Health Care Reform

Floor Speech

HEALTH CARE REFORM -- (Senate - March 23, 2009)

Ms. KLOBUCHAR. Mr. President, today I am here to talk about health care reform. I would mention, first, that I was just with Debbie Wasserman Schultz, the Congresswoman who last year battled with breast cancer and today was there, healthy, to introduce a bill. I am proud to be the Senate sponsor, to focus on increasing awareness among younger women about the risks of breast cancer.

But we are here today to talk about something else and that is how to bring costs down in health care. As we look at how to expand health care, as we look at how to improve the quality of health care, there must be work done to contain the costs. I believe, based on what I have seen in my State, you can actually reduce costs and improve quality.

A few weeks ago, President Obama convened a health care summit to bring together industry leaders, providers, and advocacy groups to discuss our opportunity to move forward with serious health care reform. That reform should begin with the Medicare system. Medicare is one of the most valued social welfare programs our country has produced in the last half century. Yet it is also a program in dire need of reform if it is to survive on sound financial footing and continue to provide the fine medical care our seniors have come to expect from it.

Change is needed now. By 2011, the first baby boomers will enter the Medicare system and by 2016 the number of Medicare beneficiaries will increase by almost 5 percent.

This past winter, I convened a health forum in Minnesota to discuss the various challenges affecting the Medicare system. The message is clear: without action, costs will continue to rise and waste will proliferate.

Medicare is the single largest purchaser of health care and its policies directly affect nearly every health care provider. Medicare's payment system, coding, quality reporting, and recordkeeping are the industry standard. Spending for the Medicare Program is projected to increase 114 percent in the next 10 years. Twenty percent of Medicare beneficiaries suffer from one of five chronic diseases. Medicare spends 66 percent of its annual budget to treat this group. Two-thirds of Medicare spending only helps one-fifth of Medicare beneficiaries. If we are going to sustain Medicare as a healthy, high-quality program Americans deserve, we must do something to address these challenges. In short, we need to reform Medicare so it addresses efficient, high-quality care.

As it happens, doctors and hospitals in many regions of the country, including my State of Minnesota, practice exactly this kind of high-quality, low-cost medicine and they should be rewarded for it. But Medicare does not reward them. Instead, it punishes them. In fact, at the health summit last week, President Obama actually asked the gathered group, ``Why should we punish Minnesota because other States are less efficient?''

The problem is, despite periodic efforts at reform, Medicare pays for quantity, not quality. More tests and more surgeries mean more money, even if the extra tests and operations do nothing to improve a patient's condition. States that have historically delivered excessive procedures are still rewarded for the wasteful practices of the past, while efficient States, such as Minnesota, are punished.

If you look at this chart, you will see that the areas in dark blue are the ones that receive the lion's share of Medicare payments. The light blue area States, such as Minnesota, Montana, Iowa--I see Maine is looking good, as I see the Senator from Maine across the way--but a number of States, you can see, are in areas where Medicare spending is low but quality of care is high. It is as if there were a huge transfusion that basically takes taxpayer money from one region, one area of the country, and puts it in another.

It is not to say people are not sick in other parts of the country--they do deserve that help--but looking at the limited resources, we have to figure out what is working and how come areas of the country that tend to have the lowest health care costs also have the highest quality health care?

It is not what you would think. You would think: Well, the highest cost must have the highest quality. That tends to happen sometimes, in clothing and other things. That is not what is going on in this country right now. Regions with more specialists and more hospital beds tend to provide more services and get more of the money.

According to the Dartmouth Institute for Health Policy and Clinical Practice, high-cost regions in Medicare boast 32 percent more hospital beds, 31 percent more doctors, and 66 percent more medical specialists. In other words, supply is driving demand. The result is that Medicare pays much more in some parts of the country than it does in others for medical care that is no better.

Medicare's own report shows that quality of care is higher in many of these low-cost States. In fact, Medicare spends more in places such as Florida and New Jersey than it spends in States such as Minnesota and Oregon. Let me give you one example:

In Miami, FL, Medicare spent roughly $15,000 per patient per year in the year 2005. In Minneapolis, a Medicare patient received about $7,000 worth of care that year. To put it another way, Medicare will spend $50,000 more on a 65-year-old patient in Miami over the course of his or her lifetime than on a comparable patient in Minneapolis. Now, $50,000, that is a lot of money.

At $2.4 trillion per year, health care spending represents close to 17 percent of the American economy, and it will exceed 20 percent by 2018 if the current trends continue. If you look at this internationally, you can see the United States spends far more than any other nation, without getting better care. We can and we must do better. A number of models are out there to provide direction for the future. The Mayo Clinic, based in my home State of Minnesota, is renowned for the effective care it provides at a reasonable cost. Now, think about this. There was a Dartmouth study that came out. It showed this: If the rest of the hospitals in the country used the same kind of high quality, with very high quality efficiency ratings from families, and high efficiency care as the Mayo Clinic now does, in the last 4 years of a patient's life, the country--the taxpayers of this country--would save $50 billion over 5 years. That is $50 billion over 5 years by simply following the protocol of having a more organized, efficient delivery system with one primary doctor, with experts who work together, without duplicate tests.

That is $50 billion every 4 years by following a set protocol with some of the highest quality ratings in the country. The Congressional Budget Office has also studied the problem and found the potential for huge savings. This chart reflects that Medicare spending would fall by 29 percent if spending in medium- and high-spending regions were the same as that in low-spending regions. That is the CBO.

So how do we change the Medicare system in a way that will reduce these disparities and reward our doctors for doing what is right? Real reform will start when the system starts paying for quality. Here are the three priorities I plan to start working on immediately. First, we need to enhance Medicare incentives that reward quality care. For many illnesses and conditions, the medical profession has widely accepted practice guidelines that result in better health care outcomes, such as when to give aspirin to heart patients, and how often to perform cancer screening, but they are not always followed. A recent RAND Corporation study found that adults received recommended care only 55 percent of the time. Medicare needs to reward doctors and hospitals for doing the right thing and achieving improvement in care. These quality guidelines can be the basis for Medicare payments to providers.

Second, we need to rethink the Medicare payment system. Right now, Medicare pays for tests, visits, and other procedures one by one, giving providers an incentive to order more and more services. We need to have better coordination of care, and less incentive to bill Medicare purely by volume. Increasing the bundling of services in Medicare's payment system has the potential to deliver savings and start rewarding value and not volume.

Third, we need to address the shortage of the number of primary care physicians who are currently practicing across our country. Today, effective primary care is severely undervalued in our health care system. Yet, research suggests that improving access to primary care and reducing reliance on speciality care can improve the efficiency and the quality of health care delivery. To accommodate the needs of an aging population, we need to promote primary care and transition away from our specialty-intensive health care workforce.

The health care system we have now needs major improvement. That means transforming the system to pay doctors for the quality of care they provide and to turn the current disconnected, reactive health care system into one that is integrated and concentrates on delivering the best care for patients.

Again, I want to stress this, when we talk about saving costs, when we look at these studies, those States that are most efficient, those areas that are more efficient, have high quality care.

I leave you with this figure: The Mayo Clinic, in the last 4 years of a patient's life, if those protocols were followed across the country, we would save $50 billion every 5 years in taxpayer money. That is an independent study, $50 billion.

I know we can do better. At the same time as we reduce the cost, we can improve the quality of care that our Nation's seniors deserve. Working together, we can give them the system they deserve.

I yield the floor.

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