[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 3648-3651]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. JOHANNS. Mr. President, we rise today to engage in a colloquy on 
an issue that is certainly front and center and has been for a long 
time in our great Nation, and that is the issue of the health care 
bill. This bill is hurting working Americans and small businesses, and 
they are the lifeblood of our economy.
  Let me, if I might, talk about a company from Nebraska: Toba, Inc. 
Toba is located in Grand Island, NE. They are a food distributor in 
central Nebraska. They employ about 200 to 300 people, depending on the 
time of the year. It is companies such as this that are the heart and 
soul of the Nebraska economy.
  Tony Wald is the chief executive officer of Toba. He shared with me 
not long ago that their health care premiums recently increased by 26 
percent. Tony's insurance agency talked to him. Of course, Tony wanted 
to know: What is going on here? What is wrong? Well, the insurance 
agent said to Tony there were several provisions in the health care law 
that were the reason for the increase.
  Let me put this in perspective. That 26-percent increase is an extra 
$188,000 increase that ultimately falls in the laps of the employees of 
Toba. Hundreds of working Americans will see their premiums go up as a 
result of this health care law.
  Let me point out something that is very obvious. That is a broken 
promise. Then-Candidate Obama promised that Americans would see their 
premiums decrease--decrease--by $2,500 by the end of his first term in 
office. Well, that has not been the reality. This health care law 
drives up premiums and Toba is a perfect example of that.
  But I need not stop there. Let me talk about Yellow Van Cleaning and 
Restoration Services in Kearney, NE, just down the road a bit from 
Grand Island. This small business employs 48 people. The owner is a 
fine gentleman by the name of Dave Keiter. He believes he has 
positioned his company correctly to grow it. In fact, some recent 
market research that was done shows his company is poised for growth. 
They have done all of the right things to take this small business and 
lay the right foundation so they can grow.
  Dave was faced with a tough choice--a choice not caused by his 
competitors, a choice not caused by a bad economy. He was faced with a 
tough choice caused by President Barack Obama and Democrats in the 
House and Senate who passed the health care bill. What is his tough 
choice? He had to choose not to expand because he will run smack-dab 
into the employer mandate if he grows his business.
  You see, this mandate requires that employers with at least 50 full-
time employees offer government-approved health insurance to their 
employees or pay a fine of $2,000 per employee. Dave did the 
calculation on this--a small business, with tight profit margins, doing 
everything they can to make the right decisions. Dave's calculation 
indicates he will be penalized more than $50,000 a year if he grows 
beyond his current 48-member staff.
  There is no doubt about it. This law is stifling job creation. Not 
only does this law prevent jobs from being created, it is forcing 
businesses to actually eliminate jobs.
  An Iowa-based insurance company recently decided to exit the 
individual insurance market, abandoning sales directly to individuals 
and families. So what happens? Thirty-five thousand policyholders lose 
that insurance through that company. But it does not stop there. Mr. 
President, 110 employees will lose their jobs--70 in Nebraska.
  A driving factor is the medical loss ratio provision in the law which 
micromanages how insurance companies spend their revenues. The CEO of 
the insurance company said job loss was ``a fairly predictable 
consequence of the regulation.''
  These are not hypothetical situations. Before the law was passed, I 
came to the floor many times with my colleagues and pointed out the 
flaws in this ill-conceived legislation. Now we

[[Page 3649]]

are telling real stories, real-life stories and talking about real 
people who have lost their jobs and are being impacted by this ill-
advised law.
  There is more. While I can directly point out that 70 Nebraskans lose 
their job, the Congressional Budget Office says the new law will mean 
800,000 fewer jobs over the next decade.
  Similar to Yellow Van Cleaning in Kearney, NE, other businesses are 
holding off on hiring. In a recent Gallup survey, 48 percent of small 
businesses are not hiring because of the potential cost of health 
insurance under the health care law.
  Financial sector analysts at UBS have stated that the law is 
``arguably the biggest impediment to hiring, particularly hiring of 
less skilled workers.'' Those are the people who need the jobs most.
  The Congressional Budget Office estimates average premiums will 
increase by 27 to 30 percent under this law largely because the new 
health care law's coverage mandates will force premiums up.
  It is no wonder Toba in Grand Island, NE, is seeing its health care 
costs go up by a staggering $188,000 per year. The Medicare Actuary 
says this law will increase health care spending by $311 billion over 
the next 10 years. Two years have passed and things are only getting 
worse. This law is suffocating job growth around the country.
