[Congressional Record Volume 144, Number 130 (Friday, September 25, 1998)]
[Senate]
[Pages S10977-S10979]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              HEALTH CARE

  Mr. GRAMM. Mr. President, our dear colleague from Massachusetts came 
over today and responded to a speech I gave yesterday. As he always 
does--and I think it is one of the things we admire about him--he spoke 
with great passion because I think he clearly is one of our Members who 
cares deeply about these issues. Whether he is right or whether he is 
wrong, I think we all respect that in one of our fellow Members.
  What I would like to try to do is to briefly respond and make the key 
points that I made yesterday, given that so much reference has been 
made to the speech of yesterday, and try to make all these points in 
such a way as to deviate from my background as a former schoolteacher 
and be brief so that Senator Byrd can give his speech and we can both 
go home for the weekend.
  Yesterday, I made the point, which I am continually struck by, that 5 
years ago in the Senate, we were debating a proposal to have the 
Government take over and run the health care system. A substantial 
majority of the Members of the Senate at the beginning of that debate, 
following the lead of Senator Kennedy and President Clinton, had 
decided that the problem we had in American health care was access; 
that 40 million Americans didn't have health insurance and that a price 
we should be willing to pay to solve that access problem was to deny 
people the freedom to choose their health care provider and force every 
American into a health care purchasing cooperative or health care 
purchasing collective which would be one giant HMO run by the 
Government.
  I have on this desk--and I want to be careful because one of these 
bills fell on my foot over there and I want to be sure all of them 
don't fall--but I have here those bills from 5 years ago. Each one of 
these bills denied the American people freedom to choose their health 
care provider, forced them into a Government-run collective in order to 
deal with the problem of access.
  Each one of these bills, this massive pile of bills--Kennedy I, 
Kennedy II; Moynihan I, Moynihan II; Mitchell I, Mitchell II, Mitchell 
III and Mitchell IV--each of these bills was about denying Americans 
the freedom to choose their doctor, choose their health care, choose 
their hospital, and we had a big debate about it 5 years ago. The 
argument from the sponsors of these bills was that the denial of this 
freedom was a small price to pay in order to guarantee access to health 
care.
  I had an alternative then. It was a very modest bill. Here is a copy. 
I want people to see what freedom looks like. It is simple.
  It was a small bill, as these kind of bills go. Basically, what it 
did was deal with the access problem by helping people who didn't have 
health insurance to get it without denying freedom to everybody else. 
It established risk pools at the State level where we would help people 
with preexisting conditions get health insurance.
  But the point is, the same people who are saying today that we should 
be willing to drive up costs and deny access to people in the name of 
guaranteeing freedom are the same people who 5 years ago said, ``Let's 
deny freedom in the name of access.'' Now, 5 years later, after we 
debated the original Kennedy-Clinton bill--and I am very proud to have 
played a small role in seeing that effort defeated--5 years later, now 
we have the same people saying, ``The problem is not access--don't 
worry that by driving up costs millions of Americans might lose their 
health coverage--the problem now is HMOs.''
  Five years ago, the same people were saying, ``HMOs are so wonderful 
that we ought to have one HMO run by the Government, and it will be 
great for everybody.'' Now they say HMOs are evil and what we have to 
do is, we have to regulate HMOs.
  What I would like to do is simply explain why the new approach is not 
the approach that I believe we should follow. Let me first define the 
real problem with HMOs, then what I believe the solution is. And then I 
want to say a little bit about the bill, and I will be finished.
  Fifteen years ago, almost every American had a low deductible health 
policy funded by either Medicaid, Medicare, or by themselves and their 
employer through private health insurance. These were health insurance 
policies where the person who bought health care, using this coverage, 
paid relatively little of the cost.
  Fifteen years ago, the average American who went to the hospital was 
responsible personally for paying only about 5 percent of the bill. And 
this was a wonderful system. It produced the greatest quality health 
care the world has ever known. It created wonderful new technology, but 
it had one terrible problem, and that is, we could not afford it. And 
it is easy to see why we could not afford it.
  If you can imagine--imagine you had grocery insurance that, when you 
went to the grocery store, paid 95 percent of the cost of the food you 
put in your basket. If we had grocery insurance like we have health 
insurance, when we went to the grocery store, we would end up eating 
differently, and so would our dog. The grocery stores we know today 
would be totally different. You would have 20 or 30 times as many 
people working at the grocery store. You would have all kinds of 
precooked foods. You would have all kinds of specialty items. And 
grocery costs would be exploding. We would all be cussing the cost of 
grocery insurance.
  So it is not surprising that our old fee-for-service medical system, 
with low deductible insurance where the patient did not care about 
controlling costs, the physician did not care about controlling costs, 
and so nobody controlled costs--it is not surprising that that system 
did not work.
  The Government talked about it for 15 years, but we never did 
anything about it. There are a lot of things we

