Press Conference With Rep. Peter Welch (D-Vt); Rep. Earl Pomeroy (D-Nd); Rep. Jay Inslee (D-Wa); Rep. Ron Kind (D-Wi); Rep. Brian Higgins (D-Ny) - Introducing The Accountable Care Promotion Act

Press Conference

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REP. WELCH: We'll get started. We're -- as you know, we have votes, so that we're going to be doing a bit of a rolling presentation. But I'm here today with my colleagues and regional sponsors of the Accountable Care -- accountable care promotion act.

Let me give you a little background. First of all, I want to thank Earl Pomeroy for working so hard with me, and our cosponsors, who will be speaking -- Jay Inslee, Brian Higgins and Ron Kind -- about this legislation. And we serve on Energy and Commerce and also on Ways and Means, which committees, as you know, are going to have major jurisdictional responsibility for health care reform.

My experience in health care is as a senate president in the state of Vermont. And as a Democrat, my colleagues and I, we're always focused on access, trying to take -- make certain that folks who did not have health care would have it. When we were having our political battles in Vermont about health care, we had a Republican governor and his colleagues were primarily focused on cost. At a certain point, we reached across the aisle, shook hands and understood that we were both right, that the path to greater access was through cost containment.

And what we did in Vermont, where we have about one of the highest rates of covered individuals and we have one of the lower for individual spending, is focus on how to reform the system of delivery of care, not just how you pay for care. And we did such things as establish a blueprint for health which is focused on providing better ways, more efficient ways to provide care for folks with chronic illnesses -- there are six chronic illnesses that account for about 70 percent of spending.

But also we started working with Elliott Fisher and folks at Dartmouth who have done extraordinary studies that are really quite shocking, when you look at it. They have been able to investigate health care spending in the Medicare population by regions. And they have found -- and it's really beyond dispute and documented in the Atul Gawande New Yorker article that is so much part of the political discussion now -- that in regions where you have the highest spending on health care, you oftentimes have the worst outcomes. And in many regions where you have the lowest spending, you have the best health care outcomes.

And what it says -- it first may seem stunning but, in fact, makes sense, because it is about how care is delivered that makes a difference in what the outcome is, as well as the cost. And the regions that have had the most success have, in effect, accountable care organizations. And that approach provides incentives for rewarding quality as opposed to volume. And the fee-for-service approach to medicine is an incentive to do more, whether it's needed or not. And it results in excessive spending that we can't afford and, ironically, outcomes that are less than desirable.

The intention of our legislation is to provide incentives to promote better health care. And the tremendous link is that if we accomplish that, we're going to be able to lower costs. All of us are unified by the desire to deal with the cost side of health care.

I'm going to turn this over now to Earl --

REP. : We'll come back.

REP. WELCH: And you'll come back.

REP. : Yeah.

REP. WELCH: Thank you.

REP. POMEROY: We have the most expensive health care system in the world, by far -- $2.2 trillion spent in 2007, almost half funded by the federal government in Medicare and Medicaid. To think that cost will not be a major component of this year's health reform debate would be a mistake. For one thing, the single greatest barrier between American families and coverage they feel secure about is the cost of coverage.

Runaway costs have caused many employers to drop their employer- provided health insurance, the single greatest way people in this country get their health care coverage. Other coverages have been dramatically shrunk, higher deductibles, ruinous copays. A recent study on bankruptcy showed most going bankrupt because of medical bills had coverage. So we've got to get at cost, cost as a driver. Two and a half percent above normal inflation for medical inflation since 1970 is killing our system.

As we address cost, we're going to look at what works and try and build upon it. And that's why I'm so pleased to be part of this legislation, the accountable care promotion act, because we know that accountable care organizations exist throughout the country. They're integrated systems where providers work together. They have primary care medicine at the forefront, helping coordinate a patient's access to the care they need.

Additionally, the accountable care organizations we envision in this legislation change the financial incentive. A witness to the Ways and Means Committee put it very well. He said, if you pay for volume, you get volume. And, indeed, the growth in intensity and volume of services has been a principal cost-driver in our system.

The accountable care organizations provide financial incentive to deliver best-quality care as effectively as possible. McKinsey & Associates estimate that $450 billion in unnecessary care is provided every year, efficiencies that can be gained through the accountable care organization structure, which I do not have time at this moment to describe further.

I'm going to get out and vote and yield to Ron Kind, who's been a real leader in the Ways and Means Committee deliberations going forward on making certain that as we address coverage we're also addressing the cost issue.

