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61–687—PDF 2008

S. HRG. 110–1083

HIGH HEALTH CARE COSTS:

A STATE PERSPECTIVE

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

(MISSOULA, MT)

OCTOBER 21, 2008

(

Printed for the use of the Committee on Finance

COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

JOHN E. SUNUNU, New Hampshire

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)

(III)

C O N T E N T S

OPENING STATEMENT

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

WITNESSES

Collins, Sara, Ph.D., assistant vice president, Program for the Future of

Health Insurance, The Commonwealth Fund, New York, NY ......................... 5

Fee, Jeff, M.B.A., president and chief executive officer, St. Patrick Hospital

and Health Sciences Center, Missoula, MT ....................................................... 7

Olson, Fred, M.D., chief medical officer, Blue Cross Blue Shield of Montana,

Helena, MT ........................................................................................................... 9

Bjelland, Leif, owner, Le Petit Outre, Missoula, MT ............................................ 11

Foster, Julie, cosmetologist, Missoula, MT ............................................................ 12

Williams, Hon. Pat, former U.S. Congressman, Missoula, MT ............................ 20

Fountain, Palm, health care professional, Missoula, MT ..................................... 22

Bower, Marietta, board member, Montana Comprehensive Health Association,

Polson, MT ............................................................................................................ 23

Roberts, Dr. Tom, administrator, Western Montana Clinic, Missoula, MT ........ 24

Orott, Ray, independent contractor, Missoula, MT ............................................... 25

Newman, Dr. Jan, fellow, American College of Surgeons and American Board

of Holistic Medicine, Missoula, MT .................................................................... 25

Olson, Dr. Byron, retired physician, Missoula, MT .............................................. 26

James, Sheila, Medicare and Medicaid recipient, Missoula, MT ......................... 28

Murphy, Dr. Anne, general internist, St. Patrick Hospital and Health Sciences Center, Missoula, MT ................................................................................ 28

Lacroy, Bill, organizer, Montana Human Rights Network, Missoula, MT ......... 29

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

Opening statement ........................................................................................... 1

Bjelland, Leif:

Testimony .......................................................................................................... 11

Prepared statement .......................................................................................... 31

Bower, Marietta:

Testimony .......................................................................................................... 23

Collins, Sara, Ph.D.:

Testimony .......................................................................................................... 5

Prepared statement with attachment ............................................................. 33

Fee, Jeff, M.B.A.:

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 66

Foster, Julie:

Testimony .......................................................................................................... 12

Prepared statement .......................................................................................... 70

Fountain, Palm:

Testimony .......................................................................................................... 22

James, Sheila:

Testimony .......................................................................................................... 28

Lacroy, Bill:

Testimony .......................................................................................................... 29

Murphy, Dr. Anne:

Testimony .......................................................................................................... 28

Page

IV

Newman, Dr. Jan:

Testimony .......................................................................................................... 25

Olson, Dr. Byron:

Testimony .......................................................................................................... 26

Olson, Fred, M.D.:

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 72

Orott, Ray:

Testimony .......................................................................................................... 25

Roberts, Dr. Tom:

Testimony .......................................................................................................... 24

Williams, Hon. Pat:

Testimony .......................................................................................................... 20

COMMUNICATIONS

Brothers, David ........................................................................................................ 79

Chadwick, Karen Kelly ........................................................................................... 80

Copple, Caitlin ......................................................................................................... 81

Grimes, Mark ........................................................................................................... 82

Henry, Hon. Teresa K. ............................................................................................ 84

Hisel, Matt ............................................................................................................... 85

Kuennen, Anita ........................................................................................................ 86

Moody, Molly ............................................................................................................ 90

Newman, Dr. Jan B. ................................................................................................ 91

Planned Parenthood of Montana ............................................................................ 94

Roy, Michelle ............................................................................................................ 103

Sarnecki, Megan ...................................................................................................... 104

Sobieszczyk, Dr. Teresa ........................................................................................... 106

Stevick, Ashley ......................................................................................................... 115

Visser, Dirk C. ......................................................................................................... 116

(1)

HIGH HEALTH CARE COSTS:

A STATE PERSPECTIVE

TUESDAY, OCTOBER 21, 2008

U.S. SENATE,

COMMITTEE ON FINANCE,

Missoula, MT.

The hearing was convened, pursuant to notice, at 11:05 a.m., in

conference room #1, St. Patrick Hospital and Health Sciences Center, Missoula, MT, Hon. Max Baucus (chairman of the committee)

presiding.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. Okay. We are going to come to order. I am very

pleased to convene this Senate Finance Committee hearing here in

Missoula. We in the Finance Committee have held a series of hearings on health care reform in Washington, DC. This is the first

hearing not in Washington, DC, and I am very pleased that the

first hearing not in Washington, DC is here in Missoula, MT. It is

very important to me that health care reform legislation have a

very strong Montana component. Often I think people in Washington, DC tend to forget rural America, partly because they do not

spend a lot of time in rural America, and it is very important for

us, our parts of the country, to remind Washington how we operate. Sometimes we are the same as people in urban areas, but

sometimes not, and it is very important that that difference not be

forgotten.

In that vein, I have had a series of what I call listening sessions

all across Montana on health care reform. There will be a dozen

of them in the month of October. They are not full-fledged Finance

Committee hearings, but they are an opportunity for me to have

a panel of experts in each different Montana city, whether it is Helena, Billings, or wherever, and then take questions from the audience. So in many respects, they are very similar to the formal Finance Committee hearing that we are having here today, but the

main point I want to make is we are going to make sure we have

a good strong Montana component in the health care reform.

I am going to begin today with a story of a woman named Terri.

Terri is 48 years old and lives in Montana. She started a new job

in January. Before she was eligible for health insurance at her job,

that is, before she was eligible as an employee, the owners of the

company decided to drop their coverage, that is, to drop health insurance. Soon after, Terri was diagnosed with ovarian cancer. She

2

had emergency surgery, now she must undergo chemotherapy

treatments, which she has no idea how she will pay for.

In Montana, like many States, insurance companies can choose

not to insure people with certain medical risks. Because of that

practice, insurance companies would most likely deny Terri private

insurance. In theory, Terri could get insurance through Montana’s

high-risk pool, but the costs would still be too high for Terri to afford. As her chemotherapy is set to begin, Terri may still have access to care, but she is worried about being able to get treatment

in the future, and she is worried about how to pay for it.

Today we will hear the story of another Montanan, Julie Foster.

Julie does not have access to the health care that she needs. Sadly,

Terri’s and Julie’s stories are all too common here at home and

across the country. America now spends more than $2 trillion a year on health care, more than $2 trillion a year. That is about half private and half

public. That averages out to over $7,000 per person. We in America

spend over $7,000 per person on health care.

In 2006, national health expenditures rose at a rate of nearly 7

percent. That is more than 2 times the rate of growth of the economy; 2 times the rate of growth of the economy. The average annual cost of family coverage in employer-based health plans was

$12,600 in 2008. That is just under the yearly salary of a full-time

worker earning the minimum wage. This means that families are

spending higher percentages of their earnings on health care costs

without getting much in return.

Those hit hardest by rising health care costs are individuals and

small businesses. High and rising health care costs have affected

the ability of businesses to continue to afford coverage. Small businesses, in particular, report that rising premiums are forcing them

to drop health coverage.

According to a Kaiser Family Foundation survey, in the past 8

years, the percentage of employers offering health insurance declined from 69 percent to 60 percent. That is right. Declined. The

percentage of employers offering health insurance actually declined

from 69 percent to 60 percent. This trend is leaving more and more

people uninsured, and it is leaving more and more people worried

about where and how they can receive care.

In Montana, only 40 percent of businesses with 10 or fewer employees offers health insurance to their employees. Of the Montana

businesses that do not offer health insurance, that is, if you take

all Montana businesses that do not offer health insurance, 81 percent cited high premiums as the major reason.

Today we will hear from Leif Bjelland, the owner of Le Petit

Outre in Missoula. His testimony provides a firsthand account of

how rising health care costs are affecting small businesses here at

home. Both employers and employees are feeling the strain of these

costs. When businesses begin limiting benefits or cutting them out

altogether, Montana families and individuals suffer.

Today you will hear also from Dr. Sara Collins with The Commonwealth Fund about the difficulties that adults face finding affordable health insurance.

In Montana, during the last 7 years, health care premiums for

families increased by almost 89 percent. That is a rate that was

3

51⁄2 times greater than the increase in wages. Premiums increased

51⁄2 times more than increases in wages. Not just health care premiums. That does not include out-of-pocket costs, which means the

disparity could be even greater. Such high costs often force individuals to go uninsured for periods of time, and that puts them at risk

of unaffordable, out-of-pocket expenses if they get sick.

According to The Commonwealth Fund, in 2007 nearly twothirds of U.S. adults under 65, two-thirds of U.S. adults under 65

reported putting off getting needed care. Why? Because of problems

with medical bills or debt. And sadly, health care spending and

medical bills play a role in half of household bankruptcy cases in

America; half. Julie Foster will tell you today about her experience.

We can do better. We can increase the number of Americans who

have health coverage. We can lower the cost of insurance to help

both employers and employees, and we can improve the quality of

care to help everyone lead longer and happier and more productive

lives. We can make American businesses of all sizes more competitive by helping them to provide health care coverage to their employees.

As a Nation, the U.S. spends almost 50 percent more per person

in health care than any other developed country. We spend more

than 50 percent per person in America on health care than any

other developed country. The other figure is, we spend 16 percent

of our GDP—gross domestic product—on health care. Japan spends

8, Germany and France spend about 11 percent. That is, we spend

twice as much as a percent of GDP on health care than Japan and

50 percent more than Germany or France. Despite all this, the

United States ranks last out of 19 countries in preventable deaths,

according to a recent Commonwealth Fund study. We are 19th out

of 19 in preventable deaths. That is just one criterion. There are

lots of other criteria that measure the United States with other

countries in terms of the quality of health care and outcomes of

health care, and this is just one. There are many others that have

virtually the same results. Namely, we stack up in America about

17th to 19th. Not number 1, even though we spend so much more

per person on health care.

