[Congressional Record (Bound Edition), Volume 153 (2007), Part 14]
[House]
[Pages 19254-19260]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Burgess) is recognized 
for the time remaining before midnight.
  Mr. BURGESS. Mr. Speaker, I do have a lot of material to cover in the 
time that is available.
  I thought it was appropriate, as we end this legislative day here in 
the United States House of Representatives, that we talk a little bit 
about health care, because health care will be one of the central 
arguments, one of the central themes that consumes this country over 
the next 16 months as we lead up to the presidential election. Indeed, 
you are already hearing presidential candidates talk about their 
various visions for health care.
  One of the things that concerns me greatly is the issue of the issue 
of the state of our physician workforce. In my home State of Texas, the 
Texas Medical Association puts out a periodical every month. In March 
the title of the magazine they put out was ``Running out of Doctors,'' 
a great concern of mine.
  A year and a half ago Alan Greenspan came and talked to a group of us 
right before he left as Chairman of the Federal Reserve board. And 
someone asked him about Medicare and about how we are going to pay for 
Medicare in the future. He acknowledged that it was going to be 
difficult, but at the appropriate time he felt that Congress would be 
able to step up to the job of doing what was going to be necessary to 
pay for Medicare. He paused, and he said, well, what concerns me 
greatly is will there be anyone there to provide the services that you 
need?
  That's what I would like to address this evening. I think if I could, 
I am going to confine my remarks to the limited time I have to four 
areas. I want to talk a little bit about medical liability, I want to 
talk a little bit about the status of the physician workforce in 
regards to the developing physician, the person who may be in college 
or high school considering a career in health care, I want to talk 
about the physician in training, and I want to concentrate greatly on 
what I call the mature physician, the physician who is in practice, and 
some of the effects of current governmental policy where we reduce 
payments to physicians year over year and the pernicious effect that is 
having on the physician workforce.
  First, just touching on liable, my home State of Texas had a 
significant problem with he had some call liability. In 2003, the State 
legislature passed a medical liability reform based off of a prior 
California law, the Medical Injury Compensation Reform Act of 1975, 
which was passed by California, but we updated it for the 21st Century.
  Indeed, the law passed by the Texas Legislature in 2003, was based 
off the California law, that had as its basis caps on noneconomic 
damages, but in California, that was a fixed $250,000 cap for all 
noneconomic damages. As you can see from the visual aid, Texas 
trifurcated the cap. We have a $250,000 cap on physicians for 
noneconomic damages, $250,000 cap on a hospital for noneconomic damages 
and a $250,000 cap on a second hospital or nursing home, if one has 
been involved.

                              {time}  2345

  Well, this was passed back in 2003. How has the Texas plan fared? The 
year I first ran for Congress, 2002, we had dropped from 17 insurers 
down to two. It was almost impossible to get medical liability 
insurance at any price because of the effects of the legislation 
passed. There are now 14 insurers back in the State, and most of those 
have come back in without an increase in premiums.
  Three years after passage, the Medical Protective Company had a 10 
percent rate cut which was their fourth since April of 2005. Texas 
Medical Liability Trust, my last insurer of record, declared an 
aggregate cut over the past 4 years of 22 percent. Another company 
called Advocate MD filed a 19.9 percent rate decrease. And another 
company called Doctors Company announced a 13 percent rate cut, real 
numbers that affect real people and affect real access to care.
  Probably one of the most significant unintended beneficiaries of this 
legislation that was passed in 2003 in my home State of Texas was the 
smaller not-for-profit community hospitals. These were hospitals that 
were self-insured and had to put large amounts of cash up as a cash 
reserve against a potential lawsuit. What has happened since this law 
has past is these hospitals have found they have been able to take more 
of that cash and invest it in capital, invest it in nurses' salaries, 
exactly the kinds of things you want your smaller, not-for-profit 
community hospital to be doing in your community.
  Mr. Speaker, I took the language of the Texas plan and modified it so 
it would work within the constructs of our language here in the House 
of Representatives and actually offered this language to the ranking 
member of our House Budget Committee, who had the bill scored by the 
Congressional Budget Office. And the Texas plan, as applied to the 
House of Representatives to the entire 50 States, would have yielded a 
$3.8 billion savings over 5 years. Now, not a mammoth amount of money 
in Congress speak; but when you talk about a $2.99999 trillion budget, 
any savings that you could manage is in fact significant. And this is 
money that could have gone for a pay-for for many of the other things 
that we talk about doing for health care in this body.
  Mr. Speaker, a lot of people ask me: Well, if Texas has solved the 
problem, so why are we even concerned about it on the national level? 
One is the savings that was demonstrated by the Congressional Budget 
Office. Another is this, Mr. Speaker: consider the cost of defensive 
medicine.
  A 1996 study, 11 years ago, done by Stanford University revealed that 
in the Medicare system alone, just Medicare, not Medicaid, not the 
Federal prison system, but in the Medicare system alone the cost of 
defensive medicine was approximately $28 billion to $30 billion a year. 
Ten or 11 years ago it was at that expense, and I submit that that 
number is significantly higher today if anyone would rework those 
numbers.
  Another consideration is young people getting out of school. They 
look at the cost of professional liability insurance and say, you know 
what, I am going to stay out of those higher risk specialties because 
it is just not worth it to me.
  Now, I do want to draw my colleagues' attention to a bill, H.R. 2583. 
This bill addresses graduate medical education. It is an enhancement 
for graduate medical education, and would develop a program that would 
permit hospitals, hospitals that do not traditionally operate a 
residency program, the opportunity to start a residency program to help 
again build physician the workforce of the future. On average, it costs 
$100,000 a year to train a resident, and that cost for a smaller 
hospital can actually be an impossible barrier to entry. But because of 
this bill, that would create a loan fund available to hospitals to 
create residency programs where none has operated in the past; and it 
would require full accreditation and be generally focused in rural 
suburban or inner urban communities.
  Another bill that I would direct my colleagues' attention to, H.R. 
2584, this bill is designed to help medical students and those who have 
just recently graduated from medical school with a mix of scholarship, 
loan repayment funds, tax incentives to entice more students into 
medical school and create incentives for those students and newly 
minted doctors. The program will have an established repayment plan for 
students who agree to go into

