[Congressional Record (Bound Edition), Volume 153 (2007), Part 10]
[House]
[Pages 13538-13545]
[From the U.S. 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.
  Mr. BURGESS. Mr. Speaker, I am coming to the floor tonight, like I 
have so often in recent weeks, to talk a little bit about health care 
in our country. The delivery of health care services is one of the 
things that may not be the first thing that registers in any poll 
that's taken in this country, but it's sure third or fourth, and it 
appears in every poll that is taken in this country.
  We are, indeed, on the threshold of what might be called a 
transformational time as far as how health care services are delivered 
in this country. Certainly, over the remaining 18 months of the 110th 
Congress, we are going to have several different issues before us, 
several different times, where we will be able to talk about and debate 
various aspects of our health care system.
  Of course, just of necessity, as a big part of the Presidential 
election that will occur in the 18 months time, we will deal with the 
issues surrounding health care and the delivery of health care services 
in this country. We will be deciding, what road do we want to go if we 
have a system in our country now where about half is delivered, half of 
every health care dollar that is spent originates here in the U.S. 
Congress, and the other half comes from the private sector, 
uncompensated care and so-called charity care.
  What do we want to see grow? What do we want to see encouraged? What 
do we want to see improved? Do we want to grow the public sector or do 
we want to grow the private sector?
  Certainly expanding the government sector and its involvement in 
delivery of services, terms you will hear talked about on the floor of 
this House, things like universal health care, health care for all--in 
the early 1990s, we called it ``Hillary care''--or do we want to 
encourage the private sector?
  Do we want to encourage the private sector to stay involved in the 
delivery of health care services in this country, to be sure, to be 
certain, whether it's public or private, that the dollars that are 
spent are spent wisely to expand the coverage that's generally 
available for our citizens of this country. But these two options, and 
all of the questions and concerns that surround them, this is what we 
are going to have to decide in this House, certainly within the 18 
months that remain in the 110th Congress, or very quickly after we 
enter into the 111th Congress.
  I am hopeful that by visiting with you on some of these things 
tonight, providing some explanations and some insights into the 
directions that we might go, or we could consider going, and at its 
heart, at its core, I think we need to bear in mind that for all of the 
criticisms that are out there, and we have heard several of them here 
in the last hour, but for all the criticisms out there about this 
country and, in particular, its health care system, we do have a health 
care system that is indeed the envy of the world.
  We have people from all over the world who come to the various 
medical centers over the United States to receive their care there. I 
believe, my position is, that we want to be certain that we maintain 
the excellence in the health care system that we have today, improve 
those parts that need improving, but don't sacrifice the excellence 
that exists in many areas of our country.
  Some people are going to say, well, that's an overstatement that the 
United States health care system is a good one. They will look at, cite 
the numbers of the uninsured, they will start to cite the high cost of 
prescription drugs. There is no question that these are tough issues 
that this House is going to have to tackle.
  Face it, you can pretty much manipulate statistics and numbers any 
way that you want to. The old adage is that there are lies, there are 
darn lies, and there are statistics. We have to be careful about how we 
ask the question and how we frame the question. We have to also be 
careful that we don't frame the question just so we get the answer that 
we want, and that we don't effect any improvement for the American 
people.
  But let's talk a little bit about the history, about the background 
of how we got the system that we have today, how we got where we are 
today.
  So, actually, if we go back and look at our country during the time 
of World War II, President Roosevelt felt that he had to do something 
to prevent wartime inflation from simply overtaking the economy. In an 
effort to do that, he put in place wage and price controls and told 
employers that, well, employees' wages would be frozen at certain 
amounts.
  Well, employers were having a tough time keeping employees anyway. 
Many people were off fighting the war or were otherwise involved in the 
war effort. So employees that were here in this country and available 
were at a premium. So the employer wanted to do something to ensure 
that he kept his workforce on the job. And one of the things that they 
thought about doing was, what if we offer a health care benefit? Is 
that something that we can do that we will still not violate the spirit 
of the wage controls that President Roosevelt has imposed?
  Indeed, they got a Supreme Court ruling on this subject, and the 
Supreme Court said that, no, health care benefits would be outside the 
scope of the wage and price controls. Health care benefits are 
something that you can make available to your employees, and in fact, 
you can make those available to employees, and neither the employee nor 
the employer will be taxed on those dollars that are so spent.
  We came out of the Second World War, of course, victorious; at the 
same time, we had an economy that was just beginning the postwar boom. 
That economy that was so robust after the war led to the creation of 
more jobs, more employment. Indeed, the health care benefit was a 
benefit that was attractive; it was one that people liked. Indeed, it 
was one that stuck around and persevered and grew over time.
  But we were also right at the beginning of a lot of pent-up demand as 
far as people starting their families, and we saw families start to 
have children. Boy, did they have children. This was the initiation of 
the so-called baby-boom generation.
  The United States, like many other allies coming out of the Second 
World War, the United States was really in a unique position, both 
economically, and from the standpoint that the war was not fought in 
our backyard, in contrast to Western Europe, we actually were in pretty 
good shape coming out of the Second World War.
  Contrast that to Western Europe, and even Great Britain, ostensibly a 
victor in the Great War, but at the same time, their economy was in 
much tougher shape; and when you get onto the continent of Europe, 
indeed, a good deal more difficulty with the economic recovery in the 
time immediately following the Second World War.
  So a single-payer health care system of necessity was a requirement 
that

[[Page 13539]]

the government needed to stand up and stand up in a hurry in order to 
prevent a significant humanitarian crisis that might otherwise have 
existed. In order to uphold the health care of their citizens, these 
governments were required to set up systems in a fairly short period of 
time.
  Fast forward 20 years from 1945 to 1965, and we have the initiation 
of Medicare, and, shortly thereafter, of the program now known as 
Medicaid. These programs were signed into law by another Texas 
President; agreeably, of note, he was from across the aisle, but 
another Texas President signed these programs into law.
  Today, these large government-run programs are focused. Initially 
they were created to focus on hospital care for the elderly and basic 
health care services for individuals who are less well off. Now, 
decades later--1965, when the Medicare program was started--decades 
later it was evident that the government-run program was slow to 
change, in need of reform, and it operated at an expense that was just 
unthought of at the time of the inception of the program. The expense 
of running Medicare was truly extraordinary.

