[Congressional Record (Bound Edition), Volume 153 (2007), Part 9]
[House]
[Pages 12468-12474]
[From the U.S. Government Publishing Office, www.gpo.gov]




              DELIVERY OF HEALTH CARE IN THE UNITED STATES

  The SPEAKER pro tempore (Mr. Sires). Under the Speaker's announced 
policy of January 18, 2007, the gentleman from Texas (Mr. Burgess) is 
recognized for 60 minutes.
  Mr. BURGESS. Mr. Speaker, I want to come to the floor tonight and 
continue on a theme that we were discussing last night, and that theme 
revolves around delivery of health care in this country.
  Some of the discussion last night dealt with the future of medical 
care in this country, whether we expand the public sector involvement, 
whether we encourage and continue the private sector involvement in the 
delivery of health care in this country; and those are extremely 
important questions, and questions that I suspect that this Congress 
will be debating at length over the coming 18 months and well into the 
next Congress, the 111th Congress that convenes in 2009.
  If we don't pay attention to the physician workforce that is going to 
be providing that health care, those discussions may be all for naught. 
We are obligated, in this Congress, to pay attention to access for our 
patients, patients in Medicare. You heard reference to the SCHIP 
program; patients in the SCHIP program are all going to need access to 
physicians. It doesn't matter whether a patient is a participant in the 
Medicare system, the SCHIP system, private insurance, pays cash for 
their care, they need access to a doctor, and that access will be 
unavailable if we don't preserve and protect our physician workforce 
going forward.
  This really came home to me about a year and a half ago in a 
conversation with Alan Greenspan. He commented on the concern for the 
future viability and stability of the Medicare program, of the system 
as a whole, is it ultimately sustainable. He felt that it would be. But 
his greater concern was is there going to be anyone there to deliver 
the services when you require them? Of course, he is talking about our 
physician workforce, our nursing workforce, the ancillary health care 
personnel, all of whom we depend upon to deliver health care in this 
country.
  We have an overburgeoning and overregulated governmental system that 
continues to sort of move along. We have got the other aspect of ever-
increasing liability costs. If we have time tonight, I do want to touch 
on that just a little bit.
  But not just the cost of medical liability insurance, but also the 
aggravation of dealing with a system that, on its face, sets doctors 
and patients against each other. We do have to deal with that.
  The consequence of this is we have physicians who are my age who are 
leaving the profession early, earlier than the generation before them. 
It

[[Page 12469]]

was very common for a physician to practice into their 60s and 70s and 
not at all uncommon to continue to read about physicians who continue 
to practice right up until the time that they no longer could.
  You don't see that as much any more. Physicians are making plans to 
leave the practice of medicine at an earlier point now than, I believe, 
ever before in our Nation's history. At the same time, at the other 
end, are we having any problems filling our residency programs? The 
answer is yes.
  Are we, in fact, encouraging the young people of this country to look 
upon health care as a career, as a profession? The answer to that 
question may not be affirmative either.
  So we have got an increasing number of physicians who are making 
early retirement plans. We are not sure it's difficult to measure the 
number, but it doesn't seem that the younger generation is showing up 
in the numbers that we would expect. Both of those pose a significant 
concern nationally, because we have got a society that's aging. We have 
a society with the so-called baby boom generation coming up, and the 
demand for services is going to be ever-increasing during that time.
  Suffice it to say, whether it's, again, the Medicare, SCHIP program, 
Medicaid, private insurance, cash on the barrel head, patients are 
going to need doctors; and it is incumbent upon this Congress to make 
certain that we do the things necessary to preserve the physician 
workforce in this country. The patients who need care, maybe a patient 
is in a city, or they may be a patient in a rural area, they may be a 
patient in an area that has been devastated by gulf coast hurricanes in 
the past couple of years. The reasons are complex, and we debate them 
at some length up here in Washington in the various ways that we can 
seek to improve our health care system.
  But even as we engage in these issue, our physician workforce is 
crumbling. In order to keep this scenario from becoming worse, I am 
proposing a series of physician workforce pieces of legislation that 
will consist, essentially, of three different parts.
  I would just draw your attention to the cover of Texas Medicine. This 
is a periodical put out by the Texas Medical Association every month. 
This is the cover of the March issue. The title is, ``Running Out of 
Doctors: Medical Schools Unable to Keep Residents in Texas.'' This is 
one of the things that we really do have to focus on.
  When you look at the Medicare system, one of the biggest problems we 
have is the formula under which physicians are paid, and addressing the 
declining Medicare physician payment issue has almost become an annual 
rite here in Washington, DC. But every time we do that, we actually 
make it harder to ultimately reform the system. Every time we come in 
at the end game, at the end of the year, to try to prevent further cuts 
to the physician reimbursement system and the Medicare system, we 
actually make the overall solution to that problem harder and harder. 
The chance, then, for real reform, the opportunities for real reform, 
become smaller and smaller with each succeeding year.
  The current payment system in the Medicare system, the current 
payment system rewards ordering labs and performing procedures, 
necessary or not. In fact, not often are the questions asked, if those 
services, not even if they are necessary, but are they, perhaps, 
overvalued. Is Medicare getting its best value for its dollar?
  The current system is indifferent to the fact that the procedures or 
the tests ordered may be questionable or may have significant merit, 
may, in fact, be critical for a patient's well-being. The fact is that 
the system doesn't work. It doesn't work for doctors, it doesn't work 
for patients, and certainly not working for the American taxpayer. Yet, 
year in and year out, Congress allows it to persist.
  Well, if we continue to allow this condition to stagnate, there will 
be fewer and fewer physicians accepting Medicare payments. This will 
result in reduced access for beneficiaries and a restriction in the 
physician workforce pipeline over a period when the demand for medical 
service is projected to explode.
  Fewer students are pursuing a career in medicine. More and more 
doctors are retiring early. Even fewer will choose primary care fields 
in their study of medicine, and all of this happens against a backdrop 
of more and more Americans growing older. As Americans grow older, they 
do face greater and greater health challenges. So, arguably, our 
sickest and most complex patients are going to need to rely on an ever-
dwindling physician workforce.
  Now, if, indeed, we do nothing, the picture I have just painted may, 
indeed, become a reality.

