[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
THE INSTABILITY OF
HEALTH COVERAGE IN AMERICA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
APRIL 15, 2008
__________
Serial No. 110-78
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
46-779 PDF WASHINGTON : 2009
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, California JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan WALLY HERGER, California
JIM MCDERMOTT, Washington DAVE CAMP, Michigan
JOHN LEWIS, Georgia JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee JERRY WELLER, Illinois
XAVIER BECERRA, California KENNY HULSHOF, Missouri
LLOYD DOGGETT, Texas RON LEWIS, Kentucky
EARL POMEROY, North Dakota KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon DEVIN NUNES, California
RON KIND, Wisconsin PAT TIBERI, Ohio
BILL PASCRELL, JR., New Jersey JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
Janice Mays, Chief Counsel and Staff Director
Brett Loper, Minority Staff Director
SUBCOMMITTEE ON HEALTH
FORTNEY PETE STARK, California, Chairman
LLOYD DOGGETT, Texas DAVE CAMP, Michigan
MIKE THOMPSON, California SAM JOHNSON, Texas
RAHM EMANUEL, Illinois JIM RAMSTAD, Minnesota
XAVIER BECERRA, California PHIL ENGLISH, Pennsylvania
EARL POMEROY, North Dakota KENNY HULSHOF, Missouri
STEPHANIE TUBBS JONES, Ohio
RON KIND, Wisconsin
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C O N T E N T S
__________
Page
Advisory of April 15, 2008, announcing the hearing............... 2
WITNESSES
Diane Rowland, Sc.D., Executive Vice President, Kaiser Family
Foundation..................................................... 29
John Z. Ayanian, MD, Professor of Medicine and Health Care
Policy, Harvard Medical School, Boston, Massachusetts.......... 49
Michael O'Grady, Senior Fellow, National Opinion Research Center,
University of Chicago, Chicago, Illinois....................... 61
Stan Brock, Founder and Volunteer Director of Operations, Remote
Area Medical, Knoxville, Tennessee............................. 79
Stephen Finan, Associate Director of Policy, American Cancer
Society........................................................ 81
SUBMISSIONS FOR THE RECORD
American College of Physicians, Statement........................ 103
Edward M. Burke, Statement....................................... 106
George Stone, Statement.......................................... 108
Jonathan B. Weisbuch, Statement.................................. 108
Karen Hawes, Statement........................................... 110
March of Dimes Foundation, Statement............................. 110
National Congress of American Indians, Statement................. 112
THE INSTABILITY OF
HEALTH COVERAGE IN AMERICA
----------
TUESDAY, APRIL 15, 2008
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:00 a.m. in
room 1100, Longworth House Office Building, Hon. Fortney Pete
Stark (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON
HEALTH
CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
April 08, 2008
HL-23
The Instability of Health Coverage in America
House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA)
announced today that the Subcommittee on Health will hold a hearing on
the instability of health coverage in America. The hearing will take
place at 10:00 a.m. on Tuesday, April 15, 2008, in the main committee
hearing room, 1100 Longworth House Office Building.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
There are nearly 47 million uninsured people in this country and
their ranks have been growing rapidly in recent years. Those without
health insurance have worse health outcomes than those with insurance,
often pay more out-of-pocket for services when they do seek care, and
increase costs to the entire health care system. Additionally, there
are millions of people who have private health insurance but have
trouble affording and accessing care.
The inadequacy of current coverage options forces many people to
forgo needed medical care because of the costs associated with seeking
care. A 2005 study by The Commonwealth Fund \1\ estimated that nearly
16 million non-elderly individuals (12 percent of the insured
population) were ``underinsured'' in 2003. Despite the fact that they
have insurance coverage, underinsured individuals can be exposed to
significant out-of-pocket costs in the form of higher premiums,
deductibles and co-pays relative to more adequately insured
individuals. They also can have trouble accessing doctors, obtaining
prescription drugs and getting their insurance to pay for needed care
because the insurance that they can afford does not cover the treatment
that they need.
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\1\ http://www.commonwealthfund.org/publications/
publications_show.htm?doc_id=280812.
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In announcing the hearing Chairman Stark said, ``America's health
system is broken. Every year more and more people join the ranks of the
uninsured. Even those who have insurance are discovering the inadequacy
of their coverage, all the while their premiums and cost sharing
continue to rise. I am pleased to hold this hearing. It is important we
understand the problems of today's system as we prepare to embark on
health care reform.''
FOCUS OF THE HEARING:
The hearing will focus on the instability of health coverage in
America, examining the problems facing those with and without health
insurance.
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*Chairman STARK. The Subcommittee will begin its hearing,
and the Chairman will make outstanding introductory remarks, if
he can find them.
Thank you for attending today and I hope to be brief.
We are going to depart a little from our standard
procedure. We'll show a short video that deals with the issues
many Americans who are uninsured and are underinsured are
facing. We know that there's a lot of discussion in the
campaign and in the press, and everyplace else, about
healthcare reform.
It's been some years since the last large attempt at
system-wide reform and the failure to be able to come to a
conclusion with it. In this election year, candidates on all
sides are talking about healthcare with different approaches
and philosophies, but I think each candidate recognizes that
there have to be some changes in the system of delivery of
medical care.
The number of uninsured is increasing. Middle class
Americans are having trouble paying their premiums, paying
their cost-sharing. They just announced the other day they're
going to charge us more for expensive drugs; and, we all know,
I think, that the medical care delivery system is in need of
change; and, before we rush into solutions, I think we should
develop an understanding of where we are. What is the problem?
Can we identify the problem we are trying to fix?
Hopefully, Mr. Camp and I can come to some kind of
agreement on that. We may not agree on what the fix ought to
be, but hopefully, we don't have to argue about what the
problem is, and that's the purpose of today's hearing.
I'd like to defer on mentioning our first witness for a
moment, but after we do hear from our first witness, we will
hear from a panel of witnesses who will describe the
instability of health coverage and the availability. After a
second, I am going to recognize Mr. Camp. We will then go off
the record and view a ten- or twelve-minute clip that comes out
of a sixty-minute program in February; and, it features the
work of one of the witnesses that we will hear from later
today.
I want to thank the witnesses and my colleagues for being
here as we try to lay some groundwork for what may face us in
the coming months and years ahead.
Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman. I want to thank our
witnesses for being here today as well. The laws and
regulations governing the U.S. health system can prevent from
between 25 to 45 million Americans from having health
insurance, and that's wrong. Every American should have access
to quality healthcare.
Before we can solve the problem, we need to ask why so many
Americans lack health insurance. One of the most immediate
causes has to be the skyrocketing cost of healthcare and health
insurance. Since 2000, employer-based insurance premiums have
increased by about 100 percent, and that's four times the rate
of inflation. These spiraling costs are driving increasing
numbers of employers to drop health insurance coverage for
their employees. At the same time, over-regulated state
insurance markets are failing to provide affordable health
insurance for many American families.
We also need to identify who is uninsured. Approximately
two-thirds of the uninsured are in families with incomes below
200 percent of poverty, or about $40,000 a year. In the
current, difficult, economic times, it shouldn't come as a
surprise that these individuals do not have the resources to
purchase private health insurance. That does not mean, however,
that they cannot have private health insurance. Every uninsured
person in this country shares one common characteristic: they
receive no assistance under the Federal Tax Code to help them
purchase health insurance.
At the same time that costs for health insurance are
soaring, our Tax Code affirmatively discriminates against the
uninsured. If we were to simply equalize the tax subsidies that
we provide, millions more Americans would be able to get health
insurance.
The generosity of the American taxpayer should not only go
to those with employer-purchased health insurance, it should
apply to individuals, small businesses, and large corporations
alike. To do that, we must make sure those Americans who
already have insurance keep it, and we must help those who
don't have coverage get it.
I want to thank Mr. Stark for calling this hearing to give
us all the opportunity to examine this issue. I hope that in
exploring this issue, we can begin to identify solutions to
reducing the number of uninsured without further burdening
existing entitlement programs that are already facing
insolvency.
Thank you, Mr. Chairman, and I yield back.
[The prepared statement of Mr. Camp follows:]
[GRAPHIC] [TIFF OMITTED] 46779A.001
[GRAPHIC] [TIFF OMITTED] 46779A.002
[GRAPHIC] [TIFF OMITTED] 46779A.003
*Chairman STARK. Well, as the Committee knows, when it
comes to introducing witnesses we draw straws; and, this
morning, Mr. Ramstad, our colleague from Minneapolis drew the
short straw, and I'd like to recognize him at this point.
Mr. RAMSTAD. Well, thank you very much, Mr. Chairman, and
I'm very pleased today that our Subcommittee will hear from one
of our country's most respected leaders in healthcare policy,
former Minnesota Senator, Dave Durenberger.
I would also like to recognize another distinguished
Minnesotan in the audience, Hennepin County Commissioner, Randy
Johnson, who at the county level has worked long and hard on
extending access to healthcare for Hennepin County residents.
My good friend, Dave Durenberger, served as Minnesota
Senior Senator from 1978 to his retirement in 1995. In the
Senate he was highly respected for his mastery of healthcare
policy and his ability to work with people from both sides of
the aisle to find solutions. He brought some of Minnesota's
most innovative and successful ideas to Washington.
Dave Durenberger served on the two Senate Committees with
jurisdiction over health policy, the Finance Committee and
Labor Committee, and also chaired the Finance Health
Subcommittee. Senator Durenberger left his mark on every major
piece of healthcare legislation through the 1980s and into the
90s. He also authored ``Prescription for Change,'' a book on
healthcare reform through consumer choice.
Since his retirement, I know firsthand, Senator Durenberger
has not slowed down one iota. In addition to teaching graduate-
level courses in health policy, and I understand his graduate
students from St. Thomas University are here today with him, he
formed the National Institute on Health Policy, a joint effort
between the University of St. Thomas and the University of
Minnesota.
Senator Durenberger also started the Medical Technology
Leadership Forum, and also serves on the Medicare Payment
Advisory Commission. Of course, most significant to me
personally, Senator Dave Durenberger has been a close friend,
mentor, confidant for 30 years.
We would be here all day if I listed all of Dave
Durenberger's credentials, but let me just say I deeply
appreciated your expertise, David, and your friendship over the
years. This Subcommittee certainly looks forward to your
testimony. We appreciate your collaboration on what I believe
is one of America's most pressing problems. Thank you again for
being here, and thank you to all the witnesses.
I yield back, Mr. Chairman, thank you.
*Chairman STARK. Thank you, and I'd like to join you.
It is my pleasure to welcome Dave here. He and I worked
together since, I guess, 1985, on issues with Medicare and
other issues on healthcare and look forward to your testimony,
following which we will view the video.
Go ahead and enlighten us.
*Mr. DURENBERGER. Thank you, Mr. Chairman, Mr. Camp,
Members of the Committee, but especially Jim Ramstad, because
as Jim said he has been a very close friend for a long period
of time. I had mixed feelings when Jim announced that he was
retiring, as many of you had too. On the one hand, I was happy
for him. On the other hand, I was unhappy for the rest of you,
because of the contribution that he has made to not just good
health policy, but a good policy in so, so many ways.
Each of us is reflective in a way of the people that we
represented, the places we were raised, how we were educated,
and so forth. Jim did this better than most people. As I see
from some of the people that I know here like Mr. Camp and his
part of Michigan, and Mr. Kind and his part of Wisconsin, we
much more alike than we differ.
That certainly is true of health policy as well. It was an
honor for me to serve Minnesota for three terms in the Senate.
It was always a challenge, I must say, to go to conference near
the end of each of those 16 years with the chair of this
Subcommittee and the chair of the energy and Commerce
Committee, because they always insisted on winning. I'm really
honored, Mr. Chairman, to have been asked to testify here
today.
I do so in the spirit that for most of those years
characterized our relationships and our effort to make national
health policy; and, particularly, to improve the health system
of this country by changing the financing incentives for
providers in the Medicare Program. One of the things you learn
fairly early on in this process is we don't have a national
health system; and, Mr. Camp alluded to that, I think, in his
comment.
But, what we do have, because we know this from our
personal experiences in the communities we represent, we have a
series of systems and the work at Dartmouth explains that to us
quite clearly. But my job is not to talk to you about the
health system or the specific challenge of the uninsured. I was
asked to reflect on my experience in doing health policy.
First, let me say that not since the Presidential campaign 1992
have Americans been as concerned about their financial well-
being as they are this year.
Most Americans know they can't afford the rapid rise of
health insurance premiums, especially when it is currently
accompanied by the escalation and the cost of so many other of
their basic needs; so it's a big challenge. But it isn't just
health policy; and, you know this better than I. Public opinion
polls reflect this in strong support for proposals to guarantee
access for all, the health and medical services for all
Americans through some system of health insurance.
But, clearly, the same polls will tell you that there's no
consensus on how to do it as both of you have pointed out. The
debate, as it always has been, is between universal coverage
and cost containment; and, it's also between social insurance
systems and private insurance. For example, Senator Clinton
advocates a universal coverage path that can utilize a form of
what we might call Medicare for persons under 65.
Senator Obama, same party, advocates using the model of the
Federal employee health benefits plan. Senator McCain advocates
cost containment through greater tax subsidies for private,
major medical insurance. Interestingly, each advocates similar
cost containment measures through realigning financial
incentives to produce better quality, outcomes, effectiveness
and efficiency from the delivery system. Similar battles, as we
know only too well, are being waged at the state level--in
part, coverage; in part, quality and value.
So it has always been. Unfortunately, critics of the
Democratic proposals characterize them as socialized medicine;
and, critics of the Republican proposal criticize them as doing
nothing to meet the issue of affordability which was driving up
the numbers of uninsured and underinsured. That will probably
get us nowhere.
As policymakers, we have always followed a two-path course
to universal coverage. It is most obvious in the Medicare
Program, where we have been making most national health
insurance policy, since I became active in health policy reform
in the early 1970s. We have used both social insurance and
private insurance in our financing policy changes, aiming
ourselves at expanding access coverage and cost containment.
The test for high value health insurance is how well it does
for people when they are sick, seriously injured, or
chronically ill. It's the 80-20 problem.
Twenty percent of the people present us with 80 plus
percent of the cost challenge. So the real test, choosing an
insurance course to universal coverage is how well does the
plan do in that regard. How many benefits a plan has or how
little people use a deductible is not the measure. The value
test for both social insurance and private insurance is how
well each does to consistently pay for quality, for outcomes,
for effectiveness, and for efficiency.
That has been our challenge since I started doing this sort
of thing. How do you move both social and private insurance in
that direction? For example, the Federal F benefit plan has
always been a model for consumer choice of private health
plans, and the impact of that choice was important in creating
health insurance competition, community by community, using
Federal employees and retirees to accomplish that.
My first health legislation proposal was the Consumer
Choice Health Plan of 1979, when some of you were born,
probably. The purpose of it was to require choices similar to
the HBP in the private employment in exchange for the employer
tax subsidy.
So, Medicare always used private insurance: first in its
benefit design and its implementation through Blue Cross/Blue
Shield carriers and intermediaries, and then, on my watch in
cost have HMOs, and in a major national test of HMO, in HMO
risk contracting starting in 1985. These were hugely successful
in areas of the country where they were tried and where medical
practice in relations with community and state-based health
insurance guaranteed their success.
For example, in our part of the country which always brags
about being the low cost area, we were one of the high cost
areas. We were in the upper quartile in the Hennepin County,
St. Paul area, and in North Dakota and places like that. Within
two and a half years of the start of this experiment with
private HMOs, we went to the bottom quartile; and,
unfortunately, we're still there; principally because we didn't
share there savings.
We in the Medicare Program did not share the savings with
the people that made them possible, who are the physicians, the
hospitals, and the local health plans. The rest of the country
chose to follow the path of hospital DRGs which we instituted
at the same time, but on another vehicle. By 1989, of necessity
we adopted the prospect we payment system to physician position
payment and created lots of other problems, none of which I
endorse that you repeat.
The mistake we made, of course, was not to leaving more of
the financial savings, for changing the overuse of medical
services with the care professionals, and the hospitals, and
the plans that were responsible for doing it. The mistake the
medical industry made was to take these community-based
examples of physician-hospital cooperation national, and to
take the local managed care organization national as well.
For example, United Health Group in our own community
became the largest health insurer in the country through merger
and acquisition of lots of local HMOs all over America.
Likewise, Wellpoint became the largest insurer in the country
through the conversion of lots of local and state blues plans
to for-profits, and their subsequent merger and acquisition.
This new national private insurance phenomenon was very
successful for a while in driving down healthcare costs, and
their premiums and profits made them Wall Street darling.
But, by the end of the 1990s, the same plans were in
national industry playing by either state rules or no rules in
the employer self-insured market because of ERISA. Congress in
1997 authorized private plans to do what markets are supposed
to do, determine through price competition for basic benefits,
what's the real cost of a basic set of medical services in a
community-by-community across the country.
The industry refused to play. The managed care industry,
slowly but surely, adopted itself to the realities of consumer
demand for freedom of choice, access, innovation and
expectations. This is unfortunate. They did that particularly
in areas in which physician groups and hospitals had the power
to make sure that sort of thing happened. So, in effect, we've
lost some of the benefit and the potential that exists in
private insurance. That's the point I'd like to make. Not that
it's wrong--it's very right--it's been our course from the
beginning. The question is what are we trying to achieve?
At the Medicare Payment Advisory Commission, on which I
served until last week, we simply asked the public policy
question that Members of Congress like me have been asking
since 1982 when Senator John Hines put the privatization
amendment on the tougher risk contract. If traditional Medicare
is less effective in achieving performance improvement than
private insurance, then how do we structure the value
proposition in the relationship between Medicare and private
health insurance?
Paying financial bonuses to Medicare Advantage Insurance
plans for simply adding service benefits to the Medicare
Program is probably something you could do as a congress. But
it's not the right thing to do without clear evidence that
those services have value added over existing insured services,
this makes us to issues around comparative effectiveness, which
I won't dwell on, because you've heard plenty of that.
So, let me conclude by saying there are many reasons why
universal coverage is important. Many of them relate to the
vastly improved economics of reducing or eliminating cross-
subsidies from paying to non-paying services in hospitals
especially. I have now lived long enough with the consequences
of our National failures to secure financial access to needed
healthcare services for all Americans that I believe a
commitment of the next president to this goal is important to
my vote. I do not believe it is possible in a Federal system
for each of the 50 states to accomplish this goal on their own.
Their fiscal capacity, their populations are just too
disparate.
This is a matter of income security policy for the nation
of which we are all citizens. We have no income security policy
and we have a bunch of aging entitlement programs, and Mr. Camp
pointed this out. We have a bunch of aging entitlement
programs, which are bending and sometimes breaking under the
weight of population health and aging and the cost of medical
technology and providers.
It would be an appropriate challenge for this Committee,
the full Committee, to take the lead in going beyond reforming
programs that were enacted in the 1930s for the 30s and the 60s
for the 60s in developing an income security policy in this
country. A good place to start would be as we recommended in
the Pepper Commission, get long-term care out of the welfare
program and convert it into a combination social and private
insurance program. That would make your challenges a lot more
simple.
I have no reason to believe that as Republicans or
Democrats we have much disagreement about the need to agree
quickly on how to do the work of data gathering, measuring
performance, motivating better outcomes, and rewarding the
first-rate performers in the business of an informed consumer
in as many communities as possible. I am also pleased to have
been afforded this opportunity.
Much is expected of each of you in an area that is too
complex to be understood by any one of you, but challenging
circumstances always bring out the best. I hope that I may
continue to serve whatever interest you may take in health
coverage and reform.
*Chairman STARK. Thank you, Senator. Dave, thank you very
much. As you know, you and I have a great difference in this
problem of the underpayment of the Minnesota, North Dakota
Wisconsin area, representing a district that is drastically in
your opinion overpaid. I've always said, swell, let's just cut
the payments to California down to the level that we're paying
in Minnesota and think of all the money we'll save.
I'm not so sure that that's the most popular approach to
this solution in your part of the country, and it sure wouldn't
be very popular in mine. But it occurs to me that that's one
way to do it. I just want to ask one question, and that is one
of the issues that we are going to be faced with--and I'm not
sure any of us as yet have an answer in the reimbursement
program for physician services--is what we do about volume. I'm
sure that in redesigning that system as I think we all agree it
must be redesigned.
We are going to have to deal with that issue, and my
question is will you come back and help us with it?
*Mr. DURENBERGER. Well, I'd be glad to, and I'm going to
connect the two, just very, very briefly. The disparities exist
in payment across the country, but it is largely because there
are disparities in performance, and whether you look in Mr.
Camp's district, or you look in my district, or you look at La
Crosse, Wisconsin.
By the way, Congressman Kind is a doctor from Gunderson out
here in the MBA class as well. If you compare measurable,
quality outcomes performance for the dollars that are spent in
your district, in his district, in my district, and so forth,
it is a bargain for the rest of the country. But it's also a
model for the rest of the country to be followed. Unless you
can design a payment system that begins to reward high
performance in some way appropriately, we are going to continue
to have these problems. The key to that is physician payment
reform.
We've talked about accountable care organizations. We talk
about bundling. We talk about a variety of approaches, and I
would be happy to come back and be helpful.
*Chairman STARK. Look forward to it.
Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman, and thank you, Senator
Durenberger.
*Mr. DURENBERGER. You are welcome.
Mr. CAMP. You made a number of good points.