                              {time}  1915

  By 2003, Congress certainly recognized the outdated model, and was 
called upon by the President here in this Chamber. President Bush in 
the first State of the Union Address that I attended as a Member of 
Congress stood in this House and said: The problem of providing a 
prescription drug benefit to our seniors is too important to wait for 
another Congress; it is too important to wait for another President; 
and it is work we are going to take up this year with this Congress, 
and we are going to get this done.
  Indeed, the President was correct, and that happened. By the end of 
2003, the Medicare Modernization Act, that did provide for a 
prescription drug benefit we now know as the part D section of 
Medicare, was signed into law, and 2 years later it began to deliver on 
that promise and deliver prescription benefits to senior citizens who 
previously had not had access to a prescription drug program.
  But it was clear that the government system needed to catch up to 
what by comparison was a relatively robust private system that was 
already doing the things required, focusing on things like disease 
management and disease prevention.
  The good work done by the people at the National Institutes of Health 
over the previous 40 years had certainly set the stage for what we now 
recognize as a virtual explosion in preventive care. The premature 
cardiac deaths prevented by research done and delivered by the National 
Institutes of Health, probably somewhere between 800,000 and 1 million 
lives from the mid-1960s to the present time, over that 40-year 
interval, probably 1 million lives that have been saved or 1 million 
premature deaths that have been prevented by advances in treatment and 
prevention of heart disease, which in 1965 was certainly a more serious 
illness or affected a good number of people. And the problem was that 
oftentimes the first symptom of cardiac disease in 1965 was sudden 
death.
  We no longer think in terms of cardiac disease as extracting that 
type of toll from our citizens, and that is largely because of the 
benefits that are there, benefits provided by the medicines like the 
statins that lower cholesterol, that are able to prevent and postpone 
the serious aspects of cardiac disease.
  So Congress passed the Medicare prescription drug plan that gives 
seniors coverage for medication. The program has been successful, 
providing greater benefits for seniors. It did not come without 
considerable discussion and considerable argument back and forth. But 
with a massive push by the Department of Health and Human Services, the 
success of the Medicare prescription drug program now, I think, is 
clearly evident. But, at the same time, the private sector also 
continued to improve and expand, and it kind of brings us to the 
crossroads where we find ourselves today.
  Again, at the present time the government pays for about half of all 
health care administered in this country. The current gross domestic 
product is roughly $11 trillion, and the Department of Health and Human 
Services, with its Medicare and Medicaid services alone, costs this 
country each year upwards of $600 billion. Add to that the expense for 
the VA, Indian Health Service, Federal Prison Service, and clearly you 
can see that we are getting quickly to that number which represents 50 
percent out of every health care dollar that is spent in this country 
originating in this Congress.
  Again, the other half is broken down, with the primary weight being 
carried by private industry, commercial insurance. There is also some 
charitable and some self-pay accounting for the balance of that number.
  As the numbers increase for just the overall expense of health care, 
and the Federal Government continues to have to put more and more of 
the American taxpayers' dollars into health care, we have got to ask 
ourselves, are we using the taxpayer dollar wisely? Is the government 
providing excellence as far as managing money when it spends dollars 
for health care? Is the government better suited to make decisions 
about health care than families? Who is better suited to handle the 
growing health care requirements in this country?
  Now, a government-only universal health care system tends to be more 
inflexible. In America, my concern is that it will hamper our 
innovation and delivery of some of the most modern health care services 
available anywhere in the world.
  Two specific examples that a private-based system is more flexible 
and less expensive. Look at what goes on to our northern neighbor in 
Canada, a government-run system that took over health care shortly 
after the Second World War. It is a universal system, and the Canadians 
are very proud of their system, and rightly so. But there are some 
trade-offs, and one of the trade-offs is there can be a wait for health 
care services. In fact, the Canadian Supreme Court ruled in 2005 that 
access to a waiting list was not the same thing as access to care, and 
that in some instances the waiting list was, in fact, health care 
denied to Canadian citizens. And the Supreme Court required that the 
Canadian system remedy that.
  But in Canada, if you find yourself with a diagnosis and a treatment, 
but a long time between that diagnosis and treatment, people who have 
the cash can certainly travel across the border to the south into the 
United States and find that they can have whatever it is they have been 
placed on a waiting list that seems interminable; whether it be a 
cardiac catheterization, a CAT scan, an MRI, they find they get it much 
more quickly than if they simply waited it out in Canada.
  So, we have to ask ourselves, is our health or the health of someone 
in our family something with which we are willing to gamble that that 
length of time, that that delay won't cause problems, won't increase 
the morbidity for that particular disease process, won't lead to a 
lower expectation of a cure or salvage with whatever that particular 
diagnosis is?
  The British Isles, where they have a similar type of system, they 
have a National Health Service. Again, very famous. Britons love the 
system. But, in fact, they also have a private system that coexists 
within their country. And if the National Health Service is not able to 
get to someone in a timely manner, and if that patient or their family 
has the funds available to expend, then indeed they can be seen in the 
private system. And for patients who are concerned that they might not 
survive their wait, or they are living with significant disability, 
this is a choice that they are willing to make.
  But the reality is, again, our population is getting older and older, 
and if you ask someone who is in their sixth decade, seventh decade, 
eighth decade of life to wait for 4 months, 6 months, 8 months, 12 
months or longer for a procedure or a diagnostic test, we, in fact, are 
consuming a significant amount of the available time they have left, 
and this, in fact, is not a fair allocation of health services.
  So my premise would be that the private sector, with all of its 
difficulties,

