[Congressional Record Volume 153, Number 165 (Monday, October 29, 2007)]
[House]
[Pages H12146-H12153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              HEALTH CARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Burgess) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. BURGESS. Madam Speaker, I come to the floor of the House tonight 
as I frequently do to talk a little bit about health care.
  Tonight, I will be filling the leadership hour of the minority side, 
and I

[[Page H12147]]

certainly thank the House leadership for providing me the opportunity 
to speak to the Chamber over this hour and talk a little bit about 
health care, perhaps give a little bit of historical context, perhaps 
talk a little bit about our current situation, perhaps talk about the 
prospects for change in the future, talk about what principles are 
important to maintain in a health care system, whether it be public or 
private, the principles of affordability, accountability and 
advancements.
  Madam Speaker, I hope to spend part of this hour talking about the 
things that I think will improve the delivery of health care in this 
country, regardless of who the payer is, because we are perhaps perched 
on a historical time.
  Madam Speaker, I believe with all my heart that we are perched on a 
transformational time in American medicine, a time that we've seen 
perhaps similarities with before, perhaps three times in the last 
century. We'll detail those in just a moment, but it is a time like any 
other.
  When the rapidity of the scientific information is coming at such a 
rate, the rapidity of scientific change is coming at such a rate, and 
at the same time we're poised to perhaps have a significant impact on 
the delivery of health care in this country by how we craft our public 
health policy, our health policy in this body, think about in the 
preceding century we had three, I believe, transformational times in 
the 20th century.
  You think about the status of medicine in the days of the late 1800s 
leading up to the early 1900s, and it was not always a pretty sight. 
Blistering, burning, and bleeding were treatments that were not only 
tolerated; they were, in fact, embraced by the medical mainstream, the 
best minds in medicine at that time. But those heroic efforts were 
beginning to be supplanted by people who rigorously applied the 
scientific method and began to investigate as to whether or not these 
heroic methods were, in fact, yielding or returning a positive benefit 
for the patient. In fact, they found that they were not.
  And at the same time, you had scientists working on concepts such as 
sterility, sterility during surgery, vaccinations, improvements in 
public health, sanitational water supplies, as well as just a decade 
before you had the introduction of anesthesia which, obviously, 
radically changed the prospects for being able to perform surgery.

                              {time}  2045

  There was also a crisis of confidence in American medicine, because 
there was no standardization in American medical schools. They were all 
over the map as far as their embracing scientific method or scientific 
philosophy. This body, the United States Congress, in 1910, 
commissioned a study that was ultimately called the Flexner Report, 
which detailed the problems inherent in American medical schools and 
how value to the patient could be improved by standardizing the 
training and making the training more rigorous and adhering to the 
scientific process.
  Well, not quite midway through the century, in the 1940s, we saw, 
again, a transformational change occurring in American medicine. How 
did this change come about? Actually, there were some discoveries that 
preceded the 1940s by a little bit. Sir Alexander Fleming discovered 
penicillin in 1928. At the time, it was just more or less a laboratory 
curiosity that the growth of a mold in a Petri dish could inhibit the 
growth of a bacteria, but it was American ingenuity and American know-
how that took this concept and made possible the distillation and 
production of large amounts of this compound.
  Prior to the 1940s and prior to the intervention of American know-
how, only small amounts of penicillin were available. Again, it was 
more of a laboratory curiosity than a useful treatment that could be 
made available to a broad spectrum of patients.
  With the introduction of new techniques for bringing this medicine to 
the public, large amounts of medicine were made available, the price 
plummeted and, as a consequence, we ushered in the new antibiotic age 
in the early part of the 1940s. It was terribly significant. Many of 
our soldiers who were wounded during the invasion of Normandy on D-Day 
had wounds that ultimately would have been much more serious had 
infection become a problem, but now, because of the availability of 
penicillin, many of those infections could be treated, life and limb 
could be saved and spared. It was, indeed, a change that medicine had 
not previously seen.
  There was another rather dramatic development during the 1940s, about 
the same time, Percy Julian, who was an African American scientist who 
we honored in this body during the last Congress. He didn't discover 
cortisone. Cortisone had previously been discovered but was only 
available by a labor-intensive process. You had to get it from the 
adrenal glands of an ox.
  Cortisone was very difficult to obtain, very expensive and really 
wasn't available to treat much in the way of a large number of 
patients. It was available only as an experimental effort.
  But Dr. Julian, who had experimented in biochemistry for a number of 
years and worked extensively with soybeans and soybean products, found 
a way to make a precursor to cortisone and, in fact, found a way to 
apply this for the commercial production of cortisone. Suddenly, this 
medicine, this miracle drug which had been available only in very small 
supply and terribly expensive, now became generally available to treat 
patients.
  So we had the advent of anti-infective agents in the antibiotics and 
anti-inflammatory agents with cortisone, all of which occurred around 
the mid-1940s. What else happened in the mid-1940s? Of course, we were 
a country at war. As a consequence, the workforce in this country was 
severely contracted. In an effort to keep employees, what employees 
were available on the job, employers wanted to pay higher and higher 
wages to keep the employees there and keep them satisfied.
  But the Federal Government, the President of the United States, 
President Roosevelt said, we are going to get in trouble with inflation 
if we are not careful, and put in place a series of wage and price 
controls to kind of keep the lid on this rapidly expanding sector of 
the economy. He felt it was justified because of a wartime situation.
  Well, employers still wanted a way to attract employees, to hold 
employees, to keep employees, keep them happy, keep them satisfied, 
keep them healthy and well so they stayed on the assembly lines and 
stayed in the workforce. They devised a plan to offer health insurance 
and retirement benefits to employees that were under their employ.
  Well, it was kind of controversial as to whether or not this would be 
something that was even available, whether or not it violated the 
spirit of the wage and price controls that were in place at the time, 
and, if it was something that could be made available, is this a 
benefit that would be taxed or not taxed? The Supreme Court in a 
historic decision in 1944 decided, number one, that this did not 
violate the spirit of wage and price controls. Just as importantly, 
they determined that these benefits provided as health insurance 
benefits and retirement benefits, in fact, were not taxable benefits. 
Thus, the era of employer-derived health insurance was born.
  After the war, it continued because it was very popular. People liked 
that concept. They liked the fact that you, at the time you went to 
work, you received health insurance; so that was one worry that was 
lifted off of you that you didn't have to contend with. It changed 
forever the face of how medicine is practiced in this country, as much, 
I submit, as the introduction of penicillin and as much as the 
introduction of large-scale production of cortisone.
  So we will quickly fast-forward to the 1960s. In the 1960s, again, we 
were seeing a big transformation in medical care, a big transformation 
in science, the newer antibiotics were available that could treat more 
and more diseases, more aggressive diseases. The whole era of 
chemotherapy began to be ushered in. Antidepressants were available for 
the first time, as well as antipsychotics, which had a profound effect 
on the census in psychiatric hospitals.
  What else happened in the 1960s? Well, a little over 40 years ago, 
this Congress, at the direction of a fellow Texan, Lyndon Johnson, 
developed the Medicare and then subsequently the Medicaid programs to 
provide a social safety net for our seniors. Then, ultimately, with the 
introduction of the Medicaid program, it provided a social