[[Page 19255]]

family practice, internal medicine, emergency medicine, general 
surgery, OB/GYN, and practice in an underserved area. It is a 5-year 
authorization. It is fairly modest at $5 million a year and would 
provide additional educational scholarships in exchange for a 
commitment to serve in a public or private nonprofit health facility 
determined to have a critical shortage of primary care physicians.
  Mr. Speaker, in whatever time I have left, I do want to address again 
the group that I call the ``mature physician,'' and I want to address 
that from the perspective of the formula that is called the 
``sustainable growth rate formula.'' That is the formula under which 
Medicare reimburses physicians.
  Why is that important? Let me show you this. If we look at how 
Medicare pays for the administration of care in this country, we have a 
situation where doctors are paid under a different formula from 
hospitals, from insurance plans, from drug companies, from nursing 
homes.
  And look at this graph, Mr. Speaker. What you see is that physicians 
receive cuts year over year, unless Congress steps in at the last 
minute and does something, which we did for several years here right 
after I first got to Congress. But compare that with Medicare 
advantaged hospitals and nursing homes where every year there is a 
cost-of-living update, the Medicare economic index, if you will, that 
adjusts payments upward. But year over year there is a reduction in 
reimbursement, and the Center for Medicare and Medicaid Services for 
Physicians provides this cut for physicians who take care of the 
patients.
  It is not a question of doctors wanting to make more money; it is 
about a stabilized repayment system for services that have already been 
rendered. And it is not just affecting doctors; it affects patients. 
Not a week goes by that I don't get a letter or a fax from some doctor, 
usually in my home State of Texas, oftentimes in my district but 
sometimes it is someplace far afield. But they say, You know what? I 
have just had enough of what Medicare is doing to my reimbursement 
schedule 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, I had a young woman come up to me that I trained with at 
Parkland Hospital and tell me what Medicare was doing to her wasn't 
right and, as a consequence, she was not going to be offering a certain 
set of high-risk procedures to her patients any longer.
  And the question is, where will those patients go for that treatment? 
I saw it in the hospital environment before I left practice to come to 
Congress and, again, I hear it in virtually every town hall that I hold 
back in my district. Someone will come up to me, either as a question 
in the formal part of the meeting or afterwards, and say, how come in 
this country you turn 65 and you have got to change doctors? And the 
answer is, because the doctor they were seeing found it no longer 
economically viable to continue to see Medicare patients because this 
was happening to them, and year over year they weren't able to pay the 
cost of delivering the care, never mind taking a paycheck home to 
support their family.
  Medicare payments to physicians are modified annually under this SGR 
formula. The process is flawed, it needs to be repealed, because it 
mandates physician fee cuts that have gone on in recent years be 
continued indefinitely, and they become quite substantial over time.
  Now, the quandary that you always hear quoted is that simple repeal 
of the SGR is cost prohibitive. But we could, Mr. Speaker, consider 
doing that over time. We could consider setting a date in the future by 
which the SGR would be repealed and perhaps bring that cost down to an 
attainable level.
  The bill that I have recently introduced, H.R. 2585, would repeal the 
SGR in 2010. Now, in the new physician payment stabilization bill, 2 
years from now the SGR formula goes away. But there are incentives 
provided to physicians in the year 2008 and the year 2009 based on some 
quality reporting and technology improvements.
  More importantly, by resetting the baseline of the SGR formula, the 
CBO estimates that the practical effect of my bill would bring a 1.5 
percent update in 2008 and a 1 percent update in 2009, and a complete 
elimination of the SGR by 2010. The CBO score calculates a savings of 
$40 billion off the total price tag of an SGR elimination.
  Again, there are also in addition to essentially what is a Medicare 
economic index update for 2008, a little less than that for 2009, and 
then elimination of the formula and a full MEI update starting in 2010, 
which would be a significant change from where we are now. In addition 
to that, bonus payments for physicians who are willing to voluntarily 
do some quality reporting and bonus payments for physicians who are 
willing to voluntarily participate in some health information 
technology upgrades, computerization of their practice, if you will.
  One of the main thrusts of this bill, Mr. Speaker, is to require the 
Center for Medicare and Medicaid Services to look up, to ascertain the 
top 10 conditions that drive the highest percentage of payments, and 
then require CMS to adopt reporting measures relating to those 
conditions. In fact, those have already been developed. We are not 
going to reinvent the wheel here. The American Medical Association 
Physician Consortium has already developed those reporting measures 
that are driving spending so high.
  Mr. Speaker, the old bank robber Willie Sutton, when he was asked, 
Why do you rob the bank? He said, Because that's where the money is. 
Mr. Speaker, let's go where the money is. Let's go to those top 10 
things where the greatest amount of money is spent, those top 10 
diagnostic codes or top 10 diseases where the major amount of money is 
spent in Medicare, and it amounts to about 70 percent of the savings in 
Medicare, because that is where the greatest amount of savings is going 
to occur.
  If we can deliver more care in a timely fashion and we can improve 
outcomes, you are actually going to spend less. And, again, that is the 
thrust of this bill. That is why you postpone the repeal of the SGR by 
2 years, to get that savings that is going to happen by doing things 
better, quicker, smarter, the same types of things we saw when we began 
to provide a prescription drug benefit under the part D part of 
Medicare. Those costs that were originally projected by CBO and the 
Office of the Management of the Budget of the White House, actually, 
those scores were way too high.
  The actual figures for the first year of the operation of the 
Medicare prescription drug program came in lower. Why did it come in 
lower? Partly because of competition and partly because the cost-
effective thing also turns out to be the right thing to do oftentimes 
in the practice of medicine. A lot of savings are in fact available in 
this system if we only again have the courage to do that.
  Let me just speak briefly about health information technology, 
because it does receive a lot of attention. Here in the House of 
Representatives we worked on several bills last year. We will probably 
have an opportunity to have several bills this year. Indeed, a reform 
in health information technology is part of the bill that I introduced, 
H.R. 2585, to repeal the sustainable growth rate formula.
  But let me just point out a couple of things. I don't know that I was 
a big believer in electronic medical records when I left the practice 
of medicine and came to Congress. They are expensive, a big cost for a 
small practice to set it up. They slow you down. When you are in 
practice, it adds minutes to each patient; and if you are seeing 30 
patients a day and you add 2 minutes to each patient, that is an extra 
hour. How are you going to be compensated for that extra hour that you 
spend?
  Mr. Speaker, this is a picture of the medical records room at Charity 
Hospital in New Orleans. It was taken in January of 2006, 5 months 
after Hurricane Katrina hit there. And this had been completely under 
water, of course, when the city was flooded. When the Corps of 
Engineers got the

