[Congressional Record (Bound Edition), Volume 145 (1999), Part 9]
[Extensions of Remarks]
[Page 12735]
[From the U.S. Government Publishing Office, www.gpo.gov]



INTRODUCTION OF ``MEDICARE HOSPITAL CAPITAL EFFICIENCY PROMOTION ACT OF 
        1999,'' 11TH IN A SERIES OF MEDICARE MODERNIZATION BILLS

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Monday, June 14, 1999

  Mr. STARK. Mr. Speaker, I am today introducing the 11th in a series 
of bills to modernize Medicare, obtain long-term savings, and make the 
program more efficient, without forcing beneficiaries to make radical 
changes.
  The bill would give Medicare authority to reduce capital payments 25% 
to hospitals in areas where we have more than an average number of beds 
and the occupancy rate is below the national average. Exceptions would 
be made if capital payments to these hospitals were used to merge or 
downsize or if the Secretary determined that special circumstances 
required a capital expansion.
  Mr. speaker, a major force making American health care the most 
expensive in the world is that we have way, way too many hospital beds. 
In California, occupancy has been below 50% for years. Throughout the 
nation, many hospitals are at 20 to 30% occupied. No one would run a 
modern factory at these occupancy rates-and certainly no banker would 
willy-nilly put more capital into such an industry. Yet the taxpayer 
consistently makes billions of dollars a year in automatic payments for 
capital to the nation's hospitals.
  Dr. John Weinberg of Dartmouth has just published the third in what 
is called The Dartmouth Atlas. He provides overwhelming documentation 
that in health, it is not so much demand, as supply that is driving the 
cost of the health care system. In other words, ``build it, and they 
shall come.'' Build a hospital, and doctors will find a way to use it. 
The more hospital beds available in a community, the more likely you 
will die in a hospital instead of at home, in a hospice, or in a 
nursing home. Yet we know that the public does not prefer a high-tech, 
prolonged death. At the moment of death, most people would like to be a 
familiar setting surrounded by family-not hooked up to a half dozen 
tubes in a hospital ICU.
  Capital payments also are used to proliferate fancy new services-
rather than asking that expensive services (such as transplant or open 
heart surgeries) be concentrated at hospitals which do a large volume 
of operations and which have better outcomes. The data is overwhelming 
that the more operations a hospital does, the less likely they are to 
kill you. In other words, practice makes perfect, or at least very 
good. Yet in California, for example, we have about 130 hospitals doing 
open heart surgeries. Setting up an open heart program costs, I am 
told, about $10 million. Yet some of these heart centers only do 3 or 5 
operations a month! They may be good for a local hospital's prestige, 
but they are almost a prime facie malpractice waiting for a jury. 
Medicare and taxpayers, again, should not be paying for this 
proliferation of local prestige: we are killing people through bad 
outcomes when we allow every Tom, Dick, and Harry hospital to do 
sophisticated operations.
  My bill is a simple proposal: where we have to many beds and they are 
going unoccupied, the taxpayer can save 25% in reduced hospital capital 
payments.

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