U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

99–776 PDF 2017

INNOVATIONS IN HEALTH CARE: EXPLORING 

FREE–MARKET SOLUTIONS FOR A 

HEALTHY WORKFORCE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR, AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN WASHINGTON, DC, APRIL 14, 2016 

Serial No. 114–45 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

CEWDOCROOM with DISTILLER

(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Buddy Carter, Georgia 

Glenn Grothman, Wisconsin 

Rick Allen, Georgia 

Jared Polis, Colorado, 

Ranking Member 

Joe Courtney, Connecticut 

Mark Pocan, Wisconsin 

Rube ́n Hinojosa, Texas 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Hakeem S. Jeffries, New York 

CEWDOCROOM with DISTILLER

(III) 

C O N T E N T S 

Page 

Hearing held on April 14, 2016 .............................................................................. 1 

Statement of Members: 

Polis, Hon. Jared, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions ........................................................................... 4 

Prepared statement of ............................................................................... 5 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 3 

Statement of Witnesses: 

Corlette, Ms. Sabrina, Senior Research Professor, Center on Health Insurance Reforms, Georgetown University’s Health Policy Institute, 

Washington, D.C. .......................................................................................... 23 

Prepared statement of ............................................................................... 25 

Franklin, Ms. Tresia, Director, Rewards and Employee Relations, Hallmark Cards, Inc., Kansas City, MO ............................................................ 31 

Prepared statement of ............................................................................... 33 

McDonough, Ms. Amy, Vice President and General Manager, Corporate 

Wellness, Fitbit, Inc., San Francisco, CA .................................................... 7 

Prepared statement of ............................................................................... 10 

Zern, Mr. John, Member, Executive Vice President and Global Health 

Leader, AON, Chicago, IL ............................................................................ 16 

Prepared statement of ............................................................................... 18 

Additional Submissions: 

Courtney, Hon. Joe, a Representative in Congress from the State of 

Connecticut: 

Report: Bureau of Labor Statistics .......................................................... 58 

Dr. Roe: 

Letter dated June 19, 2015, to Ms. Bernadette Wilson, Acting Executive Officer, Executive Secretariat, U.S. Equal Employment Opportunity Commission ................................................................................. 89 

Letter dated January 28, 2016, to Ms. Bernadette Wilson, Acting 

Executive Officer, Executive Secretariat, U.S. Equal Employment 

Opportunity Commission ...................................................................... 98 

Letter dated March 18, 2016, from National Coalition on Benefits ...... 104 

Letter dated April 13, 2016, from Society for Human Resource Management, SHRM ..................................................................................... 106 

Prepared statement of the ERISA Industry Committee ........................ 108 

Letter dated April 15, 2016, from National Association of Manufacturers ...................................................................................................... 110 

Letter dated April 21, 2016, from Hallmark Cards ................................ 111 

Prepared statement of the National Association of Worksite Health 

Centers ................................................................................................... 112 

Prepared statement of the U.S. Chamber of Commerce ........................ 115 

Prepared statement of Ms. Heidi B. Capozzi, Senior Vice President, 

Human Resources, The Boeing Company ............................................ 119 

Scott, Hon. Robert C. ‘‘Bobby’’, a Representative in Congress from the 

State of Virginia: 

Letter dated July 13, 2015, to Hon. Jenny R. Yang, Chair, U.S. 

Equal Employment Opportunity Commission ..................................... 48 

Letter dated February 2, 2016, to Hon. Jenny R. Yang, Chair, U.S. 

Equal Employment Opportunity Commission ..................................... 51 

CEWDOCROOM with DISTILLER

CEWDOCROOM with DISTILLER

(1) 

INNOVATIONS IN HEALTH CARE: EXPLORING 

FREE–MARKET SOLUTIONS FOR A 

HEALTHY WORKFORCE 

Thursday, April 14, 2016 

U.S. House of Representatives 

Committee on Education and the Workforce 

Subcommittee on Health, Employment, Labor, and Pensions 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:30 a.m., in room 

2176, Rayburn House Office Building. Hon. David P. Roe [chairman 

of the subcommittee] presiding. 

Present: Representatives Roe, Walberg, Salmon, Guthrie, Messer, 

Carter, Grothman, Allen, Polis, Courtney, Pocan, Hinojosa, 

Bonamici, and Takano. 

Also Present: Representatives Kline and Scott. 

Staff Present: Bethany Aronhalt, Press Secretary; Andrew 

Banducci, Workforce Policy Counsel; Janelle Belland, Coalitions 

and Members Services Coordinator; Ed Gilroy, Director of Workforce Policy; Callie Harman, Legislative Assistant; Christie Herman, Professional Staff Member; Nancy Locke, Chief Clerk; 

Dominique McKay, Deputy Press Secretary; Michelle Neblett, Professional Staff Member; Brian Newell, Communications Director; 

Krisann Pearce, General Counsel; Alissa Strawcutter, Deputy 

Clerk; Juliane Sullivan, Staff Director; Olivia Voslow, Staff Assistant; Joseph Wheeler, Professional Staff Member, Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority Press Assistant; Pierce Blue, Minority Labor Detailee; 

Denise Forte, Minority Staff Director; Christine Godinez, Minority 

Staff Assistant; Carolyn Hughes, Minority Senior Labor Policy Advisor; Eunice Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority General Counsel; Veronique Pluviose, Minority Civil 

Rights Counsel; and Elizabeth Watson, Minority Director of Labor 

Policy. 

Chairman ROE. A quorum being present, the Subcommittee on 

Health, Employment, Labor, and Pensions will come to order. Good 

morning, everyone. I want to welcome our witnesses. We appreciate 

you joining us today for an important conversation on health care 

and the future of employer-sponsored coverage. 

This hearing furthers the goals of the Task Force on Health Care 

Reform which was established to develop a plan to replace 

CEWDOCROOM with DISTILLER

2 

ObamaCare’s one-size-fits-all with free-market, patient-centered solutions. 

We have already held a number of meetings to take input from 

members, policy experts, and stakeholders, and to build consensus 

around policies that will deliver the results the American people 

want and deserve. 

Our vision is clear. It is time to modernize our health care system so we can empower every American with affordable coverage, 

provide more choice, promote quality for all patients, and strengthen health care security for retirees. 

Finally, as we will discuss today, we want to encourage innovation and harness the power of new technologies in order to foster 

lower prices and better treatment for patients. 

As a physician with more than 30 years of experience, I have 

personally seen the need for common sense reforms to strengthen 

our health care system, a system that is too costly and bureaucratic. As an elected official, I am constantly hearing from families 

who are struggling to access the care they need or keep up with 

their premiums that rise year, after year, after year. 

Unfortunately, the President’s government takeover of health 

care is making these problems worse. Health care costs are going 

up, not down. Americans are seeing higher premiums. Families are 

losing access to the coverage they like and the doctors they trust. 

Small business owners are being forced to choose between providing costly government-approved health insurance and hiring 

new workers as they have struggled to navigate a web of burdensome mandates and regulatory requirements. 

Just to give you an example, the city where I was mayor, Johnson City, Tennessee, had to hire a person to navigate all this so 

they could figure out whether they were complying with the law or 

not, a city with a fairly extensive HR department. 

The American people cannot afford this fundamentally flawed 

law, and that is why House Republicans are determined to deliver 

meaningful reform. We have a responsibility to put our health care 

system on a better course, one that is patient-centered, not government driven. 

As part of that effort, we need to understand the vital importance of employer-sponsored coverage, which insures roughly 155 

million Americans, and take a closer look at what is being done in 

the private sector to improve care. 

Employers have played a critical role in driving health care innovation. Despite unprecedented uncertainty in the health insurance 

market and drastic changes in employer-sponsored coverage, employers of all sizes are still developing creative strategies to help 

control costs and meet the changing needs of the workforce. 

These strategies include wellness programs, which are now an 

essential tool to help control costs and encourage healthy lifestyles. 

The Kaiser Family Foundation reported in 2015 that 50 percent of 

employers offering health benefits also offer wellness programs. 

That same year, I joined Chairmen Kline and Walberg in introducing legislation that would eliminate regulatory hurdles to implementing these programs, and I look forward to hearing from experts today on how we can make that goal a reality. 

CEWDOCROOM with DISTILLER

3 

Some employers have responded to costly mandates and rigid reporting requirements under current law by putting in place private 

exchanges. This, too, will reign in costs through competition, and 

unlike public exchanges, serve individuals, and both large and 

small employers. 

Accountable care organizations are another concept employers 

have adopted in recent years to improve the health of their employees and make coverage more affordable. ACOs improve patient experience by coordinating their care between doctors and hospitals 

and focusing on prevention and management of chronic disease. 

Employers are also incorporating telemedicine into their health 

insurance plans, providing patients more access to care at lower 

costs and much greater convenience. 

We are here today to examine how innovations in employer-provided coverage are improving health care for workers and their 

families, and how Federal policies can support rather than discourage free-market solutions. 

I hope our conversation will bring us one step closer to achieving 

responsible reforms the American people desperately need. 

With that, I will now recognize the ranking member of this subcommittee, Chairman Polis, for his opening remarks. You are recognized. 

[The statement of Chairman Roe follows:] 

Prepared Statement of Hon. David P. Roe, Chairman, Subcommittee on 

Health, Employment, Labor, and Pensions 

This hearing furthers the goals of the Task Force on Health Care Reform, which 

was established to develop a plan to replace ObamaCare’s one-size-fits-all approach 

with free-market, patient-centered solutions. We’ve already held a number of meetings to take input from members, policy experts, and stakeholders, and to build consensus around policies that will deliver the results the American people deserve. 

Our vision is clear: It’s time to modernize our health care system so we can empower every American with affordable coverage, provide more choice, promote quality care for all patients, and strengthen health care security for retirees. Finally, 

as we will discuss today, we want to encourage innovation and harness the power 

of new technologies in order to foster lower prices and better treatment for patients. 

As a physician with more than 30 years of experience, I’ve personally seen the 

need for commonsense reforms to strengthen our health care system, a system that 

is too costly and bureaucratic. As an elected official, I constantly hear from families 

who are struggling to access the care they need or keep up with premiums that rise 

year after year. 

Unfortunately, the president’s government takeover of health care is making 

these problems worse. Health care costs are going up, not down. Americans are seeing higher premiums and a lower quality of care. Families are losing access to the 

coverage they like and the doctors they trust. Small business owners are being 

forced to choose between providing costly, government-approved health insurance 

and hiring new workers, and they’re struggling to navigate a web of burdensome 

mandates and regulatory requirements. 

The American people cannot afford this fundamentally flawed law, and that’s why 

House Republicans are determined to deliver meaningful reform. We have a responsibility to put our health care system on a better course—one that is patient-centered, not government-driven. As part of that effort, we need to understand the vital 

importance of employer-sponsored coverage—which insures roughly 155 million 

Americans—and take a closer look at what’s being done in the private sector to improve care. 

Employers have played a critical role in driving health care innovation. Despite 

unprecedented uncertainty in the health insurance market and drastic changes in 

employer-sponsored coverage, employers of all sizes are still developing creative 

strategies to help control costs and meet the changing needs of the workforce. 

These strategies include employee wellness programs, which are now an essential 

tool to help control costs and encourage healthy lifestyles. The Kaiser Family FounCEWDOCROOM with DISTILLER

4 

dation reported in 2015 that 50 percent of employers offering health benefits also 

offer wellness programs. That same year, I joined Chairmen Kline and Walberg and 

introduced legislation that would eliminate regulatory hurdles to implementing 

these programs, and I look forward to hearing from experts today on how we can 

make that goal a reality. 

Some employers have responded to costly mandates and rigid reporting requirements under current law by putting in place private exchanges. This tool helps rein 

in costs through competition, and unlike public exchanges, serves individuals and 

both large and small employers. Accountable Care Organizations are another concept employers have adopted in recent years to improve the health of their employees and make coverage more affordable. ACOs improve the patient experience by 

coordinating care between doctors and hospitals and focusing on prevention and 

management of chronic diseases. Employers are also incorporating telemedicine into 

their health insurance plans, providing patients more access to care at lower costs 

and greater convenience. 

We are here today to examine how innovations in employer-provided coverage are 

improving health care for workers and their families and how federal policies can 

support—rather than discourage—free-market solutions. I hope our conversation 

will bring us one step closer to achieving the responsible reforms the American people desperately need. 

Mr. POLIS. Thank you. You referred to me as ‘‘Chairman Polis.’’ 

I do not know if we are expecting a change or not. Ranking Member Polis and someday chair, perhaps. 

But I want to thank the chairman for convening this. This is a 

great conversation. I think we are all interested in the role of employers, the role of wellness. The discussion that has occurred in 

Congress and will continue to really runs the gamut from should 

employers even be involved with the provision of health care to 

what can employers do to encourage wellness among employees 

and share in the benefits of reduced costs that can accrue from the 

right kinds of wellness programs. 

