She Knows That Under The Proposals, Any Kind Of Mandation, Any Taxes, Any Penalties That Would Be Incurred

Floor Speech

BREAK IN TRANSCRIPT

Mr. THOMPSON of Pennsylvania. Well, I thank my good friend from Utah. I feel like I am in the wild, wild west between Utah and Colorado. It is very good to be with you here.

This is a very important topic. It comes down to that very bold sign you have there, Mr. Coffman, 5.5 million jobs. That's what we are at the risk of doing, going down the direction we are going, which is not necessary. We have other alternatives. We have other bills, just like the idea that you outlined just a few minutes ago.

We have, as we look, you know, the National Federation of Independent Businesses, just one of the voices for small businesses, have been very clear about what it would like to see in health reform. It would like the ability to pool with other businesses to enjoy the economies of scale in purchasing health insurance. That's a fundamental part of what you just outlined. They want tax credits to be able to help them to be able to afford the insurance. I guess to come back to my opening analysis, but what we have here is an unhappy fable under the Democrats' health care plan in which no small business will live happily ever after.

I come out of a small business. I grew up in a small family sporting goods business. It was my job as a teenager to get up at 6 a.m. on Saturday morning to open the store that was down in the front yard in front of my parents' home where I grew up.

I have to tell you, 6 o'clock in the morning felt like the middle of the night then. I got up because of people coming in for either picking up their supplies for hunting or for fishing, and small business is what we did. I mean, we worked hard at it. My mom and dad had that.

They were looking for the American Dream, and they were willing to put whatever it took into it, the hours and the days. They created jobs and they created prosperity for other people, and they provided benefits for folks that worked for that family business.

I saw the toll that one of the biggest obstacles that ran up against being successful--and I am sad to say that the business does not exist today because those barriers eventually overtook it--it was government. It was government that did that business in, and it's government that's a barrier that impedes many, many of our small businesses. It was the taxes. It was the regulations. It was the mandates. Today we are talking about health care is one more mandate that is put on our small businesses.

Health care costs for small businesses across the country continue to outpace the rate of inflation. We know that we could do a better job of bringing the costs of health care down. But it's the path that we choose that is so important.

The path that the Democrats' plans are on will make matters worse. They will drive many small businesses out of existence, and we will lose jobs, many jobs. We have 5.5 million jobs at risk in this debate. But there are other paths that we can take, such as the ideas outlined by my good friend from Utah that we can take.

There is another bill that we have out there, Putting Patients First Act, H.R. 3400. That's a good plan. It's been introduced. We have been talking about it for some time.

I think the American people really need to know and get to know more about this, because it does so many different things. It allows being able to access across State lines for health insurance. It provides that competition, which is healthy, and which is important. It addresses tort reform.

When we talk about fraud, abuse, and waste of health care, I came out of working in health care for 28 years. We tried, as health care professionals, professionally and ethically, we worked very hard to make sure that we used every health care dollar wisely to treat the patients that are there, to help make them better where we can. One of the largest wastes, I feel, is the cost of medical liability.

Nationwide, we spend $26 billion annually in medical liability premiums, and in addition to that, the practice of defensive medicine. I understand defensive medicine. If you're practicing as a physician, when you come out of medical school, you may have $250,000 in loans as a part of that education. If you're a specialist, it may be a half a million dollars.

And because of a lawsuit, and frequently a frivolous lawsuit, you're at risk of losing not just your practice, but your family's home. And because of that, you may order these tests to be able to treat specifically this patient at this time, but these other tests are ordered and put in the medical record to be able to establish that you followed a standard of care. It's to protect you in the event that you are sued.

Well, that probably is, at a minimum, $100 billion a year annually in this country. So in terms of wasteful costs in health care that we could bring down, there is $126 billion annually just by good tort reform.

H.R. 3400 does that. H.R. 3400 provides some commonsense approaches to medical liability and brings down that cost for everybody, which would bring down the cost of health care for our small businesses and individuals all across the Nation.

BREAK IN TRANSCRIPT

Mr. COFFMAN of Colorado. Thank you, Congressman Bishop.