[[Page 19256]]

water out, this is what was left. And you see a typical medical records 
room with all of these paper charts. But this black discoloration is 
not from smoke or soot; that is black mold that has grown on these 
charts. It is not safe to let anyone go in there and try to retrieve 
data from those charts because of what has happened with the mold 
contamination.
  All of those records are lost, tens of thousands of patients. A 
patient who might have been waiting for a bone marrow transplant or a 
kidney transplant, a patient who is in the middle of their cancer 
therapy, All of that was lost in those records.
  Mr. Speaker, in January of this year we heard a lot of stories about 
Walter Reed Hospital, and I went out to Walter Reed to look for myself 
about what was happening with the treatment of our soldiers who are on 
medical hold. And Sergeant Blades took me around the complex and showed 
me the things that had been in all of the newspapers. And then he said, 
You know what bugs me even more than anything else. I could live with 
all of the other stuff, but here is the real problem I have. He was 
trying to assemble his medical records so he could make his case to the 
VA about a disability claim he had.
  He had been in the service for a number of years, he had suffered 
some injuries during his time in the service, and he wanted to be able 
to make his case for disability payments. He said he will spend 
probably 20 to 24 man hours on his medical records making the case, 
going through it with a yellow highlighter. And then he said, It goes 
and sits on someone's desk for 2 week's time and then it is lost. And 
the reason for that is there is not an electronic medical records 
system that the Department of Veterans Affairs and the Department of 
Defense can communicate with each other. So he has to go back and 
reconstruct the paper trail of his 20 years in the service and document 
all of the problems that he has had with his injuries over time in 
order to make his case for a disability claim.
  And that is what was concerning him more than anything else that day, 
was that it took so much time to get these things assembled and he was 
at the mercy of someone misplacing that record off their desk, and he 
would have to go back to square one. His medical hold would be either 
extended or denied, and he would have to start all over again with 
assembling his medical record. He advised his men to make two or three 
copies of their medical records before they submitted it to the 
appropriate person in the infirmary.
  Mr. Speaker, I know our time is about up. I appreciate the indulgence 
of the time this evening. Again, health care is an important topic. We 
are going to spend a lot of time on it in the weeks and months to come. 
And, again, it will be part of the central theme of Presidential 
elections on both sides of the political spectrum. And to be sure, I 
will be back here on several occasions talking about some of the things 
that I think are most important. But when you look at the problem with 
losing physicians, when you look at the problem with how we treat our 
Medicare physicians, the problems they have in getting their payment 
rates straightened out, what happens if you don't take care of that? 
You lose doctors. Patients don't have the physicians to see.
  What will Congress do in that event? I don't know. Parliament over in 
Great Britain decided it was in their best interest to bring physicians 
in from overseas on visas and give them waivers. Someone else paid for 
their education and they worked cheap. But we also saw in Scotland over 
the 4th of July weekend, that didn't turn out to be a good idea.


