[Congressional Record Volume 151, Number 93 (Tuesday, July 12, 2005)]
[House]
[Pages H5719-H5723]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS AND HEALTH CARE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2005, the gentleman from Georgia (Mr. Price) is recognized
for 60 minutes as the designee of the majority leader.
Mr. PRICE of Georgia. Mr. Speaker, what an honor it is to come before
my colleagues tonight to talk about some of the most important aspects
of all of our lives, and that is our jobs and our health and how they
are tied together.
I think it is helpful to begin this by answering the question, how
did we get to this point? Why do most Americans receive their health
insurance from their employer? Did you ever think about that? Whether
it is good or bad. You think about other kinds of insurance. Car
insurance does not come from your employer necessarily. Certainly,
health insurance does, and that is so incredibly important. Your home
insurance does not come from your employer. Why health? Like most
things, it has a long and a curious and sometimes a colorful history.
By way of introduction, and I will be brief, but I think it is
important to review kind of how we got to where we are right now.
Actually it begins during World War II when employers were short on
employees, and they were attempting to attract employees, and so they
offered a health benefit to try to encourage some folks to come and
work at their place of business. The government at that time had to
decide whether it was going to treat that health benefit as a taxable
benefit or whether it was going to be a nontaxable benefit. Were they
going to tax the employee for getting that benefit or not? What the
government at that time elected to do is to treat it as a nontaxable
benefit. And so began this incentive that we now have and have lived
with for the past 60 years or so for employer-based health care.
During the 1950s, there was a period of significant collective
bargaining in our Nation, and many individuals got their health
insurance with what is called first dollar coverage, meaning that every
single dollar of their health care was paid for by somebody else. In
the 1960s, the government got involved with Medicare and Medicaid and
instituted Medicare as a program that was a cost-plus program, meaning
that those individuals that were providing the care were paid for the
cost for providing it plus some. And so what you had over a period of
the next 10 or 12 years or so was a significant increase in the cost of
health care. Businesses said, Hey, wait a minute, what's going on here?
We've got to have some help. And so instead of looking at that
situation then and moving toward a system that allowed individuals
greater choice and greater opportunity for their selection in health
care, what happened was an increasing regulation of both the insurance
industry and the beginning of HMOs and the managed care as we know it.
All of this began basically with the tax favorability for employers to
purchase health insurance. And so that system flourished.
Now, tying health care to jobs has had many unintended consequences
and many that have adversely affected those who can get insurance. As a
legislature, as a Congress, as leaders and decisionmakers, we need to
make it easier for businesses to provide health insurance. One person
who knows firsthand about that and about how to make that happen is the
gentlewoman from Tennessee (Mrs. Blackburn). The gentlewoman from
Tennessee is a small business owner herself and represents a district
that is heavily dependent on small businesses and the jobs that they
generate. She understands this issue as few do and has been a great
leader in our Congress in an effort to pass both the health savings
accounts and associated health plans. I am proud to yield to my
colleague as she discusses the issue of small business and health care
for a few moments.
Mrs. BLACKBURN. Mr. Speaker, I thank the gentleman from Georgia for
his leadership on this issue. He certainly brings a wonderful
perspective to our body as he leads in the discussion of small
businesses and health. I think most people know that small town
physicians, that is a small business, and working with small business
employers, he understands so readily how employers truly desire to
provide great benefits for their employees. Mr. Speaker, I think most
small business employers feel like their employees are family. They
want to be certain that they have got the best of everything, the best
of opportunity, the best of health care, the best work environment,
because they treasure having those individuals work with them. Most
small business owners understand, too, that it is important that
employees be happy and content in their work environment, that they
stay with you, because one of the greatest expenses is having to train
a new employee, having to help them learn the ropes, learn the skills,
come up to speed to fill that role. They also know that good health
care is important because of time lost from work. That is very
expensive. That means an employer, if he has an employee who is sick,
who has not had access to good preventative health care, then what
happens? He has to go hire a temporary employee to fill that job. So
small business employers understand the importance of creating a good
comprehensive work environment and the importance of appropriate health
care and health coverage for employees.