Congressman Thompson, when we talk about the safety net that exists today, and you came from the health care industry, the first bill that the President signed was the SCHIP bill that went four times above the poverty level to provide a public insurance program for children, so that's $88,000 for a family of four, and States can do income disregards and raise the amount up more; we have Medicaid for the poor and disabled; we've got Medicare for elderly.

In my State, we have 183 community health clinics that, if you look at their Web site for the 2008 annual report, shows that they had about 400,000 patients in 2008, not patient visits, but patients that received preventive care, primary care, dental care and mental health services. This is in a State of 5 million that is publicly funded. Some of it folks can pay as they have the ability to. It's for the uninsured and the underinsured.

We have a high-risk insurance pool in the State of Colorado for everyone who buys an insurance product, pays a premium tax, and part of that goes into a pool for anybody, regardless of their income, that can't qualify for a public program; and irrespective of their preexisting condition, they receive health insurance that is capped at 140 percent of the average premium price in the State of Colorado.

Can you address to us your view as a former health care professional about the safety net that exists in America?

Mr. THOMPSON of Pennsylvania. Absolutely, and I really appreciate that question. It's been one of the biggest disappointments. I came to this body out of health. I thought I would actually retire from nonprofit community health care, which meant my hospital would have provided me a discount on my nursing home bed. But instead, I have the privilege of coming here to work on behalf of the citizens of Pennsylvania's Fifth District.

And I came here knowing that we've got a pretty good health care system. And we can do better, and we can improve it, and improve on all four principles: access, affordability, quality and patient choice.

So I was excited when the President said we were going to work on health care. And I get here, and do you know what we're working on? We're working on access to health insurance; we're not working on access to quality health care. That's what we should be working on. That's what the American people deserve: we work on things like we've been talking about, H.R. 3400 and the different bills that are presented here that would improve health care in all four dimensions. But instead, we're talking about health care insurance. And I guess I should have had some indication of that when I looked at the individual that was selected.

Mr. COFFMAN of Colorado. Would the gentleman yield for a question?

Mr. THOMPSON of Pennsylvania. Absolutely.

Mr. COFFMAN of Colorado. Representative Thompson, the bill, H.R. 3200, strips hundreds of billions of dollars out of the Medicare system, and it effectively shuts down the Medicare Advantage program. The trustees of Medicare have already said that in 2017, not by 2017, but in 2017, Medicare is expected to go broke. So there's solvency issues in Medicare. And yet we're stripping hundreds of billions of dollars out of the Medicare system.

Can you speak to that and its impact on the elderly?

Mr. THOMPSON of Pennsylvania. Sure. Medicare actually is the central component of this debate for many different ways. And let me start with the question that you raised. The Democrats' health care bill, the accounting of it, cuts essentially $128 billion from Medicare part A. Medicare part A pays for end-patient services. That pays for hospital services. It pays for up to 100 days if an individual, an older adult, is qualified in a skilled nursing facility, $128 billion.

I have to tell you that most hospitals I know, and I have probably about 20 hospitals in my congressional district, I would say that my hospitals are like most, many in America, either in rural settings, certainly underserved urban areas. They are lucky to be making a margin of 3 to 4 percent annually. And to cut $128 billion from part A will certainly impact--I think what it will do actually, it could very easily move towards bankrupting many of these facilities. Certainly Medicare part B, which is the Medicare coverage that individuals choose to purchase. It helps to pay for physician services. It helps to pay for therapy services, if you're an outpatient. And that's scheduled for $130 billion in cuts for Medicare in order to fund this Democratic health care plan.

The Advantage plan you talked about is Medicare part C. Medicare Advantage is managed care Medicare, and it's essentially a plan where individuals choose to enroll. It gives them a little more flexibility. It provides them a little more coverage. It's a choice that they make. And the Medicare Advantage plan has really been targeted by my Democratic colleagues. And that's scheduled for, within this, $133 billion in cuts.

Finally, the pharmaceutical program, one of the newest parts of Medicare, Medicare part D, that's the drug benefit that President Bush put in place here a few years ago. Under the Democrat's proposed health care plan, Medicare part D, the pharmaceuticals, the drugs, is scheduled for a cut of $20 billion, totaling $411 billion in Medicare cuts. Now, that impacts people. It impacts individual lives. It impacts jobs.

