two Years Later. Policy Politics Nursing Practice 2008 9(4): 241-8.

          As even the authoritative Medicare Payment Advisory 
        Commission (Medpac) could not find a theoretical foundation for 
        the existing payment differentials for identical primary care 
        services rendered by primary care physicians and by non-
        physician primary care givers, I support calls for eliminating 
        these differentials in public insurance programs and for 
        calling upon private health insurers, whose clients also lament 
        a shortage of primary care physicians, to recognize the role of 
        non-physician primary care givers and to eliminate the payment 
---------------------------------------------------------------------------
        differentials as well.

    Government's Role in Primary-Care Innovation: Although popular 
folklore has it that government rarely innovates in health care--even 
though it was the first to introduce bundled payments for health care 
in the form of DRGs and developed the Medicare fee schedule whose 
underlying relative-value scale is now used by most private insurers--
Medicare, Medicaid and several State governments actually have been 
quite progressive in supporting the development of the more modern 
primary care models.
    On the supply side, the Federal Government as early as the 1960s 
started to provide financial support to the education and training of 
non-physician primary care professionals through the National Health 
Service Corps (NHSC) which also, of course has supported physicians. It 
can be argued that the NHSC has never been as large as it should have 
been, or ought to be in the future; but it was important in recognizing 
early the value of these non-physician health professionals.
    The ACA of 2010 further enhances Federal institutional support to 
expand the supply of these professionals, along with individual support 
through the NHSC program.
    Finally, the U.S. Veterans Administration health system has long 
demonstrated the successful use of non-physician primary care 
professionals in the delivery of health care.\20\ \21\
---------------------------------------------------------------------------
    \20\ Perri M. Morgan, David H. Abbott, Rebecca B. McNeil and 
Deborah A. Fisher, ``Characteristics of primary care office visits to 
nurse practitioners, physician assistants and physicians in U.S. 
Veterans Health Administration facilities, 2005 to 2010: a 
retrospective cross-sectional analysis.'' Human Resources for Health. 
2012. 10: 42. http://www.human-resources-health.com/content/pdf/1478-
4491-10-42.pdf.
    \21\ D. Buzdi, S. Lurie and R. Hooker, ``Veterans' perceptions of 
care by nurse practitioners, physician assistants, and physicians: a 
comparison from satisfaction surveys.'' Journal of the American Academy 
of Nurse Practitioners. (March 2010) 22(3): 170-6.
---------------------------------------------------------------------------
    On the payment side the Medicare program at the Federal level and 
the Medicaid program at the State level have since the 1970s recognized 
the role of these professionals in primary care, in contrast to private 
health insurers. As noted, however, they do pay nurse practitioners 
lower fees for given services than they pay physicians.
    On the delivery of primary care, the Federal and State Governments 
have encouraged the development of nurse-led clinics in primary care 
which, as noted, I endorse. That development is further encouraged in 
the ACA through demonstration projects.
    The Federal Government also has long supported the establishment of 
qualified community health centers of which the Nation now has over 
2,000. They have demonstrated their value in making primary care 
accessible especially to otherwise underserved, low-income populations. 
Non-physician primary care givers play important roles in these 
centers.
    The ACA of 2010 encourages the further development of the Patient 
Centered Medical Home, thought of as a clinically integrated primary 
care facility that should facilitate collaboration among teams of 
primary care professionals and would facilitate further by the use 
modern electronic information systems. Part of these establishments 
task would be maintenance of a personal electronic health record.
    Finally, a number of State governments have been active on their 
own in promoting innovative primary care models that rely heavily on 
non-physician primary care workers--e.g., Minnesota, Pennsylvania and 
Vermont.\22\ Vermont's Blueprint for Health legislation created 
Community Health Teams of nurses, social workers and behavioral 
counselors that work with participating medical practices to help 
coordinate and monitor the primary care of patients. They now serve 
over half of the State's population in this capacity.
---------------------------------------------------------------------------
    \22\ Robert Wood Johnson Foundation, How Nurses are solving some of 
primary care's most pressing challenges. Policy Brief No. 18 (July 
2012) http://www.pcpcc.net/2012/08/21/rwjf-
report-how-nurses-are-solving-some-primary-cares-most-pressing-
challenges.
---------------------------------------------------------------------------
    All told then, although high-performing private-sector health-care 
delivery systems also have experimented and innovated in this area--
e.g., Kaiser Permanente or the Virginia Mason health system \23\ to 
mention but two of many--it is fair to say that governments at both the 
Federal and State levels have actively encouraged innovation in 
enhancing the supply of primary care services through innovative models 
of health care delivery. It is appropriate and fair to acknowledge from 
time to time this role of government as an innovator in U.S. health 
care.
---------------------------------------------------------------------------
    \23\ C. Craig Blackmore, Jordan W. Edwards, Carly Searles, Debra 
Wechter, Robert Mecklenburg, and Gary S. Kaplan, ``Nurse Practitioner--
Staffed Clinic at Virginia Mason Improves Care and Lowers Costs for 
Women with Benign Breast Conditions.'' Health Affairs. (January 2013). 
32(1): 20-6.
---------------------------------------------------------------------------
   II. INFLUENCING THE SPECIALTY AND LOCATIONAL CHOICES OF PHYSICIANS

    Even if innovation in the delivery of primary care that relies on 
non-physician professionals were pushed to the acceptable limit, there 
would undoubtedly remain the need for a sizable supply of primary care 
physicians. There is the possibility that the future demand for such 
physicians would still outstrip the future supply of them--certainly in 
traditionally underserved inner-city and rural areas.
    It raises the question what public-policy levers there are to 
influence the specialty and locational choices of physicians in 
general, and especially of primary care physicians.
    A very comprehensive survey on this question can be found in a 2009 
report by the Josiah Macy, Jr. Foundation, which specializes in health 
workforce issues.\24\ The report notes that specialty and location 
choices are related in complex ways to many factors other than 
financial incentives, among them the characteristics of medical 
students themselves, the mentoring of students during residency 
training and the medical school attended.
---------------------------------------------------------------------------
    \24\ Josiah Macy, Jr. Foundation, Specialty and Geographic 
Distribution of the Physician Workforce: What Influences Medical 
Students and Resident Choices? (March 2, 2009). http://www.graham-
center.org/online/etc/medialib/graham/documents/publications/mongraphs-
books/2009/rgcmo-specialty-geographic.Par.0001.File.tmp/Specialty-
geography-compressed.pdf.
---------------------------------------------------------------------------
    Women graduates appear to be less likely to practice in rural 
areas, and men less likely in primary care. Other things being equal, 
however, rural birth, a declared interest in serving underserved 
populations, and residency training in inner-city 
facilities increase the likelihood that graduates will choose primary 
care and locate in underserved areas. Students graduating from public 
medical schools appear to be more likely to chose primary care. 
Finally, medical graduates are more likely to choose primary care if 
during training they had mentors encouraging that choice or, in 
general, if the culture of their medical education encouraged it. 
Beliefs about and attitudes on the control over life style implied by 
different career choices also have been found to be highly 
influential.\25\
---------------------------------------------------------------------------
    \25\ E. Ray Dorsey, David Jarjoura and Gregory W. Rutecki, 
``Influence of Controllable Life Styles on Recent Trends in Specialty 
Choice by US Medical Students.'' Journal of the American Medical 
Association. (September 3, 2003) 290(9): 1173-8.
---------------------------------------------------------------------------
    Remarkably, research on the influence of accumulated debt by 
medical graduates on career choice has yielded mixed results.\24\ One 
would have thought it to be a major factor driving career choices.
    Because the compensation of primary care physicians is 
substantially lower than that of most medical specialists, there does 
seem to be wide agreement that financial incentives could be used to 
influence these choices. There certainly is empirical support for that 
theory.\26\ As the authors of a Josiah Macy, Jr. Foundation report 
conclude:
---------------------------------------------------------------------------
    \26\ James Thornton, ``Physician choice of medical specialty: do 
economic incentives matter?'' Applied Economics. 2000. vol. 32:1419-28.

          The income gap between primary care and subspecialists has an 
        impressively negative impact on choice of primary care 
        specialties and of practicing in rural or underserved settings. 
        At the high end of the range, radiologist and orthopedic 
        surgeon incomes are nearly three times that of a primary care 
        physician. Over a 35-40 year career, this payment disparity 
        produces a $3.5 million gap in return on investment between 
        primary care physicians and the midpoint of income for 
---------------------------------------------------------------------------
        subspecialist physicians.

    There is something odd in the fact that for at least two decades 
health-workforce experts and health-policymakers have wrung their hands 
over an acute shortage of primary care physicians, all the while paying 
primary care physicians so much less than is paid their specialist 
colleagues. To an economist, it comes across as insincerity over the 
alleged shortage. If primary care physicians are deemed so essential to 
the health of Americans, why are they not paid more?
    Be that as it may, in the next section I explore how the financial 
incentives facing medical graduates could be changed in favor of 
primary care.

  III. CHANGING FINANCIAL INCENTIVES TO ENCOURAGE A CHOICE OF PRIMARY 
                                  CARE

    Although economists recognize the complex set of factors that drive 
choices of a medical specialty and a practice location, it is natural 
that they concentrate on financial incentives.
    A compact way to model the impact of these financial incentives, in 
the minds of economists, is to think of the choice of a professional 
career as the perfect analogue of any other investment decision that 
requires an initial investment in the hope of a positive subsequent 
return on that investment. Figures 2 and 3 illustrate this so-called 
``human capital'' model as it is exposed in the classroom.




    In Figure 2 it is imagined that a medical-school graduate is aware 
of the two lines in that graph. The top line represents the typical 
future net cashflow, after practice expenses and income taxes, from 
practice in a medical specialty. The bottom line represents the 
analogous cashflow faced by a primary care physician. It is assumed 
here that a specialist career requires some additional years of low-
paying residency training. The foregone income that could have been 
earned in primary care is the up-front investment in a specialist 
career, relative to a primary care career.
    The decision to enter a specialist career, rather than one in 
primary care, can then be represented by subtracting the primary care 
cashflow from the specialist cashflow, to obtain the differential 
cashflow shown in Figure 3. It is the cashflow from which one 
calculates the net-present-value (NPV) or the internal rate of return 
(IRR) of the decision to become a specialist rather than enter primary 
care practice. Economists believe that medical graduates respond to 
these summary metrics in choosing their specialty.




    It is immediately apparent from figures 2 and 3 that to enhance the 
financial attractiveness of a career in primary care, other things 
being equal, one could either shift down the projected cashflow to 
specialists or by shifting up the life-cycle cashflow to primary care 
or do both. The effect would be to shift down the cashflow line in 
Figure 3, that is, to decrease the relative financial attractiveness of 
specialty training.
    How could that be done?
    Changing compensation: The most obvious method of doing so would be 
either to raise the compensation of primary care physicians (fees, 
capitation, or salaries), or to lower the compensation of specialists, 
or to do both.
    It has been attempted before, most notably when Congress 
established the Medicare fee schedule in 1992. At that time the fees of 
primary care physicians were raised substantially and those to many 
specialists were lowered relative to the previously prevailing fees.
    For some reasons, however, it has proven difficult to maintain this 
tilting of the fee schedule over time, for reasons many observers 
attribute to the manner in which the relative value scale underlying 
the Medicare physician-fee schedule has proceeded.\27\ It is in good 
part a problem of intra-medical-profession politics and power, and also 
one of congressional politics.
---------------------------------------------------------------------------
    \27\ In this connection, see Uwe E. Reinhardt, ``The Little-Known 
Decision-Makers for Medicare Physician Fees.'' The New York Times 
Economix (December 10, 2010). http://economix
.blogs.nytimes.com/2010/12/10/the-little-known-decision-makers-for-
medicare-physicians-fees/.
---------------------------------------------------------------------------
    It can be asked next why private insurers have not led the way to 
raise the fees they pay primary care physicians relative to those paid 
specialists. Many and probably most of them simply have adopted the 
Medicare relative value scale underlying their fee schedules, although 
their absolute level of fees may be higher than Medicare fees.
    Insurance executives answer this question by pointing out that 
Medicare must lead the way. First, private insurers cannot act in 
unison, as that would violate antitrust laws. Second, if one of them 
individually raised substantially the payments to primary care 
physicians, that insurer would have a cost disadvantage relative to 
competitors and yet would not be able to move the overall supply of 
primary care physicians. On the other hand, if the individual insurer 
wanted to achieve cost neutrality by paying specialists less, the 
insurer's enrollees might lose access to specialty care and move to 
competing insurers. I find that reasoning persuasive.
    Lowering the Amortization of Medical-School Debt: In other 
industrial nations, tuition in medical school is low or zero. By 
contrast, American medical students pay substantial annual tuition 
charges, ranging in 2012-13 from a median of $32,414 in public medical 
school to a median of $50,309 in private medical schools.\28\ Including 
other costs of attendance, but excluding the much higher opportunity 
cost of not earning a regular income in another job, the total cost of 
attending medical school ranged from a median of $53,685 in public 
medical school to a median of $72,344 in private medical schools.
---------------------------------------------------------------------------
    \28\ Association of American Medical Colleges, Medical Students 
Education: Debt, Cost and Loan Repayment Fact Card. (October 2012). 
https://www.aamc.org/download/152968/data/debtfactcard.pdf.
---------------------------------------------------------------------------
    Over 85 percent of medical students borrow to finance part or all 
of this huge investment in human capital. In 2012, 17 percent of them 
had an accumulated debt of $250,000 or more upon graduating from 
medical school. The average accumulated debt per graduate was $166,750 
and the median $170,000.\24\
    It may be noted in passing that the amortization of this huge 
investment in human capital cannot be deducted from taxable income as 
would be an investment in physical capital--e.g., in a haberdashery. 
Our tax code has a distinct bias in favor of physical capital, even 
though it is now widely agreed that the wealth of modern nations 
depends crucially on its human capital.
    Curiously, as already noted, the literature on the influence of 
debt on the career choices of medical-school graduates has yielded 
mixed results.\24\ It does not seem to be a major factor-driving career 
choices. Even so, it may be worth exploring what potential policy 
levers a medical graduate's accumulated debt might offer.
    Table 1 below illustrates the fraction of a physician's pretax net 
practice income (or salary) that would be absorbed by the amortization 
of debt for a hypothetical medical school graduate choosing either a 
primary care career or entering a specialty.

  Table 1--Percentage of Pretax Net Practice Income  Absorbed by Annual
               Debt Repayments under 20-Year Amortization
  (Assumed annual growth in practice income 3.5 percent; Borrowing rate
                              7.9 percent)
------------------------------------------------------------------------
   Starting annual income           $150,000              $300,000
------------------------------------------------------------------------
                                          Growing               Growing
                                          payments              payments
                                Equal      at 3.5     Equal      at 3.5
            Year               payments   percent    payments   percent
                              [percent]   per year  [percent]   per year
                                         [percent]             [percent]
------------------------------------------------------------------------
1...........................    10.1        7.8        5.1        3.9
10..........................     7.2        7.8        3.6        3.9
20..........................     5.1        7.8        2.5        3.9
------------------------------------------------------------------------

    It is assumed in this table that debt amortization takes place over 
20 years with either fixed annual loan repayments or, alternatively, 
payments that grow annually at 3.5 percent, the same rate at which the 
net practice income (or salary) of both types of physicians is assumed 
to grow. The assumed borrowing rate is 7.9 percent.
    The tables show the absorption rates, in percent of net income, in 
practice years 1, 10 and 20. As would be expected, these absorption 
rates are sensitive to the borrowing rate students must charge on their 
debt. At a borrowing rate of only 4 percent, for example, the entries 
in the table would be as those in Table 2 below.

