[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OBAMACARE'S IMPACT ON PREMIUMS AND PROVIDER NETWORKS
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 12, 2013
__________
Serial No. 113-86
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan Vacancy
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on December 12, 2013................................ 1
WITNESSES
Mr. Jeffrey English, M.D., Neurologist, The Multiple Sclerosis
Center of Atlanta
Oral Statement............................................... 6
Written Statement............................................ 9
Ms. Patricia McLaughlin, M.D., Ophthalmologist, New York City
Oral Statement............................................... 12
Written Statement............................................ 15
Eric N. Novack, M.D., Orthopaedic Surgeon, Orthoarizona
Oral Statement............................................... 21
Written Statement............................................ 23
Avik S.A. Roy, M.D., Senior Fellow, Manhattan Institute for
Policy Research
Oral Statement............................................... 63
Written Statement............................................ 66
Judith Feder, Ph.D., Professor of Public Policy, McCourt School
of Public Policy
Oral Statement............................................... 71
Written Statement............................................ 73
Mr. Edmund F. Haislamaier, Senior Research Fellow, Health Policy
Studies, The Heritage Foundation
Oral Statement............................................... 79
Written Statement............................................ 81
APPENDIX
Admendment to Testimony of Patricia A. McLaughlin, M.D........... 102
Statement of The National Association of Chain Drug Stores....... 106
Statement of America's Health Insureance Plans................... 109
Submitted for the record by Chairman Issa, a Wall Street Journal
article ``Juking the ObamaCare Stats''......................... 122
Submitted for the record by Chairman Issa a Bloomberg article
entitled ``Recession Not Health Law May Be Responsible For Cost
Curb''......................................................... 124
OBAMACARE'S IMPACT ON PREMIUMS AND PROVIDER NETWORKS
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Wednesday, December 12, 2013,
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m., in Room
2154, Rayburn House Office Building, Hon. Darrell E. Issa
[chairman of the committee] presiding.
Present: Representatives Issa, Mica, Turner, Duncan,
Jordan, Chaffetz, Walberg, Lankford, Gosar, DesJarlais,
Farenthold, Woodall, Collins, Meadows, Bentivolio, DeSantis,
Cummings, Maloney, Tierney, Clay, Lynch, Connolly, Speier,
Cartwright, Duckworth, Davis, Cardenas, Horsford, Lujan
Grisham, and Kelly.
Staff Present: Brian Blase, Majority Senior Professional
Staff Member; Molly Boyl, Majority Deputy General Counsel and
Parliamentarian; Lawrence J. Brady, Majority Staff Director;
Sharon Casey, Majority Senior Assistant Clerk; John Cuaderes,
Majority Deputy Staff Director; Brian Daner, Majority Counsel;
Adam P. Fromm, Majority Director of Member Services and
Committee Operations; Linda Good, Majority Chief Clerk;
Frederick Hill, Majority Deputy Staff Director of
Communications and Strategy; Christopher Hixon, Majority Chief
Counsel for Oversight; Mark D. Marin, Majority Deputy Staff
Director for Oversight; Matthew Tallmer, Majority Investigator;
Sharon Meredith Utz, Majority Professional Staff Member;
Rebecca Watkins, Majority Communications Director; Krista Boyd,
Minority Deputy Director of Legislation/Counsel; Courtney
Cochran, Minority Press Secretary; Jimmy Fremgen, Minority
Policy Advisor; Susanne Sachsman Grooms, Minority Deputy Staff
Director/Chief Counsel; Jennifer Hoffman, Minority
Communications Director; Chris Knauer, Minority Senior
Investigator; Una Lee, Minority Counsel; Juan McCullum,
Minority Clerk; Jason Powell, Minority Senior Counsel; Dave
Rapallo, Minority Staff Director; Daniel Roberts, Minority
Staff Assistant/Legislative Correspondent.
Chairman Issa. The committee will come to order.
The Oversight Committee exists to secure two fundamental
principles: first, Americans have a right to know that the
money Washington takes from them is well spent and, second,
Americans deserve an efficient, effective Government that works
for them. Our duty on the Oversight and Government Reform
Committee is to protect these rights. Our solemn responsibility
is to hold Government accountable to taxpayers, because
taxpayers have a right to know what they get from their
Government. It is our job to work tirelessly in partnership
with citizen watchdogs to deliver the facts to the American
people and bring genuine reform to the Federal bureaucracy.
Today, as we view a continued rollout of the Affordable
Care Act, we deal with the Administration's selling technique.
The Administration sold the health law to the American people
with a simple, clear promise: if you like your plan, you can
keep your plan; if you like your doctor, you can keep your
doctor.
After millions of Americans received notices that their
plans were being canceled, the President was forced to
acknowledge just how misleading he had been. The President
apologized for people who were misled by his claim and found
themselves in difficult circumstances. The quote is: ``I am
sorry that they are finding themselves in this situation based
on assurances they got from me. We've got to work hard to make
sure that they know we hear them and we are going to do
everything we can to deal with folks who find themselves in
tough positions as a consequence of this.''
Now there is mounting evidence that the President's second
promise is also untrue. Americans cannot keep the plan they
like, they cannot keep the doctor they like, and it is
increasingly clear that more needs to be done to keep the
President's assurance that we will do for folks everything we
can.
Americans deserve to hear the truth. The Administration has
been stringing them along with promises that every day are
being broken. Many of these promises were predictable; many of
these occurrences cannot be reversed. But to the extent that we
can bring the American people the truth of what is happening
and reverse, in any case we can, the lowering of access to
care, we must do it.
Initially, in Minnesota, for example, the Mayo Clinic was
only going to be open to people virtually within walking
distance. Now it is open, because of the backlash, to at least
people in Minnesota. But as a Californian, the ability to get
reimbursed, if I am a California exchange, for the Mayo Clinic
does not exist; and this is true throughout the Country.
Just last month, thousands of doctors were terminated from
Medicare Advantage plan networks, including 2250 in Connecticut
alone. Thousands of seniors are facing the loss of physicians
they relied and trust on.
In Florida there are areas of Southwest Florida in which no
oncologist exists for patients who currently have life-
threatening cancer.
Many Americans who are shopping for plans on the Obamacare
or Affordable Care exchanges have found that they offer
extremely limited provider networks that exclude their
preferred physicians, physicians who they have built
relationships with. Many parents are finding out that their
child's pediatrician is no longer covered by their insurance
plan.
We now know that exchange plans exclude our Nation's best
hospitals, hospitals like Seattle's Children and Sloan-
Kettering, MD Anderson Cancer Center, and the like.
Unfortunately, millions of Americans are likely to find out
early next year that their new health insurance plan doesn't
cover the doctors who they most value and trust. Such limited
plans demand that we ask the question: What quality of care
will Obamacare actually provide?
The access shock has prompted many Americans to ask: Didn't
the President promise me that I could keep my doctor, period?
On November 19th, the White House press secretary explained
that the President meant by that ``you can keep your doctor''
was that, if you want coverage from your doctor, you can look
and see if there's a plan in which your doctor participates.
Clearly, in the case of Federal and State exchanges, it is
unlikely that the best, and perhaps most expensive, physicians
will ever be available.
Just this past Sunday a key architect of the law explained
if you like your doctor, you can pay more for that doctor.
Before the Affordable Care Act was passed, you had that right,
and you had the right to pick a plan that suited you and paid
for that doctor.
In essence, the public is now being told, if you like your
doctor, then you can try to find a plan that carries them, and
then you can pay more for that plan. But you are already paying
more for plans that include items you don't want, items you
didn't need and likely will not need This is so unacceptable to
the American people that there is no question, both through
public polls and, if you will, even by Democrats no longer
touting the main benefit of the Affordable Care Act being the
improvement of affordability of healthcare, there is no doubt
at all that if you could pass this bill again, you couldn't
pass it in this Congress. Even if you had not read it and you
knew what was going to happen, you would not vote for it.