I was in Congress when we passed the Affordable Care Act. I remember various predictions that occurred, many of them were 

about many employers dropping health care coverage or skyrocketing costs. I am glad to say that many of those doomsday predictions have not occurred. 

Of course, we can find instances of employers who made decisions to drop, employers that made decisions to add health care, 

but in the aggregate, for better or worse, there has not been a market shift from the employer-based system of health care. 

In fact, there has been a delay in the tax provisions that would 

have encouraged that shift to occur, namely a tax referred to as the 

‘‘Cadillac tax,’’ which I think was in part designed to transition 

from an employer-based health care system to an individual or exchange-based health care system. 

I have started several businesses myself as an employer before 

the ACA. I knew how frustrating health care costs were. Health 

care choices were difficult, expensive for small businesses. The administrative burden to small businesses it was and is large. I certainly think anything we can do through the exchanges to reduce 

the administrative burden of administering health care programs 

for small- and mid-sized businesses would be greatly beneficial. 

The fact is that receiving health care through an employer is still 

the most popular option. In my own state, the proportion of Coloradoans with large employer coverage is actually increasing, and it 

increased about 3 percent over the last five years, and currently 

156 million Americans are covered by their employers. 

CEWDOCROOM with DISTILLER

5 

The ACA made a number of changes to improve access to insurance. I think it is a baseline of having insured more than 10 million people, 10 million more people that we can build upon. I think 

we are also very interested in cost reduction measures. Wellness 

initiatives can certainly be among those. 

Last fall, as an example, my State legislature in Colorado passed 

a law allowing physicians to write prescriptions using remote telemedicine technology. In instances like that, examples like that can 

be used to reduce costs. 

Additionally, we can share findings on things to reduce costs 

through the Division of Insurance and use data in pursuit of more 

innovative solutions to control costs. I think that will be the key 

with regard to measuring the effectiveness of wellness programs at 

employers. 

There is a lot of hype, and we really have to see what actually 

accrues in cost savings, to the shared benefit, one would hope, of 

the employee and the company that offers the wellness program 

with, of course, room for private contractors to make a profit as 

well who actually provide those types of wellness programs. 

I hope that we can find a better, more streamlined way to deliver 

care. It is also important that we do not forget the importance of 

policies like paid sick leave and paid family leave that are very important to employees and important to overall wellness and job satisfaction. 

Remind, I want to use this occasion to remind our chair that over 

40 million workers do not have access to paid sick days and paid 

family leave, which I think are really helpful and the basis of some 

of the important wellness policies that we need to initiate. 

I look forward to hearing from our witnesses, look forward to a 

thoughtful discussion about how we can control health care costs 

through innovative partnerships between the government and the 

private sector, and hearing a little bit more about the role of employer-based health care now and in the future, and I yield back 

the balance of my time. 

[The statement of Ranking Member Polis follows:] 

Prepared Statement of Hon. Jared Polis, Subcommittee on Health, 

Employment, Labor, and Pensions 

I thank the chairman for yielding to me, and I thank all of our witnesses for providing us with their time and expertise this morning. 

Since the passage of the Affordable Care Act in 2010, over 20 million uninsured 

Americans have gained access to health coverage. 

In Colorado, 15.8 percent of folks in our state lacked insurance before the ACA. 

Last year that number fell to 6.7 percent, a historic low. 

The ACA is working, despite some flaws, and this is largely due to a shared push 

by individuals, federal and state governments, and employers to increase coverage 

nationwide. 

I was in Congress when we passed the ACA, and I remember the doomsday predictions that were being thrown around at the time, about workers losing coverage 

or about costs skyrocketing. 

But thankfully, many employers have stepped up to the plate and the pundits 

have been proven wrong. 

I have started several businesses myself. And as an employer I know that before 

ACA, health care costs were climbing at an out-of-control rate for employers and 

employees. Health care choices were slim to none in many states, and people had 

to choose health insurance over strategic career moves when considering job opportunities. 

CEWDOCROOM with DISTILLER

6 

The six years since the ACA has been implemented have not always been perfect, 

but premiums are down and choices are up for employees and businesses. 

In fact, ACA has lowered costs and spread the responsibility among everyone – 

both employers and employees. Before the passage of the ACA, the annual premium 

increase for employer-sponsored family insurance hovered at 9.5%. By 2015 it had 

fallen to 2.7%. 

The fact is that receiving health insurance through your employer is still a really 

popular option for many people. In my home state, the proportion of Coloradans 

with large-employer coverage is actually increasing, growing by 3.5 % over the past 

two years. Currently, 156 million Americans are currently covered by their workplace. 

In a tightening job market, health insurance benefits are one way that employers 

can attract top talent. I don’t see how the ACA dampened that fact. 

Furthermore, under the ACA, employer-sponsored insurance plans are required to 

be more comprehensive. And everyone benefits from the coverage of preventive services without cost sharing, such as free access to flu shots or mammograms. 

The ACA improved access to insurance, and we must move forward from that 

baseline. We cannot return to a time when these basic health services were not 

guaranteed. 

Of course, we can always do better. As members of Congress, we have a responsibility to improve upon the model of health insurance we put in place six years ago, 

and to support innovations that may produce healthier outcomes for Americans 

across the country. 

I am proud to say that my home state of Colorado is leading the way in terms 

of collaboration to bend the cost curve of health care. 

Last fall, the state legislature passed a law allowing physicians to write prescriptions using remote telemedicine technology. Not only does this boost convenience by 

saving an employee a trip to the doctor during work hours, telemedicine can actually lower costs. Certain insurers have started allowing calls or emails directly between a patient and physician, which ends up being less expensive than a full visit. 

I am enthusiastic about the ways that technology can empower consumers with information, support, and near-immediate access to care. 

Colorado has also been doing some fascinating work in health care data transparency. We were one of the earliest states to adopt an all-payer claims database. 

The Center for Improving Value in Health Care (CIVHC:: pronounced ‘‘civic’’) has 

a mandate from the Governor to collect and analyze claims from both private and 

public payers. 

They track how Coloradans are spending their health care dollars, and share this 

information with the general public. Workers deserve full disclosure when it comes 

to health insurance, it’s certainly a common request I hear from constituents who 

call my office with questions about their premiums. Organizations such as CIVHC 

are playing an important role in educating people about their options. 

Additionally, they also share these findings with researchers and the Division of 

Insurance, who use this data in pursuit of more innovative solutions to control costs 

and provide higher quality care. This type of collaboration is precisely the kind of 

partnership that we should see more of. 

I personally recognize the ability of the private sector to redesign outdated models 

with an agility that Congress simply does not have. For health outcomes, this is 

particularly valuable. 

I would issue a request, however, that in this insatiable hunt to find a newer, 

more streamlined way to deliver care, we don’t forget the value of evergreen policies 

such as paid sick days and paid family leave. These relatively simple investments 

have been linked to healthier employees, higher rates of job satisfaction and lower 

turnover overall, but currently, 40 million workers don’t have access to them. 

I look forward to hearing from our witnesses, and discussing ways that we might 

be able to control health care costs through innovative partnerships between the 

government and the private sector. 

Chairman ROE. I thank the gentleman for yielding. Pursuant to 

Committee Rule 7(c), all subcommittee members will be permitted 

to submit written statements to be included in the permanent 

hearing record. Without objection, the hearing record will remain 

open for 14 days to allow statements, questions for the record, and 

other extraneous material referenced during the hearing to be submitted into the official hearing record. 

CEWDOCROOM with DISTILLER

7 

It is now my pleasure to introduce our distinguished panel of witnesses. First, Ms. Amy McDonough, who is the vice president and 

general manager of Corporate Wellness at Fitbit in San Francisco, 

California. She works with employers and partners in corporate 

wellness, supplying businesses with the tools to effectively engage 

employees in corporate wellness programs. You have a fun job, I 

think. Welcome. 

Mr. John Zern is the executive vice president and global health 

leader with Aon in Chicago, Illinois. Mr. Zern is responsible for the 

strategic direction, client satisfaction, revenue growth, and operational and professional standards of Aon’s health business. Welcome. 

Ms. Sabrina Corlette, J.D., is the senior research professor at the 

Center on Health Insurance Reforms with Georgetown University’s 

Health Policy Institute here in Washington, D.C. Ms. Corlette directs research on health insurance reform issues and has published 

many papers regarding the regulation of private health insurance 

and the development of health insurance marketplaces under 

PPACA. Welcome. 

Ms. Tresia Franklin is the director of Total Rewards and Employee Relations at Hallmark Cards, Inc. in Kansas City. I think 

there is not anybody in here that has not used your product. 

Ms. Franklin oversees Hallmark’s compensation and benefit programs, human resource information systems, and employee relations. Welcome to Washington. 

I will now ask our witnesses to stand and raise your right hands. 

[Witnesses sworn.] 

Chairman ROE. Let the record reflect that the witnesses answered in the affirmative, and you may take your seats. 

Before I recognize your testimony, let me briefly explain our 

lighting system. You have five minutes to present your testimony. 

When you begin, the light in front of you will turn green. With one 

minute left, it will turn yellow. When your time has expired, the 

light will turn red. At that point, I will ask you to wrap up your 

remarks as best as possible, and members will have five minutes 

also to ask questions. 

We will begin with Ms. McDonough for five minutes. You are recognized. 

TESTIMONY OF AMY McDONOUGH, VICE PRESIDENT AND GENERAL MANAGER OF CORPORATE WELLNESS, FITBIT, SAN 

FRANCISCO, CA 

Ms. MCDONOUGH. Thank you, Chairman Roe and Ranking Member Polis, for the opportunity to testify at today’s hearing. As the 

fifth member of Fitbit, Inc., and vice president and general manager of Fitbit Wellness, I come today to share my passion for innovating around engaging data driven health solutions for employers. 

Fitbit Wellness, our offering for corporate wellness, was born in 

2010 in response to market-stated need. We are driven by a belief 

that the right data, tools, and guidance can empower people to take 

charge of their health and fitness, and that community is key to 

fostering healthy behavior. 

With six years of experience behind us, we remain deeply committed to helping companies innovate in this space. We have a speCEWDOCROOM with DISTILLER

8 

cific vision of wellness, one that addresses the diverse needs of both 

organizations and the people that power them. 

The fundamental goal of any wellness program should be to provide opportunities for individuals to improve their health and 

wellness. The need for wellness programs has never been greater, 

and employers are uniquely positioned to improve population 

health by starting right in the workplace. Wellness should always 

be inclusive, voluntary, and should protect the privacy of the people 

it is aiming to serve. 

While the use of our technology in the corporate wellness setting 

continues to evolve rapidly, the results our customers have seen so 

far are significant. Let me briefly share a few examples. 

Indiana University Health, Indiana’s most comprehensive health 

care system, has been a Fitbit Wellness customer for more than 

two years. They found that 40 percent of participants decreased 

their BMI and 60 percent of program participants with diabetes decreased their A1C levels. 

For one of our other customers, BP, who we work with through 

a partnership with StayWell, Fitbit data was a factor in reducing 

their overall health care spending by 3.5 percent. BP also saw that 

for employees who participated in a lifestyle management program 

over a one year period, their health risks declined by 11.1 percent. 

Appirio, another Fitbit Wellness customer, cut its 2015 insurance 

premiums by 6 percent, a savings of $280,000, after showing its insurer data about engagement with their wellness program, including aggregate data from the 400 Fitbit devices it had provided to 

its employees. 

Fitbit Wellness is built around the understanding that better 

people-oriented technology enables stronger results. We focus on 

engaging people first, incentivizing health and wellness through rewarding community driven experiences using wearable devices that 

consumers love. 

Companies have traditionally worried about investing in wellness 

due to lack of participation. Traditional wellness programs generally show about an average 24 percent participation rate. Fitbit 

Wellness’ participation rates vary from company to company, but 

are often much higher, sometimes more than 80 percent. 

Across industries, we are seeing results that point to the very 

real ways that wellness works to keep employees healthy, reduce 

health care costs, and increase productivity. When workplaces 

make the healthy choice, the easy choice, health outcomes are profound. 

Employers are uniquely positioned to improve population health 

in the workplace by fostering wellness initiatives that are inclusive, 

fun, voluntary, and protect the privacy of the people they aim to 

serve. 

Corporate wellness is evolving as we speak, and is increasingly 

seeking to represent a more holistic picture of what influences 

health. Wellness professionals are beginning to look beyond tradition measures, like diet and exercise, to everything from sleep and 

mental health to financial wellness and stress management. 

Wellness programs aim to help people live healthier, happier, and 

more active lives. 

CEWDOCROOM with DISTILLER

9 

Inherent in that mission is the responsibility to implement appropriate data security and privacy policies. As the leader in the 

connected health and fitness market, Fitbit is committed to protecting user data and ensuring that the health information tools 

people turn to for help are used properly. 

Fitbit believes that participation in wellness programs should always be voluntary. Employees should be given the choice to opt in 

to participate and there should be no penalties for abstaining from 

participating in a program. 

