[Congressional Record (Bound Edition), Volume 153 (2007), Part 13]
[House]
[Pages 18338-18345]
[From the U.S. Government Publishing Office, www.gpo.gov]


                         HEALTH CARE IN AMERICA

  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 as the designee of the minority leader.
  Mr. BURGESS. Mr. Speaker, this evening, I wanted to come to the floor 
of the House to talk once again a little bit about health care. Health 
care in this country is going to be something that is on the front 
pages during the next 18 months until the next Presidential election, I 
suspect, and something we're going to devote a great deal of time and 
energy to on the floor of this House, perhaps even this month.
  As we debate the future of medical care in this country over the next 
18 months and through the Presidential election that will follow in 
2008 and the Congress that convenes in 2009, we've got to decide on the 
avenues through which our health care system will be based. And 
essentially, Mr. Speaker, right now we have a system that is based part 
on the government, part on the public sector, and partly on the private 
sector.
  The issue before us is, do we expand the public sector? Do we expand 
the government's involvement in health care? Do we expand the 
government's involvement in the delivery of health services, as 
popularly referred to as universal health care, and back in the 1990s, 
it was termed ``Hillary care,'' or do we encourage and continue the 
private sector involvement in the delivery of health care? The two 
options bring about a significant number of questions and a significant 
number of concerns addressed on both sides of the aisle. But I'm 
hopeful that as we continue to study this problem and debate this 
problem in this body, we will shed some light on the direction that we 
should be taking.
  And Mr. Speaker, I don't think there is any question that the United 
States has developed one of the best health care systems in the world. 
Access can be an issue, but the quality of health care practiced in 
this country is second to none. You have people coming from all over 
the world. When I was a medical student at the Texas Medical Center 
down in Houston, Texas, you would have people coming from all over the 
word to avail themselves of the medical care that was available at 
Texas Medical Center. And close to my district in north Texas, you have 
Southwestern Medical School in Dallas, a number of Nobel Laureates on 
the clinical faculty there. Unbelievable sources of talent and 
knowledge that are available to training the young physicians of 
tomorrow. So these are the types of things we've got to be certain that 
we preserve, protect and defend as we do things that will perhaps alter 
the way medicine is practiced in this country.
  Now, there are a lot of people who take issue with the fact that I 
maintain that the United States has the best health care system in the 
world. Plenty of people here in this body would say that's an 
overstatement. They would say, you've got a large number of uninsured 
people in this country, or prescription drugs cost way too much. The 
issues are there, but you know what, Mr. Speaker? The old saying is 
that numbers don't lie, but if you torture them long enough, they'll 
admit to almost anything.
  We've got to dispense with a lot of the platitudes and the soundbites 
and try to get to really what is causing the problems that we have 
here, and how can we best go about correcting those problems? Well, how 
about applying some American ingenuity to getting those problems 
solved.
  So, tonight, in talking about the different principles that guide the 
debate about public versus private in the delivery of health care 
services, it's important to concentrate a little bit on the background 
on how we got to the system that we have today.
  The idea that we have a problem to solve is not new. Secretary 
Leavitt, I certainly agree with him when he made the remarks in a 
speech not too long ago that tackling the division between the two 
philosophies, public versus private, recently the Secretary said in a 
speech and in an op-ed piece, he posed the question, should the 
government own the system, or should the government be responsible for 
some organization in the system and leave the proprietary standpoint to 
someone else?
  Mr. Speaker, during World War II, this country was faced with some 
significant problems, and one of the problems was the specter of 
inflation. So Franklin Roosevelt said, look, we're going to have wage 
and price controls in this country so that inflation doesn't get out of 
control. Employees found themselves highly sought after because a lot 
of the workforce was overseas fighting the war. Employers wanted to 
keep their employees happy. They wanted to keep them employed. They 
wanted to keep them loyal to their respective companies, but they were 
unable to raise wages because there was a Presidential decree that we 
were under wage and price controls. So the Supreme Court rendered a 
decision that benefits, things we talk about now as a benefits package, 
health care, retirement, these things could be available and would not 
violate the spirit of President Roosevelt's wage and price controls. 
Thus, the era of health insurance benefits or employer-derived health 
insurance was born. And Mr. Speaker, it worked tremendously well, so 
well that it persisted well after the end of the Second World War.
  Now, a lot of people will look at Western Europe and say, they've got 
a government-run system. Why don't we do what Europe did? How did 
Europe develop a system, a single-payer, government-run system? Even 
though some of the countries in Western Europe were victorious at the 
end of the Second World War, the war was fought in their back yard; 
their economies were devastated. It was important for their governments 
to stand up a medical care system quickly to avert a humanitarian 
crisis. That is what led to the institution of single-payer systems 
that you see in many countries in Europe today.
  But America, by contrast, came through the war with a benefits 
package, if you will, that was available to employees. Employees like 
it. Employers liked it because the employees were happy. The employees 
stayed, to some degree, healthier and were able to work more 
effectively and less time off for sick leave. So the American system 
persisted and did very well for a number of years.
  Now, fast forward some 20 years from the end of the war to the middle 
of the administration of Lyndon Johnson, fellow Texan, fellow House 
Member, albeit on the other side of the aisle, but during the tenure of 
President Johnson, he signed both the Medicare and the Medicaid 
programs into law. This was a large government program and represented 
a fundamental shift. It was the first time that the government got 
involved in a big way in running the