                              Health Care

     Introduction
  This evening I will address my concerns about the delivery of health 
care services in this country. The future of medical care in this 
country will be hotly debated in Congress and especially over the next 
18 months as we approach the 2008 Presidential elections and the 111th 
Congress that convenes in 2009.
  We will be deciding the avenue through which our system will be 
based--on the table exists two choices. First is to expand the 
government or public sector's involvement in the delivery of services--
popularly referred to as ``universal health care'' or termed in the 
early 90s as ``Hillary Care.'' Or second, whether we encourage and 
continue the private sector involvement in the delivery of health care. 
These two options bring about a plethora of questions and concerns, and 
I am hopeful that my explanations tonight will shed light on the 
direction we should be taking to have the United States remain as the 
best health care system in the world.
  Now some people may feel that is an overstatement. They will cite 
uninsured numbers of the cost of prescription drugs. But while these 
issues abound, they are statistics and the old adage remains, ``there 
is truth, there are lies, and then there are statistics.'' You can make 
the numbers say whatever you like or the outcome of polls can be 
manipulated just by massaging how you ask the question. So I will 
dispense with these avenues and simply explain the situation at hand 
and the solutions currently available.
  I'll be discussing different principles guiding the debate about 
private versus public delivery of health care services, but let me give 
you a background on how we got to the system we have today. The idea 
that we must solve this problem is not new. Secretary Leavitt has even 
remarked the necessity tackling the decision between these two 
philosophies. As he said in an op-ed recently, ``Should the government 
own the system or should we organize the system.''
     History
  Coming out of World War II, the United States had a flourishing 
economy and an upsurge in the birthrate clearly coining the phrase 
``Baby Boom'' generation. The U.S., unlike many of our allies coming 
out of the war was able to benefit from the economic prosperity by 
developing a hybrid system for the delivery of health care including 
both a public and private involvement. Europe, in contrast, was 
suffering from depleted resources and fatigue after World War II. It 
was clear from the outset that their economies, in particular that of 
Great Britain, were unable, from the private sector, to uphold the 
delivery of health care. The government had to run the health care 
system.
  Next we fast forward roughly 20 years to the mid-60s and the 
Presidency of Lyndon Baines Johnson, a fellow Texan from across the 
aisle. During his tenure, both Medicare and Medicaid programs were 
signed into law. These large, government-run programs were created to 
focus on hospital care for the elderly and basic health care services 
for the poverty-stricken respectively.
  Decades later, it was evident that the government-run Medicare 
program was slow to change, a behemoth to operate and extraordinarily 
expensive. By 2003, Congress recognized that the outdated model of 
providing largely hospital-only care to the elderly was insufficient. 
The government system needed to catch-up to the robust private system 
that was already focused on prevention and disease management. Finally, 
Congress passed the Medicare Prescription Drug Plan that gave seniors 
coverage for the medications. While the program has been successful, 
and has provided greater benefits for seniors, it did not come without 
considerable discussions and a massive push by the success of the 
private sector. And here is our crossroads today.
  Currently the government pays for nearly half of all health care 
administered in this country. With a current GDP of roughly $11 
trillion, the U.S. Department of Health and Human Services states that 
Medicare and Medicaid Services alone cost $600 billion. The other half 
of health care is broken down with primary weight being carried by the 
private industry, and charitable and self-pay accounting for the rest.
  As these numbers increase, and the Federal Government continues to 
funnel the American taxpayer's dollars into its coffers, we must ask if 
this is the best use of taxpayer dollars? Is the government doing an 
excellent job of managing your money? Do you think the government is 
better suited to care for your health care needs? Who is better to 
handle the growing health care crisis in this country?
  I argue that the government-only, or universal health care system, is 
unsustainable in America and will hamper our innovation and delivery of 
the most modern health care services available.
  I can site 2 specific examples that support my premise that a 
private-based system is better equipped, more flexible, and less 
expensive (being driven by the market) than a government-based system. 
First we can look to our northern border at Canada. Canada boasts a 
universal health care system but what it fails to highlight is the 
tremendous wait list for treatment that patients must endure. Their 
access to care is limited. Now this is not a significant problem if you 
are a wealthy Canadian because you can take your money,

[[Page 19257]]