[[Page H12148]]

safety net for people who were too poor to afford health insurance.
  So there was greater access, greater access for the aged, for people 
who were disabled, and for people who historically had been not allowed 
into the medical system because of a poor financial situation. But, the 
government established for the first time an enormous footprint in the 
practice of medicine in that for the first time it paid for a 
significant amount of the practice of medicine.
  Now, the current situation is that about 50 percent of the health 
care dollar is derived from the United States Congress, from the 
Federal Government. The other 50 percent is not all private pay; it's 
private, commercial insurance as well as people who pay bills out of 
their pocket, self-pay individuals, and I will actually include the 4.5 
million people that own health savings accounts. I would include them 
in that group as well.
  Of course, there are people who just simply do not pay the bill; 
there is bad debt. There is also charitable care that is given by a 
doctor or a hospital to a patient and no payment is expected.
  Now, the big question before us is can this hybrid system that has 
just sort of grown up, can this hybrid system be sustained? The tension 
that exists within this system, I think, creates a dynamic for 
continued change and for medicine to continue to evolve and continue to 
reinvent itself.
  But, as I said, we are on the brink of a time of transformational 
change. I believe that in the early part of the 21st century we will 
see and we have seen changes in medicine as a result of cracking the 
genetic code. Genomic medicine, which was a phrase that I wouldn't even 
have been aware of during medical school or residency, now is part of 
our regular parlance.
  Diseases that used to be treated only with surgery are now treated 
with medicines. There are going to be vast changes on the horizon as 
far as the treatment of disease goes as we begin to understand more 
about how the human genome affects the course of health and disease, 
how we can intervene earlier at a lower cost to prevent disease and, 
quite honestly, extend life over time.
  But, we are also poised at a time where it looks as if, because of 
frustrations with the current system, because it doesn't provide all of 
the coverage that we think it should to every person who we think needs 
it, we are poised here in this Congress to begin debating an ever 
greater expansion of the Federal Government's role in health care in 
this country.
  It will ultimately be up to us to decide is this a good thing or a 
bad thing. Since we live in a representative Republic, it will be up to 
the American people to decide is this something that we want to see 
more of or less of. They will, of course, register those thoughts with 
their votes, not only in the 2008 election but in the 2010 election.
  I would submit to you that it is important that we keep in mind 
really where the fundamental unit of production is in this vast medical 
machine that we have in this country. What is the widget that is 
produced by the vast medical machine?
  Well, my impression is that it is the interaction that takes place 
between the doctor and the patient in the treatment room, whether you 
like to say the operating room or the emergency room, but, nonetheless, 
it is the interaction between the doctor and the patient. That is the 
fundamental unit of production in American medicine. How do we interact 
that?
  Well, my opinion is anything that will deliver value to that 
interaction is one of those things that we ought to encourage. Anything 
that detracts from value or anything that serves to drive apart the 
doctor-patient interaction is something that may be seen as pernicious. 
It's all about empowering the patient and not an insurance company, not 
the Federal Government. We need to focus on those policies that will 
bring that power back to the patient, will bring that value back to the 
doctor-patient interaction.