[[Page 18339]]

practice of medicine. But it was created to focus on the elderly, to 
focus on their hospital care and their doctor care, and certainly make 
sure that persons who were then to be covered by Medicare weren't left 
in poverty in old age because of mounting medical bills.
  But then fast forward another 40 years to the 108th Congress, and we 
had the Medicare system that was big and expensive and was very, very 
slow at change. It was like trying to turn a battleship. In 2003, in 
this House of Representatives, the President came to us, in the very 
first State of the Union message that I attended as a Member of 
Congress in my first term, and the President said he was going to, or 
this Congress was going to bring a Medicare prescription drug benefit 
to Medicare, that people had waited too long for this; it was too 
important to wait for another President or another Congress. And 
indeed, Congress set about the work of providing what we now know as 
the Part D benefit. And within the year, we voted on that package, and 
within the next year, it was, indeed, starting to be run. But the 
government system needed to address some of the inefficiencies that 
were built into the system.
  Now, the Medicare prescription drug plan has given seniors access to 
medications that, quite frankly, they just didn't have available 
before. And when you look at how medicine has changed from 1965 to 
2005, when the Medicare drug plan took effect, the changes that had 
been brought about by the advances in medical research, my dad was a 
doctor as well, and I used to tease him that, back in 1965, doctors 
only had two pharmaceutical choices, penicillin and cortisone, and they 
were regarded as interchangeable. My dad didn't think that was very 
funny. But the fact is, you come to 2005, look at the lives that have 
been saved by the introduction of a medicine like statin, medicines 
that are used for reduction of cholesterol. Dr. Elias Zerhouni of the 
National Institutes of Health estimates that 800,000 premature deaths 
have been prevented between 1965 and 2005 with the introduction of 
medicines to manage cholesterol and lipid levels in patient's blood. 
That's a tremendous change. In 1965, some people simply had the heart 
attack and died. In 2005, 2007, that no longer happens. But they are 
required, in order to maintain that state of health, to be maintained 
on a medication. Well, if the medicine is too expensive for the patient 
to buy, they don't take it, and they suffer the health consequences. 
And as a consequence, the system becomes more expensive because people 
end up utilizing the system more frequently and the outcomes for 
disease management become much worse.
  The Medicare Prescription Drug Program has been successful. There 
have been a certain number of people who have been critical, but it has 
been a great benefit for seniors. And the fact that it is up and 
running now well into its second year, there is a great deal of 
satisfaction, and the penetrance into the number of people who have had 
prescription drug benefits who are covered by Medicare is now at an 
all-time high.
  Now, in this country, as I mentioned earlier, the government pays for 
about half of our health care expenditures. We have a GDP of roughly 
$11 trillion in this country. The U.S. Department of Health and Human 
Services states that Medicare and Medicaid services alone, in fact when 
we vote on our Labor-HHS appropriations bill this year, it will be 
significantly north of $600 billion.

                              {time}  1900

  So that is about a half of what we spend in health care.
  The way the other half is broken down, primarily the weight is borne 
by commercial insurance, by private insurance. There is a significant 
number of dollars that are contributed as charity care or uncompensated 
care. Certainly there are some individuals who do still simply just pay 
for their medical care out of pocket, but about half are from the 
Government source and half from private sources or the goodwill of 
America's physicians.
  The numbers are going to increase because the overall dollar 
expenditure in health care is going to increase. The baby boomers are 
aging. There are more and more advances discovered with every passing 
month. The Federal Government is going to continue to funnel taxpayer 
dollars into Medicare. We have to ask ourselves, are we getting value 
for the dollar? Are we doing the best that we possibly can do with that 
money? Is the government doing an excellent job of managing our health 
care dollars? Do we think that the government is better suited to be 
the arbiter of a person's health care needs, or are those decisions 
better left up to an individual and their family? And who, at the 
fundamental end of it all, who is better able, who is going to be able 
to handle the growing health care needs in this country?
  I would argue that if you have a public only, a government-run 
system, a universal, single-payer system, that in America it is going 
to be a significant problem. In fact, it will have the perverse 
incentive of hampering our innovation and perhaps even hampering the 
delivery of the most modern health care services available.
  As an example, I would suggest that we have a model that we can 
examine, and that is our neighbor to the north in Canada. Canada has a 
completely government-run system. The Supreme Court in Canada in 2005, 
however, said that the waiting times in Canada were unconscionable and 
access to a waiting list did not equate to the same thing as access to 
care.
  Now, in Canada they actually have a safety valve, because if somebody 
needs a medical procedure or needs a medical test done, they actually 
do have an area where there is a surplus of medical care available, and 
that would be on their southern border, the United States of America. 
So if somebody has the ability to pay and wants to come from Canada and 
cross the border to Henry Ford Hospital in Detroit, they are very 
capable of doing that. I am certain that the good folks at Henry Ford 
Hospital welcome their neighbors from Toronto all the time to sell 
essentially excess capacity that they have, whether it be an MRI or a 
CT scan or even a mammogram, heart surgery, or an artificial hip. The 
things that are on the waiting list in Canada that might take months or 
even years can be accessed relatively quickly simply by crossing the 
border. The waiting list is significantly long for some procedures.
  If we look across the ocean to the country of Great Britain, the 
National Health Service, of course, has long been established in 
Britain. The citizens of that country regard their health system with a 
good deal of affection. But there is, in fact, a two-tier system in 
England. If someone is on a list for a hip replacement and has the 
money to pay for it, they can go outside the system to a private 
orthopedic physician and have that surgery performed. Obviously, 
someone who doesn't have the means to provide that for themselves will 
simply have to stay on the waiting list. You get into a little trouble 
with the fact that when it takes so long, if someone is of a certain 
age, another year or two wait is a significant percentage of their 
remaining expected life years. In many ways that is not fair either. A 
sad reality that exists, but it is true.
  So, in both instances, you can see that where the single-payer, 
government-run system has been oversubscribed, where they have a 
private system, either here in the United States for the country of 
Canada or a two-tiered system in the country of Great Britain, they 
have a private system to act as a backstop.
  So, the question that I would ask is, if the private sector is more 
nimble and more able to provide care on a timely basis, why in the 
world would we do anything that would interfere with that system? It is 
a complex relationship.
  How Congress does its job and how we react to the situation can, in 
fact, have a significant impact on making sure that we have the best 
health care possible. Certainly I think it is incumbent upon Congress 
to promote policies that keep the private sector involved in the 
delivery of health care in this country.
  Now, you almost can't talk about health care in this country without 
talking about the problem of the uninsured. Regardless of the number 
you

