[Congressional Record Volume 150, Number 39 (Thursday, March 25, 2004)]
[Senate]
[Pages S3121-S3122]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         HEALTH INSURANCE COSTS

  Mr. THOMAS. Mr. President, I take a few minutes today to talk about 
an issue I am sure we are all concerned about and interested in. As I 
go about Wyoming and talk to people, particularly in town meetings, the 
issue that arises most often and with the most passion is the high cost 
of health insurance. The cost of health insurance is directly related 
to the cost of health care. What we hear the most about is from people 
who are in private business, farmers and ranchers, who provide all of 
their own health care costs, which have become increasingly 
prohibitive. It seems to me we are going to have to focus properly on 
Medicare, Medicaid, veterans, those government programs for which we 
are responsible. I suggest we need to focus now and begin to take a 
look at the broader picture of health care. We have a system that has 
available certainly some of the best health care in the world, but the 
key is to have access. If the cost limits access, we have a problem.
  We have some unique features in Wyoming. Because of a small 
population, we cannot have all the various professional services in 
every small town. There has to be a system. We have worked at that. 
There are several hospitals with the different kinds of specialties 
that help serve communities. We have had more and more critical access 
facilities which make it easier for small communities to work.
  I visited Dubois, WY, this week, a new clinic to a small town. I also 
met with a group of physicians and hospital operators in Cheyenne. We 
talked about some of these issues. Before it was over, these 
professionals, these providers, indicated they agree this system is 
broken and there needs to be some kind of change made in the future. I 
don't know the answer. I don't know that anyone yet knows the answer. I 
suggest to my fellow Members of the Senate and the House, we need to 
begin to take a look.
  If I can start out by saying I am not one who favors a Federal 
socialized medicine program, we need to find some ways to do something 
with what we have now.
  National health expenditures grew $1.6 trillion in 2002, a 9.3-
percent increase over the previous year. The costs of health care 
generally have gone up 15 percent a year for several years.
  It is hard to sustain 15-percent growth, particularly when, 
increasingly, health care for families is a relatively large portion of 
expenditures.
  Health care as a share of GDP in 2002 was 14.9 percent, up from 14.1 
percent in 2001. So we are seeing substantial increases. And over the 
years those increases have continued.
  So one has to ask, if the costs are going up 15 percent a year, how 
long can you sustain that? What do we need to do? Folks are seeing 
double-digit premium increases each year, including Federal employees. 
So it is quite obvious to me that we cannot continue to grow rates at 
that level.
  I indicated I had talked to some folks who certainly agree we need to 
deal with that. We face more challenges in the health care system than 
just reforming the public programs or addressing the nearly 42 million 
people--15 percent--who do not have health insurance.
  There are some things, of course, we need to consider. We need to 
improve the underlying health care infrastructure. Its rising costs 
affect all of us. I think we have to take some of the responsibility 
for fixing that system.
  We have a health care system today where, for instance, hospital 
charges do not reflect the actual costs because of public and private 
insurance reimbursements. I recently met with a hospital CEO in my 
hometown. At that hospital they had some very interesting topics they 
talked about. Their gross charges, for example, were $202 million; $80 
million was written off; $120.7 million reflects actual costs; $1.4 
million was income from insurance, and they had $3.3 million in other 
income. This is not a large profit margin.
  What does that mean? No. 1, Medicare does not pay to the level of 
actual costs. Now, you may say, well, we need to keep the cost of 
Medicare down. That is true. On the other hand, if their payment is not 
equal to the cost, then someone else has to bear the cost; Medicaid 
even more so.
  Medicaid pays even a smaller percentage of the actual cost than does 
Medicare. This is a combination, of course, of State and Federal 
programs. So we find that situation.
  Charity, for those who are uninsured, for those who come in and are 
not able to pay, we still take them, of course. Trauma care, sometimes, 
is reimbursed by the county or the State. But if someone has an 
accident and arrives at the hospital, they are given care, of course, 
whether they have the ability to pay, whether they have insurance. And 
guess who pays the principal cost of that. Those who have insurance.
  People who are insured represent about 35 percent of the people in a 
hospital, but they pay 98 percent of the cost. So what we are doing 
basically is taking the costs that are there, and those who have 
commercial insurance are paying a very large percentage of that cost. 
Therefore, we are shifting costs from the broad user base to a 
relatively small group who buy insurance, which causes the private 
insurance to be higher.

  So there are some weaknesses there. Certainly, we have to do 
something about it. Health providers must shift this cost to private 
insurance or they do not make it up.
  Emergency room costs, of course, are extremely expensive. They are 
used a great deal, particularly with Medicaid where there is no first-
dollar payment by anyone. When anything goes wrong for someone who is 
under Medicaid, they can go to the emergency room because it does not 
cost anything.
  Of course, we pay the highest prices for prescription drugs and 
shoulder the research and development costs for