  Table 2--Percentage of Pretax Net Practice Income  Absorbed by Annual
               Debt Repayments under 20-Year Amortization
  (Assumed annual growth in practice income 3.5 percent; Borrowing rate
                              7.9 percent)
------------------------------------------------------------------------
   Starting annual income           $150,000              $300,000
------------------------------------------------------------------------
                                          Growing               Growing
                                          payments              payments
                                Equal      at 3.5     Equal      at 3.5
            Year               payments   percent    payments   percent
                              [percent]   per year  [percent]   per year
                                         [percent]             [percent]
------------------------------------------------------------------------
1...........................     7.4        5.4        3.7        2.7
10..........................     5.2        5.4        2.6        2.7
20..........................     3.7        5.4        1.8        2.7
------------------------------------------------------------------------

    Evidently, one way to enhance the future cashflow from primary care 
relative to that accruing to a specialty career would be to mitigate 
the burden of this debt amortization.
    It could be done by lowering the borrowing rate for primary care 
physicians, but not for specialists.
    An alternative would be a loan-forgiveness program contingent on 
practicing full-time in primary care. For example, for every year a 
physician works full-time in primary care, X amount of dollars of his 
or her debt would be forgiven.
    There might be arguments by specialists that some of their work 
involves primary care as well, for which they would seek pro-rated loan 
forgiveness; but such objections should not stand in the way of the 
general idea. One could work around it or simply reject the argument.
    Manipulating the tax code: A final method to alter the future life 
cycle cashflow from a choice of primary care, relative to that from a 
specialty career, would be changes in the tax code, much as economists 
dislike, as a matter of principle, the now widely practiced use of the 
tax code for social engineering, in lieu of more forthright 
subsidization of activities preferred by government.
    As one such manipulation of the tax code, Congress has long 
extended to the managers of private equity funds and hedge funds the 
tax-preference under which carried interest stemming from the long-term 
capital gains earned by the fund for investors in the fund is taxed at 
the low capital gains rate. Carried interest is distinct from any long-
term capital gains these managers have earned on whatever their own 
investment in the fund may be. Carried interest basically is a cash 
bonus paid by other investors to the managers of funds for superior 
management of the funds. This tax preference has always been justified 
on the ground that it encourages capital formation, although like other 
economists,\29\ \30\ I personally find that justification unpersuasive.
---------------------------------------------------------------------------
    \29\ Alan S. Blinder, ``The Under-Taxed Kings of Private Equity.'' 
The New York Times. (July 29, 2007). http://www.nytimes.com/2007/07/29/
business/yourmoney/29view.html?ei=5090&en
=973b345a4a0b4227&ex=1343361600&adxnnl=1&partner=rssuserland&emc=rss&_r=
0.
    \30\ N. Gregory Mankiw, ``The Taxation of Carried Interest.'' Greg 
Mankiw's Blog. (July 19, 2007). http://gregmankiw.blogspot.com/2007/07/
taxation-of-carried-interest.html.
---------------------------------------------------------------------------
    But as long as this dubious tax preference continues to exist, it 
might as well be used in health policy. In one of my posts on The New 
York Times blog Economix \31\ I had proposed that, if policymakers 
really do believe that the Nation faces an acute shortage of primary 
care physicians, they might come around to the view that this 
particular type of human capital is socially as meritorious as is 
general physical capital, be it factories or golf resorts. On that 
notion, the practice income of primary care physicians might be taxed, 
at least for some duration, as if it were the equivalent of carried 
interest.
---------------------------------------------------------------------------
    \31\ Uwe E. Reinhardt, ``If Primary-Care Doctors Were Taxed Like 
Hedge-Fund Managers.'' The New York Times Economix (October 26, 2012). 
http://economix.blogs.nytimes.com/2012/10/26/if-primary-care-doctors-
were-taxed-like-hedge-fund-managers/.
---------------------------------------------------------------------------
    To sum up at section III of this statement on financial incentives. 
In view of the foregoing discussion, I would recommend that:

          If Congress sincerely believes that there is and will be an 
        acute shortage of primary care physicians, it should realign 
        the levels of compensation of physicians under Medicare and 
        Medicaid more in favor of primary care physicians. If Congress 
        would like to see that realignment, it has no choice but to 
        lead the way, as individual private insurers would find it 
        difficult to effect the realignment by themselves.
          Congress should fund experiments with rewarding the choice of 
        a career in primary care, or to practice in an area with an 
        acute shortage of primary care physicians, by forgiving for 
        every year the physician works full-time in primary care part 
        of the debt medical graduates have accumulated during their 
        education and training.
          As long as carried interest paid from long-term capital gains 
        is accorded the dubious tax preference Congress has accorded 
        the managers of private equity and hedge funds, Congress should 
        extend that privilege also to primary care professionals, at 
        least for some time of their careers.

    Senator Sanders. Dr. Reinhardt, thank you very much.
    And last, but very much not least, is Dr. Claudia Fegan. 
She is the chief medical officer for the John H. Stroger, Jr. 
Hospital, Cook County in Chicago, often referred to as Cook 
County Hospital. She was previously the associate chief medical 
officer for the Cook County Ambulatory and Community Health 
Network, and interim chief medical officer of the Cook County 
Bureau of Health Services. Dr. Fegan served as past president 
of Physicians for a National Health Program. She received her 
undergraduate degree from Fisk University, and her medical 
degree from the University of Illinois College of Medicine.
    Dr. Fegan, thanks so much for being with us.

STATEMENT OF CLAUDIA M. FEGAN, M.D., CHCQM, FACP, CHIEF MEDICAL 
OFFICER, JOHN H. STROGER, JR. HOSPITAL OF COOK COUNTY, CHICAGO, 
                               IL

    Dr. Fegan. Thank you, Senator Sanders, Senator Enzi, and 
other distinguished Senators for affording me this opportunity 
to address the issue of inadequate access to primary care in 
the United States.
    As the chief medical officer of John H. Stroger, Jr. 
Hospital in Chicago, known to most people outside of Chicago as 
Cook County Hospital, I confront on a daily basis our country's 
failure to provide universal access to health care as a right 
to which, I believe, everyone is entitled.
    Every single day, people without a physician line up across 
the street from our hospital to be seen in our walk-in clinic. 
Hundreds of people a week, tens of thousands a year, stand out 
in the wee hours of the morning hoping to be one of the 120 to 
200 people who will be seen that day. And even better, hoping 
to be one of the 12 patients who will be assigned a primary 
care physician and given an appointment so they won't have to 
come back; they hope to be one of the lucky ones who will be 
given a physician of their very own.
    Our current influenza epidemic highlights the 
vulnerabilities of our current patchwork for health care 
delivery. Too few people in this country have access to a 
primary care provider. Their primary care provider could have 
educated them about influenza and the need for influenza 
vaccine, especially to vulnerable populations and those in 
contact with those populations. Then their primary care 
provider could have given them that vaccine. Instead, we are 
witnessing tens of thousands of people presenting to our 
emergency rooms sick and looking for help. At the peak, our 
emergency room at Stroger was seeing 450 people a day while 
hospitals around the city, and the country I might add, closed 
their doors and went on bypass. At Cook County we never go on 
bypass. We never close our doors.
    We created the RBVS system to compensate physicians for 
their cognitive effort in the care of patients. It was hoped 
that that would begin to level the playing field between 
primary care physicians and procedure-based specialists. Yet, 
the RVS Update Committee, which is tasked annually, was 
reviewing how Medicare compensates physicians for care 
provided, has only a paltry few seats allocated for primary 
care when setting reimbursement rates.
    We want to increase the number of primary care physicians, 
but when Medicare funds graduate medical education in 
hospitals, we disperse the same amount for a plastic surgeon as 
a primary care physician. If we increase hospital reimbursement 
for primary care physicians in training over specialists in 
training, we will have more primary care physicians. You could 
do that.
    I have to say I have the privilege of being a primary care 
physician myself. I love taking care of patients. It is one of 
the most fun things I do. My patients invite me into their 
lives as I teach them how to take care of themselves and get 
what they need.
    The daughter of a labor union organizer and a social 
worker, I could have never been able to afford medical school. 
I was fortunate enough to be a member of the National Health 
Service Corps, which paid for my medical education. So I was 
free to make a decision to follow my passion and become a 
primary care physician without having to worry about how I 
would pay off my loans.
    I would say to you if medical students know before they 
begin medical school they will have no debt upon completion of 
their studies, they will be more likely to make a decision to 
pursue a career in primary care rather than more highly 
compensated specialties.
    The administrative burden we have placed on physicians is a 
product of our Nation's fragmented, dysfunctional system of 
financing health care with multiple private and public payers, 
including hundreds of private insurance plans each with its own 
set of rules, the costly paperwork and headaches inflicted upon 
our physicians, including primary care physicians is enough to 
drive many to distraction or exit from our profession.
    If we would enact a single-payer national health care 
program where everyone was entitled to health care as a right, 
we could focus on delivering the best care in the world to our 
patients, and relieve physicians of the administrative hassles 
required to ensure proper billing services are provided.
    The stresses on primary care physicians are tremendous, 
with the implementation of the Electronic Health Record that 
forced them to spend more time looking at the computer than at 
their patients. Most EHR systems today were designed to enhance 
efficient billing, not patient care. As a result, EHR has 
created a hideous documentation burden that robs precious time 
from the physician that they would rather spend engaging with 
their patients and understanding their needs. There is no 
question if we had designed the EHR to further clinical care, 
we would have developed a very different tool.
    While it is true there are elements of EHR that will 
improve patient safety, they are far overshadowed by the 
demands for administrative documentation. We lose the narrative 
of the individual patient to improve the point-and-click 
documentation and make billing more efficient.
    I urge you to work to make a difference, not for me or you, 
but for the patients I have the privilege of serving, who 
desperately need elected officials to care about what happens 
to them.
    Thank you.
    [The prepared statement of Dr. Fegan follows:]

       Prepared Statement of Claudia M. Fegan, M.D., CHCQM, FACP

    Thank you Senator Sanders, Senator Enzi and other distinguished 
Senators for affording me this opportunity to address the issue of 
inadequate access to primary care in the United States.
    The lack of adequate access to primary care speaks to the much 
larger issue of inadequate access to health care in this country as a 
whole.
    As the chief medical officer of John H. Stroger, Jr. Hospital in 
Chicago, known to most people outside of Chicago as Cook County 
Hospital, I confront on a daily basis the reality of our country's 
failure to provide universal access to health care as a right to which 
I believe everyone is entitled.
    Every single day, people without a physician line up across the 
street from our hospital to be seen in our walk-in clinic. Hundreds of 
people a week--tens of thousands a year--stand in line in the wee hours 
of the morning, hoping to be 1 of the 120-200 people who will be seen 
that day and even better, hoping to be one of the 12 patients who will 
be assigned to a primary care physician and given an appointment so 
they won't have to come back.
    They hope to be one of the lucky ones who will be given a physician 
of their very own, who will get to know them and take care of them and 
be available when they have a problem or question, someone to help them 
meet their medical needs, someone to help them navigate our complicated 
health care system to get what they need. I have to admit I hesitate to 
refer to health care delivery in this country as a system, because so 
little is connected to anything else.
    Every day I look at the charts of patients admitted to our public, 
safety net hospital who were told by another hospital to come to us 
because they are uninsured. They come from distances great and small. I 
see patients who come from other cities, other counties, other States, 
other countries and patients who come from just a few blocks away.
    Sometimes they come with their films or slides and have been told 
they need surgery or chemotherapy or a diagnostic study and they would 
be better off at ``the County.'' These patients come to us in a state 
of desperation with great expectations. We take care of them and do the 
best we can with the limited resources we have. This is as we prepare 
to absorb the beginning of the phaseout of Disproportionate Share Funds 
for Safety Net Hospitals on October 1 of this year. The elimination of 
DSH funds with the presumption that everyone will be insured is just 
another challenge as we continuously struggle to meet the needs of all 
who come to our doors.
    I know the Affordable Care Act promises to provide insurance 
coverage to more Americans, but I know there will still be 30 million 
people who will remain uninsured even after the Affordable Care Act is 
fully implemented. So I know the need for the safety net and places 
like Cook County will remain. I also know there are not enough primary 
care providers to care for all the patients who will need them.
    Whereas in 1930 the ratio of generalists or primary care physicians 
was about 80:20, today that ratio is reversed. It's not an exaggeration 
to say we are facing a crisis in this vital area.
    Research show that primary care is the foundation of any high 
functioning health system. A well-developed primary care infrastructure 
makes access to care easier and more efficient; it contains cost, such 
as identifying and treating problems before they become more severe or 
advanced. It improves the coordination of resources and care; and most 
important, it yields better medical outcomes than when such an 
infrastructure is missing. It saves lives. I might add, studies have 
noted more expensive for-profit hospitals, do not have better outcomes 
than our public safety net hospitals. There is no correlation between 
the amount of money we spend on care and the quality of the outcomes.
    Our current influenza epidemic highlights the vulnerabilities of 
our current patchwork for health care delivery. Too few people in this 
country have access to a primary care provider. Their primary care 
provider could have educated them about influenza and the need for 
influenza vaccine, especially in vulnerable populations and those in 
contact with those populations. Then their primary care provider could 
have provided them with that vaccine.
    Instead we are witnessing tens of thousands of people presenting to 
our emergency rooms sick and looking for help. At the peak, our 
emergency room at Stroger was seeing 450 patients a day while hospitals 
around the city closed their doors and went on bypass. At Cook County, 
we never go on bypass, we never close our doors.
    People don't understand that influenza vaccination is not just 
about you and whether you get sick, but about everyone you encounter 
and the risk you will infect them. After we had a patient in our 
hospital infected by a visitor and a pregnant patient who wound up on a 
ventilator, we were forced to limit access to the hospitals in our 
System for visitors who might be sick. People are dying, dying from 
influenza, a preventable disease. This is an example of our tendency in 
this country to be pennywise and pound foolish in our funding of health 
care.
    There is no doubt that for many years we have undervalued primary 
care. It shows up in a variety of ways.
    As a nation we provide little incentive for young physicians to 
become primary care providers. By contrast there are strong incentives 
for young clinicians to pursue higher compensated specialties.
    A medical education is expensive and most young physicians leave 
medical school with hundreds of thousands of dollars in debt. Because 
primary care physicians are the lowest compensated of physicians, and 
because the prospect of a heavy, long-term debt is so unappealing, 
medical students find themselves gravitating away from primary care 
toward higher paid specialties.
    We say we value primary care physicians and yet we pay them half as 
much as we pay specialists. We say we appreciate the cognitive skills 
of primary care physicians so necessary to see patients as a whole and 
make decisions in the best interests of each individual, but we make it 
financially difficult for young clinicians to take this path.
    Another example: We created the RBVS system to compensate 
physicians for their cognitive effort in the care of patients. It was 
hoped this would begin to level the playing field between primary care 
physicians and procedure-based specialists. Yet the RVS Update 
Committee, which is tasked with annually reviewing how Medicare 
compensates physicians for care provided, has only a paltry few seats 
allocated for primary care when setting reimbursement rates.
    We want to increase the number of primary care physicians, but when 
Medicare funds graduate medical education in hospitals, we disburse the 
same amount for a plastic surgeon as a primary care physician. If we 
increase hospital reimbursement for primary care physicians in training 
over specialists in training, we will have more primary care 
physicians. You could do that.
    I have to say that I have the privilege of being a primary care 
physician myself--previously in private practice and now at a large 
public hospital--and I love taking care of patients. It is one of the 
most fun things I do. My patients invite me into their lives as I teach 
them how to take care of themselves and get what they need. These 
experiences are often deeply moving and rewarding and they remind me 
why I chose medicine as a profession.
    The daughter of a labor union organizer and a social worker, I 
would have never been able to afford medical school. I was fortunate 
enough to be a member of the National Health Service Corps, which paid 
for my medical education, so I was free to make the decision to follow 
my passion and become a primary care physician without having to worry 
how I would pay off my loans.
    While the National Health Service Corps still exists, it is a 
shadow of its former self; more students receive funding in the form of 
loan repayment.
    I would say to you: if medical students know before they begin 
school that they will have no debt upon completion of their studies, 
they are more likely to make the decision to pursue a career in primary 
care rather than a more highly compensated specialty.
    There are other ways to make primary care more attractive to the 
next generation of physicians too.
    The administrative burden we have placed on physicians is the 
product of our Nation's fragmented, dysfunctional system of financing 
care through multiple private and public payers, including hundreds of 
private insurance plans, each with its own rules. The costly paperwork 
and headaches inflicted on our physicians, including primary care 
physicians is enough to drive many to distraction or exit from our 
profession.
    If we would enact a single-payer national health care program, 
where everyone was entitled to health care as a right, we could focus 
on delivering to our patients the best care in the world and relieve 
our physicians of the administrative hassles required to ensure proper 
billing for services provided.
    As a primary care provider myself, I feel the external control in 
the exam room with me and my patient as I struggle to make sure I have 
completed all the required elements on the computer screen, sometimes 
at the cost of neglecting to ask what the patient's concerns are today.
    Because of this onerous administrative burden, primary care 
physicians have lost something of their precious connection with their 
patients. Lifting that burden would help strengthen the doctor-patient 
relationship.
    The stresses on primary care physicians are tremendous with the 
implementation of the electronic health record (EHR) that force them to 
spend more time looking at a computer screen than looking at the 
patient. Most EHR systems today were designed to enhance more efficient 
billing, not patient care. As a result, EHR's create a hideous 
documentation burden that robs precious time from physicians that they 
would rather spend engaging with their patients and understanding their 
needs.
    There is no question, if we had designed the electronic health 
record to further clinical care we would have developed a very 
different tool. While it is true there are elements of the EHR that 
will improve patient safety, they are far overshadowed by the demands 
for administrative documentation. We lose the narrative of the 
individual patients to improve the point and click documentation and 
make billing more efficient.
    It's just one more example of where we expect primary care doctors 
to address more and more issues, even as we expect them to see more and 
more patients.
    I would say to the members of this committee, as Members of 
Congress you have the opportunity to increase the number of primary 
care providers in this country.

