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52–442 2011

HEALTH CARE REFORM IN THE 21ST CENTURY: 

A CONVERSATION WITH HEALTH AND HUMAN 

SERVICES SECRETARY KATHLEEN SEBELIUS 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MAY 6, 2009 

Serial No. 111–18 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

CHARLES B. RANGEL, New York, Chairman 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

CHRIS VAN HOLLEN, Maryland 

KENDRICK MEEK, Florida 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

DANNY K. DAVIS, Illinois 

BOB ETHERIDGE, North Carolina 

LINDA T. SA ́ NCHEZ, California 

BRIAN HIGGINS, New York 

JOHN A. YARMUTH, Kentucky 

DAVE CAMP, Michigan 

WALLY HERGER, California 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

JOHN LINDER, Georgia 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

GINNY BROWN-WAITE, Florida 

GEOFF DAVIS, Kentucky 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

DEAN HELLER, Nevada 

PETER J. ROSKAM, Illinois 

Janice Mays, Chief Counsel and Staff Director 

Jon Traub, Minority Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

Page 

Advisory of April 29, 2009, announcing the hearing ............................................ 2 

WITNESS 

The Honorable Kathleen Sebelius, Secretary, U.S. Department of Health and 

Human Services ................................................................................................... 5 

SUBMISSIONS FOR THE RECORD 

Amy Kaplan, statement .......................................................................................... 65 

Claire H. Altman, statement .................................................................................. 66 

Clark Newhall, M.D., J.D., statement ................................................................... 68 

Congressman Patrick J. Kennedy, statement ....................................................... 69 

Larry Frazer, statement .......................................................................................... 71 

Marvin J. Southard, letter ...................................................................................... 72 

Patricia Ryan, statement ........................................................................................ 73 


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HEALTH CARE REFORM IN THE 21ST CENTURY: 

A CONVERSATION WITH HEALTH AND HUMAN 

SERVICES SECRETARY KATHLEEN SEBELIUS 

WEDNESDAY, MAY 6, 2009 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, DC. 

The Committee met, pursuant to notice, at 10:10 a.m., in room 

1100, Longworth House Office Building, Hon. Charles B. Rangel 

(Chairman of the Committee), presiding. 

[The advisory announcing the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–3625 

April 29, 2009 

Chairman Rangel Announces a Hearing on 

Health Care Reform in the 21st Century: 

A Conversation with Health and Human Services 

Secretary Kathleen Sebelius 

House Ways and Means Chairman Charles B. Rangel (D–NY) announced today 

that the Committee will hold a hearing to welcome the Secretary of the Department 

of Health and Human Services Kathleen Sebelius. This is the fifth hearing in the 

series on health reform in the 111th Congress. The hearing will take place at 

10:00 a.m. on Wednesday, May 6, 2009, in the main Committee hearing 

room, 1100 Longworth House Office Building. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from the invited witness only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND: 

The U.S. spends twice as much per person for health care as any other country 

in the world, and yet continues to lag behind other countries in terms of coverage 

and quality. There are nearly 46 million uninsured people in America, and millions 

more have inadequate coverage. The U.S. has lower life expectancy rates than all 

other industrialized countries, including Japan, Germany, Australia and Switzerland. Lack of health insurance coverage, rising costs and lower quality are intimately intertwined. 

The uninsured crisis affects cost and quality for families with coverage, as well 

as those without. A recent report from the Institute of Medicine found negative 

‘‘spillover’’ effects that occur for people with health insurance who are in communities with a large uninsured population. These effects for the insured include decreased access to both primary care physicians and specialists, strained emergency 

services, and less access to state-of-the-art treatments. Widespread lack of coverage 

also increases health care costs for providers, plans, and those with health insurance through cost-shifting. 

President Obama has said that health care reform is both a moral and fiscal imperative. His principles for reform and the plan he proposed during the campaign 

envision a uniquely American system that assures affordable, quality health care for 

all Americans. 

This hearing will be the first post-confirmation hearing before the Congress for 

Health and Human Services Secretary Kathleen Sebelius. 

‘‘President Obama has shown great leadership on health care reform,’’ 

said Chairman Charles B. Rangel. ‘‘Secretary Sebelius brings enormous expertise and wisdom to the table on these issues, and I look forward to working 

closely with her on health care reform and other health and human services issues.’’ 

FOCUS OF THE HEARING: 

Health and Human Services Secretary Kathleen Sebelius will appear before the 

Committee to discuss the President’s principles for health care reform. 


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DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘Committee Hearings.’’ Select the hearing for 

which you would like to submit, and click on the link entitled, ‘‘Click here to provide 

a submission for the record.’’ Once you have followed the online instructions, complete all informational forms and click ‘‘submit’’ on the final page. ATTACH your 

submission as a Word or WordPerfect document, in compliance with the formatting 

requirements listed below, by close of business Wednesday, May 20, 2009. Finally, 

please note that due to the change in House mail policy, the U.S. Capitol Police will 

refuse sealed-package deliveries to all House Office Buildings. For questions, or if 

you encounter technical problems, please call (202) 225–1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

Chairman RANGEL. The Committee on Ways and Means will 

come to order. Will staff, visitors, stakeholders please take their 

seats at this time. 

This is, what, the fourth meeting that we are having on health 

reform, and we haven’t finished yet. But this morning we will 

pause the hearing forum to welcome the new Secretary of Health 

and Human Services. We are just so pleased that she has been selected to guide us through what most all of us feel is one of the 

most historic and meaningful measures before this Congress: To 

make certain that all Americans have access to affordable health 

care. 

For those of you that were fortunate enough to monitor her confirmation hearings, I am thoroughly convinced that, Republican or 

Democrat, we have been so impressed of the dedication almost all 


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of your life to public service and that the talents that you have acquired over those years are so very, very important to this Congress and to this Committee to reach the goals that the President 

has established for all of us. 

I want you to know, Madam Secretary, that there are really 

sharp differences of opinion on this Committee as to how we 

achieve near-universal health care. But I also want you to know 

that Ranking Member David Camp and I have reassured each 

other that, to our constituents, there are no Democratic beneficiaries or Republican beneficiaries, there are just people in need 

of a solid health plan. 

And because we try so hard to work together, I am asking you 

to use your good offices, since you have a history of working with 

Republicans and Democrats and coming up with legislation and 

programs that you and the people you work with can be proud. 

You should know that, next week, Congressman Camp and I are 

working out a caucus just for Members of this Committee, so, without cameras and microphones, we can come together and see what 

differences we have and what differences can be worked out so that 

we can give you a bipartisan bill. So there may be a lot of good reasons why people would oppose this legislation, but it will not be because we have not attempted in good faith to work out those differences. 

And so I would like to yield to the Ranking Member and publicly 

thank him, not for promising anything except an honest, good attempt to see what we can do in working together. 

Mr. Camp. 

Mr. CAMP. Well, thank you very much, Mr. Chairman. I appreciate those comments. 

And welcome to the Committee, Secretary Sebelius, to the Ways 

and Means room. I think this is a place we will meet often. And 

as much as I respect this room and what happens within its walls, 

I think we both readily admit that the Leelanau Peninsula, an area 

I represent and I know your family has come to know, is a much 

nicer meeting place. 

But I know your time is short, so I will get straight to the point. 

I have read your testimony and agree with much of it. And so I 

ask whether we will focus on developing a plan that features policies we can agree on—lowering costs for families, businesses, and 

the American taxpayer; insuring no family is bankrupted by their 

medical cost, choice of doctors; being able to keep your current coverage, among others—or will we focus on what divides us. And I 

think if it is the former, I think we can find a path to bipartisan 

health reform. If it is the latter, we may not be as successful. So 

I am hoping for success in that regard. 

And, as we continue this conversation on health care reform, I 

ask that you make yourself available to this Committee, its Republican and Democratic Members, and that you and the President 

truly be open to our ideas and working across party lines to make 

health care reform a reality. 

And since your time with us is short, I just want to make sure 

Members have as much time as possible to ask questions and discuss with you. And I yield back the balance of my time. 

Chairman RANGEL. Thank you. 


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Madam Secretary, you will be given 5 minutes to present your 

remarks, and we are going to try to be extremely liberal in that. 

But I want you to know that I have been persuaded to convince Republicans and Democrats to reduce their questioning from the 5 

minutes that we are used to to 21⁄2 minutes. It may not seem like 

much to you, but I want you to know that is a big deal to us. And 

so we hope you will take that into consideration when we ask you 

to come back when your time is better, doing so. 

At this time, I welcome you on behalf of the full Committee and 

the Congress, and I look forward to your testimony. You may proceed. 

STATEMENT OF THE HONORABLE KATHLEEN SEBELIUS, 

SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN 

SERVICES 

Secretary SEBELIUS. Thank you, Mr. Chairman and Ranking 

Member Camp and Members of the Committee. 

As the Chairman has already said, this is my first opportunity, 

outside of the confirmation hearing process, to have an opportunity 

to have a discussion in Congress and my first time before a House 

Committee. And I am pleased to be here with the House Ways and 

Means Committee and Members. And I know today is just the beginning of what I hope will be a robust and frequent conversation 

as we move toward the goal of health reform and health coverage 

for all Americans. 

I am pleased that Ranking Member Camp has already recognized 

that, actually, I am one of his constituents. I pay property taxes, 

I might say too many property taxes, in your district. But I think 

it is an opening of bipartisanship demonstrated from the outset. I 

am not Chairman Rangel’s constituent; I am Representative 

Camp’s constituent. 

Given the time shortage, Mr. Chairman, you have my printed 

testimony, and I am going to highlight a few things and then talk 

a little bit about a couple of the reports that I spoke about today 

with the Nurses Association because much of what is in the testimony this Committee is well familiar with: The need to provide 

health coverage, particularly because the costs of the current system are unacceptable and unsustainable for businesses, for families. What we have seen is the situation getting worse; costs continue to escalate, and more and more Americans lack coverage. I 

share the President’s conviction that health care reform cannot 

wait and will not wait another year. 

Many steps have been taken by Members of this Committee and 

others in the first 100 days to set a platform: Insuring 4 million 

more American children; providing resources in the Recovery Act 

for a variety of initiatives, health and wellness programs, funding 

the pipeline for new workforce efforts, making sure that the resources are there for implementation of health information technology, which can be an underpinning to moving the health system 

in a new direction. 

I share the President’s belief that reform must guarantee choice 

of doctors and health plans, including a choice between a public 

and private plan option, that no American should we forced to give 

up a doctor they trust or a health plan they like. And comprehenVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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sive reform shouldn’t force any Americans who are satisfied with 

their coverage to make changes. But covering every American, including access to high-quality health care, is so important. 

The two reports that I am issuing today, as the new Secretary 

of Health and Human Services, I think highlight some of the underlying issues that we are facing. Today we are releasing the National Health Care Quality Report and the National Health Care 

Disparities Report. 

Both of these reports underlie troubling findings about the status 

quo of our health care system. The disparities report, again, highlights that severe and pervasive disparities in care continue to persist in this country. Minority patients still receive proportionately 

poor care compared to their Caucasian neighbors. The quality report highlights that 40 percent, 4 out of 10 health care patients 

don’t receive recommended care. And that is an ongoing situation. 

And, again, prevention measures are too often lacking. Half of 

the obese adults and children who see a doctor are never given advice to exercise more frequently and eat a healthy diet. 

And most troubling is the decline in patient safety measures, 

identified in the quality report, that have worsened every year for 

the past 6 years. When you look at the underlying causes, patient 

safety is down because the number of patients acquiring healthcare-associated infections has gone up. Patients come to the hospital to get well, and unfortunately too many of them are acquiring 

potentially fatal infections. 

It has become one of the top 10 leading causes of death in the 

United States. And the infections are thought to cause about $20 

billion—$20 billion—a year in additional health care costs. So we 

are challenging the health care providers to work with us on attempting to fix this problem. 

Thanks to your support, the Recovery Act now includes $50 million to help prevent health-care-associated infections. And, as of 

today, the Department is prepared to begin to release those funds. 

Forty million dollars is aimed at States to expand their infection 

prevention teams and educate and collaborate with patients and 

hospitals to keep patients safe. An additional $10 billion is supporting increased inspections of ambulatory surgical centers, which 

are all too frequently a site of these lethal infections. 

We know that one particularly common and dangerous infection 

is the Central Line-Associated Bloodstream Infection. It strikes 

tens of millions of American patients every year, and that number 

increases year-in and year-out. But there is a relatively easy cure. 

Research has found that the hospital checklist protocol, if implemented uniformly and on a daily basis, dramatically reduces these 

results. Medicare has been studying this in 10 States. We want to 

expand that protocol to all States. 

So today, Mr. Chairman, as part of this effort to begin to transform the underlying system, I am issuing a challenge to hospitals 

across America to commit to using the patient safety checklist in 

all hospitals and reduce the serious bloodstream infections in intensive care units by 75 percent over the next 3 years. That is what 

our data tells us can happen. If the checklist is used, infections will 

go down. 


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We want to include every hospital in every State. This morning 

I spoke to the Nurses Association and asked them to join in this 

effort. And we will be putting this challenge out to hospital administrators across the country. 

So, Mr. Chairman, I know you and Members of this Committee 

share my concerns about the quality of care and the need for comprehensive health reform. I want to thank you in advance for the 

hard work that has already been done to set the platform for this 

historic moment. I want to assure you that I will do everything I 

can to work closely with this Committee and others here in the 

House and, across the Rotunda, in the Senate to make sure that 

we take advantage of this opportunity. 

And, with that, Mr. Chairman, I would stand for questions. 

[The prepared statement of Secretary Sebelius follows:] 

Prepared Statement of the Honorable Kathleen Sebelius, 

Secretary, U.S. Department of Health and Human Services 

Chairman Rangel, Ranking Member Camp, Members of the Committee, thank you 

for this opportunity to join you for a critical conversation about health reform in 

America. Health reform has advanced thanks to your work and willingness to move 

forward together with other House committees. We appreciate your hard work to 

enact reform. It is urgently needed. 

Health care costs are crushing families, businesses, and government budgets. 

Since 2000, health insurance premiums have almost doubled and health care premiums have grown three times faster than wages. Just last month, a survey found 

over half of all Americans, insured and uninsured, cut back on health care in the 

last year due to cost. And behind these statistics are stories of struggles for too 

many American families. Families who face rising premiums—now over $12,000, 

when it was $6,000 a decade ago. Parents choosing between health insurance and 

their mortgage because they can’t make ends meet because their paycheck is standing still but health care costs are rising much faster than inflation. Today health 

care costs are the big squeeze on middle class families and these challenges are 

growing as the economic picture worsens. And on top of all of this, in the last 8 

years an additional 7 million Americans have become uninsured. 

And we know that during this recession, hundreds of thousands of people are losing health insurance as they lose their jobs. 

Even families who do have some coverage are suffering. From 2003 to 2007, the 

number of ‘‘under-insured’’ families—those who pay for coverage but are unprotected 

against high costs—rose by 60 percent. 

Still, we have by far the most expensive health system in the world. We spend 

50 percent more per person than the average developed country. The U.S. spends 

more on health care than housing or food. 

And the situation is getting worse. The United States spent about $2.2 trillion on 

health care in 2007; $1 trillion more than what was spent in 1997, and half as much 

as is projected for 2018. 

High and rising health costs have certainly contributed to the current economic 

crisis. Rising health costs represent the greatest threat to our long-term economic 

stability. If rapid health cost growth persists, the Congressional Budget Office estimates that by 2025, 25 percent of our economic output will be tied up in the health 

system, limiting other investments and priorities. 

This is why I share the President’s conviction that ‘‘health care reform cannot 

wait, it must not wait, and it will not wait another year.’’ Inaction is not an option. 

The status quo is unacceptable, and unsustainable. 

We are already on our way to making health reform a reality. In just over 100 

days, this President has made great strides to advance the goal of reducing costs, 

guaranteeing choice and assuring quality, affordable health care to all Americans. 

Within days of taking office, the President signed into law the reauthorization of 

the Children’s Health Insurance program. This program’s success in covering millions of uninsured children is a hallmark of the bipartisanship and public-private 

partnerships we envision for health reform. 

The President then signed the Recovery Act, which includes essential policies that 

will protect health insurance for the American people, support groundbreaking research, and make important investments in our health care infrastructure. 


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And just last week, Members of Congress passed a budget that includes an historic commitment to health reform. 

Delivering on this commitment and enacting comprehensive health reform is one 

of my top priorities. The Obama administration is focused on passing health reform 

legislation that will end the unsustainable status quo and adhere to eight basic 

principles. 

First, we believe that reform must reduce the long-term growth of health care 

costs for businesses and government. The high cost of care is crippling businesses, 

who are struggling to provide care to their employees and remain competitive. It 

is driving budget deficits and weakening our economy. We must pass comprehensive 

reform that makes health care affordable for businesses, government, and families. 

Second, we must protect families from bankruptcy or debt because of health care 

costs. Today, too many patients leave the hospital worried about paying the bills 

rather than returning to health. They have reason to be concerned. In America, half 

of all personal bankruptcies are related to medical expenses. It’s time to fix a system that has plunged millions into debt, simply because they have fallen ill. 