  A lot of people would argue that we need health care reform. In fact, 
remember, that was a big argument in 1992 in the Presidential election 
and in 1993, the year that followed, and then, ultimately, nothing was 
accomplished and the situation stayed as it is. But they kept talking 
about health care reform, health care reform, health care reform.
  Well, reform is what you need if the system is working just jim-
dandy, just working extra special well, and you only need some marginal 
changes around the edges. But since we are upon a time of great 
scientific advancement, changes in how we handle information 
technology, changes in how we even approach medicine, the whole era of 
personalized medicine is just a little bit over the horizon, and we may 
well see that in my lifetime, certainly in my children's lifetime.
  Medicine is on the cusp or the threshold of some big changes. Is 
reform going to be enough to enact the social policies that we need 
here in Congress as well as permit those transformational changes that 
are occurring in science and occurring in the delivery of medical care?
  Now, I would submit that only by keeping a portion of the free 
enterprise system involved in health care, only by that method are we 
likely to continue to generate the kind of instability we need in a 
system in order to foster change, in order to foster growth, in fact, 
in order to drive that transformational process.
  If, suddenly, we are at complete equilibrium and there is no tension 
on the system anymore, what's going to cause it to grow? If, in fact, 
we devolve to a single-payer system where the Federal Government picks 
up the entire tab for medical care from cradle to grave, and there are 
some people who think that would be the correct response, the correct 
way to go, what will change? What will be the impetus to change? What 
will be the reason to change anything about medicine?
  What you see today, if you enact that system, is what you will see 20 
years from now, 40 years from now, 60 years from now. The 
transformational change that I think will be responsible for some of 
the greatest gifts that medicine could give to humankind, suddenly the 
spark, the spark of incentive would be removed and we would have a 
steady state that would be well paid for, a lot of people would be well 
taken care of, but the improvements, the advancements would be lacking 
in such a system.
  If we move toward a system that is more patient driven, rather than 
one that's driven by insurance companies, rather than one that's driven 
by governments, I think we will usher in that new era of transformation 
in American medicine.
  During the course of that, we have got to keep health care 
affordable. We have got to keep the monitor on the person in the 
middle, the person who acts as that barrier between the doctor and the 
patient, what we describe as a middleman. We have to keep that very 
close tab on what's happening in that arena. That's one of the things 
that prevents a patient from knowing the value of care they receive. 
It's one of the things that prevents a doctor from knowing how much the 
care they are ordering is going to cost or what burden that patient 
will have to bear. We have anesthetized everyone by putting a third-
party payer in the middle of that mix.
  Now, questions do come up as to how we bring about those changes and 
not obstruct changes that we want to see happen, but, again, keep in 
mind things like the advancements in medicine that are going to occur 
as a result of discovery of the human genome and further elucidation of 
the human genome, concepts like rapid learning. When I was in medical 
school, we all just worshipped at the altar of the double-blind 
crossover study in order to prove that something was effective or not.
  But we live in a time when computational speed and capability is so 
vast, and the speed of learning is so fast, that, you know, it may no 
longer be as necessary as it once was to select the correct sample size 
and go out and do all the statistical tests. We can just simply monitor 
everyone, everyone who is on Lipitor, everyone who is on a statin, see 
what their complications are, see what their health benefits are that 
people who are on statin live as long or longer than a closely matched 
age and gender-matched group of individuals who are on no such therapy. 
We can begin to develop those concepts, and the data is there and will 
accumulate rapidly because of advances that are being made in health 
information technology.

[[Page H12149]]

                              {time}  2100

  That's the way that, ultimately, we're going to be able to curtail 
some of the costs of taking care of chronic diseases and, in fact, 
beating chronic diseases; and I would include cancer in that group. And 
above all, we do have to ensure an adequate workforce to be able to 
provide that care.
  Now, I alluded a few minutes ago at the point of transformational 
change, but we also run the risk of getting caught up in transaction. 
You know, if you think back to 1993 and the changes in health care that 
were discussed at the time, we really weren't talking about any kind of 
health care change. We were talking about change in the administration 
of insurance policies.
  As a result, since we got caught up, in this body, in the 
transactional, we forgot about the transformational. And again, as a 
result, there really wasn't much happened, except we left the field 
essentially empty, and HMOs and managed care came in, took over a large 
market share. And that was the time, at least in my experience as a 
physician, when some of the worst excesses of HMOs and managed care 
occurred: care being denied, patients being put out of the hospital too 
soon. And then Congress was in a very reactive mode: you've got to have 
this many days after delivery, this many days in the hospital after a 
mastectomy.
  Well, that clearly wasn't the way to go about it, but that is the 
risk that we run if we focus on the transactional and forget the 
transformational. So all three things, affordability, accountability 
and advancement, must be considered and must be given equal weight in 
any change that comes about.
