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95–063 PDF 2004

S. HRG. 108–552

CONSUMER-DIRECTED DOCTORING: THE DOCTOR

IS IN, EVEN IF INSURANCE IS OUT

HEARING

BEFORE THE

JOINT ECONOMIC COMMITTEE

CONGRESS OF THE UNITED STATES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

APRIL 28, 2004

Printed for the use of the Joint Economic Committee

(

(II)

JOINT ECONOMIC COMMITTEE

[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

SENATE

ROBERT F. BENNETT, Utah, Chairman

SAM BROWNBACK, Kansas

JEFF SESSIONS, Alabama

JOHN SUNUNU, New Hampshire

LAMAR ALEXANDER, Tennessee

SUSAN COLLINS, Maine

JACK REED, Rhode Island

EDWARD M. KENNEDY, Massachusetts

PAUL S. SARBANES, Maryland

JEFF BINGAMAN, New Mexico

HOUSE OF REPRESENTATIVES

JIM SAXTON, New Jersey, Vice Chairman

PAUL RYAN, Wisconsin

JENNIFER DUNN, Washington

PHIL ENGLISH, Pennsylvania

ADAM H. PUTNAM, Florida

RON PAUL, Texas

PETE STARK, California

CAROLYN B. MALONEY, New York

MELVIN L. WATT, North Carolina

BARON P. HILL, Indiana

DONALD B. MARRON, Executive Director and Chief Economist

WENDELL PRIMUS, Minority Staff Director

(III)

CONTENTS

OPENING STATEMENTS OF MEMBERS

Page

Senator Robert F. Bennett, Chairman ................................................................... 1

Representative Pete Stark, Ranking Minority Member ....................................... 2

WITNESSES

Statement of Dr. Bernard Kaminetsky, M.D., F.A.C.P., Colton and

Kaminetsky, Boca Raton, FL .............................................................................. 5

Statement of Dr. Robert S. Berry, M.D., PATMOS EmergiClinic, Inc.,

Greeneville, TN .................................................................................................... 7

Statement of Dr. Alieta Eck, M.D., Drs. Eck, Apelian and Mathews,

Piscataway, NJ; Zarephath Health Center, Zarephath, NJ ............................. 9

Statement of Dr. Robert A. Berenson, M.D., Senior Fellow, Health Policy

Center, The Urban Institute, Washington, DC ................................................. 12

SUBMISSIONS FOR THE RECORD

Prepared statement of Senator Robert F. Bennett, Chairman ............................ 37

Prepared statement of Representative Pete Stark, Ranking Minority Member 39

Prepared statement of Dr. Bernard Kaminetsky, M.D., F.A.C.P., Colton and

Kaminetsky, Boca Raton, FL .............................................................................. 41

Prepared statement of Dr. Robert S. Berry, M.D., President and CEO of

PATMOS EmergiClinic, Inc., Greeneville, TN ................................................... 57

Prepared statement of Dr. Alieta Eck, M.D., Drs. Eck, Apelian and Mathews,

Piscataway, NJ; Co-founder, Zarephath Health Center, Zarephath, NJ ......... 80

Prepared statement of Dr. Robert A. Berenson, M.D., Senior Fellow, Health

Policy Center, The Urban Institute, Washington, DC ...................................... 91

(1)

CONSUMER-DIRECTED DOCTORING: THE

DOCTOR IS IN, EVEN IF INSURANCE IS OUT

WEDNESDAY, APRIL 28, 2004

UNITED STATES CONGRESS, JOINT ECONOMIC COMMITTEE, Washington, DC.

The Committee met at 10:03 a.m., in Room SD-628 of the

Dirksen Senate Office Building, the Honorable Robert F. Bennett,

Chairman of the Committee, presiding.

Senators present: Senator Bennett.

Representatives present: Representative Stark.

Staff present: Donald B. Marron, Tom Miller, Leah Uhlmann,

Colleen J. Healy, Mike Ashton, Wendell Primus, Deborah Veres.

OPENING STATEMENT OF SENATOR ROBERT F. BENNETT,

CHAIRMAN

Chairman Bennett. The hearing will come to order.

I understand that Dr. Berry is in the building and will be with

us shortly.

We very much appreciate our witnesses being here this morning.

We’re here to explore how some doctors are finding alternatives to

the traditional third-party payer health care system, and at the

same time providing better care for their patients.

Many doctors are frustrated by the state of our current health

care system, and their patients are, too. Doctors are continually

faced with third-party entities interfering in their practice, pushing

them towards a system that focuses on arcane regulations rather

than patient care.

Low reimbursement rates require physicians to increase the

number of patients they see, while shortening the length of office

visits. And they must also shoulder the burdens of increased practice costs, time-consuming paperwork and rising medical liability

premiums.

Many patients, particularly those with lower incomes, find it difficult to obtain affordable care and to receive it in a timely manner.

They often feel rushed through brief office appointments without

having adequate time to address their questions and concerns, or

adequate help to navigate the complex medical system.

Today’s hearing will examine the experiences of innovative and

entrepreneurial doctors who are responding to gaps in the current

system by returning to an older style of medical practice—a patient-focused approach that used to be the norm. By adopting these

approaches, doctors are finding ways to spend more time with their

patients and provide a better quality of care.

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We will examine the potential reach of these early trends among

innovative physicians who deal more directly with their patients

than do physicians relying predominantly on third-party insurance

mechanisms.

Now, I recognize that insurance-free medical care may not work

for everyone. But early evidence of consumer-directed doctoring

suggests that some physicians and patients are reacting favorably

to this way of providing care, and in some cases, it has produced

lower costs.

In other cases, it has offered a more enhanced level of personal

medical service. And on occasion, it has delivered both. In any case,

it means providing better value.

By studying how these entrepreneurial physicians are building

their practices, we can learn about the strengths and weaknesses

of our current health care system and how better to address them.

By understanding alternatives to the system, we may be able to

improve medical price transparency, help relieve medical liability

pressures, and retain highly-trained physicians who are increasingly frustrated by the present system.

We’d like to welcome our panelists today, all of whom have experience delivering health care through innovative or entrepreneurial

means, or who have studied the issue in an effort to understand

the implications of this emerging trend.

I will wait until after we’ve heard from Mr. Stark to introduce

each of the witnesses. But again, we thank you for being here and

look forward to your testimony.

Mr. Stark.

[The prepared statement of Senator Robert F. Bennett appears

in the Submissions for the Record on page 37.]

OPENING STATEMENT OF REPRESENTATIVE PETE STARK,

RANKING MINORITY MEMBER

Representative Stark. Thank you, Mr. Chairman. Excuse me,

but I certainly am in need of treatment today. If I could afford the

services of our witnesses, I would probably be better off for it.

This hearing appears to be an installment in your side of the

aisle’s move towards replacing traditional health insurance with

high-deductible health plans and health savings accounts and that

sort of thing.

This time the rationale is that doctors provide cheaper health

care to patients if we do away with the insurance companies and

their pesky paperwork.

Now I’d state right off that I’m certainly not a poster child of insurance companies in this world. But I’m not sure that they don’t

provide a service to many of us.

The frustrations in dealing with insurers have led some doctors

to accept only cash payments. And the doctors claim that they can

offer lower prices for office visits and other simple procedures because they reduce overhead from all the paperwork and the insurance reimbursement and so forth.

‘‘Concierge care’’—as it’s been dubbed—is kind of a new country

club for us rich folks. And we pay a big premium just to belong,

and then we’re guaranteed access. We don’t have to sit around with

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the riff-raff. But we still have to pay for each service that we receive.

I guess the danger is that if a large number of the doctors open

these types of practices, the health care system will move much

more quickly into a dual system, with the wealthy paying for exclusive access and the poor taking what’s left over—public charity

care, whatever.

Having access isn’t quite the same as having health insurance.

A growing body of literature shows that people without health insurance forego even necessary care and don’t have their care properly managed. They incur the risk of serious complications and

lower overall quality.

And I’m particularly amused by the concept of ‘‘empowering’’ consumers to make more choices about their health care. The need for

health care is unanticipated. We rely on our doctors’ expertise, not

our own, to guide our decision-making.

As I often say, we may ask questions of our doctor, but we never

question our doctor. And the policy of consumer-directed doctoring

says, basically, ‘‘patient—heal thy self.’’

I guess I’ve spent the last 20 years of my congressional career

in the health care policy and I’ve never known so-called ‘‘consumerdriven’’ or ‘‘consumer-directed’’ health care to perform well. It

seems to shift costs to consumers who pay more. Then we get to

the HSAs and some of these other programs, the high-deductible

plans. All I can see is that that’s another tax shelter, again, for the

rich, and it doesn’t do much to help us select.

Now I have a personal disclaimer here.

A number of years ago, I went to Johns Hopkins with prostate

problems. And probably one of the leading surgeons in the world

was there and he just looked at me and said, ‘‘I don’t take insurance, fella. If you want me, it’s $5,000 up front.’’

And I said, okay, I wanted him, because as many of you may recognize, this was delicate surgery and I wanted to come out of there

with all my moving parts in working order. So I paid it.

Now, I’m not sure that there are a lot of people who could. And

I found out why he doesn’t take insurance. Blue Cross kicked in

$1,300. That’s what they would have paid him. And he wanted

$5,000.

So there are people—I guess if you want the best and the brightest, you have to pay up for it. Maybe he occasionally did it free,

but I’m just suggesting that this does go on. I’m not sure it should,

but it does.

So I’ll be interested in hearing from our panel today and see

what light they can shed on how to help us all, every American

resident, receive first-class medical care more equitably.

Thank you.

[The prepared statement of Representative Pete Stark appears in

the Submissions for the Record on page 39.]

Chairman Bennett. Thank you very much. I normally do not

comment on other Members’ comments. But I do feel moved to

make this one disclaimer. And maybe it’s the fact that I’m in the

Senate and Mr. Stark is in the House.

But I can assure you, Mr. Stark, that there is no conspiracy on

our side of the aisle to try to undermine the present system.

4

There is certainly none on my part.

Representative Stark. I’m glad, because I don’t like any conspiracy that I’m not a part of, Mr. Chairman.

Chairman Bennett. I see. Okay.

[Laughter.]

Chairman Bennett. These hearings, and we are doing a series

of them, are structured simply in an effort to take a fresh look at

the entire health care system, a simple desire to say that nothing

is beyond examination. At least from my point of view, there are

no sacred cows that cannot be looked at.

It stems from my conviction that the present system, however

satisfactory it is in many ways, is inadequate, is falling short in a

large number of ways. And I want to take a clean sheet of paper

look at every aspect in the health care area to see what is working

and what isn’t, to see if, in the end, we can’t make a recommendation to the legislative committees, on which you sit and I don’t—

maybe that gives me some degree of objectivity, that I’m not on the

Finance Committee or the HELP Committee. So I have absolutely

no responsibility.

Representative Stark. If you were going to become a Democrat,

you wouldn’t, either. Okay.

[Laughter.]

Chairman Bennett. That’s a step I’m not planning to take.