cross the southern border in the U.S. and receive care immediately. If 
you were waiting for bypass surgery, would you prefer to get into the 
hospital as quickly as possible or be placed on a waiting list that 
could take months? Is your health, or the health of your loved ones 
something that you can take a gamble with?
  My second example stems from the British Isles where they suffer so 
of the same fate. The British National Health Service is a 2-tier 
system that faces continued allegations of ageism. The system can 
simply no longer treat patients over 80 because the system recognizes 
that the patients at this age will simply not survive their wait time. 
It is a sad reality, but it is true.
  So I return to my premise that the private sector is more nimble and 
financially a more stable arena from which to build our future health 
care system. Noting this complex relationship, how should Congress do 
its job to ensure we have the best health care system possible? 
Congress must promote policies that keep the private sector leading the 
way with some interaction by the well-run government programs.
     Uninsured
  One issue that springs to mind concerns the uninsured population, 
which the U.S. Census Bureau estimated at some 46 million back in 2005. 
Now I want to be specific . . . access to health care is not the issue. 
Those individuals classified as ``uninsured'' means they are not 
covered by a specific plan; it does not mean they cannot seek health 
care services. In fact, no one is denied health care services in this 
country. Two specific examples of where access is available through the 
State Children's Health Insurance Program and Federally Qualified 
Health Centers.
     SCHIP
  In 1997, the Republicans introduced a new program designed to help 
provide medical coverage to every vulnerable child. The program, 
commonly referred to as SCHIP, operates a joint Federal-State 
partnership. It provides flexibility for States to determine standards 
for providing health care funding for those children who are not 
eligible for Medicaid but whose parents cannot truly afford health care 
insurance. The program has been very successful across the board.
  As SCHIP is being reauthorized this year and heavily debated on both 
sides of the Capitol, I continue to push for clarification on two 
issues. First, the intent of SCHIP is clear--the acronym said CHILDREN. 
However, some States have opted to spend funds on others instead of 
children. To stop this process, I introduced H.R. 1013, making certain 
that SCHIP funds are spent exclusively on children and pregnant women--
not on any other group.
  Second, it is imperative, as we move forward in this debate, that 
individuals have the flexibility to use SCHIP funds to procure health 
care coverage that works best for them. Some legislation I've seen 
would carve people out of the private insurance market; this was never 
the intent of SCHIP nor should it be an outcome from this debate.
  SCHIP is an example where children and pregnant women can receive 
medical coverage. This eliminates a large number of those classified as 
``uninsured.'' As the differing bills appear from both House and Senate 
committees of jurisdiction, and I hope that this language is included.
     FQHC
  For those others that are not children or pregnant women, they too 
have access options, namely, Federally Qualified Health Centers. This 
patient access to health care even without ``insurance'' serves an 
estimated 15 million ``uninsured.'' So what are FQHCs? An FQHC provides 
comprehensive primary health, oral, and mental health/substance abuse 
services to persons in all stages of the life cycle.
  Both SCHIP and FQHCs are designed to help the poorest, youngest and 
underserved communities. But what about those individuals that can 
afford to pay some of their health care services? There are two 
programs available that assist individuals and companies in receiving 
health care coverage: Health Savings Accounts and Association Health 
Plans.
     Health Savings Accounts
  Health Savings Accounts (HSA) 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 higher 
deductibles than a traditional health plan. It is sometimes referred to 
as a catastrophic health insurance plan.
  For an HSA, the funds contributed to the account are not subject to 
income tax, but can only be used to pay for qualified medical expenses. 
But perhaps one of the best parts of having an HSA is that all deposits 
to an HSA become the property of the policyholder, regardless of the 
source of the deposit. Patients actually have a say in how and where 
they spend their health care dollars. Additionally, any funds 
deposited, but not withdrawn each year, will carry over into the next 
year.
  The popularity of HSAs has grown considerably since its inception. 
Although numbers are only verified from 2005, by December of that year, 
some 3.2 million individuals had coverage. Of that number, 42% of 
individuals or families with income below $50,000 were purchasing HSA-
type insurance. This fact notes that HSAs are 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 also 
accessible to people of all ages.
     Association Health Plans
  Of the roughly 46 million Americans who are uninsured, nearly 60% of 
them are employed by small business. And some of these individuals 
prefer a more traditional health plan but their small business 
employers find offering a health benefit simply too expensive. To 
unburden small business owners, Congress devised the concept of 
association health plans.
  AHPs allow small businesses to arrange their health benefits 
alongside other like-minded organizations there by spreading risk among 
a much larger group, lowering the administrative costs, and providing 
better benefit options to employees.
     Physician Workforce Issues
  But are we putting the cart before the horse? In a conversation with 
Alan Greenspan, before he stepped down as Chairman of the Federal 
Reserve, he was concerned about whether there would be an adequate 
labor supply to meet the demand for medical services in the future. The 
truth is our country faces an oncoming physician shortage. We need to 
ensure that doctors in practice today, those at the peak of their 
clinical abilities remain in practice and provide services to those 
with the most complex issues. So what steps do we need to take to 
ensure physicians remain in practice?
     Medical Liability
  First we must tackle an issue that continues to plague the medical 
community: medical liability. We need common-sense medical liability 
reform to protect patients, to stop the sky-rocketing costs associated 
with frivolous lawsuits, to make health care more affordable and 
accessible for all Americans, and to keep necessary services in 
communities that need them most.
  We need a national solution. Currently, our state-to-state coverage 
leaves us in jeopardy and tangles up the court system. Amazingly, we 
have an excellent example of the direction we should be taking on the 
Federal level by modeling legislation after what the State of Texas 
already has in place, which is getting ready to celebrate its 4th 
anniversary as law.
  Texas brought together the major stakeholders in the discussion, 
including doctors, hospitals and nursing homes. Now some might point 
out that manufacturers were not present, but the State was clear to 
leave open the option for their participation at a later date.
  My home State of Texas had a significant problem as far as medical 
liability was concerned. We had lost most of our medical liability 
insurers from the State. They had simply closed shop and left because 
they could not see a future in providing medical liability insurance in 
Texas. We went from 17 insurers down to 2 by the end of 2002. Rates 
were increasing year over year. My personal situation, running my own 
practice, was that rates were increasing by 30 percent to 50 percent a 
year.
  In 2003, Texas State legislature passed a medical liability reform 
based off the California law, but updated for the 21st Century. Instead 
of a single $250,000 cap, there was a $250,000 cap on noneconomic 
damages as it pertained to physicians, hospitals and to second 
hospitals or nursing homes--an aggregate cap of $750,000.
  So how has the Texas plan faired? Remember that I stated we dropped 
from 17 insurers down to 2 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 of Texas without 
an increase in premium.
  In 2006, only three years after passage, Medical Protective had a 10% 
rate cut which was its 4th reduction since April of 2005. Texas Medical 
Liability Trust declared an aggregate of 22% cuts. Advocate MD filed a 
19.9% rate decrease and Doctors Company announced a 13% rate cut. These 
are real numbers. That is a significant reversal. More options mean 
better prices and a more secure setting for medical professionals to 
remain in practice.
  Probably one of the most important unintended beneficiaries of this 
was the small