  Let me, if I might, now turn to my colleagues. I have a question, if 
I might start with Senator Portman.
  Senator Portman joins me on the floor and I appreciate that. I know 
the Senator has a unique perspective because he has served as the 
Director of the Office of Management and Budget. Does the Senator see 
this law increasing costs in his home State? Is it straining job 
creators as we are seeing in Nebraska?
  Mr. PORTMAN. I say to my colleague from Nebraska, I am afraid the 
answer is yes. It is increasing costs and, therefore, making us less 
competitive. When we increase the costs of doing business, of course, 
it impacts the economy. The Senator has laid this out very well. I 
appreciate the Senator's comments this morning.
  The Senator talked about the 800,000 jobs that are projected to be 
lost, and that is probably a conservative figure, given the information 
I am getting from back home and what the Senator just talked about. The 
Senator talked about the fact that premiums are going to increase 
dramatically--27 to 30 percent.
  Since the Senator mentioned the Office of Management and Budget, I 
will also say this is about our businesses and their ability to create 
jobs and get this economy moving. It is about all of us as families and 
consumers having higher costs. It is also about our Federal budget 
deficit. We have an expert on that in Dr. Coburn, who will speak in a 
moment. But the point is, this is increasing costs to all of us in 
various ways, and the budget deficit is already at record levels--a $15 
trillion debt. Our country, obviously, is awash in red ink, and one of 
the reasons, of course, is higher health care costs. So this is 
impacting us in a lot of different ways.
  Let me address the Senator's question more directly, though, and that 
is in terms of the impact on business. I will tell the Senator, I have 
visited over 100 factories in Ohio in the last few years, and in every 
one I asked this question: What is going on with taxes and regulations 
and energy and health care? I have not been to a business yet that has 
not told me their health care cost increases over the past couple years 
have added to the uncertainty, the unpredictability, and, therefore, 
the lack of investment into jobs and growth.
  I went to a factory in Cleveland, OH, one day, and this is a 
relatively small business. It is actually seeing its sales increase a 
little bit. The owner said: Rob, I would like to hire people, but I 
want to offer health care. Everybody here has health care, which is 
great. Those costs embedded in adding a new employee are too high; they 
are prohibitive. So what I am doing instead is I am going to overtime, 
I am going to part time to avoid hiring a full-time worker.
  Luckily, I was there with some members of the media, and they were 
able to hear this directly from this individual who is making a 
decision about whether to hire somebody in Ohio during this weak 
recovery. The health care law and the health care cost increases are 
directly impacting that. So it is for real.
  The U.S. Chamber of Commerce did a study recently, as the Senator 
knows. This was just a couple months ago. They asked small businesses 
with fewer than 500 employees all around America: How does this impact 
you? Seventy-four percent of them say the recent health care law makes 
it harder for their business to hire more employees. Fifty-two percent 
of them say economic uncertainty is one of the top reasons they are not 
hiring. Thirty-six percent say uncertainty about what Washington will 
do next is one of their two top reasons they are not hiring. Thirty 
percent say they are not hiring because of the requirements in the 
health care bill.
  This is not just anecdotal evidence we are picking up in our States 
as we go around and talk to employers. This is information that is out 
there for the public to see. I hope all the activity that is 
surrounding this 2-year anniversary of the passage of this law from the 
Democratic side and from our side will rekindle this debate because, 
clearly, we did not get it right. We did not affect the fundamental 
problem, which is the cost of health care rising to the point that it 
is affecting us as consumers and families. It is affecting our ability 
to get this economy moving. It is affecting our budget deficit in such 
dramatic ways.
  Doug Holtz-Eakin, who was the former head of the Congressional Budget 
Office, testified last year. I thought it was interesting what he said. 
As you know, the health care reform law says, if someone is an employer 
with more than 50 employees, they have to offer full-time employees 
coverage or pay a $2,000 penalty per worker. He made an interesting 
point. I see this around Ohio with these small businesses that have 
maybe 30, 40 workers, and they are hoping to be able to add more. He 
said--and I think he is right--this creates ``a tremendous impediment 
to expansion.'' His example was: Let's say a company does not offer 
health care benefits and they have under 50 employees and they want to 
add another full-time employee. They take it up to 51 employees--a 
$2,000-per-worker penalty, after subtracting the first 30 workers. The 
fine to hire an additional worker would be $42,000, for that one worker 
to be added marginally to its workforce.