When our Government, including the Congress, passed this
law, we have a solemn duty to honestly inform the American
people of what is going to happen. In this case, clearly the
American people were misled. This duty is no more solemn when
it affects Americans' relationships with their physicians. That
is a sacred trust; it is the most important thing in the life
or death situation to many Americans, and it is a trust that
has been broken.
Today we will hear testimony from experts at think tanks
and institutions. They will be on our second panel. We have
concluded that the first panel should include three doctors who
have actual life experience practicing with patients and
realizing what can or cannot be done, what should or should not
be done, and direct experience of what is happening under the
Affordable Care Act not just to their practices, which are
businesses, but to their patients, who are human beings in need
of their care. Today the testimony from these physicians will
describe in the most candid and personal terms exactly how the
Affordable Care Act, or Obamacare, has affected these patients
in their practices.
I am sure these doctors will agree that there were problems
in the healthcare system that needed to be reformed. The fact
is America had an imperfect system developed with a number of
public and private forms of money, tremendous Federal taxes,
insurance companies that were often difficult to work with, and
the like. But a broken system that is repaired by crashing it
into a wall is not, in fact, a fixed system.
With that, I would recognize the gentleman from Maryland
for his opening statement.
Mr. Cummings. Thank you very much, Mr. Chairman, and thank
you for calling this hearing. This week I had the tremendous
honor and privilege of traveling to South Africa as part of our
Nation's delegation to honor the life of the late President
Nelson Mandela. It was an inspirational trip, a life-altering
trip because I had the opportunity to reflect on the amazing
changes that one individual, working with determination over a
lifetime, can bring to millions of others.
There will always be forces aligned against progress,
against equality, and against basic human dignity. But Nelson
Mandela's life reminds us that our mission on Earth is to
transcend these destructive forces and always pursue the
betterment of our fellow man.
As I traveled back yesterday on the 20-hour flight home, I
began thinking about today's hearing, and I was amazed again at
the significance of what our Nation accomplished with the
Affordable Care Act. Before we passed this landmark law,
millions of our own citizens could not obtain health insurance
because they had preexisting conditions, and we allowed
insurance companies to discriminate against them. They charged
exorbitant premiums that were prohibitively expensive, they
attached riders that excluded care for these illnesses, and in
many cases they did not access the health insurance altogether.
Think about this: Before we passed the Affordable Care Act,
there were about 50 million people in the United States without
health insurance. Fifty million. That is almost exactly the
population of the entire country of South Africa. Before the
Affordable Care Act, we had an entire Nation within a nation of
people without coverage; no insurance for doctors' visits,
cancer treatments, prescription drugs, or hospital care. That
was a shameful and immoral legacy for a Nation as prosperous as
ours.
Three years ago, after decades of inaction, Congress and
the President passed the Affordable Care Act. We finally banned
insurance companies from discriminating against people with
preexisting conditions. We prohibited insurance companies from
charging higher prices for women than for men. We eliminated
junk plans that collected premiums, but then did not pay
hospital bills when the people got sick. The result today is
that tens of millions of people now have something they did not
have before we passed this law: the opportunity and the ability
to afford and obtain quality health insurance that will
safeguard their financial security and recognize their dignity
as human beings.
Congress understood, when we passed the Affordable Care
Act, that these changes would tend to increase premiums for a
subset of people who already had insurance under the old
discriminatory rules. So we put in place several measures to
lower prices and control costs, including subsidies to help
people buy insurance, a requirement that insurance companies
spend at least 80 percent of premiums on healthcare services or
offer rebates to consumers, and reviews of proposals by
insurance companies to raise their rates by more than 10
percent in a year.
The good news is that the actual premium rates have now
been submitted by insurance companies, and they have come in
much lower than expected. In September, the Department of
Health and Human Services issued a report explaining that
actual premium rates now being offered under the Affordable
Care Act are 16 percent lower than projected. Based on this
actual premium data, the Center for American Progress issued a
report in October showing that these lower premiums will save
the Federal Government $190 billion over the next 10 years,
meaning 700,000 additional people will be able to obtain
coverage.
More broadly, the Centers for Medicare and Medicaid
Services issued a report finding that national health spending
has slowed to only 3.9 percent in the last three years, which
is the lowest rate since the Government began keeping these
statistics in 1960.
I understand that we will consider two studies today that
assert that premiums are increasing for the majority of people
in the exchanges. Both reports have significant, very
significant flaws. First, the Heritage report completely
disregards the subsidies provided by the Affordable Care Act.
Completely. As a result, it inaccurately inflates the actual
cost of coverage for consumers across the Country. Second,
although the Manhattan Institute study is better because it
includes subsidies, it still compares ``apples to avocados,''
as one commenter explained. It compares five plans under the
Affordable Care Act with the five cheapest plans offered before
the law passed. The obvious problem is that the old cheap plans
offered vastly inferior coverage. To me, the most significant
problem with comparing premiums before and after the Affordable
Care Act is that it disregards the 50 million people who could
not get insurance. If someone could not afford a policy that
covered a preexisting condition, the price of that
prohibitively expensive plan is not considered.
Let me close by offering a final thought. One of the things
that Nelson Mandela will always be remembered for is his push
for reconciliation. I respect the viewpoints of my colleagues
on this committee, as well as those of our witnesses, and I
understand that the Affordable Care Act is not perfect. I have
said that many times. In that spirit, I hope that we can work
together in a bipartisan way to improve the Affordable Care
Act, rather than continuing to fight over its very existence.
One of the things that the late President Mandela said, and
I have thought about this a lot because it is so true, he said
it always seems impossible until it is done. It always seems
impossible until it is done. We can no longer disregard the
experiences of 50 million members of our population. We can no
longer ignore the pain, the frustration, and the fundamental
inequality of this Nation within a nation.
And with that, Mr. Chairman, I yield back.
Chairman Issa. I thank the gentleman.
Members may have seven days to submit opening statements
and other extraneous material for the record.
We now welcome our first panel of witnesses. Dr. Patricia
McLaughlin, M.D., is an ophthalmologist in a private practice
in New York City. Dr. Eric Novack, M.D., is an orthopaedic
surgeon with the OrthoArizona practice in Phoenix, Arizona.
And I would like to recognize the gentleman from Georgia,
Mr. Woodall, to introduce his constituent, Dr. English.
Mr. Woodall. Thank you, Mr. Chairman. I appreciate that
courtesy. We do have the great pleasure having Dr. Jeffrey
English with us today. He has been a tremendous resource to the
Georgia delegation, not just to me and Mr. Collins on the
committee, but to the entire delegation. I want to tell you
just a little bit about his background.
He earned his bachelor of arts in psychology at Boston
College in 1991 and then graduated from Dartmouth Medical
School in 1995; served relatively close by here as chief
resident in neurology at the University of Maryland in 1999;
and to the great pleasure of all Georgians has chosen to call
Norcross home, where he is now the Director of Clinical
Research at the Multiple Sclerosis Center in Atlanta and
President of the Georgia Chapter of Docs for Patient Care.
It is with great pleasure that I welcome you today, Dr.
English, and thank you so much for what you do for us not just
on the committee, but for us back home.
Thank you, Mr. Chairman.
Chairman Issa. Thank you.
Pursuant to the committee rules, I would ask all three of
our witnesses to rise to take the oath. And please raise your
right hands.
Do you solemnly swear or affirm the testimony you are about
to give will be the truth, the whole truth, and nothing but the
truth?
[Witnesses respond in the affirmative.]
Chairman Issa. Please be seated.