Third, we will guarantee choice of doctors and health plans. No American should 

be forced to give up the doctor they trust or the health plan they like. If you like 

your current health care, you can keep it. 

Fourth, we will make sure that Americans who lose or change jobs can keep their 

coverage. Americans should not lose their health care simply because they have lost 

their job. 

Fifth, we must end barriers to coverage for people with pre-existing medical conditions. In Kansas and across the country, I have heard painful stories from families 

who have been denied basic care or offered insurance at astronomical rates because 

of a pre-existing condition. Insurance companies should no longer have the right to 

pick and choose. We will not allow these companies to insure only the healthy and 

leave the sick to suffer. 

Sixth, we must assure affordable, quality health coverage for all Americans. The 

large number of uninsured Americans imposes a hidden tax on other citizens as premiums go up, and leaves too many Americans wondering where they will turn if 

they get sick. A system that leaves millions of Americans on the outside of the doctor’s office looking in is unjustifiable and unsustainable. 

Seventh, we must make important investments in prevention and wellness. The 

old adage is true—an ounce of prevention truly is worth a pound of cure. But for 

too long, we’ve sunk all our resources into cures and shortchanged prevention. It’s 

time to make preventing illness and disease the foundation of our health care system. 

And finally, any reform legislation must take steps to improve patient safety and 

the quality of care in America. Our country is home to some of the finest, most advanced medicine in the world. But today, health care associated infections—infections caught in a hospital or other settings—are one of the leading causes of death 

in our Nation. Ninety-eight thousand Americans die each year as a result of these 

and other medical errors—more than car accidents, breast cancer, or AIDS. These 

numbers are not acceptable for the world’s richest Nation. We must sharply reduce 

the number of medical errors, keep patients safe and ensure all Americans receive 

high-quality care. 

As we work to enact policies that adhere to these principles, the President is committed to hearing from people in communities across the Nation and on both sides 

of the aisle. In March, he held a White House health care forum and several regional forums in places like Michigan, Iowa, Vermont, North Carolina and California. There, bipartisan forums brought together people from all perspectives— 

across the political spectrum and representing all people with a stake in the system—to focus on solutions. 

I look forward to continuing this bipartisan process and I am eager to work with 

this Committee and your colleagues in the House and Senate to deliver the reform 

we so desperately need. 

Again, Mr. Chairman, thank you for the opportunity to participate in this conversation with you and your colleagues. I look forward to taking your questions. 

f 

Chairman RANGEL. Thank you, Madam Secretary. 

First of all, for the most part, Democrats support the President’s 

plan. We are anxious to have dialogue with others that have different plans. You may not hear it today, but we will be discussing 


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these things off-camera in the back room and trying to find out 

where we can publicly agree. 

Having said that, and without them saying it, those who oppose 

the plan, it seems like one of the most controversial issues is the 

public plan. I know the President supports it, but I would hope 

that you will be able to share with us your views on why public 

plans should not be fearful that the government is going to undercut them and put the for-profits and public plans out of business. 

It just seems to me that if we have a public plan, that this would 

monitor the private system, and the private system would look 

competitively at the public system, and at the end the standards 

of all of the plans would be the best ones to attract people who 

have no insurance. 

People who have insurance and are happy with what they have 

will not be affected. But I think we are going to have to concentrate, and I will need your help, on the question of why do you 

and the President think that a public plan is so important in providing quality care at lower, competitive prices. 

Secretary SEBELIUS. Mr. Chairman, as you are aware, part of 

my background is shared with colleagues in the Senate, where I 

was an insurance commissioner for 8 years in Kansas, and so my 

charge was to regulate the insurance market. 

And what I am a believer in, and certainly the President is a believer in, is that competition often is a very healthy component of 

any market situation. And I think that competition helps promote 

innovation, it helps promote best practices, and also can help to 

lower costs. So, in the design of a health insurance exchange, which 

is really what we are talking about and what the President discusses, a choice of a variety of options is often critical. 

In many parts of the country, including in my home State of 

Kansas, there are lots of areas in the State where there are not 

choices of private carriers for many citizens. And it is why, in our 

design of the State employee health insurance plan, for instance, 

we created a side-by-side public and private option so that it helped 

to promote a network. About 30 States have done similar things. 

I know in many States, in their design of the Children’s Health Insurance Plan, a public plan is a side-by-side option with private 

carriers. 

The underlying issues are: What are the rules? What are the actuarial issues going into the design of a plan? Is there a level playing field? I can assure you, Mr. Chairman, and some who have 

voiced opposition or at least, at best, skepticism about a public plan 

option that the President is committed to and I am committed to 

the fact that the design needs to level the playing field. 

And it is on two fronts. First, a public plan option should not undercut the private market, tilt the playing field in one direction. 

The private market, on the other hand, should not be able to cherry-pick the least costly patients. So, getting rid of some of the preexisting medical condition barriers that allow a skewed marketplace I think is important. 

But having an option for individuals, having a choice for the 

Americans who don’t currently have coverage, and having competition to drive the best practices, the best cost-efficiencies, the best 

protocol, I think, can be very positive in the long run. 


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Chairman RANGEL. Thank you. 

Mr. Camp. 

Mr. CAMP. Thank you, Mr. Chairman. 

Many have suggested limiting the amount of health insurance 

that can be excluded from an employee’s taxable income as a way 

to lower the cost of health care, help finance reform, particularly 

to those at lower income levels for individuals and families. 

And I would like to hear your views on the idea of capping or 

repealing the tax exclusion for employer-sponsored care to help address inequities in the health care system. 

And then, second, is there any timetable for the Administration 

to release a specific legislative proposal on health care to the Congress? And if there is, could you shed some light on that? 

Thank you. 

Secretary SEBELIUS. Certainly, Representative Camp. I appreciate those questions. 

As you know, the issue of the tax exemption for benefits was discussed in a robust way during the campaign season, and the President made it very clear that he did not support an elimination or 

capping of the benefit package. And I think a fundamental reason 

for that was the underlying fear that it could destabilize the private insurance market. 

And, as the President repeated over and over again, he thinks a 

fundamental component of moving forward is to ensure Americans 

who are satisfied with their coverage, whose employers are currently providing coverage that is beneficial to themselves and their 

families, that they won’t lose that. And with almost 180 million 

Americans in the private market, eliminating the tax writeoff, 

which was a component of encouraging employers to offer coverage 

in the first place, has a huge potential of destabilizing the private 

market and leaving more Americans uninsured. 

Having said that, I do know that the President understands that 

that conversation is under way here in Congress. But it is not part 

of his proposal that he made during the course of the campaign. 

But he is willing to look at all serious discussions coming forward. 

President Obama has made a commitment that he believes 

health reform has to engage the Congress in a meaningful way. I 

can tell you, during the course of my confirmation hearings, I met 

with a number of Senators who asked a similar question to your 

specific proposal question, believing that, there is a plan that has 

been written in great detail and eventually will be pulled out of the 

drawer and presented. What I can assure you is that does not 

exist, and it is not part of the President’s plan moving forward. 

What he hopes will happen—and it started, I think, in his early 

days in office, with the health care summit at the White House, a 

very bipartisan effort, not only among Members of Congress, but 

bringing in business leaders and providers and insurers, various 

stakeholders, and will continue through this process where the 

Senate Committees are very much engaged. The three primary 

House Committees are clearly very engaged in this dialogue. And 

his charge to me, as the new Secretary, is to work closely with 

Committees as proposals are being developed around the principles, frankly, that you primarily outlined in your opening statement. But the specific legislative language, the framework of exVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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actly what the benefit package ultimately looks like, what the exchange may or may not look like, will be a collaborative effort but 

primarily engaged in by Congress. 

The President also, in his blueprint budget proposal, included a set-aside of $630 billion, which he sees as a downpayment for 

health reform, half of which are on the revenue side, half of which 

are on the savings side. And I think the recognition is that you 

can’t fully cost out a plan until you know what you are paying for. 

So part of the effort going forward, in conjunction with Congress, 

is not only crafting the specific legislation, but also crafting the 

specific package to provide the revenue over a 10-year period of 

time to pay for health reform. 

Mr. CAMP. Thank you. 

Chairman RANGEL. Madam Secretary, you may not see Chairman Stark here, but we well know that he is monitoring these 

hearings, as he recuperates, on television, and he has all of his 

staff monitoring all of us. 

So, Pete, everything is going okay. 

I yield to Mr. Levin. 

Mr. LEVIN. Thank you very much. 

A special welcome. 

Your reference to patient safety, Madam Secretary, I think will 

hit a very, very warm note in Michigan, which has been trying to 

tackle this issue, and I think with some success. 

Let me ask a question, and maybe Pete Stark would ask it. With 

your unique experience as a Governor and insurance commissioner, 

why is it essential that we act this year? 

Secretary SEBELIUS. Representative Levin, I think it is clear 

that the current situation is unaffordable, unsustainable, and unacceptable. 

The costs of health care are crushing businesses and families. 

Our industries are becoming less and less competitive with their 

global partners and struggling under the high cost of care. Too 

many families are in dire financial straits because of a health-related incident that they did not have the insurance to provide coverage and a safety net system. 

And way too many Americans, close to 50 million, have no access 

to the high-quality care that some of us enjoy in this country. And 

so they come in through the doors of emergency rooms with more 

serious conditions and end up with the least effective, most expensive care because they didn’t get the preventive care, they don’t 

have a health home. And all of us pay for that. 

So I think that any economic prediction that is done underlies 

the fact that, unless we get a handle on health care costs, unless 

we can bend the cost curve—and one of the only ways to do that 

is shift the system toward prevention and wellness, make sure that 

all Americans have a health home, and begin to provide adequate 

coverage for all Americans, which provides a healthier workforce, 

students who can actually learn in school, making sure that they 

are ready to go as the workers of the future. 

And now is the time to do that. As we are fixing the economy, 

we have to fix health care as part of that overall economic strategy. 

Mr. LEVIN. Thank you. Well said. 

Thank you. 


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Chairman RANGEL. The Chair would like to recognize Mr. 

Herger from California. 

Mr. HERGER. Thank you, Mr. Chairman. 

And, Madam Secretary, I want to thank you for your testimony. 

I believe there is a great deal of potential for finding bipartisan 

common ground on the principles you and the President have outlined. One of them, which I very much agree with, is that people 

who like their current health care should be able to keep it. 

We have heard testimony in this Committee that creation of a 

new government-run health plan could result in 120 million Americans losing their current coverage, partly due to increased cost 

shifting by providers that would drive up the cost of employerbased coverage. We have also heard testimony from a health policy 

expert who supports creating a public option but does not think 

people should be able to keep their current coverage. 

Madam Secretary, are you concerned that proposals to expand 

government-run health care could run counter to the President’s 

principle that if you like your current health care you can keep it? 

Secretary SEBELIUS. Representative Herger, I think it is always a concern. And, again, it may have more to do with the overall plan design than the philosophical principles moving forward. 

I can assure you that those two principles—Americans keeping 

their health coverage if it is satisfactory and serves them and their 

family well, and having a choice within an insurance exchange for 

a public plan option—are not mutually exclusive. It isn’t either/or. 

Mr. HERGER. How do they compete? How does a private plan 

compete with a government plan, which can be subsidized, which 

perhaps could start off innocently but be changed at any time to 

where a private plan could not compete? How could they ever coexist? 

Secretary SEBELIUS. I think, Congressman, the examples of 

that, again, are in place across the country. Thirty of the States 

have State employee health plans where there is public option for 

State employees side by side with a variety of private openings, 

created largely to give those State employees in a State like mine, 

in Kansas, a choice. Because much of our State only had one private provider, and we felt giving employees a choice for themselves 

and their families, a competitive choice, was important. 

A number of States have constructed their CHIP programs, the 

health insurance plans for children, in exactly the same way, 

where there is a side-by-side option of a private provider and a 

public provider. 

What I can assure you is that it can be done as a level playing 

field. It is about the rules that are established in the beginning. 

And the President and I are committed to working with Members 

on this Committee and Members in Congress to make sure that the 

playing field is level. 

And, as I said, the private insurers currently have, in fact, I 

would say, a tilted playing field in way too many areas, where 

cherry-picking on the market is a strategy to make a profit, so that 

the ability to underwrite individuals’ medical conditions to either 

make insurance unaffordable or unavailable is a current privatemarket strategy. I think that measure doesn’t work well in a 

health insurance exchange any more than a measure which would 


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give government huge advantages and huge subsidies doesn’t work 

well. 

So I think if the rules are the same, so individuals who have 

lower income, who are not insured, have a subsidy benefit as they 

come into the health exchange and can choose between a public 

and private plan option with the same kind of rules, I think it can 

work as a very important competitive situation where it will help 

drive—where people will be competing, public and private will be 

competing, not on underlying price or on unfair government subsidies, but really on practice and protocol, on lowering overhead 

costs, on lowering administrative costs, and driving benefits to 

their incoming enrollees. 

Chairman RANGEL. Dr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

Welcome, Governor. 

My Subcommittee handles unemployment insurance and foster 

kids and welfare, TANF. We will be back talking about that next 

year, but I want to talk about health care at the moment. 

Wichita, Kansas, has 90 specialists per 100,000 people, whereas 

Boston has 180 specialists per 100,000 people. Everyone who has 

looked at these situations knows that that doesn’t mean they have 

better health care in Boston than they do in Wichita. What it reflects is the lack of enough primary care physicians in the Boston 

area, which they found out when they started Mass-Care. They 

couldn’t provide primary care physicians for everybody who was 

asking for one. 

I have made a proposal that we have all public medical schools 

be free, with the requirement that the students, when they come 

out, would serve 4 years in primary care in the State. 

And one of the things that the Dartmouth University study has 

shown is that there is clearly no connection between how many 

specialists you have and the quality of health care or anything except where people want to live, in terms of where they practice. 

Now, if you train them in Kansas and they move to San Francisco, 

the people of Kansas have nothing. Washington State is part of 

WWAMI, so we have Washington, Alaska, Montana, Idaho, and 

Wyoming. We train all the doctors in one medical school, but they 

doesn’t necessarily go back to the rural areas. 

With that kind of provision—and I hope that what will come out 

tomorrow when the President puts out his additional provisions is 

a commission that looks at workforce—a permanent commission for 

workforce planning. Right now, we have a graduate medical commission, but that only deals with specialists. It does not deal with 

the broader issue of how you get enough private practitioners to go 

into the whole area of primary care. 

And I would like to hear your ideas, having been a Governor, delivered a State where you have operated way below the national 

average, actually one-half. There are only two cities that have less 

than Wichita: Sioux City, Iowa, and Mesa, Arizona. So I would like 

to hear how you did it. 

Secretary SEBELIUS. Representative McDermott, I am not sure 

that that was a design strategy, to lower the number of specialists. 

But I can tell you there were a number of efforts at the State level 

to increase the number of primary care providers, recognizing that 


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the pipeline is very thin. And, certainly, as we look at 50 million 

additional Americans accessing a health home, having an opportunity to have regular preventive care, the pipeline issue is very 

important. 

Congress made a major step, along with the President, when he 

signed the Recovery Act with a half-billion-dollar investment in 

workforce initiatives and more nurses, more primary care doctors. 

There is a proposal in the budget to increase the Commissioned 

Corps, again, providing health care providers in underserved areas. 

And one could argue that, in a lot of areas, primary care is underserved. 

I share your interest in figuring out how we can encourage more 

medical students to actually look at primary care and preventive 

medicine as a choice going forward, because I want to make sure 

that, as we shift this system to a wellness system, we have providers that are capable of making that shift. 

Having said that, I think it is important that we do not undercut 

the specialty initiatives that are so important. I mean, frankly, if 

I need neurosurgery, I would like to know that there is a neurosurgeon at least in the proximate area that I can call upon. 

So I think there are ways to begin to shift payment incentives 

to more appropriately reward primary care doctors without 

disadvantaging the specialty care. If we begin to have payments 

based on outcomes, if we recognize that dollars spent on wellness 

pay huge dividends to lower health care costs on the other end, 

then I think we can have a system where more medical students— 

not only more people will be coming into medical school, but more 

medical students will be choosing general practice and primary 

care and family practice, as opposed to specialty care, as the way 

that they can be successful. 

Chairman RANGEL. Madam Secretary, you are going to have to 

help us, because everyone wants—— 

Secretary SEBELIUS. Okay. 

Chairman RANGEL [continuing]. At least to have some dialogue 

with you, and we are doubling up, notwithstanding the restrictions. 

So, I know it is difficult to give short answers to such complex 

questions, but since this is really just an initial introduction and 

we will be getting involved in those things, I ask you to help us 

out, too, as I recognize the hero of the Committee, Congressman 

Sam Johnson from Texas. 

Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate it. 

Welcome aboard. 

You know, I think our goal is to try to get Medicare or medical 

insurance to every individual in America. And I know it is something that Congresswoman Schwartz has inquired about in previous hearings, but do you think moving health care benefits from 

opt-in to opt-out with businesses might increase the take-up rate 

among employees, as it did for 401(k)s in the past? 