[Laughter.]

Chairman Bennett. As I think I may have said when I became

Chairman of this Committee, Alan Greenspan once said to me:

‘‘When Hubert Humphrey was Chairman of the Joint Economic

Committee, he made it look as if no other Committee in Congress

mattered, because he said, ‘you have no legislative mandate. Therefore, you can look at everything.’ ’’

And I corrected him. I said, ‘‘No, Alan, we do have a legislative

mandate.’’ And he said, ‘‘Oh, what is it?’’

And I said, ‘‘We’re required to offer a comment on the annual report of the President’s Council of Economic Advisers.’’

And he said, ‘‘As I said, since you have no legislative mandate,

you can look at everything.’’

I don’t think that there is anything that is affecting our economy

more than rising health care costs. I hear it from corporate executives as their number-one cost problem over and over again, one

that they cannot seem to contain.

So I think it appropriate that we look at every conceivable aspect

of the system to try to understand it better. And at the end of the

day, I hope that we can make some recommendations to the legislative committee.

But may I assuage my Ranking Member’s fears that this is not

the part of a long-term conspiracy on behalf of the Republicans to

try to undermine anything or promote anything other than, I hope,

solutions that can be embraced in a bipartisan fashion.

I’m not naive enough to expect that that will really happen, but

at least it’s a consummation that we can work towards.

If you need an additional rebuttal, I’ll be happy to allow you

that.

Representative Stark. [Nods in the negative.]

5

Chairman Bennett. Okay. With that, let us turn to our witnesses, whom I will introduce in the order in which I think we

should hear from them.

Dr. Bernard Kaminetsky, from Boca Raton, Florida, operates a

practice that specializes in concierge care, or retainer medicine,

where patients primarily seek preventive care, get involved with

wellness plans and individualized attention and 24-hour access to

a personal physician.

And then we’d like to go to Dr. Robert S. Berry, who is here from

the PATMOS EmergiClinic in Greeneville, Tennessee. Dr. Berry

will talk about his experience building a pay-as-you-go practice. His

office fully discloses its prices up front, receives payment at the

time of services, and generally does not accept any third-party insurance reimbursements.

Dr. Alieta Eck, a Physician from Piscataway, New Jersey, runs

a—did I pronounce that city correctly?

Dr. Eck. ‘‘Pis-cat-away.’’

Chairman Bennett. Piscataway. Okay, I apologize to the

Piscatawayans who may be offended.

She runs a charitable care clinic that combines community resources with more efficient methods of health care delivery, to meet

the urgent medical needs of the poor and the uninsured.

And then batting clean-up, we will hear from Dr. Robert

Berenson, who is an experienced physician, now a Senior Fellow

from the Urban Institute here in Washington, DC. He has focused

on health care policy, particularly Medicare.

We look forward to each of you.

Dr. Kaminetsky, we will start with you.

STATEMENT OF DR. BERNARD KAMINETSKY, M.D., F.A.C.P.,

COLTON AND KAMINETSKY, BOCA RATON, FL

Dr. Kaminetsky. Thank you, Mr. Chairman, Mr. Stark.

I am a 51-year-old, board-certified internist presently practicing

as an MDVIP-affiliated physician in Boca Raton, Florida. I affiliated with MDVIP because of the inability of the current health

care environment to accommodate the necessary emphasis on

wellness and prevention that is essential to perform comprehensive

preventive care. Instead, current practice, because of time constraints, focuses predominantly on acute care. I am honored to be

able to discuss my career, and my decision to provide my patients

with the choice to obtain the preventive care and early detection

services that they have requested and deserve.

I had always aspired to be a doctor, even from the age of six, as

my mother could tell you. I attended Albert Einstein College of

Medicine in New York, where I was elected to membership in

Alpha Omega Alpha, the national medical honor society. I completed my training at New York University-Bellevue Hospital Center, where I served as chief resident in medicine and was responsible for the continuing medical education of the house staff. My

Bellevue experience was certainly unique. I cared for addicted single mothers, Park Avenue matrons, the homeless and suburban entrepreneurs. Following training, I stayed on as a faculty member

at the New York University School of Medicine.

6

During my career, perhaps the greatest change in primary care

has resulted from the rapid growth of managed care, especially in

the realm of Medicare HMOs. Reimbursement, as we all know, became lower than traditional fee-for-service Medicare, but doctors

essentially had no choice.

Capitation—in other words, accepting fixed payment per-patient

per-month—held the potential to be very remunerative, because

whatever was not spent on the patient accrued to the doctor.

However, such an arrangement was never acceptable to myself or

my partners because of the obvious inherent conflict of interest. In

that setting, a doctor is incentivized to order as few tests and as

little medication as possible in order to improve the bottom line.

Moreover, that approach to care emphasized treatment of acute

problems with diminished emphasis on prevention.

Concomitant with declining reimbursement, we faced an increase

in our overhead on a continual basis. The health care costs for our

employees continually rose. Malpractice insurance has skyrocketed,

especially in crisis states such as Florida.

We attempted to cut staff, but that caused untenable delays. And

we became more and more constrained in our efforts to be pro-active with regard to health care and became more and more reactive.

It seemed there was only one way a practice could promote prevention and still maintain its financial viability, and that was by

seeing more patients. But the reasoning was clearly circular—more

patients would mean less time for prevention, while a solution

mandated more time, not less.

As a profession, we all had great ideas, but we were lacking in

the ability to implement any meaningful change. I was very seriously contemplating leaving clinical medicine.

Last June, the New England Journal of Medicine documented

that only 55 percent of recommended preventive care is administered. Only 52 percent of recommended screening is performed.

It’s been estimated that a doctor with a typical patient load of

2,500 patients, if he were to comply with the recommendations of

the U.S. Preventive Services Task Force, he would spend 7.4 hours

of each day on prevention only—obviously, only a tiny fraction of

the day would then be devoted to acute care.

In a similar vein, if one planned on performing comprehensive

preventive exams of even an hour in length for each of the 2,500

patients in a typical practice, that would be 2,500 hours, or one entire year solely for annual exams, with no time whatsoever for

acute care.

In contrast, if a practice is limited to 600 patients, such as my

current practice, then 12 hours a week, or even 18 hours, is devoted to annual preventive exams with ample time available for

routine and urgent care.

Hence, my decision to join MDVIP, a program which is focused

on annual preventive care, physical exams, individualized wellness

planning tailored specifically to a patient’s needs.

I make prevention the foundation of my practice rather than a

set of often ignored recommendations. My practice style allows me

to dwell on exercise, nutrition, weight loss, smoking cessation, curtailment of alcohol use. I provide detailed analyses for the patients

7

of their medical and family history, nutritional, psychological and

fitness screenings, cardiograms, comprehensive labs, imaging studies.

And all of this is supported with electronic documentation that

is given to the patient to carry on a CD in their wallet.

My practice is limited to 600 patients by necessity. In order to

offset the decline in revenue associated with the far smaller practice size, the patients pay an annual fee to receive these preventive

care services which are not covered by Medicare or commercial insurance.

Early analysis suggests that the scope of care that is delivered

in a practice such as mine results in enhanced patient outcomes.

Preliminary studies using a modified HEDIS survey of MDVIP-affiliated practices in Florida have yielded results that far exceed the

national quality of care averages.

Moreover, these same practices have experienced approximately

30 percent fewer hospitalizations relative to national averages, a

highly significant difference.

Who are my patients?

The demographic make-up of my current practice very closely

mirrors that of my former practice. My patients range in age from

18 to 101, and come from all socio-economic backgrounds, including

patients on fixed incomes and those whose incomes qualify them as

upper middle class.

Those patients who chose not to avail themselves of the benefits

of the MDVIP prevention program remained in my former practice

and a new internist was hired to join the group, take my place, and

ensure continuity of care for all patients.

For myself, for my patients, the clock has truly been turned back.

The practice environment of the past is like it used to be. I really

feel like I’m a doctor again, a confidant, an advisor.

I’m in a position to incorporate the newest recommendations regarding prevention. It’s a win for the patients. It’s a win for the

doctors. It’s a win for the insurers because of the reduced hospitalizations.

I can’t imagine anything could be better. Thank you.

[The prepared statement of Dr. Kaminetsky appears in

Submissions for the Record on page 41.]

Chairman Bennett. Thank you very much. We appreciate that.

Dr. Berry.

STATEMENT OF DR. ROBERT S. BERRY, M.D., PATMOS

EMERGICLINIC, INC., GREENEVILLE, TN

Dr. Berry. Mr. Chairman, Mr. Stark, thank you for inviting me

to testify before this Committee today.

I am grateful that our leaders want to know what is happening

at the grassroots level and you are willing to consider a perspective

of an ordinary primary care physician like me when deliberating

health care policy.

I’m Dr. Robert Berry. My background is primary care internal

medicine and emergency medicine. As a physician in a private

practice that does not take any insurance, I believe I might be able

to offer you fresh insights on some of the seemingly insurmountable problems we face in health care today.

8

Over three years ago, I left ER medicine to start a clinic primarily for the uninsured in my community. I thought I might be

able to help them avoid unnecessary expensive visits to the ER.

My motivation was simply to try and flesh out in my own life an

answer to the age-old question—‘‘who is my neighbor?’’ Of course,

I don’t refuse other patients willing to do payment at the moment

of service. In fact, because this seemed to be the unifying theme

of our practice, I chose its acronym—PATMOS—as the name for

the clinic.

PATMOS is similar to charity clinics such as Dr. Eck’s in that

it serves many patients falling through the cracks of our broken

health care system, except that we don’t receive any taxpayers’

funds, either directly as subsidies or indirectly as a tax-exempt organization.

It is similar to boutique clinics such as Dr. Kaminetsky’s in that

it contracts directly with its patients, except that most of our patients don’t have insurance.

The prices for medical services at our clinic are quite reasonable—$35 for a sore throat, $95 for a simple laceration.

I can keep my fees this low and, thus, affordable to the uninsured and patients with high deductibles, because I avoid the

crushing overhead and hassles of processing relatively small medical claims, a service from which they clearly do not benefit.

Mine is only one of many non-boutiques, cash-only clinics in this

country. There is a growing movement of physicians like me who

offer affordable quality medical care by refusing to sign insurance

contracts.

We are no longer willing to tolerate anyone intruding into the

once-sacred doctor/patient relationship. And the mainstream media

is catching on.

Last November, The Wall Street Journal featured our clinic on

the center of its front page in an article entitled, ‘‘Pay As You Go

MDs—The Doctor Is In, But Insurance Is Out.’’

Just several weeks ago, the AP News ran a story on Simple Care,

a network of cash-only clinics, which was picked up by CNN and

many local media throughout the country.

National news programs have highlighted other cash-only clinics

as well. The media is tapping into a rich vein of frustration and

fear, frustration with costs escalating and no end in sight, while

medical care is becoming less accessible and less personal.

Fear that we might end up with a single-payer system where

delays for treatment can be inhumane.

Clinics like ours offer hope that there are doctors out there today

who care, and who don’t cost an arm and a leg.

