[Congressional Record Volume 140, Number 120 (Sunday, August 21, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
              A MEANINGFUL APPROACH TO HEALTH CARE REFORM

                                 ______


                         HON. STEPHEN E. BUYER

                               of indiana

                    in the house of representatives

                        Sunday, August 21, 1994

  Mr. BUYER. Mr. Speaker, in the debate of health care reform 
alternatives, it is important to place health care reform into a proper 
perspective. This is a two-part process. The first part is an analysis 
of our current problems in health care and the second is rational and 
meaningful solutions to the problems.
  First, difficulties with the current system. The problems with our 
current system are two-fold and intertwined: Cost and access to 
insurance to pay for care. It is important to remember that there is a 
difference between access to care and access to insurance to help pay 
for that care. No one in America is denied care based upon the ability 
to pay. Our laws expressly forbid hospital emergency rooms from 
refusing to treat patients on this criteria. While hospital emergency 
rooms are used too frequently instead of doctor's offices or even self-
medication, care is available to all.
  With regard to insurance accessibility to help pay for health care, 
there are Americans who do not have insurance. Who are they? The very 
poor have Medicaid, a program in which the States and the Federal 
Government jointly spend billions of dollars. The elderly have 
Medicare, which also costs billions of dollars. Therefore, those 
without insurance are not poor and are not old.
  Who, then, are the people without access to insurance? The commonly 
cited statistic is that approximately 37 million Americans are without 
any form of health insurance. Forty-seven percent of these are full-
time/full-year workers in small firms, that have less than 10 
employees. Thirty-eight percent worked less than full time. Sixteen 
percent are unemployed. The uninsured also tend to be young and 39 
percent had incomes twice the poverty level or greater. One other 
interesting thing to note is that people in male-headed or two-parent 
families are the greatest percentage of those with insurance--86 
percent. Of female-headed families with children--82 percent had 
insurance: 35 percent from employment and 44 percent from Medicare/
Medicaid.
  This problem with access to insurance is compounded by cost. 
Literally, thousands of people have been priced out of the insurance 
market. Why is this? First, individuals have to buy insurance with 
after-tax dollars. Self-employed individuals don't fair much better--
they only get to deduct 25 percent of their costs of insurance. General 
Motors, IBM and other Fortune 500 companies get to buy their insurance 
with before-tax dollars. They have a 100 percent write-off of health 
insurance.
  In addition, individuals and the self-employed and small firms do not 
have the benefits of large groups to pool risks. It is not unusual for 
small firms to have insurance premiums skyrocket or policies be 
cancelled outright if one individual on the policy--an employee or a 
dependent of an employee--comes down with a serious illness, like 
cancer.
  Furthermore, to buy health care insurance, small firms face the fact 
that States have mandated certain benefits that must be carried in all 
policies sold. Some studies indicate that State mandated benefit laws 
can increase the cost of insurance by as much as 30 percent. Heart 
transplants are mandated coverage in Georgia; liver transplants are 
mandated in Illinois; hairpieces are mandated in Minnesota, and 
deposits to a sperm bank are mandated coverage in Massachusetts. State 
mandated benefit laws prohibit small firms and individuals from buying 
coverage that is tailored to their needs and their budgets.
  Second, solutions to the cost and access problems. Despite these 
difficulties, there is some good news on the health care front. First 
and foremost, Americans have the best quality health care in the world. 
We are the leading exporting country of pharmaceuticals, for example. 
While no one wants to diminish the quality, it is important to 
understand that the driving force behind our high quality of care is 
our free enterprise system that fosters competition and innovation. 
Anything that restricts the ability of the market to develop new 
products, seek their introduction into the market, and have consumers 
purchase them, will stifle our high quality care. One such restriction 
is price control or caps.
  The second piece of good news is that the States and the private 
sector have begun to respond to rising costs in the health care market 
and have had some success. It seems that Washington is the last to get 
into the act. Health care prices increased 5.4 percent in 1993--the 
lowest increase in 20 years. This is a continuation of a downward 
trend--9.6 percent in 1990; 7.9 percent in 1991; and 6.6 percent in 
1992.
  Nonetheless, there are things that Congress can do to deal with the 
problems of access and cost. I support these reforms and find 
continuing with the status quo unacceptable. First, insurance market 
reforms will make insurance available to many, many more people. These 
include portability--the ability to take your insurance with you should 
you leave your job. It would end ``job lock.'' Denial of pre-existing 
exclusions--reasonable reform would enable individuals with pre-
existing conditions to buy insurance and would end cancellation of 
policies to small firms and individuals when people get seriously ill.
  Voluntary purchasing groups--small businesses would be able to form 
insurance pools with others for the purchase of health insurance. They 
would get the same market clout that large corporations enjoy. Here, we 
already have success stories. In my district, a group of employers in 