I appreciate you outlining really sort of the background on
Medicare that it always has had a private insurance component
to it. Tell me, what do you think of some of the proposals that
have been introduced either in the Senate or the House that are
attempting to use the Tax Code, either a tax credit or a tax
deduction, or a combination thereof to really create an
individual insurance market.
Tell me, and also what you might think about the question
of mandates, if you have time.
*Mr. DURENBERGER. I'll again try to be brief. Number one,
we just had the benefit yesterday of having both Ron White and
Bob Bennett speak to our class. So, I'm fresh from the ideas
that are out there.
First, with regard to the proposal for the tax subsidy,
they have this increase. Everybody pays, like $10,000, and then
make them pay with their insurance. That, like President Bush's
proposal, has been needed for the 35 years that I've been
involved with this. It's the question of getting from here to
there that is always the challenge. So, I think on the
appropriateness of the tax subsidy for individuals, that is so
much better than any other approach that has been taken.
The challenge, I think, in this concept that we can blend
the universal coverage of the Democrats with the market ideas
of the Republicans is whether have real markets. I will start
with something simple, like insurance.
You will not have real markets in health insurance until
you have national rules by which all health plans have to pay.
The idea that we should just stay with 50-state regulation and
you can go shopping around the country for a good deal just
will not work. It won't protect consumers. But the idea of
having a set of national rules by which both national and state
plans can truly compete is really a great idea, and that's been
presented as value-based benefits. It's been presented as a
guaranteed issue and renewal, and some of the other things that
I know that this Committee is familiar with, but I think that
is critical to getting the best out of private insurance.
After that, the issue becomes the same with regard to
doctors and hospitals and we talked about that in terms of
what's quality, what's good outcome, how do you measure it, how
do you get consensus, and a lot of progress is being made on
that. But, again, and like the secretary's ideas on value
exchanges and things like that, focusing on local communities
and finding out who are the people that are already ahead of
the curve is critically important.
When you get the market working, you've got all the
information you need. People are informed and they are getting
their information from reliable sources. They've curbed their
own expectations about having the sun and the moon and the
stars and everything else. Then the only way a national system
works most effectively is through everyone having an ownership
of that insurance. Long term care insurance, as we've analyzed
many times, is basically supportive services for elderly
people. If we were able to sell disability insurance to
everybody in this country when they were young, you know, you
wouldn't have to worry about meeting long-term care insurance,
because people can use it at various times through this system.
Same thing applies to health insurance.
Mr. CAMP. Just quickly before my time, what do you think of
the individual mandate, some proposals think that's essential.
Others don't.
*Mr. DURENBERGER. Yeah, again, you have to tie it together
with the insurance reform in my book before you even consider
it. You also have to tie it together with some other reforms. I
think in the end at some point you are going to need it. I
would not start with an individual mandate on whether it's at
the state level or the Federal level.
There are other ways, I think, to explore the problem
that's created by freeloaders or whatever the economists call
it, the free somebody or others on the system.
Mr. CAMP. All right. Thank you very much.
*Mr. DURENBERGER. You are welcome.
*Chairman STARK. Mr. Doggett, would you like to inquire?
Mr. DOGGETT. Thank you very much for your testimony.
Does any other country provide us a model of any aspect of
what we should be striving for here, or is our predicament so
unique that we have to strike out on our own?
*Mr. DURENBERGER. The policy models have been tried in one
form or another, although we've had some discussion about
what's the appropriate policy model to get from here to there.
One of the challenges that you face as a Subcommittee and
the larger Committee on Ways and Means is there's already by
most people's assumptions a lot of money in the system, and a
lot of it is being spent on tax subsidies that are not doing. I
mean, they are benefiting wealthy people rather than lower
income people. However, you might consider this. Long term care
going into a welfare system rather than being in it's an
insurable event and we ought to be having insurance for it.
There's all kinds of money out there, the inside buildup on
tax subsidized savings and things like that, so there's plenty
of money in the system, but there's no policy to guide you as a
Committee. There's no policy to guide you to get from here to
there, which is why I made the argument about income security.
Thinking about it as income security policy, and I know along
time ago, I think it was the 25th anniversary of Medicare or
something, I made the statement that Medicare and Medicaid are
not health programs. They aren't. They are income security
programs.
If you think about that long enough, you realize we've got
this whole series of programs built for various purposes at
various times that are not working today for the benefit of the
people that need them the most. That is an enormous challenge
for you in terms of cost reduction or cost containment. Let's
take Medicare Advantage, because I just heard this yesterday
from Abbey Block who runs the Medicare Advantage program at
CMS.
She didn't know there was going to be somebody in the
audience from La Crosse, Wisconsin, so she says the difference
in the value to a Medicare beneficiary in Dade County, Florida,
and the amount of money that you are spending on her services
in Miami, Florida, versus La Cross, Wisconsin, and this is what
I heard from her, is 248 percent. More money being spent on the
same beneficiary in Dade County for no reason, you know, other
than part of the policy design and the practice design.
Mr. DOGGETT. I certainly agree with you that these tax
credits by their very nature are very blunt instruments and
they are very costly for what they produced. They are not the
most efficient way, sometimes, of getting health coverage where
we need it, and I certainly concur in your comments about how
costly some of them are for what the y produce.
Do you believe that it's possible for some type of
government insurance program to co-exist with private insurance
to address this problem?
*Mr. DURENBERGER. It does now to the potential advantage of
both. This is America. We're a pluralistic society and we ought
to build on that and that's why I made the point, that we've
always followed two paths. The question is have you set the
goals correctly?
I mean, is the goal to be paying for the sick, the severely
injured?
I mean is that the purpose of insurance?
Also, is part of the purpose of insurance to facilitate the
rewards for quality outcomes and efficiency and things like
that?
So, if you set the policy goals right, there might be some
circumstances, some populations, for which social insurance
works much better and others for which private insurance works
better.
Mr. DOGGETT. Thank you so much.
*Mr. DURENBERGER. Thank you, Lloyd.
*Chairman STARK. Mr. Thompson? You pass?
I think Ms. Tubbs Jones. Would you like to inquire?
Ms. TUBBS JONES. Thank you Mr. Chairman.
Good morning, Senator. I don't think I have ever had the
chance to meet you, and it is my pleasure.
*Mr. DURENBERGER. It has been my pleasure.
Ms. TUBBS JONES. I would like to focus for a moment and ask
you about healthcare disparities.
Today, the Congressional Black Caucus is hosting their
annual healthcare disparity conference at a hotel here in
Washington, D.C., and I had to choose between which I could
attend. So, I decided to be here with you. I wondered that in
the work that you have done around healthcare, have you had any
focus in on health disparities as it involves the delivery of
healthcare to minorities and majority. If so, what your
experience has been and what your recommendation would be to
this Committee as we walk down the road of trying to repair the
healthcare delivery system in this country.
*Mr. DURENBERGER. Thank you very much for the question, and
I will give you two brief reactions.
There are communities in this country where because of
state efforts to provide universal coverage. Mine is one. You
have heard about Massachusetts. You can see a group of states
in this country that have gone the extra mile to finance access
for as close to 100 percent of their population as you possibly
can; and, so, in varying ways we, have relied traditionally on
the states to provide the initiative for financing access for
people who are disadvantaged by income, by education, for
whatever reason. Those states are on most charts of health,
access and so forth are going to be ahead of states that have
taken different courses, and have not chosen either through the
way they practice healthcare deliver or the way they organize
their systems or the way they finance them to accomplish it.
One of the ways you can consider to broaden access to the
financial insurance side of this, of course, is to think about
it in terms of income related subsidies for either private
insurance or for some other form of access. The transition to
getting from here to there would involve taking long-term care
out of Medicaid particular thing. But, the second, and maybe
more important comment to make, is about a hearing on cultural
and other disparities, economic and other disparities today.
That same discussion is taking place in every community in
this country, and the link that organized medicine broke
between public health and medicine 80 years ago is now being
reattached in many of our communities. In Texas, for example, I
can point to Parkland Hospital in Dallas and some of the
leadership there to involve the communities. When the
legislature is unwilling to provide the financing of access,
the leadership at that very public, very challenged hospital,
is out in the community, reaching out to the gang leaders and
other leaders to try to bring the community into the delivery
system.
One of the values of not-for-profit hospitals is the
community benefit tax exemption for contributing to bringing in
the access, not just through insurance, but access to services.
It is happening in many communities around this country and it
is a wonderful thing that it's happening. We reconnect public
health, personal responsibility and, you know, the insurance
programs for medical care services and fostering that in some
appropriate way.
Ms. TUBBS JONES. Thank you.
I would just put on the record another question about how
do we increase the availability of healthcare delivery
personnel, nursing being one of the huge things that one of the
areas professions that we were in such deep need for. One idea
is that you don't have time to give me the answer today, but I
would be interested in what you might think how we might
address that issue.
*Mr. DURENBERGER. Well, in 28 seconds, I am going to tell
you to start financing the students, and stop financing the
institutions that educate them. I mean, you look at where all
the Medicare money is going, for example. It is going to large
academic medical centers and they are overpaying for indirect
medical education, benefits, and so forth.
My sort of conservative side says I'd rather finance the
consumer of education than to continue to finance the
establishment.
You are welcome.
Ms. TUBBS JONES. Thank you.
*Chairman STARK. Thank you.
Mr. Ramstad, would you like to inquire?
Mr. RAMSTAD. Thank you, Mr. Chairman.
Thank you for your excellent testimony, Senator. Thank you
Mr. Chairman for inviting this witness to lead off this
important hearing. I don't think anybody frames the issues
better than Senator Durenberger.
Senator, you have often pointed out that Minnesota does a
lot of things right when it comes to healthcare delivery. We
all know that. We were recently ranked as the healthiest state
in the nation. We have the lowest rate of uninsured. We have a
long history of delivering high quality, efficient care at a
low cost. Yet, as you pointed out, as we all know on this
Subcommittee, every Federal program seems to punish Minnesota
for doing the right thing.
We get low Medicare fee for service and Medicare Advantage
reimbursement because of our history of low cost. I don't know
how many times I have copied your illustration comparing Dade
County vis-a-vis Hennepin County in my district. We can't use
SCHIP funds to cover children because we were already covering
kids through Minnesota Care before SCHIP was ever created. Our
state high risk pool for the uninsurable gets low Federal
funding, because our state has done a good job of covering the
uninsured.
How in your judgment can Federal incentives be realigned so
we are actually paying for quality and value instead of
inefficiency and utilization as you put it?
*Mr. DURENBERGER. Well, thank you for the question and
thank you for the self-serving comments about Minnesota. We
could say the same thing about Mr. McDermott's constituency,
and I've said that about Mr. Kind and Mr. Camp. There's
probably others on this Committee that I am not aware of. The
short answer is we tried it already.
I mean we tried using what was then called the HMO and
managed care to do our work for us, basically to identify all
of the poor quality areas that were just costing us a lot of
money, and they performed well. They continue to perform well.
The Virginia Mason Clinic, for example, in Seattle, is one
of the leaders in this country on efficiency and effectiveness,
and issues like that. Inter Mountain Healthcare is probably one
of the best places to go to get healthcare in this country.
There are places in the Chairman's district as we know, some of
the Kaiser programs, and so forth.
So, it isn't possible, I'd say, for the Committee or the
Subcommittee to start designating who do you like and who do
you not like. You almost need an intermediary to do that for
you, and that's why I make an argument for changing the rules
and changing the goals and the requirements for both public and
private.
If you are going to pay extra money for private insurance
to go out there and find the most effective places to spend
money, then you ought to do the same thing for traditional
Medicare and enable the doctors and the hospitals to be
regarded for their outcomes and their quality as well.
Mr. RAMSTAD. Well, first of all, I should thank you for
being less parochial than I am.
*Mr. DURENBERGER. That's because I'm here and you are
there.
Mr. RAMSTAD. Yeah, but I am not running for re-election,
either.
[Laughter.]
*Mr. DURENBERGER. Somebody you'll be just like me.
Mr. RAMSTAD. I mean don't we really have to get rid of--I
mean, there's not enough money in the system or the Federal
treasury for that matter to equalize things through the AAPCC
formula. I mean, we really need a new system. Don't you agree?
*Mr. DURENBERGER. Yes. But the design of that system will
probably vary from one place to the other. I mean your tasks is
to reward quality. This is where Med-Pac was going, you know,
with bundling payments, with defining accountable care
organizations. That's where some of the people in the
professions are going with the concept of medical home.
We had a regional medical home application under the 646
demonstration program. We had the entire region from Montana to
Wisconsin. The medical group at the University of Wisconsin was
part of it and a six-doctor group out in Western South Dakota
was part of it, just to demonstrate, if we had the authority to
demonstrate it, from CMS, to demonstrate that paying for
quality saves money. There's a variety of those ways that can
be chosen, most of which are going to relate to physicians.
Mr. RAMSTAD. Those criteria are much more important than
geographic criteria. Some have suggested moving to a regional
system, but wouldn't we still have some of those same
geographic in equities?
*Mr. DURENBERGER. You have the same problems within some of
our systems that you have nationally. I mean, you can go to one
of the Fairview hospitals, or whatever it is in Minneapolis-St.
Paul area, and you are going to find disparities there. That's
why the physician becomes so important. Physician payment
becomes important, and the Chairman has already pointed that
out.
Mr. RAMSTAD. Thank you, Senator. Thank you, Mr. Chairman.
*Chairman STARK. Thank you.
Mr. Becerra, would you like to inquire?
Mr. BECERRA. Mr. Chairman, other than to acknowledge the
Senator for all his work and to thank him for taking the time
to be here, I very much appreciate it and with that Mr.
Chairman I will yield back and say that I hope we are able to
move forward with some of the ideas that the senator has
articulated and more importantly just recognize it. More and
more people are saying that it is time to do something.
So, thank you for your testimony and thanks for being here.
*Mr. DURENBERGER. You are very welcome.
*Chairman STARK. Mr. Kind?
Mr. KIND. Thank you, Mr. Chairman.
Just for the record, Senator Durenberger's testimony today
is not a paid advertisement on behalf of myself, Mr. Ramstad
and Mr. Camp. Although I'm sure we are all nodding in strong
agreement with the statements and it is good to have you back,
and it is good to hear from you again.
I really appreciate the effort you have made too in
reaching out with so many of the providers in my own
congressional district to have this type of conversation
ongoing. I couldn't agree with you more that there is going to
be tremendous savings had within the Medicare system if we can
get to out outcome or performance-based type of reimbursement
system. But that, of course, will follow the huge investment in
HIT which will be important in establishing the standards and
inoperability and everything that is taking place right now.
I don't know if you have had an opportunity to pick up
Shannon Bromley's book, ``Overtreated,'' at all. If you have
read that, many people have. Her basic thesis is that there is
huge disparity, obviously, in utilization, and that is backed
up with the Dartmouth Atlas study every year. If we look at how
the utilization is taking place from region to region, there
could be tremendous cost savings.
One of the points that she made, I had a chance to talk to
her a little bit more about, is the crucial, six-months, end of
life care, and the tremendous spending that goes on there. Her
point was if we get back to listening to the patient a little
more closely, because again there is vast differences in
utilization and what type of hospital stay is recommended or
tests that are ordered in those final months or weeks of life.
There could be tremendous cost savings there, not through a
major reform with healthcare treatment, but just by listening
to the patient. She says, invariably, patients don't want to be
in the ICU for weeks and weeks and weeks and having multiple
tests ordered and multiple drugs administered, and that
generally patients are more conservative than a typical
provider and they just like pain management and have a chance
to be at home in those final days of life.
If we get back to that, listening to the patient, there
could be not only greater satisfaction with the patient and the
family but also a tremendous change in the healthcare system.
One of the bills that I've been working on through a period of
years, and you know it modeled closely what you were advocating
when you were still serving in the Senate, is trying to set up
that national purchasing pool.
Of course, we have had the ongoing debate about associated
health plans and Federal preemption of State mandates; but, I
also agree with you that we do need a set of national rules,
national standards.
My question to you is how do we get there? What would the
process look like? One of the things I have been toying with in
the legislation would be a small business and family farm
health act modeled after the Federal employee purchasing pool
concept, because when you look at the 47 million uninsured,
most of them are working Americans, either in small business or
on farms, who just can't afford to provide any healthcare
coverage.
But part of the key to the success, obviously, is getting
away from the 50 different rules and mandates that are
established from state-to-state, which would make it easier for
the plans to come in that and be able to compete in the
national pool. One of the ideas I had forming this commission
perhaps represented strongly by the various state health
insurance commissioners to see if they can reach some type of
agreement on what minimal standards should look like and
therefore have a national template.
I don't know if you have any thoughts, or I'm sure you do.
*Mr. DURENBERGER. Right. Just two comments on what you
said: first with regard to the role of the patient in the last
6, 12, and 24 months of life, which Dr. Wennberg has
demonstrated for us. Jack Wennberg has always been focused on
the relationship between the doctor and the patient. He started
with shared dialog. He moved to all of this data that Dartmouth
grinds out; and, today, he sent a recommendation to you to
consider changing the legal standard for liability in
healthcare to informed patient choice.
Informed patient choice means there is an obligation on the
doctor to access all available information that relates to that
patient's condition, to provide that to the patient, and then
have the patient make the choice and take the responsibility
for that choice. On the second point, Jeff Bingaman from New
Mexico, and I think it was '91 or '92 introduced the health
insurance purchasing cooperative bill.
Unfortunately for us that got picked up in Mrs. Clinton's
health plan, and like so many good things that were in Mrs.
Clinton's health plan, it died an unfortunate death. Nobody
brings it up anymore except folks who want to talk about
association health plans, which is a very different approach.
So, I would recommend to you to look at that, Health Insurance
Purchasing Cooperative, because it is basically a local way in
which to do large group purchasing and it serves the individual
and the small group market as well.
Mr. KIND. Just to stop you there, real quick. In fact,
we've got some pilot programs taking place in Wisconsin right
now targeting family farmers throughout the state. It was the
health insurance cooperative, and allowing them to pool
together, and it has been tremendously popular and just a
backlog of waiting lists developed right now. May just decided
to participate. There are like six or seven plans right now
participating in this program, and may just decided to
participate as well.
Thank you, Senator. It was good to hear from you.
*Mr. DURENBERGER. You are welcome. Thank you, very much.
Mr. KIND. Thank you, Mr. Chairman.
*Chairman STARK. I want to thank the gentleman from
Wisconsin, but I do want to suggest a political implication.
When he starts talking about this end of life savings,
you've got to remember that Senator Durenberger and I are very
concerned about turned indicators, satellite radio, two-tone
paint, little motorized scooters; and, if I thought you were
going to take that away from us.
Mr. KIND. It's a dangerous subject, Mr. Chairman.
*Chairman STARK. I'd tread carefully there.
Mr. Johnson, would you like to weigh in on that issue?
Mr. JOHNSON. Yeah, I'd love to have one of those motorized
deals.
[Laughter.]
Mr. JOHNSON. Thank you for being here Senator.
Let me just ask one thing. It seems to me the companies
that provide insurance for their employees do it with pre-tax
dollars, and yet individuals or small companies that can't
provide insurance have to buy it with after-tax dollars. This
Committee has an opportunity to fix that, and I wonder what
your thoughts are on that subject.
*Mr. DURENBERGER. I think you ought to fix it and there are
proposals around.
We talked earlier in the morning about the proposal that
Senator Wyden and Senator Bennett had put forward. We talked
about President Bush's proposal, which is an excellent one.
Thirty years I've been asking the same question you've been
asking and we haven't gotten to the point of changing it. I
think in my opinion, these are two good ways to change it.
One of the things I don't agree with in some of the
proposals is getting rid of the employer. I think the employer
is a vital part of the purchase and whole lot of other things.
This whole effort to go to health fitness and health management
and helping people become more productive persons, and so
forth, is really being driven by employer involvement in the
healthcare system.
You know, everybody walks around with no contribution from
their employer. It's too expensive to get any kind of coverage
unless you can keep those people involved.
Mr. JOHNSON. No, I think you are on target.
Thank you sir, I appreciate you being here.
Thank you, Mr. Chairman. I yield back.
*Chairman STARK. Thank you.
Mr. Emanuel, would you like to inquire?
Mr. EMANUEL. Thank you, Senator.
*Chairman STARK. You are welcome.
Mr. EMANUEL. That's all I got to say. Actually, I do want
to pick up with Ron and on the end of life.
I mean, if you look at healthcare, five Presidents have
tried universal care: Truman, Johnson, Nixon, Carter, and
Clinton. We're 0 for 5, but we've universalized care for
segments of the population: Medicare, Medicaid, Veterans. SCHIP
was an attempt at that.
You are always torn between trying to just do the system
and get it right, because I want to associate it myself with
what your comment is. There's a lot of money in the system. We
spent $2 Trillion on 300 million people and have life
expectancy of 73. The EU, which is similar population, spends a
trillion dollars yes and has life expectancy of 75.
If you were doing this smartly, you would just say ``we
ain't gettin' our bang for the buck'', if that's one
measurement. I'm always torn between just doing the whole
thing, hopin' for hope, that the six times a magic number, we
are then taking steps here that you have outlined. One is the
end of life. We do spend a preponderance of dollars on the last
six months of life.
Two, something Dave and I are working on, which is getting
people earlier in life, that is early retiree, 55, 65,
participating in a chronic illness management before they get
into Medicare, and they get reduced co-pays for every illness
or year they spend, whether it's smoking, diabetes, heart
blood, etcetera.