In Canada, the median time from a mammogram to a mastectomy is 14 weeks. Personally, I don’t think I could look a woman

in the eye, inform her that her mammogram was suspicious for

cancer, and then have to tell her that the cancer might have spread

before she can receive treatment.

Of course, in Canada, I wouldn’t be put to that test, because clinics such as mine are currently illegal there.

The issue before you now, it appears, is very simple—who will

control health care dollars?

9

The government? No. Medical decisions are much too complex

and personal to entrust to distant bureaucrats, many of whom lack

basic medical knowledge.

How about the patients, then?

In my opinion, the most cost effective and humane solution to

many of our health care problems is to allow ordinary Americans

to manage their own routine medical care by giving them control

over health care dollars. They can do this now with pre-taxed, taxdeferred personal and family medical accounts within consumerdriven health plans and spend them at clinics like ours.

It is, after all, their money and their health. They should control

both.

Ronald Reagan once again said, ‘‘There are no easy solutions—

just simple ones.’’ All that is required is being a neighbor.

[The prepared statement of Dr. Berry appears in Submissions for

the Record on page 57.]

Chairman Bennett. Thank you very much.

Dr. Eck.

STATEMENT OF DR. ALIETA ECK, M.D., DRS. ECK, APELIAN

AND MATHEWS, PISCATAWAY, NJ; ZAREPHATH HEALTH

CENTER, ZAREPHATH, NJ

Dr. Eck. Good morning. Thank you for the opportunity to speak

before this Committee and share some of my experiences as a private practicing physician, in the trenches, so to speak.

I have prepared a written testimony, which you have. So I’m just

going to try to summarize.

Chairman Bennett. It will be part of the record.

Dr. Eck. I was a registered pharmacist before I became a physician. I graduated from St. Louis University School of Medicine, did

a residency in internal medicine at Robert Wood Johnson University Hospital in New Jersey. I’m board-certified in internal medicine.

I live and practice in New Jersey, but I participate in a health

benefits reform message board. Experts from across the country—

we’ve been discussing the different problems related to health insurance. New Jersey is considered the poster child with what can

go wrong with how government can mess things up so badly.

In 1992, they created an individual health coverage program to

ensure that people that didn’t have private insurance or government-sponsored insurance could purchase insurance. So they standardized plans.

The state was attempting to make it easier for people to understand the plans and comparison shop. But the net effect was a

staggering increase in premiums and an equally staggering increase in the number of people who are uninsured.

So New Jersey is really ripe for change.

There were 220,000 individual policies in 1996; 90,000 now, and

they’re going down quickly.

As you’ll look up on the web site, you’ll find that an individual

policy for $1,000 deductible, 30 percent co-pay, is now about $4,000

a month.

They actually publish these rates in New Jersey.

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The reasons are many. But it’s government. The government has

told people that the insurance companies have to have a community rating. They have guaranteed issue. They have a $300 mandated amount that they have to pay for check-ups. All kinds of government mandates in each insurance policy. They limit the level of

the deductible. And there’s intense political pressure to avoid

change.

I’ve outlined all of the reasons for this in my prepared comments.

I even asked our Senator, Jon Corzine, I said, please, let us buy

health insurance across state lines. But that’s not legal in New Jersey, or I don’t know if anywhere else. It certainly wouldn’t be

against the commerce clause of the Constitution and it would allow

a lot less people to be uninsured.

Anyway, I have two practices. I have a private practice with four

physicians. And there, we have cut things way down so that we

have two full-time employees, about six part-time employees. Very

efficient. We don’t do any HMOs. We don’t do any private insurance.

And this keeps our costs way down and our prices are very reasonable there. We earn a living there.

We participated in one non-capitated HMO. But they looked at

our charts and decided that we had charged a higher level than we

should have. And therefore, they wanted a claw back. They wanted

to take back some of the money that they had given us for services

that we had rendered.

We got out in a hurry. And that was the last HMO that we were

in.

We found that, in a hospital conference, they gave us a graph

and they showed us a horizontal line was where how long people

stayed in a hospital. And the vertical line was how much we spent.

And they told us if we were in the upper right-hand corner, we

were bad doctors. Lower left-hand corner, we were good doctors.

In other words, our whole training was being compromised by

how much we spent, and that was really the most important thing,

as Dr. Kaminetsky had noted.

Well, there is a problem of access for the poor. So although our

prices are reasonable, we also want to help people who are struggling and have nothing.

We have fascinating stories of people that we have helped in the

other practice that we have, called the Zarephath Health Center.

We’ve been in existence for 6 months now and we’ve been able to

take care of people in a very personal way. Not a bureaucratic way,

not a one-size-fits-all way.

But you get to know these people and you say, well, how can I

help? And how can I make a difference?

There’s a little building that was given on our church property

for us to use. Our overhead is about $500 a month. We have all

volunteers taking care of people. And they come in. And I want to

tell you about a couple of these people that we’ve been able to take

care of.

A 28-year-old woman came. Her father had died from a long illness. She had been the primary caretaker and became very depressed. She lost her apartment. She had no job and needed $230

worth of medicine.

11

She went to the local social service agency and they looked at

their lines and they filled in what she needed. She said, ‘‘You

know, the way you could get help is to just get pregnant.’’

Well, she was smart enough to realize that wouldn’t really help

her. So she wound up coming to us. We helped her access a pharmaceutical program where she could get $230 worth of this medicine, a three-month supply. And after that, they wouldn’t repeat it

until she got a letter from the social services agency that said why

they had turned her down. They wouldn’t write it.

So we just called around. We found out how much the medicine

cost, wrote her a check and bought her her medicine.

It’s a tax-deductible gift that people had given to us to help take

care of the poor. We helped her. Now she’s getting a job. She’s not

going to need us any more. That’s the kind of person we’re helping.

Another, a 52-year-old woman is taking care of her 54-year-old

sister dying of breast cancer. She has no insurance. Her family has

no insurance. She went to the local hospital where she thought she

could get reasonable care. They charged her $495 for a physical

and blood work. They then gave her a prescription for a mammogram.

Now she has no money, no anything. She came to us. We said,

wow, we could have done that for a whole lot less. But we gave her

the money for a mammogram. And she got it and thankfully, she’s

okay.

Interestingly, her sister was just told that she can get on to Medicaid as of July 1st. And she’ll be dead by then. So she has really

no help. We’ll help her, too.

The bureaucratic systems just don’t really help, when you really

get down to the bottom to where people are struggling.

Just to summarize. I love being a physician. It’s the most rewarding of professions. But we’re struggling because a lot of government mandates—the malpractice situation is extremely difficult. That makes it harder and harder for us to provide reasonably-priced care.

There are 15,000 retired doctors in New Jersey who can’t even

help in our clinic because they can’t buy the mandated health insurance. Or aren’t interested in paying a lot for health insurance.

Those doctors——

Chairman Bennett. You mean malpractice insurance, don’t

you?

Dr. Eck. I’m sorry. Malpractice insurance, yes. That’s an army

of people who could serve the poor in our very personalized way if

they were just freed up from that kind of a liability.

Anyway, we have to hurry because there are a lot of Americans

that are being hurt. The obstetricians and neurosurgeons aren’t

able to do what they do best because of the malpractice situation.

To summarize, that’s basically it. We just need less government

pressure on us and more freedom to practice the way we were

trained.

Thank you.

[The prepared statement of Dr. Eck appears in Submissions for

the Record on page 80.]

Chairman Bennett. Thank you very much.

Dr. Berenson.

12

STATEMENT OF DR. ROBERT A. BERENSON, M.D., SENIOR

FELLOW, THE URBAN INSTITUTE, WASHINGTON, DC.

Dr. Berenson. Thank you, Mr. Chairman, Mr. Stark, and the

other witnesses. I appreciate the opportunity to speak here today.

I’ve provided testimony or a statement for the record. I’m going

to divert from that because yesterday evening, I had an opportunity to read the testimony of the other witnesses and found it

very interesting and wanted to comment briefly on some of what

I read and heard this morning.

Chairman Bennett. Your full statement will be included in the

record, as is the case with all of the witnesses.

Dr. Berenson. Thank you very much. And I actually found I

had a lot to agree with in the testimony and the statements of the

other witnesses.

I think, in composite, they are painting a picture of an increasingly dysfunctional health care system, where primary care physicians, in particular—and I guess we’re all, I’m an internist, also,

a board-certified internist. I think in particular feel that the system

is not working very well for ourselves or for our patients.

I certainly think in aggregate, the other witnesses presented a

good picture of the symptoms of our current system and I fully understand their responses, how they’ve tried to cope with the problems in their own way.

I was actually in a similar situation about a decade ago to Dr.

Kaminetsky, where I was working harder trying to just stay afloat.

I think the best year I ever had practicing internal medicine was making about $35 an hour on a full-time basis, making $75,000.

I took time with my patients. Insurance didn’t reward me for

taking time with my patients. And I wound up, instead of doing

what Dr. Kaminetsky did, moving on to more of the policy side of

health care to try to see what we could do about improving the system.

So I’m quite sympathetic to what they have described.

However, I think I disagree with some of the proposed approaches, or at least where the physicians suggest the solutions lie.

Dr. Berry made some very compelling comments about how a patient has a choice between going to a busy, crowded emergency

room, spending hours, getting a huge bill and not terrific service.

And he was providing an alternative to that.

And indeed, all of the physicians described sort of the growing

impersonality and bureaucracy that characterizes medicine.

Let me briefly tell you a story of my wife, who a few years ago

was traveling in a city where she didn’t know any physicians. She

was on a trip, developed a fever of 103, felt terrible at about 6:30

at night, and decided she needed to get some medical attention.

She went across the street to a pharmacy that was open. Got the

name of a physician to call. Called, a man answered. She said,

‘‘Can I speak to the physician?’’ He said, ‘‘I’m the physician.’’ She

had expected to be going through a whole array of people, actually

expected to be talking to an answering service.

Described her problem. The physician said, ‘‘I’ll be right over.’’

In half an hour, had seen her, diagnosed her, given her a pre- scription, and billed her for $40, which she paid on the spot.

That’s the way medicine should be practiced.

13

That was in France. That was not the United States. That was

in a social health insurance system. In Belgium, physicians make

as many home visits as they do office visits. In other words, just

the fact that there is social health insurance does not mean that

we have to have a bureaucratic, impersonal, costly health care system.

There are clearly examples of problems. The UK is under-funded.

There are long waits. Canada is having a problem. Other systems

have problems. But to equate bureaucracy with government, I

think, is a mistake.

In my opinion, the kinds of problems that we have don’t call for

moving towards high deductible plans that put even greater financial burdens on individuals to seek care, but actually should be addressed by dealing with the problems of uninsurance and under-insurance, by the huge waste and inefficiency that we have because

of, in particular, the individual and small group insurance market,

which does not work very well and extracts 40 cents on every dollar. These dollars are not going to patient care and this insurance

market creates some of the confusion that physicians and patients

experience.