Companies should provide participants with an understanding of 

how their data will be used. However, the regulations governing 

wellness programs are not always clear, and this confusion has left 

some employers on the sidelines. 

We at Fitbit are supportive of efforts to clarify and streamline 

the applicable laws and regulations that govern the structure of 

wellness programs. 

Thank you for inviting me to participate and to share Fitbit’s 

passion for data-driven, community-oriented health solutions. 

[The statement of Ms. McDonough follows:] 

CEWDOCROOM with DISTILLER

10 

CEWDOCROOM with DISTILLER


Insert offset folio 1 here 99776.001
11 

CEWDOCROOM with DISTILLER


Insert offset folio 2 here 99776.002
12 

CEWDOCROOM with DISTILLER


Insert offset folio 3 here 99776.003
13 

CEWDOCROOM with DISTILLER


Insert offset folio 4 here 99776.004
14 

CEWDOCROOM with DISTILLER


Insert offset folio 5 here 99776.005
15 

CEWDOCROOM with DISTILLER


Insert offset folio 6 here 99776.006
16 

Chairman ROE. Typical of Fitbit, you finished right on time. Perfect. 

Ms. MCDONOUGH. Thank you. 

Chairman ROE. Mr. Zern, you are recognized for five minutes. 

TESTIMONY OF JOHN ZERN, EXECUTIVE VICE PRESIDENT 

AND GLOBAL HEALTH LEADER, AON, CHICAGO, IL 

Mr. ZERN. Mr. Chairman and members of the subcommittee, 

thank you for the opportunity to testify at this important hearing 

on the value proposition that employer-sponsored coverage brings 

to our Nation’s health care system. 

More than 150 million Americans receive their health coverage 

through their employer. 

Facing an increasingly diverse workforce and employees’ desire 

for greater choice and control over their health care, employers are 

creating a more consumer driven experience for their employees, 

arming them with the right balance of tools, resources, and incentives to improve their health and their choices, along with the guidance, advocacy, and support needed for those individuals with serious and ongoing medical needs. 

Aon is a leading global provider of risk and human services solutions. We serve over 5,000 employers in the U.S., and we administer benefits for over 10 million employees and retirees. 

Employers are looking for new and innovative ways to change 

the way health benefits are offered. These programs include 

wellness, new technology, innovative delivery systems, private exchanges, and greater transparency in the cost and quality of health 

care services. 

While we have experience in these and other types of new and 

innovative programs that employers are offering, today I will focus 

the discussion on one program in particular, Aon’s development of 

a private health exchange. Employers face a significant challenge 

today of providing quality, affordable health coverage for employees 

in our complex health care system. 

Employers are focused on promoting consumer engagement, reducing health care spending, and continuing to ensure that employees and their families have comprehensive coverage. 

Our 2016 health care survey reveals that employers support the 

value proposition of offering health benefits to their employees, and 

only 5 percent of employers say they will stop offering health benefits in the next three to five years. 

But, healthcare costs continue to rise at rates higher than CPI. 

Employers are evaluating better solutions that empower consumers 

with more choices in their health plan and benefit offerings. A private health exchange is a competitive retail-based, Web-enabled 

marketplace offering employer-sponsored group coverage. 

Aon gives employers the ability to offer benefits through a private health exchange. These private health exchanges combine cost 

accountability with meaningful choice. The employer remains a 

vital part of the health care delivery system. Employers continue 

employer-sponsored coverage, pay the employer premium for the 

group, and remain subject to ERISA. 

Employers determine how much of the coverage costs to subsidize, and employees use this subsidy to choose from a menu of 

CEWDOCROOM with DISTILLER

17 

plans and insurance providers that best fit their needs and their 

financial situation. 

Employees select among varying out-of-pocket differences and 

network requirements. It is a win-win for employer-based sponsored coverage and for employees who have the ability to select a 

plan that meets their needs and the needs of their families. 

What we have learned is that most employees will select a plan 

based on their physician and provider network, their experience 

with that insurance carrier, the coverage of prescription drugs, and 

then price. 

Many employers that currently offer their medical benefits 

through the Aon Active Health Exchange are also pursuing other 

workplace programs that encourage greater well-being and management of chronic illnesses. 

Employers using the private exchange experienced a 3.3 percent 

cost increase for 2016, compared to an average health care cost increase of 5.5 to 6.5 percent. 

We appreciate talking about private health exchanges as one way 

to maintain affordable employer-sponsored health coverage and expand the role of consumers in health care decision-making. We are 

also eager to help employers find other innovative ways to engage 

their employees, and we urge the Committee to support these efforts. 

Rising costs, recent market shifts, and health care reform are 

challenges to maintaining coverage for Americans. Employers are 

the key to the success and need flexibility in the design and management of their benefit plans. They need congressional support to 

preserve and enhance the value of benefit plans offered to their employees and their families. 

Thank you for permitting me the opportunity to testify today. I 

will submit for the record more comprehensive information about 

the development and growth of private health exchanges and other 

innovations that employers are adopting to engage their employees 

and their families. 

Thank you. 

[The statement of Mr. Zern follows:] 

CEWDOCROOM with DISTILLER

18 

CEWDOCROOM with DISTILLER


Insert offset folio 7 here 99776.007
19 

CEWDOCROOM with DISTILLER


Insert offset folio 8 here 99776.008
20 

CEWDOCROOM with DISTILLER


Insert offset folio 9 here 99776.009
21 

CEWDOCROOM with DISTILLER


Insert offset folio 10 here 99776.010
22 

CEWDOCROOM with DISTILLER


Insert offset folio 11 here 99776.011
23 

Chairman ROE. Thank you, Mr. Zern. Ms. Corlette, you are recognized for five minutes. 

TESTIMONY OF SABRINA CORLETTE, SENIOR RESEARCH PROFESSOR, CENTER ON HEALTH INSURANCE REFORMS, 

GEORGETOWN UNIVERSITY’S HEALTH POLICY INSTITUTE, 

WASHINGTON, D.C. 

Ms. CORLETTE. Thank you, Chairman Roe and Ranking Member 

Polis, for inviting me to participate in today’s hearing. 

As has been said, over 150 million Americans receive their health 

coverage through their employer. It is consistently rated as one of 

the most popular benefits that employers provide, second only to 

paid leave. 

In my testimony today, I would like to emphasize two primary 

points. Number one, our foundation of ESI is strong in this country, but affordability remains a challenge. Number two, to address 

affordability, requires a multi-stakeholder effort that actively engages in local delivery system reform efforts. 

In spite of early fears, the ACA has not caused employers to drop 

coverage for their workers, nor has it resulted in reductions in employment. What is clear is that employers have benefitted over the 

last few years in a significant slowdown in health care price 

growth. 

But even with these promising trends, affordability remains a 

huge challenge for too many families. Worker contributions to premiums grew an estimated 83 percent between 2005 and 2015, and 

nearly one-quarter of people with ESI report problems paying medical bills. 

A report released just yesterday by the Kaiser Family Foundation finds that between 2004 and 2014, average out-of-pocket expenses for workers increased 77 percent, largely due to high 

deductibles, and people with high deductible plans report problems 

paying medical bills two times more than those in low deductible 

plans. 

Thanks to the ACA, there are some financial protections for 

these families with high costs, but they are still significant burdens. The bottom line is that employers and employees are struggling under high health care costs, and tackling affordability requires a multi-stakeholder effort, and employers have a particularly important role to play. 

Many employers, both on their own and in concert with other 

local purchasers, are engaged in innovative efforts to push back 

against high and rising health care prices, while not sacrificing the 

quality of care provided to their employees. 

The ACA has spurred activity in payment and delivery system 

reform across public and private sectors, building momentum to 

improve health care value. For example, a multi-payer initiative in 

Arkansas is leveraging partnerships with Medicare, Medicaid, state 

employees, and Walmart to expand primary care medical homes. 

Many of new models sparked by the ACA provide opportunities 

for employers to partner with major government purchasers to 

pressure providers to reduce inefficiencies and improve quality. 

For many employers, workplace wellness programs are intuitively appealing, and these programs, if well designed, commuCEWDOCROOM with DISTILLER

24 

nicated and executed, can make a big difference. Most of us spend 

most of our waking hours at work, and there is much that employers can do to support a working environment that supports health. 

However, some of these programs tie an employee’s achievement 

of a particular health outcome to their health insurance premiums 

or cost-sharing, but there is very little evidence that doing so actually improves health, increases productivity, or lowers costs. 

What they do instead, unfortunately, is raise the barriers for 

many individuals to access the support they need to achieve better 

health outcomes. 

There is also disturbing evidence that some wellness programs 

place employees’ privacy at risk. Wellness vendors can and do harvest vast amounts of personal health information, but there is no 

Federal law that restricts what these companies share with business partners for marketing purposes. Yet, many employees face 

tremendous pressure to participate in these programs, especially 

when up to 30 percent of the cost of a family premium is at stake. 

Just as with workplace wellness programs, some benefit and network changes sound promising on the surface, but may ultimately 

be more about cost shifting than actually improving health outcomes. 

For example, network tiering has been touted as a way to encourage consumers to seek care from higher quality, lower cost providers, but there is limited evidence to suggest that providers in 

the lowest cost tiers are selected with quality taken into account. 

Their ‘‘preferred’’ status is sometimes just a function of price. 

A fundamental challenge for employers and their workers today 

is the cost of health care, but many proposed reforms do not get 

at the primary cost drivers - providers, many of whom use local 

market clout to demand reimbursement that is disproportionate to 

the actual value they deliver. With increasing consolidation among 

provider systems, this problem may only get worse. 

Ultimately, it is going to fall to employers in partnership with 

other purchasers to drive reforms that will ultimately reduce costs 

and achieve better health care outcomes. 

Thank you so much for the opportunity to participate today. 

[The statement of Ms. Corlette follows:] 

CEWDOCROOM with DISTILLER

25 

CEWDOCROOM with DISTILLER


Insert offset folio 12 here 99776.012
26 

CEWDOCROOM with DISTILLER


Insert offset folio 13 here 99776.013
27 

CEWDOCROOM with DISTILLER


Insert offset folio 14 here 99776.014
28 

CEWDOCROOM with DISTILLER


Insert offset folio 15 here 99776.015
29 

CEWDOCROOM with DISTILLER


Insert offset folio 16 here 99776.016
30 

CEWDOCROOM with DISTILLER


Insert offset folio 17 here 99776.017
31 

Chairman ROE. Thank you very much. Ms. Franklin, you are recognized for five minutes. 

TESTIMONY OF TRESIA FRANKLIN, DIRECTOR, REWARDS AND 

EMPLOYEE RELATIONS, HALLMARK CARDS, INC., KANSAS 

CITY, MO 

Ms. FRANKLIN. Thank you, Chairman Roe and Ranking Member 

Polis. I appreciate very much the opportunity to testify before the 

Committee today on behalf of the American Benefits Council, of 

which Hallmark is a member. 

Briefly, Hallmark is a family owned $3.5 billion company, and as 

you have acknowledged, mostly in the greeting card business and 

other social expression products. We have about 5,000 benefits eligible employees and another 2,000 retirees who are eligible for our 

programs. 

Our culture strongly reflects the family ownership. Our CEO is 

third generation. The average number of years of service at Hallmark is 18 years. We are very planful and careful as we offer these 

programs to our employees. 

I want to start our conversation today focusing on our wellness 

programs. Hallmark has a very long, rich history of commitment to 

employee wellness. Hallmark even has a subsidiary company that 

helps other companies develop their wellness strategy and communication. 

Our founder, J.C. Hall, started healthy onsite food services in 

1923. That tradition continues to this day. In 1956, we opened an 

onsite medical facility which provided employees convenience and 

extra care for support. 

These programs have evolved, and today, the Hallmark Health 

Rewards Program is a program that rewards Hallmark employees 

with points to be redeemed for gift cards, health care premium 

credits, and HSA contributions for participating in activities that 

encourage doing the right thing, getting a routine physical, attending onsite health seminars, et cetera. 

I next want to focus a little bit on what I believe has been an 

innovative approach to our health care strategy. In January 2015, 

Hallmark joined the Aon private exchange. This was a strategic decision. As Hallmark evaluated its role in health care, we adopted 

an approach of educating our employees about their choices and 

how to make decisions to best meet their individual needs. 

The complexities of health care, the significant changes, and the 

ever growing costs of health care benefits, resulted in Hallmark 

seeking this innovative approach. 

We had grown frustrated with increasing deductibles and employee premiums, and sought an approach that leveraged market 

competition between carriers, simplified programs, and could 

change the dynamics of health care. 

The new approach allows carriers to develop services to compete 

in a geographic marketplace, standardizes plan design across carriers, and provides our employees with state-of-the-art decisionmaking tools. We moved from self-funded to a fully insured model 

as part of this move, which we felt moved risk and accountability 

to the carriers who are best equipped to manage these complexities. 

