[Congressional Record Volume 146, Number 66 (Wednesday, May 24, 2000)]
[House]
[Pages H3756-H3762]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MANAGED CARE REFORM

  The SPEAKER pro tempore (Mr. Souder). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Iowa (Mr. Ganske) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, we are going to discuss managed care reform 
tonight. It is pertinent that we do this. Back in October this House 
voted 275 to 151 to pass the Norwood-Dingell-Ganske Patient Protection 
Act. That is in conference now. Things are going very, very slow.
  Mr. Speaker, I remember back at the time of the debate that we had on 
managed care reform, a lot of our colleagues, primarily on the 
Republican side of the aisle, but some on the Democratic side of the 
aisle, said, Well, you know, we ought to just let the free market work 
this out.
  I am happy tonight to have join me in this special order my 
colleague, the gentleman from California (Mr. Campbell), who has worked 
so hard on this issue. We are going to discuss in some detail his bill, 
which will come to the floor tomorrow, the Quality Health Care 
Coalition Act.
  I am going to yield to the gentleman to describe his bill, and then 
we will talk about various aspects of it.
  Mr. CAMPBELL. I appreciate the gentleman yielding.
  Mr. Speaker, let me just say, I am so proud to have the support of 
not only a brilliant man and a great colleague, but a medical doctor in 
the gentleman from Iowa (Mr. Ganske). All of us here in the House that 
have dealt with him know that is the case. When he speaks on issues of 
patient care, he speaks from knowledge and compassion.
  Mr. GANSKE. If the gentleman would yield, since we will be dealing 
with an issue related to antitrust, I very much appreciate the 
gentleman's expertise on this issue as a former professor of law at 
Stanford University and somebody well qualified to talk about the legal 
aspects of this bill which we are going to be talking about.
  Mr. CAMPBELL. Mr. Speaker, I thank the gentleman.
  Mr. Speaker, in 1914 the Sherman Act was amended to say that the 
labor of a human being shall not be an article of commerce. The reason 
it was amended was to make absolutely clear what I think most people 
would consider common sense, that cement and steel and petroleum are 
one thing, but what was quite different was when an individual did not 
know exactly what it was they needed, they had to go to a professional, 
and the professional exercised her or his judgment, and, in exercising 
her or his judgment, really the doctor or the professional was making a 
decision that the client or the patient

[[Page H3757]]

placed in that doctor's hands, and that was not the same thing as 
cement or steel or petroleum, because the individual did not know what 
they needed.
  The concept of a professional was quite different than the concept of 
commerce, because the State would regulate the professions and the 
professions would regulate themselves. They would have a code of 
ethics. For example, the doctor said that we do not want people 
advertising cut rate prices, because you run the risk then that some 
patients will get something that is not the best service because it is 
cheaper.
  Well, that is the concept of a profession, and I respect the concept 
of a profession. I regret the fact that we lost a sense of that when 
the antitrust laws were reversed in 1975, not by action of the 
Congress, but by the Supreme Court in a case, sadly, that came from my 
profession, the attorneys. In that case the Supreme Court said not only 
are we going to extent antitrust to attorneys, but we are going to 
extend antitrust to all the professions.
  The height of absurdity, in my judgment, was reached in 1982 when the 
Supreme Court said that a group of doctors who had band together to 
keep prices low in Arizona were price fixers and, hence, subject to the 
per se rules of the antitrust laws.

                              {time}  1915

  I really do think that we can date the decline of the profession of 
medicine from that 1975 original and 1982 subsequent Supreme Court 
date, because doctors are suddenly treated under the law as though they 
were the same as commercial enterprises providing steel or autos or 
cement.
  One of the greatest artifacts of being treated the same as any 
article of commerce, just as an article of commerce, not a profession 
anymore; no more respect for the fact that a doctor is licensed and in 
every instance that I know of, and I am sure there is good and bad, but 
in every instance that I know of are dedicated individuals trying to 
prevent disease and cure it; one of the artifacts is that when one 
bargains with an HMO, it is now against the law for one to do something 
that is as natural as one can imagine; one is treated as though one has 
to take the contract or leave it.
  The HMO comes up to you, and let us say you are an opthalmologist and 
let us say you perform cataract surgery and the HMO says, you know, we 
are not going to exactly say you cannot perform a cataract surgery on 
patients over 70, but the risk is a lot higher, and you may not get 
reupped next year; you may not be able to get your contract renewed 
next year if you perform too many cataract surgeries on patients over 
70. Get the idea, Dr. Smith, Dr. Jones?
  Dr. Smith says well, I am an opthalmologist. I will decide when the 
patient can benefit from cataract surgery. They say well, take it or 
leave it, because Dr. Green over here is the other opthalmologist in 
town, maybe there are three or four, in several small towns in America 
there is only one; take it or leave it. Take it or leave it. And if Dr. 
Smith calls up Dr. Green and says, you know what they just gave me, I 
think it is outrageous, at that moment, Dr. Smith has violated the 
antitrust laws per se and is subject to treble damage action, indeed 
although the Justice Department has not yet put any doctor in jail for 
this, it is actually a criminal offense.
  Mr. GANSKE. Mr. Speaker, reclaiming my time for a moment, as the 
gentleman mentioned, prior to my coming to Congress, I was a 
reconstructive surgeon. I took care of women who had cancer operations, 
farmers who had put their hands into machines, children with birth 
defects. But when I was elected to Congress, I closed my practice, so I 
no longer practice, except for going overseas to do some charity work.
  So I want to say this because I do not have a personal interest in 
this legislation. My wife is a physician, but my wife is a salaried 
physician. So she has an exemption to this prohibition that we are 
going to be talking about, because for instance, as a salaried 
physician, she could join a union and collectively bargain. But this is 
what has happened.
  Let us say back in 1993 and 1994, when I was still practicing before 
being elected to Congress, in Des Moines, Iowa, there were probably 
seven or eight HMOs that were offering services. None of them 
controlled such a large market share that they could make or break a 
practice. So, for instance, if any one of them was behaving 
irresponsibly, not taking care of their patients properly, I could get 
on the phone, give them a call and say, I think you are not treating 
this patient right. I hope you change your mind. You could lobby on 
behalf of your patient. They might actually listen to you at that time. 
But what has happened since then?
  Mr. Speaker, in the last 5 or 6 years, since 1994, there have been 
275 mergers and acquisitions of health plans around the country. So, 
for instance, in Des Moines, Iowa, essentially there are two HMOs. For 
instance Blue Cross/Blue Shield in Iowa controls the health care of 98 
percent of hospitals and 90 percent of doctors. One insurance company 
controls the access and cost of health care for 60 percent of insured 
Oregonians.
  Market competition in Texas is all but gone. Mr. Speaker, 24 
competing companies have been compressed into 4 mega-managed care 
companies. Sixty percent of the Pittsburgh market is controlled by one 
plan. Half of the Philadelphia market is controlled by one plan. Each 
of those plans maintains its dominance by virtue of an agreement not to 
compete with each other. One insurance company dictates health care to 
over half of Washington State. In Seattle, the figure is higher. In 
eastern Washington, 70 percent of the patients are controlled by one 
plan.
  What does this mean? It means, for instance, that an HMO can devise a 
contract like this one. We define medical necessity as the short test, 
least expensive or least intense level of treatment as determined by 
us, the health plan. Then they can give the physicians, let us say we 
are talking about eastern Washington where this HMO controls 70 percent 
of the population. They can give that contract to employees; they can 
also give a contract to the physicians or the nurses, or, for that 
matter, the pharmacists, and they can say, take it or leave it.