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community not-for-profit hospital, who was self-insured for medical 
liability. They have been able to take money out of those escrow 
accounts and put it back to work for those hospitals capitalize 
improvements, paying nurse's salaries, the kinds of things you want 
your small not-for-profit community-based hospitals to be doing, not 
holding money in escrow against that inevitable liability suit that 
might occur.
  I took the language of the Texas plan, worked it so it would fit 
within our constructs here in the House of Representatives and offered 
it to the ranking member of the Budget Committee. He had scored by the 
Congressional Budget Office, and the Texas plan, as applied through the 
House of Representatives to the entire 50 States, would yield a savings 
of $3.8 billion over 5 years. Not a mammoth amount of money when you 
are talking about a $2.999 trillion budget, but savings nonetheless, 
monies that we will leave on the table in this budgetary cycle that 
could have gone to some of the other spending priorities that we hear 
so much about. You can look to me for legislative action on this issue 
in the coming months.
  Consider this--a 1996 study done by Stanford University revealed that 
in the Medicare system alone, the cost of defensive medicine was 
approximately $28 to $30 billion a year. That was 10 years ago. I 
suspect that number is higher today. That's why we can scarcely afford 
to continue the trajectory we are on with the medical liability issue 
in this country.
  Another consideration is those young people getting out of college 
who are considering medical school. The current system keeps young 
people out of the practice of a health care for their livelihood 
because of the burden that we put upon them. This is the thing that we 
have to consider. We have to focus on how we are affecting our 
physician workforce for the future, how we are affecting the health 
care that you are our children and our children's children will 
receive.
     Physician Workforce and Graduate Medical Education 
         Enhancement Act of 2007
  Part of ensuring this future workforce includes helping the younger 
doctors with residency programs. The funny thing about doctors is we to 
have a lot of inertia. A lot of us tend to practice very close to where 
we did our training. The bill I propose is designed to get more 
training programs in areas that are underserved, like rural or inner 
cities. We must get young doctors training in locations where they are 
actually needed.
  The ``GME,'' or Graduate Medical Education, Enhancement Act of 2007 
would develop a program that would permit hospitals that do not 
traditionally operate a residency training program the opportunity to 
start a residency training program to build the physician workforce of 
the future.
  On average, it costs $100,000 a year to train a resident and that 
cost for a smaller hospital can be prohibitive. Because of this 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 programs would require full accreditation and generally be 
focused in rural, suburban, inner urban or frontier community 
hospitals.
  A diverse group, including the American College of Emergency 
Physicians and American Osteopathic Association, supports my GME 
legislation.
     High-Need Physician Specialty Workforce Incentive Act of 2007
  Locating young doctors where they are needed is part of solving the 
impending physician shortage crisis that will affect the entire health 
care system. Another aspect that must be considered is training doctors 
for high-need specialties.
  My High-Need Physician Specialty Act of 2007 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. 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 underserved areas. It will be a 5-year authorization at $5 million 
per year.
  This bill would provide additional educational scholarships in 
exchange for a commitment to serve in a public or private nonprofit 
health facility determined to have a critical shortage of primary care 
physicians.
  Prominent groups such as AARP, the American College of Physicians, 
and the ERISA Industry Committee, support my High-Need Specialty 
legislation.
     Physician Stabilization
  So far we in addressing the Physician Workforce crisis we have 
discuss medical liability, the placement of doctors in locations of 
greatest need and the financial concerns of encouraging doctors to 
remain in high-need specialties. The next portion of my remarks is 
related to perhaps the largest group of doctors in this country and 
certainly, the largest and still-growing group of patients--our ``Baby 
Boom'' generation and the Medicare program.
  As the baby boomers age and retire, the demand for services is going 
to go nowhere but up. And if the physician workforce trends continue as 
they are today, we may be not talking about funding a Medicare program, 
we may be talking about there is no one there to take care of the 
seniors.
  Year-after-year there is a reduction in reimbursement payments from 
the Center for Medicare and Medicaid Services to physicians for the 
services they provide their Medicare patients. This is not a question 
of doctors wanting to make more money; it is about stabilized repayment 
for services already rendered. And it isn't affecting just doctors--
this problem affects patients. It becomes a real crisis of access.
  Not a week goes by that I don't get a letter or fax from some 
physician who says, ``You know what, I have just had enough and I am 
going to retire early. I am no longer going to see Medicare patients in 
my practice, or I am going to restrict the procedures that I offer 
Medicare patients.''
  Unfortunately, I know that is happening because I saw it in the 
hospital environment before I left the practice of medicine to come to 
Congress. But I also hear it in virtually every town hall that I do 
back in my district. Someone will raise their hand and say, ``How come 
on Medicare, you turn 65 and you have got to change doctors?''
  And the answer is because their doctor found it no longer 
economically viable to continue to see Medicare patients because they 
weren't able to pay the cost of delivering the care. They weren't able 
to cover the cost of providing the care.
  Medicare payments to physicians are modified annually using the 
sustainable growth rate (SGR) formula. Because of flaws in the process, 
the SGR mandated physician fee cuts in recent years have been only 
moderately averted by last minute fixes. If no long-term congressional 
action is implemented, the SGR will continue to mandate fee cuts.
  Unlike hospital reimbursement rates, which follow closely the 
Medicare Economic Index (MEI), which measures the increasing costs of 
providing care, physicians reimbursements do not. In fact, Medicare 
payments to physicians cover only about 65% of the actual cost of 
providing patient services. Can you imagine any industry or company 
that would continue in business if they received only 65% of what they 
spent.
  But the simple repeal of the SGR is simply too cost prohibitive. But 
if we do that over time, perhaps we can bring that cost down to a level 
where it is manageable.
  Paying physicians fairly will extend the careers of many physicians 
who are now in practice who would otherwise opt out of the Medicare 
program, seek early retirement, or restrict those procedures that they 
offer to their Medicare patients.
  It also has the effect of insuring an adequate network of doctors 
available to older Americans as this country makes the transition to 
the physician workforce of the future.
  In my new physician payment stabilization bill, the SGR formula would 
be repealed in 2010, 2 years from now, but would also provide incentive 
payments based on quality reporting and technology improvements.
  Recently, CBO estimated that the practical payment effect from my 
bill would bring a 1.5% update in 2008, a 1.0% update in 2009, and a 
complete elimination by 2010. The CBO score calculates a savings of $40 
billion off the total price tag of an SGR elimination.
  These incentive payments would be installed to protect the practicing 
physician against that 5% cut that will likely occur in 2008 and 2009. 
That would be voluntary. No one would be required to participate in the 
quality program or the technology improvement, but it would be 
available to those doctors or practices who wanted to offset the 
proposed cuts that will occur in physician reimbursement in the 2 years 
until the formal repeal of the SGR happens.
  Now I know this is perhaps a frightening thought to some physicians--
I'm sure I would have been wary at first when I ran my own practice. 
But step back and view the long-term solution. This is the only 
logical, economically viable and I reiterate long-term solution.
  Now, why do it that way? Why not just bite the bullet and let's go 
ahead and get the SGR out of the way and get it repealed? Remember, it 
costs a tremendous amount of money to do that. Another problem that we 
have in Congress is we are required to submit all legislation to the 
Congressional Budget Office to find out how much it costs. If we are 
going to be spending the taxpayers' money, how much