REP. KIND: Good morning, everyone. Congressman Ron Kind. I represent western Wisconsin.

I come from one of these high-quality, low-cost areas. In fact, last week, the president came into Green Bay, Wisconsin, to make this very point. But he very easily could have come to my hometown in La Crosse, Wisconsin, where the average Medicare beneficiary receives spending and benefits of roughly $5,800, compared to over $16,000 down in Miami. But the catch is the quality of care is higher in our area than it is in Miami.

And that's the whole point of this accountable care organization legislation; it is to emphasize the value and the models that we see taking place in the health care system today over the volume and the consumption. And if we do one thing -- accomplish this one thing in health care reform, it's figuring out how we can find cost containment in the system, which is affecting everyone, from family budgets to businesses to public and private budgets alike, but without jeopardizing the quality of care at the end of the day.

And we have models in my backyard that show us how to do this -- the Mayo Clinic, Gunderson Lutheran, Marshfield -- that have developed this coordinated team approach to care, so that things don't slip through the cracks that affect patient quality at the end of the day, with substantial cost savings, too. Because if we don't find the cost savings without jeopardizing quality, the coverage issue is going to be unsustainable and very difficult to do. And that's why we think this is a very important piece to the overall health care reform package that we're working on right now, incentivizing the use of the models that have already proven they work, high quality, low cost delivery of health care so that we can bend that cost curve and make health care reform that is sustainable for everyone alike.

With that, I'll turn over to my colleague, Jay Inslee, from the great state of Washington.

REP. INSLEE: All right. I'm Jay Inslee. I represent the First District of the state of Washington.

We have discovered a gold mine of cost savings with which we can provide access to 40 million-plus Americans without insurance, and that gold mine is the absolute malignancy of over-utilization of unnecessary and oftentimes contra-indicated work that's going on, for which Uncle Sam is paying. And though -- the center of those gold mines of efficiency are now found in Green Bay, Wisconsin, in Minnesota at the Mayo Clinic and Group Health Cooperative in Seattle, where physicians have learned that if they work together in a coordinated fashion to figure out truly the most effective way and the most health-centered ways to provide people health care, they will achieve enormous savings.

And I want to just note this: We are not talking about rounding errors here. We are talking about reductions of 100 percent that are available to the taxpayers to save taxpayers money and allow that to be spent on access for those people without insurance. The difference between Ron Kind's $5,800 and the $8,000 spent on a typical recipient in San Francisco and those in Miami, Florida, is 100 percent. So this truly is a gold mine of savings that we need to tap into. That's my first point.

The second point is that we believe this can result in a dramatic increase in the health of Americans and the quality of medical care they receive. And the evidence is not just anecdotal and it's not just based on wishful thinking. It is based on the clear evidence.

Let me give you one factoid in that regard. President Obama has rightfully led on this subject, and he's talked about rehospitalization rates as a measure of healthy outcomes. The average rehospitalization rate across the United States is 20 percent -- 20 percent. In my state, which is way ahead of the curve on this issue of coordinated care, it is 16 percent. At a group health cooperative in Seattle, Washington, it is 14 percent.

There are 6 percent of the people going into hospitals that don't have to come back because of infections and problems, because doctors work in a coordinated fashion to figure out the best type of health care. This will not only be a gold mine for Uncle Sam in the tax standpoint; it is a gold mine in patient health as well.

REP. POMEROY: Brian, go ahead.

REP. HIGGINS: Thank you very much. I'm glad to be joined with leaders on this piece of legislation, Peter Welch and Earl Pomeroy, Ron Kind and Jay Inslee. They have captured, I think, this issue in a very, very effective way. Zach Space is also with us.

The United States pays two and a half trillion dollars for health care, the most expensive system in the world, and our outcomes are deplorable and getting worse. We have a situation where health care premiums are increasing by 6 and a half percent. It is unsustainable and it is unacceptable.

Everybody has made reference to the Dartmouth study, to the Atul Gawande article in The New Yorker, and to historical and contemporary studies. They all point to the same thing: We're spending more for health care and getting poorer outcomes. That's unacceptable.

This bill, I believe, under the leadership of Peter Welch and Earl Pomeroy, will serve as a basis for health care reform. You can't spend more money. And as the president has said many, many times, this is not only about the 46.7 million people that don't have insurance. It's about the 250 million people who do and are paying extraordinary costs that is killing our competitiveness, small businesses, large businesses, working families throughout the nation.