Reform must lead to improved quality and decreased costs. We

must get better health outcomes for the money we spend. America

simply cannot sustain its current rate of growth in health care

spending over the long run. We must find ways to cut health insurance costs, because otherwise, health spending will consume, sooner or later, most of our economy.

Our current system leaves too many people without health insurance. Nationwide, 46 million Americans lack health insurance completely and another 25 million are underinsured. We sometimes

talk about those who do not have coverage, some 46 million. We

sometimes forget to also mention those who have poor coverage,

the underinsured, who number 25 million. So that means, if you

add the two together, about 71 million Americans either have no

health insurance or they have very poor health insurance. In Montana, 160,000 people do not have health insurance and 37,000 of

them are uninsured kids.

More than half of Montana’s uninsured work full time for small

businesses. Let me say that again. More than half of Montana’s unVerDate 11-MAY-2000 14:26 Oct 27, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 61687.000 TIMD PsN: TIMD
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insured persons work full time for small businesses. This is more

proof that our system does not work. Small businesses find it difficult to offer insurance, and workers are left exposed. Our current

system is in need of reform.

Today we have a panel well suited to provide both expert and

firsthand knowledge of these issues. I must say it is very difficult

to choose from so many willing and interested Montanans for today’s panel. An awful lot of you wanted to be on the panel today.

It was very, very difficult. Basically it was first-come, first-served,

but I just thank everybody for their deep interest. I am sorry we

could not accommodate everybody. Our witnesses here today,

though, will help us understand the effects of high health care

costs on employers, employees, health care providers, and families

alike. Their diverse perspectives will help us to focus reform so

that we reach our goal of having affordable, high-quality health

care for all Montanans and Americans.

I would like now to show you my basic goal.

The first is a goal of universal coverage. I believe that we should

have—that every American should have health insurance. That is

what I mean by universal coverage. Everybody should have health

insurance, and I think that there are various ways to get there. I

do not advocate a single-payer system. We in America have to have

our own unique American solution, probably a combination of public and private coverage so that every American has health insurance.

The second principle is sharing the burden. Neither the

employer-based system nor the individual market can fulfill the demand for affordable, portable quality coverage on its own.

The third principle is improving quality and controlling costs,

and a little later we will get into why our system is so costly. One

thing is, we have such a high percentage of our health care bills

attributable to administrative costs. Our pharmaceuticals are expensive, and we have overutilization. There are a lot of reasons

why we spend so much in America compared to other countries,

and a lot of it is wasteful and inefficient. We have to get to the bottom of it if we are going to solve this thing in any serious way, and

clearly address quality.

Quality in America is uneven. We have great quality in some respects—we have great drugs, great doctors, great hospitals—but

still the quality of care—partly because of our reimbursement system, other reasons as well—is uneven, and that has to be addressed.

The fourth principle is prevention. American health care tends to

focus on sickness. Instead we should devote more time to prevention and focus on care coordination. Not just obesity and tobacco

cessation and alcoholism, but it is also care coordination and a little more reimbursement to thinking and a little less reimbursement comparatively to procedures.

The fifth principle is shared responsibility. I think employers, individuals and governments all bear responsibility and all should

contribute to reform.

So let us now hear from our panel. I would like to welcome our

witnesses. First we will hear from Dr. Sara Collins, who is the assistant vice president with the Program for the Future of Health

5

Insurance at The Commonwealth Fund. The second witness is—

you all know him here in Missoula—Mr. Jeff Fee, the president

and CEO of St. Patrick Hospital and Health Sciences Center. The

third witness is Dr. Fred Olson, chief medical officer for Blue Cross

Blue Shield of Montana. The fourth witness is Leif Bjelland, owner

of Le Petit Outre here in town. I worked for Leif 1 day; he is a good

employer. Finally we will hear from Ms. Julie Foster, who is a cosmetologist here in town and cannot afford health insurance.

I must remind all the witnesses, the standard rule of these committee hearings is you have 5 minutes to speak. Your full statements will be included in the record. If you feel compelled to speak

more than 5 minutes, you know, we will give you a little room

there, but whatever works works, and we will just kind of play it

by ear here. So we will start first with you, Dr. Collins.

STATEMENT OF SARA COLLINS, Ph.D., ASSISTANT VICE PRESIDENT, PROGRAM FOR THE FUTURE OF HEALTH INSURANCE,

THE COMMONWEALTH FUND, NEW YORK, NY

Dr. COLLINS. Thank you. Thank you very much, Mr. Chairman,

for this invitation to testify on high health care costs and the implications for U.S. families, and thank you for the invitation to come

out to this beautiful part of the country today.

The soaring costs of health care and stagnant incomes are leaving many working families without insurance or with medical expenses that consume a large share of their budgets. An analysis of

The Commonwealth Fund Biennial Health Insurance Survey found

that nearly two-thirds of working-age adults either were uninsured

for a time during 2007, had such high out-of-pocket costs relative

to their incomes that they were underinsured, reported a problem

paying medical bills, or did not get needed health care because of

costs. Over the past 7 years, these problems have spread up the income scale. The Nation now faces a potentially severe economic

downturn that could have potent financial implications for lowerand middle-income families, those most at risk of being uninsured

or underinsured. There is now an urgent need for a national solution that will provide families with affordable coverage options to

ensure access to timely health care and provide protection against

catastrophic financial losses.

As Senator Baucus said, in 2006, national health expenditures

increased at a rate of nearly 7 percent per year. Again, more than

2 times the rate of growth in the economy. Premiums are growing

more than twice the rate of wages and price inflation. Again, the

average premium in employer health plans is $12,700, more than

the average yearly earnings of a full-time worker earning the minimum wage.

Employer coverage remains the predominant form of health insurance for U.S. families. Ninety-nine percent of companies with

200 or more employees offer health benefits, but rising premiums,

as Senator Baucus said, have weakened the ability of small firms

to offer insurance. Just 49 percent of employers with fewer than 10

employees offered health insurance in 2008. This is down from 57

percent in 2000. Employers have also tried to hold down their premiums by increasing employee cost sharing. In-network deductibles

6

have tripled since 2000, and they have quadrupled for small businesses.

Rising health care costs over the past decade have occurred as

family incomes have barely budged. This means that increasing

numbers of Americans are spending large shares of their income on

health care. It also means that the number of people without

health insurance has surged, rising to 46 million in 2007. In addition, as Senator Baucus said, in 2007 an estimated 25 million

adults were underinsured. This is up from 16 million in 2003.

The share of adults under age 65 with problems getting needed

health care because of costs rose from 29 percent to 45 percent between 2001 and 2007. Cost-related problems in getting needed care

rose across all income groups with adults and low- and moderateincome families reporting the highest rates.

Among adults with chronic health problems, more than 60 percent of those who were uninsured, and nearly half of those who are

underinsured reported skimping on their medications for their

chronic illness because of cost. Forty-one percent of working-age

adults or about 72 million people reported problems paying their

medical bills or paying off accrued medical debt over the past year.

This is up from 34 percent or 58 million people in 2005.

Three-quarters of adults who reported a problem with medical

bills said that they had not pursued needed health care because of

costs. This is compared with a quarter of people who did not report

problems with their medical bills.

The public is voicing a strong desire for relief from rising health

care costs. In a recent Commonwealth Fund survey, 80 percent of

adults said that the health care system is in need of a major overhaul or fundamental reform. A strong majority of adults across political parties said that it will be important for the next president

to improve the quality of health care, ensure that insurance and

health care are affordable, and reduce the number of people who

are uninsured.

The Commonwealth Fund Commission on a High Performance

Health System has identified key strategies for moving the health

care system to a higher level of performance. They include extending affordable health insurance to everyone; aligning incentives to

reward high quality and efficient care; organizing the health system to achieve accountable and coordinated care; and investing in

public reporting, evidence-based medicine, information technology,

and the infrastructure needed to deliver the best care.

In terms of health insurance reform, it will be critical that benefits cover essential services with financial protection, and premiums, deductibles, and out-of-pocket costs are affordable relative

to family income. Health risks should be broadly pooled. It should

be simple to administer; coverage should be automatic, stable, and

seamless; and financing should be adequate, fair, and shared

across stakeholders.

Universal coverage must be pursued, along with strategies

geared to improving quality and efficiency and reducing the growth

in health care costs. A recent report by The Commonwealth Fund,

‘‘Bending the Curve,’’ examined the impact on health care costs of

several strategies to improve quality and efficiency, including increasing the use of health information technology, comparative efVerDate 11-MAY-2000 14:26 Oct 27, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 61687.000 TIMD PsN: TIMD
7

fectiveness evidence, promoting better health and disease prevention, aligning incentives to improve quality and efficiency, and correcting price signals in health care markets. Potential health system savings from these strategies ranged from $9 billion to $368

billion over 10 years. Thank you.

The CHAIRMAN. Thank you very much, Dr. Collins. That was very

informative. Thank you very, very much.

[The prepared statement of Dr. Collins appears in the appendix.]

The CHAIRMAN. Mr. Fee?

STATEMENT OF JEFF FEE, M.B.A., PRESIDENT AND CHIEF EXECUTIVE OFFICER, ST. PATRICK HOSPITAL AND HEALTH

SCIENCES CENTER, MISSOULA, MT

Mr. FEE. Very good. Good morning, Chairman Baucus. Again, I

am Jeff Fee, president and CEO of St. Patrick here in western

Montana. Founded in 1873, St. Patrick Hospital is the largest community hospital in western Montana and is part of Providence

Health and Services, a Catholic not-for-profit health system serving

communities across Montana, Washington, Oregon, Alaska, and

California. Our system includes hospitals, long-term care facilities,

nursing homes, physician groups, and a health plan.