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are we going to spend? Over what time will we spend it?
  Because of the constraints of the Congressional Budget Office, we are 
not allowed to do dynamic scoring. Unfortunately, we can't do look-
ahead and say, ``You know, I think if we do this, we are going to save 
some money.''
  But, by postponing the repeal of the SGR by 2 years' time; taking the 
savings that occurs during that time and applying it to the SGR 
formula; we may actually get a number that is doable as far as 
releasing the SGR and replacing it with the Medicare Economic Index 
similar to the way hospitals are reimbursed.
  One of the main thrusts of this bill is to require the Center for 
Medicare and Medicare Services to look at their top 10 conditions that 
drive the highest percentage of payments. The bill would require CMS to 
adopt reporting measures relating to these conditions that have already 
been developed. It is not reinventing the wheel. The American Medical 
Association Physician Consortium has already developed those reporting 
measures that drive that spending so high.
  You know, the old famous bank robber Willie Sutton, when he was asked 
why do you rob the bank, he said that is because that is where the 
money is. Let's go to those top 10 things where the greatest amount of 
money is spent, because that is where the greatest amount of savings 
can occur. If we can deliver care in a more timely fashion and if we 
can improve outcomes, we are actually going to spend less. And by 
focusing on those top 10 programs, at least initially, that will be the 
greatest return on investment for CMS and ultimately will be the 
greatest return on investment for retiring the SGR.
  The same considerations may apply to the Medicaid program as well, so 
it will be a very useful exercise to go through that and identify those 
top 10 conditions. And where cost savings may be most easily gathered, 
not only will it have an improving effect on Medicare, but I suspect on 
Medicaid as well.
  This will also include a report back to doctors on what their volume 
and intensity is. This information will not be made generally public, 
but it will be made available to the individual physician so they can 
see how they are doing; how they are doing relative to other doctors in 
their practice, other doctors in their community, and other doctors 
around the country. Physicians are a competitive group; I assure you 
these reports will be read.
     Health Information Technology
  There is also going to be a provision in the bill to help physicians' 
offices bring their information technology, their infrastructure, 
hardware and software, up to a standard where it will begin to derive 
benefit not only the patient and the practice but also to the Medicare 
system in general.
  The provision will also create a safe harbor that will allow clinics, 
physicians' offices, and hospitals to share health information 
technology platforms. These standards will be established and available 
to physicians' practices so they will understand how they need to 
comply. The standards must be established no later than January 1, 
2008.
  Back in the day, I wasn't always a big proponent of things like 
electronic records. I wasn't sure if it would deliver the payoff that 
people said it would. But here is a picture of the medical records 
department in Charity Hospital in New Orleans. This picture was made in 
January 2006, about 4 or 5 months after Hurricane Katrina and the 
downtown flooding that occurred. It is the medical records room. These 
records are ruined. You can see this is not smoke or soot damage; this 
is black mold that is growing on the records. You look there and it 
almost goes on to infinity, tens of thousands, hundred of thousands of 
records that were active, ongoing charts of people's medical conditions 
absolutely now unavailable. No one is going to get into that medical 
records department and risk inhaling the spores from the mold that is 
covering those charts.
  This is the kind of problem that you can get into with a paper 
medical record. Of course the youngsters of today, the college students 
of today, the young physicians of today, they understand this very 
well. They are all connected and wired in. They would no more imagine 
turning in or doing a paper for one of their classes where they just 
had a single copy, a single paper copy, the old adage ``the dog ate my 
homework,'' most students will have a paper on a CD or on a flash drive 
readily accessible and retrievable in many forms. We should do no less 
with our medical records.
  But it costs money to do this. It is going to require a push from the 
private sector. I prefer to think of a bonus payment as being an 
inducement, an enticement for physicians' offices to participate in 
this type of program. But it is also just good medicine. It is good 
patient care.
  We all heard about the troubles at Walter Reed Hospital a few months 
ago. I went out to Walter Reed probably the week after the story broke 
in the Washington Post and talked to this young man who took me around 
Building 18. Yes, there was some concern. It was a crummy building. But 
his biggest concern was spending hours and hours with his medical 
record, his service record, going through the various parts and 
highlighting things. He had a yellow marker, a highlighter, 
highlighting parts of his medical record because this is how he was 
going to establish the benefits that he was going to receive in the VA 
system for his disability.
  He said ``I can spend 20 man-hours putting this medical record 
together and it ends up on someone's desk and it doesn't get picked up, 
and then no one can find it and I have to start all over again.'' That 
was his main message to me that day.
  Now the VA system has been indeed very forward-thinking in its 
embrace of electronic medical records and its investment in information 
technology. The problem is the medical records from the Department of 
Defense and the Department of Veterans Affairs do not possess the 
interoperability necessary to make this type of activity unnecessary.
  Delivering value to the patient is of paramount importance. And it is 
my contention that if we do make the bonus payment generally available 
to physicians, this will be something that they will embrace. There is 
a learning curve, to be sure. It is going to slow people down a little 
bit initially. But ultimately, the rapidity of the system will be 
impressive. And even in a smaller physician's office the ability to 
never have to wait while they find your medical records would be 
amazing. Once physicians and medical offices become used to this 
technology, they will embrace it.
  Another unintended benefit to providing incentives for health 
information technology is the rapidity with which the health care 
system itself can learn. When I say the health care system, I 
specifically address the possibility that treatments and the delivery 
of quality health care services can be faster, cost less and simply be 
better. Wouldn't it be great to have that information and know what 
treatments were effective and what treatments were only marginal? That 
information can be literally at a physician's fingertips with the right 
type of computer architecture and technology environment. I believe the 
time has come that we do need to embrace that.
  So the physician payment stabilization bill will include a federal 
incentive to implement health information technology along with 
provisions providing safe harbors for the sharing of software, 
technical assistance and hardware, as well as the creation of 
consortiums.
     Health Care Price Transparency
  Once you have established measures that will allow for a medical 
workforce in the future--through a nation medical liability law, 
ensuring a medical workforce in areas that you need and in locations 
that need them, and by stabilizing physician reimbursements, you can 
refine other health care projects.
  Perhaps the foundation of understanding health care is to understand 
its costs. The average consumer has little understanding about how much 
any service or prescription drug costs because they are supplemented by 
the government and often their employer. This must change.
  In August 2006, President Bush issued an executive order calling for 
increased transparency within the federal government's health care 
agencies. The legislation I have proposed in the past is an extension 
of that executive order, giving States the tools to become part of a 
necessary solution for health care consumers.
  The bill would require states establish health care transparency 
requirements for hospitals and health plans, as well as conduct a study 
on what information is most useful to consumers.
  For example, the Texas Hospital Association has created a web-based 
tool that allows consumers to compare hospital-to-hospital cost called 
Texas PricePoint. This website assists consumers that are considering 
non-emergency procedures at area hospitals. Texas health care consumers 
now can view and compare charge data on inpatient hospital services. 
Couple this data with hospital quality information and consumers will 
be able to truly shop for health services based on quality and cost. 
What a remarkably simply idea that is literally educating and engaging 
the consumer in making his or her health care choices. Knowledge is an 
essential tool for making informed decisions.
  This type of planning tool should be made available to all patients, 
across the country, at any time. Think of it like a ``Travelocity'' or 
``Priceline'' for health care servIces. Wouldn't that be terrific? The 
long and the short of it is