So, you reward the right type of behavior, and that's one
option to look at. The other thing is to invest in the IT and
get to the national standards you talked about and then
allowing people to compete once that kind of floor and
boundaries were set up.
Based on what you've seen in the history of reform where it
has succeeded and where it hasn't, what would guidance be given
the next congress and the next presidents. Go for the whole
thing, or try to make significant reforms, kind of early
retiree buy-in to Medicare and then alter that? I mean, take
kind of the piece-meal approach, or go for the ``Hail Mary''
pass and see if this time is different than the last 50 years.
*Mr. DURENBERGER. Back in 1988 long-term care financing was
the big political issue, and Claude Pepper wanted to create a
commission to deal with long-term care. Danny Rostenkowski said
right after we lost the Medicare Catastrophic Act, a step in
the direction of making some sense out of the Medicare program,
``No. It's got to be a commission for long-term care and
everything else.''
Out of that came the employer mandate. It did not come to
the answer to your question. We came with a solution. The
Republicans voted against it, but the AMA person and the
Democrats including Pete voted for it. Excuse me, Mr. Chairman.
Out of it came the employer mandate, which was, you know, it
was a solution or an answer, but it wasn't the answer to your
question.
We've always had this kind of debate between cost
containment. What belief about 2009 is the importance of the
President. It doesn't make any difference whether its
Republican, Democrat, or which Democrat. It is critical that
the President begin by giving all Americans a view of what is
possible in a country as rich as ours, as varied as ours, with
the entrepreneurship that we see in healthcare and medicine.
With a vision like that, people like you all can accomplish
a lot. Because with no vision, the status quo, you have, the
old business of what is one person's income is somebody else's
cost, or the reverse of that. So, I think leadership right now
is the biggest factor in getting to all this other stuff.
There's a lot of things we can talk about, but unless the
people are on board this thing, you know. You aren't going to
make it or you are going to lose it at some point, so that
leadership issue is my answer.
Mr. EMANUEL. I'd add one point and then I'll end, Mr.
Chairman.
The difference between the 90s and now, vis-a-vis household
income, where we saw a $6,000 rise in the nineties and an
$1,100 drop in median household income, all related to
healthcare. In fact, Americans got a raise in the last six
years. The problem is it all went to the health insurance
industry.
When you get healthcare costs for a family of four going
from 6,000 to 12,000, median income is dropping by 11,000. They
got a raise; it just went to the healthcare system. It didn't
go to their bottom line to meet other needs. Unless we do
something about this, we just double it again.
Thank you.
*Mr. DURENBERGER. You're welcome.
*Chairman STARK. Again, Dave, thank you very much. We are
going to take you up on your generous offer to help us as we
grind through this next year.
I appreciate you sharing your thoughts with us today.
*Mr. DURENBERGER. Thanks to all of you, Mr. Chairman.
*Chairman STARK. We will now in just a moment, we'll go off
the record for about 10 or 12 minutes and observe a video.
Perhaps while we are doing that, if the second panel would like
to come on up, I think you will be able to see the video from
the witness stand. Why don't we just start the video.
[Video.]
*Chairman STARK. Without, we will go back on the record. We
have a print script of that, and without objection, I ask that
we put the script in the record.
[A transcript of the video follows:]
[GRAPHIC] [TIFF OMITTED] 46779A.004
[GRAPHIC] [TIFF OMITTED] 46779A.005
[GRAPHIC] [TIFF OMITTED] 46779A.006
[GRAPHIC] [TIFF OMITTED] 46779A.007
*Chairman STARK. We will proceed with our second panel, and
they include Dr. Diane Rowland, who is familiar to all of us.
Diane has testified many times. She is vice president of the
Kaiser Family Foundation, which I am told to remind people has
nothing to do with Kaiser Permanente in my district, which
provides hundreds of thousands of people with medical care.
Dr. Ayanian, who is a professor of medicine and healthcare
policy at the Harvard Medical School.
Dr. Michael J. O'Grady, who is a senior follow of the
National Opinion Research Center at the University of Chicago.
Stan Brock, who we saw displayed just a few minutes ago;
and Stephen Finan, the associate director of policy for the
American Cancer Society.
Each of you have submitted testimony which will without
objection appear in the record in its entirety and we will ask
you each to summarize or expand upon your testimony in any
manner that you are comfortable.
We will start with Dr. Rowland.
STATEMENT OF DIANE ROWLAND, SC.D., EXECUTIVE VICE PRESIDENT,
KAISER FAMILY FOUNDATION
*Ms. ROWLAND. Thank you, Mr. Chairman, and Members of the
Subcommittee.
I am pleased to be here today and will try to put some
numbers to go with the very human experience you just saw in
the video.
Health insurance coverage can provide a valuable lever to
help gain access to primary and preventive healthcare services,
as well as piece of mind and financial security for many facing
serious healthcare problems. Yet, our latest statistics show
that nearly 47 million Americans were without health insurance
coverage in 2006.
Whether or not one receives healthcare coverage in the U.S.
today depends on a variety of factors: age, income, workplace,
and state of residence. For those over age 65 and those with
permanent disabilities, Medicare provides health insurance
protection. Slightly more than half of all Americans receive
employer-based coverage and about five percent purchase
coverage through the non-group or individual market.
Together, Medicaid and SCHIP play a critical role for the
low income population covering 29 million children and 24
million non-elderly adults and people with disabilities. This
leaves, however, one in six Americans, 16 percent of our
population, uninsured.
The 47 million uninsured Americans include 9 million
children primarily coming from low-wage, working families. 80
percent of the uninsured are from families with a full- or
part-time worker and two-thirds have incomes below 200 percent
of poverty or roughly $40,000 for a family of four.
Most work in places where health insurance is not offered
through their job, and the rising cost of health insurance
premiums, now over $12,000 for a family, means that if coverage
is offered, the employee's share of the premium is becoming
more and more unaffordable for working families.
Take for example one of the families participating in our
study on family budgets. Sam is uninsured and has just gotten a
job in a home improvement store. His wife, Carmen, is at home
with their three children. Once he becomes eligible for
employer-sponsored coverage, he will be required to pay $400
per month in his share of the insurance premium, which is a
quarter of his $1600 monthly take-home pay. Today, nearly 90
percent of the family spending already goes to basic
necessities, leaving little room in their budget, roughly $150
a month, for additional spending that could be used for
healthcare or to pay deductibles and cost sharing for the
health plan.
Yet, having health insurance matters. It affects how and
when people use the health system, and ultimately their health
and financial well being. The uninsured are much more likely to
postpone or forego care due to costs than those with coverage.
When they seek care, they are often billed full charge and left
to pay what they can, sometimes accumulating large medical
debts that can lead to bankruptcy.
Leaving 47 million Americans without health coverage
affects not only the uninsured, but also puts a growing burden
on our healthcare system and adds additional strain on the
economy. In 2006 it is estimated that some 22,000 Americans
died prematurely as a consequence of being uninsured, and the
lost productivity of the uninsured had an annualized, economic
cost of between 100 and 200 billion dollars.
As the availability, affordability, and scope of insurance
decrease, both insured and uninsured Americans are now dealing
with budget-consuming medical bills and debt. In 2004 some 45
million Americans were in families that had a high financial
burden for healthcare, i.e. spending more than 10 percent of
disposable family income on healthcare services and insurance
premiums. This financial burden provides a measure of
underinsurance.
Individuals at high risk for these levels of financial
burden include those 55 to 64 who are not yet eligible for
Medicare, those in fair or poor health, and especially those
with diabetes, stroke, heart disease, and other chronic
illnesses. It is clear that for many health insurance alone is
no longer a guarantee of financial protection from the cost of
healthcare and financial stress when illness strikes.
Health insurance is an important source of financial
security for families when illness strikes and helps to promote
access to healthcare services that can often stave off more
serious illness.
As Congress moves forward to address the growing uninsured
population and the impact of rising healthcare costs for
America's families, promoting improved access to affordable
healthcare and adequate health coverage for all Americans, will
be an important but challenging objective.
I appreciate the opportunity to testify before you today
and will welcome your questions at the conclusion of the panel.
Thank you.
[The prepared statement of Diane Rowland follows:]
Prepared Statement of Diane Rowland, Sc.D., Executive Vice President,
Kaiser Family Foundation
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*Chairman STARK. Dr. Ayanian?
STATEMENT OF JOHN Z. AYANIAN, M.D., PROFESSOR OF MEDICINE AND
HEALTH CARE POLICY, HARVARD MEDICAL SCHOOL
*Dr. AYANIAN. Thank you, Chairman Stark, Representative
Camp, and the Members of the Subcommittee on health for
inviting me to testify on the health consequences for Americans
who lack insurance and on the persistent problem of racial and
ethnic disparities in the U.S. healthcare system. These topics
are of vital importance to our Nation.
My name is John Ayanian, and I am a professor of medicine
and health care policy at Harvard Medical School. Over the past
16 years, I have studied the adverse effects Americans
experience when they lack health insurance, as well as racial
and ethnic disparities in healthcare.
From 2000 to 2004 I served on the Institute of Medicine
Committee on the Consequences of Uninsurance. I am also a
practicing physician at Brigham and Young Women's Hospital in
Boston, where I have seen first-hand how patients lives are
affected when they lose their insurance.
Uninsured Americans are much more likely than insured
Americans to avoid seeing a doctor because of the cost. Among
those in poor health, 50 to 70 percent of uninsured adults go
without needed medical care, compared with only about 20
percent of insured adults in poor health. Uninsured adults are
less likely to receive high quality primary care and important
preventive services, such as cholesterol testing and
mammograms. As a result, they are often unaware of their major
health risks, such as high blood pressure, high cholesterol,
and those with curable cancers such as breast cancer or colon
cancer, are diagnosed at a more severe stage of disease.
Because of their unstable and sporadic medical care,
uninsured adults have a much greater risk of dying at younger
ages than insured adults. The Institute of Medicine has
estimated that 18,000 Americans died prematurely in 2000
because they lacked health insurance. Sadly, many of these
premature deaths occur among people with conditions that are
readily treatable, including high blood pressure, HIV
infection, and breast cancer.
The instability of insurance coverage in the United States
has especially harsh effects for adults who are uninsured or
erratically insured between ages 55 and 64. About four million
adults in this age group were uninsured in 2006. For those who
have lost their coverage, finding insurance in the individual
market is often prohibitively expensive, if not impossible,
when they have pre-existing medical conditions.
As a physician, I see that people who receive good medical
care in their 50s and early 60s live longer and healthier
lives; however, recent research by our group and others has
shown that the health of uninsured adults declines more rapidly
in middle age than the health of insured adults. These declines
in health are associated with a 40 percent greater risk of
death for uninsured adults. This risk is concentrated among
uninsured adults with high blood pressure, diabetes or heart
disease, precisely the conditions for which we know good
medical care makes a difference.
But the evidence on this topic is not all grim. If
uninsured adults survive to age 65, Medicare improves their
access to physicians, medical tests and effective treatments.
In our most recent research, we have found that differences in
health between uninsured and insured adults with cardiovascular
disease or diabetes at age 65 are reduced by half after five
years of Medicare coverage. Our research also shows that after
these uninsured adults gain Medicare coverage, they experience
fewer heart attacks, less heart failure, and less severe chest
pain.
The status quo masks hidden cost to the Medicare Program
when millions of uninsured adults enroll in Medicare. Uninsured
adults, particularly those with chronic medical conditions,
have fewer visits to physicians and fewer hospitalizations than
insured adults in similar health before age 65. After becoming
eligible for Medicare, uninsured adults have a rapid increase
in physician visits and hospitalizations that persists for at
least seven years after age 65.
Their care in the Medicare Program is thus more costly,
because they reach age 65 in worse health and have more
immediate and expensive medical needs than if they had been
insured and well-treated in their fifties and sixties. If all
adults in this age group had insurance coverage, the cost of
covering them could be off-set by better health and potential
savings for the Medicare program.
The instability of insurance coverage in the U.S. is also
an important factor contributing to racial and ethnic
disparities in healthcare and health outcomes. Rates of
coverage very widely across racial and ethnic groups in the
United States with the highest rates of uninsurance among
African Americans, American Indians, and Hispanic Americans.
Without consistent insurance coverage, many minority Americans
receive fewer preventive services and less effective treatment
for many medical conditions.
In the latest national healthcare disparities report, three
key themes have emerged since 2001. First, overall disparities
in healthcare quality and access are not getting smaller.
Second, some progress is being made, but many of the biggest
gaps in quality and access have not been reduced. Third, the
problem of persistent uninsurance is a major barrier to
reducing disparities.
In conclusion, as you consider the instability of health
coverage in the United States, the financial challenge of
achieving universal coverage may appear daunting, but the human
and economic consequences of the status quo are substantial. To
put it bluntly, uninsured Americans live sicker and die quicker
because they receive too little medical care that often comes
too late to prevent avoidable complications and death.
Thank you for inviting me to speak with you today about
this important problem for our Nation.
[The prepared statement of John Ayanian, M.D. follows:]
Prepared Statement of John Z. Ayanian, MD, Professor of Medicine and
Health Care Policy, Harvard Medical School, Boston, Massachusetts
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*Chairman STARK. Thank you.
Dr. O'Grady?
STATEMENT OF MICHAEL J. O'GRADY, PH.D., SENIOR FELLOW, NATIONAL
OPINION RESEARCH CENTER, UNIVERSITY OF CHICAGO
*Mr. O'GRADY. Mr. Chairman, Members of the Subcommittee, my
name is Michael O'Grady, and I am a senior fellow at the
National Opinion Research Center at the University of Chicago.
Previously, I was the assistant secretary for planning and
evaluation at the Department of Health and Human Services. I
have also served on the professional staff of the Senate
Finance Committee, the Joint Economic Committee, and the
Congressional Research Service. In all of those roles I have
studied the problem of the uninsured.
First slide, please?
[Slide.]
*Mr. O'GRADY. An important point I urge you to keep in mind
is the uninsured are not one single population. Consider the
following: more than half of the uninsured who are of working
age are full-time workers. It is not only the unemployed who
lack insurance.
Second, those who work in small firms are far less likely
to have coverage than those in the larger firms.
Third, the uninsured are found at all income levels, but
most notably the poor and the near poor.
Four, the uninsured are found at all ages, except for
seniors, because of Medicare. Youth, 18 to 24, are the least
likely to be insured, and sometimes by their own choice.
Hispanics are the last likely to have insurance, followed
by blacks, Asians, and then whites. About 20 percent or 10
million people of the uninsured living in the United States are
not U.S. citizens.
Other than being uninsured, these individuals often have
very little else in common. Designing and evaluating proposals
to expand health insurance coverage is remarkably complex. It
is made even more difficult in the event that budget
constraints require tough choices about who will be assisted in
what way.
I offer two suggestions. First, consider coverage options
along several key policy dimensions. Second, consider the mix
of coverage tools for providing coverage to this very diverse
population.
Next slide please.
[Slide.]
*Mr. O'GRADY. The first dimension I recommend is the desire
for coverage. It can be broken down into at least three groups.
First, people who are desperate for coverage, such as the
chronically ill and are willing to pay almost any price if it
was only available. Second, those who seek coverage, but are
priced out of the market. They just can't afford it. Third,
people who do not seek coverage, even if it is available and
affordable.
Traditional definitions of universal coverage: provide
coverage to everyone, regardless of an individual's desire to
be covered. For example, the single, healthy, young adult who
isn't interested in health coverage at this point in life. On
the other hand, those following a phased approach might rank
some groups of the uninsured as a higher priority than others.
For example, they may be more concerned about an uninsured, 55-
year-old diabetic with complications than a young, healthy,
recent college graduate.
The second dimension I'd suggest is time without coverage.
The data on coverage indicates that the longer a person is
uninsured, the longer the potential gap in needed services. In
this example, higher priority might be given to those uninsured
for the longest period of time. For example, more than two
years.
The third dimension is citizenship status. There may be
neither the political consensus nor the budget to extend
coverage to all the people living in the United States. A
likely scenario might have coverage first off to citizens
before coverage would be considered for non-citizens, either
legally or illegally in the country. This chart provides a
visual way to think about the interactions among the three
policy dimensions I've just outlined.
People falling into the highest priority on all three
dimensions are assigned the highest overall priority of one.
While policymakers may differ on the assignment of priorities
or on the dimensions they wish to consider, this provides a
common framework on which to base decisions. In addition to
those policy dimensions, different policy tools may be needed
to meet the needs of these very different subpopulations.
For small business with moderate income employees, the
successful solution might include access to both purchasing
pools, so they have the same options as larger firms, and an
improved tax advantage to help them offset the cost of
coverage. For the uninsured without employment-based coverage,
it could be made more affordable if they had access to the same
tax advantages as employer-based coverage.
For immigrants, legal or illegal, that same combination of
incentives would probably not be as nearly as effective. Also,
especially for the illegal immigrants, it would seem unlikely
that expanded government programs would prove effective, asking
illegal immigrants to interact with government intake and
eligibility officials is unlikely to generate much trust or
compliance.
This subpopulation may be better served through a clinic
approach, which insures care, if not coverage, and is closer to
the model of care found in many of their home countries.
Policymakers will need to carefully consider the circumstances
of the subpopulation involved to judge which type of design
will be the most successful. The systematic examination of the
composition of the uninsured, a prioritization of those who
receive insurance assistance, and a review of the mix of tools
available to help the uninsured gain access to health care will
prove useful in shaping a scientifically sound and viable
policy for the future. Thank you.
[The prepared statement of Michael J. O'Grady follows:]
Prepared Statement of Michael O'Grady, Senior Fellow, National Opinion
Research Center, University of Chicago, Chicago, Illinois
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*Chairman STARK. Thank you very much, doctor.
Mr. Brock, what can you add to the wonderful program, which
we just viewed? Please.
STATEMENT OF STAN BROCK, FOUNDER AND VOLUNTEER DIRECTOR OF
OPERATIONS, REMOTE AREA MEDICAL, KNOXVILLE, TENNESSEE
*Mr. BROCK. I'll try. Thank you, sir.
Remote Area of Medical, often referred to the acronym, RAM,
was formed in 1985 as a tax-exempt 501(c)(3) publicly supported
organization headquartered in Knoxville, Tennessee. Its intent
was to provide airborne medical and veterinary relief for the
Wapishana indians, with whom I had lived for many years in a
remote area over the upper Amazon. However, observations at our
U.S. base in the heart of Appalachia revealed a substantial
need for RAM free services here at home. The need is massive
and it touches all regions of America, both rural and urban.
It's not limited to the homeless, unemployed, and uninsured. It
affects the working class and those who have insurance. Health
care in America has become a privilege of the wealthy and well-
insured.
More than 15 percent of America's population are uninsured,
and there are millions more who have insurance inadequate to
meet the needs of a catastrophic medical event or visits to the
dentist or eye doctor.
The RAM experience in hundreds of thousands of cases proves
huge numbers of Americans cannot afford routine dental care and
simply neglect their teeth. RAM data showed that our volunteer
dentists extract an overwhelming number of teeth that are
beyond repair. People tell us they face thousands of dollars of
dental work, and when we look in their mouths, we see cases as
bad as any discovered among the Amazonian tribal groups.
The state of vision care among those who visit RAM clinics
is no better. They can't afford an eye exam and if they had
one, can't afford the prescription glasses. No wonder hundreds,
sometimes a thousand people line up throughout the night before
a RAM-free clinic in an effort to get their teeth fixed and
obtain a free pair of glasses from us.
Services for children under the age of 18 usually are
covered by state programs, but access can be difficult. Toping
the list of reasons is government reimbursements are too low,
and paperwork too cumbersome to make it worthwhile.
Once people transition into adulthood, they are on their
own for dental and vision care, unless they're able to pay
large insurance premiums. I received a call last Sunday from a
38-year-old working mother of four in Kentucky. All five of the
family have serious dental problems. She has insurance through
her employer, but it has a $50 deductible, and when the plan
pays, she has to cover an unaffordable 20 percent co-payment.
Her 17-year-old needs his wisdom teeth extracted, but the plan
does not cover the $700 for the anesthesia. The mother needs
her own teeth extracted so she can get dentures. Oh, and the
family cat needs to be spayed. I told her to come to the RAM
clinic at Lincoln Memorial University at the end of May and
would fix everybody's teeth, and a RAM volunteer vet would spay
the cat, all free.
Why does the United States, the richest country on our
planet, have a health care system ranked No. 37 out 190
countries by the World Health Organization? We have the most
advanced technology accessible only to those who can afford it.
America's poor and the not-so-poor, who have some type of
insurance are suffering debilitating pain and health risk from
diseased teeth and are handicapped with vision problems that
are correctable, but not affordable.
When Britain was at war in 1941 the government realized
that they needed a national health care system, and in 1944
gave the minister of health and Aneurin Bevan a mandate to
develop it. I'm not advocating that the United States follow
Britain, France, Canada, Germany, or any other developed
country which has some form of national health care system;
however, I am convinced that the RAM experience with the
hundreds of thousands of patients we have seen that America
does need to provide free care for the millions who cannot
afford it, and free dental and vision care for the adults must
be included.
In closing, I would like to stress that a great impediment
to providing free care in this country is that willing
volunteer health care providers holding licenses in one state
are not allowed to provide free care in another.
Tennessee changed this in 1995 with the enactment of the
Volunteer Health Care Services Act. Under that law, any
charitable organization can bring volunteer medical workers and
vets licensed anywhere in the U.S. into Tennessee to provide
free care. House concurrent resolution No. 69 was introduced to
Congress in 1997 to encourage national adoption of the
Tennessee model. To our knowledge, it never got out of
Committee. If practitioners were allowed to cross state lines
to provide free care for those in need and had protection from
frivolous malpractice suits, the system of free care that RAM
has developed and proven throughout all these years, could be
replicated throughout America.