[[Page S10978]]

could have done. We could have let people have tax deductibility to buy 
their own health insurance, so that if I did not like the health 
insurance provided by my employer, I could take the employers 
contribution and with some of my own money, on a tax-deductible basis, 
choose and buy my own health insurance. We did not do that, have not 
done it to this day. There are other things we could have done, but we 
did not do them either.
  The private sector started to respond to the problem, and the net 
result is that we now have over 100 million people who are in HMOs.
  HMOs have advantages and disadvantages like anything else in life, 
with any choice you make. If you buy a Cadillac, the advantage is, you 
have a good car; the disadvantage is, it costs a lot of money. If you 
buy a Chevrolet, the advantage is that it does not cost as much as a 
Cadillac, but generally it is not as good or as fancy. And we should 
not be surprised that in life, even with the Government, we face these 
kinds of tradeoffs.
  We have over 100 million people in HMOs. The advantage of HMOs is 
that they are more efficient, they do control costs, they have brought 
the medical price index down from twice the Consumer Price Index--twice 
the growth as goods in general--down to the same growth as goods in 
general.
  Fifteen years ago, we would not have believed that it was possible, 
but it has happened. But there is a disadvantage. And the disadvantage 
is, when you enter into a contract with an HMO, you are bound by the 
terms of the contract. It describes what they will cover and what they 
will not do, and the HMO exercises some control over the amount of 
health care you consume and from whom you consume it. And everyone 
knows that when they enter into these contracts.
  This creates a problem, which Senator Kennedy and others have put 
their finger on, and which is a real problem. The problem is that you 
have, in these HMOs, gatekeepers whose job it is to try to see that you 
get good enough health care to meet your needs, so that next year you 
renew with the HMO, but they also attempt to prevent the consumption of 
health care that you do not need because such usage drives up costs. 
The problem is, they are deciding--not you.
  So I have likened the problem to, you go to the doctor, you go into 
the examining room, and instead of being alone with your doctor, you 
have--not literally--but figuratively, you have a gatekeeper in the 
examining room with you. And you want him out. You want to be in the 
examining room with your doctor. You do not want somebody there, who is 
not a doctor, second-guessing your doctor. That is the problem. On that 
point, Senator Kennedy and I are in agreement.
  The question is, How do you fix it? How do you get a Cadillac at 
Chevrolet prices? Well, nobody has, throughout 5,000 years of recorded 
history, figured out how to do that. Maybe we will. But if we do, we 
will be the first. But the point I made yesterday was that in reality 
the solution that is being proposed in the Kennedy bill can be depicted 
as I've done here, using a Greek invention, the stethoscope.
  The problem basically is that here you are with your heart right on 
the other side of this stethoscope, and what you want is, you want your 
doctor's ears at the other end trying to be sure that your heart is 
working right and fixing it if it is not. Senator Kennedy's complaint 
is that in a very real sense the HMO has this gatekeeper who is 
listening in on the stethoscope. You would like to get him out of the 
examining room.
  But in an incredible paradox, the bill that Senator Kennedy presents 
not only does not get the HMO gatekeeper out of the examining room but 
it brings two other people in. It lets the Government hire a 
bureaucrat, who comes in and he gets his ears to the stethoscope so 
that he can regulate your HMO and your doctor, and then, under the 
Kennedy bill, you can also hire a lawyer who can come and listen so 
that he can join the bureaucrat in listening to your heart with your 
doctor and with the HMO so that he can sue the HMO and sue the doctor.
  The point I made yesterday was that, people are already unhappy about 
having the HMO gatekeeper in the examining room with them. And we are 