In my district, in a very rural district with rural counties, my hospitals are actually important economic engines. It's a place with some really good jobs. They're economic engines. They buy a lot of resources to operate the hospital. They try to buy them locally to support the local economy. And when you start to make these types of Medicare cuts on facilities, health care facilities that are at best in a banner year making a 4 percent margin, we're talking about closing those. We're talking about losing jobs. And that's not good for anyone.

You never want to see a hospital close. But in a city, you can make, I guess, an argument that if you close one hospital, somewhere in the city, probably within blocks, you'll find another one. In rural America, rural Pennsylvania, if you close a hospital and what you wind up with is a commute, that makes a difference between life and death.

Mr. COFFMAN of Colorado. Would the gentleman yield for a question? Congressman Thompson, we talked about cost shifting, and I know clearly there's cost shifting for uncompensated care, but there's also cost shifting for Medicare and Medicaid. The underfunding of those government programs have done much more in terms of cost shifting on to the private insurance market and have had a big factor in escalating premiums.

But when we talk about how government sets rates, it doesn't set rates really to the market, as a private company would have to do. It can set rates at an artificially low level because it doesn't have to respond to the market.

I wonder if you could address that, and why the public option would destroy private insurance?

Mr. THOMPSON of Pennsylvania. Absolutely. I see three reasons, three primary reasons why commercial health insurance is so expensive. One is we need more competition, and that is allowing a broader pool. I am really interested in learning more about the model in Utah. It is intriguing. It sounds like a great model to look at. But more competition is important.

Secondly, it is the need for tort reform. I talked about those numbers, $126 billion a year. It drives costs up. It drives the cost of providing care up. Therefore, commercial insurance goes up.

Finally, there is the necessary cost-shifting that occurs. Now, some of my colleagues in this body, particularly across the aisle, when you hear the term ``cost shifting,'' they see that as an evil thing. When you come out of health care, you begin to understand what happens in health care.

I would say the primary reason that health insurance is so expensive is because government creates an entitlement, Medicare, medical assistance, and then from day one, after they created it, discovers they can't afford it and they systematically underfund it.

Let me talk about the numbers specifically. Medicare: For every dollar of cost that a hospital or a physician has, Medicare pays 80 to 90 cents, 80 to 90 percent. If it is medical assistance, that is 40 to 60 cents for every dollar of cost. If you are just operating on Medicare or medical assistance, a hospital and doctor, you could see, they have these costs and this reimbursement, they are not going to keep their doors open very long because they can't cover their costs.

So what they do is negotiate with commercial insurance, and commercial insurance average, average across the Nation, pays at least 140 percent; 140 percent of cost. Now, why do they do that? Well, they do that because in the negotiation process, doctors and hospitals need to achieve that 140 percent from commercial insurance to offset what medical assistance and Medicare, what the government doesn't pay.

So that is where the cost shifting occurs, because if you don't get that higher rate for commercial insurance, you are not going to be able to make payroll. You are not going to be able to invest in lifesaving technology. You are not going to be able to keep the lights on in the facility.

So, the fact is the government creates these new programs, with the best intentions, I am sure, but quickly finds that the costs are just so tremendous that they begin to systematically underfund those costs.

One of the biggest concerns I have with the public option, as I read H.R. 3200 in the Education and Labor Committee when we marked that bill up, is that the public option would pay Medicare rates. Medicare rates are 80 to 90 percent of costs, 80 to 90 cents for every dollar of cost.

I do believe that the public option will be cheaper than commercial insurance because the public option will also underfund the cost of health care. And if the public option replaces the commercial insurance of today, that really today funds and keeps the lights on and our hospitals operating and our doctors in practice, we are going to lose health care providers.

Mr. COFFMAN of Colorado. Congressman Bishop, you have talked about some of the health care reform measures before the Congress, some of the Republican measures. I think you referenced one by Congressman Shadegg, and you referenced another one, let's see, Congressman Shadegg and Congressman Price. I think you referenced two Republican health care proposals.

I think that everybody in the Congress agrees that reform is necessary, that the system isn't working as it should, that people are paying too much for health care, that we need to do more for the uninsured. It is a question of how we get there, and do we do a government takeover of the system by inserting a government-controlled health care plan, or are there market-based solutions.