On behalf of St. Patrick and Providence Health and Services, we

welcome you here to St. Pat’s and appreciate the opportunity to

testify this morning on the high cost of health care.

Our perspective this morning is really from a provider’s perspective, and I think it is important to note early on that what we see

as a primary problem on this particular issue and some of the solutions that we are proposing financially jeopardize hospitals in our

current state. It is a risky proposition for us, but we believe it is

the right thing. We believe, however, that hospitals should play a

different role in ideal future states, and as such, are not suggesting

solutions that perpetuate and or protect the hospital and/or health

care industry as we know it today.

As you know and as you stated earlier, the high cost of health

care is a complex, multi-faceted problem facing Americans today.

Pharma, device manufacturers, high-cost technology, litigation, specialty hospitals, malpractice, unfunded mandates, cost shifting, I

could go on, all these contribute significantly to the high cost of

health care and are in large part symptoms of the larger issue.

That issue is horribly dysfunctional structural incentives that have

been built into our health care system over the past several decades. Our system is focused not on improving the health of our people in our communities. Rather, it is oriented towards sick care and

the notion that problems can simply be solved by doing more medical services and procedures. Physician payment, driven by the

Medicare fee schedule and reinforced by the private insurance system, encourages overutilization of high-cost procedures over basic

care management. Hospital payment structures encourage increasing the volume of high-cost procedures that are more profitable to

offset those services that are not.

Our health care delivery system is highly fragmented. Providers

compete for sick patients rather than collaborate to improve health.

Simply put, hospitals and health care providers are paid to take

care of sick people, not to keep them well. The ugly truth is, the

8

more we do, the better we do financially. There are built-in economic incentives to overutilize health services. We the providers

are rewarded based upon the quantity of service provided, and this

fact alone, we believe, drives costs at an unsustainable rate.

As a result of these perverse incentives, the government and

commercial payers have put laws, regulations, and burdensome

processes in place to counteract this dynamic. Stark Laws, medical

necessity criteria, managed care paperwork, documentation standards, Recovery Audit Contractor (RAC) audits, and much more are

all regulations aimed at preventing overutilization and do nothing

to add to the value of improving the health and wellness of our people in our communities.

To add insult to injury, the cost to hospitals and physicians of

overhead related to coding, billing, claims, and compliance with

regulation is estimated to be well into the billions. We must develop a health care system that focuses on quality health care rather than quantity sick care; a system that creates incentives to keep

our people and communities well; a system that provides all Americans access to quality health care; a system that balances risks

with all the key stakeholders, including risks and accountability at

the individual level for maintaining health; a system that no longer

emphasizes high tech acute care, but, rather, emphasizes wellness

and collaborative care management through primary care and integrated health information technology; a system that is patientcentered to provide improved health and wellness for our communities as a whole.

We believe that any measures that truly want to address the

foundational problem causing an unsustainable trend in health

care costs must address the perverse incentives at their core. While

we believe that some of the models and pilots that are currently

being explored today, like pay-for performance, for example, are

certainly steps in the right direction, we also believe that they are

simply tweaks to our existing system and too closely follow the contours of our existing payment and financing structures.

We urge Congress and our next president to consider the following. First, completely overhauling provider payment systems to

reorient them towards collaboration aimed at improving the health

and wellness of individuals in our communities. Second, shifting

the direction of value-based purchasing towards shared provider incentives across the continuum of care. Third, rewarding providers

for helping to improve the overall health of their communities.

These are just a few possible ideas for reform of the health care

delivery system that we believe would significantly reign in

unsustainable increases in our health care costs, but more importantly, significantly improve the health of our people, our communities, and our Nation.

Thank you, Chairman Baucus, and the Finance Committee as a

whole for your continued strong leadership on this issue, and I look

forward to working with you in the future.

The CHAIRMAN. Thank you very much, Jeff. I appreciate that. I

thank you for your testimony. Thank you.

[The prepared statement of Mr. Fee appears in the appendix.]

The CHAIRMAN. Okay, Dr. Olson, you are next.

9

STATEMENT OF FRED OLSON, M.D., CHIEF MEDICAL OFFICER,

BLUE CROSS BLUE SHIELD OF MONTANA, HELENA, MT

Dr. OLSON. Mr. Chairman, thank you for inviting me here today

to testify on the important topic of rising health care costs. For the

record, my name is Dr. Fred Olson. I am the chief medical officer

at Blue Cross Blue Shield of Montana.

Blue Cross Blue Shield of Montana provides services to approximately one-third of the population of Montana and almost 50 percent of the fully insured market. We administer the Children’s

Health Insurance Program for the State of Montana, and through

Tri-West, we handle the health insurance of Montana’s military

families.

The cost of health care, which is rising at unsustainable rates,

is of paramount importance to Blue Cross Blue Shield of Montana.

We are pleased to be able to provide our thoughts on what we consider to be some of the top drivers of health care costs.

The U.S. consumes approximately twice as much health care as

other industrialized nations. Many factors have been identified as

contributing to this overutilization of health care services. Insurance has tended to insulate patients from true health care costs by

covering the majority of services. Studies have shown that patients

choose to receive 40 percent more health care services when the

cost is born by someone else.

We support publication of cost and quality information that will

allow patients to become more cost-effective consumers, and insurance products that reward cost-effective behavior. Many feel that

more health care results in superior outcomes, in spite of numerous

studies that have shown excessive consumption of health care to be

counterproductive. In the U.S., we approve therapies without consideration of cost in contrast to other nations which consider benefits as well as costs in their approval processes. As we learned at

the Senate Finance Committee’s health care summit in June, 30

percent of health care spending goes towards ineffective, inappropriate, or redundant care. I applaud Senator Baucus for introducing the Comparative Effectiveness Research Act, which will

help support evidence-based medicine. We need more information

on what works best in medicine, and we need to support use of

electronic medical records that can help prevent redundant care.

Patients today are increasingly frustrated at being unable to locate a primary care physician who is accepting new patients. The

United States has the highest ratio of specialist physicians to primary care physicians found among industrialized nations. Comparing nations, there is a clear correlation between an increasing

percentage of primary care physicians and more cost-effective

health care. Comparing States within the United States, analysis

of Medicare costs and quality metrics shows the same relationship.

States with higher percentages of primary care physicians as compared with specialist physicians have shown lower health care

costs and higher quality metrics.

U.S.-trained physicians are increasingly less likely to become primary care physicians. A 2007 survey of 1,177 4th-year medical students at 11 U.S. medical schools showed that only 24 students, 2

percent, were planning to become internal medicine generalists.

The U.S. needs to address the growing shortage of primary care

10

physicians by actively managing its physician training programs

and by enacting changes in the physician compensation system

that pays specialists 2 to 3 times more than primary care physicians.

Unhealthy lifestyle choices, including smoking, lack of exercise,

and eating habits that lead to obesity add significantly to health

care costs. According to the Centers for Disease Control and Prevention, 33 percent of adults and 14 to 18 percent of children are

obese. The CDC also found 24 percent of men and 18 percent of

women still smoke. More often than not, these personal choices

lead to chronic diseases such as diabetes, hypertension, and heart

disease. As a result, 6 out of 10 adults in the U.S. have at least

one chronic condition. To contain health care costs, we must add

additional support to programs that promote wellness through improved lifestyle choices and reduce the prevalence of chronic conditions.

Medical malpractice suits increasingly target bad outcomes rather than true malpractice. Malpractice insurance varies by specialty,

with direct costs varying between $5,000 and $200,000 per physician per year. In addition, physicians learn to practice defensive

medicine, ordering services that protect them from litigation rather

than help to define or treat a patient’s medical condition. The true

costs of malpractice litigation are difficult to quantify, but continue

to substantially contribute to rising health care costs.

We often see facilities duplicating very expensive services such as

cancer treatment as they compete within the health care market.

Competition in health care in contrast to competition in other economic sectors does not seem to lower costs. U.S. consumers pay the

cost of these duplications. We need a mechanism to constrain deployment of these duplicative medical services in some areas while

assuring the provision of necessary services in others.

While cost shifting does not increase the overall cost of health

care, it does lead to higher health care costs and higher insurance

costs for individuals insured through the private sector. Cost shifting occurs when the uninsured cannot afford to pay their health

care costs and when Medicare and Medicaid pay less for health

care services than providers find acceptable. Health care providers

in Montana tell us that the cost shifting from Medicare and Medicaid to the commercially insured is approximately 35 percent. That

35 percent cost shift translates into an approximate increase in

paid claims of $700 per year for each Blue Cross Blue Shield Montana insured member.

Cost shifting will become more problematic as our population

continues to age. By 2030, it is estimated one-fourth of the population in Montana will be over age 65, resulting in additional cost

shifting to the commercially insured.

Blue Cross Blue Shield of Montana believes that the reimbursement rates for Medicare and Medicaid must be adjusted to reduce

cost shifting. We also support universal coverage which will eliminate cost shifting for care of the uninsured.

Thank you for your time today. Blue Cross Blue Shield of Montana appreciates the focus the Senate Finance Committee is putting toward health care reform. We believe your efforts will bring

about substantive reform from which all Americans will benefit.

11

The CHAIRMAN. Thank you very much, Dr. Olson.

[The prepared statement of Dr. Olson appears in the appendix.]

The CHAIRMAN. Mr. Bjelland?

STATEMENT OF LEIF BJELLAND, OWNER,

LE PETIT OUTRE, MISSOULA, MT

Mr. BJELLAND. Thanks for having me. My name is Leif Bjelland.

I am the owner of Le Petit Outre here in town. I feel that I can

speak on behalf of myself and many small businesses, and share

my experience with you in terms of health insurance.