Lake, Porter, and LaPorte Counties have voluntarily joined together to 
gain market clout to buy health care coverage for their employees. 
Typically, the employers in the alliance enjoy savings of 10 percent to 
40 percent and can access 11 different health plans. These employers 
also can access an innovative occupational medicine program. One of the 
obstacles that alliance faces is in the area of employers with 
employees with pre-existing conditions. Insurance reforms will help the 
alliance and more people will have coverage.
  In 1993, California allowed businesses with 5 to 50 employees to join 
voluntary purchasing groups. After just one year of implementation, 
premiums for small businesses in the group declined by over 6 percent 
and nearly 12,000 previously uninsured individuals obtained coverage 
through the group.
  Another insurance market reform would be making available medical 
savings accounts. With medical savings accounts, employees elect a 
high-deductible, low-cost policy and employers deposit funds into an 
account for the employee to cover routine medical bills. In Indiana, 
Golden Rule Insurance Company has used this device. Golden Rule 
Insurance Company deposits $2,000 a year into a medical savings account 
for employees who choose a $3,000 family deductible. Employees at 
Golden Rule have the option of a traditional policy with a $500 
deductible and a 20 percent copayment up to a maximum of $1,000. In 
1993, 80 percent of employees chose the medical savings account option. 
In 1994, the number is up to 90 percent! In 1993, Golden Rule health 
costs were 40 percent lower than they otherwise would have been.
  Medical malpractice reform--many people argue that defensive medical 
practice doesn't really exist and even if it does there is not 
appreciable increases in medical costs. This is not an accurate 
portrayal of what happens in the real world. In Indiana, 20 years ago, 
due to the strong leadership of our former Governor, Dr. Otis Bowen, 
medical malpractice reforms were put in place. The reforms included: 
caps on damages, sharp limits on contingency fees, and prohibitions on 
double recovery. Today in Indiana, an orthopedic surgeon pays on 
average $10,875 per year in malpractice insurance. In Michigan, an 
orthopedic surgeon pays $108,762--10 times as much!
  The Competitiveness Center of the Hudson Institute just completed a 
study of medical malpractice at a major hospital in Indiana. It found 
that medical liability added $450 in direct and indirect costs for 
every admission--and this in the State with commendable malpractice 
reform on the books--Nationwide, the estimate of costs to our health 
care system due to medical malpractice liability is at least $15 
billion a year!
  Malpractice reform should include all medical liability disputes to 
be initially resolved by a dispute resolution process, prior to 
entering court. There should be a cap on noneconomic damages at 
$250,000 and limits on attorneys' contingency fees. There should also 
be limits on a liability of the defendant to the proportion of 
negligence and discourage frivolous court actions by requiring the 
plaintiff to pay the defendant's legal fees, if the plaintiff loses. I 
would also like to apply medical malpractice reform to medical device 
and drug manufacturers, with exceptions for fraud, misrepresentation or 
withheld information.
  Tax fairness--self-employed individuals and others who buy individual 
policies should receive the same tax treatment when it comes to health 
insurance as the Fortune 500. Farmers, small businesses and others 
should be able to deduct 100 percent of the premium from their taxes.
  Probations on State-mandated benefits--this would lower the cost of 
insurance and let plans be tailored to actual needs.
  Under served areas should have better access to care--this is 
especially important to rural areas. I have supported efforts on the 
House floor to increase funding for community health centers. Community 
health centers provide care to low-income working families in a cost-
effective and efficient setting. I supported an amendment offered by 
Congressman Porter to shift $100 million to community health centers 
from the administrative overhead budgets of three Cabinet departments. 
This would have funded an additional 125 community health centers 
serving an additional 848,000 Americans. It would have doubled the 
outreach grants to rural areas.
  Main-streaming Medicaid--we should seek methods to bring the Medicaid 
population into the existing health care network. This would mean 
giving States flexibility to use Medicaid funds to place recipients 
into managed-care networks or allow States to purchase private 
insurance.
  Administrative reforms--the paperwork tiger must be tamed. More 
bureaucracy from Washington is not the solution to this. We must 
streamline and standardize the paperwork that drives increased costs in 
administrative overhead. In a survey of nursing homes in my district, 
the biggest complaint was that the nursing staff spent more time on 
paperwork than they did on providing care to residents.
  According to one study, if Congress did only three things, it would 
increase coverage to over 90 percent. These three things are: insurance 
market reforms, tax fairness of insurance, and subsidies to low-income 
individuals. These three things would also cover about 97 percent of 
all potentially covered health spending and there is room to do more 
reforms with the private sector which I advocate. The last thing we 
need to add to our system is more taxes, more bureaucracy, more 
Government regulation, more Federal entitlement programs, more 
litigation, price controls and rationing.
  We can bring greater access and cost control to our health care 
system in a sensible manner that builds upon our free market system. 
This is the reform that would work the best and preserve the high 
quality found in American health care.

                          ____________________