I'd like to thank the Committee for inviting me today, and
thank you, CBS, 60 Minutes, for dramatically focusing on this
national problem.
[The prepared statement of Stan Brock follows:]
Prepared Statement of Stan Brock, Founder and Volunteer Director of
Operations, Remote Area Medical, Knoxville, Tennessee
Remote Area Medical, often referred to by the acronym, ``RAM,'' was
formed in 1985 as a tax exempt 501c3 publicly supported organization
headquartered in Knoxville, TN. Its intent was to provide airborne
medical and veterinary relief for Wapishana Indians with whom I had
lived for many years in a remote area of the upper Amazon.
However, observations at our U.S. base in the heart of Appalachia
revealed a substantial need for RAM free services here at home. The
need is massive and it touches all regions of America both rural and
urban. It is not limited to the homeless, unemployed and uninsured. It
affects the working class and those who have insurance. Health care in
America has become a privilege of the wealthy and well-insured.
More than 15 percent of America's population are uninsured and
there are millions more who have insurance inadequate to meet the needs
of a catastrophic medical event or visits to the dentist or eye doctor.
The RAM experience in hundreds of thousands of cases proves huge
numbers of Americans cannot afford routine dental care and simply
neglect their teeth. RAM data show that our volunteer dentists extract
an overwhelming number of teeth that are beyond repair. People tell us
they face thousands of dollars of dental work and, when we look in
their mouths, we see cases as bad as any discovered among the Amazonian
tribal groups.
The state of vision care among those who visit RAM clinics is no
better. They cannot afford an eye exam and, if they had one, cannot
afford the prescription eyeglasses.
No wonder hundreds--sometimes a thousand--people line up throughout
the night before a RAM free clinic in an effort to get their teeth
fixed and obtain a free pair of eyeglasses from us.
Services for children under the age of 18 usually are covered by
state programs, but access can be difficult. Topping the list of
reasons is government reimbursements are too low and paperwork too
cumbersome to make it worthwhile. Once people transition into
adulthood, they are on their own for dental and vision care unless they
are able to pay large insurance premiums.
I received a call last Sunday from a 38-year-old working mother of
four in Kentucky. All five of them have serious dental problems. She
has insurance through her employer but it has a $50 deductible and,
when the plan pays, she has to cover an unaffordable 20 percent co-
payment. Her 17-year-old needs his wisdom teeth extracted but the plan
does not cover the $700 cost for the anesthesia. The mother needs her
own teeth extracted so she can get dentures. Oh, and the family cat
needs to be spayed. I told her to come to the RAM clinic at Lincoln
Memorial University at the end of May and we would fix everybody's
teeth and a RAM volunteer veterinarian would spay the cat--all free.
Why does the United States, the richest country on our planet, have
a health care system ranked number 37 out of 190 countries by the World
Health Organization? We have the most advanced technology accessible
only to those who can afford it.
America's poor, and the not-so-poor who have some type of
insurance, are suffering debilitating pain and health risk from
diseased teeth and are handicapped with vision problems which are
correctable but not affordable.
When Britain was at war in 1941, the Government realized they
needed a national health care system and in 1944, gave the Minister of
Health, Aneurin Bevan, a mandate to develop it. I am not advocating
that the United States follow Great Britain, France, Canada, Germany or
any other developed country which has some form of national health care
system. However, I am convinced by the RAM experience with the hundreds
of thousands of patients we have seen that America does need to provide
free care for the millions who cannot afford it and free dental and
vision care for adults must be included.
In closing, I would like to stress that a great impediment to
providing free care in this country is that willing volunteer health
care providers holding licenses in one state are not allowed to provide
free care in another state. Tennessee changed this in 1995 with the
enactment of the Volunteer Health Care Services Act. Under that law,
any charitable organization can bring volunteer medical workers and
veterinarians licensed anywhere in the United States into Tennessee to
provide free care. House Concurrent Resolution No. 69 was introduced to
Congress in 1997 to encourage national adoption of the Tennessee model.
To our knowledge, it never got out of committee.
If practitioners were allowed to cross state lines to provide free
care for those in need, and had protection from frivolous malpractice
suits, the system of free care that RAM has developed and proven
throughout all these years could be replicated throughout America.
*Chairman STARK. Thank you, Mr. Brock.
Mr. Finan, would you?
STATEMENT OF STEPHEN FINAN, ASSOCIATE DIRECTOR OF POLICY,
AMERICAN CANCER SOCIETY
*Mr. FINAN. Good morning, Mr. Chairman, Mr. Camp, and
distinguished Members of the Committee. Thank you for inviting
the American Cancer Society year to testify today. The American
Cancer Society is a nation-wide, community-based voluntary
health organization dedicated to eliminating cancer. The
Society and its sister advocacy organization, the American
Cancer Society Cancer Action Network, are working together to
elevate the issue of access to care and its impact on cancer
patients and their families.
I would like to begin my discussion of inadequate health
insurance by sharing Doreen's story with you. Doreen, a 57-
year-old former medical office receptionist, was diagnosed with
stage IV breast cancer in the fall of 2005. The cancer spread
to her spinal column, liver, lungs, and left femur.
Doreen's husband is a retired New York policeman, and she
has health insurance through his retirement plan. Her plan
limited her to thirty outpatient visits a year, a number Doreen
quickly exceeded. Her plan had other restrictions as well,
including a limit that initially prevented her from getting a
stent for her chemotherapy. She was ultimately allowed to have
the procedure for the stent, but only after a delay. She also
learned of some of these restrictions from her plan, only after
she had exceeded them. As a result, in less than a year Doreen
and her husband owed more than $100,000 to the hospital for
various treatments. These significant restrictions resulted in
delays in treatment and great emotional stress that further
jeopardized her health.
As defined by the Society, adequate health insurance
insures timely access to the full range of evidence-based
health care services necessary to maintain health, avoid
disease, overcome acute illness, and live with a chronic
condition. These services include the complete continuum of
evidence-based cancer care for preventing treatment and support
needs, including clinical trials.
Doreen is one of 16,000 people who have called the American
Cancer Society because she had problems with her private health
insurance. The primary problems we have identified among those
with inadequate health insurance include annular life-time
dollar limits or restrictions on necessary services, like
Doreen experienced; no or limited coverage within the plan for
out-of-network specialists, limiting the patient's ability to
access care; no or limited coverage within the plan for
prescription drugs.
But the biggest single issue we see is related to cost
sharing. Nearly two-thirds have trouble meeting deductibles,
paying their co-insurance for prescription drugs and treatment,
and covering costs for necessary services not covered by their
plan.
Let me illustrate the cost-sharing problem with Martha's
story. Martha, a 63-year old retired woman, was diagnosed with
stage I breast cancer in November of 2007. Martha's cancer
treatment included surgery followed by radiation. Martha has
health insurance but the policy is inadequate. For example, the
insurance paid $100,000 of a $10,000 hospital bill for her
surgery. Her accumulated deductibles and co-pays for various
medical services have left her with $28,000 in medical debt and
the hospital is threatening her with a collection agency.
Co-pays and deductibles may be reasonable or routine care,
but when a person has a serious medical condition like cancer,
the accumulated expenses can become very significant. Today
Martha is struggling with keeping her head above water
financially.
Some of the most disheartening kinds of stories we hear are
from people who have had to interrupt their treatment because
of inadequate coverage. We logged nearly 900 such cases last
year. Please think about this for a minute. These are people
who have stopped treatment for a deadly disease because they
cannot afford to pay for additional necessary care.
For them a decision to delay treatment is often a life-or-
death decision, but if they proceed, they risk breaking
themselves and their families financially.
More formal studies support our experience. For example,
nearly 1 in 3 cancer patients who are insured have out-of-
pocket costs that exceed 10 percent of their family income.
More than 1 in 9 cancer patients with insurance have out-of-
pocket health costs that exceed 20 percent of their family
income. Twenty percent of cancer patients with insurance use
all or most of their savings when dealing with their financial
costs of cancer. And 10 percent of medical bankruptcies are
from people who have had a cancer diagnosis.
The problem of under-insurance is very difficult to
measure, but we know the problem is very real for many cancer
patients. This should be a concern to everyone, because cancer
can touch us all. Slightly less than 1 in 2 men will have
cancer in their lifetime, and slightly more than 1 in 3 women
will.
Although I've focused on the issue of adequacy of
insurance, the American Cancer Society is also greatly
concerned about the problems of the uninsured which the other
witnesses this morning have addressed. We believe that the
science and the knowledge exist to provide quality care for all
Americans, but we must work together to restructure our
coverage and delivery systems to achieve that goal. Your
hearing today is a valuable contribution to that discussion.
Thank you, Mr. Chairman.
[The prepared statement of Stephen Finan follows:]
Prepared Statement of Stephen Finan, Associate Director of Policy,
American Cancer Society
Good morning, Mr. Chairman and distinguished Members of the
Committee. My name is Stephen Finan, Associate Director of Policy for
the American Cancer Society. The American Cancer Society is a
nationwide, community-based, voluntary health organization, dedicated
to eliminating cancer as a major health problem by preventing cancer,
saving lives, and diminishing suffering from cancer through research,
education, advocacy, and services.
Thank you for inviting the American Cancer Society to testify. As
you may know, ACS, and its sister advocacy organization the American
Cancer Society Cancer Action Network (ACS CAN) are working together to
elevate the issue of access to care and its impact on cancer patients
and their families by educating the public and policymakers about
problems in the health care system and the need for change. We look
forward to working with this Subcommittee as you work toward solutions
to improve and expand access to quality care.
This morning you are listening to other speakers on the panel
describe the problem of availability of health insurance. Although we
fully share that concern, I would like to take this time to shed light
on the under-appreciated, and at times overlooked, problem of adequacy
of insurance. I would like to paint a picture--all too common in
America--of how cancer patients and survivors with inadequate insurance
face barriers and financial burdens in getting the quality health care
they need to fight their dreadful disease.
Doreen's Struggle With Inadequate Insurance Coverage
Let me begin our discussion of inadequate insured by sharing
Doreen's story with you. Doreen, a 57-year-old former medical office
receptionist, was diagnosed with Stage IV breast cancer in the fall of
2005. The cancer metastasized to her spinal column, liver, lungs, and
left femur. Doreen and her husband, a retired New York City police
officer, have health insurance through his retirement plan. The
insurance covers 30 outpatient visits a year, a number Doreen quickly
exceeded after beginning treatment for her cancer. After she reached
this annual limit, she was billed $5,000 a week for chemotherapy
treatments. In less than a year, Doreen and her husband owed more than
$100,000 to the hospital for her treatment. By the time Doreen's
insurance company informed her that she had exceeded her maximum number
of outpatient visits, she had already made additional visits the plan
would not cover. Fortunately for Doreen, she spoke at an American
Cancer Society event about her inadequate insurance and the story ran
in the Long Island Newsday. Upon reading the article, the insurer
reversed the decision and paid Doreen's medical bills in full. While
Doreen's story turned out well, countless others are not as fortunate
to have a platform to share their story.
It was stories like Doreen's and the countless stories of uninsured
Americans' struggle with this dreadful disease that brought the
American Cancer Society to the conclusion that we had to enter the
broader national debate about access to care.
Defining Adequate Health Insurance
As defined by the Society, adequate health insurance ensures timely
access to the full range of evidence-based health care services (i.e.,
rational, science-based, patient-centered)--including prevention and
primary care--necessary to maintain health, avoid disease, overcome
acute illness, and live with chronic illness. These services include
the complete continuum of evidence-based cancer care for treatment and
support needs including clinical trials. Coverage should be
comprehensive and protect the individual from incurring catastrophic
expenditures.
Little Help Available for Those With Inadequate Insurance
The stories we are giving you come from our Health Insurance
Assistance Service (HIAS), which is a service offered through the
American Cancer Society's National Cancer Information Center (NCIC).
HIAS is a free resource that connects callers with health insurance
specialists who work to address their needs. The specialists at NCIC
handle inquiries about health insurance, coverage dynamics, and state
programs--all specific to the caller's needs. To date HIAS has captured
almost 16,000 cases from 32 states, with plans to expand the program to
other states.
The volume and type of calls received are captured as part of an
internal database that allows for analysis of trends and emerging
issues. While the database is not systematic or representative of all
Americans, the volume and type of calls we receive identify serious
problems that exist in our insurance system today. A recent analysis of
the cases in the database revealed interesting information about cancer
patients who have inadequate health insurance. In general, the Society
is able to assist 1 in 6 cancer patients who contact HIAS about their
health insurance problems. In the cases where we were unable to help
the cancer patient, we can identify barriers in the current health
insurance system facing cancer patients.
HIAS receives calls from individuals who are uninsured, those who
are transitioning between plans, and cancer patients who are currently
insured. Many of these callers are people who have been recently
diagnosed or who are in treatment for cancer.
The problems we have specifically identified among those with
inadequate insurance include:
Annual or lifetime benefit limits within the plan that
results in the patient not being able to access further cancer care
without incurring medical debt.
No or limited coverage within the plan for out-of-network
specialists, limiting the patient's ability to access quality cancer
care.
No or limited coverage within the plan for prescription
drugs or treatments.
Mounting, affordable co-pays or co-insurance.
For these callers, there is seldom help available to solve their
problems. Unfortunately, there are few safety net options for the
under-insured.
The biggest single issue is related to cost-sharing being too high.
Nearly two-thirds (63 percent) stated cost-sharing as their primary
reason to call HIAS. These callers had trouble meeting deductibles,
paying their co-insurance for prescription drugs and treatment, and
covering costs for physician visits and non-network specialty care.
Martha's Financial Struggle With High Cost-Sharing
I would like to share a story from HIAS of a cancer patient who was
insured and struggled financially because of the high cost-sharing for
covered benefits. Martha, a 63-year-old retired woman, was diagnosed
with Stage I breast cancer in November 2007. For her cancer treatment,
Martha had surgery followed by radiation. Martha is now post-treatment,
but still needs periodic follow-up visits to her oncologist to monitor
for recurrence. Martha has a health insurance policy, but the policy is
inadequate for her needs. For example, the insurance paid $1,000 of a
$10,000 hospital bill for her surgery. Martha said she is $28,000 in
medical debt due to her cancer diagnosis, and the hospital is
threatening her with a collection agency. Martha lives in a state that
has a medically underwritten individual insurance market, so it is
unlikely she would be offered another policy. Martha beat her cancer,
but now she is struggling with keeping her head above water
financially.
Patients Interrupting Treatment Because of Inadequate Coverage
Some of the most disheartening kind of stories we hear come from
people who have had to interrupt their treatment because of inadequate
coverage. Nearly 900 of the cases logged in the last year have involved
cancer patients interrupting their treatment, meaning they elect to
stop their treatment before it has been completed. Please think about
this for a moment--these are people who stop treatment for a deadly
disease because they cannot afford to pay. The consequences of this
decision could be detrimental to their health and may very well be a
life or death situation.
Another common problem we see involves pre-existing condition
restrictions on coverage. Although this is an access problem, it can
also be viewed as an adequacy issue. If the caller has a current cancer
diagnosis or a history of cancer, insurers may limit their coverage by
imposing a pre-existing exclusion period. These exclusions eliminate
all coverage for cancer-related health care for the duration of the
exclusion period--usually 6-12 months, but sometimes permanently,
depending on the coverage type. Pre-existing condition exclusion
periods are a leading reason why HIAS callers do not enroll in coverage
options available to them. They cannot afford to pay for premiums
without receiving coverage for their cancer.
Let me share a story illustrating the adequacy problems related to
the exclusion of pre-existing conditions. Thomas, a 35-year-old married
father of three, was diagnosed with testicular cancer in March 2004. At
the time, he was insured and able to get the appropriate care to
successfully treat his cancer with surgery and radiation. Thomas' wife
called HIAS because Thomas was without insurance and needed follow-up
care to ensure his cancer remained in remission. Thomas could not
receive the follow-up tests, which cost more than $2,500, without
insurance or a means to pay. Since his remission, Thomas started his
own business and lost his previous coverage. He attempted to get
coverage in the individual market, but due to medically underwriting he
was denied several insurance policies. Thomas was eligible for the
state high risk pool; however, Thomas said the 12-month pre-existing
exclusion period renders this option not viable. Thomas remains
uninsured and unable to access the follow-up care to monitor his
health.
Cancer and the ``Under-Insured''
The problem of paying costly medical bills affects middle-class
families, particularly those with chronic diseases such as cancer.
Often insurance policy deductibles, co-payments and limits on health
services may leave cancer patients without access to the timely,
lifesaving treatment they need. Cancer patients may have to deal with
major financial burdens because of out-of-pocket costs in addition to
their cancer diagnosis. We receive calls everyday from cancer patients
with these problems and published research is available that supports
these problems of inadequate and unaffordable insurance as illustrated
through the HIAS stories.
A recent study analyzing data from the Medical Expenditures Panel
Survey (MEPS) shows the breadth of this kind of financial problem.\1\
The MEPS household survey, sponsored by the Agency for Health Care
Research and Quality (AHRQ), collects information from the non-elderly,
non-institutionalized U.S. population. The survey asks American
families questions about health insurance coverage, health care
utilization, and health care expenditures. In this study, the
researchers defined ``under-insured'' as people with insurance spending
10 percent or more of their tax-adjusted family income on health care
services, including insurance premiums. Nearly 1 in 3 (28.8 percent)
cancer patients who are insured have an out-of-pocket health care
burden that exceeds 10 percent of their family income. More than 1 in 9
cancer patients with insurance have out-of-pocket health care burdens
exceeding 20 percent of their family income in health care
expenditures.
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\1\ Banthin JS, Bernard DM. Changes in financial burdens for health
care: National estimates for the population younger than 65 years, 1996
to 2003. JAMA 2006; 296: 2712-19.
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Cancer patients who have inadequate coverage have higher medical
costs and must deal with the additional stress of financial
instability. A survey of cancer patients and their families found that
one in five cancer patients with insurance uses all or most of their
savings when dealing with the financial costs of cancer.\2\ Another
study found that more than one in five people with chronic conditions
have problems paying medical bills. Furthermore, the incidence of
burdensome out-of-pocket spending among low-income, privately insured
people with chronic conditions is rising dramatically.\3\
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\2\ USA Today, the Kaiser Family Foundation, the Harvard School of
Public Health. National survey of households affected by cancer, August
1-September 14, 2006.
\3\ Tu HT. Rising health costs, medical debt, and chronic
conditions. Center for Studying Health System Change Issue Brief No.
88, September 2004.
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Medical debt has been an important cause of bankruptcy filing in
the U.S. An analysis of national survey data found nearly six of ten
adults who had current-year difficulty paying medical bills and 70
percent of those reporting medical debt said they were insured at the
time their problems began.\4\ Another study examined the causes of
bankruptcy and found that 1.9-2.2 million Americans experienced
bankruptcy related to medical problems in 2001.\5\ Among those with
illnesses that led to bankruptcy, their out-of-pocket costs average
$11,854 and three-quarters had insurance at the time of their
diagnosis.
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\4\ Doty MM, Edwards JN, Holgren AL. Seeing red: Americans driven
into debt by medical bills. The Commonwealth Fund, August 2005.
\5\ Himmelstein DB, Warren E, Thorne D, Woolhandler S. Illness and
injury as contributors to bankruptcy. Health Aff 2005; Web exclusive:
63-73.
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Despite having insurance, many cancer patients and survivors
experience major financial burdens. The situation of the ``under-
insured'' is difficult to measure because wide variation exists among
health insurance plans and people do not realize they are ``under-
insured'' until they have a health crisis such as cancer. Furthermore,
studies like the one I previously mentioned use a narrow definition to
measure the number of ``under-insured''--that is, they do not include
those who stop or delay treatment because they will not be able to
afford it. While we use these studies to talk about the ``under-
insured,'' they do not fully capture the nature and extent of the
problem.
American Cancer Society's Commitment to Access to Care
Our testimony this morning focused on the issue of adequacy, but
the American Cancer Society is also greatly concerned about the
problems of the uninsured, which the other witnesses this morning are
addressing.
We have made significant progress in recent years in addressing the
cancer problem. Cancer death rates have decreased by 18.4 percent among
men and 10.5 percent among women since the early 1990s. Despite this
significant progress, the American Cancer Society realizes that its
long-term goals of reducing the incidence and mortality of cancer
cannot be achieved unless the gaps that exist within the current health
care system are addressed. The challenge lies in the fact that our
health care system is not up to the task.
A recent American Cancer Society study of 12 types of cancer among
more than 3.5 million cancer patients dramatically demonstrates the
problem of access today for uninsured cancer patients.\6\ The study
found uninsured patients were significantly more likely to present with
advanced stage cancer compared to patients with private insurance. The
study found consistent associations between insurance status and stage
at diagnosis across multiple cancer sites. Compared to patients with
private insurance, uninsured patients had significantly increased
likelihoods of being diagnosed with cancer at more advanced stages. The
greatest risk for diagnosis with moderately advanced cancer (stage II)
instead of the earliest stage (stage I) was in colorectal cancer, while
the highest risk for diagnosis at the most advanced stage of cancer
(stage III/IV) was in breast cancer. The study shows that too many
cancer patients are being diagnosed too late, when treatment is more
difficult, more expensive, and has less chance of saving lives.