  Now, in the old days, and this is where the market competition comes 
in that my friend who opposed the managed care reform bill said, well 
just let the market work. Well, in the old days, you could. You could 
say, I am sorry, I am not going to sign that contract with you when you 
define medical necessity that way. But today, if they control 70 
percent of the patients and they say take it or leave it, one may be 
left not being able to pay mortgage payments or pay for your daughter's 
education. That is tough. That is a tough decision. It could break your 
practice. It could mean you could no longer practice in eastern Oregon, 
for example.
  So you say, well, what is the problem with signing that contract that 
has that clause in it?
  Let me give an example, and then I will yield back to the gentleman. 
As a reconstructive surgeon I used to take care of, and I still take 
care of overseas kids that are born with this type of birth defect, a 
cleft lip and palate. Under that plan's arbitrary definition in their 
contract, they could say, we are not going to authorize surgical 
correction of that huge hole in the roof of this baby's mouth; we are 
just going to authorize you using a little piece of plastic to shove up 
in there to close the hole, it is called a plastic obturator. They can 
do that according to the contract. If I came back to them and I said, 
that is egregiously wrong; that is keeping this child from being able 
to learn to speak properly. If I then went to some of my medical 
colleagues and I started to talk to them about that HMO's practices and 
we mentioned to each other gee, we do not think that we can support or 
sign up for an HMO that does that kind of practice, my friend from 
California, what would happen to us?
  Mr. CAMPBELL. Mr. Speaker, you would be sued for treble damages by 
the insurance company that made the offer to you.
  Mr. GANSKE. And what effect would that have on the ability of this 
child to get this?
  Mr. CAMPBELL. Mr. Speaker, if I were the gentleman's attorney, I 
would advise the gentleman not to treat that child, because he would 
run the risk not only of financial damage, but he also might run the 
risk of a conviction,

[[Page H3758]]

and a conviction even of a misdemeanor is, in many States, sufficient 
to disqualify one to practice medicine.
  Mr. GANSKE. Mr. Speaker, let me continue then about another type of 
contract provision that HMOs force on providers, and that is what is 
called gag rules. That is where, for instance, Aetna has said, 
providers shall not provide or threaten to provide inferior care or 
imply to members that their care or access to care will be inferior due 
to source of payment.
  In other words, there are some HMOs that say, before you can tell a 
patient all of their treatment options, you must first get an okay from 
us. And if you do not do that, we are going to deselect you from our 
plan. If our plan happens to cover 50 percent of your patients, tough 
luck.
  The point is this: by using their market share, they have a huge 
amount of leverage on the individual practitioners that can then 
significantly interfere with the physician in his professional duty of 
being the advocate for the patient.
  Mr. CAMPBELL. Mr. Speaker, if the gentleman would yield, that example 
is even worse than the first. One's obligation as a physician to advise 
a patient on what the patient's best choice of treatment should be 
seems to me paramount and ought to be untouchable. Yet, what we have 
allowed to develop in this country, through contract, not through any 
Federal law, but through contract and the force of power of the HMO or 
the insurance company on the other side of the contract, is that you do 
not offer that advice. You are gagged. You are subject to the gag rule.

