[Congressional Record Volume 150, Number 66 (Wednesday, May 12, 2004)]
[House]
[Pages H2891-H2898]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IRAQ AND BRINGING JOBS BACK TO AMERICA
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from Kansas (Mr. Tiahrt) is recognized
for 60 minutes as the designee of the majority leader.
Mr. TIAHRT. Mr. Speaker, tonight I am going to spend a little bit of
time talking about how we are going to bring jobs back into America.
But before I get to that topic, I want to mention a little bit about
Iraq and the situation over there currently.
There has been a lot of handwringing in Washington, D.C. over what
has happened in the Abu Ghraib prison. It was a horrible scandal that
was wrong, it was sick, and we must hold those people who are
responsible accountable. Court martials are currently going on. They
will be open public prosecutions. There will be quick and severe
punishment, and I think it is necessary that we get all of those
responsible.
Recently in a hearing, I was able to listen to Major General Tagabu,
who underwent the investigation; and he found that there is no
documented approval of these actions. Quite the opposite. Everything
that is documented within the Department of Defense says just the
opposite. The Geneva rules and conventions will be followed. Proper
procedures of handling prisoners will be followed. But yet in that
prison, and it is an isolated case, there was a lack of training, there
was lack of supervision, there was poor discipline among the troops;
and the result was what we have seen in the media recently, including
photos and videotapes that are available. But this situation will be
corrected, and there is no coverup.
I think there is a silver lining in this dark cloud, though, that has
been surrounding Iraq. The 130,000-plus troops that are in Iraq have
been doing exemplary work. They have been carrying out their duty with
great respect to the Iraqi people, and they have focused on the enemies
of those people who hate democracy in the Middle East. They have done
their job without shame, and they have conducted themselves in a
professional manner. The leadership in Iraq has done an excellent job,
as has the leadership in the Pentagon.
It is probably likely that the Secretary of Defense does not know how
many traffic tickets were issued to members of the military this past
week. There is a lot going on around the globe with approximately 3
million Americans in uniform. But yet when this was discovered, he
acted quickly and sternly and brought this to the forefront. I think
Secretary Rumsfeld needs to continue in that position. He is the right
man for this time. He is the right man for the job. We need his clear
thinking and his firm leadership.
Now I would like to move on to careers for the 21st century, but I
want to go into a little bit of history before we get into some
specifics about how we are going to bring jobs back into America. Our
economy has been suffering lately. In 1999, we suffered a tech bust,
and we saw the stock market drop $7 trillion in value and money came
out of our economy. In November of 2000, it was the technical start of
our recession, which was one of the shortest recessions in history.
But then on September 11, 2001, terrorists attacked America, and they
plunged our economy into a deeper recession. But then we responded here
in Washington, D.C. with tax relief. People did one of three things
when they got a little extra money in their pocket. They either spent
that money, which was a demand for goods and it is helping our economy
respond; or they saved that money, which allowed money available for
home mortgages, and we have seen one of the biggest expansions in the
home market in recent history; or they invested it.
When that money was invested, corporations have then taken that money
and built new plants and now are hiring people. In fact, in the month
of April, jobs increased by 288,000. Over the last 2 months, there has
been an increase of 600,000 jobs. Since last September, there has been
an increase of 1.1 million jobs to our economy. In fact, today there
are more Americans working than ever before in the history of our
Nation. Today, according to the Department of Commerce and Dr. Kathleen
Cooper, who is responsible for the 7,000 employees that collect this
data, she tells us that today there are more Americans working than
ever before in the history of our Nation.
But we can do better. What we want in America is high-quality, high-
paying jobs; and here is how we are going to get there. One of the
things that I found out when I was talking to local manufacturers in
the Wichita area is that it is not about wages. The problem we are
having with bringing jobs back to America is not about wages. In fact,
the CEO of Raytheon Corporation in Wichita, Kansas told me that after
he was working on an attempt to hold our wire harness manufacturing
jobs for Raytheon in Wichita, Kansas, he worked with the union that
came up with the best solution possible. He finally came to the
conclusion that if his wages were zero, he would still have to do
something about the excessive cost that he is facing.
Today, I met with a CEO of Converge Corporation. He told me that if
he was going to build a building in America or build a building in the
Philippines or in India, the costs are about the same. He convinced me
that what we need to do to control costs and bring jobs in America is
not about overhead.
[[Page H2892]]
So it is not about wages. It is not about overhead. It is about costs
that are out of control for the CEOs, for the people who keep and
create jobs here in America.
{time} 2030
Now, what are these costs? Where do they come from? Well, over the
last generation, Congress, with good intentions, has passed legislation
that has ended up with disastrous results.
The results have been that we have increased costs that cannot be
controlled by the people who keep and create jobs, by the employers, by
small business employers, by large corporations. Because it is things
that are controlled by Congress. The CEOs and the small businessmen and
the entrepreneurs and those who hire people cannot have a vote. The
votes occur right on the floor of the House of Representatives.
Well, it is time that we change that environment. We have divided
these costs into eight separate issues, and this week we started the
first of 8 weeks to deal with these costs so we can bring back jobs
into America. The eight issues are health care security; bureaucratic
red tape termination; lifelong learning; trade fairness and
opportunity; tax relief and simplification; energy self-sufficiency and
security; research and development; and ending lawsuit abuse and
litigation management.
Health care security we will come back to, because that is the issue
we are dealing with this week. But let me give you a little snippet of
what we are going to deal with in weeks to come.