Let the record reflect that all witnesses answered in the
affirmative.
Dr. English, do you have time in your practice to watch C-
SPAN?
Dr. English. [Nonverbal response.]
Chairman Issa. Well, then for all of you, I will give you a
brief. First of all, with unanimous consent, all of your
opening statements in their entirety will be placed in the
record. In addition, any pertinent or even extraneous material
you would like to submit now or for the next seven days will be
included in the record. That leaves you free to use the entire
five minutes on the clocks in front of you to say anything you
would like to say, but I would ask that, as that runs down, you
try to wrap up.
Dr. English.
WITNESS STATEMENTS
STATEMENT OF JEFFREY ENGLISH, M.D.
Dr. English. Mr. Chairman and members of the committee, I
want to thank you for inviting me to talk about how the
Affordable Care Act is going to affect my patients.
Practicing physicians who see real patients like myself,
members on the panel, and the Group of Docs for Patient Care,
who have the read the law and understand the law have already
predicted some of these outcomes that you mentioned earlier.
None of what you are seeing and are about to see is unforeseen.
The Affordable Care Act's problem is not a computer site. It
would be common sense to me that a program that is designed in
Washington, D.C. by people who don't take care of patients,
that is supposed to affect people from Maine to Oregon in a
sort of a top-down fashion, with patients being so variable, is
going to have a lot of unintended consequences, as you
mentioned before. Unfortunately, those unintended consequences
are the patients that we are going to talk about, and they are
also your constituents and our fellow Americans.
I am a private practice doctor, but half of what I do is in
a salaried position at the MS Center of Atlanta, which is a
nonprofit for the treatment of patients with MS. What I am
going to talk about is not isolated to MS, certainly.
MS is a disease of the brain and spinal cord, and can be
very disabling; affects about half a million Americans. Most of
the patients are female and it affects them at a young age,
twenties and forties. In the 1990s we had no medications; now
we have ten. They are highly variable; patients' response is
highly variable and they can have life-threatening side
effects. So the MS patients require twice the number of staff
and twice the amount of time to take care of. So these people
can present as young teachers, working mothers who all of a
sudden can't walk, a typical presentation.
MS doctors must be able to identify risk factors and start
to move very quickly to therapy. It takes a lot of experience
to know how to do that, which is why we have about 5,000
patients that come from 28 States and 118 of our 159 counties
in Georgia, and they look at us as their primary care providers
because they see us so often.
We are now set up with a healthcare plan where we are
looking at things like metrics that different physicians will
be weighed against, and I think my colleagues will probably
touch on this too. The metrics, again, are set up by people,
mostly in Washington, D.C., who don't take care of patients. If
you comply with these metrics, there are bonuses; if you don't,
there are penalties. And section 302 and 307 of the healthcare
law actually states some of those penalties include removing
physicians from Government-approved insurance.
So I want to give you a couple of stories, and hopefully I
can finish them in five minutes.
Number one was a report by CMS, or Centers of Medicare-
Medicaid Services, February of 2012, and it said that I was an
over-utilizer of MRIs, compared to my peers. MRIs are what we
use to look at brain injury. They are a routine protocol for
MS. Not to do so can lead to disability, so we obviously don't
want to not do the MRIs. So I called CMS and I said, first of
all, who are my peers, were they other MS doctors? They said
no. My other peers also included orthopaedic surgeons. And I
also said are you aware that I am an MS doctor and that these
are routine protocols, and I got nos to that as well. They did
tell me on the report, though, that this information would be
on the Medicare website in the future, and people would look
and they would see that I did not meet their standards. Again,
that will be on their website.
I heard earlier in the opening testimonies about United
Healthcare. Many of you have read United Healthcare dropped
quite a few providers, and according to The Wall Street Journal
article, it mentions that this was in part due to managing its
network using Medicare's new five star rating system that ties
bonus payments that meet certain measures on cost and quality.
Well, you are looking at now a downgraded physician. I am
not off United Healthcare, but I am downgraded because of,
again, in compared to my peers, which are fellow neurologists,
general neurologists, they looked at cost and quality. And I
want you to know that my quality was literally off the chart.
There was a bell-shaped curve. We were over here, thanks to my
wonderful staff. However, because of cost, I was also too high,
so that was what downgraded me. And the two areas of cost were,
guess what, MRI, which we talked about, and the other was drug
cost. MS drugs are expensive and I have absolutely no control
over that. And, again, my peers are neurologists who send me
their most complicated patients that require these therapies.
So I actually reached out to CMS a few years ago with a
question, and I want to ask United Healthcare, but besides a
December 2nd deadline to appeal, after three weeks of calling
we still, now four weeks out, have not gotten through to United
Healthcare to appeal after the deadline. So what I want to
know, as a provider, am I supposed to not take care of MS
patients, or do I just take care of them, but I don't do what
is required, and limit my MRIs and my medications in order to
meet metrics. And I think, again, this is just an example. I
think physicians will be stuck with, the way the law is written
now, that we will be penalized for taking care of these more
complicated patients.
I will close by saying that I have submitted testimony on
the State exchanges. They are going to have as equal a
difficult time as far as access to medications and to providers
who know how to care for certain types of patients like I do
myself.
With that, I will close and again I thank you for this
opportunity.
[Prepared statement of Dr. English follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. Thank you, Dr. English.
Dr. McLaughlin.
STATEMENT OF PATRICIA MCLAUGHLIN, M.D.
Dr. McLaughlin. Good morning, Mr. Chairman and members of
the committee. I want to thank you for the invitation to be
here, and I welcome that opportunity. I have submitted
testimony which I hope you will all take the time to read; it
is packed with details about the nuances of how these plans
were designed and architecture with perhaps improper thoughts
of the privates in the battlefield, and that being the patient
and the doctor.
You are all generals, and we respect the hard work that you
have done to get this law passed. And as Mr. Cummings said,
even in my own family I can personally attest the fear that
came when my father passed away and my mother ,at the age of
61, with a terrible medical history, lost her insurance because
it was company-based with my father's company, and for four
years she was essentially uninsured. So I have walked that road
and I understand where you are coming from, and the President,
in wanting to do something for the citizens of this Nation who
had such fears as well.
However, in taking care of that, unintentionally there were
horrific events that are only starting to come to light, which
is the part that concerns me so much. In my State society in
ophthalmology, I serve as the third-party liaison, and I look
at all things that insurances do as a patterned behavior and I
report on them, and then we take appropriate action, as
necessary; and most times, with good negotiations, we can
sometimes make great strides. So I am an optimist at heart and
I believe that everything can be fixed.
My former training in college and my graduate work was an
aerospace engineer, and I had hoped to become an astronaut,
but, because of my mother's health, my life took a vast change.
And I must tell you a little divergent comment. The pay-for-
performance structure that we have now in Medicare for bonus
pay, to most physician colleagues, I think we can honestly say
should be scrapped. We are trained to give our best to our
patients. We are paid, supposedly, to give our best to
patients. We shouldn't be doing metrics that have no bearing on
the field that we do. In my field of ophthalmology, some of the
pay-for-performance measures could include something as
ridiculous as being a body mass index. What does that have to
do with the health of the eye or what the eye says about other
conditions in the body? Nothing.
So you are spending Medicare money for ridiculous measures,
taking our time in clinical practice to document this for
someone who is a statistician who wants to run numbers. This is
not what the doctor-patient relationship is about, and that is
the only thing that this is about.
My comments have no bearing on politics or what brought us
to this point. We are now at T minus 20 days and counting. The
doctors and the patients are going to be having extreme
difficulties in accessing care.
And yes, Mr. Cummings, I agree with you it is nice to carry
a plastic insurance card to say you are insured. It is quite
another thing to access the care.