Secretary SEBELIUS. Businesses moving to an opt-in strategy? 

Mr. JOHNSON. That is what I wonder, if we should mandate 

that. 

Secretary SEBELIUS. The sort of pay-or-play—I am not sure I 

understand the question. I am sorry. 


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Mr. JOHNSON. Well, the way it works is every individual who 

works for a company would have to take insurance, health insurance from the company, and the only way they don’t is they opt 

out. 

Secretary SEBELIUS. I understand. 

Certainly, I think there is discussion under way for an individual 

mandate for health insurance. And it was not part of the President’s proposal, except for parents who had children; they would be 

required. 

But I think, as the proposals are developed here in Congress, 

that is one of the initiatives. Should everyone have a personal responsibility, whether it is through your employer or in the private 

market, to provide health coverage? And I look forward to working 

with Congress in figuring that out. 

Mr. JOHNSON. Thank you. 

And, second, I have talked a number of times about physicianowned hospitals, and it seems like everybody wants to torpedo 

them. And, you know, we have our best docs, our best nurses, and 

the best medicines in those physician-owned hospitals because they 

are specialty hospitals. 

And I wonder what your thoughts are on that and whether you 

oppose their development or not. And, previously, CBO scored it 

differently from what HHS scored it, and I would like to know your 

feelings on that. 

Secretary SEBELIUS. Congressman, The President and Congress have tried to clarify the hospital ownership exception currently in place. And it really is aimed, I think, at some troubling 

data about physician-owned hospitals producing numerous additional tests and additional protocol for patients that then directly 

benefit the owner/provider. 

And I think that issue is one that is very serious, as we look at 

costs in the future. What Congressman McDermott may not know 

is Wichita, Kansas, has one of the highest per capita levels of specialty hospitals of anyplace in the country. I know Texas has a significant number. 

So there are certainly some benefits to patients, but I think looking at the cost issues and certainly looking at the potential conflict 

issues are ones that are very serious. 

Mr. JOHNSON. Thank you. 

Thank you, Mr. Chairman. 

Chairman RANGEL. The Chair recognizes Mr. Lewis. 

Mr. LEWIS. Thank you very much, Mr. Chairman. 

Madam Secretary, thank you for being here today. 

I agree with you, very much so, that we cannot wait any longer 

before we pass comprehensive health care for all of our citizens. I 

happen to believe, as so many others, that health care in our country is a right and it is not a privilege and that all of our citizens 

and every person that dwells in America should have adequate and 

affordable health care. 

I would like to know from you, is the President committed to 

passing health care reform this year? 

Secretary SEBELIUS. Yes, sir. 

Mr. LEWIS. That is all I need to know. 

Thank you very much, Madam Secretary. 


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Thank you, Mr. Chairman. 

Chairman RANGEL. Thank you, Mr. Lewis. 

Mr. LEWIS. Less than 21⁄2 minutes. 

Chairman RANGEL. You are good, you are good. 

The Chair recognizes one of the rising stars of our Committee, 

Mr. Ryan. 

Mr. RYAN. What? 

Chairman RANGEL. Unless you want to yield to him. 

Mr. RYAN. Well, no, but Mr. Brady is in front of me, so I 

thought—— 

Mr. BRADY. Go right ahead. 

Mr. RYAN. And I would submit Mr. Brady is also a rising star. 

Mr. CAMP. That is right. He has already risen. 

Chairman RANGEL. The seniority system is alive and well. 

Mr. RYAN. He is in front of me. 

Mr. Brady, really, you are in front of me, so you should go. 

Mr. BRADY. Okay. My ego has taken a huge hit this morning. 

Madam Secretary, thanks for coming here. 

You just got on the job, but have you had a chance to examine 

the way we reimburse physicians under Medicare? 

It is truly a mess. We drive good doctors out of the system, away 

from our seniors. And it is embarrassing to have to have them 

come up here every year to beg for a 1 or 1.5-percent increase in 

their reimbursements when their nursing costs have gone up, technology has gone up, operations have gone up. 

Have you had a chance to take a look at the way we do that? 

Secretary SEBELIUS. Well, Congressman, I haven’t had a 

chance to do the global examination in the budget, but I certainly 

am aware of that situation, having been in the State of Kansas. 

Mr. BRADY. I would encourage you to examine it, to weigh in 

on a truly sustainable fix for reimbursement. I would encourage 

you to take a look at if you can administratively remove the part 

B drug costs from that formula. They don’t belong in there, and I 

think it creates a false cost within that system. 

And, finally, the reason I encourage you to take a look at it, one 

of the reasons many of us are scared about rationing of health care 

under a government-run system is that the physician payments are 

a prime example of how we ration care today. Physician cost-of-living increases aren’t determined by what the cost of providing those 

services are within their office. Basically, MedPAC takes an accumulation of physician practitioner services, estimates what that 

amount should be, and then, if actual services are above that, they 

lower the reimbursement. That is why doctors face a 21 percent cut 

in reimbursement. When you take a number, ration the care and 

the reimbursement from it, you get bad results. That is an area 

that produces it. 

Madam Secretary, if you get a moment, I think that would be an 

important thing for you to weigh and, I think, important as we go 

forward. 

Secretary SEBELIUS. Representative Brady, let me assure you, 

that the 21 percent cut that is looming right over the horizon is totally unacceptable. And nothing could be more disruptive to the 

health system and that will underpin moving forward on health reform is losing providers. When people talk about choice, they are 


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not talking about choosing their insurance company; they are attached to their doctor and their health care provider. 

So I share your concern. Let me assure you that the Administration and I look forward to working with Congress to address not 

only the current crisis that is right around the corner, but a longterm sustainable coverage to make sure that seniors and our most 

disabled population who rely on Medicare services keep the doctor 

that they want and need and keep the health services vital. 

Mr. BRADY. Thank you, Madam Secretary. 

I thank the Chairman. 

Chairman RANGEL. The Chair recognizes Chairman Richard 

Neal. 

Mr. NEAL. Thank you, Mr. Chairman. 

Madam Secretary, childhood obesity, I think we all acknowledge 

that it is growing more common in America. And it is being diagnosed in more people at a younger age, as well. 

Great emphasis in this plan is going to have to be placed upon 

the whole notion of prevention. And would you maybe outline for 

us some of the thoughts that you have about how some investments in prevention and wellness might change the entire health 

care system? It seems to be a recurring theme in our discussions. 

Secretary SEBELIUS. Thank you, Congressman Neal. 

There are, I think, a couple of strategies that can work together. 

First of all, the expansion of the CHIP program, 4 million more 

American children, is a piece of that puzzle. We have to do that 

well. We have to make sure that we drive a wellness message, 

along with expanded coverage. 

In addition, in the Recovery Act, the Department of Health and 

Human Services was given a billion dollars to focus on wellness 

and prevention. And that discussion is well under way with providers and experts across the country to determine what is the best 

possible strategy for not only using our resources but leveraging 

those resources with some private-market care. 

There are a number of efforts that we know are successful. Working, as we did in Kansas, with school groups on everything from 

vending machines to more PE in school to doing a body mass index 

for every child and driving that information home to parents is an 

effective strategy. 

But I share your concern that we have the first generation of 

American children who may actually have shorter lifespans than 

their parents, ever in history. That is a pretty frightening place to 

be. And even if you just look at it as a workforce issue, we need 

every child to be healthy and acquire the skills they need to be 

competitive in the future. So this is an issue which is not just a 

health care issue; it is a huge economic crisis looming in this country. 

Mr. NEAL. Thank you, Madam Secretary. 

Thank you, Mr. Chairman. 

Chairman RANGEL. The Chair yields to Mr. Ryan, unless he 

wants to yield to—— 

Mr. RYAN. No, I am good now. I thank the Chairman. 

Nice to see you, Madam Secretary. This is the first time I am 

having a chance to meet you. 


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The rhetoric coming from the Administration sounds good; it 

sounds familiar. If you like what you have, you can keep it. We are 

going to have more choice and more competition in health care. 

Those are the principles I think most of us all agree with. 

But when you look at what is being advocated here, in particular 

the public plan option, it just seems to me that actuarially speaking you are embracing contradictory principles. You are embracing 

faulty premises that collide with one another. 

And what I mean when I say that is, if the public plan option 

will reimburse at Medicare rates, as it has been advocated, as most 

of the plans that are out there already do, and as your budget rests 

upon, then how do you escape the conclusion that reputable actuarial firms, like The Lewin Group, suggest 120 million people will 

lose their private health insurance and be thrust upon the public 

plan option? Seven out of 10 workers who get health care from 

their jobs will, in fact, lose that as they go into the public plan option. 

That is question number one. Since we are short, I will just put 

it all into a question now. 

Question number two is, where are you going to pay for all of this? The budget carves out $646 billion. About half of it comes 

from provider cuts, from Medicare, MedPAC recommendations, 

things like that. The other half comes from revenues. Chief among 

that is the limit on charitable deductions, which I think will have 

a hard time passing here, or at least in Senate Finance. 

You have already said that the Administration is opposed to capping the exclusion, which I think that ought to be revisited. There 

is an issue there, I think, that both sides would agree needs to be 

addressed. 

But where are going to come up with the money, number one? 

Number two, looking at these plans, it is going to take you about another $600 billion on top of what you have already put in the 

budget, and that has been acknowledged by the Administration, as 

well. So if we are going to have about a $1.2 trillion or $1.3 trillion 

plan, you have already identified $646 billion—some of that which 

probably won’t materialize—where is the other $600 billion-plus 

going to come from to make this work? 

And how do you escape the conclusion that if you have a public 

plan alongside the government plan, the way I see it, it is kind of 

like my daughter’s lemonade stand competing against McDonald’s. 

It is having the referee, the government, also be a player in the 

same game. And, actuarially speaking, it is almost impossible to 

make that a fair game. 

Secretary SEBELIUS. Again—— 

Chairman RANGEL. Unfortunately, Mr. Ryan has used up the 

time allotted for you to answer in his question. However, I am certain—— 

Mr. RYAN. Go figure. 

Chairman RANGEL [continuing]. That you will be able in writing to give some response to his very complicated but interesting 

inquiry. 

And the Chair would now like to recognize Mr. Becerra, who is 

not here. 

Mr. Doggett. 


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Mr. DOGGETT. Thank you, Mr. Chairman. 

Madam Secretary, thank you. 

Three issues to ask you to respond to at once. 

First, our colleague, Debbie Wasserman Schultz, has an excellent 

bill based on the experience she has had in a struggle with breast 

cancer that so many Americans face that would focus on education 

of young women. And I hope that it can be included in any health 

care reform legislation. It is supported by the Komen Race for the 

Cure and a number of other groups. 

Second, I applaud the bipartisan cooperation that the Administration has sought, to get all stakeholders at the table. But I think 

that some of those who have successfully blocked health care reform for decades have not changed their goal to thwarting reform, 

only their tactics. And I think it is vital that any reform offer the 

uninsured the option of a public insurance plan and that our goal 

must continue to be getting access to health care for all Americans, 

not getting all to agree to a plan that will not provide access to all 

Americans. 

Third, I believe that health care reform must address the soaring 

cost of prescription drugs. One report I saw on a particular class 

of drugs last year showed an increase in 1 year of 3,000 percent 

on the cost of some of the drugs. Those soaring costs bankrupt individual families. They can present great problems to us in trying to 

have the taxpayer pay for it. And we know what to do about that, 

but Congress hasn’t had the political will to deal with it. 

Could you respond? 

Secretary SEBELIUS. Congressman Doggett, let me assure you, 

I look forward to working with you and with Rising Star Ryan on 

the issues that you have outlined. 

Chairman RANGEL. Madam Secretary, your response, because 

of the length of the question, will be limited to 40 seconds. 

Secretary SEBELIUS. I just responded, Mr. Chairman, to both. 

Chairman RANGEL. It is embarrassing for me, as Chair, to do 

this, but the Secretary has gone out of her way to make certain 

that the first Committee that she reports to is our Committee. And 

we graciously accept that. But, rest assured, Mr. Camp and I have 

reason to believe the Secretary will have more time to spend with 

us, and we appreciate that. 

So I guess most of us want you to hear how bright we are, and 

we will then get responses to make certain that we are correct in 

our thinking. 

And if you yield back, then the Chair will recognize Mr. Linder 

for 21⁄2 minutes. 

Mr. LINDER. Thank you, Mr. Chairman. 

Thank you for being here, Madam Secretary. 

When President Johnson gave his ‘‘Great Society’’ speech, he 

said, ‘‘We know from using easily quantifiable user statistics that, 

by 1990, Medicare will cost us $9 billion and Medicaid will cost us 

$1 billion.’’ But he was wrong, it was $108 billion and $76 billion 

respectively, because people overuse something they think someone 

else is paying for. 

We are proposing to increase the number of consumers in health 

care by 17 percent. And we are increasing the number of doctors 


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per year by 1 percent. And the number of nurses has been flat for 

5 years in its increase, just flat. 

Who is going to treat these people? 

Secretary SEBELIUS. Congressman Linder, I think that is a 

huge issue, and the looming shortage of providers—particularly 

nurses, but primary care doctors are shortly behind the nurses— 

is huge. States have been trying to work on the pipeline issue for 

a number of years. 

I was pleased that, in the Recovery Act, there is a half billion 

dollars for workforce issues. And I look forward to working with 

those of you here in Congress on a long-term strategy. It has been 

suggested that we have an ongoing workforce commission. 

We need to focus payment—we need to shift payment to appropriate protocol. A lot of people, frankly, overuse the system because 

it is often recommended that they have procedures that aren’t necessarily the best health outcome, as our quality report, issued 

today, will indicate. 

So I think there are ways to address this from the workforce system, but also to begin to shift the payment system to look at outcomes and not necessarily contacts with a health provider. 

Mr. LINDER. And we are going to have bureaucrats make those 

decisions? 

Secretary SEBELIUS. Ideally, the health providers make those 

decisions with informed information about best practices, which 

currently are in place in some parts of the country but are not uniformly driven throughout the system. 

Mr. LINDER. Thank you. 

Chairman RANGEL. Thank you. 

The Chair recognizes Earl Pomeroy. 

Mr. POMEROY. Thank you. 

And, Madam Secretary, I know I speak for Senator Ben Nelson 

and Senator Bill Nelson, both former insurance commissioners like 

myself and you, in acknowledging at least someone in the former 

insurance regulatory ranks has gone on to make something of their 

lives, and we congratulate you. 

The White House this week had a roundtable on rural health 

care, in particular, and released a report called ‘‘Hard Times in the 

Heartland,’’ reflecting that in rural areas you have higher rates of 

poverty, mortality, uninsurance, and limited access to primary care 

providers. 

As former Governor of Kansas and insurance commissioner of 

Kansas, you have seen the difficulties of keeping proximate access 

to care in sparsely populated areas. It is excruciatingly difficult. 

I believe part of our rural health care system is being under-reimbursed by Medicare. You see Medicare reimbursement at half 

per capita rates reflecting more urban areas. That also includes 

much higher utilization trends in urban areas, but also, I believe, 

underpayment for rural services. 

I am wondering about your thoughts, as you assume your new 

responsibilities, relative to this unique dimension of America’s 

health care, in rural areas. 

Secretary SEBELIUS. Congressman Pomeroy, as you said, you 

and I share a lot of background, not only in our insurance commissioner days, but in dealing in a very rural State. 


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So this is a huge issue. The disparities in Medicare reimbursement is a big issue. I just want to assure you that I look forward 

to working with Congress to reduce those disparities. 

Part of it is a shift toward outcome and away from geography. 

So we look for protocol that will reward outcome and begin to have 

the Medicare system focus more on prevention and wellness, which 

reduces cost. 

But it is an issue I take very seriously and one I look forward 

to working on. 

Chairman RANGEL. The Chair recognizes Mr. Nunes. 

Mr. Tiberi. 

Mr. TIBERI. Thank you, Mr. Chairman. 

As the only Ohioan on this panel, Madam Secretary, I want to 

give you a Buckeye welcome—— 

Secretary SEBELIUS. Thank you. 

Mr. TIBERI [continuing]. From your native State and wish you 

well in your job. As Ranking Member Camp said earlier, the principles that you outlined I think we all agree on. 

In my district, in Columbus and central Ohio, we have a Medicare Advantage plan called MediGold that is very, very popular, 

that I have had family members actually talk to me about the popularity of it. Anyhow, a very popular, very well-defined program in 

my district. And I have talked to many, many seniors that enjoy 

that program. 

MediGold’s principles are very similar to what you outline in 

terms of the principles that you see going forward with respect to 

health care reform. How do you see their plan, MediGold, their 

Medicare Advantage plan, playing out with respect to your proposals and the Administration’s proposal on health care reform? 

Secretary SEBELIUS. Congressman Tiberi, first of all, I appreciate the Buckeye welcome. 

I know that there are some very popular and well-run Medicare 

Advantage plans, and there are some that I think have not provided the additional benefits that would be estimated to be provided with a 14 percent additional payment over traditional Medicare. 