Next week we will be dealing with bureaucratic red tape termination.
Over the last generation, Congress has put many agencies in place that
have forced continuation of an increase in paperwork to be submitted,
and it has become unrealistic, impractical, and an unnecessary
environment that includes OSHA mandates; that is, Occupational Safety
and Health Agency, OSHA mandates, and they are driving our industries
and small businesses and health care systems to a grinding halt.
According to the National Association of Manufacturers, 12 percent of
the cost of any product made in America is dealing with bureaucratic
red tape.
Energy cost, we wonder why we have $2 gasoline today. Well, our
bureaucratic red tape has imposed regulations that cause our limited
oil manufacturers to try to make boutique gasolines that are being
shifted through limited pipelines, so we come up with temporary
shortages. This week we have $1.95 gas in Wichita, Kansas. So we have
to deal with the bureaucratic red tape.
Following that, we are going to deal with lifelong learning. We are
going to talk about job training and retraining so that we can have a
highly skilled workforce. Now, our public school system has given
generations of Americans the tools to pursue their dreams, and it can
certainly help prepare boys and girls for the demands of a new century.
But we must focus on those areas that are going to be in demand for
us to stay in the lead. We must concentrate on science and engineering
careers. Our bachelor programs and the production rates of scientists
and engineers are among the lowest in the world today in America, and
we must change that.
The next issue we are going to deal with is trade, fairness, and
opportunity. We need to have a fair deal in the world market. We need
to make sure that our exports are treated the same as everyone else
treats exports. We should have equalizing tax rates. We should ensure
balanced tariffs, and we should prevent currency manipulation. And we
have to stop other countries from targeting certain industries here in
America.
One example in Wichita, Kansas, is a company that builds handtrucks.
Right now we are encouraging the Commerce Department to take up with
the nation of China their attempt to try to force out handtruck
manufacturers in America by flooding the market with under-cost
handtrucks.
The same is with auto lift equipment, that equipment that lifts up
automobiles so it can be worked on in gas stations and auto repair
shops, that is being targeted by China as well. That needs to be
corrected.
The next issue we are going to deal with is tax relief and
simplification. Right now we do not have a fair playing field for
American industries. Our tax costs end up buried in our products and it
drives up the cost of our products, and there is a way we can pull out
some of those costs.
We also need to encourage the right incentives, like accelerated
depreciation. That concept of accelerated depreciation will in fact get
more products built and sold within America and it will help bring jobs
back to America.
But we need equity in our Tax Code. We ought to look at something
like the fair tax that is being proposed by the gentleman from Georgia
(Mr. Linder). It is a national sales tax that would give us great trade
advantages. We would eliminate income taxes. When we move a car or
something built in America overseas, that tax would stop at the border
and we would make ourselves 22 to 25 percent more competitive.
The week following that, we are going to deal with energy self-
sufficiency and security. We are going to talk about why we have $2
gas. We are going to talk about stabilizing our energy system. We are
going to talk about creating 700,000 jobs in America and strengthening
our businesses.
Following that we are going to deal with research and development.
America has always been in the lead. It has a history of attracting the
brightest minds in the world and creating some of the best concepts and
ideas. But we are seeing a reduction in the number of papers submitted
about research. We are seeing less money being available for research
and development in America, and we need to change that around by
providing incentives so we can apply knowledge into the public market
and disseminate the technology that we develop.
The last week, the eighth week, we are going to deal with ending
lawsuit abuse and litigation management. We have become a litigious
society.
Our Nation was built on justice and our courts were structured to
protect Americans, but that objective has become warped over the years.
It has warped to the point where our legal system actually attacks our
citizens and our way of life.
We have come to the point where the United States Congress has had to
step in and prevent food companies from being sued, and distributors
and restaurants from being sued, so that they are not liable for
somebody eating too many cheeseburgers. It is amazing that we have come
to this point, but litigation has turned against us and turned against
our economy. It has driven up costs and it has driven jobs overseas.
If we could make some simple changes, a drastic change would be loser
pays. It is the system that is prevalent in Europe today. They do not
have the same high cost of litigation we have in America. Loser pays
would be the obvious solution. If that is not achievable, then we ought
to outlaw frivolous lawsuits and return the court's attention to
upholding the laws of the land.
One commonsense change that is part of our history is the statute of
repose that was put in place in 1994 by Congress. The result in the
aircraft industry, what it did basically was limit liability for
single-engine aircraft to 18 years. In other words you could not sue
them for design flaws after 18 years. For heavy jets it was 23 years.
You could not sue the manufacturers for design flaws after 23 years. I
mean, if an airplane can fly for 18 years, you would think all the
design flaws would be out of it. I do.
But anyway, the statute of repose created 4,000 jobs in south central
Kansas. It increased the working population of aerospace manufacturing
in that area by 15 percent, and it restarted a single-engine production
line in Independence, Kansas. That same concept can be applied to other
manufacturing in America, and it can see a parallel increase in jobs.
So, let us go back to health care security, the issue we are dealing
with this week. I have got some charts that I think illustrate very
closely the point we are dealing with.
In this first chart, we have a lady standing at the door and we have
a stork delivering a pizza. He says, ``I used to deliver babies, but
the insurance got too expensive.'' So he can no longer deliver babies
anymore, he is delivering pizza.
