[Congressional Record Volume 152, Number 12 (Monday, February 6, 2006)]
[Senate]
[Pages S730-S731]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID (for Mr. Obama):
  S. 2247. A bill to promote greater use of information technology in 
the Federal Employees Health Benefits Program under chapter 89 of title 
5, United States Code, to increase efficiency and reduce costs; to the 
Committee on Homeland Security and Governmental Affairs.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
  Mr. OBAMA. Mr. President, the American people are facing two, major 
health care crises--lack of health insurance and the soaring costs of 
medical care. Nearly 46 million Americans are uninsured, and the number 
one reason is because they can't afford it. Even those with health 
insurance are struggling to pay their medical bills. Family incomes 
can't keep up with rising health costs--health premiums alone have 
increased 73 percent over the past 5 years, while wages have only risen 
15 percent. Unfortunately, we can't fix either of these crises without 
addressing the other. As health care costs rise, more employers will 
drop coverage for their employees. As the number of uninsured rise, the 
cost of their care is subsidized by those individuals that have 
insurance. It's a vicious cycle, and the longer we wait to act, the 
more difficult it will be to successfully intervene.
  There are many drivers of health care costs, but perhaps the easiest 
one to tackle is the wasteful, administrative costs associated with 
health care. Health care is one of the least efficient industries in 
America. Processing a single transaction in health care can cost as 
much as $25, whereas banks and brokerages spend less than a penny per 
transaction. Indeed, administrative costs account for 31 percent of 
total health care spending, or roughly $465 billion each and every 
year.
  Today, I am introducing a bill that would help to reduce health care 
administrative costs in the Nation's largest employer-sponsored health 
insurance program, the Federal Employees Health Benefit Program. FEHBP 
serves over 8 million Federal Government employees, retirees, and their 
families, who can choose from over 200 health plan options. The FEHBP 
Efficiency Act of 2006 would require all health plans participating in 
FEHBP to develop systems for hospitals and doctors to submit their 
bills electronically within 4 years.
  Ken Thorpe, a health economist at Emory University, has reported that 
if all FEHBP participating health plans switched to electronic systems 
for submission of bills, the program could save up to 2 percent of the 
$31 billion in

[[Page S731]]

total premiums, or over $600 million every year. That is a tremendous 
amount of savings--money that could be used to expand FEHBP benefits, 
increase the number of eligible employees, or lower premiums for FEHBP 
beneficiaries. Using its tremendous purchasing power, the Federal 
Government could help spur the health care industry to move to a 
completely paperless system for processing transactions in all 
government health programs as well as the private sector.
  I urge my colleagues to join me in this effort to increase efficiency 
and reduce costs. Every American should have access to affordable 
health care, and this bill is one step towards making that a reality.

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