[Congressional Record Volume 150, Number 67 (Thursday, May 13, 2004)]
[Senate]
[Pages S5479-S5480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY:
  S. 2421. A bill to modernize the health care system through the use 
of information technology and to reduce costs, improve quality, and 
provide a new focus on prevention with respect to health care; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. KENNEDY. Mr. President, the Health Care Modernization, Cost 
Reduction, and Quality Improvement Act addresses three serious and 
related problems in our health care system that affect every American 
family: Health care costs are too high and are rising too rapidly. The 
quality of care received by too many patients is well below the 
standard that we are capable of achieving. In fact, the gap between the 
care we actually provide and the care we should be providing is so 
great that the prestigious Institute of Medicine has referred to it as 
a ``quality chasm.'' Our system lavishes funds on sickness care and 
neglects the health promotion and disease prevention activities that 
are the most effective ways of reducing health costs and assuring good 
health for as many of our people as possible.
  The legislation we are introducing is an effective way to modernize 
and improve the health care system, by using modern information 
technology, by paying for value and results and not simply for 
procedures performed or patients admitted to hospitals, and by focusing 
on improving quality and preventing disease.
  Controlling the soaring cost of health care is essential. In the year 
2000, health insurance premiums grew 8 percent--two and a half times 
the cost of living. In 2001, premiums went up 11 percent--six times the 
Consumer Price Index. They went up 13 percent in 2002, and 14 percent 
in 2003--almost eight times the cost of living increase. By any 
standard, increases like that are unsustainable.
  We have to bring these costs under control--but there is a right way 
and a wrong way to do it. Arbitrary cutbacks for hard-pressed hospitals 
and physicians are the wrong remedy.
  With emergency rooms bursting at the seams, nursing shortages 
threatening the quality of care, and physicians forced to spend less 
time with more patients, we have an obligation to all our health 
providers as well. They're the backbone of our health care system, and 
we have an obligation to help them provide the quality care that every 
patient deserves.
  Fortunately, the right way to control costs is also the right way to 
achieve higher quality care. It's based on an emerging consensus of 
health experts and practitioners. It involves four fundamental 
principles--using information technology, paying for results, improving 
quality, and investing in prevention.
  The gap is vast and growing between information technology and the 
current practice of medicine. Health care in America is the best in the 
world, but it is also one of the least efficient industries in America. 
We spend a staggering $480 billion a year on administration alone--more 
than 30 cents of every dollar spent on care. Over a quarter of all 
personnel in the health care system today are performing administrative 
tasks, not providing care.
  The potential savings through modern technology are immense. 
Transactions in health care cost $12 to $25 apiece. Brokers and bankers 
used to have similar costs, but now, a transaction in these industries 
costs less than one cent.
  Information technology can also improve the quality of care, at the 
same time it reduces costs. Automated patient record-keeping can help 
bring real coordination to what is often a frighteningly fragmented 
health care system.
  Today, for one in five patients with significant health problems, 
various health professionals order duplicate tests and procedures. One 
in four patients arrive for a doctor's appointment and find that needed 
test results or records are not available. Information technology can 
end this waste of time and resources and also prevent the errors that 
reduce quality. Automated prescribing, for example, has reduced errors 
by 95 percent, and reduced hospital costs by an amazing 13 percent. 
It's time to end the disconnect between modern health care and modern 
information technology, and the savings will be immense.
  The gap between the best standard of care and the care that too many 
patients receive is staggering. A quarter of all breast cancer patients 
receive substandard care. A third of all patients diagnosed with high 
blood pressure receive substandard care. Half of asthma patients 
receive substandard care. Sixty percent of patients with pneumonia 
receive substandard care. Almost 80 percent of patients with a hip 
fracture receive substandard care.
  The Midwest Business Group on Health estimates that poor quality care 
costs employers $2,000 a worker every year. Improving quality can cut 
costs dramatically. But more important, it can reduce unnecessary 
suffering. For patients and their families, good quality care can truly 
mean the difference between life and death, and between disability and 
health.
  One of the highest barriers to improving the quality of care is the 
backward incentive system embedded in the way we pay for care. We need 
to start rewarding the quality care by paying for results, and not just 
for the number of procedures performed or the number of hospital 
admissions. Too often, the incentives today are geared to doing more--
not doing better. It makes no sense that doing better today can 
actually result in even greater financial hardship for health care 
institutions. If hospitals organize patient-tracking, home visits, and 
patient education to improve care for chronic diseases, they can reduce 
hospitalization dramatically. But the hospitals won't get paid much, if 
anything, for these improvements--and they will no longer receive the 
large reimbursements they would otherwise receive for inpatient care. 
Use of doctors specially trained to manage hospital intensive care 
units has been shown to reduce costs and improve outcomes. But fewer 
days in the ICU mean lower revenues for hospitals. That's wrong, and we 
need to correct it.