So I think what is important going forward is to make sure that, 

again, there is a kind of level playing field that we are paying for 

the benefits and the outcome, and that the information provided to 

seniors, the numbers of plans—I mean, there are literally dozens 

and dozens of Medicare Advantage plans which have a very small 

number of enrollees, which are very confusing, in my experience for 

seniors to try and identify what the best plan is. But I think in the 

situation that you have described, the health reform plan ideally 

will not tamper with the kind of coverage and benefits that your 

family is currently enjoying. 

Mr. TIBERI. Thank you. Look forward to working with you. 

Yield back. 

Chairman RANGEL. Because there is such an outstanding number of Democrats, Majority Members waiting, I will now try to do 

two of them at a time to try to level this off, and recognize Mike 

Thompson of California. 

Mr. THOMPSON. Thank you, Mr. Chairman. 

Madam Secretary, congratulations, and thank you for being here. 


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I, too, want to chime in on your rural experience and how important that is for someone with a district such as mine. I think a lot 

of our success in health care reform hinges on providers, making 

sure we have the number of providers necessary, especially in rural 

areas where it is so hard to get not only primary care, but all the 

specialties. I don’t think we can do it unless we address that issue. 

And at the same time, we have to do it in a way where it is affordable to small businesses, and that is something that I hear about 

constantly. And so I appreciate your experience in this regard, and 

look forward to working with you on those two areas in particular. 

If you have something you want to add, fine. If not, I yield back. 

Secretary SEBELIUS. Look forward to it. 

Chairman RANGEL. Thank you so much for your cooperation. 

Believe me, we will make up for this embarrassing moment. 

Mr. Becerra. 

Mr. BECERRA. Thank you, Mr. Chairman. 

And, Madam Secretary, great to see you here. Thank you. We 

look forward to further opportunities. 

Without spending time on it, because we don’t have time, I would 

like to mention that I appreciate that you mentioned the reports 

that you are issuing, especially the one on disparities. I would love 

to follow up, because as we know that there are disparities in the 

quality of health care dispensed to Americans. I hope that you will 

take a look at your agency, your Department, to make sure that 

there aren’t disparities within your own personnel ranks when it 

comes to being able to meet the needs of all Americans. And you 

have a diverse workforce that can address those disparity issues 

that we have in America. 

On health care, you said some interesting things, and I want to 

follow up on them, and perhaps later on we will have an opportunity to discuss them more fully. 

In response to the question about whether or not a public health 

insurance option could really compete, this notion that there is no 

way the government could compete, I appreciate that you mentioned that today we have a track record of public health insurance 

options competing, and competing on a playing field that is level 

through the 30 States that currently do that. 

I think it is also important to note that Medicare, which is, in 

essence, a public health insurance plan, offers 48 million seniors in 

America the options and the opportunity to have health care coverage. And by the way, 95 percent of all of America’s doctors participate in Medicare. And so, clearly, it becomes obvious that you 

have quite a bit of choice within a public health insurance option 

in terms of doctors if 95 percent of today’s doctors participate in 

Medicare. 

And I am wondering if it is your sense, as you said before, that 

a level field can be created in this health care reform so that we 

can remove any doubts that any type of option that gives Americans the most choices can be constructed so that at the end of the 

day what we have done is we have left consumers with the option 

and the choice of what plan they will use, and not have the government or private insurance companies make the choices for consumers. 


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Secretary SEBELIUS. Representative Becerra, I think you have 

just outlined and articulated very well the strategy of a public 

plan. Clearly, you could have a situation where it would be unfair 

and lack the competition element for private insurers. But I can assure this Committee that the President and I believe strongly that 

we want to stabilize the private insurance market, not undermine 

the private insurance market, because millions of Americans rely 

on their private coverage and feel it is very satisfactory for themselves and their families. 

So the rules of a public plan within a health insurance exchange 

are to offer choice, offer competition based on what are the best 

practices, how to lower costs, not with an unfair advantage, but 

who is doing the best job for their patients, because wellness, 

frankly, costs less than sickness does. So keeping patients healthy 

is part of the competition we are eager to have plans engage in. 

Mr. BECERRA. Thank you, Mr. Chairman. 

Chairman RANGEL. Mr. Davis of Kentucky. 

Mr. DAVIS OF KENTUCKY. Thank you Mr. Chairman. 

Madam Secretary, one question that I would like to ask, or follow 

a request. I would like to submit two questions regarding community pharmacy efforts to get detailed answers in writing that I am 

sure will exceed the 21⁄2-minute limit here. We will provide those 

to staff. 

But the question that I have, and it concerns me greatly, on the 

national connector model. We have tremendous local solutions that 

are being developed. In particular, a gentleman named Chris Goddard, who runs Healthpoint, a community health center network in 

northern Kentucky, developed a plan working with small businessowners that will remove the majority of our uninsured or underinsured in northern Kentucky entirely off the grid of the Federal 

system, providing a physician home, providing preventive dental 

and medical services and some acute care, not catastrophic, but at 

the cost of about $50 per employee per month. And I would like to 

hear your thought on having solutions like that that are locally 

driven, have the accountability in the network that is key for success in health care, as opposed to the one-size-fits-all plan that we 

have heard so much about over the last couple of months. 

Secretary SEBELIUS. Congressman Davis, let me assure you, 

there is no one-size-fits-all plan. There is no national health plan 

that has been developed or written. In fact, the more strategies 

that are successful at the local and State level, the more people will 

have coverage that they enjoy and benefits themselves and their 

families, then the more provider support there will be. The effort 

for health reform is aimed at stabilizing just that market, so if you 

have a strategy that is working in Kentucky that is insuring previously uninsured folks, I think that not only will it not be disruptive, but, hopefully, will help lower the additional costs that those 

individuals, those Kentuckians, are paying for the uninsured care 

that is currently coming through emergency room doors and stabilize that market. 

This effort is primarily aimed at either those individuals who are 

paying out of their own pocket for catastrophic coverage, have no 

prevention care, for those 50 million Americans who have no access 


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to health insurance at all, and for a system, frankly, where the 

costs continue to rise. 

Mr. DAVIS OF KENTUCKY. I think in that case, Madam Secretary, it will be well served both for the country and I think would 

be illuminating. I would like to invite you to personally come to 

northern Kentucky, to Covington, and to see some creative solutions that have been developed out of that old saw, the greatest 

source of inspiration is desperation. 

Secretary SEBELIUS. I would be glad to do that. And, you know, 

Cincinnati is my hometown, birth town, with my dad and sisters 

still there, so any opportunity to visit Covington provides a trip 

home. 

Chairman RANGEL. The Chair would like to recognize Mr. 

Lawson and then Mr. Blumenauer. 

Mr. Lawson. 

Mr. LAWSON. Thank you, Mr. Chairman. 

Chairman RANGEL. If I could interrupt. The record will be open 

for those people that would want to submit questions to the Secretary. 

Chairman RANGEL. Mr. Lawson. 

Mr. LAWSON. Thank you, Mr. Chairman. 

Again, thank you, Madam Secretary, and thank you, with very 

little notice, and having just been confirmed, to come before a joint 

caucus conference of the House Democrats and House Republicans 

last week to address H1N1, commonly referred to—but Mr. 

Etheridge won’t let me say it, so I won’t. So I want to thank you 

for that. 

I just have one question I would like to follow up with you on, 

and especially given your experience as an insurance commissioner, 

in your estimation does the current private health insurance market do an adequate job of providing affordable health insurance? 

And what do we need to do to improve access and create affordable 

coverage? 

Secretary SEBELIUS. I think, Congressman, there are certainly 

lots of Americans who have coverage that they think is terrific, and 

it is very good. Others, I think, are really struggling with underinsurance or struggling in a situation where they have been underwritten because of a medical condition or are limited where the cost 

is exorbitant because they have recovered from a heart attack or 

have diabetes. So there are the best and the worst, if you will, currently in place. And I think working on the strategy moving forward, getting rid of some of the rules which allow insurers to make 

health decisions instead of providers—I know there is a lot of talk 

about not having bureaucrats make health decisions, but I think it 

is equally important not to have private insurance companies make 

health decisions overruling protocol recommended by health providers. And part of health reform is to change those underlying 

rules, to have major insurance reform along with this effort. 

Mr. LAWSON. Thank you, Madam Secretary. 

Chairman RANGEL. Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. 

Madam Secretary, coming from one of those low-cost, high-quality regions in Oregon, I hope to work with you on fundamental payment reform that encourages the outcome we want in one specific 


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area, end of life, where most of us spend most of our lifetime supply of health care dollars, and we are finding that people are too 

often unprepared. And Medicare doesn’t even recognize a consultation with a patient and their family to be able to deal with these 

complex choices that they face to help guide them through as worthy of a specific reimbursement. 

Now, I introduced some legislation to try and remedy that on a 

specific area, but I wonder if you see this counseling initiative, end 

of life empowerment of patients and families, as an area to be dealt 

with in comprehensive reform, and maybe even something that we 

might be able to make some adjustment sooner to give patients and 

families the support they need at this difficult time. 

Secretary SEBELIUS. Congressman, I can assure you on a personal basis I share your concerns. I am not familiar with your specific legislation. But my mother spent the last 10 weeks of her life 

in three different hospitals and an army of health providers, and 

frankly, the help and support needed by families to not only make 

medical decisions, but end-of-life decisions is really essential and 

something I take very seriously. So I look forward to working with 

you on strategies moving forward to not only lower what are often 

exorbitant costs that are not necessarily as patient-friendly or direct the patient outcome, but to help family members make tough 

decisions at an earlier point. 

Mr. BLUMENAUER. I appreciate that, and I appreciate your 

emphasis. Yes, it may end up saving us money in the long run, but, 

most important, it is giving the sort of tools so that families’ needs 

are met. And I appreciate your words and look forward to working 

with you. 

Thank you, Mr. Chairman. 

Chairman RANGEL. Thank you. 

Mr. Reichert, you may inquire. 

Mr. REICHERT. Thank you, Mr. Chairman. 

Welcome, Madam Secretary. 

My background is in law enforcement, so I am really interested 

in fraud, waste and abuse and safety, and you have touched on the 

safety issue. I am glad to hear that you are a proponent of the safety checklist, which will save lives. 

I am going to try to run real quickly here two questions together. 

GAO has estimated that Medicare wastes $13 billion a year. It has 

paid out to $92 million just this year in part B providers who have 

deceased, are deceased. 

Then I want to shift real quickly to interoperability, so that 

waste, fraud and abuse kind of shifts over to interoperability; $35 

billion in the stimulus package ready to go out the door. I don’t 

think we are ready for it. Health providers have said they don’t 

need it yet. They don’t know how to spend it yet. There aren’t providers that they believe are interoperable and that it can work with 

now. There is no national standard. I am afraid we are going to be 

wasting some money here if we don’t have a plan in place. 

Secretary SEBELIUS. Let me try to first assure you, I very much 

am interested in waste, fraud and abuse. Every dime stolen from 

the health care system is money we can not apply to appropriate 

care and quality care for Americans. So that is an effort I will look 


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forward to working with you and the Committee on cracking down 

in any way we can. 

On the interoperable standards, as you know, Dr. David 

Blumenthal has now been appointed. He is charged with the kind 

of protocol that you are suggesting. There is a Committee at work 

right now to develop a national platform. I couldn’t agree more that 

having—just shifting our paperwork onto computers doesn’t save 

any money and is totally ineffective unless our technology can talk 

to one another. So protecting privacy on one hand and moving forward as rapidly as we can with a system that eliminates paperwork, eliminates the duplication, lets health care providers not fill 

out dozens of forms, but focus on medical care is what the shared 

goal is, and that is very much on the way. But dollars are not going 

to leave before there is a platform ready to go. 

Mr. REICHERT. That is good to hear. Thank you. 

Chairman RANGEL. Thank you. 

Mr. Kind and Mr. Pascrell. 

Mr. KIND. Thank you, Madam Secretary. Thank you for being 

here. And I agree with the President. I think that health care is 

one of those reforms, is one of those building blocks that we have 

got to get done at the end of the day if we are going to have prolonged, sustainable economic growth in the country. 

Here are my concerns. At the end of the day, we have got to figure out a way of how we bend the cost curve in all this, but we 

also need to figure out a way to deal with the affordability of 

health care for small businesses, family farmers throughout the 

country. 

With the cost curve issue, I, too, come from one of those low-cost, 

low-reimbursed, high-quality care areas of the country in western 

Wisconsin, a lot of innovation taking place. That is why I am a big 

believer in the importance of HIT buildout, but also comparative effectiveness studies. As you said, best practices, I think, are going 

to show us the way for greater cost savings, while improving outcomes and quality of care at the end of the day. 

The Economic Recovery and the Investment Act had about $1.1 

billion in there to go forward on comparative effectiveness studies. 

I know you are relatively new to the position, but I am wondering 

if you gave any thought about whether that money is going to be 

sufficient to get us where we need to go, or if it is just the beginning of more of what needs to be done to find out what works, what 

doesn’t, so we can, as Mr. Blumenauer indicated, revamp the reimbursement system so we are rewarding quality at the end of the 

day, as opposed to more quantity or just more consumption in the 

health care system. 

Secretary SEBELIUS. I think that the effectiveness research, 

comparative effectiveness research is a strategy that we know can 

help inform providers, empower consumers, and drive best practices. That is the goal at the end of the day. It is prohibited by law 

to use that research to make Medicare cost decisions. But certainly, 

empowering and driving best practices and highlighting what we 

know works is an effective strategy. And as the quality report says 

today, we know 4 of 10 Americans do not receive the care that is 

recommended, so that bends the cost curve. 


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Mr. KIND. And I am a small business friend. Tomorrow I am 

going to be introducing a bipartisan bill called the SHOP Act, 

which establishes purchasing pools for small businesses, family 

farmers, with ratings reform, administrative fees, tax incentives 

that Senators Durbin and Snowe have been carrying on the Senate 

side, too, and we think this could be a commonsense piece to the 

overall health reform that addresses needs in the small-business 

community and family farmers throughout the country. So we will 

look forward to supplying some more information to you and your 

team over there to take a closer look at the SHOP Act. Thank you 

for being here. 

Mr. PASCRELL. Madam Secretary, just one quick question on 

the end of life. Would you consider a mandatory—that all Medicare 

recipients must have an end-of-life directive? 

Secretary SEBELIUS. Congressman, it is something that I certainly would be glad to take a look at. I am not quite sure what 

that means in terms of individual mandates. 

Mr. PASCRELL. I want to continue what my good friend from 

Wisconsin was talking about, and that is cost. We have got to get 

folks on the Hill, as well as the folks, our constituents, to understand that the costs of health care have to be contained, or else we 

cannot come up with enough money to sustain a universal health 

care plan. I don’t care what anybody says. There isn’t enough 

money out there. If that is true, if you accept that premise, that 

we can’t continue to do business as we are doing—otherwise I 

guess we wouldn’t be here, would we—what policy options hold the 

greatest promise for systemically slowing the growth of health care 

costs? And as part B of that question, would you prefer to pay for 

performance, a value-based purchasing system and/or a public plan 

option? If you had to make a choice amongst those three, what 

would you do? 

Secretary SEBELIUS. My sense is, Congressman, we do all of 

the above. 

Mr. PASCRELL. So they are all possible. 

Secretary SEBELIUS. Absolutely. And I think that part of what 

is happening in America is that we pay more than any country on 

Earth, and our health results are poorer than many of the countries who have coverage. So we clearly don’t have to substitute 

quality for cost. They are not paying for quality right now. We need 

to begin to pay for outcomes. 

Mr. PASCRELL. If we don’t do these things, Madam Secretary, 

will we have to begin to ration health care? 

Secretary SEBELIUS. Essentially it is going on right now; 50 

million Americans have rationed care. We have people who, because of their gaps in their coverage, are cutting their pills or not 

taking their protocol that is recommended. Hospital stays are often 

cut short, not because it is the provider’s recommendation, but because the insurance plan only covers a limited stay. So we are essentially in a situation where providers’ recommendations are often 

compromised by what dollars are available. 

Mr. PASCRELL. Thank you, Madam Secretary. Good luck to you. 

Chairman RANGEL. Mr. Boustany from Louisiana. 

Mr. BOUSTANY. Thank you, Mr. Chairman. 

Welcome, Madam Secretary. 


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As a heart surgeon with over 20 years’ experience clinically, and 

as somebody who has deep concerns about quality and cost in 

health care, I have to say that I have concerns, and I am certainly 

well aware of the problems in the private insurance and in current 

existing government health care programs. But I would like to ask 

you, if we can build off the current insurance system, private insurance system, make it truly competitive, make it truly accessible for 

coverage, are you willing to entertain this, or are you purely wedded to a government option? 

In other words, I mean, are you—is this an exclusionary foregone 

conclusion that the Administration wants a government option at 

the expense of real bipartisanship to solve a very complex problem? 

