[Congressional Record Volume 141, Number 157 (Wednesday, October 11, 1995)]
[House]
[Pages H9874-H9886]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      THE IMPACT OF REPUBLICAN PROPOSALS ON MEDICARE AND MEDICAID

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from California [Ms. Pelosi] is recognized 
for 60 minutes as the designee of the minority leader.
  Ms. PELOSI. Mr. Speaker, last week the gentleman from California [Mr. 
Lantos], the gentlewoman from California [Ms. Woolsey], and I held a 
field hearing in San Francisco on the impact of the extreme Republican 
proposals to devastate both Medicare and Medicaid, and all this 
devastation has wrought to pay for a tax break for the rich, yes, a tax 
break for the rich.
  The Republican proposal would cut $270 billion from Medicare and $182 
billion from Medicaid programs. Over 50 percent of the tax break will 
go to the highest 6 percent income earners in the country, over 50 
percent of the tax break goes to the highest 6 percent of the 
population.
  The hearing was very revealing. We had an extraordinary list of 
panelists who are respected in their fields who presented their views 
on the impact of these drastic cuts.
  First, we heard from individuals, experts, really, because they can 
say directly how these cuts would affect them. The first panel was 
comprised of representatives of working families, mothers and children 
and seniors. Our first witness was a pioneer in the field of women's 
health and women's rights, Del Martin. At age 74, Del was a delegate to 
the White House Conference on Aging and is a respected community 
leader.
  Del said seniors are more than willing to carry their share of the 
deficit reduction burden.

       We are told that Medicare is responsible for only 6 percent 
     of last year's Federal deficit. Why then, why then is 
     Medicare being cut by 35 percent? That is not fair. 
     Congressional leaders refused to even consider eliminating 
     tax breaks and loopholes which primarily benefit the wealthy. 
     You do not need a PhD in economics to know there is something 
     drastically wrong in this balancing act.

  Del went on to say in her testimony the increase in Medicare costs 
for her personally projected over the Republican plan would amount to 
over 27 percent of her income, and this percentage would increase as 
her income diminishes as time goes by. She said as she grows older, 
that if this Medicare plan is put into effect, her children may have to 
help her, and that is why these Medicare and Medicaid cuts, these 
drastic cuts proposed by the extreme Republican majority are of concern 
to not only our senior citizens but our middle-aged, middle-income 
families and children in America.
  I think it was Betty Davis who said, Mr. Speaker, growing old is not 
for sissies. And being elderly in our country and being faced with 
these cuts in Medicare and Medicaid will have a devastating impact on 
America's families, because if our parents are not cared for, the 
delivery of service is not paid for by Medicare and Medicaid, then who 
is going to pay?
  Under the Republican plan, I will tell you who is going to pay. The 
Republicans will have a call on the income of the working children of 
those parents from those elderly parents. The Republican plan will say 
that a woman, a spouse whose husband has gone, say, to a nursing home 
under Medicaid will not be able to retain even the $14,000 per year 
that she is now allowed to save. That money will have to go for her 
husband's care in the nursing home, and she will be pauperized and not 
able to stay in the community, and that the Republican plan will allow 
States to call on the home that that spouse is living in, in order to 
pay for her husband's care in the nursing home.

  So this strikes right to the economic and health security of our 
senior citizens, but also the economic security of their children as 
those working married children who are trying to raise their own 
families will now have more responsibility for the health care bills of 
their parents.
  Another member of the panel was a remarkable young woman, Melica 
Sadasar, who is director of Family Rights and Dignity, an organization 
for homeless and low-income families. She spoke to the consequences 
that changing Medicaid into block grants would have on poor children. 
She said the decision to block grant Medicaid relegates mothers and 
children to a caste of disposable human rights. These political 
decisions simply say that our children, that their lives are not 
valuable, that their futures are irrelevant. This is political 
savagery, she had said. This is child abuse masquerading as 
congressional legislation. ``How can we say to an entire generation of 
children that their country will not protect or invest in them?''
  Mr. Speaker, I contend that these changes in Medicare and Medicaid 
will not lead to balancing the budget or reducing the deficit. Indeed, 
the best way for us to do that is to invest in human capital, to 
invest, to intervene earlier if someone is sick or in need of care, 
rather than waiting until the bill is so much higher.
  Finally, on that panel, Mr. Speaker, Bruce Livingston, the executive 
director of Health Access, spoke, and he talked very movingly about his 
parents and what the impact would be on their economics and indeed on 
their dignity and indeed on his financial security. He said that his 
father was a Vietnam vet and a career U.S. civil servant, had wisely 
and carefully structured a health plan for himself and his mother prior 
to his father's death. That included reliance on Medicare and Medicaid.
  Now, like many Americans, his mother must rely solely on herself and 
whatever benefits she still receives from her husband's pension to make 
ends meet.
  Bruce said,

       My father worked very hard to provide security for his 
     family. This was the most important thing in his life. When I 
     asked him why he fought in that war, he said, ``I wanted to 
     care for my family.'' My father would turn over in his grave 
     if he thought the security he built for my mother was 
     threatened because of proposals for tax cuts for the wealthy.

  Bruce's father and mother made their financial decisions based on the 
promise that Medicare and Medicaid would be there for them. Bruce said, 
``My parents kept their promises to the U.S. Government. Now, as their 
son, I ask you to keep your promise to them.''
  As I said earlier, Bruce is part of that sandwich generation where he 
will now have his assets and his income called upon to help pay for his 
mother's health care costs.
  I saw an interesting poster at one of the rallies that said, ``My 
children cannot afford my health care.''
  What does it do to the dignity of a senior who has worked all of his 
or her life to provide for his or her retirement to then have to go to 
their working-age children, middle-income, working-age children who are 
caring for their own children, and say, ``We need to call on your 
assets to take care of my health care benefits because Medicare and 
Medicaid are no longer there?'' It is interesting to hear our 
colleagues, to talk about the choices seniors will have.

  Oh, yes, they will have a choice. They can stay in Medicare with 
higher premiums and lower benefits. If they go into one of these other 
managed plans, I predict, Mr. Speaker, you can call that the Roach 
Motel plan, because once they go in that plan, they are not going to 
have any choices. It is in and it is not out, and let me choose another 
plan because I do not like it in there; so seniors have to be very, 
very concerned about this Republican proposal.

[[Page H 9875]]

  Well, it is clear it is easy to understand why the Republicans want 
to change Medicare. They did not believe in it in the first place. 
Ninety-five percent of the Republicans in the Congress voted against 
Medicare 30 years ago when it was passed in the Congress of the United 
States. They have not liked it. Now they want to move on from it, and 
it providing the health security to America's seniors.
  We had other panels that I am going to get around to. But first I 
would like to yield to some of my colleagues from Northern California 
so that they can address some of the other voices that they are hearing 
from their districts. They can tell us about some of the other voices 
they are hearing from their districts on the Republican proposal. I 
first would like to yield to that fighter for seniors, the gentleman 
from California [Mr. Farr], who has been in very close touch with the 
seniors in his district and is here to report on their concerns about 
the impact of the Republican cuts in Medicare and Medicaid to give a 
tax break to the 6 percent wealthiest in our country.
  Mr. FARR of California. I thank the gentlewoman.
  I really appreciate the gentlewoman yielding this time. I hope that 
in our brief moment here tonight that we can bring to attention what is 
really going on in Congress.
  Like the gentlewoman, this last week I met with senior citizens in my 
area and, in fact, they gave me this postcard. They asked me what would 
I do with it, what does it matter when they go out and gather 
signatures and then they turn in cards, cards by the hundreds. Every 
one of these cards is just coming in from the districts daily.
  Those cards read:

       California seniors are willing to do their fair share to 
     help reduce the budget deficit, but the drastic measures now 
     proposed for Medicaid and Medicare are unacceptable. Your 
     vote, those of Members of Congress, to devastate Medicare in 
     this way would be breaking a campaign promise to thousands of 
     your constituents.

  I got to thinking just with that first sentence in there, ``campaign 
promises.'' Is that not what this discussion really is all about? It is 
not about reforming Medicare. It is about a campaign promise that was 
made that this year the Republican-controlled Congress will give tax 
cuts to the very wealthy. That was a promise made, and when you think 
about it, I looked in the Webster's Dictionary of what is a promise. A 
promise is a legally binding declaration that gives the person to whom 
it is made a right to expect or to claim performance or forbearance of 
a specific act.
  In order to deliver on that campaign promise, to cut Federal programs 
so that they can pay for tax cuts, they have to find a major program 
like Medicare, and attack it.
  Now, we know it has some problems, and we are all willing to do 
something about it. But if you really want to keep your promises to 
seniors, you would not be attacking the very program that benefits 
them. In fact, the first thing you would do is you would get up and say 
``Look, this isn't about tax cuts. It is so much not about tax cuts 
that we are not even going to consider tax cuts. Take them off the 
table. We'll never deal with them.'' That honesty would bring us a long 
way.
  This card goes on to say, ``The current budget proposal described as 
a reduction in the rate of growth is nothing less than a cut, which 
will cost seniors and their families thousands of dollars more for 
their health care.''
  We just heard a debate that this is not going to cost seniors more, 
everybody is happy about it. If everybody really believes that, where 
are they? They are not in here saying ``Give us this Republican 
proposal, give us this plan. We can't wait to have it. It is going to 
be so wonderful, the nirvana we are all going to live under when we do 
not have to spend more with less.''
  The card goes on to say, ``Additionally, I am very concerned about 
congressional plans to cut spending for programs under the Older 
Americans Act, Meals on Wheels, congruent meal programs, programs to 
prevent elderly abuse,'' all of those programs we heard about at the 
hearings and out on the lawn that are under the acts. ``Please act 
responsibly.''
  I think that is what we are trying to do here tonight, is be 
responsible about Medicare, about Medicaid, about the Older Americans 
Act. These are vital to seniors and to their families.
  These cards just come from my district. So when I met with these 
seniors this last Monday, they said, ``How can we just as individuals 
out here who have signed our names and have written you cards, and some 
of us are too old to write long letters, so the best thing we can do is 
sign a card, how can our plea, our voice, be heard in the U.S. 
Congress?''
  I said, ``There is a wonderful thing about Congress, and that is 
there are what is called special orders. And I will bring back to the 
U.S. Capitol, where we are standing tonight, all of these cards and all 
of this poster that you put out and the signatures you have had, and 
you will see and the rest of the nation can see your concerns, and will 
be able to join in with you, as thousands and millions of seniors are 
doing across the country to say `don't break your promise to seniors 
just because you want to keep your promise to the rich.' ''
  Ms. PELOSI. I thank the gentleman for his speech. I hope the 
gentleman will continue to contribute to our discussion this evening. I 
commend the gentleman for his hard work in the district and 
congratulate him on this collection of signatures on the cards of real 
people, real grassroots people speaking out about the injustices of the 
Medicare and Medicaid cuts.
  As the gentleman says, of course, we all stipulate that we must 
address the issue of waste, fraud and abuse. Indeed, President Clinton 
last year in his comprehensive health care reform addressed these 
issues. This was rejected by the Republicans. The President addressed 
the issue of the shoring up of the trust fund, of eliminating waste, 
fraud and abuse, and by moving forward with a comprehensive health 
plan, universal access to health care for all Americans, really took 
the bull by the horns in saying this is the only way we are going to 
address the rising cost of health care in America, is by making health 
care more available to many more of our citizens.