[[Page 18340]]

use, whether it is 42, 45 or 46 million, it does become a question of 
access for people without insurance.
  But I would also point out that health care is rendered all the time 
in this country to people who don't have insurance or don't have the 
means to pay for it. It is not always rendered in the time frame that 
would be most propitious for the best health outcome, and certainly it 
is not always administered in the time frame where it is the least 
expensive type of care, but access to care in this country is, in fact, 
something that is generally available. But it can become very expensive 
and the time involved can be significant.
  Now, we have a program in this country. It is about to turn 10 years 
old. In fact, it is a program that we have to reauthorize this year or 
it will expire at the end of September. This is a program that provides 
health insurance for children whose parents earn too much money for 
them to qualify for Medicaid and not enough money to purchase health 
insurance. So we have the SCHIP program that operates as a joint 
Federal-State partnership. It does provide some flexibility to States 
to determine the standards for providing health care funding for those 
children, again, who are not eligible for Medicaid and whose parents 
have not been able to get private insurance. The program has been very 
well thought of. It has been very successful across the board.
  This year, in fact, before September 30, we have to reauthorize the 
State Children's Health Insurance Program. There is going to be a lot 
of debate. I suspect there will be a lot of debate this month. 
Certainly, in my Committee on Energy and Commerce and the Committee on 
Ways and Means, there will be a lot of debate on the best way to go 
forward with that.
  One of the things I have had a problem with since coming to Congress 
and examining the SCHIP system is the fact that it is a program that 
was designed to cover children, but, in fact, we have some States that 
cover adults. Pregnant women, okay, it is reasonable to have them 
covered under the SCHIP system. But nonpregnant adults, it strains 
credulity to have a system that is there to provide health care for 
children, and in four States in this country we actually have more 
adults covered under the SCHIP program than we do children.
  Certainly, where you have a State where all of the uninsured children 
have been covered by the SCHIP program, it may be appropriate to cover 
some adults. But until that trigger point is met, until that condition 
is met, to me it makes less sense to cover adults, when there are 
children who would benefit from having the coverage from the State 
Children's Health Insurance Program, to have them remain uncovered 
while we cover a population where the money was never intended to be 
used for that purpose.
  A bill that I introduced, H.R. 1013, would make certain that SCHIP 
funds are spent exclusively on children and pregnant women and not on 
any other group. I hope to be able to have that concept considered when 
we go through the reauthorization of the SCHIP program.
  Last year in Congress we also debated and got through the committee 
process the reauthorization for Federally Qualified Health Centers. We 
did not finish the work on that legislation, so we are likely to have 
to take that up again this year.
  But about someone who is not a child, not a pregnant woman, who 
doesn't have access to health insurance, there are many places in the 
country where Federally Qualified Health Centers exist that give the 
patients access to health care without insurance; gives them a medical 
home, gives them continuity of care, a place they can go and see the 
same health care providers, whether it be a physician or nurse 
practioner, can see that person over and over again; provides primary 
health, oral and mental health and substance abuse services to persons 
at all stages in the life cycle.
  Federally Qualified Health Centers take care of 15 million people in 
this country every year, typically someone who does not have insurance 
and so would be counted as one of the uninsured, but the reality is 
that they do have access to the continuity of care, just as someone who 
has insurance. Both the SCHIP program and the Federal Qualified Health 
Centers are designed to help the poorest, youngest and neediest in our 
communities.
  But what about for individuals who can afford to pay some for their 
health services but just choose not to? We need to get past that point, 
and certainly there are two things that would improve the access to 
health insurance for people who do have the ability to pay something 
for their health care, health savings accounts and health association 
plans.
  Health savings accounts are a tax-advantaged medical savings account 
available to taxpayers who are enrolled in a high-deductible health 
plan, a health insurance plan with lower premiums and a higher 
deductible than a traditional health plan. In the old days we used to 
refer to this as a catastrophic health plan.
  Now, about 1996 or 1997, long before I ever thought about running for 
Congress, I was a physician in practice back in Texas. The Kennedy-
Kassebaum bill was passed by the House and Senate and signed into law. 
It had in it what was called a demonstration project that would allow 
750,000 people in the United States to sign up for at that time what 
were called medical savings accounts.
  I subscribed to one of those. I purchased one of those for my family. 
The primary reason I did it was not even so much cost considerations 
but because it kept me in control of making health-care decisions. 
Those were the days when HMOs and 1-800 numbers were the order of the 
day, and I wanted to be certain that the health care decisions made in 
my family were made by my family and not by a bureaucrat or an 
insurance executive at the end of a 1-800 number.
  The medical savings account proved to have a lot of restrictions on 
them. For that reason, a lot of people shied away from them. So I don't 
know that they ever got to their full enrollment of 750,000, but to me 
it was another very viable form of insurance.
  Again, the premiums were lower because the deductible was higher, and 
you were able to put money into an account like an IRA, called a 
medical IRA, that would grow tax-free. The interest in it would grow 
tax-free year over year. This money could be used only for legitimate 
medical expenses, but if you found yourself in a situation where you 
needed to pay for medical care, yes, you had a high deductible, but now 
you have saved some money that can offset the high deductible.
  When the Medicare Modernization Act passed in 2003, we also did away 
with a lot of the regulations and restrictions on medical savings 
accounts, and the follow-on for that are what are called health savings 
accounts or HSAs.
  For an HSA, the funds contributed to the account are not subject to 
the income tax and can only be used to pay for medical expenses. But 
one of the best parts about having an HSA is that all deposits stay the 
property of the policyholder. They don't go to the insurance company. 
They don't go to the government. They stay under the control and 
ownership of the person who has put those funds, regardless of the 
source of the deposit. So even if an employer makes a contribution to 
that, the funds belong to the person who owns the insurance policy. 
Additionally, any funds deposited that are not used that year will stay 
in the fund and grow year over year, different from the old use-it-or-
lose-it programs that were so prevalent and popular during the 1990s.
  The popularity of health savings accounts has grown considerably 
since its inception. The latest numbers I have are, unfortunately, a 
couple of years old. They are from 2005. But by December of that year, 
3.5 million people had insurance coverage through an HSA. Of that 
number, 42 percent of the individuals are families who had income 
levels below $50,000 a year and were purchasing an HSA type of 
insurance. Additionally, about another 40 percent were individuals who 
previously had not been insured. So this allowed a way

