[Congressional Record (Bound Edition), Volume 153 (2007), Part 11]
[House]
[Pages 15323-15330]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         HEALTH CARE IN AMERICA

  The SPEAKER pro tempore (Ms. Berkley). Under the Speaker's announced 
policy of January 18, 2007, the gentleman from Texas (Mr. Burgess) is 
recognized for 60 minutes.
  Mr. BURGESS. Madam Speaker, I want to also thank and commend my 
friends for their discussion of the suburban agenda. I am coming to the 
floor tonight to talk about health care, and of course they've already 
covered a lot of those issues in their discussion that preceded in the 
past hour.
  I want to talk about some concerns we have in the delivery of health 
care services throughout the country. The future of medical care in 
this country is going to be front and center over the next 18 months 
time. The elections of 2008 will be about a lot of things, but they 
will also be a lot about health care.
  Three bills that I want to focus on this evening as well, H.R. 2583, 
H.R. 2584 and H.R. 2585. The first, H.R. 2583 deals with residency 
programs. The second, H.R. 2584 deals with loan forgiveness and tax 
abatements for medical students and newly minted doctors. And the 
third, H.R. 2585, deals with physicians in the Medicare program who are 
adversely affected by reimbursement reductions every year under a 
formula known as the sustainable growth rate formula.
  Well, as we go through these next 18 months and deciding which avenue 
through which our health care system is going to go, we have two 
choices on the table. We've got a public sector, the government side, 
which already has about half of the responsibility for health care in 
this country. And we've got that which is comprised of the private 
sector, as well as that care which is just simply delivered without 
expectation of compensation, what used to be known as charitable care.
  Under the option to expand the government's role, the government's 
side, the government's sector involvement in the delivery of health 
care, typically that's known as universal health care. In the 1990s we 
called that ``Hillary Care.''
  But could we also approach it from a standpoint of encouraging the 
private sector to stay involved and to improve their products and make 
them more flexible and user friendly in order to provide more for our 
health care dollar in this country.
  My opinion, having worked in the system for well over 25 years, is 
the United States does have the best health care system in the world, 
and it is my obligation, my charge to help it remain the best health 
care system in the world.
  Now, I know there's plenty of people in this body who would contest 
that statement. And there's plenty of issues around to call it into 
question.
  My predecessor in this office, former Majority Leader Dick Armey used 
to be fond of saying, you know, the numbers don't lie; but if you 
torture them long enough, they'll admit to almost anything.
  But let's talk about some of the different principles that are 
guiding the debate about public versus private and the delivery of 
health care services. And maybe we ought to spend a little time talking 
about the background. How did we get into this? How'd we get to where 
we are today?
  You almost have to go back over 60 years to go back to the time 
coming out of World War II when the United States, of course, was the 
victor; came out of the war with a flourishing economy.
  But during the war, President Roosevelt, in an effort to keep down 
trouble from inflation, put into effect rather stringent wage and price 
controls across the country. The employers wanted to keep employees, so 
a lot of employees, of course, had been drafted and were serving 
overseas, so those employees that were left the employers wanted to 
keep them working. But they were constrained. They couldn't offer 
raises. They couldn't offer the money that would be required; they were 
worried that someone across town might outbid them.
  Well, they went and came upon the idea of providing a health care 
benefit, and, in fact, the Supreme Court ruled that that was okay; that 
that did not violate the spirit or the intent of the law that Franklin 
Roosevelt had passed governing the wage and price controls. So during 
the war, the concept of employer-based insurance was begun.
  The war ended. The United States was blessed with the postwar 
economic boom that started, and what began as a necessity born out of a 
wartime economy continued. It was extremely popular. Health care 
insurance provided by the employer turned out to be one of the most 
popular employee benefits that has ever been seen in this country. And 
up until the early 1980s it just worked wonderfully.
  Contrast that, of course, with Europe. Even the parts the Europe that 
were victorious in the Second World War, the battles were fought in 
their back yard. Their economies were devastated. They needed to 
quickly stand up a health care system that would take care of a 
population that had been deprived by 5 years of war or longer. And 
these countries decided to promote the single payer system that you see 
that's so prevalent in Western Europe and in England today.
  But that was born of necessity also, because, again, the country's 
economies were devastated or, in fact, they had not been victorious in 
the war, they had lost the war, but they needed to quickly stand up a 
system that would take care of their citizens.
  We go from 1945 to 1965. Presidency of another Texan, Lyndon Baines 
Johnson. During that time, President Johnson enacted the Medicare 
statute, a little over 40 years ago. The Medicare and the Medicaid 
programs were signed into law during his administration. These were 
large government-run programs that were created to focus primarily on 
hospital and physician care for elderly and basic health care services 
for the people who were this poverty.
  Decades later, almost 40 years later, it was evident that the 
government-run Medicare program, extremely slow to change, very 
difficult to change a large government program; and anything that that 
caused any change within the program was going to be incredibly 
expensive.
  Already difficult to operate.
  But in 2003, in fact, my first year to serve in this Congress, my 
first State of the Union message that I heard the President deliver in 
this House, he talked about how the need for, or the time for a 
Medicare prescription drug benefit had arrived; and this was too 
important an issue to be left to another President or another Congress. 
It was work that we were going to take on that year, 2003, and get that 
benefit delivered to the American people. And indeed we did.
  We worked on that bill in various committees throughout the year 
2003. Right at the end of the year we passed the bill. There was 
initially a prescription drug discount card that was available, but 
over the next 2 years the Centers for Medicaid and Medicare Services 
put together the plan that we now