Secretary SEBELIUS. Congressman, I would say that the Administration is committed to working with Congress and has every 

hope that this will be a bipartisan effort, and hopes that all serious 

ideas are on the table from both sides of the aisle, that it isn’t exclusionary on one side or the other. So as we move forward, what 

I know from my experience is that if the public plan option is opposed because it is seen as uncompetitive, it is seen as the way to 

drive private insurers out of the market, there are plenty of examples around the country to indicate that that is not the case. 

Mr. BOUSTANY. Reclaiming my time, I would submit to you 

that some of the biggest culprits with regard to lack of emphasis 

on prevention, screening, early detection are our existing government programs. 

Secretary SEBELIUS. And I would certainly share that notion 

that we have to change that. One of the building blocks for health 

reform is the assets, frankly, the programs run right now in the 

Department of Health and Human Services, both Medicare and 

Medicaid. And changing our system, our underlying system, and 

the dollars that are already available in the public program and focusing more on prevention and wellness is a huge part of this effort. 

Mr. BOUSTANY. Thank you, Madam Secretary. We certainly 

hope you will work with our side of the aisle on those very difficult 

issues. Thank you. 

I yield back, Mr. Chairman. 

Chairman RANGEL. The Chair recognizes on our side Mr. Crowley. He is not here. 

Madam Schwartz from Pennsylvania. Thank you. I am so sorry. 

Ms. Berkley. 

Ms. BERKLEY. I thank you very much, Madam Secretary, for 

joining us today. I know there is a great deal resting on your shoulders. This is such an important issue. I believe that Congress and 

the Administration have a once-in-a-generation opportunity to 

make important reforms to our country’s health care system. We 

have done quite a bit already with the SCHIP program and our 

health IT infrastructure, bringing it into the 21st century, increasing COBRA benefits for those who lose their jobs. I also would like 

to see us increase health care and provide health insurance for the 

50 million of our fellow citizens that do not have health care or 

health care insurance. 

I was very, very pleased to hear you emphasize prevention and 

wellness programs. I have often said in these hearings that the 


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way we deliver health care in this country is ‘‘bass ackward.’’ We 

spend a fortune in end-of-life care, not enough money in early detection and prevention of illness. 

Also, the fact that we need to educate our fellow citizens. We contribute to our own sicknesses and illnesses. If we would moderate 

our liquor consumption, moderate exercise, watch our diets and 

stop the cigarette smoking, I think we would be much healthier, 

and we would save billions of dollars. 

I am concerned about the lack of enough health care providers 

that currently exist in this country, including, as we all know, we 

don’t have enough primary-care physicians. Coming from Las 

Vegas, I can tell you we don’t have enough specialties either. 

There are things we can do, and I am wondering what your opinion is on increasing the GMEs and better distribution of them so 

some of the States in the Western United States could take advantage of that program. 

Also, loan forgiveness. My own stepdaughter started practicing primary-care medicine in September with a $190,000 debt. 

And also SGR. I know the President’s budget provided for a permanent fix, but we are hearing from the other side of the dome in 

the Senate that they are more willing to kick that problem, that 

can down the road. That would be a disaster. What do you think? 

My time is up. 

Secretary SEBELIUS. All of the above. 

Chairman RANGEL. I hope that you share your answers with all 

of us, because those are questions that she asked that we are all 

concerned with. 

Congresswoman Schwartz from Pennsylvania. 

Ms. SCHWARTZ. Thank you, Madam Secretary. Congratulations 

and welcome. You have a very full plate, and I wish you well. I 

know you are well positioned to be successful. 

There has been a lot, two issues I wanted to raise. One you have 

heard a good bit about, so I will—and you have answered, so I 

won’t—it is just to say that I do have a bill I am introducing tomorrow to create incentives for primary-care physicians and nurses. 

And I would just ask you to take a look at that. It addresses many 

of the issues that you have heard today, and I would ask you to 

take a serious look at that. 

And I also know that you have been looking at market reform, 

and I am also working on legislation. A number of these pieces 

have been talked about, both by the insurance companies, the Insurance Federation. Of course, many of us have been looking at 

them for a number of years. One is, of course, ending the preexisting condition exclusions, getting to a guaranteed issue, being 

able to go to community rating, stopping gender discrimination in 

rating as well has been talked about, ending waiting periods for 

employees are all important. 

I did want to follow up on Mr. Johnson’s reference to legislation 

I am working on that he is in agreement on, which is nice to have 

a bipartisan start, and that is to really do what we did under 

401(k) plans, which is to just change the way employees opt in. 

And basically what I am saying is that they should be presumed 

to be in the health benefits package plan that their employer offers. 

They can opt out, but instead of potentially failing to sign up and 


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then never being able to sign up even if you are employed for years 

seems really unconscionable in this day and age. 

So we really want to make it easier. We think that there has to 

be transparency to make sure the employee knows what they are 

doing, but would ask you to take a look at that and see what you 

think is a way to encourage those who do have available insurance 

coverage to take it. So I wanted to have your reaction to that, and 

just say I look forward to working with you on all of these issues 

so that we do actually get to coverage for all Americans in an affordable way for the government and for them. 

Secretary SEBELIUS. Congresswoman Schwartz, I look forward 

to working with you. And I know that the kind of autoenrollment 

strategies that you are talking about are often looked at as in 

many cases as effective and in some cases more effective than mandate strategies. So I look forward to looking at your legislation and 

moving forward. 

There are lots of people who have eligibility right now in a variety of programs who, for one reason or another, are not enrolled, 

and I think we need to take that very seriously as an underpinning 

to cut down on the number of uninsured Americans. 

Ms. SCHWARTZ. Actually that is a great point. I know we saw 

that in CHIP, for example. Thank you. 

Chairman RANGEL. Mr. Heller. 

Mr. HELLER. Thank you, Mr. Chairman, and Governor, thanks 

for being here. Look forward to working with you. I have noticed 

a theme from both sides, and that is talking about rural care and 

the concern that we have for rural care. I represent a district that 

is 105,000 square miles, and if you live in central Nevada, and you 

need a blood test taken, in most cases—or you can’t find a primarycare physician, needless to say you obviously can’t find a specialist 

either. So your choice is to travel 200 miles to Reno or another 200 

miles the other way to Salt Lake City. And I just want to emphasize my concern for that. 

Veterans that Need Help, which is another government-run program, find similar accessibility problems in rural areas. Those that 

are on Medicaid and Medicare have accessibility problems in the 

rural areas. 

I guess my question for you is, how would another governmentrun program like we are discussing today solve these accessibility 

problems? 

Secretary SEBELIUS. Congressman, first of all, I don’t think 

anybody is talking about a government-run program. I think the 

goal is to have most Americans without health coverage in a health 

insurance exchange run by the private market to stabilize the current private market where we see employers, frankly, dropping coverage every day because they can’t sustain the cost of insuring 

their employees. None of that solves the workforce issue that you 

are addressing, and particularly the underserved rural areas that 

are very common. 

There is a proposal by the President to double the Commissioned 

Corps. That will provide some incentives. There is a half billion 

dollars in the recovery plan to help fill the pipeline for nurses and 

doctors. I think there are a series of strategies, frankly, using 

health technology, and at least it has been my experience in our 


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State that health providers are more likely to choose and stay in 

an isolated and more rural area if they have access to specialist 

consultation through telemedicine, if they can tap into advice and 

consult and support. 

So I think there are underpinnings of this underway. I don’t have 

all of the answers of the workforce issue, but it is huge, and I think 

looking at incentives, looking at forgiveness of medical loans, a variety of strategies that, frankly, have been proven successful at the 

State level, are things we should examine at the Federal level. 

Mr. HELLER. Look forward to working with you. 

Chairman RANGEL. Mr. Davis of Illinois and Mr. Etheridge of 

North Carolina. Mr. Davis, you may inquire, and the time, as you 

may have heard, is 21⁄2 minutes. 

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman. 

Madam Secretary, welcome. A few minutes ago you and Representative McDermott talked about the need and desirability of increasing primary-care providers. My question is, would you see increasing community health centers and networks with built-in 

home visiting programs as a way of doing that? 

And in the Recovery and Reinvestment Act, there are provisions 

for some hospital-based physicians to receive incentives, but then 

the act specifically states that some will not be eligible. 

Could you tell us how you would go about looking at or determining which ones would be eligible and which ones would not? 

Secretary SEBELIUS. Congressman Davis, you make a great 

point about the community health centers. And again, the Recovery 

Act had resources to double the number of health centers, and that 

will certainly provide a health home to millions of Americans who 

currently don’t have that health home. There also is an expansion 

of the Commissioned Corps for providers who work in underserved 

areas. 

And I think what we have to look at is a series of strategies. Incentive payment is one. Shifting the payment to reward outcome 

and not contact with doctors is another. Looking at the ways that 

Medicare can be an innovator and an opportunity to lead the way 

in terms of how the payment system can begin to incentivize additional primary care docs is something that again, I know is a major 

challenge and look forward to those of you who have worked on 

this issue for a number of times, and having some dialogue and figuring out ways that we can use the Department’s assets to move 

in the right direction. 

Mr. DAVIS OF ILLINOIS. Thank you very much. And I would 

just like to say I also have a great deal of interest in long-term care 

and the needs of people with disabilities, and look forward to working with the Department on those issues. 

Chairman RANGEL. Bob Etheridge from North Carolina. 

Mr. ETHERIDGE. Thank you, Mr. Chairman. 

Thank you, Madam Secretary for being here. 

And coming from a State that has some great hospitals and institutions, but in North Carolina, in the past 2 years, the uninsured 

has jumped 22.5 percent, the biggest increase in the Nation. Nationwide about 22 percent of adults do not have insurance, and in 

my home State, that is now about 25 percent of adults, and an additional 9 percent are underinsured. And that is being compounded 


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by the fact that our unemployment rate has more than doubled in 

the last year, making us the fourth highest in the Nation. 

And I set that stage to say a lot of the people who had insurance 

have lost it. Those who don’t have it are looking for care. And so 

they are moving to the community health centers, who are stepping 

in to help fill some of these gaps. 

So my question is this: Following Congressman Davis’ question, 

CACs in turn are seeing their reimbursement rate stretched because of the people who are coming to them, and they are really 

stretched hard. 

As we work to reform health care, I ask you to consider, and if 

you have time to comment on how we are going to make sure that 

the rural areas, and really some of our low-income areas, many are 

more in rural areas, have access to quality care because I think 

that is a critical piece in this whole issue. 

Secretary SEBELIUS. Congressman, just let me assure you, it is 

a piece I take very seriously, and stabilizing the existing system 

where it is effective. I think community health centers have been 

very effective in delivering care. So we don’t want to destabilize, by 

either lack of resources or overdemand, any piece of this system. 

So figuring out strategies to make sure that the community health 

system continues to serve the population it is serving effectively 

right now is something I look forward to working on. 

Mr. ETHERIDGE. Thank you. 

Thank you, Mr. Chairman. I yield back. 

Chairman RANGEL. Mr. Roskam of Illinois. 

Mr. ROSKAM. Thank you, Mr. Chairman. 

Madam Secretary, we have seen eight dot points that have come 

out of the Administration, and the fifth one is really the one that 

folks are tending to focus on today, the public plan, and the assurance and confidence that there is not an erosion of the choice for 

folks. 

It is interesting to me, there are two groups that are out there, 

or two entities that are out there that think you are wrong or sort 

of think you are wrong. 

Secretary SEBELIUS. I am sure there are more than that. 

Mr. ROSKAM. Right. But sort of wrong in the underlying 

premise. And you have demonstrated a certain amount of humility 

on we have got to get it right, and I respect that. But it is interesting, the Lewin Group, in a study that I am sure you are familiar 

with, says it is not going to happen, and 120 million folks are going 

to be out of that public—out of a private plan. 

And the other is one of my colleagues from my delegation, Representative Jan Schakowsky. Let me read a quote, and I am interested in how you reconcile these two views in the brief time that 

we have. 

This is Representative Schakowsky’s quote on April 18 speaking 

to a group of single-payer advocates. She said, ‘‘I know many of you 

here today are single-payer advocates, and so am I. And those of 

us who are pushing for a public insurance don’t disagree with this 

goal. This is not a principle fight. This is a fight about strategy for 

getting there, and I believe we will.’’ In other words, this part of 

the plan is part of a prelude toward ultimately a large single-payer 

plan. 


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Can you debunk that? Can you reconcile those? 

Chairman RANGEL. That is very difficult, Madam Secretary, for 

you to respond to a statement attributed to a Member, but I am 

certain that the question could be reframed without responding to 

a Member and asking whether or not she believes that this is the 

beginning of single-payer. But I don’t think it is fair, since the Congresswoman is not here, to say whether or not she ever said it. 

Mr. ROSKAM. Okay. That is fair enough. 

Is it a prelude? 

Secretary SEBELIUS. I don’t think so, Congressman. Again, I 

would point to the fact that these competitive strategies are effectively in place across the country. They are not a prelude to anything other than offering consumers choice and driving competition 

based on practice models. So it is determined by the plan design. 

Can you construct an unlevel playing field with a public option 

unfairly competing with private options? You bet. Is that the intention of the Administration or the Majority in Congress when they 

talk about it? I don’t think so at all. 

So it can be designed any number of ways if you have the right 

actuarial support. If you design the rules so there really is a level 

playing field that private insurers don’t have the advantage of 

cherry-picking the market, and the public plan doesn’t have the advantage of undercutting the costs and driving everybody out, it can 

work very effectively and does work very effectively across this 

country. 

Chairman RANGEL. Ms. Sanchez of California will be followed 

by John Yarmuth of Kentucky. 

Ms. Sanchez. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

And thank you, Madam Secretary for being with us this morning. 

I have been a strong supporter of employer-based coverage, and 

for those who have union jobs or a college education or work for 

big corporations, the employer system, based system, works quite 

well, and people generally, according to surveys, are satisfied with 

their plans if they are lucky enough to have them through their 

employer. 

But those who are not as satisfied with the current system include not only those that don’t get coverage through their workplace, but also those who lose coverage when they lose their job. 

And I routinely get letters from constituents. A constituent recently 

wrote me about the struggles that she has gone through as a cancer patient after losing her job and the health insurance that went 

with it. And I know that COBRA coverage exists, and for some people that is an option, but for a lot of unemployed people, they can’t 

even afford COBRA, so they can’t afford to extend their health care 

benefits. 

I am interested if you could please share with us a little bit 

about how we might reform the system so that losing a job doesn’t 

mean that you lose high-quality, affordable coverage, even if we retain the current employer-based system. For example, how we 

might—the newly unemployed access the health insurance exchange to obtain or maintain their health insurance benefits. 

Secretary SEBELIUS. Those are great questions. I think that the 

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ployed Americans can’t afford COBRA. It is hard for unemployed 

folks to have COBRA coverage because you are suddenly paying 

100 percent of the cost, 103 percent, as opposed to having an employer contribution. That is really the issue. And if you have lost 

your job, there is no way you are going to be able to come up with 

a 100 percent benefit. So the Recovery Act provided additional Federal assistance as a stream of money so people could afford 

COBRA. 

I share your concerns about stabilizing the current system. The 

opportunity, though, in a reform of the future would be you would 

have a system where that individual who has lost his or her coverage through the job would, first of all, be able to continue coverage in an exchange program, would not lose coverage based on 

job loss. I think that is one of the issues facing way too many 

Americans today. 

Ms. SANCHEZ. Thank you. 

I yield back, Mr. Chairman. 

Chairman RANGEL. Mr. Yarmuth of Kentucky. 

Mr. YARMUTH. Thank you, Mr. Chairman. 

Welcome, Madam Secretary. 

We have heard, I think, pretty much what—a broad acceptance 

of the fact that we are all trying to find a way to insure every 

American. Although we haven’t specifically heard that from some 

people here, I think everybody on our side of the aisle and certainly 

the President has expressed that. As far as I can tell, there are 

three ways of doing it. One is to create a single-payer plan, one is 

to create the hybrid plan that is under discussion with a public option, and the third way is to rely strictly on the private insurance 

industry. 

Mr. Ryan earlier gave an assessment as to the budgetary problems that might be inherent in developing a coverage for everybody 

using the public option. Could you give an assessment of what the 

budgetary implications would be of trying to shove everybody into 

the private system without a public option? Would that be more or 

less affordable than doing it with the public option? 

Secretary SEBELIUS. I think that the current system is 

unsustainable in terms of cost. What we have to look at is not only 

transforming the underlying payment incentives, but changing 

what the payment incentives do. I think this will help encourage 

different kinds of behavior. So if we want a wellness and prevention system, we have to pay differently at the end of the day. And 

I think both public and private plans can be effective doing that. 

We have to change the underlying Medicare directives and opportunities for provider incentives, and they can be a leader in this. 

We can shift the system around. I don’t think it is can this work 

in either the public or private; it has to work in both places. And 

dismantling the private market and having an entirely public option, the single-payer system, I think, is not something that the 

President supports. He supports moving forward and filling the 

gap, not disrupting the entire marketplace. 

So we have got to stabilize the private market with a different 

set of rules, hopefully, that will make it more accessible to more 

Americans, and encourage competition moving forward. 


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Mr. YARMUTH. But my question, I guess, was in relation to Mr. 

