[Congressional Record Volume 140, Number 75 (Wednesday, June 15, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
 MEDICARE DOES A BETTER JOB HOLDING DOWN COSTS THAN THE PRIVATE SECTOR

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, June 15, 1994

  Mr. STARK. Mr. Speaker, overall, Medicare does a better job than the 
private sector in holding down per capita health care costs and not 
overpaying for medical procedures.
  If anyone doubts this, I refer them to GAO report HEHS-94-65, 
entitled ``Impact of OBRA-90's Dialysis Provisions on Providers and 
Beneficiaries.'' For over 20 years, Medicare has been paying roughly 
$125-$130 for the dialysis of kidney disease patients. The program has 
saved the lives of tens of thousands of people. We basically have never 
raised the amount we paid. Productivity and technology have allowed us 
to keep paying the same dollar figure--a figure which in real value 
terms is less than 40 percent of the original payment rate.
  Medicare historically did not pay for the first 12 months of 
dialysis. In OBRA 1990, to save some money, we delayed the start of 
Medicare payments for people who had private insurance until a person 
had been on dialysis for 18 months. The dialysis companies lobbied for 
this change, because they generally charge private insurance companies 
more than the Government will pay. They'd rather have the so-called 
great, efficient highly competitive insurance companies paying them 
than Uncle Sam, because they know they can get away with a lot more.
  How much more? $41 million per year. Says the GAO, ``This increase 
occurred because employer-sponsored plans generally paid dialysis 
providers more than the cost-based Medicare rates * * * because the 
higher payments involve no increase in the type or level of services 
provided, they generally represent profits for the providers who 
receive them.''
  Mr. Speaker, dialysis is an old technology and an old billing 
procedure. Medicare has shown how to do it for over 20 years. But the 
GAO found that:

       ``The [dialysis providers] in our sample received an 
     average of 80% more when employer-provided health insurance 
     plans acted as the primary payer for kidney dialysis services 
     than they would have received if Medicare had been the 
     primary payer. On average, providers received $690 per week 
     for such services, compared to $383, which they would have 
     received under the Medicare composite rate.

  Of the 583 patients whose bills the GAO examined, 139 had bills that 
were $500 or more higher than the matching Medicare rate. The GAO found 
15 patients who were being paid more than a $1000 per dialysis.
  Mr. Speaker, in the year 1994 for a private insurance company to be 
paying more than a $1000 for a dialysis--three times a week, 52 weeks a 
year--is just plain dumb. It makes $600 Air Force toilet seats look 
like a bargain.
  Just turn cost containment over to us, say the big insurance 
companies.
  Not when they are paying these kinds of charges, Mr. Speaker.

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