[Congressional Record Volume 143, Number 39 (Monday, April 7, 1997)]
[Senate]
[Pages S2764-S2766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                MEDICARE

  Mr. WYDEN. Mr. President, the process of making public policy, like 
much of life, is about opportunity, risk, and reward. That proposition 
is clearly demonstrated when the Senate looks at the critical issue of 
Medicare reform.
  I take the floor today, as I plan to do every day this week, to talk 
about a tremendous opportunity that the Senate has before it, the 
opportunity to finally remake Medicare for the 21st century in a 
bipartisan way. The Senate ought to seize this opportunity to act now 
and act boldly so that Medicare can be preserved for future generations 
of Americans.
  As Senators return from visiting their respective States today, we 
begin a legislative period that I believe can be a critical few months 
in Medicare's history. There is an opportunity to engage this issue as 
serious debate begins on the fiscal year 1998 budget. I believe that 
there is now a unique window of opportunity for reforming Medicare that 
would come along in only rare instances.
  Three factors combine to make this a special opportunity to try to 
set Medicare on track for the next century. The first is that the 
Federal deficit is less than was anticipated for this year, just over 
$108 billion. Second, we have a fairly benign economy. Surely, there 
are too many folks still hurting, there are too many folks falling 
between the cracks, but overall the economy has been strong. Third, it 
is very clear that our country will face a demographic earthquake in 
the next century with so many more older people, and we have a window 
of opportunity now to act before those demographic trends are set in 
place.
  My view is that Medicare does not need to be reformed because it has 
failed but because it has been such a great success that it cannot be 
allowed to deteriorate. I argue that only enemies of this program would 
want it to stay exactly as it is, because the status quo, the Medicare 
status quo that encourages waste and discourages user-friendly 
innovation, in my view, consigns Medicare to very difficult times.
  The General Accounting Office, for example, has estimated that the 
gap between expected revenues for the program and the enormous service 
demands is going to produce a gap of almost a half trillion dollars at 
the end of the next decade. This program, which is a lifeline to 38 
million senior citizens, faces very serious, if not calamitous, 
financial circumstances by the end of the decade. There are a variety 
of reasons for this, as I am going to outline this week.
  In much of the United States, Medicare is engaging in wasteful 
practices that the private sector consigned to the attic years and 
years ago. In much of the country, Medicare is inefficient, volume-
driven, clunky health care, and it is one of the first things that 
needs to be changed.
  I believe that there are substantial opportunities for this Senate to 
move on Medicare reform, and I think there are some special areas that 
we should be careful to avoid. I say, Mr. President, and colleagues, 
that I think it would be a great mistake to appoint yet another 
bipartisan commission to study Medicare. A number of our colleagues 
have proposed that. I have great respect for them, but if there is 
another bipartisan committee that studies this issue, I believe we will 
see bipartisan inertia for Medicare for years and years to come. The 
first question a bipartisan commission would face is should they report 
before the 1998 election. Then there would be a question about whether 
they would report before the year 2000 election.
  I do not think that a commission can create a forum for avoiding the 
tough

[[Page S2765]]