  Mr. GANSKE. Mr. Speaker, reclaiming my time, what happens then? The 
company uses its ability to gag you or deny necessary care, and so you 
have a baby born with that birth defect that does not get the treatment 
that they need.
  Mr. CAMPBELL. Would the gentleman yield?
  Mr. GANSKE. I yield to the gentleman.
  Mr. CAMPBELL. Mr. Speaker, it is most galling that this situation 
persists because the insurance company has an antitrust exemption, and 
what we are trying to do in the bill that we will vote on tomorrow is 
to say that a medical doctor ought to be treated no worse than the 
insurance company on the other side of the bargaining table. What 
happened is remarkably fascinating to the situation at hand.
  Mr. Speaker, the Supreme Court said that insurance was not subject to 
the antitrust laws for about 50 years, and then in the 1940s, they held 
that it did apply. Do my colleagues know how long it took before the 
insurance industry got an exemption from insurance from antitrust 
through this Congress? It took less than 2 years. And so today, we are 
left with insurance having an antitrust exemption to the extent that it 
is regulated by State law, the business of insurance is exempt from 
antitrust.
  Mr. GANSKE. Mr. Speaker, let me get this straight, reclaiming my 
time. So while the insurance industry is critical of the bill, they, at 
the same time, have an antitrust exemption. Is that right?
  Mr. CAMPBELL. Mr. Speaker, the gentleman is quite right. In fact, 
they ought to consider emulation is the highest form of flattery. They 
came to Congress and got an exemption from antitrust for their industry 
and they begrudge those who they say are exploiting on the other side 
of the bargaining table.
  Mr. Speaker, I go back to the example of take it or leave it. Take it 
or leave it was something that employers used to say to employees too, 
and the employees said, I am not taking it. I am joining the union. In 
1914, the Clayton Act was passed that created an exemption from 
antitrust for labor unions for exactly the same reason, that it was not 
fair for the powerful employer in a particular area to say, take it or 
leave it. Even worse is the insurance company, because the employer 
would have market power just by reason of being large; the insurance 
company has market power in some instances because of the antitrust 
exemption. So in the case of labor, if a doctor is a member of a labor 
union, the doctor can say, no, I am not taking it or leaving it, and 
neither is my brother and neither is my sister.
  What we are trying to do in this bill is not force every doctor to 
join a labor union. Indeed, this bill is quite explicit. It does not 
touch the question of a doctor being in a labor union; it explicitly 
says the bill gives no right to any doctor to strike, but it says one 
very important thing, that the doctor or the medical professional shall 
be allowed the same degree as though they were in a labor union an 
exemption from the antitrust laws solely in the context of bargaining, 
just getting the terms of that contract so that one can treat that 
child with a cleft palate, so that one can communicate with one's 
patient and tell her or him all of the options available.
  Mr. GANSKE. Mr. Speaker, reclaiming my time, practically speaking, 
what has happened is this: we have seen a number of HMO abuses around 
the country. Eighty percent of the public thinks that Congress should 
do something to fix this problem. Almost everybody knows a friend or a 
family member or a fellow worker, an employee who has not been treated 
fairly and gotten the type of treatment that they need. There are two 
approaches to fixing this.
  The first approach is a regulatory approach.

                              {time}  1930

  When Congress took away from the States for employer plans the 
ability to oversee the quality of those health plans, those insurance 
plans through the Employee Retirement Income Security Act, it basically 
left a vacuum. It did not fill in that traditional State oversight by a 
State insurance commissioner, and so people, most of the people in this 
country who are working get their insurance from their employer. Most 
of them are surprised to know that if their State legislature has 
passed some type of patient protection, it probably does not even apply 
to them.
  So what we did back in October was, we started to fill in the gaps in 
terms of patients being treated with due process, the regulatory gap at 
the Federal level. But we had a lot of comment on that. People said, 
well, you know, maybe we just ought to let the market work better.
  Well, what we are talking about tonight is that because of market 
concentration where we now essentially have six large HMOs in the 
country, the free market is not working right. I mean, the gentleman 
could probably give me analogies better to what it was like for a 
farmer having to deal with a railroad monopoly.
  Mr. CAMPBELL. Mr. Speaker, will the gentleman yield?
  Mr. GANSKE. I yield to the gentleman from California.
  Mr. CAMPBELL. Mr. Speaker, the gentleman makes an excellent point, 
because this is another example, it is called the Capper-Volstead Act, 
and the farmers of the United States have an antitrust exemption. And 
the reason was that Congress was scared, worried, troubled that the 
great purchasers, the railroad cooperative or the purchaser, I hesitate 
to use a company name, but let me say in the past what you might have 
called Cargill or Archer Daniels & Midland, I am not in the slightest 
alleging that they are engaged in exploitative practices now or that 
they ever were specifically, but use them as an example, a large 
purchaser might be able to tell the farmer, hey, we are not buying your 
crop, go put it back in the ground.
  Mr. GANSKE. Reclaiming my time, I believe there have also been some 
antitrust exemptions for fisherman.
  Mr. CAMPBELL. For the same reason, the Fisherman's Cooperative 
Antitrust Exemption Act, because once you catch the fish, you cannot 
put them back in the ocean and hope to collect them again. And what is 
common, whether we are speaking about the labor union or the farmer or 
the fisherman, is that there is unequal bargaining power, because the 
other purchaser, the other side of the contract, the purchaser is able 
to say take it or leave it.
  What has been done with Congress in every instance that we have been 
through here, that we have been explaining, it is fair for the other 
side to present a united front, whether it is the employee facing the 
employer in the company town, whether it is the single purchaser of the 
fish or the large purchaser of the grain, and what is proposed in this 
bill is to do, even, more

[[Page H3759]]

importantly, for an industry that faces an insurer, which as the 
gentleman has so wisely observed is increasingly concentrated market 
power in some particular geographic markets. I know the gentleman can 
give examples that are in the 90 and 95 percent range, but also with an 
antitrust exemption.
  Let me say this is completely in keeping with the other antitrust 
exemptions that we have created in the context of unequal bargaining 
power. But it is more narrow than virtually any of them, because it 
only will extend to the process of bargaining. It does not, for example 
in insurance, say the business of insurance is hereby exempt to the 
extent it is regulated by State law. That is a huge exemption.