[[Page 18341]]

for people who were previously uninsured to access insurance. A good 
number of those folks were between the ages of 50 and 60, taking away 
some credence to the myth that HSAs are only for the healthy and 
wealthy.
  These programs have been well-subscribed. Again, the numbers that I 
have are from 2005. I suspect they are much more robust at this point.
  Well, when you consider a young person just getting out of college, 
roundabout age 25, if they don't want to go to work for a major 
corporation and therefore have employer-derived insurance, what are 
their options? I will tell you, 10 years ago, you didn't have many 
options. In fact, I tried to purchase a health insurance policy for an 
adult child just in that situation. You almost couldn't get an 
insurance policy for a single individual, regardless of the price you 
were willing to pay.
  Fast forward to 2005 or 2007. You can go on the Internet, type 
``health savings account'' into the search engine of your choice, and 
very quickly you will be given a plethora of choices from a variety of 
different health plans. In my home State of Texas, a male age 25 
looking for health insurance can find a high-deductible PPO plan from a 
reputable insurance provider for between $60 and $70 a month. So that 
is eminently affordable.
  Sure, there is a high deductible involved with that. That means every 
fall, if you go get a flu shot, you are probably going to pay for that 
flu shot out-of-pocket, or if you have money in your health savings 
account, you can make a draw on that.

                              {time}  1915

  So that type of expense is not going to be covered, but if that 
individual is in an accident and ends up spending 3 or 4 hours in the 
emergency room and a day in the intensive care unit, they will be 
covered because those expenses will rapidly exceed their deductible. 
That individual will be covered with health insurance. That is a 
concept that we need to make people aware of, that there are options. 
Even though you may work for a company that doesn't provide insurance 
or you are self-employed and are a small group and otherwise would not 
have access to employer-derived health insurance, the concept of a 
health savings account is available and marketed over the Internet, and 
there is a lot of competition for those products. As a consequence of 
that competition, the price on those has come down in the years since 
they were introduced.
  Mr. Speaker, another concept that we have debated in this House at 
least every year I have been here is the concept of association health 
plans. Association health plans allow small employers to band together 
to get the purchasing power of a larger corporation when they go out 
and price insurance on the open market.
  To date, we have passed that legislation four times that I can recall 
in the House of Representatives. It never passed in the Senate. I would 
like to see us take up and at least discuss that as a possibility this 
year. I don't know in fact if that will happen. But association health 
plans may not bring down the number of uninsured directly, but it 
certainly would help bend the growth curve that is going upward of the 
number of people not covered by insurance because it allows for small 
employers to get access to much more economic leverage in the market 
for buying insurance policies and allows them to be able to offer that 
insurance policy to their employees in the small group market.
  It means that a group of perhaps Chambers of Commerce or a group of 
realtors could band together and offer health insurance to their 
employees where otherwise it might not have been available. All of 
these things are important.
  Another factor to consider, and we have to be careful here, about a 
year and a half ago, Alan Greenspan was talking to us just before he 
left his position at the Federal Reserve. Someone brought up the topic 
of Medicare, and where is the funding going to come from? Mr. Greenspan 
said he was confident at some point in the future Congress will come to 
grips with this problem and will solve this problem.
  But he went on to say what concerns me more is, will there be anyone 
there to provide the service when you require it? Those words really 
struck me. What he is talking about, are there going to be doctors 
there in the future? Are there going to be nurses in the future to 
provide for us when we are the ones who are relying on Medicare for our 
health services?
  Back in my home State of Texas, the Texas Medical Association puts 
out a journal called Texas Medicine, and last March they had a special 
issue called, ``Running Out of Doctors.''
  Our country faces a potential crisis with a health care provider 
shortage or a physician shortage in the future. So when we work on 
health care issues in this body and on both sides of the aisle, this is 
going to be important; when we work on health care issues in Congress, 
we have to be is certain that we retain the doctors of today, that we 
encourage the doctors who are in training today, and that we encourage 
those young people who might consider a career in health care, that we 
encourage them to pursue that dream and realize that dream.
  Certainly the doctors of today, those at the peak of their clinical 
abilities, it is incumbent upon us to make certain that they remain in 
practice and they continue to provide services, services to our 
Medicare patients and services to patients who typically have one, two, 
three or more medical problems. Some of the most complex medical issues 
that can face a practitioner today will occur in the Medicare 
population.
  Well, what steps do we need to take to make certain that we have 
doctors in practice, that we have people there able to deliver those 
services that Alan Greenspan was talking about a year and a half ago? 
Well, Mr. Speaker, you almost can't have this discussion without 
talking a little bit about medical liability. Now, in the 4 years prior 
to this Congress, every year, again, we passed some type of medical 
liability reform bill in the House of Representatives. It never got 
enough votes in the Senate to cut off debate and come to a vote. I feel 
certain it would have passed had it come to an up-or-down vote, but 
they were never to muster the 60 votes.
  We need commonsense medical liability reform to protect patients, to 
protect patients' access to physicians, to stop the continuous 
escalation of costs associated with medical liability in this country. 
And in turn, this makes health care more affordable and more accessible 
for more Americans because we keep the services available in the 
communities as they are needed, when they are needed.
  Mr. Speaker, I believe we need a national solution. Our State-to-
State responses to this problem, some areas, like my State of Texas, 
have gone a long ways towards solving the problem, but there are many 
areas in the country where the problem persists, and it does remain a 
national problem.
  We have an example, I think a good example, in my home State of Texas 
of exactly the type of legislation that we should be considering in the 
House of Representatives. Texas, in 2003, brought together the major 
stakeholders in the discussion, included the doctors, patients, 
hospitals, nursing homes, and crafted legislation that was modeled 
after the Medical Injury Compensation Reform Act of 1975 that was 
passed in California in 1975. There were some differences with the 
California law, but basically it is a cap on noneconomic damages. In 
Texas, we had a significant problem as far as medical liability was 
concerned. We had medical liability insurers that were leaving the 
State. They were simply not going to write any more policies. They 
closed up shop and left town because they couldn't see a future in 
providing medical liability coverage in Texas. We went from 17 insurers 
down to two at the end of 2002, the year I first ran for Congress. The 
rates were increasing year over year. Running my own practice in 2002, 
my rates were increasing by 30 to 50 percent a year.
  In 2003, the State legislature passed medical liability reform, again 
based on the California law of 1975. The California law in 1975 was 
also a cap on noneconomic damages. They had a single cap of $250,000 on 
all noneconomic damages.