  So businesses have to offset that lost revenue. The burden will be 
borne, as Doug Holtz-Eakin said, by whom? The workers, with lower 
wages, fewer jobs, fewer hours to be worked, less job growth.
  The Senator talked about the many taxes in this legislation, and the 
overall burden of the taxation on the economy is one of the problems 
with it, but there is also a very specific tax on medical device 
companies, and this is one that I know affects both of the Senators' 
States. It certainly affects Ohio. We have a lot of very innovative 
medical device companies in Ohio, and they tell me they are going to 
have to cut back on their workforce because of this new tax that is in 
the health care bill.
  So think about this. At a time when we are all proposing we do more 
on science and technology and math and engineering, the STEM programs, 
we are trying to encourage more innovation in this country to be able 
to compete globally, medical device businesses in Ohio and around our 
country have been able to be strong and we have been able to compete 
globally and we should be doing all we can to encourage them and to 
help them. Instead, we are doing the opposite.
  There is a 2.3-percent medical device excise tax in this legislation, 
and it is going to hit next year. They are already planning for it. It 
is not a 2.3-percent tax on profits. That is what you would expect, 
right? It is a tax on revenues. So we could have a young startup 
entrepreneur who says: I am starting this company even though it is a 
loss leader the first couple years. I am not making any money. But I 
know

[[Page 3650]]

I have a great idea, and I am going to continue to stretch this out to 
be able to create something of great value for our health care, for the 
quality of health care, to be able to save lives. Yet I have no profit. 
So I probably will not be taxed, right? Guess what. They are going to 
be taxed. They are going to be taxed on their revenue.
  Established companies that do have some profit--they are looking at 
big taxes on their revenues, particularly if they are doing well. There 
are a couple companies in Ohio and around the country that have already 
told us what they are going to do.
  Let me give you an example. Last year, I visited Mound Laser and 
Photonics Center outside Dayton, OH. They provide services to the 
medical device industry--fabrication. They do very technical work. They 
have machinists there who are specializing in medical device 
manufacturing. They provide machining services to the device industry.
  The CEO is a friend of mine, Dr. Larry Dosser. He told me when I was 
there--he said: Look, this could be devastating to our business--this 
2.3 percent excise tax--because these are our customers. Unfortunately, 
he has just told me he is going to have to start laying off people. On 
January 1, 2012--a couple months ago--they laid off people for the 
first time in their history. It is a 16-year-old company. It is an up-
and-coming company. They are adding people every year. Because of this 
medical device tax, they are having to plan for higher taxes, 
therefore, a hit to their revenues, and they are starting to lay off 
people already.
  There are other examples. Meridian Bioscience is in Cincinnati. I 
visited there. I talked to the workers, I talked to the management, and 
they tell me flat out: This is going to cost us tens of millions of 
dollars, and this is going to result in us laying off workers. They are 
not sure if it is 40 workers or 80 workers, but it is an up-and-coming 
company in our area that is doing the right things, creating jobs and 
opportunity and creating devices that will, in this case, by the way, 
also improve the quality and lower the costs of health care. That is 
what they specialize in--diagnostic services that the Senator, as a 
doctor, understands, Dr. Coburn, can be incredibly helpful in getting 
health care costs down.
  There are others. Stryker Corporation just announced its intention to 
lay off 5 percent of its workforce in anticipation of the 
implementation of this tax at the beginning of next year.
  This is what is happening. There is a better way. There is a way to 
reduce costs and increase competition in health care to make it more 
patient centered. You all have been leaders in that. We have laid out 
alternatives. We are not saying the health care system was perfect 
before this legislation was drafted--not at all. Of course, it needs to 
be improved and reformed and it can be. It can be done in a way that 
both improves quality and improves the ability of people to have access 
by adding transparency and adding competition and adding the value of 
quality and outcomes rather than just input and volume to reduce costs 
in our system.
  We have to do that. If we do not do that, this law will continue to 
affect our economy negatively. One reason we have the weakest recovery 
since the Great Depression is because of the impact of health care, and 
this law has made it worse, not better.
  I thank the Senator for letting me come by to talk about this issue. 
I look forward to the continuing dialog.