  This bill will only exempt in the context of negotiating the medical 
professional who joins with another medical professional to tell the 
HMO we speak as one.
  Mr. GANSKE. Reclaiming my time, let us go back to this for a minute. 
Let us say you have a family practitioner out in a small rural town and 
he knows of some examples where this HMO has not treated his patients 
fairly; and he says, you know, I think also possibly through specific 
contract provisions as they relate to his relationship with the HMO, 
that, for instance, might gag him from telling the patients about their 
illnesses, if he says to that large insurer, you know, I think you 
ought to change that, but 80 percent or 50 percent of his patients are 
in that, do you think that that large insurer is going to bargain with 
them, is going to change their contract with him? No. They are going to 
say, as the gentleman said, take it or leave it.
  Mr. CAMPBELL. They will go next door.
  Mr. GANSKE. They will go next door, and so what we are looking at is 
an ability, and I think this is crucial, the gentleman has it in your 
bill, and we have to repeat this, the gentleman has in his bill a 
prohibition on strikes.
  Mr. CAMPBELL. Absolutely.
  Mr. GANSKE. Let us repeat that.
  Mr. CAMPBELL. There is a clear statement in the bill that there is no 
right to strike conferred by this bill.
  Mr. GANSKE. So that nobody tomorrow when we debate this can say that 
doctors, if we pass this bill, the Campbell bill will allow physicians 
to go on strike; is that right?
  Mr. CAMPBELL. That is right, no one can say that truthfully tomorrow.
  Mr. GANSKE. That is a good point. Now, what we are talking about then 
is for a group of physicians, for instance, that have seen abuses by 
that HMO to be able to get together, possibly to hire somebody to 
negotiate for them to go to that HMO and correct some of the abuses 
that they are seeing, and, say, look, as a group now, they have more 
equality in terms of this bargaining position. We want you to treat 
patients more fairly when, for instance, they go to the emergency room.
  Mr. CAMPBELL. Great example. I say to the gentleman, ought there not 
be some understanding that the HMO will cover the costs in the 
emergency room closest to the accident? Ought this not be a minimum 
sort of situation, and if a doctor insists on that and says I am sorry, 
we are not going to put that in your contract, take it or leave it, who 
cares more for the patient, the doctor who is the trained professional 
committed to a code of conduct regulated sternly by the State and by 
her or his own colleagues in caring for the patient, or the HMO. And I 
am not saying that they are all bad; I am not saying that they are most 
bad. But I am saying that they are differently motivated.
  Mr. GANSKE. Reclaiming my time, what we are dealing with is a 
situation, for instance, where it may not be a matter that is 
specifically in the contract that the physician has, but he knows that 
there are provisions in the contract that an employee might have that 
are preventing the patient from getting the needed care in an 
emergency.
  I will give my colleagues one example here. We have a little boy here 
who is 6 months old. One night about 3:00 in the morning, he had a 
temperature of about 104, 105. The mother and father lived south of 
Atlanta, Georgia. His mother gets on the 1-800 HMO number line, talks 
to somebody a thousand miles away, says my baby Jimmy has a 
temperature. He is really sick. He needs to go to the emergency room.

  The HMO reviewer, who has never examined the child, says, well, I 
guess I could authorize you to go to an emergency room, but the only 
emergency room we are going to authorize is one that is 70 miles away, 
70 miles away. And if you go to any other one, then you can pay for it 
yourself. So Mom and Dad wrap up little Jimmy. They get in the car; 
they start their drive. 20 miles or 30 miles into the drive, they pass 
three emergency rooms that they should have been able to stop at, 
because Jimmy was really sick; but they were not health professionals, 
they did not know how sick he was.
  Before they got to the designated hospital, he has a cardiac arrest. 
Imagine, Dad's driving this little baby frantically, mother is trying 
to keep him alive. He is not breathing any more. His heart is not 
going. They finally screech into an emergency room. Mother leaps out of 
the car, screaming save my baby, save my baby. A nurse comes running 
out of the emergency room, gives him mouth to mouth resuscitation.
  They start an IV. They start medicines and somehow they get him back 
to life, but they were not able to save all of this little baby, 
because he ended up with gangrene in both hands and both feet as a 
consequence of that HMO's decision. He ends up having to have both 
hands and both feet amputated.
  Now, the point of the gentleman's bill I say to the gentleman is 
this. Let us say I am the family doctor, and I find out that this HMO 
has treated my patient this way, and I hear from some other fellow 
physicians that they have done the same thing; and we say, you know, we 
are not incorporated together. We are not salaried physicians. We are 
just individual physicians out there, but we know there is a problem 
with this HMO, the way they are treating babies like this.
  We say to the HMO, unless you change your emergency room policy, we 
are not going to sign up with you. Under current law, that group of 
doctors advocating on behalf of their patient could be sued under 
antitrust. Is that not right?
  Mr. CAMPBELL. It is absolutely right. I say to the gentleman, they 
could be sued by the Federal Trade Commission. They could be sued by 
the Department of Justice. They could also be sued by the HMO, which 
would calculate for the year, let us say, how much additional costs the 
HMO had to pay out over what the contract would have been if they had 
only access to the emergency room 70 miles away, and multiply that 
additional cost by three, it is trouble damages in antitrust, plus the 
HMO would get its attorneys fees, because prevailing plaintiffs, not 
prevailing defendants, only prevailing plaintiffs get their attorneys 
fees in antitrust.
  Mr. GANSKE. Let us deal with some of the myths about the Campbell 
bill. Some people say that this would allow price fixing. I wonder if 
the gentleman would like to address that issue.
  Mr. CAMPBELL. Well, indeed, when we are speaking about doctors 
presenting a united front, it is going to impact the compensation that 
they get. It just has to. If you are a family physician and you are 
being forced to accept a per-patient capitated rate, that means you see 
20 patients per hour, you are not the same family physician that you 
wanted to be when you graduated from medical school. And in most 
instances, you are not really adequately providing health care.
  It is impossible, impossible to divide the question of compensation 
from the question of care. That, however, leaves us open to criticism 
by the unfair, to create traps for those who would use the trap. It is 
unavoidable if you are going to get better care that you are going to 
have to have some payment for the better care. You cannot repeal the 
law of economics any more than you can repeal the law of physics.