[[Page 13540]]

with all of its faults, is more nimble and is a more suitable and 
stable arena from which we can build our health care system in the 
future.
  This is a complex relationship; and how Congress instructs the 
medical care in this country be done is largely going to determine if 
we have the best health care system possible. Certainly, it is 
incumbent upon Congress to promote policies that help the public sector 
maintain efficiency and become efficient in areas where it is not 
efficient, and, at the same time, allow the private sector to lead the 
way with innovation and development of new therapies, new techniques, 
and new ways of tackling old problems.
  Now, one of the things that immediately comes to mind any time you 
have a discussion about health care is the issue with the uninsured. 
The uninsured population in this country is estimated by the United 
States Census Bureau to be somewhere around 46 million people. Now, 
within that group, I would argue that access to health care is not 
frequently the issue; it is the coverage that is the issue, because 
there always exists an emergency room someplace where care can be 
delivered urgently. But we all know the problem there is you don't 
always get your best result if you put off the treatment or the 
diagnosis until such time as it just no longer will allow itself to be 
put off, and we can increase the cost of health care by delivering 
health care under that model. But I would stress that in this country, 
it is not lack of access to health care, because those access points do 
exist, but it is lack of access to coverage that drives a lot of this 
debate.
  Now, some of the things that have happened, and two examples that we 
should talk about, and, in fact, they are issues that we are going to 
need to take up within this Congress, because both programs require 
reauthorization, are the State Children's Health Insurance Program, or 
the SCHIP program, and Federally Qualified Health Centers.
  Now, currently the children's health insurance operates as a joint 
Federal-State partnership. It certainly provides some flexibility for 
States to determine the standards of providing health care and funding 
for those children who are not eligible for Medicaid, but whose parents 
truly cannot afford health insurance. The program has been successful, 
and it has been successful across the board.
  As we look to reauthorize the program this year, I think one of the 
things we can do and should do is clarify the fact that it is 
children's health insurance. While the intent of the legislation is 
clear, some States have opted to spend their funds on individuals other 
than children or pregnant adults. In an effort to correct this process, 
I introduced H.R. 1013, making certain that the SCHIP funds are spent 
exclusively on children and pregnant women, not on other groups. We 
don't cover every child who should be covered under the SCHIP program; 
and, until we do, it only makes sense that we restrict the funding, 
again, for children and for pregnant women, who are obviously going to 
be having a child in the near future, so that child can be covered 
during the prenatal period. But to take those dollars that should be 
spent covering children when not every child is covered in this country 
and spend that covering nonpregnant adults seems to undo the intent of 
the legislation.
  Now, if our intent is to provide other coverage for other 
individuals, let's have that debate, let's have that discussion, let's 
have that vote. But let's keep those dollars that are designated to 
provide health care for children providing health care for children.
  But SCHIP is an example where children and pregnant women can receive 
additional medical coverage which otherwise would not be available to 
them through the Medicaid program. And, certainly, there are some 
people who are now covered by SCHIP who previously would have fallen 
into the broad category as the uninsured.
  Other ways of coverage for those individuals who are not children, 
who are not pregnant, there is access to care. If a Federally Qualified 
Health Center is available in the area, certainly health care can be 
gained through an FQHC. The patient has access to health care without 
insurance. In fact, 15 million of that number of the uninsured can 
access their health care through a Federally Qualified Health Center. A 
medical home, continuity of care, see the same doctor every time, in 
some instances have dental and other coverage, have some coverage for 
prescription drugs. This is real care available to real people, and it 
is care that should not be discounted, because it is available to all 
persons in the community regardless of ability to pay, and it is a 
program that has been up and running for 35 years. It is a program that 
is providing care today.
  Both SCHIP and the Federally Qualified Health Center program were 
designed to help the poorest, the youngest, and those underserved in 
our communities. What about individuals that can afford to pay some of 
their health care services? Two programs that would assist individuals 
and their companies in receiving health care coverage, health savings 
accounts and association health plans.
  Health savings accounts, previously known as medical savings 
accounts, are a tax-advantaged savings account that is available to 
taxpayers who are enrolled in a high-deductible insurance plan, an 
insurance plan with lower premiums and higher deductibles than a 
traditional health plan. Sometimes that is referred to as a 
catastrophic health plan, but it is with a difference, because you can 
put money away up to an amount that is $5,000 for a married couple. You 
can put money away in a tax-deferred or tax-free savings account. That 
money must be used only to pay for health care services in the future, 
but that money grows over time and can be a significant source of 
health care funds for an individual or a couple as they go through 
life.
  For the health savings accounts, the funds are contributed to the 
account, they are not subject to income tax, and they can only be used 
to pay for qualified medical expenses. But the best part of having a 
health savings account is that all deposits to an HSA become the 
property of the policyholder regardless of the source of the deposit. 
So that means whether it is the individual themselves or their employer 
who deposits that money into the health savings account, the actual 
policyholder is the owner of those dollars designated for health care.