[[Page H5720]]
I cannot go any further talking about a small business without first
having a couple of things to say about this economic engine and what a
lot of these small business employers are able to do. We are averaging
146,000 new jobs a month. Unemployment is at near historic lows. We are
just above 5 percent on unemployment. What that tells us is that the
small business sector is working, that with new ideas and new
innovations and lower taxes and with the focus on lessening regulation
like we have done this very week, this very day right here in this
House as we have looked at OSHA regulations and found ways, we passed
four bills, finding a way to help make OSHA and the rules and the
regulations less burdensome to small businesses. So it is wonderful
that during this small business week, we have our legislative attention
focused on what we do, not to create jobs, what we do not to strap down
business, but what we do to create the type environment in this Nation
that small business and free enterprise can do what they do best, that
is, create jobs, be the economic engine for this great Nation.
I commend our leadership here in the House for continuing to work on
these issues and put this focus on small businesses, whether it is
through an energy bill or through the death tax repeal or class action
fairness or bankruptcy or jobs training improvement. All of that
affects small business, much the same way as health care affects small
business and its employees.
There are just a couple of other quick points that I would like to
add. Looking at health care and the viability of health care for small
business is not new. This is not something that is on the plate for the
first time in the 109th Congress. This is an issue that our leadership
has been focused on for many years.
{time} 2000
One provision that was on the table for quite a while and finally was
passed in the 108th Congress is health savings accounts; and for small
businesses that are seeking to find an affordable way to continue or to
give health choices for their employees, the health savings accounts
are a wonderful alternative.
And, Mr. Speaker, one of the things that has come to mind that we
have seen with the past year, with the advent of health savings
accounts, more than 1 million Americans have chosen this as an option
because it is a way for them to save, to set aside, and a way for them
to begin looking to expanding their health care dollar, being certain
that they have that health care dollar where they are getting basically
the most bang for their buck. And I certainly think that it is to our
credit that this option was made available to the American people last
year, and I commend our leadership for that.
Another bill that this House has passed, and we certainly are looking
forward to the same type of success with, is association health plans.
These are basically small business health plans that we talk about in
my district, because it will allow businesses to group together in
their associations, of different types, whether they are small business
manufacturers or maybe marketing companies or some of the high-tech
companies, but group together and pool their buying power so that they
can have group policies for their employees and will be able to do it
more affordably.
So association health plans will be another great addition, putting a
little bit more of that private sector expertise back in there to get
the cost of health care down so that it is more affordable for our
small business employers.
I want to thank the gentleman from Georgia again for allowing me to
come in and participate as we talk about small businesses, keeping them
healthy, keeping them vibrant, and also having health care affordable
and available for their employees. I thank him for the leadership.
Mr. PRICE of Georgia. Mr. Speaker, reclaiming my time, I thank the
gentlewoman so much for her comments. I appreciate her leadership in
this issue and so many other issues in our Congress, and I thank her
for her perspective as a small business owner and somebody who has been
a real advocate for increasing choices for patients and opportunities
to purchase health insurance.
I mentioned briefly before the tax treatment of health insurance and
why we seem to be in a situation now where there is this remarkable
incentive for employers to purchase health insurance, and that again is
because of the tax treatment. And nobody understands that better than
the next individual whom I have asked to join me today. Because of this
tax incentive, solutions to our current situation must address the
taxes and how they affect decisions about the purchase of health care.
And one person who understands this as well as anybody and is a good
friend and legislator is the gentleman from Iowa (Mr. King). The
gentleman from Iowa (Mr. King) is working to fight burdensome
government regulation and red tape. He truly understands the challenges
of starting and operating a business first hand as a successful agri-
businessman. He brings 28 years of business know-how with him to
Congress, and he has introduced a very exciting piece of legislation
that talks about the tax treatment of the purchase of health insurance.
I yield to the gentleman from Iowa (Mr. King).
Mr. KING of Iowa. Mr. Speaker, I thank the gentleman from Georgia
(Mr. Price) for yielding to me. I appreciate the opportunity to speak
here tonight, and I appreciate his organizing this Special Order so
that we can further take a look into some of the things that we can do
to improve the health care circumstances within this country.
Mr. Speaker, health care costs are escalating. And there are few
options for small business owners to choose from when selecting
insurance coverage for their employees. In order to keep and attract
talented workers, sourcing affordable, quality health insurance is a
top concern. As an owner/operator of a small construction business for
over 28 years, I am well aware that the largest challenges here are
access and cost.
