[Congressional Record Volume 164, Number 195 (Tuesday, December 11, 2018)]
[Senate]
[Pages S7391-S7393]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            Healthcare Costs

  Mr. ALEXANDER. Madam President, I ask unanimous consent to speak for 
up to 30 minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. ALEXANDER. Madam President, today I am asking experts at the 
American Enterprise Institute and Brookings Institute, as well as other 
leading experts, for specific ideas about how Congress and the 
President can work together to reduce the cost of healthcare in the 
United States. Here is why.
  Last July, at the Senate HELP Committee's second in a series of five 
hearings on reducing healthcare costs, Dr. Brent James, a member of the 
National Academy of Medicine, testified that 30 percent--and perhaps as 
much as 50 percent--of all the money spent in this country on 
healthcare is unnecessary. That startled me, and I hope it startles 
you.
  So I asked another witness, Dr. David Lansky from the Pacific 
Business Group on Health, if he agreed with Dr. James' estimate that 50 
percent of all the money spent on healthcare is unnecessary. Dr. Lansky 
said yes.
  Then, in our next hearing on reducing healthcare costs, not one 
witness on our distinguished panel disagreed with Dr. James. That means 
we are spending as much as half of all we spend on healthcare on 
unnecessary treatment, tests, and administrative costs.
  As a country, we spend a huge amount on healthcare--$3.5 trillion in 
2017, according to the Centers for Medicare and Medicaid Services. When 
we use Dr. James' estimates, that means we spent roughly $1 to $1.8 
trillion on unnecessary healthcare in 2017. That is more money than the 
gross domestic product of every country in the world except nine. That 
is three times as much as the Federal Government spends on all of our 
national defense, 60 times as much as it spends on Pell grants for 
college students, and about 550 times as much as the Federal Government 
spends on national parks.
  For the last 8 years, most of the debate about healthcare has not 
been about this extraordinary fact that we may be spending up to half 
of what we spend on healthcare unnecessarily. Instead, we have been 
arguing about health insurance. In fact, really, we have been arguing 
about 6 percent of the health insurance market--the individual 
insurance market.
  The truth is, we will never have lower cost health insurance until we 
have lower cost healthcare. Instead of continuing to argue over a small 
percentage of the insurance market, what we should be discussing is the 
high cost of healthcare that affects virtually every American.
  Here is something we ought to be able to agree on. We are spending 
too much on healthcare, and too much of what we spend is unnecessary. 
The five hearings we held reminded us of something else we should be 
able to agree on. One major reason for the unnecessarily high cost of 
healthcare is that the healthcare system does not operate with the 
discipline and cost saving benefits of a real market.
  Too many barriers to innovation drive up costs, and most Americans 
have no earthly idea of the true price of healthcare services they buy, 
which also drives up costs. Let me repeat that. One major reason for 
the unnecessarily high cost of healthcare is, the healthcare system 
does not operate with the discipline and the cost-saving benefits of a 
real market.
  Too many barriers to innovation drive up costs, and most Americans 
have no earthly idea of the price of the healthcare services they buy, 
so that also drives up costs. As a country--American families, American 
Federal and State governments, and private companies--we spent $3.5 
trillion on healthcare in 2017, according to CMS, almost as much as we 
spent on the entire Federal Government in 2017, according to the 
Congressional Budget Office.
  High healthcare costs impact everyone; first, the taxpayer because 
the Federal Government spends about one-third of all Federal dollars on 
healthcare. According to the Congressional Budget Office, of the $3.98 
trillion the government spent in 2017, $1.1 trillion of that was 
mandatory spending for Medicare, Medicaid, and other healthcare 
programs.
  This Federal Government runaway spending is the principal cause of 
the national debt. The principal cause of the national debt is not 
national defense, national parks, and the National Institutes of 
Health. The principle cause of the national debt is the runaway 
government spending on healthcare, which is squeezing the budget for 
national parks, national defense, and basic biomedical research.
  Healthcare costs also impact States, all of which have to balance 
their budgets. When I was Governor of Tennessee a few years ago, 
Medicaid was about 8 percent of our State budget. That was in the 
1980s. Today, it is 30 percent of Tennessee's State budget. That means 
States have less to spend on fixing roads, educating children, and 
helping adults and high school graduates get better job skills.
  Second, healthcare spending adds to the cost of doing business in the 
United States. Warren Buffett has called the ballooning cost of 
healthcare ``a hungry tapeworm on the American economy.''
  Third and most important, the rising cost of healthcare is squeezing 
the budgets of American families. According to the Gallup poll, 80 
percent of registered voters before this midterm election rated 
healthcare as ``extremely'' or ``very important'' to their vote--a 
higher percentage than every other issue polled, including the economy, 
immigration, and taxes.
  I imagine every Senator has heard stories from their constituents 
about struggling to stretch paychecks to afford prescriptions or to 
cover a surprise medical bill.
  Any one of us who has received a medical bill in the mail has 
wondered, what am I actually paying for?
  Here is a story I heard recently. Todd is a Knoxville father who 
recently took his son to the emergency room after a bicycle accident. 
His son was treated. Todd paid a $150 copay because the emergency room 
was ``in network'' for his health insurance, and they headed home. So 
Todd was surprised when he received a bill in the mail for $1,800 
because, even though the emergency room was in network, the doctor who 
treated his son was not.
  Todd wrote his Senator--me--trying to figure out why it is so hard to 
understand what healthcare prices really are. ``If I am expected to be 
a conscientious consumer of my own healthcare needs,'' he wrote, ``I 
need a little more help.''
  The issue of surprise billing is a widely recognized problem. It was 
highlighted in a report from the White House on healthcare costs just 
this last Monday.
  We want Americans like Todd and his son to be able to access quality 
care they can afford. So earlier this year, our Senate committee set 
out, in a bipartisan way, to see what we could find out about lowering 
healthcare costs. We held five hearings over 6 months.
  In June, at our first hearing, we set out to better understand how 
much healthcare actually costs in the United

