[Congressional Record (Bound Edition), Volume 155 (2009), Part 19]
[House]
[Pages 25822-25829]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  The SPEAKER pro tempore (Mr. Quigley). Under the Speaker's announced 
policy of January 6, 2009, the gentleman from Wisconsin (Mr. Kagen) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. KAGEN. Thank you very much, Mr. Speaker. I feel very flattered 
that you have provided me with sufficient time to explain some of the 
problems and solutions that we're looking at in helping to solve our 
crisis in health care across America.
  By way of background, my name is Steve Kagen. For the first time in 
my life, I ran for public office in 2006, and I was elected and 
reelected in 2008. I grew up in Appleton, Wisconsin; went to public 
schools; went to the University of Wisconsin; studied molecular 
biology; went to medical school. I went back home to Appleton with my 
wife, Gayle, to raise a family in 1981, practicing allergy, asthma and 
immunology.
  Over the years, what has been happening to my patients is they've 
been having more and more difficulty paying for their prescription 
drugs. What has been happening to my friends I went to high school with 
is they've had more and more difficulty running their businesses and 
having access to affordable health care.
  The health care costs in this country have simply gone through the 
roof. It's becoming more and more impossible for people to pay for, not 
only their medically necessary and life-saving prescription drugs, but 
also their health care coverage that they so dearly need. It's not just 
difficult for families. It's difficult for small businesses. It's 
difficult for large businesses.
  Recently, I received an e-mail from a large employer in Green Bay, 
Wisconsin--home of the world champion a

[[Page 25823]]

long time ago, the Green Bay Packers. This very large employer-CEO 
said: Kagen, keep the public option on the table. I just got my quote 
from Blue Cross, and they're jacking it up by 29 percent in 2010.
  People have to understand that, if we don't address this crisis and 
begin to solve it immediately in 2010, they'll either have a job with 
no health care coverage or no job at all, and good luck with the 
coverage you can get.
  Now I'd like to share with you some of the personal stories and 
comments from people in Northeast Wisconsin, and I trust that they're 
very much the same as they might be all across this great land.
  Ned writes from Dunbar, Wisconsin: The part D doughnut hole needs to 
be eliminated.
  Well, Ned, you're right, and we're working very hard on the 
Democratic side, and I'm sure the Republicans will go along with the 
idea of closing the doughnut hole in Medicare part D. Medicare part D, 
after all, was a prescription drug plan which was written by and for 
the insurance industry, which was nothing more than a windfall profit 
of billions and billions of dollars for Big Pharma. It wasn't intended 
to help my patients. It wasn't intended to help the senior citizens who 
live in Northeast Wisconsin. It was written by and for Big Pharma, and 
they're the ones that had the windfall profit. Ned needs help now 
because he needs to be able to go to the pharmacy and pay for his 
prescription drugs without having to go to the bank before doing so.
  Jack from Kaukauna writes: I need help. Prescription drugs are most 
important to very many seniors on limited incomes.
  In these economic times, those people who are most at risk are people 
who are living on fixed incomes, not only because they may not receive 
a cost-of-living adjustment but also because they have fixed incomes. 
They're not getting the interest payments they were before on their 
investments.
  So it is for Ned, for Jack and for everybody who is living on fixed 
incomes that we must write a bill here in the House that will guarantee 
access to affordable prescription drugs, and we have to do it soon.
  Eleanor from Green Bay, Wisconsin writes: Drug prices rise since part 
D. One of my husband's drugs in December 2005 was $144; in January of 
2007, $189. A $45 rise in 14 months is too much.
  They need help now with prescription drugs, and we intend to provide 
it in the legislation that we're writing.
  Deb from Florence, Wisconsin writes: I have no health insurance. We 
cannot afford it.
  Well, we've got to make sure that the prices are driven down. 
Ordinary people, both seniors and hardworking families, students 
alike--everybody understands there is a crisis in affordable health 
care.
  Here is a note from Carl from Greenleaf, Wisconsin: I have a 
pacemaker, and feel better than I had a year ago. I don't know why I 
had to pay $1,725 every 3 months for insurance with a $3,500 
deductible.
  You know, one of the games that's being played by the health 
insurance corporations, which are pretty much Wall Street-run, is to 
increase the premium and also to increase the deductible. What ends up 
happening is the patients are paying for their own health care with 
their deductibles, and then they're paying for the health insurance 
corporations' profits as well.
  Sheila from Weyauwega, Wisconsin: Family businesses need affordable 
insurance for health care.
  I think she's right.
  It goes on. Pat from Green Bay: Health care issues are critical. We 
need to develop a plan to help the elderly and the uninsurable.
  You know, one of the ideas on the Senate side is to create a high-
risk pool, in other words, to allow for some discrimination where the 
insurance companies would be cherry-picking you out if you were an 
expensive date, if you had health care issues and cost a lot to care 
for.
  In my view, I think that's an act of discrimination, and one of the 
greatest ideas in the Democrat bill, which is moving through the House, 
is the idea that we're going to bring an end to discrimination in 
health care. No longer will a health insurance corporation be allowed 
to cherry-pick you or your children or your family out of the risk 
pool. No longer will they be allowed to say ``no'' to you because of a 
preexisting condition or because of the way you were born.