[[Page H2893]]
This chart shows the States in America where a medical liability
crisis exists, sort of a national view. The white States are the six
States that have taken care of their medical malpractice laws and are
currently in a pretty good situation. The 19 States in trouble are the
ones in red. That is where health care costs have dramatically gotten
out of control.
Here is a good example between a yellow State, which is showing some
problem signs but not there yet, and a red State. We have Kansas, where
I am from, the Fourth District of Kansas, and then we have Missouri
right next door, a red State, or a State in crisis.
In that State, in Kansas City, where we have Kansas City, Missouri,
and Kansas City, Kansas, the physicians in Kansas City, Missouri, had a
white-coat flight day, where they walked across the State line to
emphasize the point that if you do not deal with medical liability
costs, you are going to lose physicians. And physicians have been
migrating, closing their offices in Kansas City, Missouri, and opening
them up in Overland Park and other places on the Kansas side where they
have better protection for the liability crisis in medical malpractice.
Time magazine, they emphasized the problem in one of their issues. It
shows a physician's white coat with a tie, and no one inside the shirt
or the jacket. It says, ``The doctor is out. Why so many patients are
losing their doctors to the rising cost of malpractice.''
It gives how much it costs. For a neurosurgeon, the annual cost for
medical malpractice is $71,200. How many surgeries does he have to
perform just to pick up the cost of his insurance? For OB-GYN, the
average is $56,546. How many babies have to be delivered just to pay
the liability insurance? Emergency physicians, $53,500; orthopedic
surgeon, $38,000; general surgeon, $36,354. It has become a crisis in
America, and what we are seeing, because that crisis is signs like this
where at Phoenix Memorial Hospital the emergency room was closed.
It has also has found its way into our manufacturing process, and,
again, it is part of the problem that is driving jobs overseas. You
know, in America today, we have seen some jobs come in, in-sourcing
jobs. For example, BMW is now manufacturing automobiles in America and
exporting them to Germany. Honda builds automobiles here; Toyota,
Mazda, a lot of other companies build cars, like GM, Ford and Saturn.
But this is a typical, average automobile in America.
Well, how much of that car does it take to cover the cost of health
care for the auto manufacturers? Again, this is just a typical auto
manufacturer.
If you look at the cost, the cost buried into the cost of every
automobile is about $1,300 on an average and up. Thirteen hundred
dollars. Now, that is the cost of the wheels and the tires and the
frame of the automobile. So, this much of an automobile showed in the
lower left-hand corner, right-hand corner on your television screen, to
those here in the House floor, that frame which is the outside of the
car and the wheels and the tires, that is the costs that are buried
into health care.
If you extracted the health care costs, you would have the frame left
over with the motor and the undercarriage and the seats and the
dashboard and all of that, but you would not have the outside of the
car and you would not have the tires. It is an expensive proposition to
cover the cost of health care. And that is part of the reason why it
has been excluded, or it has been driving up costs and driving jobs
overseas.
The Kansas Hospital Association tells me that if we cannot revise
some of the problems they are having with paperwork, today the costs
they are absorbing are the equivalent of what they provide in health
care. In other words, for every hour of health care they provide, it
requires an hour of paperwork to comply with all these health care
burdens that have been placed on them.
We have also been seeing a lot of escalating jury awards that have
been very difficult in providing, and we talked about that with the
Time magazine article. It has required a lot of additional costs for
physicians, and that has increased the cost of health care. And there
has been very little means for us to control those costs.
The problems have been, financially, percentage-wise they have
increased just in 2003 by 12 percent or more. That is the fifth
consecutive year of double-digit increases, and it has doubled the
health care costs for employers since 1999.
By decreasing these costs, we could see an increase in jobs in
America. With each percentage point rise in health care insurance
costs, it increases the number of uninsured people in America by
300,000 people, according to the Congressional Budget Office. That
means that if we can hold down costs, we will see less uninsured people
in America.
Medical liability insurance premiums have increased 505 percent since
1976, and that has driven many doctors out of the profession, closing
some specialty practices in entire regions and placing an unnecessary
financial burden on the Nation and its employers.
The average jury award now is $3.5 million, which is up by more than
70 percent since 1995. The increasing cost of insuring doctors against
petty lawsuits is severely reducing the quality and access of America's
top-rate health care.
We have got a lot of problems to deal with here. One of the
statistics I wanted to bring out here is the National Association of
Manufacturers. They have calculated the benefit it costs for American
companies, and it puts us at a 5.5 percent disadvantage compared to our
nine largest trading partners.
Not only is the United States spending more on health care annually,
but 7.7 percent of our gross domestic product goes into health care
from our private sector. That is effectively matched by the public
sector, so it is now 14 percent of our gross domestic product.
We have been blessed with the best health care system. We must make
it affordable and available to all of us.
So we have come up with three specific pieces of legislation this
week. I have joining me this evening the gentleman from Minnesota (Mr.
Kennedy), and he is going to talk to us about his view of the issues
that we are facing to make health care more affordable and help us to
bring jobs back.
I yield to the gentleman from Minnesota.
{time} 2045
Mr. KENNEDY of Minnesota. Mr. Speaker, I thank the gentleman from
Kansas; and I thank him for his passion for keeping jobs here in
America, for growing jobs in America, for understanding what it takes
to have that happen.
As I go around my district and talk to businesses that are growing
those jobs, health care costs are one of the top issues that they talk
about to us. The gentleman has hit right on many of the key issues of
medical malpractice driving doctors out of practice, getting them to do
what they would tell you is unnecessary practices, just to make sure
that they are covered in case something happens. We are going to get
into talking about health savings accounts and flexible savings
accounts and how we can really help individuals better control costs,
and how association health plans can help associations of businesses
that do not really have a good program available to them provide that
to their many, many employees.