I wonder if you could give your view on how you see reform.

Mr. BISHOP of Utah. I appreciate that, and I think the conversation you have had so far with Congressman Thompson is fascinating, because he has explained some of the problem you have when the government steps in to run the system.

If we look back at the history of the Medicaid portion, it does not give us a whole lot of confidence for moving forward and allowing the government to take a larger role in this area. Since Medicaid was founded in 1965, costs have escalated at 2.3 percent higher than the rate of inflation. Today, Medicare costs 37 times what it cost back then after being adjusted for inflation.

So when Congress first established Medicare, they thought it would cost $238 million a year. That first year it was closer to $17 billion. They projected by 1990 it would cost $12 billion. The actual number was more like $90 billion. And if as the gentleman suggests the government therefore has taken over those particular options and you no longer have this cost-shifting that you can go to the private sector, the only other option you have in the health care system to try and deal with those real costs--well, you can go bankrupt--but the only other option you have is cutting services that are given, which is why this debate is so significant and why these other bills we are talking about are so important that they be debated here on the floor.

So people can realize that rather than having the government explain what you can and cannot do, if you simply open up the option so individuals have a choice and become part of the system, there is a responsibility of the consumer as part of the system, then these changes can happen.

In every other kind of insurance, you can buy insurance across State lines, for auto, for housing. Why not for medicine? A simple change in the Federal restrictions would allow that to take place. You can pool for almost everything, except in this area. Why not change those restrictions, which is what we are talking about.

Why not allow people to buy their own insurance with pre-tax dollars, not post-tax dollars? Why not simply allow a benefit to the small businesses the way big businesses have for HSAs? These are portable, so when a person leaves the employ of that company they still have a pot of money, and they still have some kind of security with them to go on.

These are the kind of ideas that are going to change the dynamic of the system, because, as has clearly been stated is, all we are talking about so far with leadership's plans they have been presenting is how to assure that everyone has insurance, not how to make health care affordable for all Americans, and the only way you can do that is by allowing the consumers to take responsibility, to have choices, to do the comparison shopping.

That is the entire program in Utah. It is a defined contribution approach. So the employer gives money to

the employee, and that employee can then go online and look at everything out there and pick what is important for them, not necessarily what the company is offering. A small business that can't afford to do that can now give the employee money, they can add with their money if they want to, to go out and pick what is available from what are the options out there. And we can even expand that wider. That is the only way you get competition that will have the effect of adding pressure on the system to lower the price and to increase the quality.

We do that all the time. It is cheaper today to get your nose fixed than ever before because it is not covered by insurance. Individuals negotiate with doctors for medical services and the costs have come down. Laser eye surgery is cheaper today than ever before because employees negotiate with doctors and the prices are coming down.

Why don't we allow that system to work in other ways? That is what these other programs are talking about, allowing people to be empowered to make choices for themselves that they are competent and capable of doing, and with those kind of market forces now in the system, the cost will come down.

But it has never happened when the government has decided to step in and force those costs to come down. It didn't work with Medicare. It hasn't worked in foreign countries. And the real fear is if you are not destroying jobs, you are destroying the quality of health care, because the only other option you are left with is minimizing what can be given to an individual, denying services. That is not where we want to go.

Unfortunately, if we only have this one bill that the leadership wants to put forward here, that is the end result of that bill. We need to beg leadership to allow other debates and other options to be fully vetted on this particular floor.

I may have gone too far off from what your initial question was, but that is still the bottom line. It is we should be empowering people with options and choices. That is not what the leadership of this House is trying to do with their particular bill, and that is why we need to bring these other bills to the floor for open discussion and open debate and an open vote.

I yield back to the gentleman from Colorado.

Mr. COFFMAN of Colorado. Thank you.

Congressman Thompson, there is a great deal of discussion, particularly among seniors, that are very concerned about changes in their health care--is their health care specifically going to be rationed? When we look at the fact we are stripping hundreds of billions of dollars out of Medicare to fund the public option, and the fact that Medicare has solvency problems of its own, it is projected to run out of money in 2017, so then we have a commission. If they revert to the public option, the services that are allowed to be provided in the public option are going to be defined by bureaucrats. It is not going to be about a doctor-patient relationship in terms of what is going to be provided. There is a commission, I believe, that is established to decide what services will be provided in the public option.