CEWDOCROOM with DISTILLER

32 

We are no longer in the middle of increasingly complex decisions 

regarding formularies, network reimbursements, reference-based 

pricing, or specific appeals by employees around their coverage. We 

have left these issues to carriers to structure their best approach 

and compete for our employees’ business. 

This model also permits our employees to post public comments 

about their experiences with the carrier in a true consumer feedback model. 

We continue to believe that employers play a critical role in our 

employees’ health care. I want to highlight three specific aspects. 

First, we provide a significant contribution to their premiums. 

However, we pay the same funding amount whether an employee 

chooses the most expensive or the most inexpensive or richest benefit. Employees who choose a gold option pay more, from our standard contribution, employees who choose a less costly bronze plan 

pay less. 

Second, we provide onsite and online education facilities and 

seminars for our employees, and finally, we provide Aon’s ongoing 

service support to answer employee questions and serve as advocates for employees. 

I have described for you the path Hallmark has chosen. We have 

found that the previous one-size-fits-all approach that put Hallmark in the middle of being a health care delivery expert no longer 

worked for us. Rather, the private exchange model provides employers with this innovation. 

However, and this is very important, it is critical to recognize 

that our path is not necessarily fit for every employer. While this 

strategy has been right for Hallmark, other employers may decide 

that more direct involvement with administration and design of 

their benefits will result in the innovation they seek. 

And finally, I think it is very important to consider the legislative framework that makes possible affordable and meaningful benefits. I know tax issues are not within the jurisdiction of this Committee, but within our written testimony we have highlighted two 

very important elements. 

First, the so-called ‘‘Cadillac tax,’’ should be repealed, and we 

want to commend Congressman Courtney for his leadership in authoring bipartisan legislation to do so, and I want to thank you, 

Chairman Roe, and those members of the Committee that have cosponsored repeal legislation. 

Finally, I want to mention the tax exclusion and how critical that 

is. I would be happy to address this during questions as well. 

Thank you again for this opportunity. 

[The statement of Ms. Franklin follows:] 

CEWDOCROOM with DISTILLER

33 

CEWDOCROOM with DISTILLER


Insert offset folio 18 here 99776.018
34 

CEWDOCROOM with DISTILLER


Insert offset folio 19 here 99776.019
35 

CEWDOCROOM with DISTILLER


Insert offset folio 20 here 99776.020
36 

CEWDOCROOM with DISTILLER


Insert offset folio 21 here 99776.021
37 

CEWDOCROOM with DISTILLER


Insert offset folio 22 here 99776.022
38 

CEWDOCROOM with DISTILLER


Insert offset folio 23 here 99776.023
39 

CEWDOCROOM with DISTILLER


Insert offset folio 24 here 99776.024
40 

CEWDOCROOM with DISTILLER


Insert offset folio 25 here 99776.025
41 

Chairman ROE. Thank you, all. You have been an amazing panel. 

Everybody came in under five minutes. I hope the members will be 

as good as you are. 

I would like to take this opportunity to recognize Chairman 

Walberg. 

Mr. WALBERG. Thank you, Mr. Chairman, and the heat is on, 

right, to perform. I thank each of the panelists as well. 

Ms. Franklin, appreciate your testimony. It is a Hallmark testimony. 

Ms. FRANKLIN. Thank you, sir, appreciate it. 

Mr. WALBERG. We know that employer-based wellness programs 

generally have two thrusts, one at least most of the employers that 

I meet in my district truly care about their employees. You might 

find an occasional one that is more materialistic. For the most part, 

they really care about them and what to see them be successful, 

healthy, and continue to work. 

On the other side, there are certain cost savings to have coverage 

for employees that are healthy as opposed to ones that have repairable or preventable health issues. We understand at least when 

you look at it in common sense, why would not an employer want 

to encourage healthy employees in using wellness programs to do 

that, but we are also understand more importantly there are employers that are very fearful of what EEOC is looking at, in direct 

contradiction to what is being pushed in the Affordable Care Act, 

with the First Lady’s nutrition proposals, et cetera, and so with the 

liability concerns that go on there, there are challenges. 

I would like, if you would, to speak more fully on the importance 

of employer-based wellness programs to a healthy workforce, and 

then secondly, what are some of the hurdles that you encounter as 

a result of what I believe is EEOC’s overreach? 

Ms. FRANKLIN. Well, as I said, our programs are part of our culture. Today, as I sit here, in fact, it is the Hallmark Health Week 

in Kansas City, and employees are having the opportunity to do onsite biometrics screening and other screenings. 

It is an element where, I think, does send a message, that this 

is part of our culture that we care about our employees. You know, 

I often get asked, well, are you saving money as a result. I have 

taken a different approach with that. Of course, when my boss asks 

me that, I say yes, but I will say what we have focused on is a program that really allows our employees who do the right thing to 

reduce their health care costs through these rewards. 

So, when you get a physical and you get a paycheck credit for 

doing that, it creates the incentive that we think is good behavior 

for employees to do that. 

You are right, Congressman. The myriad of legislation does create a minefield for us to work through, whether it is EEOC, whether it is GINA, whether it is other elements of this that has created 

that. 

In the end, I think our programs do send a message that we care, 

and it does send a message that if you do the things that make 

sense for your health, you will pay less for your health care by 

these rewards. 

Mr. WALBERG. It does work, does it not? 

Ms. FRANKLIN. I believe so. 

CEWDOCROOM with DISTILLER

42 

Mr. WALBERG. Thank you. Ms. McDonough, as you well know, 

the EEOC has recently become very engaged in employer sponsored wellness programs, and will soon issue new regulations as it 

relates to the ADA and GINA. 

How has the EEOC’s involvement chilled wellness programs affected you specifically? 

Ms. MCDONOUGH. Thank you for the question. Employers, who 

you suggested this in your introduction, employers come to us for 

a variety of reasons, a lot of them come to get more participation, 

more engagement with their programs, some are looking at health 

care savings, some are looking at productivity, so they have a variety of reasons of they are coming to work with Fitbit. 

They are looking to bring something effective and engaging and 

that has longevity into their workplace. In terms of how we see the 

EEOC guidelines affect that, I think our goal and the goal of all 

of our employers is to make programs voluntary, to make them effective, to make them fun, but I think there is, and as I stated in 

my testimony, some further clarity that could allow them the ability to run more effective and engaging programs. 

I think clarifying those guidelines so they have a very strong understanding of what is within the guidelines would be very helpful 

for employers in developing greater wellness programs or launching 

them to a greater population. 

Mr. WALBERG. Also, for the employee, it certainly makes it feel 

more voluntary if they understand the benefits to them. 

Ms. MCDONOUGH. Absolutely. Communication and transparency 

up front is what leads to great participation rates. So, a shared 

commitment to health, a culture of health or wellness, and really 

understanding that the employer and employee what data is being 

shared, how it is being used, and how that is going to impact the 

culture within the organization. 

Mr. WALBERG. Thank you, I yield back. 

Chairman ROE. I thank the gentleman for yielding. Mr. Polis, 

you are recognized for five minutes. 

Mr. POLIS. Thank you. Real interesting testimony. I wanted to 

address to Ms. McDonough and Ms. Franklin, obviously very exciting ways to encourage wellness and health at the employer level. 

What mechanisms have you seen for incentivizing employees to 

participate and for some of the savings to accrue to the benefit of 

the employee as well as the employer? I will go to Ms. McDonough 

first, and then Ms. Franklin. 

Ms. MCDONOUGH. Sir, thank you for the question. So, in terms 

of mechanisms for and incentives that we have seen, it really does 

vary from employer to employer based on the sophistication of their 

program. In our six years of history, we have had the opportunity 

to work with thousands of small- and medium-sized businesses as 

well as Fortune 500 companies. 

The way they incentivize may be very different based on the sophistication of their program. In general, I think they try to align 

their incentives with the goals of the program. That is where I 

think Fitbit can actually be very effective. 

For example, if you want someone to take a health screening or 

to get more active, running a collaborative or competitive program 

that ties into social responsibility and other things that are part of 

CEWDOCROOM with DISTILLER

43 

the culture of the organization actually has everyone’s incentives 

aligned that good health. So that’s a very common model. 

Mr. POLIS. In your case, they also get a free Fitbit, right? 

Ms. MCDONOUGH. There is a variety of models in which that 

works. So, oftentimes, it is a cost-shared commitment between the 

employer and the employee. 

Mr. POLIS. What is the typical cost of a Fitbit device? 

Ms. MCDONOUGH. They range between $60 and $250, based on 

the features set and . . . 

Mr. POLIS. So, the employee benefit might be half the cost of a Fitbit, so it might be $50 or $100, something like that, towards the 

cost of it? 

Ms. MCDONOUGH. That is correct, or even less— 

Mr. POLIS. Or the whole cost? 

Ms. MCDONOUGH. Exactly. 

Mr. POLIS. In any case that is great, Ms. Franklin? 

Ms. FRANKLIN. Thank you, Congressman. I want to emphasize 

our program is voluntary, and so the way we encourage, the dollars, the rewards themselves, are the biggest incentive. Our employees can earn up to $400 in a year doing the various activities. 

As I said, we try to make it fun. We do challenges, whether it 

is a thousand or a Walk to the Moon, we did a Walk to the Moon 

once, and people accumulated steps as part of that. We did Lose 

a Ton, people came together in teams. That was one of the more 

exciting ones because I think the prize was a trip somewhere. 

It encourages people to have fun, to create networking opportunities within the company. 

Mr. POLIS. Hopefully, where this will go, and maybe someone will 

comment on this, you know is tying the data on the actual savings 

back to what the incentive is and how that can earned along with 

savings to the company. Does anybody want to address that frontier of how we can tie data back to provide the right incentive for 

employees and save money for employers? Mr. Zern? 

Mr. ZERN. I am happy to, thank you. So, there is no doubt data 

analytics is becoming more prevalent in the health care environment, and how do we tie it back to the return on investment. 

I think employers are certainly looking at health benefits differently today. They are looking at it more as an investment in 

their population and driving a healthier population as maybe in the 

past where sometimes it was viewed more as an expense. 

The engagement of the senior leaders of employers of all shapes 

and sizes, they are asking those questions. They want to tie data 

back, and they want to understand their population across the 

healthiest parts of the population and those equally that need assistance in getting healthier, so it is across the board. 

Mr. POLIS. In a follow-up question, if there is a second round we 

will go more into this, and I think there might be depending on 

how many questions from the panel there are, but how do we weed 

out wellness programs that do not increase wellness? 

And by the way Mr. Zern, there seems like there would be a lot 

of those, because there are hundreds or thousands of folks with 

various wellness programs, I do not know, maybe half of them do, 

half of them do not, or 90 percent do not and 10 do, whatever it 

is. 

CEWDOCROOM with DISTILLER

44 

How do we actually make sure that—by the way, the ones that 

do not enhance wellness may very well have other benefits like employee morale, retention, or other things, but not health care costs 

and wellness. 

How do we weed out—not weed out. I guess how do we differentiate between what a wellness program is or what is a straight employee morale retention program? 

Mr. ZERN. There is no doubt the marketplace is a little crowded. 

But most importantly, employers are looking at how do they continue to communicate effectively what their goals are with their 

benefit programs. 

It could take on a variety of forms, healthy lifestyle, better eating. There are a variety of them. The challenge, I think, that employers face is how do they understand which ones align with their 

corporate goals most effectively, and then how do they communicate them. That is the big thing. 

Mr. POLIS. Thank you. I yield back the balance of my time. 

Chairman ROE. I thank the gentleman for yielding. Mr. Guthrie, 

you are recognized. 

Mr. GUTHRIE. Thank you, Mr. Chairman. My first question will 

be for Ms. McDonough. On Fitbit, employer benefits are becoming 

more valuable to employees, and you described—I was going to ask 

you specifically of a case, but you described a case earlier of someone who said saved $280,000, I think you said, because of Fitbit 

and the data. 

I guess my question is are the insurance companies—you have 

it for a year, you provide the data and they expect to have lower 

health cost coverage because people are exercising or taking care 

of their health more, or is it over a longer period of time, you have 

to actually show the experience? 

The one year they start the program, the next year, people go to 

the hospital less, therefore, they know it is going to be cheaper, or 

are they accepting the data and having an expectation of better 

performance? 

Ms. MCDONOUGH. Sure. Thank you for the question. Again, employers come to us for a variety of reasons. So they will come to 

us for return on investment in terms of health care savings and 

costs. We did have the example of Appirio. I am not sure if you are 

familiar with them. They are a small business, 700 employees or 

so, very distributed population. 

They needed something virtual to bring their program together. 

We work with a lot of companies of that size. 

There is also a ‘‘value on investment’’ termed VOI, which includes the productivity and absenteeism and those kinds of things. 

Employers are actually looking really holistically across that. 

There is not an expectation at this point for most employers that 

there is going to be a direct health care savings cost in the next 

year. 

What is great is that the data will be able to show those outcomes over a period of time. 

Mr. GUTHRIE. How long did it take to get that $280,000 in savings? Was that over a couple of years, five years? 