  Mr. GANSKE. What the gentleman is saying is that some may try to 
narrow the law to only deal with nonfiduciary matters, but I believe 
what the gentleman is saying is that an HMO can set a fee so low as to 
effectively deny the treatment.
  Mr. CAMPBELL. The gentleman is absolutely right. And we anticipate an 
amendment to this extent being offered tomorrow. And on its first 
blush, it will sound good. It will say none of this antitrust immunity 
shall extend to the question of compensation. It is, however, a gutting 
amendment, a killer

[[Page H3760]]

amendment. What it would do is leave virtually nothing, because 
virtually nothing that we speak about here tonight is unrelated to the 
question of compensation. So that is a very important point to make 
clear.
  Mr. GANSKE. I go overseas and I do cleft lip and palate operations in 
Third World countries where the families cannot afford it. But I will 
tell you what, people are spending an awful lot of money in this 
country for their health insurance. It ought to mean something when 
they actually get sick and need it, for instance, a child. And it ought 
to be covered at a level that would not preclude a person from getting 
it.
  But I want to go back to one thing, and that is that under the 
gentleman's bill, price fixing or fee setting by physicians is still 
illegal, and that is because what we are talking about is a group of 
physicians being able to negotiate with an HMO, but we are not talking 
about that group of physicians being able to set fees across the board. 
Is that not correct?
  Mr. CAMPBELL. The gentleman is absolutely right. The extent of the 
immunity is in the context of bargaining. And even today, I heard a 
related myth, that this will be a wholesale antitrust exemption and 
would allow doctors to join in a boycott, a boycott of a particular 
pharmaceutical company, Merck was mentioned because it was in the news, 
the argument about price fixing, the argument that doctors could get 
together and agree that no nurse anesthetist would practice.
  Those are all false. The exemption is specific to the practice only 
of bargaining; and to make it even more clear, we added an amendment 
that even in the context of bargaining it shall not be permitted as an 
exemption from the antitrust laws to agree to exclude any other 
professional from their scope of conduct, and we have our colleague 
from the other side of aisle, the gentleman from New York (Mr. Nadler), 
to thank for working out that amendment. The Nadler amendment is part 
of this bill. So price fixing at the patient level, not permitted. 
Exclusion of other professionals, not permitted. Barring the doctor's 
right to choose a pharmaceutical of his or her choice, not permitted. 
And, yet, I suspect in fear, we will hear about those tomorrow.
  Indeed, with my colleagues' indulgence, let me say that I woke to a 
fascinating circumstance yesterday. I heard my name mentioned in an ad 
on the local radio station in Washington D.C. And I had no idea I was 
so evil, but the Campbell bill was being described as OPEC for doctors, 
and this is actually the first thing I heard after waking up. The 
Campbell bill is OPEC for doctors; call your Congressman and oppose the 
Campbell bill.

                              {time}  1945

  Well, being Campbell, this did get me out of bed very quickly.
  My own view, is that, as I described, OPEC is the scariest cartel 
because Americans know about price-fixing by petroleum companies. This 
bill is restricted to the bargaining context. And I am grateful, I 
suppose, that people are mentioning my name, and hopefully they will 
spell it right, but I am not running for office in the District of 
Columbia.
  Mr. GANSKE. Reclaiming my time, I have to laugh that they are calling 
this bill a doctors cartel, because when we look at the oil cartel, we 
have 11 OPEC countries controlling the cost and access of 40 percent of 
the world's oil. What we have in this country is we have a managed care 
cartel where seven giant insurers and the Blues control costs and 
access of over 50 percent of the U.S. health care market. OPEC nations 
utilize their oil production policies to control the market, the price 
and the profit of oil. And that is exactly what the managed care cartel 
does.
  But I think we should also go onto this issue of, well, is the 
Campbell bill just going to mean that physicians are going to become 
unionized. I find this the most amazing misunderstanding of the 
gentleman's bill, because the gentleman's bill, H.R. 1304, would allow 
physicians and other health care professionals to negotiate with 
insurers without forming a union.
  Let me tell my colleagues on the Republican side of the aisle that if 
they want to see physicians become a union, then they should vote 
against the Campbell bill. Because if we take those physicians out 
there in those small communities where they are just squished in any 
type of consumer care problems with the HMOs, and the only recourse 
they have is to join a health group and become salaried physician, then 
in that circumstance, under the current law, then they can form a 
union.
  If we do not pass the Campbell bill, I will make a prediction. I will 
predict that we will see an acceleration of physicians into unions. The 
Campbell bill is a preventive piece of medicine in terms of physicians 
becoming unionized.
  Mr. CAMPBELL. I am pleased that the gentleman made it very clear, 
particularly for our colleagues on the Republican side. I want to add a 
word for our colleagues on the Democratic side, however, as well.
  I have been very pleased with the support that we have had from 
several unions who have said, even though this undercuts the 
attractiveness of a union, we recognize and we are happy to see the 
benefit of collective bargaining. And we have actually had support from 
the American Federation of State, County, Municipal Employees Union for 
that concept. So to make it clear, it actually provides some of the 
benefits of being in a union and, hence, makes it less attractive to be 
in a union.
  Nevertheless, it is my delight to report that it is supported by over 
100 Democrats as well as just under 100 Republicans. We have about 90 
Republican cosponsors and about 120 Democrats.
  May I say one extra thing, too, at this moment, because it is 
important. The American Medical Association is supporting the bill. So 
also is the National Medical Association. And let me just take a moment 
on that. The National Medical Association was organized as an 
alternative for medical doctors of the African American race. That was 
its origin. And there are parts of our history in this area, as in so 
many others, where there was the practice of discrimination. It has 
been a source of great pride and support to me that the medical 
association most connected with increasing the prominence and 
opportunity for African Americans in our country has endorsed this 
bill.