We have to have health care reform. We have to have a system that works. The president has made specific reference to the Cleveland Clinic, to the Mayo Clinic and other programs that work very effectively at low cost and very, very good outcomes. That should be the model that we adopt. That is the model that this legislation addresses. And if we do health care reform and this bill is not included, we will have done nothing.

REP. POMEROY: Thank you, Brian.

And next is Zack Space, an original co-sponsor from Ohio.

Thanks, Zack.

REP. SPACE: I'd like to thank Peter Welch and Earl Pomeroy for their work on this bill.

The whole concept of accountability care organizations is something we've seen in concept back in Ohio's 18th district and it works quite effectively. Not only does it bring costs down, but it, even more importantly, enhances the quality of care that's available.

And I think this bill incorporates something that has to be a central part of the reform that we're undertaking right now, and that has to do with instilling a sense of responsibility at all ends of the health care delivery process, both in terms of the delivery as well as the consumption of health care.

And if we're going to be successful in dealing with health care in America this year, I firmly believe we're going to have to change the culture of health care in America. We need to start thinking smarter and better about how we deliver it and how we consume it.

This accountability care organization concept does just that. And we've seen positive results in the field already in parallel organizations that exist right now that are handling it quite effectively.

I want to commend Mr. Welch and Mr. Pomeroy for their insight and their leadership on this issue, and I look forward to working with the rest of the committee and Congress in tackling this very challenging issue this year. Thank you.

REP. POMEROY: I'd just like a 30-second sum-up. These are voluntary associations. They will be completely at the discretion of participating medical providers, whether they care to associate and form one of these or not.

If they do, there'll be some incentives. First of all, there'll be a sustainable growth rate designed specifically for this particular group, not a national group. Secondly, there will be a gain-share opportunity. If they ultimately unfold their care practice in ways that provide meeting the quality targets while saving money, they're going to get to share in the savings. That's the underlying financial incentive change we think is so critical about ACOs, and we look forward to advancing this in the legislation.

Have we voted on this one?

REP. WELCH: Yeah.

REP. POMEROY: Okay.

All right, we'll take questions.

Q Do you know how much it would save overall -- (inaudible)?

REP. POMEROY: We don't have a specific score from CBO on this. We're wrestling with CBO scoring. Some of the savings, we actually believe, are going to produce more than we're given credit for by CBO; not the first time that's happened. But we'll continue to work with them on getting a score. I'm quite optimistic it will be in the package. Discussions in the committees of jurisdiction have been advancing this topic even while the bill is still coming together.

Q Congressman, what's the incentive for -- (inaudible) -- providers? I mean, everybody knows that when you go to a doctor these days, you're in the doctor's office, he sees you -- (inaudible) -- no longer than five minutes maximum. And when they walk out the door -- (inaudible) -- or somebody else comes in to take over, they certainly aren't -- (inaudible).

So how are you going to get the doctors to cooperate in this kind of environment, where they're going to have to perhaps look at taking a cut in pay or looking at how they're going to get their money?

REP. WELCH: Well, here's the incentive. First of all, it's voluntary. What's the incentive? There's going to be the gain share that Earl mentioned. So if they do a better job and save money, they get some of the benefit of that.

But you know the real benefit for most of the doctors and the health care providers? It's that they get to spend their time doing health care. And when we talk to doctors, one of the frustrations that they have is they -- you know, there's a lot of doctors who don't drive Mercedes and who actually (went in it ?), because when a patient comes in, they want to provide them good care. But they're under the gun. And, in fact, they've got administrators telling them to push people through. So there's a lot of pressures on the doctors to compromise the time that they want to spend with patients.

So in these accountable care organizations that more or less have been implemented voluntarily in some regions of the country, you get higher satisfaction among the providers, the doctors. There's a lot of folks out there who'd like to do medicine the old-fashioned way, where they actually spend time with the patient and work as a team.

Q (Off mike.)

REP. : It's a great question. And we're hoping that the incentives involved in this legislation is going to be enough to induce other regions, other providers, to move in this type of model care environment. But Mayo Clinic, you know, set up their own clinic. They're located in Rochester, Minnesota, but they set one up in Florida at a very high-cost area. They were able to duplicate these results.