---------------------------------------------------------------------------
\6\ Halpern MT, Ward EM, Pavluck AL, Schrag NM, Bian J, et al.
Association of Insurance Status and Ethnicity with Cancer Stage at
Diagnosis for 12 Cancer Sites: A Retrospective Analysis. Lancet
Oncology 2008; 9:222-31.
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We know that individuals and families who are uninsured or have
inadequate insurance often go without preventive care despite research
showing that early detection and timely treatment are effective in
improving outcomes.
We know that cancer patients who are uninsured or have inadequate
insurance often do not receive necessary and appropriate treatment in a
timely manner, and that they have worse health because of these
problems.
And we know we cannot meet the American Cancer Society's goals of
reducing cancer mortality by 25 percent and cancer incidence by 50
percent by 2015 if we don't achieve greater improvements in our
nation's coverage and health care delivery systems.
The recognition of these problems for cancer patients led the
American Cancer Society to decide to enter the broader national debate
on health care reform. Last year, the Society developed evidence-based
principles defining meaningful health insurance to be adequate,
available, affordable, and administratively simple without regard to
health status or risk. These guiding principles, known as the 4As, are
essential to any health care reform. (The principles are attached as
Appendix A.)
Conclusion
Cancer death rates are decreasing and we know what we must do as a
nation to defeat cancer. Much of the public debate today is about the
need to cover the 47 million uninsured, and the American Cancer Society
fully shares that concern. However, we need to recognize more fully the
very significant problem of underinsurance. Health plans vary
enormously in their deductibles, co-pays, benefits covered, and
exceptions. Insurance plans are written in very detailed legalistic
language that very few lay people can begin to comprehend, and the
summary plan documents that are provided to enrollees almost never
begin to convey the adequacy of coverage. Put another way, if you were
to look at an array of plans that might be available to you as a
consumer, and you were to ask, what would be the adequacy of your
coverage if you were to be diagnosed with cancer or some other serious
disease, you would probably conclude that you have no idea whether the
plan would be adequate. As we see all too often in our HIAS cases,
people often discover after their diagnosis what their plan really
means--and that is a point where for most patients it is virtually
impossible to change coverage. As an appendix to my testimony, I am
including additional stories that highlight the problems of the
inadequately insured. (The stories are attached as Appendix B.)
In adopting our principles for meaningful health insurance--our
4As--we said that adequacy should cover the full array of necessary
services, from early detection through treatment and survivorship, but
we did not attempt to define the specifics of an adequate plan. Rather,
our goal is to stimulate a public discussion that will lead to a broad
consensus. We want to raise the issues through the campaigns this year
and carry the discussion forward at the Federal and State level as
legislative reform efforts are developed. We believe the science and
the knowledge exist to provide quality health care for all Americans,
but we must work together to restructure our coverage and delivery
systems to achieve that goal. Your hearing today is a valuable
contribution to that discussion.
Thank you.
Appendix A:
American Cancer Society Statement of Principles on What Constitutes
Meaningful Health Insurance
The American Cancer Society is the nationwide community-based
voluntary health organization dedicated to eliminating cancer as a
major health problem by preventing cancer, saving lives and diminishing
suffering from cancer, through research, education, advocacy, and
service. The American Cancer Society has set ambitious goals for
significantly reducing the rates of cancer incidence and mortality
along with measurably improving the quality of life for all people with
cancer.
``The ultimate conquest of cancer in America is as much a public
policy aspiration as it is a scientific and medical challenge. There
are many stakeholders in the cancer fight actively doing their part to
defeat this disease, but it cannot be done without the sustained
leadership and strong commitment of government. We are poised to make
gains so substantial that we now can talk about a time when cancer is
no longer a killer and is instead just a chronic condition, or even
better, a disease for which a cure is a realistic, frequently achieved
goal. Our nation's current health care system is not up to this
challenge. If we are to ultimately conquer cancer our system must
ensure that all Americans have access to high quality care.'' \7\
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\7\ Dr. John Seffrin, American Cancer Society CEO, Statement to ACS
Board of Directors during January 2006 meeting.
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Improving the nation's health care system requires a new
partnership for the nation that will facilitate the coverage and
delivery of quality evidence-based cancer care and work to eliminate
disparities and inequities in the current system. This will require a
commitment from the private, public, and not-for-profit sectors and
individuals. Stakeholders in the health care system, from doctors,
hospitals, and insurers, to employers, and not-for-profit
organizations, all have critical roles to play. All Americans have an
obligation, as well, to take responsibility for their own health to the
extent possible, by pursuing healthy lifestyles, and educating
themselves about their health needs, including ways to prevent and
detect cancer.
A critical aspect of improving the health care system is to define
and ensure access to meaningful public or private insurance. This
includes adequate financing. Our nation has had much conversation on
the insured and uninsured and less on what it means to be meaningfully
insured. Below is the statement of the American Cancer Society on what
constitutes meaningful health insurance.
Statement of Principles
It is a fundamental principle of the American Cancer Society that
everyone should have meaningful public or private health
insurance.
Meaningful health insurance is adequate, affordable, available and
administratively simple.
Adequate health insurance means:
timely access and coverage of the complete continuum of
quality, evidence-based healthcare services (i.e., rational, science-
based, patient-centered), including prevention and early detection,
diagnosis, and treatment
supportive services should be available as appropriate,
including access to clinical trials, chronic disease management, and
palliative care
coverage with sufficient annual and lifetime benefits to
cover catastrophic expenditures
Available health insurance means:
coverage will be available regardless of health status,
or claims history
policies are renewable
coverage is continuous
Affordable health insurance means:
costs, including premiums, deductibles, co-pays, and
total out-of-pocket expenditure limits, are not excessive and are based
on the family's or individual's ability to pay
premium pricing is not based on health status or claims
experience
Administratively simple health insurance means:
clear, up-front explanations of covered benefits,
financial liability, billing procedures, and processes for filing
claims, grievances, and appeals are easily understood and timely, and
required forms are readily comprehensible by consumers, providers and
regulators
consumers can reasonably compare and contrast the
different health insurance plans available and can navigate health
insurance transactions and transitions
Appendix B: Stories from Cancer Patients on the Adequacy of Health
Insurance
Since 2005, the Society has documented real stories from cancer
patients who have had trouble accessing adequate coverage. These case
studies reflect actual cases of cancer patients who called the American
Cancer Society National Cancer Information Center for advice navigating
the health care system and solving coverage problems.
Randy, 63 years old, Pennsylvania
Following his diagnosis with Stage IV esophageal cancer, Randy had
surgery to remove his esophagus and stomach. Radiation and intense
chemotherapy followed. Randy quickly reached the $100,000 lifetime cap
on his major medical coverage and now receives no further benefits. He
has paid out of pocket for follow-up scans and labs to monitor his
condition. Because he had 18 months of continuous, creditable coverage,
Randy would've been eligible by Federal law for a policy with no pre-
exclusionary period. However, he wasn't aware of the option until after
it had expired. Meanwhile, Randy and his wife are ineligible for
AdultBasic or Medicaid, and he is unlikely to get private insurance due
to medical underwriting. Randy's only option, a guaranteed issue
policy, includes a pre-existing condition exclusionary period of up to
three years. The policy allows for riders that could modify the
benefits and conditions of his coverage. Ultimately, Randy will have to
wait two years to become Medicare eligible. He has no other choice.
Valerie, 34 years old, Georgia
Valerie, a mother and wife, is a contract worker for a small
staffing agency. Her husband, Jeff, is a car salesman. The family's
income fluctuates based on her workload and his commission. Valerie was
recently diagnosed with Stage IV breast cancer and is currently
undergoing treatment. She has employee-sponsored insurance through the
staffing agency, but she quickly met the plan's $10,000 yearly maximum
benefit. She now owes $6,000 in bills to her oncologist's office and is
responsible for the cost of her treatments moving forward. Those
treatments include three more rounds of chemotherapy and potentially
radiation or surgery. Valerie doesn't want to change insurance, largely
because the other members of her family are covered under her plan.
Jeff doesn't have access to employee-sponsored insurance at his job.
Valerie will likely be denied insurance in the individual market
because of medical underwriting. Therefore, she can't buy a
supplemental policy to cover her chemotherapy. She will continue paying
her considerable treatment costs out of pocket.
Kay, 61 years old, Florida
Kay works part time at a large department store earning $13,000 per
year. She has insurance through her employer but quickly exceeded the
plan's $25,000 annual maximum following her diagnosis with Stage II
breast cancer. She has received eight cycles of pre-operative
chemotherapy, had a lumpectomy with auxiliary lymph node dissection,
and now needs radiation. Kay already has $40,000 in outstanding medical
bills from various diagnostic tests that were not covered. Now she's
been told that she cannot begin radiation unless she plans to bring
$115,000 with her to the first appointment. Kay's Medicaid application
is pending; it will take months before she learns if help is available.
Meanwhile, she will likely be denied private insurance because of
medical underwriting. Kay has no adequate insurance options.
Bettie, 57 years old, Florida
Bettie works at a toll both in Florida. She exceeded the $50,000
annual maximum on her employer-sponsored insurance within six weeks of
her breast cancer diagnosis. Bettie had a lumpectomy followed by
auxiliary dissection of her underarm lymph nodes. She has been unable
to start radiation treatments and is now uninsured; her plan was
terminated when her employer changed parent companies. Bettie has been
told that she cannot enroll in the new employee-sponsored plan until
she returns from short-term disability. She is currently caring for her
husband, a double amputee, and spending many hours searching for a way
to afford her radiation treatments.
Andrew, 19 years old, Rhode Island
Andrew was recently diagnosed with Hodgkin lymphoma. He is on leave
from his landscaping job and receives $641 per month in unemployment
compensation. Andrew's outstanding medical bills currently total
between $15,000 and $20,000. He has private insurance but his
treatments sometimes exceed the policy's limit of $1,000 per day for
chemotherapy. The insurance also does not cover many of his hospital
costs. Andrew's boss has offered him a different insurance policy once
he returns to work. Andrew will elect the new coverage option when the
time comes. However, his medical debt will remain.
Donna, 45 years old, Ohio
Donna has two children. She works full time, and her annual income
is $27,000. She was recently diagnosed with breast cancer. Donna does
have health insurance, a major medical individual policy that she
purchased after her company ended its group plan. However, she quickly
met the $10,000 limit on outpatient services under her new plan.
Donna's treatment, including 15 chemotherapy sessions, has left her
with more than $100,000 in outstanding medical bills. Donna is
uncertain how she is going to pay the debt and handle future out-of-
pocket costs. She had been supplementing her income through a second,
part-time job but had to give that up once her chemotherapy began.
Donna's hoping she can get one of Ohio's guaranteed issue policies,
which are limited by enrollment caps. The plans are only available
during an annual 30-day open enrollment period, so Donna will wait to
see what happens. She has no insurance options otherwise.
*Chairman STARK. Thank you. I had agreed that I would yield
my first chance to inquire to Mr. Thompson. Would you like to
inquire, Mr. Thompson?
Mr. THOMPSON. Thank you very much, Mr. Chairman. I
appreciate your generosity, and thank you to all of the
witnesses who are here today. Mr. Finan, I'd like to pick up
where you left off. I'm a huge proponent of preventive care, an
area where I see there is a huge problem is the barriers that
seniors face in regard to getting preventive care in the form
of cancer screenings and such. It seems to me that someone's a
senior in many instances their disposable income numbers are
going down, and right now sadly at the same time that the costs
for food and gasoline and energy and everything else is going
up, I'm concerned that copayments and co-insurance payments are
having an impact, a negative impact, in providing a barrier to
these preventive services. That's had an impact on things like
cancer screening, which costs us more money in the long run.
Anything you want to add to that? Push your button, please.
*Chairman STARK. Your mike please, Mr. Finan?
*Mr. FINAN. Yes, I would. First of all I want to thank you
very much for your continued support on this issue. We totally
agree with you that it is a significant problem, and we are
totally supportive of your legislative efforts in this area.
I'd like to point out that there was an article recently in
the New England Journal of Medicine that looked at the issue of
co-pays and preventive services among the Medicare population;
and they found that even a co-pay as little as $10 resulted in
about an 8 percent decline in the number of women who sought
mammograms. So, it does suggest that there's enormous price
sensitivity among the elderly to these kinds of services.
Mr. THOMPSON. Then we pay for it at the other end, when it
becomes an acute problem.
*Mr. FINAN. Exactly. Here for $10 we see a decline in women
getting the mammograms, and yet, as you just point out, the
cost if they're not getting them could be extraordinarily high.
Mr. THOMPSON. Thank you. Dr. Ayanian? Thanks. On the other
end of the spectrum, on the other end of the age spectrum, the
issue of preventive care for children. When I was in the state
legislature, I had success with legislation that required all
providers to provide health care for kids, preventive health
care for kids from birth to 18 years of age. One loophole in
that legislation was the ERISA loophole. Its my feeling that
that is, in fact, a true loophole, and I know we can save a lot
of money and a lot of lives and a lot of anguish if we can
catch problems early in kids. It's everything from keeping kids
out of the hospital and hospitalization for kids is more
expensive than adults, and it's longer than adults. Then also
if we can deal with these things when they're preventable,
rather than when they're acute, we're building a more healthy
Medicare population in the future, should we close that ERISA
loophole.
*Dr. AYANIAN. It's clear that investing in the health of
children is a very worthwhile endeavor, and anything we can do
in a cost-effective manner to achieve that goal is very
important. We this at the issue Institute of Medicine regarding
the consequences of uninsurance and the importance of
consistent coverage for children as well as their parents. It
was clear that the evidence is that children are more likely to
get the care they need when they have coverage and it's
consistent across different plans; and particularly also when
their parents are covered the parents use the health system
more effectively for their children. We get long-term benefits
from that. So, yes.
Mr. THOMPSON. Then, lastly, Mr. Brock, thank you for being
here and thank you for all of the work that you're doing.
That's pretty fascinating.
Ten percent of the doctors practice in rural areas, and I'm
told about 25 percent of the patients are in rural areas, so
there's a real disparity. Representing one of those rural
areas, I hear all the time about the trouble that we get to
attract physicians to our areas and keep physicians in our
areas, and we share the same health care problems as under-
served areas, be they rural, urban, or otherwise.
How much of the lack of access to health care in rural
areas can be attributed to the lack of providers?
*Mr. BROCK. Well, thank you for asking that question. A lot
of the problems do stem from the fact that there are programs
to help some of these people, but the paperwork requirements
and the reimbursement rates unfortunately are not attractive
enough for many of the providers to be willing to accept the
patients.
The other problem that we are continually faced with and
actually it doesn't matter whether we're in a very, very rural
area of Appalachia or whether we're in a downtown urban area,
the number of patients that are going to show up for our
services are about the same. As a small turnout, there are
going to be 5 or 6 hundred patients turn out. At a large RAM
event, there are going to be several thousand that turn up. It
doesn't matter whether they're living in an urban area or a
rural area.
The biggest problem really in providing this kind of care
for these people is that we have found over many, many years
now that the local physicians, dentists, and eye doctors really
don't want to deliver the care to these people in their
hometown. Those same doctors are very, very willing to travel
hundreds of miles with us, perhaps to Eagle Butte, South
Dakota, to provide the care, but they're really not interested
in providing the care in their own home districts. For that
reason, we are strongly hoping that rules will change, so that
doctors can cross state lines from all over the country and
alleviate this very, very serious problem.
Mr. THOMPSON. Thank you. Mr. Chairman, Mr. Doggett, thank
you both for yielding me the time.
*Chairman STARK. Mr. Camp?
Mr. CAMP. Thank you, Mr. Chairman. Dr. O'Grady, you
testified that of the uninsured population that 22 percent are
non-citizens. What percentage of the total uninsured population
are eligible for Medicaid and other programs, but are not
enrolled?
*Mr. O'GRADY. I don't have that figure right off the top of
my head, but I can certainly get it for. Although it is one
that is under some considerable kind of discussion of figuring
out what the right figure is--and part of it has to do with the
interactions between these eligibility questions--so if some of
these kids, given immigration laws, would not be eligible as is
true for the legal immigrants, that you're not eligible in the
first five years for either Medicaid or S-CHIP, exactly who's
eligible or not is certainly somewhat of a bone of contention.
Although one of the nation's best experts in this is right
across the street at the Congressional Research Service. So,
candidly, I'm going to go and pull that, and get back to you on
it.
Mr. CAMP. All right. If you could get back to the Committee
with your----
Mr. Rowland. Mr. Camp, if I could----
Mr. CAMP. I just have a short time. I'm not done with him
yet.
Mr. Rowland. I was going to just answer----
Mr. CAMP. All right. If you could submit that in writing,
that answer, I'd appreciate that.
What percentage of the uninsured lack coverage for just a
short period of time, say less than three months or less than
six months?
*Mr. O'GRADY. Well, we tend the see this pattern. Again,
I'll get back to you with the exact figure. But what we see is
we see there's points in your life where you are more
vulnerable. Some of these vulnerabilities we worry about more
than others. So, you do--I gave the example in the oral
testimony about the kid who leaves college, and before they
start that first real job and get coverage, that is, certainly
they're uninsured, we would certainly prefer to have them
insured, but we don't really worry about them quite as much as
we do about the chronically ill and these people who have been
uninsured for years.
So, it is this idea of where I've tried to introduce this
idea of thinking about how you might triage this problem,
because the likelihood of having enough money and political
consensus to do everything for everybody might just not be
there, in reality.
Mr. CAMP. Do you know, and can you tell us what percentage
of the uninsured elect not to purchase health insurance, even
if it's offered to them?
*Mr. O'GRADY. There are certain ways we sort of back into
that question. There is not good data. What we do know and
you'll see in the written testimony is we know that the
offering rates, especially among once you're over about 500 or
a thousand employees in a firm, that almost all those firms
offer. But you still see perhaps 10 percent in both those
categories as being uninsured.
Now we know they're offered. We don't know exactly whether
they are, like I said, what we tend to jokingly call the young
immortals, who sort of as long as they don't fall off their
motorcycle, they really don't see much need for insurance. Is
it that category?, or is it someone who is in a position where,
you know, coverage is being offered, but whatever their share
of the premium, their share of the cost-sharing going on makes
it unaffordable for then. Splitting those two kinds of groups
is--I don't know anyone who's done it well yet.
Mr. CAMP. Difficult to do?
*Mr. O'GRADY. Yeah.
Mr. CAMP. There's been a lot of debate around the question
of an individual mandate to buying health insurance. Do you
have any opinion on whether there should be a mandate, and what
would be the pros and cons of imposing a requirement that an
individual is to buy insurance, even if they feel they don't
need it.
*Mr. O'GRADY. Yeah. An individual mandate is a tough issue
in terms of you have these situations in the last generation of
these sort of proposals we heard an awful lot about employer
mandates, and in some today we hear about matching of employer
and individual. The individual mandate does get to the point of
where we talked about before, my young immortals. The idea of
should you be in a position where you in effect force them to
have coverage? Now that's much of the discussion that's gone
on, on the campaign trail between Mrs. Clinton and Mr. Obama.
Mr. Obama sort of wondering once you're out of children, once
you're at a certain age, you want to make it as affordable as
possible; do you actually want to take that extra step to
mandate?
Mr. CAMP. Okay.
*Mr. O'GRADY. It is true, the term that the Senator was
searching for before is ``free rider.'' So, when these folks do
fall off their motorcycle and all of a sudden need the health
care system, they are going as bad debt on the rest of us;
there's no doubt about that.
Mr. CAMP. All right. I noticed in the tape we saw that--
well, let me just say there are 23 federally qualified health
centers in Tennessee, and from what I understand, they have a
list of services that are required, including emergency medical
and dental services, among a list of other services. Can you
tell me why individuals would not be able to be also attending
the federally-qualified health centers that have a mandate to
see anyone who comes in?
*Mr. O'GRADY. Right. They do have a mandate, they certainly
serve the uninsured. They serve the underinsured, Medicaid
population, and even a few, just because of locale, regular
insurance people. All the evaluations I've seen is they scored
very high on what they do; they have--this was brought up
before about health information technology--they have one of
the best systems in the country right now--whether it's poor
outreach or just a nod of allowing them to know, but I know of
no structural barrier of why folks can't seek out those
clinics.
As you may have remembered, the President a few state of
the unions ago, made the push to have a clinic in every poor
county, and from what I saw when I was at the Department of
Health and Human Services, they took that seriously. Especially
in those areas like in the, you know where Katrina hit,
especially poor.
Mr. CAMP. All right. Thank you very much. Thank you, Mr.
Chairman.
*Chairman STARK. Mr. Doggett, would you like to inquire?
Mr. DOGGETT. Thank you, Mr. Chairman and thanks to each of
you for your insightful remarks. Of course, Mr. Brock, what
we've seen that you've accomplished is incredibly impressive,
and yet it is an indictment of the failings of our public
health system in this country that those serious needs are
there, demanding the extraordinary effort you've undertaken.
One of the issues that I noted from the 60 Minutes clip is
the difference between providing a one-stop or a periodic kind
of service like eyeglasses or dental care versus the need for
continuing treatment, continuing care, like the young woman who
had had cervical cancer. Is there any way through your program
that you can provide someone a primary health care home for
that type of continuing care?, or what happens to the person
who requires the periodic checkup, whether it's for cervical
cancer or for maintaining their blood pressure or their
cholesterol, or whatever, on a repeat visit basis?