  Their president has testified in favor of this bill; and he believes, 
and has said in testimony, that this will yield increased quality of 
service in those communities that may not get the maximum attention. So 
on the question of, let me say the traditional issues of importance to 
all of us, but sometimes more identified on the Democratic side, we are 
proud of the support that we have.
  Would the gentleman indulge me one second.
  Mr. GANSKE. I wonder if the gentleman would address the issue, 
because I am sure we will hear about this tomorrow, the issue of the 
cost of the gentleman's bill. I know there was an initial Congressional 
Budget Office analysis of the bill which was incorrect in several of 
their assumptions, and I will bet the gentleman can fill me in on the 
details of that.
  Mr. CAMPBELL. Well, indeed. What reminds me of this was the radio 
advertisement that I referred to. The advertisement now running in 
Washington, D.C., says that one estimate says that this will increase 
cost 15 percent. No, that is not correct.
  The Congressional Budget Office assessment is that the ultimate 
effect to the patient will be six-tenth's of 1 percent. Six-tenth's of 
1 percent. Now, I have good reason to believe that is wrong because 
they do not measure quality. And if quality is improving, which it 
surely will under this bill, any measurement of cost-per-unit quality 
will likely drop.
  But let me explain how 15 percent came to be. The Congressional 
Budget Office said, well, we have to make some assumption as to what 
the initial increase in compensation to the doctors will be. Let us 
just assume that the studies of industrial unions, which show that 
members of industrial unions make roughly 15 percent more than 
individuals in that same calling who are not members of industrial 
unions, let us assume 15 percent.
  Mr. Speaker, it was done on no more basis than that. But it started 
there, and then it came down to six-tenth's of 1 percent after figuring 
the following.

[[Page H3761]]