    1. Adjust the funding for graduate medical education to reimburse 
hospitals more for the primary care physicians than specialists.
    2. Insist the American Medical Association increase primary care 
representation on the RVS Update Committee.
    3. Increase the National Health Service Corps scholarship program.

    I urge you to work to make a difference, not for me or you, but for 
the patients I have the privilege of serving, who desperately need 
their elected officials to care about what happens to them.

    Senator Sanders. Dr. Fegan, thank you very, very much.
    Let me begin the questioning. I want to ask two brief 
questions in my 5 minutes. My understanding is that if I have 
the flu or a non-urgent type of illness, and I walk into an 
emergency room, it will cost Medicaid something like 10 times 
more than me walking into a community health center to visit my 
primary health care physician.
    My understanding is that there are millions of Americans 
who hesitate, I know this is true in Vermont. People get sick. 
They think it is going to get better. They don't go to the 
doctor. They wait months and months, they wait a year, they 
walk-in to a doctor. The doctor says, ``Why weren't you here 6 
months ago? You're really ill. I've got to get you to the 
hospital.''
    My question is how much money does it cost and how much 
human suffering is taking place in this country because people 
are unable to walk into a doctor's office when they need to? 
Who wants to respond to that?
    Dr. Fegan.
    Dr. Fegan. I can just tell you about the faces of the 
patients who line-up to be seen at our walk-in clinic on a 
daily basis, and I don't know how you measure the cost of human 
suffering. But we see always--people come to County because you 
can see things you will never see anywhere else in the world, 
such advanced stages of disease, and people who with everything 
from brain tumors to breast lesions that are eroding from the 
skin. I mean, and you say, ``Why did you stay home?'' And they 
didn't have to.
    I am going to tell you, these people are working folks. 
These are taxi drivers. They are college professors. They are 
accountants. They are attorneys. And the first thing they say 
to me is, ``I never thought I'd be here. I never thought I'd be 
at the County.'' So I would say it has to be, and no 
exaggeration, millions of dollars we lose in workforce 
productivity, as well as in the suffering.
    I see so many patients who get cancer, particularly breast 
cancer, and lose their jobs, and then wind up coming to us to 
get further treatment. And they've lost their homes, many of 
them, by the time they get to us, and we are trying to figure 
out how to get them started on their chemotherapy and find them 
some place to live.
    Senator Sanders. Other comments on that?
    Ms. Kuenning.
    Ms. Kuenning. Yes, thank you. I know from the stories from 
the community health centers just in Vermont, I can't put a 
dollar equation to it, but we have so many stories. We have a 
farm worker program that actually goes out to farms and works 
with, not only seasonal farmers, but actually our farmers who 
aren't coming in for care.
    We have a 50-year-old farmer who has a history in the 
family of diabetes and has never seen a doctor, comes in and 
actually doesn't know that they can get care at the community 
health center on a sliding fee discount because of their 
income.
    So I think a lot of it is outreach and enrollment into 
understanding both their cultural issues, as well as being able 
to get them into care.
    Senator Sanders. OK. Let me switch gears for a moment and 
touch on another very important issue in terms of how we 
determine reimbursement rates for physicians. And that is the 
RUC, which I think probably is not a household word throughout 
America, and yet is an organization which plays an enormously 
important role in determining how much specialists will make, 
how much primary care physicians will make.
    And apparently, we have an organization which is kind of 
loaded, top heavy, with people in the specialties and weak in 
terms of representing primary care physicians. Is this an 
important issue?
    Dr. Mullan, do you want to take a shot at that?
    Dr. Mullan. I do. A key issue, when we talk globally about 
the idea of pay inequity, how do we get a handle on it?
    Since Medicare is the largest single payer, and 
historically many private payers key off Medicare in a variety 
of ways, managing the Medicare conundrum around the pay gap 
would be central to reforming the whole system, and the RUC is 
at the center of it. It is well-wired in the sense that it has 
been this way a long time, and there are a variety of 
approaches to it, but I think just sunshine, daylight 
featuring, focusing on this.
    You have lurking under it the question of, do you raise the 
floor or bring the ceiling down? Both will raise all kinds of 
issues for people involved, and philosophically, and 
politically as well.
    I believe it is both. I mean, the point is we are not going 
to pay all our primary care physicians $500,000 a year. But I 
must say as a physician and a citizen, when I hear about a 
physician making $500,000 or $1 million a year, yes, there are 
people in business from their college class, et cetera, etc. I 
think it is a moral argument we need to engage as a country.
    Senator Sanders. Dr. Wilper, you had some strong words on 
that, and then we will get to Dr. Reinhardt.
    Dr. Wilper. Thank you. So I do have some additional 
thoughts on this, and specifically the process by which the RUC 
evaluates billing codes between the different subspecialties 
and primary care. This process could be improved by 
reevaluating the evaluation and management, what are called, 
CPT codes.
    An example of this is as follows: an ophthalmologist will 
bill the same code, a 99214, for a 10 minute exam with very 
little followup needed. A PCP, a Primary Care Physician, who 
bills the same code generally spends 25 to 30 minutes with a 
patient, face-to-face, has 25 to 30 minutes' post-care 
documentation and followup at an estimated 20 to 30 minutes 
between visits for the same patient. Now, the reimbursement for 
those two services are identical.
    So what we need are new E&M codes in primary care. We need 
to update our knowledge base regarding this issue as current 
time estimates for these codes are actually outdated and are 
dated to the 1980s, 20-25 years old, and they are based on very 
small sample sizes.
    A proposal would be to develop an independent process for 
reviewing these codes that is transparent, peer-reviewed, and 
based on real world data.
    Senator Sanders. Dr. Reinhardt, do you want to comment? 
Briefly, please.
    Dr. Reinhardt. Yes, the RUC determines relative values, not 
absolute levels, but it is a zero sum game if it is budget 
neutral.
    One could put more primary care members on that board, and 
I think that would be a good idea. But MedPAC had also proposed 
that there be an outside committee, an independent committee of 
stakeholders who kind of audit and review the RUC 
recommendations. I don't know if that ever went anywhere, but I 
would encourage you to look at it, and maybe go that way.
    Senator Sanders. OK. Thank you very much.
    Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman.
    I will begin by asking Miss Decklever. In your testimony, 
you described some of the challenges that frontier States face 
in qualifying for Federal grants to improve primary care access 
and increase the health professional workforce.
    What needs to be done at the Federal level to improve that 
grant process, and what can we do to make the process better?
    Ms. Decklever. Senator Enzi, members of the committee, the 
information that I received from the community health centers 
refers back to the number when they are looking at 
designations. So it is the number of people per provider rather 
than the amount of space where those people are located in.
    The other thing that sometimes is a bit of a disparity is 
in States like ours where we have lower minority populations, 
just by the nature of our State that sometimes by those 
designations we are put out of the running, as it were, because 
we just don't have a high enough percentage of minority or 
different types of ethnic backgrounds.
    And then, again, the wage disparity where the average 
statewide data, States that are the designated areas are 
financially in pretty good shape. But if you were to look at 
the overall where we have many people that are making a lot of 
money, and then some that are making very little, it skews the 
average. And to maybe look at that type of data and those types 
of figures as far as designation goes.
    Senator Enzi. Thank you.
    This is a question of you and Ms. Kuenning. What needs to 
be done to enhance and improve the coordination and 
collaboration between the Federal Government and the State 
government agencies to most effectively deploy the resources? 
How can we avoid duplication of efforts?
    Ms. Kuenning. Thank you.
    At least I can speak to Vermont and New Hampshire in terms 
of accepting, not the National Health Service Corps loan 
repayment to providers, but actually a loan repayment dollar. 
There are restrictions on how you use those resources. They 
have to be within health professional shortage areas rather 
than MUA's and MUP's.
    If we could get a change from that in the Federal 
Government, then States like Vermont and New Hampshire who 
don't take any Federal funding for loan repayment--they have 
State loan repayment, but no Federal loan repayment--that 
actually would be very favorable.
    Senator Enzi. Thank you. Were you going to comment on that, 
Miss Decklever?
    Ms. Decklever. Senator Enzi, I do not have enough 
information to be able to give you an intelligent answer, but I 
would be more than happy to do some research on that and get 
back to you.
    Senator Enzi. OK. I do have some other questions for 
everybody on the panel that I hope they will answer in writing.
    Dr. Mullan, what needs to be done to ensure that effective 
oversight and financial controls are in place to ensure that 
Federal funding is being used effectively, and helps ensure 
professional resources are being allocated more efficiently?
    Dr. Mullan. Thank you, Senator Enzi.
    The array of Federal programs is quite different. I have 
spoken to the issue of Medicare GME, which I think--you would 
not issue a contract without a deliverable, without 
specificity. And I think oversight there is actually quite lax. 
I realize that is not the jurisdiction of this committee, but 
it inevitably speaks to this issue.
    In regard to the title VII programs, these would be 
programs that support educational activities for primary care 
physicians, for physician assistants, and the title VIII 
programs for nurse practitioners, they are actually managed 
fairly tightly. They use an NIH-type grant award system, with 
Federal project officers, and I think there is good 
supervision. In fact, from the perspective of the schools, 
often, they feel it is too tight. It is very hard to move when 
things are highly stipulated.
    The National Service Corps is a relationship, of course, 
with the individuals. And happily over the years, there used to 
be many individuals who bought out, simply didn't serve. That 
has been tightened with the help of Federal legislation. There 
is extra indemnity if you don't serve on the scholarship, and 
with loan repayment, that is managed quite tightly.
    So I think in this area in general there is pretty good 
accountability across the programs, and no doubt, room for 
improvement, but in general, it is pretty good.
    Senator Enzi. Thank you. My time has expired.
    Senator Sanders. Thank you, Senator Enzi.
    Senator Warren.
    Senator Warren. Thank you.
    Like Senator Enzi, I would like to followup with some 
questions about community health centers as a vehicle for 
delivering primary health care, and it is their impact on 
access, on costs, and on disparity.
    I am very interested. I read through all of the testimony, 
and am very impressed by the work you have done, Ms. Kuenning. 
It is terrific work.
    I was very glad to hear, Ms. Decklever, about the work that 
is done out in Wyoming and that you've got community health 
centers there.
    But what I would really like to know is, what else do we 
know about them in any of those dimensions? As I said, it is 
about cost. It is about access. It is about reducing disparity. 
Can anyone speak to that?
    Dr. Wilper, your head snapped up, so I am guessing it is 
you.
    Dr. Wilper. Sorry for that.
    Senator Warren. No, no. I like it.
    Dr. Wilper. In addition to my work at the VA, I also work 
at a community health center in Boise, ID called Terry Reilly 
Health Systems.
    In my experience, the CHC's provide a critical safety net 
for the uninsured of our Valley. I live in the Treasure Valley. 
The un-
insurance rate for this population is nearly 50 percent, which 
is actually second highest in the Nation.
    My experience as a clinician working in that clinic is that 
despite the access that it provides, oftentimes what we end up 
providing is care that, at least in my other job at the VA, we 
would not find acceptable because we don't have other resources 
to offer to these patients seen in our community health center 
because they don't have insurance. So even though they have a 
foot in the door to the clinic at the community health center, 
oftentimes patients are unable to access additional services 
that would be standard of care in any other system in the 
United States.
    Senator Warren. Very helpful. Yes, ma'am.
    Dr. Fegan. Cook County also pairs with many other community 
health centers, and what we find is that when we provide access 
to primary care, we uncover specialty needs. One of the big 
problems that we have as a hospital, or one of our major 
challenges, is that these patients in between the health 
centers have nowhere to go to receive those services, and they 
refer them to us.
    So I think that community health centers are invaluable 
because they offer care in the community where people live and 
they are likely to be more flexible in their hours and in their 
pay scale. People who don't normally have access to care will 
receive access. But then, they have nowhere to send them, and 
we are the safety net, and it is a continuous tension we have 
with capacity in meeting those needs.
    Senator Warren. Dr. Mullan, did you want to add?
    Dr. Mullan. Yes. Thanks, Senator Warren.
    I had the privilege of working for 12 years at a community 
health center, the Upper Cardozo part of the Unity Network; it 
is about 2 or 3 miles from here. And what one saw there, what I 
saw there day to day was a population that, were it not for 
that health center, would be in the emergency room.
    There were not private providers in the neighborhood and to 
the extent there were, they weren't really prepared to deal 
with the clinical needs, the language needs, the support needs 
of this population. Health centers, Unity here in DC and others 
around the country, have built-in, hardwired in social work, 
mental health, and a variety of services that typify the kinds 
of needs that our population had.
    So it represents, at its best, a one-stop shop which is the 
spirit of primary care, but particularly attuned to the kind of 
neighborhood, the kind of population that you are working with. 
Without that, the emergency room would have been the recourse 
if care was to be delivered at all.
    Senator Warren. Thank you. Miss Kuenning.
    Ms. Kuenning. Yes, thank you.
    I would characterize that what we're doing in Vermont is, 
working toward a redesign of both the finance and the delivery 
system, and the community health centers are really part of 
that. There were acts that came out of the State house and all 
of them made primary care centric.
    Part of that is the financing, which is you are going to do 
some kind of shared savings, or a global payment, or bundled 
payment. Then you are also going to change, with regard to the 
delivery system, in terms of ACO's, and that is your 
relationship with mental health and specialists so that you are 
not aligning in terms of your governance, but you are aligning 
with regard to the total medical expense. So you are 
responsible for that patient's expense, and it is changing the 
way that we do business. That we are not really doing it based 
on the volume of care, but doing it and being paid based on 
value. And that whole system is being done at many community 
health centers across the Nation.
    Actually, Blackstone Valley is a great example. I am sorry 
the Senator left, but it is a great example of how they 
redesigned the visit to actually have the providers working at 
the top of their scope, bringing in more assistants to the 
nurses and to the health centers' physicians, and they saved 
over 1 year, $1 million just at one community health center 
looking at total medical expense. But that requires having 
electronic medical records and claims data so that you can 
actually see where your patients go. Because when you are at 
the health center, you have a medical record of where they have 
come to see you, but you don't have any experience of where 
they are going in terms of the hospital, or to the emergency 
room, or to mental health.
    So this whole concept of ACO, as long as it is primary care 
centric, really aligns the thinking about both financing and 
delivery for our patients so that we are thinking about the 
total medical expense, and making interventions in the primary 
care that will matter both in terms of their outcomes and the 
finances.
    Senator Warren. Thank you. Enormously valuable. So it is an 
estimate. I am sorry, Mr. Chairman.
    This estimate that we've got a $24 billion savings from the 
current community health centers, in part is coming from 
keeping people out of emergency rooms, in part is coming, I 
assume, from integrated care. As Dr. Reinhardt talks about 
different kinds of providers. But it is also coming from these 
innovative approaches to care.
    Ms. Kuenning. Right, and a lot of the patients under 
medical home work--in Vermont we have a concept that is called 
the Blueprint, and it is really thinking about chronic care 
management. How do you really take somebody that has a higher 
prevalence of diabetes, or hypertension, or asthma and really 
manage their care to keep them out of the emergency room, keep 
them out of the hospital and they are inpatient, as well as 
returning to the hospital? So it is about really focusing in on 
the patient rather than the delivery system.
    Senator Warren. Thank you very much.
    Senator Sanders. Thank you, Senator Warren.
    Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman. Again, thank you 
for the focus of this hearing. The title sort of speaks 
volumes, ``30 Million New Patients and 11 Months To Go.''
    Certainly our States have different experiences as we move 
forward in terms of the level of uninsuredness, the level of 
preparation with primary care providers, the distribution of 
those providers throughout the State.
    I apologized earlier for having to step out to attend 
another organizational meeting of one of my other committees, 
and so, I missed some of your testimony. But I hinted in my 
opening statement that I would like to hear a little bit more 
about your opinions and the level of knowledge on the impact of 
the non-remunerative factors in increasing the supply of 
primary care practitioners.
    I think about the anecdotal information I hear as medical 
students are going through their rotations and observing the 
specialties, as well as joining primary care settings. And they 
are observing mentors and teachers with different levels of 
autonomy, different levels of flexibility. I think about the 
difference in experience that one might have if they are in a 
setting where they are modeling a patient-centered medical home 
versus other settings that would be for service, more 
traditional payment systems. You know, how much is their mentor 
and teacher on-call? Every other night, is it more reasonable?
    So I am wondering about the level of knowledge of how these 
non-compensatory factors play into the decisionmaking to 
specialize or to go into primary care as students have these 
observations and are looking to the future of the way we design 
medicine?
    Dr. Mullan, I understand you did raise that briefly in your 
testimony. I wonder if you would start.
    Dr. Mullan. Thank you, Senator Baldwin. Could we spend the 
afternoon on it? It is an important topic.
    Senator Baldwin. I would love to.
    Dr. Mullan. I will be very quick.
    The culture, as I have called it, of medical schools and 
teaching hospitals over the years, for good reasons, has 
developed a very reductionist, research-oriented, subspecialty-
oriented culture. All of our medical schools have that element 
to them. Some do better in terms of local accountability, local 
focus.
    I would like to see every medical school have a workforce 
plan. I travel often to medical schools and say, ``What is your 
geography? What is your catchment area?'' State schools do a 
little better. They say, ``Our State,'' but even that is kind 
of vague. When a school has a fiduciary, a focus, they do much 
better and there are a number of schools who do that, Southern 
Illinois being an example.
    A very new model of changing the culture is an osteopathic 
medical school in Phoenix, the A.T. Still College of Medicine. 
They now do 1 year on campus for the basic sciences. They take 
their class, then for the last 3 years and distribute them to 1 
of 11 community health centers, and they do all their teaching, 
all of their clinical medicine in a community health center 
working with local or regional hospitals. That is really 
breaking the mold; one school doing that.
    There are other experiments underway, but we have 10 of our 
leading universities that don't even have family practice 
departments that are sort of saying, ``That is somebody else's 
problem.''
    These issues are core to the economy of this country, the 
health of this country, and the nature of the physicians that 
we produce. And I think, in general, medical schools have not 
taken this as a challenge. There is a great deal that could be 
done and we could spend the afternoon on it, but that is just a 
sample of possibilities.
    Senator Baldwin. I don't know if any of our other witnesses 
would like to comment on this. I am particularly interested in 
knowing how much do we know about this rather than the 
anecdotal sharing that we hear?
    Professor Reinhardt.
    Dr. Reinhardt. The Macy Foundation in 2009, or even later, 
published a really comprehensive report on this issue, on the 
whole workforce issue and listed these nonfinancial factors.
    One of them is the background of the student. That people 
from rural areas are more likely to go there from inner city, 
or people who sort of demonstrate that they are interested in 
this. And so through the admissions process, you could probably 
rearrange the classes; no guarantee, but nevertheless, you 
could go there.
    Part of it is, of course, the culture. I have read about 
that also that one of the Senators mentioned, ``You're too 
smart; you shouldn't go into primary care.''
    One way, perhaps, to do this is through the graduate 
medical education support. Most economists don't actually think 
it is warranted. That actually these residents are cheap labor 
to a hospital, but you could differentiate and give a teaching 
hospital more if they develop programs that specifically 
acculturize students into this. So that the residency is in 
community centers and that there are first rate faculties who 
do mentor them.
    I think medical schools react very much like everyone else 
to the money, which is through the direct graduate medical 
education and indirect at them without really asking much in 
return.
    Senator Sanders. Thank you, Senator Baldwin.
    Senator Murphy.
    Senator Murphy. Thank you very much, Mr. Chairman.
    I worry a little bit about our ability to micromanage this 
problem, and I think a lot of the ideas we are talking about 
are incredibly important. But whether it is rate setting or 
loan forgiveness programs, I am sometimes more attracted to 
ideas that sort of reset the marketplace itself, to give the 
marketplace more reason to invest in primary care.
    One of the themes we have talked about is that this new 
delivery system that is potentially based on bigger systems of 
care, accountable care organizations, more physicians working 
for salary rather than for fee-for-service, may help solve this 
prestige issue. Because if you are in charge of specialists 
instead of just referring out to specialists then you feel a 
little bit better about your work.
    But there is probably also a theory that says that if you 
have more primary care doctors working for organizations rather 
than working on their own, and you have an ACO that is getting 
a big bundled payment to take care of a big group of patients, 
then the ACO is going to actually be incentivized to pay its 
primary care physicians more. Because that is going to help 
them manage their costs, and help them keep the delta of 
whatever they save, and you already see that happening. You see 
more primary care physicians now going to work for hospitals. 
At least in Connecticut, you are seeing hospitals starting to 
buy up primary care groups, and you are starting to see more of 
them working for salary.
    I guess I pose that as the question here, is there a 
potential that as you shift a delivery system to have more 
integrated systems of care, more accountable care 
organizations, that there will be an incentive for the 
organizations to pay primary care doctors more, separate and 
aside from decisions that we may make on reimbursement?
    Maybe I will put this to the economist first as to what, 
Dr. Reinhardt, what you think ultimately the shift in delivery 
system may mean for the kind of rates that primary care doctors 
get paid?
    Dr. Reinhardt. Well, the great hope is that it will do 
exactly that, that a bundled payment, ideally there should be 
capitation for chronic or bundled payment for episodic care. 
That somebody is in charge of managing the money from that 
bundle, and will realize that having a heavy component of 
primary care is cost minimizing, and therefore profitable in 
that way.
    I once talked to a group, North Texas Medical Group, and 
they were an integrated IPA, connected with a computer, who 
took risks. The hospital piece was done by Pacific Health Care 
and they did the medical piece; I think also the drugs. They 
told me, they had already tilted the fee schedule internally of 
primary care substantially and paid the specialists less 
because they were at-risk for a capitation that they got.
    It might be worth it to talk to them. They are now, 
actually, an ACO. They were one of the first pioneer ACO's. It 
might be interesting to talk to them or invite them to tell you 
what they experienced.
    Senator Murphy. Dr. Wilper, you expressed skepticism based 
on the literature as to the cost savings medical home models 
may provide. ACO's are a little bit different.
    What do we know about the ability for ACO's with perhaps 
primary care specialists, primary care doctors, elevated to get 
cost savings that maybe we have not seen in some of the early 
rollouts of medical home models?
    Dr. Wilper. To my knowledge we know, actually, very little 
about how ACO's will reduce costs or what their effects on 
costs will be.
    What we could look to is the model of care where I 
practice, which is in the VA, which is sort of the ultimate 
integrated care model, right. We have people for life after 
they return from service and do a very good job taking care of 
them. It is my understanding, although I do not know this 
literature in its entirety, that we provide care that is of 
similar or better quality to most private institutions in the 
United Stats at costs that are much lower.
    Senator Murphy. One final question to you, Dr. Wilper. 
You've got a provocative statement at the end of your testimony 
about the interests that the AMA may be serving here. Can you 
elaborate a little bit on that?
    Dr. Wilper. Happy to, thank you.
    My personal position on this is that this subcommittee of 
the AMA wields inordinate power over physician rate setting, 
and I know we are trying to get away from remuneration, but the 
Federal Government is sending a very clear price signal to 
students about what they want them, what the Federal Government 
would like them to practice in. And I think to minimize that is 
a little bit dangerous.
    My personal view is that physician groups treat public 
payers as though they were their own entitlement programs 
rather than a source of coverage for the U.S. population.
    Senator Sanders. Thank you, Senator Murphy.
    Senator Casey.
    Senator Casey. Thank you, Mr. Chairman.
    I have two questions. One would be more specific, and the 
second is more broad-based for the whole panel. We appreciate 
your testimony here today.
    The specific question--and I will direct it to Dr. Mullan 
and Dr. Fegan or anyone in between who wants to comment on 
this--relates to health care as it relates to children. Our 
child advocates always remind us that in the context of health 
care and otherwise, children are not small adults. They are 
different. We have to treat them differently and have 
strategies that recognize that reality.
    When we were going through the debate about health care in 
this committee in the summer of 2009, Senator Dodd and I worked 
together, and he was really the lead on this, to design 
elements in the bill that would speak directly to that reality.
    We had one, in particular, that spoke to the workforce. I 
am looking at section 5203, Health Care Workforce Loan 
Repayment Programs, ``Establishing a loan repayment program for 
pediatric subspecialists and providers of mental and behavioral 
health services to children and adults who will be working in 
health professional shortage areas,'' and it goes on from 
there. But that was our intent. We were successful in that.
    But I am wondering, now that we are beyond just the 
theoretical stage, and we have a piece of legislation which is 
in place and continuing to be implemented in this broader topic 
of primary care, are there steps we need to take to make sure 
that that primary care physician, and the services and 
treatments that come with it, are available for children?
    Doctor, I don't know if you have a thought about that.
    Dr. Mullan. Thank you, Senator Casey.
    Your observations about children are, of course, on point. 
Children are more vulnerable, they are poorer, and they are 
more underserved than the rest of the population as a matter of 
analysis of the benefits that come to children. We are 
definitely weighted toward the elderly in terms of benefits, 
public benefits, and that creates a challenge, particularly 
with the ACA principles of trying to be inclusive and bring 
kids in.
    I think we are all optimistic that, particularly with the 
Medicaid expansion where it occurs, kids will get good benefits 
or better benefits than they have in the past.
    The specific issues in pediatrics, generally the notion of 
primary care does not include subspecialties. I think probably 
the correct notion is underserved or under-populated 
disciplines, which primary care is the heart of it, but there 
are some others. General surgery, for instance, we have a 
growing trend of shortage.
    Pediatric subspecialties, the argument is made and I do not 
know the arguments well, but they have been pretty well 
substantiated that there is not the tendency of pediatricians 
to subspecialize. There aren't as many training programs, and 
we probably do need more. So the spirit of the legislation that 
was encouraging that, makes sense in terms of workforce 
development.
    I would not want to see the profile where well over two-
thirds of adult internists are specializing and going into 
hospital medicine. Hospitalists, which is a good development, 
but it takes them out of the primary care field. So there is 
that challenge.
    By and large, though, pediatrics has had a good market. 
Medical students like it. They tend to go into it in good 
numbers. So pediatrics overall is not short, but some of the 
subspecialties are.
    Senator Casey. Doctor, from the vantage point of Chicago 
and the pediatric workforce.
    Dr. Fegan. The issue of pediatric specialists, it is 
because pediatrics tends to be a loss leader for hospitals. So 
the number of specialists that are pediatric specialists that 
are available at general hospitals is very low.
    In Chicago, we actually have, I would say, a glut of 
pediatric hospitals and so the specialists are generally 
available. But I know that in a more rural community, this is a 
tremendous challenge in terms of providing access for those 
children, complicated children who need multidiscipline 
support. Providing those services for them is increasingly 
difficult today and encouraging people not only to the 
specialties, not that they are underrepresented, but they are 
poorly distributed in terms of where the areas of need are for 
that.
    Senator Casey. I will hold my second question, but anyone 
in the 15 seconds we have want to comment on this question or 
not?
    Senator Sanders. Thank you, Senator Casey.
    Let me conclude by thanking all of the Senators who 
participated in this hearing. I think the large turnout tells 
you how seriously many of us feel about this issue.
    Most importantly, I want to thank all of our panelists for 
their wonderful testimony and to tell you that we are going to 
listen very seriously to what you had to tell us. And I 
especially want to thank those who came from such far 
distances, Ms. Decklever and Dr. Wilper, but thank you all very 
much for your help.
    This hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

