[Congressional Record Volume 160, Number 85 (Tuesday, June 3, 2014)]
[Senate]
[Pages S3350-S3351]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          Markets Transparency

  Mr. KING. Mr. President, I believe in markets and I believe in 
transparency, and that is what I wish to speak about today. I think 
markets generally are the best allocators of goods and services, but in 
order for markets to work, people who purchase--consumers--need 
information. I wish to address one small piece of a very important 
market today.
  I serve on the Budget Committee of this body and as such I have had 
an opportunity to look at not only the current budget but projections 
of future

[[Page S3351]]

budgets. I think it is important to emphasize that virtually all the 
growth--all the growth--in future Federal budgets is attributable to 
health care--all the growth. It is not Pell grants, it is not national 
parks, it is not national defense, it is not the National Security 
Agency; it is all in health care.
  There are several ways we can control those costs. One way which has 
been suggested is to simply shift those costs off to other people--to 
the States, to the elderly, to other citizens--and say it is not the 
Federal Government's problem; it is someone else's problem. I would 
suggest that is not the answer. We need to be focused on the issue of 
health care costs generally, for everyone--for the Federal Government 
as a consumer, as it is in Medicare and Medicaid, but also for all of 
us as health care consumers across the country.
  The standard response around here to growing health care costs is to 
cut programs, cut recipients, reduce payments to States, or reduce 
payments to providers. That does nothing about the fundamental issue. I 
can tell my colleagues that none of these steps has anything to do with 
reducing the demand for services or the costs of those services. We 
have to spend the money we have more responsibly.
  There have been discussions recently about repealing the medical 
device tax which was passed as part of the Affordable Care Act. The 
theory, by the way, was that the Affordable Care Act would produce, as 
it has, millions of new customers for the private insurance industry as 
well as for all of those who participate in the health care system, 
including those who manufacture medical devices. The Affordable Care 
Act has produced new customers. And the theory, as I understand it, 
because I wasn't here when the bill was originally passed, was the 
industry--the businesses that will profit by the production of new 
customers through new people gaining insurance who never had it 
before--was that part of that would be paid back to support the overall 
system. That was the idea of the tax on medical devices. I realize the 
medical device tax is a controversial tax and that strong arguments can 
be made that it should be modified or reduced. But the repeal of the 
medical device tax would cost the government $29 billion over the next 
10 years. That is money, as we all know, that has to be replaced 
somewhere else. So I think that is a consideration that has to be taken 
into account as we discuss this matter which is under consideration as 
part of the tax extenders package.
  As I looked into this issue and thought about the medical device 
industry, I was surprised to find it is very difficult to find out the 
price of an implantable medical device. One of the reasons is that the 
hospitals, which are the purchasers of these devices, are often 
prevented by agreements with the medical device company from revealing 
the price they pay. In other words, there is no transparency about the 
prices of these devices which find their way into the cost of 
everybody's health care.
  Imagine for a moment going to buy a new car and there is no 
advertising about the prices of the cars. We couldn't go on the 
Internet and determine the prices of the cars. We couldn't compare the 
prices of the cars from one dealer to the other. But we go in and 
somebody behind a closed door says, OK, the price is $20,200, and we 
are not allowed to tell anybody the price we are paying for this car, 
and we have to sign an agreement that we are keeping that price secret. 
Imagine that system, and imagine for a moment what would happen to the 
price of cars. I don't think it is gross speculation to assume that the 
price would go up, because there is no transparency.
  I have filed amendment No. 3802 to H.R. 3474, which is the tax 
extenders bill that is pending. It simply says that when a medical 
device is being sold, the manufacturer cannot impose a secrecy 
provision on the hospitals that purchase these devices, and they also 
have to report median prices to the Secretary of Health and Human 
Services on a regular basis.
  In 2012, the GAO did a report on Medicare and one of the pieces of 
the report was titled ``Lack of Price Transparency May Hamper 
Hospitals' Ability to Be Prudent Purchasers of Implantable Medical 
Devices''--a long title, but the conclusion is contained in the title: 
``may hamper hospitals' ability to be prudent purchasers.'' Well, if 
hospitals can't be prudent purchasers, we who are paying the bills, 
quite often through Medicare and Medicaid, are not able to get the best 
prices. Who pays? All of us pay.
  This amendment would prohibit medical device manufacturers from 
requiring hospitals and buyers to sign purchasing agreements that 
contain confidentiality clauses that would restrict them from revealing 
the prices paid for medical devices to third parties. In addition, as I 
mentioned, the amendment would require these manufacturers to submit 
the average and median sales prices of covered devices to the Secretary 
of Health and Human Services on a quarterly basis.
  In 2007, my good friend Senator Grassley from Iowa sponsored a 
bipartisan bill to create a process of reporting this kind of price 
data to HHS, and I believe it is time to do just that.
  To the extent that prices of implantable medical devices, which are 
very expensive generally, are not disclosed, the ability of hospitals 
to bring price information to bear in negotiations and decisions is 
clearly limited. I believe if we are going to talk about repealing a 
medical device tax, we should also talk about calling upon the industry 
to provide to consumers and policymakers greater transparency in order 
to better control costs.
  In a world of limited resources, we have to spend the money we have 
most wisely. It is very difficult to spend money wisely if prices and 
comparative prices and prices of the various components of the health 
care system are essentially kept secret.
  This is a simple amendment. It is simply based upon the fundamental 
idea that markets work, but they only work when consumers--in this 
case, hospitals--have the information necessary to make good purchasing 
decisions. I think markets, as I said at the beginning, are the best 
way to allocate goods and services, but that information is necessary 
for markets to work, and that is the purpose of this amendment.
  Mr. President, I ask unanimous consent that all time between now and 
12 noon during quorum calls be equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KING. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CASEY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.