                              {time}  1930

  And patients have a say in how and when they spend their health care 
dollars; any funds deposited but not withdrawn each year carry over to 
the next year. And the popularity of HSAs has grown considerably since 
their inception.
  Now remember, medical savings accounts were started a little over 10 
years ago in the Kennedy-Kassebaum bill that was passed in 1996. With 
the Medicare Modernization Act in 2003, the health savings accounts 
became the follow-on from the medical savings account. These were 
expanded. The number of companies offering insurance greatly expanded, 
a lot of the restrictions were removed, and health savings accounts 
really represent the full measure of what the old medical savings 
account attempted to achieve, but it just simply had too many 
regulations in its way to allow itself to come to fruition.
  But numbers from 2005, by December of 2005, some 3.2 million 
individuals had coverage from a HSA. Of that number, 42 percent of 
those individuals or families had incomes below $50,000 and were 
purchasing health savings account-type insurance. The HSAs are an 
affordable option.
  In addition, the number of previously uninsured HSA plan purchasers 
over the age of 60 nearly doubled, proving that plans are accessible to 
people of all ages. And really, the proof of that, for a young person 
in the mid-1990s, getting out of college, perhaps going to go into 
business for themselves, didn't want to go to work for a big company, 
no longer can be carried on their parents' health insurance, almost 
impossible to buy health insurance coverage at any price. I know, 
because I tried in the mid-1990s to do just that for one of my 
children.

[[Page 13541]]

  Fast forward to the present time. Go on the Internet, your search 
engine of choice, type in health savings accounts, and very quickly, 
with a few clicks, you'll be with a menu that has a number of options 
available as far as health savings accounts are concerned. And a high 
deductible, reputable company, PPO plan in the State of Texas for a 
male, 25 years of age, nonsmoker, these premiums run about $65 a month.
  Yes, you do have a high deductible. Yes, until that high deductible 
is funded with tax-deferred, pretax dollars that are going to go into 
that health savings account to grow over time and provide the offset 
for that high deductible, sure, during the first year or early years of 
having a health savings account, things like preventive care are not 
necessarily going to be covered. Those are expenses that will have to 
be paid for out of pocket because most people, fortunately, will not 
get to the limit of their deductible.
  A young person needs a flu shot. They're probably going to have to 
write a check for that out of personal funds. But over time, that so-
called medical IRA will grow and, again, it grows tax deferred and so 
it can begin to grow quite quickly.
  Albert Einstein one time said the most powerful force for good known 
to man was the miracle of compound interest. That money will grow over 
time. So for a young person especially, starting that type of account, 
again, that that can be very powerful.
  Now, of the 46 million Americans who are uninsured, nearly 60 percent 
of them are employed, and they're employed within a small business. 
Some of these individuals prefer a more traditional health plan than a 
HSA, but their employer, the small business for whom they work, find 
offering a health benefit is either nonexistent or just quite simply 
too expensive for them to provide.
  To take some of the burden off of the small employer who wants to 
provide insurance for their employee, Congress has devised the concept 
of what is known as association health plans. This allows small 
businesses a similar business model, or business plan, to band together 
to get the purchasing power of a much larger corporation in order to 
provide more cost-effective insurance coverage to their employees.
  A group of realtors, for example, or a group of Chambers of Commerce, 
or medical offices or dental offices or insurance offices, these groups 
would be able to form a purchasing unit that would be able to purchase 
health care, again, get the purchasing clout of a much larger group 
than a small office could ever provide by itself.
  This legislation has passed the House of Representatives twice in the 
108th Congress, twice in the 109th Congress. It never could get through 
the Senate, and I believe it is still an important concept and one 
which we need to come together and work on.
  We heard the group before me talking about how important it was to 
have a bipartisan effort on these issues, and I certainly welcome that 
spirit, and would suggest we do need to have a bipartisan effort on 
working out these types of problems for the American people, because 
association health plans might not bring down the number of uninsured 
acutely, right away, but it will certainly help stem the number of 
small employers who are finding it increasingly difficult to provide 
insurance for their employees.
  So it will bend that growth curve of the uninsured that has gone 
inexorably upward. It will bend that growth curve of the uninsured in a 
much more favorable direction.
  But I think we also heard from the President this year when he talked 
in the State of the Union address, he talked a little bit about perhaps 
providing some tax relief to individuals who are self-employed, who 
would purchase insurance but, gosh, I've got to buy it with after-tax 
dollars, and that just adds to the expense. So the President was 
talking about providing some measure of tax relief for individuals who 
wish to have their own insurance policy.
  He also talked about putting a cap on the upper limit of insurance 
benefits that would be able to be offered by a company to an employee 
and come to that employee as an untaxed benefit.
  One of the things in addition to the issues that the President 
brought up and one of the things that I think this Congress should look 
at as perhaps a follow-on or extension to what the President was 
talking about, would be to provide, whether you call it vouchers, 
whether you call it tax credits for people who lack insurance, whether 
you call it premium support, to buy down the cost of the premiums so 
that a person who is employed, but says those health insurance premiums 
are just too expensive for me to afford. If we can help that individual 
pay that premium cost, that keeps the individual off of the Medicaid 
rolls. So it keeps them from being a governmental expense and allows 
them to participate in their employer's insurance plan, which has an 
advantage of keeping the insurance plan that the employer offers a 
viable one because more employees will be participating; and over time, 
perhaps that employer will find that they can indeed reach a stage in 
their employment where they are, in fact, able to carry the cost of the 
premium expense themselves.
  But the concept of premium support not mentioned by the President 
during his State of the Union address, but one which I feel very 
strongly is an issue that should be explored by this Congress, it is a 
concept that we should study, and I think come up with a solution that 
would be a benefit for the American people.
  Well, one of the other things that I do want to talk about in the 
context of all of these things that I've discussed with health care is, 
we've got to be careful we're not putting the cart before the horse. A 
conversation with Alan Greenspan about a year and a half ago, just as 
he was leaving the Federal Reserve Board, the obvious question came up, 
how in the world is Congress ever going to pay for Medicare in the 
future?
  He thought about it. He said, at some point, when the time comes, the 
Congress will do the right thing and figure out a way to pay for 
Medicare. He paused and then said, what concerns me more is, will there 
be anyone left to provide the services that you desire when you get to 
that point? And that is a very valid observation, and certainly one 
that drives a lot of my thinking when I study the issues surrounding 
health care and health care delivery in this country. Because the 
question legitimately can be asked, is our country heading into what 
might be described as a crisis in physician staffing, a crisis brought 
on by a physician shortage in the country?
  And I reference back in my home State of Texas. The Texas Medical 
Association puts out a magazine every month, a periodical every month, 
called Texas Medicine. I stole the cover of their March issue because 
it really says what Mr. Greenspan was telling us that day. The title of 
the lead article in the periodical last March was, Running Out of 
Doctors. And that is a concept that I think this Congress, we need to 
pay some attention to that. And if we don't, I think we put the system 
in this country in greater peril than it needs to be.
  And we need to ensure that the doctors who are in practice today stay 
in practice, that they stay engaged, they stay there providing care to 
their patients. These are doctors who are at the peak of their clinical 
abilities, they're at the peak of their diagnostic abilities. We want 
them to remain active in their practices and providing services and, 
honestly, services to the patient who have, who provide them with their 
most complex medical challenges, our senior citizens.
  So what steps do we need to take to ensure we have an adequate 
physician workforce going forward into the future and ensure that the 
doctors of today stay engaged in the practice of medicine, and that the 
young people of tomorrow come to realize that a career in health care 
is one that is not only viable but one that is going to be rewarding 
for them as well?
  Well, tackling a problem that has plagued the medical community for 
years and years revolves around the issues of medical liability. My 
belief is that we need a commonsense medical