But even though small business is the backbone of our American
economy, over 60 percent of the estimated 43 million people without
health care are small business owners, both employers and their
dependents. Additionally, small businesses, which create two out of
every three jobs in this country, continue to struggle with the high
cost of offering health insurance to their employees. The structure of
the current health care industry does not allow many small business
owners and their employees access to affordable health insurance. As a
result, uninsured figures continue to rise as the cost of insurance
continues to skyrocket, pricing many small businesses out of the
marketplace.
Many factors contribute to the overall cost of health care. Lack of
competition in the small group market, litigation, and mandates are
just some of the many culprits driving up costs. The problems facing
small business owners, their employees and families must be addressed
as part of the overall health care debate.
I support health savings accounts, HSAs, recently enacted under the
Medicare Modernization Act, coupled with hide-deductible health care
plans. They are a way for small businesses and individuals to lower
their health care premiums. Along with HSAs, individuals should be
allowed to deduct 100 percent of their high-deductible health plan
premiums if they are not subsidized by an employer plan already. High-
deductible health care premiums are defined as a minimum of $1,000 and
up to $5,100 deductible for individuals and a minimum of $2,000 and up
to $10,200 deductible for families. I have introduced a bill titled the
Health Insurance Affordability Act, H.R. 37, which would allow for this
type of deductibility for health insurance premiums.
Currently, large businesses are allowed to deduct employee health
insurance premium payments, as are small businesses, for their
employees as a business expense. Unfortunately, employees of small
businesses that cannot afford to provide health insurance coverage are
not able to deduct the cost of health insurance. This group of people
includes waitresses in diners, workers in dry cleaners shops, temporary
workers; and that is just a few. With the rising cost of health care
coverage, many of the Nation's small employers are dropping coverage,
which increases the number of uninsured Americans.
[[Page H5721]]
In the 2004 State of the Union Address, President Bush proposed that
individuals who buy catastrophic health care coverage as part of our
new health savings accounts be allowed to deduct 100 percent of their
premiums from their taxes, President Bush's fiscal year 2006 budget
request stating the following: ``Above-the-Line Deduction for Certain
Health Insurance Premiums, under this proposal all individuals who
purchase a high-deductible health plan in conjunction with a health
savings account would be allowed to deduct the amount of the health
plan's premium from their taxable income even if they do not itemize
their deductions.'' That is the President's proposal. It mirrors my
proposal on H.R. 37, the Health Insurance Affordability Act, which I
drafted and dropped last year as well as this year. This new deduction
would make high-deductible health plans more affordable.
We should follow the President's lead and continue to promote
personal health care ownership and control of health care policies.
H.R. 37 provides an above-the-line tax deduction of the health
insurance premiums for those who buy their own HSA plan. Several HSA
providers report that a high number of previously uninsured individuals
are buying HSAs in the individual market. By allowing consumers to
deduct the premiums, we are building on the benefits of HSAs and will
make health insurance affordable for America's uninsured population.
Health savings accounts will also help reduce the number of uninsured
Americans by allowing small businesses more choice in the current small
group market. Additionally, individuals who have catastrophic health
care coverage with a health savings account should be allowed to deduct
100 percent of their premiums from their taxes. HSAs, along with 100
percent deductibility, will provide small businesses with more
accessible, affordable options in the health insurance market.
A government-run health care system is not the solution to the health
care problems facing small businesses. A government-run health care
system or mandates and minimum benefit packages forced upon small
employers will deter or even destroy entrepreneurship and the growth of
small businesses.
Mr. Speaker, the small businesses in this country lead in new jobs.
They lead in employment. They are at a disadvantage today because the
structure of health insurance premiums is wrong, and it is wrong
because it lacks full deductibility for the people who utilize it. And
this goes back in history to World War II when we had wage and price
controls and when that order came out, employers were looking for a way
to compete in a shrinking labor market because much of the labor put on
a uniform and went overseas to fight World War II.
So in keeping with the freezing of wages and prices, instead they
gave health care benefits to their employees; and it was not really
circumventing a raise, but it was keeping with the freeze, but it was
benefits to compete for that shrinking labor supply that was there.
That tradition now has been in place over 60 years, and in this 60-
plus years, we have watched it get more and more distorted every year.