[[Page S7392]]

States to see if we could get some agreement on the numbers.
  At our second hearing in July, we heard from Dr. James, who told us 
that up to half of what we spend on healthcare is unnecessary.
  At our third hearing later in July, we looked at administrative tasks 
imposed by the Federal Government and how those burdens lead to doctors 
spending more time on paperwork, less time on treating patients, and 
all of this also increases costs.
  In September, we looked at why, when you check reviews and prices 
before buying everything from a coffeemaker to a car, the cost or the 
price of your healthcare has remained hidden in a black box.
  This is something even the Federal Government's top healthcare 
official knows personally. Health and Human Services Secretary Alex 
Azar recently told a story of how his doctor ordered him to have a 
routine echo cardio stress test. He was sent down the street and 
admitted to the hospital, where, after a considerable effort on his 
part, he learned the test would cost him $3,500. After using a website 
that compiled typical prices for medical care, Secretary Azar learned 
the same test would have cost just $550 in a doctor's office. Secretary 
Azar said consumers are so in the dark, they often feel ``powerless.''
  In an age where you can compare different prices and check a dozen 
reviews when you are buying a barbecue grill, you should be able to 
more easily understand what you are paying for healthcare.
  Last month, at our fifth hearing, we heard about steps the private 
sector is taking to disrupt the healthcare system and what kinds of 
Federal barriers are preventing private companies from lowering costs. 
As we held our five hearings, two conclusions became clear.
  The first is that we spend more on healthcare than does any other 
country, but we don't spend it well.
  Again, Dr. James told us that 30 percent--maybe as much as 50 
percent--of all of the money we spend on healthcare is unnecessary. 
That is really astonishing. It echoes what Dr. Ashish Jha said, who was 
a witness from our first hearing and is the Director of the Harvard 
Global Health Institute. He said this:

       The popular belief has been that the reason we spend so 
     much more on healthcare than other countries is that we just 
     use too much healthcare. Well, it turns out when you look at 
     the data . . . we are not using more healthcare. Why is it we 
     are spending twice as much? There are two reasons. One is 
     administrative complexity, [and second], every time we use 
     healthcare in America, we pay a lot more than any other 
     country in the world.''