[[Page 15324]]

know as the Medicare Part-D plan. And in spite of all of the problems 
that it had getting started, arguably it is one of the better 
functioning government-run health care programs ever seen to date.
  But the government needed to catch up to a private system that was 
already focused on prevention, timely treatment of disease and disease 
management. So finally Congress put the Medicare prescription drug 
plan, that focused on giving seniors access go needed medications 
forward, and the program has been successful and provided benefits for 
seniors. It's come with, obviously, considerable discussion, and a big 
push for success, a lot of it delivered by the private sector.
  So here we sit at the crossroads today. Again, the government pays 
for half of the health care administered in the country with a current 
gross domestic product, the GDP of 11 to $12 trillion.
  The U.S. Department of Health and Human Services, through their 
Medicare and Medicaid services alone, pay $600 billion. Add to that the 
VA system, add to that the Federal prison system, the Indian Health 
Service, and you have about half of the health care expenditures in 
this country.
  The other half of health care is broken down with the primary weight 
being carried by private insurance. There is some charitable and there 
is some self-pay accounting for the rest. I think you'd probably 
include bad debt in that other 50 percent.
  Well, as the numbers increase, the overall cost of health care for 
the entire country, as that number increases the Federal Government 
continues to funnel the American taxpayers' dollars into these efforts, 
and we have to ask ourselves, what is the wisest and best use of 
taxpayer dollars?
  Is the government doing an excellent job of managing your money?
  It's not their money. It's your money. Do you think the government is 
better suited for your health care needs?
  Whose going to handle or who is better equipped to handle the growing 
health care problems crisis, if you will, in this country?
  The government only or the universal health care system, to me, 
almost is unsustainable. And it certainly is likely to hamper 
innovation, and hamper the delivery of some of the most modern health 
care services that the world has ever known.
  Now, two examples of that, one very close to home, that would support 
the notion that a private-based system is better equipped and more 
flexible and less expensive than a government system, look to our 
north. Look at Canada.
  Canada boasts a universal health care system. But what it fails to 
highlight is the tremendous wait for treatment that its patients must 
endure. In fact, in either 2004 or 2005, the Canadian Supreme Court 
ruled that access to a waiting list did not equal access to care 
because the waiting times were so long in that country. Their access to 
care is limited by the length of time that one must wait for care.

                              {time}  2200

  Now, in Canada they actually have a pretty good safety valve, and 
that safety valve is called the United States of America. One of the 
longest borders in the world is our northern border with our northern 
neighbor of Canada. And, in fact, if someone has the means to pay 
outside the system and feels that the wait is deleterious to their 
health, they can leave Toronto and go to Henry Ford Hospital in Detroit 
and have that MRI, have that CAT scan, have the stint placed in a 
coronary artery if they don't feel the wait is in the best long-term 
interest of their health.
  So you can take your money, cross the southern border of the United 
States, and receive care almost immediately, waiting for bypass surgery 
where you go to the hospital that puts you on a waiting list or puts 
you in a hospital and put you in a cath lab and gets the problem fixed. 
When it comes down to your health and a serious health problem, who 
wants to gamble?
  Also, look at the National Health Service in Britain. They really 
have developed within their country a two-tiered system. Indeed, the 
wait times are a significant problem within the National Health 
Service. You can go outside the National Health Service, stay in the 
country of Britain, go outside the National Health Service and go to 
one of the private physicians. Physicians work in their offices at the 
time they are required by the government and then operate a private 
practice on the side. Some of the most expensive health care in the 
world is available right alongside the free system in the National 
Health Service. And the fact that it is able to run, the fact that it 
is able to go, certainly speaks to the fact that it is serving a need 
that people want filled.
  The other thing you have to ask yourself, if you have someone who is 
going to have to wait 6 or 8 months for a CAT scan or an MRI, if you 
have someone who is going to wait half a year or a year's time for 
replacement of an artificial hip and that person is nearing the age of 
80, a year's wait is a significant period of time of the number of days 
that that person has left in their life. It is a sad reality but, 
nevertheless, true.
  Again, I come back to the notion that the private sector is more 
nimble and more financially responsible and it is the better way to 
build the future of our health system. It is a complex relationship. 
And how Congress should do its job to ensure that we have the best 
health care system possible is going to be the central part of the 
debate that we have over the next 18 months. In my opinion, Congress 
has to promote policies that keep the private sector leading the way 
with some interaction that leads to a well-run government system.
  You can hardly talk about health care in this country without coming 
up against the problem of the uninsured. The Census Bureau right now 
estimates that some 46 million people in this country are uninsured.
  Now, uninsured does not always mean lack of access to health care 
because we all have heard stories about people who use the emergency 
room for relatively modest problems. It is one of the more expensive 
ways to get care. There is also a disadvantage too in that if you wait 
until a modest health care problem becomes an emergency, then you are 
oftentimes not going to get the best health care bargain or the best 
bargain for your health care dollar. You are also possibly going to 
jeopardize the health outcome. So no one would argue that just simply 
relying upon our Nation's overstretched emergency rooms are a method of 
dealing with the problem of the uninsured. But I think it is important 
to point out that doctors and nurses in hospitals on the front lines 
every day see people and take care of their medical needs, fully 
recognizing that there may not be a reasonable expectation of payment 
for those services. And we owe those individuals a debt of gratitude 
for continuing to do that, sometimes in the face of some rather severe 
Federal regulations and an extremely hostile medical liability climate.
  One of the other things that we will talk about, in fact, we are 
required to do in this Congress is the reauthorization of what is known 
as SCHIP, the State Children's Health Insurance Program. This is a 
program that was started some 10 years ago. It had a 10-year 
authorization and requires that the Congress reauthorize it this year.
  The two gentlemen who were here before me talking about the slow pace 
of things in this Congress could have added the slow pace of the 
reauthorization of the current SCHIP language to that list of things 
that they were concerned about. This is legislation that, again, 
Congress is required to reauthorize prior to September 30 of this year 
when the authorization expires. There is no continuing resolution. 
There is no IOU or Band-Aid we can put on this program. We simply must 
reauthorize the program if we want it to continue. And it has been a 
good program, and I would argue that virtually everyone within this 
body wants it to continue.
  Not to say there are not some areas for improvement. A bill that I 
introduced earlier this year, H.R. 1013, the purpose of this 
legislation was to ensure that the SCHIP funding that Congress has made 
available be used to