Whoever allowed the insurance companies to devise the
current plans and how they are structured on the Affordable
Care Act and, I might say, affecting small businesses, as well,
outside or off the Affordable Care Act, leaves a lot to be
desired. And I am glad that I was put in the middle of this,
because for everything bad something good comes of it, and that
is why I am here today. As a small business, I insured my
family and my two employees, and I had wonderful insurance. I
was pleased with it. It was a small business plan. And I might
tell you a little fact now that you will find surprising. In
2008, just as you said, those premiums raised ridiculous
amounts every year. One year it was 26 percent for this great
insurance plan. I was in sticker shock. It got to the point, in
2008 dollars, that each individual in my small business plan,
to have a fully comprehensive plan, would have cost $859. These
are 2008 dollars. I did the math and I said I can't possibly
afford this, so I contacted my insurance broker, I said what
are my options, and he mentioned the consumer-driven health
plans. Not very familiar with it, a little bit leery about a
new concept, I explored it. It took me two years to sign on,
however.
What that did in those 2008 dollars, without the Affordable
Care Act legislation, the insurance company took my premium of
$859 and dropped it down to $300 for the same plan. So why? It
did that because we had to assume a $2,000 first-pay deductible
expense. That is where the risk got put. The insurance company
lowered the premium by increasing the deductible. We didn't
have a deductible before for in-network coverage. We had a very
modest deductible of $500 to go out of network. And I was
blessed, yes, with an out-of-network plan. I continued this
plan for all those years and I was pleased.
I was not pleased when I received a letter dated September
21st that my plan was going to be canceled, that it was not in
compliance, it said, with the ACA. I am no one to judge that; I
have not read that 2,000-page document. I am assuming the
insurance company is telling me the truth. They said that plan
would be replaced by something comparable, and I trusted them
for that. I have been with this company for years. I was a
participating provider with them for years. Just like patients
have trust in their doctors, patients have trust, sometimes, in
their insurance company too, and I was one of them.
The new plan rolled out. It took away my out-of-network
benefits, which I might say I might be able to live with
because, under the high deductible plan, the in-network
deductible was $2,000 for an individual, but the out-of-pocket
was $3500. I was less likely, I must say, even in my position,
and certainly my staff, to go to an out-of-network physician
because those first dollar amounts would be ours to bear and,
being a responsible individual, you should take care of your
bills.
The new plan does not give out-of-network benefits; not
just to me, but to all small businesses. The Affordable Care
Act insurances do not allow for individuals out-of-network
benefits.
What I also noted with my new plan that was developed was a
very crafted letter that implied that even though I was going
to have an in-network plan, presumably of the same level as my
current day plan, but only in-network, it would now be called
an EPO. The EPO plan was not going to have the same network of
physicians that my current plan did. Both EPO and PPOs had the
same network. The HMO physicians were a smaller, different
network. So some doctors, by their contract, had the ability to
be in one or the other network, but by some contracts they had
to be in all products.
So what happened now was there was this term about I needed
to be careful, as the administrator, and I needed to inform my
employees that they needed to check to be sure that all of
their doctors that they currently saw in-network--now, mind
you, the same insurance company makes this a bit difficult,
because you would assume if your doctor was in-network before,
why wouldn't your doctor be in-network afterwards? But that was
where the catch was.
The new network was given a fancy name, it was called
Pathway, with variations; Pathway X, Pathway X Enhanced, or
just simply Pathway. I didn't understand that. I am a
participating physician. I never heard Pathway before. I just
knew that I took care of the EPO and PPO levels, I took care of
the HMOs and the point of services. But I didn't understand
Pathway. I went to their website and I looked this up, and what
I saw was that actually these pathways were very restricted. So
we have now an inability to refer patients. As an
ophthalmologist, I will need a neurologist, but if that
neurologist is not in that network, how am I going to give the
patient with optic neuritis and sudden loss of their sight the
ability to see a fine physician that I have sitting on my
right?
We have to fix this, and we have to fix this now. We have
no time to play with this. Patients lives are at stake. Acute
care situations need a specific doctor to refer the patient to;
it is not enough to send them to an emergency room. And, by the
way, many hospitals are not in these networks either.
I thank you so much for your time and I hope I can count on
you to fix this. Thank you, sirs.
[Prepared statement of Dr. McLaughlin follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. Thank you, doctor.
Dr. Novack.
STATEMENT OF ERIC N. NOVACK, M.D.
Dr. Novack. Mr. Chairman, members of the committee, thank
you for having me back again.
When President Obama made the case in 2009 that the U.S.
needed to lower cost and improve access to healthcare, I agreed
with him. On June 23rd, 2009, I told the House Subcommittee on
Health that ``The system within which you are allowed to
provide care is as important to the delivery as the people
providing it. So if we are not willing to put the same level of
attention to detail into designing the system, it is doomed to
fail.''
During that same hearing, Congressman Dingell announced
that he ``would never presume to tell somebody how to take out
an appendix or to replace a knee,'' but he does know a little
bit about drafting law; he's been doing it for 50 years.
Since then, the healthcare law has failed to deliver on
nearly every promise, including if you like your doctor, you
can keep her, and if you like your healthcare, you can keep it.
The problems and failings certainly extend to Medicaid.
In February 2013, the Obama Administration made clear their
position about access to care for Medicaid patients in a court
filing in the 9th Circuit: ``There is no general mandate under
Medicaid to reimburse providers for all or substantially all of
their costs.''
As Children's Defense Fund President Marian Wright-Edelman
said at that same hearing in June 2009, talking about a child
on Medicaid who died, ``His mother couldn't get the dentist to
take him because of low Medicaid reimbursement rates.''
In addition, Obamacare architect Jonathan Gruber's research
and Austin Frakt's research suggests that between 50 to 80
percent of all new Medicaid enrollees will actually lose
private insurance as it is crowded out by Medicaid.
And in Arizona, according to a 2013 Milliman report, most
hospitals receive 70 percent of Medicare rates from Medicaid,
which is unsustainable.
While some will benefit from the expansion, the losers will
far outnumber the winners. To respond to Congressman Dingell,
he may not be saying how the surgery gets done, but he is
certainly impacting who will get it and when.
But the access problems do not end with Medicaid. As I
wrote in August 2010, the healthcare exchanges are really just
a variation of Arizona's 100 percent Medicaid managed care
system, which, the last time it was expanded, has actually cost
over four times what was predicted by the supporters.
The policies available through the exchanges, even with
subsidies, are, for many, far more expensive than Democrats and
the President promised, and many have higher deductibles,
copays, and coinsurance, and very narrow provider networks.
OrthoArizona, the group of over 70 musculoskeletal
providers I am in, does not have a single exchange contract by
choice. One reason is the required 90-day grace period for
policies. This means we can provide two months of care,
thinking the patient has coverage, and then we are on the hook
for payment, and the insurers have no responsibility. And
OrthoArizona is not alone. At least one major Phoenix area
hospital system does not yet have a single exchange contract,
in large part because the rates being offered are at or near
Medicaid rates.
I recently spoke with a retired professor from an esteemed
New York medical school. She feels Obamacare is morally right.
But she notes that none of her personal doctors take Medicare,
let alone Medicaid. Unwilling to make a moral stand and not go
to those doctors, the professor is blaming the doctors and
seeks to have Government force them and hospitals accept
whatever payment the Government decides, even if they go out of
business doing so. And I strongly suspect we will be hearing
some variation of this very soon from the Administration.
Those who do not wish to defend the failures of the law are
quick to say, well, what is your solution? I know this hearing
is not focused on alternatives, but I want to quickly mention
three areas that should contribute to the many larger proposals
that do exist.