 Even assuming that 15 percent increase goes to the medical 
professional, the next step is the HMO. And the HMO is going to take a 
hit to its profit. I do not deny that, and I do not apologize for it. 
And as it does, that eats up some of the proposed increase in cost. 
Then the HMO has a certain amount it passes along to the employer, and 
the employer takes a certain amount of that in her or his profit. And 
then the employer passes along a certain amount of it to the employee. 
And by the time it gets down to the employee, the Congressional Budget 
Office estimate was six-tenth's of 1 percent.
  Mr. GANSKE. Okay. So they originally said that the cost was going to 
be how much?
  Mr. CAMPBELL. They said that the reimbursement to the physician was 
15 percent. But their original estimate of the cost was 2 percent, and 
I pointed out a couple of errors in their analysis.
  Mr. GANSKE. And now the CBO is saying that the cost would be six-
tenths of 1 percent.
  Mr. CAMPBELL. Six-tenths of 1 percent.
  Mr. GANSKE. Six-tenths of 1 percent. And I would point out that that 
is probably an accurate figure. I think that there would be a very 
small increase. And the reason why there would be a very small increase 
is because, quite frankly, when groups of physicians get together to 
negotiate with those HMOs, especially concerning those consumer 
practices that affect whether a patient can get the type of treatment 
that they need, let us say on the medical-necessity issue, then I think 
there would be a little bit of an increase in cost because, quite 
frankly, I think a lot of HMOs have been denying appropriate care, and 
that care is going to cost a little bit more.
  But the fact of the matter is that we can, if we treat people 
appropriately and fairly, and they get the type of treatment that they 
need at an appropriate time, then, in the long run, I think we can 
prevent not just additional expenses to the medical system, but we can 
also prevent disasters like happened to this little boy when he lost 
his hands and feet. And how do we calculate what his hands and feet are 
going to be worth to him the rest of his life?
  Mr. CAMPBELL. There is one other aspect, if the gentleman will yield, 
on the question of cost. But I cannot leave the gentleman's previous 
example without saying he is absolutely right. And for those whose only 
focus is cost, they will forever be subject to the predatory activities 
of those who offer a quality that is diminished.
  But the other aspect of the cost estimate is the CBO, in coming to 
the six-tenths of 1 percent, did not include the following 
consideration: that as dealing with HMOs becomes a little bit fairer 
and a little bit more enjoyable and a little bit more professional for 
the medical doctor, we will see doctors staying in HMOs who otherwise 
would have left them.
  It is true that the HMO is a lower cost effect delivery than fee-for-
service has been. And so as we have more doctors going into HMOs 
because it is a more hospitable environment, we will actually have a 
depressing effect on cost. That I pointed out, but the CBO did not 
include in its estimate.
  So I think we can safely conclude two things: one, that the cost 
increase to the patient is going to be very, very small. And I will 
accept the six-tenths of 1 percent, as does the gentleman. But, 
secondly, that estimate has not considered quality. And there are many 
points where we simply cannot measure quality in dollars and cents. But 
taking the most conservative assessments, the quality increase is worth 
it.
  Mr. GANSKE. I wonder if the gentleman would care to comment on the 
opposition of the Federal Trade Commission and the Department of 
Justice.
  Mr. CAMPBELL. I had the honor to be director of the Bureau of 
Competition, Federal Trade Commission, during the administration of 
President Ronald Reagan. As a result, I am an FTC graduate. I used to 
bring antitrust lawsuits on behalf of the Federal Trade Commission. And 
the Federal Trade Commission, to my knowledge, has opposed every 
exemption from the antitrust laws ever proposed. I do not run the risk 
of being corrected on that.
  I remember testifying before Congress, when I was the director of the 
Bureau of Competition, for a limitation on the antitrust exemption for 
ocean shipping. In each case, the FTC and the Department of Justice do 
exactly what we would expect of them, and I do not fault them at all.
  Mr. GANSKE. They are protecting their turf.
  Mr. CAMPBELL. That might be a doctor's assessment of a lawyer. A 
lawyer might say defending his jurisdiction. Protecting his turf sounds 
like the same thing.
  Mr. GANSKE. I wonder if the gentleman would care to comment on the 
fact that the Department of Justice did not challenge a single health 
care merger in the last decade of all these HMOs, while the 18 largest 
health plans merged into just six, at least not until one of the health 
groups pushed the DOJ to look at the issue, and then I think they went 
ahead and granted the merger anyway. Would the gentleman care to 
comment on that?
  Mr. CAMPBELL. Indeed, I was in charge of the aspects of merger 
analysis that was applied by the Federal Trade Commission. And, roughly 
speaking, and this is ballpark but it is about right, up until 40, 50 
percent market share is achieved in a merger, the FTC and the 
Department of Justice will permit the merger.
  It is actually more complex than that. It is done under an index 
called the Herfindahl-Hirschman Index. But the FTC and Justice will 
oftentimes make an analysis of will there be potential competition. 
Will another hospital enter if the existing merged entity extracts a 
higher price. And in so doing, the patients might suffer for a year or 
two until that new entrant happens. The analysis, in other words, 
allows a substantial accumulation of market share.
  I find myself admiring the analysis that involves economics at the 
Federal Trade Commission and not admiring the outcomes that, at least 
in this instance, allowed the accumulation of market power. The 
theories might have been right; but the practice, as we have seen, did 
not result in consumer benefit.
  Mr. GANSKE. Now, some people say that H.R. 1304 will come under the 
National Labor Relations Act. Is there anything in the gentleman's bill 
that has to do with the National Labor Relations Act?
  Mr. CAMPBELL. Only the one sentence in the bill that it does not come 
under the National Labor Relations Act. I explicitly put into the bill 
a statement that nothing in this bill shall alter in the slightest the 
application of the National Labor Relations Act or extend to areas 
which previously it did not extend to. Absolutely false. Not a change.
  And I will put to the gentleman something he and all of us in the 
House know. If there were any such implication, the bill would have 
been referred to the Committee on Education and the Workforce, which is 
jealous of its jurisdiction, and it was not. It was kept in Judiciary, 
dealing strictly with antitrust.
  Mr. GANSKE. Now, the gentleman has wide bipartisan support of this 
bill. How many cosponsors does the gentleman have for this bill?
  Mr. CAMPBELL. I am proud to say we have 220 cosponsors. And as 
everyone here knows, 218 is a majority of the House. Of those 220, as I 
said, just under 100 are Republicans and the rest, slightly more, are 
Democrats.
  Mr. GANSKE. So it would be the gentleman's contention that since 
Congress is indicating now that they think that there is a problem, our 
leadership does too, that there is a problem with HMO abuses, that for 
those who think, well, let the market do its will, the market has to be 
able to do its will.
  Mr. CAMPBELL. Right. And we cannot have an antitrust exemption on one 
side and individuals unable even to call each other on the other. And 
market power with fewer and fewer HMOs on one side, and a doctor who 
cannot even express her or his revulsion against a gag order to her or 
his colleague, is not the market.
  I suppose if one were a real free market Ricardo economist, they 
might say, let us go back to the state of nature. Let us get rid of the 
antitrust exemption for insurance. Incidently, I actually offered that 
once, and it got one vote in the Committee on the Judiciary in 1989.

[[Page H3762]]