[[Page 15325]]

cover children and pregnant adults with this coverage. Right now we 
have four States that are covering more adults than they are children 
with their SCHIP funding. That stands the whole program on its head. It 
is cheaper to cover children with health insurance than it is adults. 
In fact, the ratio is it costs about 60 cents to provide what otherwise 
would cost a dollar's worth of health care insurance for adults. So we 
get a lot of mileage for our dollars when we put that coverage into 
children. If we take that coverage away from children to then cover 
adults who otherwise would not belong in the system but get in through 
some type of waiver, we are not doing a good job with the moneys that 
we intended to put forward to cover children. And the reality is until 
we have covered all the children who need coverage in this country, we 
shouldn't be taking those dollars away from the children to cover 
adults in the system. Once we have covered all the children in the 
country, then perhaps it is time to talk about a waiver. If we want to 
cover other nonpregnant adults, let's find another program to do that. 
Let's not steal money from the SCHIP program to provide that coverage.
  Another thing that we don't really talk about a lot on the House 
floor, last year in my committee, the Committee on Energy and Commerce, 
we reauthorized the federally qualified health center statute. We never 
got that completely finished in the House. We should take it up again 
this year. It should be taken up by the Senate, and this is a program 
that fully deserves reauthorization by this Congress.
  The federally qualified health center statute provides in federally 
qualified health centers coverage for about 15 million uninsureds. That 
is access to medicines, access to a medical home, access to mental 
health services, access to treatment for substance abuse, a significant 
set of services that are available to people who otherwise would not 
have access to medical care. Federally qualified health centers do a 
good job. Both SCHIP and the federally qualified health center system 
deserve to be taken up and reauthorized by this Congress. If there are 
improvements that we can make, then by all means let's have the debate 
and make those improvements necessary, but let's not let those two 
programs languish and by default be sunsetted and not continue.
  Now, the two gentlemen that were here talking earlier were talking 
about some of the problems that people get into when they lose their 
health insurance and wanting to extend COBRA benefits, a noble 
exercise. One of the things that I have really thought is a forward-
looking way to go with health insurance, and it kind of gets at what 
they were talking about, that is the individual ownership of an 
insurance policy.
  The point made by Mr. Kirk of Illinois, gone are the days where a 
person gets out of high school or college, works in one job, one 
factory, one manufacturing plant for the remainder of their work life, 
then retires and gets a gold watch and goes off to a well-deserved 
retirement. People change jobs in today's economy. Their health 
insurance ought to be able to be flexible to change with them, to move 
with them. One way to ensure that is to allow an individual to own 
their health insurance policy.
  Back in the days when I was practicing medicine in the middle 1990s, 
this Congress passed a bill called the Health Insurance Portability Act 
of 1996, the Kennedy-Kassebaum bill. In it, it provided for a 
demonstration product for what were then called the medical savings 
accounts. Bill Archer, chairman of the Ways and Means Committee at the 
time, was a champion of the old MSA. I had an MSA when I was a 
practicing physician. It allows you to build a tax-deferred savings 
account that is dedicated to your medical expenses. You buy an 
insurance policy that is yours. You do pay for it with after-tax 
dollars, but the advantage is that since it has such a high deductible, 
it typically has a lower premium.
  Now, there are some problems with the previous MSAs that were first 
passed by this Congress. This Congress put a lot of regulations on 
those insurance policies, and as a consequence, in my home State of 
Texas, we only had two insurers who were willing to take people on with 
a medical savings account. When we did the Medicare bill that I 
referenced earlier in the talk, back in 2003, when we did the Medicare 
Modernization Act, included within that language was language that 
allowed for a significant expansion of what we now call health savings 
accounts. The central concept is still there. It is a high deductible 
insurance policy owned by the individual, not the employer, or the 
individual can own the policy. Some employers have now begun to offer 
health savings accounts. A high deductible policy with a lower premium, 
and you put money into a tax-deferred savings account. Remember Albert 
Einstein said there is no power in the universe as strong as the 
miracle of compound interest. Put that as a pretax expense, and that 
can be something that grows significantly over time. Imagine that. A 
health-based IRA or a health savings account, an account that is 
dedicated only to your health care needs. Start that when you are 
young. It grows over time, and that can be an incredibly powerful tool 
to combat problems that might occur with health later in life.
  But even if someone has a high deductible policy in their younger 
years and maybe they don't have quite as much stored up in that health 
savings account that would cover the deductible, still you get into a 
catastrophic situation, or it doesn't even need to be a catastrophic 
situation. In today's environment you have a single car accident and 
the medical costs can just be astronomical after spending an afternoon 
in the emergency room, a couple of hours in the CAT scanner, maybe a 
day or 2 in the intensive care unit, 3 or 4 days in the hospital, and 
by the time you get out, you have got a bill that will literally shock 
you. And a health savings account would provide that type of 
catastrophic coverage.
  Why is this important? Say a young person just getting out of college 
decides they want to go off on their own and they want to be the next 
Bill Gates. They want to be an entrepreneur. They want to develop their 
own company. They don't want to work for a large company with its 
attendant benefits and health care insurance. They just want to go out 
on their own. Ten years ago you went into the private individual market 
and said, I want to buy some health insurance because I am going to 
work for myself and start a small business and be my own boss, you 
couldn't get anybody to talk to you for any price. There just wasn't a 
policy available.
  Fast forward to the present time, and with the changes we made with 
health savings accounts in the Medicare Modernization Act of 2003, you 
can go on the Internet. You can type in ``health savings account'' into 
the search engine of your choice. And in my home State of Texas for a 
male age 25, just out of college, nonsmoker, you can pick up a high 
deductible policy in the range of $65 to $75 a month. Not an 
astronomical expense. Sure, there is a high deductible associated with 
that. So if you want a flu shot next fall, you are probably just paying 
for that out of pocket. But if you get pneumonia and you end up in the 
hospital in the ICU for several days, you are going to have coverage 
for that so-called catastrophic event because, even though it is a high 
deductible, your medical expenses will quickly exceed that. So that is 
a good thing to have so that you do have coverage.
  For a young family where a husband and wife want to have the 
coverage, want to do the responsible thing if they have small children, 
a health savings account may provide the way to do that and have that 
coverage beginning at an early age. And over time the money will grow 
in the actual savings account portion of that. It grows tax deferred. 
It can accumulate quickly. And as a consequence, the specter of having 
a very high deductible is something that is now not such a big deal 
because there is easily money within that health savings account to pay 
for those health care needs. Even the routine care if someone chooses 
to do that, the dollars are there to be spent for that purpose.