[[Page 13542]]

liability reform to protect patients, to stop the escalation of costs 
associated with lawsuits, and to make health care, to keep health care 
more affordable and thereby more accessible for more Americans, and to 
keep the necessary services in the communities that need them the most.
  My belief is that we do need a national solution. The State-to-State 
solutions that have grown out of necessity do leave vast populations in 
jeopardy, and have the undesirable effect of actually increasing health 
care expenditures in this country all of the time that we leave that 
condition unsolved.
  I like the system that was developed by my home State of Texas that 
placed caps on noneconomic damages in medical liability suits. I think 
it is one that certainly is worthy of study by this body, and perhaps 
worthy of consideration by this body. Texas brought together all the 
major stakeholders in the discussion, doctors, hospitals, nursing homes 
and patients. The State was able to have these discussions and bring 
the stakeholders to the table and come up and craft legislation that 
really put the brakes on the escalation that was going on in medical 
premiums; and just as importantly, to keep medical liability insurers 
involved in writing policies in the State of Texas.
  We'd lost most of our medical liability insurers from the State. They 
had simply closed up shop and left because they could not see a future 
in providing medical liability insurance in Texas. We went from 17 
insurers in 2000 down to two in 2002. Rates were increasing year over 
year. In my personal situation, before I left medical practice, my 
rates were increasing by 30 percent to 50 percent each year.
  So, in 2003, the Texas State Legislature passed a medical liability 
reform based on a much older reform passed in the State of California. 
California, in 1975, passed the Medical Injury Compensation Reform Act 
of 1975, which essentially put a cap on noneconomic damages in medical 
liability suits, and it has worked extraordinarily well in the State of 
California.
  The Texas law was modified a little bit, I'd say made ready for the 
21st century. Instead of a single $250,000 cap, there is a $250,000 cap 
on noneconomic damages as it pertains to a physician, a $250,000 cap on 
noneconomic damages as it pertains to a hospital, and an additional 
$250,000 cap as it pertains to a nursing home or a second hospital, if 
one is involved, for an aggregate cap of $750,000.
  So the question is, how has the Texas plan fared? It actually came 
into law September 12th of 2003, and remember, I said the State had 
dropped from 17 medical liability carriers down to two because of the 
medical liability crisis in the State. Now we're back up to 14 or 15 
carriers. And most importantly, they came back to write business in the 
State of Texas without an increase in their premiums. This is, indeed, 
a significant reversal.
  More options mean better prices and a more secure setting for medical 
professionals to remain in practice and certainly provides physicians 
the certainty that they need to keep their practices open in Texas. And 
one of the most astounding and unintended beneficiaries of this was 
that of the small, community, not-for-profit hospital that was self-
insured for medical liability. These small community hospitals have 
been able to take money out of those escrow accounts that they were 
having to hold in abeyance in case they found themselves involved in a 
liability suit, and have been able to put more money back into their 
community hospitals, been able to spend money on capital expenses, been 
able to spend money on nurses' salaries, precisely the types of things 
you want your small, community, not-for-profit hospital to be doing, 
rather than just holding money against a day where they might be 
involved in a large damage suit.
  So I took the language of the Texas plan and worked so it would fit 
within our legislative structure here in the House of Representatives, 
and actually gave this legislation to the ranking member of our Budget 
Committee, and he had that bill scored by the Congressional Budget 
Office. So the Texas plan, as applied to the Texas house of 
representatives, to the entire 50 States, would yield an average 
savings of $3.8 billion over 5 years.