Mr. Speaker, there are two different ways that people think about how
do we control costs long term. Some would suggest that we need to move
towards a single-payer plan where one government entity is paying all
of the health care costs across the country. We know what that looks
like. That looks like government rationing. That looks like standing in
a queue and waiting forever to get a basic procedure. We see that up in
Canada. Canadians come down here to America to get their health care
because they know what that looks like.
What we are talking about here is empowering individuals, putting
individuals and their relationship with their doctor in charge of their
health care, having them control the decision, having them have the say
and the knowledge and the ultimate give-and-take on how to move
forward. I look forward to talking about how each of the things we are
talking about here really addresses that issue.
Mr. TIAHRT. Mr. Speaker, if the gentleman would continue to
contribute
[[Page H2894]]
here, the gentleman is from Minnesota, up there bordering Canada. I
have heard reports from our northern cities like Seattle, Minneapolis,
Detroit, Buffalo, that we see an influx of Canadians coming in to get
the health care coverage that has been denied them in Canada because
their socialized health care system is rationed. They have to wait too
long for procedures, or that procedure simply is not available because
of their age or weight restrictions.
Has the gentleman noticed that occurring in Minnesota?
Mr. KENNEDY of Minnesota. Mr. Speaker, that is absolutely the case.
Health care will be allocated by some means. If it is totally free,
totally available in a single-payer plan, then the government will come
up with restrictions. We have too much today, even in this country, of
government deciding to ration what they are going to pay for health
care, ration the procedures, and having businesses make too many of
those decisions.
One of the most beautiful things that we have done to advance health
care empowerment of individuals is the health savings accounts that we
passed as part of the Medicare reform last year. What this does is if
you have a high deductible plan, a minimum of $1,000 per person, $2,000
per couple, it can be up to over $2,500 per person, $5,000 per couple,
you can put that amount away, tax-free, into an account, use it for
health expenditures tax-free. If you do not use it, you can roll it
over, earn interest on it tax-free, and build up a nest egg that you
can use in your senior years. But what this means is that rather than
some impersonal party getting the bill that you never see for your
health care costs, you can know what it costs, shop for the best price,
and make decisions.
The best example I have is the young woman that helps me in my office
on health care matters said that she once twisted her knee, and they
had an MRI done. That MRI costs $1,500, and they found nothing. And she
said, you know, if I had a health savings account and that was my
$1,500 being spent, I might have had a simple x-ray done; and if
nothing was broken, I would walk on it for a week before I decided I
was going to spend another $1,500.
It is those types of decisions made over and over again that will
affect health care costs; and we have seen when these types of programs
have been put in place in businesses, they have dramatically reduced
costs while, at the same time, they are giving individuals better care
and better control over their care.
Mr. TIAHRT. Mr. Speaker, I think that the gentleman would agree that
we need to have more transparency in the cost of health care so that
consumers can make better decisions; also, so that physicians can make
better decisions.
One of the gentlemen that I spoke with is a physician who has retired
from running a surgical group. He said when he was just a surgeon, he
would order a lot of tests because he thought they were good data
points for him to sort of mull over and make a decision, and he gave me
the example of an x-ray and an MRI. He said, quite often, you need one
or the other and occasionally, you need both; but for most information,
especially in his type of work, he thought that an MRI is the most
productive for him, but on occasions, x-rays. He said that it was very
difficult for him to determine where these costs were going until he
started looking down as the manager of this surgical group and saying,
what are driving my costs? He realized that all his doctors did the
same thing that he used to do. They would order every possible test as
data points whether they were necessary or not, and that transparency
for him made him tighten up his procedures and lower the costs of
health care. I think if consumers had good, clear transparency in the
costs that were involved, they also would make good decisions, and
health savings accounts would help consumers have more control over
their health care.
Before we go on to these three bills that we are going to deal with
this week as part of this Health Care Security Act, I wanted to mention
my firsthand experience and how it relates to why I think socialized
medicine or a single-paid plan would not be right for this country,
because it does end up in the rationing of health care.
My father is 85 years old. I am very proud of him. He is a World War
II veteran. He served in Heiwajima during World War II. A year ago
January he had trouble with his heart and went in for open heart
surgery. It was a difficult month. He spent 3 weeks in the hospital. It
was touch-and-go for a couple of weeks. We worried about it a great
deal. But he came out very strong, and we still have him today. He is
very active, and he travels still frequently and is a productive member
of our society. But he would not have received that health care
treatment had he lived in Canada. He would have been above the age of
eligibility for open heart surgery. Even if he was within the age
requirements, right now the wait is 6 to 8 months for open heart
surgery in Canada. Can my colleague imagine somebody who has had a
borderline heart condition or even a heart attack and they say, well,
yes, we know you had a heart attack and if you can hold on for another
6 months, we will get you right in.
That is why they have people crossing the border and coming to
America to get health care, because it is the only place that it can be
provided. And because of that, because of our excellent health care
system we have today, I still have my father. I get to talk with him on
the phone, I get to see him on holidays, and I get to gain the wisdom
that he is passing on to me and on to my children. It is because of our
health care system that I still have him.
Mr. KENNEDY of Minnesota. Mr. Speaker, I can tell my colleague that
the health savings accounts let your father and your family be in
control.