 Prepared Statement of the American Academy of Family Physicians (AAFP)

    The American Academy of Family Physicians (AAFP), which represents 
105,300 family physicians and medical students, is pleased to submit 
the following statement for the record of the Health, Education, Labor, 
and Pensions Committee's subcommittee hearing entitled, ``30 Million 
New Patients and 11 Months to Go: Who Will Provide Their Primary 
Care?''
    According to the Institute of Medicine, primary care is defined as:

          The provision of integrated, accessible health care services 
        by clinicians who are accountable for addressing a large 
        majority of personal health care needs, developing a sustained 
        partnership with patients, and practicing in the context of 
        family and community.

    Unfortunately, our current health care system is not consistent 
with this definition. Instead, the system is fragmented, uncoordinated, 
wasteful and expensive.
    Every day, family physicians and other primary care doctors see the 
results of our poorly functioning system of care. Duplicative and 
unnecessary tests are ordered. Diseases remain undiagnosed and 
untreated until they result in acute conditions. Patients with multiple 
chronic illnesses are shunted from one specialist to another, each one 
of whom treats only one of the diseases. And far too little attention 
is paid to prevention and wellness services.
    That is why the AAFP consistently has supported efforts to increase 
the role of primary care physicians in the delivery of health care. 
Primary care provides high-quality, coordinated, cost-effective care to 
patients employing a whole-person approach.
    As such, efficient and effective health systems result when primary 
care physicians are the usual source of care for people. Family 
physicians and other primary care physicians can help patients prevent 
disease by improving their healthy behavior. They can aid them in 
managing their chronic diseases, especially when the patient has more 
than one chronic illness, and refer to a subspecialist, when necessary. 
And family physicians and other primary care physicians can help 
patients navigate the complex world of hospitals and other health 
institutions.
    Health delivery reform requires considering how our dysfunctional 
health care system can become one that serves the patient by 
coordinating care over time to prevent disease, managing chronic 
conditions and providing immediate and targeted care for an acute 
condition when it arises.
    Consequently, the availability of an adequate primary-care 
physician workforce is essential to achieving these aims. 
Unfortunately, this workforce is stagnant, if not dwindling, which 
raises significant concerns about the viability of the Nation's health 
care system.
    The Commission on Graduate Medical Education (COGME) in its 20th 
report (December 2010) offered specific recommendations and goals for 
building an adequate primary-care physician workforce.
    COGME cited compelling evidence that health care outcomes and costs 
in the United States are strongly linked to the availability of primary 
care physicians. For each incremental primary care physician (PCP), 
there are 1.44 fewer deaths per 10,000 persons. Patients with a regular 
primary care physician have lower overall health care costs than those 
without one.
    As a result of a number of factors including compensation, practice 
environments, and experience in medical school, there is a shortage in 
the number of primary care physicians, particularly those with the 
ability to care for adults and their associated chronic disease burden. 
This shortage is especially critical now in the context of health care 
reform objectives that will increase the need for primary care 
physicians. As a result of passage of the Patient Protection and 
Affordable Care Act (ACA), as many as 32 million previously uninsured 
Americans will be eligible for coverage. Such an influx of previously 
uninsured and likely underserved individuals will undoubtedly increase 
the demand for primary care services nationwide.
    At the present time, 32 percent of physicians in the United States 
are primary care providers, of which 12.7 percent are family 
physicians, 10.9 percent general internists, 6.8 percent general 
pediatricians, and 1.6 percent in general practice. The current U.S. 
primary-care physician workforce is in jeopardy of accelerated decline 
because of decreased production and accelerated attrition. Decreased 
production from graduate medical education is a reflection of the 
choices made by young physicians and by teaching hospitals that are 
associated with a growing income disparity between primary care 
physicians and other specialties. Over the last several years, a 
variety of policies have been adopted to reduce this disparity and the 
new Affordable Care Act takes steps to reduce it even further. 
Decreased medical student interest in primary care is caused by 
multiple factors including heavy workload, insufficient reimbursement, 
the subtle persuasion in medical school away from primary care, and a 
lack of strong primary care role models.
    Attrition also will be augmented as the primary-care physician 
workforce continues to age. At the present, there are 242,500 primary 
care physicians in the United States and almost one quarter (55,000) 
are age 56 or older. The likelihood is that many of these physicians 
will retire within the next decade.
    The AAFP believes policies and programs should be implemented to 
support the practice of primary care, and to increase the supply of 
primary care physicians. Fee-for-service payment for physician services 
is biased in favor of hospital-based and procedural services and does 
not provide appropriate incentives for the practice of primary care, or 
to increase the supply of primary care physicians. Policy changes 
should be dramatic to remedy these legacy biases and have immediate 
effect.
    Specifically, policies should be implemented that raise the 
percentage of primary care physicians (i.e., family physicians, general 
internists, and general pediatricians) among all physicians to at least 
40 percent from the current level of 32 percent, a percentage that is 
actively declining at the present time. The achievement of this goal 
should be measured by assessing physician specialty once in practice, 
rather than at the start of postgraduate medical training.
    In order to achieve the desired ratio of practicing primary care 
physicians, the average income of these physicians must achieve at 
least 70 percent of the median income of all other physicians. 
Currently this average is in the 50 percent range. If primary care 
physicians are paid differently and better, in the context of the 
physician-led Patient Centered Medical Home, costs should decline. 
Investment in primary care office practice infrastructure will also be 
needed to cope with the increasing burdens of chronic care and to 
provide comprehensive, coordinated care. Payment policies should be 
modified to support both of these goals.
    Accordingly, Congress, CMS, and private insurers should embrace 
reimbursement mechanisms that enhance primary care physician income 
including:

    1. Preferential increases in fee-for-service payments for primary 
care services.
    2. Support for coordination in primary care practices through per-
member, per-month care management fees.
    3. Financial rewards for improvements in performance measures.
    4. Reward the Patient-Centered Medical Home (PCMH) financially when 
its physicians meet the four essential functions (first contact access, 
patient-focused care over time, comprehensive care, and coordinated 
care) and the three corollary functions (family orientation, community 
orientation, and cultural competency) and when measures of process and 
quality are met and improved. The physician-led PCMH should be 
supported as the construct for the practice environment that achieves 
optimal care coordination and integration, for use of health 
information technology, for enhanced access, and for appropriate 
payment. Study levels of funding necessary to sustain the physician-led 
PCMH model and its impact on costs in settings other than physicians' 
offices.
    5. Implement payment models that bundle payments for full-service 
accountable care organizations and incentivize the development of 
community health care organizations that provide the four essential 
functions of primary care through collaboration of primary care 
physicians, public health, care coordination organizations, and mental 
health organizations.

    Medical schools and academic health centers should develop an 
accountable mission statement and measures of social responsibility to 
improve the health of all Americans. This includes strategically 
focusing and changing the processes of medical student and resident 
selection and altering the design of educational environments to foster 
a physician workforce of at least 40 percent primary care physicians 
and a health system that meets societal needs.
    In order to accomplish the transformation of the educational 
environment, medical schools and academic health centers should:

    1. Increase and sustain the involvement of primary care physicians 
through all levels of medical training;
    2. Support student primary care interest groups;
    3. Recruit, develop, and support community physician faculty 
members; and
    4. Require student participation in rural, underserved, and global 
health experiences.
    5. Expand medical school class size strategically to address the 
primary care physician deficit and maldistribution issues.
    6. Reform admission processes to increase the number of qualified 
students more likely to choose a primary care specialty and to serve 
medically vulnerable populations.
    7. Recruit and retain underrepresented minority students and 
faculty members.
    8. Require block and longitudinal experiences of sufficient length 
that medical students clearly understand the essential functions of 
primary care and the medical home.
    9. Collaborate with local communities and distribute resident 
training accordingly, support reductions in physician income 
disparities, and lead in the development of new models of practice like 
the physician-led PCMH.

    The Federal and State Government contributions to this effort would 
include:

    1. Providing increased incentives for physicians who practice 
primary care or other critical specialties in designated health 
workforce shortage areas.
    2. Substantially enhancing funding for scholarships, loans, loan 
repayment, and tuition waiver programs to lower financial obligations 
for students who plan and pursue careers in primary care.

    Graduate Medical Education (GME) payment and accreditation policies 
and a significantly expanded title VII program should also support the 
goal of producing a physician workforce that is at least 40 percent 
primary care.
    To accomplish this objective, Congress, the Administration, 
Department of Health and Human Services, and accrediting agencies 
should:

    1. Change regulations to support more training in outpatient 
settings and experimentation with practice models to prepare residents 
appropriately for an evolving contemporary health care environment;
    2. Strategically increase the number of new primary care GME 
positions and programs to accommodate the increased production of 
medical school graduates and respond to the need for a workforce 
composed of at least 40 percent primary care physicians;
    3. Increase training in ambulatory, community, and medically 
underserved sites by promoting collaboration between academic programs 
and Federally Qualified Health Centers (FQHCs), rural health clinics 
(RHCs), and the National Health Service Corps (NHSC);
    4. Implement new methods of funding to include GME funding that is 
not calculated according to Medicare beneficiary bed-days, and 
substantial expansion of title VII funding specifically for community-
based training;
    5. Provide financial incentives for GME that directs funding to 
primary care residency programs, educational consortia, or non-hospital 
community agencies to provide the proper incentives for ambulatory and 
community-based training;
    6. Explore augmenting payments for primary care residents, 
including differentially higher salaries and early loan repayments, to 
decrease the negative impact of educational debt on primary care 
specialty choice;
    7. Fund all primary care residency programs at least at the 95th 
percentile level of funding for all programs (using total direct 
medical education (DME) and indirect medical education (IME) payments 
as a basis); and
    8. Reward teaching hospitals, training programs, and community 
agencies financially on the basis of the number of primary care 
physicians produced, to be determined by specialty in practice and not 
at the initiation of training.

    Last, to enable policy development predicated on data and to 
address geographic and socioeconomic maldistribution of physician 
supply, Congress and the Administration should:

    1. Ensure funding for the Healthcare Workforce Commission included 
in ACA;
    2. Ensure funding of the National Health Service Corps at the $1.15 
billion amount authorized by the ACA so that the NHSC can recruit more 
primary care physicians, provide greater support of scholarship 
recipients, create special learning opportunities and networks for 
scholarship recipients and early loan repayers, and forge formal 
affiliations with academic institutions and training programs;
    3. Increase substantially the funding for Title VII, section 747, 
in Primary Care Medicine and Dentistry cluster grants;
    4. Implement programs to increase funding by the Agency for 
Healthcare Research and Quality (AHRQ), National Institutes of Health 
(NIH), and private research enterprises for projects that stimulate 
primary care and community-based research and emphasize methodologies 
such as population-based ecological and cluster studies, qualitative 
behavioral studies, and comparative effectiveness research; and
    5. Increase funding for Community Health Centers (CHCs) that are 
committed to training students and residents; and increase funding for 
Area Health Education Centers (AHEC) programs to improve existing 
programs, support new programs, and support innovative funding 
proposals that promote the practice of primary care in medically 
underserved areas.

    The AAFP appreciates the opportunity to provide family medicine's 
views on the importance of an adequate primary-care physician workforce 
in the development of an efficient and effective U.S. health delivery 
system. In particular, we agree with the evidence that suggests that 
health system reform can be successful only if it is built on a base of 
primary care physicians. To this end, we recommend:

    1. Elimination of the flawed sustainable growth formula in the 
Medicare physician fee schedule and support alternative delivery 
systems including the physician-led patient-centered medical home;
    2. Full funding for the National Physician Workforce commission, 
title VII and the National Health Service Commission;
    3. Increased availability of scholarships and loan repayment for 
medical students choosing to practice as primary care physicians; and
    4. Support for innovation in graduate medical education funding, 
including allowing GME dollars to ``follow the resident'' and 
reimbursement for residency sponsoring entities other than hospitals.

    Thank you for the opportunity to provide recommendations on this 
critical topic.

        Prepared Statement of the American Academy of Physician 
                           Assistants (AAPA)

                                SUMMARY

    Physician assistants (PAs) are one of three healthcare professions 
providing primary medical care in the United States today, and are an 
integral part of the solution to healthcare workforce shortages.

     In 2010, over 300 million patient visits were made to 
physician assistants.
     PAs practice in virtually every area of medicine. 
Approximately one-third of all PAs practice in primary care. PA 
education is based on the primary care model of care, providing greater 
flexibility for PA practice upon graduation.
     By design, PAs always work with physicians. Team-based, 
patient-centered medical care is a hallmark of the PA profession and a 
perfect fit for today's dynamically changing healthcare system.
     PAs serve as medical directors in rural health clinics, 
community health centers, and other federally qualified health centers. 
In rural and other medically underserved communities, a physician 
assistant may be the only health care professional available.
     PAs provide first contact, continuous, and comprehensive 
care for patients throughout the United States. PAs currently manage 
care for patients in primary care, chronic care, and other areas of 
medicine.
     Studies show that in a primary care setting, PAs can 
execute at least 80 percent of the responsibilities of a physician with 
no diminution of quality and equivalent patient-care satisfaction.
     By virtue of PA education in primary care and the ability 
of PAs to work in all medical and surgical specialties, PAs expand 
access to care in medically underserved rural and urban communities.

    In addition to the need to produce more primary care physicians and 
nurses, it is critical that Congress support PA educational programs as 
they develop strategies for addressing healthcare workforce challenges.

     The Title VII, Public Health Service Act's, Health 
Professions Program is successful in training health care professionals 
for practice in medically underserved communities. Funding for PA 
educational programs through title VII should be a priority.
     The single largest barrier to PA educational programs 
educating more PAs is a lack of clinical training sites. Attention must 
be directed to investing in the number of these sites, including loan 
repayment for preceptors in primary care medical practices and/or the 
increased use of VA facilities as clinical training sites for PA 
educational programs.
     Funds must be made available to increase the number of 
faculty at PA educational programs. Eligible PA students are being 
turned away because of the lack of faculty and clinical sites.
     Federally supported student loans and increased 
opportunities through the National Health Service Corps are key to 
attracting PA students and clinicians to primary care.
     Graduate medical education funding should be used to 
support the educational preparation of physician assistants in 
hospitals and outpatient, community-based settings.
     The President's initiative to create a pathway for 
veterans to PA education is particularly well-suited to support the 
increased presence of PAs in rural areas. Veterans are 
disproportionately from rural areas and are well-equipped to return to 
rural communities and provide quality medical care as PAs. The 
initiative is a good healthcare workforce development model that 
warrants ongoing support.

    Physician assistants are key to healthcare workforce shortages. 
However, to be fully utilized and add maximum efficiency of team-based 
medical care, technical changes must be made to Federal programs to 
provide full transparency of the medical care (and cost of medical 
care) provided by PAs. Additionally, current barriers to care that 
exist in Federal law must be addressed.

     Medicare and Medicaid must be updated to fully enroll PAs.
     The Medicare statute must be amended to allow PAs to order 
home health and hospice care, as well as to provide hospice care for 
Medicare beneficiaries.
     The Federal Employee Compensation Act needs to be updated 
to allow PAs to diagnose and treat Federal employees who are injured on 
the job.
                                 ______
                                 
    On behalf of the nearly 90,000 certified physician assistants (PAs) 
represented by the American Academy of Physician Assistants (AAPA), 
thank you for the opportunity to submit written testimony for the 
hearing record of the Senate Subcommittee on Primary Health and Aging, 
Committee on Health, Education, Labor, and Pensions.
    As one of three professions (medicine, nursing, and physician 
assistants) with a primary role in healthcare delivery, the growth of 
the physician assistant workforce is an integral part of addressing our 
Nation's future needs.
    The Affordable Care Act has brought unprecedented attention to 
ensuring the supply of primary healthcare professionals is adequate to 
address the future needs of patient care. When ACA is fully 
implemented, up to 32 million currently uninsured patients will have 
healthcare coverage, requiring an accompanying growth in the healthcare 
workforce. The Bureau of Labor Statistics projects 39 percent increase 
in demand for physician assistants from 2008 to 2018.
    The PA profession with its generalist education, commitment to 
team-based practice, and relatively short training is ideally 
positioned to address both the short-term and long-term needs of the 
Nation. However, those needs can be met by PAs only if the profession 
is able to substantially increase the number of graduates over the next 
10 years.

                          PHYSICIAN ASSISTANTS

    Physician assistants are licensed health professionals, or in the 
case of those employed by the Federal Government, credentialed health 
professionals, who:

     practice medicine in teams with physicians,
     exercise autonomy in medical decisionmaking,
     provide a comprehensive range of diagnostic and 
therapeutic services, including performing physical exams, taking 
patient histories, ordering and interpreting laboratory tests, 
diagnosing and treating illnesses, assisting in surgery, writing 
prescriptions, and providing patient education and counseling, and
     may also work in educational, research, and administrative 
settings.

    PAs are located in almost all health care settings and in every 
medical and surgical specialty. PAs are covered providers within 
Medicare, Medicaid, Tri-Care, and most private insurance plans. 
Additionally, PAs are employed by the Federal Government to provide 
medical care, including the Department of Defense, the Department of 
Veterans Affairs, the Public and Indian Health Services, the State 
Department, and the Peace Corps.

                AMERICAN ACADEMY OF PHYSICIAN ASSISTANTS

    The AAPA represents PAs throughout the United States, and is the 
only national organization representing PAs in all medical specialties. 
The mission of the Academy is to promote quality, cost-effective, 
accessible health care, and to promote the professional and personal 
development of physician assistants. The Academy assures competency of 
PAs through active involvement in the development of educational 
curricula and accreditation of PA programs, provides continuing medical 
education, conducts PA-related research, and educates the general 
public about the PA profession.

               OVERVIEW OF PHYSICIAN ASSISTANT EDUCATION

    The PA educational program is modeled on the medical school 
curriculum, a combination of classroom and clinical instruction. The PA 
course is rigorous and intense. The average length of a PA education 
program is 27 months.
    Admission to PA school is highly competitive. Applicants to PA 
programs must have completed at least 2 years of college courses in 
basic science and behavioral science as prerequisites, analogous to 
premedical studies required of medical students.
    PA programs are located at schools of medicine or health sciences, 
universities, teaching hospitals, and the Armed Services. All PA 
educational programs are accredited by the Accreditation Review 
Commission on Education for the Physician Assistant, an organization 
composed of representatives from national physician groups and PAs.
    The first phase of the program consists of intensive classroom and 
laboratory study, providing students with an in-depth understanding of 
the medical sciences. More than 400 hours in classroom and laboratory 
instruction are devoted to the basic sciences, with over 70 hours in 
pharmacology, more than 149 hours in behavioral sciences, and more than 
535 hours of clinical medicine.
    The second year of PA education consists of clinical rotations. On 
average, students devote more than 2,000 hours or 50-55 weeks to 
clinical education, divided between primary care medicine and various 
specialties, including family medicine, internal medicine, pediatrics, 
obstetrics and gynecology, surgery and surgical specialties, internal 
medicine subspecialties, emergency medicine, and psychiatry. During 
clinical rotations, PA students work directly under the supervision of 
physician preceptors, participating in the full range of patient care 
activities, including patient assessment and diagnosis, development of 
treatment plans, patient education, and counseling.
    After graduation from an accredited PA program, the physician 
assistant must pass a national certifying examination jointly developed 
by the National Board of Medical Examiners and the independent National 
Commission on Certification of Physician Assistants. To maintain 
certification, PAs must log 100 continuing medical education credits 
over a 2-year cycle and reregister every 2 years. Also to maintain 
certification, PAs must take a recertification exam every 6 years.
    The majority of PA educational programs offer master's degrees, and 
the overwhelming majority of recent graduates hold a master's degree.

               TITLE VII SUPPORT OF PA EDUCATION PROGRAMS

    The title VII support for PA educational programs is the only 
Federal funding available, on a competitive application basis, to PA 
programs.
    Targeted Federal support for PA educational programs is authorized 
through section 747 of the Public Health Service Act. The funds are 
used to encourage PA students, upon graduation, to practice in 
underserved communities. These goals are accomplished by funding PA 
education programs that have a demonstrated track record of: placing PA 
students in health professional shortage areas; exposing PA students to 
medically underserved communities during the clinical rotation portion 
of their training; and recruiting and retaining students who are 
indigenous to communities with unmet health care needs.
    The Title VII program works.