                              {time}  1945

  Not a mammoth amount of money, but when you are talking about a 
$2.99999 trillion budget, this savings would amount to moneys that we 
could use on any of the other number of spending priorities that we 
hear so much about in this Congress.
  And consider this: A study done in 1996 by Stanford University 
revealed that in the Medicare system alone, the cost of defensive 
medicine was approximately $28 to $30 billion a year, 10 years ago, Mr. 
Speaker. I suspect that that number is significantly higher today. 
Defensive medicine, those additional tests and procedures that are 
ordered by doctors in order to help them provide a good defense should 
they have a bad outcome and should the case go to litigation in the 
courts, again, moneys expended on medical care not for the care of the 
patient, but to provide the best possible defense for a physician if a 
case is taken into court.
  Another consideration is young people getting out of college who are 
considering a career in the health professions, whether it be medical 
school, nursing school, dental school, or one of the allied 
professionals, the current system keeps young people out of the 
practice of health care for their livelihood because of the burden that 
we put on them. One thing we have to consider: They are graduating from 
school with massive amounts of debt, and then immediately upon getting 
out and emerging on the world and starting into practice, they have to 
come up with another $100,000 for their liability insurance. It is an 
untenable position, and it drives young people away from considering a 
career in health care.
  One of the things that I think we really need to focus on, getting 
back to the cover of Texas Medical Association and running out of 
doctors, part of ensuring that the workforce for the future includes 
helping younger doctors and younger students with residency programs, 
one of the strange things about doctors is we do tend to have a lot of 
inertia. A lot of us tend to practice very close to where we did our 
training. Studies have shown that many doctors will stay within 100 
miles of where they trained. They like to practice in communities 
similar to the communities in which they did their training. So it 
would be a great asset to look at areas in this country where there is 
high need for certain types of physician specialties, areas that are 
currently medically underserved, and encourage young doctors to get 
their training in these locations where they are actually needed.
  Now, a bill that I am going to introduce, called the Physician 
Workforce and Graduate Medical Education Enhancement Act, would develop 
a program that would permit hospitals that do not traditionally operate 
a residency training program the opportunity to start a residency 
training program to build a physician workforce of the future. This 
bill would create a loan fund available to hospitals to create 
residency training programs where none has operated in the past. The 
programs would require full accreditation and be generally focused in 
rural, suburban, inner-urban community hospital locations.
  On average it costs a hospital $100,000 a year to train a resident, 
and the cost for smaller hospitals can be prohibitive. Another concern 
stems from the 1997 congressionally passed balanced budget amendment 
that set a residency cap that also limits resources to nontraditional 
residency hospitals such as smaller community hospitals. In my bill the 
loan amount to any institution would not exceed $1 million, and the 
loan itself would constitute start-up funding for a new residency 
program.
  As we all know, the start-up money is essential. Since Medicare 
graduate medical education funding can be obtained only when a 
residency program is firmly established, the cost to start a training 
program for a smaller, more rural, or suburban hospital can be cost-

[[Page 13543]]

