[Congressional Record Volume 143, Number 42 (Thursday, April 10, 1997)]
[Senate]
[Pages S2966-S2968]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       MEDICARE REFORM PRINCIPLES

  Mr. WYDEN. Mr. President, as you know, I have come to the floor each 
day this week to talk about what I think is the critical need for the 
Senate to move forward with bipartisan Medicare reform. I believe there 
is a unique window of opportunity now for action, a window built around 
the proposition that our economy is moving forward in a positive way. 
Certainly, we are a few years away from the demographic earthquake that 
is coming, and I believe it is possible to fashion a bipartisan package 
that will also achieve real savings to advance the cause of enacting a 
balanced budget.
  I come to the floor today to reflect for just a few moments on some 
of the discussion over the last few days as it relates to Medicare and 
the budget. It is my view that Senator Domenici, the chairman of the 
Senate Budget Committee, said it very well a number of weeks ago when 
the Budget Committee first began hearings on this year's budget, when 
Senator Domenici said, with respect to Medicare, policy must drive the 
budget numbers. Unfortunately, that has not been the case in the past, 
and I am concerned, based on the discussions that have gone on in the 
last couple of days as well, that we are moving away from the need for 
structural Medicare reform that is in the interests of both seniors and 
taxpayers.
  In the last Congress, I think we did see a numbers-driven approach to 
Medicare. Over in the other body, there was a judgment made that 
spending for Medicare had to be reduced $274 billion. Others in my 
party proposed reducing Medicare spending by a smaller sum. In both 
instances, I do not think enough attention was paid to the need to come 
up with sensible policies that would really show how you could get to 
those kinds of budget savings proposed by either party in a way that 
was good for both seniors and for taxpayers.
  If we look at the debate over the last couple of days, we see some of 
the discussion again moving just to the question of a budget number. I 
am convinced that it is possible over the next 5 years to save about 
$100 billion as it relates to the Medicare Program and do it in a way 
that protects the interests of older people and also will help to 
reduce the deficit.
  But I think it is even more important--even more important, Mr. 
President--that this body understand that the big challenge is to lay 
the foundation for 21st century Medicare and that that challenge goes 
far beyond the question that has driven discussions the last couple of 
days. What we have to do is start bringing choice and competition to 
the Medicare Program. That is what is driving progress as it relates to 
health care reform in the private sector, and, obviously, choice and 
competition is what Members of this body enjoy through the Federal 
employee plan.
  I think it is possible to do this in a way that protects the rights 
of patients and makes sure that as we look to the future with more 
choice and more competition, that it is a future that does not involve 
health plans with gag clauses, does not strip seniors of their rights 
to appeal a denial of benefits, makes sure that their grievance 
procedures include what are called ``report cards'' so that our country 
can find out if people who sign up for health maintenance organizations 
drop out a few months later because service is unacceptable.
  The Congress now, as we move to try to develop a budget resolution, I 
think can find an opportunity to generate real savings.
  I do not want to, in any way, minimize the importance of that task in 
getting a budget. But we can do it in a way that will also ensure that 
the kind of structural changes in Medicare are made and we put this 
program on a solid footing. If that is not done, Mr. President, we will 
see a continuation of the kinds of problems that Chairman Grassley 
demonstrated this morning at the Senate Committee on Aging.
  Senator Grassley held a very important hearing as it related to 
accountability in the Medicare Program and particularly as it related 
to managed care. What Senator Grassley's hearing pursued was making 
sure that older people could have access to good information so they 
could make choices in their Medicare.
  In this country, we have, unfortunately, because Medicare has not 
been modernized, a situation where older people either have no choices, 
which goes on in rural parts of the United States, such as the area 
that the Presiding Officer represents and I represent, or, as we saw 
this morning in Chairman Grassley's hearing, places like Los Angeles 
where there is kind of a blizzard of information offered and it is not 
possible for older people to compare the policies that are offered to 
them in an intelligible kind of way.
  I said at Mr. Grassley's hearing that as we go forward with Medicare 
discussions let us make sure that his work, which is designed to 
empower consumers and is certainly not going to be a budget buster 
because it is largely an effort to try to force disclosure and 
comparability of these various plans--I urged that Chairman Grassley's 
work be included in a final bipartisan package.
  Suffice it to say, you do not hear much discussion in terms of the 
budget