choices. That is why I come to the floor today, as I will this week, to 
outline first why it is so important to act and why I believe that 
finally, after a substantial period of sharp and acrimonious debate on 
Medicare, it ought to be possible to act in a bipartisan way.
  I have had a number of private conversations with my colleagues on 
this issue over the last few months. I believe that despite some of the 
political backbiting that has gone on on this issue, every Senator 
understands that this program has to be reformed. In some measure, the 
U.S. Senate and the Congress have become like a bunch of reluctant 
seventh graders at a junior high school sock hop, standing on the gym 
sidelines, all waiting for the first brave soul to hit the dance floor.
  In an effort to try to move the process forward, to jump-start the 
debate, I recently introduced S. 386, the Medicare Modernization and 
Patient Protection Act.
  I offered this legislation not as a be-all and end-all solution to 
all of the financial challenges we face with Medicare, but rather as a 
direction to build on some of the progress that has been made in areas 
of the country like my own in Oregon. Much of Oregon is already 
operating 21st century Medicare services, operating Medicare in a way 
that is good for seniors and good for taxpayers. So when people tell me 
it's not possible to get this program on track, I invite them to come 
to my own State, because in my own State we have been able to do it.
  Mr. President, I would like to outline briefly a few of the specific 
items in my Medicare legislation that I will go into further detail on 
throughout this week.
  The first initiative in any responsible Medicare reform effort has 
got to be to bring more choices and more competition to the program. We 
have to see Medicare reform in comparison to what the private sector 
has done. Members of the U.S. Senate should not have too much 
difficulty grasping this concept because a model, the Federal employee 
health benefits plan, exists. Members are part of it, and surely it can 
be a central plank for any bipartisan Medicare reform to look to the 
model of the Federal employees health benefits plan to produce more 
choices and more options.
  The second plank of any Medicare reform effort should be to eliminate 
the rewards that the program has for waste and eliminate the way it 
penalizes the frugal. As incredible as it sounds, that's exactly what 
happens in the Medicare Program as it relates to health plans. If a 
plan holds down their costs, they end up getting penalized, and very 
often it is tough for providers, particularly in rural areas, to make a 
go of it. If a plan or part of the country sits on its hands and does 
not make an effort to hold down costs, they get bigger reimbursement 
checks. That's not right. The private sector consigned that kind of 
approach to the attic years ago in eliminating the rewards for waste 
and penalties. Efficiency should be a central component of any Medicare 
reform.
  Third, Mr. President, it seems critical, in my view, to protect the 
rights of patients. I believe that when there is a modernized Medicare 
Program, there will be more managed care available under the program 
across this country. Many of our citizens, seniors and others, have had 
legitimate questions about managed care, and I believe it is important 
to put in place strong patient protections to safeguard the rights of 
older people. This would include provisions such as a ban on these gag 
clauses that keep older people from knowing their rights in managed 
care plans. It would include stronger appeals procedures, grievance 
procedures, and also the right of patients in managed care plans to get 
data through report cards about how their plan stacks up on key issues. 
I believe that part of the effort to reform Medicare ought to be to 
protect patients' rights, and this should be a central component of 
Medicare reform as the effort to promote more competition goes forward.
  Fourth, Mr. President, I would change the reimbursement system that 
is used in Medicare, known as the average adjusted per capita cost. 
This is a sleep-inducing, eye-glazing concept by any calculus, but it 
is the guts of Medicare reform. To reform this system, we ought to 
gradually increase the reimbursement levels for low-cost areas, many of 
them in rural areas, and we ought to inject more competition in high-
cost areas. There have been a number of recent analyses indicating that 
some managed care plans have been overpaid, many of them in the high-
cost areas. Introducing more competition in those high-cost areas 
through changes in this Medicare reimbursement formula is a sensible 
way to enact bipartisan reform.
  Then, Mr. President, it is critical that the Senate tighten up 
efforts to fight fraud in Medicare. The General Accounting Office 
recently indicated that about 10 percent of all of the costs of 
Medicare are lost due to fraud. In a $200 billion program, $20 billion 
lost to fraud and abuse has plagued the program. Stronger penalties 
ought to be imposed for defrauding Medicare. If someone engages in a 
flagrant, reprehensible fraud, they ought to be kicked out of the 
Medicare Program for all time, not just some sort of slap on the wrist 
in a resolving door situation. For flagrant frauds, there ought to be 
lifetime debarment.
  Next, Mr. President, in my legislation we would expand the role of 
alternative health care providers. Nurses, physician assistants, 
pharmacists, and chiropractors, among others, have shown an ability 
across this country to deliver good quality, affordable health care to 
older people. They ought to be allowed to play an expanded role in the 
Medicare of the 21st century, both because these alternative 
professions will help us to hold costs down through more competition 
and also because they offer good quality care.
  Next, Mr. President, I would unleash the power of new 
telecommunications technologies in the health care field. A number of 
Senators on both sides of the aisle have sought to expand the role of 
telemedicine, which is already delivering good quality, low-cost care, 
particularly in the preventive area. It is time for Medicare managers 
to employ these tools. But as we see in so many parts of Medicare, the 
Federal Government program, which is relied on by millions of seniors 
and their families, lags behind the private sector. The Federal 
Government hasn't even taken baby steps in terms of trying to set out a 
policy to utilize telemedicine. So my legislation tries to ensure that 
Internet access, which at least will help our rural communities, is 
available. And, Mr. President, Senators on both sides of the aisle have 
done good work that could be incorporated into a Medicare reform bill.

