Hearing of the Special Committee on Aging - Seniors at Risk: Improving Medicare for our Most Vulnerable

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Thank you once again. I appreciate the ranking member's having chaired this hearing and given us the opportunity to hear from these wonderful witnesses.

All I was going to do was to say, how much I appreciated your testimony, particularly Ms. Korynasz's personal testimony and Ms. Emerson's -- the attachment that told the stories of all the different folks on your SHIBA program and what their lives were like, what they are going through.

It's so easy for us to forget that here when the tassel-shoed lobbyists show up from the pharmaceutical industry and try to have their way, that it really harms folks who don't have a voice all across this country, and I thought those were really wonderful stories in your testimony.

I appreciate that you assembled them and brought them to us. So that was all I was going to say and then Ms. Payne said what she said about the need for reform, and I just have to pounce on that because I couldn't agree with it more.

I think it is absolutely critical. We've heard the testimony in the budget committee about the $35 trillion in health care entitlement costs that is coming at us.

Unless somebody figures out how to repeal the passage of time or repeal the aging of humans, or make it more likely that older humans cost less for medical care than younger humans, then this is an inevitable, unavoidable fact that is bearing down on us with what our Chairman Kent Conrad has called a tsunami of cost.

And if we would dawdle around here in congress and don't do something about it until the wolf is really at the door, then the only tools left in our toolbox are going to be the fiscal tools that can be deployed to solve a problem like this and there are only three of them.

One is raising taxes, and anybody who knows what American businesses pay for healthcare already, and what competitive posture that puts us in vis-à-vis the rest of the world, knows that's a pretty sale to make, that American businesses need to pay more on taxes for this healthcare system.

The second is to throw folks off of healthcare. In a country that has 50 million people already uninsured, which is a national disgrace compared to other developed countries, the idea that we'd throw more off is pretty awful.

And the third is you cut provider payments, which is what Senator Smith was asking about, and we're already at the limit with provider payments. We had this battle in Rhode Island a decade ago, when our worker's compensation system fell apart.

And the industry folks all came in and said, "Well, this is easy, you pick the doctors, you pay them 15 percent less, you chalk up those savings, we'll take it."

And commonsense thankfully prevailed, and instead we went to a medical advisory board for worker's compensation and they established protocols of care and some discipline was put into it and the people from the specialty groups came in and decided, okay, you know, for this -- here's the program.

They were pretty broad, solid programs. They weren't forcing doctors to make, you know, inch-by-inch decisions, but it really controlled the cost in the worker's compensation medical care in Rhode Island after that. And we didn't have to cut, because we knew that would be a foolish thing to do -- penny-wise for the moment, pound- foolish in the long run. And you know, that day is inevitable and that day is coming soon and those three alternatives that we have to address that day are sickening ones, frankly.

The only way we're going to get ahead of this is if we start doing exactly what you said right now. We have to build a national health information technology infrastructure that doctors can connect to.

To expect them to build them all by themselves is as dumb as expecting everybody to build their own roads to work.

There is a national infrastructure issue and we have to see it that way and we have to build that national infrastructure, then everybody can connect their machines.

But there are issues of privacy, there are issues of, you know, coordination, of how you get in and out, what the -- you know, goes into an electronic health record and so forth, how the health information exchange works, that need to worked out on a national level.

We also need to focus a lot on quality of care improvement and prevention. We way under-invest in those things, in areas where we know it will save money.

The RAND Corporation says it could be as much as $346 billion a year from a health information technology system that supports these quality improvements.

There's 2 billion a year in Pennsylvania alone that gets burned in hospital-acquired infections that are completely unnecessary. We kill a 100,000 Americans every year for medical errors that don't need to happen.

There is a huge savings associated with properly targeted quality and prevention investments, and we're not pursuing it, and we're not pursuing it because of the economics of the system.

So we have to change the way it's reimbursed, so that those problems get solved. But between those three things and national health information technology infrastructure, reform in the area of quality improvement and prevention, and a better reimbursement system, we can drive enormous costs out of the system.

I mean, it's burning up 16 percent of our gross domestic product. The next closest country is only 11 percent of their gross domestic product.

The average for the European Union is only of their gross domestic product and those countries have better health outcomes than we do.

We're paying twice as much to have worse health outcomes. We're the highest paying country in the world and when you look at the outcomes, we're somewhere between 25 and 40th.

We rank with countries like Croatia and Cuba. I mean, it's embarrassing and we have to get after that, because we either have to do that now, or face those horrible fiscal adjustments a decade from now.

It's really vital and I'm -- I know it's taken us off-point, but I think it's such an important point, I'm so glad you raised it, and I hope that AARP will pick up its stick and go around this building and knock everybody upside the head until they get it, because if we don't do that now, time is short.

MS. PAYNE: Working on getting a bigger stick.

SEN. WHITEHOUSE: Good.

(Laughter)

SEN. SMITH: Good. It's going to grow, because as Senator Whitehouse, points out the baby boom generation is here. And so the ranks of the AARP will grow, and I wonder as you -- does AARP have a position -- I know how it feels about the Donut hole that captures lots of low and middle-income people such as Judy's family.

Is that the wrong place for the Donut hole? You know, it is -- Medicare Part D is means-tested already but not very much. Should it be means-tested?

MS. PAYNE: Well, we are certainly working on that. We obviously want any asset tests to be eliminated. We recognize that there are some problems with the Donut hole and we're certainly working with a number of staffers and trying to resolve some of those issues.

It is a major problem. We certainly recognize that.

SEN. SMITH: Well, we look forward to your counsel on that because those of us who may or may not be here, whoever is here is going to have to wrestle with these very, very stark and terrible choices.

SEN. WHITEHOUSE: Mr. Chairman, I'd suggest that we have no farther to look for the solution to the Donut hole problem, the senior trap problem, I hate calling it the Donut hole, it really sounds like it's something good.

(Laughter)

It's to the veteran's administration, which has the authority to negotiate with the pharmaceutical industry over the price of prescriptions, and when you put the prices they get compared to the prices CMS pays to Part D side-by-side, the savings add up to enough to close the coverage gap.

MS. PAYNE: And those are the two priorities we have, the fact that we want to eliminate the asset test and certainly give the secretary the authority to negotiate --

SEN. WHITEHOUSE: The authority to negotiate.

MS. PAYNE: -- for lower prices.

SEN. WHITEHOUSE: Why would we privilege an industry from being negotiated with?

MS. PAYNE: Absolutely.

SEN. WHITEHOUSE: It's an extraordinary privilege. It's a ridiculous privilege in my view.

MS. PAYNE: And we certainly have enough models to follow that.

SEN. WHITEHOUSE: Yeah. No -- to look no farther than the VA, which does a wonderful job.

MS. : Thank you.

SEN. WHITEHOUSE: Thank you, Chairman.

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