CEWDOCROOM with DISTILLER

45 

Ms. MCDONOUGH. That was actually over just one year, so they 

did a one year program in 2014, and then affected their premiums 

in the following year. 

Mr. GUTHRIE. That is fantastic. Yeah you’re right in the other 

values there. What kind of roadblocks if an employer wants a Fitbit 

or a program such as this? What kind of roadblocks are they facing? Do they get discouraged? Or is it . . . Or are they always 

happy? 

I know what they are trying to get to, but are there some problems to get to that point that you have seen? 

Ms. MCDONOUGH. Specifically, do you mean for the employee or 

the employer? 

Mr. GUTHRIE. For the employer bringing in a program, what kind 

of roadblocks they may have and they say this is not worth it, or 

is it worth it. What do they have to fight through? 

Ms. MCDONOUGH. Sure. I think this is now the minority, which 

I think is a great thing, but often times, they do need to sell the 

program up to an executive suite, so there is a financial commitment, and it has to be a culture commitment to healthy employees 

and really wanting to make their employees successful. 

So that’s when . . . I also think that the adoption rate, so the 24 

percent average participation, can sometimes be a barrier, but 

again that is what is great about bringing consumer technology 

into this, you’re being able to capitalize on a movement literally 

that is already happening in the marketplace, and being able to 

bring that and increase those participation rates. 

I think that by bringing those technologies into the corporate 

marketplace, we are able to push back a lot of those objections. 

Mr. GUTHRIE. Thank you very much. Mr. Zern, during an open 

enrollment period, have you seen employees change coverage from 

year to year? Do they shop around year to year? What kind of 

drives them? Is it the network choice, the cost, or they had a pleasant experience with a carrier or an unpleasant experience with a 

carrier and wanted to just change insurance companies because 

they did not want to deal? 

Mr. ZERN. Thank you for the question. It is all of the above. In 

our active exchange, I think that is one of the liberating things for 

the consumer, for the employee. What the employer community 

really likes is that it gives a tremendous amount of choice to the 

employee supported by very strong decision support tools. 

Left to their own devices, it can be overwhelming, but with great 

decision support tools, you get employees that are—they normally 

start with what is the right level of coverage for their situation, 

whether they are an individual or a family situation. Then they 

will go into looking at networks, their experience with insurance 

companies. 

Our survey results show that price is really kind of the last determinant of their selection. It is plan design, then network, experience with the insurer, and then its cost. 

Mr. GUTHRIE. Thanks. I am in the manufacturing business or I 

was, and in human resources involved in here is the health insurance plan, and people just took it and you moved forward. 

CEWDOCROOM with DISTILLER

46 

I understand you have to allow your employees to rate the carrier. Has that changed the insurance companies’ behavior by actually having ratings from their customers? 

Mr. ZERN. It is one of our newer parts of our innovation of our 

active exchange. Consumer ratings are certainly piquing the attention not only of our insurance companies that are part of our exchange, but also their employers. I think that is also factoring into 

how they view their partners on the exchange. 

It really kind of cuts across all the key stakeholders, from the 

employer, provider, and the insurer. 

Mr. GUTHRIE. It is really bringing the customer into the mix. 

Mr. ZERN. Exactly. 

Mr. GUTHRIE. That is innovative and appreciated. I have run out 

of time, so I yield back. 

Chairman ROE. I thank the gentleman for yielding. Ranking 

Member Scott, you are recognized. 

Mr. SCOTT. Thank you, Mr. Chairman. I think it is important to 

remind people where we were when we passed the Affordable Care 

Act. We were experiencing cost increase routinely in double digits 

for thousands of people; at one point 14,000 people a month were 

losing their insurance. Those with preexisting conditions, if they 

could get insurance, they paid exorbitant rates. They usually could 

not get insurance, and millions others did not have insurance. 

The proposal for a government takeover single payer plan could 

have solved these problems and reduced overall health care budgets significantly, but the government takeover did not pass. We instead passed a more modest market-based approach, patterned 

after RomneyCare in Massachusetts, a Republican plan, but that 

has been successful. 

The costs have increased since the Affordable Care Act are the 

lowest in decades, probably half a century. Those with preexisting 

conditions can get insurance at the average rate. We have the highest portion of people with insurance in recorded history, children 

up to 26 years old can stay on their parents’ policies. Women are 

no longer paying more for insurance than men. We are closing the 

doughnut, the prescriptive drug doughnut hole, preventive services, 

annual check-ups are without co-pays or deductibles. 

Since the Affordable Care Act, those that had warned of job loss, 

are forced to explain the longest continuous number of months of 

job growth since records have been kept. So that’s where we are. 

That is where we are since the Affordable Care Act. 

Ms. Corlette, one thing that has not been completed is the Medicaid expansion. Some states have not expanded Medicaid. Can you 

comment on the effect that has had on the people who are in the 

gap for insurance – in the Medicaid gap – that is caused by the 

failure of some states to expand Medicaid? 

Ms. CORLETTE. Certainly, Congressman, and thank you for the 

question. I think this is something that I hope that Congress will 

address soon in whatever way it can, and also for the states that 

have not yet expanded Medicaid, this is a true moral failing. 

I believe we have I think an estimated three million people who 

because their incomes are too low cannot get access to the kind of 

help with premiums to buy health insurance that people who have 

incomes above 100 percent of poverty have. 

CEWDOCROOM with DISTILLER

47 

I think that kind of inequity is simply wrong and it is also demonstrated that it is having not just an impact on the families that 

cannot afford the insurance but actually on many local providers, 

hospital systems and others that are really suffering because the 

people that they serve cannot afford the care. 

Mr. SCOTT. The failure to expand Medicaid also affects those 

with insurance because they have to cover the cost shifting. People 

who are in the gap without insurance get sick, go to the hospital. 

Can you make a comment on that concept of cost shifting? 

Ms. CORLETTE. Sure. That is a problem. I do not know that it has 

been exactly quantified, but essentially the problem is that just because you do not have insurance does not mean that you do not 

ever have health problems. 

So what happens is that many people because they cannot pay 

for care, they wait until the last possible minute when the problem 

has become perhaps even a crisis or much more severe than it otherwise would have been. They must go to the emergency room, and 

somebody has to pay for that care. 

Typically, what the hospital does is shift those costs over to other 

payers, privately insured, and other payers. We all pay for it in 

some way, so it is penny wise and pound foolish for these states 

that have not expanded it and continue to fail to do so. 

Mr. SCOTT. Ms. Corlette, can you make a comment on the issue 

of privacy in the wellness plans, whether or not people are coerced 

into revealing private information as a result of participation in 

wellness plans? 

Ms. CORLETTE. Sure, absolutely. I should just first of all say that 

I think workplace wellness programs can be incredibly important 

and effective. But you have identified one particular area of concern, which is that under current Federal rules and under the proposed EEOC rules, somebody making $50,000 a year could be 

asked or told that if they do not complete a health risk assessment 

or if they do not agree to have personal health information turned 

over to a wellness vendor, as much as $5,000 of health care premiums could be at stake. In other words, they could be asked to 

pay more in health premiums, as much as $5,000 or more. 

It is really hard for me to understand how that would not be considered coercive for somebody making that amount of money. I 

think they would feel under tremendous financial pressure to complete that health risk assessment and participate. So to me, that 

is not voluntary, and it does not fall under anybody’s common 

sense definition of what voluntary means. 

Mr. SCOTT. Thank you. Mr. Chairman, can I ask unanimous consent to enter two documents for the record, one, a comment to the 

EEOC regarding the proposed rule on wellness programs and its effect on the Americans with Disabilities Act, and another comment 

to the EEOC regarding the proposed rule related to wellness programs and the Genetic Information Non-Discrimination Act? 

Chairman ROE. Without objection, so ordered. 

[Additional submissions by Mr. Scott follows:] 

CEWDOCROOM with DISTILLER

48 

CEWDOCROOM with DISTILLER


Insert offset folio 48 here 99776.048
49 

CEWDOCROOM with DISTILLER


Insert offset folio 49 here 99776.049
50 

CEWDOCROOM with DISTILLER


Insert offset folio 50 here 99776.050
51 

CEWDOCROOM with DISTILLER


Insert offset folio 44 here 99776.044
52 

CEWDOCROOM with DISTILLER


Insert offset folio 45 here 99776.045
53 

CEWDOCROOM with DISTILLER


Insert offset folio 46 here 99776.046
54 

CEWDOCROOM with DISTILLER


Insert offset folio 47 here 99776.047
55 

Mr. SCOTT. Thank you. 

Chairman ROE. Mr. Carter, you are recognized. 

Mr. CARTER. Thank you, Mr. Chairman, and thank all of you for 

being here. This is certainly an important subject that we all need 

to be paying particular attention to, and I want to thank Chairman 

Roe for his efforts in bringing this to light before this subcommittee. 

I am a small business owner. I am a pharmacist by trade. I own 

three—excuse me—my wife now owns three independent retail 

pharmacies with about 19 to 20 employees. We value that relationship very much between with our employees, and some are very 

long term, been with us for 28 years, and that is certainly very important. 

Their health is important. Their health is important to me as an 

employer, I need them to show up for work. I depend on them. Obviously, I could not do what I am doing here without them being 

there. This is very important. 

However, like all small business owners, I have been faced with 

the dilemma of trying to reduce health care costs, and that is something that has really been a struggle recently, as you can imagine. 

I am not any different from any other small business owner in that 

respect. 

Ms. McDonough, I want to speak to you. First of all, I think we 

are all familiar with Fitbit and what it does and the benefit it can 

have. As we get to a more socially conscious health care society, if 

you will, these are the type of things that we are looking at. I am 

concerned because—not concerned, inquisitive as to the collection 

methods. 

As I understand it, if I were to provide my employees with the 

Fitbit, if I wanted to get the information, I would have to get their 

permission to get it first of all? 

Ms. MCDONOUGH. Absolutely. 

Mr. CARTER. Okay. That data that is relayed to me, how can we 

make sure that it is going to be private and it’s going to be secure? 

They are going to want to know that and they should. If they do 

not want to know it, they should want to know it. 

Ms. MCDONOUGH. Absolutely. Privacy and security of our user’s 

data and the trust of our customers is paramount at Fitbit. We 

have a very clear, easy to read privacy policy that we share with 

all the consumers. It is written in plain English so that they can 

understand that. That is for all the consumers who use Fitbit products. 

When we work with an employer on an employer wellness program, they actually have to opt in and give active explicit consent 

to share data with their employer. And that is a subset of the actual data that is collected by Fitbit overall. 

Some of the devices collect things like heart rate or GPS when 

you are out running if you are using that functionality. That data 

is not shared with an employer when they work with Fitbit directly. 

The type of data that might be shared would be steps and distance and active minutes. So data that would be beneficial and useful for them to run an effective and engaging program. The employee has the opportunity to—again, the programs are voluntary, 

CEWDOCROOM with DISTILLER

56 

so they do not have to agree to share their data, and they can also 

opt out at any time. 

Mr. CARTER. Okay. One final question for you, as a small business owner, we have asked about the barriers the employers have, 

but what about small business owners? What kind of barriers do 

they typically have? 

Ms. MCDONOUGH. I am so glad you asked this question because 

I am really passionate about supporting small businesses, and I actually think it is through the use of technology that small and midsized businesses can actually have really effective wellness programs. 

There are a number of vendors who will only work with very 

large employers. We work with and we are ourselves a small business. I am very passionate about it and real excited about it. 

The barriers tend to be that it is one person who is responsible 

for all of H.R. and benefits and staff— 

Mr. CARTER. That is usually the owner. 

Ms. MCDONOUGH. Exactly. You have been there. What is great 

about the advent of the technology that we can provide is we make 

it very easy and streamlined, and we take a lot of pain points for 

the small business owner and we also solve those for them. 

Mr. CARTER. Great. Very quickly, Mr. Zern and Ms. Franklin, I 

know that private exchanges, they offer a lot more flexibility. I am 

just wondering—Ms. Franklin, I believe Hallmark has recently 

changed to a private exchange. I am just wondering about the experience you have had with that. 

Ms. FRANKLIN. It has—Thank you, Congressman. It has been a 

very positive impact to our workforce. It has given employees the 

opportunity to learn how to determine what health care plans best 

meet their needs. It is not an one-size-fits-all approach, as I mentioned. 

It very much empowers the individual to be part of the process. 

That has been very, very valuable. It gives our employees choice. 

They can choose from a variety of national or even local carriers. 

I think it introduces the opportunity to truly make health care a 

consumer focused product. 

Mr. CARTER. Great. Thank you. Mr. Chairman, I yield back. 

Chairman ROE. Hopefully, the H.R. director is doing okay at your 

business. 

Mr. CARTER. You know I got problems with it, but I am dealing 

with it. 

Chairman ROE. Mr. Courtney, you are recognized. 

Mr. COURTNEY. Thank you, Mr. Chairman. Thank you to the witnesses for your outstanding testimony today. 