I started a business about 10 years ago. I was the only employee;

currently we have 31 employees. Of those, 22 are full-time employees and are qualified for health care insurance.

Five years ago we started shopping around to actually get a policy, and I felt pretty proud about the policy that we came up with.

The decision was to kind of strip down and custom create a policy

for our group specifically. My full-time employees are a fairly young

group, a fairly healthy group, very active and in outstanding

health. The policy that we created, actually, took away prescription

drugs, and I had my employees pay 25 percent of the policy pretax

out of their pocket or out of their paycheck, and we turned that

around and gave them a medical flex account so they could actually

use that money directly 100 percent towards whatever health care

kind of instances came up, COBRA or doctor office visits and such.

In the last 5 years, we have seen our rates increase above and

beyond what we were told initially. What we were told was the

standard increase was 18 percent per year, 11⁄2 percent per month.

You know, the increases have been anywhere from 25 to 50 percent

per year, and over those years we have actually changed our policy,

and our deductibles have become higher, and the quality of the policy has decreased.

At this point in time, you know, I am kind of looking at our policy and what we are doing and trying to make a choice as to whether this is something that we continue or if I would be better off

turning this money around directly to our employees and giving

them the choice of finding their own policies or using that money

for preventative measures directly.

For us, I mean, being a small business in Missoula, we bake le

petit outre—we bake bread, so a lot of baguettes. And I guess, if

I were to compare, our baguettes go for about $2.50 a piece and,

over the last 5 years, if we were to compare the amount of increase

in my policy and the price of my bread, we would be looking at a

$5 loaf of bread, and I do not think anybody would be buying that.

So I really kind of have an unsustainable trend. It is something

that I feel that I might not be able to afford to be doing in the future, and I definitely feel that reform is necessary. Thanks.

The CHAIRMAN. Thanks, Leif, very much. I appreciate it.

[The prepared statement of Mr. Bjelland appears in the appendix.]

The CHAIRMAN. Okay, Julie.

Ms. FOSTER. My turn.

The CHAIRMAN. Let ’er rip.

12

STATEMENT OF JULIE FOSTER, COSMETOLOGIST,

MISSOULA, MT

Ms. FOSTER. Thank you for letting me speak today.

I am a cosmetologist here in Missoula, MT, and I am here to

share my story about my accessing health care and how it has impacted me and my family.

I have been a hard worker my entire life, and, after graduating

from high school, I worked my way through cosmetology school and

have never been unemployed. As a single mother, I have always

worked to pay medical bills for my daughter and myself. I have

never been able to afford health insurance and have made too

much money to qualify for assistance programs. To pay for the

birth of my daughter, I made arrangements for monthly payments,

and I worked for several years to pay off the debt.

When my daughter was 1 year old, she had spinal meningitis

and was in the hospital for 9 days, 5 of which were in intensive

care. As a result of a huge medical bill, I was forced to file bankruptcy, basically. It was either you make a $100-a-month payment

or, you know, we will sue you, so I filed for bankruptcy.

There were two other medical situations that have caused extreme financial hardship during my life. I sustained a broken arm

and leg when I was walking across the street and I was hit by an

uninsured motorist. Luckily I had tremendous family support during that time, and my daughter and I were able to live with my

parents. I have been a patient at Partnership Health Care Center

for many years. Partnership Health Care Center is the local community health center that offers services at a sliding scale fee. The

health center was able to help me when I had a broken ankle after

slipping and falling off my steps on my way to work.

I continued to seek services at Partnership, although I have

tough times making ends meet with my current salary. I make too

much to qualify for the sliding scale fees. As a result, I only seek

medical advice when it is—excuse me, sorry, I am not a public

speaker. But I seek medical advice when it is an absolute emergency, and rarely do I go to the doctor for annual exams.

Additionally I am too young to qualify for the State of Montana

Breast and Cervical Health Program. I am 47 years old and have

never had a mammogram due to the cost of it. I know that preventive care is essential to assure a healthy future, but I simply cannot afford it.

My employer does not provide insurance coverage for me, nor do

I have an option to purchase it. If I go out and find my own policy,

they will take it out of my check pretax, but to find my own policy,

that is going to cost me $300, $400 with, you know, preexisting

conditions and everything like that, so—oh. I am able to afford dental and eye care coverage through a private company, which I pay

for myself. However, there is no way that I can afford medical insurance. I take great pride in myself and my work. I also take

great pride and instill my work ethics in my daughter. I have

worked hard to be a homeowner and have lived in the same place

for over 20 years. I do not spend my money on frivolous things and

make sure that I am able to cover the basics on my salary. I hesitate to think what would happen if a major medical event or chronic disease were to happen to me.

13

I would like to take this time to thank you for listening to my

story. Unfortunately, my story is so common, and I work with people and know many people in the same situation I am in. Addressing the lack of coverage for people in our country is very important,

and I appreciate you taking the time to work on this problem.

The CHAIRMAN. Well, thank you, Julie, very much.

[The prepared statement of Ms. Foster appears in the appendix.]

The CHAIRMAN. Thank you for taking the time to share that with

us, and you are right: your story is all too common. These listening

sessions I have had across the State, it comes up all the time, your

story, or something very similar to yours. It is a huge problem.

Okay. I am going to ask our panel just a question here. A couple—

three, actually. I would like each of you to respond. The first is, do

you think—and you have already indicated your answer to my

question in your statements, but I will ask it again. Do you think

we should set up a system in America where every American has

health insurance? I will ask that question first. Should every American have health insurance under some system, whatever it is, that

we set up? Let us start with you, Dr. Collins.

Dr. COLLINS. Absolutely. I think universal coverage is critical to

improving our performance. I also think it is critical to getting our

health care cost growth under control as well.

The CHAIRMAN. Okay. Mr. Fee?

Mr. FEE. Absolutely.

The CHAIRMAN. Okay. Dr. Olson?

Dr. OLSON. Absolutely.

The CHAIRMAN. Good. And Leif?

Mr. BJELLAND. Yes, I do, as long as it does not come down on

the lap of small businesses.

The CHAIRMAN. That is the next question—how do you do it? And

Julie?

Ms. FOSTER. Absolutely.

The CHAIRMAN. Okay. All right, I will get to that. How do we do

this? Your thoughts. You know, different countries do this differently. And Canada has its single-payer system. Other countries

have their systems, so forth. As you work toward universal coverage, that is, working toward everybody having health insurance,

how do you suggest we do this? What should some of the components be to allow that to happen? I will start again with you, Dr.

Collins.

Dr. COLLINS. I think an option for us right now is to move forward by building on the existing system. So, building on the

strongest risk pools, the large employer-based pools that we have.

Also building on public insurance programs: Medicaid and the

State Children’s Health Insurance Program. So, looking at what

part of the system is working really well, particularly in terms of

risk pooling, and then fixing the part of the system that works so

poorly. The individual and small group markets are the weakest

part of the system. If you lose coverage through an employer or you

are a small business, it is difficult to find affordable coverage because of the underwriting issues in those markets. I think we will

need to make sure that there are standard benefits so that people,

when they buy coverage through any reorganized individual insurance market such as an exchange or connector, will know what

14

they are getting. That their deductibles are not so high that, for example, people do not get mammograms when they need them, do

not get cancer screenings when they need them, and also ensuring

that premiums are affordable. So also, providing premiums subsidies for people.

The CHAIRMAN. Now, some people suggest something called an

individual mandate or, to get at it a different way, employer payor-play. Your thoughts in all that, because I am told the Massachusetts system, for example, has a mandate.

Dr. COLLINS. Yes.

The CHAIRMAN. And coverage there is quite high.

Dr. COLLINS. That is right.

The CHAIRMAN. About 98 percent in Massachusetts. Other people

think, oh, no, do not do that. Senator Obama’s plan has an individual mandate for kids but not for all the rest of Americans. Senator Clinton’s plan, when she was running, had an individual mandate.

Dr. COLLINS. Yes.

The CHAIRMAN. But I do not think Senator McCain has one in

his plan.

Dr. COLLINS. That is right.

The CHAIRMAN. He wants to repeal the employer-provided coverage and put in place a tax credit for individuals to buy insurance,

but what about a mandate?

Dr. COLLINS. Well, if you look at the estimates that have been

done of Senator Obama’s plan, you know, making some assumptions about the details of the plan, you get about halfway to universal coverage without the individual mandate. He has a mandate

for children as you said, but not an individual mandate for everyone. So, if we want everyone covered in a mixed, private/public system like that employer-based public program, and in this new exchange or connector, we will need to require everyone to have coverage. It needs to be affordable coverage, it needs to be a benefit

package that everyone is comfortable with.

The CHAIRMAN. Okay. Jeff, your thoughts.

Mr. FEE. Yes, I think it goes back to some of my talking points.

I think that if we realign the incentives away from quantity sick

care towards quality health care, I think the savings along that

line will be absolutely massive. If you just think about——

The CHAIRMAN. You are talking about care coordination.

Mr. FEE. Care coordination and the whole concept. I mean, it

really is a perverse incentive when hospital administrators are rewarded by having full beds, their beds full in the hospital.

The CHAIRMAN. Okay.

Mr. FEE. Because I can tell you, just from a business perspective,

when our beds are empty, we are sweating, and it should be the

exact opposite. I believe that, if you go look at all the laws and regulations that go into trying to prevent an appropriate utilization,

with the appropriate alignment and incentives, if we really are

working together in a collaborative model, a lot of the utilization

issues, they go away and so do a lot of the regulations that really

do not do anything to add to health care.

15

The CHAIRMAN. Those are all good points, but how does that get

us toward universal coverage? How does that move toward all of

us having health insurance?

Mr. FEE. Well, first, I believe that, if you align the incentives appropriately and you allow those savings to actually be realized, I

think the financing piece of it becomes much more easy, because

I really do believe—I mean, if you just look——

The CHAIRMAN. That is less expensive for what you get.