[[Page S3122]]

much of the rest of the world. I think most of us are working on that 
issue. I think we are going to have a hearing next week in the Finance 
Committee to see if there is any relationship in terms of the trade 
aspect of it--with Canada, for example, where you can send goods from 
this country that cost a certain amount, and the Government up there 
says they will cost less. Is that part of a trade problem? I think it 
is something we ought to talk about.
  Also, of course, one of the things we have tried to fix--and I hope 
we continue to try to do something about it--is putting a limit on 
noneconomic damages for liability in health care. We have tried to pass 
that. We tried to pass it in the Wyoming Legislature. I think, 
hopefully, they will continue to do that.
  But what it has done in our State--and I think in a number of other 
States--is it certainly has raised the costs because the cost for 
malpractice insurance for practioners has gone up a great deal. It has 
also caused some practitioners, particularly OB/GYNs, to not serve any 
longer. Again, in a State such as ours, where there may be just one 
provider in a community, if that person does not provide services, then 
there is no one there and people have to go miles and miles to find 
care.
  So it has a great impact. Not only is it the impact of increased 
costs to the provider, which he or she passes on to his or her 
patients, but it also has caused practices to be quite different and to 
be overly general about care. A number of years ago, if you hurt your 
arm, you would go to a general practitioner, he would fix it, put a 
cast on it, and you would go home. Now you would go in and: Oh, my 
gosh, you hurt your arm? You better see an arm specialist. We need to 
take some tests. We need to have an MRI and a few other things--all of 
which make care more expensive than it used to be. Some of that cost is 
simply for protection against malpractice lawsuits. So that is one of 
the things we can do.
  We are seeing more and more small businesses being unable and 
unwilling to help provide health care for their employees. So there are 
all kinds of different problems that have arisen.
  I think people, also, are probably less responsible for their own 
health. This idea that we should take care of ourselves a little better 
to avoid sickness--everyone agrees with that idea, but not everyone 
participates in that. So, again, we have some things that could be 
changed.
  I met a gentleman who is promoting a new program, running a new 
program called Be-well. It is a program for employers who create health 
contracts with their employees under the proposition that the employer 
says to the employee: I am willing and able to cover your health care 
expense, your insurance expense. However, you must agree to do some 
things for your own health. You need to agree to exercise. You need to 
agree to do some things. You need to agree to this Be-Well program.
  Most everyone agrees with that idea, but often there is not any real 
incentive to do that. This program provides an incentive to people to 
be more responsible for themselves.
  So we face some real challenges. Physicians and providers are 
retiring earlier because of some of these pressures. Hospital vacancy 
rates for registered nurses, radiology technicians, and pharmacists 
have reached more than 10 percent. There are a number of hospitals that 
face rather severe shortages. We are also facing dental shortages. 
Again, in low population States, we are seeing the dental providers 
becoming an older group. Many are soon to retire. Frankly, there are 
not enough people standing in line waiting to replace them. We are 
working on trying to get a multistate dental training arrangement and 
also urging some assistance for underserved areas in this area as well.
  So what I am interested in seeing is if we can start a little dialog 
on the broader issues that affect health care and health care costs and 
the ability to have access to health care for people in this country.
  I will continue to work on this issue. We have been very involved in 
our office on rural health care. We are very pleased with some of the 
things that were done in the bill that we passed last year for 
Medicare.
  I was very pleased that we passed that bill. To be sure, it is not 
finalized, but it is a first step in 30-some years to begin making 
changes. So we have had changes taking place with people but not a lot 
of changes in terms of how we provide health care.
  Last year we had a forum on rural health care which is a little 
unique, but some of the problems are the same. We began to discuss 
those problems and to look to the future. That is what we have to ask, 
what is health care going to look like 5 or 10 years from now, if we 
can make that sort of projection, and then begin to look at what we can 
do to get where we want it to be rather than where we think it will be 
if we do nothing.
  There are some ideas out there. I don't suggest they are all the 
best, but some are being talked about--tax credits to have a medical 
setaside for payments that you could keep tax free and then use it. In 
many cases you could use it for the first dollar cost, and then all you 
have to buy is a higher level insurance, which is much cheaper, 
catastrophic insurance, rather than the first low dollar, which is much 
more expensive. We are going to be working on a better medical savings 
program.
  Association health plans have been talked about. The idea of 
insurance is to get enough people into the package so you can level out 
the cost between those who are less healthy and those who are more 
healthy. But if you do not have large numbers, that doesn't happen. 
There is some objection to that in terms of the States. I am not 
necessarily supporting all these ideas. But, for example, if you were a 
service station operator, you could be part of a national service 
station operators insurance program.
  Some have talked about the idea that everyone, even if they had to be 
helped, should have insurance. We require insurance on your car. We 
don't require it, but somebody else has to pay for it. So that is 
something we should talk about.
  Better education efforts for consumers to make healthier choices, 
certainly that is something we ought to take seriously.
  As I mentioned, medical malpractice reform is clearly something we 
ought to do. We, obviously, have been blocked in the Senate from doing 
that.
  There are a lot of issues we need to look at, and they deal with 
where we are going to be in a few years and where we are now. But we 
will be worse off in a few years unless we begin to deal with some of 
those issues.
  I appreciate the time and look forward to continuing to have the 
debate.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I say to my good friend from Wyoming, 
before he leaves the floor, I share his frustration over our failure to 
act on any kind of medical malpractice reform. We have tried a broad 
approach. We have tried a narrow approach. We will be back again to try 
another narrow approach. We can't even seem to get cloture on the 
motion to proceed. That is how dug in the Senate seems to be against 
any effort to lower those liability insurance premiums for doctors. The 
Senator from Wyoming brings up a very important issue. I thank him.

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