prohibitive because these hospitals operate on much narrower operating 
margins.
  The overall bill would authorize a total of $25 million to be 
available over 10 years. The fund, of course, would be replenished 
because these are constructed as loans, and the Health Resources 
Service Administration may make the loans available to new applicants. 
These moneys would be repaid, and the residency slots in existing 
programs would continually work to bring new residents into the program 
and keep the program self-perpetuating.
  To be eligible, a hospital must demonstrate that they currently do 
not operate a residency program, have not operated a residency training 
program in the past, and that they have secured preliminary 
accreditation by the American Council on Graduate Medical Education. 
Additionally, the petitioning hospital must commit to operating a 
residency program in one of five medical specialties or a combination 
of specialties: family medicine, internal medicine, emergency medicine, 
OB-GYN, or general surgery. Again, the hospital may request up to $1 
million to assist the establishment of this new residency program, and 
funding could be used to offset the cost of residents' salaries and 
benefits.
  The bill would require that the Health Resources Services 
Administration study the efficacy of the program in increasing the 
number of residents in family medicine. The loans would be made 
available beginning January 1, 2008, and the program would be sunsetted 
in 10 years' time, in January 2018, unless Congress voted to 
reauthorize the program.
  Now, locating young doctors where they are needed is just part of 
solving the impending physician shortage crisis that will affect the 
entire health care system. Another aspect that must be considered is 
training doctors for high-need specialties.
  My High-Need Physician Specialty Workforce Incentive Act of 2007 will 
establish a mix of scholarships, loan repayment funds, tax incentives 
to entice more students to medical school, and create incentives for 
those students and those newly minted doctors. This program will have 
an established repayment program for students who agree to go into, 
again, family medicine, internal medicine, emergency medicine, general 
surgery, or OB-GYN, and practice in an underserved area. The Health and 
Human Services Department will administer and promulgate the 
requirements. The recipients must practice in the prescribed specialty 
and the prescribed area, which is designated as a medically underserved 
area, and the practices may include solo or group practices, clinics, 
public or private nonprofit hospitals. And it will be a 5-year 
authorization at $5 million a year.
  The bill would provide additional educational scholarships in 
exchange for a commitment to serve a public or private nonprofit health 
facility determined to have a critical shortage of primary care 
physicians. Such scholarships will be treated as equivalent to those 
under the National Health Service Corps, and penalties apply for those 
that take advantage but do not go into one of those practice areas.
  This will establish the Primary Care Physician Retention and Medical 
Home Enhancement grants to help ensure that primary care physicians 
continue to provide coordinated care to patients in underserved areas 
or high-risk populations. And the reality is we can all think of areas 
like that back in our home States or, indeed, back in our districts.
  In other areas such as the Louisiana gulf coast, where so many 
doctors left after the devastating hurricanes of Katrina and Rita 1\1/
2\ years ago, it has been very hard on the doctors in this area, very 
hard to keep doctors in this area, very hard to encourage and entice 
new doctors to come to the area; and this would be one more tool, one 
more way, to keep the rather fraying social safety net from becoming 
completely undone in that area.
  Every year there would be a report back to Congress about the 
effectiveness of the program. This would allow us to assess if we are 
spending our dollars wisely and getting what we thought we would get 
when we initiated the program. Again, oversight is going to be key to 
this process.
  Well, so far in addressing the physician workforce crisis, we have 
discussed the medical liability, the placement of doctors in locations 
of greatest need, and the financial concerns of encouraging young 
people to go into medical school in the first place and to remain in 
high-need areas in high-need specialties.
  The next portion of this has to deal with perhaps the largest group 
of practitioners affected in this country and certainly the still-
growing group of patients, our baby-boom generation, within the 
Medicare program.
  The baby boomers, and we have already talked about it, as they age 
and retire, the demand for services has nowhere to go but up. And if 
the physician workforce trends continue as they are today, which is 
downward, we may not be talking about funding a Medicare program. We 
may be talking about what are we going to do to take care of our senior 
citizens when there is no one there to take care of them? I often tell 
people if you see a train wreck coming, you have two options. One is to 
stop the wreck and avert the wreck from happening in the first place; 
and the other is to run home and get your video camera and be the first 
to get it up on YouTube. I believe the responsible approach is to avert 
the crisis in the first place.
  Year after year there is a reduction in reimbursement payments from 
the Center for Medicare and Medicaid Services to doctors for the 
services they provide to their Medicare patients. This is not a 
question of doctors wanting to make more money; it is about a 
stabilized payment system for the services that are already rendered. 
And it isn't just affecting doctors. It affects patients. It becomes a 
real crisis of access.
  Not a week goes by that I don't get a letter or fax from some 
physician who says, you know what, I have just had enough, and I am 
going to retire early. I am no longer going to see Medicare patients in 
my practice, or I am going to restrict the procedures that I offer to 
my Medicare patients. Unfortunately, I know this is happening because I 
saw it in the hospital environment before I left the practice of 
medicine to come to Congress, but I also hear it in virtually every 
town hall that I do back in my district. Someone will raise their hand 
or come up to me after the town hall is over and say, how come on 
Medicare, when you turn 65, you have to change doctors? And the answer 
is because their doctor found it no longer economically viable to 
continue to see Medicare patients because they weren't able to keep up 
with the cost of delivering the care. They weren't able to cover the 
cost of providing the care because of the cuts that are happening year 
over year in the Medicare reimbursement formula.
  Now, Medicare payments to physicians are modified annually using a 
formula called the sustainable growth rate. Because of flaws in the 
process, the sustainable growth rate formula has mandated physician fee 
cuts in recent years that have only been moderately averted by last-
minute activity by Congress. If no congressional action is implemented, 
a cut goes through. And if no long-term action is taken, the SGR will 
continue to mandate fee cuts for physicians. And unlike hospital 
reimbursement rates, which closely follow the Medicare Economic Index, 
a cost of living index, if you will, which measures the increasing cost 
of providing care, physician reimbursements don't do that. In fact, 
Medicare payments to physicians cover only about 65 percent of the 
actual cost of providing patient services. Can you imagine any other 
industry or service or company that would continue in business if they 
received only 65 percent of what they spent to deliver the service? Not 
65 percent of what they needed to make a profit; 65 percent of what 
they need to simply keep the doors open in the first place. Currently, 
the sustainable growth rate formula links physician payment updates to 
the gross domestic product, which has no relationship to the cost of 
providing patient services.
  But the simple repeal of the sustainable growth rate formula can't 
happen,

[[Page 13544]]

or we are told it can't happen, because it is too cost-prohibitive. Two 
hundred and eighty billion dollars is what it would cost this year to 
repeal the sustainable growth rate formula.
  But perhaps if we approached it as something we could do over time, 
we could bring that cost level down to an area that is manageable. And 
paying physicians fairly will extend the careers of many physicians who 
are now in practice who would either opt out of the Medicare program, 
seek early retirement, or restrict those procedures that they offer to 
their Medicare patients. It also has an effect on ensuring an adequate 
network of doctors available to older Americans in this country that 
make the transition to the physician workforce in the future.
  In the physician payment stabilization bill that I will introduce, 
the SGR formula would be repealed in 2010, 2 years from now, and 
provide incentive payments based on quality reporting and technology 
improvements. These incentive payments would be installed to protect 
practicing physicians against the program cuts that are likely to occur 
in 2008 and 2009. The incentive payments would be voluntary. No one 
would be required to participate in a quality program or the technology 
improvement, but it would be available to those doctors or practices 
who wanted to offset the proposed cuts that will occur in physician 
reimbursement in the 2 years until a formal repeal of the SGR happens.
  Now, I do know from talking to my friends who are physicians and my 
friends in organized medicine that it is an alarming thought that we 
would have to wait for any period of time before repeal of the SGR.