This year, Arizona passed a first in the Nation price
transparency law. I would add, with significant bipartisan
support. The law extends already ``only in the Nation' State
constitutional rights to spend your own resources for legal
healthcare services, but it also ends direct pay price
discrimination based upon insurance status. This law goes into
effect on January 1st.
OrthoArizona, since its inception in 1994, has focused on
quality, utilization, and cost. We have shown repeatedly with
payers that local, same specialty physician accountability is a
reproducible and effective way to lower healthcare costs while
maintaining high-quality orthopaedic care.
Intelligent InSites, a software company with whom I work,
is a company that provides a platform that takes automatically
collected data and provide analytics on that data combined with
other sources of information. Getting better, more accurate,
unbiased information in the hands of everyone from transporters
in the hospital to doctors to healthcare system CEOs to you,
the policymakers in the Country, has never been more needed.
Ultimately, we must move to policies that ensure patients
and families maintain control of their healthcare decisions,
and that includes access to quality physicians.
[Prepared statement of Dr. Novack follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. Thank you. I thank all three of you. I will
recognize myself for a first round of questions.
Dr. English, you said very well in five minutes a position.
I just want to make sure I ask a question that makes it clear
to all of us. Under the Affordable Care Act, what was often
called rationed care is occurring simply because you are being
told that if you take an expensive practice, you could be
locked out, while a doctor who sends off, casts off the kinds
of people you deal with, in other words, a doctor, a
neurologist who says, look, anyone gets MS, I am going to dump
them onto Dr. English because Dr. English costs more, and I am
going to keep my costs down by not having those patients; he or
she wins, you lose under this rating system. Is that pretty
much a wrap-up of what you are dealing with?
Dr. English. Correct. That is my interpretation.
Chairman Issa. But you can fix that. You simply provide
marginal care and do less MRIs and so on, and then you will be
okay, is that right?
Dr. English. Or I stop working for the MS Center of Atlanta
and just do general neurology, correct.
Chairman Issa. So you cannot take these difficult patients.
And the same with an oncologist who says I am going to go into
a practice where I only deal with people up until the time they
have a serious cancer event, but after that I am going to dump
that person. So the really sick, under the current system,
unless we change it, find themselves undesirable either to get
full care, which costs more, or, quite frankly, to get to the
doctor at all. That is what you are dealing with unless we make
these changes.
Dr. English. Yes.
Chairman Issa. Dr. Novack, transparency is a good thing,
and certainly the person who walks in and writes a check or
hands out cash for the service should not be disadvantaged.
What happens, though, if--and I support that. I really, from
the bottom of my heart, find it hard to believe that your cash
customer pays more, as they do in almost every State and every
hospital in America, and they don't even know they are paying
more because there is no transparency. But what would happen to
the hospital system if everybody walked in and paid the
Medicaid reimbursement, if that is the lowest rate?
Dr. Novack. Mr. Chairman, in my conversations with a
variety of hospital system C suite folks over the last few
months, for the most part they feel that they need to be able
to be profitable at Medicare rates, which, talking to, again,
major hospital systems, meaning they need to actually cut their
operating costs by 30 percent. So I can speak to Arizona, where
the average hospital Medicaid reimbursement is 70 percent of
Medicare. So, for example, for a total knee replacement, the
average commercial payment is $24,000. Medicare pays 14;
Medicaid pays 8. So were that to be extended further, there is
simply no way that basically any of the hospitals, certainly in
the Phoenix area, and I guess the bulk of the ones around the
Country, would stay open.
I would add, by the way, that that isn't that unique a
statement, because if you look at the Medicare actuary report
that came out, there is an expectation that up to 25 percent of
the hospitals won't be able to survive this decade, anyway.
Chairman Issa. So one of the things that we have to do is
figure out how to stop cost-shifting. In other words, anyone,
including the Federal Government, mandating a rate less than
what it takes for an entity to stay in business, unless we are
willing to work with that entity to make sure they can in fact
live with that rate.
Dr. Novack. That is correct. It is important to know, on
the issue of transparency, as a very brief aside, remember that
over 100 million Americans get their insurance through a self-
funded payer. So in the same example of transparency, what we
found out was that, again, in Arizona, using hospital
association data, that the commercial payment was $24,000. In
Arizona, if you pay cash for a total knee replacement, it was
$19,000. So as one of the executives of a privately held large
company in the State said to me, in exchange for doing
everything right for our employees and their spouses, we are
paying $5,000 extra, or 20 percent more, for that knee
replacement.
So when we look at what the healthcare price transparency
law has done in Arizona, is in effect it creates a mechanism
where not only can we protect the uninsured, but ultimately we
are going to protect the folks who are insured by hopefully
lowering the difference between what they are going to pay.
Chairman Issa. One quick question. And I am going to
respect the five minute clock very exactly today. The fact is
that you are all seeing something else, I believe, and I would
just like a yes or no if you have observed it. Federal
reimbursement for a particular event at a clinic or a doctor's
hospital is almost always less than in a hospital, right?
Dr. Novack. Correct.
Chairman Issa. So one of the interesting things is if a
doctor's hospital is more efficient than a hospital, a doctor's
office is more efficient than a hospital, we don't say we are
going to try to get people to the most efficient rate by paying
a fair rate to the doctor; instead, we simply pay less to the
doctor, more to the hospital, and it is causing hospitals to
buy up doctors' practices, which means we are paying more. Is
that correct in all of your experience?
Dr. Novack. Yes.
Chairman Issa. Thank you.
The gentleman from Maryland, Mr. Cummings.
Mr. Cummings. Thank you very much, all of you, for your
testimony. I appreciate your passion and what you do, and I
want you to be effective and efficient in what you do. It is so
important.
Dr. English, you talked about the work that you do with
multiple sclerosis patients. I am very familiar with that whole
area. Johns Hopkins is smack dab in the middle of my district,
so we spend a lot of time dealing with that issue. You also
discussed the costs associated with it as being about $50,000
per year, is that right?
Dr. English. [Nonverbal response.]
Mr. Cummings. That is a hefty price tag. Dr. English, MS
is, of course, a troubled disease and I sincerely appreciate
the work that you do to treat those patients afflicted with it.
And I know you have concerns about the Affordable Care Act, but
I have serious concerns about what happens to the 20-year-old
woman or the 40-year-old woman who is diagnosed with MS but
does not have insurance. So do you agree with the Affordable
Care Act's prohibition on discriminating against people with
preexisting conditions? Do you agree with that? I can't hear
you, I am sorry.
Dr. English. Yes. Again, as we opened up, everyone agrees,
I think, with the majority of your opening statement about the
need to fix the healthcare system and preexisting conditions,
so sure.
Mr. Cummings. Do you agree that if an uninsured person with
MS were seeking healthcare coverage in the individual market
prior to the ACA, that person would have been very unlikely to
have gotten insurance? Would you agree?
Dr. English. No. In my experience, at least in my State,
the majority of my patients had very good access to care. Those
who were uninsured, there were methods of getting them care.
Again, as Congressman Issa mentioned, I am cheap. The cost of
seeing me is cheap. The medications are expensive, and those
are usually subsidized.
Mr. Cummings. So prior to the ACA, insurance companies were
allowed to discriminate against patients with preexisting
conditions and exclude them from coverage, and that is a fact.
But do you think that people with MS would have been able to
get health insurance, or would it have been so cost-prohibitive
that they wouldn't have been able to afford it?
Dr. English. Well, again, I would agree with your original
statement that we need to handle preexisting conditions. What I
am seeing here is that patients are getting, again, as Dr.
McLaughlin said, a card that gives them access to nothing. So I
want to solve the problem that you exactly stated. I am on
board with you 100 percent, especially since at the time it was
the University of Maryland that was the MS center. Now Hopkins
has taken over, you are right. But at the University of
Maryland, again, I was----
Mr. Cummings. That is right, you graduated from Maryland?