[[Page 15326]]



                              {time}  2215

  The popularity has grown a lot. When I first got mine back in 1997, 
my old Archer medical savings account, I worried because they said 
we're going to put a cap on this; we're not going to allow more than 
750,000 of these to be sold in the United States of America. I thought 
golly, I better get out there and get one fast or they are going to all 
be snapped up. It turned out I didn't need to worry because those 
original insurance policies, probably less than 100,000 were sold.
  But the health savings accounts, when the conditions changed in 2003, 
have been significantly popular. The last year for which I have 
accurate and verifiable data is 2005. But by December of that year, the 
end of calendar year 2005, 3.2 million individuals had coverage through 
a health savings account; 42 percent of those individuals had families 
with incomes below $50,000 purchasing an HSA type of insurance. 
Certainly that is indicative that this is an affordable option. In 
addition, the number of previously uninsured HSA plan purchasers over 
the age of 60 nearly doubled, proving that the plans are accessible to 
people of all ages. And again, out of that number, over 3 million, 
probably about 40 percent of those individuals were previously 
uninsured. So it did have the effect of, at least temporarily, bending 
the growth curve of the uninsured in this country.
  Of those 46 million people that we talked about before that are 
uninsured, over half, 60 percent, are employed in small businesses. 
Some of these individuals prefer a more traditional health plan. They 
would like to have what we talked about earlier, an employer-derived 
health insurance. But their employers, their small business employers 
look at those premiums going up every year and they say, you know what, 
I just cannot do it anymore, and so they drop the benefit because it is 
simply too expensive.
  Now, Congress has had before it, over the last 4 years I think we've 
had at least three votes on this concept; it has always passed the 
House of Representatives; it always stalled in the Senate. I don't know 
if we will take it up this year, but I think we should because I think 
it is fundamentally a good idea. And maybe at some point we will get 
some cooperation from the other body.
  But to unburden small business owners, Congress has devised the 
concept of what are called Association Health Plans, essentially 
allowing a group of small businesses with a small business model to 
band together to get the purchasing clout of a big corporation. It is 
really not too hard a concept for most people to understand. It is, 
again, something that has passed this House at least three times that I 
am aware of. It is a sensible solution. It allows the spread of the 
insurance risk amongst a larger group. A small employer, say a realtor 
in your hometown who has 3 or 4 people working in the office, very 
difficult, very expensive for them to get insurance, if they can find 
it. Well, imagine if you let all the realtors in Texas band together 
and form a single group that was negotiating for the sale of insurance. 
Now imagine that you couple that with the realtors in Oklahoma, 
Louisiana and New Mexico. Then you've got a group of people that really 
is beginning to have some significant financial clout and may be able 
to get a much better price in the group health insurance market. Well, 
all of this, from the insurance side, is extremely important. You've 
got to worry though, are we putting the cart before the horse?
  About a year and a half ago, Alan Greenspan, just as he retired as 
Chairman of the Federal Reserve Board here in Washington, D.C., met 
with several groups. He met with a group of us one morning, and he was 
asked the inevitable question, well, Chairman, what about the ability 
of the Federal Government to pay for Medicare in the future. He alluded 
to how that was going to be a problem that was going to have to be 
faced. But at the end of it all, he felt that Congress would be able to 
come up with an equitable solution to that. And he paused and he said, 
what concerns me more is will there be anyone there to provide the 
services that you want when you get there. That is a pretty profound 
statement, certainly something that has stuck with me since that time.
  No question about it in my mind, our country faces a crisis in health 
care manpower, a physician shortage, if you will, in the future. We 
need to ensure that the doctors who are in practice today, those 
physicians I like to call ``mature physicians'' at the peak of their 
clinical abilities, at the peak of their diagnostic abilities, at the 
peak of their surgical expertise and abilities, we've got to be sure 
that they stay in the game, that they continue to practice, that they 
don't retire early, that they don't wander off and do something else. 
We need to keep them involved.
  At the same time, we need to ensure that the younger physicians, the 
doctors of tomorrow, those that are in residency programs today, those 
that might be thinking about going to medical school or into nursing, 
that those individuals stay involved and in fact pursue their career 
dream of working in health care.
  The first issue that always comes to my mind when I think of what are 
some of the things that drive doctors out of practice or keep people 
from going into the practice of medicine, and that is, of course, the 
conundrum of medical liability. Again, we faced it in this House of 
Representatives probably four times in the time that I have been in 
Congress. It is an issue that has never gotten through the other body. 
Again, I believe we need to continue to push that as an issue because 
in so many ways we just need some commonsense medical liability reform 
to protect patients, stop the escalating costs associated with lawsuits 
that are not well-grounded, and to make health care more affordable, 
ensure that health care is in fact even available to Americans all 
across from coast to coast in Alaska and Hawaii, and make sure that 
those physicians stay in the game and continue to provide the needed 
services.
  I believe we do need a national solution. State to State coverage is 
always going to be tenuous. My home State of Texas did a great thing as 
far as medical liability reform is concerned back in September of 2003, 
but you worry every time the State legislature comes into session every 
2 years, is something going to happen that undoes those great steps 
forward that were taken back in 2003.
  I do think that modelling after the concept that was developed, 
actually originally in the State of California back in 1975, the 
Medical Injury Compensation Reform Act of 1975, signed into law by 
Governor Jerry Brown, a great step forward that put a cap on 
noneconomic damages in medical liability suits.
  Fast forward to 2003, and the Texas plan came forward. Indeed, the 
basis of the program or the basis of the reform does lie in a cap on 
noneconomic damages, but I like to say it's got a 21st century angle to 
it. There is a $250,000 cap on noneconomic damages for the doctor, a 
$250,000 on noneconomic damages for the hospital, and a third cap of 
$250,000 for noneconomic damages from a second hospital or nursing 
home, if one is involved. In fact, the original cap legislation that 
worked so well in California, in Texas it has been trifurcated. It is 
in the aggregate of a $750,000 cap.
  Well, how does that work? Did that fix the problem that the State of 
Texas faced the year I ran for Congress 2003? Well, in Texas, we've 
gone from 17 medical liability insurers down to two. My personal 
situation, running my own practice, really having not had a problem 
that would take me into the courts, but my rates were increasing by 25, 
30, 40 percent a year. Well, in 2003, the Texas legislature passed 
medical liability reform based off that California law, again, updated 
for the 21st century, for an aggregate cap of $750,000. What has 
happened since then? Well, remember I just said, we dropped from 17 
liability insurers down to two because of the medical liability crisis. 
We are back up to 14 or 15 carriers. And most importantly, those 
carriers have returned to the State of Texas without an increase in 
their rates. They have held their rates down.