[[Page S2967]]

discussions about the work that Chairman Grassley is doing or about the 
role of the Federal Employees Health Benefits Plan. And, unfortunately, 
there has not been enough focus on how the Medicare Program rewards 
waste and penalizes frugality. The private sector consigned that kind 
of approach to the attic years ago but that is how Medicare does 
business today.
  Mr. President, and colleagues, I think that as these discussions go 
forward--and certainly yesterday they dominated the debate about the 
budget--we have to remember that it is critical that Medicare be part 
of an effort to help address the financial challenges that our 
Government faces. I think that that can be done in a way that is good 
for seniors and good for taxpayers, but that it is even more important 
that the bipartisan changes in Medicare focus on the structural and 
underlying concerns that are plaguing this program.
  In much of the United States, the Medicare Program is a bureaucratic 
Tin Lizzie. It is clunky. It is inefficient. It is volume driven. And 
it is doing all the kinds of things that if another agency, such as the 
Pentagon, was doing, there would be a vast outcry.
  But we are not making the changes that the Medicare Program needs so 
as to make it secure for the 21st century, so as to make it secure for 
both seniors and for taxpayers. And that is why I come to the floor 
today, to say that this debate that we have seen in the last couple of 
days about budget numbers is important, but it is even more important 
to talk about the underlying and structural changes that the program 
needs for the 21st century.
  Mr. President, let me conclude by saying that I think that this 
debate about Medicare has been a bit like a high school sock hop where 
in effect everyone looks at the dance floor and no one really wants to 
go first. And I believe that now, if we put a focus on bipartisan 
structural changes in Medicare, a focus that says that the old debate 
about just trying to find a budget number for purposes of the budget 
resolution is not the way to proceed, but that we have a bigger 
challenge which is to get this program on track for the 21st century, 
that that kind of approach will allow us to make real progress.
  I have enormous admiration for Chairman Domenici who has made it very 
clear that he wants to proceed in a way that does help to reform 
Medicare policy for the 21st century. I think it is very clear that the 
Clinton administration has in some of their Medicare proposals reforms 
that would also help to advance a bipartisan compromise.
  I tried to take, in my legislation, the Medicare Modernization and 
Patient Protection Act, some of the key principles that both political 
parties had advanced in recent years. I believe that if the Congress 
does not get stuck in the old debate about just finding a budget 
number, regardless of the implications for the program long term, we 
can, in this session of Congress, get the Medicare Program ready for 
the 21st century.
  That is what I am committed to doing, Mr. President. It is a 
bipartisan challenge. And I intend to come to this floor on an ongoing 
basis, as I have done today, to talk about the key issues with respect 
to Medicare reform. And the events of the last couple of days, which 
take us back, in my view, to just a budget question rather than making 
sure the policy changes are made, are exactly what we have to tackle. 
There is the opportunity now to get Medicare on the right course for 
the 21st century.
  As I have said, Mr. President, I have visited the floor each day this 
week to talk about Medicare reform, and the brief window of opportunity 
I believe this Congress may have to effect strong, stabilizing, and 
sensible structural reforms in this program.
  This should be about more than saving a targeted number of dollars in 
spending over the next 5 years, or adjusting the Medicare part B up or 
down to accommodate short term fiscal goals.
  To quote my friend Senator Domenici, the chairman of the Budget 
