Health Care Reform
Floor Speech
HEALTH CARE REFORM -- (Senate - December 13, 2009)
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Mr. WHITEHOUSE. Very well. Mr. President, I have had the chance to sit yesterday where the Presiding Officer is sitting today and hear several hours of Republican criticism of the health care bill, much of it focusing on the recent report from the CMS Office of the Actuary and the concern about cost. I wish to say a few words about that.
Clearly, the problem of cost is a very real and dramatic one. This is the curve of our national health care spending, starting back in 1955, the year I was born, at $12 billion and increasing at an accelerating rate until in 2009 we were at $2.5 trillion every single year. Of course, if we look at the curve, we are not going to level out next year at that level; it is going to keep rocketing upward to the point where in my home State of Rhode Island, if we don't do anything, by 2016--which is just over the horizon; it is not too far to look forward to, even in this building--$26,000 is what it will cost the average family of four for their health insurance. So the problem of cost is a very real one and the numbers involved are staggering.
However, if you are going to look at the CMS report, I would suggest there is not just one number to look at, there are several numbers. Then there is an alternative consideration that I think we need to consider.
The Republicans have focused on page 4 of the CMS report where the Actuary estimates that total national health expenditures under this bill would increase by an estimated total of $234 billion, or 0.7 percent during the calendar years 2010 to 2019, over those 10 years. That is an important number, I will grant them that, but I think there is another number that is equally important--indeed, more important, and that is on the page before. On page 3 the CMS Actuary says that: ``Under this legislation, an additional 33 million people would become insured by 2019.''
An additional 33 million Americans would become insured by 2019. Think about that. We have over and over again come to the floor and told of stories from our home States, heard our colleagues tell us stories from their home States about the terrible toll and tragedy that befalls families when they are uninsured or underinsured. Just 30 years ago when we were about here on the chart, only 8 percent of American families filing for bankruptcy protection did so as a result of medical bills. Now it is 60 percent. Sixty percent of family bankruptcies relate back to medical emergencies, unforeseen diagnoses, medical bills that have broken the family. Thirty-three million people with adequate health insurance so they don't face that trauma and that catastrophe, that is something real.
It has been estimated that because of a lack of insurance, 40,000 people a year die prematurely. Forty thousand Americans dead as a consequence of lack of insurance. So this bill would cover 33 million people and lift that burden of worry, of anxiety, of financial catastrophe, of illness, even of death, off of all of those families. That is not something to shrug off. Yet, not once did I hear that number mentioned by the other side. Not once did they even mention that this bill would cover 33 million Americans who would otherwise be without health insurance. They must hear the same stories at home. It is not that in Republican States there are no bankruptcies and no deaths because people are uninsured and no misery, no tragedy. They just come to this floor and don't bother to count that side of the equation.
Another number out of the report is that if you took just the savings side, the net savings from the Medicare-Medicaid growth trend and class proposals in the bill are estimated to total about $564 billion--net savings totaling $564 billion, before you get to those 33 million. When you cover them, that is how it gets to that $224 billion. If you do rough math, and if you have 33 million Americans and they start getting coverage, say, 5 years out--so that there is 5 years of coverage in this for them--divide by $234 billion, it is about $1,500 per person per year to have those 33 million people insured.
Anybody who thinks for 1 minute about the human side of our health care tragedy cannot help but think that that would be a wise investment--for $1,500, to give somebody the security of health insurance. Of course, that assumes that this bill actually does, when it is implemented, raise costs by $234 billion.
As somebody used to say on the radio, that is not the end of the story. The end of the story takes a little bit of development. I note that the Actuary himself said that the actual future impacts of this act on health expenditures, insured status, and individual decisions, and employee behavior are ``very uncertain.''
Why? Because few precedents exist for use and estimation. Consequently, ``the estimates presented here are subject to a substantially greater degree of uncertainty than is usually the case with more routine health care proposals.''
In the conclusion, the CMS Chief Actuary reiterates that, saying:
These findings are subject to much greater uncertainty than normal. Many of the provisions are unprecedented or have been implemented only on a smaller scale. Consequently, little historical experience is available with which to estimate the potential impact.
Where does that affect the bill? It doesn't affect it in new coverage. We know how much it costs to cover people. It doesn't affect it with expanding access to health care. We know how much that costs. Where it affects it is on the savings side.
It is not just the CMS Actuary who says that. As I will get to in a moment, that is also the conclusion of the Congressional Budget Office. They agree on this. If we are going to get something done about this health care increase, we are going to have to do something about reforming the delivery system, about taking out waste and excess costs. Those things are, by definition, hard to predict. They don't lend themselves to the actuarial prediction that the CMS Actuary does and that CBO does. But there is a big target out there. Here is President Obama's Council of Economic Advisers. They had a report out in July:
Efficiency improvements in the U.S. health care system potentially could free up resources equal to 5 percent of U.S. GDP.