                              {time}  1830

  But again, the three pieces of legislation that I plan to introduce 
will start with one that will ensure stability of the physician work 
force by ensuring stability of the payment system within Medicare. 
There is a formula under which physicians are paid in Medicare, and I'm 
going to talk about this in a little bit more detail in just a few 
minutes, but it's called the sustainable growth rate. And the net 
effect of the sustainable growth rate formula is really anything but 
growth. It, in fact, results in a reduction over time, 5 to 10 percent 
reduction in physician payments year in and year out. And that number 
is brought to us every year by the Center for Medicare and Medicaid 
Services out of the Department of Health and Human Services. We'll 
actually receive data on that, what that number of that percentage cut 
will be this summer, sometime in July.
  The first bill that I'm proposing would, in fact, eliminate that 
sustainable growth rate formula and replace it with a different 
formula. It's called the Medicare Economic Index, really not so 
important what it's called, but it is a cost of living update, if you 
will, a market basket update based upon the cost of input. What does it 
cost the doctor to run their office, to run their practice? And if 
they're going to be able to sustain that over time, obviously, the 
Medicare reimbursement rates are going to have to keep up with the cost 
of living adjustment, or keep up with inflation. It only makes sense. 
We do it in almost every other aspect of Medicare. And again, I want to 
discuss that in some detail in just a moment.
  One of the other things that happened in 2003 was we reset the SGR 
baseline to reduce the level of those cuts, and, in fact, that's a 
budgetary maneuver that may well be available to us again this year 
and, in fact, is one that I think we should take advantage of.
  So this legislation does, in addition to repealing the SGR, it does 
so in the year 2010. In the 2 years prior to that time, reset the 
baseline so that the depth of those cuts are not so significant. In 
order to protect physician practices against a reduction in income and, 
hence, encouraging physicians to leave the Medicare system, in order to 
protect during that 2 years time, allow bonus payment of 3 percent for 
voluntary reporting on quality measures and 3 percent for those 
practices that choose to increase or improve their health information 
technology that almost every practice will be relying on with greater 
and greater need in the years to come.
  So in aggregate, those bonus payments are 6 percent. And by resetting 
the baseline, the reduction in payment will be in the 5 percent range. 
So the net effect will be either a 0 percent update or possibly even a 
1 percent update, which I think would be welcomed by most physicians in 
practice. And that's a temporary situation.
  What is the reason to delay the SGR repeal? Why not just do it 
straight up? The reason is because of the projected cost by the 
Congressional Budget Office, and that projected cost makes it almost 
impossible to do that without making some significant adjustments in 
other aspects of payments for medical care that, quite frankly, I don't 
know that Congress has the will to do.
  But the reality is, we are saving money year over year in Medicare by 
providing services in a more timely fashion. The Medicare prescription 
drug benefit passed in 2003, a case in

[[Page 12470]]

