Health Care

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Mr. THOMPSON of Pennsylvania. I thank my good friend, Dr. Burgess from Texas, for yielding and also for being able to work with him in terms of our Congressional Health Care Caucus. We cover the health care industry from both important aspects--you as a physician and all of your experience specifically in the medical field.

My background came up through therapy. Most of my almost 30 years of working in nonprofit community health care was really on the administration side; some as a therapist, but largely in administering programs in hospitals, in comprehensive rehab centers, and nursing homes. I was licensed as a nursing home administrator towards the end of my career there. And, frankly, I dealt very, very closely with Medicare out of necessity

because Medicare is, on the in-patient side, at least 60 percent in terms of market share, in terms of payment. So Medicare is very important.

I have to say to my good friend, I was pretty naive when I came to Washington in January 2009. That's when I was sworn in. I won election in 2008. I thought everybody knew that one of the impending crises had to do with the insolvency and the eventual bankruptcy of the Medicare program, only to get here and find out that that was not on the agenda under the previous leadership. And, frankly, it has emerged because it is a truth.

When you look at the situation today with the Medicare system, Medicare is in jeopardy. And what we're trying to do, what the Republicans are trying to do, is to save Medicare. The thing that would hurt Medicare the most is to do nothing, to further kick that can down the road.

Just by coincidence, I was off the Hill and stopped by, and I picked up a prescription earlier today. The only prescription to save Medicare is a Republican prescription. I have to tell you, on the Democratic side, they're just willing to pull the plug and let it die, because if you don't make changes to the Medicare program, that's exactly what happens. And that's not political rhetoric. That's coming from some pretty credible sources that you talked about.

Last Friday, the Medicare trustees' report confirmed that the Medicare program is already contributing to the Federal deficit and will continue to do so for the next decade and that, since 2008, the program has run a cash flow deficit. That's a fact that has been largely ignored in Washington. Still there are those of our colleagues who choose to pretend it's not true, but it is the truth. In fact, in 2011, it exceeds $32 billion. That's a program that, if we don't make the necessary reforms to save, will go bankrupt.

And what an injustice that will be for all of us, all the people across this Nation who have paid into that program, who are looking forward to hitting those retirement years to be able to access and utilize that benefit. If we allow it to go insolvent, if we don't reform it, if we don't save it, it goes bankrupt.

The only thing keeping the program afloat financially, really, is the sale of Treasury bonds in the Medicare trust fund. And when those bonds are cashed, that increases the deficit.

The President's plan, I guess, is to let it go insolvent, because I read today he's restated he doesn't want to do anything about Medicare, leave Medicare alone, which essentially says let's let it go bankrupt, and let's let it go away.

In fact, the measures--and you did a great job of, I think, talking about one in particular, the Independent Payment Advisory Board, which essentially takes the decision-making out of the hands of those of us who are accountable, of those of us who are elected every 2 years to make decisions about Medicare. Those decisions will not be about what benefits to expand in this financial situation. This will be about where to make cuts, where to ration care.

The Federal Government already does that. Under part B, if you are in a nursing home and you need to receive rehabilitation therapy, the Federal Government has already put a cap on how much therapy that you're able to receive. It has nothing to do with what your need is. It has to do with how many dollars have been spent. So if Americans think the Federal Government would not do rationing, it already happens. It already happens.

You talked about the board. What the President has done, I think, in his plan, which really is going to pull the plug on Medicare, a program that is already financially insolvent and challenged, is cut $575 billion from the Medicare program to fund his health care initiative. He cuts over $200 billion for Medicare Advantage and forces over 7 million seniors out of their current Medicare plans. The projection from the CMS actuary--this is the person who is responsible for really crunching the numbers for the Medicare agency--Richard Foster, in April 22, 2010, said that 15 percent of hospitals, nursing homes and home health will close because Medicare pays less under ObamaCare.

We have an opportunity here to do the right thing and to reform Medicare and to save Medicare. The President has an obligation to do that. Under the Medicare trust fund--and what a lot of folks don't know--is there is a requirement, a statutory requirement, that at whatever point the Medicare trust fund reaches a 45 percent level for more than 2 years, the President is required--is required--to put forth a plan essentially to save Medicare, to be able to address Medicare.

We are way past that trigger, and President Obama knows that. I assume he knows it. It's part of his job. So he has chosen to ignore his responsibilities to really put a plan forward. In fact, when we were at the White House just earlier this week, the President said that he was not going to put a plan forward for dealing with Medicare.

He was going to just not take the leadership on that issue. We have, and I am very pleased with the plan we have put forward. It has to do with putting premium supports. Our plan would direct Medicare to go out and to bid out for many different vendors health care plans that seniors could then shop through. Medicare sets the standards, and these companies that would put these products forward would have to meet Medicare requirements. It is not a new concept. It is what we do under Medicare part D today, and Medicare part D is probably one of the few government programs which has actually come in under budget. Most government programs come in way over budget, but Medicare part D has come in under budget. It also will put an emphasis on prevention and wellness. We are keeping people well. That is what we need to do. Obviously, that is the best thing for individuals, for folks to remain as healthy as possible.