Ryan’s statement earlier. The budgetary problems inherent in insuring everyone who is right now—every citizen—are not going to 

be diminished by relying strictly on the private sector. 

Secretary SEBELIUS. I would say that is fair. 

Mr. YARMUTH. Thank you very much. 

Chairman RANGEL. Thank you. 

It looks like we have made the deadline. We have Congresswoman Brown-Waite, who has been patiently waiting to inquire, 

and then we will be followed by Mr. Tanner, Mr. Higgins and Mr. 

Davis of Alabama. 

Congresswoman Brown-Waite. 

Ms. BROWN–WAITE. Thank you very much. 

Welcome, Madam Secretary. I look forward to working with you 

on health care reform that I think all Americans do want. I think 

we may differ in how it is formulated, but we look forward to working with you. And congratulations again. 

Representative Anna Eshoo and I introduced a bill on additional 

funding for pancreatic cancer research. The bill number is H.R. 

745. We have 130 cosponsors. And last year I found out, tragically, 

how quickly pancreatic cancer can take a life because my husband 

finally succumbed to it 6 months after he was diagnosed. 

The bill also addresses other hard-to-find cancers that have a 

very—that, once diagnosed, people have a very short lifespan. So 

it is not just about pancreatic cancer. I would certainly welcome 

your views on it and your support. We are gathering more and 

more cosponsors every single day, and I would appreciate your support on that bill. 

I think we agree—and this is on another subject—I think that 

we agree that we should get individuals involved, everybody who 

is eligible for Medicare, Medicaid and SCHIP. How do you propose 

that we enroll the 11 million Americans who are currently eligible 

for these programs, but are not yet enrolled in Medicare and 

SCHIP? 

I know hospitals tell me all the time that parents bring children 

in for care, and when they go over the fact that they don’t have 

insurance, many of them are eligible for SCHIP or Medicaid. So 

how do we encourage those individuals to sign up for the programs 

already in effect? I look forward to hearing your views on that. 

Secretary SEBELIUS. Thank you, Congresswoman. First of 

all—— 

Chairman RANGEL. Madam Secretary, you have 30 seconds to 

respond, and the rest of your response we will be glad to receive 

in writing. 

Secretary SEBELIUS. We need to look for best practices of enrollment. It is very clear that there are strategies out there, and 

some States have had huge success. We did pretty well in Kansas 

with SCHIP. Other States haven’t begun to do that. So best practices. 

Working with you on cancer initiatives is certainly something I 

will look forward to, and I am sorry for your loss. 

Ms. BROWN–WAITE. Thank you very much. And I yield back 

my time. 


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Chairman RANGEL. We have five Members left, Madam Secretary. We recognize that you have extended your time here. So I 

am going to ask Mr. Tanner, Mr. Higgins, Mr. Davis of Alabama, 

Mr. Van Hollen and Mr. Meek of Florida to greet you and to share 

with you how grateful they are that you committed yourself to attend our Committee first, and they will be submitting questions to 

you. And we know you will respond. 

But since they are here, I am certain that they would want to 

greet you. And so, Mr. Tanner, say hello to the Secretary. 

Mr. TANNER. I understand that, Mr. Chairman. You called on 

probably the Member who can talk as slow as anyone here. So I 

will just say, Madam Secretary, it is great to see you. I have a couple of questions about rural delivery of health care with regard to 

competitive bidding of durable medical equipment and the pharmacy requirements for the surety bond and the accreditation. But 

we will talk about that later. Thank you. 

Chairman RANGEL. Mr. Higgins of New York. 

Mr. HIGGINS. Thank you, Madam Secretary. I am just interested in the issue of the cancer treatment and cancer drug reimbursement. And my concern is that the reimbursement paradigm 

hasn’t kept pace with the science. And I think we are at the dawn 

of a cancer treatment revolution with smart drugs, Avastin for lung 

cancer, Herceptin for breast cancer, and there are so many smart 

drugs that are in the pipeline toward discovery, and I would just 

hope that the Administration would take a very serious look at 

cancer drug reimbursement within the context of health care reform. 

Secretary SEBELIUS. That is a great point. 

Chairman RANGEL. Mr. Davis of Alabama. 

Mr. DAVIS OF ALABAMA. Thank you, Madam Secretary. And 

obviously, I have to be brief, too, but I would just invite you to personally take a look at an issue that has been affecting my State 

and could have significant consequences going forward. The 10-second version of it is we have been embroiled, the State of Alabama 

been embroiled, in a decades-long dispute with CMS over how we 

finance our Medicaid system. As a former Governor, you know that 

the issue of intergovernmental transfer has been a very important 

one. And unfortunately, unless there is a change in course in CMS’ 

current position, unless there is a change in course, Alabama could 

have to make dramatic cuts to its acute care services, and potentially many of our safety-net hospitals could have to literally close 

their doors; not cut back services, but literally close their doors. I 

would urge you, as the new Secretary and as a former Governor 

who knows these issues intimately, to personally engage this question and to look at a resolution on behalf of my State. 

Chairman RANGEL. Mr. Van Hollen from Maryland. 

Mr. VAN HOLLEN. Thank you, Mr. Chairman. 

And congratulations and welcome, Madam Secretary. We all look 

forward to working with you and the President to get health care 

reform done this year. 

We have talked today about some of the ways we can both reduce 

costs and improve quality of care. One of the areas I think we need 

to look into within the Medicare system is changing the incentives 

with respect to multiple chronic diseases. 


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Right now under Medicare there is really no incentive to better 

manage those diseases. You have people going to individual specialists, and, again, payment is made just on number of contacts, and 

there are very few incentives within the system to better manage 

that care to, number one, to get a better health care outcome, but 

also to drive down an area of costs in an area where we have lots 

of payments and costs. So it seems to me that is an area that is 

ripe for again meeting our twin objectives of improving care and reducing costs. And I look forward to working with you in that area. 

Thank you, Mr. Chairman. 

Chairman RANGEL. Mr. Meek of Florida. 

Mr. MEEK. Thank you, Mr. Chairman. 

Madam Secretary, again, congratulations, and looking forward to 

working with you. 

My line of questioning was going to go along the future. And in 

a State like Florida, right now we are one of very few States especially under a 2006 waiver as it relates to Medicaid. We have a 

senior population and an issue of uninsured, especially among service workers, a very, very important issue to us, and also the utilization of community health centers. And I look forward to talking 

with you and working with your Department as we move forward. 

Florida, as you know, we are special in many ways. And when 

it comes down to health care and delivery of health care for seniors 

and for indigent and for giving some relief to small businesses, 

incentivizing best practices so that they don’t have a mountain of 

health care issues is paramount. So I look forward to talking with 

you in the future. Thank you. 

Chairman RANGEL. Madam Secretary, I want to thank you for 

giving this Committee the courtesy of your first congressional hearing. 

I want to apologize to the Members for curtailing their ability to 

follow through in their questions. And I want to thank you also for 

making yourself available to us, if not necessarily in hearings, but 

when we have our Democrats and Republicans together, that you 

would come in an informal way and try help us out with some of 

the questions. 

We again congratulate you for your appointment. We look forward to working with you. Thank you so very, very much. And the 

Committee stands adjourned, subject to the call of the Chair. 

Thank you so much. 

[Whereupon, at 12 p.m., the Committee was adjourned.] 

[Questions for the Record follow:] 


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f 

[Submissions for the Record follow:] 


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Statement of Amy Kaplan 

My congratulations to AHIP and the other stakeholders for coming to the table. 

Their cooperation is essential . . . if only for self-preservation. Please, however, do 

not allow them to sabotage the ‘public/exchange’ option. 

After perusing Sen. Baucus’ and the guidelines proposed by some of the citizensfor-reform groups, all seem excellent preparation for the inevitable haggling over details. One point they all stress is making insurance more readily available and 

affordable. But two critically relevant points seem to have been overlooked. The 

first, that: 

IMPROVING ACCESS TO HEALTH INSURANCE IS NOT THE SAME AS PROVIDING HEALTH INSURANCE COVERAGE AND AUTHORIZING ESSENTIAL 

TREATMENT 

And, second, is the existence of a sidelined third category, beyond the oft-considered uninsured and underinsured: 

THE FALSELY INSURED 

The falsely-insured are those people who have purchased individual policies from 

private insurers, but are routinely denied benefits when a major (expensive) health 

catastrophe occurs. This happens all too often because the language of individual 

policies is intentionally arbitrary, ambiguous, contradictory and evasive. 

Surely it is ironic that as Karen Ignagni and AHIP now seek national regulations 

to expand access, they have yet to concede any responsibility, accountability, let 

alone culpability, for rectifying the circumstances of their falsely-insured clients. 

Case-in-point: What qualifies as ‘‘Durable Medical Equipment that we determine 

to be covered?’’ This exact phrase, never clarified in my 2 years of dialogue with 

Assurant Health (whose CEO sits on the board of AHIP) was used to deny a medically-necessary pediatric power wheelchair for my grandson, born with Type II Spinal Muscular Atrophy (SMA), a genetic degenerative disease. (When my daughter 

first challenged their denial she was told, ‘‘You should have read your policy more 

carefully before giving birth to this child.’’) 

While AHIP now says they will abandon ‘‘pre-existing conditions’’ as an exclusionary category, what about their recission and denial practices based on their subjective interpretations of language and their various definitions of ‘‘fraud?’’ 

‘‘Fraud’’ is claimed to deny coverage: 

. . . when a policyholder doesn’t know that he/she had at condition at the time 

they were approved and purchased their individual policy (specifically for HIV/ 

AIDS) 

. . . when a policyholder failed to correctly comprehend the catch-all categories 

on the medical history forms. How should one answer the question ‘‘Have your 

ever had . . .’’ when epilepsy and headaches are in the same question? (Specifically, 

failure to acknowledge a headache is ‘‘fraud’’ for later coverage of a brain tumor.) 

. . . when a policyholder has minor lapses of memory. (Specifically, failure to 

mention a hospitalization at age 6 for a tonsillectomy is later designated as fraud 

for the treatment of cancer.) 

No doubt all the above, and more, can be construed as claimant-fraud, but is it 

not also fraudulent for insurers: 

. . . to imply that a consumer’s timely payment of premiums buys them health 

care insurance? 

. . . to pay bounties to low-level claims agents for identifying the legal loophole 

by which benefits can be denied? 

. . . after denying benefits, to offer the claimant a convoluted grievance procedure stacked in the insurer’s favor? (This process only further victimizes the 

claimant, particularly when the insurer includes use of an outside arbitrator but 

then, in writing, says the insurer is not bound by the findings of such an arbitrator.) 

. . . to have such influence that a State Insurance Commissioner can tell his employee, ‘‘Drop the case. You’re making too many waves.’’ (The case manager handling the dispute of Assurant’s denial of the power wheelchair.) 

And should a disgruntled claimant take his/her case to court and win, it is merely 

a victory in one case, in one State, against one company; and the industries’ access 

to denials via fraud are not compromised. 

At this moment in time, private insurance companies rightfully fear competition 

from a government sponsored public/exchange plan. 


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1 Emanuel, EJ, ‘‘Cost Savings at End of Life. What do the data show?’’ JAMA, Vol. 275, No. 

24, 6/26/96. 2 Hogan, Christopher, et. al., ‘‘Medicare Beneficiaries’ Cost of Care in the Last Years of Life,’’ 

Healthaffairs.org/cgi/content/abstract/20/4/188, 2001. 

But until that industry, with guidance and oversight from Congress and the other 

stakeholders, agrees on binding legislation that ends their legal and egregious denial of benefits, no private health care consumer, despite purchasing a ‘‘competitive 

plan,’’ can be assured of buying anything more than improved access—without necessarily improved coverage. 

Private policies must be regulated as if they were a tangible product; one that, 

should it prove either ineffective or dangerous, could be pulled from the market and 

its manufacturers held accountable. To be equitable, private policies must include 

the guarantees of coverage that stand behind all Federal plans: Government worker 

plans, Medicare and Medicaid, the VA, and even private employer-sponsored group 

plans. 

While it is not the job of the government to act as big-brother to individual Americans, at this moment of increased vigilance and pending change, the government 

must protect consumers from existing practices which put it’s individual citizens at 

risk. 

Thank you and please share these thoughts with anyone more influential than I. 

Sincerely and persistently, 

f 

Amy Kaplan 

Statement of Claire H. Altman 

To: Hon. Charles Rangel, Chair, House Ways and Means Committee 

From: Claire H. Altman, Director of Capital Projects, HealthCare Chaplaincy 

Re: Proposal to Develop a National Strategy for End-of-Life Care That 

Reduces Cost and Increases Quality of Care 

Date: April 16, 2009 

Summary 

The United States health care system is poorly organized to address endof-life care. This brief will make the case for a new national strategy to reduce cost and increase quality of care. End-of-life care is one of several 

major areas in health care where the status quo both raises costs to the 

system and decreases consumer service and satisfaction. Patients, families, 

and staff often agree the patient is best served by less aggressive medical 

intervention, but inertia, lack of education, and reimbursement structures in the 

system push powerfully for continued treatment. An urgent need exists for a coordinated, systemwide approach to providing end-of-life care that focuses on quality of 

care for individuals and their families while avoiding extraordinary costs—often for 

unwanted and unnecessary interventions. The United Kingdom issued a ‘‘Strategy 

for End-of-Life Care’’ in July 2007 that could serve as a guide for a U.S. plan. 

Background 

Dying has been viewed as a medical event in American hospitals, a mind-set that 

limits the capacity of the health care system to provide optimum quality of care and 

to contain costs. End-of-life with dignity, however, is a profound spiritual event for 

patients, families, and oftentimes staff. If handled well, the spiritual dimension of 

‘‘une belle mort,’’ a good death, can reduce costs and emotional suffering. 

In addition to the need to provide end of life care that is more responsive 

to patients’ needs and desires, there is an opportunity for significant cost 

savings. Twenty-five percent of the annual Medicare budget of $627 billion is spent 

on care for persons in the last year of life, with 40% of that number spent in the 

last 30 days. Medical care at the end of life consumes 10–12% of the Nation’s total 

health care budget.1 These numbers have not changed significantly over the last 10 

years despite the fact that in-patient, residential and home hospice care services are 

less costly and underutilized—and provide higher quality service. Existing data 

(mainly from the 1980’s) suggest that hospice and advance directives can save between 25 and 40% of health care costs during the last month of life, with savings 

decreasing to 10–17% over the last 6 months of life.2 The Congressional Budget OfVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00070 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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3 ‘‘Redefining and Reforming Health Care for the Last Years of Life,’’ RAND Health Research 

Highlight, 2008. 4 Ibid. 

5 ‘‘The New York Long-Term Care Compact Proposal: Update, Analysis, and Recommendations,’’ Stephen A. Moses, President, Center for Long-Term Care Reform, 2008, p. 2. 6 ‘‘End of Life Issues and Care,’’ Issues of Access and Variability in Health Care at the End 

of Life,’’ http://www.apa.org/pi/eol/access.html. 7 Valente, Sharone, and Bill Haley, ‘‘Culturally Diverse Communities and End of Life Care, 

American Psychological Association. 8 Ibid. 

9 Raphael, Carol, PPA, Joann Ahrens, MPA and Nicole Fowler, MHSA, ‘‘Financing end of life 

care in the USA,’’ Journal of the Royal Society of Medicine, v. 95(9), Sept. 2001. 10 Ibid. 11 Hogan, et. al. 12 End of Life Care Strategy, United Kingdom, July 2008. 

fice forecasts that the cost of long term care will reach $207 billion in 2020 and $346 

billion in 2040.3

Exploding health care costs and unnecessary patient suffering will only 

accelerate with the exponential growth in the population over 65 that will 

live longer, have more chronic diseases, and require more care in their last years.4

People 85 years of age and older—those most likely to need expensive long term 

care—were 1.7% of the U.S. population in 2005 but are expected to grow to 2.2% 

in 2020—an increase of 38% only 11 years from now.5

Poor quality and high end-of-life care costs have many causes, which include: 

• The challenges of dealing with death for health care professionals, who often 

do not know about their patients’ preferences for end-of-life care.6

• Patients and their families not understanding their choices at end-of-life.7

• Focus of medicine on curing disease and viewing death as the enemy or as a 

failure.8

• Most insurance plans do not cover services that are necessary for good quality 

end-of-life care. Traditional health insurance favors high-tech/high-cost services 

and inpatient hospital care.9

• Health coverage is often linked to site of care provided, rather than the person, 

and by time limits not by the amount of service needed.10

• Many dying patients may be better served with comfort care and interventions 

that help families deal with forgiveness, reconciliation, and other topics that 

arise at the end-of-life. 

• Issues around access: Medicare beneficiaries who die in low income areas have 

higher end-of-life costs, are less likely to use hospices, and are more likely to 

die in a hospital than the general population.11

Development of a National Strategy for End-of-Life Care 

It is critical to identify the barriers and incentives to moving larger numbers of 

dying patients, earlier in their disease paths, from acute treatment to comfort care 

into environments that are characterized by sensitivity and respect. Conceptual and 

ethical challenges are inherent in this topic, but research can identify innovative, 

cost-effective solutions in the best interests of patients, State and Federal Governments, and hospitals.12 New thinking is needed about the management of 

death and dying. New frameworks are needed that utilize the most effective intervention points by which to move the health care culture toward 

an approach to end-of-life care in which the whole person is served with 

medical and spiritual tasks better balanced than they are today. 