[[Page 18342]]

  In Texas, the cap was trifurcated. There was a $250,000 cap on 
noneconomic damages as it pertains to a physician, a $250,000 cap on 
noneconomic damages as it pertains to the hospital and a $250,000 cap 
on noneconomic damages as it pertains to a nursing home or a second 
hospital; so an aggregate cap of $750,000 on noneconomic damages.
  How has the Texas plan fared? Remember, we had gone from 17 insurers 
down to two because of the medical liability crisis in the State. Now 
we are back up to 14 or 15 carriers. And most importantly, those 
carriers have returned to the State without a premium increase.
  In 2006, 3 years after the passage of the medical liability reform, 
an insurance company called Medical Protective, I had a policy with 
them for years and years, Medical Protective company cut their rates 10 
percent, which was the fourth reduction since April of 2005.
  Texas Medical Liability Trust, my last insurer of record when I left 
practice in Texas, has had an aggregate cut of 22 percent since the law 
was passed.
  Advocate MD, another insurance company, has filed a 19.9 percent rate 
decrease. Another company called Doctor's Company has announced a 13 
percent rate cut. These are real numbers, and they affect real people 
in real practice situations in Texas. It is a significant reversal.
  The year when I first came to Congress, we lost one-half of the 
neurosurgeons in the metroplex because of the medical liability expense 
problem. The doctor looked at the renewal bill and said, I cannot work 
enough to pay for this and pay for my practice and support my family, 
so I will go elsewhere. The net effect is it put the whole trauma 
system in north Texas at risk because one neurosurgeon was going to 
have to do the work of two, and you cannot physically work 24 hours a 
day, 7 days a week, delivering that type of care. So the whole trauma 
system was put at risk before this law went into effect in Texas.
  A young perinatologist whom I met during my first year in office, had 
gone on and gotten specialized training to care for those high-risk 
pregnancies, well, you can imagine what his medical liability premiums 
were. Mine were high as an obstetrician. His were even higher as a 
perinatologist who specialized only in high-risk cases. And, in fact, 
at a lecture in Texas, he came to me and said, you know, I am going to 
have to leave the practice of medicine altogether because I simply 
cannot get insurance.
  Well, how are we furthering the cause of patient care if we take a 
young person who is very dedicated to taking care of the highest-risk 
pregnancies in the metroplex and we say, sorry, you can't practice 
because we can't get you insurance anywhere. Happily, in Texas, that 
situation reversed, and that doctor, I know, is in practice.
  The problem with the neurosurgeon, because of the straightening out 
of the insurance in Texas, has been reversed. Our trauma system is 
protected, as is the young man who is practicing high-risk obstetrics 
and saving babies even as we speak.
  One of the unintended beneficiaries of the legislation was the 
benefit for community, small, mid-sized community not-for-profit 
hospitals who were self insured as far as medical liability was 
concerned. They had to put so much money in escrow to cover potential 
bad outcomes that that money was just tied up, and it was not available 
to them. Now they have been able to back some of that money out of 
escrow because of putting stability into the system with the cap on 
noneconomic damages, and now they are able to use that money for 
capital expansion, nurses' salaries, exactly what you want your small 
community not-for-profit hospitals to be engaged in. They can, once 
again, participate in those activities because of the benefits from the 
medical liability plan that was passed in Texas.
  So, Mr. Speaker, I took the language of the Texas medical liability 
plan, worked with legislative counsel and made it so it would conform 
with all of our constructs here in the House of Representatives. And 
although I didn't introduce that legislation, I offered it to the 
ranking member on our Budget Committee last spring when we offered our 
Republican budget here on the floor of the House.
  Mr. Ryan, the ranking member, had that scored by the Congressional 
Budget Office, and the Texas plan as applied by the House of 
Representatives legislative counsel and applied to the entire 50 States 
would yield a savings of $3.8 billion scored over a 5-year time span. 
That is not a mammoth amount of money when we talk about the types of 
dollars we talk about in our Federal budget, some $2.999 trillion, but 
$3.8 billion over 5 years is not insignificant. And it is basically 
money that we left on the table because we did not include the language 
of that medical liability reform in the budget that was passed this 
year.
  Now, when I say the problem, although the problem in Texas is 
measurably better than it was when I took office here, consider a 1996 
study done at Stanford University that revealed within the Medicare 
system alone the cost of defensive medicine, that is medicine that you 
practice so that you tone the chart and you look good if something goes 
wrong and the case is brought to trial; if you have practiced 
satisfactory defensive medicine, you will be able to defend yourself in 
the case of a medical liability suit. A couple of doctors and 
economists at Stanford got together and said, what does this cost 
Medicare? What does it cost for doctors to practice this type of 
defensive medicine? And it cost about $28 billion a year back in 1996. 
I would submit that the number is probably higher today if they were to 
revise and redo that study.