*Mr. BROCK. Well, I think that that question is admirably
demonstrated at our clinic that we do every year in Wise
County, Virginia. In Wise County, Virginia, for 2\1/2\ days,
people come at the rate of twelve hundred people a day, and
they wait eight, ten, fifteen hours for the service.
Now we provide all of the services that you've just
mentioned. Not only do we have about a hundred dentists there
and dozens and dozens of eye doctors, but we also have
cardiologists and we have cancer experts, we do mammograms and
we do Pap smears. The whole gamut. The interesting thing is--
and again this goes back to the fact that so few of these state
and Federal programs address the dentistry and the vision
care--so here you have twelve hundred people who arrive at one
of our clinics, and wait many, many hours. When they get in the
door, they want to see the dentist so bad because their teeth
are just in agony and they want a pair of eyeglasses because
they can't see to read the paper or they can't qualify to get a
job. We are constantly, with the hundreds of other
practitioners that we've got there, saying, ``Save your place
in line. You need to come down here and you need to have a
diabetic check-up. You need to have a check-up for high blood
pressure'', and so on and so forth.
It is extremely difficult to get those people motivated to
do that. So, if some of these programs were addressing and
enabling people to get their teeth fixed, those immediate
problems, then we would find it easier to get them to see the
other specialties that they need.
When you look at the cross-section of the thousands of
people that we see, it's largely self-induced problems. They're
all smoking and they're all eating the wrong things; they're
largely overweight, and of course there's an educational factor
in there too.
But the services are there, but they're so hung up on the
teeth and the eyes, that's it's very difficult to get them to
take advantage of the rest of it.
Mr. DOGGETT. Thank you. Dr. Rowland, and Dr. Ayanian,
you've touched on this issue, but really the lack of insurance
is a matter of life and death, and I have seen one recent study
in the state of Texas, which is notable for having more
uninsured children proportionally than any other state in the
nation, tragically, that about seven working-aged Texans die
each day because of a lack of health insurance. I suppose if
the death certificate were amended to show the true cause of
death along with the physical cause as being a societal
disability, that we would see lack of health insurance on that
death certificate on a pretty regular basis. It would be up
perhaps as high as deaths from diabetes.
Could you just comment again on what you see as the life
and death cost of the failings of this Congress and this
administration to see that there is access to health insurance
for more of our citizens?
*Ms. ROWLAND. Well, clearly we see from all of the research
that when you don't have health insurance, you make decisions
that are contrary to your health. So, as we saw in the film so
graphically, people delay care, and as a result of delaying
care they come at a later stage of diagnosis, where treatment
options are fewer and where the outcomes are worse therefore
mean this means that on their death certificate they may die
from a cancer, but the cancer could have been treated if caught
in an earlier stage.
Dr. Ayanian's work has really helped to really the impact
of lack of insurance by looking at specific conditions, so I'll
let him comment in addition.
*Dr. AYANIAN. I would just add that we all know that
effective insurance coverage is the gateway to the health care
system for most people in our country, and when people lack
that, they don't have the good primary and specialty care that
we know makes a difference. In many ways we just defer the
costs. Effective primary care can be very cost-effective.
Preventive care screening tests, and care of chronic diseases
like high blood pressure and diabetes. If we don't take
measures to provide coverage and provide access to care for
people at those early stages of disease, then we end up with
more costly complications of heart attacks, kidney failure,
advanced cancer.
*Chairman STARK. Mr. Johnson, would you like to inquire?
Mr. JOHNSON. Thank you, Mr. Chairman. For any of you first
three over there, you know, I believe one way to increase
access to health care for more Americans in this country is to
decrease the cost, and if there's one thing America has proven,
that it's competition is the best way to drive down the cost.
Health care is no different.
There's two initiatives I think are critical in achieving
this goal: Health savings accounts, and association health
plans. You know, over 4.5 million Americans have chosen HSA
type insurance, and some studies show that as many as one-third
of them were previously uninsured, and almost half have incomes
below $50,000.
Concerning HPs, estimates indicate that at least 60 percent
of the working uninsured work for small businesses. I think we
can't have a conversation about the uninsured in this country
without talking about a way to allow small businesses to pool
their resources in order to provide health insurance for their
employees. Would you all discuss that for me?
*Ms. ROWLAND. When you look at the problems facing our
health care system, rising costs from the increases that we've
seen in premiums over the last few years have taken a real toll
on both employers' ability to offer coverage as well as on
employees' ability to pay their share of those premiums.
However, I think one of the things that's important when
you look at the low-income, uninsured population, is that two-
thirds of the uninsured come from families with incomes below
$40,000 a year. How much they can they afford for the premium,
how much would you subsidize that premium, and also how much
they are able to pay out of pocket. One of the concerns we have
stems from some of the research we've done is looking at the
liquid assets of individuals at these lower income levels. We
see that they have relatively few savings. As a result, if they
have a health care policy that requires a fairly high
deductible, they may not have the resources to be able to pay
those co-payments and deductibles, which in the end could end
up having them behave more in their interaction with the health
system, like an uninsured person rather than like someone with
health insurance coverage.
So, I think one really needs to look at the availability of
income and the availability of assets to be able to meet
obligations as one assesses the adequacy of health insurance
coverage. Work that the Department of Health and Human Services
has done, looking at financial burden, finds many families,
especially those with higher deductible plans, as end up
spending much more of a share of their income on health
insurance coverage than people with more comprehensive plans,
especially those offered now through the employer sector.
*Mr. O'GRADY. Yes. There are a couple of things you brought
up which were very good. One thing to keep in mind is that
making this more affordable is essential. At the same time it
is that value proposition that was being discussed earlier
about we have the baby boomer retiring, we have these other
pressures that are coming, so it's more spending smarter, not
more, not--and how we're going to control that, and how we're
going to determine whether we're really getting--most of us
don't mind spending more if we think we're getting that
breakthrough drug or that breakthrough device that's going to
really make a difference. But we mind spending more for
something that seems wasteful and is just nicer cars for
physicians. That sort of thing.
So, when the chief actuary came in, I assume a week or two
ago, and showed those trends in Medicare, those same trends
exist for employers trying to offer coverage, Medicaid. They
just don't have a trustee's report that you get every year.
So, all that money being absorbed there is more money being
taken off the table for the uninsured. So the notion of how you
ease up on that cost pressure to give yourself enough leeway to
start to think about expansion and doing it in a fiscally
responsible way is vital.
There was a piece done a few years ago by a researcher at
the University of San Diego, that looked at those small firms,
and in years when premiums were going up very fast, they either
had to drop their coverage, or for the firms that were looking
to add coverage, not in a 10 percent premium increase here. In
the slower years, that's when people either held their own in
terms of offering coverage, or were able to expand. So, it's
very important. HSAs fill a niche, a very important niche in
terms of affordability. Because by changing the structure of
the health benefit, moving it to the more serious, more
catastrophic things, they definitely lower the premium.
Now I have one personally. I've had it for about three
years now. I like it very much. I have a chronic illness. It
works because it means also that account I can go to whatever
provider I want to, whether they're in the network or not, or
participating with my plan or not.
So, it works very well on the affordability, but certainly
it is putting financial pressures on folks for that up-front
cost. There's no denying that. Again, none of these particular
solutions that people put forth, me or anyone else you'll hear
from, are going to be totally pain-free. Also, you'll help on
affordability but you'll hurt on cost-sharings on the
beneficiary.
But back to your first notion about bringing down this
overall growth in spending, you know, that's where you can have
it cost less for both the employer and the worker, for the
government and the beneficiary is by slowing that growth in
overall spending.
Mr. JOHNSON. Yeah. They get to pick their hospital. That's
important.
Thank you, Mr. Chairman.
*Mr. BROCK. Is it possible that I can just in the half-
minute light on unemployment insurance thing from a statistic
that we came up with last Saturday?
*Chairman STARK. Certainly, Mr. Brock.
*Mr. BROCK. Two hundred and fifty people showed up at a
rural area in Tennessee and 124 of them were prepared to answer
the following questions. It turned out that 73 percent of them
were unemployed; 18 percent were employed part time; and 10
percent were employed full time. Of the full-time employed,
only 18 percent had any kind of insurance. Of those employed
part time, 58 percent of them had insurance; and of the
unemployed of which there were 73 percent of them were
unemployed, 46 percent of them had insurance. So, from this
non-scientific but carefully done study last Saturday, if you
were unemployed you were more likely to have some kind of
insurance.
*Chairman STARK. Mr. Becerra, would you like to inquire?
Mr. BECERRA. I don't know if I should be more depressed now
after hearing that.
[Laughter.]
Mr. BECERRA. Thank you all for your testimony. I think you
are reiterating much of what we've heard or experienced. I wish
we knew how to crack this nut that keeps us from having
universal coverage; but perhaps I can try to whittle my
thoughts here down to a couple of questions.
I was wondering, Mr. Brock, if you'd give me just a quick
sense of what your understanding or what your sense is of an
individual mandate, the proposals to require that individuals
purchase insurance in order to obtain access to health care
that rather than require an employer, or rather than do it
through a system like Medicare, which is government-financed,
that we put the burden of obtaining the insurance on the
individual and by requiring everyone in the country to have
insurance, then we will end up having that universal coverage
that we need.
*Mr. BROCK. I think----
Mr. BECERRA. Your microphone. You need to turn your
microphone on.
*Mr. BROCK. I think that in light of the fact that 73
percent of the people that show up are unemployed, this would
demonstrate that those people could not afford to buy
insurance. So, that presents us with a very difficult problem.
Mr. BECERRA. Another question. Give us again a very quick
sense, because I know my time is limited--what are some of the
comments you hear from some of the caregivers, the doctors, the
dentists, the other providers, that volunteer to be part of
these clinics that you set up? What's their sense? They
obviously go back to their paying job later on, where they're
providing health care, but what's their sense of where we have
to go, where a solution lies?
*Mr. BROCK. Well, they want coverage for malpractice. The
first question that doctors ask us when they volunteer is, ``Am
I covered for malpractice?'' The answer unfortunately is not,
they are not. So, that's something that needs to be fixed.
Again, going back to--we really need to allow these doctors and
dentists who are willing to provide the service to cross state
lines and provide free care anywhere in the country as long as
they can prove that they are a doctor in good standing. The
Tennessee Volunteer Health Care Services Act, it's as simple as
this: The doctor shows up, even without any notice. ``Hey, I
heard you're holding a clinic. I'm from Iowa, here's my
license, I'm not under any judicial review.'' ``Sign that
statement, roll your sleeves up, and go to work.''
Mr. BECERRA. Let me ask--my question is more--I imagine the
doctor from Iowa who goes to Tennessee can only do that once in
a while. My question goes more to the point of: What do they
see as a longer-term solution to this crisis that causes
hundreds if not thousands of people to show up on a weekend to
try to receive the care you offer?
*Mr. BROCK. Well, I think that they would like to see some
type of national coverage for people who are in a certain
economic strata, whether it's twice the poverty line or three
times the poverty line, that people in that group need some
kind of national health care coverage, and people who are above
that economic group let's not mess with the system that we've
already got, which is fabulous as long as you can afford it.
Mr. BECERRA. Dr. Rowland, let me see I can ask you
something. I find what Mr. Brock does inspiring and
demoralizing at the same time: inspiring because you have
people who are willing to volunteer, the good Samaritans who go
out there, professionals who provide this care; demoralizing
because hundreds and thousands of people have to rely on a
weekend opportunity to get a tooth taken care of.
In all these studies that have been done, in all the work
that we've had come before us for presentation, I still don't
see that the American public is any more angry and prepared to
take us to a place where we, then, as policy-makers feel that
we could go and provide that type of coverage that gets the
universality that I think most of us would like to see for the
American public.
So I guess my question to you is: Do you see any further
movement in the eyes of the American public--not so much the
policy-makers, but the American public, in having the outrage
to having their policy-makers move in a universal direction?
*Ms. ROWLAND. As we do our work in public opinion, we ask
the public about the uninsured and about their access to care,
and one of the startling things from our research is that
people say, ``Well, the uninsured get the care they need; they
just may get it a little later.'' I think we still have a real
burden of educating the public on the facts. I think things
like the 60 Minute documentary is very important about to show
that if you're uninsured, you make different choices and you
may not get the care you need. As John and others' work shows,
the consequences on your health and on our society's health are
really monumental.
But I think it really is a lack of understanding--we think
that we have the best medical care system in the world, and
that if anyone really gets sick, they can show up at an
emergency room and they can get the care they need. Yet we know
they don't even show up often at the emergency room, and the
consequences of not getting preventive and primary care are
overwhelming.
Mr. BECERRA. Thank you. I appreciate your testimony, all of
you, and look forward to having you back again. Thank you very
much. Mr. Chairman, thank you.
*Chairman STARK. Ms. Tubbs Jones, would you like to
inquire?
Ms. TUBBS JONES. Mr. Chairman, thank you very much, and to
all the witnesses, thank you for appearing here today.
I think the public is actually saying to policy makers like
us and legislators that they do want and need health care. I
think the dilemma is that the United States has been so
reluctant to focus on preventive care that we tend to be a
country that focuses on acute and chronic care versus
preventive care. That's my little piece of it.
But I want to focus for a moment, if I can, with you, Dr.
Ayanian, if I'm saying your name appropriately. As I said
earlier before this panel came, the Congressional Black Caucus
Foundation is doing a health disparities session at a hotel
here yesterday and today, and I'm hoping to get over there this
afternoon. But I see that in your report--and I don't recall
that you had enough time in your 5 minutes to really delve into
what we need to focus in around disparities. There were seven
things that I just had in front of me, and I lost them. So, why
don't you go back through that again for me, and if you had to
prioritize the 1 through 7 factors around health care
disparities, would you give them to me in that order?
*Dr. AYANIAN. Sure. You're referring to a set of what have
been described as voltage drops in the health care system from
the basic essential of having insurance coverage to ending up
with high-quality care and the seven steps in which we can lose
voltage, and people not get the care and the quality of health
outcomes that we're looking for.
Clearly insurance coverage is an important part of the
health care disparities we see for different racial and ethnic
groups and economic groups in this country, and so that's one
of the most important factors. We have a safety net. In many
areas safety net providers are doing very important and
effective work. But it leaves too many people outside the
boundaries of our health care system, who are not coming in
until their illnesses are too far advanced.
We also know that health care providers that serve
predominantly minority communities, low-income communities tend
to be less well-supported, and less access to appropriate
specialty care. If primary care is available, it's not
consistently available to all in the community.
So, I think we also need to focus on the providers, the
health care organizations, hospitals, community health centers,
and medical groups, that care for disproportionate shares of
minority patients, and make sure that they're well supported,
that their staff are highly qualified, that they have the
services that are needed, and relationships within their
communities.
I think one of the points that was touched on in the first
panel discussion was the need for communities and states to
understand the presence of health care disparities in their
midst and develop their own local and state plans. We're seeing
some promising evidence about this work in Chicago, trying to
address racial disparities between African American women and
white women, and breast cancer mortality, where community
health centers, breast cancer survivors, community leaders,
leaders of the major medical centers, are coming together and
really working on access to mammography, access to effective
treatment, and then the quality of care that people get.
So, I think those are some of the highest priority areas,
and I think it's very important at a national level through
tools like the National Health Care Disparities Report, to pay
close attention to what progress or lack of progress we have on
this front; and then also to use data and resources to support
local communities in addressing the health care needs, where
they're well understood.
Ms. TUBBS JONES. I remember that as a kid in the public
school systems, there were at least a school nurse and a
dentist that fell through at least every once in a while. I
can't understand why we can't get back to some of that service.
There's less schools, there are less students in many of the
schools. Because to me it would be the broker for other
services for folks at every level, and hopefully begin a
process of working with young people with the vision of what
prevention really means, because that is what's ultimately
going to be the concept.
I don't have time to allow the rest of you to respond to
that particular issue, but I think it's something we need to
think about, how do we marry an education and then an education
about preventive care within the system?
Mr. Brock, I want to applaud you for the work you're doing,
and I think I'm going to be in Knoxville on Friday, and
depending on my schedule, I may try to catch up with you, if I
can get a number or an address.
*Mr. BROCK. I'd be delighted to see you, madame.
Ms. TUBBS JONES. Thank you. Mr. Chairman?
*Chairman STARK. Thank you. Dr. Rowland, you were going to
add an answer or a comment to Mr. Camp's question relative to
the make-up of the uninsured. Would you like to?
*Ms. ROWLAND. It's roughly 20 percent of our uninsured
population are children. When we look at uninsured children, we
think that about two-thirds of those children are actually
eligible today for either the Medicaid or the S-CHIP program,
but have not been enrolled, partially because they may be
unaware of their eligibility or their family may not have taken
them in. About half a million children who are uninsured have
an immigration status that prohibits them from being eligible
for either Medicaid or S-CHIP, although their incomes are below
the 300 percent of poverty.
*Chairman STARK. Thank you. Further, can you comment on
what's happening to the projections of the growth in uninsured
Americans, and this question of citizenship or documentation
unhappily will come up and for those who are more xenophobic
than others, it's a great political stance to suggest that--I
don't know of other countries that deny coverage to people who
happen not to be citizens--but how big a part of our problem is
that?
*Ms. ROWLAND. Well currently, about 22 percent of our 47
million uninsured are non-citizens; however, the majority of
them are legal and not illegal, and we estimate that about 10
million people therefore out of the 47 million are non-
citizens, many of them waiting for eligibility for citizenship.
About 4 million are from the illegal immigration population and
therefore currently ineligible for anything except for
emergency care in the U.S.
*Chairman STARK. So, can I infer from that, that if we
think there are 12 million undocumented workers here and there
are only 4 million of the 12, at least with about 8 million who
have some form of insurance, even though they are not
documented, is that fair?
*Ms. ROWLAND. Correct.
*Chairman STARK. Okay.
*Ms. ROWLAND. In fact most of the growth we see in our
uninsured population comes growth among citizens, who makes up
about 80 percent of the growth each year, since the number of
illegals is still small in comparison to the total population.
*Chairman STARK. Okay.
I want to ask both you and Dr. Ayanian, in your testimony,
doctor, and I think Diane as well, you've talked about hidden
costs. Dr. Ayanian points out that if--I think if I remember
correctly--if I'm uninsured before I mature into Medicare for
the next 7 years, 65-72, I'm apt to be more expensive than
those who have a continuum of medical--which one presumes means
they were insured.
Then there's the issue of the local emergency room. I'd
like to think, although I'm not positive, that we don't let
people bleed to death on the streets, so if they end up in an
emergency room, they're at least stabilized if they're treated,
somebody pays for that, either those of us who are paying for
insurance pay through higher premiums, or the local community
pays through taxes to subsidize care.
Then there is the issue of benefit caps, in other words,
whether it's the people who sell these association plans that
generally don't meet decent standards in terms of providing
care that is covered by most insurance commissioners or other
reasons--can we get--I think Commonwealth did a study that
deals with the social costs. Productivity is kind of an elusive
issue. You know, is General Motors going to make less money
because of productivity, or is the dry cleaner in the shopping
going to make less money because their workers may be absent
more than others--are there many studies, and any of you I'd
appreciate the answer, seriously--it's kind of hard for us to
quantify that. I mean how much more do we spend on Medicare?,
can we find out?, because of the uninsured who mature into
Medicare? Is there a number out there that would available to
us without extensive research?
*Dr. AYANIAN. I'd have to say at this point there is not a
definitive number, but it's something that we're actively
working on, and working with Medicare data to try to understand
that better. From some of the work that I discussed earlier, we
found that people in their late fifties and early sixties who
are uninsured use 15 percent lower levels of services in the
presence of heart disease and diabetes, so this is a group
clearly that should be in care and where we know health care
makes a difference.
Then almost immediately after they turn 65, we see a sort
of flipping of that, and the people who are previously
uninsured use about 15 percent more services after they enter
the Medicare Program. So, we're now moving forward to try and
understand exactly what services. Some of them may be fairly
expensive, like people needing coronary bypass surgery. Other
aspects may be fairly basic, like seeing primary care physician
for diabetes care. Another issue that we're pursing is to what
extent might those savings be available to the Medicare Program
if we did a better job of covering people in their 50s and 60s
before their conditions became more severe.
*Chairman STARK. Okay. It would be helpful, I'm sure to all
of us if we could, at least as we have to wind our way through
this, we could in fact quantify those areas, because there are
a lot of people who on both sides of the aisle that unless we
can assure them that we're not wasting a lot of money, we're
going to have trouble. It's one thing to talk in generalities;
it's another thing to say, ``Hey, this costs X bucks'' to
Medicare. That makes our job a bit easier.
Mr. Brock, I just want to commend you as well for the
efforts of your organization, and I hope you'll keep it up. I'm
concerned that many of the services that you suggest are not
insurable, insofar as I know, the American Dental Society is
not very anxious to see dental insurance made available by any
kind of mandate, and so without their help, I'm not sure it
will ever happen.
Speaking of mandates, which is an issue that was brought
up, I'd be remiss if I didn't suggest that Governor Romney and
Governor Schwarzenegger, whom I have not ever seen at any of
our progressive caucuses, or any other liberal groups, both
suggested mandates as part of their state plans, and I don't
think to their political disadvantage. I think they both felt,
as I feel, that there was no way they were going to get
universal coverage without somehow ``mandating'' it. I just
don't think that whether it's the youngsters who think they're
invincible, who won't buy it if they're not told to, but at
some point I think mandate--if we would like to see universal
coverage, I don't know how we're going to avoid that.