certainly not going to make them happier by bringing in a Government 
bureaucrat, who we choose, and by letting them hire a lawyer.
  What they want, literally and figuratively, is to be alone with their 
doctor in their examining room. What they want is a system where their 
doctor is using this stethoscope; their heart is at this end and their 
doctor's ears are at this end, and nobody else is involved. That is the 
ideal that people want.
  Now, how can we get it? I believe the best way to get it is to make a 
dramatic change in the system. Therefore, I and others have proposed 
what we call medical savings accounts. Here in essence is how it works: 
Say I currently have a Blue Cross/Blue Shield policy, standard 
deduction, and it costs about $4,000 a year. It has very low 
deductibles. If that policy had a $3,000 high deductible, I could buy 
it for about $2,000. What the bill that I have introduced with Senator 
Nickles and others would do is give people the choice. It doesn't make 
anybody do it. Nobody is forced under our bill to do anything. They can 
stay in the HMO they are in if they are happy. We set out reasonable 
things to do to try to deal with the problems that Senator Kennedy and 
others have raised, without driving up costs and forcing young working 
couples out of the health care market and out of their HMO because they 
can't afford it.
  In addition to that, we do something more important; that is, we give 
people the right to choose a medical savings account. Here is how it 
would work: I am a young man and I am married to a young woman. We have 
two little children and we are both working hard and we both have 
modest incomes. It lets my employer join with me in buying the high 
deductible policy I've described, with a $3,000 deductible. Then we 
would take the $2,000 we saved--we bought the high deductible policy 
for roughly $2,000; we were paying $4,000 for Blue Cross/Blue Shield--
and we put the $2,000 into a medical savings account out of which I can 
pay deductibles. At the end of the year, if I don't spend the money on 
medicine, I get to keep it. I can use it to get braces for my children 
or I can get tutors for them or save it and send them to Texas A&M, the 
University of West Virginia, or the University of Alabama, or wherever 
they want to go.
  Now, that is how this system is different because 90 percent of 
American families don't spend $3,000 on medicine. If I go to the doctor 
and he says, ``Phil, you have a headache. I think it is just a 
headache. Take two aspirin. If it doesn't go away, come back in 2 days 
and we will give you a brain scan which costs $1,000, or we can give 
you the brain scan right now.'' Currently, I might ask, well, does my 
insurance cover the brain scan? If it does, it is interesting, you get 
to look at it, I may say let's do the brain scan right now. But if I 
would get to keep that money for my children, and I am a truck driver, 
my wife is a waitress, I will say, you know, Doc, I will take those two 
aspirin. If it doesn't go away I will come back.
  One of the benefits of the medical savings account is that it 
provides incentives to be cost conscious. But that is not the most 
important thing. The most important element is it allows me freedom to 
choose.
  I showed this chart yesterday and I will show it several times in 
this debate because it is so important to me and I think to the people 
I represent. I and my staff did a little experiment. We took one column 
of doctors on one page selected at random from the Yellow Pages. We 
called up every one of these doctors and we took the most popular, 
most-participated-in HMO in our region, which is Kaiser HMO. We took 
the largest participating PPO, preferred provider option, which is Blue 
Cross/Blue Shield preferred provider. Then we called everybody on this 
list and said, ``Do you take Kaiser HMO?'' In other words, we called 
William D. Goldman, pediatric and adolescent medicine, and we said, 
``Do you take Kaiser HMO? Do you take Blue Cross, PPO?''
  When we did this, 10 of the physicians listed on page 1017, in the 
left-hand column, took Kaiser payments. If I were a member of Kaiser, I 
could have gone to 10 of these physicians. If I were a member of Blue 
Cross/Blue Shield preferred provider, 17 of them would have taken me.