Dr. English. From Maryland.
Mr. Cummings. Oh, wonderful.
Dr. English. I have two children born in your district. My
wife got an MBA at Loyola.
Mr. Cummings. Fantastic. I am a Maryland graduate too.
Dr. English. Good.
Mr. Cummings. Go ahead.
Dr. English. So, yes, so we needed to solve that problem. I
don't think this, in my opinion, my experience, and what you
have heard here, this didn't solve that problem, and we are
going to see these unintended consequences in the very near
future and you are going to hear it from your constituents.
Mr. Cummings. Thank you.
Dr. McLaughlin, I just couldn't help but think about the
things that you said about your mother not having insurance for
a short period of time. A member of my immediate family had a,
they found some precancerous cells with regard to the breast
and could not get insurance, could not get it for four or five
years; and this was a young woman. Couldn't get it. As I
listened to you, I can see that you all seem to understand the
problem here. On the one hand, we want to make sure that
treatment that is provided is the appropriate treatment and it
does not--because we hear all these complaints about, and I
know you have heard them, doctors giving too many tests and all
this kind of thing, and at the same time we want to get the
results so that people can stay well or get well, if they are
sick, because if they have to keep coming back it is only going
to cost the system even more.
The last thing you said, and this is written in the DNA of
every cell of my brain. You said I want you to fix it. That is
what you said, didn't you?
Dr. McLaughlin. Yes, sir.
Mr. Cummings. And I want to fix it. What suggestions do you
have, based upon the things that you talked about today, that
you would suggest to us about fixing it?
Dr. McLaughlin. Well, I am glad you asked. Thank you so
much. You see, the real problem with this, too, besides these
networks being set up that are so restrictive, I also got a
letter dismissing me as a participating provider from the
insurance that would cover patients on the ACA. No one here
intended that to happen, I am sure, but that is what is
happening to us as physicians. Or we are being put on these
panels without knowledge that we are because of contracts we
signed 10 years ago that had all products clauses. And you
might assume, as someone who owns a business, that if you were
paid X number of dollars by the insurance company as a
participating provider currently with them, wouldn't you be
offered the same fee just simply because you were taking care
of the new Government law? Well, that is not the case. They are
coming in with fees that are sometimes 50 percent of Medicare
and, as businesses, we can't survive.
So back to your question, the other problem here is these
deductibles, sir, is their subsidy, but that is for people who
qualify for it. And maybe this is not universal across the
Nation, but in a large city like New York City, a studio
apartment is $2,000 a month. How is a person earning $50,000,
which by most standards across this Country is not a terribly
small amount of money, but someone earning $50,000 in New York
City, paying $2,000 rent for a hole in the wall, cannot afford
a $3,000 deductible for a plan that is being advertised as
affordable because they take the bronze plan. The bronze plan
in New York State, for something like Emblem, has a 50 percent
coinsurance after that patient reaches that $3,000 deductible.
What we have found, when we went back to that 2008 level,
is that just simply having these high deductible plans slowed
down healthcare utilization because patients were afraid that
they would have to pay that first deductible amount. Other
patients saw good physicians, went to the hospitals, and then
are in collections. We can't have a whole Nation of patients in
collection and we can't have a whole Nation of physicians'
offices and hospitals fighting the system to get paid. And this
isn't fair to the patients.
So when we talk or there is rumor about a single payer
system, I think, in my heart, the quickest answer to help us in
the next 20 days is eliminate these networks. Let everybody who
signed up stay in those plans, and those insurance companies
must be made also to be transparent about what they will pay,
which, by the way, up until this point they haven't. I have
colleagues that have no idea that they are even on these panels
and they have no idea what they are going to be paid. So let
the insurance companies, so not to hurt their business
operations, because we all want them to stay in business too
for the rest of us, let them pay that same dollar amount as the
access reference point, and then allow a negotiated fee between
the patient and any doctor they want for a value for that
service. Who is hurt by that? You will then establish a
competition between physicians to keep prices controlled,
unless you want to have one of those often spoken about
concierge practices that charge enrollment fees of $24,000 for
a certain one percent of this Nation. But everyone else will
keep their prices in check with this negotiated amount. The
doctors will be able to remain in private practice, keeping
them out of the facilities that are going to cost everyone more
money, and the patients will have the ability to see someone
for a modest fee, if that is available, or they can negotiate
some other fee. That is the only fix right now. But get rid of,
please, those networks and allow the doctors to stay in
business at the same time.
Mr. Cummings. Thank you, Mr. Chairman.
Chairman Issa. Thank you.
I now ask unanimous consent that the article today in The
Wall Street Journal, or actually yesterday in The Wall Street
Journal, entitled Juking the Obamacare Stats, be placed in the
record. Without objection, so ordered.
Chairman Issa. I now recognize the gentleman from Florida,
Mr. Mica.
Mr. Mica. Thank you, Mr. Chairman. Perfect lead-in, putting
that into the record.
The title of the hearing is Obamacare Impact on Premiums
and Provider Networks. Let's first talk generally about the
impact on premiums and the people who have been affected so far
that we know about. So far, the chairman just put this in, The
Wall Street Journal said yesterday that between 4 million and
5.5 million people have had their plans liquidated. Isn't it
your observation that most of these people are now going to
face a higher premium, Dr. English? Actually, a higher premium
and lower deductibility. I mean higher deductibility and higher
premiums, both. Would that be your guesstimate?
Dr. English. Well, I think there is so much variability, I
think, as we have talked about. We want people to have----
Mr. Mica. But these people who had existing plans now have
been notified that they are not getting them, with the new
mandates in that. For example, I have been forced onto
Obamacare. My deductibles are doubled or tripled, and my
premiums are up, and I think that is what 4 million to 5.5
million have seen. What do you think, doctor?
Dr. English. I would answer that. I am reading what you are
reading. I just can't give you personal experience with my
patients.
Mr. Mica. Okay.
Dr. English. Some of them even don't know yet; they don't
know what they are having.
Mr. Mica. Well, again, with more mandates, the cost, the
premiums are more. So they have shafted as many as 5.5 million
in their premiums.
Dr. Novack, any comment here?
Dr. Novack. No. Clearly, we are seeing that it is highly
likely that the number of net losers are going to substantially
outweigh the number of----
Mr. Mica. And they have signed up a whopping 364,682.
Dr. Novack. And we don't know if those are--since the
Country is starting out with a 5.5 million negative number, so
we don't know who those people are. Are the 300,000 people or
so just the people who previously had insurance but lost it? So
we don't know who those numbers are, let alone whether or not
they paid for it.
Mr. Mica. Let's jump to the impact. Again, the title is
Impact on Provider Networks. Here is another article from The
Wall Street Journal about what the chairman talked about in his
opening statement. In my State, which has many, many senior
citizens residing in Southwest Florida, their primary
oncologist provider was the Moffitt Hospital. That has been
dropped. Thousands of seniors now do not have access to this
critical care. Is that the kind of impact you are seeing?
Again, this is on our seniors. This doesn't involve Obamacare
coverage, this is an existing Medicare Advantage, of which 28
percent, I guess, of all the Medicare people are on. This is an
indirect result of Obamacare and what is going on in the
marketplace.
Is that correct, Dr. English?
Dr. English. Yes. I think Congressman Issa mentioned,
again, the drafter of the law who was on the talk shows talked
about paying more to see doctors on those plans. The State
exchanges are set up, there are different exchanges in the
State, so your providers, if they are in a different area, you
can't even move out of that exchange to see those people.
Mr. Mica. What we are seeing is absolute turmoil in the
marketplace. Seniors, they are the most vulnerable in our
society and probably need the most medical coverage. Instead of
getting coverage, they are searching for a doctor to serve
them, as doctors have been thrown out in the cold.