point. The trustees, the Medicare trustees report released just a few 
weeks ago said that in 2005 there were 600,000 hospital beds that 
weren't filled in Medicare. This was a savings to part A in Medicare, 
which really should accrue to part B and go to offset the cost of 
repealing the SGR formula.
  We are not allowed, under the rules of the Congressional Budget 
Office, we are not allowed to look ahead and say well, we are going to 
get savings in this system because of changes that we've made. But what 
we can do is sequester and aggregate those savings over the next 2 
years, and then use those actual dollars to buy down or reduce the 
amount of dollars that it's going to cost to repeal the SGR.
  Again, a small bonus update for beginning in the year 2008 for some 
health information technology implementation. These measures are in a 
large part well overdue. And this Congress, the last Congress was 
unable to come to an agreement, the House and the Senate, over the type 
of health information technology that we wanted doctors offices to 
pursue.
  But the reality is, delaying that implementation further only tends 
to cost more money to the system. So we do need to get on about the 
business of encouraging physicians' offices to do this work. Not only 
is it necessary, I think, to provide that bonus payment, but it's also 
necessary to provide some safe harbor provisions in laws that are known 
as the Stark clause, the anti-kickback, and anti-compete laws that we 
know in aggregate as Stark 1 and Stark 2.
  Additionally, if physicians voluntarily report quality data, that 
additional bonus payment will be there for them as well. So collect an 
aggregate. All of that data within the Center for Medicare and Medicaid 
services, money to save from part A, part C and part D as well. 
Aggregate, sequester those savings and use that to offset the cost of 
the ultimate repeal of the SGR.
  And in addition to that, there is the Inspector General in Health and 
Human Services, along with the Department of Justice, have gotten very 
aggressive about going after areas where health care monies are spent 
inappropriately, the so-called fraud and abuse that exists within some 
aspects of the Medicare system.
  And a recent newspaper article disclosed a significant amount of 
money that was recovered by eliminating an episode of fraud and abuse 
that was occurring I believe in the State of Florida.
  Well, those monies need to be, again, reallocated back to the part B 
part of Medicare again to pay down or buy down the cost of that SGR 
appeal when the time comes.
  Now, one of the issues that was addressed in the Texas Medical 
Association article is that because of the lack of residency programs 
within the State of Texas, Texas is doing a good job with, they've 
expanded medical schools and they're doing a good job with medical 
instruction, but the doctors that they're educating in Texas are having 
to leave Texas to get their specialty training or their residency 
training. And the fact is that most physicians practice within 100 
miles of where they did their residency training. So to be able to 
increase the amount of residency programs that are available in rural 
areas, in midsize or small urban areas, it is going to take some effort 
by this Congress for that to happen.
  The United States does have good residency programs. They're the envy 
of the world, and people come from all over the world to participate in 
our postgraduate education in our academic medical centers. But that's 
just the point. A lot of residencies do exist in conjunction with large 
academic medical centers and, as of a consequence, that's in a large 
urban area.
  Again, doctors are more likely to practice close to where they train 
and in similar environments. So most American trained doctors, as you 
would imagine, stay in urban areas and practice specialty or 
subspecialty medicine, which is not a bad thing. And that's not to say 
that that is necessarily wrong, but we do need more physicians who are 
going to set up their practices in primary care in more of the 
generalist theme rather than the specialty theme.
  The second bill that would be introduced would be the Physician Work 
Force and Graduate Education Enhancement Act. And it establishes an 
interest free loan program for eligible hospitals in rural, small and 
urban areas to attract residency programs in specialties like family 
medicine, internal medicine, pediatrics, emergency medicine, OB/GYN or 
general surgery. This would require an authorization of $25 million 
over 10 years from 2008 to 2018. And of course the Secretary of HHS 
would report back to Congress on how the program is doing with 
achieving its stated goals.
  Well, let me talk for just a moment about the Medicare payment 
formula, because this is an important point, and it is difficult to 
understand. It's a program that obviously was created by Congress and 
Federal agencies and one that is understandable by perhaps very few.
  But looking at this graph, the colored bars on this graph represent 
the years, 2002, 2003, 2004, 2005, 2006, I'm sorry, 2007, 2006 does not 
appear on this graph because it was actually a 0 percent, 2006 is the 
blue bar on the graph.
  If you look at the four parts of Medicare, the hospitals representing 
Medicare part A, doctors, Medicare part B, Medicare Advantage, part C, 
including nursing homes on this graph as well, and you look at the 
Medicare Advantage plans, the hospitals and the nursing homes, and each 
of those year over year receive a market basket or a cost of living 
upgrade year over year. You can see for hospitals, for example, it's 
ranged about 3 percent a year, sometimes a little bit lower, sometimes 
a little bit higher. The Medicare Advantage plans have done a little 
bit better. Nursing homes very similar to hospitals.
  But look over at the physician reimbursement. In the year 2002 there 
was about a 4\1/2\ percent reduction in physician reimbursement. Then, 
in 2003, 2004, 2005, very, very modest, 1.8, 1.7 percent cost of living 
updates. Lower, I would point out, than hospitals, nursing homes or 
certainly the Medicare Advantage plans.
  In 2005, this was actually part of the Deficit Reduction Act that was 
passed in 2005 and held physicians at a 0 percent update.
  Projection for 2007 was for a significant reduction, but the reality 
was, again, we made an adjustment at the end of last year to once again 
hold that at a 0 percent update.
  But you would have to ask yourself, how long, at running a small 
business, could you continue without any attention being paid to what 
does it cost to run the business? At some point, if this line stays 
flat or continues to diminish, at some point you don't have to have an 
MBA from an elite Eastern institution to figure out that you cannot 
continue to sustain that. Again, physician offices, in the main, are 
small businesses and as a consequence, a continued reduction in payment 
or even a flattening of payment which when everyone else is seeing a 
cost of living adjustment of between 2 and 4 percent, that's indicative 
of the inflation rate for medical offices. And they in fact are on a 
significant downward trajectory, one that ultimately is not likely to 
be sustainable.
  Now, last year, in an attempt to deal with this, I introduced 
legislation that was a little bit different from the bill that I've 
introduced this year. It was H.R. 5866, and it was aimed at tackling 
this problem with the sustainable growth rate formula and replacing it 
with a cost of living update, a cost of living adjustment update. The 
primary focus was to ensure that seniors have better access to the 
health care that they need, that, acknowledging that the SGR reductions 
of 5 percent every year, year over year, makes it less likely for 
doctors to continue to see Medicare patients.
  The plan then had four main goals. Ensure that physicians receive a 
full and fair payment for services rendered; secondly, to create 
quality performance measures to keep consumers informed. Are you, in 
fact, getting value for your dollar when you purchase medical care. We 
have well established, in fact, they've been around for 20