[[Page 15327]]

  My old insurer of record, Texas Medical Liability Trust, between rate 
reductions, rebates and dividend payments to physicians over the 3\1/2\ 
years since this law was passed, the actual net effect is a 22 percent 
reduction in premiums for physicians across the board in the State of 
Texas. Again, remember premiums were going up by 20, 25, 30 percent or 
more a year, now they are coming down, and over the last few years they 
have come down 22 percent.
  One of the most significant, unintended benefits of this was what 
happened with the small not-for-profit, community-based hospitals, 
those hospitals that were essentially self-insured for medical 
liability. They have been able to take money that was in those escrow 
accounts against the uncertainty of the medical liability climate that 
they faced in 2001, 2002 and early 2003, now that money has been able 
to go to hiring nurses, capital improvements, just the very things you 
would want your smaller not-for-profit, community-based hospital to be 
able to do. This is certainly one of the good news stories. And again, 
the smaller hospitals were not the intended beneficiary of this 
legislation when it passed in the State of Texas.
  I took the language of the Texas-passed medical liability reform, 
worked it into the type of language that we have to have here in the 
House of Representatives, ran it through legislative counsel and 
offered it to Mr. Ryan, Paul Ryan, the ranking member of the Budget 
Committee on the Republican side, when we were doing our budgetary work 
in March. He had that bill scored by the Congressional Budget Office. 
And the Texas plan, as applied through the House of Representatives 
language, applied to the entire 50 States, would yield a savings of 
$3.8 billion over 5 years. Now, not a mammoth amount of money, but when 
you are talking about a $2.999 trillion budget, savings is savings. And 
these are monies that we are in a sense just going to leave on the 
table in this budgetary cycle that could have gone to some of the other 
spending priorities, some of which I have already alluded to in the 
SCHIP and the Federally Qualified Health Center statutes. But anything, 
even those things not dealing with health, $3.8 billion, as the old 
saying goes, you keep leaving that amount of money on the table and 
pretty soon you're going to be talking about some real dollars.
  And also consider this: A study done in 1996, that's over 10 years 
ago, out of Stanford University, revealed that in the Medicare system 
alone, the cost of defensive medicine was approximately $28 to $30 
billion a year. The cost of Medicare, not the entire cost of the health 
care infrastructure of the United States of America, the cost to 
Medicare was $28 to $30 billion a year 10 years ago. I submit that that 
number has likely increased today. We can scarcely afford to continue 
this trajectory that we are on with regards to medical liability in 
this country.
  And again, remember when I started this part of the discussion 
talking about are we going to have anyone there to provide the services 
when we want them. And another consideration is that young people today 
entering college, in college, just getting out of college, who wanted 
to consider a career in health care, are looking at the crisis that we 
face in medical liability in this country, and it's keeping them out of 
the game, and that's not right. One of the obstetrics residency 
directors from a big New York program was down here actually a couple 
of years ago now, and I asked her, is the medical liability crisis, is 
it having an effect on your residency classes that you're recruiting? 
And she told me that right now we are taking people into our residency 
program that we wouldn't have interviewed 5 years ago. In other words, 
we are lowering the class and the capabilities of those people who are 
willing to go into obstetrics as a specialty. Well, these are our 
children's doctors, these are our children's children's doctors that 
are being trained in the residency programs today. I fail to see how it 
advances the case for patient safety and the well-being of Americans to 
continue to allow this condition to exist without addressing it.
  Again, we voted on the bill several times in this House over the past 
several years. My understanding is the bill was just recently 
reintroduced last week. I hope we will have a chance to address it in 
this House. And I hope we can get some activity from the other body. I 
am not optimistic, but I believe this is so important that we have got 
to continue to try to get this done.
  This brings me to one of the things I initially spoke about, one of 
three health care bills, H.R. 2583, the so-called Physician Workforce 
and Graduate Medical Education Enhancement Act of 2007. There is a 
Washington-type title that everyone can love. Well, part of ensuring 
the future health care workforce in this country is going to be to make 
certain that there are the types of residency programs in the types of 
communities in which we want doctors to consider going into practice. 
You know, the funny thing about physicians is they do have a lot of 
inertia. They tend to stay where they're dropped; that is, they tend to 
work and have their practice in communities where they trained or close 
to where they trained.

