[Congressional Record (Bound Edition), Volume 153 (2007), Part 6]
[Extensions of Remarks]
[Pages 8530-8531]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    COMMENTARY FROM DAVE DURENBERGER

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Thursday, March 29, 2007

  Mr. STARK. Madam Speaker, I encourage my colleagues on both sides of 
the aisle to read the column below from our former Senate colleague 
Dave Durenberger from Minnesota. Dave continues to be a leader in 
health policy, having founded the National Institute of Health Policy 
which promotes health policy dialogue in the Upper Midwest. He also 
serves as a member of the Medicare Payment Advisory Commission 
(MEDPAC).
  We can all learn from Dave who looks at our health system from a 
policy perspective, not a purely party perspective.
  He is an example for us all.

     [From the National Institute of Health Policy, Mar. 22, 2007]

                         National Health Policy

                         (By Dave Durenberger)


                     MEDICARE ``UNFAIR'' ADVANTAGE

       House Ways and Means Health Committee Chair, Pete Stark, 
     accused AHIP of ``lying, using false information'' last week 
     when the organization stated the impact that reductions in 
     Medicare Advantage (MA) reimbursements would have on 
     minorities.
       When the GOP and AHIP cut a deal to privatize Medicare and 
     set up a formula (benchmarks), AHIP members were positioned 
     to set the annual ``defined contribution'' Congress must make 
     to private health insurance plans to keep them in the 
     Medicare market. That subsidy today averages 112 percent 
     above what Congress pays for traditional fee-for-service 
     Medicare.
       Unfortunately, Republicans asked nothing in return for the 
     subsidy. No cost containment, quality or outcome improvement, 
     no care coordination or service integration, no equity across 
     practices or counties or regions; no value for money. So the 
     plans continue to employ marketing strategies to compete on 
     increasing ``benefits'' (services access) and reducing 
     beneficiary cost-sharing in ``competitive'' insurance 
     markets. Both are antithetical to improving ``consumer-
     driven'' healthcare cost containment and to improving value 
     for money paid.
       When Democrats cry ``foul,'' the AHIP rallies all those 
     folks who now get ``more for less,'' to preserve their unfair 
     advantage over traditional Medicare as well as their 
     insurance companies' profit margins. All of this at the 
     expense of Medicare trust funds, the next generations of tax 
     payers, doctors and hospitals whose payments will be reduced 
     or frozen, and the road to value in medicine on which the 
     AHIP talks a good game but has shown no good-faith effort to 
     ``walk their talk.''
       My suggestion to Pete Stark is that he and his colleagues 
     focus not their anger, but their hearings on the issue of 
     value for money from Medicare Advantage, Private, Fee-for-
     service Plans, Special Needs Plans, and all the other hybrid 
     models the financial services industry is putting into the 
     Medicare program.


                   GOP PREPARES ANOTHER SERIOUS FIGHT

       Democrats--and a lot of health economists--have always 
     questioned the value of public subsidies for high-deductible 
     health insurance financed with tax-sheltered Health Savings 
     Accounts (HSAs). Bad tax policy, bad health policy, and bad 
     economics. A December 2006 amendment even expanded the amount 
     of money that can be contributed to HSAs, costing the 
     government $1 billion in lost tax revenue over the next 10 
     years.
       The new majority in the House is talking about repeal or 
     serious changes, and Republican health policy leader Senator 
     Orrin Hatch of Utah through an aide has declared ``there will 
     be a serious fight from Senate

[[Page 8531]]

     Republicans if there is any effort to roll back these 
     provisions.'' He goes on to claim proof that HSA-driven 
     health insurance plans have reduced health care costs and 
     made American businesses more competitive.
       No doubt about it. Bigger deductibles mean cheaper health 
     insurance, but not economies in the big-ticket medical 
     services. HSAs are a totally tax-free wealth-enhancement 
     vehicle and Democrats are serious about finding money to 
     cover all kids, not just the well-born. The bank and 
     financial services industry loves this new product and will 
     help Republicans make a real ``serious'' fight out of this 
     one.


                           MEDICARE'S FUTURE

       The Medicare Payment Advisory Commission (MedPAC) chair, 
     Glenn Hackbarth, found varying Congressional reception of 
     MedPAC recommendations for change in physician payment and 
     on-going payment reform initiatives. Because four 
     congressional hearings followed quickly on release of a 300-
     page summary of nearly two years of work, members of Congress 
     had difficulty finding a path through a forest of 
     recommendations. They eventually will, of course, because 
     they have little other choice given the huge financial 
     consequences of living with the current SGR reimbursement-
     reduction formula.
       MedPAC staff recommendations for changes in the physician 
     payment formula relative to practice expense (54 percent of 
     payment base) ran into fairly stiff resistance from physician 
     members. The Commission is seeking ways to more accurately 
     reflect direct and indirect costs since current formula seems 
     to drive the growing disparity between cognitive and 
     procedural. In another effort to more accurately reflect 
     Medicare policy goals, the staff and commission members were 
     uniformly critical of the MMA policy which drives growing 
     subsidies for Medicare Advantage (MA) insurance plans beyond 
     the payments for traditional Medicare provider expense 
     reimbursement.