The national health reform effort needs to include a national strategy for 

end-of-life care. This could be accomplished within 6–12 months with the 

immediate appointment of a National Panel of the leaders in end-of-life 

care to: inventory the challenges and innovative programs nationwide; propose new policy frameworks at the Federal and State level; and propose 

critical demonstration projects. 

Some of the issues to be addressed include: 

• Identifying communication and cultural competency problems that impede the 

ability of health care professionals to communicate effectively with patients and 

their families about death and dying, thereby limiting patients’ abilities to 

make informed choices; 

• Identifying innovative approaches to educating health care professionals about 

death and dying; 


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13 Assisted living offers an option that is half the cost of skilled nursing care and a fraction 

of the cost of acute hospital care. Current regulations in New York State, for example, permit 

assisted living residences that apply for an enhanced assisted living license to care for residents 

through the end of life, bringing in necessary skilled nursing and hospice care. Persons facing 

serious progressive illness and end-of-life want an environment that offers autonomy, independence, and privacy. Assisted living communities are organized so family members can spend time 

with the individual in a non-medicalized but supportive setting, in which basic care (assistance 

with activities of daily living) are provided. This ensures the ‘‘peace of mind’’ that family members need and want without the institutional model of a hospital or nursing home. 

• Documenting issues related to culture, communication, and dying that lead to 

unwanted and unnecessary treatments; 

• Recommending financial incentives to hospitals for discussing advanced directives with every patient and her family (if applicable) and for obtaining signed 

advanced directives; and 

• Authorizing Medicare demonstration programs to provide reimbursement for assisted living programs for persons with serious progressive illness and/or terminal diagnoses to test the hypothesis that this care option might be preferred 

by individuals and be more cost effective than the current pattern of frequent 

hospitalizations and high-tech interventions in the last year of a patient’s life. 

Individuals might choose compassionate care over acute care or skilled nursing 

care; if reimbursement were available (reimbursement might be limited to those 

with annual incomes of less than $100,000).13

HealthCare Chaplaincy is committed to working with other organizations 

that share these goals to assist the Health Reform movement to achieve a 

coordinated, integrated strategy for quality end-of-life care. 

f 

Statement of Clark Newhall, M.D., J.D. 

We don’t have a health care problem. We don’t have a health care crisis. What 

we have is a health care famine. I realized this when a friend told me that she was 

not in favor of universal health insurance. She was opposed to paying for health 

care for all. She has a little boy with cancer. She was afraid that universal health 

care would mean her little boy would not be able to get an appointment with the 

oncologist. ‘‘But all those other children with cancer deserve treatment too don’t 

they?’’ I asked. ‘‘I guess so’’ she grudgingly admitted, ‘‘but I have to worry about 

my little boy.’’ 

Too many other people’s children would be trying to get appointments and treatment. Too many other people would be competing for a scarce resource—the time 

of a doctor. 

It Is a Health Care Famine 

Perhaps you know the story of Jacob, who predicted 7 years of plenty and 7 years 

of famine. When famine came, he was prepared with full granaries. His brothers, 

who had sold him into slavery, begged him for grain for their starving families and 

he gave them grain. We are like Jacob’s brothers in the famine, begging for health 

care. But for us, there is no Jacob. There is only the for-profit medical-industrial 

complex, ‘‘gate-keeping’’ us out of the health care system. 

When too many people are fighting to get the scarce stuff to stay alive, whether 

the scarce stuff is food or health care—that is a famine. 

When those of us who have barely enough are willing to sacrifice those others of 

us who have too little or none at all—that is a famine. 

When our own situation is so desperate that we turn a blind eye to the more desperate situation of others—that is a famine. 

When ‘dog-eat-dog’ surpasses ‘do unto others’ as the Golden Rule—that is a famine. 

A famine never strikes everyone equally. In a famine, the ‘have-nots’ become the 

‘have-nothings’ while the ‘haves’ become the ‘have-barely-enough.’ And as always, 

the wealthy survive, even thrive, even profit, from the shortages that are killing 

others. 

This famine is not new—it has been slowly building for years. 

The price of our privately-run, profit-driven medical-industrial complex has 

caused this famine. About one-third of every dollar going to health care pays for administrative costs—for utilization reviewers, for computer programmers, for advertising, for sales managers, for executives of all kind, for billing clerks, for coding 

clerks, for CEO bonuses in the millions and hundreds of million—and for profits. 


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1 ‘‘Mental health’’ as defined in this paper, includes substance abuse disorders and related conditions. 2 Compendium of Primary Care and Mental Health Integration Across Various Participating 

Federal Agencies, January 2008. www.samhsa.gov/Matrix/MHST/CompendiumlMental%20 

Health.pdf. 3 Institute of Medicine, Improving the Quality of Health Care for Mental and Substance-Use 

Conditions, Committee on Crossing the Quality Chasm: Adaptation to Mental Health and Addictive Disorders, Washington, D.C.: The National Academies Press (2006). 4 NASMHPD, 2006. 

We are not talking about government waste. We are not talking about the cost 

of actually treating the sick and nurturing the healthy. We are talking only about 

the cost of running our profit-making health insurance industry. 

One-third of the health care dollar—that amount is far more than enough to give 

excellent medical care to everyone in the Nation. It is far more than enough to fund 

the (privately-owned) surgical centers and imaging centers and Lasik centers that 

sprout up on every corner. It is even more than the amount we have given to Wall 

Street to bail out financiers and bankers from their hubristic near-demise. 

The famine has grown while insurance companies charge higher premiums and 

reduce coverage, while employers cut their contribution and increase deductibles, 

while legislators reduce Medicaid and CHIP budgets, and on and on. 

We are in a health care famine. Millions of us are suffering and millions more 

will suffer soon. More than 20,000 people die each year in this famine because they 

cannot afford the price of for-profit health insurance. 

The famine will not end until, like Jacob, we open the granaries and give aid to 

the starving. The health care famine will not end until we end the money hoarding 

that health insurance companies call ‘reserves’ and ‘administrative cost’ and ‘profits.’ It will not end until we open our blind eye and see the plight of our neighbor. 

It will not end until we learn that tolerating a profit-making middleman in the 

health care system builds a wall between patient and doctor. It will not end until 

we learn that good things for everyone can only be accomplished by the will of everyone. It will not end until we pay for health care in the same way that we pay 

for everything else that we value highly—our security, our freedom, our laws. It will 

not end until we have a national health care system that covers everyone equally 

and is paid for by everyone equitably. It is time for national single payer health insurance. It is time to remove the profit-making middleman from medical care. It is 

time to see health care for the public good that it is and not for the profitable business it has become. Support Medicare For All. 

f 

Statement of Congressman Patrick J. Kennedy 

The World Health Organization defines health as ‘‘a state of complete physical, 

mental and social well-being, and not merely the absence of disease or infirmity.’’ 

As we reform and re-incentivize our health care system, this must be acknowledged. 

Health care reform must be a whole body initiative, recognizing that mental health 

is integral to overall health, and that optimal overall health cannot be achieved 

without this.1 Integration, as a strategy, is meant to be as broad and over-arching 

as a whole body approach to health care, and as specific as ensuring that new policies, such as health information technology, integrate mental health. The integration of primary care and mental health is a national priority that was not only identified in the recommendations of the New Freedom Commission on Mental Health, 

but is recognized in programs and activities of 11 Federal agencies that have initiatives to integrate services to improve access, services, and outcomes.2

According to the Institute of Medicine, together, mental and substance-use illnesses are the leading cause of combined death and disability for women of all ages 

and for men aged 15–44, and the second highest for all men. When appropriately 

treated, individuals with these conditions can recover and lead satisfying and productive lives. Conversely, when treatment is not provided or is of poor quality, these 

conditions can have serious consequences for individuals, their loved ones, their 

workplaces, and the Nation as a whole.3 Tragically, individuals with serious mental 

illness have a life expectancy of 25 years less than general population.4 In order to 

effectively combat this and create a sustainable health care system which embodies 

the concept of whole body care, the following principles must be incorporated into 

health care reform. 

Primary and coordinated care. Health care reform must make changes to the 

delivery system to provide incentives for models of care which treat the whole person. Health care reform policy should support and encourage practices that fully inVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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5Kessler R.C., Berglund P., Demler O., et al., Lifetime Prevalence and Age-of-Onset Distributions of DSM–IV Disorders in the National Comorbidity Survey Replication, Arch Gen Psychiatry, 2005; 62:593–602. 

tegrate mental health into primary care. All providers, and in particular primary 

care doctors, must be trained and adequately reimbursed, for providing comprehensive and coordinated care—care which approaches health as a whole body initiative. 

Primary care physicians must be given the resources needed to adequately address 

the mental health needs of their patients. Innovations, like medical homes, are 

working to improve quality and contain cost, but the primary care workforce is not 

sufficient to meet the country’s needs. Over the last two decades, fewer medical students are choosing primary care for a number of reasons, including reimbursement 

issues. Payment policies do not adequately compensate doctors for the time it takes 

to coordinate care, provide case management, or address mental health and substance abuse issues in the primary care visit. Specialty providers and other physicians must likewise have training on mental health and substance abuse problems 

and be trained to provide collaborative care and case management, and be reimbursed accordingly. 

Coverage. For the 45.7 million Americans without health insurance (a number 

which has grown due to the recent economic downturn), we must create an affordable, quality health care system in which all Americans are covered. Providing coverage alone, as it exists now, is not a solution unto itself however. The coverage we 

provide for all Americans must include the full spectrum of evidence-based mental 

health care, including both treatment and prevention services. Mental health coverage should not be subject to restrictive or prohibitive limits when formulating coverage determinations on the frequency or duration of treatment, cost-sharing requirements, access to providers and specialists, range of covered services, life-time 

caps, and reimbursement practices. 

Access. The expansion of insurance coverage is not the same as ensuring access. 

Lack of insurance is only one of the many barriers to care for those seeking mental 

health services. Those with coverage also face financial barriers to care due to prohibitive cost sharing requirements, limited access to providers, and denials of coverage for mental health conditions. Once all Americans have health insurance, coverage must provide for access to affordable, high-quality care. Current barriers to 

care within the health insurance system must be eliminated, and mental health coverage must include access to the full spectrum of evidence-based care for both prevention and treatment of mental health conditions. This includes, but is not limited 

to, access to and choice of doctors who approach health as a whole body initiative. 

Standardized rules for payment. Instituting rules for standardized payments, 

as done in Medicare, would save significant time and cost. Many large hospitals 

carry numerous plans, all of which have different rules for payment submission. 

Time spent determining how to process a claim, as well as how much a claim is 

worth, is time that raises the cost of health care, and time that could be spent on 

patient care. 

Clinical necessity. Clinical necessity should be the determinant of patient care. 

All patients have the right to have their medical decisions made by a doctor, rather 

than what an insurer chooses to reimburse. Coverage must include treatment 

deemed clinically necessary to treat symptoms, as well as treatment to prevent more 

serious mental illness, or to prevent relapse. 

Community rating. Replacing underwriting with a ‘‘community rating’’ system 

would set premiums based on age and location instead of the health status of the 

individual. This would bring down the cost of insurance for higher risk populations 

and guard against radical changes in premiums from year to year. Thus, people 

with pre-existing conditions would not be subject to discriminatory premiums, nor 

would females be charged higher premiums than males. 

Transparency. Any denials of coverage must be transparent and subject to a 

meaningful and independent review process. A review process should enable individuals to effectively understand the grounds for denial and include clear direction on 

how to appeal the decision. 

Prevention and wellness. Our current ‘‘sick-care’’ system must be transformed 

into one which is patient-centered, collaborative, and focused on prevention. Coverage and access policies must reflect this. Half of all people with a mental health 

diagnosis first experience it by age 14, but will not receive treatment until age 24.5

Early detection and treatment is essential for ensuring positive health care outcomes. Prevention, especially in behavioral health, is given a mere fraction of the 

attention as treatment. Prevention and wellness programs must also promote and 

incentivize mental health prevention programs as part of an improved approach to 

treating health care as a whole body initiative. This includes promoting and reimVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00074 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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6Marcia Angell, MD. CMAJ • October 21, 2008; 179(9). First published October 6, 2008; 

doi:10.1503/cmaj.081177. 7 Journal of American Medicine, 2007. 

8 A CBS News/New York Times poll published in February 2009 reported that 59% say the 

government should provide national health insurance (up from 40% 30 years earlier). A study 

published in the Annals of Internal Medicine concluded that 59% of physicians ‘‘supported legislation to establish national health insurance’’ while 9% were neutral on the topic, and 32% opposed it. CBS NEWS (Sunday, February 1, 2009). CBS NEWS/NEW YORK TIMES POLL. Press 

release. http://www.cbsnews.com/htdocs/pdf/SunMolpolll0209.pdf. ‘‘Americans are more likely 

today to embrace the idea of the government providing health insurance than they were 30 

years ago.’’ 

Carroll AE, Ackerman RT (April 2008). ‘‘Support for National Health Insurance among U.S. 

Physicians: 5 years later.’’ Ann. Intern. Med. 148(7): 566–7. PMID 18378959. 

bursing for brief interventions and screening and mental health check-ups, along 

with the full integration of mental health into primary care settings. This also includes investments in research aimed at determining effective prevention strategies. 

Health information technology. Health information technology is an essential 

aspect to improving the coordination and quality of health care. As we continue to 

build and advance this aspect of our health care system, it is essential that these 

efforts integrate mental health consumers and providers, and continue to place high 

value on consumer privacy and protection. 

Outcome measures. High-quality health care relies on the implementation of 

evidence-based practices. In order to achieve this, existing behavioral outcome measures must be improved so that the effectiveness of prevention and treatment programs can produce functional standards. Health care reform should require the regular use of standardized, objective, and uniformly applied clinical outcome measures. Outcome measures should also be benchmarked, in an effort to establish best 

practices. 

Workforce development. To effectively achieve full integration of mental health 

into health care, workforce training in mental health is necessary. All health care 

providers must have more inclusive health care training which includes behavioral 

health, including cross-training for co-occurring health conditions. Behavioral health 

must be given fuller weight in medical training, continuing education, and required 

examinations for all medical specialties. Further, in some areas of the country there 

are shortages of mental health providers and some mental health specialties. Federal grant or loan repayment programs that include students of behavioral health 

should continue to be expanded. Graduate Medical Education can also be expanded 

to further support mental health professionals. 

Improved coordination among sectors. In order to achieve optimal health, 

mental health services must be more fully integrated into non-traditional settings 

such as schools, juvenile justice settings, early childhood programs, communitybased programs, housing and welfare programs. 

New post for behavioral health. To achieve full integration of mental health 

into health care reform, a new position may need to be created, either at the White 

House or at a Federal agency, which has as its responsibility the oversight of the 

coordination between behavioral health and overall health care. This position would 

bring with it the expertise and authority necessary to achieve integration and would 

represent the commitment by Congress and the President that optimal mental 

health is essential to achieving optimal overall health. 

Single-payer. In order to truly achieve the above stated principles, we need 

health care reform that addresses the underlying, systemic issues in our current 

system. We are the only industrialized country that treats health care like a market 

commodity instead of a social service. Thus care is not distributed according to medical need but rather according to ability to pay.6 Cost savings cannot be discussed 

without acknowledging that 31 percent of all health care expenditures in the U.S. 

are administrative costs. The average overhead for private insurance in this country 

is 26 percent, compared to 3 percent for Medicare.7 The majority of doctors and 

Americans support a single-payer health care system, yet this option has been dismissed by many policymakers as unrealistic.8 As elected representatives of this 

democratic system, we are responsible for representing the views of the public. 

Therefore, it is imperative that we keep this option in the discussion of health care 

reform. 

f 

Statement of Larry Frazer 

Committee Members, it’s time to take action on behalf of America and its citizens. 


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The Congress has to step up to the plate and provide some leadership for America. The Obama administration is demonstrating its lack of experience and naivete 

in their role in the White House. The stimulus spending is not working, the 

economy is trying to recover but the Federal Government keeps knocking the slates 

out from under it. 

We don’t need more taxes, to support Obama’s health care proposal, in a time 

of economic recession. You don’t take money out of people’s pockets with more taxes 

to satisfy a misguided President’s desire to destroy the health care system for 95% 

of the population for the benefit of only 5% of the population. Yes, that’s right, only 

5% would benefit from Obama’s proposed health care plan while 95% will get higher 

taxes and poorer quality health care. 

Furthermore, Obama’s numbers are fraught with errors and falsehoods. He projected GDP at growth rates higher than has ever been achieved, reduction of his 

massive deficit spending in his current term (based on inflated GDP numbers), 

which the White House Budget Office has already increased projected deficit 

amounts before the ink dries. No other Federal agency outside of White House influence uses such inflated projections for GDP. 