Mr. FEE. Significantly less expensive.

The CHAIRMAN. Yes.

Mr. FEE. I mean, again, if you look at the realities of us as providers, the better, the more we do—and this is the ugly truth—the

more we do, the better we do financially.

The CHAIRMAN. Right.

Mr. FEE. So there are incentives. However, if you get out ahead

of the curve and you are managing health—and there does need to

be shared risk. There needs to be risk at the individual level as

well as the institutional level. We believe that more rational care,

as Dr. Olson alluded to, saves significant dollars and also keeps

people from getting into situations where they come into the organization much sicker than they would be if they were managing

their health.

The CHAIRMAN. So, Dr. Olson, how do we get universal coverage?

Dr. OLSON. I think the gap is primarily determined by individuals who can——

The CHAIRMAN. We have—do we still have the figure up there?

Forty-six million uninsured, 25 million underinsured. That is 71

million Americans either with no insurance or underinsured.

Dr. OLSON. Yes.

The CHAIRMAN. And Julie talked about it; she cannot afford

health insurance. How do we get universal coverage?

Dr. OLSON. I agree that I think the issue is that health care is

too expensive in this country and that people cannot afford insurance, and the help has to be for those people who are between making so little money that they are on Medicaid and being able to afford private insurance, and I think the government needs to help

in that area in support.

The CHAIRMAN. So you are saying what—expand Medicaid?

Dr. OLSON. I think——

The CHAIRMAN. Children’s Health Insurance?

Dr. OLSON. Some expansion of——

The CHAIRMAN. Partially?

Dr. OLSON [continuing]. Government support for individuals who

are caught in that window——

The CHAIRMAN. What about a mandate?

Dr. OLSON. You know, I am not——

The CHAIRMAN. In our country, you know, you have to have auto

insurance before you can drive a car.

Dr. OLSON. Yes.

The CHAIRMAN. And some suggest, man, if we require a health

care system, you have to have health insurance. Now, that gets a

little bit to Leif’s question and also Julie’s: but what if I cannot afford it? So we have to have some way to deal with that, and some

further suggest you have to have a mandate for the pool to be large

16

enough. So we have a huge, big pool, more easily accommodate preexisting conditions, et cetera. So, just asking the question, is that

something that is out of question, a mandate—what do you think?

Dr. OLSON. You know, I do not think we are opposed to it, but

I think there are probably some people who are.

The CHAIRMAN. Well, I am asking you.

Dr. OLSON. I am not opposed to it.

The CHAIRMAN. Okay.

Dr. OLSON. No, I think it is entirely reasonable to mandate that

people have health insurance because the uncovered do confer costs

to the people who are covered.

The CHAIRMAN. Yes.

Dr. OLSON. And that is the logic.

The CHAIRMAN. Well, I think you are right. It is a big bugaboo

for a lot of people, and there is no doubt about that. The question

I am trying to drive toward is, how in the world are we going to

get in this position where every American has health insurance

and that it would be—you talk about cost, that is clearly part of

it, but the question is, does a requirement help solve the problem

or not so long as, you know, the affordability part is addressed?

What do you think, Leif? What about a mandate?

Mr. BJELLAND. I think a mandate would work for youth, and I

think that a lot of times when we look at this, we are looking for

immediate solutions to a problem that is really complex and affects

a lot of different people differently. You know, in my conversations

with some of your staff, we were looking at—like I said, I have a

young group, a pretty healthy group. My needs are way different——

The CHAIRMAN. Right.

Mr. BJELLAND [continuing]. Than people who are approaching

Medicare age or, you know, upper 50s, early 60s, and that has to

be—we are not going to hit everybody, we are not going to solve

this, but I think it is more of a generational thing.

Maybe we should shift from mandated youth and then a preventative perspective.

The CHAIRMAN. Yes. A lot of youth will think, why mandate me?

I am invincible, you know, I do not get sick, why me? That is just

for older people.

Mr. BJELLAND. Well, preventative mind-set, though, right?

The CHAIRMAN. Right.

Mr. BJELLAND. I mean, a shift. I mean, we are talking about obesity and then this is long-term. I mean, these are long-term problems. So, I mean, there is a long-term solution there.

The CHAIRMAN. Okay.

Mr. BJELLAND. We need to start somewhere.

The CHAIRMAN. Sure. Julie, your thoughts?

Ms. FOSTER. But then again, I had a 17-year-old niece who

passed away from leukemia, you know. It could happen to anyone.

Mandating would be wonderful if you can make it affordable.

The CHAIRMAN. All right. Which raises the next question. Affordable cost. You have touched on this already. What are the big drivers, the cost drivers in the American system? What makes America’s system so expensive compared to other countries? Two or

17

three basics, what are they, and once you have identified them,

what do we do about them, how do we control them? Sara?

Dr. COLLINS. I think there are a couple differences. If you look

at how we differ from other countries, one of the key differences is

what we pay for health care, so what we pay physicians. We pay

70 percent more for prescription drugs than other industrialized

countries.

The CHAIRMAN. So we pay physicians more?

Dr. COLLINS. We pay physicians more.

The CHAIRMAN. We pay more for drugs?

Dr. COLLINS. We pay more for drugs, and we pay more for devices.

The CHAIRMAN. Yes.

Dr. COLLINS. And that also leads to overcapacity, and that has

been mentioned a little bit this morning. So outpatient clinics, for

example, can make a lot of money without providing very many

procedures. The other key difference between us and other countries is administrative costs.

The CHAIRMAN. Why are those so high in America compared to

other countries?

Dr. COLLINS. Part of it is insurance administration. The individual market is a particular culprit, but there are other culprits

in our system. We, as you know, spend 7 percent of our national

health expenditures on administration relative to about 2 percent

in Japan, Finland, France. So, very big differences. About 25 to 40

percent of the premium dollar in individual plans—market plans—

goes to the costs of administration. In terms of other cost drivers,

technology is a huge driver of our costs, and also obesity is a huge

contributor to cost growth in the system.

The CHAIRMAN. Sometimes I hear doctors say, you know, this

hospital has the latest and greatest PET scan or MRI, the latest

version, and it costs 30 percent more, but it only helps me in my

diagnosis and treatment about 2 percent more.

Dr. COLLINS. Yes.

The CHAIRMAN. I mean, it just—we all have to have the latest

and greatest to keep up with the Joneses, because patients demand

it, even though we really do not need it. It does help in a lot of

areas, but it does not help as many areas as physicians ideally

would prescribe. Is there anything to that, do you think? Let me

ask Mr. Fee that question.

Mr. FEE. Can you rephrase the question? I want to make

sure——

The CHAIRMAN. Yes. It is just that it is overutilization, for one,

between hospitals, to keep up with the Joneses and compete,

whether it is St. Pat’s, Community——

Mr. FEE. Sure.

The CHAIRMAN. You have to have the latest and greatest and all

that kind of stuff.

Mr. FEE. No, it is definitely a driver, and I think that it again

speaks to the nature of the competition in health care versus other

sectors, because sometimes you can engage in competitive practices

that really do not do anything to necessarily enhance quality; it

really just is aimed at pursuing market share, trying to move busiVerDate 11-MAY-2000 14:26 Oct 27, 2010 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 61687.000 TIMD PsN: TIMD
18

ness into your organization, again because we are incentivized to

do more. That is how we ultimately get paid.

The CHAIRMAN. Okay. Dr. Olson, you know, some say our system

is more expensive unnecessarily because we have such high administrative costs compared to other countries. That is your business,

right?

Dr. OLSON. It is.

The CHAIRMAN. So what do we do about that?

Dr. OLSON. I hope I get this number right. As I recall, Medicare’s

administrative overhead is about 61⁄2 to 7 percent when we add up

central and contractors. Blue Cross Blue Shield of Montana is running 10.2 percent of administrative overhead. I trust your numbers

for other industrialized nations. They are too high. In part, we are

spending money processing claims under our current claims processing system, CPT coding, hospital coding, to pass costs, to pay

providers and pass costs back to employer groups, et cetera, et

cetera. It is something of a complicated system, and I think, if you

look at some of the most efficient, in terms of administrators, in

the country, which are probably in Medicare, no one gets below 61⁄2

or 7 percent, so I think it is—there is probably a plateau there. The

way we codify and pay for health care, it is going to cost that much

money.

The CHAIRMAN. All right. Let us just cut to the quick here and

just ask the provocative question. Is there a need for private commercial coverage when it adds additional administrative costs.

Other countries generally do not——

Dr. OLSON. No, they have a single payer.

The CHAIRMAN. That is right.

Dr. OLSON. Yes.

The CHAIRMAN. So what is—and I am sorry it is such a provocative question.

Dr. OLSON. No, it is a loaded question for me, you know it is, but,

you know, my personal feeling——

The CHAIRMAN. I get asked tough questions like this all the time.

This is my opportunity.

Dr. OLSON. You know, I mean, I am an American citizen, and my insurance is $14,500 for a family of four through Blue Cross.

The CHAIRMAN. Yes.

Dr. OLSON. I have been a primary care doctor before I worked

for an insurance company.

The CHAIRMAN. Yes.

Dr. OLSON. So, you know, I have seen this issue from a number

of sides, and my personal feeling is that it is the will of the American people. If the American people want a single payer, so be it.

The CHAIRMAN. Yes. What about pharmaceuticals? You know, I

have been told many times that each of us in this room subsidizes

a European consumer who consumes the same drugs manufactured

by the same company because those countries negotiate price with

pharmaceuticals. Medicare does not negotiate a price with pharmaceuticals. We pay more; it is an unnegotiated price. Is that part of

our problem, too? Should the United States negotiate—should

Medicare negotiate with pharmaceuticals, negotiate price? Is that

a problem with the health insurance industry? I am asking that

question because you as an insurer must run into that.

