[Congressional Record Volume 143, Number 83 (Monday, June 16, 1997)]
[Senate]
[Pages S5694-S5695]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself, Mr. Mack and Mr. Kerrey):
  S. 904. A bill to amend title XVIII of the Social Security Act to 
provide Medicare beneficiaries with choices, and for other purposes; to 
the Committee on Finance.


     THE COMPREHENSIVE MEDICARE REFORM AND IMPROVEMENT ACT OF 1997

  Mr. BREAUX. Mr. President, I rise for a moment or two to speak to a 
bill which Senator Mack and I are introducing today on the entire 
question of Medicare. So many people around the country have heard 
Congress and elected officials for a long period of time talk about how 
we need to reform the Medicare Program. The Medicare Program has been a 
wonderful program since 1965. It has assured our senior citizens they 
will have adequate health care in a period in their lives when health 
care is vitally important.
  We have all seen the studies and the reports which clearly point out 
that unless Congress fundamentally reforms this program, it is not 
going to be around for much longer. We clearly see a program that will 
be bankrupt, which is running out of money, and that has to be a 
tremendous concern not only to our Nation's seniors but also to their 
children and their grandchildren and to society at large. 
Unfortunately, every time Congress moves toward trying to reform 
Medicare, we do not do it. We have taken the same approach year in and 
year out with the thought of fixing Medicare with a Band-Aid type of 
approach instead of addressing the fundamental defects in the program. 
We have every year said we are going to fix it this year by reducing 
the reimbursement fees that doctors and hospitals get for treating 
Medicare patients.
  I said the other day, and others have made this comment, that before 
too long doctors and hospitals will refuse to take Medicare patients 
because their reimbursement rate from the Government will be less than 
it costs them to do business, that they will simply refuse to take 
Medicare patients any longer.
  That is already happening in my own family. My mother-in-law just a 
week ago informed us that after being diagnosed with an ailment of 
diabetes, in trying to go to a local physician in our State of 
Louisiana, they promptly informed her they do not take Medicare 
patients. I think that is something we all need to be very concerned 
about. We cannot continue to try to fix Medicare with a proposal that 
truly does not fix it.
  What we introduce today is a proposal to make an option available to 
Medicare recipients which is patterned on the Federal Employees Health 
Benefit Plan that every Member of the Senate and every Member of the 
House and all 9 million Federal employees have.
  It is a program which is fundamentally different than Medicare 
because, unlike Medicare, it is based on competition in the marketplace 
as opposed to arbitrary price fixing of Medicare services, which is the 
current system under Medicare based here in Washington.
  There was an interesting story in the Washington Post this morning 
which talked about how House and Senate committees are looking at 
bringing about reform to Medicare and Medicaid and basing that reform 
on the Federal health plan available to Members of Congress and other 
Federal employees. Unfortunately, while the Medicare proposals which 
are now pending in the House and the Senate will increase the range of 
options available to seniors, they lack the most important feature of 
the Federal Employees Health Benefit Plan. That is competition. 
Medicare is the only program that fails to deliver health care based on 
competition but does it based on arbitrary price fixing, which is no 
longer working. The proposals currently in both the House and the 
Senate plan would continue to base what we pay managed care programs on 
what we spend on the so-called fee-for-service, currently available 
under Medicare. And that is the

[[Page S5695]]

problem. There is not fundamental reform.