Dr. McLaughlin?
Dr. McLaughlin. Well, absolutely, sir. I can tell you, in
New York State, we are such a large State and, really, the
behavior of the insurance companies has been quite different
upstate New York as opposed to downstate New York. In the
downstate area, 2100 physicians were dismissed from Oxford
United managed medical----
Mr. Mica. So it is not just Florida.
Dr. McLaughlin. Absolutely no.
Mr. Mica. We are seeing it across the Nation.
Dr. McLaughlin. And there is a reason for that and there is
a link to the ACA, because the CMS budget to these managed care
companies was decreased from 17 percent to I believe the figure
is about 8 percent to manage the Medicare beneficiaries. Now,
with all due respect to the business operations of an insurance
company, when they have a cut like that in their payments from
the Government to manage these patients, as a business, they
have to do something to cut their costs. Morally and ethically,
none of us in here are happy with that, but I can understand
where that came about.
Mr. Mica. Doctor, you had mentioned the panels that are
being set up and I hear from seniors these rumors that certain
ages, certain types of care is going to be cut off. Do you
envision that happening? I heard rumor 73 you don't get cancer
treatment or there is a possibility of not getting transplants
and things like that. What do you see----
Chairman Issa. The gentleman's time has expired. The
gentlelady may answer, doctor.
Dr. McLaughlin. May I answer?
Chairman Issa. Of course.
Dr. McLaughlin. Okay. You know, a lot of that could be
hearsay at this point. We heard rumors about death panels and
things like that, but clearly rationing care is something that
has to be part of this to make it work. It is not the
appropriate answer, however. So I am not quite sure what the
facts are about at what age some procedures will be limited,
but I would not dare think that that may not come.
Mr. Mica. Thank you.
Chairman Issa. If I could ask unanimous consent just to
follow up for 30 seconds on this, because when the word death
panel is used, Dr. Boustany and others who are serving in
Congress have a real problem with it.
Dr. McLaughlin, you do agree, I believe all of you, that
medically sensible decisions about whether to use extreme
healthcare options or not, in other words, decisions that are
not always to do the most expensive and thorough do change with
age, and that medical doctors need to make those decisions. So
the term death panel hopefully does not mean that doctors don't
make a decision that extraordinary measures sometimes are not
appropriate for the elderly. And I want to ask that because I
think both Republicans and Democrats found that word to divide
us, rather than unite us, on your making decisions about what
is best. So just a yes or no, if you can.
Dr. McLaughlin. The simple answer is most of us who are
physicians will have a talk with the family and advise them
what we feel is medically appropriate at the time and will do
everything possible to sustain life where there is life and to
allow the family to make a just decision. We hope most people
will do advance beneficiary notices so that the individual has
that choice and takes that burden away from the family. And if
there is anything we can do as a society, we should be pushing
individuals to make that decision. Thank you.
Chairman Issa. I appreciate that. I didn't want that to
divide this panel, because I think we are united on the need to
fix healthcare.
The gentlelady from Illinois, Ms. Duckworth.
Ms. Duckworth. Thank you, Mr. Chairman. Thank you for that
comment. As someone who was accused of being involved in death
panels at the VA, where they certainly use outcomes-based to
deem what is appropriate for veterans, that is a very sensitive
statement, so thank you very much for bringing that up, Mr.
Chairman.
Dr. English, I just wanted to follow up with you a little
bit. You know, the goal of giving Americans access to
affordable, quality, life-saving healthcare is critical. It is
not only the moral thing to do, to make sure that getting sick
in America doesn't lead families to bankruptcies, but, as far
as I am concerned, it is common sense for our Country's
economic competitiveness and our Government's fiscal health. I
personally think that the Affordable Care Act made big steps in
that right direction, but, as you have mentioned, there have
been some real problems with it that need to be fixed. You
spoke a little bit about the issues with CMS, for example, and
how they rated your use of MRIs and incorrectly compared your
use to others. I, myself, understand how different types of
therapies will differ and associated diagnostic equipment that
you need to do to treat that.
Are you saying in your testimony that the CMS decisions on
how you are evaluated with your use to this is specifically to
the Affordable Care Act, or are you saying this is just part of
their trying to improve the Medicare-Medicaid system?
Dr. English. I believe that outcomes measures are a major
part of the Affordable Care Act, and they are using models like
that. Some of those things were predated with the stimulus
package, some of that started ahead of the Affordable Care Act,
but that is big portion when we look at the Medicare cuts for
the future. How will we evaluate outcomes and physicians and
bonuses versus penalties, that is part of the Affordable Care
Act. So it is a combination.
Ms. Duckworth. Do you support outcomes based on decision-
making in medicine in terms of aggregate treatment and outcomes
of those treatments for your patients, this particular
procedure works better than others? I know you come from a very
cutting-edge institution that is, according to your web page,
very progressive and aggressive in treatment which, if I had
MS, that is what I would want, but do you support looking at
outcomes?
Dr. English. I do. I think when they come from as far away
from where the actual patient care is occurring, the more
mistakes are made, and I think the ACA really approaches this
coming from D.C., which was the wrong way. I really wish
specialty societies were encouraged to come up with metrics,
given a few years to say what is appropriate care in MS, what
is appropriate care in knee surgery, etcetera. That would have
been a better way, in my opinion.
Ms. Duckworth. So what I am hearing is not so much that
looking at outcomes is a bad thing, but that the way CMS is
going about it, using accountants to look at it versus relying
on the healthcare practitioners to be the ones who inform that
process of developing what those guidelines are, so that if
they are going to evaluate the outcomes, if they are going to
use outcomes, base evaluation of physicians who deal with MS,
they should probably have some MS physicians who would inform
that process of developing those guidelines so that your use of
MRI would be perfectly in keeping with other physicians who
treat MS in an institution like in your setting, right?
Dr. English. Yes. As I stated, I think the Affordable Care
Act, again, is going to have all of these unintended
consequences because it is built from the top down, not from
the ground up. So whether you like the law or not, I want you
to understand these things, these unintended consequences, are
going to happen and they are not unforeseen.
Ms. Duckworth. Well, I happen to agree with you that we
need to fix these unintended consequences, and I would love to
be able to continue to focus on that. I don't know that
repealing the law or unfunding it or defunding it is the way to
go, but I do agree with you that there are many problems that
need to be fixed. But there are good things with it. I have a
preexisting condition. I would assume that someone with MS
would be considered to have a preexisting condition if they
were to enter the marketplace or try to find their health
insurance now. Have you had experience with MS patients on
reaching lifetime caps from insurance companies for their
treatment?
Dr. English. Well, first of all, I would say everybody in
this room has a preexisting condition, it is just that some of
us don't know it yet.
Ms. Duckworth. Good point.
Dr. English. So you need to have an insurance that actually
will follow you once that happens. If everybody owned their own
insurance, then once they got sick there is no such thing as
preexisting conditions.
So in my practice the answer is no, I have never, to date,
13 years in Atlanta at our center, not been able to get the
care to my patients through one way or another. Even with gaps
there have been ways to do that.
Ms. Duckworth. Let me fix that. I am talking about caps
from insurance companies. I think your institution does a
fantastic job of raising alternate funds as a charity, to
provide charity dollars in order to cover patients who have
lost the coverage from their own insurance companies. That is
very different. I am glad that you can get the care to the
patient. But the fact of the matter is you are using other
techniques. And I would think it would be better if the patient
had insurance that stayed with them and would cover so that
they did not have to rely on charity.
I am out of time. Thank you.
Chairman Issa. I thank you all.
We now go to the gentleman from Michigan for his questions.