  What is interesting is that today the reason we have the hearings in 
our district that the gentlewoman from California [Ms. Woolsey] 
participated in, was because our people really could not come to 
Washington to be able to be heard by the committees of jurisdiction on 
this issue. Some came and spoke on the lawn where we had our hearings 
outside, and some came and spoke in our district. It is very sad that 
our colleagues on the other side of the aisle were not there to hear 
what these experts had to say about the Republican proposal, indeed, 
what the individuals had to say about the insecurity that these 
proposals brought to their lives.
  But what is interesting is what has happened in the last 24 hours 
here in Washington, DC. Within the last 24 hours, senior citizens who 
came to a hearing room where Medicare and Medicaid were being written 
up into legislation, legislative language, were ejected from the 
meeting with the assistance of the police. These senior citizens were 
ejected from the meeting. Within a number of hours, representatives of 
the AMA were waltzed into the Speaker's office to talk about what they 
wanted out of the Republican Medicare bill. They came out and said ``We 
picked up, the AMA, we picked up $3 billion. $3 billion. So we support 
the plan.'' Nothing about what this does to undermine the delivery of 
health care services in America. ``We, the AMA, we picked up $3 
billion.''
  Well, guess who is paying the $3 billion? Those seniors who got 
ejected by the police from the hearing, because that same day, as the 
AMA is celebrating their $3 billion windfall, the Committee on Energy 
and Commerce voted a $25 per month increase in premiums for senior 
citizens in America to pay for the increase that they gave the AMA, and 
to also pay for the tax break, over 50 percent of which goes to the 6 
percent highest earners in our country.
  Before I yield to my colleague, I want to state that I will be 
placing in the Record the full statements of Bruce Livingston, 
executive director of Health Access, and other representatives of 
various groups.
  Mr. Speaker, I am pleased to yield to our colleague, the gentlewoman 
from California [Ms. Woolsey], who was present at the hearing, who had 
some 

[[Page H 9876]]
of her constituents there, and who has been a relentless fighter in 
this fight. She brings dignity and pride to the State of California by 
her service on the Committee on the Budget, where she represents so 
very well the values of the people of her district.
  Ms. WOOLSEY. Mr. Speaker, I thank the gentlewoman for yielding. First 
of all, I want to thank you, my fellow Bay Area colleague, for having 
the forums that we had while we were in the district last week and for 
putting this special order together tonight, because when I was 
listening to what they were saying on the other side of the aisle 
earlier, it totally floored me. We must, in the Bay Area, live in a 
totally different part of this world or something than they represent, 
because the entire Bay Area, from Sam Farr's district down to Santa 
Cruz and north and through San Francisco and into Sonoma County and 
across the Bay to Oakland, Alameda, and Oakland, we do not hear these 
things.
  I do not know why I did not bring them. I have stacks and stacks of 
petitions from the people in my district, one of the most affluent 
districts, by the way, in the United States of America, of seniors 
saying they do not like these cuts, if not for themselves, for other 
people they know. They are willing to pay their fair share, but they 
want fraud and abuse taken care of; they want the tax cuts off the 
table.

  Well, I always do tell people that I am fortunate to represent Marin 
and Sonoma Counties, because being the two counties directly north of 
the gentlewoman's district, across the Golden Gate Bridge, I know that 
all of my fellow members of the Bay Area delegation, including myself 
and those that I work with in the sixth District, I know that we live 
in an oasis of sanity. That makes it easier for us, because we work 
with people who time and time again, our constituents, the true leaders 
of this country when it comes to caring, when it comes to 
understanding, and when it comes to working for the rights of other 
people in this Nation, including their own rights. But they care about 
other people.
  So last week when Nancy and Tom Lantos and I had the hearing in San 
Francisco and we met with many of the people who wanted to tell us what 
they thought about these radical cuts in Medicare and Medicaid, which 
Speaker Gingrich and the new majority are pushing through our Congress, 
I was comfortable being with all of you, because I knew that we 
represented districts much the same. But I felt appalled that we had to 
have these meetings in our districts, which we have been having all 
over the place anyway.
  I have had meetings with hospital administrators, with doctors, and 
with senior citizens throughout my entire district. Nobody is coming to 
me saying they like what is happening.
  But we had to have more meetings than the one in San Francisco, 
because we are making up for 1 day of hearings here in the House of 
Representatives in the committee. We tried to make up for that with a 
week of hearings out on the front lawn, where we could have people come 
and actually express themselves. But it was important that we take 
these hearings also to the Bay Area within our own districts.
  So when we had our hearings last week, we were able to hear what 
people really though about the impact of Medicare. The wonderful people 
spoke out, people like Dr. Tom Peters, who is the head of the Marin 
County Department of Public Health in my district, and to Anthony 
Wagner, the executive director of Laguna-Hondo hospital in San 
Francisco, and Paul Dimoto, who is with the San Francisco AIDS 
Foundation. They came to us, and they gave us one message to bring back 
here to Washington. That one message is this: The Gingrich Medicare and 
Medicaid cuts will devastate the elderly, the poor, and the disabled.
  Today, I think we all know that the Committee on Ways and Means 
passed their assault on Medicare and Medicaid. Today, the new majority 
demonstrated their willingness to ram their plan through Congress with 
only 1 day of public hearings. What an outrage.
  As a former Member of the Petaluma City Council, I can tell you that 
we talked longer and harder about sidewalk repairs then Speaker 
Gingrich and his allies have for an issue which affects the health of 
millions of Americans.
  So we are here tonight, the three of us, speaking out to the people 
that have been shut out, shut out of the democratic process by the new 
majority. We are here tonight to tell you that people in the Bay Area, 
seniors, patients in nursing homes and middle-income families, are 
scared to death, scared by the new majority's assault on Medicare and 
Medicaid. They know that this plan will inflict real pain on real 
people. They know and we know that the Gingrich Medicare and Medicaid 
plan is not fair. The people of Sonoma and Marin Counties know that the 
Gingrich Medicare and Medicaid plan is not fair as well as our knowing 
it.

  Maybe even the majority knows that this plan is not fair. Maybe they 
do not really care. But the American people care, and so do the people 
who testified before Nancy Pelosi, Tom Lantos, and myself last week in 
San Francisco. So do the doctors, the hospital administrators, the 
senior citizens, who have come to forums and hearings that I have had 
in Marin and Sonoma Counties.
  I urge my colleagues, everyone in this House of Representatives, to 
heed the words of the people that we have been talking to, to reject 
these attacks on seniors, children, and middle-class families, and to 
show that we really care, really care about the people in this country.
  Ms. PELOSI. I thank the gentlewoman from California for her statement 
this evening, for her participation in the hearing, and for her 
leadership on this very important issue. It was interesting then and 
now to hear your point that as a leader in local government, the time 
that you have spent, the period of public comment that is required for 
changes in the infrastructure in your district, be it a sidewalk or 
whatever, and how quickly the Republican majority wants to move forth 
with its stealth plan before anybody can really see what it is. I know 
our colleague, Mr. Farr, has a similar experience.
  Mr. FARR. I think it is very interesting. The gentlewoman are on a 
city council and very involved in local government. Congresswoman 
Pelosi was on the board of supervisors in San Francisco County. I 
served the local government and then in the State legislature. There is 
not a city, county, or State in the Nation that does not require 
publication of any change in law that you are going to make, and that 
publication has to be available to the public, I know in California, at 
least 30 days before you even have a public hearing on it.
  In the State legislature, an analysis has to be made of both the 
costs and the benefits, and that is all public information. In fact, 
you can call up on a hot line and get it, and those bills are free to 
any constituent in the State of California who wants them.
  The point is, every time you are going to tinker with the law, the 
process requires that the public be aware and know about it. The one 
exception to that rule is right here in the U.S. Capitol, where 
essentially you do not have to tell anybody until the day that a vote 
is taken what is in the law. I think that is very confusing to most of 
the American public, because they are familiar with going to a school 
board meeting or going to a city council meeting or even petitioning 
their State legislature and finding out the details of the law, not 
what some press release says, not a public relations firm comment, but 
what is the law. People can read.
  In this case, the public of the United States has no idea what is in 
this great promise to resolve Medicare, other than it is going to 
affect their pocketbook.

                              {time}  2100

  Mr. FARR. It is essentially going to take money, saying, 
``Government, you spend less, and, people, you spend more.'' For those 
people that are on fixed incomes that have signed these petitions that 
were at your hearing, what did they tell you? ``Our incomes are 
limited. We are on fixed incomes. We cannot go out and make more money. 
We do not have the ability to increase our income. Our water bills have 
gone up, our garbage bills have gone up, our sewage bills have gone up, 
our telephone bills have gone up, and 

[[Page H 9877]]
our cable television bills have gone up. Now you are coming along and 
saying the most vile thing of all, our health care bills are going to 
go up even more. Where are we going to get the money to pay for it?''
  This is the sham being played on America. It is essentially saying, 
``You people, the poorest in the Nation, who have limited incomes, who 
cannot go out and get more, you have to pay more,'' so that they can 
turn around, take that money, and give tax cuts to the most wealthy 
people. This is not the Nation of America that takes care of people 
like that. It is not why we ran for Congress and why we took the oath 
of office to be here. Not to rob from the poor to give to the rich.
  Ms. PELOSI. Mr. Speaker, as the gentleman mentioned earlier, if this 
is not all about giving a tax break to the wealthiest Americans, why do 
they not just take the tax cut off the table? Let us address getting 
rid of waste, fraud, and abuse in Medicare and Medicaid. Let us address 
the delivery of health care to our senior citizens, because that is 
mostly what we are talking about here, outside the arena of ``We will 
take this money and we will spend it on a tax cut.'' If that is not 
what the purpose of this is, let us eliminate it.
  Within the Republican Party there are many people saying it is not 
right to do this; we ought not have that tax cut. But the majority of 
the Republicans are insisting on it, because that is what this is 
about. They want to give the tax cut. They are going to where they can 
get many people who are paying into the system, and that is our 
seniors, and asking them to pay more into the system for their health 
care.
  It would be a more fair and honest debate if we could have this 
debate without a tax cut on the table.
  Ms. WOOLSEY. Mr. Speaker, if the gentlewoman would continue to yield, 
first I want to say I do not believe they are hearing what they are 
saying they are hearing from their constituents, because their 
constituents cannot be that different than ours. I know a Republican 
Representative just north of me. Our newspapers are telling us that his 
constituents are saying to him what they are saying to me, and that is 
keep your hands off our Medicare and our Medicaid. Because Medicaid is 
going to get hit next if we even tweak with Medicare. We will pass it 
down to the poorest of the poor; our elderly, frail seniors, and also 
the other third of the people who are on Medicare, which are the 
disabled and handicapped, and then children who are on welfare, which 
make up 70 percent of welfare recipients who need Medicaid.
  So he is hearing what I am hearing. I know that. They are hearing 
what we are hearing. They are just trying to tell them that they think 
something else. It will not work. I do not know about other Members, 
but I have a lot of faith in the American people, and when they know 
what is happening to them, they will not put up with this.
  Now, when we talk about process and we talk about the difference 
between local government and State government and county government, we 
have the Brown Act in California. I cannot imagine taking the AMA into 
a back room and negotiating what we are going to do with their fees and 
leaving all of the people, the consumers, the seniors, out of that 
debate process. No way.

  It is such an insult to the people of this country. That is exactly 
why American voters are getting disenchanted. They think they do not 
have a say. The Republicans, in doing what they did with the AMA, gave 
the American voters a lot to believe in when they told them you, the 
American voters, do not mean anything to us. We are taking a special 
interest group into a back room and we are going to make great 
decisions that affect you.
  Ms. PELOSI. Mr. Speaker, it is interesting that the gentlewoman makes 
that comment because at the same time that this is happening, as 
lobbyists are having very special access in this process, the 
Republican majority is at the same time saying anyone who gets a grant 
from the Federal Government should not be able to lobby the Federal 
Government.
  Certainly nobody who gets a grant from the Federal Government should 
use any of those Federal grant dollars to lobby the Federal Government, 
and they must use it for the purpose of the grant. But just because an 
organization has competed in a process and won a grant does not mean 
they have abdicated their rights as a citizen of our country to be able 
to petition government. That is the right of a democracy. The public's 
participation in the formation of public policy is what a democracy is 
all about as much as a free election of representatives.
  So when we talk about process, we are talking about a stealth plan 
which continues to be substituted. As recently as 48 hours ago, the 
plan became a new plan. And as recently as the AMA walking in that 
office, there was another change made. So we have this stealth plan and 
then we have a process where there are no open hearings where consumers 
can come in and citizens can come in and say this is how this would 
affect me, or professional judgment opinion would say this is how this 
would affect the delivery of service. And on top of that, we are going 
to squelch the voices of people who have participated in our process 
and have won grants.
  And yet, Mr. Speaker, when we ask them would they apply that to the 
Defense Department, which awards contracts into the hundreds of 
billions of dollars, they say, oh, no, not the Defense Department. 
Well, if we are going to do it to people on the domestic side, then we 
should do it on the defense side or not do it at all.
  And I prefer that. I prefer that the people who get government 
contracts have the ability to speak out, whether it is defense 
contracts or other contracts. But in this situation, the defense 
contractors are off the table, just as they are in the budget 
priorities.
  Mr. FARR. I think we are really hitting on what is at stake here. It 
is really confidence in America. We have lost that confidence. I do not 
think the Contract for America buys confidence, particularly when you 
have in that contract this big tax cut. The American public can 
understand if you want to balance the budget let us stick to balancing 
the budget, but do not get us confused with also doing big tax cuts.
  To the best of my knowledge, frankly, the debate has not been very 
honest because there are two forms of balancing the budget. There is a 
fast track, which I think is the Republican form, a steep glidepath, 
and then there is the more moderate glidepath which the President 
introduced, and the American public should know what the consequences 
are by taking either the steep path or by taking the less steep path. 
Because along the way, if you hurt the most vulnerable people, and we 
have seen in the Contract With America that we have already hit and 
hurt rural America, we have hit and hurt the elderly citizens, we have 
hit and hurt the school children needing lunch programs, we have hit 
and hurt students who want to go to college by making them pay more. 
What difference is it going to make if you have a balanced budget if 
people are too sick to enjoy it, too poor to access college, everything 
becomes too expensive? You have not really developed this kind of 
wonderful Utopia that all of a sudden you are going to get with a 
balanced budget where interest rates come down.