                              {time}  1845

  And to families like the Wendel family here next to me, they need 
access to that affordable health care now. And like many, many families 
across the country who have preexisting conditions--heck, these days 
who doesn't--we have to bring an end to discrimination. President Obama 
agrees, the Senate agrees, and so does the House. But to create a toxic 
risk pool, so to speak, of these patients with preexisting conditions I 
feel is a wrong direction, and I hope that the Senate turns this 
around. We cannot allow for any discrimination against any citizen due 
to preexisting conditions.
  Well, one of the problems in practicing medicine today is that 
Medicare may not cover all of the overhead costs of caring for patients 
even when you provide high-quality care. And I'm going to use my great 
State of Wisconsin as an example. A State where we have covered nearly 
97 percent to 98 percent of every citizen within the State by one form 
of coverage or another.
  According to studies in quality care, Wisconsin ranks number 2 in the 
Nation, the 1st being the State of Minnesota, our neighbor. But when it 
comes to where we rank with the rates paid to health plans to provide 
coverage, the Medicare Advantage monthly payment rates in Wisconsin are 
number 44 in the country. In other words, we are paying on average 
$765. States like Florida, Louisiana, New York, and Texas are some of 
the highest in the country, where in Florida the Medicare Advantage 
programs are taking $1,013 as an average monthly payment.
  The Medicare Advantage plans that we have available in northeast 
Wisconsin are wonderful. They're affordable. They're great. They should 
be measured in terms of the quality of their service, and if they don't 
measure up, they should be eliminated. We have to seek out and root out 
and eliminate all wasteful practices in spending in health care, 
beginning with our hospitals and also within the Medicare system.
  I heard my colleagues on the other side of the aisle make the case 
that there was some cutting coming up in Medicare. Well, I'd say what 
we're trying to do is make your tax dollars go further. We want to be 
able to invest our tax dollars and get the highest quality care 
available anywhere at the lowest possible price.
  This is something that northeast Wisconsin knows a great deal about. 
We have a health care facility called ThedaCare, and the ThedaCare 
Center for Healthcare Value has been able to drive down the cost of 
caring for patients at a hospital by 25 percent. By lowering the cost, 
at the same time they have also improved the quality. Higher quality 
care at a lower price. This is something that should be replicated 
across the country, and if it were, we would be able to save in every 
year $40 billion of savings. Now, this is not a cut to Medicare; this 
is about making your tax dollars stretch and go further. Higher quality 
care at a lower price. This is exactly what you would want.
  Now, what happens when you talk about the total Medicare patient 
spending at hospitals and clinics? When you look at that, New York, per 
patient, is spending about $9,564; Wisconsin, $6,978. Wow, about a 30 
percent increase.
  I was very proud to work with other Members in the Midwest from the 
State of Nebraska over to Ohio to bring about an agreement with the 
leadership of the House that we have to address a Medicare payment 
discrepancy, a disparity, an unfairness. Something you may not know, 
but if you retire

[[Page 25824]]

from the State of Wisconsin, Minnesota, or anywhere in the upper 
Midwest, including the State of Washington in the Northwest, your 
Social Security check will follow you wherever you go and it will be 
the same amount in the State of Washington or the State of Wisconsin 
when you retire, let's say, for example, to Arizona, New Mexico, Texas, 
or even into Florida. But the same cannot be said about Medicare. Your 
Medicare tax dollars that you've been paying in for your entire working 
life may not follow you when you move out of the upper Midwest or the 
Northwest.
  So we have reached an agreement with the Speaker of the House to 
begin to address this payment disparity with Medicare, and at the same 
time we took up the conversation about how are we going to pay for 
medical services with your hard-earned tax dollars. Well, with Medicare 
and Medicaid, what we are seeking to do is to make certain that we 
reward physicians and hospitals for higher quality care and the value 
of that care that they're offering and delivering, and we intend to 
measure it. We intend to change the payment mechanism away from the 
volume of tests and care that you're receiving and more towards 
rewarding value. Not volume but, yes, to the value. And I think 
physicians and hospitals across the country will welcome this idea of 
moving up.
  Well, there's another topic that is very important. When I, as 
cochairman of the Congressional Business Owners Caucus, had a listening 
session with employers and the representatives here who came to 
Washington who represent them, groups such as the Small Business 
Majority and the Franchise Owners of America and others, they had some 
very simple requests. They asked us for immediate results where we 
would lower the cost of care. Lower costs have to be gotten immediately 
or as soon as possible. Why? Because the businesses can't survive with 
their current overhead. The single greatest component of their overhead 
is the cost for health care, and they want very much to see Congress 
help them to drive it down. And one way to do that is to provide 
transparency in health care pricing.
  Imagine this: You go to the grocery store. You put the food you're 
looking to buy for yourself and your family in the cart. You go to the 
checkout counter. They put it in the bag, and you take it home. You've 
never seen the price and they never billed you at the cash register. 
You simply take what you feel you need, go home, eat it, feed it to 
your family, and then later, a month or so later, they send you the 
bill. That would be unimaginable in this country. But that's what's 
happening in this health care, because you really don't know the price 
when you go to the hospital, to the doctor. You don't know the price, 
and the price really is whatever they can get.
  And I will get one picture here to take a look at. I will hold it in 
front of the Wendel family. This is a little picture I took at a 
grocery store. It's got Bayer Aspirin, generic aspirin, and then 
there's a flavored aspirin as well. And for 20 percent less, you can 
buy the generic aspirin. The price is openly disclosed, and if I take 
this off the counter and so do you, when we get to the cash register, 
we get to pay the same openly disclosed price.
  I think it's time, and I think you might agree, that we need to have 
open and transparent pricing throughout the health care industry. That 
way you will know the price of a pill before you swallow it. And I'm 
sure you would agree with that. We don't have that yet, but we're 
working hard to get it.
  Now, immediate results in 2010, it's a difficult challenge. And 
joining me here on the floor is Mr. Murphy.
  Thank you, Mr. Murphy. I yield to you in this fine hour to help 
reassure people across America that we have been studying this problem 
for a number of decades and we are beginning to take action on their 
behalf.
  Mr. MURPHY of Connecticut. I thank the gentleman for convening us 
here on the House floor.
  I think that transition is important. There are a lot of people back 
in our districts and people on the Republican side of the aisle who 
say, You're moving too fast. Slow it down. Why does this have to happen 
this year? Why don't we wait until next year or why don't we wait until 
the year after that or maybe 5 years from now or maybe do a little 
piece now and see how that works and 10 years from now come back and 
check it out and make a little different adjustment?
  Your point is exactly right. We've been debating this for 50 years. 
We have been on a journey to try to make good on our promise as the 
most affluent and most powerful Nation in the world to the millions of 
Americans who, through no fault of their own, wake up every day and go 
to bed every night sick just because they can't afford a doctor, not 
because they aren't trying to do the right thing and get insurance and 
health coverage for themselves and their families. We have been talking 
about this for a very long time. We have been doing a lot of talking. I 
think you can go back to probably every campaign that's been waged for 
the last 50, 60 years since this concept was first introduced by Harry 
Truman. And we are now to a point where we can actually do something 
about it.
  Now, this specific proposal that we are debating right now has been 
debated here in Congress and throughout this country for coming on 12 
months now. As many of us hope, we'll get a bill to the President's 
desk by the end of the year. We will have started this process in 
January or February of this year with legislative hearings, debated it 
out in public, debated it in five different committees in the United 
States House of Representatives and Senate, in countless, thousands of 
town hall meetings throughout this country, and we're going to end up 
with what I think is going to be a pretty sound product. And it's 
because we took time. It's because we didn't rush it through in the 
first 100 days of the Obama administration, because this House decided 
to step back from an original self-imposed deadline of passing it by 
the August break, because we have stepped back and taken the time to 
get this right. But our constituents can't wait any longer.
  I'm always afraid of legislating by anecdote, Mr. Kagen. I mean, we 
should be legislating here based on facts and data and statistics. But 
when it comes to whether or not we should pass reform, both the data 
and the anecdotes are on our side. So we're happy to talk about the 
real facts that underlie the necessity for change. The fact that this 
chart plainly illustrates. The fact that health care costs are 
bankrupting this Nation, comprising 5.2 percent of our economy in 1960 
to 2009 when health care costs comprised almost 18 percent of our 
economy. It's predicted to go up over the next 8 years to 20 percent; 
$1 in every $5 in this country soon to be spent on health care costs, a 
cost internalized by every business and manufacturer that's trying to 
compete and sell products throughout the globe. The facts are on our 
side when we talk about our need to control health care costs so that 
it doesn't cripple this economy.
  When it comes to families in this country who have seen, just over 
the last 10 years, a 119 percent increase in the premiums that they pay 
for health care, and the worker contribution that workers specifically 
make has gone up 117 percent during that same time, a 10-year 119 
percent increase in health care costs. The facts are on our side, but 
so are the anecdotes.
  This morning, I came down to the House floor, as maybe Mr. Kagen did, 
because we saw a lineup of dozens of our Republican colleagues to give 
1-minute speeches on the House floor. We have the ability on mornings 
like this to give unlimited amounts of 1-minute speeches on the House 
floor. And our Republican friends were here to deliver a message: Stop 
health care reform. Don't let it happen. Don't pass it. We want to 
preserve, essentially, the status quo.
  I know some of our friends get up and talk about cross-State 
purchasing and tort reform, which are laudable goals, but they don't 
solve the problem. They are working largely around the margins of the 
root causes of the crisis within our health care system. The message 
was pretty loud and clear:

[[Page 25825]]

Stop this health care bill from happening. And the hope, I think, for 
some people on the Republican side is that by doing that, they can 
provide a world of hurt to the Democratic President of the United 
States.
  So I came down and interrupted that long train of Republican Members 
saying to stop health care reform by telling a story that I'll share 
with you, Mr. Kagen, again tonight.
  At one of the roundtable discussions that I held back in my district, 
a gentleman who lives in New Britain, Connecticut, came and told a very 
simple story. He had gotten a job at the Carnival Ice Cream factory in 
my district, one of the, frankly, success stories of New Britain, 
Connecticut, a new company which has located several hundred jobs in an 
old abandoned factory footprint. And he got sick, unfortunately. He was 
a good worker but he got sick. He got really sick. He got cancer, 
gallbladder cancer, and that gallbladder cancer caused him to miss 
enough days of work that he got laid off. He got fired.
  He's now collecting insurance, unemployment benefits, and he is 
devoting almost every dime of those checks to pay for health care 
costs. He has lost his job because of his cancer. He is now having 
trouble paying for food because of his cancer. He can't wait any 
longer. And for all of this talk that I hear from conservative talk 
show hosts and Republican Members of Congress about preserving freedom 
and defending liberty, what kind of freedom does that guy have? What 
kind of liberty does he have every day when he wakes up having 
contracted a potentially life-threatening disease that has taken away 
from him the ability to make a living and now sucks every dime of out 
of his pocket to pay for that treatment? What kind of freedom is that?