  Finally, Mr. President, I propose in my legislation to clear away the 
regulatory underbrush that needlessly and expensively fragments our 
system of care for the older folks who are eligible for both Medicare 
and Medicaid. These are folks on a low, fixed income. They are the so-
called dual eligibles. Right now, they are a big factor in major cost 
increases in both Medicare and Medicaid. It is time for some more 
creative approaches for dealing with those older people who are 
eligible for both Medicare and Medicaid. My legislation proposes that, 
and I intend to outline that further in the week.
  Mr. President, the legislation that I have introduced can save about 
$100 billion in hard savings over the next 5 years to provide short-
term financial stability for the program. I submit that our challenge 
now is to lay the foundation for the next century. My legislation 
doesn't, in any way, deal with all of the tough questions that the 
Senate is going to face on Medicare. Medicare is not just an important 
part of the Federal budget; Medicare is likely to be the Federal budget 
for the next 15 to 20 years. When we look at the technological 
explosion and the extraordinary technologies that are available, when 
we look at the demographic tsunami that is coming in the next century 
with so many older people, the challenge now is to lay a bipartisan 
foundation to build on in the years ahead. The program that I have 
described and the legislation I have introduced takes from the efforts 
of both political parties over the last few years on Medicare.
  For example, my legislation protects defined, secure, guaranteed 
benefits for older people under Medicare. A number of Senators, led by 
Senator Kennedy, have made this their priority, and I am of the view 
that they are absolutely right. I think it would be a great mistake to 
say that the future of Medicare

[[Page S2766]]

ought to be to just involve handing a check to an older person and say, 
``Well, ma'am, buy health care until your money runs out. If the cost 
of your care is greater than your check, well, so be it.'' I think it 
is important to have guaranteed, secure, defined benefits. Many 
Senators have stood for this principle. It is at the heart of my 
legislation.
  Let me also say that I believe that many Senators on the other side 
of the aisle have been absolutely right in saying that it is time to 
bring more competition and more choice to the Medicare Program. Many 
Senators on the other side of the aisle have made the case that 
competitive models--be it the Federal employee health plan or be it the 
private sector--ought to be the kind of approach that we look to for 
21st century Medicare. I believe they are right. I believe, in 
addition, that it is now possible to forge a bipartisan coalition on 
Medicare between the two parties, where those who have advocated for 
guaranteeing secure, defined benefits can work with those who have 
called for more competition and more choice and the kinds of changes 
that have come to the private sector.
  What it comes down to, Mr. President, is, will the Senate have the 
political will to do it? Will the Senate have the vision to see beyond 
the next electoral ridge? I believe that there is an extraordinary 
opportunity now to set out a foundation for the next century. We know 
that in the next century we are going to have to be dealing with the 
question of whether, hypothetically, Lee Iaccoca ought to be paying 
more for his Medicare than should a woman who is 75 years old and on a 
low income who suffers from Alzheimer's. I didn't address it in my 
legislation, but I happen to think that ought to be done. Senators will 
have different views on that issue.
  Mr. President, I am not convinced that's the issue that has to be 
tackled right now. The issue that has to be tackled by the Senate right 
now is to come up with $100 billion of hard savings to deal with the 
budget resolution and the short-term financial challenge of Medicare 
and then to lay the foundation for the next century. The foundation for 
the next century can build on some very good work being done by 
Senators of both political parties. I have been meeting with those 
Senators privately.
  I will have more to say during this week, Mr. President, for I intend 
to go into further detail on my comprehensive Medicare reform 
legislation every day this week. I will close with one last point. This 
issue is so important to our country and so important to the Senate 
that I believe in the next century--2010, 2020, 2030--people are going 
to ask everyone in public life today: What did you do to try to get 
Medicare on track?
  I believe the legislation I have introduced opens up the opportunity 
for bipartisan discussions toward Medicare reform. I have had a number 
of those already with Chairman Domenici, Chairman Gramm on the other 
side of the aisle, and have been very gracious in that regard. I have 
had a chance to talk to the minority leader, Senator Daschle, and 
Senator Kennedy, who have done so much good work.
  Mr. President, I close by saying that my concern is to make sure that 
the Senate, after years of bitter and acrimonious discussions on 
Medicare, now tries to approach it in a different way, in a bipartisan 
way, in a way that will allow us to tap the revolution of private 
sector health care, in a way that is good for patients, and in a way 
that is good for seniors and for taxpayers.
  Mr. President, I yield the floor.

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