If a young person starts out and they are putting away the maximum
amount you can into a health savings account and they live a healthy
life and they spend their money frugally for health care costs, they
can build up a pretty significant nest egg by the time they get to be
your father's age. When you talk to people approaching their senior
years, making sure they can have that control over their medical life
and make the medical decisions that they want to are vitally important
to them.
That is what I think these health savings accounts will do,
ultimately. If they can build up $100,000 or $200,000 of a nest egg
over a lifetime, they can make the decisions and have the resources for
whatever the health care plan is saying to get that kind of treatment.
If they have to go into some type of senior care rather than being
forced to spend their way to poverty before we do anything in terms of
long-term care, they can work with their children and say, hey, listen,
I have this nest egg, so that you can buy the services I need, buy home
health care and take care of me, and here is the resources for it.
So I think the flexibility, combined with the market-based services
availability we have here in America, is vitally important.
I would also say, if you look to controlling costs, which is what we
are talking about here with growing jobs and getting these costs under
control, if you look at the growth in costs that we have experienced,
whether you are a public or private plan, they are straight up. But if
you look at what it is for cosmetic surgery, which is about the most
personal and invasive surgery there is, those costs are almost flat.
Now, why are they flat? They are flat because the market is involved.
If you look at Lasik eye surgery, the costs are down, because you have
both the combination of the market and technology bringing that down.
That makes everyone's costs more affordable. That makes our jobs more
competitive here in America, and it makes whatever surgery you or your
father are going to be having later on in life something that is more
likely to be within their means. It is a great move forward, and a step
that we are building on with the steps we are taking this week.
Mr. TIAHRT. Mr. Speaker, the gentleman makes a very good point about
where the free market is involved we see no increase in health care
costs. Dr. Greg Ganske, who was elected in 1994 to the United States
House of Representatives from Iowa and now is back in private practice,
told one of our other classmates from the class of the 104th Congress
that right now, when somebody has selective surgery, and he is a
plastic surgeon, when they have selective surgery, they call around to
get
[[Page H2895]]
three or four quotes. He said, we all know in Des Moines, Iowa, who is
charging what because we hear it from our customers. And because of
that, the growth in costs for plastic surgery has been flat over the
years. If you compare that to the health care costs that are managed by
these big insurance companies, by Medicare, by Medicaid, which is
managed by the government, then we see a continual increase in costs.
So we have a situation where health care costs that are available for
small businesses, for example, are going up 12 percent per year for the
last 6 years. They have doubled since 1999, and it is a continuous
increase, much faster than the rate of inflation; and yet where the
free market is involved, then we see a reduction in the growth and
sometimes it is very flat.
Mr. KENNEDY of Minnesota. Mr. Speaker, we have also added other
things in the Medicare bill that we just passed to get us going in this
direction. We have strong incentives and encouragement for health care
providers to do electronic prescriptions so that we not only have
quality because we cannot always read the doctor's signature, but we
have the ability to have a travelocity.com approach to getting that
prescription. We also have strong incentives and requirements for
increased quality reporting; and what we ultimately need to get to is,
like you would with any other kind of product you are buying, where you
can see it, call it up on the Internet: I am looking for this type of
procedure, here is the ranking of the providers in my area, here is
what each of them is costing, here is what the quality ratings are on
them. Because if I were to look for this podium and want to buy a
podium, the market offers me an endless variety of podiums and sizes,
colors, styles, shapes, materials in every single product category
imaginable except where we try to keep the market out, such as in
education, in transportation, frankly, and in health care.
We have got to take away the barriers to providing quality,
affordable services to our people, and that is exactly what we have
done with the reforms that were part of the Medicare prescription drug
bill. It is exactly what we are talking about in the additional reforms
we are going to be passing this week in the House.
Mr. TIAHRT. Mr. Speaker, to illustrate the transparency that we have
been talking about and what impact it has and the free market on
prices, we have some places where you can buy drugs over the Internet
and elsewhere and the prices they were on selected prescriptions.
This chart that I am holding in my hand is based on prices as of May
4. We can see some of these red lines very clearly where they extend
out here for about $1,400 per year is the cost of those prescriptions.
After 1 week of having transparency and visibility in the
marketplace, the shift is very dramatic. The same set of companies,
Walgreen, Costco.com, drugstore.com, et cetera, what the free market
has done is reduced the prices on the top line, which is the Primary
Care Alliance, the costs were nearly $1,400. Now, because of
transparency in the free market system, it is down to $1,000, a 40
percent reduction. We can see all of the costs are now coming into
line, and that is the impact of transparency and the impact of the free
market system.
I think that what we can say safely is that when we have the ability
for people to make market decisions, they will make good decisions.
{time} 2100
They will bring costs down. In this case, it is prescription drugs,
but also it occurs in health care costs. I think that is very
important.
Mr. KENNEDY of Minnesota. Mr. Speaker, I would just compare this to
how you get your auto insurance. When you buy auto insurance, your auto
insurance does not cover filling up with gas. It does not cover the oil
change. It does not cover the car wash. It does not cover a whole lot
of things.
It covers when you have a major accident and you have a major
expenditure, and because of that car insurance, although when you have
four teenagers like myself it can be pretty steep, it still has not had
the type of increases that we have seen in health care.