  Within the concept of affordability, it's really not how much money 
you spend; it's how you spend it and are you getting value for the 
dollar that you spend in health care. And I would circle back and bring 
it back to that interaction between the doctor and the patient in the 
treatment room. How do we deliver value to that fundamental unit of 
production of medical care? And if a policy that we propose delivers 
value, then that is something that really should be looked at and one 
that should be carefully debated and perhaps enacted into law.
  But if you look at that fundamental interaction between the doctor 
and the patient in the treatment room and it is fundamentally 
deleterious, well, maybe that's something that we should not be doing. 
We see examples of this within the insurance environment all the time.
  And I would use the bill that we voted on last week, the State 
Children's Health Insurance Program. Good things in the bill, but some 
bad things in the bill. Some of the bad things is we tend to take 
children off of private health insurance and move them onto the State's 
Children's Health Insurance Program; and we do that for successive, for 
families who earn excessively larger and larger incomes.
  Now, we can argue what the top line was; the top line reported in the 
bill was $60,000. But on the floor of this House, the chairman of the 
Energy and Commerce Committee admitted to me that States could 
disregard $20,000 income for housing, $10,000 in income for clothing, 
and $10,000 in income for transportation. We're up to over $100,000 
with the income set-asides that some States could develop.
  Well, what's going to happen to taking all these children off of 
private health insurance, perhaps coverage that the employer provides 
their mom and dad and moves them on to an SCHIP policy? Many 
pediatricians around the country find that the reimbursement for a 
State Children's Health Insurance policy in their State reimburses at a 
fundamentally lower rate than the private plans. Even though the 
private plans aren't great, they're better than the State Children's 
Health Insurance policy.
  So what if a pediatrician's earnings or gross bookings for their 
practice go down by 30 or 40 percent on that segment of patients? Well, 
if you make that segment of patients successively larger, it's going to 
be more and more difficult for them to make up that gap; and what they 
will do is what doctors have always done: they'll open a little 
earlier, they'll stay open a little later and they'll kind of squeeze a 
few more patients into every hour.
  Now, I ask you, is that a way to drive up the value in that doctor-
patient interaction? I don't think so. I think if you squeeze more and 
more patients into that hour, if you increase that doctor's work day so 
they're having to make decisions on less and less rest with more and 
more stress, we are ultimately likely to negatively affect the value of 
that doctor-patient interaction.
  So certainly that's one aspect of the bill for me that was extremely 
important for us to fully evaluate; and, unfortunately, we didn't get 
to evaluate it. We didn't get to debate it. We didn't get to do it in 
committee. We didn't get really to debate it on the floor. It was kind 
of an up-or-down vote: take it or leave it. And that's fine if that's 
the way you want to run things. But for me it was a fundamentally 
flawed idea because it damaged the value of the doctor-patient 
interaction.
  Other programs that may improve the doctor-patient interaction, I'm 
aware of a large employer in my district back home, school district, to 
be precise, that has a number of employees under their insurance policy 
that provides a $20-a-month premium reduction for anyone who undergoes 
some pretty basic screening, blood pressure, weight and doing a little 
blood work. So there's a $250 value returned to the enrollee in the 
health plan over a year's time. So obviously that's a value. It's a 
value to the insurance company because now they're able to identify 
perhaps that silent person with a cholesterol up to here or a blood 
sugar that's an undiagnosed and unmonitored diabetic.
  They can identify those individuals; and if the individual is 
desirous of help, they can get them into the proper type of care that 
will lower the likelihood of a heart attack with the attendant time in 
the intensive care unit, perhaps coronary artery bypass grafting, 
perhaps even the risk of sudden death or the complications of untreated 
diabetes, problems with eyesight, the problems with circulation, leg 
amputation, all of the kidney disease that goes along with untreated 
diabetes. Perhaps we can begin to get a handle on this earlier in the 
course of the disease so that the disease course may be modified and 
ultimately less costly.
  Well, I would submit that that insurance company has found a way to 
deliver value to the doctor-patient interaction; and, in fact, I would 
think that's behavior that this body would want to encourage, not 
discourage, amongst private insurance players.
  But these are just two examples of where value for the doctor-patient 
interaction can be increased or decreased. And as a consequence, when I 
apply that test to any health care policy, my decision about that, 
whether or not to support that health care policy, is likely to be 
based on the fundamental question, are we delivering value to the 
doctor-patient interaction? If the answer is yes, that's a program 
that's worthy of further study, debate, and perhaps enacting. If the 
answer is no, then it becomes fairly easy for me to say that's not a 
policy that I would be inclined to support at the present time.
  Now, one of the things we move on to or other aspects of 
affordability that we should talk about, I did allude earlier to the 
fact that there are now, according to recent data that was released 
last April, 4.5 million people who are covered under health savings 
accounts. That's up about a million and a half from the year before. 
And, certainly, while it is not a vast segment of coverage, the reality 
is we could cover a great deal more people who are uninsured if they 
just simply knew about these products.