  Mr. JOHANNS. I thank Senator Portman. The Senator has made so many 
excellent points.
  I believe if we look at the people who have spoken about this 
legislation, before and after its passage, one would be hard-pressed to 
find anyone who speaks with greater authority than Dr. Tom Coburn, who 
is a Member of the Senate.
  I would ask Dr. Coburn to weigh in on this health care bill. He has 
talked through the years so often about what this health care bill is 
doing to medicine, the impact it is going to have on patients, the 
impact on the economy, the impact on jobs. I would like the Senator to 
talk to us today about what he is seeing as we are literally on the 
time of the second anniversary and tell us how this is panning out. It 
has been the law now for a couple of years. What is the reality of this 
legislation?
  Mr. COBURN. I, thank the Senator. The reality is we are committing 
malpractice. Let me describe what I mean by that. In medicine, when a 
patient comes in, listening is a very important aspect. In fact, there 
is the axiom in medicine that if you listen to your patient, they will 
tell you what is wrong with them, completely. The more time you spend, 
the more effective you are at gaining it. The reason that is the axiom 
in medicine is because you do not want to treat symptoms of a disease, 
you want to treat the real disease.
  All of America recognizes that we had some difficulties in being 
competitive and also with access in terms of health care. We know our 
health care is good, but it is too expensive. As a matter of fact, it 
is more expensive than anywhere in the world. But we do know some 
things about that. We know one out of three dollars we spend in health 
care in this country does not help anybody. It does not help them get 
well. It does not keep them from getting sick.
  The problem with the Affordable Care Act is that it almost always 
treats the symptoms rather than the underlying disease. Let me give 
some examples. I have practiced medicine. I have been a physician for 
almost 30 years. When I have a contract with a private insurer, they 
are going to renew that contract in the next year on whether or not I 
am efficient and effective in taking care of people who have insurance 
with them. There is no motivation at all in the Medicare Act.
  The underlying problem with our $2.6 trillion is that we all think 
somebody else is paying for our health care. So I am a practicing 
physician. I have no motivation not to spend Medicare dollars and avoid 
the axiom of listening to the patient because maybe the short-term 
remuneration for my services is low, so I need to see more people. So 
we have addressed the symptoms of the disease but not the real disease.
  The real disease is that we, on both the purchasing and providing 
side, are not responsible with the available dollars in our economy. 
When we always assume someone else is paying for it, we cannot get 
there. We do not have the right incentives. Consequently, when we treat 
symptoms we actually make it worse.
  What are we seeing? What we are going to see is the government jump 
between the doctor and the patient to make the symptoms worse. We are 
going to have an IPAB board, which is not coming yet, but it is coming. 
We are going to have an innovation board--not patients, not doctors--
not patients making these decisions but somebody in Washington making 
the decisions. So the very capability of utilizing that one axiom of 
medicine, having the freedom to listen to the patient and then acting 
on what we heard rather than acting on the basis of rules and 
regulations coming out of an autonomous nonpersonal body in Washington 
that is going to tell us what we are going to do.
  Let me give a great example. In the Affordable Care Act is the money 
and the incentive to put everything online. Now, by itself that sounds 
smart. What do the first studies show on the basis of that? The first 
studies show that when a doctor has online available diagnostic tests 
versus the doctors who do not, they order 18 percent more tests then 
the doctors who do not.
  In other words, if something is easy to do, we do more of it, and so 
here is the first--this just came out 2 weeks ago--the first set, when 
people were looking at radiographic tests such as CTs, MRIs, CAT scans, 
chest x-rays, ultrasounds, they get the results. They get the results 
faster. Without the patient being there, without reading them, they 
automatically order 18 percent more tests.
  Well, our problem in our country was we were ordering too many tests. 
We have all of the incentives to order tests rather than listen to the 
patient, and now we set up a system where we are going to order more 
tests. That is what

[[Page 3651]]

the first study shows. We are going to give hundreds of millions of 
dollars to doctors to have an IT system put in their offices so we have 
an electronic medical record. Well, what are we seeing from the first 
examples of that? Other than in isolated cases where it is a very 
refined product, such as Mayo Clinic or Cleveland Clinic or even at the 
VA, what do we find? People fill out the paperwork, check the boxes, 
but they do not check it in relationship to the patient. So when the 
next person looks at the electronic medical record, they do not look at 
all of the garbage that is there that does not mean anything--but, oh, 
it might because there is too much information now in terms of the 
computer screen.