                              {time}  2230

  A lot of us have followed that trajectory, and I suspect there is 
nothing unique about that. It will continue to be the way physicians 
behave for probably well into the future. So the bill introduced just 
last week was designed to get more training programs in areas that are 
underserved, like rural areas, inner-city areas, to get young doctors-
in-training in locations where they are actually needed.
  The Physician Workforce and Graduate Medical Education Enhancement 
Act of 2007 would develop a program that would permit hospitals that do 
not traditionally operate a residency training program that will allow 
them the opportunity to start a residency training program and in fact 
build that physician workforce of the future on site in those 
communities where they are in fact needed.
  On average, it costs $100,000 a year to train a resident, and that 
cost for a smaller hospital is clearly prohibitive. Because of the cost 
consideration, the bill would create a loan fund available to hospitals 
to make residency training programs where none has operated in the 
past. The programs would require full accreditation and be focused 
obviously in rural and suburban inner-urban or other smaller community-
type hospitals. I can think of several communities in the congressional 
district that I represent that might benefit from such a program.
  Clearly, it is one thing to say we are just going to educate more 
doctors, but to get them to practice in the areas where they are 
needed, and, boy, an area that comes to mind is the area around New 
Orleans, Louisiana. They have lost doctors. The wholesale loss of 
doctors since the twin hurricanes of August of 2005, it is going to be 
very difficult to encourage people to come back to that area. But the 
reality is if someone trains in that area, the likelihood of them 
staying in that area is increased.
  It is all well and good to create new residency programs, but if you 
don't have anyone interested in filling that residency slot, it is not 
going to be really something that does all that much good. So the 
second bill, H.R. 2584, the High Need Physician Specialty Workforce 
Incentive Act of 2007, would help locate young doctors where they are 
needed to solve part of the impending physician shortage crisis that 
likely could affect the entire country.
  We have got to consider training doctors for high need specialties. 
This act will establish a mix of scholarships, loan repayment funds and 
tax incentives to entice more students to medical school and create 
incentives for those students and newly-minted doctors to help them go 
into healthcare. The program will have a established repayment program 
for students who agree to go into family practice, internal medicine, 
emergency medicine, general surgery or OB/GYN, and practice in 
underserved areas. It will be a 5-year authorization at $5 million a 
year and it will provide additional educational scholarships in 
exchange for a

[[Page 15328]]