  In the mid-1990s when I went to look for an insurance policy for an 
adult child, it was just almost impossible to get a private 
individually owned insurance policy for someone in their mid-20s. No 
one wanted to talk to you about one single policy. We won't even 
discuss it unless you've got a group of five or 10, and then we're 
going to charge you a great deal for that. Now, I was ultimately able 
to get insurance for that individual.
  But what a change 10 years later. Any individual getting out of 
college today, mid-20s, off their parents insurance for the first time 
in their life, maybe they want to go start a business. Maybe they 
haven't quite found that right job yet; but rather than going without 
health insurance, they now have an option. They can go to the

[[Page H12150]]

Internet and in the search engine of choice type in health savings 
account and very quickly they'll be taken to sites that will provide 
them a vast array of choices in high deductible insurance policies. 
These policies are typically paid for with after-tax dollars, which is 
a limitation, I admit, and one that this Congress should take up and 
deal with. But oftentimes we're talking about individuals who are not 
in the higher income earning brackets or perhaps pay no Federal income 
tax at all. So the fact that it's not a tax deductible expense is not 
of great import to them.
  But the fact that you can get a high deductible insurance policy 
that, with a $2,000 to $5,000 deductible that ranges in price from 
about $55 a month to $75 a month, well, that's a pretty significant 
savings over what we typically associate with the cost of insurance, 
which is obviously much greater than that.
  So that young individual who's just starting out doesn't need to 
start out life without insurance coverage. It's not something that they 
need to forego. Yeah, it's a high deductible policy, so guess what? If 
you go in for a flu shot or you go in for some relatively minor 
difficulty likely as not that's going to be something that will have to 
be borne by the individual.
  But if that individual has a catastrophic event, a motorcycle 
accident, an accident or pregnancy and requires prolonged 
hospitalization, that hospitalization is covered after the deductible 
is met. And how powerful is that to be able to put that type of 
protection in the hands of a whole segment of society that 10 years ago 
had no choice at all, no option. You just simply cannot buy or find 
insurance no matter how big a check you're willing to write, because I 
was willing to write a big check to get insurance coverage at that 
time, but it just wasn't available. Ten years later it's readily 
available. It's up on the Internet. And because of competition on the 
Internet, we've driven the price down, so affordability obviously has 
improved.
  Now, the other great things about a health savings account is you can 
put money away. If you do pay taxes, you can put away money with pre-
tax dollars, put money into essentially a medical IRA, or a health 
savings accounts. You can actually begin to accumulate dollars in that 
health savings account. And the good news is that over time, if that 
money is not used for medical expenses, it can only be used for medical 
expenses, but if it's not used, it doesn't go back to someone else at 
the end of the year. It doesn't even go back to the Federal Government 
if you die too soon. That money is yours. It is yours to use for your 
health expenses, or it is then delivered on to your heirs and assigns 
if you meet an untimely demise, but that money is yours. It doesn't 
belong to the Federal Government. The money you put into that health 
savings account stays under your command and control for the rest of 
your life as long as it is spent for health care expenses.
  So you can see, even a young individual who doesn't have the 
financial wherewithal to contribute the full amount, say the $2,000 or 
the $5,000 every month to a health savings account, still can put some 
number of dollars away that will grow over time. And since we're 
talking about young individuals, well, the time value of money comes 
into play. And if you begin such an account when you're 25, by the time 
you're 65 and ready to face retirement, there may be a significant 
accumulation of dollars in that account. And the good news is there is 
no one can take that away from you.
  Now another thing that we've worked on in this Congress and something 
that I would argue would be a positive in the values section for 
delivering value to the doctor-patient interaction are what are called 
association health plans. Now, association health plans by themselves 
are not going to drive down the cost of the, or the number of the, 
uninsured; but they will help control the ever-rising cost of health 
insurance which, of course, is what drives a lot of small businesses 
out of the business of providing health insurance. So association 
health plans have been voted on in the two previous Congresses several 
times since I arrived here in the beginning of 2003.
  And the concept is pretty simple. It just says small businesses can 
kind of group together to get the purchasing power, the purchasing 
clout of a much larger organization and use that ability to aggregate 
themselves to get a better deal with an insurance company, to get a 
better deal in providing insurance to their employees. So if you have, 
say, a group of Realtors, a group of dentists offices, for example, a 
group of chambers of commerce employees, you can put this group 
together as long as they have similar business models. That's why the 
term ``association'' is used. They can be put together to go out and 
purchase or to make bids on the commercial insurance market and, again, 
get a little bit more of that purchasing clout that large organizations 
have.
  And one of the reasons that association health plans have been 
contentious in this House is because for them to be effective, 
particularly in medium and small-sized States, you've got to have the 
ability to go and take in a group of people that may cross a State 
line. Now, a State as big as Texas, which at one time was its own 
country, that's not as big an issue. But still you will get a better 
economy of scale if you are able to draw in more people into this 
association that then goes out and buys insurance.
  For whatever reason, we passed it in the House, three or four times 
in the last 4 years, but unfortunately it never did pass in the Senate. 
They had Senator Enzi, who was at the time chairman of the Senate 
Health Committee, make a good run at it last year, got all the 
principals in the room and tried to get them to craft an agreement on 
that, but ultimately was not able to get that done. And that's a shame, 
that's too bad because again this is one of those things that would 
fundamentally deliver value to the doctor-patient interaction because 
it would hold down the cost, the ever-increasing cost, bend that growth 
curve a little bit on the increasing cost, the ever-increasing cost of 
health insurance, and allow more people to keep and retain their 
insurance coverage.
  Now, the President brought up in his State of the Union message here 
last January, and it's been talked about on and off again over the past 
six to eight months, the issue of equal tax treatment for employer-
derived insurance and insurance that's owned by the individual. We've 
really not made any great progress, but I do believe the concept is one 
that's worthy of study, that's worthy of debate in this House. I 
already alluded to that fact a little earlier in the talk that once you 
have the employer-derived insurance as a pre-tax expense, that alters 
the playing field and it, in fact, encourages the use of that type of 
insurance and maybe even encourages the use of that type of insurance a 
little too much.