And I think we have a continuing problem that has not been adequately addressed by the Medicare Resource-Based Relative Value

Scale or by private insurance, which tends to follow the RBRBS, in

which we over-reward procedures and tests and doing things to patients and under-reward the activities that physicians are trained

to do, but are not compensated for doing.

So I think there are lessons in what these doctors have described

for changes in public and private insurance companies. But doing

away with front-end insurance coverage, I do not think is the solution.

Specifically, on the issue of health savings accounts, I think they

actually exacerbate some of the problems. The healthy and wealthy

would be able to do reasonably well with high-deductible plans. But

those with chronic diseases, which are an increasing percentage of

the population, who would immediately go through their deductible

and be in the catastrophic part of the insurance, would be worse

off because of adverse selection.

And so the premiums would go up more and more for those with

illnesses, and those who are healthy and wealthy would be able to

essentially opt out of the insurance pool.

Similarly, I would argue that the costs in health care which are

driving government budgets and private premiums through the

roof, are associated with a small percentage of patients who generate a huge percentage of costs.

Virtually anywhere that you look, whether it’s in Medicare or in

private insurance plans, about 5 percent of patients generate about

50 percent of the costs.

In Medicare, patients with four or more chronic diseases represent about 79 percent of spending in the Medicare program.

To provide some incentives for people to use their own money to

shop more carefully might feel good. It might reduce some marginal, discretionary services. It would not make a dent in what’s

driving our health care spending, which is really spending for the

very sick.

14

And then the thing that would bother me the most, and picking

up on some of the remarks that Dr. Kaminetsky made, is that people with high-deductible plans who are not affluent would be making choices about whether they should forego early prevention and

early diagnosis and treatment, which should forestall health problems down the road and reduce spending down the road.

I don’t think we have any evidence base to suggest that people,

basically being asked to be their own doctor, know how to make

those kinds of choices.

I certainly would not go there based on what we know right now.

So let me conclude by saying I look forward to our discussion. I

think the physicians are on to something when they describe the

problems in the health care system.

I just don’t think that moving more towards a market solution

is the way we want to go.

Thank you very much.

[The prepared statement of Dr. Berenson appears in Submissions

for the Record on page 91.]

Chairman Bennett. Thank you very much. I look forward to

discussion with all of you.

If I might, Dr. Berenson, picking up on your example of your

wife. If I understood Dr. Eck correctly, the physician in France that

you talk about would not be permitted to do that in the State of

New Jersey. Is that correct?

Dr. Eck. I don’t think he’d be permitted to do that in Canada.

But in New Jersey, they could do that. Cash practices are okay in

New Jersey.

It’s just that if you wanted to have health insurance, the mandates are all in the health insurance policies, which makes the

price of the insurance policies go up. But, yes, cash payments are

okay in New Jersey.

Dr. Berenson. I’m not aware specifically of New Jersey, but

there have been developments of physicians starting activities to do

home visits.

I actually think it’s sort of a mechanical thing. In some countries,

patients pay at the point of service and then get reimbursed from

the social security system. In other places, they send the insurance

through up front.

I don’t think that—we do not have to have all of the overhead

associated with the current practice of U.S. medicine in a well-insured health care system, is the point that I want to make.

Chairman Bennett. Yes. And I find agreement there between

what you’re saying and the experience that’s being demonstrated

here.

Now, Dr. Kaminetsky, respond to Dr. Berenson. By the way, I

never mentioned health savings accounts in establishing this hearing.

It’s interesting that that’s where the conversation goes because

that’s where the conversation has been.

As I said in my response to Congressman Stark, I’m not carrying

water at this point for any particular solution. We just want to find

out what will work to make physicians, as these physicians have

indicated, get excited about practicing medicine again.

15

Increasingly, I hear that physicians want to get out of it, that the

bureaucracy, whether it be private or government, is intolerable.

Among physicians, I don’t get any division between the bureaucratic heavy hand of an insurance company or the bureaucratic

heavy hand of the government. It isn’t an anti-government kind of

thing.

It’s a revolt against the idea that a third party, whoever it may

be, is constantly injected into the equation.

So let’s go back to understanding where we are.

Now, Dr. Kaminetsky, will you respond to Dr. Berenson and talk

about what——

Dr. Kaminetsky. When you raised the point, which is, of course,

on the principal reasons we’re here, discussing physician dissatisfaction and why doctors have chosen to make changes in the

nature of their practice.

The premise underlying the question or the criticism of what I

do is the assumption that were I not doing what I’m doing, I would

just be back on the treadmill the way I was, seeing 30 people a

day, dealing with acute care, but paying little, if any, emphasis to

prevention.

That’s a flawed premise, because I was certainly on the verge of

leaving the practice. I had done enough investigation to actually be

very seriously contemplating signing a contract with a pharmaceutical company. And of course, many physicians have, unfortunately, left the profession because of the frustrations involved. And

sadly, their skills are being lost.

Concerns—Dr. Berenson touched on many different aspects.

What I do is a solution. It’s certainly a niche product. To quote

from the AMA’s report of the Council on Medical Services—‘‘The

phenomenon of retainer medicine is inherently self-limiting. The

more physicians charge for their services, the smaller the demand

for their services. These economic realities limit any potential for

widespread adoption of retainer practice.’’

In terms of access, I also want to emphasize that affording oneself of the opportunity to concentrate on preventive services and,

as a patient in a smaller practice, reap the de facto benefits of

being a patient in a smaller practice, is a matter of choice.

Certainly, for those patients, of my former patients who were not

capable of making the choice because they truly would find that

$1,500 prohibitive, those patients are still my patients.

We call them scholarship patients. There’s absolutely no differentiation between the preventive services they receive and any other

patients.

So, I do not believe that access is limited by the nature of an

MDVIP affiliated practice because of it being a niche product, and

because those patients who truly are not capable of making the

choice are accommodated, nonetheless.

Chairman Bennett. Any other comment before I turn it over to

Mr. Stark on this?

[No response.]

Chairman Bennett. Okay. What I’d like to do, Mr. Stark, if it’s

all right with you, is for you to take a round and then I would hope

that the six of us could have a roundtable kind of conversation

rather than the traditional your turn, my turn, my time, your time.

16

Let’s interrupt each other and interact with each other, if that’s

acceptable to you.

Representative Stark. It certainly is. Thank you. That’s generous of you, Mr. Chairman.

Like Dr. Berenson, I haven’t heard anything this morning that

gets me terribly upset. I have to look at the Stark family.

I like the idea of what we call the ‘‘boutique.’’ I’m just enough

of a snob that I’d just as soon be able to call the doctor at home

and do a whole lot of things that—now, the Senator and I have

available to us, courtesy of the United States Navy, a whole clinic

full of doctors who are available 24/7. And we don’t wait. I mean,

we really don’t. And they’re high-class physicians.

And it is a form of medical care delivery that this country could

not afford.

But we know what the boutique of the boutiques is like. And it’s

pretty nice. And I have some of my colleagues who have retired

who get out into the real world and miss that very much. They

could afford and would go to a physician.

We changed with our three little children pediatricians. Same

reason. We just got sick of being shuffled. They ran maybe three

offices and had 15 physicians. And that got to be just more than

we could deal with until we found a physician who would deal with

the children and we could contact her. So I think that’s instinctive.

The trouble with it, I suspect, is if everybody went that way, we

would get into much more of a two-class system than we have.

Let’s assume that the 40 million uninsured are one class and

those who enjoy medical payment systems are in another class.

So I have no quarrel there.

Dr. Eck, first of all, you’re to be commended for formalizing your

commitment to treating people without charge. I have often suspected that when I hear physicians, and I hear a lot of physicians

every year, complaining about how poorly Medicare pays them and

how much time they spend on pro-bono services, that the only time

I think they really mention pro-bono services is when I see them

in my office.

But that’s a skepticism that you certainly disprove.

As for cash only, I have this experience. Near Annapolis, where

we live, there’s a doc-in-the-box person who doesn’t require an appointment and is near our home. And often, either our nanny or

my wife or I will go there when we’re pretty sure what we need.

We’re pretty sure it’s an ear infection and we need an antibiotic,

or whatever.

And she’s very accommodating. She takes cash, but we can send

her bill on to Blue Cross. And sometimes they’ll pay us some and

sometimes they won’t, depending on what she writes down that

she’s done to us. This physician serves a real purpose in our community.

There’s a nighttime pediatrics that now takes adults as well. It’s

a community organization mostly of pediatricians and a couple of

family practice physicians. And they’re open 6:00 till midnight and

Saturday afternoons and some Sundays for the time that children

mostly seem to get sick. And they will take adults.

So I had an experience there, and this is what troubles me.

17

I was waiting to register my son to go in, probably with an earache. A woman was next to me and they were saying how much

she had to give them her insurance card or her credit card. They

did not take her insurance. She had a young child with her and the

child was quite obviously in some pain. They wanted $65.

She had driven, for those of you who know the area, from Kent

Island all the way to Annapolis. So this wasn’t just in the neighborhood. They made some effort to bring this child some distance. And

she couldn’t afford the $65.

So she left with the child and hopefully went to the Annapolis

Medical Center and waited around the emergency room for a while.

And there are people—and it’s hard for many of us who are more comfortable to understand where $65 is a real barrier to getting

the kind of attention that we think, as patients, that we’d like at

the time. And that’s a problem I have.

I wanted to ask because I want to talk about the free market in

a minute.

In each of your practices, for the primary care patients—and I

don’t know how many of you provide other services than primary

observation and referral. But give me what you think would be the

median dollar amount that your patients spend. Not including your

fee.

But what does a patient on your books spending a couple of thousand, three thousand, two thousand, one thousand, what’s the median of people who you see?

But before you get to that, my concern is, and I think in your

testimony, Dr. Berenson, you presented this to some extent.

I don’t think that we as lay people—and the Senator may be better at this than I am—I don’t think that we’re able to shop for medical care or services.

I can go out and shop, with the help of Consumer Reports, for

automobiles and tell you how to get the best deal on a Camry or

a Lexus or whatever you’re looking for, and we know about that.

And my wife can tell you where to go to get the best produce,

whether it’s best at Fresh Fields or Giant and what days the fish

is fresher, where.

But we are absolutely clueless as to what it costs or what kinds

of things to go shopping for in terms of medical services.

And I had my staff, just for the heck of it, shop in your hometowns earlier this week. It took four of them about 3 hours apiece.

And I would just ask—and it was two things—a head CAT scan

and a colonoscopy.

And I don’t know if you found a bargain colonoscopy, if you’d like

to run out and get one right away. But let me just ask Dr. Berry.

In Greeneville, Tennessee, do you know what the range of

colonoscopy charges—now they all said about $2,500 for anesthesiology and the facility fee.

Dr. Berry. Do you want to know the doctor’s fee or the hospital’s

fee?

Representative Stark. What would you guess the range is?

Dr. Berry. The doctor’s charges versus what he’s reimbursed—

the doctor’s charges I think run between $600 and $800. The hospital charge to the uninsured——

Representative Stark. We said that we were uninsured.