                              {time}  2000

  If we step back and look, in terms of a long-term solution, the only 
practical approach is, in fact, to deal with it on a long-term basis. 
The reason we are in the deep depression we find ourselves in is 
because year over year we've only provided these last-minute fixes, 
which have only served to exacerbate the problem, not solve the 
problem.
  Well, why not just do away with the SGR once and for all and get it 
done? Remember, the cost for doing that is going to be about $280 
billion. One of the problems that we have in Congress is the 
Congressional Budget Office is the group to which we must petition and 
the group to which we must look for advice about how much things are 
going to cost. If we are going to be spending the taxpayers' money, how 
much are we going to spend, over what time will we spend it? Because of 
some of the constraints of the Congressional Budget Office, we are not 
allowed to say, look, we are doing things so much better now within the 
system that give us credit for that going forward so we can, in fact, 
reduce that number from $280 billion down to something that is more 
reasonable.
  We all saw the Medicare Trustees Report from about 2 weeks ago. It 
said that in the year 2005, there were 600,000 hospital beds that were 
not filled as a result of improvements that have occurred because of 
disease management, because of doctors doing things more efficiently. 
These are dollars that have been saved out of the part A portion of 
Medicare, but it's because of work done in the part B part of Medicare, 
and that is, after all, where we are all focused within the part B 
world.
  By postponing the repeal of the SGR by 2 years' time and taking the 
savings that occur during those next 2 years and applying it back to 
the SGR formula, we may actually get a number that is doable as far as 
releasing the SGR and replacing it with the full Medicare economic 
index so we can pay doctors the same way hospitals, HMOs and drug 
companies are reimbursed.
  One of the main thrusts of this bill is to require the Center for 
Medicare and Medicaid Services to look to their top 10 conditions that 
drive the highest percentage of payment. It's the old Willie Sutton 
argument: He robbed banks because that's where the money is. Let's look 
at the top 10 drivers of health care expenditures in this country, and 
look at ways where we can improve the care that is delivered in those 
10 areas, and look to those areas to give us the savings that will, in 
fact, deliver the benefit towards the ultimate repeal or retirement of 
the SGR.
  The same conditions actually apply to the Medicaid program as well. 
It will be a useful exercise. It helps not only Medicare, but would 
also help CMS with the Medicaid expenditures as well, and will just 
help physicians in general provide better care for their patients.
  It will include some reporting back to doctors and back to patients 
as to their utilization amounts; these numbers will not be made public 
generally, but will allow doctors to individually modify their own 
practices if they see there are ways where they may improve.
  Health information technology, it is something which, I will admit, I 
have been slow to come to the table with as far as looking for 
improvements in health information technology to provide substantial 
savings. And I will tell you what changed my mind on that.
  In January of 2006, with our Oversight and Investigations Committee 
down in New Orleans, Louisiana, to look at the recovery from the 
hurricane as it impacted the health care system in that part of the 
world, this is the medical records department at Charity Hospital, one 
of the venerable teaching institutions in our country. When the city of 
New Orleans was flooded, these records were completely under water.
  Now the basement has been all but completely emptied of water. There 
is probably about a foot of standing water that doesn't show up in the 
photographs. But look at the records. This is not smoke or soot damage, 
this is black mold growing on these records. So how do we know that 
there is a patient in there that is on dialysis waiting for a kidney 
transplant? We will never know.
  We couldn't ask anyone to go in there and go through those records, 
it would be hazardous to their own health. How do we know about where a 
person was in their cancer treatment? We will never know that 
information; that information has been lost to the ages. This is the 
kind of problem that you can get into with paper records.
  You know, the youngsters of today, the college students of today, 
indeed, the young physicians of today, they understand this very well. 
They are connected, they are wired in, they all have flash drives and 
zip drives. They would no more imagine preparing a term paper for one 
of their classes and then only keeping one paper copy. No. They've got 
it on their hard disk. They've got it on a floppy disk. They've got it 
on a flash drive. They have probably e-mailed it to someone back home. 
The old adage of ``The dog ate my homework'' just won't wash anymore. 
We need to evolve into the 21st century when it comes to medical record 
keeping.
  It costs money to do this. It is going to require a big push from 
both the public and the private sectors. I prefer to think of the bonus 
payment as being an inducement and enticement for physicians offices to 
participate in this program. But on the face of it, it's just good 
medicine, it's just good patient care.
  Now, we all heard about the troubles at Walter Reed Hospital a few 
months ago. I went out to Walter Reed shortly after the story broke in 
the Washington Post, and here is Master Sergeant Blades. And he took me 
around building 18, and yeah, it was a crummy building. We could 
certainly have done a lot better than we were doing for our soldiers on 
medical hold in building 18.
  But the real thing that bothered Master Sergeant Blades was the fact 
that they had to wait so long to get in to see someone. And when they 
did, oftentimes their records that they had worked on and they had 
prepared and they had organized, sometimes those records, after they 
delivered them to the appropriate clinic, their records would get lost. 
His specific complaint to me was, I can spend 20 man-hours putting 
together my medical record and highlighting the areas that are of 
significance and importance to me. This goes over to one of the 
clinics. It sits on someone's desk until it is no longer retrievable, 
and I have to start all over again.

[[Page 13545]]

  Now, the VA has been very forward thinking in its embrace of 
electronic medical records and its investment in medical technology. 
The problem is the Department of Defense medical records do not 
interface with the VistA system at the Department of Veterans Affairs. 
So if delivering value to the patient is of paramount importance, it is 
critical that we make this type of service generally available to our 
patients.
  Mr. Speaker, I was also going to address some of the issues on health 
care transparency; I probably don't have time to do that. I will simply 
mention that I have introduced a bill dealing with health care 
transparency that provides for keying off what is happening in the 
States, and making certain that every State would have at least some 
level of transparency in health care pricing.
  In Texas, up on the Web right now, and I realize it is going to go 
through several different iterations and it will evolve considerably 
over time, but TXpricepoint.org, available on the Internet, allows 
patients to compare prices on hospitals in their area.
  Again, a lot of things we have to consider when we work on the 
transformation of the health care system in this country. There are 
good things as far as the public system, there are good things as far 
as the private system. We have got to be certain that we build on the 
good things present in both systems, and that we stop doing the things 
that no longer deliver value to our patients.

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