     A review of PA graduates from 1990-2009 demonstrates that 
PAs who have graduated from PA educational programs supported by title 
VII are 67 percent more likely to be from underrepresented minority 
populations and 47 percent more likely to work in a rural health clinic 
than graduates of programs that were not supported by title VII.
     A study by the UCSF Center for California Health Workforce 
Studies found a strong association between physician assistants exposed 
to title VII during their PA educational preparation and those who ever 
reported working in a federally qualified health center or other 
community health center.

    The PA programs' success in recruiting underrepresented minority 
and disadvantaged students is linked to their ability to creatively use 
title VII funds to enhance existing educational programs. Without title 
VII funding, many special PA training initiatives would be eliminated. 
Institutional budgets and student tuition fees are not sufficient to 
meet the special, unmet needs of medically underserved areas or 
disadvantaged students. The need is very real, and title VII is 
critical in leveraging innovations in PA training.
          need for increased targeted support for pa education
    Federal support must be directed to PA educational programs to 
stimulate growth in the PA profession to meet the needs of universal 
health care coverage. Targeted funding should be directed to:

     The use of title VII funds for recruitment and loan 
repayment for faculty in PA educational programs.
     Incentives to increase clinical training sites for PA 
education.
     Federally backed loans and loan repayment programs for PA 
students.
     Graduate Medical Education support for the education of 
PAs in hospitals and community-based settings.
     Expansion of the President's initiative to create a 
pathway for veterans to PA educational programs.

              ELIMINATING BARRIERS TO CARE IN FEDERAL LAW

    Eliminating current barriers to medical care provided by PAs that 
exist in the Medicare, Medicaid, and the Federal Employees Compensation 
Act (FECA) laws would do much to expand access to needed medical care, 
particularly for patients living in rural and other medically 
underserved areas.

     AAPA believes that the intent of the 1997 Balanced Budget 
Act was to cover all physician services provided by PAs at a uniform 
rate. However, PAs are still not allowed to order home health, or 
hospice care, or provide the hospice benefit for Medicare 
beneficiaries. At best, this creates a misuse of the patient's 
physician's, and PA's time to find a physician signature for an order 
or form. At worst, it causes delayed access to care and inappropriate 
more costly utilization of care, such as longer stays in hospitals. For 
patients at end-of-life, it creates an unconscionable disruption of 
care. (A 2009 report by the Lewin Group estimates an overall cost 
savings through implementation of the PA Medicare provisions.)
     Most States recognize services provided by PAs in their 
Medicaid Programs, but it is not required by law. Consequently, some 
State Medicaid Directors pick and choose which services provided by PAs 
they will cover. Others impose coverage limitations not required by 
State law, such as direct supervision by a physician.
     Although nearly all State workers' compensation programs 
recognize the ability of PAs to diagnose and treat State employees who 
are injured on the job, the Federal program does not. As a result, 
Federal workers who are injured on the job may be rerouted to emergency 
rooms for workers' compensation-related care, rather than to go to a 
practice where the PA is the only available health care professional.

    The Medicare, Medicaid, and FECA statutes create Federal barriers 
to care that do not exist in State law. The barriers need to be 
eliminated to promote increased access to the quality, affordable 
medical care provided by PAs and to add efficiency to team-based care.

     NEED FOR TRANSPARENCY IN THE MEDICARE CARE AND REIMBURSEMENT 
                        FOR CARE PROVIDED BY PAS

    PAs contribute a unique role as part of medical teams in virtually 
all medical specialties and health care systems. However, the 
contribution of PAs and the physician-PA team are rarely captured in 
reporting systems. The AAPA strongly encourages Congress to encourage 
the development of patient-centered comparative effectiveness research 
to require that all public and private health care reporting systems 
identify medical services and payment for medical services provided by 
PAs. The Academy believes that a requirement of data systems to track 
medical care provided by PAs is essential to track the clinical and 
economic performance of PAs for issues related to cost-effectiveness, 
quality, and outcomes research; practice patterns; and to determine the 
volume of patient care services delivered for workforce projections.
    To encourage transparency, as well as increased accountability for 
medical care provided by PAs, AAPA recommends that:

     PAs be fully enrolled in Medicare by amending the Medicare 
statute to update payment services provided by PAs to allow for payment 
to the PA, just as payment is allowed for virtually every other 
healthcare professional recognized by Medicare;
     All State Medicaid programs enroll PAs, as opposed to 
reimbursing medical care provided by PAs through the physician; and
     The Medicare claims system be modified to require the 
identification of PA delivered services.

    A baseline for medical care provided by PAs will be increasingly 
important as the healthcare delivery system moves toward a model that 
relies more on team-based delivery of care in order to better evaluate 
the cost-effectiveness of team-based care.

    Thank you for the opportunity to submit a statement for the hearing 
record of 30 Million New Patients and 11 Months to Go: Who Will Provide 
Their Primary Care?
     American Association Colleges of Osteopathic Medicine (AACOM)
    The American Association of Colleges of Osteopathic Medicine 
(AACOM) is pleased to submit this statement for the record to the U.S. 
Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on 
Primary Health and Aging for the January 29, 2013 hearing, ``30 Million 
New Patients and 11 Months to Go: Who Will Provide Their Primary 
Care?'' AACOM commends subcommittee Chairman Bernard Sanders for 
convening this hearing on this extremely important issue.
    AACOM represents the Nation's 29 colleges of osteopathic medicine 
at 37 locations in 28 States. Today, more than 21,000 students are 
enrolled in osteopathic medical schools. One in five U.S. medical 
students is training to become an osteopathic physician. AACOM was 
founded in 1898 to support and assist the Nation's osteopathic medical 
schools, and to serve as a unifying voice for osteopathic medical 
education.

             OSTEOPATHIC MEDICAL EDUCATION AND PRIMARY CARE

    Osteopathic medical education (OME) has a long history of 
establishing educational programs for medical students and residents 
that target the health care needs of rural and underserved populations. 
Colleges of osteopathic medicine (COMs) have a standing commitment and 
focus on training primary care physicians, and osteopathic physicians 
have a special commitment to providing primary care, particularly to 
the Nation's rural and underserved communities. All osteopathic medical 
schools provide training in community-based settings, where students 
spend time in community hospitals, physician offices, and health care 
facilities such as Area Health Education Centers (AHECs) and Community 
Health Centers (CHCs) in which they are integrated into those 
communities. The majority of osteopathic medical schools are located 
outside of urban areas and have particular missions related to the 
underserved areas in which they are located.
    OME plays an extremely strong role in training future primary care 
physicians--many of whom will serve in workforce shortage areas. In 
each of the last three cohorts of osteopathic medical school graduates 
(2010-12), 32 percent of graduates indicated the intention to 
specialize in the primary care specialties of family practice, general 
internal medicine, and general pediatrics. For each year, an additional 
11 to 12 percent planned to specialize in emergency medicine, and 5 
percent in obstetrics and gynecology. From these same three classes, 
one-third of graduates indicated plans to practice in areas that are 
designated health care underserved/physician shortage areas.
    AACOM strongly believes that primary care should be an essential 
part of any foundation of a modern health care system. Any proposal 
that would displace physicians from this role would disrupt the health 
care delivery system and create obstacles to the development of the 
integrated, team-based system needed to maximize value, access, and 
quality. A medical education system that produces the kind of primary 
care physicians that are needed to work in a value-driven health care 
system should be a strong goal of medical education.

                          PHYSICIAN WORKFORCE

    There are nearly 70,000 active osteopathic physicians (DOs) 
practicing in the United States today, including those currently in 
graduate medical education (GME) (or internships, residencies, and 
fellowships). Of osteopathic physicians who have completed GME, 56 
percent are practicing in the primary care specialties of family and 
general practice, pediatrics and adolescent medicine, and general 
internal 
medicine (http://www.osteopathic.org/inside-aoa/about/aoa-annual-
statistics/Documents/2012-OMP-report.pdf).
    Currently, more than 20 percent of new U.S. medical students are 
training to be osteopathic physicians. By 2019, that number is expected 
to grow to 25 percent. Many current osteopathic medical students will 
pursue careers in primary care and many will practice in rural and 
underserved areas; these are areas that already face shortages of 
primary care providers.
    AACOM believes that GME funding should be more closely associated 
with specific workforce needs. With rising projections of physician 
shortages to meet the health care needs of a growing and aging 
population, AACOM supports the sustainable expansion of GME positions 
in areas of specialty need (e.g., primary care, geriatrics, general 
surgery) in which there are substantial current demand and anticipated 
growing shortages--especially in rural and underserved areas. AACOM 
believes that GME funding is critical to ensuring the stability and 
continuity of both the Nation's medical residency training programs 
that produce future physicians and the hospitals that provide care to 
the Nation's citizens.

   GRADUATE MEDICAL EDUCATION SUPPORTS PHYSICIAN WORKFORCE SHORTAGES

    The current number of GME positions funded by the Centers for 
Medicare & Medicaid Services (CMS) will not be sufficient to 
accommodate the number of medical school graduates seeking positions or 
the number of positions needed to offset projected physician workforce 
shortages; there is growing evidence of the need for community-based 
medical education to produce an outcome that will address the need for 
a primary care-based health care system that provides access and value 
to populations in rural and underserved areas, as well as to those 
areas traditionally well-served. Since osteopathic medical students who 
train in community-based institutions are more likely to practice in 
these areas, AACOM continues to support GME programs that expand the 
participation of community-based institutions. This is particularly 
important at a time when the number of osteopathic medical school 
graduates is growing and is expected to continue to grow in response to 
physician workforce shortages that exist and are projected over the 
next 5 to 15 years.
    AACOM understands the necessity of evaluating the process of and 
funding mechanism for future physician training, but we also firmly 
believe Congress must take into consideration the full spectrum of 
medical education in order to thoroughly understand the complexities of 
GME as appropriate avenues of reform are explored.

          THE ROLE OF INNOVATION IN TRAINING FUTURE PHYSICIANS

    AACOM believes that there are many potential innovative solutions 
that could address the challenges in the current GME system and 
recognizes that training needs to support developments leading to a 
patient-centered, team-based and value-driven system. It is important 
to note the strong connection between osteopathic medical colleges' 
training of students, which is patient-centered and geared toward 
primary care in community-based and non-hospital settings, and 
osteopathic GME programs, which are tied together through the oversight 
of an Osteopathic Postdoctoral Training Institution (OPTI). OPTIs are 
built upon partnerships between one or more teaching hospitals, a 
medical school, and other medical training facilities. Additionally, 
osteopathic medical schools are actively pursuing innovative approaches 
to education with many students participating in interprofessional 
education for team-based care, as well as utilizing problem- and case-
based curricular models.
    AACOM supports the evaluation of Medicare GME funding as it 
relates to need and supports expanded flexibility of current funding to 
create an environment in which innovation can occur. Innovation, 
partnership, and targeting of resources should help address need. The 
current OME model links the osteopathic medical schools training to the 
community where their student's learn. For instance, the number and 
distribution of GME positions should be tied directly to the number and 
type of positions needed, with an eye to geographic, demographic, and 
specialty need; the development of more programs should be developed at 
hospitals that do not fall under the GME cap; osteopathic medical 
colleges should be enabled to work with their OPTIs on creative 
development of more GME programs, in association with a variety of 
institutions and funding mechanisms.
    In addition, programs such as the Health Resources and Services 
Administration's (HRSA) Teaching Health Center GME Program, which 
provides funds to establish or enlarge primary care residency training 
programs in community health centers, should continue to expand with 
stable funding sources beyond those originally provided in the Patient 
Protection and Affordable Care Act (P.L. 111-148). The HRSA Teaching 
Health Center GME Program, currently in its third year, has provided a 
model of innovation that produces primary care physicians in the 
communities in which they are most needed. While approximately 10 
percent of all U.S. GME programs are osteopathic programs, 21 of the 32 
Teaching Health Center residencies are osteopathic consortia programs 
accredited by the American Osteopathic Association (AOA), and three of 
those programs are dually accredited by both the AOA and the 
Accreditation Council for Graduate Medical Education (ACGME). 
Sustainability for programs such as these is critical in addressing 
physician workforce needs and has the potential to increase the number 
of primary care physicians that serve the communities most in need.
    Thank you again for the opportunity to submit this statement for 
the record. AACOM looks forward to working with the subcommittee on 
supporting quality patient care and a robust physician workforce that 
will meet the demands of our Nation's complex and evolving health care 
system.

       Prepared Statement of the Association of American Medical 
                            Colleges (AAMC)

    The Association of American Medical Colleges (AAMC) is pleased to 
submit this statement to the record for the January 29, 2013, hearing, 
``30 Million New Patients and 11 Months to Go: Who Will Provide Their 
Primary Care?'' of the Health, Education, Labor, and Pensions (HELP) 
Subcommittee on Primary Health and Aging.
    AAMC is a not-for-profit association representing all 141 
accredited United States and 17 accredited Canadian medical schools; 
nearly 400 major teaching hospitals and health systems, including 51 
Department of Veterans Affairs medical centers; and nearly 90 academic 
and scientific societies. Through these institutions and organizations, 
the AAMC represents 128,000 faculty members, 75,000 medical students, 
and 110,000 resident physicians.
    The AAMC applauds subcommittee Chairman Bernard Sanders, and 
Senators Mike Enzi and Rand Paul for convening this hearing on a timely 
and important topic. Five years ago--nearly to the day--the AAMC 
testified before the committee on this matter at a hearing chaired by 
Senator Sanders, ``Addressing Healthcare Workforce Issues for the 
Future.''
    Much has changed in the 5 years that have passed. Enactment of the 
Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) ushered 
historic reforms that will provide affordable health care coverage to 
as many as 32 million more Americans; many of these people finally will 
be able to access regular care for previously untreated health 
conditions. The first Baby Boomers entered the Medicare program in 
2011, and for the next two decades, another 10,000 Americans will turn 
65 daily. The Nation's medical schools already have taken the first 
critical step to address increased demand for physician services 
expected as the number of Medicare beneficiaries soars and coverage 
expands under the ACA: 15 new medical schools and 9 new osteopathic 
medical schools have opened since 2008, with several more planned. In 
combination with existing medical schools that have expanded 
enrollment, the number of medical graduates is currently on track to 
meet by 2016 the goal of a 30 percent increase in enrollment over 2002 
levels.
    Yet, despite this growing shift in demographics and the response of 
the medical education community, the central challenge discussed at the 
2008 HELP Committee hearing remains a challenge today: the Nation faces 
a critical shortage of physicians. By 2020, the shortfall will reach 
91,500 physicians, and grow to more than 130,000 by 2025. While medical 
schools have taken action by graduating 30 percent more students, we 
have not seen a proportionate increase in the number of residency 
training or graduate medical education (GME) positions. The limited 
availability of residency positions--the direct result of a cap 
Congress imposed in 1997, freezing Medicare support for GME at 1996 
levels--soon will preclude medical graduates from completing the 
supervised training required for independent practice. In other words, 
the best efforts of medical schools to increase the number of 
matriculates will not curtail the physician shortages unless Congress 
releases the bottleneck and lifts the Federal cap on residency training 
support.
    Underserved populations in both urban and rural areas will continue 
to bear the greatest burden of workforce deficits, but extensive 
shortages across a number of specialties are likely to impede access to 
care for many Americans. The AAMC projects there will be 45,000 too few 
primary care physicians by the end of the decade, hindering access to 
preventive care for millions.
    Accordingly, in a 2010 survey of medical school deans, 75 percent 
(94 of 125 respondents) reported instituting or considering initiatives 
to encourage primary care.
    Less commonly reported, but equally troubling, is the parallel 
shortage of more than 46,000 specialists, leaving patients with cancer, 
Alzheimer's disease and dementia, hip fractures, and other ailments 
without immediate access to necessary care. These trends are of 
particular concern as the Nation ages and requires specialty care for 
many age-related illnesses and disabilities.
    Some have argued that policymakers should limit the number of 
specialists, based on a study suggesting that places with more 
generalists report lower Medicare spending and higher quality. These 
findings repeatedly have been challenged and invalidated--most recently 
in a January 2013 Working Paper for the Federal Reserve Board of 
Governors' Finance and Economics Discussion Series--for neglecting to 
adjust appropriately for socioeconomic factors. The recent analysis 
clearly demonstrates that including the rate of uninsured and black in 
the regression negates the original conclusion correlating workforce 
composition with health care spending.
    Indeed, prioritizing only one component of the workforce will be a 
futile strategy, as the broad scope of the problem necessitates an 
equally multi-faceted response. As the subcommittee discusses potential 
solutions, the AAMC provides the following background principles about 
graduate medical education and teaching hospitals, and offers policy 
recommendations to consider in the interest of improving access to care 
for all patients.