18

Dr. Berry. Uninsured.

Representative Stark. The ranges we got were $900 to $1,500.

Dr. Berry. Okay.

Representative Stark. Dr. Eck, what do you think——

Dr. Berry. The hospital, by the way, sir, would be about $1,500

for the uninsured.

I know that because I have a copy of a bill from someone who

came in.

Representative Stark. That’s okay. I’m just trying to——

Dr. Berry. And his wife’s insurance was——

Representative Stark. What do you think they are in

Piscataway?

Dr. Eck. Piscataway. It’s an Indian name.

Representative Stark. Just the doctor’s fee. What do you

guess?

Dr. Eck. I’d say about $1,200 to $2,000.

Representative Stark. You’d pay too much. $600 to $1,200 is

what we got.

Dr. Kaminetsky, do you want to take my test? What would you

guess?

Dr. Kaminetsky. I would hazard a guess of about $800 for the

doctor’s fee.

Representative Stark. Well, we got $500, $900, $650 and

$1,100 in Boca Raton where we called.

So, I guess the only reason I say this is that it took us forever

and a day. And if you need a head CAT scan, you’re probably not

in shape to be spending a couple of hours calling around to get the

best price. We don’t shop for that. You tell us to take a test. We

take it and hope we pass. And we go where you send us.

Dr. Eck. If you’re going to save several hundred dollars, you

would shop around. That’s not that hard.

Representative Stark. Well, Doc, I want to tell you that there

are times when various malfunctions hit you and you’re in no mood

to shop around.

Dr. Eck. Well, that’s different.

Representative Stark. And my sense is that——

Dr. Eck. Then what you need is a general contractor who knows

the system who can help you out.

Representative Stark. I’d just point out that it’s difficult for

us——

Dr. Berry. I’ve done the shopping, Mr. Stark, and I’ve gotten

discounts from hospitals and from other—not for colonoscopies. I’ve

tried. I haven’t been able to do that. But for an MRI, for example,

cash payment to our clinic would be $530, and that includes the

interpretation. If they want to put it on their credit card, $550.

Representative Stark. But you’re doing that.

Dr. Berry. I’ve done that for a lot of tests.

Representative Stark. What I’m suggesting is that that’s fine,

and that’s as it should be.

But we as patients——

Dr. Berry. That’s why you come to me.

Representative Stark. Precisely.

Dr. Berry. Because I’ve done that work.

19

Representative Stark. And what I’m trying to suggest is that

that’s what’s wrong with these high co-payments—we as patients

don’t know how to do that. We don’t know what we’re looking for.

Dr. Berry. Well, what happens out in the real world is that patients talk among themselves and they find out which doctors they

can trust.

Chairman Bennett. Right.

Dr. Berry. And that’s why more and more patients are coming

to me.

Chairman Bennett. Yes. If I can intrude my personal experience in this.

I don’t shop for dollars, but I shop for doctors. And if I can give

you a somewhat parallel example. You talk about automobiles.

I am as clueless when it comes to car repair as I am medical repair. I have no idea whether I’m getting ripped off by a——

Representative Stark. You are.

Chairman Bennett. Okay.

[Laughter.]

Representative Stark. Go into the repair shop with that in

mind and you’ll be right.

[Laughter.]

Chairman Bennett. I have found in my lifetime repairmen,

auto repairmen who are willing to talk to me. And you spend some

time talking to them, they’ll tell you who in the community gives

you good service and good prices and who doesn’t.

And usually, I take the coward’s way out and simply take the car

back to the dealer, which may or may not be the right thing to do.

But when I’m worried about money and I’ve got an old car that

I’ve got to deal with, I’ll talk to a mechanic who will tell me who

the other mechanics are.

Now, do the same thing with doctors. And doctors break the code

of silence if you get to know them and they’ll say, ‘‘the question is,

all right, doctor, if you had a problem, where would you go?’’

And inevitably, in one area, and I won’t identify it, because I

don’t want anybody listening to this to start to go down the trail.

But in one area in my family, we’ve had a particular problem that

has occurred in several members of the family.

We have asked doctors—‘‘Okay, if you had this problem, where

would you go?’’ And the same name has come up every time.

And by careful activity, every member of our family that has had

that particular problem has gotten in to see that doctor.

I don’t think it’s just because I’m a Senator that I can make a

phone call and say, ‘‘Will you see my grand-daughter?’’ And have

him say ‘‘yes.’’

The network is out there. One of the great frustrations with

managed care is that you can’t do that. Indeed, when I was CEO

of my company picking plans for my employees, I picked the plan

that made the most economic sense, which is what the incentive is.

And then when I looked at the particulars, I said, ‘‘Wait a

minute. I don’t want this plan,’’ because the doctor with whom I

had a relationship was not on the list of doctors.

I got around it by going to a doctor who was on the list whom

I knew and said, ‘‘Will you please accept the assignment of my priVerDate 03-FEB-2003 13:12 Oct 01, 2004 Jkt 095063 PO 00000 Frm 00023 Fmt 6601 Sfmt 6601 D:\DOCS\95063.TXT SSC1 PsN: SSC1
20

mary physician and immediately refer me to the doctor that I

want?’’

And he knew the doctor that I wanted. He agreed with me that

it was a very good choice and said, ‘‘sure.’’

So we gamed the system by my signing up with this plan and

worked it around so that I never ever saw the doctor who was on

the list as my primary care physician.

Dr. Eck. You know, it’s interesting. The very best specialists you

won’t find on any plan because they can name their price.

Chairman Bennett. That was the case with the doctor that I

wanted.

Dr. Eck. They can name their price, they’re so good. Who do you

want to go to when you need that neurosurgery? I’d rather go to

the best and pay more than go to the doctor on my plan. That’s

why I’m not in any plan.

Representative Stark. I just wonder if I could get the numbers

real quick and then I’ll yield.

Have you guys thought about what the median patient spends

for primary care in your practice each year?

Dr. Berry?

Dr. Berry. At my clinic?

Representative Stark. Yes.

Dr. Berry. I know what they spend per visit.

Representative Stark. No. Well, what would you guess they

spend in a year?

Dr. Berry. I don’t know that, sir, because I don’t keep those

kinds of records.

But they spend $51 per visit, which includes the professional fee,

the labs, whatever tests that I order and whatever medicines I provide there or dispense from the clinic. That’s the total visit.

Representative Stark. Any idea, Dr. Eck?

Dr. Eck. The average person? Again, I don’t have those kinds of

records, either. I’m just imagining.

Some of them like to come a lot. They feel better when they see

me a lot. So they might pay $500 or $600 a year, if they’re not

very, very sick.

Representative Stark. All right.

Dr. Kaminetsky, other than the fee, what’s your average?

Dr. Kaminetsky. As Dr. Eck said, a lot of patients like to come

a lot. And one of the old complaints about Medicare, of course, is

that there’s no disincentive for a patient to come for a very trivial

complaint.

But I’d say the vast majority of my patients are either paying for

their Medicare supplement, which is several thousand dollars a

year, plus medications, depending on what their needs may be in

terms of relative health.

My non-Medicare patients, their main expense would be the cost

of their health insurance, which would vary. I think single with

children—for my family of five, I pay $1,300 a month.

Representative Stark. Most of your patients have insurance.

And that covers most of what you would bill them for, your procedures.

Dr. Kaminetsky. The vast majority, yes.

Representative Stark. Okay. Thank you.

21

Dr. Kaminetsky. Can I take the opportunity?

Chairman Bennett. Sure.

Dr. Kaminetsky. I just want to respond to Mr. Stark’s anecdote

about changing to the pediatrician. And of course, you change because you are frustrated by the lack of access.

Chairman Bennett. You shopped.

Dr. Kaminetsky. The prevention program, the emphasis is truly

prevention.

For example, numerous studies have shown that what is most effective in getting patients to stop smoking is doctor-patient intervention. Not Nicorette gum, not nicotine patches, not Welbutrin,

but doctor-patient intervention.

When I have a smoker and I’m trying to get him to stop, it’s almost like a game. But he knows that a designated day of the week,

every week, he’s going to get a phone call.

That’s prevention.

With 2,500 patients, I couldn’t possibly do it. Now it is true,

again, a de facto benefit of being in a smaller practice, as when

you’re competing with 600 people for an appointment versus competing with 2,500. It’s different. But the emphasis in the program

is prevention.

And as far as the concern about creating tiers, well, medicine is

tiers. We’ve got HMOs. We’ve got PPOs. A Medicaid patient can’t

see a doctor who is not a participant in Medicaid. And a Medicare

HMO patient cannot see a doctor who is not a participant in that

HMO.

This is another product in a very pluralistic market which offers

many different options for patients. And the AMA’s Council on Ethical and Judicial Affairs, specifically referring to retainer practices,

has endorsed the concept that, ‘‘the patient has the freedom to select their health care on the basis of what appears to them to be

an acceptable trade-off between quality and cost.’’

Representative Stark. I have no quarrel with it at all. I am a

little uncertain as to how it deals with extra billing relative to

Medicare. But that’s a very technical problem for another day. But

other than that——

Dr. Berry. To answer your question, though, all you have to do

is multiply, say, the patient sees me 4 times a year for hypertension. That would be about $200.

Representative Stark. One of the problems we have, and then

I’ll get out of this, what I was leading up to is that, on average,

and averages are bad. We spend $7,000 a year on a Medicare patient.

Now, most of that is spent on those beneficiaries who are very

much older than I am. But nonetheless——

Chairman Bennett. And in the last 30 days, isn’t it?

Representative Stark. Yes. But I think even if you took the 20

percent at the right hand of the curve and lopped it off, we’d still

be at $2,000 or $3,000, anyway that would be spent, again, on average, by these 40 million Medicare beneficiaries.

And I don’t know that they could get insurance, absent community rating and forced across the country and a whole lot of other

things that they could afford if we didn’t have it.

22

Now you may not like it as the best system, but many of us think

it’s pretty efficient. And prior to 1965, I was active in finding insurance for my grandparents and my parents and it was impossible.

So for those people who remember back that far, it was a great

burden that was removed from the worries of seniors as to what

they were going to do about paying for health care.

And in those days, it wasn’t as expensive. There weren’t as many

sophisticated techniques and tests and things to pay for. But it was

still a concern for people.

Dr. Eck. Do you remember what the cost of a hospital bed was

per day back in 1965?

Chairman Bennett. It’s under a $100.

Representative Stark. I’m going to guess, in the neighborhood of $100 and change.

Dr. Eck. In New Jersey, it was $39. But once all those dollars

came infusing in, that was part of the reason for the medical inflation that has occurred.

Representative Stark. You could buy a Mercedes for $2,000 in

1965, too.

Chairman Bennett. A Mustang, maybe.

Representative Stark. A Mercedes.

[Laughter.]

Representative Stark. A Mustang was $900.

Dr. Eck. Medical inflation is higher than Mercedes inflation.

Chairman Bennett. Yes.

Dr. Berenson, get into this.