                              {time}  1900

  If we really want to talk about preserving freedom and liberty in 
this country, then let's talk about the ability to wake up every day 
and know that you are going to be able to get care for yourself and 
your family when you get sick. That's freedom.
  And so I reject the notion that this has gone too fast and that we 
haven't taken our time. And I reject the notion that people out there, 
like the family you talked about and the gentleman I talked about in my 
district, can wait any longer for this Congress to wake up and realize 
that this current system does not work for all of the businesses that 
are being run into bankruptcy due to the incredible expansion of health 
care costs, due to the families and small businesses that have had 120 
percent escalation in their costs, and the millions of Americans who 
have gotten sick and lost their jobs because they can't afford health 
care, Mr. Kagen.
  Mr. KAGEN. Thank you for your comments. Everybody who has a human 
heart has feelings about people who are in need.
  I went into health care, into medicine, became a physician because I 
wanted to help people out. But what good is it to be a doctor if you 
write a prescription that people can't afford to pay for? What good is 
it to be a doctor if people can't afford to come in and get the tests 
that they require?
  We have the right ideas. We have heard a lot from many people who 
reject change. No, no, no. No, you can't do this, you can't do that. 
They are trying to create a great deal of fear. It is easy to scare and 
frighten people when you hand them the wrong information and threaten 
their livelihood and lives. That is what this is. If people don't have 
access to the care they need, their lives and their livelihood are at 
risk.
  In northeast Wisconsin, the greatest cause of bankruptcy is health 
care costs, people who can't make their payments. We have the right 
idea of fixing things as quickly as we can. We intend to close the 
doughnut hole beginning in the first year by closing it by 50 percent. 
That is a step in a positive direction. We intend to do things for 
people rather than the Wall Street-run corporations who today are 
controlling our health care industry.
  I can tell you as a doctor, in the room with me was the patient and 
their family, and that invisible person in the room was also the health 
insurance corporation who would be telling my patients where to get 
their tests, what tests they could have, and how much they are going to 
be paying for it. I think it is time to move the insurance industry out 
of our examination rooms. And the focus of the Democrats here in the 
House is to make certain that that happens, to guarantee that you have 
control of your health care decisions. It is between the patient and 
the doctor and the patient's family.
  In the health care legislation that we are putting together, the 
winners, first of all, will be Medicare patients, because with our 
legislation, with the efforts we are about to make, there will be no 
deductibles and no out-of-pocket expenses for prevention services.
  The other winners, the biggest winners in this legislation in my view 
as a business owner, is small businesses, because small businesses 
can't afford to continue to pay 30 percent more per year. They will 
have it as a big win because we are going to pool small businesses 
together in large risk pools, large buying groups, to leverage down the 
prices for them. Just like the big businesses get discounts, today the 
numbers are almost unbelievable. If you are in small business, you are 
paying anywhere from 18 percent more than a large business, or 60 
percent more, even though you live and work and recreate in the same 
location.
  Another big winner is people who have coverage now. You will be able 
to keep it and hopefully at a lower cost. We want these insurance 
companies to compete against one another. Today they are exempt from 
the antitrust laws. That allows them to talk about where they are going 
to sell and compete and where they are not, or to conspire about 
prices. We want to eliminate that. Whether or not that gets into the 
bill is yet to be determined.
  If you don't have coverage now, coverage will be available to you 
through some credits. We are going to help those, a helping hand up. It 
is not a handout; it is a helping hand up.
  In my State of Wisconsin, with the fix to the geographical 
disparities, where a doctor or hospital might get paid $40 for a 
service and the same service would be compensated by Medicare in 
Florida about $200, we are going to address that. So Wisconsin 
hospitals and Wisconsin physicians, you are going to get an increase in 
compensation for your services through Medicare very shortly.
  Overall the big winner will be our economy because when we drive down 
the cost of health care and improve the quality, you will have an 
opportunity as a small business owner to hire more people, to invest 
not in the Wall Street-run health insurance corporation, but to invest 
in your business and acquire the equipment you need to expand and hire 
more people so we can begin to work our way through this recession.
  Mr. MURPHY of Connecticut. In Connecticut, we have an organization of 
thousands of small businesses who have joined together to make the push 
that you are talking about, Mr. Kagen. They have figured out that the 
status quo doesn't work for them. It is actually run by one gentleman 
in particular who runs a small company who doesn't provide benefits for 
his employees because he surveyed the landscape of insurance options he 
could purchase, and he realized that there was no way he could afford 
it. For the margins he was making on his maintenance business and for 
the small number of employees that he had, that offered him no 
bargaining leverage with the insurance companies. He couldn't buy 
insurance for his employees and he desperately wanted to.
  This is a guy who has some tragic personal and family stories with 
respect to health care concerns, so he knows more than anybody how 
important it is to have health care insurance and how health care costs 
can bankrupt you. When he found out that he couldn't afford it and keep 
the business up and running, he wanted the employees to have a wage to 
bring home, rather than fire half of them in order to give the 
remaining half health care, so he started an organization of small 
businessmen who have bound together in Connecticut. I don't know the 
latest numbers, but it is in the thousands,

[[Page 25826]]