  So I think the debate on how you balance the budget ought to be a lot 
more honest and it should be a lot more honest about who will get hurt 
if you take the fast slope toward balancing it. And along the way, we 
are hurting the very people that we want to help.
  As you said, we prohibit Girl Scouts from coming in here and lobbying 
in Congress if they receive any Federal grants, but the big aerospace 
industry, defense industry, who get billions of dollars, can come in 
here and lobby for B-2 bombers, even when nobody in the Defense 
Department wants them, and they are not taken off the list.
  So this is really about building confidence in America, and I 
appreciate both of my colleagues in northern California and the Bay 
Area for bringing a little sunshine and sunlight into what has been a 
very closed, mysterious system that I think misses a point of honesty, 
and the honesty is if we want to balance the budget let us talk about 
it, but not under the guise of just making poor people pay more so rich 
people can pay less.
  Ms. WOOLSEY. If the gentlewoman would yield, in my hearings and 
forums 

[[Page H 9878]]
I have been having in my district, I will have 100 or 200 people 
possibly in a room, and of course somebody in the room is going to 
disagree with me, and when that person stands up, the rest of the 
wonderful senior people as well as this person that stands up and gives 
his opinion sometimes boo or speak out, and I stop that person, those 
people immediately and say, no, no, this gentleman has every bit a 
right to give me his opinion as you do. This is the American process, 
which is about hearing each other and what we care about.
  That has been the disappointment in this debate here in the House of 
Representatives. We have not allowed those who do not agree with what 
the new majority is recommending to have their say.
  One of the other things they tell me in my meetings is besides taking 
the tax breaks off the table, why are we increasing the defense budget 
beyond what the Department of Defense wanted in the first place. They 
would like those increases off the table, also. They are very clear 
about that. So those are the kinds of inputs I am getting, and I 
believe that those around the country, besides ourselves, are getting 
the same kind of input from their constituents.
  Ms. PELOSI. I think the polls are showing that the Republican 
proposal to cut Medicare in order to fund a tax break for the 
wealthiest Americans is not a popular proposal in all of America.
  I want to take up on a point you mentioned about defense. Certainly 
we all, as we stipulated earlier, we must address the waste, fraud, and 
abuse in Medicare, as President Clinton tried to do and as we will all, 
I think, in a bipartisan way address, and let us also stipulate that we 
are all patriotic Americans and we want to have a very strong national 
defense.

  But as we try to reduce the deficit and balance the budget, why, when 
the Republican majority is trying to look for inefficiencies in 
Government, do they take defense off the table? Maybe there are no 
inefficiencies in the defense budget. It could be. I doubt it, that 
there are no inefficiencies in any part of the budget. But why is it 
not on the table?
  So when we say to senior citizens in order to balance the budget in x 
number of years and give a tax break to the wealthiest Americans, you 
will have to pay a higher premium per month and that could amount to 
several hundred dollars a year which, contrary to what my colleagues on 
the Republican side of the aisle may think, is a great deal of money to 
our senior citizens, while at the same time we are saying but we will 
hold harmless the entire defense budget and not look there for any 
inefficiencies or any ways that we can cut.
  So it is about process, it is about the process of a closed process 
with a stealth plan. It is about substance, it is about what this 
proposal will do, and it is about priorities. If we do not respect the 
contributions that have been made by our senior citizens and also 
recognize that unless we invest in people, as our colleague from 
California, Mr. Farr, said, what is the use of balancing the budget? 
Our people are sick, our children are undereducated. If we define a 
strong country, it certainly is in terms of our national defense and 
our military might, but it most certainly is even more so in terms of 
the health, education, and well-being of our people.
  I would like to yield back to my colleague from California, Mr. Farr, 
to further pursue that line of thought.
  Mr. FARR. I think the big debate here in Congress is how do we ensure 
that we have a society moving into the 21st century that is a 
responsible society. It is not just the rights of individuals that you 
have heard a lot about, particularly when it got into issues about Waco 
and things like that; it is the responsibilities of society. We are not 
going to have what I call the domestic tranquility of this country 
balanced in a style in which we can all appreciate if indeed you have 
disenfranchised a lot of people. If parents do not think their kids can 
get an affordable education, we talk about accessible education, 
accessible education means you can get there from here, that you have a 
chance to avail yourself of the great schools. And we have some 
wonderful ones in the State of California, some of the best in the 
world. But what good are they if they are too expensive to get to and 
the kids are not getting into because of cost. What good is a health 
care program if you cannot access it?
  So what happens is things, as we know, they get worse. I think that 
the one difficulty that is not in this entire Contract for America that 
they are trying to approach is what happens to the people that do not 
make it, that fall through the cracks.
  Ms. PELOSI. That is laissez-faire. Too bad.
  Mr. FARR. Do they end up on the streets as the homeless population we 
are all very familiar with? I think the security of this Nation, the 
domestic security is dependent on the confidence that people have in 
government, and a government that tells you that they are going to help 
you with one hand, balancing the budget, and with the same hand takes 
away your own ability to access prosperity is a country that is not 
telling you the truth.

                              {time}  2115

  Ms. WOOLSEY. Mr. Speaker, we are missing another point here. That is 
that this does not just affect seniors. The sandwich generation comes 
to me in my meetings, 40-, 50-, 60-, and 70-year-olds say to me, I have 
a parent in a nursing home. The 70-year-olds could be in a nursing home 
themselves. But they have got parents they are worried about in nursing 
homes. They know they will have to start taking on more and more of the 
responsibility for that parent.
  Now, many, many of the sandwich generation also have children that 
need to go to college, and college education is going up. Loans are 
going to be far more expensive. These same people are going to want to 
help their children go to college. They are going to make a choice: Do 
I send my kid to school, help my child go to college; do I help my 
parent in a nursing home? And for heaven sakes, where will they ever 
have any discretionary money to put away so that their children do not 
have to help them when they are seniors? I mean, we are just squeezing 
the middle income sandwich generation down to having nothing. They are 
frustrated and, boy, I do not blame them.
  Ms. PELOSI. We talked earlier about the middle income, middle-aged 
people in America, which includes very many people who are the backbone 
of society, making such a valuable contribution to the greatness of our 
country, as they try to do their own jobs, educate their children and 
feel some responsibility for their aging parents, as you call them, the 
sandwich generation.
  They are so at risk not only under the Medicare cuts but under 
Medicaid cuts. I think many people are not aware, they think of 
Medicaid as a poor people program. But very many seniors benefit 
greatly from Medicaid, whether it is long-term health care or, for 
example, 5 million American women have their Medicare premiums paid by 
Medicaid, 5 million American women. Of course that is not the whole 
number. There are men who have it, too. But women would be particularly 
hit by this.
  These Medicaid cuts compound the problems caused by the Medicare 
cuts. Poor or nearly poor elderly, those are monthly incomes below $625 
a month, may no longer be assured that Medicaid will provide cost 
sharing protections for their Medicare. As I say, the Medicare can pay 
for their Medicaid, their Medicare premiums, copayments and 
deductibles. The copays and deductibles can rise and these people, 
where are they going to get the money to pay for that? From their 
children.
  These low income elderly are doubly hurt because Medicare premiums 
and copayments will increase substantially at the same time that the 
Medicaid Program stops paying for them. Further, under the Republican 
plan, there would be no more guarantee of coverage for nursing home 
care after an individual or family has spent all of its savings. There 
would be no more guarantee that spouses of nursing home residents would 
be able to retain enough monthly income to remain in the community.
  States would be allowed to place liens on the family home and family 
farms. In addition to all of that, States would be allowed to require 
adult children of nursing home residents to pay for their parents' 
nursing home care, which could be $40,000 per year. I mean, where are 
people going to get this money? 

[[Page H 9879]]

  If you have a mother or father with Alzheimer's disease, for example, 
requiring nursing home care and you are trying to put your children 
through college, you have good reason to oppose the Republican plan. 
What the Republicans are doing in wrong, and working families deserve 
better.
  I just might add, apart from the money issue, an absolutely shocking 
part of the proposal is that they would remove the standards from 
nursing homes. This is the era of Dickens. We are returning to the 
past. We would eliminate Federal standards for nursing homes. It is 
appalling.
  Ms. WOOLSEY. Mr. Speaker, when I was a youngster, I was in the Girl 
Scouts. And every Christmas we would sing to nursing homes and go in 
and out of these nursing homes. This was in the early 1950's. I mean, I 
am old. I would leave those nursing homes sobbing because here were 
these old people sitting on newpapers. I had never seen such dismal 
situations. Well, it is improved now. There is a reason there are 
national Federal standards for nursing homes. You go in a nursing home 
and you can pretty much, at least where I live, feel that somebody is 
being taken care of with quality and dignity.
  Well, I just blink and we could go right back to seniors on 
newspapers.
  Ms. PELOSI. It is very hard to understand why they would think that 
that is a good idea. But it is also easy to understand why they do not 
want anybody having public hearings to have to come in and testify as 
to why that is not a good idea.

  I did want to put on the Record some more testimony from our hearing 
in San Francisco, but I am pleased to yield to the gentleman from 
California if he had something further to add before that.
  Mr. FARR. Mr. Speaker, I was just thinking about this issue of 
national standards. It is too bad that they have not really gone out 
and asked the American public what they think about it. Obviously we 
have national standards for aviation. We all use it a lot having to fly 
back and forth from California. We respect those national standards. 
They do not leave those up to States. Banks have national standards. 
The stock exchange has national standards. Drugs have national 
standards.
  I think the American public has realized this in areas where there is 
a vulnerability at risk, you want some national standards. To say to 
the most elderly people of this country, your future, your time when 
you may be most vulnerable in life, most frail in life, we are going to 
leave this up to your State. If they like you and they have money and 
they want to spend it on you, they will take care of you.
  But what about those States--and you never know where you are going 
to end up in life, you do not know where you are going to end up being 
an elderly person, where in your hometown you may not be able to afford 
it. Many people move in their elderly age to other States, other 
locales. Is there not supposed to be some kind of equal playing field 
here, a common denominator that says in this country that we are going 
to have standards for people that are in need, that are frail and need 
special care?
  Under this proposal they take them all away. In fact there may not be 
any standards at all. Is it optional that you do not have to take care 
of people anymore? What kind of country are we developing here?
  Ms. WOOLSEY. The gentleman said if the State has money, maybe they 
will have high standards. What about if the consumer or the patient 
does not have money? I bet you people who have will be in nursing homes 
that have high standards. Those who are the most vulnerable, who are on 
Medicaid, who have the least, are probably going to be the ones faced 
with the nursing homes without standards. And I think that is what we 
are talking about today.
  We are talking about not having a system, that just the few that have 
plenty get to have, reap the rights. We are talking about having a 
country where everybody knows that they can have, can live in dignity 
when they are old and when they are at the end of their lives, that 
everybody has options for an education. That middle income families do 
not feel, are not going to feel pulled in the middle, apart, because 
they do not know whether they should help their parent in a nursing 
home or their child in a school and they are feeling badly because they 
are not putting any money away.
  We cannot have a country that only marches to the beat of the top 6 
percent of the wealthiest in this country, because that is not what 
this United States is built on.
  Ms. PELOSI. Well, I agree. I think that the one thing that everyone 
in this body will agree to, and that is that we are proud of our 
country, that it is a great country and that it is a decent country. 
And I do not think that greatness and decency are associated with what 
you just described about how our senior citizens, who helped build our 
country, would be treated under this plan.
  So I think it is very important for people to understand, certainly 
we have concerns about the poor in our country. But if you are not 
poor, you are still very much at risk under this plan. And we have said 
it over and over again. If you are working, middle-age, middle-income 
people, you will be more responsible under this plan for your parents' 
care, paying for it, just at the same time as you may be putting your 
children through school.
  I did want to also say how the Republican proposal would undermine, 
undermine the excellence of the American health care system. People 
always say, if I ever were to be sick, I want to be sick in America. We 
had some very fine testimony from experts who gave us their 
professional judgment about what the impact of these cuts would be.
  Congreswoman Woolsey mentioned one, Dr. Tom Peters from Marin County. 
I wanted to quote from the statement of Dr. Wintroub from the 
University of California, San Francisco, one of the finest teaching 
hospitals in the country. And Mr. Speaker, I will include his statement 
as well as that of Tim McMurdo, Tom Peters, and Richard Cordova for the 
Record as well.