It should be possible to cut total health expenditures about 30 percent without worsening outcomes ..... which would again suggest that savings on the order of 5 percent of GDP could be feasible.
Five percent of GDP is about $700 billion a year. So there is a big saving target to do something about those national health expenditures. And some groups, such as the Lewin Group, have come up with pretty good ideas of where those savings could be found. They, by the way, don't project it as $700 billion a year in excess waste and costs. They predict that it is over $1 trillion a year that we now burn up in our system through excess services, waste, and excess costs. They actually have broken out where you can find excess costs due to transactional inefficiencies, excess billing and paperwork, excess cost due to competition and regulatory factors. They don't compete. You get a couple of big insurance companies in there that take over and they are not subject to the antirust laws and make deals with each other and with the hospitals--of course, the regular person is on the short end of that deal. Excess cost from poor care management and lifestyle factors. We know care management is terrible. There is very poor coordination of care and we are investing in wellness and prevention to address lifestyle factors. Excess costs from incentives to overuse services. When you pay doctors, that is what they do. When you pay for better health care outcomes, you will get them and get them cheaper. This adds up to over $1 trillion in excess costs. It is our target. It is a real number. It is a big number.
There is a problem with how you get after the savings. A lot of people actually agree on this. I will pull a couple of sources together. We heard from the CMS Actuary, who said some of this is unprecedented and there aren't historical records to exactly extrapolate how it is going to work. Here is what Doug Elmendorf, the head of the CBO, said:
Changes in government policy have the potential to yield large reductions in both national health expenditures and Federal health care spending without harming health.
Many experts agree on some general direction in which the Government's health policy should move. Many of the specific changes that might ultimately prove most important cannot be foreseen today and could be developed only over time through experimentation and learning.
There is a potential for large reductions in costs. We agree on the general direction that needs to be pursued to achieve large reductions. But experimentation and learning are going to be necessary to do it.
There is a Professor Jonathan Gruber, probably the lead health economist--one of the leading health economists in the world, who is at the Massachusetts Institute of Technology. He said this:
My summary is, it is really hard to figure out how to bend the cost curve. But I can't think of a thing to try that they didn't try--
That is in our bill.
They really make the best effort anyone has ever made. Everything is in here. I can't think of anything I would do that they are not doing in the bill. You couldn't have done better than they are doing.
Seven hundred billion dollars to a trillion dollar target--hard to project it whether you are CBO or CMS. But we know the general directions that are required, and we have everything in this bill that we can to explore it.
Somebody has actually taken a bit of a look at this, and they admit their findings aren't as solid as a full actuarial report. But the Commonwealth Fund does a lot of work in this area. They are very good people. Here is what they conclude:
The effect of national reform on total national health expenditures and the insurance premiums that families would likely pay is this: We would save $683 billion, or more, in national health spending over the 10-year period 2010 to 2019.
Where do they go for that? To things such as administrative expenses. Remember, I pointed out the problem of administrative expense and transactional inefficiencies? Currently, nearly 13 percent of insurance premiums are accounted for by administrative costs. Things that we do in this bill can reduce that. They make a very modest estimate that administrative costs will fall 10 percent of total premiums.
The reduction in health spending associated with reduced insurer administration is $191 billion to $221 billion over 2010 to 2019. That is just making the paperwork more efficient. And it is around a $200 billion savings.
CBO also estimates some reduction in premiums from exchanges. If you take the CBO estimates, and they apply them here, they say those estimates from the exchanges yield 10-year savings of $29 billion to $34 billion. Then they look at the delivery system innovations--payment innovations, so you are paying for outcomes, not procedures, and negotiations in pharmaceutical prices. As you know, our friends across the aisle made the pharmaceutical industry immune from negotiation by the Federal Government in their last piece of legislation, Part D; comparative effectiveness studies, so you know whether something works or not before you pay for it; financial incentives for low-quality and high-cost providers to get their act together; wellness and prevention investments; demonstration and pilot projects on Medicare to pull things together, and the ongoing Medicare Commission that our colleague Senator Rockefeller is such a champion of, as well as the excise tax on the high-cost insurance plans.
The exact amount to be saved from these provisions collectively is uncertain, the report admits. They look at scholarly estimates. One scholarly report estimates that significant health care reform could reduce cost increases by 1.5 percentage points annually, or more than $700 billion in the 10-year window. Another report estimates that a savings of more than 10 percent is possible, largely from payment reforms such as bundled payment systems.
A Commonwealth Fund report indicates that similar provisions would slow the annual growth in national health expenditures from 6.5 percent to 5.6 percent over the period 2010 to 2020.
So cost reductions on the order of 1.0 percentage points are realistic. To be conservative, they considered cost changes of a smaller amount, .75 percent. They concluded that the public and private savings from health system modernization are $530 billion over the 10 years. Taking account of these different factors, they say, on net, the Senate bill should reduce health care spending by $683 billion over 2010 to 2019.