  So what is happening? We are doing duplicate things that were not 
done before. So the impact of the health care bill--just in terms of 
taxes, does anybody think health insurance premiums are not going to 
rise enough to offset whatever the increased cost is for the medical 
loss ratio? They are going to make money. Businesses are going to make 
money. So if we put a medical loss ratio at 15 percent, what is going 
to happen is they are going to live within that, but the premiums are 
going to go up so they can do what they need to do.
  Blue Cross-Blue Shield Oklahoma knows my practice parameters. They 
know what I am good at, what I am efficient at, and what I am not. They 
are not going to give up that knowledge of whether or not I should be 
doing a test by simply saying the Federal Government put in a medical 
loss ratio. They are going to raise premium prices, which we are 
already seeing in Oklahoma.
  So when we continue to treat symptoms instead of the underlying 
disease, we do not solve a problem; we actually make the problem worse. 
That is why you get sued as a physician when you miss a diagnosis of a 
disease, and what I will tell you is Americans are at ``dis-ease'' 
about health care in our country. But we have committed malpractice in 
our approach to it because we are treating the symptoms and not the 
underlying disease.
  Mr. JOHANNS. Let me express my appreciation, but let me also follow 
up with a question because I think it is important. The Senator 
mentioned IPAB. This was a little-discussed provision, although the 
Senator kept pointing it out. Talk about the powers of this group and 
where you think it is leading.
  Mr. COBURN. The IPAB stands for the Independent Payment Advisory 
Board. They are a group of individuals who will decide what we pay for 
and what we do not pay for in terms of health care. They will also 
decide how much we pay.
  Once those 15 people are in place, if they are wrong, people will 
have no ability to challenge it in court. They have no ability to see 
their work product and why they decided on what they did. They have no 
ability to cut off their funding. In other words, they are an 
autonomous nondemocratic function whose whole goal will be to control 
costs.
  Well, there are lots of ways to control cost. I call it the 
``sovietization'' of the American medical industry. They are going to 
control costs. Well, we know how that works. We have already seen it. 
It is called NICE in England, and we are seeing a revolt. As a matter 
of fact, in England today they are talking about reforming their health 
care system and going in the opposite direction of what we are doing 
because what they know is the rationing of care based on a value of 1 
year of life per individual is the way they make that decision.
  So if Senator Johanns is 78 years old and has a broken hip and bad 
diabetes and bad heart disease, they look at the value of what his life 
expectancy is with that and then the cost of fixing his hip. They say: 
You are not worth it. So in England they do not fix your hip. Well, 
that is called rationing.
  The fact is it is not bad by the word; it is a loss of liberty. It 
means people no longer have the ability to decide themselves what will 
happen to them, and somebody autonomously, very distant from them, 
makes the decision for them.
  IPAB is not the worst--the innovation council. What will not happen 
that the innovation will not allow to happen? I have a story of a 
patient--and I will just give an example. Not IPAB, not innovation, but 
we are also going to have the Preventive Services Task Force that is 
going to make recommendations on screening.
  I want to give an example. This is a true story. I will not use her 
name, but a young lady came to me with a breast lump. I did the 
standard protocol, best practices on her. It showed to be a simple 
cyst, and the point I am making is about the art of medicine, not the 
science of medicine because everybody gets hung up on the science, but 
nobody ever talks about the art.
  I had an uncomfortable feeling about this cyst. So I aspirated it. It 
was inflammatory carcinoma of the breast. In other words, had I 
followed the protocols that are going to be recommended by IPAB and the 
best practices, I would have never aspirated it.
  Well, this patient is now dead. But she lived 12 years. A delay in 
diagnosis on inflammatory carcinoma would have given her less than a 
year to live. Because I did not follow what the standard protocol was 
but followed my history and my knowledge of the patient and my feeling, 
I diagnosed her early. She got to see her kids get married; she got to 
see a grandchild. That never would have happened.
  So what is coming with IPAB and the Preventive Services Task Force is 
people making decisions that are not in the room with the doctor and 
the patient, and that is the biggest danger of the Affordable Care Act: 
that we are going to take the ability of patients and doctors to make 
choices and give that choice to a government bureaucrat.
  The ACTING PRESIDENT pro tempore. The Senator's time has expired.
  Mr. JOHANNS. We yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mrs. MURRAY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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