19

Dr. OLSON. Yes. Well, we have a pharmacy benefit, and so we are

able to negotiate prices for prescription drugs, obtain mail-order retail, but not so for physician office use. That is based on average

sale price plus, and the prices are set by the pharmaceutical industry, so I think that the prices are inflated compared to what other

countries pay. They look at cost and benefit, and they are willing

to say ‘‘no’’ to a pharmaceutical company to keep a drug off a formulary if the price is not reduced so that they feel it is costeffective.

The CHAIRMAN. I appreciate this. There have been tons of questions asked, but I am going to open it up for everybody in the audience here, too. I just think this is a huge issue, and it is a huge

opportunity for us as a country to address. Our health care hodgepodge system, whatever it is, I think it is in a real crisis, because

costs are going up so much, and it hurts individuals like Julie and

small businessmen like Leif; it hurts all of us as taxpayers because

Medicare is going up as a component of the Federal budget. I

mean, it has to be addressed from the cost side, in addition to coverage. It just makes no sense to me that we allow in America a system where so many people do not have health insurance. That is

just wrong, and people should have health insurance, and also the

quality issues, and they are very, very real, a little bit more difficult to get at. Aligning reimbursement with quality clearly is the

goal, and how you do it is very, very important. But I just think

we have to address this, and I am going to make this one of my

top priorities next year in the Congress, and I will work with

whomever is president, either John McCain or Barack Obama and

introduce a bill the first of the year just to try to get at this and

have a lot of hearings like this, talking to a lot of people. I think

we can no longer just nickel and dime this, we cannot just work

around the edges. We have to come up with a more systemic, more

comprehensive health care reform, and now is the time to do it

with a new president, new Congress, and, if we do not, we may not

have this opportunity for another decade. So we have to strike

while the iron is hot, and I think it is—the iron is getting pretty

hot right now, so it is time to strike, but I want to thank you very,

very much.

Okay, let us open it up to everybody in the audience here.

One thing I ask, though, is this. It is very tempting for persons

to say, make changes for me, you know, for my industry, my special interest group and so forth, and I am trying to avoid that.

What I would like everyone to do as much as possible is, not promote your own agendas but, rather, share some basic thoughts

about health care reform. What do we have to do so we are sharing

and finding a good solid health care reform result, and I just appreciate your deep involvement here. But let us just not be too much

for ourselves individually, let us be a little more for ourselves together as a country and a team.

Okay. Number 1. Would you please say your name, sir, and—it

is a real honor for us to have our first speaker be Pat Williams,

former member of Congress, who is not known to be reticent or

bashful or shy, and is very smart, very intelligent, and very perceptive. Pat, we are honored to have you here.

20

STATEMENT OF HON. PAT WILLIAMS,

FORMER U.S. CONGRESSMAN, MISSOULA, MT

Mr. WILLIAMS. Senator, it is nice to see the chairman of the Finance Committee here, and it is always good to be with you, Max.

Thanks for doing this in Montana. I assume, but let us not take

it for granted, that Montanans understand this State’s role in trying, again and again, to pass national health care through the U.S.

Congress.

The first effort was under Harry Truman by Montana Senator

Jim Murray in the late ’40s and the early ’50s. Murray found that

he had a very difficult reelection effort after trying it because some

scored him, frankly, as a socialist or a communist, and it was almost 50 years following that that any president or any Congress

dared try again, and that was under Bill Clinton in 1994.

As you know, Max, Montanans had sent me to Congress some

years earlier, and I happened, by circumstance, to be in the enviable position of being the second Montanan to try to lead on passing health care reform. I chaired a committee called Labor Management and then was senior member on the full Committee on Education and Labor. We became the first committee in American history to pass out health care legislation. My committee passed out

a bill somewhat similar to what President Clinton had drafted, and

on top of it, for competitive and consideration purposes, passed out

with it second legislation for single-payer. Now, those bills passed

both the subcommittee and the full committee but did not come to

the floor of the House, and the Senate, likewise, did not act. And

now, 14 years later, our senior Senator Max Baucus has the honor

of chairing the Finance Committee, and Montana finds itself once

again in the driver’s seat, so to speak, with regard to health care.

Perhaps it is right that Montanans should, in some small measure, lead the way, because our State is almost dragging bottom

when it comes to appropriate health care for its citizens, and this

region of the Rocky Mountain West is dragging bottom.

When it comes to the coverage, health care insurance coverage

of the children of working families, the Rocky Mountain West,

these eight States, are the worst. It is the worst region in the country for insuring moderate-income children. Of the worst eight

States in the Nation in that coverage, the Rocky Mountain West

has five of them. No other region of America has even two of the

worst States.

It is a crime that a region this generous, this open is the worst

region in America for covering children, which means, as you know,

we are the worst in the world unless one wants to count the

poverty-ridden, war-depressed, basket-case nations around the

world.

In Montana we are not doing, unfortunately, much better. The

last statistic I saw showed that Montana had one of the poorest

ratings in America for health care coverage of its people. Only

slightly over 40 percent, as you heard, of our employers provide

health care coverage to their employees.

I want to make some recommendations, Max, based on my 4

years of experience with just this issue in front of the House of

Representatives, and I do this on behalf of not only myself, but an

21

8-State public policy western group called Western Progress, as

well as Montanans for Health Care.

First, of course—and I will be very quick because a couple of

them have been covered—first is portability. We must have health

care insurance that will follow us around the country because we

are a mobile lot these days.

Second, we do have to prevent insurance companies from cherrypicking. They have to cover the sick as well as the well.

Third, we have to encourage preventive care. Americans are not

very good at it. We have to have access for every single American,

bar none.

We have to stop cost shifting, Max. We have to correct the shortages of health care personnel, for example, primary care physicians. We have to allow Americans the choice of coverage, hospitals, and doctors. In our view, we have to have tax fairness. That

is, we ought to collect the revenue from health care on a graduated

scale. Those Americans able to pay more, should. We have to have

catastrophic coverage. We have to have cost management, and the

partners in determining that have to include all the stakeholders.

If the Congress does not do that, if we do not include the hospitals

and we do not include the insurance companies, then I think it will

be less than a quarter of a century until hospitals and insurance

companies start to go broke and the Congress of the United States

will have another major bailout on their hands. So, if we are going

to do this through the insurance companies and the private sector,

then we had better protect them, or we are going to end up bailing

them out in relatively short order. And finally, as we have heard,

Max, we have to have reduced administrative costs.

Now, on my own, I would like Max to make this suggestion. I understand your concern, I guess, is about single-payer, and I assume

it is based on the fact that it is highly unlikely that the Congress

of the United States will pass single-payer. But for myself, Max, I

would encourage you not to take it off the table even though it cannot pass, because the mere consideration, we found out in my committee in the House in 1994, the mere consideration and hearings

of health care single-payer inform the members of Congress and inform the debate because it gives you comparative bills. I doubt that

it can pass, but I do not think it ought to taken off the table, and

I do not think it ought to be denigrated for this reason. Seniors

have single-payer; it is called Medicare. Our returning veterans

have single-payer; it is called veteran’s care. And those single-payer

systems around the world were adopted off of Social Security

single-payer retirement, Medicare single-payer health care, and GI

health care insurance single-payer veteran’s care. That is where a

lot of the world got their ideas for their single-payer packages, and

it is one of the reasons the rest of the world is now ahead of the

United States.

So, Max, I commend your good efforts here, and I am glad that

another Montana is again in charge, so to speak. Thanks a lot for

having me.

The CHAIRMAN. Thank you Pat, very, very much. I do appreciate

it. Your basic point is a good one, namely, we are all in this together, and, well, we have to find solutions that are, again, systemic and comprehensive. We are all in this together, and I do beVerDate 11-MAY-2000 14:26 Oct 27, 2010 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 61687.000 TIMD PsN: TIMD
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lieve everything should be on the table; nothing is off the table.

Someone said, if I am not on the table, I will be on the menu, and

we want to make sure that nobody is on the menu here. We are

all on the table as we find a common solution.

Yes, sir?

STATEMENT OF PALM FOUNTAIN, HEALTH CARE

PROFESSIONAL, MISSOULA, MT

Mr. FOUNTAIN. Hi, I am Palm Fountain. I started working in

health care around 1962 or ’63. I happened to watch this whole fiasco take place, from where people started worrying about the

health care system to where they started putting in place measures

that they thought might turn things around, and it only made

things worse.

I have done everything from being a CNA working in people’s

homes to doing research at the grad school in public health and at

the med school at the University of Pittsburgh, so I have seen a

lot of health care. I have worked in large met centers and worked

in very small hospitals and worked in people’s private homes, and

I have seen a wide range of things go on.

One of the things I hear said here, and almost everybody in

health care and the average person knows, is that one of the biggest priorities absolutely has to be preventative medicine. One of

the things when we talk about other countries that comes up—one

of the major points of why they do so much better is preventative

medicine. We would like to think that our health care is really

great. We are 36th in quality of health care in the world. That

means a lot of third-world countries are way ahead of us. We need

to get very real about our health care. We need to come down a

peg. We really need to—in a real way, in a functional way—admit

that we suck and then start to work up from there. A lot of what

I hear being proposed is like having a festering sore that is bloody

and pussy and we just want to put a bandage on top of it. We really do need to look closely at the cause, and like a doctor, a good

physician, take out the bad tissue until we get to healthy tissue,

and a lot of that is going to do with how we think about health

care, how we think about insurance companies. I have dealt with

insurance companies. They have been my biggest problem in trying

to deliver good health care to clients.

I have also been a registered nurse. When I was an RN and trying to give good care to my clients, the one big thing that was a

stumbling block was health care and the insurance companies.