Again, just to follow up on Mr. Scott’s comments, I come from the 

State of Connecticut, which is a State that fully embraced the Affordable Care Act. In 2010, our uninsured rate was about 9 percent. Last fall, the latest statistics that came out, it is now 3.8 percent. 

The exchange, which again I think has been touted as the highest functioning exchange in the country by Forbes Magazine, the 

individual policies, private policies, that were sold through the exchange, the actual premium price went down by 5 percent. I am 

CEWDOCROOM with DISTILLER

57 

going to say that again, went down by 5 percent, in terms of what 

was offered last year. 

Again, like many of us, I am a former employer and believe in 

the employment-based component of the system. Again, what we 

are seeing in Connecticut is that despite some of the hysteria, that 

employment-based benefits are alive and well and that some of the 

really good solid initiatives like wellness programs or private exchanges are totally free to operate, and that is all good. 

Like any measure, particularly one that had 440 sections, there 

are provisions which even those of us who voted for it had concerns 

with, and as was mentioned by Ms. Franklin, the excise tax, which 

we pushed against the administration back in 2010 and got delayed 

til 2018, we again succeeded last year in terms of delaying it to 

2020. 

H.R. 2050 has 186 co-sponsors, 70 percent of the House Democratic caucus to strike this provision from the law, and there is 

nothing, I think, contradictory about that. As I said, any law always can use sprucing up and improvements. 

The administration actually with their budget that came over 

this year kind of acknowledged some of the criticisms that we have 

been weighing against it because they at least tried, I think, vainly, to come up with some actuarial adjustments, which again, I just 

think at the end of the day is just not really—no one is that smart 

and no one is that capable in terms of coming up with those kinds 

of fixes. So, we should strike from it. 

But you know—Stepping back and looking at the big picture, one 

of the things again that was predicted was it was going to be this 

huge negative impact in terms of America’s health care sector. 

Last month, the Bureau of Labor Statistics, which came out with 

again another positive jobs report, 215,000 jobs added to the U.S. 

economy, 37,000 of those jobs were in the health care sector, 10,000 

in hospitals, and about 27,000 in ambulatory care. In the hospital 

sector in the last 12 months, the employment in that sector has 

grown by 183,000 jobs in the last year. 

Mr. Chairman, I would ask that those figures from BLS be entered into the record. 

Chairman ROE. Without objection. 

[Additional submission by Mr. Courtney follows:] 

CEWDOCROOM with DISTILLER

58 

CEWDOCROOM with DISTILLER


Insert offset folio 26 here 99776.026
59 

CEWDOCROOM with DISTILLER


Insert offset folio 27 here 99776.027
60 

CEWDOCROOM with DISTILLER


Insert offset folio 28 here 99776.028
61 

CEWDOCROOM with DISTILLER


Insert offset folio 29 here 99776.029
62 

CEWDOCROOM with DISTILLER


Insert offset folio 30 here 99776.030
63 

CEWDOCROOM with DISTILLER


Insert offset folio 31 here 99776.031
64 

CEWDOCROOM with DISTILLER


Insert offset folio 32 here 99776.032
65 

CEWDOCROOM with DISTILLER


Insert offset folio 33 here 99776.033
66 

CEWDOCROOM with DISTILLER


Insert offset folio 34 here 99776.034
67 

CEWDOCROOM with DISTILLER


Insert offset folio 35 here 99776.035
68 

CEWDOCROOM with DISTILLER


Insert offset folio 36 here 99776.036
69 

CEWDOCROOM with DISTILLER


Insert offset folio 37 here 99776.037
70 

CEWDOCROOM with DISTILLER


Insert offset folio 38 here 99776.038
71 

CEWDOCROOM with DISTILLER


Insert offset folio 39 here 99776.039
72 

CEWDOCROOM with DISTILLER


Insert offset folio 40 here 99776.040
73 

CEWDOCROOM with DISTILLER


Insert offset folio 41 here 99776.041
74 

CEWDOCROOM with DISTILLER


Insert offset folio 42 here 99776.042
75 

CEWDOCROOM with DISTILLER


Insert offset folio 43 here 99776.043
76 

Mr. COURTNEY. Again, we still have work to do to make improvements, but there is no question that certainly when people actually 

step up and figure out how to make it work, as in Connecticut, 

both in terms of cost and access, I think we can point to real tangible results. 

Ms. Corlette, just to shift the conversation a little bit, we are also 

a State that was the first to adopt paid sick leave, of up to five 

days, very controversial when the State legislature passed it. There 

was a business survey that was just done recently. Three-quarters 

of employers now in the State support it. 

I just wonder if you could talk about that sort of feature as a way 

of improving workplace coverage in health and wellness. 

Ms. CORLETTE. Thank you, Congressman. So, in full disclosure, 

this is not my area of expertise, my area of expertise is health insurance. But as I did note earlier in my testimony, paid leave often 

– changes places year to year –as the most popular employee benefit that employees cite as something they appreciate about their 

employment. 

I can really only speak as an individual about the importance of 

paid leave, and also as a mother, and how critically important it 

was to me after I had my children. I would also say as a consumer 

of goods and services, I would like to know that the people that 

serve me in restaurants and establishments are not working because they are sick because they cannot afford to take a day off to 

get better. So, that is the best I can do. Unfortunately, it is outside 

my expertise. 

Mr. COURTNEY. That is fine. I appreciate that. What is interesting is the survey that took place that I mentioned a moment 

ago. A third of employees who were eligible to use the statutory 

paid leave did not even use it. 

Again, the notion that it is just going to trigger this huge utilization, in fact has not happened, people are committed to their jobs, 

but like you said, they should not be forced to be there when they 

are too ill to do it at the highest level, and also to keep the public 

safe. 

With that, I yield back, Mr. Chairman. 

Chairman ROE. I thank the gentleman for yielding. Mr. Allen, 

you are recognized. 

Mr. ALLEN. Thank you, Mr. Chairman. Obviously, we have 

tipped the scales with healthcare prevention toward healthcare 

prevention. In fact, one of the early meetings with the most recent 

president of our medical school in Augusta, I think he said then we 

were spending about 25 percent of every healthcare dollar on preventive, and about 75 percent on critical, and we could cut health 

care costs tremendously if we could just move that to 50–50. And 

he felt like that was possible. 

Ms. McDonough, I have been very interested in what you have 

had to say about that, and congratulate you on your work. 

You know –- we—The public ObamaCare exchanges are failing, 

as we all know. I actually introduced legislation, the Transparency 

and Accountability of Failed State Exchanges, H.R. 4262, it requires failed State exchanges to return unused Federal funds for 

deficit reduction, requires an audit of how Federal taxpayer dollars 

were spent. 

CEWDOCROOM with DISTILLER

77 

In our own State, our governor was criticized for not opting to 

take the Federal dollars and to open up a State exchange, but he 

obviously knew. In Georgia, we have to balance our budget. He did 

not want to have to write a blank check. We know that Oregon now 

is wanting to opt out as well as Kentucky. 

Mr. Zern, can you talk about your free-market competitive exchange and how it saves employers and employees money, and how 

that might help having these private exchanges influence employee 

choice for health care? 

Mr. ZERN. Sure. Thank you for the question, Congressman. First 

I would start by establishing that our exchange is an employer 

sponsored group plan, compliant with ERISA. It has some core 

themes or governing areas to it that I would share. First is standardized plan designs that really help the employee navigate the 

various choices. 

Secondly is multiple insurance companies offering networks, so 

there is different network options for the consumer from which to 

select. The third is around strong decision support tools. 

If you think about consistent plan designs, multiple carriers with 

network options for the consumer, and strong decision support 

tools, what those really lead to is an outcome around the engaged 

consumer and the empowered consumer, making a choice that 

works for them personally and their family situation. 

It addresses choice which all of our survey data shows that employees and employers want to offer more choice around plan designs, multiple networks, and then it gets to transparency around 

costs and quality, which is kind of the third key governing thought 

for me. 

So, our exchange, as I mentioned in opening comments, is driving 

a 100 to 200 basis point reduction over the standard health care 

cost increase. 

Mr. ALLEN. One thing I have found about the American people 

is they want choice, and that is the big problem with the mandatory government health care program. 

We know in the business world and we talked about it— 

Ms. FRANKLIN. Congressman, could I just tag onto that very, very 

quickly? 

Mr. ALLEN. Yes. 

Ms. FRANKLIN. One other element that I think is fundamental in 

the private exchange is that there are different geographic markets. In our experience when we moved to the exchange, is that not 

one carrier has the best price everywhere. By having the localities 

compete, there is an opportunity for better products and cost savings as well. 

Mr. ALLEN. We are having problems in Georgia, frankly, because 

of the status of health of a lot of our citizens there and particularly 

in my district. 

You know we know that the only way to bring down costs in the 

business world, which I have been a small business owner for 

years, is by competition. Of course, the health insurance industry, 

they are consolidating as we speak. There are less and less companies offering health insurance. There are companies who are also 

saying they are going to get out, they are not going to serve this 

area or this exchange. They are just making calls. 

CEWDOCROOM with DISTILLER

78 

How do we –- And Mr. Zern I will start with you and we have 

just a few seconds How do we introduce competition back into the 

marketplace? For example, ophthalmology. To get your vision corrected, it used to cost $3,000. It is a couple hundred dollars today. 

How do we do that real quickly? You got 25 seconds. 

Mr. ZERN. Sure. I would say that in our exchange absolutely the 

fundamental piece is promoting market competition amongst the 

insurers. Quickly, on behalf of our employers, when the announcement was made about the potential consolidation, we did two pretty significant surveys. 

The information coming back from employers is they are kind of 

on a wait and see as to if consolidation happens, what they are 

going to, what that is going to mean, but none of them stopped advancing their health care strategies, not a single one. 

Mr. ALLEN. Thank you very much, panel, and I yield back, Mr. 

Chairman. 

Chairman ROE. I thank the gentleman for yielding. Ms. 

Bonamici, you are recognized. 

Ms. BONAMICI. Thank you very much, Mr. Chairman, and thank 

you, Chairman Roe and Ranking Member Polis for holding this 

hearing, and thank you all for your testimonies. It has been great 

to hear about some of the innovative approaches and the work that 

several companies are doing to make sure that they have a healthy 

workforce. 

My home State of Oregon has often been a leader in finding more 

efficient and effective ways to deliver health care and improve 

health outcomes. Following up on Mr. Courtney’s comment, our Oregon legislature did just pass paid sick days, which is really important, to make sure that we have a healthy workforce. 

We also in Oregon expanded Medicaid. A year between 2013 and 

2014 saw a 63 percent drop in the number of uninsured in Oregon. 

Recently, I visited a company called Provata Health in Oregon. 

It is an Oregon based health technology company, focused on workplace wellness, and they use digital technologies. They have an evidence-based series of wellness programs that are scientifically designed to create a healthier and more productive workforce. They 

have been the subject of peer reviewed studies and showed both increased cost savings and improved health outcomes. 

I wanted to ask first Ms. Corlette, can you talk a little bit about 

how employers might evaluate the potential cost savings, and what 

kind of methodologies could be used to determine those? 

Ms. CORLETTE. Thank you, Congresswoman. So, we are in an interesting time when it comes to workplace wellness programs. 

Right now, in the marketplace, it is like 1,000 flowers are blooming. 

That kind of innovation is both very exciting and provides some 

great opportunities, but I also think it can be very difficult both for 

employers as well as employees to sort of tease out of this myriad 

of programs that exist, what are the tools and incentives that really work both to change behavior, get to better health outcomes, and 

ultimately get to a lower cost growth trend. 

The truth of the matter is that the research out there is growing, 

but it can be very difficult to tease out what is working and what 

is not. I will say what we are seeing is first of all that wellness 

CEWDOCROOM with DISTILLER

79 

programs that are tied to some sort of premium based or cost sharing based cost financial incentives have really not been shown by 

themselves to change behavior. 

What does seem to work in terms of cost reduction, of course, are 

targeted disease management programs that really target, for example, people with diabetes or a heart condition, that kind of thing, 

with direct and personalized interventions. 

Also, frankly, changing the environment. Google is a great example of a company that has experimented with different wellness 

things but one of the most effective things they found was in their 

cafeteria, they moved all the healthy options up front and took the 

unhealthy options and sort of hid them in the corners, they reduced 

the sizes of plates and bowls, and that has made a tremendous difference in people’s nutrition and overall health. 

Those kinds of environmental changes sometimes are very easy 

to do but can be incredibly cost effective. 

Ms. BONAMICI. I know just a few days ago the Center for American Progress talked about some of the state initiatives. Can you 

talk a little bit about some of the successful state models that we 

have seen? 

Ms. CORLETTE. Sure. The ACA has really sparked a number of 

really innovative and exciting payment and delivery system models 

that are happening at the State and local level. 

Here is an area where I think employers are really critically important participants in those models. 