Committee, this should not be about numbers driving policy, not for 
something as important as the long-term integrity of the Medicare 
Program.
  We have the opportunity in the 105th Congress to begin turning this 
30-year-old, Tin-Lizzie style program into a 21st century, 
comprehensive seniors health system, employing the tools and the 
innovations that have already marked much of the rest of American 
health care for the better.
  The reformed Medicare Program I envision, and which I believe is 
within our grasp, is a health plan that is about choice, quality, and 
access, and also about the efficiencies that characterize much of our 
Nation's private health care marketplace.
  Over the last few days, the conversation about Medicare reform has 
for the most part revolved around the negotiations between the White 
House and the congressional budget committees, and whether we can get 
close enough on a 5-year savings figure in order to proceed with 
marking up what we all hope will be a bipartisan budget resolution for 
1998.
  I hope we can.
  And I commend all the parties involved in trying to hammer this out. 
I know it is tough. It is obvious from my limited involvement in this 
process that the determination of the Medicare piece may be the single 
most important function of putting together a Federal budget, or 
failing in that effort, this year.
  But I would go beyond that.
  I believe that my colleagues and I will be spending years together 
talking about Medicare as the major piece of the Federal budget 
process. I say this because Medicare threatens to be the monster that 
devours the budget, and with it the prospect of a health and secure 
future for millions of future retirees.
  And quite obviously, the longer we wait to put the brakes to the run 
away spending aspects of this program, the greater the political crunch 
we face in terms of dealing with the economic impact of the 75 million 
baby boomers--this demographic tsunami--that is set to begin hitting 
the program in the year 2013.
  During the next 30 years, we will see a society shift from the 
current four taxpaying wage-earners supporting each retiree to just two 
workers for each retiree.
  You do the math. The prospect is far from pretty.
  And that picture doesn't get better by merely formulating a number 
for spending reductions over the next 5 years. We can and must do 
better.
  If we focus merely on the short-term problems--and I agree that they 
are substantial--we risk losing the chance to change Medicare's 
essential structure to deal with the long-term, and much tougher 
problems to come.
  And that is why I must say that I am disappointed in certain aspects 
of the President's budget--I think this Congress can do better.
  Specifically, we are given in the President's Medicare reform ideas a 
method of adjusting rates in our payments to Medicare managed care 
plans which will No. 1, not focus a significant and targeted reduction 
in the rates of payment that we make to vastly over-paid plans in many 
of our large metropolitan areas, and No. 2, continues the ``starve-'em, 
and kill-'em'' approach to paying for coordinated plans--and for 
encouraging choice, in rural areas around the country, and in areas of 
high health care efficiency like my home State of Oregon.
  I've said it before, earlier this week.
  I will say it again.
  This is not the way to bring 21st century medicine to our Nation's 38 
million Medicare eligible citizens.
  It is not the way to begin the long-term restructuring of the 
Medicare necessary to establishing a humane, cost-efficient and choice-
rich program that will maintain financial equilibrium well into the 
next century, and not for just the next half dozen years.
  Mr. President, we must look to what is happening in the private 
health insurance market in this Nation in order to chart the new course 
for Medicare. Over the last decade, run away cost-growth in that market 
has been reduced to rises in per capita spending that are now just 
about steady with the increase in the consumer price index--a massive, 
massive change.