   Mr. Speaker, Dr. Wintroub testified that by eliminating Medicare 
payments for teaching and patient care, as well as graduate medical 
education, the Republicans are putting in jeopardy the future of health 
care delivery in this country. The indirect medical education 
adjustment, the direct medical education and the disproportionate share 
payments account for over 15 percent of all Medicare and Medicaid 
revenues to UCSF, University of California San Francisco, an excellent 
teaching hospital, and 42 percent of the total budget for UCSF Medical 
Center is dependent on Medicare and Medicaid.
  In addition to that, Mr. McMurdo, chief executive officer, San Mateo 
County General Hospital testified that the proposed cuts to Medicare 
and Medicaid programs will have a catastrophic effect on hospitals and 
clinics that have heretofore relied on the stability of Federal and 
State payments to help cover the cost of care. This reliance has grown 
increasingly important since private insurance carriers continue to cut 
payments to hospitals and physicians as the number of uninsured people 
continues to grow. It is estimated that hospitals and other providers 
in our bay area will lose hundreds of millions of dollars over the next 
7 years if these cuts are enacted.
  Mr. Cordova, from the San Francisco General Hospital, said, you 
cannot slash both Medicare and Medicaid, Medi-Cal disproportionate 
share hospital payments for graduate medical education and indirect 
medical education support and essentially eliminate the entitlement 
status for Medi-Cal without causing a virtual earthquake in the 
provision of health care for many of our most needy residents.
  Mr. Peters says, the blunt truth of the matter is, if you ridicule 
and deny the efforts at comprehensive redesign of the American health 
care system and instead insist only on weakening two of its most 
important components, the quality and availability of health care for 
all Americans is threatened.
   Mr. Speaker, the point being that even the wealthiest Americans will 
not have access to the kind of quality of care that exists today when 
we undermine it for the rest of the country.
  I yield to the gentlewoman from California, if she has anything to 
say on that subject, as she presided over that section of the panel.
  Ms. WOOLSEY. What I would say would be pretty repetitive. But just in 


[[Page H 9880]]
general, we did hear that training colleges and training hospitals, 
health departments, small community hospitals and county hospitals and 
clinics were subject to closing their doors, if we go with what we are 
anticipating with the Republican Medicare/Medicaid cuts.
  Ms. PELOSI. In the interest of time, Mr. Speaker, I may have to take 
another special order to go to our third panel. But with your 
permission, I would like to put their statements in the Record. That 
would be the statement of Mr. Paul Di Donato, Dr. Bergman, and I have 
one more, but I will reference that.
  Dr. Bergman, who is from the Packard Children's Hospital at Stanford 
said, without a regular pediatrician and with limited financial 
resources, he was talking about the impact on children, without a 
regular pediatrician and with limited financial resources, these 
families will often be forced to wait until the child's illness has 
progressed to a more serious and complicated level. Beyond the 
increased costs of providing health care in the emergency room and 
treating illnesses of increased severity because of delay in initiating 
treatment, there is the more important cost, there is the more 
important cost in unnecessary suffering of children. Delays in 
treatment often lead to lifelong disabling conditions or chronic 
illnesses.

                              {time}  2130

  And that is not about balancing a budget. It is about a false sense 
of values.
  The other statement I want to put in the Record is from Anthony 
Wagner from Laguna Honda Hospital, city and county of San Francisco. I 
will be addressing his remarks in another special order.
  Mr. FARR of California. I just want to close in my part here, again, 
reminding people that these are cards from my district that I picked up 
just this last Monday. Here is one just out of the pile from Beth 
Binkert from Pacific Grove, and I think the key sentence in here is the 
second sentence that says:

       These actions represent broken promises and unfair 
     treatment to your elderly constituency. In fact, the current 
     cuts will substantially increase out-of-pocket expenses for 
     the seniors you represent.

  These cards are to all Members of Congress addressed in care of my 
office, but that key point, ``These actions represent broken 
promises,'' and I think tonight we pointed out the promise made here is 
the tax cut for the rich, not the promise to keep people in their 
elderly years secure in health care delivery.
  The testimony referred to follows:

   Testimony on Medicare Reform by Del Martin, Medicare Beneficiary, 
                            October 2, 1995

       I've been hearing some cold hard figures about drastic cuts 
     in Medicare. I'm here to tell you what that would mean to me 
     personally.
       In 1994 I received $9,373 in Social Security benefits and 
     $8,267 in additional income for a total of $17,640. I paid 
     $3,854 or 22% of that income on medical & dental expenses, 
     leaving me $13,786 for other living expenses.
       In 1994 my doctor bills amounted to $1,130. Medicare 
     approved only $521.34 (less than \1/2\) for payment. We hear 
     a lot about doctors taking advantage of Medicare. In my 
     experience that is simply not true. Medicare clients are 
     lucky to find doctors who will accept Medicare limits. Many 
     doctors say NO to Medicare patients.
       The exorbitant expense comes from hospital bills. I 
     underwent outpatient surgery which required the use of 
     operating room and personnel and space for a change of 
     clothes. I was in the hospital for a maximum of four hours. 
     The cost was $1,790. I did not receive a copy of the itemized 
     bill, but presume Medicare did. It was paid in full without 
     question. From past experience I have found that hospitals 
     charge for everything within sight, whether used or not, 
     right down to a piece of Kleenex tissue. If I were a member 
     of Congress I would take a look at hospital costs.
       Hospitals are cutting skilled staff although numerous 
     studies show that adequate staffing of registered nurses and 
     other skilled professionals reduces mortality, infection, 
     accident and readmission rates.
       Under the Republican bill to cut Medicare for a savings of 
     $270 billion over the next seven years, beneficiaries are 
     being pushed to join health maintenance organizations (HMOs) 
     rather than stay in traditional fee-for-service Medicare. 
     They say managed care is the best vehicle for improving care 
     while containing costs. Long ago I learned the hard way that 
     you get what you pay for. Under managed care HMOs are paid 
     whether or not services are used--an incentive to restrict 
     admissions to hospitals, send patients home too soon, reduce 
     staffing and limit access to specialists.
       Containing costs by using HMOs means cutting services. 
     Congress is not dealing with reality. Excessive hospital, 
     HMO, insurer and drug company profits are the source of 
     rising costs.
       For me an HMO is not acceptable. To retain traditional 
     Medicare coverage will cost me another $1,000 or more per 
     year. That would raise my medical expenses to about $5,000 or 
     27% of my present income, which will diminish in the next 
     seven years.
       As a delegate to the White House Conference on Aging and a 
     member of the Leadership Council of the National Committee to 
     Preserve Social Security and Medicare, I have been closely 
     following what is happening in Congress. Seniors are more 
     than willing to carry their share of the deficit reduction 
     burden. We are told Medicare is responsible for only 6% of 
     last year's federal deficit. But Congress proposes a 35% cut, 
     not 6%, to reduce the deficit. That is not fair. In 1994 the 
     Pentagon was responsible for 36% of the deficit. Military 
     bases all over the country are closing down, but defense 
     spending is to increase over the next seven years. That is 
     not fair. Congressional leaders refuse to even consider 
     eliminating tax breaks and loopholes which primarily benefit 
     the wealthy. These loopholes will cost the federal treasury 
     $2.5 trillion over the next seven years--almost ten times the 
     amount they want to cut out of Medicare over the same period.
       You don't need a Ph.D. in economics to know there is 
     something drastically wrong with this balancing act. Too 
     large a burden is being placed on Medicare and thus on 
     America's oldest, and in many cases poorest, citizens.
                                                                    ____


  Testimony on Medicaid Reform by Malika Saada Saar, Director, Family 
                  Rights and Dignity, October 2, 1995

       In his book, Faces at the Bottom of the Well, Derek Bell 
     tells the story of aliens who come to this country demanding 
     the possession of Black folks. In return for the US 
     government handing over all African American citizens, the 
     aliens promise to alleviate the nation's environmental and 
     economic ills. After a brief and self-serving debate, the US 
     government agrees to the exchange.
       Bell's parable powerfully illustrates the disposability of 
     the African American community, that our community is not 
     valued or considered sacrosanct. When I hear Newt Gingrich 
     talk about low income mothers and children, I am reminded of 
     Derek Bell's story. For it is this same concept of human 
     disposability being demonstrated.
       The decision to block grant AFDC, and now Medicaid, to 
     basically strip families of a desperately needed safety net, 
     relegates mothers and children to a caste of disposable human 
     beings. These political decisions simply say to our children 
     that their lives are not valuable, that their futures are 
     irrelevant.
       Last week, I was in the Bayview speaking to families. One 
     mother, with tears streaming down her face, approached me. 
     She told me about her child: a six year old boy who stood at 
     the window of his room and witnessed a friend, not much older 
     than him, get killed. Since then, the child has suffered 
     severe mental trauma. He is receiving extensive counseling 
     and therapy.
       If Medicaid is block granted, this six year old African 
     American boy will not be guaranteed any of the services 
     presently offered to him under Medi-Cal. His life, his 
     future, will be deemed disposable.
       This is political savagery, this is child abuse 
     masquerading as Congressional legislation. The consequences 
     of block granting AFDC, dismantling HUD, and eliminating the 
     Federal entitlement status of Medicaid, will inevitably take 
     the shape of children's and mothers' bodies strewn on the 
     streets of America; they will be hungry, diseased, and 
     disregarded.
       How dare we do this. How dare we say to an entire 
     generation of children that their country will not protect 
     nor invest in them. This cruelty must be stopped. If it is 
     continued, low income families will stand on the threshold of 
     extinction. And that is absolutely unacceptable.
                                                                    ____


   Testimony on Medicare and Medicaid by Bruce Livingston, Ex. Dir., 
                     Health Access, October 2, 1995

       Good morning Members of Congress. My name is Bruce 
     Livingston, and I am pleased to have the opportunity to speak 
     to you today--not in my usual capacity as the Executive 
     Director of Health Access, but as a concerned son.
       Just two months ago my father passed away. He died of 
     cancer three days after his 65th birthday. Fortunately for 
     him and for my family, he died with very little pain, soon 
     after he was diagnosed with cancer. And fortunately for my 
     mother and for my family, he planned for their security--and 
     their health care--after his retirement.
       My father retired from civil service at the age of 62 after 
     serving with the US Air Force in Korea and Viet Nam, and then 
     as the civilian director of 600 staff persons at the Army 
     Corps of Engineers in Alaska. He was an accountant and a very 
     careful financial planner for both the US Government and his 
     family. He made sure that when he retired, all of his bills 
     were paid, his car was paid off, and his house expenses could 
     be covered by his monthly pension. Because he retired as a 
     veteran, he had the VA safety net, but the heart of his 
     medical coverage planning was Medicare and Medicaid. He 
     purchased an HMO plan for my mother. He shopped very 
     carefully so that they had enough coverage in case either he, 
     or my mother fell ill.