                         BACKGROUND PRINCIPLES

Medicare Supports GME to Ensure Access to Physicians and to Highly 
        Specialized Services for Medicare Beneficiaries
    Physician training is inextricable from patient care, and Medicare 
historically has paid for its share of the costs of training and the 
highly sophisticated health services provided by teaching hospitals. 
Medicare reimburses teaching hospitals for a portion of these costs 
through two types of payments: Direct Graduate Medical Education (DGME) 
and Indirect Medical Education (IME) payments.
    DGME payments are intended to offset the direct costs of GME, such 
as resident stipends and benefits; supervising faculty salaries and 
benefits; and allocated institutional overhead costs. These payments 
are tied directly to a program's ``Medicare share,'' an institution-
specific amount that reflects Medicare volume as a percent of patient 
care days at the institution. According to fiscal year 2009 Medicare 
cost reports (www.HealthData.gov), Medicare DGME payments reimbursed 
less than one quarter of the total direct costs teaching hospitals 
incurred in fiscal year 2009. The training costs above Medicare's share 
are borne primarily by the program itself.
    Medicare DGME payments are not limited to teaching hospitals; 
currently, community health centers and other teaching settings are 
eligible for DGME payments that, like teaching hospitals, are 
calculated based on the facility's Medicare share. Congress repeatedly 
has clarified that Medicare GME support should remain tied to the level 
of Medicare services provided, rather than diverting limited Medicare 
funds to providers that do not treat a substantial number of Medicare 
beneficiaries.
    Medicare IME payments, on the other hand, are patient care payments 
that recognize the additional costs incurred by teaching hospitals 
because they maintain specialized services and treat the most complex, 
acutely ill patients. As stated in House and Senate report language 
when Congress created the IME adjustment as part of Medicare's 
Prospective Payment System (PPS) in 1983:

          This adjustment is provided in light of doubts . . . about 
        the ability of the DRG case classification system to account 
        fully for factors such as severity of illness of patients 
        requiring the specialized services and treatment programs 
        provided by teaching institutions and the additional costs 
        associated with the teaching of residents . . . The adjustment 
        for indirect medical education costs is only a proxy to account 
        for a number of factors which may legitimately increase costs 
        in teaching hospitals. (House Ways & Means Committee Rept. No. 
        98-25, March 4, 1983, and Senate Finance Committee Rept. No. 
        98-23, March 11, 1983)

    For example, AAMC-member teaching hospitals operate 80 percent of 
Level 1 Trauma centers and provide a range of highly sophisticated 
services not offered elsewhere in communities. IME payments are meant 
to partially offset these costs. Providers that do not incur the unique 
patient care costs associated with caring for highly complex, severely 
ill inpatients (i.e., ambulatory sites that largely provide primary, 
non-acute care) do not qualify for these payments.
    The specialized services supported in part by IME payments extend 
far beyond the locale of the recipient institution. Rather, in many 
cases, major teaching hospitals provide life-saving care to the entire 
region. Consider, for example, inpatient discharges for the University 
of Colorado Health Systems. As depicted in the map below, patients 
across the State of Wyoming, regions of Montana, New Mexico, and 
several other States beyond Colorado rely on services offered by the 
University of Colorado Health Systems.



Major Teaching Hospitals Offer A Comprehensive Range of Unique Services 
        to All Patients
    As described above, AAMC-member teaching hospitals maintain the 
vast majority of the country's critical standby units. In addition to 
the trauma centers, AAMC members operate: 79 percent of all burn care 
units; 40 percent of neonatal- and 61 percent of pediatric-ICUs; nearly 
half of the surgical transplant services; over one-fifth of all cardiac 
surgery services; and 44 percent of Alzheimer centers. These 
institutions provide over one-third of all hospital charity care. 
Compared with physician offices and other hospitals, major teaching 
hospitals care for patients that are sicker, poorer, and more likely to 
be disabled or non-white.
    At nearly half of academic medical centers, the majority of 
Medicare visits are provided in hospital-based clinics. Hospital 
Outpatient Departments (HOPDs) serve as a safety net for vulnerable 
populations, offering both primary care, and comprehensive and 
coordinated care settings for patients with chronic or complex 
conditions. Examples include access to pain centers, cancer clinics, or 
psychiatric care, as well as wrap-around services, such as translation 
and community-based services.
    Academic medical centers also serve as vital partners to community-
based facilities. A 2010 study described the barriers that community 
health centers (CHCs), which primarily provide primary care services, 
face in securing specialty care for patients; 91 percent reported 
difficulties in finding offsite specialists for uninsured patients, 71 
percent for Medicaid patients, and 49 percent for Medicare patients, 
though hospital affiliations eased the difficulty in some cases. These 
findings suggest a major obstacle in ensuring timely treatment, as an 
October 2007 study in Health Affairs reported that 25 percent of visits 
to CHCs result in ``medically necessary referrals for services not 
provided by the center.'' The Health Affairs study describes that those 
CHCs affiliated with medical schools or hospitals report better access 
to specialty services, and notes:

          ``If policymakers plan to extend access to primary care for 
        the uninsured by increasing the number of CHCs, they must also 
        address the problem of access to secondary and tertiary levels 
        of care.''

With major teaching hospitals treating a substantial and growing 
percentage of Medicaid and/or financially disadvantaged patients, the 
studies reinforce the importance of a comprehensive approach to 
resolving access issues, rather than growing the capabilities of one 
type of facility or specialty at the expense of others.

Teaching Hospitals Are Leading Innovative Efforts to Improve Care 
        Quality and Efficiency
    The current caps on physician training were imposed at a time when 
most researchers predicted that the delivery system would change 
rapidly and drastically under the influence of tightly managed care. 
Today, the health care delivery system is in a time of significant 
transformation with numerous Federal, State, and private efforts under 
way to improve coordination and quality of care, increase access, and 
reduce cost--which may have a significant impact on demand for 
physician services.
    Major teaching hospitals are at the forefront of many of these 
innovations in care delivery. AAMC member institutions account for less 
than 6 percent of all hospitals but constitute a much larger percentage 
of participants in reforms sponsored by the Centers for Medicare and 
Medicaid Services (CMS). For example, AAMC members make up 44 percent 
of Health Care Innovation Award grantees; 34 percent of the Innovation 
Advisors Program; 18 percent of all CMS Accountable Care Organizations 
(ACOs); 38 percent of Pioneer ACOs; and 17 percent of Medicare Shared 
Savings Program participants.
    Similarly, AAMC medical schools and teaching hospitals are 
innovating to prepare the next generation of health professionals for 
practice in a new delivery system. For example, AAMC has partnered with 
other health education associations through the Interprofessional 
Education Collaborative (IPEC) to focus on better integrating and 
coordinating the education of physicians, nurses, pharmacists, 
dentists, public health professionals, and other members of the patient 
health care team to provide more collaborative and team-based care.
    It is too early to know the short-or long-term effect these nascent 
efforts will have on our future workforce needs, but these changes will 
take years to come to fruition. In the interim, it would be 
irresponsible to ignore the Nation's expanding health care needs. As 
demonstrated in Massachusetts, expanding insurance coverage leads to an 
initial increase in utilization of both primary and subspecialty care.

Influencing Specialty Choice: Studies Indicate Debt Plays a Minor Role
    Many claim prohibitive debt levels lead medical students to choose 
careers other than primary care, but surprisingly little evidence 
supports this assertion. In fact, a thorough review of the academic 
literature shows little to no connection between debt and specialty 
choice. Rather, studies show specialty choice is a complex and personal 
decision involving many factors. According to AAMC's annual survey of 
graduating medical students, the most important factors are a student's 
personal interest in a specialty's content and/or level of patient 
care; desire for the ``controllable lifestyle'' offered by some 
specialties; and the influence of a role model in a specialty. Student 
debt consistently ranks toward the bottom of the list for this question 
every year.
    Further, Federal programs, such as the National Health Service 
Corps (NHSC), offer incentives to help physicians manage their debt. A 
January 2013 study in Academic Medicine found that,

        ``physicians in all specialties, including primary care, can 
        repay the current median level of education debt. At the most 
        extreme borrowing levels . . . options exist to mitigate the 
        economic impact of education debt repayment. These options 
        include an extended repayment term or Federal loan forgiveness/
        repayment program, such as IBR, PSLF, and the NHSC.''

    In addition to the NHSC, other programs at the Health Resources and 
Services Administration (HRSA) have proven successful in guiding 
students toward a career in primary care and underserved communities. 
The title VII health professions programs offer support for educational 
opportunities in these settings. Marking their 50th anniversary in 
2013, these programs serve as a catalyst for innovations in education 
and training, helping the workforce over the years adapt to the 
Nation's changing workforce needs. Similarly, the Children's Hospitals 
Graduate Medical Education program provides critical support to 
strengthen the future primary and specialty care workforce for the 
Nation's children.
    The Teaching Health Center (THC) program is a new HRSA initiative, 
established in the Affordable Care Act and funded with a mandatory 
appropriation. The THC program provides payments of $150,000 per 
resident, per year, to community-based, ambulatory patient care centers 
that operate primary care residency programs. These payments are being 
made at a far higher level than Medicare supports teaching hospitals. 
AAMC continues to support HRSA funding for this new program, given that 
the agency oversees the Federal health center program, health 
professions workforce development programs, and other community-based 
entities. We look forward to studying the outcomes of the initial 
cohort of THCs, and how continued HRSA funding can sustain the higher 
payments made to these facilities.
    It should also be noted that past attempts to influence specialty 
selection through Medicare GME payments have failed, leading the 
Medicare Payment Advisory Commission (MedPAC) to promote other 
mechanisms, such as clinical reimbursement, NHSC, and title VII 
programs, instead. Since the mid-1990s, hospitals have received twice 
the DGME payment for primary care and geriatrics residents as compared 
to subspecialty fellowships, yet shortages persist. As observed by 
MedPAC in its November 2003 report on the Impact of Resident Caps on 
the Supply of Geriatricians, ``[f]actors other than Medicare's resident 
caps may better explain the slow growth in the number of geriatric 
physicians.'' The report further notes that:

        ``federal policies intended to affect the number, mix, and 
        distribution of the health care workforce should be implemented 
        through specific targeted programs rather than through 
        Medicare.''

                         POLICY RECOMMENDATIONS

    Despite the best-implemented health care delivery reforms, the 
growing and aging Nation will need a larger physician workforce. The 
United States cannot afford to wait until the physician shortage takes 
full effect, as the education and training of each physician takes more 
than a decade. These recommendations are intended to clarify that an 
adequate supply of physicians must be achieved both through more 
efficient health care delivery models and by increasing physician 
training positions. No single approach is sufficient; all of the 
following are necessary to ensure an adequate supply of physicians:

    1. The number of federally supported GME training positions should 
be increased by at least 4,000 new positions a year to meet the needs 
of a growing, aging population and to accommodate the additional 
graduates from accredited medical schools. The medical education 
community will be accountable and transparent throughout the expansion.
    Training an additional 4,000 physicians a year would allow the 
Nation to increase its expected supply of doctors by approximately 
30,000 by the end of the decade--meeting approximately one-third of the 
expected shortage. This represents an expansion of approximately 15 
percent over current training levels, which would provide a sufficient 
number of positions to accommodate U.S.-educated doctors while allowing 
for international medical graduates (IMGs) to occupy about 10 percent 
of training positions. Absent the necessary increases in residency 
positions, per capita numbers of physicians will continue to fall as 
the population grows and ages with rising per capita needs.
    The AAMC believes that primary care is the foundation of a high-
performing health system, but it is equally important to increase the 
supply of subspecialists in many areas. As patients age, incidence of 
both chronic and acute conditions rises dramatically; U.S. health care 
has made great advances in the care of these conditions. Cancer, 
arthritis, diabetes, and other illnesses of adults will continue to be 
treatable disorders that require the care of oncologists, surgeons, 
endocrinologists, and other specialties. Children who previously would 
have succumbed to their illnesses will survive into adulthood but 
require decades of followup by primary care, pediatric subspecialists, 
and adult subspecialists. Meeting these needs cannot be accomplished 
without increasing the number of residency positions.
    2. Current and future targeting of funding for new residency 
positions should be planned with clear attention to population growth, 
regional and State-specific needs, and evolving changes in delivery 
systems. Today, approximately half (2,000) of these additional 
positions should be targeted to primary care and generalist 
disciplines; the remainder should be distributed across the dozens of 
the approximately 140 other specialties that an aging nation relies 
upon. Attempts to increase physicians in targeted specialties by 
reducing training of other specialists will impede access to care.
    Approximately half (or 13,000) of first-year residency training 
positions are in family medicine, internal medicine, and pediatrics; 
while many of these residents will go on to subspecialize, the number 
of fellowship (or subspecialty) training positions accounts for 
approximately 20 percent of all available GME slots. Even the largest 
internal medicine subspecialty, cardiology, trains fewer than 1,000 
physicians a year; fewer than 500 oncologists are trained annually. 
Attempting to force physicians to forgo subspecialty training by 
limiting fellowship opportunities would have limited effect and, even 
if successful, would jeopardize timely access to care for patients who 
require a subspecialist.
    Wait times for access to subspecialists continue to grow, 
necessitating that, in some cases, training capacity must be increased, 
combined with efforts to more efficiently use subspecialty care. The 
AAMC believes that the ideal team-based health care delivery and 
utilization model should efficiently use human resources to improve 
patient access to appropriate services. For example, some patients 
managed by specialists can be directed back to primary care providers 
with management plans for chronic conditions. Other providers in a 
variety of settings could care for lower acuity patients now treated by 
physicians. Optimizing utilization will help relieve both the burden on 
patients seeking to access appropriate health care services and on 
overwhelmed providers, but will not obviate the need to train more 
doctors.
    Physician shortages will persist even if the Medicare funding caps 
are lifted today, given the severity of the problem and a likely modest 
rate of change in the delivery and payment systems. Increasingly, 
patient access to both primary and specialty care will be a challenge. 
As health care is better integrated--team care expands and unnecessary 
variations are reduced--newly insured patients will present in the 
offices of primary care providers. For many of those patients, primary 
care providers will need to coordinate the care of subspecialists for 
complex illnesses. These needs will outstrip the supply of many 
subspecialties at current levels, even if utilization rates are 
significantly reduced.
    It is unclear how extensive this increase in utilization will be 
over the course of subsequent years. Therefore, it is imperative to 
target the current and future increase in federally funded residency 
positions through ongoing analysis of health care utilization and 
estimates of future demand, rather than by prescribing a static 
specialty composition that does not actively respond to a dynamic 
health care environment.
    3. In addition to expanding support for GME, policymakers should 
leverage clinical reimbursement and other mechanisms to affect 
geographic distribution of physicians and influence specialty 
composition.
    While the ACA took steps to increase reimbursement to primary care 
providers, policymakers will need to reimburse cognitive and patient 
management services in a way that makes these specialties more 
attractive to new physicians. Similarly, programs like NHSC and title 
VII have successfully improved distribution of primary care providers 
to underserved areas, but policymakers must find ways to reward 
physicians economically who serve geographically or economically 
underserved communities. Education and training cannot overcome the 
intense market incentives that influence physician choices.
    Recent studies show 31 percent of physicians are not accepting new 
Medicaid patients. Teaching hospitals and physician faculty are more 
likely to serve poor and vulnerable populations and will be asked to 
see more patients for whom reimbursement is less than the cost of 
providing care. Physicians and other providers must be paid adequately 
to ensure that patients have access to care.
    4. The Federal Government should continue to invest in delivery 
system research and evidence-based innovations in health care delivery.
    Lifting the 15-year freeze in Federal support for physician 
training by 15 percent only would meet one-third of the expected 
shortage of physicians by the end of this decade, and is insufficient 
to ensure access to care. Delivery system innovations that improve 
efficiency, integrate care, and leverage other health professionals 
also will be necessary.
    The ACA created new opportunities for health care delivery reform 
at the Federal level and for the States, which are now in the beginning 
stages of implementation. AAMC institutions and faculty are working 
with the Federal Government to improve delivery and payment by 
participating in numerous initiatives. AAMC members are focused on the 
transformation of health care delivery, including through the Patient-
Centered Outcomes Research Institute (PCORI).
    AAMC teaching hospital members receive significant public funding 
for their missions and are willing to be meaningfully accountable for 
that support. The training of physicians and other health professionals 
has changed significantly in the last 15 years and is increasingly 
focused on teaching doctors to improve systems of care. As measures are 
created, tested, and evaluated, these data will demonstrate the 
increasing ability of new physicians to work in teams; facilitate 
system changes to improve population health; and foster continuous 
quality improvement.
    Continued research will inform how providers, systems, and payers 
can ensure access to care as well as optimal outcomes. Along with the 
AAMC, the Federal Government should continually assess how these 
delivery changes affect workforce needs and make the necessary 
additional investments in training to provide an adequate physician 
workforce.