  No employer, now, will tell you that health care is cheap. But 
certainly, far fewer employers are now saying that the cost of health 
care provided to employees is putting them out of business.

[[Page S2968]]

  Our business is the Federal budget.
  We have a fiduciary responsibility to keep the Government solvent.
  I ran my election campaign on the promise that I would work my 
hardest--and bear my share of the heavy lifting--to balance the budget 
and end deficit spending.
  And I know that all of us, every one of us, Democrat and Republican, 
realizes that balance can't be bought cheaply or painlessly.
  Addressing Medicare's long-term financial problems in ways that 
maintain the program's long-standing commitment to a defined package of 
benefits, no matter how sick or poor the senior, must be at the top of 
our Federal budget agenda.
  Mr. President, today I want to conclude my floor statements this week 
with a short list of basic principles which I believe must under-line 
Medicare's restructuring effort this year, and which I am convinced a 
broad, bipartisan consensus may be reached.
  I am not arguing that this is the entire reform menu.
  And many will note that there's a lot of spinach on the bill of fare 
before you get to the desert portions.
  But I do believe that this is a square-meal reform agenda:
  First, I believe that we have to agree in a bipartisan fashion that 
Medicare remains a defined benefits program, first, last, and always.
  We should never turn Medicare into an exercise where elderly and 
frail beneficiaries, most often single women living on their own on 
limited fixed incomes, are given a check once a month and told, 
``here's your benefit, your voucher--go out and buy health care you 
need and if the benefit runs out I hope you can find help, elsewhere.''
  This would be an egregious retreat from a basic social contract with 
our Nation's senior citizens, and one for which I think there is little 
justification given the kinds of savings we can extract from the 
program by requiring better management, better plans and more choice.
  Second, we must develop spending controls that guarantee access, but 
at the lowest possible cost to the program and the beneficiaries. 
Medicare must employ prospective payment systems, putting providers on 
a daily reimbursement diet, for skilled nursing facilities and for home 
care, and for other portions of fee-for-service Medicare as 
opportunities present themselves.
  I have introduced a bill that would in part save approximately $20 
billion over 5 years from these kinds of management systems in home 
care and skilled nursing facilities. Similar gatekeeping ought to be 
considered for other portions of Medicare that are now driven totally 
by volume.
  Third, the current system of paying for Medicare managed care plans, 
based primarily on the local cost of fee-for-service Medicine, makes no 
sense, and we've got to fix it.
  We have the strange situation where the highest-cost, volume-driven 
portion of the program determining how we pay, or reimburse, the part 
of the program designed to operate as a managed, cost-efficient model.
  Our purpose is defeated by trying to marry two completely 
antagonistic systems. And there are very unwholesome results in the 
form of beneficiaries in vast numbers of counties where Medicare 
managed care payments are either dramatically too low, or horrendously 
too high.
  In California alone, the U.S. General Accounting Office has estimated 
that this leads to over-payments to plans as high as $1 billion per 
year.
  We have to de-couple the cost of fee-for-service medicine from the 
formula we use to determine payments to Medicare managed care plans.
  Fourth, in a world where we hope that Medicare beneficiaries will 
have many more choices for health care, Medicare must work much harder 
to empower those consumers to make appropriate choices.
  And this is about better information about the plans available to 
them, and tools by which consumers can make informed choices about 
which plan is best for them.
  Mr. President, today I spent some time at a Senate Select Committee 
on Aging hearing that focused on this very issue. We heard testimony on 
the horrendous difficulty beneficiaries had in places where choice 
currently exists, trying to figure out what each available plan might 
provide. The plan brochures are confusing and filled with 
technicaleeze. And most importantly, it's obvious that there's no way 
most consumers are going to be able to sit down at a kitchen table and 
compare one plan against another.
  That's got to change. We need a system for Medicare beneficiaries not 
unlike the system we have in the Federal Employees Health Benefits 
Program where plans are required to present themselves using conforming 
language so that comparisons can be drawn.
  And we need qualitative analysis by HCFA regarding how well 
individual plans perform--report card grades, if you will, on items 
ranging from disenrollment, to how long doctors stay with plans, to how 
many grievances are filed by beneficiaries.
  Fifth, beneficiaries must be reassured that improving consumer 
protection is still a front-burner issue.
  Appeals processes on denial of services must be streamlined. Medicare 
supplemental insurance laws must be reformed to guarantee issue of 
Medigap policies to seniors.
  HCFA should employ more ombudsmen to help seniors navigate through a 
Medicare system that will offer more choices, and necessarily will be 
somewhat more complicated than traditional Medicare.
  Five points--a modest agenda. But one that can begin creating huge 
dividends for our most important social program if we begin our work, 
now.
  There is, I know, a great deal of attraction in subcontracting the 
job of reforming Medicare to a bipartisan commission. I have a great 
deal of respect for my colleagues who have made this argument.
  Indeed, the conventional wisdom is that Congress simply does not have 
the political will to tackle this tough question.
  I have had a number of conversations with colleagues on both sides of 
the aisle, however, and surprising as it may seem there appears to be a 
hunger to attempt Medicare reform, now. I think there's a general 
recognition that we enjoy a window of opportunity that is characterized 
by rapidly falling budget deficits, strong employment and a growing 
economy, and that the general environment for fixing Medicare may not 
get much better for an awfully long time.
  And finally, let me remind colleagues that the ideas offered here 
today are not radical, and are really not out of left field.
  This model of a competitive, choice-rich Medicare that is efficient 
while maintaining quality has been road-tested--indeed it exists 
today--in Oregon, where low-cost, high-quality, coordinated care 
Medicare now embraces almost 60 percent of the Portland metropolitan 
area market, and where the highest reimbursement rates for such care 
are still almost 20 percent below the national average.
  We have seen the future.
  It works.
  It is time for this Congress to begin implementing changes in 
Medicare that transforms the national program along the lines of what 
has worked for thousands of seniors in Oregon.

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