Under his proposals the American taxpayer (that’s you and me by the way) will 

accumulate debts greater than the sum of all Administrations before this one. We 

don’t have the money! 

Obama through his naivete is sending this country down the proverbial river 

without a paddle! 

The CONGRESS must stand up, do the right thing and provide much needed 

national leadership. Stop this runaway spending and don’t raise taxes. Allow the 

economy to recover, and facilitate it don’t hobble it! 

Health care changes may be required but NOBODY has performed an objective 

analysis and assessment of the ‘‘Health Care Process’’ in America to determine what 

the cost drivers are or where the real problems are. I haven’t seen any numbers 

from creditable sources, just hallucinatory shouting from the Administration and 

other noncreditable sources. The Congress must obtain creditable factual information from nonpartisan sources before developing a policy direction. The current and 

apparent Obama policy direction spells disaster for Americans. 

Obama, I guess from his ‘‘community organizer’’ experience, thinks he can look 

at the situation from 30,000 feet and see the problems. I’m sorry, but he does not 

have the knowledge or visibility to determine the problems and solutions. But I am 

sure that he is getting advice from special interest groups/persons who will stand 

to make ‘‘big bucks’’ from Federal intervention. 

The FIRST TENET of a lobbyist, consultant or service ‘‘for hire’’ provider is to 

create (or proclaim) situations (or conditions) to ensure employment opportunities 

regardless of the need or justification. 

The CONGRESS must take the reins and perform an OBJECTIVE analysis to determine the right course of action before taking any action. America’s health care 

system, even with its problems, is the best in the world; DO NOT destroy our health 

care system to appease poor leadership from the White House. There is no manmade 

system on earth that cannot stand improvements from constructive justifiable 

changes. 

Be vigilant and frugal with MY money; stop allowing it to be thrown away. 

We have some far bigger problems looming, look at Social Security (which 

begins paying out more than it takes in by 2016 and will be bankrupt by 2037) and 

Medicare (will pay out more than it takes in this year, 2009, and begin drawing 

down trust fund assets). (Ref: http://www.ssa.gov/OACT/TRSUM/index.html). If 

Congress doesn’t take some action here we won’t have just 5% of the population 

with problems you’ll have 20% of the population with problems. 

f 

Los Angeles County Department of Mental Health 

May 6, 2009 

Hon. Charles Rangel, Chairman 

Committee on Ways and Means 

Dear Chairman Rangel and Committee Members: 

As the Director of Los Angeles County Department of Mental Health, I wanted 

to express concern and interest as progress toward health care reform continues. 

Los Angeles County Department of Mental Health is the largest public mental 

health service provider in the Nation and we serve a multi-ethnic population with 

a myriad of needs. In California, as in 70% of the jurisdictions nationwide, health 


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care services are provided by county government. We believe and our experience has 

shown that individuals present with a complex set of interrelated needs; we are very 

certain that there can be no real health care reform without the inclusion of mental 

health in this discussion and planning effort. 

We in California believe that it is important to adopt certain basic core principles 

for any health care reform plan. The principles are: 

(1) Good health care is holistic and integrated in that it is inclusive of all facets 

of the individual’s well-being. There is no health without mental health. 

Physical and mental health care issues are integrally linked and must 

be treated in an integrated fashion. 

(2) The lack of a cohesive Federal health care policy has led to an inefficient and 

costly method of health care delivery in the U.S. that is crisis driven. Prevention and early intervention are key components to a cost effective 

health care delivery system. 

(3) Equal access for all U.S. citizens and residents remains an unresolved issue. 

Individuals who do not have private insurance or who have insurance with 

limited coverage continue to present in emergency rooms throughout the country for treatment. These people do not get early, non-emergency treatment but 

rather present in the emergency rooms for treatment that is much more costly. Standard coverage for U.S. citizens and residents alike will result 

in long term savings as the emphasis of the health care system moves 

from crisis or emergency intervention to the less costly prevention 

and early intervention model. 

(4) Our fragmented, ‘‘de facto’’ health care delivery system results, at best, in duplication of multiple services and wasted resources as individuals are pushed 

from one provider to another to have health care needs met. In the worst case, 

it results in confusion and in a lack of compliance for many people with disabilities as the system is too complex and difficult for them to navigate without assistance. Individuals with mental illness die on average 25 years 

earlier than individuals that do not have mental illness. Simplify the 

system with (a) full service provider sites that can deliver multiple 

appointments on the same day and (b) give each individual a ‘‘medical 

home’’ or case manager to assist with followup for improved results. 

(5) There is an increasing body of evidence as to what treatments and services 

produce the best outcomes for treatment of mental illness. Health care payment and finance programs should be revamped to support evidencebased treatments. Documentation, recordkeeping, billing submission 

and payment of claims processes should be simplified. Audit processes 

should be combined and simplified. 

(6) The mechanism for record sharing and information sharing should be less 

cumbersome between health and mental health agencies. Treatment would be 

improved with collaboration and there would be cost efficiencies. Implement 

the electronic health record with inclusion of health and mental 

health information so it can be shared by all county agencies involved 

in providing health care services. 

In Los Angeles County, we have identified our 250 highest cost users of health 

and mental health services and have found that we can, in fact, coordinate services 

and control costs with good case management services. We have implemented numerous programs here locally with integrated physical health care and mental 

health care services with great success. Our Skid Row Project 50 has saved more 

public funding that the actual project cost in 1 year. We would love to share our 

experience with the Committee. 

Respectfully, 

Marvin J. Southard, D.S.W. 

f 

Director of Mental Health 

Statement of Patricia Ryan, MPA 

Executive Director, California Mental Health Directors Association 

Health Reform in the 21st Century 

Thank you for the opportunity to offer to this Committee the perspective of California’s county mental health/behavioral health directors on health care reform. 


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My name is Patricia Ryan, and I am the Executive Director of the California Mental Health Directors Association (CMHDA), which represents all 58 county (and two 

city) mental health and/or behavioral health directors. CMHDA’s mission is ‘‘to ensure the accessibility of quality, cost-effective, culturally competent mental health 

care for the people of the State of California, and to provide the leadership, advocacy 

and support to county and city mental health programs for quality care necessary 

to meet our vision and values for the public mental health system.’’ The core principle underlying all of the work we do is to advocate for social justice and the needs 

of persons with mental illness in California, especially those who are served or in 

need of services by the public mental health system. 

I am also a member of the Board of Directors of the National Association of County Behavioral Health and Developmental Disability Directors (NACBHDD). As such, 

this testimony also reflects many of the principles adopted by NACBHDD related 

to national health care reform. 

Counties in California are responsible for managing the public community-based 

system, including the Medi-Cal (Medicaid) Specialty Mental Health Managed Care 

program. Collectively, counties manage a system that totals over $4 billion Statewide (including State, county and Federal revenues). 

County governments are an integral part of America’s current health system, and 

in many ways are leaders in determining what is most effective in addressing the 

diverse health and mental health care needs of our communities. 

Below is CMHDA’s perspective on the importance of ensuring recovery-oriented, 

person centered, culturally competent services for individuals with mental illness 

and substance use disorders in any health care reform proposal. How we handle 

these issues in the context of health care reform is critical to our ultimate success, 

and to the optimum health of our communities. 

Behavioral Health Care is Essential to Health Care Reform 

CMHDA endorses the Campaign for Mental Health Reform’s ‘‘recognition that 

there can be no health without mental health, that prevention of and recovery from 

many health care conditions rests on mental wellness in each individual.’’ (William 

Emmet, Director, Campaign for Mental Health Reform, September 10, 2008). 

As health care reform evolves in Washington, DC, across the Nation and in individual States, it is critical to focus on enhancing and preserving systems of care that 

serve people with mental illnesses and substance use disorders. Any discussion of 

health care reform must include the importance of access to and coverage of recovery-oriented, person centered, culturally competent services for individuals with 

mental illness and substance use disorders. We must ensure the integration of behavioral health services as a fundamental component of any comprehensive reform 

plan that is developed, enacted, and implemented. 

Behavioral health issues must be addressed because it makes no policy or fiscal 

sense NOT to. Consider that: 

• One in four adult Americans has a mental disorder, substance use disorder, or 

both. 

• Mental illness is the leading cause of disability in North America for people between the ages of 15 and 44. The burden of disease from mental health disorders exceeds those from any other health condition. 

• Adults with serious mental illness die, on average, 25 years sooner than those 

who do not have mental illness due to a lack of primary care for physical conditions such as heart disease, pulmonary diseases, high blood pressure, diabetes 

and other conditions. 

• In 2005 alone over 32,000 individuals in this country took their own lives. Suicide was the third leading cause of death for young people aged 10–24 in 2004. 

According to the World Health Organization, mental illnesses, including alcohol 

and drug abuse, have the greatest negative impact on society in terms of lost 

days of healthy productive life, of any disease, accounting for 21% of the total. 

• Almost one in four stays in U.S. community hospitals involves depression, bipolar disorder, schizophrenia or other mental health and substance use disorders. 

• Treatment for mental health and substance use disorders is effective. 

Recovery rates for mental illness are comparable to and even surpass 

the treatment success rates for many physical health conditions. Relapse 

rates for drug/alcohol treatment are less, and compliance is higher, 

than those for hypertension and asthma; they are equal to diabetes relapse and compliance rates. 

Coverage Does Not Guarantee Access 

Adults with serious mental illness are a medically vulnerable population. Many 

will not access needed physical health services or comply with medical treatment 


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without significant support. Any health care reform plan must recognize the need 

for specialized mental health and social services—including case management—to 

enable this population to benefit from health care coverage and eliminate the disparities in health outcomes for those with serious mental illness. 

Further, while we applaud the recent enactment of mental health parity laws at 

the Federal level, we must also ensure that private health plans include coverage 

for the types of person-centered recovery and resiliency-oriented behavioral health 

services that work, and that they provide access to those services. In California, 

which adopted a mental health parity law approximately 9 years ago, health plans 

have found many ways to make it difficult for their beneficiaries to access needed 

care. Individuals with severe mental illnesses must have access to the range of rehabilitation services that enable them to function. As with other chronic ailments 

such as asthma or diabetes, they may require lifelong management; but those who 

have these disorders can live full, healthy, and productive lives in the community 

with the proper support. Coordination between private health plans and public mental health sector services should also be encouraged for this group. 

System Accountability and Outcomes 

A reformed health care system should be informed by those who are being served, 

and be accountable based on measurable outcomes. Establishing a consensus of specific and measurable criteria as to what constitutes positive outcomes is an essential 

element of a reformed U.S. health system. 

Prevention and Wellness Strategies Are Essential 

Health care reform must include a public health effort to identify health risks and 

prevention strategies that address the emotional, psychological, and neurological development and wellness of all, and to inform and educate the public about these 

strategies. 

In California we are finally beginning to make prevention in the area of behavioral health care a reality with funding from our voter-approved Mental Health 

Services Act (Proposition 63, enacted November, 2004). The theory behind the Act 

is that we must move from a ‘‘fail first’’ system for those with serious behavioral 

health disorders, to one that recognizes and addresses the early signs of potentially 

severe and disabling mental illnesses. The Mental Health Services Act (MHSA) combines prevention services with a full range of integrated services to treat the whole 

person, with the goal of self-sufficiency for those who may have otherwise faced 

homelessness or dependence on the State for years to come. We are already beginning to see phenomenal results. For example, in Los Angeles County, nearly 40,000 

individuals living with mental illness have been served through the MHSA. In one 

program alone, individuals on Skid Row served by MHSA-funds showed an 83% decrease in homelessness, a 40% decrease in jail time, and a significant decrease in 

hospitalizations. 

Integration of Behavioral Health and Physical Health Services is Critical 

To be successful, health care reform must ensure that individuals have access to 

both physical health and behavioral health care services. Strategies for integration 

should be based on principles that recognize and embrace a person-centered approach; family involvement; cultural competency; evidence-based/practice-based approach; and multi-systemic frameworks. 

Specifically, CMHDA believes health care reform should: 

• Address and enhance access to care that embraces a holistic approach to care, 

centered on the person’s strengths and integrates care which is person directed. 

• Incorporate behavioral health care screenings, assessment, and treatment in 

physical health care settings through collaboration with behavioral health providers, for children, adults and older adults. 

• Incorporate access to physical health care services in behavioral health settings 

to help address the 25 year lifespan deficit for individuals with serious and 

chronic mental illness and/or substance use disorders who would be at risk for 

increased morbidity and mortality due to an inability to access physical care. 

• Prioritize and recognize the provision of physical health services; oral health 

services; and behavioral health services in school settings for children and adolescents. 

• Assure parity in benefits and coverage provisions for diagnostic categories of behavioral health services in order to eliminate disparities in care. 

• Support adequate reimbursements for delivery of behavioral health services 

that take into account the locus of delivery, recognition of evidence-based practice, intensity of care, and level of provider. 


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• Recognize publicly funded behavioral health organizations as eligible ‘‘safety 

net’’ providers and ‘‘medical homes’’ with pathways to primary and specialty 

care. • Provide the social services and supports that encourage recovery and resiliency, 

especially for persons with severe or chronic psychiatric disabilities and substance use disorders/addictions. • Address the workforce shortages of psychiatric specialty providers and specially 

trained behavioral health staff. 

Recovery Principles Are Essential 

Recovery principles must guide any behavioral health services reform. The fundamental principles of a recovery-based service system—including self-direction, individualization, strengths-based approach, peer support and hope—have proven necessary to achieving mental health recovery. The Federal Substance Abuse and Mental Health Services Administration’s (SAMHSA) 2006 consensus statement on mental health recovery is as essential a guide today as it was then: ‘‘Recovery must be 

the common, recognized outcome of the services we support.’’ (SAMHSA Administrator Charles G. Currie, 2006). 

Cultural Competency 

A culturally and linguistically competent service system is essential in order to 

eliminate disparities in access, and in the quality of services for all members of the 

community. The design, implementation and evaluation of programs that are responsive to the cultural and social contexts of all individuals are critical to the 

achievement of system reform, and to promote recovery of individuals with behavioral health disorders. 

Mental Health Workforce Development 

Vitally important to the success of any comprehensive health care reform is assuring that an adequately trained workforce is available to deliver the necessary range 

of services. A shortage of qualified mental health clinicians is prevalent across the 

Nation, and constitutes a serious barrier to the expansion, enhancement and/or improvement of the existing mental health service delivery infrastructure. It will also 

impede implementation of reform proposals no matter how well designed. Attention 

must be given to finding ways to develop a workforce reflective of the cultural and 

linguistic diversity of our communities, and to equip these mental health clinicians 

with skills that incorporate the principles of recovery and cultural and linguistic 

competency into their everyday practice. Schools of higher education need to update 

their curricula to emphasize recovery and cultural and linguistic competence principles and models, and experienced clinicians should be offered continuing education 

credits for receiving training in these recovery principles and treatment approaches 

that may not have been part of their education. 

Health Information Technology (HIT) Must Include Behavioral Health 

The accurate capturing of health information is critical. Our reformed health system must build on the increasing availability of health information technology (HIT) 

to provide a system of electronic health records (EHRs) that is universally available, 

affordable, accessible to large and small providers nationwide, and provides for capturing both physical and behavioral health information. EHRs allow the sharing of 

information across providers and facilitate care coordination, while also enabling national and regional data collection to monitor and measure access to and cost effectiveness of care. To maximize the value of these tools, we need to adopt a uniform 

language and format, and ensure that consumers retain control and ownership of 

their health data. 

Summary and Future Hopes 

In summary, CMHDA believes that any universal health care system must be an 

integrated system of prevention, assessment, early intervention, treatment, wraparound services, care management and long-term supports. Beginning with prenatal 

care and ending with improved end-of-life care, the new system must be person-centered, providing the mix of physical and behavioral health care services each consumer requires. Silos between physical health care and behavioral health care must 

be eliminated; both types of care must be available to consumers whether their 

‘‘medical home’’ is a physical care setting or a behavioral health care setting. Electronic health records and other health information technology (HIT) innovations 

must be included, in order to facilitate care coordination, reduce errors and lower 

costs. 

Financing for the new system should be shared among Federal, State and local 

governments along with significantly improved third-party private sector reimburseVerDate Nov 24 2008 07:58 Jan 11, 2011 Jkt 052442 PO 00000 Frm 00080 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\52442.XXX APPS06 PsN: 52442

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ments and services. Public behavioral health systems must be designed at the local 

level, tailored to the geographic, demographic, ethnic and cultural needs of the service population. Multiple Federal funding streams should be available to support 

local systems of care, but be braided in a manner that allows reimbursements for 

clinical care, social services, supportive housing, supported employment, job training, transportation subsidies and other essential services. 

If we can accomplish all of this, we see a future where individuals with mental 

illness and substance use disorders are able to live and work in their communities 

with proper supports; and where jails, prisons, skilled nursing facilities and hospitals are no longer inappropriately housing persons with serious mental illness and 

addictive disorders because they will be able to access and afford the care they need 

to move to recovery and live productive, rewarding lives. 

Æ 


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