    Communities in all regions of the country rely on academic medical 
centers for high-quality medical care, advanced research, job creation, 
new business development, and education of medical professionals. As 
the Nation faces an unprecedented demand for health care services, 
continued support for medical schools and teaching hospitals will be 
essential.
    Thank you again for the opportunity to submit this statement for 
the record and for your leadership in addressing this important 
subject. The AAMC looks forward to working with the subcommittee in 
strengthening access to health care for patients across the country.
 Prepared Statement of the Society of General Internal Medicine (SGIM)
    Mr. Chairman and members of the subcommittee, the Society of 
General Internal Medicine is pleased to submit this statement for the 
record associated with the subcommittee's January 29, 2013 hearing, 
``Primary Care Access--30 Million New Patients and 11 Months to Go: Who 
Will Provide Their Primary Care?''
    SGIM is comprised of approximately 3,000 general internists who 
provide patient care and conduct research and educational activities to 
improve the health of individuals, many of whom suffer from complex, 
multiple chronic illnesses. Our mission is rooted in the fact that 
patients who have access to a robust primary care system experience 
better health care quality and better outcomes at lower costs. For the 
poor, the uninsured and the elderly, in particular, primary care 
functions as a safety net by serving as the first, and often their only 
source for medical care and treatment.
    Primary care is the backbone of our health care system, but it is 
under severe strain. Recent studies show that half of adults reported 
problems obtaining access to care and nearly two-thirds experienced 
problems with the coordination of their care by providers. Patients 
often encounter extended waits for primary care services, with one in 
five adults reporting a delay of 6 days or more to see a physician. 
Lacking ready access to care, one in five chronically ill adults end up 
visiting the emergency room for care they could have received from a 
primary care physician.
    With an estimated 30 million newly insured people set to enter the 
health care market over the next 6 years, the demand for primary care 
services will skyrocket. The current physician shortage and 
maldistribution will be aggravated, and quality of care will be 
threatened.
    And unless our national leaders act soon, the situation will only 
get worse. Within the next 10 years the demand for primary care 
services in the United States will increase dramatically as 80 million 
baby boomers age into the Medicare system, as the obesity epidemic 
continues to grow and as the Affordable Care Act is fully implemented 
across the United States.
    Just as demand is growing dramatically, the supply of primary care 
clinicians is dwindling, with projections of a shortage of 52,000 
primary care physicians by 2025. At the same time, one-third of 
generalist physicians will retire from medical practice. As a result, 
by 2016 the number of adult primary care physicians leaving practice 
will exceed the number who are entering.
    What can be done to ensure greater access to primary care? Multiple 
steps must be taken to right-size primary care.

              ALIGN TAXPAYER SUBSIDIES WITH SOCIETAL NEEDS

    Medicare is the Nation's single largest funder of graduate medical 
education (GME), the training that medical school graduates receive as 
residents in approximately 1,100 of the Nation's teaching hospitals. To 
help overcome the current shortage of primary care practitioners, 
Congress should consider policy changes that better align the Medicare 
GME program with physician workforce needs. These would include:

     Increasing the direct GME per resident payment for 
trainees in primary care programs;
     Providing bonus payments to hospitals for graduating 
residents who practice primary care after their training is completed;
     Expanding loan repayment programs for residents who 
practice primary care;
     Increasing salaries of primary care residents;
     Raising the cap for funded GME positions by 3,000 
positions annually for 5 years and allocating at least 80 percent of 
the new slots for primary care training programs; and
     Teaching hospitals should be encouraged to pursue funding 
through the CMS's Center for Medicare and Medicaid Innovations to 
develop innovative models to enhance the training of primary care 
residents.

    Equitable pay during residency could help reduce the financial 
strain on many residents and enable them to make career and specialty 
decisions that are not dictated by financial constraints.

                       REDUCE FINANCIAL BARRIERS

    Low reimbursement rates have long threatened patient access to 
primary care providers and services. While the ACA put in place a 
modest 10 percent Medicare bonus for primary care services from 2010 
through 2015, this is insufficient to appreciably address the workforce 
shortage as the demand for primary care services increases. A much 
larger increase that is not time limited is needed to change behavior 
and increase the supply of primary care physicians. A primary care 
physician's annual practice income would need to increase by 63 
percent, for example, to generate the same lifetime earnings as that of 
a cardiologist.
    In 2008, median income for generalist physicians was 54 percent of 
that for specialty physicians. This compares to almost 65 percent in 
the early 1990s, when the compensation gap between generalists and 
specialists narrowed, and we saw a 12 percent rise in the number of 
students choosing primary care residencies.
    So long as physician reimbursement rates for both existing and new 
services are so severely skewed toward procedural services, primary 
care will be undervalued and underinvested. Aligning incentives, 
especially monetary ones, for current and future physicians with the 
society's need for more primary care physicians would bring about the 
desired change more quickly and dependably than will continue to 
support the existing infrastructure that has contributed to the 
maldistribution of physicians and shortages in primary care 
specialties.
    Since 1991, the Centers for Medicare and Medicaid Services (CMS) 
has relied upon the recommendations of the American Medical 
Association's Relative Value Scale Update Committee (RUC) to determine 
the relative value units for physician services, including the 
evaluation and management services billed by primary care providers. 
Historically, CMS accepts over 90 percent of the RUC's recommendations. 
While the RUC has recently added primary care members, the vast 
majority of the 31 person panel is composed as specialists. Given the 
influence of this committee over payment policy, more must be done to 
increase primary care membership and the transparency of its 
proceedings. The Affordable Care Act took the first step at 
scrutinizing the RUC's work by including a provision to review mis-
valued codes, and CMS has awarded a contract to do this work. In 2011, 
Representative Jim McDermott introduced legislation aimed at the RUC. 
These were important first steps, but policymakers must further 
scrutinize the work and composition of the RUC and change current 
incentives in a fiscally prudent manner.

 STRENGTHEN SUPPORT FOR TITLE VII PRIMARY CARE TRAINING AND ENHANCEMENT

    Title VII of the Public Health Service Act authorizes the only 
source of Federal funds for primary care training. In order to meet the 
growing demands for primary care services, particularly in underserved 
rural and urban communities, SGIM strongly urges Congress to support 
the following HRSA programs with a proven track record of increasing 
the supply of primary care physicians, including:

     $150 million for Training in Primary Care Medicine to 
support training and improved general competencies of primary care 
professionals through grants to hospitals, medical schools and other 
entities;

     $30 million for Centers of Excellence designed to increase 
the number of minority youth who pursue careers in the health 
professions;
     $30 million for the Health Careers Opportunity Program 
(HCOP) to provide students from disadvantaged backgrounds an 
opportunity to develop the skills needed to successfully compete, enter 
and graduate from health professions schools; and
     $3 million for the National Health Care Workforce 
Commission to provide Congress and the executive branch with 
comprehensive, unbiased recommendations on workforce goals, priorities 
and policies.

    SGIM stands ready to work with the subcommittee as it grapples with 
these challenges.
    Thank you for the opportunity to submit this statement.
                                 ______
                                 
    The American Occupational Therapy Association, 
                                              Inc.,
                                   Bethesda, MD 20814-1220,
                                                 February 11, 2013.
Hon. Bernard Sanders, Chairman,
Committee on Health, Eduation, Labor, and Pensions,
Subcommittee on Primary Health and Aging,
U.S. Senate,
Washington, DC 20510.

Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Eduation, Labor, and Pensions,
Subcommittee on Primary Health and Aging,
U.S. Senate,
Washington, DC 20510.

    Dear Chairman Sanders and Ranking Member Enzi: The American 
Occupational Therapy Association (AOTA) is the national professional 
association representing the interests of more than 140,000 
occupational therapists, occupational therapy assistants, and students 
of occupational therapy. We greatly appreciate the recent subcommittee 
hearing, ``30 Million New Patients and 11 Months to Go: Who Will 
Provide Their Primary Care?'' As the subommittee proceeds in forming 
recommendations to improve the current healthcare system and promote 
timely, cohesive, quality healthcare services, AOTA would like to 
provide a brief explanation of the critical role occupational therapy 
practitioners can play in primary care settings through promoting 
wellness, coordinating care, and providing rehabilitative services to 
individuals throughout the lifespan, thus reducing healthcare costs and 
promoting a healthier nation.\1\
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    \1\ Journal of the American Medical Association, Vol. 278 (1997). 
Occupational therapy for independent-living older adults: A randomized 
controlled trial.
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    Occupational Therapy (OT) is a profession dedicated to the 
improvement and maximization of function and performance--how, when and 
how well people do the activities or ``occupations'' important to 
them--so that people can live healthier, more productive and satisfying 
lives. People define health in many ways but it is beyond being 
disease-free. When people describe ``healthy'' it usually involves 
being able to DO things: to work and care for oneself despite 
conditions or age, being interested in the world, having energy and 
vitality. All of this involves performance of activities of daily life 
which ultimately contribute to quality of life.\2\ Including 
Occupational Therapy as part of the team providing services and 
interventions in a coordinated manner, is the way for people to live 
life to its fullest.
---------------------------------------------------------------------------
    \2\ British Medical Journal, Vol. 319 (1999) Population-based study 
of social and productive activities as predictors of survival among 
elderly Americans.
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    Primary care can be defined very narrowly, simply identifying 
practitioners--physicians, nurse practitioners, and physician's 
assistants, or it can be defined from the much broader view of primary 
health care--comprehensive care that addresses the majority of a 
patients needs over time including both preventative and curative 
services. This latter, more broad view of primary care is essential to 
improving health outcomes and reducing healthcare costs. We believe 
that Occupational Therapy can be central to many aspects of a cohesive, 
quality healthcare system.

                           PRIMARY CARE TEAMS

    Primary care addresses basic health needs but must also include the 
ability to effectively link to rehabilitative services that enable 
individuals to become or stay healthy. Because of the holistic nature 
of occupational therapy and expertise related to performance and 
function across the lifespan, occupational therapy practitioners should 
be utilized in primary care teams.
    Occupational therapy's collaborative approach to the provision of 
healthcare and focus on increasing client capacity and independence 
make practitioners a valuable part of beneficiaries' primary care team 
particularly in critical areas such as preventing falls for elderly 
patients, working with individuals with diabetes on assuring their 
lifestyles support health, monitoring child development to increase 
early and appropriate intervention. Other areas where occupational 
therapy can be useful in a coordinated model are in premature infants/
NICU, mental health (e.g., schizophrenia), and hand, wrist or shoulder 
injuries to begin the rehabilitation process immediately or even avoid 
more expensive treatments.\3\ \4\
---------------------------------------------------------------------------
    \3\ The British Journal of Occupational Therapy, Vol. 132 (2008). 
Audit of a therapist-led clinic for carpal tunnel syndrome in primary 
care.
    \4\ Occupational Therapy International, Vol. 15 (2008). 
Effectiveness of a peer-support community in addiction recovery: 
participation as intervention.
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                             MEDICAL HOMES

    Similar to the arguments for primary care participation, AOTA 
supports the medical home concept and sees a unique role for 
occupational therapy as part of the medical home team to help clients 
get the right services to maximize their functional independence. 
Additionally, occupational therapy interventions help clients with 
compliance with their medical regimen delivering improved outcomes and 
thus cost savings.

                               PREVENTION

    Occupational therapy practitioners have the education, perspective 
and knowledge base to be recognized as qualified providers of 
preventative services. Occupational therapy practitioners have 
expertise in falls risk assessment, smoking cessation, obesity 
interventions and a variety of other lifestyle management techniques 
important to the formulation and implementation of comprehensive, 
successful personalized prevention plans. Research indicates that 
preventative occupational therapy cost effectively slowed down the 
declines associated with aging and improved health in the elderly or 
simply prevented injuries (e.g., through preventable falls) and 
improved lives.\5\ \6\ \7\
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    \5\ Journal of Gerontology: Psychological Sciences, Vol. 56 (2001). 
Embedding health promoting changes into the daily lives of independent-
living older adults: Long-term followup of occupational therapy 
intervention.
    \6\ Journal of the American Geriatrics Society, Vol. 54 (2006). A 
randomized trial of a multicomponent home intervention to reduce 
functional difficulties in older adults.
    \7\ Journal of Rehabilitation Medicine, Vol. 40 (2008). A single 
home visit by an occupational therapist reduces the risk of falling 
after hip fracture in elderly women: a quasi-randomized controlled 
trial.
---------------------------------------------------------------------------
                           CARE COORDINATION

    Occupational therapy practitioners bring a unique skill set and 
expertise that can and should be a vital component of any new or 
existing care coordination models to achieve optimal client outcomes 
and deliver more targeted, effective care. Occupational therapy 
addresses issues of daily living that are often ignored but are 
critical to care coordination, particularly for individuals with 
chronic conditions. Occupational therapy is particularly effective in 
addressing children with disabilities like autism in school or in other 
settings \8\ or families addressing Alzheimer's disease.\9\
---------------------------------------------------------------------------
    \8\ American Journal of Occupational Therapy, Vol. 62 (2008). 
Evidence-based review of interventions for autism used in or of 
relevance to occupational therapy.
    \9\ The Gerontologist, Vol. 41 (2000). A randomized controlled 
trial of home environmental intervention to enhance self-efficacy and 
reduce upset in family caregivers of persons with dementia.
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                        CHRONIC CARE MANAGEMENT

    Occupational therapy focuses on enabling individuals to participate 
in productive and meaningful activities of daily life using approaches 
that help individuals self-manage--vital to such things as appropriate 
medication management skills, fall prevention, energy conservation, 
self-care, and maintaining participation in key activities such as 
work, family management or leisure. Savings can be achieved as people 
maintain their health and independence through their own actions. 
Practitioners achieve improved outcomes through active collaboration 
with clients and their caregivers during the evaluation and 
intervention process. Occupational therapy should be a part of chronic 
care management teams for persons with traumatic brain injury, multiple 
sclerosis, spinal cord injury, diabetes, autism, stroke among other 
conditions.\10\ \11\
---------------------------------------------------------------------------
    \10\ American Journal of Occupational Therapy, Vol. 63 (2009). 
Changing face of stroke: Implications for occupational therapy 
practice.
    \11\ Multiple Sclerosis, Vol. 14 (2008). A longitudinal study on 
effects of a 6-week course for energy conservation for multiple 
sclerosis clients.
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    As stated throughout the subcommittee hearing, allied health 
professionals have the potential to be a key component to reducing 
healthcare spending costs if utilized properly. While considering new 
and innovative ways to provide primary health care and improve outcomes 
within our healthcare system, we strongly encourage you to consider the 
important role that occupational therapy can play as part of the 
healthcare solution.
    Thank you for the opportunity to express our views to the 
subcommittee. Should you have any questions or need additional 
information about the role of occupational therapy practitioners in 
primary care, please contact Heather Parsons at [email protected] or 
(301) 652-6611 Ext. 2112.
            Sincerely,
                                         Christina Metzler,
                                 AOTA Chief Public Affairs Officer,
                    American Occupational Therapy Association, Inc.

    [Whereupon, at 11:58 a.m., the hearing was adjourned.]

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