What the ACA has done is brought big government purchasers 

like Medicare and Medicaid to the table, but from providers’ perspective, when you have Medicare telling them to do one thing and 

the commercial carriers telling them to do something else, and 

Medicaid yet another thing, those signals can get very confusing 

and administratively, very burdensome. 

When the signals are aligned and you are encouraging more efficiency, higher quality, that can lead to both better health outcomes 

and lower costs. 

Ms. BONAMICI. I am going to try to get one more question in. We 

have a need for more healthcare literacy and the uniform Summary 

of Benefits and Coverage that was created under the Affordable 

Care Act, and I think it has made a difference. 

Can you discuss how that tool for workers can help them make 

more informed decisions, and are employees more confident in selecting a health plan now that will fit their specific needs? 

Ms. CORLETTE. Thank you. So, polling does show that the SBC 

or Summary of Benefits and Coverage, is consistently one of the 

most popular provisions of the ACA. I think people are really excited for sort of standardized, uniform information that just says 

okay, what does this plan actually do for me. 

Ms. BONAMICI. Do the employers on the panel agree with that? 

Mr. ZERN. Yes, very similar feedback. 

Ms. BONAMICI. Terrific, thank you. 

Ms. FRANKLIN. I would add that decision support tools that are 

made available also encourage that kind of education as well. 

Ms. BONAMICI. Terrific. Thank you. My time has expired. Thank 

you, Mr. Chairman. 

CEWDOCROOM with DISTILLER

80 

Chairman ROE. I thank the gentlelady for yielding. Mr. Messer, 

you are recognized. 

Mr. MESSER. Thank you, Chairman. Fascinating conversation 

today. You know, as we look at how we can control costs in the 

world of health care, I think most of us would concede that one of 

the most important things we can do is turn every American who 

receives health care into a health care consumer, where they are 

actually making consumer decisions. 

At the same time, Mr. Zern, as you highlighted in your testimony, you have over 150 million Americans getting employer provided health care. That is an important part of our system. You 

mentioned in your testimony that employers offering health care 

benefits are genuinely driven to promote health care awareness, reduce health care spending, ensure that employees and their families have comprehensive coverage and the like. 

There has been a lot of discussion lately about the overall viability and future role of employer-based health care. I was hoping you 

could just highlight for the panel, how do consumers behave differently when coverage is provided by their employer versus when 

they purchase health insurance on their own? 

Mr. ZERN. So, I will be able to speak from the employer side certainly. Health care is complex. Employees look to their employer to 

continue to educate and communicate with them around a variety 

of issues, whether it is plan design, whether it is network configuration changes, what type of wellness programs I should be accessing or thinking about. 

The employer is, to me, exceptionally critical to continuing to advance the communication and the empowerment of the consumer. 

We have—The next stage, I think, that we really have to tackle 

is how do we get information in the hands of the consumer at the 

point of service. Right so, when you look at the waste in our health 

care system, how do we start to address that. I think that is the 

next set, and you can see that innovation through mobility apps 

and different things of that nature. 

The education piece from the employer to the consumer is a critical function for us. 

Mr. MESSER. Following up on that, what are some of the obstacles preventing employers from signing up for private exchanges 

that you can identify? 

Mr. ZERN. So I think, you know, to Ms. Franklin’s comments earlier, a private exchange is a great solution for a particular client. 

I have been in health care consulting for close to 30 years. I have 

seen lots of different plan designs, and an active exchange, a private exchange is a really good one that drives consumer engagement, transparency, and choice. 

So, I think we are going to continue to see the evolution of exchanges, both public and private. 

Mr. MESSER. I might open it to both Mr. Zern and others on the 

panel, we are here obviously today in Congress, what could Congress do to enhance the opportunities or to eliminate barriers for 

employers to be engaged in private exchanges? 

Mr. ZERN. I am happy to jump in on that one, representing our 

the employers who are our clients. I think there is a desire for trying to drive a little more simplicity in the system. So, that would 

CEWDOCROOM with DISTILLER

81 

be an area that we would be happy to work with Congress on behalf of our employer community, too. 

How do we simplify some of the regulatory issues that our employers have to face that can push them to look at other areas, 

whether it is active exchange or other areas of innovation within 

the health care ecosystem. 

Mr. MESSER. I presume part of your point there is when it gets 

so complicated, the individual employer just throws up their hands 

and decides to— 

Mr. ZERN. It can be a little frustrating. 

Mr. MESSER. Yes. Anybody else? 

Okay. Thank you. I yield back the balance of my time, Chairman. 

Chairman ROE. I thank the gentleman for yielding. Mr. Hinojosa, 

you are recognized. 

Mr. HINOJOSA. Thank you, Chairman Roe, and Ranking Member 

Polis. The health insurance landscape has changed tremendously 

for employers and employees since the Patient Protection and Affordable Care Act implementation. 

Just last month, we celebrated six years since ACA’s enactment 

and celebrated the 20 million previously uninsured Americans who 

now have access to quality, affordable coverage. 

In my region of South Texas, from San Antonio down to the Rio 

Grande Valley, we have close to 200,000 families receiving tax 

credits to help pay for coverage. In 2009, prior to ACA, 40 percent 

of the families in my congressional district were uninsured. Today, 

in 2016, only 20 percent are uninsured. 

We have made great progress in this large region that has been 

growing so fast. Today’s hearing focuses on alternative insurance 

models for employer provided health coverage, but in my view, any 

changes to employer coverage must be handled carefully as over 

147 million people currently rely on employer sponsored benefits 

for health needs. 

As you well know, the governor and the Texas legislature did not 

embrace ACA in our State, and they did not allow expansion of 

Medicare, nor did they allow creation of the Texas health insurance 

exchange marketplace. 

However, in spite of those actions, Texas saw 1,306,208 people 

enrolled in private plans for 2016 through the Texas exchange during open enrollment. I am encouraged that we are doing some 

things right and helping a lot of people who under the conditions 

that our ranking member, Bobby Scott, gave that could not afford 

it or had preexisting medical conditions, are now covered. 

So, my question that I have goes to—I have my papers a little 

mixed up here, excuse me. To Sabrina Corlette. Based on your expertise, how can Congress work together with health care service 

providers to ultimately reduce the cost of health care experienced 

by patients? 

Ms. CORLETTE. Thank you, Congressman. As I mentioned in my 

testimony, I think one exciting thing but often under publicized 

about the Affordable Care Act is that it really launched a number 

of experiments in payment and delivery system reform that are 

bringing both public purchasers, like Medicare and Medicaid, along 

with private purchasers, like employers and employer coalitions, together to start to work towards increasing health care value. 

CEWDOCROOM with DISTILLER

82 

By that, I am talking about things like patient-centered primary 

medical homes. As the Chairman mentioned earlier, accountable 

care organizations. Efforts to really re-emphasize primary, lets 

really Primary care, start putting more accountability into the system, reduce unnecessary and wasteful care. 

These experiments are still in early days, and so they are showing, so we are starting to see some results, but still more time 

needed needs to tell. One thing that was very exciting about this 

particular hearing is the role of the employer and particularly selffunded employers, and how influential they can be at the local level 

in really driving change towards value and value-based care. 

Mr. HINOJOSA. I agree with you. I want to be sure that the 

record reflects that across all 38 states, that use healthcare.gov, in 

the final week of the 2016 open enrollment period, eight of the 10 

local areas with the fastest growing enrollment numbers were in 

Texas. It included Corpus Christi, Harlington, Laredo, El Paso, 

Odessa, Midland, San Antonio, Abilene, Sweetwater, and Lubbock. 

I am encouraged. I am an optimist and I believe if we can just 

tweak ACA a little bit, that we can make it work for so many more 

people, and with that, I yield back. 

Chairman ROE. I thank the gentleman for yielding. Mr. 

Grothman, you are recognized. 

Mr. GROTHMAN. Thank you very much. I guess what we are coming down to is what can we do to make health care affordable. Yes, 

I strongly agree with Ms. Corlette that we are in the beginning 

stages of that. I think there are a variety of companies out there, 

Serigraph owned by John Torinus, in my neck of the woods, who 

have already found ways to greatly reduce the cost of their health 

care for employees. 

I give a couple of you guys, if you can kind of rattle off what your 

total costs, not just the cost to the employer, but the cost to the 

employer plus employee is, in each one of your businesses, or if you 

don’t have I guess—I guess you are all businesses of one nature or 

another. 

We will start with Ms. Corlette since I just finished up with her. 

What is the total cost per employee at Georgetown University? 

Ms. CORLETTE. I am sorry, sir. I actually do not know. I am not 

here to represent the university. 

Mr. GROTHMAN. You will look into it? It is an important number. 

We should all know that. Ms. McDonough, what is the cost for 

health care at Fitbit per employee, in the programs that you cover? 

Ms. MCDONOUGH. Unfortunately, I am also not able to speak to 

that. I do not sit within the H.R. organization. 

Mr. GROTHMAN. Mr. Zern, do you know? 

Mr. ZERN. Unfortunately not. 

Mr. GROTHMAN. We need new witnesses. Ms. Franklin, do you 

know for Hallmark, what is your total cost— 

Ms. FRANKLIN. Yes, sir. I pay those bills. It is about $9,500 

$9,800 per employee per year. 

Mr. GROTHMAN. That includes the cost the employee is paying? 

Ms. FRANKLIN. No, that is just the Hallmark cost. 

Mr. GROTHMAN. What is the cost per employee? 

CEWDOCROOM with DISTILLER

83 

Ms. FRANKLIN. You know, I do not have that on an average basis 

because employees can enroll in different levels of coverage. I 

apologize. 

Mr. GROTHMAN. You should keep track of that. It is a little bit 

embarrassing. What I wanted to do was talk about the difference 

between costs in corporations, what they are, and costs in government, costs in Medicare, and what they could be. What they could 

be if you combined an HSA with a wellness program, with an onsite clinic, and you did some sort of co-pay so your employees could 

shop for the lowest cost health care. 

Since none of you know the answer to this, which you all should, 

since you are experts in the field, I can tell you I think a lot of companies could drop their total costs from about $20,000 to $12,000 

per employee. It would be a difficult thing for the government to 

do since the government is so big, but I think if you had your own 

onsite clinics without the incentives to send people to expensive 

specialists, if you get a little bit wellness, even an HSA, so people 

had a little bit incentive not to run to the doctor at the drop of a 

hat, you would be amazed how much you four could find a drop in 

health care costs. It can be done by nonprofits, too. 

I think Ms. Corlette, if you get involved in Georgetown’s health 

insurance, I think you would find you could save a lot. There are 

a lot of universities today that claim they need more money and 

tuition is so high, but you might find, Ms. Corlette – I recommend 

you should read Mr. Torinus’ book. You might find you could save 

$6,000 or $7,000 per employee at Georgetown and not have those 

kids graduating with such excessive debt. 

Since people do not know that, I guess I will yield back the remainder of my time. That is what you should focus on, total cost 

including cost paid for by the employee in your businesses, and see 

what you can do to drag that down. 

Thanks much. 

Chairman ROE. I thank the gentleman for yielding. Mr. Takano, 

you are recognized. 

Mr. TAKANO. Thank you, Mr. Chairman. Following up on my colleague Representative Bonamici’s comments about health literacy, 

Ms. Corlette, I wanted to relate some experience in my home State 

of California. 

Covered California recently announced—Covered California is 

the name of our exchange—recently announced that its contract 

with insurers for plan years 2017 through 2019 will include expanded tools to help consumers make their choice in plans that is 

best for them. 

Can you discuss how improving health literacy is a tool for workers to make more informed health care decisions? 

Ms. CORLETTE. Absolutely. There are a number of exciting components to that Covered California contract for 2017 that include 

both more support for consumers to make smart choices but also 

really starting to align incentives for insurance companies to start 

to deliver better value. So, I commend California for really being 

the leader in this area. 

On the issue of health insurance literacy, what we have now 

learned after a few years of enrollment through the health insurCEWDOCROOM with DISTILLER

84 

ance exchanges is that there really is not much health insurance 

literacy in this country, unfortunately. 

Part of that stems from the fact that health insurance is such a 

complicated product. You are talking about premiums, deductible, 

co-insurance, co-payments, network issues, benefits. It is just very, 

very complicated. 

Then you couple that with once you are enrolled, figuring out 

where is the appropriate place to get care. All of these things require a tremendous amount of knowledge on the part of the consumer. 

One of the things the ACA has tried to do is provide more tools 

to consumers such as the Summary of Benefits and Coverage, to 

help them make informed decisions, but we are still a long, long 

way away from really getting to the decision support tools that are 

needed. 

Mr. TAKANO. This may be an obvious question, but I think it is 

important for us to kind of get the thinking out there for the public. 

I want to ask you a follow up. How does improved health literacy 

help to keep costs in check? 

Ms. CORLETTE. Well I think first and foremost, by helping people 

understand where an appropriate care setting is for a particular injury or illness or condition, that can help people get the right care 

at the right place at the right time. 

For example, you should not go to the emergency room for a sore 

throat or if you got the flu, you should go to a primary care setting, 

and that can lower costs dramatically. That is just one example. 