[[Page H 9881]]

       When he died, my mother's benefits from his pension were 
     reduced. My mother still receives a potion of his pension and 
     social security, but it is much less than what they received 
     while he was alive. Yet my mother's monthly household 
     expenses have not decreased--they are exactly the same. She 
     has no source of income to fall back on.
       If Medicare and Medicaid should be reduced, and my mother 
     is forced to pay higher premiums for less coverage at her 
     HMO, her very tenuous safety net could spring a big hole. 
     Right now, my mother is a healthy woman. The proposed cuts by 
     the Republican leadership would reduce the reimbursement 
     rates to doctors and health care facilities. Who knows how 
     her HMO will respond to these reductions. Hopefully, the 
     standard procedures she how depends on will still be covered. 
     But if she is asked to pay out of pocket for any procedures, 
     her whole world could come tumbling down. It is also possible 
     that the HMO could increasingly deny operations, tests, and 
     access to specialists.
       My parents house, their biggest reward for a lifetime of 
     work, could also be lost if long-term care coverage is cut 
     out of Medicaid, or if Congress cuts Medicaid costs by making 
     the homes of the elderly part of their payment.
       My father worked very hard to provide security to his 
     family. This was the most important thing in his life. While 
     at his military funeral, before his final twenty-one gun 
     salute, I thought about a conversation I had with him a dozen 
     years after he returned from a two year tour in Viet Nam. I 
     asked him why he fought in that war. He said it was not his 
     role to question the government. He ended the conversation by 
     saying simply, ``I wanted to care for my family.''
       My father would turn over in his grave if he thought that 
     the security he built for my mother was threatened because of 
     proposals to tax cuts for the wealthy. He believed completely 
     in the promises made to him by the US Government--both as a 
     member of the military and as a retired civil servant.
       He and my mother made their financial decisions based on 
     the promise that Medicare and Medicaid would be there for 
     them, to cover their health care needs, when they needed it, 
     for as long as they needed, once retired. My parents kept 
     their promises to the US Government. Now, as their son, I ask 
     you to keep your promise to them. Don't cut Medicare and 
     Medicaid. Please don't end these entitlements.

        Testimony on Reductions in Medicare and Medicaid Funding

  (By Richard Cordova, Executive Administrator, San Francisco General 
                       Hospital, October 2, 1995)

       Madam Chair and Members of this Committee: I am Richard 
     Cordova, Executive Administrator and Chief Executive Officer 
     of San Francisco General Hospital.
       Thank you for holding this hearing and for the opportunity 
     to appear before you today. I am astounded at the paucity of 
     public hearings on the health care impacts of proposed 
     federal reductions. I recognize that the gravity of these 
     proposals demand unusual community outreach and public 
     deliberation. True opportunities for this discourse have been 
     denied in Washington. As such, I appreciate your efforts to 
     bring this discussion back to San Francisco so that we may 
     have the opportunity to share with you our fears and 
     projections for these sweeping reductions in Medicare and 
     Medicaid financing.
       The only reason we have had the luxury of debating rather 
     than enacting universal health coverage in recent years is 
     because of a small and extremely fragile institutional health 
     safety net. This safety net is centered around no more than 
     three to four hundred public and nonprofit hospitals 
     nationwide, a much smaller number of children's hospitals, 
     and a nationwide (but poorly funded) network of community 
     health centers and rural health facilities.
       We have already witnessed the deterioration of many of 
     these essential safety net providers in the recent years. 
     With the failure of Congress to enact a national health plan 
     setting the goal of universal coverage, our nation's safety 
     net is facing a crisis today of unprecedented proportions.
       The number of uninsured are growing. Many state and local 
     governments are aggressively curbing their own health 
     spending. In other words, this crisis would exist even 
     without the potentially devastating impact of the budget 
     reductions currently proposed for the Medicare and Medicaid 
     programs, which could make this situation substantially 
     worse.
       Preliminary analysis of the proposed reductions clearly 
     threaten the quality of and access to care, for already 
     vulnerable members of our community, children, the elderly, 
     the disabled, the working poor, low-income, immigrants and 
     the indigent.
       The Republican proposal requires massive reductions over 
     the 7 year period from 1995 to 2002. To achieve this goal, 
     53% of the proposed $894 billion in federal reductions comes 
     from health and human services programs.
       The Republican Medicaid and Medicare cuts are based on 
     three strategies: Capping growth in expenditures, limiting 
     the scope and benefits, restricting the number of persons 
     eligible for programs.
       Public hospitals receive significant funding from Medicaid 
     and Medicare to provide services to the poor and indigent. 
     Roughly 77% of San Francisco General Hospital's revenue are 
     from these sources. As a result, significant funding 
     reductions will severely impact the Hospital's ability to 
     meet critical acute care and emergency care needs for these 
     populations.
       In addition to functioning as a safety net hospital, the 
     Hospital provides invaluable services to the entire 
     community. For example, San Francisco General Hospital is the 
     only designated Level 1 Trauma Center in the region and the 
     sole provider of trauma care to San Francisco residents and 
     visitors. The Hospital admits over 2,700 critically injured 
     patients per year. San Francisco General Hospital is also the 
     Bay Area regional Poison Control Center. This Center responds 
     to poison control calls for all nine Bay Area counties.
       We are also the largest provider of HIV care, and have been 
     recognized by the U.S. News and World Report as the Number 
     One provider of HIV care in the country, and the only 
     provider of emergency psychiatric services. The federal 
     budget proposal jeopardizes all these programs which benefit 
     the entire San Francisco community.
       As a business entity, SFGH is a significant contributor to 
     the San Francisco economy, putting approximately $220 million 
     back into the City's economy each year.
       The National Association of Public Hospitals estimates that 
     San Francisco General will lose $182 million in Medicaid 
     revenues from fiscal years 1996 through 2002. Over the seven 
     year period, this is the equivalent of receiving no Medicaid 
     revenue at all, for one and a half of the seven years. 
     Reductions of this magnitude would require the Hospital to 
     significantly reduce its outpatient, acute care, emergency 
     care and specialty care services.
       Since the early 1980s, California has contained growth in 
     Medi-Cal expenditures by restricting eligibility, limiting 
     the scope of services and instituting select provider 
     contracting for hospital services. As a result, California is 
     49th in the amount expended per Medi-Cal beneficiary. 
     California spends $602 per Medi-Cal child, approximately 40% 
     less than the national average of $955; California spends 
     $4,929 per Medi-Cal elder, approximately 45% less than the 
     national average of $8,704.
       The GOP reduction proposals penalize a State for adopting 
     cost savings measures that other states have not adopted.
       California will have very few choices if Medicaid 
     reductions are approved, the state will be forced to further 
     reduce eligibility, increase taxes, reduce or eliminate 
     program benefits, or reduce or eliminate other State 
     programs.
       Restricting eligibility of Medicaid programs will increase 
     the number of uninsured Americans. According to the Kaiser 
     Commission, 7% to 18% of California's Medi-Cal eligibles may 
     lose coverage by the year 2002.
       There are an estimated 156,000 uninsured in San Francisco. 
     This number could increase by 10,000 to 30,000 if the 
     proposed reductions are passed.
       The increased burden for providing health care to 
     individuals who are no longer eligible for Medicaid and 
     become uninsured will shift to the counties, at an increased 
     expense.
       County health care systems are uniquely reliant on 
     governmental support to provide care to Medicaid and Medicare 
     beneficiaries, the uninsured, working poor families and 
     indigent persons, the City and County of San Francisco is no 
     exception.
       Over the past five years, the Department has significantly 
     reduced City and County general fund support for health care 
     services by maximizing reimbursement from the State and 
     Federal governments. As a result, since 1991-92, the 
     Department has reduced the City and County general fund 
     allocation by $63 million.
       Forty-seven percent of the San Francisco Department of 
     Public Health's revenues are from Medicaid and Medicare. The 
     majority of these funds are used to provide primary care in 
     community-based health centers, outpatient and acute care to 
     the poor at San Francisco General Hospital, and long-term 
     care to the disabled and elderly at Laguna Honda Hospital.
       Only 16% of the Department of Public Health's funding comes 
     from the City and County. These funds are used to pay for 
     acute care, primary care, mental health, substance abuse and 
     health care services for the indigent, uninsured and 
     incarcerated persons at the County's jails.
       In sum, public hospitals and health systems provide a wide 
     range of primary care and specialty services. Some public 
     hospitals, such as San Francisco General Hospital, also 
     provide trauma care, a burn center, high-risk obstetrics and 
     neonatal intensive care, spinal cord/brain injury 
     rehabilitation, emergency psychiatric services, and crisis 
     response units for both industrial and natural disasters. In 
     addition, California's public hospitals train one-third of 
     the State's physician residents. These critical services and 
     activities must be preserved under any federal cost 
     containment strategy.
       There are many unanswered questions still associated with 
     these proposals. As the SFGH Executive Administrator, I am 
     weary of ``budget blue prints'' which require massive 
     reductions without a specific plan of action. I know that you 
     are familiar with the expression, ``The devil's in the 
     details.'' The few details which have been released do not 
     bode well for the protection of a viable safety net in our 
     country.
       You can not slash both Medicare and Medi-Cal 
     Disproportionate Share Hospital payments, reduce payments for 
     Graduate Medical Education and Indirect Medical Education 
     support, and essentially eliminate the entitlement status for 
     Medi-Cal without 

[[Page H 9882]]
     causing a virtual earthquake in the provision of health care for many 
     of our most needy residents.
       Let me remind all of us here today, that these proposals 
     will increase the need for safety net health care services, 
     while reducing funding to meet this increased need.
       According to State law, the County is obligated to continue 
     in its role as the provider of last resort in spite of 
     reduced federal support. The City and County will 
     unequivocally be required to increase its support for health 
     care services in response to these reductions.
       Thank you again for holding this hearing. I look forward to 
     our continued advocacy in the spirit of good will and humane 
     public policy.
                                                                    ____


  Testimony on the Impact of Potential Reductions in the Medicare and 
                           Medicaid Programs

(By Timothy McMurdo, Chief Executive Officer, San Mateo County General 
                       Hospital, October 2, 1995)