  That was Dr. Ashish from the Harvard Global Health Institute.
  Second, while it would be convenient to have a moonshot to reduce 
healthcare costs, this will require people other than the Federal 
Government.
  First, as the largest purchasers of health insurance, employers are 
really leading the way in the effort to reduce costs. For example, 
let's take International Paper, which is based in Memphis. It uses a 
service called Best Doctors. Employees can use it for second opinions 
on healthcare. Best Doctors reviews an employee's records, and then it 
either reaffirms the treatment that has been recommended by a doctor or 
it recommends a different course, such as physical therapy. The use of 
this voluntary program saved International Paper over $500,000 in 2017 
by preventing unnecessary treatments.
  Another way employers reduce healthcare costs is through wellness 
programs, which encourage employees to lead healthier lives. There is 
probably no greater consensus in healthcare than that wellness--
lifestyle changes, such as eating healthier and stopping smoking--can 
prevent serious illness and reduce healthcare costs. It is hard to 
think of a better way to make a bigger impact on the health of millions 
of Americans than to connect the consensus about wellness and reducing 
health costs to the health insurance that 181 million people get on the 
job. About 60 percent of insured Americans get our health insurance on 
the job.
  Second, States are taking an active role in the cost of healthcare.
  In 2017, the State of Maine required health insurers to split the 
savings with a patient if the patient shops around and chooses a doctor 
who costs less than the average price the insurer pays. In Oregon, the 
State compiles data on insured residents and uses this information to 
run a tool that allows patients to compare the costs of procedures at 
different hospitals.
  Third, private companies are creating innovative tools to reduce 
healthcare costs. For example, Healthcare Bluebook, a Nashville company 
and a witness at one of our hearings, provides a tool that helps 
patients find the best prices for the highest quality care in their 
areas by using their employer-sponsored insurance, which, as I said, 60 
percent of insured Americans have. This is useful in lowering costs 
because, for example, the amount a patient pays for cataract surgery in 
Memphis can range from as little as $2,000 to more than $8,000.
  Fourth, hospitals, doctors, and other healthcare providers have the 
potential to make a large impact on the cost of healthcare.
  On a smaller scale, one of our witnesses, Dr. Gross from Florida, 
runs a practice under what is called the direct primary care model. Dr. 
Gross charges a flat membership rate of $60, in cash, per patient for 
adults under the age of 65, $25 for one child, and $10 for each 
additional child. His practice does not bill anything to an insurance 
company for direct primary care members--not to ObamaCare, not to 
Medicaid, not to Medicare. In return for this membership fee, members 
receive an annual wellness exam, 25 office visits per year, including 
same-day appointments, and some in-office testing and chronic disease 
management without having to pay anything additional out of pocket. 
This gives patients access to a defined level of healthcare at a 
predictable price, which ranges from about $1,000 to $1,200 a year.
  On a larger scale, HCA Healthcare, which also testified--it has 178 
hospitals and 119 freestanding surgery centers that are located in the 
United States and the United Kingdom--is implementing new techniques to 
reduce the spread of MRSA, which is a drug-resistant bacterial 
infection that occurs in intensive care units.
  These new techniques have reduced cases of MRSA by 37 percent in HCA 
facilities and have been so effective that the World Health 
Organization and the Centers for Disease Control and Prevention have 
added them to best practices. According to HCA, this reduction in MRSA 
infections saves $170,000 for every 1,000 patients. These savings are 
shared among the hospitals, insurers, and patients.