and they are pushing for health care reform, both at the State and 
Federal level.
  And just to underscore what you have said again, it is a simple 
concept that when you have five employees and you are negotiating with 
the insurance company, and an insurance company in many States that has 
almost no competitors, they can take or leave you. If you don't want to 
pay their price, there is no reason to give you a lower price because 
you are only five employees. Even worse, if you are an individual 
negotiating only on behalf of yourself, you have absolutely no 
leverage. If you can't pay that insurer's price, they will be happy to 
move on to the next person who can pay their price.
  In the 50 percent of the States in this country that have one insurer 
that controls more than half the market, the balance is even further 
thrown off. So what we are doing is simple economics. We are saying, 
instead of Joe and Mary and Sally, and Joe's garage and Mary's factory 
all negotiating on their own, let's put Joe and Mary and Sally all 
together into one pool. And let's put all of the rest who are 
negotiating on their own or negotiating as small businesses together, 
and then let's make the insurance companies bid to be able to provide 
insurance to those Joes and Marys and Sallys, and we will let the 10 
insurers who give us the best price in, and the others out. All of a 
sudden they have leverage for the first time ever, and they do it 
within a marketplace. It is a marketplace that is structured.
  Mr. KAGEN. Do you mean capitalism?
  Mr. MURPHY of Connecticut. It is capitalism. It is not unbrokered, 
unfettered capitalism but it is capitalism nonetheless where private 
health care companies offer the lowest price that they can, and they 
get business if they offer that lowest price. That doesn't happen today 
in this marketplace.
  We are simply changing the rules of the marketplace to give a little 
better deal to those small businesses and individuals who right now are 
getting screwed in the marketplace.
  Now, frankly, I think this isn't a Democratic idea, it is not a 
liberal idea or a conservative idea or a Republican idea. But for some 
reason when the Republicans ran this place for 12 years, they didn't 
come up with it. For some reason, even though they profess to be for 
the end of the preexisting condition exclusion, they had 12 years and 
they didn't come up with that idea. Although they profess to be for 
changing the way that we pay for medicine, as you talked about tonight, 
so we stop reimbursing just volume for volume sake and start 
reimbursing for quality health care systems, they had 12 years to 
implement that, and they didn't do it.
  So again, I draw issue with a lot of my Republican friends who say we 
have gone too fast. And I draw issue with my Republican friends who say 
don't do anything, and I draw issue with some of my Republican friends 
who have found recent religion on this subject, because they have had a 
long time to implement some of these reforms, and it has unfortunately 
taken a change in the leadership of this House and the Senate to get it 
done.
  Mr. KAGEN. I think what you are trying to say, it is hard to 
negotiate when you have a gun held at your head. How do you negotiate 
as a single purchaser against a large corporation? You can't negotiate; 
it is a take it or leave it.
  We did something in Wisconsin where we created a prescription-drug 
program for senior citizens in low-income situations. I think it is the 
best prescription-drug plan in America. We have got about 103,000 
senior citizens in a buying group, and that buying group leveraged down 
their prescription drugs tremendously. It is life saving. It saves 
taxes because when you are healthy you don't end up in the emergency 
room where it is expensive on the government who cares for these 
elderly seniors and low income.
  So senior care saves lives and tax dollars, and it is exactly the 
same kind of concept that we did with the SCHIP, the State health 
insurance plan for low-income children. But let's not mix the 
metaphors, senior care and SCHIP are not government-run health care. It 
is private doctors, private hospitals, private drug companies who 
provide the care and get paid through a government system. It is very 
fair. It is a level playing field.
  So senior care is a wonderful model, a prescription-drug program that 
really works for senior citizens who are in lower-income situations.
  Now I think a buying group is a good idea. Who do you think would 
stand against having large risk pools and lowering the cost of 
insurance coverage? My guess is going to be the Wall Street insurance 
corporations, for one. I think they would be against that, don't you?
  Mr. MURPHY of Connecticut. And I would add to that list, Mr. Kagen, 
some of the other industries that have profited off of the scattering 
of purchasing power. Pharmaceutical companies have also made a killing 
off our current policy, really founded initially in the Medicare part D 
benefit, that refused to centralize purchasing power, thus guaranteeing 
some pretty generous profits.
  Mr. KAGEN. A buying group drives down the price in a competitive, 
openly disclosed price situation. When you have a very competitive 
medical marketplace where the power and the leverage and the purchasing 
power of people buying together, that is when you drive down the price.
  But I want to burn this point into the American people: We are not 
talking about government-run health care. The government, hey, if you 
get sick, don't call your congressman, call your doctor. Today, you are 
calling your insurance agent to make sure that you can go to the doctor 
or hospital of your choice. We want people to have choices when you 
call your doctor. Ask your doctor for help, don't call your congressman 
or your governor.
  Earlier today, I met with World War II veterans. They took the honor 
flight where they flew from Wisconsin this morning to see the World War 
II memorial that they hadn't visited before. There were over 80 of 
them. The youngest is about 85, and the oldest is about 92. What a 
great honor and pleasure it was for me to greet them and listen to some 
of their stories and to thank them for their service.

                              {time}  1915

  One senior came up to me, a World War II veteran, and he's much like 
a lot of people in the country, and here's his quote: ``I don't want 
the government involved in deciding my health care choices, period.'' I 
said, Sir, I want to thank you, and I will share that quote on the 
House floor tonight with my colleagues so all of America will hear your 
voice. That's my job; I'm listening and transmitting their message. And 
then I asked him, How is the VA treating you? ``Good. That's 
different.'' Well, it's different in some senses because he has earned 
his benefit and he is receiving the benefit at the Veterans 
Administration clinic and hospital, and it's a benefit well deserved. 
We're fighting very hard to move those benefits up and to guarantee 
that it gets out to every veteran. But you see, it isn't that much 
different. It is government run, and he's happy with the service.
  Now I will be the first to admit, as a doctor practicing in the VA 
hospitals in the 1970s, beginning in 1973, it was terrible, it was 
disgusting, it was to the point of becoming inhumane. Our shelves were 
not bare, but close to it. We didn't have the newer drugs to help our 
veterans who came back from Vietnam, in particular, and many World War 
II veterans. It got to the point where at one time I had to kidnap a 
patient and take him several blocks away in Chicago to a real hospital 
to get him the surgery that he needed because our operating room wasn't 
open after hours.
  Things have changed. This Congress, the 110th and the 111th Congress 
have stepped up for our veterans, increasing by 77 percent--the biggest 
increase in the history of the VA--its funding. We're not at the top 
yet, but we're getting there, and we intend to invest in our veterans' 
care. The government isn't going to be your doctor. We're not talking 
about government-run health care.
  Two others things that some World War II veterans were concerned 
about:

[[Page 25827]]