       Good morning, my name is Tim McMurdo. I am the Chief 
     Executive Officer of the Division of Hospitals and Clinics of 
     San Mateo County located approximately 20 miles south of San 
     Francisco, California. Our hospital in conjunction with other 
     health services of the county provide a safety net for over 
     60,000 individuals who are indigent, uninsured and under 
     insured. Many of the individuals we serve receive Medicare 
     and Medicaid benefits.
       The Medicare and Medicaid programs pay for a significant 
     amount of the care that is provided in hospitals and by 
     physicians. Medicare generally accounts for a larger portion 
     of the payor mix in private hospitals with Medicaid (Medi-Cal 
     in California) paying for a smaller part of the payor mix. In 
     public hospitals this Medicare/Medi-Cal payor mix is usually 
     inverted with Medi-Cal often making up the largest group of 
     patients cared for. In both the private and the public 
     sector, however, the programs combined can amount to over 
     one-half of the net revenues received by hospitals to pay for 
     care.
       The proposed cuts to the Medicare and Medicaid programs 
     will have a catastrophic effect on hospitals and clinics that 
     have heretofore relied on the stability of federal and state 
     payments to help cover the cost of care. This reliance has 
     grown increasingly important since private insurance carriers 
     continue to cut payments to hospitals and physicians and as 
     the number of uninsured people continues to grow.
       It is estimated that hospitals and other providers on the 
     San Francisco Bay Area Peninsula will lose hundreds of 
     millions of dollars over the next seven years if these cuts 
     are enacted. These losses will undoubtedly place hospitals 
     that are currently in financial jeopardy due to rapid changes 
     that have already taken place in the health care market, at a 
     much higher level of risk of closure or significant 
     curtailment of programs and personnel. Moreover, heavily 
     utilized public hospitals will be required to take on an even 
     greater burden of uncompensated care as resources at private 
     hospitals to provide charity care dwindle and as those once 
     eligible to receive benefits from Medicare and Medicaid now 
     find themselves in the ranks of the uninsured. It can be 
     assumed that ultimately counties will bear the brunt of the 
     financial responsibility for caring for this increased number 
     of patients dispossessed by Medicare and Medicaid. If county 
     revenues are not available to pay for this additional burden 
     of care, access to many important medical services will be 
     reduced or possibly eliminated. Since Medicaid is a program 
     primarily designed to support poor women with children and 
     older Americans in need of skilled nursing care and long term 
     care, these cuts could be particularly harsh to those who are 
     most vulnerable and who need the care most.
       Most hospitals have already reduced their administrative 
     and overhead cost significantly to stay in step with cuts in 
     reimbursement coming from the private health insurance 
     industry. Additional cuts from Medicare and Medicaid will now 
     directly affect those providing care to patients at the 
     bedside. San Mateo County General Hospital for example, 
     estimates that over 80 positions or 15% of the work force 
     including physicians, nurses, ancillary and administrative 
     staff would have to be eliminated. This would result in 
     500 less patients per year being admitted to the acute 
     setting and 5,000 to 7,000 patients not being able to see 
     a primary care physician or specialist for outpatient 
     services. At larger hospitals on the Peninsula the effect 
     would be greater. Cuts in Medicare and Medicaid will also 
     negatively affect other traditional services offered by 
     counties. In addition to inpatient hospital care, services 
     for the mentally ill and adults with disabilities, in-home 
     support services for the elderly and disabled, and public 
     health nursing will all be affected.
       Hospitals on the Peninsula are also major employers that 
     spend in the aggregate approximately $200,000,000 per year 
     for over 5,000 employees. Cuts in Medicare and Medi-Cal would 
     affect local economies as well if major losses of jobs 
     result.
       The centerpiece of the Medicare cuts appears to be in 
     incentive programs that will give individuals a chance of 
     keeping traditional Medicare benefits by paying more for 
     those services or shifting to a managed care or health 
     maintenance organization (HMO) arrangement where there is no 
     out-of-pocket cost. The ability of HMO's to control cost and 
     provide high quality care in particular to a population like 
     Medicare beneficiaries who often require higher cost sub-
     specialty care is unclear. It is clear, however, if the HMO 
     model is adopted, choice and access to hospital and specialty 
     physician providers will be controlled through primary care 
     physicians with the incentive to manage each case at the 
     least expensive level of care as possible. This may create 
     conflict between patients and physicians and other providers 
     as well who must increasingly make decisions regarding care 
     with the financial impact in mind.
       In addition block granting Medicaid dollars raises many 
     questions regarding the equitable distribution of those 
     dollars based on actual utilization within the states and the 
     potential for states to spend these dollars on items other 
     than their intended purpose.
       In summary, the proposed cuts will have a major impact on 
     service availability and access for patients. However, 
     hospitals and medical providers are bound by legal, ethical 
     and moral standards by which they must provide care. The 
     proposed reduction will not correspondingly release providers 
     from those requirements. How quality can continue to be 
     maintained at the highest standard without adequate resources 
     is an open question. I urge you to oppose the cuts in the 
     Medicare/Medicaid programs on behalf of all individuals who 
     will suffer as a result of them and for the many hundreds of 
     thousands of health professionals who have committed their 
     lives to making the health care system of the United States 
     of America second to none.
                                                                    ____


  Testimony on Medicare and Medicaid Reform By Thomas Peters, Ph.D., 
 Director, Marin County Department of Social Services--October 2, 1995

       Good morning. My name is Dr. Thomas Peters. I am the 
     Director of Health and Human Services for Marin County, and I 
     also serve as the Chairman of the Association of Bay Area 
     Health Officials, and as a member of the Executive Committee 
     of the County Health Executives Association of California.
       Our time this morning is limited, but let me share with you 
     some reactions and observations about the current proposals 
     to ``reform'' Medicare and Medicaid.


                                   I

       As a number of you know, I have been privileged to serve as 
     a public health official in the Bay Area for more than 22 
     years, 17 years in the Health Department here in San 
     Francisco, and the last 5 in Marin County.
       Over those years, I have travelled regularly to Sacramento 
     and Washington, and in fact have just returned from 
     Washington D.C., where I had the opportunity, and the shock, 
     of learning more detail about the ``radical reform plan'' to 
     strip nearly a half-trillion dollars from Medicare and 
     Medicaid.
       Having read everything I could find about these proposals, 
     and having had numerous discussions in Washington, I was left 
     frankly astounded, flabbergasted, and chagrined:
       Astounded--because the only meaningful hearings on such a 
     complex and critical matter for the country were being held 
     outside the chambers of Congress.
       Flabbergasted--because of the striking absence of 
     specificity regarding the ``reform'' proposals. In 
     California, for even a fraction of the changes being 
     proposed, we would have to hold, under mandate of law, 
     specific, detailed hearings on the cuts and their likely 
     impact. Every cut . . . every position . . . every program 
     reduction, would have to be posted and explained.
       Chagrined--because with the notable exception of the 
     efforts of those Congressional members who held the outside 
     hearings, and with the writings of a few commentators, I 
     simply do not sense the urgency of the threat which these 
     proposals pose to the health of every American.
       Let's look more closely at these ``reform'' proposals, at 
     least at the broad outline that has thus far been revealed.
       Given the scope, magnitude, and intent of what we now know 
     about the frighteningly-fast proposals to change Medicare, I 
     would say that if the health care field had the equivalent of 
     a District Attorney, the ``radical reform plan'' would be 
     subject to three violations, each filed as a felony--for 
     fraud, extortion, and assault:
       Fraud--To date, we have seen no verifiable evidence that 
     the magnitude of Medicare's problems require a $270 billion 
     expenditure reduction. It is commonly known that some 
     financial correction in Medicare is needed, and that, indeed, 
     some significant savings could be achieved. But $270 
     billion?! Where is the actuarial data to back up this demand?
       Extortion--If the attempt is successful in simply declaring 
     the problem to be so severe as to warrant these draconian 
     reductions, then tens of billions of dollars will have to be 
     suddenly extracted from this country's medical providers. 
     This would undeniably undermine the basic financial structure 
     of America's hospitals, clinics, nursing homes, and medical 
     offices.
       Assault--Count 1 will be for assault against seniors, for 
     they will be the ones most immediately threatened by these 
     proposals. The sicker they are, the more outcast they will 
     become, and the more harm will befall them.
       Count 2 will be assault against working Americans. Not only 
     will they invariably be 

[[Page H 9883]]
     forced to pay much more for their health care, but they will also find 
     the health care network on which they and their families 
     depend will be weakened and more inaccessible.


                                  III

       Let me turn to the seniors themselves:
       I am the health director for the ``grayest'' county in 
     California--that is, the county with the oldest average age.
       As such, I have the advantage, the pleasure, and the 
     privilege of talking with many seniors. They have much to 
     say, so let me for a moment speak on their behalf.
       Increasingly, they will admit to being scared, worried, and 
     angry:
       Scared--because as they get sicker and more infirm, in many 
     cases needing nursing home and in-home care, it will be less 
     available and less monitored. In addition, they understand 
     (even if some policy-makers do not), that the combined half-
     trillion dollar reduction of Medicare and Medicaid is a 
     direct threat to overall health care quality and 
     accessibility--in hospitals, in nursing homes, in doctors' 
     offices.
       They know that Medicaid is the ``safety net'' for Medicare, 
     and that many of the poorest and sickest seniors have only 
     this double system to care for them. If you rip Medicare and 
     then go on to shred Medicaid, many will be injured or killed 
     in the fall.
       Worried--about the pressures and dilemmas they may cause to 
     their own children--forcing these children into the 
     ``sandwich generation,'' having to choose between the well-
     being of their parents and their children.
       Angry--because the math being presented in these ``radical 
     reform'' proposals just doesn't add up. While they may be 
     gray, they're not stupid, and they correctly sense a high 
     degree of chicanery.


                                   iv

       You will hear the claim that these ``reform'' efforts are 
     new and creative, cleverly crafted to generate huge savings 
     without dire consequences.
       If only that were so.
       The blunt truth is that this ``radical reform plan'' is not 
     creative, but crushing, and it will soon be seen as a matter 
     not of reform, but of regret.
       What the just-released analysis by the impartial 
     Congressional Budget Office reveals is a plan notable only 
     for being flat-footed and ham-handed: of the total projected 
     ``savings,'' nearly $200 billion will be created simply by 
     denying payment for services in hospitals, clinics, nursing 
     homes, and medical offices.
       In other words, the masterminds of this scheme intend to 
     earn their money the old-fashioned way: steal it.
       And finally, you will hear from the supporters of the 
     ``radical reform plan'' that these changes, as painful as 
     they may be, are necessary in order to save both Medicare and 
     Medicaid.
       Nothing could be further from the truth.
       Actually, their claim is reminiscent of the haunting and 
     infamous remark during the Vietnam War: ``It became necessary 
     to bomb the village in order to save it.''
       The blunt truth of the matter is this: if you ridicule and 
     deny the efforts at comprehensive redesign of the American 
     health care system, and instead insist only on weakening two 
     of its most important components, the quality and 
     availability of health care for all Americans is threatened.


                                   v

       Let me conclude with this remark.
       The public should be aware that certain members of 
     Congress, in giving voice to the justifiable medical, social, 
     and financial fears engendered by the radical proposals, are 
     being charged with being ``morally bankrupt.''
       That's strong language, and a grievous charge against their 
     integrity. Instead, they deserve credit for courage. For 
     indeed:
       What is ``morally bankrupt'' is proposing profound changes 
     in the American health care system in a manner that is not 
     honest in its explanation of either the intent or the impact.
       What is ``morally bankrupt'' is rejecting and ridiculing 
     the previous calls for comprehensive health care reform, and 
     now proposing instead to weaken the system of medical care 
     for the elderly, for the young--indeed for all Americans.
       And what is ``morally bankrupt'' is to attempt to deny the 
     American people their basic right to debate and discuss 
     issues of profound social change, and of life and death.
       The members of Congress seeking to slow the runaway of 
     ``reform'' in Washington deserve acknowledgement for being 
     morally courageous in their struggles to honor a national 
     commitment to the ill and aged of America. On behalf of the 
     health and well-being of all Americans, we should immediately 
     give these representatives our full support.
                                                                    ____


  Testimony on Medicare and Medicaid Reform by Bruce U. Wintroub, MD, 
 Executive Vice Dean, University of California, San Francisco--October 
                                2, 1995