  I think most committees are to be commended. Our Finance Committee 
draft does recognize that there is a problem. But in trying to reduce 
the costs of Medicare by $115 billion, almost all of those savings come 
out of reducing payments to doctors and hospitals. I have said what the 
problem is there. Doctors and hospitals will begin to refuse to take 
Medicare patients. That, certainly, is not going to help anyone.
  So what we are recommending, Senator Mack and I, by our approach, is 
to introduce a test program over a 5-year period to try to 
fundamentally reform Medicare; to set up demonstration projects around 
the country to allow competitive bidding and negotiations to take part 
in the delivery of Medicare services to seniors in this country. We had 
an interesting report the other day in our Aging Committee that pointed 
out we are overpaying managed care programs under Medicare by almost $2 
billion a year more than it is costing them to treat the patients. That 
is because it is not based on competition, but rather on an arbitrary, 
bureaucratic program that is run out of a department here in 
Washington. I don't fault the program managers and the bureaucrats. 
That is how Congress set it up. But while it may have been a good idea 
in 1965, in 1997 it is no longer working. It is totally out of step 
with the way health care services need to be delivered in this country.
  So what the Breaux-Mack proposal says is that we are going to take a 
look at how the Federal employee plan works; we are going to do some 
demonstration projects around the country; we are going to take those 
results, and Congress will act on those results. We will not just let 
the study sit on a shelf somewhere in a library and not have anything 
happen with it, but rather we will have the Congress actually take 
those recommendations and act on those recommendations.
  We are convinced that with this new approach, Medicare beneficiaries 
will get more services. We start off with a basic standardized plan 
that in addition to what is now available to Medicare patients, also 
includes prescription drugs, which is incredibly important. We also 
guarantee this basic package will be available to all of the people we 
are proposing. But the fundamental difference is they will have more 
information about the plans, so the plans will be able to be compared 
for people to see which plan is the best. So we will create a situation 
where Medicare beneficiaries will have more services offered to them, 
more choices of which plan they would like to consider, more benefits 
under those plans, and we think we can clearly do it for less money 
than is being spent on the program right now.
  One of the features of our program is that it sets up an office of 
competition, much like the private plans that are available now to 
Federal employees. We think that an office of competition will be able 
to call for people to actually come in and submit proposals. Then, 
after they look at these proposals and make sure they meet the 
standardized package of benefits, they will begin to negotiate with 
these people who are offering these plans to our seniors in the United 
States.
  Competition is a wonderful thing. For the right to treat 38 million 
Medicare recipients, people will compete. They will say, ``Our plan is 
better than their plan. Our plan offers more than their plan. Our plan 
can do it at a better price.'' There will be a competitive world set up 
that is not now available to Medicare recipients.

  That is the fundamental problem, I think, that the House and Senate 
bills, and respective Finance and Ways and Means Committee bills, do 
not address. It still says we are going to continue to fix prices out 
of Washington for Medicare recipients. I think that every think tank we 
have talked to--and Senator Mack and I have met with liberal think 
tanks and conservative think tanks, and people who have spent a 
lifetime studying this problem. Generally, they all have come to the 
same conclusion--that greater competition in the marketplace will allow 
health providers to offer more services to senior citizens and do it at 
a better price.
  So we are going to introduce today legislation that does establish a 
Medicare reform package or proposals which we think represent 
fundamental reform in the system. We are not saying that all seniors 
have to move into this program immediately. No, we are saying we ought 
to have a demonstration project in 10 cities around the country and in 
rural areas around America, to see how it would work, do this test 
marketing for about a 5-year period, until we can get a great deal of 
information about what is happening out there when you try to reform 
this system, then take that information and bring it back to the 
Congress and have Congress act on that recommendation. We think that is 
something that makes a great deal of sense.
  I think it is a balanced way to proceed. We are not rushing into it. 
We are not telling seniors they have to do something overnight, but 
merely giving them the choice during this period of time. I think that 
is what seniors really want. They want the choice. They want more 
information. They want a better benefit package. And all of us want, 
bottom line, to see that this program is going to be around for when we 
move into it, when our children move into it, when the baby-boomer 
generation we hear so much talk about is ready to participate in the 
program.
  We clearly cannot continue down the same path that we have continued 
on for so many years, since 1965. We think the Breaux-Mack proposal is 
a realistic alternative. It merits bipartisan support, and we hope both 
committees ultimately will bring to the floor a type of program based 
on what myself and Senator Mack will be introducing in the Congress 
today.
                                 ______