  Finally, information needs to be easily available so that patients, 
consumers, can find out the prices of their care and take an active 
role in choosing their healthcare and in planning for medical expenses 
whenever they can.
  There is also a role for the Federal Government to play. The Federal 
Government spent, as I said earlier, $1.1 trillion on Medicare, 
Medicaid, and other healthcare programs in 2017. About one-third of all 
healthcare spending in America is by the Federal Government, so how we 
spend those Federal dollars will obviously make a big difference to the 
healthcare system. There may also be things Washington can do or is 
doing to increase healthcare costs or to prevent private companies from 
taking steps to lower those healthcare costs.
  I want to find out what concrete, specific steps the Federal 
Government can take to reduce unnecessary healthcare spending or to at 
least stop making the problem worse. For example, after our committee 
heard about gag clauses, which prohibit pharmacists from telling 
patients their prescriptions would be cheaper if they paid in cash 
instead of through their insurance, Congress was able to act and ban 
those gag clauses earlier this year. In August, the CMS began to 
require hospitals to post online the amounts they charge for services 
and to keep that information up to date. These are the types of 
specific recommendations I am looking for.
  In working with experts, I have had some success in asking them for 
recommendations in priority order and then turning those 
recommendations into legislation.
  In 2005, I was a member of the Budget Committee, and I had become 
concerned about the rapid increase in the

[[Page S7393]]