                              {time}  2115

  It encourages people to be overinsured because, look, I can't really 
pay you any more without distorting my salary structure but I will give 
you this more generous insurance package. And as a consequence, more 
insurance benefits are added to that person's benefits package, and it 
may, in fact, be more insurance than they actually need. So they are 
paying for something that they don't actually need.
  On the other end of the spectrum, you have the individual who is out 
there pricing insurance now in the private market, and perhaps they do 
earn enough money to pay income taxes, and it would be great to extend 
or expand their purchasing power for that insurance by allowing them to 
pay for that with pretax dollars.
  There is going to be a lot of debate on that over the next several 
years, I expect. In my mind, it is the only sane and smart way to go 
to, again, decouple the insurance product from the tax code and kind of 
put everybody on an equal footing. It's either deductible for everyone 
or not deductible for everyone. But let's put everyone on the same 
playing field there because only in that way will we get true equity 
and only in that way will we get the demand for the type of products 
that, again, ultimately will have the competitive forces that will push 
the price down. And after all, the kind of competition that is 
available on the Internet, the same type of competition that's 
available now with health savings accounts, and since they are after-
tax items anyway, they are not under the same restrictions, but to get 
that same type of

[[Page H12151]]

competitive influence from pricing on the Internet that will help keep 
the cost of health care coverage more affordable for more people. It's 
kind of analogous to the people who sell car insurance and who say 15 
minutes can save you big bucks on your car insurance if you are willing 
to invest 15 minutes on a telephone call to a particular insurance 
company. They have done a lot of clever things with their advertising 
with animated lizards and unfrozen cavemen and the like, but the 
reality is they have taken the concept of the type of competitive edge 
you can get by utilization of the Internet with car insurance. If we 
had the same ability to do that with health insurance, how much better 
would that be? Because we could drive the price down, because now 
people would be competing with large volumes, large numbers of 
patients. Now companies would be competing with large numbers of 
patients, and, in fact, I think we would see an improvement on the 
price structure rather than this continued year-after-year increase in 
prices and this continued year-after-year of picking only the people 
that we want to insure and leaving others out. This is a way of 
broadening the base and lowering the rate. We liked that concept in our 
tax policy; we should like that concept in our insurance policies as 
well.
  Madam Speaker, mandates are another issue that will come up from time 
to time. The health care program that was popularized in the State of 
Massachusetts, very famously, depends upon an individual mandate. It is 
your obligation and responsibility to have insurance, and you will have 
insurance or we will buy it for you and charge you for it. If you don't 
want to pay us, we will take that money out of your State income tax 
refund that you are due at the first of the year. So that is one way to 
get people to buy insurance, to be sure.
  Now, in 1993, when the Clinton health care plan was discussed, they 
talked about employer mandates: We're going to require every employer 
to participate in an employer-derived health insurance program or they 
are going to have to pay a large amount in order for their employees to 
get coverage elsewhere.
  So employer mandates and individual mandates are certainly techniques 
that have been tried in the past, and we may see them tried again in 
the future.
  State mandates are where a State says any insurance policy that is 
written in the State, you have to provide coverage for these items. It 
varies from State to State. Some States are quite generous, and as a 
consequence, their insurance rates are high. Some States are more 
spartan, and as a consequence, their insurance rates are more 
reasonable. But State mandates, individual mandates, employer mandates, 
in my opinion, have the ability of driving up the cost and limiting the 
care because they remove the competitive influences that otherwise 
would be brought by the competition that's available in the open market 
and just keeping free enterprise involved in medicine.
  I guess the counterpart to mandates, for all its faults and for all 
of the sort of anguished discussion that we had about Medicare part D 
over the past several years, Medicare part D now provides 
pharmaceutical benefits, pharmaceutical coverage to 90 percent of the 
Nation's seniors, and it does so with a 90 percent satisfaction rate. 
And there is not a mandate in the program. And how do they do it? They 
provided programs that people actually wanted. That would be a novel 
approach. Instead of a mandate, you make something that is marketable. 
You make something that's desirable. You make something that patients 
and families are going to say that's a good idea and it's reasonably 
priced and I am going to do that. Mandates, on the other hand, tend to 
drive things in the other direction. And ultimately, although there may 
be a transient reduction in price long term, it has a negative 
influence on price and causes prices to inflate and increase over time.
  Madam Speaker, I can hardly come to the floor of the House and talk 
about changes in our health care system without at least briefly 
talking about changes in the way the medical justice system is handled 
in this country. And the reason that it is so important to me is my 
State, my home State of Texas, changed the nature of the argument 4 
years ago and since then has been reaping the benefits of fundamental 
and sound medical liability reform.
  Now, the Texas legislation that passed in the legislature that 
convened in 2003, and subsequently we had to undergo a constitutional 
amendment in September of 2003, it provided a cap on noneconomic 
damages. The so-called Medical Injury Compensation Reform Act of 1974, 
as passed by the State of California, was adopted and modernized in the 
Texas plan. But it was a Medical Injury Compensation Reform Act-style 
reform that was done in my home State of Texas.
  Now, caps on noneconomic damages out in California in 1975 were set 
at $250,000. In Texas, with the passage of this legislation, there was 
a cap set at $250,000 for a physician if the physician was involved; 
$250,000 set for the hospital if a hospital was involved; and $250,000 
for a second hospital or a nursing home if one was involved. So there 
was an aggregate cap of $750,000. At the same time, there was no cap 
placed on actual damages, real damages, that were sustained in a 
medical liability suit and no cap placed on punitive damages if those 
were awarded by a judge in a medical liability suit.
  The result of all of this was that a State that was in turmoil, a 
State that was in chaos in the year 2002, today is eminently stable 
when you talk about its medical justice system because of these 
commonsense reforms that were enacted back in 2003. The benefits that 
we have seen for my old insurer of record, Texas Medical Liability 
Trust, my medical liability premiums had been increasing by double 
digits every year, year after year for about the 4 years before I 
concluded my practice and came to Congress. The very next year after 
the passage of this bill in 2003, prices dropped. They dropped 
12 percent. They have continued to drop. So the aggregate reduction in 
premium prices over the 4 years since this passed has been 22 percent 
for physicians insured under the Texas Medical Liability Trust. And 
that is in addition to double-digit increases that were happening every 
year up to 2003. Now we have had a 22 percent reduction. That's a 
significant change.

  One of the most important things, though, was the number of medical 
liability insurers that existed in the State of Texas had gone from 17 
down to two. You are not going to get much in the way of a competitive 
edge if you have only got two people willing to write medical liability 
insurance in your State. So by the start of 2003, we were truly in 
crisis with the fleeing of medical liability insurers from our State.
  What happened after the law passed? The insurers started to come back 
in. Now, many of them wanted to come back in and say, we're going to 
have to charge you more money because Texas is still an unproven deal 
and we're not sure we want to come in at the rates you are going to 
set. But Commissioner Montemayor, who was then the Commissioner of 
Insurance in the State of Texas said, if you are going to come back in, 
you're going to come back in at reasonable rates. And as a consequence 
today, I'm not sure of the top number of Texas insurance companies, but 
certainly above 15 and may well be above 20 insurance companies that 
have come back to the State, and, most importantly, they have come back 
without an increase in their rates.
  One of the unintended beneficiaries of this reform was the smaller 
not-for-profit hospital in the State of Texas. Smaller and medium-sized 
hospitals, self-insured, they had to put a lot of money away against a 
possible bad outcome in a court. With the passage of this law and with 
some return of sensibility and stability to what their actual outlay 
may be if they lost a case, smaller hospitals and medium-sized 
hospitals were able to take some of that money that they had put away 
in accounts to guard against a possible adverse finding in court, and 
now they were able to take that money and use it for capital expansion, 
nurses' salaries, the kinds of things you want your smaller not-for-
profit hospital to be doing in your small and medium-sized community.
  So it was a very big boon not only to physicians but also to 
hospitals. And, again, I would submit is that a win or a loss for 
someone who wants to deliver value to the fundamental doctor-patient 
interaction in the treatment

[[Page H12152]]