They are not health care companies, they are sick care. They have

clerks making decisions over doctors, and trying to get to a doctor

and an insurance company to help make a decision for the client

is very difficult, and very often you talk to a doctor who is not a

specialist in the area that they are making a decision on and

maybe has very, very little information or almost none. So that was

one of my biggest things, and then the other thing is trying to get

that preventative care for a client once they leave the sick care

part of it. We do not support it, we do not have a philosophy or

a way of thinking that allows us to see preventative medicine as

important. The high tech is important. We think of that as real

health, and it is not. By the time a person gets that far, we are

23

a failure in 90 percent of the cases. If we had preventative care,

that is where the success is. So, if we want to be successful in

health care, we have to go for the preventative.

And so far as doctors, doctors retrain all the time, and we have

large numbers of doctors who are specialists. If we start to turn

things around, doctors can retrain just like everybody else. They retrain to do a new specialty or to extend their specialty, so they

could just as easily retrain to do the higher job of family practitioner, family care.

The CHAIRMAN. Okay, thanks, I really appreciate that. Thank

you. I would like to say—just out of respect for everybody else—

there is a long line here of people who want to speak, so I would

just urge everyone be very brief, and I am going to frankly after

2 to 3 minutes, I am just going to have to ask you to wrap up in

the interest of time for everybody else, otherwise we are not going

to be able to get through everything.

Okay.

STATEMENT OF MARIETTA BOWER, BOARD MEMBER, MONTANA COMPREHENSIVE HEALTH ASSOCIATION, POLSON, MT

Ms. BOWER. Hi, Senator Baucus, I am Marietta Bower.

The CHAIRMAN. Hi, Marietta.

Ms. BOWER. I live in Polson, drove myself here this morning. My

biggest challenge was finding a place to park so I could get out of

my car. As I was thinking about your hearing, I feel that the public

and private sector need to work together. The hat I am wearing

today is not primarily as a patient. I serve on the board of the

Montana Comprehensive Health Association, which was created in

1985 by the Montana legislature to provide access to health insurance to people who are denied because of preexisting conditions.

Mostly it is heart disease, cancer, things like that.

After I was injured in a horse accident in 1983, in a couple of

years I needed insurance. I had insurance, but when things expire,

you do not have it anymore, you cannot afford it, and, so, the

MCHA came along just in time for me.

The MCHA has two purposes. It insures people who cannot get

insurance, but it also is the portability avenue for Montanans on

the HIPAA requirement which guarantees portability of insurance

for people who leave group coverage. The two pools serve over

3,000 Montanans, and their average premiums are $800 a month.

That is a lot. Persons who enroll in the MCHA make considerable

sacrifices so they can take care of themselves so that they do not

need to use the services as much as possible.

Insurance companies that do business in Montana pay 1 percent

of their premiums into the MCHA to help cover our costs because

the premiums for these high-risk individuals do not cover the

claims, and we are facing a huge deficit in the next few years unless something major happens, like the rising costs of medical care

being stabilized, but that is not too likely in the near future. For

those in the high-risk pool, we——

The CHAIRMAN. I am going to have to ask you to summarize,

Marietta.

Ms. BOWER. One of our avenues has been taken away from us,

and that is Medicare. We are not able to access Medicare premium

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payers anymore, and the people who are self-funded, or TPAs, we

are not able to access them as well to help share the cost—you

know, even it off like you are talking about. If everybody pitches

in, we can cover it.

The CHAIRMAN. Okay, thank you, thank you very much. Thank

you, Marietta.

Okay. Next?

STATEMENT OF DR. TOM ROBERTS, ADMINISTRATOR,

WESTERN MONTANA CLINIC, MISSOULA, MT

Dr. ROBERTS. Senator Baucus, thanks very much for holding the

hearing here. My name is Tom Roberts. I am a retired internist,

actually practicing as an administrator right now for the Western

Montana Clinic. It is interesting that health care expenditures

cross-country vary so much, maybe by as much as a factor of 2-fold.

That difference in what we spend as a country to a large extent is

related directly to how many hospital beds we have in the different

sections of the country and how many specialists we have in the

different sections of the country.

Health care costs are inversely related, as you know, to the number of primary care doctors that we are able to field into the State

and into the country. Despite that, as we all know, the primary

care docs are dying. I mean, they are really not out there practicing

anymore. Fred Olson and myself are pretty good examples of that,

and a lot of that problem is that we are just not paying those guys

to practice medicine. The students understand that, the residents

understand that; they are not going into primary care medicine,

they are not making that choice, and I think a lot of that comes

down to the bottom line.

Fred and I talk about this periodically and, you know, maybe he

can chip in, but when I left practice 3 years ago, I had a 75-percent

Medicare practice. That was after 25 years of practicing internal

medicine. At that point, after I subtracted expenses from what I

earned, there was $25,000 left over, so that is not enough to support primary care docs. We are just not doing that, and I am curious as to what you think we can do in the future to beef that up.

The CHAIRMAN. Thank you very much, Dr. Roberts. In answer to

your question, first of all, I totally agree with the main point.

Dr. ROBERTS. Yes.

The CHAIRMAN. And many, many people are starting to understand that, and the figure I heard today is what I have heard a

couple, 3 times, namely only 2 percent of medical school graduates

now go into primary care because that is not where the money is,

and they have the big loans to pay off, so they are going to——

Dr. ROBERTS. That is right.

The CHAIRMAN [continuing]. Choose specialties where the money

is in many respects. What do we do about it? One thought I have

is, as you know better than I, that our major teaching hospitals get

a lot of money from the graduate medical education portion on

Medicare and something else called IME (Indirect Medical Payments) on Medicare, and my thought is, well, if Medicare is paying

in many respects for the education of the medical students, that

Medicare ought to be able to put a condition on here, that is, a

number of docs who go into one speciality as opposed to another.

25

At the same time, we are just going to have to increase the reimbursement for primary care docs and not allow an increase in reimbursement for the others, for the specialists and subspecialists in

Medicare. I doubt the subspecialists are going to want to cut back

very much; that is not going to be near and dear to their hearts.

Dr. ROBERTS. They are not going to want to fund primary care.

The CHAIRMAN. They are not going to want to fund it, but the

increases that they received in the past can just be stopped——

Dr. ROBERTS. Right.

The CHAIRMAN [continuing]. So that the primary increase goes to

the primary care physicians, and also the GME reimbursement.

Dr. ROBERTS. Yes. It is going to be hard to force doctors to go

into primary care in a situation where they cannot make a living

in primary care.

The CHAIRMAN. That is why reimbursement has to be addressed.

Dr. ROBERTS. There has to be a change in that, and not to beat

the drum, but it is not about the primary care doctors. We have

already lost——

The CHAIRMAN. That is right.

Dr. ROBERTS. We are not practicing anymore if we can get out

of it. It is about the health of this country.

The CHAIRMAN. Right.

Dr. ROBERTS. We cannot have a health care system that is not

based on primary care, and we are trying to do that right now.

The CHAIRMAN. Right, right. No, it is way out of whack; it has

lots of adverse consequences, that is true.

STATEMENT OF RAY OROTT, INDEPENDENT

CONTRACTOR, MISSOULA, MT

Mr. OROTT. Senator Baucus, my name is Ray Orott, and I am an

independent contractor. My question is basically for the panel

there. I understand that, when they pass away, people who had

Medicare or Medicaid, their pharmaceuticals are already paid for.

How can we recycle those pharmaceuticals without throwing them

away?

The CHAIRMAN. Good question. What about that? Okay. We will

look into it. I do not know. Maybe someone else can address that.

Ray, I will try to find an answer to that question. I do not know.

I will get back to you. Leave your name and address with one of

our persons here. That is Carla. Great, Carla, that is great.

Thanks, Carla, very much.

Okay.

STATEMENT OF DR. JAN NEWMAN, FELLOW, AMERICAN COLLEGE OF SURGEONS AND AMERICAN BOARD OF HOLISTIC

MEDICINE, MISSOULA, MT

Dr. NEWMAN. Hi. I am Dr. Jan Newman. I am a Fellow of the

American College of Surgeons and the American Board of Holistic

Medicine. I have been retired from practice for several years now

due to injury. At this time I have been deeply concerned throughout my career with the quality of health care and medical education. The current system now is not health care, it is health

abuse, and until we——

The CHAIRMAN. I am sorry, it is health——

26

Dr. NEWMAN. Abuse.

The CHAIRMAN. Abuse. Thank you.

Dr. NEWMAN. Abuse. Until we change our priorities where the

patient is the primary focus of health care, the system is not going

to change, and currently the system is oriented to money. It is interesting that this is the Senate Finance Committee that is looking

at this and not Health and Human Services, and so that means

that the incentive for physicians and for insurance companies is always the bottom line rather than proper care. When proper care is

the goal, then the money will follow in the appropriate way.

Currently the system is such that it is overregulated and inappropriately regulated. There is no certificate of needs for things like

CAT scanners, et cetera. We here in Missoula have within the

catchment of 200, over six CAT scanners. It is unnecessary. There

are two helicopters to provide emergency services. It is all duplications of services. St. Pat’s has added OB. When there used to be

cooperation, Community handled it, and until this competitive idea

of having to have services is eliminated and there is cooperation

and not competition, this cannot be helped.

As a physician, there are over 50 insurance companies you deal

with. Each patient has different deductibles, has different policy

limits, and the physician in a private office just cannot deal with

that kind of administrative burden. There has to be some sort of

uniformity in deductibles.

Physicians are turning away patients because they do not have

insurance or they have not paid up or they cannot pay preprocedure, and once again, it is that sort of incentive. So the idea of

getting a reward in medicine by caring for patients and being a

proper practitioner has gone by the way, and that is one of the

main incentives for students not wanting to go into primary care—

they do not see it as a personally rewarding experience. It is also

one of the main incentives for physicians to retire early, and until

the incentives start to come back in terms of personal job satisfaction rather than stress, it is not going to change.