commitment to serve in a public or private nonprofit health facility 
determined to have a critical shortage of primary care physicians.
  Again, the Gulf Coast area comes to mind, but there are plenty of 
areas in my home State of Texas, West Texas and in fact East Texas, 
that would fit the bill for something like that. It is very similar to 
what used to be called the Berry Plan. The armed services used to offer 
a scholarship and some loan forgiveness to encourage physicians to go 
into one of the branches of service. This is modeled after those plans 
that were so popular in the early 1970s. Again, it is an important step 
in getting doctors into the communities where they are actually needed.
  The third bill of the three that I introduced last week, H.R. 2585, 
really deals with the heart of the problem, which is stabilization of 
the current physician workforce.
  When we talk about the current physician workforce, discussing things 
like medical liability, placement of doctors in locations of greatest 
need and financial concerns, encouraging doctors to remain in those 
high-need specialties, the next step is to fix on that largest group of 
doctors in the country and certainly the largest and still growing 
group of patients, those baby-boomers that you heard Mark Kirk talk 
about in the last hour.
  Baby-boomers are going to continue to age. They are going to retire, 
and the demand for services has no where to go but up. If the physician 
workforce trends continues as they are today, we may no longer be 
talking about trying to fund the Medicare program. We may be talking 
about trying to find the Medicare physician. We may be talking about 
the fact that there is no one there to take care of America's seniors.
  Year after year, there is a reduction in reimbursement payments from 
the Center for Medicare and Medicaid Services to doctors for services 
that they provide their Medicare patients. This is not a question of 
doctors just simply wanting to make more money. It is about a 
stabilized repayment for services that are already rendered. It is 
about a question of fundamental fairness. And it is not just affecting 
doctors. It is affecting patients, and it becomes a real crisis of 
access.
  Not a week goes by that I don't get a letter or fax from a physician 
back in Texas who says, you know what? I have just had enough of this, 
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 Medicare patients.
  In fact it happened to me while we were home on the Memorial Day 
recess. A woman came up to me, someone I had trained with, and said, 
look, I just can no longer do these long, involved operations and be 
paid literally a pittance for the service, when I could spend my time 
doing other things that would actually pay for the cost of running my 
practice.
  I certainly understand that. I certainly sympathize with that. It is 
a difficult situation for doctors to find themselves in, because they 
want to do right. These are difficult operations that they trained for 
years to be able to provide for people. Now, the fact that they are so 
poorly compensated by Medicare, they are simply having to turn their 
back on these challenging, technically difficult procedures, and say I 
will just see the well patient in the office and stay out of the 
operating room. I saw it happen in the hospital environment before I 
left the practice of medicine to come to Congress.
  But I hear it in virtually every town hall that I do back in my 
district. Someone will raise their happened or come up to me afterwards 
and say, how come on Medicare, you turn 65 and you have to change 
doctors? The answer is because their doctor found it no longer 
economically viable to continue to see Medicare patients because they 
weren't able to cover the cost of delivering the care rendered. They 
weren't able to cover the cost of providing the care.
  Medicare payments to physicians are modified annually. They use 
something called the sustainable growth rate formula. A lot of the 
people around here call it the SGR rate. Because of flaws in the 
process, the sustainable growth rate formula, mandated physician fee 
cuts in recent years have only been moderately averted by last-minute 
machinations and fixes that the Congress has provided. In fact, if no 
long-term congressional action is implemented, the SGR will continue to 
mandate cuts for physician reimbursement as far as the eye can see, 
cuts in aggregate between 35 and 40 percent over the next 10 years.
  Now, unlike hospitals, who are reimbursed under essentially a cost of 
living adjustment every year known as the Medicare Economic Index, 
physicians are reimbursed under the SGR, which says there is a fixed 
amount of money to pay for all of the doctor-derived healthcare in this 
country, and there is more demands on that volume, then the slices of 
that pie are just going to get successively thinner year after year.
  Medicare payments to physicians cover only about 65 percent of the 
cost of providing the patient services. That doesn't figure in anything 
for the doctor's take-home pay. That is the cost of providing the 
services. That is the office rent. That is the nurse's salary. That is 
keeping the lights on. That is paying for the medical equipment. That 
is buying the syringes and the medicines that might be administered in 
that office.
  Can you imagine any industry, any business, any company that would 
continue in business if they received only two-thirds of the cost of 
what it costs them to provide the services? Currently the sustainable 
growth rate formula links physician payment updates to the Gross 
Domestic Product, which actually has no relationship whatsoever to the 
cost of providing those services.
  But simply the repeal of the SGR, one of the big stumbling blocks for 
that is it is very, very costly when figured in the overall Federal 
budget. But the reality is we have to do it. Maybe if we do it over 
time, perhaps we can bring that down to a level that is in fact 
manageable.
  Paying physicians fairly will extend their careers for many of those 
doctors now in practice and those who would otherwise opt out of the 
Medicare program or seek early retirement or restrict those procedures 
that they offer to their Medicare patients. It also has the effect of 
ensuring an adequate network of doctors available to older Americans as 
this country makes the transition to the physician workforce of the 
future.
  In the physician payment stabilization bill, the SGR formula would be 
repealed 2 years from now, in 2010. There would be some incentive 
payments based on quality reporting and technology improvements 
installed to protect the practicing of physicians against the 5 percent 
cut that will likely occur each in the years 2008 and 2009. Those 
things would be voluntary. No one would have to do them. No one would 
be required to participate in the quality program or the technology 
improvement, but it would be available to those doctors and those 
practices who wanted to offset the proposed cuts that would occur in 
physician reimbursement over the 2 years until a formal repeal of the 
SGR would be allowed to happen.
  Now, for most doctors, that is unacceptable. They say, well, I want 
the SGR repealed now, not 2 years from now, and I want it repealed this 
year and I want a positive update or I am going to stop seeing Medicare 
patients.
  The reality is that possibly if we do this over time, we will be able 
to get it done. The other reality is I wish we had started this when I 
first got to Congress 4 years ago, and we might be well on our way or 
well past the where we would have in fact solved this problem. So, it 
is time to begin that journey of 1,000 miles with the very first steps, 
and we do have to focus on the fact that this is a long-term solution.
  A lot of people say why do it that way? Why not just bite the bullet 
and get the SGR out of the way and get it repealed? It costs a 
tremendous amount of money. The other unfortunate aspect of that 
costing a tremendous amount of money is it may make the premium for the 
Part B recipient, it may make that premium go up significantly.