Kagen, now in that bill, are you putting in money for illegal 
abortions? Are you putting in money for people who are here outside the 
law, here illegally, who immigrated here but did it illegally? And the 
answer is no and the answer is no.
  You're going to hear, unfortunately, a great deal of misinformation, 
but it is our intention to work with Members of all parties to 
guarantee that your tax dollars are going to you, who earned it like 
our veterans, and to make sure those benefits go towards legal causes.
  I yield.
  Mr. MURPHY of Connecticut. I thank you, Mr. Kagen, because there is 
obviously a tremendous amount of misinformation.
  I think the reason why there is momentum right now in this country in 
favor of health care reform is that as we have taken the time over the 
summer and the fall to confront this misinformation, we have made 
people understand that there is a difference between rhetoric and 
reality when it comes to health care. A tremendous amount of people who 
are driving the rhetoric have no interest in connecting that to reality 
because their agenda is not to really influence the contours of the 
health care reform bill, their agenda--and I'm talking about some 
Republicans, but I'm more talking about the folks who are in the 
entertainment news media--their agenda is to sell air time and to sell 
commercials and to say outrageous things that get them some attention 
in the world, and you can do that best by distorting.
  So it is our job to come down here to the House floor, to go out and 
stand at town hall meetings, on town greens, in supermarkets--wherever 
it may be--to talk about the reality here.
  I caught, as I entered the Chamber, Mr. Kagen, you talking about 
Medicare. This is such an important piece of this debate. I actually 
caught some of our Republican colleagues down here earlier with a list 
of Medicare cuts that are in the bill. Listen, everybody seems to agree 
on both sides of the aisle that something is wrong with Medicare, 
right, that we have more money going out than coming in? Medicare is 
going to go bankrupt someday at the current pace--it's certainly not 
going to be around for me, and it may not even be around for some 
people who are becoming current beneficiaries today. So everybody 
agrees that we've got to do something about it.
  Well, here's the problem: There are only two things you can do to fix 
Medicare, you have to start slowing the amount of money that goes out 
that we pay, or you have to start increasing the amount of money that 
comes in. Now, the second one isn't very attractive because that's 
increased payroll taxes, that's more money coming out of people's 
paychecks--and I'm not sure that a lot of Republicans are for that. So 
if you're not for more money coming into Medicare, the only way that 
you save it is by stopping the money from going out. And what this bill 
does is it slows the rate of Medicare growth, of overall Medicare 
spending, without cutting or harming benefits for seniors, and in fact 
improving them.
  Now people might say, How do you do that? That doesn't sound right. 
That sounds like political double-speak. How do you cut Medicare costs 
but maintain Medicare benefits? Well, the problem as you've talked 
about already this evening is that we have all sorts of medical systems 
and hospitals and some physicians out there that are billing for all 
sorts of extra procedures and extra treatments that aren't adding any 
value. We have a lot of hospitals out there who do a procedure on 
somebody, send them home before they're ready to go home, and they show 
up again and again and again and again in the hospital, and we pay them 
every time that they come back.
  And then we have a system of reimbursement to drug companies and 
insurance companies that are paying them 120 percent of the cost of 
actually providing the service, as we do for our Medicare Advantage 
plans. So how we have done this is by starting to tailor health care 
payments--not benefits--health care payments to hospitals and providers 
and drug companies and insurance companies to promote value, not 
volume--and you've said this already today, Mr. Kagen--and then we take 
most of those savings and apply it to the overall health care bill to 
try to get people coverage that don't have it, but we take some of 
those savings and make benefits better, as you said, closing the 
doughnut hole, eliminating all copayments for preventative services, 
increasing for the first time in the last 6 years the amount of money 
that doctors get on a routine basis to provide care for patients.
  So we need to dispel this mythology out there that the Medicare 
growth restraints in this bill are benefit cuts. They're not. They are 
payment cuts and payment reductions that are going to save Medicare in 
the long run. And if Republicans want to come down to this floor and 
argue against any restraint of growth in Medicare, then if they want 
Medicare to survive in the long run, Mr. Kagen, they then have to be 
prepared to argue for more taxes to pay for it.
  Mr. KAGEN. But isn't that elimination of wasteful spending?
  Mr. MURPHY of Connecticut. It is. You're talking about waste, fraud 
and abuse. Now fraud, we've got to do a better job of rooting out fraud 
in Medicare, but no matter how tight you get on fraud, it's never going 
to get you all the way out of bankruptcy. So you've got to get to the 
other pieces here, which are waste and abuse. If you ask me, medical 
procedures performed on me or on my family that don't add any value to 
my health but do add reimbursements to the doctor and hospital that I 
go to, that's waste, and we shouldn't be paying for it.
  Mr. KAGEN. There are three other ways we could help to save money to 
reduce the cost of health care. The first idea is not a new one, we did 
it in Wisconsin with Senior-Care; we negotiated for deeper, steeper 
cuts and discounts from prescription drug makers. We need to be able to 
negotiate with pharmaceutical companies for deeper discounts for all of 
Medicare, for all the VA, for all the Coast Guard, and for all of us.
  The men and women I saw today at the World War II monuments, they 
fought for this country, not only for themselves and their family, they 
fought for the entire country. So why can't we allow a veteran, who has 
a deep discount for a prescription drug, why can't we give that same 
discount to his wife and his family? What about his neighbors? What 
about his whole town? What about the whole country?
  If we have a steep discount that we're benefiting from as we invest 
our tax dollars in the health care of our veterans, that discount 
should be spread out to all Americans who are here legally. So let's 
begin to negotiate for deeper discounts for prescription drugs for all 
of us.
  The second thing we must do is to encourage hospitals to cut their 
overhead costs, to deliver care more efficiently, to make sure that our 
tax dollars are stretched to the very limit, not by cutting quality, 
but by cutting their cost of care. It has been done in a number of 
institutions, one of them in my district I mentioned earlier, which is 
the ThedaCare health care system. We have to take that model and 
replicate it across the country. In over 10 years, we will save $400 
billion. That's called the elimination of wasteful spending. It's 
becoming more efficient. We have to do that not just in the corporate 
world and the business world, but in our hospitals. After all, we just 
proved in the sands of Iraq that we can deliver world-class health care 
in a tent in a desert. Then maybe we can do the same by getting skinny, 
getting leaner in our hospital system.
  So negotiating for steeper discounts from drug companies, driving 
down the cost of care in hospitals. And the third, the biggest savings 
yet to come, is prevention, which is why we want people to get to a 
primary care doctor and make sure we diagnose things early because 
you're a cheaper date; your illnesses are better managed through 
prevention. And that the government can't do for you. That's something 
that you have to do with your family in the personal choices you make, 
in consultation with your own family and personal physicians.