So if a large corporation or a government employer can offer a health
insurance benefit that is fully deductible and especially to large
corporations and there sits a ma-and-pa operation, a family farm, a gas
station, a convenience store, a company that is hiring part-time labor,
these people that are disadvantaged from the current structure, when
they are disallowed from full deduction of their health insurance
premiums, should be allowed that deduction. That is what the Health
Insurance Affordability Act does, H.R. 37. It is one piece of the whole
puzzle that we need to do.
The gentleman from Georgia (Mr. Price) is bringing forth a more
comprehensive discussion here tonight. I have targeted on H.R. 37
because I think it is the one thing that we can do to bring
deductibility to the employees who are not able to deduct their health
insurance premiums. But I believe that if a Fortune 500 company can
deduct a full coverage insurance plan and every dime that they put into
that full coverage insurance plan is an above-the-line deduction, a
Schedule C deduction, on their income tax, then that also should be
available for every citizen whatsoever in the United States of America.
H.R. 37 takes us down that path. It gets us closer. It does not get
us all the way. We will not get this done overnight. It has been over
60 years to get in the condition that we are in.
I thank the gentleman from Georgia for organizing this Special Order
tonight and for bringing his professionalism in the health care
industry and his experience as a doctor that actually sees how this
works in the lives and minds of patients to the floor here tonight and
to everything he does here in this Congress. I thank the gentleman from
Georgia (Mr. Price) and appreciate his yielding to me.
Mr. PRICE of Georgia. Mr. Speaker, reclaiming my time, I thank the
gentleman from Iowa (Mr. King) so very much for his comments.
When I first started looking into this issue of health insurance and
why it seemed that employers had this remarkable incentive and I looked
back and looked back and tried to figure out where it began and I got
to the discussion about World War II and I talked to some of my friends
about it and they would say it could not have started back then, I
appreciate his perspective on it and his knowledge and expertise in
appreciating that the tax treatment of the purchase of health insurance
is so important, so incredibly important, as we try to solve the
challenges of the increased cost of health insurance and health care. I
thank him so much for joining me tonight. He was very kind to
participate and bring focus to those issues.
I touched a little earlier on that association between jobs and
health care and how jobs are so important to health care because of the
tax treatment. And so it is important that we talk about jobs and small
businesses; and this Congress has worked incredibly hard, incredibly
hard, to create jobs, especially in the area of small business; and it
is important. We keep talking about small business because that is the
engine, that is the engine that drives our economy.
Ninety-nine percent of all businesses in this Nation are small
businesses, and 75 percent of all new jobs that have been created have
been jobs that are added in the area of small business. And this
Congress has been incredibly diligent in making certain that we have
the right incentives to create jobs. And they have been mentioned
earlier, but I would like to touch on a couple of them.
The Energy Policy Act that we passed will create nearly \1/2\ million
new jobs in the manufacturing and construction and agriculture and
technology sectors, \1/2\ million jobs. The Death Tax Repeal Permanency
Act, that is not only an unfair tax, but it is also taking money out of
the pockets of individuals, especially small business individuals, that
they could use to instead grow their businesses. The Class Action
Fairness Act that we passed, some legal reform. It is estimated that
$88 billion a year, $88 billion a year, is spent on lawsuits; and if
that money is not needed on inappropriate lawsuits, then where can that
money go? To small business and to jobs, create jobs, hire more
workers. So this was an important bill that was passed and signed into
law by the President.
The highway bill, the Transportation Reauthorization bill, not only
will it increase the quality of our transportation infrastructure
across this Nation, but it is estimated that for every $1 billion that
is spent to improve our highways, 40,000 jobs are created, 40,000 jobs:
$1 billion, 40,000 jobs.
{time} 2015
Do we know what that means for a bill that has a price tag of about
$280 billion? That is 15 million jobs. You talk about a Congress that
is serious about putting people to work, this is that Congress. And the
Job Training Improvement Act that we passed breaks down the barriers
for millions, millions of job-seekers.
So this Congress has actively worked to expand small business which,
again, is the engine, the engine of our economy, and it is working. We
see the results already. Mr. Speaker, 146,000 jobs were created in the
month of June with the unemployment rate dropping to 5 percent, the
lowest unemployment rate since September of 2001. Steady growth
[[Page H5722]]
has taken place each of the last 25 months with more Americans working
than ever before.