room? Obviously, it's a win. We have more doctors coming to the State. 
We have so many doctors coming to the State, the Texas State Board of 
Medical Examiners can't keep up with the pressure, with the demand on 
new licenses for doctors who want to get licensed to practice in Texas. 
So that is a good thing. Texas as a whole has been underprovidered, if 
``providered'' can be used as a verb. Texas as a whole has been 
underprovidered for some time. The national average is 260 doctors per 
100,000 population. Texas sits at about 186. But the situation is 
improving month over month because of some of the commonsense changes 
we made in medical liability insurance.
  And one last thing I would add. If I'm from Texas and we've already 
done this, what do I care about the rest of the country that their 
medical justice system perhaps remains with the scales uneven and 
tipped to one side or the other? Well, the reason I care is because 
now, as a Member of Congress, we have to deal with the Federal budget 
every year. We have to decide how much money we are going to give 
Medicare and Medicaid every year. Consider this: A study done back in 
1996 at Stanford University looking at the cost to the Medicare system 
for treatment of heart disease, the additional cost for the treatment 
of heart disease when factoring in the cost for defensive medicine, 
back in 1996, that cost was calculated to be just under $30 billion. 
Well, that was 12 years ago. I rather suspect that number would be 
higher today if anyone went back in and recalculated those figures. So 
it is significant. That is practically 10 percent of the money we 
budget every year, the money we appropriate every year to pay for the 
Medicare system. It is a significant savings to the Medicare system if, 
in fact, we can capture these savings.
  Just the Texas bill alone introduced in the House of Representatives 
was scored by the Congressional Budget Office as saving $3.8 billion 
over 5 years just with the language of the Texas bill, to say nothing 
of what it would do on putting negative pressure, downward pressure on 
the cost of defensive medicine. And $3.8 billion is not a big figure 
when we talk about money up here in Congress. It's usually tens or 
hundreds of billions of dollars. But I have got to tell you what, $3.8 
billion is real money, and in a year where we are scratching around 
trying to find every dollar that we can, that $3.8 billion is 
significant. And, again, I, frankly, do not understand why the House 
wouldn't consider taking this up, because this is a commonsense 
solution to a problem that vexes many States around the country.
  And perhaps one of the even more pernicious effects of the medical 
liability crises in some States is the fact that it directs the best 
and brightest of our young people in a career path other than medicine. 
If I am going to spend all that time in school, if I'm going to 
accumulate all that student debt, and then when I get out, I have got 
to pay these high liability premiums and you go to court and they make 
you look like a bad guy, I don't think I want any part of it. It does 
have a negative effect on attracting the best and brightest into our 
physician workforce.
  The physician workforce is important. I want to talk about that in 
greater detail. But just consider this: A residency program director 
out of one of the big hospitals up in New York a few years ago, when I 
asked her, ``Does the medical liability crisis impact your residency 
training program at all?'' she told me that, well, currently we are 
taking people into our residency program that we wouldn't have 
interviewed 5 years ago.

                              {time}  2130

  In other words, the pool of available applicants for their residency 
program had contracted because of the chilling effect, the negative 
effect of the medical liability insurance in that State. And these are 
our children's doctors; these are our children's children's doctors. I 
fail to see how the advancement of medical care is furthered by 
allowing policies that have that type of an effect on our physician 
workforce.
  But let's talk a little bit about the physician workforce in the time 
that remains because this is another important part of where we go with 
health care reform, health care transformation in this country. And 
three bills that have recently been introduced, H.R. 2583, H.R. 2584 
and H.R. 2585, deal with the problems surrounding the physician 
workforce.
  Now, just a little bit less than 2 years ago, Alan Greenspan, as one 
of his last trips around the Capitol, came and talked to a group of us 
one morning. And a question was posed to him: What do you think about 
Medicare? Are we ever going to be able to pay for the unfunded 
liability of Medicare in the future? And he stopped and thought for a 
moment and said, Yes. I think when the time comes Congress will make 
the hard choices, make the hard decisions, and, indeed, we will be able 
to salvage and pay for the Medicare system. And he paused for a moment 
and then went on to say, But what concerns me more is, will there be 
anyone there to deliver the services when you require them?
  And that, Madam Speaker, is a crucial point in this discussion. And 
that is the point behind the three bills that were introduced earlier 
this year to create incentives for hospitals to provide residency 
programs, to create incentives for medical students to go into medicine 
in the first place and, finally, to encourage physicians who are more 
mature in their practice to stay in their practice.
  Creating more residency programs. There are some hospitals in the 
country that would welcome a residency program. They have the patient 
load. They could get the accreditation from the American Council of 
Graduate Medical Education, but the barrier for entry is just simply 
too high, the cost of starting a residency program is too high.
  So this bill would provide loans to hospitals to begin residency 
programs where none have existed in the past, particularly in fields in 
high-need medical specialties in medically underserved areas, things 
like general surgery; things like family practice; things like 
obstetrics and gynecology. This would be the subset of residency 
programs that would be encouraged with this legislation.
  And, as a consequence, since it is a loan program, the money would be 
paid back and over time would recirculate so more and more programs 
could be added to the Nation's training programs, particularly, again, 
for high-need primary care specialties in medically underserved areas.
  H.R. 2584 dealt more with the younger individual who is either in 
medical school or perhaps thinking about a profession in health care. 
And this bill would provide incentives, it would provide scholarships, 
it would provide loan forgiveness, it would provide tax relief for 
individuals who, at the time of their conferring of their degrees and 
the beginning of their practice, would agree to practice in areas that 
are medically underserved and, again, in high-need specialties.
  Now, this concept is actually an older concept. It was around when I 
was in medical school, but we need to modernize it for the 21st 
century.
  And what really brought it home for me was visiting the gulf coast 
area after Hurricane Katrina. So many doctors had left, and so many 
more doctors were contemplating leaving. How in the world are they ever 
going to maintain a health care workforce in that part of the country 
unless they grow their own doctors in place? This is a way to allow 
that to happen, and of course there are other medically underserved 
areas around the country that might benefit from this as well.
  Again, back in my home State of Texas, the Texas Medical Association 
puts out a periodical called ``Texas Medicine.'' This was the cover of 
their March issue, which raised the specter or the question: ``Running 
Out of Doctors.'' And these two bills were largely inspired by the work 
done in this article.
  And one of the concepts that was put forward in this article was that 
medical residents tend to stay where they train; they don't go very 
far. The fruit doesn't fall very far from the tree. So a medical 
resident who trains in a town is likely to set up practice within 50 or 
100 miles of that town. That is the concept behind setting up these 
residencies in smaller and medium-sized communities, smaller hospitals 
that have the need and have the patient load that will allow for the 
training and teaching and allow those physicians to stay in that 
practice area.
  Well, you might ask, how does this deliver value to that doctor-
patient