[[Page 25828]]


  Mr. MURPHY of Connecticut. I think that last point is important, but 
also important to understand the limitations. Prevention is critical, 
and there are all sorts of personal choices that we can make and be 
incentivized to make through the way that our benefit is structured to 
try to be healthier. But again, I come back to some of the arguments 
against it. I hear over and over again opponents of health care reform 
sort of putting the burden on individuals, like it's their fault. There 
are a lot of people who have gotten sick because of choices they made--
bad eating habits, smoking, unhealthy lifestyles. There are millions of 
people out there who could have made better choices and avoided getting 
sick, but there are millions more who got sick through no fault of 
their own. We have to understand--and I agree, I'm not disagreeing with 
my friend, but as important as personal responsibility is in health 
care, it seems to sometimes be the only answer that we hear from the 
opponents of health care reform, that why should the government get 
involved in remaking the insurance markets? Why should we get involved 
in remaking our Medicare bargain? Why don't we just tell people to stop 
getting sick? Well, you know what, there are some people out there that 
can make better choices, but there are a lot of other people out 
there--like the gentleman that I spoke about who contracted gallbladder 
cancer that have no power over that, and we've got to have a system 
that answers for those people.
  I just want to turn it over to our colleague here, because it 
happened to be as we were starting to talk about the transformation of 
our health care payment system that one of the champions of that 
transformation came down to the floor. So I will kick it back to you, 
and then you can kick it over to Mr. Braley.
  Mr. KAGEN. I was a little concerned that you were going to blame all 
the lawyers; I'm glad you didn't do that. But when we bring this 
subject up about reducing costs, many people on the other side have 
been screaming that if we just got tort reform, we could really drive 
down the cost.
  I wonder, Mr. Braley from Iowa, if you could address this issue and 
other issues that we haven't yet discussed?
  Mr. BRALEY of Iowa. Well, I think one of the things that people 
always overlook is the cost of patient safety on our health care 
delivery system. The Institutes of Medicine, which is the foremost 
authority in terms of independent, nonpartisan medical research has 
looked at this in three studies they did in the last decade there: 
patient safety treatise on to err is human; their patient safety study; 
and also their study of medication errors. Their conclusions were 
interesting because they concluded that the cost of preventable medical 
errors on our health care system every year is between $17 and $28 
billion of preventable medical errors. That's the added cost in 
additional health care that's imposed on people who are injured due to 
preventable medical errors.
  So if you multiply those numbers over the 10-year life of this bill 
that's being scored by CBO, you're looking at an opportunity cost loss 
by not focusing on patient safety of somewhere between $170 and $280 
billion. That's why patient safety should be the primary focus of any 
health care reform, and that's what the Institute of Medicine 
concluded.
  That is why when we were coming up with a solution to the enormous 
problem of over-utilization in certain parts of the country--it's a 
well-known problem--it costs, according to medical economists, 
somewhere between $500 and $700 billion a year, which would be $5 to $7 
trillion over the 10-year period that's being scored by CBO. You could 
pay for everything in this health care bill five to seven times with 
those types of savings.
  Mr. KAGEN. But if I can interrupt for a minute, this internal 
conservation about the CBO, Congressional Budget Office--for those of 
you listening, the CBO, the Congressional Budget Office, only counts 
money that goes into and out of the United States Treasury. They don't 
measure those savings, do they?
  Mr. BRALEY of Iowa. Well, they don't because they don't have the 
opportunity to look at what portion of those would be directly related 
to Medicare, Medicaid patient and the cost shifting that takes place 
when we ask other people to carry the burden of fixing those problems.
  But I want to focus more on what's in the photograph next to you, 
because we stand on this floor every day and talk about policy.

                              {time}  1930

  To a lot of people policy is vague. It's hard to understand. It's 
complex. But you, Dr. Kagen, have put a human face on health care. I 
want to spend just a few minutes talking about the human drama of 
health care that nobody seems to really be talking about.
  When I was out at my 17 town hall meetings in my district this summer 
and people were complaining about this health care bill and who was 
going to benefit from it, I would always bring them back to the human 
side of health care. I would talk about my nephew's 18-month-old son, 
Tucker Wright, who lives in Malcom, Iowa.
  Tucker was 18 months old when he was diagnosed with liver cancer. He 
had two-thirds of his liver removed. He faces a very uncertain medical 
future. The medical costs, as you know better than anyone, Dr. Kagen, 
were astronomical from that surgery and from the followup and from the 
constant monitoring that has to be done on a young patient with such a 
serious medical condition. He is almost certain to get another form of 
cancer before he reaches the age of 18.
  His parents are the classic example of what we want responsible 
adults to do. They are both employed in full-time employment. They had 
health insurance coverage. But with a lifetime cap on benefits in most 
private health insurance policies available now, his parents are locked 
into jobs that they cannot leave. If they do, under our current health 
care delivery model, they will be denied future payments for his health 
care needs, which are enormous, because of something called preexisting 
condition exclusions.
  It's more than that, because I have attended fund-raisers for this 
adorable little boy, because even with good health insurance, they have 
tens of thousands of dollars of uninsured and underinsured health care 
needs. You have seen that human drama play out, and I would like you to 
talk about the toll that that takes on the families that you cared for 
in Wisconsin.
  Mr. KAGEN. Well, I will tell you about Brandon Rudie, who is a 2-
year-old who, through no fault of his own, accidently fell below the 
lawnmower of the father cutting the lawn. They busted through the cap. 
They stand to lose not just their jobs but their home. We had a bake 
sale to try to come up with money for Brandon, who lost much of his 
face and some facial structure. He is going to have to go through a lot 
of surgery that this family cannot afford.
  The days of having bake sales to pay for a child's health care needs 
must come to an end.
  I yield to Mr. Klein from Florida. Thank you for joining us.
  Mr. KLEIN of Florida. Well, it's my pleasure to join my colleague 
from Iowa, Mr. Braley, and Mr. Murphy from Connecticut and Dr. Kagen. 
We have been doing this now for a couple of years together and it's an 
honor to represent our respective communities.
  I am from Florida, a wonderful place to live, great place for 
retirees to come. As you know, a lot of people retire to Florida or 
retire to other places, and they know that they have got Medicare.
  Medicare was something that was set up many, many decades ago, and I 
think just about every American wants Medicare because they know they 
have got security. They have got the security to know that they are not 
going to fall into a situation where, as an older person, that they are 
going to have a medical expense that will be out of control. They may 
have a nest egg they have put aside after all those hard years of work.
  When Medicare was originally set up, it was set up as a way to cover 
hospitalization and significant medical costs; it was doctors and 
providers and