       Academic medical centers serve a state and national need:
       They ensure Americans the highest quality of health care in 
     the world; and
       They are a national resource for this reason.
       UC's academic medical centers share a three-fold mission 
     with the nation's teaching hospitals:
       Training the next generation of physicians;
       Performing innovative and life-saving clinical research; 
     and
       Providing patient care for the sickest and often neediest 
     patients.
       Academic medical centers are instrumental to the vitality 
     of California's economy:
       As major employers within their regions; and
       As a research engine for California's leading $7.7 billion 
     biotechnology industry. The industry's three major companies 
     trace their origins to our medical centers.
       UC's academic medical centers have responded to 
     California's fiercely competitive health care market by 
     cutting costs and managing care:
       $200 million in cuts at UC medical centers over the past 
     three years. The centers plan to cut another $75 million in 
     the current budget year; and
       US's teaching hospitals are regional centers of treatment 
     and diagnostic innovation and have affiliated with community 
     hospitals, non-profit clinics and physician groups to form 
     efficient and integrated delivery systems. UC has also 
     increased training of versatile primary care physicians.
       However, California's academic medical centers face unique 
     issues and circumstances:
       California is the nation's most aggressive and competitive 
     health care market. The penetration of managed care is more 
     than twice the national average for the private sector and 
     more than four times the national average for Medicare;
       HMOs refuse to share in the responsibility of paying for 
     our teaching mission and are capturing dollars intended to 
     pay teaching hospitals for the greater costs they incur. The 
     California Association of Hospitals and Health Systems 
     estimates the windfall for California HMOs will be $280 
     million this year alone; and
       California's teaching hospitals are losing millions of 
     dollars because of the way Medicare calculates payments to 
     HMOs. The Medicare formula for paying HMOs includes special 
     payments--the Indirect Medical Education Adjustment, the 
     Direct Medical Education and Disproportionate Share 
     payments--that Congress intended for teaching hospitals. HMOs 
     are not required to pass through these payments to the 
     institutions that incur the costs, putting medical centers at 
     a competitive disadvantage.
       UC is very concerned about the impact of Medicare reform on 
     our ability to carry out our unique teaching and patient care 
     missions:
       Several proposals under consideration would slash specific 
     Medicare payments which are earmarked for paying costs 
     associated with teaching and patient care. These payments--
     the indirect medical education adjustment (IME), the direct 
     medical education (DME) and disproportionate share payments 
     (DSH)--support a significant portion of UC's medical center 
     operating budgets; and
       Medicare and Medicaid payments account for 42 percent of 
     our medical centers' net operating revenue. In turn, the IME, 
     DME and DSH payments account for 36.5 percent of the total 
     Medicare and Medicaid payments to our medical centers.
       In addition, proposals targeting funding cuts for graduate 
     medical education would have a devastating impact on UC's 
     medical centers:
       One plan would cut IME payments by as much as 60 percent; 
     eliminate DSH altogether, and reduce DME funding by as much 
     as 30 to 40 percent;
       Under this scenario, UC medical centers would lose as much 
     as $55 million from the IME reduction alone; cuts to all 
     three programs would represent a loss of more than $100 
     million; and
       These are real cuts; they would be in addition to other 
     proposed changes and reductions that all hospitals, including 
     UC's medical centers, would have to absorb.
       Under current proposals, UC's teaching hospitals would be 
     hurt disproportionately and each of our five medical centers 
     would face dire choices:
       We believe that the unique missions of our medical centers 
     should be protected. We believe that Congress should adopt 
     the following principles as it works to reform the Medicare 
     system:
       Preserve the core missions of academic medical centers;
       Protect teaching hospitals from Medicare reductions that 
     are greater than the overall percentage reduction in the 
     Medicare program;
       Fix the current Medicare managed care formula that diverts 
     graduate medical education funding away from the teaching 
     hospitals that incur the costs of training physicians; and
       Make graduate medical education a shared responsibility of 
     the private and public sectors.
                                                                    ____


    Testimony on the Impact of Medicaid Reform on Children by David 
  Bergman, MD, Vice President for Quality of Care, Packard Children's 
             Hospital, Stanford University, October 2, 1995

       Congresswoman Pelosi and other distinguished guests, my 
     name is Dr. David Bergman and I am here today to represent 
     Packard Children's Hospital. I am a practicing pediatrician 
     and Vice President for Quality of Care at LPCH. I also serve 
     as Chairman of the Academy of Pediatrics Committee on Quality 
     Improvement and I have been 

[[Page H 9884]]
     involved with numerous research projects assessing the quality of care 
     delivered to children. Thank you for the opportunity to 
     testify today on the impact the proposed reductions in 
     Medicaid will have on children and their families.
       I would like to begin by reminding all of us, that when we 
     speak of reductions in Medicaid funding, we are speaking of 
     reductions in access to health care for children.
       Not only are there direct impacts on children, such as 
     reducing the number of children eligible to receive Medicaid 
     there are also indirect impacts. Many of the proposed 
     reductions will limit the ability of physicians and 
     children's hospitals to provide the breadth and depth of 
     services needed to provide the high quality of care that 
     children deserve.
       As we look at what the financial impacts are on Packard 
     Children's Hospital and other children's hospitals, we are 
     really speaking about the impacts on children, especially low 
     income children, and their ability to get the health care 
     necessary to live full and productive lives.
       We believe that increased Medicaid savings and enhanced 
     state flexibility can be accomplished while preserving 
     Medicaid as the nation's health care safety net for children.
       In any Medicaid restructuring, we urge your support of 
     three key issues.
       1. Ensure equity for California Medicaid recipients;
       2. Protect the health care safety net for children from low 
     income families; and
       3. Protect children with special care needs.
       All three of these areas are important in maintaining good 
     health for children. Children are the healthiest segment of 
     our community, but also other than the elderly the segment 
     least likely to have commercial health insurance. Medicaid 
     is the health insurance for over one quarter of all 
     children.
       Congress in its wisdom several years ago, untied Medicaid 
     from welfare and instead tied it to income levels. Most of us 
     do not realize that a majority of the children on Medicaid 
     are white and live in two parent families with at least one 
     working parent. These children need our help. If it wasn't 
     for Medicaid, approximately 40% of all children would be 
     uninsured. Even with Medicaid, approximately 16% of our 
     children are still uninsured.
       Fewer dollars translates to more children without health 
     care insurance and less comprehensive coverage for those who 
     are eligible. And no insurance limits the ability of children 
     to get the needed and timely medical care. This may mean that 
     children who are currently seen in primary care clinics--at 
     Packard 89% of our primary care visits are for children who 
     have Medicaid--and obtain well child exams and immunizations, 
     or treatment for acute illnesses will either not receive 
     preventive health care or will be forced to use the emergency 
     room as their ``medical home.''
       Without a regular pediatrician and with limited financial 
     resources these families will often be forced to wait until 
     their child's illness has progressed to a more serious and 
     complicated level all the time hoping the illness will 
     spontaneously resolve.
       Beyond the increased costs of providing health care in an 
     emergency room and treating illnesses of increased severity 
     because of delay in initiating treatment, there is the more 
     important cost in unnecessary suffering of children. Delays 
     in treatment often lead to lifelong disabling conditions or 
     chronic illnesses.
       California has long been a leader in providing quality 
     health care to its citizens in a cost effective manner. 
     Currently, however, California is 48th in the nation in its 
     per person expenditure of Medicaid funds. For children, the 
     average cost per enrollee is $601 versus $955 nationally. As 
     a Medicaid growth state, the proposed program cap will not 
     only fail to cover California's growth in eligibles 
     (primarily children) and hospital price inflation, but will 
     perpetuate existing funding inequities and punish 
     California for developing a cost-effective program. We 
     need to ensure equity for California's children.
       One way to protect the health care safety net for children 
     from low income families is to maintain disproportionate 
     share as a separate program.
       Disproportionate share helps to maintain the health care 
     safety net for children from low income families because 
     Medicaid does not cover the full cost of care. 
     Disproportionate share is a program that was initiated by the 
     federal government and is matched by states to provide 
     additional dollars to hospitals that care for a 
     disproportionate number of patients who receive Medicaid or 
     are uninsured. On average, the base Medicaid payment covers 
     only 80% of every dollar a children's hospital spends to care 
     for a child. Even with the addition of disproportionate share 
     payments, Medicaid on average pays less than the full cost.
       Children's Hospitals are recommending that disproportionate 
     share dollars be paid directly to disproportionate share 
     hospital providers and that minimum guidelines for 
     qualification be established. This could save approximately 
     $6 billion annually.
       Without disproportionate share dollars, the barriers to 
     access health care for low income and uninsured children will 
     increase.
       Based on preliminary analysis and projected savings 
     outlined in the approved House and Senate budget resolutions, 
     we estimate that the potential long term impact on Lucile 
     Packard Children's Hospital would mean fewer available 
     federal and state dollars ranging from $38 million to $105 
     million over the next seven years.
       Next, we must protect children with special health care 
     needs and incorporate minimum national standards for 
     eligibility and access to medically necessary and appropriate 
     care for children.
       Many children's hospitals including Packard Children's 
     Hospital have patients from multiple states. This is an even 
     greater problem for children's hospitals located in close 
     proximity to state boundaries. Not only is it essential 
     that all children be treated equitably regardless of where 
     they live, but it is equally important that they have the 
     same access to quality medical care as those fortunate 
     enough to have what private insurance can obtain. By this 
     I mean, that children should be guaranteed access to 
     pediatric specialists and subspecialists.
       I offer you an example from the commercial insurance side, 
     of a patient whose family fought for his right to have 
     medically appropriate care by a pediatric subspecialist. 
     Imagine this same situation, if you will, for the typical 
     family who receives Medicaid and ask yourself whether or not 
     the families of these children will be able to fight for the 
     most appropriate medical care to which their children should 
     be entitled or will they be forced to receive inadequate and 
     at times life threatening care.
       Recently, we had a child at Packard Children's Hospital who 
     was diagnosed with Wilms tumor. This is a type of kidney 
     cancer unique to children. The child was in a managed care 
     plan and was referred to a surgeon who cares for adults and 
     who had no experience in treating Wilms tumor.
       The appropriate treatment requires surgery provided by 
     pediatric surgeons and pediatric oncologists. The father 
     objected to having a surgeon trained in adult urology who had 
     never previously performed this surgery and requested that 
     his child be treated at Packard Children's Hospital where a 
     leading pediatric surgeon with extensive experience with 
     Wilms tumor was based.
       Fortunately, for this patient, the father had the 
     sophistication and resources to have his child be treated by 
     the appropriate pediatric specialists in spite of the managed 
     care plan and physicians denial of coverage. The father later 
     sued the insurer and an arbitrator found in favor of the 
     parent. As a result of his efforts, all insurance carriers in 
     California now have to provide appropriate pediatric 
     specialty services. Should we allow anything less for 
     children receiving Medicaid?
                                                                    ____


  Testimony on Reductions in Medicare and Medicaid Funding by Anthony 
Wagner, Executive Administrator, Laguna Honda Hospital, October 2, 1995

       Madam Chair and Members of this Committee:
       I am Anthony Wagner, Executive Administrator and Chief 
     Executive Officer of Laguna Honda Hospital, which is located 
     here in San Francisco.
       Thank you for holding this hearing, and for the opportunity 
     to appear before you today to discuss the grave implications 
     of projected Federal budget reductions in Medicare and 
     Medicaid financing.
       As you may be aware, Laguna Honda Hospital (LHH) serves 
     more patients than any other municipally operated facility in 
     our country. This represents approximately 40% of staffed 
     long term beds in San Francisco. Our 1995 year to date 
     average daily census is 1,170 patients. There are 
     approximately 80 persons on the waiting list for admission to 
     LHH.
       Our patients exhibit a wide variety of medical conditions. 
     Over 700 of our patients currently suffer from dementia, at 
     least 60 of these patients exhibit the behavior of ``dementia 
     with wandering''. This condition requires additional 
     precautions, including the provision of medical care in a 
     locked area, to ensure patient safety. We also provide 
     specialized hospice, HIV and head injury care to our 
     patients. Over 22% of our patients are under the age of 60, 
     with the average age continuing to drop. An increasing number 
     of our patients are exhibiting complex medical and 
     psychological problems. I attribute this increase to societal 
     trends which include increased drug abuse, heightened 
     consequences of risky behaviors and an increase in years of 
     life. Unfortunately, these individuals are too medically 
     compromised to be placed in other institutions.
       I stand before you today chagrined by the moral and 
     financial forecasts associated with the Republican proposals 
     for Medicare and Medicaid. As the Executive Administrator of 
     Laguna Honda Hospital, I find myself in the perilous position 
     of interpreting legislation which may portend grave 
     consequences for the health and safety of our patients and 
     staff.
       The GOP budget reflects disproportionate cuts in health and 
     human service related programs, a full 53% of the $894 
     billion in proposed reductions is slated to come from these 
     programs alone. It is impossible to slash $182 billion from 
     Medicaid, $270 billion from Medicare and $588 million from 
     Substance Abuse and Mental Health programs over the next 
     seven years without compromising the integrity of the 
     traditional safety net, and threatening the ability of 
     providers to offer timely, culturally competent, and cost 
     efficient medical services to a vulnerable population.
       Individuals and service providers most acutely affected by 
     these cuts will also suffer from simultaneous elimination or 
     reduction of critical welfare, education, housing and labor 
     related programs.