We are not talking about voucher programs. We are not talking about privatizing Medicare. Those are concepts. That is just not true when people claim that we are. We are talking about providing people the choice of quality products that meet minimum standards and that the Medicare agency will ensure are there, because they are the ones who will bid this out and manage the process.

Then we're going to provide premium supports that allow our seniors--and we're talking about just impacting people that are younger than 55 years of age. If you are 55 years or older, there won't be any change. Although, I have bumped into a few who wonder why they can't have this opportunity. They think that it sounds like a really good thing. We are holding those harmless aged 55 and older. I think it is important that we have this debate, and it is a debate that brings forward all of the facts and the realities of what we are talking about.

We are talking about doing something that will improve Medicare, just like Medicare part C, which is Medicare Advantage. It has been shown that seniors on that, because of the emphasis on prevention and wellness, have been hospitalized for fewer days and smaller length of stays, which has saved money in the long run. So we are talking about a positive investment in the health care of our seniors, in saving the country money and, frankly, in saving Medicare.

So I appreciate the opportunity to join my good friend from Texas. This is a conversation that I think is going to be very important that we continue throughout the rest of the spring and well into the summer.

Mr. BURGESS. Well said, because that is exactly the point of this exercise this afternoon. These are difficult concepts. They are very easy to demagogue; they are very easy to demagogue against the Republican plan. The President himself may choose to do this. Certainly the Democratic leadership in this House has chosen to do that. They do that in the absence of putting forward their own plan.

But let's be realistic. We talk about things like premium support. Now, in the 1990s, I'm just a regular guy practicing OB-GYN in Texas, and President Clinton recognizes that Medicare is going to be headed for difficulty in a few years. He convenes a big commission, the bipartisan Medicare commission that is going to save Medicare.

Senator Frist, who at the time was relatively new in the Senate, was a heart surgeon from Tennessee. At that time, he was recognized as one of the thought leaders and forward thinking in health care reform. So Senator Frist was on that commission. Senator Breaux from Louisiana, a well-respected conservative Democrat, was on the commission; Bill Thomas, who subsequently became chairman of the Ways and Means Committee in the House, was on the commission. The Breaux-Frist Commission came up with a series of recommendations to the Clinton administration on how to sustain Medicare into the future.

The Breaux-Frist Commission had a number of recommendations, but the centerpiece of what they recommended to President Clinton was this concept of premium support. It was not necessarily new with them. It had previously been described by the Brookings Institute, certainly not a conservative think tank, probably regarded more as a moderate to somewhat left of center think tank, but the Brookings Institute had come up with the concept of premium support. People liked to try to describe what the Republican budget produced as a voucher system. That is, in fact, incorrect.

I will tell you, I was a little bit surprised that members of the administration, when the Republican conference was called down to the White House earlier this week and had a discussion with the administration, required some instruction as to what premium support actually was and what the history of premium support actually represented: that it was in fact developed by a moderate think tank, that it was embraced by a centrist to center left Democratic administration in the Clinton

administration, and that the Clinton administration essentially took this idea, evaluated it and put it on the shelf and said we are not going to consider it because there were too many special interest groups on the left who did not like the concept of Medicare moving away from central Federal control.

But what premium support represents is, in this case a purchaser, in this case the United States Government, going out and negotiating with insurers, saying we have a bank of patients that is going to require care, i.e., our seniors on Medicare, and this is the type of claims history they have had for the last several years, and we would like to see if you would be interested in developing a proposal for what you can do for our patients.

So it is essentially a request for proposals that goes out from the Federal Government--yes, to private health insurance companies, some for-profit, some not-for-profit. The only requirement is that they be able to show that they can take care of the patients where the government needs help with its seniors and produce a product that is going to be cost effective and is going to deliver quality care to the patients.

A voucher system--and, again, I was somewhat startled that members of the administration required instruction in this regard. A voucher system would be essentially giving a check to someone and saying: Go out and negotiate and cut your best deal with an insurance company. A premium support system is the government going out, negotiating with the insurance companies and then saying: Come to us with your best proposals for taking care of Medicare patients.

Some people would say: That is preposterous. That would never work. Congressman Thompson, you were not here when Medicare part D was passed. I was. Part D was built on that premise. It was let's see if there is an interest out there in providing a prescription drug benefit for seniors. Since we were criticized that no one in their right mind would provide such insurance for seniors, we had a fallback position.