[[Page 12471]]

years or so, institutions in each State called quality improvement 
organizations.
  Well, I wanted to, in fact, embellish or augment the quality 
improvement organizations and increase their accountability and 
flexibility so that they would be able to provide the feedback to 
physicians and to patients as to how they are doing; are they able to 
provide the services for a reasonable amount of money? Are they able to 
provide the services in a timely fashion? Do they provide the services 
that people in fact want?
  Well, the problem with 5866 is that once again there was a 
significant number of dollars that would need to be identified to 
offset the cost of going from the sustainable growth rate formula to 
the cost of living update formula. That figure last year was about $218 
billion. And that is a significant amount of money to come up with over 
1 year's time. Hence, the reason that this year the trajectory that I 
have introduced has lengthened that timeline out a little bit longer in 
order to identify where some of those pay fors may be found.
  The other option, following along the lines of 5866 from last year, 
would just simply be to take the money from other aspects of Medicare 
and other parts of the Federal payment for health care in this country. 
The problem is that each of those areas finds great difficulty if 
indeed a proposal is made to restrict or reduce the Federal 
expenditures that come their way and, as a consequence, 5866 never 
enjoyed very widespread support because of the fact that, like so many 
things here in Washington, DC, you end up having to pick winners and 
losers.

                              {time}  1845

  That is the reason that I have taken the approach that I have for 
this year to expand out the timeline for the elimination of the SGR, to 
identify pay-fors in advance that are going to be going on anyway, but 
we just simply sequester them, collect them, attribute them to the part 
B part of Medicare. Savings that occur in hospitals, if you fill 
600,000 hospital beds a year fewer than was intended, that is going to 
be a significant savings to the part A part of Medicare. But the 
reality is that savings occurs because of work that is done in part B. 
More doctors doing more procedures in their offices, doctors treating 
disease in a timely fashion so that fewer hospitalizations are 
required, doctors doing procedures in ambulatory care centers so that 
the high expense item of a hospital expenditure is, therefore, avoided. 
But all of those expenses come back to part B. It is only fair, then, 
that the savings that result to the system, the integrated Medicare 
system, those savings that come to the Medicare system, need to be 
attributed to the part B, especially when we have got this large price 
tag for repealing the SGR that confronts us.
  Well, again, this year I want to approach things a little 
differently. But, again, first and foremost if you are talking about 
preserving the physician workforce, you have got to protect those men 
and women who are on the ground, in the trenches, delivering care right 
now. If they get dispirited and walk off the job or say, I am no longer 
going to care for Medicare patients or I am going to restrict Medicare 
patients from my practice or begin restricting the procedures that I 
offer to Medicare patients, we don't get good value for our dollar that 
way.
  So getting that Medicare payment policy right has to be the first 
aspect of this physicians workforce consortium that will preserve our 
medical workforce for the future. Paying physicians fairly will extend 
the careers of many doctors who otherwise will simply opt out of the 
Medicare program or seek early retirement.
  The principles of the new bill: Again, eliminate the SGR. It is 
critical that the SGR be eliminated, and we can't lose sight of that 
fact. The problem is right now I don't think there is the savings 
identified to eliminate the SGR nor am I convinced that the will in 
Congress is to eliminate the SGR in one chunk. So extend that timeline 
out a little bit and allow that price tag to be reduced because of the 
lengthening of the timeline. But eliminating the SGR is the fundamental 
principle that has to be followed, and the bill that I am going to 
introduce will eliminate the SGR in the year 2010 and in the meantime 
provide incentive payments based on quality reporting, technology 
improvement that could total as much as 6 percent to protect the 
physicians over these next 2 years where the cuts in the SGR arguably 
will be about 5 percent.
  In both 2008 and 2009, physicians' practices can opt to take 
advantages of those bonuses and may, in fact, be returning value back 
to their businesses, and this would be a good thing. If you expand the 
ability to monitor patient care through health information technology, 
that is not just for your Medicare patients. That is going to be for 
all patients. So there would be a general improvement that would 
permeate throughout a physician's practice. Most physicians in this 
country don't just see Medicare or don't just see Medicaid. In fact, 
they see a mix of patients, some Medicare and some Medicaid, some 
private insurance; but all patients under a doctor's care would benefit 
from the advances in health information technology.
  Let me digress for just a moment and talk a little bit about health 
information technology because I was a late arrival to the concept of 
the necessity of improving health information technology, but it really 
came home to me in October of 2005 when I took a trip to New Orleans. I 
was invited by several of the hospitals down there to come down to see 
how their doctors were coping with the after effects of the storm, see 
what had happened to some of the physical infrastructure. We spent part 
of the afternoon in Charity Hospital in downtown New Orleans. Charity 
Hospital, one of the venerable old training hospitals that has been 
around for generations. In fact, most of my professors at Parkland 
Hospital had trained a generation before at Charity Hospital in New 
Orleans.
  And here is a picture of the medical records department in Charity 
Hospital in October of 2005. Katrina, as you recall, came through right 
at the end of August of 2005. It doesn't show up well, but there is 
still probably three or four inches of water on the floor. Like many 
hospitals, Charity's medical records department was in their basement.
  The lights that you see overhead were actually pretty dim. I was able 
to get a good photograph because of a television crew that was 
following along behind us with their very bright lights. But look at 
the medical records, and you can see the black mold that has grown on 
these because of, again, the water on the floor and probably 110 
percent humidity in this hot, damp basement. The records had been 
flooded. And then after the water had been mostly evacuated, of course, 
the water damage has already happened and now you have the growth of 
the black mold on the records. And, really, I don't think anyone would 
be too interested in handling those records.
  And even if you just look at the overall arrangement of this medical 
records department, you can see some records stuffed in on their sides 
up there. Some others have fallen down over there. It just makes you 
wonder about how good this paper system is if everything goes well. And 
if things go badly, as you can see, they can go very badly indeed.
  Well, another aspect that clarified in my mind the importance in 
upgrades of health information technology, a couple of months ago, of 
course, when all of the newspaper stories were going on out at Walter 
Reed Hospital, I took a trip out there to visit with the soldiers and 
see for myself firsthand what the situation was in Building 18. And, 
correct, Building 18 was an old building and it really wasn't that 
nice. And I think we are all better served by the fact that our 
soldiers who are on medical hold are no longer being housed in Building 
18.
  But the bigger problem, Master Sergeant Blade was kind enough to 
explain to me what he saw as a greater degree of difficulty for our 
soldiers who were on medical hold waiting to see if they could rejoin 
their units or if they were going to be discharged from the service on 
a disability. And you see