Why is that? We have another very thoughtful observer of the health care scene who has offered opinions on this, and that is Dr. Atul Gawande, who has written several times in the New Yorker on this subject. He notes that:
It appears the legislation has no master plan for dealing with the problem of soaring medical costs. We crave sweeping transformations. However, all the current bill offers is those pilot programs, a battery of small-scale experiments. The strategy seems hopelessly inadequate to solve a problem of this magnitude. And yet--he concludes, and here is the interesting thing-- history suggests otherwise.
And uses the example:
Another indispensable, but costly sector, that was strangling the country at the beginning of the 20th century, and that was agriculture.
He said:
The government never took over agriculture, but the government didn't leave it alone either. It shaped a feedback loop of experiments and learning and encouragement for farmers across the country.
Experiments and learning. Does that sound like the CBO words?
The results were beyond what anyone could have imagined. Productivity went way up, prices fell by half. Today, food is produced on no more land than was devoted to it a century ago, and with far greater variety and abundance than ever before in history.
The strategy works because United States agencies were allowed to proceed by trial and error, continually adjusting policies over time, in response not to ideology but to hard measurement of the results against social goals. The same goes for reforming the health care system ..... Nobody has found a master switch that you can flip to make the [delivery system cost] problem go away. ..... we first need to recognize that there is no technical solution.
Much like farming ..... hospitals, clinics, pharmacies, home-health agencies, drug and device suppliers. ..... They want to provide good care, but they also measure their success by the amount of revenue they take in, and, as each pursues its individual interests, the net result has been disastrous.
The system, he says, ``rewards doing more over doing right, it increases paperwork and the duplication of efforts, and it discourages clinicians from working together for the best possible results.''
The PRESIDING OFFICER. The Senator has used 20 minutes.
Mr. WHITEHOUSE. May I have an additional 5 minutes?
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WHITEHOUSE. Dr. Gawande continues:
Pick up the Senate health-care bill--yes, all 2,074 pages--and leaf through it. Almost half of it is devoted to programs that would test various ways to curb costs and increase quality.
Just like Professor Gruber said:
..... I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here. ..... I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing.
Dr. Gawande continues:
The bill is a hodgepodge. And it should be.
Which of these programs will work? We can't know. That's why the Congressional Budget Office doesn't credit any of them with substantial savings. ..... But we should not lose faith.
He concludes:
..... there's no piece of legislation that will have all the answers. ..... But if we're willing to accept an arduous, messy, and continuous process we can come to grips with a problem even of this immensity. We've done it before.
So when the other side comes to the table and argues that this bill is a cost disaster, a nightmare, and all the things they are saying, I urge people to consider two things. First is that they have been pretty clear that they do not want a bill at all, ever, any bill, none. Their desire to deny our new President this victory is an ulterior goal they have declared. Senators have said they want it to be his Waterloo. They have said: It is our goal to break him, to break his momentum.
So when they say start over, it is a little hard to believe it. If they were candid, they would say: No, stop dead and leave things just the way they are. Obviously, they could not say that because America would not get behind that. So they have come up in the last few days with this ``start over'' theory.
When you look at what their political purpose is, to break President Obama, to break his momentum, to stop any health care bill from happening, it is worth considering their protestations on the floor in that light.
The other light in considering them is in this one: If we are going to save significant money by making the delivery system more efficient, all experts agree you cannot cost it out in advance. The actuaries cannot figure it out. But the tools we need to make it happen, the intent of the Obama administration to make it happen is in there.
The savings target is between $700 billion and over $1 trillion a year. When we achieve those savings, we are improving the quality of health care. It is less duplicative, it is less wasteful, it is less paperwork, and the quality goes up.
A perfect example is the famous Keystone Project in Michigan where they practically eliminated hospital-acquired infections in intensive care units in a number of hospitals in Michigan. In 15 months, they saved 1,500 lives and $150 million. When they started that project, could an actuary have predicted that would happen? No, never. Never. And at the beginning of the agricultural revolution, when agricultural extension agents first went out and we modernized the American agricultural center, could they have predicted what Dr. Gawande reported? No, they could not. You cannot predict it, but this President can direct it. He can make it happen. We will give him the tools.
For those who are concerned about cost, there is very significant grounds for optimism about what happens in this bill. If we don't do it this way with those delivery system reforms, we are going to be left with a bloody toolbox, cutting people off, throwing them off, chopping the benefits, paying providers less. It will be to health care reform what a Civil War surgeon's toolbox was to modern medicine--saws, knives, cauterizing irons, and the patients screaming. It does not have to be that way. There is a better way, and it is in the bill.
I thank the distinguished Senator for yielding me the extra time. I yield the floor.
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