                           COMMUNITY BENEFIT

       The Board of Trustees of the American Hospital Association 
     (AHA) has restated its position on what qualifies as 
     community benefit for purposes of preserving tax exempt 
     status for not-for-profit hospitals. ``Charity care, bad 
     debt, unpaid cost of Medicare, Medicaid, SCHIP, indigent care 
     and other safety net programs,'' which make up 90 percent of 
     most non-profit hospital reports, continues to be a 
     qualifier. The Catholic Health Association (CHA) of the 
     United States will report to the public by April 1 on a 
     different kind of measure--all audited data. These were 
     developed with the VHA over the past couple years and reflect 
     FY 2006 performance data on 95 percent of CHA hospitals.
       Everyone knows that for-profit hospitals--large and small, 
     urban and rural--operate in much the same markets as not-for-
     profits and have the very same under-pay and no- pay 
     problems. Hospital Corporation of America (CHA) claims 20 
     percent of unpaid charges for its hospitals, I believe. 
     Everyone knows that it's the rare hospital that doesn't 
     market itself to Medicare patients. It is to the credit of 
     serious mission-driven hospitals like those in CRA and VHA 
     who have chosen not to play the game, but to get serious 
     about accountability to the communities that provide them the 
     opportunity to serve. It is also to the credit of AHA members 
     who have decided to go far beyond the AHA criteria and 
     establish their own improved benefit criteria and 
     accountability processes.
       On a policy note: Todd Sloane at Modern Healthcare suggests 
     this week that Senate Finance Chair Max Baucus and Ways and 
     Means Chair Charley Rangel have gone soft on non-profit 
     accountability, so hospitals are breathing easy. He also 
     suggests that Senator Chuck Grassley and the IRS ought to 
     start shining their lights on not-for-profit health insurance 
     plans and include reserves accumulation, executive 
     compensation and other contributions to ``rising medical 
     costs.'' Just when we thought only the for-profit AHIPs were 
     big in compensation and profit. Go Dean Zerbe!


                       COMPARATIVE EFFECTIVENESS

       How can we assure beneficiaries that they receive value for 
     their money from medical technology, clinical procedures and 
     services? It's basically a scientific analysis of varying 
     alternatives to diagnostics and therapy, practiced in many 
     ways by multi-specialty groups, HMOs, and some large health 
     plans like the Blues and the VA healthcare system. The MedPAC 
     staff analysis recommends consideration of one national 
     entity to perform the service for all practices ala the 
     National Institute for Health and Clinical Excellence (NICE) 
     in the U.K. Commission members are split on the 
     recommendation with a majority inclined to accept the idea 
     with refinement and a vocal minority (including this member) 
     suggesting that AHRQ be charged and funded by Congress with 
     developing a policy pathway toward comparative and cost 
     effectiveness. All of this would eventually be tied to 
     payment systems as well as practices, and utilizing and 
     encouraging existing practice-based research efforts around 
     the country.


          THE FEDERAL GOVERNMENT'S ROLE IN UNIVERSAL COVERAGE

       The President and his administration once again made clear 
     their position on consumer choice for America's healthcare. 
     In reaction to the Citizens' Health Care Working Group's 
     Report from September, 2006. the administration agreed with 
     the group's overall goal of providing quality health care for 
     all Americans, but disagreed on the strategy to get there.
       According to HHS Secretary Mike Leavitt, the administration 
     supports ``an approach emphasizing consumer choice and 
     options'' rather than an approach ``based on mandates and 
     government intervention.'' The administration also rejected 
     the idea of creating a single-benefit--defined by a federally 
     appointed committee--for all Americans.
       The Bush Administration believes in two principles: (1) 
     Each state legislature can reflect the ``insurance benefit'' 
     that people believe is best to secure the blessings of 
     universal coverage: and (2) The federal spending role should 
     be confined to supporting consumer choice in the form of tax 
     credits/deductions rather than any direct spending.
       The problem with (1) is that we are talking here about the 
     income security of all Americans, not health benefit mandates 
     which are often the work of the medical establishment. The 
     challenge with (2) is that reliance on tax policy alone 
     requires a transition from regressive subsidies to income-
     related subsidies especially when tied to a mandate. I would 
     assert an additional (3) in that I don't believe ``universal 
     insurance plan access'' is the same as the promise of 
     universal access to health and related services every 
     American could enjoy if we ran a more efficient health care 
     system.


                          WRONG WAY CALIFORNIA

       Just as the rest of the country is looking to pay 
     physicians to improve the value of health care delivery, 
     California employers are moving their employees away from the 
     recognized higher-performing health care systems towards 
     PPOs. Independent consultant, Allan Baumgarten, in his recent 
     California Health Care Market Report tells us that large 
     employers are moving some of the 12+ million Californians in 
     HMOs out to fee-for-service medical care. ``All of this has 
     physicians scrambling to retool themselves . . . faced with 
     the need to change a culture that encouraged physicians to be 
     conservative providing care and to be `modest' in reporting 
     the amount of care provided, into a culture focused on 
     maximizing fee for service payments.''
       Meanwhile, in the business world, a new survey by Watson 
     Wyatt Worldwide and the National Business Group on Health 
     shows a tendency of employees to opt for more comprehensive 
     coverage. Despite ever-increasing healthcare costs, most 
     employers still offer a choice in health insurance to their 
     employees, while a small percentage (5 percent) are forcing 
     the health insurance decision by only offering a CDHP option.

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