Federal debt and how it was squeezing out some of the essential 
programs that make our country competitive. So I stopped by a meeting 
of the National Academy of Sciences on American competitiveness, and I 
said to them: Most ideas fail in Washington, DC, for there being the 
lack of an idea. If you, the academy, will give Congress 10 specific 
ideas in priority order to improve American competitiveness, I believe 
Congress will enact those ideas.''
  The academy immediately got busy and recruited Norm Augustine and 
then put together a task force of American leaders, called the 
Committee on Prospering in the Global Economy of the 21st Century. 
Under Norm's leadership, they produced a National Academies report 
entitled ``Rising Above the Gathering Storm.'' They came up with 20 
ideas, not just 10, and they were specific, such as doubling the 
funding for basic science research and creating an energy agency to be 
modeled after the Department of Defense's highly successful DARPA 
agency, which would invest in the high-potential, high-impact energy 
technologies--what we now call ARPA-E.
  Congress used most of those ideas and put together a bill that we 
called America COMPETES. We passed it in 2007 and reauthorized it in 
2010. It was introduced by the majority and minority leaders and had a 
large number of Republican and Democratic sponsors.
  That is an example of what can happen when experts give us specific 
recommendations toward an important public goal and give them to us in 
a way that we can actually implement them.
  That is what I am looking for in the letter that I am sending to 
experts today at the American Enterprise Institute and at the Brookings 
Institution--specific recommendations, preferably in priority order, 
about what Congress and the President can do to reduce the staggering 
healthcare costs, which is a problem in America. Our witnesses from the 
National Academy of Sciences and all across the board tell us that 
nearly half of everything we spend on healthcare is unnecessary.
  I also want input from other leading policy experts, including 
economists, doctors, nurses, patients, hospital administrators, State 
regulators, legislators, governors, employers, insurers, and healthcare 
innovators. I am asking, in writing, for as many specific legislative, 
regulatory, or sub-regulatory solutions as possible by March 1, 2019.
  I am especially interested in policies that bring to the healthcare 
system the discipline and lower cost benefits of a real, functioning 
market. One way to do that is to remove the barriers that discourage 
innovators from coming up with new ways to reduce healthcare costs. A 
second way is to make it easier for the consumers of healthcare to know 
the true price of what they are buying.
  I welcome suggestions of how those policy ideas could be 
implemented--what law to amend, what regulation to change--and any 
potential downsides to the policy recommendations. I will share the 
recommendations with Senator Patty Murray, who is the ranking 
Democratic member of the Senate's HELP Committee, and with all of the 
members of our committee. I will share the recommendations with Senator 
Grassley and Senator Wyden, who are expected to be the chairman and 
ranking member of the Finance Committee. Our HELP Committee and the 
Finance Committee have shared jurisdiction over healthcare costs. It 
sometimes gets in the way of solutions, but there is no reason it 
should. We should all be able to work together in a bipartisan way to 
address this startling phenomenon that the experts tell us is true, 
which is that we are spending nearly half the money--wasting it 
unnecessarily on healthcare. Now we need the experts to tell us exactly 
what to do about it.
  The Federal Government is not going to lower the cost of healthcare 
overnight, but I believe there are steps we can take to make a real 
difference to American families. It might be two or three big steps, or 
it might be a dozen smaller steps, but we shouldn't let this 
opportunity to make progress pass us by.
  I ask unanimous consent that the letter I have written and am mailing 
today to experts at the American Enterprise Institute and the Brookings 
Institution, as well as to other leading healthcare experts, be printed 
in the Record following my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                December 11, 2018.
     James C. Capretta,
     Resident Fellow and Milton Friedman Chair, American 
         Enterprise Institute, Washington, DC.
     Paul B. Ginsburg, Ph.D.,
     Director, Center for Health Policy, Brookings, Washington, 
         DC.
       Dear Mr. Capretta and Dr. Ginsburg: I am writing to ask for 
     your specific recommendations to help address America's 
     rising health care costs. The Senate Committee on Health, 
     Education, Labor and Pensions (HELP) I chair has held five 
     hearings on the cost of health care and heard from Americans 
     from across the country--from Alaska to Tennessee--that 
     health care costs are a growing burden on taxpayers, 
     employers, and family budgets.
       At a hearing in July, we heard a startling estimate from 
     our witness, Dr. Brent James, a member of the National 
     Academy of Medicine, who said that 30 percent, and probably 
     over 50 percent, of all health care spending in America is 
     unnecessary. That means that American taxpayers, patients, 
     and businesses are wasting as much as $1.8 trillion a year. A 
     number of witnesses corroborated Dr. James' estimate, 
     pointing to causes such as excessive and duplicative federal 
     reporting requirements on doctors and hospitals and a lack of 
     accessible information on health care costs and quality.
       I am sending this request to additional experts including 
     economists, doctors, nurses, patients, hospital 
     administrators, state lawmakers, governors, employers, 
     insurers, and health care innovators, on what steps the next 
     Congress should take to address America's rising health care 
     costs as well as any steps we can recommend that the Trump 
     Administration or state governments should take.
       For the last eight years, Republicans and Democrats have 
     been locked in a stalemate over the cost of insurance in the 
     individual health insurance market, where six percent of all 
     Americans with health care purchase their insurance. This is 
     an important part of the discussion, but it puts the 
     spotlight in the wrong place. The hard truth is that we will 
     never get the cost of health insurance down until we get the 
     cost of health care down.
       This is why the HELP Committee has been holding hearings on 
     how to reduce administrative burdens; how to reduce what we 
     spend on unnecessary health care tests, services, procedures, 
     and prescription drugs; how to reduce the prices of health 
     care goods and services; how to make available more 
     information on the cost and quality of care; and how the 
     private and public sectors have been able to lower health 
     care costs.
       I am especially interested in trying to bring to the health 
     care system the discipline and cost saving benefits of a real 
     market. Too many barriers to innovation drive up costs. And 
     most Americans have no idea of the true price of the health 
     care services they buy--which also drives up costs.
       I request that you provide written responses to the below 
     questions by email to LowerHealthCareC[email protected] by 
     March 1, 2019:
       1. What specific steps can Congress take to lower health 
     care costs, incentivize care that improves the health and 
     outcomes of patients, and increase the ability for patients 
     to access information about their care to make informed 
     decisions?
       2. What does Congress or the administration need to do to 
     implement those steps? Operationally, how would these 
     recommendations work?
       3. Once implemented, what are the potential shortcomings of 
     those steps, and why are they worthy of consideration despite 
     the shortcomings?
       Thank you for your consideration and attention to this 
     request.
           Sincerely,
                                                  Lamar Alexander,
                                                         Chairman.

  Mr. ALEXANDER. I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mrs. CAPITO. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.