Just educating people about where the right place is to get care for 

a particular condition is important. 

Mr. TAKANO. Because people who have not been insured before 

really do not know the different aspects of a health care system. 

Ms. CORLETTE. That is right. 

Mr. TAKANO. They need to learn these things, these terms, copay, co-insurance, all new to someone who has not really been insured before. 

Had we not acted and passed the ACA, do you believe premiums 

for workers likely would be higher than they are today if we had 

not acted? 

Ms. CORLETTE. Since the ACA was enacted, we have had the 

slowest growth in health care prices in just about a generation. It 

has really been remarkable. Some attribute that to the ACA. Some 

say it is the economy and other factors. We certainly have seen 

much, much slower growth than we had prior to the ACA. 

I think that one of the other exciting things about the ACA are 

these multi-payer efforts where private purchasers are pulling together with Medicaid and Medicare to start to get more efficiencies 

into the system. Those are still in the early stages, and need some 

time to bear fruit. I am hopeful that we can, as you say, bend the 

cost curve for the long term. 

Mr. TAKANO. One thing we know for sure is the sky did not fall, 

the world did not end, and we are not seeing lots of people being 

put out of work, lots of full-time people being moved into part-time 

jobs, all these claims that were made pointing to a dire disaster 

have not occurred. 

CEWDOCROOM with DISTILLER

85 

Ms. CORLETTE. Quite the opposite. We are seeing job growth, 

really strong foundation of an employer-sponsored health care system. 

Mr. TAKANO. Thank you very much, and I yield back my time. 

Chairman ROE. Thank you, Mr. Takano. I will now yield to myself for five minutes. Why do companies form wellness programs? 

Well I think they do that, which is what the subject of this was 

today, to lower costs and improve the health care for their employees. I think that is why we do it. It makes sense to do it. 

Just to point out something, I think the way you do that, and 

you have all clearly pointed out, is empower consumers, transparency, and quality. If you do those things, people can shop, and 

Americans are the best shoppers in the world. We will drive across 

five lanes of Interstate to get gas two cents a gallon cheaper. I 

know if we have the knowledge, we absolutely will make smart 

consumers. 

I am a smart healthcare consumer. I have an HSA. What did the 

Affordable Care Act do? It discouraged consumerism, me being able 

to be in charge, not the insurance company, not the government, 

and one of the things you can do tomorrow, we could do tomorrow, 

is allow people to shop. 

In other words, I am forced right now to buy ten essential health 

benefits, half of which I do not need. We need to allow consumers 

to purchase what they and their family can afford and what they 

need. 

Let me just tell you what has happened in the real world, this 

all sounds great. In the real world, in the hospital where I practiced and taught at the medical school, 60 percent of the 

uncollectible debt in that hospital are people with insurance. Why? 

To meet these benchmarks of affordability, you raise the co-pays 

and out-of-pockets so high that people cannot afford it. 

Now, it is left to providers, me and the hospitals, to provide that 

care when people cannot pay. If you have a $5,000 out-of-pocket, 

and you are a police officer where I live making $35,000 a year, it 

might as well be $100,000 out-of-pocket. You do not have the 

money to pay it. 

We have to factor that in and figure out how not to do that. I 

think having consumers decide what they need to buy is the way. 

Medicare, for instance—Medicaid, I mean for instance, we tried 

that experiment 20 years ago. Right now with the Federal Government running a deficit and paying all the bills, it looks fine, except 

the quality of care for Medicaid patients in many cases is actually 

less than people with no insurance. I find that abhorrent that we 

have people in this country with Medicaid that get a lower standard of care than other people. I think that is absurd. We need to 

reform that program before we expand that program. It almost 

bankrupted our State of Tennessee, which is why we have not expanded it yet. 

Just a few things like that. I want to get back to a couple of 

questions that I would like to ask. By the way, the exchanges, 

which I found amazing, you all have set up these private exchanges 

at zero cost to the taxpayers, and we literally have flushed billions 

down the drain with the public exchanges. 

CEWDOCROOM with DISTILLER

86 

By the way, one of them was Oregon, Hawaii. I could go on and 

on. The co-op’s, almost half, over half of them are bankrupt and out 

of business. We need to let the private sector do this. They have 

done it very well at no cost to the taxpayers. 

I wanted to say those few things just to get started. First, Mr. 

Zern, I want to go to you, and Ms. Franklin, both. Do you see these 

private exchanges expanding? In other words, you went from a system where you were self-insured to an insurance plan. Did you see 

that happening? Is that going up? I love the idea of these private 

exchanges. 

Mr. ZERN. We certainly see continued steady growth in the exchange portfolio, and across the definition of exchanges, we absolutely expect to see continued growth, not only within ours but just 

as the industry defines exchanges and what is happening in the 

private health care exchange. 

Chairman ROE. Why do you, Ms. Franklin—because when I was 

mayor of our local city, we had 1,000 employees, 1,500 teachers or 

so, and we were self-insured. What reason did you make at Hallmark to switch from a self-insured plan to— 

Ms. FRANKLIN. The primary model that Aon has used is a fully 

insured model. Part of that model is to put the responsibility and 

accountability to the carriers as they seek innovation in health 

care. 

To your specific question about the growth of this program, I do 

think—we have seen with our employees coming into the workforce, they value choice, they do not want one-size-fits-all, they appreciate being able to learn and customize a program that meets 

their needs. 

Chairman ROE. I think by allowing consumers to have that voice 

and choice you have empowered them. I think there is no question 

about that. 

The other thing I want to get in my little bit of time left, and 

this goes to maybe Fitbit, we need data to make clinical decisions. 

I mean I have to have that to make a rational clinical decision. 

Ms. Corlette, I certainly understand where you are coming from 

with maybe someone who is coerced into doing something, we do 

not want that either. 

We also need that data to be able to make decisions about are 

we doing the right thing. Otherwise, we keep doing, as Mr. Polis 

just said, at least some of these wellness programs may not work, 

and a gym membership is not a wellness program. 

How do we protect the data so I can use it? I don’t know what 

My cholesterol is my cholesterol. I could put it out there you 

wouldn’t know it was Phil Roe. 

Ms. MCDONOUGH. Thank you for the question. Fundamentally, I 

think it goes back to what you suggested, which is giving the consumer the choice to who and when and what data they share and 

with whom. There is a responsibility on Fitbit in this case to make 

sure that the data is secure and privacy is respected, and then by 

giving the employee or the individual the availability to share that 

data with their practitioner in the future so that they can have a 

better and more informed conversation, I definitely think is where 

the market is growing, given it is empowering the consumer and 

also the practitioner to be able to have that conversation. 

CEWDOCROOM with DISTILLER

87 

Chairman ROE. I am going to gavel myself, I am over time. I 

want to thank the witnesses today. You all have been terrific. I 

have thoroughly enjoyed this. It is always nice to have a hearing 

you know something about, which is health care. I really enjoyed 

hearing what you had to say. I think it has been very beneficial. 

We want to continue this discussion, and I want to thank you all 

for taking time to prepare to come today. At this point, I would like 

to ask Mr. Polis if he has any closing remarks. 

Mr. POLIS. I will be brief. Thank you, Mr. Chair. Thank you to 

our witnesses for a very thoughtful and thought provoking discussion about how we can reduce costs, improve health outcomes in 

our employer-based health care system. Employer-sponsored insurance has been very popular, is very popular, will likely remain very 

popular. 

We need to do everything we can to make sure that businesses 

and health care consumers have the right incentives to provide additional wellness based options and new programs to employees to 

help save costs and to make workers healthier. 

I am excited about the role and the potential of technology and 

data to be very central to the decision making process at the employer level and within private exchanges as well. 

It is heartening to see companies that are taking a close look at 

new and more efficient models for delivery, that can cut costs and 

improve outcomes. 

I think we only scratched the surface today, Mr. Chair, and look 

forward to a lot more information for policymakers to make informed decisions about how we can encourage these kinds of activities in the marketplace, and I yield back. 

Chairman ROE. I thank the gentleman for yielding. Just to finish 

up, I agree with much of what Mr. Polis said. We have created a 

system in the public system, and Ms. Franklin has a premium support, basically, it is a defined contribution for health care. You get 

to choose as a consumer which one of those. 

Mr. Zern clearly pointed out that consumers will decide where 

their providers, where they go to the hospital, what doctors they 

see, what medications they can receive. 

That is empowering people to make those decisions. We need to 

do more of that. What we have in Medicaid and Medicare is an archaic out of date system, and it needs to be completely redone, it 

is completely archaic. I mean we have a Medicare system that has 

an A, B, C, and D, and the day I turned 65, nothing happened except I got 65, and now I had an alphabet to go through about what 

kind of health care I wanted. I am exactly what I had the day before. 

Those are the kinds of things I think this hearing—you have 

really ferreted it out very, very well. I do believe, absolutely believe, that the wellness part and one of the questions I did not get 

to ask was how do we take this technology and do we—in a big 

company, at Georgetown, where they are highly educated people, it 

is really pretty easy to do. 

As I walked into the office today, I walked by a lot of people who 

are not very sophisticated, and I have lived in areas that are not, 

and I want to know is how do we get that information down to 

CEWDOCROOM with DISTILLER

88 

where it can make a bigger impact, which is our lower income people and other folks. 

I think we did not delve into that, and maybe that is a subject 

for another hearing. I think it is critically important. That is where 

your biggest gains will quite frankly be. 

With nothing further, I appreciate very much you being here. 

The hearing is adjourned. 

[Additional submissions by Dr. Roe follow:] 

CEWDOCROOM with DISTILLER

89 

CEWDOCROOM with DISTILLER


Insert offset folio 72 here 99776.072
90 

CEWDOCROOM with DISTILLER


Insert offset folio 73 here 99776.073
91 

CEWDOCROOM with DISTILLER


Insert offset folio 74 here 99776.074
92 

CEWDOCROOM with DISTILLER


Insert offset folio 75 here 99776.075
93 

CEWDOCROOM with DISTILLER


Insert offset folio 76 here 99776.076
94 

CEWDOCROOM with DISTILLER


Insert offset folio 77 here 99776.077
95 

CEWDOCROOM with DISTILLER


Insert offset folio 78 here 99776.078
96 

CEWDOCROOM with DISTILLER


Insert offset folio 79 here 99776.079
97 

CEWDOCROOM with DISTILLER


Insert offset folio 80 here 99776.080
98 

CEWDOCROOM with DISTILLER


Insert offset folio 51 here 99776.051
99 

CEWDOCROOM with DISTILLER


Insert offset folio 52 here 99776.052
100 

CEWDOCROOM with DISTILLER


Insert offset folio 53 here 99776.053
101 

CEWDOCROOM with DISTILLER


Insert offset folio 54 here 99776.054
102 

CEWDOCROOM with DISTILLER


Insert offset folio 55 here 99776.055
103 

CEWDOCROOM with DISTILLER


Insert offset folio 56 here 99776.056
104 

CEWDOCROOM with DISTILLER


Insert offset folio 57 here 99776.057
105 

CEWDOCROOM with DISTILLER


Insert offset folio 58 here 99776.058
106 

CEWDOCROOM with DISTILLER


Insert offset folio 59 here 99776.059
107 

CEWDOCROOM with DISTILLER


Insert offset folio 60 here 99776.060
108 

CEWDOCROOM with DISTILLER


Insert offset folio 61 here 99776.061
109 

CEWDOCROOM with DISTILLER


Insert offset folio 62 here 99776.062
110 

CEWDOCROOM with DISTILLER


Insert offset folio 63 here 99776.063
111 

CEWDOCROOM with DISTILLER


Insert offset folio 64 here 99776.064
112 

CEWDOCROOM with DISTILLER


Insert offset folio 65 here 99776.065
113 

CEWDOCROOM with DISTILLER


Insert offset folio 66 here 99776.066
114 

CEWDOCROOM with DISTILLER


Insert offset folio 67 here 99776.067
115 

CEWDOCROOM with DISTILLER


Insert offset folio 68 here 99776.068
116 

CEWDOCROOM with DISTILLER


Insert offset folio 69 here 99776.069
117 

CEWDOCROOM with DISTILLER


Insert offset folio 70 here 99776.070
118 

CEWDOCROOM with DISTILLER


Insert offset folio 71 here 99776.071
119 

CEWDOCROOM with DISTILLER


Insert offset folio 81 here 99776.081
120 

CEWDOCROOM with DISTILLER


Insert offset folio 82 here 99776.082
121 

CEWDOCROOM with DISTILLER


Insert offset folio 83 here 99776.083
122 

CEWDOCROOM with DISTILLER


Insert offset folio 84 here 99776.084
123 

CEWDOCROOM with DISTILLER


Insert offset folio 85 here 99776.085
124 

CEWDOCROOM with DISTILLER


Insert offset folio 86 here 99776.086
125 

[Whereupon, at 12:15 p.m., the Subcommittee was adjourned.] 

Æ 

CEWDOCROOM with DISTILLER