Is there any evidence that concierge care or insurance-free medicine of the kind that we’re talking about here which Mr. Stark has

endorsed as something he’d like to see survive—the Canadian system clearly says, no, we will not allow this to survive.

Is there any evidence that this has contributed significantly to

the escalating health care costs? Hasn’t the orthodox insurance and

medical practice been able to escalate entirely on its own without

any help or upward pressure from this kind of thing?

Or is, in fact, this a threat to the now more traditional kind of

financing?

Dr. Berenson. I guess a couple of responses.

First, we’re combining to some extent apples and oranges here,

because as I understand what Dr. Kaminetsky is doing is he’s got

a separate subscription for a certain kind of additional service.

Chairman Bennett. We deliberately tried to get three different

kinds of examples instead of the same one all 3 times.

Dr. Berenson. So, in a sense, I think people are paying extra

out of their pocket, without tax-subsidization for this special attention. And it probably marginally increases overall costs. But it’s so

small, that I don’t think it’s anything to worry about.

And it might actually have benefits, as he points out, in promoting early diagnosis and treatment.

Again, these other approaches, whether it’s having special, cashonly emergi-clinics or physicians who are starting home visit services and getting paid, that’s not where the money is in the health

care system. And so——

Chairman Bennett. When you say the money, you mean the

costs.

23

Dr. Berenson. The costs. I mean, that’s not what’s driving

health care costs.

So, again, as sort of niche activities, certainly a free clinic is a

worthwhile activity that’s taking care of uninsured. So I don’t think

what we’re talking about today as sort of niche activities is a threat

or driving up health care costs.

What I get concerned about is seeing this become part of a philosophy of moving away from the important social role of insurance

pooling risk. To think that we can take these few examples and

build it into something bigger is what bothers me.

Chairman Bennett. Well, let’s pursue that. Let’s not talk about

philosophy. Let’s just talk about the market.

Suppose this catches on and a lot of people decide they want to

do it. You consider—in other words, there’s a threshold, if I understand what you’re saying—as long as they remain small and scattered and not very many, you’re not going to worry about it.

But is there a threshold at which point the Dr. Berrys and the

Dr. Ecks and the Dr. Kaminetskies multiply where you say, ‘‘Wait

a minute, this does become a threat.’’ And at that point, you’re

going to come to the Congress and say, ‘‘You’ve got to take action

to stop it.’’

Dr. Berenson. I guess my concern is, if we develop—if at some

point we’re developing specialized services that attract the healthy

and the affluent into a separate sort of risk pool that they benefit

from, we just drive up the risks for those who have no choice but

to have comprehensive insurance.

And so, we may save a few dollars on some reduced discretionary

services—if somebody doesn’t need an MRI because they’re a weekend tennis player and they’re going to have to pay out of pocket

and they make a decision not to have it, that might reduce some

expenses, if it’s purely discretionary and it’s something that somebody doesn’t want to pay for out of pocket.

But the problems created for those who are in the basic comprehensive insurance pool, I think, are not worth that sort of marginal savings.

Chairman Bennett. So there is a point at which you would

draw the line and say, by government fiat, we’re going to say ‘‘no

more?’’

Dr. Berenson. I’m not sure that I know where that line is, because these are very diverse kinds of activities.

Chairman Bennett. Well, I’m not looking for the line. But

philosophically——

Dr. Berenson. Philosophically, I think that’s right. I think we

don’t want to go too far down this road.

Chairman Bennett. Okay.

Dr. Eck, do you serve the wealthy and draw people away from

insurance?

Dr. Eck. No, I believe in insurance. I just believe that the insurance model has to be correct.

I believe in high deductible insurance. I don’t want people trying

to run through their deductibles so that they can get into insurance

where everything is covered and then over-spend.

So that’s why I like the idea of high deductible and then paying

for their services via health savings accounts for the lower things.

24

Representative Stark. Can I add to that?

Chairman Bennett. Sure.

Representative Stark. I would assume that all four of you feel that whatever the plan, at some amount, $2,000 or $3,000, there

ought to be a catastrophic benefit for people who need surgery or

severe—do all of you feel like that?

Dr. Berry. I have that kind of insurance.

Representative Stark. Yes.

Chairman Bennett. And I agree with that, too.

Representative Stark. Just the first thousand or two. And beyond that, whoever they are, they ought to have some coverage.

Dr. Eck. It just has to be properly designed. My family, since

1997, has not had health insurance, and I’ll tell you why.

Because we live in New Jersey, it was way too expensive and it’s

not worth the money.

But we were able to get into a Faith Christian group where they

could put restrictions on our behavior that would lower the cost of

health care for all. And therefore, we pay $215 a month to be covered for catastrophic events that exceed $900. And it’s extremely

reasonable, and it works, and it’s covered. It’s not insurance.

Therefore, it doesn’t get under the department’s banking and insurance.

Representative Stark. Do they provide that for warlocks? Have

you ever heard?

[Laughter.]

Dr. Eck. They’d have to have their own.

[Laughter.]

Representative Stark. I can’t find any. That’s why I ask.

[Laughter.]

Dr. Berry. That’s because their behavior is so high risk.

[Laughter.]

Dr. Kaminetsky. My practice is entirely compatible with insurance. It does not supplant insurance in any way. And certainly, my

patients are far from being cherry-picked as being healthy and

wealthy.

It’s because of the nature that many of them have chronic illnesses and they would like to forestall getting more seriously ill,

that they put the emphasis on our preventive products.

So, certainly, if anything, though it’s a small sample, our preliminary data, as I said, shows a 30 percent reduction in hospitalization rate. I am convinced that we are saving insurance companies

money.

Chairman Bennett. But your comment there seems to be

counter to what Dr. Berenson says, because you say that you’re

getting the sicker rather than—that is, people who have chronic

problems that they want to deal with.

Dr. Kaminetsky. No, I have an entire spectrum.

Chairman Bennett. Okay.

Dr. Kaminetsky. The point I was trying to make is that it’s not

just getting young, affluent, healthy people who want to live longer

than 50.

Chairman Bennett. Okay. In other words, there is no adverse

selection.

Dr. Kaminetsky. Absolutely.

25

Chairman Bennett. All right.

Dr. Berenson, you want to say something?

Dr. Berenson. Well, simply that they have their full insurance

coverage. And in addition, they are purchasing some additional

services. I think we should actually do the study that’s implied

here.

A lot of the best physicians I know in Washington where I practiced for many years, and from what I understand from around the

country, practice a different style, which is spending lots more time

with their patients—these are primary care physicians, often internists. And because they are doing that, they believe that they are

reducing unnecessary referrals to other specialists. They think they

are reducing tests and procedures and saving money.

This should be subjected to some real testing, and if it demonstrates, in fact, that that’s what the effect is, I don’t know why

insurance companies within their insurance products are not rewarding Dr. Kaminetsky for doing exactly that kind of thing.

I don’t know why we have to have this to be extra insurance, I

guess is what I’m saying. Why shouldn’t Medicare, as I’ve suggested, and other payers, actually pay additional fees for the coordination activity that primary care physicians should be doing,

but don’t have time to do for their patients who may have seven

doctors and take 35 medications in a year. They’re not paying for

any of that kind of coordination. And so important care falls

through the cracks.

So I guess what I’m saying is I haven’t heard anything here

today that’s not compatible with insurance products, whether public or private. I think there have been some misguided decisions by

insurance companies, public and private, about what they’re paying

for.

Chairman Bennett. Okay. That’s getting——

Dr. Berry. May I say something here?

Chairman Bennett. Sure.

Dr. Berry. I think that actually the low co-pay, low deductible

so-called ‘‘insurance,’’ which is not really insurance at all, is, in

fact, increasing the cost of care for a number of reasons. And I

don’t think that the government should encourage that with their

tax policy, because right now, it’s open-ended. A company can write

as an expense $10,000, $20,000. And the rest of the country is paying for that, including the uninsured.

They’re effectively subsidizing these low co-pay, low-deductible

insurance policies.

What I’m for is payment at time of service for routine health

care. And he says that it’s not going to reduce costs much. I don’t

know. But there are about a half billion patient-doctor interactions

or encounters per year in primary care.

Now you change the mindset of people. Instead of their asking,

‘‘Doc, don’t you think I need that MRI or some blood work on

this?’’—they will be asking, ‘‘Doc, do you really think I need to have

that test done?′′

Let me tell you, that changes the whole equation. And I suspect

that once you translate that cost savings per encounter, you would

see significant cost savings. I don’t know what the numbers are.

Policy people can probably churn those out. But you don’t get visits

26

at $51, including all that I provide, without doing some pennypinching.

Chairman Bennett. Dr. Eck.

Dr. Eck. In May, we’re going to have ‘‘Cover The Uninsured

Week.’’ That’s a big publicity event where I think what we’re saying is that people who have no money, somehow we have to come

and cover them. And by covering them, we have to buy them health

insurance.

I would disagree with that, because the whole idea of health insurance is not necessarily health care and it’s phenomenally expensive.

There’s a little center in New Jersey that is a lot like ours, only

it is 4 years old. It sees 6,000 people a year who have no money,

and it’s all volunteers. It’s a lot like what we do, volunteer doctors

and physicians. Their budget is $500,000 a year for 6,000 people.

That translates to $83 a year per person.

Now these people get health care. So do they have coverage? No.

But they get health care. They get referred. The hospital takes care

of them if there’s a problem. The community that’s working that’s

getting health care to people.

Everybody’s happy. Patients love it. They get personal care. The

doctors feel good. They’re volunteering their time. It’s not a big, expensive, bureaucratic—actually, it was covered on ‘‘20/20,’’ and I

think it’s a real solution to take care of the poor.

Is it a two-tiered system? I suppose. They’re not paying. But it’s

getting the job done. And I think that we should look into that as

a way to get health care to the poor rather than the big government programs.

Chairman Bennett. Mr. Stark.

Representative Stark. Well, I think we’re—let me just try this.

We don’t think boutique medicine is inherently bad. All of us——

Chairman Bennett. Say that again. I didn’t hear you.

Representative Stark. We do not think——

Chairman Bennett. You do not think. Okay.

Representative Stark. We don’t think it’s inherently bad.

Chairman Bennett. You said it quickly enough that I heard,

‘‘we all think.’’

Representative Stark. Now all of us want better access. But

not everyone has the type of access that we are able, either as professionals or politicians or wealthy people—we’re in a class distinct

from, say, the family of four with $25,000 of income or less, they

don’t have the advantage.

Chairman Bennett. Unless they live in Dr. Eck’s neighborhood,

and then they do.

Representative Stark. They may. But they don’t as a matter

of practice. So, obviously, there are perverse incentives in the feefor-service area to do more to get paid more. That’s an incentive

that we’ve had to deal with a lot, and I’m sure the physicians recognize.

But there’s also the reverse of that incentive, is when you don’t

have any insurance. There’s a big of an incentive to postpone perhaps getting treatment because your tolerance for pain may go up

as your pocketbook gets thinner.

27

And I think if we could figure out somewhere in between, Mr.