[[Page H 9885]]

       Let me elaborate on a few of the financial consequences 
     associated with these proposals:
       The San Francisco Department of Public Health projects at 
     least a $2.9 million revenue reduction this year (1995-96) 
     from Medicaid. The reductions would be in long-term care and 
     in acute care. This revenue loss increases to $69 million in 
     fiscal year 2001-2002 alone.
       17% of the State's Medi-Cal expenditures are spent on long-
     term care. There is a significant need for these service. For 
     example, although Laguna Honda Hospital, has one-third of all 
     skilled nursing beds in the City, it consistently has a 
     waiting list for admission into the Hospital.
       Over 93% of Laguna Honda Hospital's budget is based on 
     Medi-Cal revenues. Significant changes to the Medicaid 
     reimbursement rate will result in drastic consequences for 
     our hospital, as well as other long term care facilities in 
     the State.
       In San Francisco, this shift will force an increased 
     reliance on the City's general Fund for support. Currently, 
     Laguna Honda Hospital draws no general fund dollars, with the 
     advent of these changes and the elimination of a ``State 
     Match Requirement'', the county general fund may be forced 
     to assume up to 50% or approximately $50 million of our 
     currently projected budget.
       Laguna Honda Hospital operates a small acute care hospital 
     along with its long term care facility, as such, it is 
     officially designated as a Distinct Part Skilled Nursing 
     Facility. This designation allows for a higher reimbursement 
     rate, than a free standing facility, in recognition of the 
     acuity of these patients. This rate is now vulnerable to an 
     as-yet undefined reduction.
       I would be remiss in my responsibilities if I spoke only on 
     the impact of Medicaid reductions. As you are aware the 
     Medicare reductions are equally ominous, especially as they 
     relate to the provision of safe, humane and appropriate long 
     term care. As the nation's population ages, the need for 
     long-term care increases. The Medicare population has doubled 
     since the program began, from 19.5 million in 1967 to 37 
     million in 1995.
       The current House language does not specify exactly how 
     $270 billion in federal Medicare reductions will occur. The 
     allocation of the ``Fail-Safe'' spending limit is not 
     defined, thus making it impossible to accurately analyze. 
     None the less, it is obvious that physician and hospital 
     rates will face negative adjustments.
       In addition to the funding reductions, the GOP proposes to 
     remove federal standards of care for nursing facilities. 
     Removal of these standards severely compromises the 
     community's ability to ensure high quality, appropriate and 
     timely quality care to residents in these facilities.
       Both the House and Senate bill include the repeal of the 
     ``Boren Amendment'' and related federal provisions which 
     mandate provider rates that are comparable to those paid in 
     the private sector, and that are based on costs.
       Finally, I am worried about a proposal which would pay 
     bonuses to facilities in low cost areas with relatively 
     healthy patients, and would penalize facilities in higher 
     cost areas with relatively sicker patients.
       In sum, the Republican bill leaves the elderly and their 
     families unprotected. This bill takes away current legal 
     protections from the elderly and their families:
       There would be no more guarantee of coverage for nursing 
     home care after an individual or family has spent all of its 
     own savings.
       Those elderly whom States elected to cover would no longer 
     have a guarantee of choice of which nursing home or home care 
     provider to select.
       There would be no more guarantee that spouses of nursing 
     home residents would be able retain enough money to remain in 
     the community.
       Nursing home residents (whether covered by Medicaid or not) 
     would no longer be protected from the use of restraints, 
     drugs or other poor quality care.
       States would be allowed to impose liens on personal 
     residences (including family farms).
       States would be allowed to require the adult children of 
     nursing home residents to contribute toward the cost of their 
     parents care, regardless of the financial circumstances or 
     family obligations.
       Elderly with incomes below poverty ($625 per month) would 
     lose their guarantee to assistance with their monthly 
     Medicare premiums, deductibles, and coinsurance.
       Given the preliminary information which has been revealed 
     to date on these proposals, I have grave concerns about our 
     ability to continue to provide quality medical care to a 
     growing population with increasingly complex needs.
       From increased co-payment requirements, to reduced facility 
     assurances; from slashed hospital and physician reimbursement 
     rates to the ruse of medical savings accounts, it is clear 
     that both patients, providers, facilities, the general 
     population and surely the county government will be forced to 
     shoulder additional and unbearable burdens associated with 
     these cuts.
       I sincerely appreciate your attention to this situation, by 
     calling for a special hearing on these critical issues. Thank 
     you for the opportunity to share my views with you today.
       I look forward to our continued dialogue, as these 
     proposals take shape.
                                                                    ____


   Testimony on Pending Congressional Medicaid Proposals by Paul Di 
         Donato, San Francisco AIDS Foundation, October 2, 1995

       My name is Paul Di Donato and I am the Director of Federal 
     Affairs for the San Francisco AIDS Foundation. The AIDS 
     Foundation serves over 3000 clients annually with direct 
     client, case management and housing services, develops HIV 
     education and prevention initiatives, provides research and 
     treatment education and engages in local, state and federal 
     public policy advocacy efforts around HIV/AIDS issues, 
     including work on national health care reform last year and 
     the battle to save Medicaid this year. I am pleased to be 
     here to testify about the critical importance of Medicaid to 
     people living with HIV/AIDS in San Francisco, in California 
     and across the nation.
       The importance of continued adequate funding of and federal 
     standards for Medicaid--as a matter of life and death for 
     people with HIV/AIDS--becomes crystal clear when one realizes 
     the tremendous extent to which the bulk of people with HIV/
     AIDS rely on Medicaid. The HIV/AIDS trends in Medicaid are 
     also essential to understand. In fact, when one analyzes 
     these facts, the likely impact on people with HIV/AIDS of the 
     current Republican proposals before Congress becomes 
     frighteningly clear.
       Medicaid provides health coverage to over 40% of people 
     with HIV/AIDS nationally, including over 90% of pediatric AID 
     cases. In California, this figure is close to 50%. In the Bay 
     Area, it is close to 60%. Medicaid is the largest insurer of 
     people with HIV/AIDS and has become increasingly so through 
     every year of the epidemic. The growth trend in Medicaid 
     coverage of HIV/AIDS health care is astounding. Between 1991 
     and 1995 alone, the Health Care Financing Administration 
     estimates that Medicaid HIV/AIDS care costs more than 
     doubled. In California, the figures quadrupled from 1986 
     to 1993.
       Medicaid will provide close to $4 billion worth HIV/AIDS 
     care nationally in 1995, a figure that includes the federal 
     and state contributions. In comparison, the Ryan White CARE 
     Act has been funded at $656 million for FY 1996, thus making 
     Medicaid the largest, single HIV/AIDS program funded by 
     either the federal government or the states. In California, 
     Medi-Cal provided $165 million in HIV/AIDS care in 1992-93, 
     the last year for which the state has such figures. Medi-
     Cal's importance to San Francisco and to California for HIV/
     AIDS care is not surprising given the impact of HIV/AIDS in 
     these areas. San Francisco has had over 20,000 AIDS cases to 
     date and 1 in every 25 residents (approximately 28,000) is 
     assumed to be HIV-positive; California has had over 85,000 
     cases of AIDS to date and approximately 150,000 Californians 
     is assumed to be living with HIV.
       Medicaid is especially important for people with HIV/AIDS 
     because of the nature of HIV/AIDS itself. Due to the general 
     age and average lifespan of those living with HIV, few people 
     with AIDS ever qualify for Medicare--approximately 4%. 
     Moreover, with the average cost of HIV/AIDS care at $120,000-
     $140,000 per person, HIV/AIDS quickly impoverishes even those 
     who are well off at the start of the disease, thus making 
     self-financing of adequate care virtually impossible for 
     everyone. Furthermore, the private health insurance industry, 
     through a variety of means--legal and illegal--manages to 
     reduce its share of coverage of annual HIV/AIDS health care 
     costs every year.
       I do not need to review in detail the federal proposals on 
     Medicaid here: the $182 billion in cuts by the year 2002; the 
     incentives for states to cut even more from their 
     contributions to the program and the permission to do so; the 
     block granting with its attendant loss of essential federal 
     guidelines, standards and mandates; the incentives for states 
     to implement the barest of bare-bones managed care plans and 
     so on. California will loose over $19 billion, or 20% of its 
     federal Medicaid monies by the year 2002 under the current 
     Republican Congressional plans. Like other states, California 
     will be free to set new standards for eligibility, services 
     rendered with Medicaid dollars and the like.
       Let me say simply and clearly that every major element of 
     these plans will devastate people with HIV and AIDS dependent 
     now or in the future on Medi-Cal:
       The funding cuts will result in many PWA's loosing some or 
     all of their desperately-needed Medicaid health services with 
     the obvious result being increased illness and premature 
     death;
       Mandatory managed care programs without adequate funding 
     and guidelines will also result in decreased access to care 
     and a lower level of care that is inappropriate for HIV/AIDS 
     and other serious, chronic or life-threatening diseases;
       The block granting of Medicaid will only compound these 
     problems through the loss of federal guidelines that now 
     protect vulnerable populations and mandate a broad 
     benefits package. The inevitable end effect of block 
     granting will be the loss of essential services for those 
     who need them.
       Let me mention one California-specific example of 
     innovative and essential Medicaid-financed care likely to 
     fall victim to these Congressional proposals. In California, 
     we have used waivers to create innovative, humane and cost-
     effective programs, such as the AIDS Medi-Cal Waiver Program. 
     This program provides nurse case-management and home and 
     community-based care to Medi-Cal recipients with symptomatic 
     HIV or AIDS. In 1994, the AIDS waiver program cost $5.3 
     million, yet saved over $90 million in nursing home and 
     hospital costs, as calculated by the federal government, that 


[[Page H 9886]]
     would have otherwise been incurred for these recipients. Such optional 
     programs will likely be the first to go as California 
     attempts to manage Medi-Cal with a dramatic decrease in 
     federal dollars.
       It must be made clear as well that there is no safety net 
     underneath the Medicaid system to compensate for these 
     draconian measures. For example, in San Francisco, our Public 
     Health Department, which provides essential HIV/AIDS services 
     and many other essential services, currently receives 40% of 
     its income from Medi-Cal. San Francisco's Public Health 
     Department will not only not be able to make up for this loss 
     in HIV/AIDS care resulting from these Medicaid cuts, but will 
     be hard-pressed to maintain its level of current services. 
     Moreover, Congress is cutting other funds essential to public 
     health departments and urban health care infrastructures, 
     such as funds for mental health and substance abuse.
       Ryan White CARE dollars and the non-profit sector that 
     exists in the AIDS community are no solutions. Ryan White 
     monies in the Bay Area and throughout California have always 
     been inadequate to meet the demands of the HIV epidemic; they 
     are already stretched to a breaking point. Moreover, in many 
     Ryan White programs and other city and state funded programs, 
     Medicaid funding provides the foundation upon which other 
     funds are used to build the HIV/AIDS care system. Thus, there 
     is no safety net to catch those who will fall between the 
     ever-widening, soon to be gaping Medicaid/Medi-Cal crack.
       Reform in Medicaid may be desirable, even necessary. 
     However, what we are looking at in these proposals moving 
     through Congress now with such speed is not careful reform or 
     effective cost-efficiency' it is a wholesale rampage against 
     the medical safety net in this nation.
       Thank you.
  Ms. PELOSI. I thank the gentleman, and I yield to the gentlewoman 
from California for her closing remarks.
  Ms. WOOLSEY. My final remark would have to do with health care reform 
in general. I believe until we are willing to first take the tax cuts 
off the table, second, do something about defense expenditures beyond 
what was asked by the Department of Defense, and, third, we must look 
at the entirety of health care reform, not just balance the budget on 
the backs of seniors and the most vulnerable and not just take one 
piece of health care. We must look at the entire health care program.
  Ms. PELOSI. I thank the gentlewoman for her participation in our 
special order tonight.
  I would just comment on her role as a member of the Committee on the 
Budget, thank her for her leadership role there in representing the 
values of our community. Many of us believe the budget of our country 
should be a statement of our Nation's values and those values should 
reflect the priority we place on investing in our children and in the 
health care of all our people and certainly protections for our senior 
citizens. We have grave concerns about how those at the low end of the 
economic scale fare in our country, but we have a large responsibility 
to middle-income and working people in our country to make sure that 
they are not paying the bill for everyone, and they would bear a 
terrible brunt from these Medicare and Medicaid cuts, unless they think 
that unless you are a senior, unless you are a poor person, this does 
not matter to you. They have to know that they are directly impacted by 
it, and their ability to raise and educate their own children will be 
very, very much affected by the Republican proposals, which I believe 
are not a statement of America's values, and I hope that the American 
people will speak out loudly and clearly to our Republican Members of 
Congress to make their voices heard to our colleagues so that they will 
reject this ill-advised and ill-conceived, in-secret proposal to cut 
Medicare and Medicaid to give a tax break to the wealthiest Americans.

                          ____________________