[[Page 15329]]

  In Congress, we are all required to submit legislation to the 
Congressional Budget Office to find out how much it costs. If we are 
going to spend the taxpayers' money, how much are we going to spend, 
over what time will we spend it?
  Because of constraints at the Congressional Budget Office, we are not 
allowed to do what is called dynamic scoring. We are not able to look 
at changing a program or a new program and say if we did things this 
way, we would save money in the future. That is well and good, but we 
can't claim those future savings to offset the cost of doing it a new 
way. And that is what static scoring tells us, and that is why dynamic 
scoring would be so beneficial in a situation like this. But we are not 
able to use that.
  If we look at some of the things we have done already in the Medicare 
system we can say, you know, if we do it this way, we are actually 
going to save some money. We are not allowed to capture those savings.
  The Trustees Report that came out just a few weeks ago, there were 
600,000 hospital beds in the year 2005 that weren't filled because of 
things that doctors and hospitals are doing better, improvements that 
have been made in the healthcare system. 600,000 hospital beds that 
weren't filled. Do we get the financial credit for those 600,000 
hospital beds that weren't filled? No, we can't claim that. That is 
just something that is absorbed by the system, and we go on and reset 
things for the next year and continue on our merry way with the SGR.
  But the reality is if we could capture those savings, if we could 
aggregate those savings, it is not just in hospital beds, there are 
other areas where savings are occurring at the same time, if we could 
capture those savings, aggregate those savings, and use those savings 
to offset the cost of the SGR repeal, we might very well come down to a 
much more manageable number.
  The old bank robber, Willie Sutton, was famous for saying he robbed 
banks because that is where the money is. Well, let's go after the 
procedures where most of the money is spent in CMS, identify where the 
savings are in delivering the care for people who are in those 
diagnostic groups, and let's keep that money, capture that money, and 
use it to offset the cost of the SGR. I think that is the greatest 
return on investment that we could expect from those savings that we 
are likely going to see from Medicare in the future.
  The same considerations apply to the Medicaid program as well. Again, 
it could be a useful exercise to go through and identify the top 10 
conditions and see where the easy savings are in taking care of 
patients with those conditions. How can their care be better managed? 
How can things be prospectively managed? What types of intervention 
might keep a patient out of an expensive hospitalization or away from 
an expensive dialysis unit? These are the times of savings we need to 
gather.
  I see that I am going to run up against some time constraints. I just 
want to mention health information technology is something that we do 
have to pay some attention to.
  In the SGR reform bill that I introduced, there is some language 
about moving us down the road on information technology, embracing 
information technology. I haven't always been a big proponent of that. 
When I was practicing medicine, if someone had come to me with 
proposals like that, I would say, you know, that is going to increase 
the number of hours I spend every day, not increase my payments to any 
great degree, and I just don't see how it is going to be economically 
useful to me as a physician.
  That was before I traveled to the City of New Orleans for the second 
time in January of 2006 and was taken into the records room at Charity 
Hospital shortly after they had gotten all of the water out of the 
records room at Charity Hospital.

                              {time}  2245

  It looked like the records room of any big city hospital. There were 
rows and rows, perhaps hundreds of thousands of records in this large 
room, tens of thousand of square feet devoted to the storage of medical 
records. They were ruined. They had been ruined by the water and by the 
black mold growing on the manilla folders. There was not enough 
protective gear to protect someone to go in and pull the charts out of 
the racks and begin to go through them to get the patient's medical 
history.
  Clearly, the time has come where we need to have the concept of 
computerized access to medical records. It is something this country 
needs to embrace.
  The old adage when I was in college, you could say, the dog ate my 
homework. No student today would do a report, a term paper and keep one 
single paper copy. They have it on a flash drive, on a hard drive, on a 
floppy disk. They have printed it out several times. They live in the 
electronic age. It would make no sense to the medical student of today 
to have a single paper copy of a term paper or lab report that they 
would have to turn in for a grade. It would never cross their mind.
  Some of the other things, the interoperability of our systems is key. 
Right after the Walter Reed story broke, I was there visiting. Yes, the 
physical conditions were one thing; but one soldier told me the biggest 
concern he has is as he prepares his records, he is on medical hold and 
as he is looking to go back to join his unit or be discharged, he has 
to put in order his medical records to make the case for staying in the 
service or get the disability to which he is entitled if he is 
discharged from the service.
  The biggest fear they have is they will spend hour after hour putting 
records together and highlighting critical areas, have them sit on 
someone's desk until they are lost, and then have to start over again. 
Their biggest concern was the inability of the Department of Defense 
and the Veterans Administration to interact with each other on the 
transfer of medical records. Clearly, that is a concept whose time has 
come.
  Price transparency. I have talked about HSAs. If we are going to have 
health savings accounts work for Americans, we are going to have to be 
able to allow them to access information about price, cost and quality 
of medical care and procedures. I introduced legislation dealing with 
price transparency earlier.
  My home State of Texas has gone a long way in this regard, providing 
information up on the Internet about the costs at various hospitals 
throughout the State and how they compare to other hospitals in the 
State. There is a lot of information. It is technically complex. It may 
even be boring to listen to, but nonetheless it is part of an 
incredibly important story. The story of how the most advanced, most 
innovative health care system in the world itself is in need of a 
little attention.
  The last chapter should read happily ever after. How do we get there? 
The last chapter may read private industry leads to a healthy ending. 
We are in a debate that will forever change the way health care is 
delivered in our country. The next 18 months will spell that out for 
us. We have to understand what is working in our system. How do we make 
it work better, and how do we extend that to areas where we don't find 
excellence in our system, whether those areas be public or private. We 
can't delay making changes to bring our health care system into the 
21st century.
  I believe the only way this can work is to allow the private sector 
to lay the foundation for further improvements. The pillars of the 
system we have have to be rooted in the bedrock of a thriving public 
sector, and a thriving private sector, not in the shaky ground of a 
public and private system always at war with each other, and many times 
are inefficient.
  We need to devote our work in Congress to building a stronger private 
sector in health care. History has proven this to be a tried and true 
measure. We can bring down the number of uninsured, increase patient 
access, stabilize physician workforce and modernize technology if we 
simply have the political and institutional courage to take the steps 
necessary.

[[Page 15330]]



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