This chart shows the declining unemployment rate and the number of
jobs that have been created, and we see each month for the past, on
this chart, 13 months, but it has been 25 months in a row, each month
we have created jobs in this Nation, across the Nation. The economic
indicators show strong and sustained growth with real gross domestic
product and real income revised up for the first quarter, and inflation
down. Listen to this: profits as a share of gross domestic product are
up to their highest level since 1967, profits up to their highest
levels since 1967. What does that do? It allows businesses to reinvest
and create more jobs.
Mr. Speaker, durable goods orders are on the rise with new orders for
durable goods increased by 5.5 percent in May. That is the largest
increase in 14 months. U.S. manufacturing continues to expand. Again,
for the 25th consecutive month, manufacturing expanded again in June.
And we see it in the private sector as well, with consumer confidence
rising nearly 3 points in June to its highest level in 3 years.
Mr. Speaker, I am telling my colleagues, the improving economy that
we have talked about and the jobs that have been created, it is not
empty rhetoric, it is not just words. The policies of this Congress and
this administration, they are pro-growth, and they are leading the
charge, and they are indeed succeeding in the challenges that we have
before us in creating jobs.
But when I go home, when I talk to folks at home who are small
business owners, who create the jobs in this Nation, and when I talk to
them and I ask them, what is the biggest challenge that you have? I do
not care what kind of small business it is, whether it is a restaurant
owner or gas station folks or a small business owner or lawn care
people, real estate, shoe repair, I do not care what it is, their
biggest challenge, they will tell you that their biggest challenge is
the health care, providing health care for their employees, and many,
many simply stop. They are unable to provide health care any longer for
their employees, whether it is that extra dollar that the health
insurance costs or whether it is the undue burden of the regulation
that pushes them over the top. And they say, as much as I would like
to, I am just unable to do so from a financial standpoint.
So it is imperative; remember, most employees, most people get their
health insurance through their employer, again, because of the things
we were talking about before, but it is imperative that we work on
those constraints that make it so that it is difficult for employers to
purchase that health insurance.
The unemployment rate is coming down with all of the work that we
have done, now down to, as the gentlewoman from Tennessee (Mrs.
Blackburn) mentioned, 5 percent, a remarkable, remarkable improvement
in our economy.
I want to talk about small business and health care facts. I want to
talk about the problem as it relates to the rising cost of health care
and how it affects jobs and the provision of that health care. As
health care premiums continue to increase or as they increase,
employers are forced to pass that expense on to their workers in the
form of higher copayments or deductibles, and oftentimes, they have to
reduce coverage. They are not able to provide the same kind of coverage
that they have in the past. It is not because they want to; it is
because they are being constrained from a financial standpoint.
Employers this year will pay an estimated 12 percent more for employee
health care than benefits in 2003, 12 percent more, marking the fifth
consecutive year of double-digit increases and a doubling of employer
health care costs since 1999.
This graph is so incredibly poignant, and it just shows the
continuing increase of the cost of health care. The cost for employers
is the lower bar. The middle bar is the cost for employees. And then
the upper bar is the out-of-pocket costs for employees, and we see
those continue to rise over the years. Decreasing these costs to
American businesses is imperative, because what it will allow them to
do is to spend more money on expanding their operations and hiring
workers, more jobs.
It has been shown that each percentage point increase, this is a
phenomenal statistic, each percentage point increase in health
insurance costs increases the number of uninsured by 300,000 people.
Think about that. Each single percent of increase in health insurance
costs increases the number of uninsured by 300,000 people. This is an
issue that is imperative, imperative for us to tackle as a Congress.
Then we have heard about the need for legal reform, what kind of
challenges we have in the area of liability insurance that physicians
and hospitals and others have. Those premiums for medical liability
insurance have increased 500 percent, 500 percent since 1976, and what
that has done is driven many doctors out of the profession, many of
them closing their practices or decreasing the high-risk procedures
that they do. I had one fellow physician tell me that they had to stop
one of their high-risk procedures, and I said, what was that? And they
said, delivering babies. An obstetrician, they could no longer deliver
babies because that is defined as a high-risk procedure. In fact, in
our State, over a third of the obstetricians have stopped delivering
babies because it is a high-risk procedure because of the cost of
liability insurance. The average jury award in a medical malpractice
case is now up to $3.5 million, up more than 70 percent since 1995.