We need to have a similar type of approach with what the health
savings accounts provide which is basically saying we have catastrophic
coverage. You and your employer, either one of you, or your family
members, can contribute to the health savings account. You are going to
spend those dollars. You are going to shop for the cheapest place for
nonemergency service for health care, just like you would shop for the
cheapest place for gas which, oh, by the way, if we got this energy
bill passed, as my colleague mentioned, would be lower, and this is the
type of thing that we need do.
I would just say that one of the things we are doing this week is
loosening up the restrictions on flexible savings accounts, and
flexible savings accounts are similar to a health savings account, but
they are employer offered. They allow cafeteria plans, put in their
pretax, but they are not really used because it is a use it or lose it.
We have allowed the rollover option in health savings accounts. Why
was it use it or lose it? It is use it or lose it because those that
want to have a single-payer government plan know how powerful this
approach can be, wanted to limit that. So we are allowing people that
have flexible savings accounts offered through their employer. If they
do not use it all, be able to roll over $500 to the next year or take
$500 out and invest it in their own personal health savings account
that they can carry with them wherever they go, and given that the
average 32-year-old has been at seven or nine different employers in
their life, having that portable plan that is with you always should be
a great comfort and a great benefit to them.
Mr. TIAHRT. We have under our Health Security Act this week three
phases. It is a 3-point plan.
The first part of the plan is called the Small Business Health
Fairness Act. It allows for consolidated risk pools. The House plan
allows small businesses to create these association health care plans,
and it gives them the opportunity to join together, through existing
trade associations, to purchase health care insurance for their workers
at a lower cost, and that is because 60 percent of the nearly 44
million uninsured Americans are employed at small businesses today and/
or they are dependent on someone who is employed by one of the small
businesses.
By allowing the creation of association health plans, we will
significantly decrease the number of uninsured in America. The plan
establishes eligibility requirements so that all AHPs, or association
health plans, are required to offer fully insured or self-insured
benefits certified by the U.S. Department of Labor. It encourages broad
participation and coverage by prohibiting discrimination against any
kind of certain high-risk individual.
It increases the bargaining power. Small businesses will see
increased bargaining power with health care providers, more freedom
from costly State-mandated packages and lower overhead costs by as much
as 30 percent.
Insurers selling directly to small employers typically incur
administrative costs of 20 to 25 percent. Under the plan that the
Republicans have here in the House, AHPs will save small businesses an
average of 13 percent on their employee health care costs.
AHPs also cover specific diseases, maternal and newborn
hospitalization, and mental health issues. It requires that AHPs be
financially responsible and have strong reserves, strong enough to fund
any potential costs and other obligations.
So, one of the first things we are dealing with the short version is
AHPs as they are known by, but really, it is the Small Business Health
Fairness Act.
Mr. KENNEDY of Minnesota. These AHPs, or association health plans,
are a critical link in lowering the uninsured. Just repeating what you
said, 60 percent of the uninsured are employed by companies that really
have a hard time getting availability of health insurance. By the time
you sell to that small company, it is, as you mentioned, a very high
overhead cost.
So many of these would want to pool together, provide a plan that is
tailored for the type of employees they have, and lower their cost in a
bargaining pool.
Who would these associations be? These associations are like we just
had
[[Page H2896]]
the Realtors in visiting us today. The major issue they spoke to me
about, saying Realtors are a lot of times independent contractors with
some umbrella firm. They need to have negotiated lower prices that can
combine this with the health savings accounts very nicely, but they
need it to be able to offer insurance to Realtors.
Look at restaurants that have a wide variety of full-time and part-
time employees. They could tailor a plan specifically for those, again
meshed with a health savings account.
So these are the types of plans that are going to really help to let
more small businesses offer insurance.
One of the things that is important to point out is I know the
gentleman from Kansas represents a rural State and has significant
parts of his district which are rural, just as I have. A lot of times
in those rural areas, they do not really have options. In our State in
Minneapolis-St. Paul, there are multiple health plans available, and
there are three or four or five, or significant options and several
other smaller options; but if we get out into small-town U.S.A, you do
not have a lot of options.
This really has even a stronger benefit for those small businesses
operating in the rural areas that can combine themselves with an
association health plan that goes across State borders, pools
businesses of character. And it just does not need to be businesses;
this could be a religious organization, a nonprofit organization, a
community service organization. The Lion's Club, of which I belong,
could do an association health plan for Lion's Club members.
It opens up the amount of people participating, thinking about how
can we offer services to those with a commonality. Having more options
is exactly what we need if we are going to really grab control of these
health care costs and reduce the number of people that are uninsured.
Mr. TIAHRT. Mr. Speaker, the second point of our plan and the way we
are going to help reduce health care costs in America is called
flexible spending accounts. That allows an employee to have some
flexibility in his health care. It allows workers to direct their
employers to deduct money from their paychecks to be placed in a
flexible spending account. It is tax free, and it is to pay for health
care expenses that they may incur during the year.
Employers are not restricted based on the size of their business on
whether or not they offer FSAs as their choice interpreted so that
employees are restricted by whether or not their employer offers the
option. There are no health insurance requirements for the workers to
open up an FSA. There is no minimum or maximum contribution limits.
Money can be drawn from an FSA to pay most medical expenses. That money
may not be used for long-term care or health insurance premiums, but it
is a tax benefit to the employees. Workers could save on their taxes
because the amount committed to an FSA is subtracted from their wages
before taxes are applied.
There are long-term coverage advantages. Thirty-seven million
employees in America have access to FSAs, but few take advantage of
them today because they have a use-it-or-lose-it rule. Currently, if
you do not use the money that an employee puts into an FSA, that money
is forfeited to an employer, and it is a huge disadvantage or two
disadvantages. Quite often we will see employees will not get into it
because of that.