Chairman, how we can be sure that the person who has to come

up out of pocket—now in Dr. Eck’s area, there are non-governmental organizations that provide. There aren’t in a lot of areas.

I mean, your neighborhood—and your neighbors are to be commended—but that doesn’t exist universally.

So if we could be sure that the people at the lowest income scale,

let’s just suggest, had access as any of you would suggest they need

for either primary care, for preventive care, to do all the things

that you’d recommend, and also then, for those of us at the other

end, are somehow prevented from abusing the system by over-indulging our whims to chat with you nice professionals whenever we

get the urge or sneeze, that’s the middle ground that perhaps we’re

all pushing towards. I don’t know what the answer is. There may

be different approaches.

Dr. Berry. I think part of the answer is doing payment at the

time of service for routine health care.

Representative Stark. What if you don’t have any money?

Dr. Berry. The administrative overhead for doing——

Representative Stark. What if you’re homeless and don’t have

any money? How do you pay at the time of service?

Dr. Berry. That’s a separate and small issue, I will admit.

There’s no question about that.

But let me say this, that when I was working in the ER, 80 percent of TennCare patients who came, adult TennCare patients,

smoked cigarettes. Assuming $1,000 a year, that would be 20 office visits at my clinic. They need to be made accountable as well. They need to be acting neighborly as well. And they don’t need to be driving Toyota

Sequoias. They don’t need to own vast tracts of land. Some of the

people’s net worth on TennCare is much higher than mine will ever

be. So there’s something wrong with that.

Representative Stark. I think you’re quite right. I just think

that we don’t have a system—I noticed in Colorado recently, it was

in the press yesterday or the day before, the emergency rooms are,

many of them, trying to triage now to keep the burden of unnecessary visits——

Dr. Berry. They could come to our clinic.

Representative Stark. I beg your pardon?

Dr. Berry. Our clinic is ideal for that. And they’re not willing

to forego a $1,000-a-year cigarette habit——

Representative Stark. If they have any money.

Dr. Berry. Their problem is with priority, not with my price.

Dr. Eck. There are 32 volunteers in medicine clinics across the

country.

Representative Stark. You have a clinic that can handle it.

Dr. Eck. There are 32. And they just need to be encouraged. And

I think that army of retired physicians that I was speaking about,

if we could relieve them of the malpractice burden so that if they

donate their time, they’re not liable for anything that might have

a bad outcome, we can make a big difference.

Representative Stark. You’re getting close, Doc. If we relieve

them of the malpractice burden and maybe the tax burden, we’re

really paying you. And I have no quarrel——

28

In other words——

Dr. Eck. They’re not getting paid. These doctors aren’t getting

paid. They wouldn’t be getting paid. They would be giving free

service. You take care of the poor. Just relieve them of the malpractice burden so that they’re free to do this.

Representative Stark. What do we do in areas where there

aren’t any nice guys like that?

Dr. Eck. They’re all over the country. There are 15,000 in New

Jersey.

Representative Stark. Send everybody who can’t afford to New

Jersey.

[Laughter.]

Chairman Bennett. No, let’s not send them to New Jersey.

[Laughter.]

Dr. Eck. So there must be a lot in other states. That’s what I’m

extrapolating.

Chairman Bennett. One of the issues that this panel has highlighted that gets ignored a great deal in the discussion of health

care is the number of doctors who are voting with their feet and

walking away from medicine.

And that has to say to us that there’s something wrong with the

current system if it is driving away its most qualified practitioners.

At the risk of opening another area, and I’ll shut it off very

quickly if indeed this does inflame a lot of comment:

When I got involved in looking at education, I discovered a very

interesting thing. Education is the only area where people will accept a lower price for the privilege of not teaching in public schools.

Private schools pay lower salaries than public schools and teachers will voluntarily walk out of the public school for the privilege

of teaching in an environment that they consider more conducive

to education.

Now I’ll quickly shut that door, having opened it.

But it does represent a signal that there’s something wrong that

has to be dealt with. And we find some of the best teachers refuse

to go into public education, and they go elsewhere.

I know that because I used to run a company that was basically

an education company and we had wonderful teachers, none of

whom would have any interest in teaching in public schools, and

the public schools were the poorer for that.

So if we are in fact seeing ‘‘hamster health care,’’ which is the

phrase I use with physicians on the treadmill all the time, and

therefore, physician satisfaction going down, and as I’ve talked to

physicians and I think what you’re saying here, it’s not financial.

It’s not because they’re not earning enough money that they decide

that they have to get out of medicine because they can make more

money someplace else.

It’s what you have said here, they are feeling that they cannot

perform what they were trained to do, and so they’re leaving health

care.

Dr. Eck. A lot of them are leaving the HMOs and that frees

them up.

Chairman Bennett. Okay.

Dr. Eck. That frees them up tremendously. And I think most of

us sitting here enjoy practicing medicine.

29

Dr. Kaminetsky. But the problem you just touched on is a very

serious one. I don’t know if anyone might have seen, not this past

Sunday, but the week before, The New York Times Sunday Magazine, Lisa Sanders at Yale, a primary care professor talking about

the declining applications every year to primary care.

We’re all primary care-givers. And the national residency match

program, every year there’s been a decline in internal medicine and

family practice.

So with the numbers of primary care-givers going down, at the

same time that the population is getting older and demographically, the need for internists is going up. Furthermore, there are

more reasons to see a doctor now.

For instance, as an example, someone who might have had congestive heart failure 10 or 15 years ago would have been treated

with just Digoxin and a diuretic.

Now there are many other modalities of therapy. There are many

new drugs. There are inhibitors, ARBs, and so forth. There’s more

reason to see the doctor. There’s an older population and there are

fewer primary care-givers.

Now part of the problem realistically is not because—you’re

right. I agree with you. It’s about being a doctor and giving care.

However, when you graduate with $175,000 of debt, you’re not

immune to a respected mentor saying, ‘‘You know what? Don’t go

into medicine.’’

So one of the potential solutions is maybe there needs to be more

government intervention and subsidizing private medical school

education in return for encouraging people to go into primary care

subsequently.

Dr. Berry. I’m not so sure about that. But it seems that society

doesn’t value the services of a physician today quite so much.

Had I graduated from the University of North Carolina business

school in 1992 instead of graduating from the medical school in

1989, I would be making more than I would be if I were still practicing emergency medicine, a considerable sum.

So that shows—if you’re a senior or junior college student and

trying to decide what you’re going to do with your life, why would

you go into medicine? You’re going to get paid less. You have long

hours. You’ve got incredible risk. People’s lives are in your hands.

Why do it? I think that that’s a legitimate question to be asking.

Dr. Berenson. I’d like to add, I think we sometimes lump all

docs together. And what’s I think the serious problem right now is

the lack of training in the primary care fields. In the same article

that Dr. Sanders wrote in The Times, there was a reference to Alan

Goroll, who is a professor at Harvard who is a friend of mine. I was

in his class at college.

He told me that last year’s graduating class at Harvard Medical

School, of about 160 graduates, 20 were going into internal medicine. But of those 20, 15 were going into cardiology and gastroenterology and perhaps 5 were becoming the kinds of doctors that

you call at 2:00 in the morning.

That’s something we haven’t talked about, everybody getting a

doctor with whom we can have a relationship as the way to get

their basic primary care.

30

There was another article I saw in The Times surveying graduates of some medical school. 40 percent of them wanted to go into

dermatology because the pay was better, the hours were better,

there was no night call. I don’t think they’re so unhappy, frankly,

the dermatologists of the world. I do think that practicing primary

care right now is very difficult. And a lot of doctors I know are giving up HMOs. They’re giving up Medicare.

Medicare patients are complicated. They have four, five or six

problems and many medications and it’s hard work. And we’re not

rewarding them and compensating them appropriately or giving

them sort of the kind of nonrenumerative support that I think they

need.

And I would offer a policy opinion on this one. Because in the

Medicare statute, we have control over expenditures for physicians,

the Congress, CMS, Medpac, don’t look at where we’re spending

that money because we control expenses.

So the fact that we are sending huge signals about what specialties to go into, and those signals are don’t go into primary care, is

not anything that has gotten policy-makers’ attention. I think it

needs to be focused there.

Representative Stark. Are you familiar with the German system? Do you like it?

The only people on fee-for-service in Germany are the primary

care docs. You go to the hospital and it’s a flat-rate per day, whether you’ve got a plantar wart to be removed or a heart transplant,

the same amount. And all hospital-based physicians, which are all

surgeons, are paid a salary, except if you’re the chairman of a department at a university. Then you can charge a fee on top. And

it just turns our system on its head.

In other words, you maybe get three pfennings for a Xerox, but

you get a long Chinese menu of things that you can charge as a

primary care doc. And they do much better than their counterparts,

unless they happen to head a department.

Dr. Berry. Well, I think I would be doing much better if I could

see, instead of three patients an hour, four patients an hour. I

would be almost making as much as that MBA from Carolina.

The problem is that, besides the government subsidizing low copay, low-deductible insurance, they make it very difficult for doctors to do this kind of practice. They require basically doctors to opt

out of Medicare. If I did not opt-out of Medicare, I would have to

refuse Medicare beneficiaries showing up at my clinic asking to be

seen, willing to pay me $35 out of pocket. Quite frankly, I’m not

willing to discriminate against Medicare beneficiaries in my community.

So that is one policy that you could look at, is to roll back this

crazy opt-out clause, because I can’t find physician coverage for my

clinic. I had to shut down the clinic today. Nobody’s going to work

at my clinic because everybody still takes Medicare. I’ve opted out.

Chairman Bennett. Any other comment on that?

[No response.]

Chairman Bennett. Well, let’s wrap this up. This has been

enormously helpful, and I’m very grateful to the four of you.

Dr. Eck. Can I just say one more topic we haven’t touched on?

And that is the plight of the uninsured.

31

In New Jersey, I know, they get charged 300 percent of what

Medicare pays for a hospital visit. If a hospital visit costs $10,000,

the uninsured get charged $30,000. Tremendous. And these are the

people who presumably really can’t afford it. And so then liens get

put on their house and the whole thing.

What we have found out is that if you go to a little island in the

Caribbean that is not the United States, there are little hospitals

there that can take out a gall bladder and they would charge

$1,000.

Compare that with $30,000 in New Jersey, $1,000 in the Caribbean.

And so we’re looking into that. And we’re just saying, what

would happen if Americans came down and had an operation done

there? Maybe we could even bring our surgeons down. And they’re

very positive. The surgeons are saying, ‘‘Hey, we would do that. We

would do it for free if you gave us a week in the Caribbean.’’ So

we’re looking into it and I’ll keep you posted.

Dr. Berry. Well, the front page of The Wall Street Journal

shows a Canadian citizen going to India to pay for a hip replacement that costs about $5,000. He would have had to have waited

a year-and-a-half for it in Canada. And the $5,000 is about a quarter of what he would have been charged in the United States.