[[Page 25829]]

things like that. What happened that's a good thing over the years is 
we have got some tremendous scientists and medical researchers who have 
come up with some really good prescription medications that keep people 
healthy and keep people alive longer, and that's a good thing. We have 
to thank the great companies and great people in the United States that 
make our pharmaceutical industry the envy of the world.
  However, the problem, the down side of all of this goodness, is the 
cost. Unfortunately, the cost has just gotten out of control, out of 
control for private businesses who have to pay for it as part of the 
medical plans, out of control for Medicare and for anybody who has to 
provide, to buy their medicine.
  As a matter of fact, there was an argument a couple of years ago 
about you shouldn't be able to buy your medicines from Canada. What 
absurdity. Many times it's the same medicines that are produced in the 
United States, sold to Canada, and you can buy it for a lot less. We 
all understood that. We tried to fix that. The previous administration 
didn't allow us, but that's obviously being fixed now.
  One of the things that was passed is the part D part of the Medicare 
prescription drug plan, and it's called the prescription drug plan 
because people who are Medicare patients can now get a prescription 
drug plan that can cover a lot of their costs, and that is really a 
lifesaver.
  I take some of these pharmaceutical products. I have got a little 
hereditary problem with cholesterol. I take Lipitor, which many people 
do. I will mention it by name because it is what it is. My father, who 
is 80 years old, he is really a wonderful man and still plays tennis 
three times a week, but he takes Lipitor. He has blood pressure--these 
are the things that keep him alive today. If he didn't have them he 
probably would maybe had some serious illness.
  But the problem when the Medicare prescription drug plan was 
constructed is they created something in the middle called the doughnut 
hole. For those people who pay a few thousand dollars of medical 
expenses or it's counted up to a certain point, at a certain point they 
have to pay 100 cents on the dollar. If you have chronic medical 
problems--and there are a lot of our senior citizens that do--all of a 
sudden they go to the pharmacy and they have to pay $160 for this and 
$640 for that, and all of a sudden thousands of dollars out of their 
pocket.
  You know, the story you just told about the young people who have had 
their serious illnesses, what about those senior citizens in our 
hometowns that are making decisions about medicine or food or a 
mortgage payment or medicine? That's not where this country should be.
  Good news, good news. In the bill that's being proposed right now, we 
are going to phase out this doughnut hole, reduce it in size and allow 
people from day one to buy medicines at a lower cost and eliminate it 
eventually. It's very expensive to do, but it has to be done over time.
  Originally, the way they talked about this was it was going to start 
in 2015 or 2020. Great news. Last week, it's part of the whole 
discussion, the bill is still a work in process, but many of the things 
that many of us have been fighting for--I have been fighting for this, 
I know, as my colleagues have from day one of getting elected--was 
helping close the doughnut hole. The good news is we fought and we just 
now got an agreement in the House that on January 1 of next year we 
will start that process of closing the doughnut hole and reducing those 
out-of-pocket prescription costs for our seniors.
  It makes you feel good because this is something that I have heard 
from so many people and, you know, I know my own dad and his costs, and 
he and his wife hit that doughnut hole. This is real. If we can do 
whatever we can to keep people out of hospitals and having a peace of 
mind and quality of life, that's exactly what all of this is about.
  Mr. BRALEY of Iowa. I think one of the things we have been talking 
about is how you put a human face on complex health care policy. When 
we were out in our districts, we got a lot of feedback about the public 
health insurance option and people saying don't do anything to disrupt 
our private health insurance system.
  I had a recent meeting with a young woman, 20 years old, Hannah 
Rodriguez is her name. She is a student at the University of Northern 
Iowa in my district. She sat down to interview me, and one of the first 
things I noticed about her is she had a cleft palate, 20 years old in 
the United States of America. She was so excited because she said she 
was soon going to have her final surgery to fix her cleft palate.
  I said to her, Well, what's taken so long for you to get this 
surgery? She says, Well, my mom and dad don't make much money and they 
have been saving up money to have this surgery done. I said, Well, why 
isn't this covered under your health insurance? Your folks have health 
insurance, don't they? She said, Yes, but this is considered cosmetic 
surgery.
  Think about that. A young woman, for 20 years, born with a birth 
defect, just like cystic fibrosis, just like cerebral palsy, all of 
which are covered under a regular health insurance policy, and this 
young woman has been struggling with this for 20 years. That's why we 
have to fix this broken health care system.
  Mr. KAGEN. Thank you, Mr. Braley.
  I will summarize by saying that we are working hard to fix what's 
broken. We are going to improve what we already have and make sure that 
it's at a price we can all afford to pay. What kind of nation, what 
kind of nation would we be if we didn't take this positive step 
forward?

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