My commentary on that. I appreciate, Mr. Finan, the work
that American Cancer Society does to try and save us from
ourselves, and what happens the somebody diagnosed with cancer
with no insurance, no money? You're a male and when you get
prostate cancer, if you're uninsured you go to the emergency
room. Prostate cancer generally doesn't present itself except
for maybe an urgency to go to the bathroom that you can't
satisfy, but other than that. What happens to that person? What
happens to the woman who says, ``Oh, oh, I've got a lump, but I
don't know whether that's breast cancer or not.''--and they
virtually don't have access to a systematic medical protocol--
what do they do?
*Mr. FINAN. Well, you're correct, Mr. Chairman. These
people in those situations typically show up at the emergency
room. At that point they probably have an advanced stage of a
cancer. It obviously becomes much more expensive to treat at
that point. That cost is being borne more widely by society
because they're uninsured.
*Chairman STARK. Do they get treated, though? I mean if
they show up, do they get surgery or radiology or chemo, which
could be a long and expensive procedure. Is that----
*Mr. FINAN. It depends on the state of the condition,
actually. Where they happen to go into the emergency room. I
think it varies considerably by the facility and where they
are, and what kind of charity is available. But the fact is we
know that some recent research was done by some of my
colleagues in the Society shows that for those who are
uninsured, they tend to be diagnosed much later and are much
less likely to survive, or they have less chances of
survivorship for the uninsured.
So, insurance makes a huge difference.
*Chairman STARK. Okay. Well, I can't conclude this hearing
without commenting that the one thing--and Dr. O'Grady, I hate
to tell you, but you failed me--I know coming from the ``Let
them eat cake'' school of social consciousness that you'd like
to find ways to provide care like public clinics, but with all
your perspicuity and intellectual curiosity, you blew it. The
Stark solution for these people who are truly uninsured, be
they citizens with document or people without documentation--
how you could have missed the chance that I have suggested for
every uninsured American, who under the Constitution, all they
have to do is walk out of this room, step out there on the
corner, and kick a cop. You'll end up in jail, where the
Constitution will require us with the medical care you deserve.
So I've always suggested, if you don't have medical care any
place else, go hit a cop, you'll get all the medical care--
you'll probably need a little extra when you're done--but
please add that to your testimony because you really haven't
done the job that I think your position requires.
[Laughter.]
*Mr. O'GRADY. I stand corrected.
*Chairman STARK. Having said that, I want to thank the
witnesses and the Members for starting at least on this road to
seeing whether we can identify the problem that faces us.
Thank you all very much for being with us today.
*Mr. BROCK. Can I just add a 10-second thing--that comment
that you made a moment ago?
*Chairman STARK. Certainly, Mr. Brock, you may.
*Mr. BROCK. About the state of Massachusetts. I have here
as a result of the 60 Minutes piece a request from the Campaign
for a Better Tomorrow in Massachusetts, saying to us, ``We are
proposing a convoy of 300 southeastern Massachusetts residents
via school bus for treatment by Remote Area of Medical in
Tennessee.'' Does this mean, then, that one of the richest
states in the Union is going to be sending patients to us, at
one of the poorest states in the Union? But I found it rather
interesting. If they show up, we'll treat them.
*Chairman STARK. You're very kind. Thank you very much, and
the hearing is adjourned.
[Whereupon, at 12:37 p.m., the hearing was adjourned.]
[Submissions for the Record follow:]
Statement of American College of Physicians
The American College of Physicians (ACP) is the largest medical
specialty society in the United States, representing 125,000 doctors of
internal medicine, residents and medical students. ACP commends
Chairman Pete Stark for holding this hearing to better understand the
problems of today's health care system so that we may achieve effective
health care reform. The College advocates that all Americans should
have affordable health insurance coverage.
To determine how to achieve a high performance health care system
with universal health insurance coverage, the College examined the U.S.
health care system and compared it to health care systems in other
countries.\i\ The analysis revealed lessons that could be
learned from high performance health care systems in other
industrialized countries. Based on these lessons, ACP proposes
recommendations to achieve a more efficient, better functioning health
care system in the USA with health insurance coverage for all.
---------------------------------------------------------------------------
\i\ American College of Physicians. Achieving a High-Performance
Health Care System with Universal Access: What the United States Can
Learn from Other Countries. Annals of Internal Medicine. 2008;148:55-75
(accessible at http://www.annals.org/cgi/content/full/0000605-
200801010-00196v1)
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The U.S. health care system spends far more on health care than any
other country. Costs continue to rise at a faster pace than spending in
the rest of the U.S. economy. Yet, an estimated 47 million Americans
(15.8 percent) lack health insurance protection.\ii\ These
Americans are much less likely than those with insurance to receive
recommended preventive services and medications, are less likely to
have access to regular care by a personal physician and are less able
to obtain needed health care services. People without health insurance
live sicker and die younger.\iii\ Even among those with
health insurance coverage, wide variations exist in terms of cost,
utilization, quality and access to health care services. Rising costs
are creating financial burdens for individuals, government and
employers, resulting in reduced access to care, and adding to the
number of uninsured.\iv\
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\ii\ Organization for Economic Co-operation and Development. Total
Expenditures Per Capita, June 2006.
\iii\ U.S. Bureau of the Census. Income, poverty, and health
insurance coverage in the United States: 2006. U.S. Deptartment of
Commerce (P60-233). August 2007.
\iv\ American College of Physicians--American Society of Internal
Medicine. No health insurance? It's enough to make you sick.
Philadelphia: American College of Physicians--American Society of
Internal Medicine; November 1999.
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Additional problems in the U.S. include disparities in health care
based on race, ethnicity and geography; an insufficient supply of
primary care physicians for an aging society; a dysfunctional system
for paying physicians; and excessive administrative and regulatory
costs.
Our analysis of health care systems in twelve other industrialized
countries included an overview of each country's healthcare system, its
advantages and disadvantages, and possible lessons to be learned for
the USA. Criteria developed by the Commonwealth Fund were used for
measuring the performance of health care systems.
Although many individuals in the United States receive exemplary
health care, international comparisons on most key indicators of the
public's health have shown that the United States has poorer health
outcomes in the aggregate than many other industrialized countries.
Major improvements are needed in the health care system in the United
States to achieve performance levels attained by health systems in
other countries.
The following lessons and recommendations were identified for
improving health care in the United States:
Lesson: Well-functioning health systems guarantee that all
residents have access to affordable health care. Some countries achieve
universal coverage with a system funded solely by the government. Most,
however, have opted for models that include a mix of public and private
sources of funding.
Lesson: Global budgets can help restrain health care costs but do
not provide incentives for improved efficiency unless they are set
reasonably and targeted to small enough groups.
Lesson: The use of government power to negotiate prices can achieve
cost savings but may result in shortages of services subject to price
controls, delays in obtaining elective procedures, cost-shifting, and
creation of parallel private sector markets.
Recommendation: Provide universal health insurance coverage to
ensure that all people within the United States have equitable access
to appropriate health care without unreasonable financial barriers.
Health insurance coverage and benefits should be continuous and not
dependent on place of residence or employment status. ACP calls on
policymakers to consider adopting one of the following two pathways to
achieve universal coverage:
A single-payer system in which one government entity is the sole
third-party payer of health care costs. The advantages of single-payer
systems are that they generally are more equitable, have lower
administrative costs, have lower per capita health care expenditures,
have high levels of patient satisfaction, and have high performance on
measures of quality and access than systems using private health
insurance. The disadvantages of this system include potential shortages
of services subject to price controls and delays in obtaining elective
procedures.
A pluralistic system in which government entities as well as for-
profit and not-for-profit organizations ensure universal access while
allowing individuals the freedom to purchase private supplemental
coverage. The disadvantages of this system are that it is more likely
to result in inequalities in coverage and higher administrative costs.
Pluralistic financing models must provide a legal guarantee that all
individuals have access to coverage and sufficient government subsidies
and funded coverage for those who cannot afford to purchase coverage
through the private sector.
Lesson: Cost-sharing designed so that low-income individuals pay no
or nominal amounts can help restrain costs while assuring that poorer
individuals are still able to access services.
Recommendation: Create incentives to encourage patients to be
prudent purchasers and to participate in their health care. Patients
should have ready access to health information necessary for informed
decision-making. Cost-sharing should be designed to encourage patient
cost-consciousness without deterring patients from receiving needed and
appropriate services or participating in their care.
Lesson: Societal investment in professional medical education can
help achieve a health care workforce that is balanced, well-trained,
and in sufficient supply. Investment in primary and preventive care can
result in better health outcomes, reduce costs, and may better assure
an adequate supply of primary care physicians.
Recommendation: Develop a national health workforce policy that
includes sufficient support to educate and train a supply of health
professionals that meets the nation's health care needs. To meet this
goal, the nation's workforce policy must focus on ensuring an adequate
supply of primary and principal care physicians trained to manage care
for the whole patient. The Federal Government must intervene to avert
the impending shortage of primary care physicians. A key element of
workforce policy is setting specific targets for producing generalists
and specialists and enacting policy to achieve these targets.
Lesson: Effective physician payment systems include support for the
role of primary care physicians, incentives for quality improvement and
reporting, and incentives for care coordination. Establishment of
performance measures, financial incentives, and active monitoring of
performance can encourage higher quality of care. Countries that
organize care around the relationship between a primary care physician
and the patient through a patient-centered medical home have better
outcomes at lower cost.
Recommendation: Provide financial incentives for physicians to
achieve evidence-based performance standards. The United States should
revise existing volume-based payment systems to create care
coordination payments for physicians working with health care teams to
provide patient care management and maintain a fee-for-service
component for separately identifiable visits. Redirect Federal health
care policy toward supporting patient-centered care and the patient-
centered medical home.
Lesson: Uniform billing systems and electronic processing of claims
improve efficiency and reduce administrative expenses.
Recommendation: Support with Federal funds an inter-operable health
information technology infrastructure, create a uniform billing system
for all services, and reduce regulatory burdens.
Lesson: Insufficient investments in research and medical technology
result in reliance on outdated technologies and medical equipment, and
delay patients' access to advances in medical science.
Recommendation: Encourage public and private investment in medical
research and assessments of the comparative effectiveness of different
medical treatments.
Conclusion
The American College of Physicians appreciates the opportunity to
provide the Health Subcommittee with this summary of our views on
health system reform. We recognized that although we can learn much
from other health care systems, any solution for the United States must
be unique to our political and social culture, demographics, and form
of government. Many factors make it unlikely that we can simply adopt
systems used by other nations, particularly those that involve a
substantial expansion of the power of the Federal Government to
regulate health care. Nevertheless, we believe our examination of the
evidence identified several approaches that are more likely than others
to be effective in achieving a well-functioning health system that
could be adapted to the unique circumstances in the U.S.
Additional information on ACP's analysis and proposals for
improving access to health care can be found on our website at: http://
www.acponline.org/advocacy/where_we_stand/access/#access.
The American College of Physicians would welcome an opportunity to
provide further details of our findings and recommendations or to
answer any questions.
Statement of Edward M. Burke
Hello, my name is Edward M. Burke and I am a 49-year-old individual
with hemophilia. I want to share my concern with you about the
increasingly unobtainable and unaffordable health insurance coverage
for Americans, especially the unemployed, the disabled and vulnerable
youth. Therefore I am submitting for the record the following
statistics:
Health insurance costs continue to climb and will probably rise
again next year according to the survey released by the Kaiser Family
Foundation, a health care research organization that annually tracks
the cost of health insurance.\(1)\ Traditionally health care premiums
rises between 9-14 percent per year, challenging the standard of income
increase. Although health insurance is a priority issue in American
lives and amongst political candidates no new significant advance or
major change has been applied in years.
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\(1)\ Health Insurance Costs Climb; Workers Pay \1/4\ of Premiums
Emily Fredrix, The Associated Press, Page 9
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The largest uninsured population of the U.S. are the young people
between 19-30. The reason they do not have health insurance is because
most have jobs that do not offer it or because they only make average
annual incomes of less than $26,000. If they were to pay premiums they
would require approximately $3,600 which would be 13 percent of their
income before taxes and other expenses.
Here is an example at $26,000 ($2,166 monthly):
Monthly Income:
$2,166 per month
Monthly Expenses:
------------------------------------------------------------------------
------------------------------------------------------------------------
$375 per month 4,500 Taxes 15% of income
------------------------------------------------------------------------
$300 per month 3,600 Health Premiums 13%
of income
------------------------------------------------------------------------
$900 per month Rent 38% of income
------------------------------------------------------------------------
$400 per month Transportation--18% of
income
------------------------------------------------------------------------
$250 per month Food--11% of income
------------------------------------------------------------------------
$150 per month Utilities--7% of income
------------------------------------------------------------------------
$100 per month Debt--4.5% of income
------------------------------------------------------------------------
$2,475 per month
------------------------------------------------------------------------
($309) Monthly Debt with health insurance(2)
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\(2)\ UCLA Center for Health Policy Research, California Budget
Project, August 2007, ``What Does It Take For a Family to Afford to Pay
for Health Care'', David Carroll, Dylan H. Roby, Jean Ross, Michael
Snavely, E. Richard Brown, and Gerald F. Kominski
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It is clearly evident from an economic standpoint that the younger
uninsured population cannot afford health insurance. There is nothing
to scale down unless you expect this population to live in section 8
housing, ride bicycles to work, live off of soup and crackers, and heat
their homes with dangerous space heaters. Many in this population would
rather ``roll the dice'' of chances than live in debt, given the fact
that they are already living from ``hand to mouth''. The strategy for
this population is, ``if I need medical attention, I will just go to an
emergency room and either the state or government will pay for it. . .
. not me.''
Now that we have looked at the livelihood of a relatively health
young adult population, let's assume there is a small population within
this population who have expensive chronic illnesses. Suddenly the $309
monthly debt would significantly increase to an additional $500 to
$1,000 per month in co-payments. Me, having hemophilia and being one of
these young people would have to not only incur a debt of $300 per
month so I can stay insured, but I would have to incur an additional
monthly debt of $2500 per month until my out-of-pocket was met or it
would be a recurrent monthly debt for all 12 months if I were on
Medicare totaling $30,000. And you wonder why people who are uninsured
flock to the emergency rooms?!
Our health care system does not provide affordable coverage,
plummets working tax-paying citizens into public assistance programs
(which incurs cost to the govern-
ment), and removes any incentive to better oneself or even maintain a
work environment. Why not just live off the State and Federal
Governments?
In all due respect, many legislators are not understanding the
economics livelihoods and capabilities of their constituents. There
seems to be a loss of reality between those making the laws and those
trying to live the laws.
The Factor Foundation would like to propose two solutions to
provide an incentive for helping young people afford health insurance
and helping people maintain health insurance. The first is simply to
negotiate with health plans to offer more affordable premiums that
would provide at least catastrophic coverage for injuries,
hospitalizations, and necessary tests and surgeries. The second would
be the elimination of lifetime health insurance caps.
``Sixty (60) percent of all individuals affected by hemophilia have
private health insurance and approximately 3,000 people in the U.S.
exceed their lifetime cap each year,'' (3)
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\(3)\ www.HemophiliaGalaxy. About Lifetime Caps, Page 1
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``The average cap for hemophilia A is around $1.4 million.''
(4) Since this chronic disease state can incur from $100,000
to $2,000,000 per patient per year health insurance coverage is a
constant concern for families with hemophilia. In 1970, the cap of 1
million dollars was set by the insurance industry. ``The same coverage
today would equal $18 million.'' (5)
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\(4)\ www.HemophiliaGalaxy. About Lifetime Caps, Page 1
\(5)\ www.hemophilia.org, Lifetime Insurance Caps, Page 1
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Eliminating or raising lifetime caps would be of the utmost benefit
to chronic disease states such as hemophilia. Other disease states like
Cancer, Cystic Fibrosis, Fabry Disease, Parkinson's and Multiple
Sclerosis as well as so many others would also benefit.
``In 1995 Price Waterhouse found that eliminating the lifetime cap
would save the Medicaid program alone more than $7 billion over seven
years. These savings are likely more in today's dollars. A study from
the American Academy of Actuaries, also in 1995, found that eliminating
the lifetime cap would increase premiums as little as $8 a year.
Eliminating lifetime caps would allow individuals with manageable, but
high costs such as those with bleeding disorders to maintain their
private insurance.'' (6)
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\(6)\ www.hemophilia.org, Lifetime Insurance Caps, Page 2
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Further, as per the research of Mr. Jack Rodgers, then Director of
Health Policy Economics at Price Waterhouse in 1995, Mr. Rodgers
stated, ``based on our preliminary calculations, we estimate that
removing lifetime insurance caps on medical care would result in an
annual savings of $440 million to the entire Medicaid program for 1995
and increasing to roughly $1.3 billion in year 2002. The cumulative
estimated Medicaid savings for Federal and State/local governments for
years 1995 to 2002 is approximately $7 billion. Of the $440 million
Medicaid savings in 1995, we estimate that approximately $250 million
would go towards Federal Medicaid savings and $190 million would go
towards State/local Medicaid savings.'' (7)
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\(7)\ Jack Rodgers, November 8, 1995, Research Letter, Page 7
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In 2001 Price Waterhouse estimated about 2,500 patients per year
reached their insurance cap. The Price Waterhouse report prepared in
1995 as Congress was considering legislation to require higher lifetime
caps, estimated that State and Federal health programs could save $1.3
billion in 2002 if lifetime caps were completely removed.
Eliminating lifetime caps would allow the Federal Government and
State governments to experience cost savings to ever increasing
challenged budgets, and avoid costly utilization of emergency rooms and
hospitalizations due to the chronically ill being uninsured and limited
by lifetime caps. Making health insurance minimal and more affordable
to fit a young persons budget illustrated above would also provide cost
savings to the Federal Government.
I thank you for the opportunity to present this information to you
and would be willing to provide you with the documented resources that
support this statement. Thank you for your interest and concern.
Additional information provided by Dana Kuhn, PhD, President and
Founder of Patient Services Incorporated.
Statement of George Stone
Thank you for looking into the rising cost of health insurance in
this country. I retired about 6 years ago and since that time the cost
of my health insurance has gone up dramatically while my income has
not.
Without help controlling those health care costs I will be joining
the ranks of the uninsured.
Retired Firefighter/Paramedic
Statement of Jonathan B. Weisbuch
Thank you for the opportunity to submit a statement to your
informational hearing, Health Subcommittee Advisory No. HL-23. Since my
graduation from NYU Medical School in 1963, this country has struggled
to provide health care to all its residents. Medicare and Medicaid were
initial steps, but continue to leave huge gaps that have not been
closed. Now is the time to make the major changes that will set the
system right.
Plans currently promoted by Senators Clinton and Obama are
insufficient. Their plans rely on an insurance industry which profits
by denying care, and a Medicaid program for ``medically indigent'' that
promotes the myth that a health system for the poor can be separate,
but equal.
Preserving a profit system continues the benighted notion that
medicine operates under the rules of Adam Smith, Milton Friedman and
the economics of the market place. This cultural error produces waste,
inefficiency, and unnecessary human morbidity and mortality. It
encourages the outright greed we now find in hospitals, physician
practices, the medical equipment and pharmaceutical sectors, and the
insurance industry. The business model is driven by profits and
competition; a medical system should focus on preventing disease, using
science to diagnosis and treat patients, and providing humane care when
cure is no longer possible. Profit does not enter the equation. Quality
care and profits frequently conflict; nothing in the business
vocabulary speaks to serving human needs where no economic benefit
accrue to the corporation. The cultural misconception that medicine is
a business, not a profession, must be eliminated from any reform.
Similarly, Medicaid, focused on serving the ``medically indigent,''
has produced 50 state systems, all of which are different. Eligibility
is variable, coverage is not transportable; individuals are subject to
means tests, and may lose coverage for themselves or their children
when income exceeds a minimal level. States invariably have difficulty
covering their medical costs, reducing eligibility, services, and the
fee schedule. A special system for the poor must be eliminated.
Congress must adopt a universal program that assures that everyone has
coverage that is equitable and accessible in every region of the
country; is based on common standards of care, practice and quality;
and is reimbursed by fees agreed upon by all parties. Administration
costs should be a low percentage of total expenditures.
The one program in the United States that could meet these
objectives, if expanded and modified, is Medicare. It is true that the
VA system provides the highest quality care at the lowest cost of any
large system in this country; but proposing a program, fully owned by
government, is inconsistent with the independent nature of medical
practice. The VA should be preserved until the new health reform
achieves the level of quality, cost and patient satisfaction that
exists in the VA. Until that time, however, the Medicare model will
suffice for non-veterans. The New Medicare should eliminate Parts C and
D, and modify Part B in lieu of a service model that expands primary
care and prevention, supports quality improvement, and spreads all
costs across the entire system. The New Medicare should pay hospital
costs on a per diem rather than a DRG basis; and should encourage the
use of high technology only when clear outcome improvements to health
are demonstrable. The differences in care and cost that exist between
regions are unconscionable. The New Medicare should also include mental
health and dental services, rehabilitation, and community care.
Expanding Medicare to include everyone can be accomplished in three
years. The age for eligibility for adults could be lowered annually by
15 year increments; for children, providing coverage for those 0-1 in
year one, then up to 10 in year two, and to 20 in year three would
achieve universal coverage with minimal strain to the current system.
Patients now covered by insurance would maintain their current patterns
of care; those without coverage or a medical home, would be given the
opportunity to choose one. Adding 16 percent to every primary care
practice in the country might be a short term burden to the system; but
if primary providers were given a large increase in their fee schedule,
they could be willing to add one hour to their day to meet the demand.