                              {time}  1930

  So that is a significant amount of money, and the Medicare system is 
the one that pays for that. Remember, Medicare runs about $300 billion 
a year. That's almost 10 percent of its budget that is being spent on 
defensive medicine because of the broken medical liability system we 
have here in this country. We can scarcely afford to continue on that 
trajectory that we're on with the medical liability system in this 
country.
  Another consideration, Mr. Speaker, I talked a little bit about young 
people who are perhaps considering a career in medicine or nursing, and 
the current medical liability system is a deterrent for going into the 
practice of health care because they look at the burden that's placed 
on young doctors and nurses for the payment for medical liability 
insurance, and we keep people out of the system and it's something we 
have to consider because, again, remember, we're talking about 
physician workforce issues and how we keep the doctors of today in 
practice, but how do we encourage that young person who's in middle 
school or high school today who's thinking about a career in one of the 
health professions, and we want them to be able to pursue that dream.
  But currently, they get to the end of college and they look at the 
expense for getting medical training, they look at the money they will 
have to put up front to purchase their medical liability policy when 
they get out, and they say maybe it's not worth it.
  And the problem, Mr. Speaker, with that is these are our children's 
doctors and our children's children's doctors who perhaps are not going 
to go into the healing professions because of problems within the 
medical liability system. I could talk about that a great deal longer, 
but let me get to three specific pieces of legislation that really get 
to the core of dealing with the physician workforce issues and I think 
the problems that we're going to face in the future if we don't get our 
arms around this problem.
  A recent piece of legislation that I introduced is H.R. 2584, the so-
called Physician Workforce and Graduate Medical Education Enhancement 
Act of 2007. Part of this legislation is to ensure this workforce in 
the future by helping young doctors with the availability of residency 
programs.
  One thing about physicians is we tend to have a lot of inertia. We 
tend to go into practice where we did our residency. We tend to not go 
too far

[[Page 18343]]