                              {time}  2000

  Mr. GANSKE. I know that I have many friends who will say, well, you 
know, maybe we do not need to deal with this issue right now because, 
after all, the Managed Care Reform Act of 1999 that passed the House is 
now in conference with the Senate and maybe we just ought to wait and 
see what happens on that conference.
  My personal opinion on this is I think we probably need both. I think 
we need to see some regulatory oversight in the vacuum that was created 
by ERISA. I think we would probably need less of that if the Campbell 
bill passed. I do not see them as exclusive of each other.
  Furthermore, I would say this: The managed care industry is very 
creative. We have no way of knowing how they will change their 
contracts, how they will change their business practices, and what kind 
of quality issues will arise out of that in the next few years. And 
that is why I would say H.R. 1304 would address this issue because it 
would enable the health care providers who are having to deal with 
this, who are having to stand up and advocate for their patients at 
that time to be able to band together and advocate for those patients 
as new permeations arise within the industry.
  Mr. CAMPBELL. Mr. Speaker, I appreciate the point of the gentleman. 
As I said at the start, I admire his compassion, his knowledge, his 
medical as well as congressional experience.
  I took a slightly different view, as the gentleman knows on the 
Patients' Bill of Rights. So it is fascinating, here we are with two 
different positions on the Patients' Bill of Rights.
  Mr. GANSKE. Yes, Mr. Speaker, I am supporting the gentleman on his 
bill. I wish he would have supported me on mine, but he did not. But I 
understand the commitment of the gentleman when I asked him to support 
the bill he said I want to approach this from a different aspect, I 
want to try to make that market work, but in order for a market to 
work, you have to have fairness in terms of the bargaining positions of 
the participants.
  Mr. CAMPBELL. That is exactly right. And I do have ultimate trust 
that market solutions are better than Government-imposed solutions. And 
so, if we pass H.R. 1304 tomorrow and the other body passes it and the 
President signs it into law, we will have the opportunity to let that 
private ordering between the insurer and doctor prevail.
  My hesitation was the Federal Government seldom gets it right, and 
having Government put in terms of contracts certainly is offered as an 
alternative but it is an alternative I would go to as the last one 
rather than the first.
  Might I ask my colleague to yield on one last point, which is the 
amendment that will be offered by our friend the gentleman from Florida 
(Mr. Stearns)?
  Mr. GANSKE. Mr. Speaker, I yield to the gentleman.
  Mr. CAMPBELL. Mr. Speaker, first of all, the gentleman from Florida 
(Mr. Stearns) is a colleague of mine. We entered Congress the same 
year. So I have high regard for him, but I also have a friendship for 
him.
  The amendment he offers tomorrow, however, is a killing amendment. I 
just want to draw attention to this. It says that all of this may be 
well and good, however, the Federal Trade Commission shall have the 
authority to vitiate any contract reached after such process if in the 
Federal Trade Commission's opinion that contract does not enhance 
patient welfare.
  If my colleague sees my point, it is directly against the principle I 
just announced. Here is a Federal Government agency, which does not 
want this bill, which has been hostile to the concept that medicine 
should be a perceived as a profession rather than the subject of 
antitrust to be given the power to vitiate any contract upon its own 
determination that the particular contract, and here the judgment is 
not an economic one but a social one, does not enhance patient welfare.

  It is a killer amendment. In fact, it goes much farther than an 
amendment which was offered by our friend from Indiana in the 
committee, which said they have got to get approval from the FTC first. 
The theory there was let the FTC sign on or not and give them the yes 
or no in any particular case.
  Well, once again, we know pretty much what the FTC did. Here is the 
power to vitiate any contract the FTC chooses to decide that it does 
not benefit health care in its own essentially unreviewable discretion.
  So I say to my colleagues who might be listening or to their 
constituents who might wish to advise them, if they feel this bill is 
not good, of course vote against it, but it would be disappointing to 
vote in favor of the amendment being offered by our friend from Florida 
(Mr. Stearns) thinking it is improving the bill when in reality it is 
killing the bill. Vote up or down on the merits. Do not kill by subtle 
amendment.
  Mr. GANSKE. Let me just go back to the nitty-gritty of the bill, and 
that is that physicians cannot sue under this bill.
  The most recent cost estimates by the Congressional Budget Office are 
six-tenths of one percent. What we are talking about is a group of 
physicians who do not join a labor union but are concerned about HMO 
practices who want to get together and tell that HMO, you know, the 
contract that you are giving those employees for that company where it 
says ``medical necessity'' means the shortest, least expensive, or 
least intense level of care is just not right and, together as a group, 
we will not sign onto a health plan where you are treating one of your 
subscribers in that way or, for instance, when you have provisions in 
your contract that says first we have to phone you before we can even 
tell a patient about their treatment options.
  I mean, this affects real-life people and the ability of a physician 
to be an advocate for your patient.
  This is a lady who was profiled in Time Magazine. She had received a 
recommendation for treatment. She lived in California, the home State 
of my colleague. She had received a recommendation for treatment from 
her HMO. The HMO referred her to a medical center, which I will not 
name, and then put undue pressure on that medical center to deny her 
the treatment and not tell her all of her treatment options.
  She died because of that practice. This little girl and that little 
boy and her husband now no longer have a mother or a wife because of 
that. But we have a situation now where if a group of physicians or 
nurses or pharmacists or other health care providers, professionals, 
wanted to get together to try to effect changes and to negotiate with 
an HMO to stop those kinds of practices, unless they were salaried, 
then they could be brought to court for an antitrust violation.
  I just find that that is terribly, terribly wrong. And I know that 
this happens. I know from practice that physicians are very, very 
careful about sharing information of misadventures of other HMOs for 
exactly this reason. Because if they get together and start talking 
about it sort of as a group, even if it is done on an individual basis, 
they decide, I am not going to renew that contract, then they could get 
hit with a big antitrust.
  But the fact of the matter is that now they are not even given that 
choice in many examples anymore because of the concentration in the 
industry, it may very well mean that they have just lost half of their 
patients without being able to effect any negotiations with any 
reasonable chance of success on that; and that may mean, in effect, 
that they can no longer practice in that community.
  Mr. CAMPBELL. I have just received a signal that we have only 2 
minutes left. So I simply want to say in about 10 seconds that the 
whole purpose behind H.R. 1304 is to allow medical professionals to 
practice their profession so that they can help their patients and that 
what has happened is that decision has in large part been taken away 
from them and that is what we wish to correct.
  I thank the gentleman for sharing his hour with me.
  Mr. GANSKE. Mr. Speaker, I appreciate very much the gentleman from 
California (Mr. Campbell) joining me in this discussion on his bill, 
which will reach the floor tomorrow morning at about 9 o'clock. We will 
have a couple hours of debate on it.
  I will encourage all of our colleagues who have cosponsored this 
legislation to vote against any weakening amendments and to vote for 
the bill, as my colleagues have indicated they would in cosponsoring 
this legislation.




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