[[Page 12472]]

this rather large stack of papers that he has in front of him. That is 
his medical record. He is going through it with a yellow highlighter to 
make his case in regards to a particular disability claim. And his 
largest concern was, after spending hour after hour after hour going 
through his medical record and documenting the points that he thought 
were critical for him to receive the proper consideration from the 
Disability Board, he said it wasn't uncommon for that medical record to 
go sit on someone's desk for a couple of weeks and then ultimately be 
lost. So he was advising the men in his unit. In fact, I think it was 
either the second or third copy of his medical record that he was 
marking up in this manner so that he wouldn't run the risk of putting 
all his time and effort into documenting the issues surrounding his 
disability only to have the medical record disappear because the system 
really wasn't well suited to handle that.
  And that really brought home for me the fact that, well, of course, 
the VA system has a relatively forward thinking electronic medical 
record, but the problem is the record produced by the Department of 
Defense doesn't talk to the VA record system, and as a consequence, the 
poor soldier in the middle has to spend the time and the effort going 
through their individual record to make certain that, again, their case 
gets the proper disability consideration that it deserves.
  So just two reasons why I have become a believer in the past couple 
years that improving the information technology aspect of medical 
practice, true in hospitals but also true in physicians' offices as 
well, why I have become a believer that that is, indeed, something we 
do need to be devoting time and resources to. There are certainly 
problems with some of the systems that are out there, but ultimately 
the payoff is going to be that we will be able to deliver care faster, 
cheaper, smarter, and as a consequence, deliver more care and more 
value for our patients.
  One of the other things that again I think is important in this 
endeavor and the reason I have included part of the bonus payment for 
quality reporting is that you can't change a system if you don't know 
what is going on within the system. Now, again, I would stress that 
this would be voluntary quality reporting, that no physician or 
physician's office would be required to provide quality reporting. The 
risk to run there is that the SGR reduction would affect that 
physician's bottom line in 2008 and 2009. But if a physician or medical 
practice opted not to do quality reporting or improvements of health 
information technology, beginning in the year 2010, they would indeed 
see a repeal of the SGR, replacing that with the Medicare Economic 
Index. So beginning a series of positive updates of about 2 to 2\1/2\ 
percent in the year 2010, but, again, to forestall the pain that would 
go on in the years 2008 and 2009, reset that SGR baseline so the cuts 
are not so deep, and then provide protection for voluntary reporting 
measures on quality, voluntary improvements in an office's health 
information technology, and make these things so that they are 
generally available, which CMS would be tasked with making the quality 
reporting measures generally available, and really sort of zero in on 
the top 10 conditions or diagnoses where the bulk of the money is spent 
in the Medicare system. Not so much to emphasize quality reporting 
measures for esoteric diseases or diseases that are encountered once in 
a career but those things that are encountered over and over and over 
again: hypertension, diabetes, congestive heart failure. These are the 
types of things where the concentration of dollars is going to be 
located, and these are the areas where the quality reporting really 
needs to be focused.
  The part of the issue there is that the quality reporting measures do 
have to be generally available to physicians in all specialties and all 
practices. We certainly don't want to see someone who is not able to 
participate because their particular specialty does not have an 
identified quality reporting mechanism. CMS and some of the specialty 
organizations are already pretty far down the road on this, and really 
at this point it has not been identified to me that there is a problem 
or would be a problem for a particular specialty with not having a 
mechanism to report quality.
  Well, dealing with the other aspects of the physician workforce, the 
other two aspects of the three pieces of legislation, one would deal 
with physicians in residency and one would deal with those individuals 
who are looking to become physicians or those individuals who are in 
medical school.
  The Physician Workforce Graduate Medical Education Enhancement Act of 
2007 would acknowledge that it is costly to educate medical students 
and it is costly to get medical students through a residency program. 
The big programs are in more heavily populated areas that tend to 
attract more residencies, but we need to get the physicians out into 
the smaller and rural communities where the medically underserved 
populations actually exist and get them out there in high-needs 
specialties. So developing a program that would permit hospitals that 
do not traditionally operate a residency training program would be the 
second aspect of establishing and protecting the future physician 
workforce. So this bill would create a loan fund available to hospitals 
to create residency training programs where none have operated in the 
past. And, again, that is a critical aspect to this. This is not 
something that is to go in and layer on top of existing programs, but 
this would be to create residency programs where none has existed 
previously. Communities like the community of Denton, Texas, that I 
represent, a community like the community of Lewisville, Texas, that I 
represent, smaller community hospitals, 150 to 200 beds, no residency 
program has ever existed in those communities. These would be the types 
of targeted communities that perhaps we could look to for establishing 
residencies in primary care, OB/GYN, pediatrics, general surgery.