The CHAIRMAN. But your main point is to encourage cooperation

as opposed to competition among providers. Is that the basic point?

Dr. NEWMAN. Yes, and I think that there have to be certificates

of need for scanners and that sort of thing.

The CHAIRMAN. Right.

Dr. NEWMAN. That is so costly.

The CHAIRMAN. Thank you, Doctor. I very much appreciate it.

Thank you very much.

Okay, sir.

STATEMENT OF DR. BYRON OLSON,

RETIRED PHYSICIAN, MISSOULA, MT

Dr. OLSON. Hello, I am Byron Olson, retired physician, urologist.

I practiced in Missoula for my career. I really admire what you are

doing, and I applaud it. I am going to read fairly rapidly a very

short statement, and it is solution-based.

In respect to health care, we have clearly trapped ourselves in

an extremely complex and costly box. The structure of that box, unfortunately, is founded on a widespread misconception these days

that somebody else is footing the bill. That has to change or there

27

is no way out. We have to pay the bill ourselves. The only way I

see to do this that is at all doable and fair is the same way we pay

our other major collective costs. Both the income tax and the property tax are progressive taxes. If you earn more or have more, you

pay more.

Right now those who have employment-based insurance think

they do not pay as much because their employer pays a large

chunk of the premium cost. Well, the employer definitely passes

that cost along to the consumer; as much as $4,000 to $5,000 of the

price of a new car is paying the health insurance for the auto worker. We are all carrying the massive burden of the unpaid premiums

of the 47 million uninsured in this country. Yes, we pay. We just

somehow have convinced ourselves we do not pay and, if we are

covered and facing major personal health problems, we do not

worry now as much because our insurance, meaning somebody

else’s money, will pay for it, so cost is not the issue. We want the

best, so test away.

The way out of the box, as I see it, is to call a spade a spade.

Change the system so that everyone pays a health care tax according to ability to pay, the revenues of which are kept clearly separate from the general Federal budget. In return, everyone receives

a voucher that enables them to obtain an insurance policy for the

taxpayer and his dependants. This policy must meet certain basic

standards, and Pat Williams outlined a number of them. The policy

would provide coverage for catastrophic costs so that no one is

without this prevention, yet the policy would have to have a significant deductible carefully designed so that everyone is aware of cost

implications in their choice of provider, evaluation, and care.

The vouchers would create a competitive insurance market.

Without competition and cost awareness at every level of the system, there is no way to control the escalating costs. Even Medicare

and Medicaid could eventually be rolled into this system. There is

no reason that ability to pay should not apply to someone just because they are older. Clearly the costs of those unable to pay would

be absorbed into the system. It is crucial to get everyone covered,

which will eliminate the totally confusing problem of cost shifting

that obscures real costs.

There are many other problems, but one step, the first step is to

break out of that box.

The CHAIRMAN. Thank you, sir. Thanks, Dr. Olson, very much.

Okay, we are going to—this is very popular. We are going to have

to wrap up pretty quickly here, and two or three more speak, then

the rest are going to have to give written statements, and I guarantee I will personally read every one of your statements and you

will get an answer from me personally. In the meantime for everybody here, there is up on the screen here, I think, an e-mail address to send statements to and write to us at any time, but we

are going to have to wrap up, because we have to be out of this

room and I have other appointments.

Yes, go ahead.

28

STATEMENT OF SHEILA JAMES, MEDICARE AND

MEDICAID RECIPIENT, MISSOULA, MT

Ms. JAMES. Mr. Baucus, my name is Sheila James.

The CHAIRMAN. Hi, Sheila.

Ms. JAMES. I have cerebral palsy, and I have to take plenty of

medications, and I do receive Medicaid and Medicare, but I only receive Medicaid because I pay half of my income on a spend-down

basis to do so. And when they switched from Medicaid to Medicare

to pay for medications, it was really hard because now the private

insurance companies can decide if they want to pay for the medicine that you take, and so I have to often look at them and switch

providers, and I get really frustrated and confused because, when

I was with Medicaid, I did not have to do that. So, I want to know

what we have to do to be able to make sure that we can receive

our medications, because sometimes it is a choice between if we

want to pay to eat or if we want to pay for the medications, because some of them are up to $200 for a month of medication.

Thank you.

The CHAIRMAN. Thank you, Sheila. Some people may have individual health care issues they want to raise with us that are not

medical. I am no doc, but maybe I can help with reimbursement

financial case work, so, if anybody has any issue or issues they

want to raise with us, sometimes we can help out, get on the

phone, talk to the relevant agency, whether it is VA or Medicare/

Medicaid, what it is. So just get a hold of us and we will individually try to help each of you out with that. So, in addition to the

general hearing here, I want you to know that our office wants to

help all of you with individual cases as well.

Yes?

STATEMENT OF DR. ANNE MURPHY, GENERAL INTERNIST, ST.

PATRICK HOSPITAL AND HEALTH SCIENCES CENTER, MISSOULA, MT

Dr. MURPHY. My name is Anne Murphy. I am a general internist,

and I worked for 25 years in the Western Montana Clinic. I am

now a half-time hospitalist here at St. Pat’s, and I have been on

the board of directors here for 9 years. I want to second what Pat

Williams had to say about leaving single-payer on the table. I think

the problem with single-payer—I mean, I do not think we have discussed it in any real way in recent years. I know that polls are

being done and, if you just ask people in terms of, you know, do

you want one, that name has gotten out there as a bad name. I do

not see that there is any way to pay for the kind of health care that

we all would like without a single payer. My suggestion, however,

is that it be based on a better Medicare system. Medicare is a financing system, but it also needs to be a quality-based system.

There also needs to be significant Medicare reform with regard to

how they audit and monitor the health care system. It really

should be based on, rather than going out and assuming that people are guilty before proven innocent, it should really be based on,

can their regulations demonstrate improvement in the quality of

health care that is provided. Right now that does not happen. So

I think single-payer is essential, and whatever we start out with,

we will waste a lot of time if we do not put that on the table right

29

away because, if you look at the cost savings, they are tremendous.

Thank you.

The CHAIRMAN. Thank you very much, Anne. Your outline has

made a very interesting point, and you have basically said it yourself by discussing single-payer. It helps inform people about some

of the causes of the problems in our current health care system.

That alone is of great value. I found that very much to be the case

personally, because it helps again to flesh out some of the reasons

why our current health care system has a big problem.

Yes, sir?

STATEMENT OF BILL LACROY, ORGANIZER, MONTANA HUMAN

RIGHTS NETWORK, MISSOULA, MT

Mr. LACROY. Okay. My name is Bill Lacroy, and I am——

The CHAIRMAN. This is going to have to be the last speaker.

Sorry.

Mr. LACROY. Sorry about that.

The CHAIRMAN. It is Bill?

Mr. LACROY. My name is Bill Lacroy. I am an organizer for the

Montana Human Rights Network, but I am also here speaking for

my deaf daughter and me and my neighbor who called me up the

other day and asked if I might have some extra venison this winter

because, same reason they do not answer their phone anymore—

the bill collectors call up 12 hours a day because her husband successfully fought off cancer, thanks St. Pat, but it busted him.

We do not believe that access to health care insurance is a fundamental human right any more than we believe access to car insurance is a fundamental human right. We do believe that access to

health care is a fundamental human right just like education, and

we out here—the world is a different place than it was a month

ago, obviously, and we out here need to hear better and new discussions on issues that affect our lives so deeply, these financial

issues that are really crushing us. And I guess since I am the last

speaker, just ironically and serendipitously, I want to underscore

what Pat Williams said. Every Canadian I know and have talked

to about it loves their health care system, notwithstanding what

has been drilled into us the last 3 decades by the people who got

us into this financial mess. Single-payer is not socialized medicine.

More folks are paying attention to details. I just want to urge you,

Senator Baucus, and your colleagues to take advantage of this tremendous opportunity we have to elevate the discussion to include

single-payer health care in a meaningful way. Thank you.

The CHAIRMAN. Thank you very much. Thank you, Bill. We have

to wrap up here. Just a couple points I want to make. First, if people want to, they can give their written statements to either Carla

Martin—Carla, did you want to raise your hand, stand up?—or

Catherine Dratz, who is right up here. I guess I will give you Catherine’s e-mail. You see the e-mail here on the board, right?

Website. Address that website; that works—that works better.

And second, a lot of thanks here. First for you, Jeff—Jeff Fee—

for helping provide the forum here. Lynn Sconce, the executive director to you, Jeff; I want to thank Lynn. April Buffington for catering. Thank you. Tim Chopp, who is the supervisor of facilities

engineering, and the entire engineering staff. Laura Shadwick, diVerDate 11-MAY-2000 14:26 Oct 27, 2010 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 61687.000 TIMD PsN: TIMD
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rector of marketing, and the entire marketing staff. Mary Anne

Sladich-Lantz, vice president of Mission Leadership. Kyle Larson,

director of Environmental Services, and the entire Environmental

Services staff. Mary Kramer, conference coordinator. Tim Karst, St.

Pat’s audio technician. Mary Sullivan, who has been our reporter

here. And Montana Party Time for staging and drapes, and I am

sure there are many more here, but thank you very, very much.

And special thanks to all of you here who came and participated,

and also to our panelists. Some have come great distances, and I

thank you all very much.

This is the first of many hearings. It is a huge problem, and we

are going to tackle it. This is probably the most difficult challenge

I will ever have in my professional career, trying to solve this problem. With the help of an awful lot of people working with Republicans and Democrats, all of the communities have jurisdictions

here, we have just got to do this. I encourage all of us to keep an

open mind on everything, nothing is off the table. Let us keep our

minds open so we can work together to find a solution here.

Thanks everybody, very, very much. The hearing is adjourned.

[Whereupon, at 12:44 p.m., the hearing was concluded.]

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61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

(79)

COMMUNICATIONS

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

Æ