[[Page 19260]]

that this is possible. And Congress can make this happen if we commit 
ourselves to the process.
     Conclusion
  I recognize that all of this information is technically complex, 
sometimes even boring to listen to, but it nonetheless tells an 
incredibly important story. It is the story of how the most advanced, 
most innovative and most appreciated health care system in the world 
needs help. The end of the story should read ``happily ever after.'' So 
how do we reach that conclusion? The last chapter should read, ``A 
Private Industry Leads to a Healthy Ending.''
  As I stated in the beginning of this hour, we are in a debate that 
will forever change our health care system. We must understand what is 
working in our system and what is not. We cannot delay making changes 
and bringing health care into the 21st Century.
  I believe that the only way this can work is if we allow the private 
sector to lay the foundation for improvements. The pillars of the 
amazing health system we have now must be rooted in the bedrock of a 
thriving private sector, not on the shaky ground of a public system 
that has proven costly and inefficient in other countries.
  We must devote our work in Congress to building a stronger private 
sector in health care. History has proven this is a tried and true 
method. We can bring down the number of uninsured, increase patient 
access, stabilize the physician workforce, modernize through technology 
and bring transparency to the system. Each of these goals is within our 
grasp. We must only have the foresight and determination to achieve 
each goal.
  There is a reason why people come from around the world to the United 
States for health care treatments--we are the best, but we must make 
adjustments to remain at the top of the game.

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