[[Page H12153]]

interaction that I've talked about several times tonight? Well, there 
are several ways. Number one, in just having the availability and the 
access of a physician. You can't deliver value to the doctor-patient 
interaction if you don't have a doctor there to interact with the 
patient. So that is certainly one very fundamental way that it can 
improve it. But another way, and perhaps a less tangible way, is if a 
doctor goes into practice within 50 miles of where they did their 
training, what do they know about that place? Well, they know the 
community. Their family, their wives and their children are probably 
going to be more comfortable in that community, so there is increased 
job satisfaction that the doctor will have in that community. I'm 
sorry, I should have said wives or husbands would have in that 
community. So there is increased personal satisfaction.
  But the other thing is, you know the doctors in the area, you know 
who's good and you know who's not so good. Referral patterns that are 
established during a 3- or 4-year residency can be continued. And this 
is the additional value that this type of training will bring to our 
young physicians in the State and allow them to be better physicians 
when the time comes for them to begin their practice.
  The final bill, 2585, deals with a problem that we've had in this 
Congress for as long as I've been here, in fact, before I got here, and 
that is the problem that we have with reimbursing physicians in the 
Medicare system. The current Medicare system of pricing is one that is 
not based on any sort of reality. Hospitals, drug companies, HMOs each 
get sort of a cost-of-living adjustment every year for their funding 
sources; but physicians, for whatever reason, don't get that cost-of-
living adjustment. They don't get what's called the Medical Economic 
Index. What they get is called the Sustainable Growth Rate Formula, 
which generally pushes their reimbursement rates down year over year. 
And over the next 10 years time, the budgetary projection is for 
physician payment rates for Medicare patients to be reduced on the 
order of 30-38 percent. Well, that's untenable. No doctor can continue 
to practice; they can't even plan for their practice. They can't plan 
for hiring; they can't plan for the purchase of new equipment all of 
the time they're laboring under that type of restriction.
  2585 would repeal the Sustainable Growth Rate Formula in 2 years' 
time. It resets the baseline for 2008 and 2009, which does allow for a 
positive update for physicians in 2008 and 2009, with no smoke and 
mirrors, no fancy footwork. It is just something that could be done.
  And then we aggregate all of the savings that accrue to the Medicare 
system because we are doing things better, cheaper, and faster in the 
Medicare system currently. As a consequence, that savings can be used 
to offset what is described as the cost of repealing the Sustainable 
Growth Rate Formula over 10 years' time.
  Consider this, the Medicare Trustees Report from last June said that 
the bad news is Medicare is still going broke, but the good news is 
it's going to go broke a year later than we told you last year. The 
reason for that is 600,000 hospital beds were not filled last year 
because doctors are doing things better in their practices, they are 
keeping patients out of the hospital, they are doing procedures in an 
ambulatory surgery center; and as a consequence, the overall cost price 
pressure on the Medicare system has reduced. The problem is that 
doctors don't get to have any credit for that reduction. It all goes to 
the hospitals, drug companies, nursing homes and HMOs, not to the part 
B of Medicare, which is, after all, where physicians are paid.
  We need to change this. We need to make those savings only 
attributable to part B. And as a consequence, we can drive down the 
cost of repealing the Sustainable Growth Rate Formula. And by 
postponing that repeal for 2 years' time, but at the same time 
providing a positive update for 2008 and 2009, I believe we have a 
system in place that can be a win-win for Congress, for doctors, and 
for the American patient, the Medicare patient, who has increased 
difficulty with finding a Medicare physician.
  Two other proposals in that bill, 2585, would be to provide positive 
updates for doctors who voluntarily improve information technology in 
their offices. We all know this is something that is going to have to 
happen. This is something that is going to have to occur. Let's give a 
little bit of a positive update, a little bit of a positive bonus. Yes, 
patients who aren't in the Medicare system will also benefit from that, 
but we're not getting a tremendous amount, about a 3 percent bonus per 
year for voluntary improvements in health information technology.
  Let's also make available for physicians who voluntarily report 
quality measures, let's also make a positive update available for them 
as well. And the consequences of that is people will begin to focus on 
the quality aspect if you just simply make a physician aware of what 
their expenditures in the Medicare system were for the past year. That 
information is confidential. It's not something that's published; other 
people aren't aware of it. But doctors tend to be relatively 
competitive, and if they have that number available to them, they are 
likely to behave in a way that will try to drive that number down. 
Doctors are goal-directed, doctors are competitive, doctors want to be 
the best at what they are. Well, let's give them the data and see if 
they can't compete on that level.
  The other thing is I think we need to make that information available 
to the patient as well: What did it cost the patient to provide for the 
treatment over the cycle of care for the past year? And, again, these 
are less defined, but equally important, ways we can begin to deliver 
value to that doctor-patient interaction.
  The health information technology is so important. Many doctors are 
sitting on the sidelines right now. It's like buying a VCR in the mid-
1980s: Do you go with Beta or VHS? And it's hard to know what the 
technology is going to look like in 5 years; and the person who guesses 
right will be rewarded, the person who guesses wrong will be penalized.
  So there is a lot of tension, a lot of nervousness out there when you 
talk to physicians' offices. And there is no question about it, these 
things add a lot of time to the doctor's day, time that is not readily 
compensated in any other formula. So we need to consider adding that 
positive update, such as was done in H.R. 2585.
  Well, Madam Speaker, we cannot rise to the transformational change 
required in this country without keeping the best doctors involved and 
without incentivizing and training the best doctors for tomorrow. This 
is going to require a near-term, a mid-term and a far-term, a long-term 
strategy. We will not be able to master the transformational changes 
and challenges without America's best and brightest still involved in 
the teaching and in the practice of medicine.
  This is a bipartisan issue. It doesn't affect only one side of the 
aisle. It doesn't only affect the other side of the aisle. It requires 
each of us to work together.
  Madam Speaker, I will submit our congressional approval ratings right 
now are at historic lows; and the reason they're at historic lows is 
not for the reason that most people think up here. The reason they're 
at historic lows is because we won't work together to get a single 
thing done for the American people, and this is one of those things 
that they want done.
  Now, I left my beloved profession a little over 4 years ago to come 
and serve here in Congress. I didn't come to just sit and watch as 
things happened and things were brought to us by other people. I came 
to be actively involved in the process, and I intend to remain involved 
in the process.
  I have outlined numerous solutions here tonight. I am grateful to the 
leadership on my side for giving me the opportunity to talk about these 
things and would only submit that there is a great deal more to 
discuss, and there will be more to come later.

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