Over three to five years, the increased primary care fees might draw
physicians into primary care specialty training, helping to equilibrate
what is now a disproportionate number of specialists in the American
system.
A significant outcome of this change, apart from the fact that
everyone will be covered, is that all providers will know the fee
schedule for a particular service. Today, insurance carriers all have
different fees, Medicare and Medicaid differ, and fees paid to some
providers of care differ from those paid to others for the same
service. This promotes inefficiency and efforts to beat the system; it
encourages dishonesty. Adjustment in the fee schedules will take time,
hard work; and must include representatives from all segments of the
system to be equitable and acceptable.
Payment for the new program will require transferring premium
dollars now paid by employers for private insurance into the Medicare
Trust Fund, as each eligible age group moves from private insurance
into the New Medicare program. The coverage for pregnant women and
children would be paid in part by transferring the family coverage
premiums into the Trust Fund, and the rest from the Federal monies now
used by Medicaid for deliveries and other pediatric programs like
SCHIP. The New Medicare should allow states to retain their portion of
Medicaid dollars, a benefit of nearly $200 billion, funds sorely needed
by the states.
Under this scenario, the insurance industry will remain active for
three years, diminishing in size each year. Corporate costs for health
benefits will remain approximately the same, since the monies now
purchasing private insurance for each age group will be transferred to
the Trust Fund as that age group becomes eligible. Family coverage will
be transferred to the Trust Fund. As premiums shift to the Trust Fund,
corporate staff now used to choose insurance programs, examine
utilization, determine benefits, and respond to personnel complaints,
can be reassigned. Other insurance costs that cover worker health
benefits will decline over time: Workers' Compensation, vehicle
insurance, pension health benefits, etc.
Corporate premiums will not cover all health costs, however, since
current costs also include patients' out-of-pocket costs. These point-
of-service fees will be eliminated for patients, but will have to be
covered by a small increase in personal income taxes.
No new finances will be required to pay for the New Medicare,
sufficient funds already exist in the system to meet the $2.3 trillion
cost. Corporate premiums generate about $900 billion. Out-of-pocket
costs today approximate $1,500 per individual, or $450 billion. The
payroll tax going into the Medicare Trust Fund to cover the elderly,
approximately $500 billion, will continue; and may decline in time as
the system becomes more efficient in preventing the morbidity of those
entering the 65 year old window. The Federal portion of the $350
billion now spent by State and Federal general revenues for Medicaid
will be added to the Trust Fund, and the state portion retained by each
state. Most of the categorical funding now coming from HHS, such as
Ryan White, Maternal and Child Health funds, special disability monies,
etc. will all be rolled into the Trust Fund. These monies will allow
the New Medicare to operate without a means test, without exclusions
for pre-conditions, without the need for annual state legislative
action, without the need for any definition of eligibility based on the
Federal Poverty Line, and without the 30 percent overhead and profits
now drained from the system. The only new ``tax'' is the income tax on
individuals to offset the out-of-pocket costs now paid at the point of
service. The New Medicare program will function as did the old, with
minimal administrative overhead, saving clinicians and hospitals
hundreds of billions of dollars in billing costs now required to keep
up with the current paperwork.
In three years everyone in the U.S. will be covered. Preventable
deaths in the uninsured, failure to use preventive services, individual
bankruptcies for catastrophic illness, and the failure to provide
adequate health care to prisoners, will all be eliminated. Initially,
everyone will be covered under the same rules now governing Medicare;
but these rules will have to change, so that by year 5, the entire
system will have common service guidelines. Some service exclusions
will exist, including cosmetic surgery, experimental treatments and
those without scientific justification; but, the approved set of
services will include all the care needed to promote health, to cure
and care for disease. Profits will no longer drive the process, rather
the care giving concept outlined by Hippocrates 2500 years ago will
prevail. The pharmaceutical industry, the medical equipment industry,
private transport services, etc., will provide services to the program
under competitive bids. Fees and reimbursements will be based upon the
cost to provide care and a relative value scale. Incentives may be used
to encourage providers to work in underserved areas. And the system
should cover public health costs up to 3 percent of the gross health
expenditures; allowing PH to meet its legislative mandates and be
prepared for mass events.
HB 676 submitted by Congressman Conyers, and over 100 cosigners,
would achieve these objectives. Everyone would be included, the states
would be relieved of their Medicaid burden, companies providing health
benefits would experience a decline in their costs.
Medicare Trust Fund problems would be resolved as large additional
revenues from individuals and corporations are added, increasing the
risk pool with large numbers who use limited medical services. With an
entire nation covered by one common payer, the actual cost of care per
individual will decline as many exploit prevention services, utilize
early diagnosis and treatment, and reduce inappropriate use of hospital
emergency services.
Statement of Karen Hawes
Speaking one's mind is what we should all be doing, in healthy
debates and not heated arguments. When 47 million Americans is quoted
as the number of people adversely affected by our present-day, health-
scare system, the numbers game can be flipped and dissected to support
any argument, even using the same numbers. However, knowing/seeing much
of the impact firsthand, alongside comparisons with what is provided in
other countries, the U.S. is not the leader when it comes to caring for
its own. We may have many technological advances, but they are limited
to the select few--this does not translate to being great as a nation;
other nations, with perhaps fewer or less-fantastic advances, but who
provide necessary care to their people, provides a greater national
advancement than any bleeding-edge technology. The rhetoric does not
reflect the reality, when it comes to our health care system.
Some mention that there are millions in America who choose to go
without health care coverage. For those who are choosing to go without
healthcare coverage, it's most likely because of cost, not because of
choice. We all want quality care, not all of us can afford it;
especially when you have families who have to choose between paying the
rent or paying for ever-inflating insurance--for coverage that may not
pay for your medical needs (due to multiple loopholes and contractual
fine print). So, people gamble with their lives, in order to keep
afloat and provide what they know is needed: food, shelter, etc. I
think that every American should volunteer at one of these health
clinics, at least once a year, to see it first-hand and at the front-
line who ``these people'' are and how it is that things got this way
"for them". It's a lot different than what's covered in the sound-bytes
of our news sources. There are more people than we're being shown, who
are frightened to death, no pun intended, about getting sick. This also
reflects the factoid that well over half of Americans who file for
bankruptcy have done so as a result of a major medical illness. When in
America, it often is ``your money or our life.''
Statement of March of Dimes Foundation
The March of Dimes is pleased to submit testimony on the importance
of health insurance coverage for women of childbearing age, infants and
children on behalf of its over 3 million volunteers and 1500 staff. As
you may know, the March of Dimes is a national voluntary health agency
founded in 1938 by President Franklin D. Roosevelt to conquer polio.
Today, the Foundation works to improve the health of mothers, infants
and children by preventing birth defects, prematurity and infant
mortality through research, community services, education, and
advocacy. The Foundation is a unique collaboration of scientists,
clinicians, parents, members of the business community, and other
volunteers affiliated with 51 chapters in every state, the District of
Columbia and Puerto Rico.
The March of Dimes thanks Chairman Stark and Members of the
Subcommittee for holding a hearing on the topic of the instability of
health coverage in America. According to the Institute of Medicine,
health coverage is the single most important factor in determining
whether a child receives medically-needed care. The IOM has also found
that health coverage plays an important role in access to maternity
care, and pregnant women without health insurance receive fewer health
services and report greater difficulty in obtaining needed care than
women with insurance.
Given the Foundation's history with the polio epidemics and our
current focus on preterm birth, the March of Dimes is equally committed
to ensuring that all women of childbearing age, infants and children
have coverage for preventive services as recommended by the American
College of Obstetricians and Gynecologists (ACOG) and the American
Academy of Pediatrics (AAP) and that high risk pregnant women and
medically compromised children, such as those born preterm or with
birth defects, have comprehensive coverage for special health care they
require.
The March of Dimes has worked with Members of Congress, other
Federal officials, and numerous states on efforts to improve, expand
and protect both private and public coverage. Specifically in regard to
private coverage, in 2006, the March of Dimes commissioned a report
from the Georgetown University Health Policy Institute entitled,
``Health Insurance Regulation by States and the Federal Government: A
Review of Current Approaches and Proposals for Change.'' This report
found that numerous states have enacted laws to ensure that individuals
covered by state regulated insurance plans received access to certain
important benefits. For example, 19 states have requirements regarding
maternity coverage, 27 states have requirements regarding the screening
for and treatment of phenylketonuria (PKU), and 13 states have
requirements that address coverage for the treatment of cleft lip/
palate malformations. These measures provide access to critical care.
As the Subcommittee considers healthcare reform proposals, the March of
Dimes urges Members to recognize the importance of these mandates to
pregnant women, children with birth defects, and their families.
The need for continued efforts to expand access to health coverage
is clear. According to Census Bureau data prepared for the March of
Dimes, in 2006, 9.4 million--12 percent--of the nation's 78 million
children under age 19 lacked health insurance coverage. Some 61 percent
of these children lived in families with incomes below 200 percent of
poverty and may have been eligible for Medicaid or the State Children's
Health Insurance Program (SCHIP). In fact, public programs like
Medicaid, SCHIP and Medicare are a critical source of access to care
for many low income women of childbearing age, infants and children.
Medicare finances approximately 10,000 births annually, and Medicaid
financed 41 percent of hospital births in 2002. Medicaid also covered
nearly 30 million children in 2004, and SCHIP covered approximately 6
million. The March of Dimes is dedicated to continuing to work with
Members of the Subcommittee to ensure a swift reauthorization of SCHIP
that will provide states with the tools and resources necessary to make
significant gains in enrolling eligible pregnant women, infants and
children. The Foundation is also eager to work with Members to ensure
that the specific healthcare needs of women of childbearing age,
infants and children are addressed in any healthcare reform efforts.
The March of Dimes supports access to comprehensive insurance
coverage for all women of childbearing age, especially those who are
pregnant, that covers the full scope of maternity care benefits
recommended by the American College of Obstetricians and Gynecologists
(ACOG) and the AAP. Women who receive maternity care are more likely to
have access to screening and diagnostic tests that can help identify
problems early; services to manage developing and existing problems;
and education, counseling and referral to reduce risky behaviors like
substance use and poor nutrition. Such care may thus help improve the
health of both mothers and infants. In addition, postpartum care helps
women appropriately space pregnancies, thus reducing the risk of
preterm birth.
While maternity care is crucial, research increasingly shows that
women who have regular access to health care before becoming pregnant
have healthier pregnancies and better birth outcomes than women who
begin care after they become pregnant. In fact, ACOG now recommends
that women receive preconception care, defined as, ``the identification
of those conditions that could affect a future pregnancy or fetus and
that may be amenable to intervention.'' Such care includes tobacco
cessation counseling and pharmaceuticals, nutrition and folic acid
counseling, and controlling pre-existing medical conditions that could
impact a pregnancy (such as diabetes or hypertension). For these
reasons, the March of Dimes believes that all women of childbearing age
should have access to comprehensive health coverage to improve their
chances of receiving these services.
Once again, the March of Dimes thanks Chairman Stark and Members of
the Subcommittee for holding this important hearing and for providing
us with this opportunity to submit testimony. The Foundation looks
forward to working closely with Subcommittee Members to improve access
to comprehensive health coverage for women of childbearing age, infants
and children.
Submitted by Marina L. Weiss, Senior Vice President, Public Policy
and Government Affairs
Contact: Amanda Jezek, Deputy Director, Federal Affairs
Statement of National Congress of American Indians
On behalf of the National Congress of American Indians (NCAI), we
are pleased to present testimony to the House Committee on Ways and
Means, Subcommittee on Health for the hearing on the Instability of
Health Coverage in America.
NCAI is the oldest and largest American Indian organization in the
United States. NCAI was founded in 1944 in response to termination and
assimilation policies that the United States forced upon the tribal
governments in contradiction of their treaty rights and status as
sovereign governments. Today NCAI remains dedicated to protecting the
rights of tribal governments to achieve self-determination and self-
sufficiency.
American Indian and Alaska Natives Face Massive Disparities\1\
Throughout America, health care is a top priority. It is widely
accepted that high-quality health care is a necessity, not a luxury. In
Indian Country, even the most basic health care is a luxury and high-
quality health care is usually not even an option. Most tribal
communities cannot easily access health care services and, even when
services are available, they are often subject to decades-old, outdated
practices and services.
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\1\ Results from the 2006 National Survey on Drug Use and Health:
National Findings
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Across every indicator, American Indian and Alaska Natives face
massive disparities in health:
Life Expectancy
Life expectancy of American Indian and Alaska Natives is
nearly six years less than any other race or ethnic group in America--
72.4 versus 77.8 for the general population.\2\
The life expectancy for males on the Pine Ridge
Reservation is 56 years old. The life expectancy for males from Iraq,
Haiti, and Ghana is higher at 58, 59, and 60, respectively.\3\
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\2\ National Vital Statistics Reports, U.S. States Life Tables,
2003. Available from http://www.cdc.gov/nchs/data/nvsr/nvsr54/
nvsr54_14.pdf. (accessed April 2008).
\3\ United Nations, Department of Economic and Social Affairs,
Population Division (2007), World Population Prospects: The 2006
Revision. CD-ROM Edition--Comprehensive Dataset (United Nations
publications, forthcoming); supplemented by official national
statistics published in United Nations Demographic Yearbook 2003 and
Demographic Yearbook 2004, available from the United Nations Statistics
Division website, http://unstats.un.org/unsd/demographic/products/dyb/
default.htm (accessed Dec 2007); and data compiled by the Secretariat
of the Pacific Community (SPC) Demography Programme, available from the
SPC website, http://www.spc.int/prism/social/health.html (accessed Dec
2007). http://unstats.un.org/unsd/demographic/products/indwm/tab3a.htm
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Diabetes
American Indians and Alaska Natives have the highest
prevalence of Type 2 diabetes in the world and the incidence of type 2
diabetes is rising at 2.6 times the national average among American
Indian and Alaska Native children and young adults.\4\
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\4\ National Center for Health Statistics, Health, United States,
2007, With Chartbook on Trends in the Health of Americans.
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The American Indian and Alaska Native diabetes death rate
of 36.3\5\ per 100,000 \6\ places Indian Country 17th out of 191 World
Health Organization Member States.
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\5\ Adjusted to compensate for miscoding of Indian race on death
certificates.
\6\ Trends in Indian Health 1998-1999. Indian Health Service.
http://www.ihs.gov/PublicInfo/Publications/trends98/trends98.asp.
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Heart Disease
The leading cause of death among American Indian and
Alaska Natives are heart diseases--at 133.5 \7\ per 100,000 \8\--a
higher rate than found in the general population.
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\7\ Adjusted to compensate for miscoding of Indian race on death
certificates.
\8\ Trends in Indian Health 1998-1999. Indian Health Service.
http://www.ihs.gov/PublicInfo/Publications/trends98/trends98.asp.
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Suicide
Native people ages 15-34 make up 40 percent of all
suicides within AI/AN populations.
As a recent example, in the past 12 months there have
been 213 suicide attempts on the Rosebud Sioux reservation. At least
one suicide attempt every other day.
Fetal Alcohol Syndrome (FAS) 1.5 to 2.5 Native children
per 1,000 live births are afflicted with FAS.
By Comparison, the general U.S. population is 0.2 to 1.0 per 1,000 live
births.
Substance Use
19 percent of the Native population aged 12 years and
over are substance abuse dependent.
By Comparison, the general U.S. population is 9 percent
of those aged 12 years and over are substance abuse dependent.
2 percent of the Native population currently abuses
methamphetamine.
By Comparison, the general U.S. population is 0.07
percent currently abuses methamphetamine.
Mental Health
30 percent of Native adults have had a serious
psychological distress.
By Comparison, the general U.S. population is 11 percent.
Health Insurance Coverage in Indian Country
American Indians and Alaska Natives have limited health care
options. Because of higher rates of poverty and economic insecurity,
American Indian and Alaska Natives are less likely to have continuous
health insurance, and as a result, less access to healthcare resources.
In 2003, 45 percent of American Indians and Alaska Natives have private
health insurance coverage, 21.3 percent relied on Medicaid, and 30
percent had no health insurance--this compares to the 8.8 percent of
uninsured in the majority population.\9\
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\9\ Henry J. Kaiser Family Foundation Issue Brief, February 2004 &
Income, Poverty, and Health Insurance Coverage in the United States:
2005.
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Indian Health Service (IHS), the agency tasked to uphold the
Federal Government's obligation to provide health care to American
Indians and Alaska Natives, largely provides primary, onsite treatment.
Coverage varies widely among Indian health programs and should not be
assumed to be equivalent to the defined benefits packages of private
insurance.\10\ In fact, according to the U.S. Census Bureau's Current
Population Survey, individuals who solely report IHS health coverage
are classified as uninsured.
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\10\ Zuckerman et al., American Journal of Public Health, Volume
94, Number 1, January 2004.
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Uninsured American Indian and Alaska Natives, which includes those
receiving health care thought IHS, are less likely to see a physician
than those with insurance coverage. Uninsured Americans are also less
likely to get screened for cancer, more likely to be diagnosed with an
advanced stage of the disease, and less likely to survive that
diagnosis than their privately insured counterparts.\11\ Strong
evidence suggests that having a usual source of care produces better
health outcomes, reduced disparities, and reduced costs.\12\
Considering the staggering health disparities faced by American Indians
and Alaska Natives, it is clear that action must be taken to improve
the health and well-being of our tribal communities.
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\11\ American Cancer Society report February 2008 issue of CA: A
Cancer Journal for Clinicians.
\12\ De Maeseneer JM, De Prins L, Gosset C, Heyerick J. Provider
continuity in family medicine. Ann Fam Med 2003;1:144-8.
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Indian Health Care Improvement Act
The United States has a longstanding trust responsibility to
provide health care services to American Indians and Alaska Natives.
This responsibility is carried out by the Secretary of the United
States Department of Health and Human Services through the Indian
Health Service. Since its passage in 1976 the Indian Health Care
Improvement Act (IHCIA) has provided the programmatic and legal
framework for carrying out the Federal Government's trust
responsibility for Indian health.
The need for this reauthorization is clear. The American Indian and
Alaska Native population is the most negatively impacted by health
disparities and suffers from chronic diseases and other illnesses at a
rate disproportionate to that of the mainstream population.
The statistics provided accurately illustrate the deplorable health
conditions of the American Indian and Alaska Native population at
large. Many of these diseases and illnesses could be treated and/or
prevented with adequate funding and proper care. While the health
services delivered to American Indians and Alaska Natives have improved
over time, the current service level is not adequately addressing the
chronic need in the American Indian and Alaska Native population.
Reauthorizing the IHCIA would allocate funding to address the
current needs in Indian health and provide Indian people with the same
modernized and technologically advanced health care delivery systems
and services that are already afforded to mainstream America.
Nationally, health care has progressed to provide in-home care and
to focus on disease prevention and health promotion. The IHCIA
addresses these progressive approaches to health care delivery and will
help move Indian health care into the 21st Century.
The reauthorization of the IHCIA is critical to ensuring healthy
Indian communities nationwide. It is necessary to modernize the
outdated health care delivery system and services that are currently
found throughout Indian Country. Indian people must be given the
opportunity to access health care that is up-to-date and directly
addresses their needs. Indian people deserve to live in a world where
their health care is as cutting edge as their fellow Americans.
Tax Treatment of Health Care Coverage
In light of these shattering disparities, tribal governments have
been trying to be creative in addressing the health care challenges in
their communities. Some tribes have met this challenge by providing an
affordable healthcare plan for all their citizens regardless of need.
This type of universal health coverage is similar to Medicare. However,
some IRS agents--in examining specific tribal governments for their
compliance dating back to 2002 or 2003--are asserting that this type of
coverage, when provided by a tribal government, should be treated as a
taxable benefit unlike Medicare which is another government benefit
health plan that is not viewed as taxable to those eligible for
coverage.
By virtue of this IRS action, Tribes are being penalized for
providing creative solutions to their healthcare challenges. The
penalty asserted is substantial: Withholding tax equal to 30 percent of
the entire expenditure for tribal health care, IRS reporting penalties,
possible negligence penalties, and interest--amounts totaling several
millions of dollars each year. In the interim, no IRS guidance has been
issued. The justification given by these IRS agents is that (1)
government provided health plans do not have the benefit of a statutory
exclusion (unlike employer-provided health care), (2) exclusion under
the general welfare doctrine is not available where the coverage
provided is universal (i.e., not restricted to low-income members), and
(3) healthcare benefits, when funded with gaming revenues, are
considered to be deemed per capita distributions by a Tribe. This
justification fails to recognize the basic function of a government
which is to provide for fundamental citizen needs.
NCAI encourages the committee to begin oversight of this important
issue in Indian Country. Guidance is needed at the highest level to
ensure that Tribes who are diligently working to address the health
needs in their communities are not subject to tax disincentives. If
necessary, NCAI would support legislative action consistent with the
sovereign power of governments to provide health care for their
citizens.
Conclusion
The Federal Government's constitutional and treaty responsibility
to address the serious health needs facing Indian Country must be met.
We at NCAI urge you to make a strong commitment to meeting the Federal
trust obligation in passing the Indian Health Care Improvement Act,
investigating the tax treatment of health care coverage in tribal
communities, and fully funding Indian Health Service. Such a
commitment, coupled with continued efforts to strengthen tribal
governments and to clarify the government-to-government relationship,
truly will make a difference in helping us to create healthy
communities in Indian Country.