[[Page S10979]]

  But if I had a medical savings account, and even though the current 
law doesn't really permit a full-blown system to work, there are 
several options. One is Golden Rule Insurance in Indiana. They give you 
the option of a medical savings account checking account. Out of that 
checking account you pay your deductibles, and above that level they 
pay for the costs. We have other MSAs that use Mellon Bank with 
MasterCard. This is your medical savings account. It keeps the record 
for you as to what you are spending the money on. And then American 
Health Value Medical Savings Account uses Visa.
  Let's just assume that you have a baby and your baby has a fever of 
104 and you want to go see William D. Goldman who is in pediatrics and 
adolescent medicine. You call him. If you are with Kaiser--he may be 
one of the 10 people on this list that takes it, but he may not be; if 
you are with Blue Cross PPO you call up, he may be one of the 17, he 
may not be; but if you have a medical savings account, which I want 
people to be allowed to choose, you call up and you don't say do you 
participate in Kaiser HMO? You don't say do you participate in Blue 
Cross PPO? You simply say, Do you take a check? Or, Do you take 
MasterCard? Or, Do you take Visa?
  The point being, every single person who is a physician on page 1017 
in column 1 of the Yellow Pages takes a check, MasterCard and Visa. If 
my baby is sick I don't have to go to some gatekeeper to get to see a 
specialist. All I do is take my Visa and go. I make the decision. The 
medical savings account sets me free. It makes me the decision maker. 
It gives me the freedom to choose. I believe that is a better way.
  Finally, we have had a lot of discussion about trying to get started 
on this debate. We have 10 days left in the session. We have a lot of 
things left to do in this session. We have passed to completion, I 
think, only one appropriations bill which has been signed into law. We 
know at some point we have to deal with all of those legislative 
problems. We don't know how they will all work out. It will take lots 
of time and lots of long nights.
  Senator Kennedy and others have a proposal that they believe is the 
answer to our health care system. Senator Nickles, I and others have a 
proposal that we think should be part of the health care system. 
Granted, the normal procedure of the Senate would be to bring a bill to 
the floor, have unlimited debate, and unlimited amendments. We could do 
that, but I think everybody here knows with 10 days left we will not 
pass a bill if we do that.
  So a proposal has been made to let Senator Kennedy and others write 
their bill however they want to write it, make whatever changes they 
want to make in it, and we will agree to set a time to vote on it--as 
the Presiding Officer knows, and as many people who follow our debate 
know, we often operate under what is known as unanimous consent where 
we agree to a more truncated procedure.
  What I have proposed is the following: Let those who have an idea 
write their bill exactly as they want it written. In the case of 
Senator Kennedy, I don't want to change his bill before we vote on it. 
What often happens in that process is we get something that nobody 
wants and that doesn't work. The proposal I have made is that we enter 
into unanimous consent that Senator Kennedy and others can present 
their proposal and we will vote on it, up or down, without amendment, 
however they write it. Then Senator Nickles, I, and others will present 
our proposal. If their proposal gets 51 votes, then it will be adopted 
by the Senate. If our proposal gets 51 votes, it will be adopted by the 
Senate.

  Now, it is true that that is not the normal way we do business. But 
with 10 days left, if we really want to pass a health care bill, that 
is the option we are down to. I believe we have written a good bill. I 
am proud of our bill. I know Senator Kennedy is proud of his bill, and 
I am sure he feels at least as passionately about his as I do about 
mine. But the point is, we are never going to get to choose his bill or 
choose the bill I and others have worked on, unless we work out some 
kind of accommodation, because we only have 10 days left in the 
session.
  So we are down to having to make a decision. Do we want to take this 
into the election and campaign on it and then come back, which is 
perfectly legitimate? I am not criticizing anybody for wanting to do 
that. But if we do, then I think we would continue the standoff and 
then this would be an election year issue and we would decide next 
year. On the other hand, if we actually want to pass a bill this year--
and the House has passed a bill--the only way I can see that we can do 
it is with an agreement where we simply present the bills and let the 
Senate vote up or down on the bills. I don't have any desire to amend 
Senator Kennedy's bill. I want him to have his best shot, and then we 
would have ours.
  I thank the Senator from West Virginia for withholding and allowing 
me to speak.
  I yield the floor.
  Mr. BYRD addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. Mr. President, I thank the Senator from Texas for a very 
interesting statement concerning the health bills. I admire the Senator 
from Texas. I admire his ability. He is one of the most articulate 
Members that I have ever seen in my 40 years in the Senate. He has one 
of the best brains, I would say, of any of those that I have seen on 
both sides of the aisle in those 40 years. I think Darwin's theory of 
natural selection would not explain how this kind of a brain developed. 
I take my hat off to people like Senator Gramm for the extremely high 
intelligence that is obviously there.

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