from home when it comes to setting up a medical practice.
  So with that in mind, and in fact, that was one of the main thrusts 
of the article that was included in Texas Medicine, is to develop more 
residency programs in the communities where the medical need is 
greatest and develop those residency programs with the type of 
physician that's needed in those medical communities: Primary care to 
be certain; obstetrics to be certain; general surgery; again, the types 
of physicians that we want to be on the front lines practicing in our 
medium-sized communities. We need to get young doctors in training in 
locations where they're actually needed.
  This bill, the physician workforce bill, 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 
and build a physician workforce of the future and build it from the 
ground up, start at home, start right where it's going to be needed.
  On average, it costs $100,000 a year to train a resident, and that 
cost for a smaller hospital obviously can be prohibitive. Because of 
the cost consideration, my bill would create a loan fund available to 
hospitals to create residency training programs where none has operated 
in the past. The program would require full accreditation and be 
generally focused in rural suburban inner community hospitals and focus 
on those specialties that are in the greatest need, and that will, of 
necessity, be some of the primary care specialties that I just 
mentioned.
  Well, what about those people who may not yet be in medical school 
but may be contemplating a career in health care? Locating young 
doctors where they're needed is just part of solving the impending 
physician shortage crisis that I think will affect the entire health 
care system nationally. Another aspect that must be considered is 
training doctors for high-need specialties.
  The second bill, H.R. 2583, the High Need Physician Specialty 
Workforce Incentive Act of 2007, will establish a mix of scholarship, 
loan repayment funds and tax incentives to entice more students to 
medical school and create incentives for those students and newly 
minted doctors to stay in those communities.
  This program will have an established repayment program for students 
who agree to go into family practice, internal medicine, emergency 
medicine, general surgery or OB/GYN and practice in a designated 
underserved area. It will be a 5-year authorization at $5 million per 
year. It will provide additional educational scholarships in exchange 
for a commitment, a commitment to serve in a public or private non-
profit health facility determined where there's a critical shortage of 
primary care physicians.
  Well, in addressing the physician workforce crisis, looking a little 
bit at residency programs, looking a little bit at medical students 
and, of course, medical liability but the placement of doctors in 
locations of greatest need and the financial concerns of encouraging 
doctors to remain in high-need specialties, the next bill, H.R. 2585, 
will address perhaps what is the largest group of doctors in this 
country, what I like to call the mature physician, and certainly the 
largest and still growing group of patients, our baby boomers, those 
who are just on Medicare and those soon to be on Medicare.
  Now, before I get too far into this, I'm joined by my friend from 
Pennsylvania. Did you wish to weigh in on this subject this evening?
  Mr. DENT. I would very much like to.
  Mr. BURGESS. I'm happy to yield to my friend from Pennsylvania for a 
few minutes and give him time to talk.
  Mr. DENT. Mr. Speaker, I first want to applaud you for your 
leadership on this issue. As an OB/GYN physician, you know this issue 
probably better than anyone in this institution.
  But I just wanted to share with you a perspective from the 
Commonwealth of Pennsylvania, where we were a crisis State. And you're 
right on on some of these issues you just discussed, but the bad policy 
on medical liability reform was far too common in the Commonwealth of 
Pennsylvania for a very long time.
  Our crisis actually originated back in the 1970s when no one would 
write medical liability insurance. So we created a State fund, and it 
was supposed to be a stopgap measure. We addressed that stopgap measure 
almost 30 years later in 2002, 2003.
  But the point of the whole issue is you had to buy insurance from the 
State fund, we call it the MCAT fund, and it's been renamed the MCARE 
fund, and then you would buy additional insurance from the private 
sector.
  The problem with the program was, though, you would buy your 
insurance basically today, if you're a young doctor you buy into the 
MCARE fund, and you're really paying for past claims, unlike a 
traditional insurance product where you pay your premium today to pay 
against a future claim, and so this has created an enormous retention 
problem for us because over the years there are so many unsettled cases 
in this MCAT fund that what would happen is these claims all collected 
and we started settling these cases rather aggressively in the late 
1990s and 2001 and 2002. And so today's physicians were being assessed 
with an emergency surcharge to pay for previous medical liability 
incidents. A major, major problem.
  And also, in a city like Philadelphia, where the average jury verdict 
was more than double that of anywhere else in the Commonwealth of 
Pennsylvania, where jury verdicts were in excess of $1 million on 
average, as reported by a jury verdict research, and the rest of the 
Commonwealth, the verdicts were less than half that.
  But my point again is this: we created this State fund, an unfunded 
liability accumulates, today's doctors are paying for the liability 
situation of their predecessors, creates an enormous physician 
recruitment problem. Of course, there's always a retention problem, but 
the recruitment problem was enormously pronounced because of that 
policy change.
  And so what ultimately happened, because the premiums became so high 
through this State fund, the people who ultimately had to solve this 
problem for the physicians were the taxpayers. And so cigarette taxes 
were used to pay for physicians' premiums, particularly in the high-
risk areas, the OBs, the neurosurgeons and many other trauma surgeons 
and orthopods.
  That's what happened in Pennsylvania, and I think many of the 
remedies you've discussed here, such as caps on noneconomic damages or 
collateral sources, structured payments, some of the things that you've 
done in Texas, I'm not as familiar with all those changes, but it 
certainly had an impact.
  I just wanted to applaud you for this. You know, of course, that 
there's legislation pending in this Congress from some of the 
legislation last session, and I just want to thank you for yielding, 
but I just again want to applaud you for your leadership on this issue. 
I'm glad you're bringing this issue, once again, to the attention of 
the American people.
  Mr. BURGESS. I thank the gentleman for his input. Certainly, the 
ability to recruit doctors to Texas from Pennsylvania has been greatly 
enhanced by the passage of the Texas medical liability bill, but you 
point up a very real problem that the physicians in Pennsylvania face. 
And, again, it points up the need for a national solution to wait and 
have the process work its way through every State legislature, State by 
State. It costs an enormous amount of money, costs an enormous amount 
of time, and just the effort, the efficiency of those doctors affected 
is going to be diminished.
  So I really appreciate the gentleman taking the time to come down 
here and add his thoughts about what is happening in his home State of 
Pennsylvania.
  Mr. Speaker, let me go on and talk just a little bit about H.R. 2585. 
That will address some of the problems that are faced by the physicians 
who are in practice now, the physicians who are the primary source of 
care for our

[[Page 18344]]

Medicare patients. As baby boomers retire, the demand for services is 
going to go nowhere but up, and if the physician workforce trends of 
today continue, we may not be talking about a Medicare funding problem. 
We may be talking about why there is no one there to take care of our 
seniors.
  Year after year, there's a reduction in the reimbursement payments 
from the Center of Medicare and Medicaid Services to physicians for the 
services they provide for Medicare patients. It's not a question of 
doctors just simply wanting to make more money. It's about a stabilized 
repayment for services that have already been rendered, and it isn't 
just affecting doctors. The problem also affects patients. It becomes a 
real crisis of access.
  Not a week goes by that I don't get a letter from a physician from 
somewhere in the country or a fax that says, you know what, I've just 
had it up to here, and I'm going to stop seeing Medicare patients. I'm 
going to retire early. I'm no longer going to accept new Medicare 
patients in my practice, or I'm going to restrict those procedures that 
I offer to Medicare patients.
  And, unfortunately, I know this is happening because I saw it in the 
hospital environment before I left practice 5 years ago to come to 
Congress, and I hear it in virtually every town hall that I have in my 
district. Someone will raise their hand and say how come on Medicare, 
you turn 65 and you've got to change doctors. And the answer is, 
because their doctor found it no longer economically viability to 
continue to see Medicare patients because they weren't able to pay for 
the cost of delivering the care. They weren't able to cover the cost of 
delivering the care.
  Now, Medicare payments to physicians are modified annually under a 
formula that is known as the ``sustainable growth rate.'' Because of 
flaws in the process and flaws built into the formula, the SGR-mandated 
physician fee cuts in recent years have only been moderately averted at 
the last minute; and if long-term congressional action is not 
implemented, the SGR will continue to mandate physician cuts.
  Now, unlike hospital reimbursement rates which closely follow the 
consumer price index that measures the cost of providing care, 
physician reimbursements do not. I have a graph here, again from the 
Texas Medical Association, that shows based on various calendar years 
what the cuts in the SGR formula have amounted to as far as physician 
reimbursement versus what the cost-of-living adjustment has been for 
Medicare Advantage, the Medicare HMOs, for hospitals, for nursing 
homes, for pharmaceuticals now would be the same type of formula.
  Only physicians are asked to live under this formula. In fact, 
ordinarily Medicare payments do not cover or only cover about 65 
percent of the actual cost of providing the patient services. Can you 
imagine going to any industry or company and ask them to continue in 
business when you're only paying them 65 percent of what it costs them 
to stay in business?
  The SGR links physician payments updates to the gross domestic 
product and the reality is that has no relationship to the cost of 
providing patient services. But simply the repeal of the SGR has been 
difficult because it costs a lot of money; but perhaps if we do it over 
time, perhaps we can bring that down to a level that's manageable.
  Paying physicians fairly will extend the career of practicing 
physicians who would otherwise opt out of the Medicare program, seek 
early retirement or severely 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 a transition to the physician workforce of the future.
  In the new physician payment stabilization bill, the SGR formula 
would be repealed in the year 2010, 2 years from now, but would also 
provide incentive payments based on quality reporting and technology 
improvements. These incentive payments would be installed to protect 
the practicing physician against that 5 percent cut that is estimated 
to occur in 2008 and 2009.