So the model has proven very effectively. And we've got studies now showing what works and what doesn't work, and we're hoping that that's going to be enough to drive the other care providers, the other doctors, to take this patient-first focused approach and this coordinated team approach, as opposed to just the test-and-procedure approach which is occurring in too many regions of the country. And part of this is getting that information out and empowering the doctors and patients with the best information, what's working, what isn't. What can drive down costs without jeopardizing quality at the end of the day?

REP. POMEROY: We've been joined by a person who's been a leader on health care in Congress for -- I hate to say it -- decades. (Laughter.) But the time may be coming for Jim Cooper's insight and efforts to be paying off; Jim Cooper from Tennessee.

REP. JIM COOPER (D-TN): Sorry to be here late. I went ahead and voted, and I know some of you all have to get down and do it.

The Dartmouth work that this accountable health care organization builds on has been extraordinary. It's some of the most important working going on anywhere in America to help reform our nation's health care system. In particular, Dr. Elliott Fisher and Dr. Jack Winberg are remarkable clinicians. As physicians, they know how to treat patients, but also, as policy experts, they know how to make the system work better all over the country.

So this is all about aligning incentives so that physicians put their patients' best interests first. That's what the doctor-patient relationship is all about -- top-quality care and doing the treatments that are necessary and not doing extra treatments that just boost the income of the physician. So aligning incentives is the key to this accountable health care organization.

So I know the press conference (is over ?). I'm sorry to be slow. But we -- (inaudible).

REP. POMEROY: Are there any questions -- (inaudible)?

Q What's it going to take to actually -- (inaudible)? What's it going to take to actually create a system that's nationwide?

REP. WELCH: First of all, it's going to be implemented regionally. Health care is delivered very much at an intimate level, and there have to be incentives in the regions in order for people to decide this is what they want to do. And it is voluntary. But the incentives are you can share in the savings, so there's a financial benefit. There's security with a sustainable growth rate.

And for the providers, they get -- as Jim Cooper was saying, they get to practice medicine. And, you know, the dilemma we're facing now is that everyone is feeling squeezed. We're spending way too much on health care for what we get, and the only way we try to, quote, "control costs" is by squeezing the doctors and the providers and the hospitals instead of squeezing out of an inefficient system the inefficiencies.

This debate that we have every single year about the Medicare reimbursement rate for doctors kind of misses the point. We should pay doctors a fair -- we should pay them fairly for what they do. But we shouldn't pay for things done that don't need to be done. And the MacKenzie (sp) study suggests that that's close to half a trillion dollars. It is real money. And that's been the neglected area of reform, and that's what has to be reformed, both in order to make the cost of health care sustainable and to provide better quality care.

REP. : That's well put. So much of the health debate so far has been about giving regular citizens more choices in their health insurance. This would actually give doctors and other medical providers more choices in the way they practice medicine, freeing them to practice high-quality, affordable medicine again. That's the old tradition in America, you know, a good family doctor who puts the patients' interests first. We're giving them this choice. It'll be a voluntary program. And it'll be interesting to see how quickly it's taken up by physicians and physician groups all over the country.

REP. POMEROY: It occurs to me that it's a very good sign that we've had an aerobic press conference. (Laughter.) You know, plenty of stair exercise, a lot of -- you have a lot of aerobic activity. This is a healthy lifestyle press conference. (Laughter.)

REP. : (Inaudible.)

REP. POMEROY: All right, any other questions?

Q (Inaudible) -- time line. How long will it take -- (inaudible)?

REP. POMEROY: You know, easily, this can be effective as the program commences, as the overall program commences. So the program is going to consist of many things -- insurance reform, substantial subsidies to assist those who don't have coverage, in the purchase of their coverage, as perhaps construction of new insurance markets. And as those come into being, this will be fitting easily along that timetable.

REP. WELCH: Also, there's some regions in the country where folks are ahead of us on this.

Q (Off mike.)

REP. WELCH: There are parts of the country where people are ahead of us on this. I mean, many people in the trenches -- the doctors that you mentioned, some of the providers -- want to have a different way of delivering care. And this legislation would enable them to accomplish their objectives.

REP. POMEROY: One other thing I want to add also, and that's we're going to be doing sustainable growth rate reform, the SGR component. That's taken so much of our time over the last number of years. As we reform SGR, this will really be quite possibly part of that legislation, and again, creates the opportunity for an accountable care organization to have their own sustainable growth rate target and gain-sharing opportunity to the extent they improve upon what would otherwise be the expected rate of growth.

Q Thank you.

REP. WELCH: Thank you.

REP. POMEROY: Thank you. Thank you very much.

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