Dr. Berenson. If I could, I think, though, that Dr. Eck’s comment is something that I wanted to address about sort of this alternative approach of low-cost, often what has been called ‘‘charity’’

care. I worked in a free clinic. I also saw patients who didn’t have

insurance. I’m sure all of these physicians provide uncompensated

care.

But I remember an experience I had. I had a patient I was seeing for nothing who needed a chest x-ray. So I called the head of

my hospital where I admitted and said, ‘‘Can I get a free chest xray?’’ And the guy said, ‘‘I’d love to help you out, but I don’t have

anything to do with the x-ray department. That’s owned by somebody else, a separate radiologist company.’’

The point is that medicine, health care is a very complex—there

are many people who have to provide services. So the physicians

providing cut-rate and good services perhaps, but the hospital is

then charging 3 times more for that same patient or the radiology

group is not discounting their MRI rates or might actually be price

discriminating more against the person who has poor insurance or

no insurance. And so, I commend approaches to fill gaps and to

provide some services in a lower cost way.

But I think it’s pretty clear from the studies that are being done

by—some by my colleagues at the Urban Institute—that people do

better with insurance. It does drive up costs some, but their health

care is better. And there are some cost offsets.

And an alternative of non-insurance, second-class, ‘‘we do the

best we can for you,’’ I don’t think is something that we as the

United States should be looking to as the major way we provide

health care to the uninsured.

Chairman Bennett. I haven’t heard anybody here say this

morning that we should get rid of insurance.

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My concern is that insurance ought to be insurance. Now I’ve

used this before and it’s an imperfect analogy, like every analogy

is, but I use it again to make the case.

I have homeowner’s insurance. I would be foolish not to have

homeowner’s insurance. It’s a wonderful policy. If the house burns

down, they not only replace the house. They replace the paintings

on the wall. They replace the carpets on the floor. They replace the

silverware in the drawer in the kitchen and the clothes in the closet. Everything.

It’s just terrific.

But try as I might and read the fine print as often as I can, I

can’t find anything in the insurance policy that will reimburse me

for mowing the lawn or painting the front door when the dog

scratches it, which the dog does quite often. Or used to when we

had a dog.

Insurance is for the issues that I cannot handle in the every day

experience. And I pay to have the lawn mowed. I pay because I’m

in Washington and can’t be there, the guy who mows the lawn, also

takes care of the garden. And that’s just part of the expense of having to maintain two homes.

I guess when we live there, we’ll plant our own tulips. But at the

moment, my wife likes to go home to see tulips and I pay for that.

I cannot file an insurance claim to pay for the tulips.

Dr. Kaminetsky. By way of analogy, if the branch falls on your

roof and it’s damaged and the adjuster comes and says, ‘‘Well,

we’re going to fix this area over here,’’ you’re not in a position to

say, ‘‘Well, you know, that’s really not going to look nice. I want

the whole roof.’’

By way of analogy, there is no reason why an adult child can’t

say with regard to their 92-year-old mother with metastatic carcinoma, ‘‘I want her in the ICU, doctor.’’

I’m not proposing more bureaucratic oversight of Medicare. But

these are types of real-life issues that come up every day where,

as we all know, half the Medicare dollars are spent in the last 6

months of life, and there’s essentially no oversight about appropriateness of care and whether the dollars should perhaps be reapportioned, which is obviously a very weighty issue with a lot of

ethical and moral considerations, but one which has been too long

ignored.

Chairman Bennett. Thank you for that addition. I’ll use it from

now on.

[Laughter.]

Chairman Bennett. This is the point. If we can, in fact, make

insurance truly insurance by incentivizing people to be in the businesses that these three are in, I think it’s absolutely inevitable that

the cost of insurance will come down and come down quite dramatically. Particularly if they practice the kind of medicine that Dr.

Kaminetsky focuses on, and I assume the other two do as well,

which is the way to keep costs down is to keep people healthy.

There is no incentive in a pure insurance program to keep anybody healthy. It’s all focused on acute care and not focused on prevention.

And there have been fairly significant studies, case studies of

folks who spent a whole lot more time on prevention, having proVerDate 03-FEB-2003 13:12 Oct 01, 2004 Jkt 095063 PO 00000 Frm 00036 Fmt 6601 Sfmt 6601 D:\DOCS\95063.TXT SSC1 PsN: SSC1
33

duced the enviable result of having lower costs and higher satisfaction on the part of the people that are in the insurance pool. We’ve

had testimony on that in previous hearings.

So the problem with the poor is a clear problem. But, quite

frankly, the insurance system, whether it’s government or private,

is part of the problem.

And I now repeat to you a conversation I had with a woman in

Utah who heard me give a brilliant luncheon speech on this subject

and came up afterwards and said, Senator, you haven’t the slightest idea what you’re talking about.

And I said, Okay. Teach me.

And she’s a woman who spends almost all of her time dealing

with the homeless and the poor. And she said, the primary problem

with the homeless and the poor is not that they don’t have any

money. And it’s not that they don’t have access.

They cannot navigate the system.

The rules are so overwhelming, the bureaucracy is so daunting,

that they can’t navigate the system. And she said, you should be

spending more time on community health centers—and I’ve been to

the community health center in Salt Lake, where, when you walk

in, the first thing that happens to you is somebody approaches you

and becomes your navigator and says, Okay, this is where you can

go. This is where you can go.

Medicaid, charitable activity, the Shriners Hospital, whatever it

might be, there is a mentor or navigator that knows about those

things, which the person on the street who is homeless has no clue.

Even though in the law he may have access to or eligibility for, in

his own capability, he can’t navigate the system.

So I want to encourage community health centers of that kind

that will help the poor and the homeless with their real problems

rather than their perceived problems as we sit behind this dais and

make judgments about them.

We are spending as a society plenty of money on health care.

But, in the language of the west, we are not seeing the water get

to the end of the ditch.

There’s plenty of water in the irrigation reservoir. But when we

pull up the gates, the water is not getting to the end of the ditch.

And we’ve got to do something to see to it that the percentage of

GDP that we are spending on health in this country produces the

kind of result that that money could, in fact, buy.

Dr. Berenson, I’m not sure that there is a level where I would

cut off what these people are doing. I would hope that we could devise some kind of a system, and the government’s got to do it, because the tax code drives the health care system. The tax code

drives what employers do. And then the government steps in with

Medicare and Medicaid and that’s, what, 40 percent of the dollars.

I end with the way I began. I’m hoping that we can find a clean

sheet of paper solution that takes the very best of these entrepreneurial activities that are producing at least in the populations

that they serve better health care at a lower price with, if Dr.

Kaminetsky is correct, an impact on the insurance system because

it makes fewer demands on the hospital structure and other things

that the insurance system is using.

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This is not an either/or. This is not ‘‘we want to kill the insurance system by a purely market system.’’ But at the same time, we

don’t want to kill the market entrepreneur system by the Canadian

model that says, you’ve got to do it our way or you can’t practice

medicine.

Okay. That’s the end of my oration.

Representative Stark. I’m just curious. In thinking about the

problems of primary care, do any of the three of you have a code—

Medicare doesn’t quite cover it yet—for what I would call disease

management?

You come close, Dr. Kaminetsky, in your practice. But let’s say that a diabetic comes in. Would you charge them $100 a month or

$50 a month and say, ‘‘I’ll send you out for the tests?’’ Do any of

you have that?

Dr. Berry. Well, if somebody wants, say, 30 minutes of my time, that would probably cost $100, if they really wanted to sit

down——

Representative Stark. No. But would you proactively say, ‘‘I’ll

call you. I’ll be after you.’’ You talk about it in maybe stopping people from smoking. One of you mentioned that.

But we’re looking at disease management as a procedure, if you

will, for primary care docs to be the interlocutory between a variety

of providers and the patient. And I just wondered if any of you

were doing that in your practices now?

Dr. Eck. Diabetes a great example. It’s very education-intensive.

People just have to understand their disease and be reminded and

don’t do this and do this and check your sugars. It’s very complicated.

You try to make them make a little list of their sugars and what

they ate and that type of thing. I like to see diabetics once a

month. But some of them are very, very smart and very good at

it and they don’t need to be seen that often.

It depends on the person. It’s not a one-size-fits-all type of management.

I don’t do insurance. So if it’s a long visit and if they’re highmaintenance, they get charged more.

Representative Stark. But you don’t set up an annual program

where you would get after them.

Dr. Eck. I don’t tell them. Every year you check their——

Dr. Berry. They’ve got to see an ophthalmologist.

Dr. Eck. Yes.

Representative Stark. Pardon?

Dr. Berry. They’ve got to see an ophthalmologist every year,

make sure you’re looking at their feet.

Dr. Eck. There are certain things that you make them do routinely—check their eyes, check their micro-albumin, the urine. See

if they’re developing that. A good foot exam.

Those type of things, we just do without telling them. But this

is part of their program.

Representative Stark. Thank you, Mr. Chairman.

Chairman Bennett. The kind of thing that the Capitol physician does for you and me.

Representative Stark. Gets after us.

[Laughter.]

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Chairman Bennett. And we pay for it.

Representative Stark. Yes, we do.

Chairman Bennett. Anybody else have a last burning comment

you want to make before we leave? We’ve held you here all morning.

Representative Stark. Thank you.

Dr. Berry. Let insurance manage risk and patients manage

care.

Chairman Bennett. That’s a pretty good bumper sticker.

[Laughter.]

Dr. Eck. There you go. The real answer is to allow individuals

to deduct the health insurance just as the employers do.

And therefore, the employers should be relieved of having to buy

the health insurance policy. Just like the employers don’t buy our

car insurance policy, our homeowners insurance.

That would make a phenomenal difference.

And then I think if people were spending their own money, they

wouldn’t pay for HMOs, and that would be the end.

Chairman Bennett. Well, if they were, the HMOs would change

dramatically.

Dr. Eck. Absolutely. If people had to buy their own insurance,

they’d really buy it in value.

Chairman Bennett. Again, I’m sorry. But my market orientation comes in here. If I go to an HMO and I get treated badly, I

get disrespected, I get shuffled off, I have to wait a lot, and I control the money that’s paying for that HMO, and I can say, ‘‘Look,

if I don’t see the doctor in another 5 minutes, I am out of here and

my money is out of here with me. I’m going down the road to another HMO that’s run by Dr. Eck.’’ The HMO concept is not a bad

concept, except as it is run for the economic and financial benefit

of the people who own it because their customer is the third party

who doesn’t care how I get treated.

Dr. Eck. That’s right.

Chairman Bennett. But if the person who is running the HMO

is dependent upon my patronage, just the way that the person who

is running any other business is dependent on my patronage, why,

the waiting times will go down, all kinds of marvelous things will

happen.

I don’t want to leave it just that we trash HMOs and we want

to eliminate HMOs. But if we give the customer the economic

power to determine what’s going to happen in the HMOs, I think

the three of you, and maybe if you can lure Dr. Berenson back into

the practice of medicine, the four of you, might some day open an

HMO based on the concepts that you’re practicing here.

Thank you very much. The hearing is adjourned.

[Whereupon, at 11:55 a.m., the hearing was adjourned.]

(37)

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