                              {time}  1945

  Note that this would be voluntary. No one would be required to 
participate in either program that dealt with quality improvement or 
technology improvement, but it would be available to doctors or 
practices who wanted to offset the proposed cuts that would occur in 
physician reimbursement until the 2 years time the physician repayment 
formally can be repealed.
  Now I know that a lot of the doctors don't like the concept of 
postponing the SGR by 2 years. In fact, in the bill 2585, by resetting 
the baseline of the SGR formula, a technique that we used in this 
Congress back in 2003, by resetting the baseline, the amount of cuts 
contemplated for 2008 and 2009 are actually modified significantly, 
and, in fact, there may not be a cut at all in 2008 or 2009. This could 
translate into an actual positive update for physicians in those 2 
years.
  But the critical thing, in my mind, is that we have to be, regardless 
of what we decide to do over the next 2 years, we have got to be 
working on a long-term solution to get out from under the tyranny of 
the SGR formula.
  Now, why do it this way? Why not just bite the bullet and get the SGR 
out of the way and get it repealed once and for all? The problem is, it 
costs a tremendous amount of money to do that. The problem we have in 
Congress is, if we are required to submit all legislation that we 
propose to the Congressional Budget Office to find out how much 
something costs, we are going to be spending the taxpayers' money, we 
have got to know how much we are going to spend, over what time will we 
spend it.
  Because of the constraints in the Congressional Budget Office, we are 
not allowed to do what's called dynamic scoring. We can't look ahead 
and say, you know, if we do this, we are going to save money. The 
Congressional Budget Office doesn't work that way.
  That's why postponing the renewal of the SGR by 2 years, take that 
savings that is going to occur over those 2 years, sequester it and 
aggregate that savings and put it towards paying for the repeal of the 
SGR and replacing it with a cost of living index, the Medicare, 
economic index that would be fundamentally much fairer.
  One of the main thrusts of the bill is to require the Centers for 
Medicaid and Medicare Services to do just exactly that and to look at 
the 10 diagnostic codes for which most of the monetary expenditures are 
rendered. You know the old bank robber, Willie Sutton, when he was 
asked why he would rob the bank, he said, that's where the money is. 
Let's go to where the money is. Let's go to those top 10 procedures and 
diagnoses that spend the greatest amount of Medicare and look for where 
the greatest amount of savings can be found within that.
  The same considerations actually apply to the Medicaid program as 
well, so it will be useful to go through this process in identifying 
those top 10 conditions and trying to modify things so that the 
delivery of care for those top 10 conditions actually ends up costing 
us less.
  With the time that remains, I know I have talked about a lot of stuff 
tonight, a lot of it is technically very complex. I will admit it, a 
lot of it is actually very boring to listen to. But it is an incredibly 
important subject, and it is an incredibly important story that we have 
to tell here in Congress. It's a story of how the most advanced, most 
innovative and most appreciated health care system in the world 
actually needs a little help itself.
  The end of the story should read, ``happily ever after,'' but how are 
we going to get to that conclusion? In fact, the last chapter may well 
read, ``private industry leads to a healthy ending.''
  At the beginning of this hour, we talked about the debate that will 
forever change the face of health care in this country. Again, I think 
it's important to understand, that we understand here in Congress, that 
we understand what's working in our system and what is not. We can't 
delay making the changes and bringing health care into the 21st 
century.

[[Page 18345]]

  I believe the only way we can make this work is if we allow the 
private sector to be involved, to stay involved and, in fact, lay the 
foundation for the improvements that we all want.
  The pillars of this system are that we are going to have, be rooted 
in, the bedrock of a thriving private sector, not the tenuous ground of 
a public system that has proven costly and inefficient in other 
countries.
  I believe we need to devote our working Congress to building a 
stronger system and involving the private sector within that system. 
History has proven this to be a tried and true method. We can bring 
down the number of insured. We can increase patient access. We can 
stabilize the physician workforce, and we can modernize through 
technology, and we can bring transparency into the system. Each of 
these goals is within our grasp if we only have the foresight and the 
determination, the political courage to achieve each goal.
  Again, I referenced when I was a medical student in Houston, people 
would come from around the world to come to the Texas Medical Center 
for their care. There is a reason that people come from around the 
world to the United States for their health care and for their 
treatment. We are the best, but we must make adjustments to remain at 
the top of the game.

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