Number two, they will get to the end of the year and they will see
that money going back to the employer so they will have selective
surgeries or they will have botox or something they do not really need,
and again, it is driving up health care costs.
But under the plan, up to $500 of unused funds in this new plan can
be carried forward each year on an FSA and allow them to continue to
invest in their future. If they do not use it, it is available for them
in the future. Alternatively, up to $500 of unused funds can be rolled
over to a health savings account for eligible individuals.
So there are some real advantages to these FSAs. Because employees
will have their money at stake, they will be more selective on the
health care they receive. We will have less frivolous visits to
emergency rooms or to physicians. I think people will start to use home
remedies a little more. Right now, there is a tremendous amount of
information on the Internet. All you have got to do is put in health
care into some of the search engines on the Internet and you can find a
lot of Internet Web sites that you can get information on. And I think
people will start to use those to reduce their health care costs, save
money, lower their taxes; and again, this is part of our plan to lower
the cost of health care so we can attract jobs back into America.
The last of the 3-point plan is medical liability reform. This
includes a speedy resolution of claims. Instead of having health care
claims drag on and on, there is a fair accountability. The plan waives
the degree of fault so that a person with 1 percent of the blame is not
forced to pay 100 percent of the damages. This component eliminates the
incentives to look for deep pockets, making one party unfairly
responsible for another party's negligence.
This also has maximum patient recovery. It empowers the courts to
maximize patient awards by ensuring that an unjust portion of the
patient's recovery is not misdirected to his or her attorney. The plan
prohibits attorneys from pocketing large percentages of an injured
patient's award. The award is to go to the patient, not the attorney.
Full compensation for patients' injuries are allowed. There are
reasonable limits on punitive and noneconomic damages. There are
flexibility for States that already have enacted damage caps. It
respects those States' ability to enact these caps and enforce the
damage caps.
It also has experts predict significant positive change from the
reform. The plan would decrease premiums for medical malpractice
insurance by an average of 25 to 30 percent according to the
Congressional Budget Office.
The Joint Economic Committee study asserts that the number of
Americans with health insurance would increase by 3.9 million if
medical liability reform is passed. Specifically, the plan places
reasonable limits on malpractice that would save from $60 to $100
billion each year and that would not have to be buried back into the
rates.
It would allow American business to expand their operations through
hiring, and it enacts sensible liability reform that would save
American taxpayers at least $30 billion annually by reducing the
Federal health care spending.
I showed you the map earlier of the States. The white States, again,
who are currently okay on this map, and California is one of the white
States. They have enacted medical liability reform. They are a great
model for it. The Nation's medical liability premiums have increased by
505 percent since 1976. California's has only increased by 167 percent
since it passed its medical malpractice reforms in 1975.
An OB-GYN in California pays about $57 annually for liability
insurance while OB-GYNs in the crisis States, like Pennsylvania shown
in the red over here, and Florida and Ohio, all in red, they pay about
$100,000 a year annually.
What it means to be a medical liability crisis State, these 19 States
that are depicted in red, in Pennsylvania, Philadelphia's Methodist
Hospital announced it would stop delivering babies and discontinue its
prenatal program for low-income women.
In Florida, women are facing waiting lists for 4 months before being
able to get an appointment for a mammogram because at least six
mammogram centers in south Florida alone have stopped offering the
procedure as a result of increased medical liability insurance
premiums. This trend is troubling. There are a growing number of older
people and less and less people are being provided with mammograms,
according to Jolean McPherson, a Florida spokeswoman for the American
Cancer Society.
In Arizona, a baby was born on the side of the road after a mother
had passed her community hospital where the insurance crisis had closed
the maternity ward.
In Nevada, more than 30 Las Vegas obstetricians have closed their
practices in recent months, leaving the city with about 85
obstetricians to deliver more than 23,000 babies in the next year.
Kathryn Moore, the director of
[[Page H2897]]
the State Legislation for the American College of Obstetricians and
Gynecologists said, ``If I was a woman planning a family in Las Vegas,
I'd be very concerned. I would certainly think twice about starting a
family.''
Well, we want families to start in Las Vegas, and we think it is
unfair that 85 obstetricians are going to have to handle approximately
23,000 births next year.
We need to do something about that, and what we have passed tonight,
as a matter of fact, in the House is medical liability reform, and it
is the first step on the road to lowering health care costs and
bringing jobs back into America.
I think it is very clear that if you cannot support these three
measures, you are turning your back on the people who want jobs in
America, high-quality, high-paying jobs. The only way we are going to
bring them back is lower health care costs. We cannot do it by
socialized medicine. We know that does not work. We can do it by our
Health Care Security Act, by lowering the costs, bringing jobs back
into America.
{time} 2115
Mr. KENNEDY of Minnesota. Mr. Speaker, I would also say to my
colleague that, unfortunately, what we see here too much on this floor
and what we hear is anger and complaining about health care costs going
up, they are being harder for the average family to afford. We agree,
but we do not hear very often, unfortunately, except with the great
dialogue we have had here tonight, about what the solutions are. And I
would like particularly my fellow Members from the other side of the
aisle to talk about what their solutions are, talk about how you are
going to control costs.
The uninsured is a huge issue. Besides growing jobs, each one of
these proposals reduces the level of the uninsured. This is really the
most effective way for us to reduce the uninsured.