                              {time}  1900

  On average, it cost $100,000 a year to train a resident, and that 
cost for some institutions can be prohibitive. In addition, the 
Balanced Budget amendment, passed 10 years ago in this Congress, has a 
residency cap that limits resources to hospitals, such as smaller 
community hospitals. The loan amounts available under this bill would 
not exceed $1 million, and the loan would constitute start-up funding, 
again, for new residency programs.
  The start-up money is essential. Since medical graduate, medical 
education funding can be obtained only once a residency program is 
established, the cost to start a training program for a smaller, more 
rural and/or small urban hospital can be cost prohibitive because these 
hospitals do operate on much narrower margins.
  Identifying high-need physician specialties and getting young people 
to consider medical school, to getting young medical students to 
consider going into a primary care specialty, to going into one of 
those medically underserved areas, again, going back to the Texas 
Medical Association article, the Texas Medicine article, most 
physicians practice close by where they did their residency. And as a 
consequence, there are areas in the country that do lack medical care 
by trained professionals. So the third aspect of this three-part health 
workforce, physician workforce trio of bills, the third part would 
ensure the availability of the adequacy of the future physician 
workforce in providing medical students with incentives and assistance 
to practice in shortage areas and shortage specialties in those 
shortage areas.
  So the third bill would be to establish a mix of scholarships, loan 
repayment funds, and tax incentives to entice more students into 
medical school in the first place, and then create incentives for those 
students, those newly minted doctors, to become the family physicians, 
the general surgeons, the OB/GYNs, the pediatricians, the 
gerontologists, to become those practitioners of the future that are 
going to more likely stay in shortage areas, such as rural and small 
urban areas.
  There is no question that the issues in front of us as far as the 
physician

[[Page 12473]]