This cost of insuring doctors against oftentimes petty and frivolous
lawsuits is reducing the quality and access of Americans to top-rate
health care.
Now, there are a number of solutions that have been put on the table,
and I want to talk about three of them in kind of a larger principled
way. The first is about pooling resources. The second is about the tax
treatment that we have talked about, and the third is about liability
reform.
Associated health plans, which the gentlewoman from Tennessee (Mrs.
Blackburn) mentioned, are incredibly important, and they work because
what they allow people to do is to pool larger numbers to purchase
health insurance. Remember that 60 percent, 60 percent of the 44
million uninsured Americans are employed by small businesses or are
dependents of someone who is employed by a small business. Some people
estimate that that number is as high as 85 percent, meaning that 85
percent of the folks that are either employed or live in the home of
somebody who is employed by a small business do not have health
insurance, of the 44 million who are uninsured. Phenomenal when you
think about it.
What do associated health plans allow you to do? They allow you to
buy in bulk. They allow one small business, a group of employees, say
three or five folks to join with three or five folks from some other
businesses to pool with eight or ten somewhere else, and before you
know it, you have hundreds and thousands and sometimes millions of
individuals who then use that purchasing power to purchase health
insurance. It allows them to get health insurance at the cost that some
of the larger employers do. Associated health plans would be required
to offer fully-insured or self-insured benefits that are certified by
the United States Department of Labor. There has been some discussion
about whether or not people could provide cut-rate health insurance.
Well, that is not the case. It encourages broad participation in
coverage by prohibiting discrimination of any kind against certain
high-risk individuals. Again, if you pool numbers of folks together, if
you allow them to join together and use their power to purchase
insurance, then they will be able to do so in a very competitive way.
It increases the bargaining power.
So the first area is allowing folks to get together as groups, large
groups, thousands, hundreds of thousands, millions of people to have
the benefit of purchasing insurance.
The second issue I want to bring to the fore that would allow for a
real solution has to do with the tax treatment and flexible spending
accounts. Now, the gentleman from Iowa (Mr. King) talked about his idea
for health savings accounts and the equal tax treatment for individuals
to purchase health savings accounts. Great idea. Works splendidly to
move some of those incentives so that people who are employed by a
small business or are self-employed or are unable to get their
insurance in another way will have an incentive to
[[Page H5723]]
purchase health insurance. And what flexible spending accounts do is
that they allow workers to direct their employers to deduct money from
their paychecks to be placed in this flexible spending account, tax-
free--tax-free. That is the key. That is the incentive: to pay for
health care expenses that they may incur during the course of the year.
It is a tax benefit to employees. Workers could save on their taxes for
the purchase of health insurance.
It also provides for long-term coverage advantages, because 37
million employees right now in America have access to these accounts,
but few of them take advantage of it because there is a use-it-or-lose-
it rule. Now, what is the use-it-or-lose-it rule? Well, currently, if
you do not use the money by the end of the year that you have put into
a flexible savings spending account for health care, then that money is
forfeited. It goes away. It goes back to the employer.
This rule is a huge disincentive for participating in a flexible
spending account, and it probably drives up health care costs itself
because it encourages individuals to spend money on health care at the
end of the year that may not necessarily be needed, but you have three
weeks left, and you have this money in your account, so you might as
well go do that. So it has that adverse incentive for the purchase of
appropriate health insurance.
So flexible spending accounts, allowing you to have equal tax
protection, tax-free purchase of health insurance or health care, in
addition to the pooling that we talked about. Those are the first two.
And the final one is medical liability reform. As the gentleman from
Iowa (Mr. King) mentioned, I am a physician, an orthopedic surgeon;
spent nearly 20 years in private practice of health care and saw during
that period of time an incredible explosion in the cost of liability
insurance, for somebody that was never sued, never had a suit. And
whether or not you do, the real cost of the current crisis that we have
as it relates to medical liability reform is not the cost of the
purchase of the insurance for the doctor; that is not the real cost.
Those costs are going up, certainly, but that is not the real cost. But
those are millions and millions of dollars.