I would also suggest one more piece in the puzzle, which includes my
Fair Care Act, which I have introduced and am pleased to have 127 other
Members joining me on. And if we think about it, right now, the
uninsured can go into a hospital and get care; but it is through the
most expensive vehicle possible, the emergency room, through the EMTALA
law. We could provide for that service at one-fifth the cost in a
community clinic, if we had an individual on some base level of
insurance at least, and probably address the underlying problem of that
cost much more efficiently, and let people live a healthier life by
letting us also do a better job of controlling costs.
Because what happens when an uninsured comes into a hospital and is
not paying for it? It ultimately layers onto the premiums for the
insured and increases their costs. As my friend from Kansas mentioned,
when the cost goes up more on the insured, it creates a vicious,
vicious cycle. My bill, to allow for a $1,000 credit per person, $500
per child, up to $3,000 for a family, refundable tax credit so they can
get that insurance, pay for that insurance policy directly, is another
piece of this puzzle.
And as we think about the uninsured side, we need to recognize that
we have, just as we have in education, left too many of the
disadvantaged behind. Thirty-five percent of Hispanic households are
uninsured; 18 percent of African American households, with only 11
percent of white. There is a disparity in who is hurting, and we need
to address them.
While we address the uninsured, we also get control of costs. By
getting control of costs, we make American jobs more competitive, and
we keep American jobs here. And I think it is also important as we look
off on the horizon at how do we control the long-term deficit, how do
we control the long-term liabilities that we have, the unfunded
liabilities in Medicare and Medicaid are significant. The number one
variable that will determine how we control those will be to help
control health care costs.
These measures that we have proposed, that we have talked about
tonight will not just lower the uninsured, will not just grow jobs here
in America, but will get long-term costs under control so we can
control that deficit, which again will help make for a stronger economy
now and in the future.
So I thank my friend from Kansas for bringing this very important
topic to the floor.
Mr. TIAHRT. In summary, Mr. Speaker, we have over the last generation
watched Congress continually raise barriers for us to keep and create
jobs in America. We have found out by investigating this that we could
develop these problems into eight categories, eight issues that we are
going to deal with.
The problem is not Benedict Arnold CEOs. They only have a couple of
costs they can control, and that is wages and overhead. And the problem
is not the wages, because most of them want to have high-quality
employees they want to pay high wages to. They want to attract the best
and the brightest. The problem is not overhead. We found out it costs
the same to build a building in India, in the Philippines, or in
America. It is Congress. The problem is in Congress and what we have
done over the last generation to continually put barriers in the way
for people to keep and create jobs.
We have started with these eight issues. We are starting this week
with health care security. We talked about the three plans that we are
dealing with this week, including medical malpractice reform,
association health plans, and what was the other one?
Mr. KENNEDY of Minnesota. The flexible savings accounts and the
ability to roll those over.
Mr. TIAHRT. Flexible savings accounts, correct. Next week we are
moving on to bureaucratic red tape termination, because we found out
that the cost of complying with bureaucratic red tape in America is
about 12 percent of every manufactured product. If we can cut that in
half, we would be 5 percent more competitive.
We are going to deal with life-long learning so that we have high-
skilled, high-trained workers. We need to get more science and
technical and engineering graduates.
Then we are going to deal with trade fairness and opportunity. We
must have fairly applied trade agreements. We must open up new markets,
but we have to overcome monetary manipulations by other countries and
by unfair trade practices by other countries. And we are going to deal
with that.
Then we will move on to tax relief and simplification and figure a
way to pull the cost of taxes that are buried into our products out of
it so that we are more competitive.
Then we will deal with energy self-sufficiency and security. We are
going to present legislation that will create 700,000 jobs in America.
We are going to deal with research and development so that we can
continue to be innovative and bring new ideas to the world and more
jobs to America.
Then we are going to deal with ending lawsuit abuse and litigation so
that we can lower the cost of liability insurance, limit liability so
we can create new jobs, and, again, bring workers back into America.
The lines are very clear. Congress over the last generation has
created these barriers. The people who employ workers cannot vote on
this. They cannot reduce these barriers. They cannot remove these
barriers. Only the Members of Congress can remove these barriers, and
so we must deal with them.
This is the debate we should be having today. This is the debate we
need to have so that we can remove the barriers and bring workers back
into America, bring jobs back into America, high-quality, high-paying
jobs. We call it ``Careers for the 21st Century'' because we want
people to be able to pursue their dreams, pursue the career that they
desire the most.
So we are going to complete health care security this week and next
week move on to bureaucratic red tape. And if you cannot support these
issues, it is my firm belief that you cannot support bringing jobs back
into America, because these are clearly the barriers to bringing jobs
back. They are barriers faced by every small businessman I talk to.
They are barriers faced by even the large employers. They know this is
what is controlling their costs. They want to pay high wages and build
buildings and have their plants here in America, but they cannot reduce
these costs: health care security, bureaucratic red tape, life-long
learning, trade fairness and opportunity, tax relief, energy self-
sufficiency, research and development, and ending lawsuit abuse.
[[Page H2898]]
If we can overcome these barriers, we will bring jobs back into
America. That is the plan the Republicans have in the House.
Mr. Speaker, I want to thank the gentleman from Minnesota (Mr.
Kennedy) for joining me this evening. I think we have covered some good
territory. We have covered the topic, I think, very well, and next week
we will move on to bureaucratic red tape.
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