workforce are serious, they are significant. But the feeling is that 
once you have established measures that will allow the medical 
workforce of the future, then you can begin to refine other aspects of 
the health care system. And, again, as I stressed last night, we are 
going to have that tension between what is public and what is private. 
What is paid for by the government, what is paid for by insurance, what 
is paid for by people who wish to pay cash. Is it better to have a 
health savings account or rely on SCHIP or Medicaid? Those arguments we 
are going to have, but those arguments are going to diminish in 
importance if we don't do the things necessary to create and retain the 
physician workforce that is going to be necessary to take care of 
people in the future.
  One of the greatest frustrations that I hear all the time from 
medical professionals, and since we are on the subject of medical 
professionals and how to keep physicians engaged in practicing medicine 
and how to get more people to consider health care as a career, 
obviously medical liability plays a big part in that. My home State of 
Texas has done an excellent job of dealing with the medical liability 
issue. We, on the floor of this House in Congress, in fact for the last 
two Congresses over the previous 4 years have passed several medical 
liability bills that have had at their heart a cap on noneconomic 
damages patterned after the Medical Injury Compensation Reform Act of 
1975 out in California that has been so effective in keeping the cost 
of providing liability insurance within reason.
  Now, my home State of Texas, the year that I ran for Congress the 
first time in 2002, was in a crisis situation. We were losing insurers 
from th
  State liability. Insurers were leaving Texas because the climate was 
so pernicious. Rates were going up for physicians. For those companies 
that stayed behind, their rates were going up, doubling and sometimes 
tripling.
  The State of Texas and the State legislature passed a bill in the 
summer of 2003 that actually again was patterned after that Medical 
Injury Compensation Reform Act of 1975 out in California that capped 
noneconomic damages. The Texas approach was a little different from the 
approach that we took in Congress. The approach we took in Congress had 
a $250,000 flat cap for noneconomic damages. The Texas solution 
actually took that cap and spread it out three ways; a $250,000 cap for 
the physician, a $250,000 cap for the hospital and a $250,000 cap for a 
nursing home or a second hospital, if indeed there was a second 
hospital involved. That required a constitutional amendment in order to 
become law. And that constitutional amendment was passed in September 
of 2003. It was not passed by a very large margin. It was essentially 
the grass-roots efforts of physicians, their families and their 
patients that got the constitutional amendment passed that allowed the 
Texas law to take effect.
  But the effect of the Texas law over the ensuing 3 or 4 years has 
been significant. Medical liability premiums have now fallen 20-22 
percent. My last insurer of record, Texas Liability Trust, has reduced 
insurance rates by 20 to 22 percent, depending upon the length of time 
that the doctor has been with the company.
  More importantly, insurance companies have come back, liability 
carriers have come back to the State of Texas. We diminished from about 
17 carriers to 2 in 2002. Now there are 13 or 14 carriers back in the 
State. And most importantly, they have come back to the State without 
an overall increase in their premiums.
  One of the big beneficiaries of the law that was passed in Texas has 
been the smaller community-based not-for-profit hospital. The money 
that they were previously having to--these hospitals largely self-
insured and the dollars that they were having to put in escrow against 
possible claims was significant. And now these hospitals have been able 
to put more of that capital back to work for them: Capital expansions, 
hiring nurses, paying nurses' salaries. Exactly the kinds of things you 
would want your smaller community hospitals to be able to do they have 
now been able to do under the legislation passed in Texas.
  Well, if Texas is in such good shape from its liability reform, is it 
still important to consider passing a law at this level, at the Federal 
level, to deal with our medical justice system? And the answer still is 
yes. Legislation in draft form that I had scored by the Congressional 
Budget Office right before we did our Republican budget a few months 
ago, at the request of the Budget Committee ranking member, we put 
forth that legislation, the Congressional Budget Office scored it as 
savings of $3 billion over 5 years. Well, we are already talking about 
other areas in the Federal expenditure of health care funds where that 
money is needed. And that $3 billion, in fact, it's wrong, it is 
unconscionable to leave that money on the table and not provide that 
money to other areas of the Federal expenditure for health care where 
it might come in handy.
  And the bigger aspect for me, the more important aspect for me in 
dealing with the problem of the medical justice system at the Federal 
level is the dollars that are spent on defensive medicine in the 
Medicare system, in the Medicaid system. A study from 1996, so that is 
10 years ago, over 10 years ago, out in Stanford, California, estimated 
the cost of defensive medicine in the Medicare system, just in the 
Medicare system, not in the entire health care system, but just in the 
Medicare system, amounted to about $28 billion a year. Again, that is 
money we can scarcely afford to leave on the table. If those savings 
are available to us, indeed, we do need to be getting those dollars 
back.
  But it is not just a dollars-and-cents issue. Nome, Alaska. I 
happened to be through there in the summer of 2003, stopping in Nome, 
Alaska, with a group of other Congressmen. You can imagine the Chamber 
of Commerce wanted to have a big lunch, so they invited us all there. 
And of course being a physician who was also a Member of Congress, 
about the entire medical staff from their hospital, all 19 physicians 
turned out to talk to me during the course of our stopover in Nome, 
Alaska. And one of the points that they wanted made was that they 
needed help because they couldn't afford the medical liability cost for 
having an anesthesiologist in their hospital. And the doctor who was 
telling me this story, I asked, well, what is your specialty, sir? And 
he said, well, I am an OB/GYN doctor just like you. And I said wait a 
minute, you're an OB/GYN doctor and you work in a hospital that doesn't 
provide anesthesia services. How do you do that? Ignore for a moment 
the woman who may need an epidural during child birth, what do you do 
if you're faced with having to do a C-section? He said, well, we get 
that patient and put her on an airplane and take her to Anchorage. 
Anchorage, probably 3 hours away. I am given to understand that they 
sometimes have bad weather in Nome, Alaska. It just makes no sense that 
we would allow a system like that to continue. We are doing nothing to 
enhance patient safety; we are doing nothing to enhance the ability to 
deliver care by allowing a system like that to continue.
  Again, we are talking about the workforce issues. Talking to a 
residency director from one of the large residencies up in New York 
City a couple of years ago, I asked her what effect the medical 
liability problem was having on attracting young physicians into their 
residency program. And she replied to me that we are now taking people 
into our residency program that 5 years ago we wouldn't even have 
interviewed. So these are our children's doctors. We are driving away 
some of the best and brightest from the desirability of the practice of 
health care, and we need to do better.
  So once again I would add that, while the three bills that will 
establish and encourage and protect and preserve and defend the 
existing physician workforce and the physician workforce of the future 
in this country, we also need to pay attention to the medical justice 
system in this country.
  We have had a number of hearings in my committee, the Committee on 
Energy and Commerce, and our health