The real cost, the real reason that we need liability reform in the
area of health care is because of the practice of defensive medicine.
You may have heard about this. What is defensive medicine? Well, when
you go to your doctor and you tell your doctor what your symptoms are,
what you think is wrong, your doctor, he or she, will run through in
their mind or look through their resources to be able to determine what
kind of tests or studies ought to be done to make an appropriate
diagnosis.
Now, the practice of defensive medicine says to the doctor that we
ought to do virtually everything that we can do to make that diagnosis
as rapidly and as accurately as possible, even though those tests may
not be absolutely imperative to do to make that diagnosis. The example
that I like to use is, if you have back pain and you came into my
office, 90 percent of back pain, 90 percent of back pain is what is
called functional back pain. It means that you hurt your back, and you
strained it, and it will go away, given a little rest and therapy and
exercise and sometimes some medication, 90 percent. But I promise you
that everybody that comes into the doctor's office with back pain, what
do they get? They get an x-ray. Now, they do not get an x-ray because
you can diagnose functional back pain on an x-ray; they get an x-ray
because if something is not picked up immediately on that x-ray, then
they are liable. They are liable to be sued for not picking it up in 1
week when they may have picked it up in 3 weeks if the back pain did
not get any better. That is the kind of thing that goes into the
practice of defensive medicine. It has to do with blood tests. It has
to do with heart tracings. It has to do with extremely expensive tests
and studies that we have available to us that are wonderful. They allow
us to have the kind of quality health care that we have as a Nation.
But what happens is that they drive up the cost of health care to an
incredible degree and frankly do not increase the quality of care that
is being provided.
How much money is that? The estimates vary because you cannot get a
firm figure on that. No doctor orders a test and says, this test is
unnecessary. So the cost is likely to be somewhere in the range of $250
billion to $500 billion, that is with a B, $250 billion to $500 billion
in the cost of health care each year in our Nation.
{time} 2030
That is why, that is why it is imperative that we have medical
liability reform. So the cost of the insurance itself is significant.
But that is not the real reason.
Now, there are a number of ways that you can institute appropriate
health care reform. I believe that we must give States as much
flexibility as possible. I think that there are a number of good
solutions on the table. I believe that we have got to adopt one of
those solutions that will have true and real and honest effect on the
medical liability crisis that we face.
So lots of solutions. Three that I have put out on the table tonight:
one is to allow individuals to pool together, to be able to use the
power of many people for the purchase of health insurance; second it is
imperative to allow individuals to have that equal tax treatment for
the purchase of health insurance that the employer has. We need to make
it so that all individuals have an incentive to be able to purchase and
have health insurance; and then the third issue is the one that I
touched on at the end there, that is, the extreme importance of
reforming our crisis in lawsuit abuse. It is imperative that that
happen. If we do not do that, we do all of the other things, it is not
likely that we will be able to get our handle on the increase of health
care costs.
So, finally, what three things drive up the cost of business for any
business, be it large or small? There is a common denominator to those
things that drive up costs. They are taxation, they are litigation, and
they are regulation.
The problem with the area of health care is that all of those costs
for the provision of health care for our entire Nation are passed on to
somebody else. They are passed on in this instance to the employer, by
and large, who provides again the majority of health insurance.
When they are passed on to the employer, what is the employer bound
to do? They must pass them on to the employee, to the worker. So the
worker is hit twice. It is a double jeopardy as it relates to the
ability to obtain health insurance.
So hopefully what we have been able to do tonight is to bring some
clarity and some focus to how jobs and how health insurance are
related, why it is important to concentrate on the cost drivers for
health care, taxation litigation, regulation, and why it is important
to provide options and opportunities for both individuals and
businesses to purchase health insurance and to provide health insurance
for their employees.
So with that, Mr. Speaker, I am honored to have had the opportunity
to address the House tonight; and once again I want to thank my
colleagues, the gentlewoman from Tennessee (Mrs. Blackburn) and the
gentleman from Iowa (Mr. King) who were so very helpful in bringing
clarity to those issues.
And I look forward to garnering the support of my friends on both
sides of the aisle, because this is not a Republican issue, it is not a
Democrat issue. It is an American issue. It is an issue that is
important for all of our constituents across this Nation.
I look forward to working with all Members of this House to solve the
challenges that we have.
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