And seniors are concerned because 25 percent or more of health care is used in the latest stages of life. And so what does that mean for them? And maybe you could address that.

Mr. THOMPSON of Pennsylvania. Well, thank you. And actually, the commission is a body of individuals. But even more frightening to me is just the one lone bureaucrat, the Health Insurance Commissioner, as defined within House Resolution 3200.

And as we worked our way through this thousand-plus bill in the Education and Labor Committee over a course of 20 hours back in the very end of July, I found that many times there was so much left undefined, and everything was referred to according to the Health Insurance Commissioner, the Health Insurance Commissioner, the Health Insurance Commissioner.

Well, you know, our health care is, there's probably few things that we could debate on this floor that's more intimate than our health care, and certainly few things that are as large a part of our economy. And our colleagues who were here just the previous hour from the Progressive Caucus talked about how those of us who oppose, those of us who oppose their health care plan, those of us who would support more smart government solutions, more free-market solutions to health care, that we have these scare tactics, and one of them is rationing. Rationing could never occur. Rationing just won't happen. Well, I've got news for them. Rationing happens today. And where does it happen? It happens, first and foremost, under the government plans.

Let me tell you about Medicare part B. You know, part of my background is I've had the privilege of working with older adults for my entire career, in rehabilitation services. The last number of many years of my career, 15 years I worked in skilled nursing as well, and I became licensed as a nursing home administrator. And I've talked briefly about the cuts to Medicare part B.

Medicare part B is slated for additional cuts of $130 billion. And Medicare part B--think about the individuals who come into a nursing home. They come there because they're the sickest of the sick. They're there because they don't have any other alternatives in terms of the care, the health care that they require. They have intense needs. These are folks who have just a lot of very intense needs. And today, the government, under Medicare part B, if you need therapy services, it arbitrarily puts a number. There's a maximum amount of dollars.

And now I've been out of that for about 10 months, but it was somewhere around $1,800 a year, $1,800 to $1,900 a year of therapy services. Arbitrary number. Now, that's rationing, in my line. You know, it doesn't matter the fact that you have maybe suffered a stroke or you have fallen or you have a debilitating weakness that you develop. Once you max out on that Medicare part B benefit, that's it. That's the upper limit of what you receive. So we have rationing today, and rationing occurs under the current, one of the current government programs for Medicare part B.

So I don't know where you--when you look at--you know, I've worked in the inpatient hospital side for almost 30 years as a part of my practice. As I said, a 2 to 4 percent margin is a banner year, okay? And out of that, you want to be able to, out of that 4 percent, give cost of living adjustments so you continue to retain the best and the brightest.

Personally, if somebody's going to use a scalpel on me, I want them to be the smartest person in the county, and we want to be able to retain, recruit, and retain those individuals. So 4 percent margin. Most of my hospitals, I would say, are probably not doing that well, and most hospitals across the Nation are probably challenged and not doing that well. And then you have skilled nursing facilities where, honestly, nobody's getting rich operating skilled nursing facilities. They're providing good, compassionate care. They're treating people with intense needs, and yet, those are slated for significant cuts.

Specifically, in skilled nursing, $14.6 billion in designated cuts. Now, this is out of the Senate Finance bill, the Baucus bill, Senator Baucus' bill, and so those cuts have to come somewhere, and they're going to come out of services. They're going to come out of--it won't come out of the compassion, because the people that work in those areas, they're truly dedicated to serving the needs of older adults and people with needs. But they will come out of the care. Those dollars have to impact access to services.

Mr. COFFMAN of Colorado. Thank you, Congressman Thompson, and thank you Congressman Bishop. And we had Congressman Lamborn from Colorado, DOUG LAMBORN earlier, and Congressman Polis as well talked about these issues. I certainly hope that we can have a bipartisan solution on what I think is a very critical issue, and that really needs to involve both parties of Congress in a negotiation that we don't have right now. And I think that's a great tragedy that it hasn't been a bipartisan process. But I believe that there are market-based solutions that will not endanger this economy in terms of creating unemployment through the burdens on small business and driving the deficit and driving the debt of this country beyond what it is today. And from the Republican point of view, thank you.

Source