[[Page 12474]]

subcommittee on this issue. There are some other suggestions out there 
in addition to or instead of the caps on noneconomic damages. I am 
willing to listen to other philosophies, but the reality is in my home 
State of Texas. Caps on noneconomic damages again are working. They are 
delivering lower premium rates for physicians. They are delivering on 
the promise of more flexibility for capital expenditures for small 
community-size hospitals because of the dollars they don't have to tie 
up in escrow because of the way their self-insurance plans are 
constructed.
  And, again, we've seen the insurance companies come back to Texas. 
And I do from time to time hear people say, well, it's just the 
insurance companies wanting to make more money. The reality is, my old 
insurer in Texas was a physician-owned company, a physician-run 
company. It was essentially a company where all of the profits were 
returned back to the insurance company. We have several of those in 
Texas. So I don't believe it is all just a question of a profit-driven 
motive from the liability insurer.
  One of the things that I think we lose sight of, and there was an 
article in one of the papers today that talked about the fact that 
America was not the premier as far as the delivery of health care. We 
can have a lot of arguments around that thought, around that 
philosophy. The American health care system in general, and certainly 
the Medicare program in particular, has no shortage of critics here at 
home and certainly abroad. But it is the American system that stands at 
the forefront of innovation and new technology, precisely the types of 
system-wide changes that are going to be necessary to efficiently and 
effectively provide care for Americans, and particularly for America's 
seniors in the future.
  There was an article, and please don't tell anyone back in my home 
State of Texas that I read the New York Times, but there was a New York 
Times article published last October, October 5, by Tyler Cowan who 
writes: When it comes to medical innovation, the United States is the 
world leader. In the past 10 years, for instance, 12 Nobel Prizes in 
medicine have gone to American-born scientists working in the United 
States, three have gone to foreign-born scientists working in the 
United States, and seven have gone to researchers outside of the 
country.

                              {time}  1915

  He goes on to point out that five of the six most important medical 
innovations in the past 25 years have been developed within and because 
of the American system.
  The fact is the United States is not Europe. American patients are 
accustomed to wide choices when it comes to hospitals, wide choices 
when it comes to physicians, and choices in their pharmaceuticals. 
Because our experience is unique and different from other countries, 
this difference should be acknowledged and certainly expanded when 
reforming either the public or the private aspect of healthcare 
delivery in this country.
  Mr. Speaker, in the time that I have remaining, let me just recap 
again the three aspects of physician workforce that I am going to be 
introducing.
  This will be a bill to repeal the so-called sustainable growth rate 
expenditure and replace that with a Medicare Economic Index or cost of 
living index for physicians beginning in the year 2010; protections in 
the year 2008 and 2009 for voluntary reporting and voluntary compliance 
with improvements in health information technology.
  The second bill will deal with the physician workforce and graduate 
medical education. This will establish an interest-free loan program 
for eligible hospitals in rural and small urban areas to establish 
residency training programs for primary care, family medicine, internal 
medicine, pediatrics, emergency medicine, general surgeon and OB/GYN. 
The authorization for this will be $25 million over 10 years, those 10 
years being 2008 through 2018 inclusive. Of course, the Secretary of 
HHS will report to Congress on the efficacy of the programs and how 
they are going about achieving their stated goals.
  Finally, and interestingly enough, we voted on a bill on the floor of 
this House just a few hours ago that would be a loan forgiveness 
package for lawyers who graduate from law school with large student 
loans and are willing to practice as prosecutors in high need areas. 
This would be a very similar structured bill that would establish a 
scholarship program for physicians who are wanting to practice in 
primary care in high need areas to alleviate shortages in the fields of 
family medicine, internal medicine, pediatrics, emergency medicine, 
general surgeon and OB/GYN, again the so-called generalist physicians.
  This authorization would be for $5 million for each of 5 years, 
fiscal year 2008 through 2015, a $25 million total authorization that 
would establish a loan repayment program for generalist physicians who 
agree to serve in medically underserved areas. A second authorization 
for an additional $25 million total would make grants to States to 
provide financial aid to physicians agreeing to serve in medically 
underserved areas and to support patient-centered coordinated care in 
qualified medical homes.
  There would be additional authorizations to make grants for board 
certified entities to establish or expand geriatric program fellowships 
in rural, suburban or medically underserved communities, and, finally, 
a report to Congress on the efficacy of the program.
  Then lastly, but certainly not least, amend the Internal Revenue Code 
so that gross income does not include compensation received by a 
physician from a local government for a qualified medical service that 
is performed in a medically underserved community and under contract 
with the local government for 4 years. This compensation will be taken 
into account as wages and must still be reported, but it just won't 
count toward that individual's adjusted gross income.
  Mr. Speaker, I appreciate very much the time allotted to me this 
evening. These are important issues. Again, whether one comes down on 
the side of increased governmental control of medical care or 
continuation of some aspect of the private practice of medicine in this 
country, the critical thing is that we have the doctors there who are 
willing and able and trained to provide the services that we all want.
  Additionally, for those individuals who would say expansion of the 
government program, the government-funded side of medical care is the 
only way to adequately cover people in this country, I think we have to 
look at how good a job we are doing right now with about the 50 percent 
that is devoted to the public sector in the practice of medicine. About 
50 cents out of every health care dollar spent in this country has as 
part of its origin the United States Congress at some point or other.
  So we have to ask ourselves, are we doing a good enough job there? 
And I would suggest, particularly when you look at things like the 
sustainable growth rate formula under which physicians are paid, I 
think the answer to that question would have to be no, we can do a 
better job with that.
  So certainly before any consideration for expanding any part of the 
public part of paying for medical care in this country, we have got to 
be sure that we have our figures straight. We have to be certain that 
we are willing to tackle the tough problems of paying for those things, 
and certainly the SGR formula needs to be sunsetted and needs to be no 
longer part of the parlance and discussion on the floor of this House 
of Representatives.

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