It was a Medicare prescription drug program exclusively, not one run through a private intermediary. The fear was there would be parts of the country that no insurance company would show up to make a proposal. What we got was, indeed, a surprise. After being criticized for several months that no one was going to show up to participate, we were criticized by the other side because people said there are too many plans out there from which seniors have to choose. In the State of Texas, there were 45 plans available subscribing at different rates. You could pick the one that most consistently met your needs for a prescription drug program. But it really was a pleasant surprise.

Because of the competition between so many plans, the prices were vastly under what had been projected by both the Congressional Budget Office and the Office of Management and Budget, and one of those few programs that came in on time and under budget where the satisfaction rate is in excess of 94 percent. Very few seniors today would be willing to give up their part D coverage under the Medicare prescription drug program.

Yes, it has had some bumps and bruises along the way, but a lot has been learned in the process. Now the concept of premium support is much more developed in 2011 than it was in 2003 when the Medicare Modernization Act passed.

So premium support--and again, I was surprised that members of the administration required sort of remedial learning on this. But at the end of the morning, I hope they understood better that it is not necessary to demagogue against the Republican plan because, after all, it is a reasonable plan that has been tested with Medicare part D satisfaction rates high and the cost of delivering the care under what was projected. Why in the world wouldn't we draw on that worthwhile experience?

Now, what do you do about someone who is between the ages of 55 and the end of their life? What do you do with someone who has reached that point where they have basically made all otheir assumptions and plans based around what the government promised they were going to do? For that individual aged 55 or older, nothing changes. I happen to fall into that age group. As Mr. Thompson alluded to, I would happily opt into the group that is going to have choices because I would rather have choices than a prescribed benefit.

Nevertheless, those individuals who are 55 and older will see no change, the thought being that they have already structured their lives and their retirements based on the fact that this promise had been made. For individuals who are younger than that, when there is still time to make some adjustments in your post-work years, your retirement years, there will be a different program.

Now you ask: For people who are 54 years of age and younger, is that fair to do this?

Well, I think both Mr. Thompson and I have articulated what ``fair'' will look like if you don't do something. What ``fair'' will look like if you don't do something is either vastly restricted benefits, as has been recommended by the Medicare trustees, vastly restricted benefits as dictated by the Independent Payment Advisory Board, or perhaps no Medicare program at all. After all, the makeup of the voting public in 10-to 15-years' time is going to be different than what it is today, and the makeup of the voting population in 10-to 15-years' time may feel significantly different about paying 60, 65, 70, 75 percent of their paychecks in order to continue benefits that were promised by a Congress 60 years before.

This type of intergenerational anxiety is just around the corner, and if we don't deal with it head on, if we don't take it as a serious responsibility, then it, indeed, could set the stage for some significant strife down the road between today's children and tomorrow's grandparents. That is why it is so important that we address this situation today.

G.T., I have said what I had intended to say today. If you have any additional comments or closing thoughts, we'll wind down this hour a little early.

Mr. THOMPSON of Pennsylvania. I appreciate that. Thanks again for hosting this hour.

Whether we're talking about addressing the deficit or whether we're talking about saving Medicare--frankly, both of those issues are intertwined--we've got to save the country, and we've got to save the Medicare program. What we cannot do is allow the politics of 2012 to affect the problem-solving of critical problems in 2011. That's what we have seen so far. Where the facts are evident and clear that this country is facing a critical deficit that could bankrupt it and where the numbers for Medicare are such that its insolvency is impending and bankruptcy occurs and it goes away, these are critical problems, and they shouldn't be demagogued as we bring solutions to the floor to debate. That's what has been happening. So there is no way we should allow the politics of 2012 to affect the critical problem-solving of 2011.

After the Balanced Budget Act of 1997, I had the privilege as a health care professional to be recruited to serve on a technical expert panel for Medicare. At the time, it was the Health Care Finance Administration. Today, it's the Centers for Medicare and Medicaid Services. Based on that experience, this is necessary. This is a necessary debate. This is necessary in order to save Medicare, and it's an opportunity for us.

We have had previous reforms. The most recent one I saw was under President Bush where he created the waiver program. That was a reform to an entitlement program that actually increased the quality of life and decreased the costs of many people who were institutionalized, living in nursing homes. Frankly, I like nursing homes. I think they can be very quality facilities, and I was an administrator at one time. Yet people should have the choice of where they live if they're living with a significant disability. It was President Bush's waiver program, a reform actually, that allowed that to occur.

So ``reform,'' I think, can be a word used to scare people, but we need to talk about the specifics of why it is necessary and the opportunities that we have, I believe, to increase the quality of care, to decrease costs, to even increase access--all those--and certainly choice since the health care consumers are making decisions. Those are four principles that we share as a caucus as to whatever we do in health care. In looking at Medicare reform, I think that our plan, which is really the only viable plan, honors all four of those qualities.

So I look forward to continuing this debate. We need to have a good, transparent debate, but it needs to be a debate that is not based on demagoguery. It's a debate that needs to be based on the facts. I thank my colleague for hosting this Special Order time.

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