  Hospitals in Boston have already negotiated terms with insurers under 
which they are paid for results, rather than days of care. Some 
business associations, such as the Leapfrog Group, have begun to make 
quality standards a condition for participation in their insurance 
plans. the Department of Health and Human Services is testing the use 
of incentive payments to hospitals that meet specific quality 
standards. These steps are hopeful, but we need to make payment for 
results the rule, rather than the exception, in all aspects of our 
health care system.

[[Page S5480]]

  Another key step is to assure that the typical standard of care comes 
much closer to the best standard of care. We need to do far more to see 
that what we know how to do for patients is actually what is done.
  Opportunities are immense for improvements by targeting specific 
diseases that have high incidence, high costs, and high impact on 
individuals and families. Diabetes, for example, afflicts 17 million 
Americans. Patients with the disease account for one in ten dollars of 
overall health expenditures and one in four dollars of expenditures by 
Medicare. By using proven methods of prevention and treatment, we can 
save 10 million Americans from diabetes-related amputations, 
disability, or blindness during their lives--and save more than 50 
billion dollars a year as well.
  Stroke is another example of the huge gap between what we could do 
and what we actually do. Stroke is the third leading cause of death and 
one of the major causes of disability. It strikes nearly 750,000 
Americans each year. The economic cost is also staggering. The United 
States spends almost $50 billion a year in caring for persons who have 
suffered a stroke. Appropriate, timely intervention with clot-
dissolving drugs has been shown to reduce disability and death by 55 
percent but only three percent of patients receive the needed 
treatment.
  Chronic illnesses are major costs in the current system. Medicare 
beneficiaries with three or more chronic conditions account for almost 
90 percent of Medicare spending. Well-organized care for patients with 
chronic conditions such as congestive heart failure, diabetes, asthma, 
and depression produce significant reductions in costs and significant 
improvements in outcomes. But only a fraction of patients with chronic 
conditions have the opportunity to benefit from such treatment.
  Finally, to cut costs and promote quality, we can do much more to 
stop illness before it starts. Health promotion and disease prevention 
must be central to our health system as hospital and physician care. 
Four hundred thousand Americans require medical treatment every year 
for diseases that are fully preventable by vaccination. Lack of 
exercise and poor diet cost almost $80 billion a year because of 
increased heart disease, cancer, and diabetes.
  The legislation being introduced today is a recipe for a peaceful 
revolution in the way health care in the United States is delivered. 
Building on a growing expert consensus, it provides a blueprint for a 
better health care system that will be lower in cost, higher in 
quality, and more closely oriented toward prevention.
  To assure that modern information technology will be fully utilized 
in health care, the legislation sets a goal of full implementation of a 
broad-based system of electronic medical records and automated bill-
paying. It authorizes grants, loans and loan guarantees for health 
providers to install and implement clinical information systems that 
meet national technical standards for parameters such as security and 
interoperability.
  The bill also offers larger reimbursements for providers who 
implement these types of information systems. Over a period of time, it 
reduces payments for large health care facilities that fail to do so. 
The legislation also encourages the use of information technology to 
reduce the administrative costs, by requiring insurance companies to 
adopt the same types of computerized transaction-processing systems 
that are the norm in other industries.
  In these ways, the legislation begins the needed effort to enable the 
health care system to become a system that pays for value, rather than 
solely for procedures performed or illnesses treated. The Secretary of 
HHS is required to set quality standards for providers of services. 
Public and private payers will be required, through their reimbursement 
procedures, to reward the attainment of these quality standards, and 
are permitted to reduce reimbursements to providers who fail to meet 
the standards.
  When a provider of services believes it can provide higher quality 
care at lower cost, but feels that existing reimbursement procedures 
will not fairly recognize these innovations, payers are required to 
enter into good faith negotiations with providers to reach agreement on 
an alternative payment system. The legislation also has special 
provisions for payment for chronic care services in recognition of the 
special role of coordination of care, patient education, tracking, and 
follow-up in achieving quality care for individuals with chronic 
diseases.
  Finally, the legislation contains a number of important initiatives 
to improve the quality of care and strengthen health promotion and 
disease prevention. These include the establishment of a National 
Quality Council, and specific initiatives on diabetes, stroke, 
arthritis, nutrition, exercise, adult oral health, adult immunizations, 
and the provision of culturally and linguistically appropriate care for 
patients whose primary language is not English.
  America's health care system cannot continue to lurch from crisis to 
crisis. Our people deserve affordable care, and when illness strikes, 
they deserve the best care our system can provide. This legislation 
lays out a number of important steps to achieve this objective, and I 
look forward to working with my colleagues in Congress and the broader 
health community to achieve the important goals we share.
                                 ______