Mr. Walberg. Thank you, Mr. Chairman, and thanks to the
panelists for being here. Thanks for the work you do, as well.
Dr. Novack, let me go back to some questioning beforehand,
and specifically what are your views on the Independent Payment
Advisory Board, or IPAD?
Dr. Novack. Sure. Thank you for that question. Obviously,
the IPAD, which is supposed to be in existence, but no one has
been nominated yet, to my knowledge, they say that it is not
going to be involved and it doesn't have the power to determine
what care can or cannot be given, but as I believe not only are
the people on the panel with me saying, but I think in the
comments of the members implies, that what the IPAD can do is
determine effectively how much you get paid for it. And if the
payment for something drops to a point where you cannot stay in
business or keep your doors open if you continue to provide it,
less of it is going to be available.
So I think it is a bit of semantics and I think some of the
words can cause division, but the ultimate reality and the
ultimate goal of the Independent Payment Advisory Board, if
Medicare expenditures go up faster than inflation, or 1 percent
above inflation, is to reduce those costs, and they are going
to go where the money is. So they are going to go to the
expensive patients with MS and say we are just going to pay a
lot less because we think that means that centers like Dr.
English's will just not make services available, and that is
how they are going to lower the cost.
Mr. Walberg. So it takes away decisions from the patient
and the healthcare provider.
Dr. Novack. Correct.
Mr. Walberg. To a great degree.
Dr. Novack. Correct.
Mr. Walberg. I would assume that that is, from what you
say, a negative to the healthcare system.
Dr. Novack. Well, I think that ultimately the question is
how do we get the best healthcare to the mom who brings in
their child to me after they fall at the park.
Mr. Walberg. The best healthcare, what we deserve.
Dr. Novack. And the ultimate answer is trying to get
patients and families involved on multiple levels to help try
to make the best decision for them, because certainly in my
world, taking care of a number of fractures and acute injuries,
I don't have the luxury of longstanding experiences with
patients and families, so you need to be able to get data so
that families can make the best decisions.
Mr. Walberg. Do you have any evidence, doctor, that
competition and choice is a better way to increase value and
reduce cost than Government bureaucracies and their expertise?
Dr. Novack. Sure. Obviously, you have examples in certain
parts of medicine where that does exist, but I think we can
look, for example, in California more recently with what
WellPoint has done with reference pricing for joint
replacements, and by changing the structure, they have lowered
the cost of joint replacements by 20 percent in, I think, less
than two years. So the idea of creating transparency and really
giving the opportunity to create new creative ways where you
bundle your services together, you can actually provide high-
quality care at a lower cost that ultimately results in better
patient satisfaction.
Mr. Walberg. Okay. Thank you.
Dr. English, just to make sure it is clear where you stand,
will Obamacare limit your patients' treatments?
Dr. English. Yes.
Mr. Walberg. In your testimony you mentioned 10 medications
for MS patients. A Washington Post article from two days ago
said one-way insurance plans under Obamacare are keeping costs
low by not covering widely used MS drugs and requiring doctors
to prescribe drugs in a certain order, which would compel
patients to take drugs more toxic to them, potentially. Have
you found that to be the case?
Dr. English. This is our major concern, because I can't
impress upon you enough how variable patients are and the drugs
that they need, and without the ability to move quickly to one
and switch to another. If I can't do that anymore, that is what
will get me out of medicine, not the reimbursement stuff.
Mr. Walberg. What does that do to your patients?
Dr. English. It is my teacher who is paralyzed, who I know
I can do something for, but I can't, and I have to watch her
stay paralyzed. That is my concern.
Mr. Walberg. And puts them at risk, at the very least----
Dr. English. Correct.
Mr. Walberg.--to take drugs that don't impact them
positively, let alone produce the change that is necessary.
Dr. English. Correct.
Mr. Walberg. You stated Obamacare punishes you because you
care for the most vulnerable patients. How does it do that?
Dr. English. Well, let's look at that. I think Congressman
Issa had mentioned, too, or it might have been Congressman
Cummings, about if our center closed down and I was looking for
a job at a hospital, and 5,000 expensive patients were coming
that was going to bankrupt my hospital, which ones do you think
would sign up to take me on? I want to work, like University of
Maryland, the trauma center, I learned there. That was
incredible, taking care of the sickest of the sickest. But I
loved doing that. And I don't see how, under these payment
models, that any hospital system is incentivized by taking care
of the sickest patients; they would be disincentivized based on
incomes.
Mr. Walberg. So what we are looking at is a two-tier, those
that can afford it for specialized treatment, have the money to
do that, and then all of the rest of us.
Dr. English. Correct.
Chairman Issa. I thank the gentleman.
We now go to the gentlelady from New York, Mrs. Maloney.
Mrs. Maloney. Thank you, Mr. Chairman and ranking member
for calling this hearing, and I thank all of the panelists for
their testimony and participation, particularly Dr. McLaughlin,
who is from the great State of New York, which I have the
privilege of representing a portion of it.
I do believe that you have raised some important concerns,
but I truly do believe that the Affordable Care Act really is
important legislation; and it is by no means perfect, but it
really addresses some of the massive deficiencies in our
Nation's healthcare system, such as covering preexisting
conditions and providing coverage to over 30 million Americans
that did not previously have coverage. And while I do want to
get to your concerns and understand them in a deeper way, I
would like to take a moment to highlight some of the successes
of the marketplace in my home State of New York.
Earlier this week, the New York State of Health reported
that over 314,000 New Yorkers had completed their applications
for insurance and over 100,000 New Yorkers have enrolled for
coverage starting on January 1st, 2014. And I understand that
70,000 selected a private insurance plan and one report stated
that New York has the second highest raw enrollment numbers of
any State. So there are some successes, but I do want to
acknowledge that there is always room for improvement. And any
massive new change in something as complicated as healthcare is
going to have to face many improvements and we need to be
willing to work together on both sides of the aisle to correct
deficiencies and challenges that we see during this
implementation process.
But, Dr. McLaughlin, I would like to understand the
concerns that you raised today, and I want to make sure that I
understand completely your situation. You stated that you
received notice last month from an insurance company stating
that you would not be extended participating status on the new
insurance plans in the Pathway network. Is that correct?
Dr. McLaughlin. Yes, councilwoman, that is correct.
Mrs. Maloney. And what about other insurers, did you get
similar letters from other insurers?
Dr. McLaughlin. Well, the way this works is the insurance
companies can only approach those physicians that happen to be
already networked with them, under contract to them. So, for
instance, I am not in the Emblem system, so they cannot
approach me or do anything to me involuntarily. And that is
important to understand.
Mrs. Maloney. But can you approach them, another insurance
company? Would you be willing to participate in any plan on the
exchange? Can you approach another plan?
Dr. McLaughlin. I am assuming that that door may be open;
however, what is clearly evident by the plans that I am already
under contract to, BlueCross for the main one, they made a
decision, for whatever reason, that they had enough
participating physicians to form this Pathway network, which I
might add, by just looking at the ophthalmologists serving
Manhattan in that list, came to less than 150 names, of which
most of them were in solo practices with no affiliation to
large group contracting forces. So these physicians happen to
be under contract to that company for the lowest fee
reimbursement for the same service that another physician who
is part of a faculty practice or a large group practice would
get. And as insane as that sounds for doing the same work,
physicians are paid differently in the current system depending
on how large a group you belong to and what negotiating power
comes with those numbers.
Mrs. Maloney. Well, have you appealed the decision? I know
that they are trying to save money. In fact, the New York State
testified or released a report saying that the people that had
enrolled, 100,000, were seeing premium rates that are as much
as 53 percent lower than the rates in effect in 2013 for
comparable coverage. So that is great news for them, but they
are looking for services that are more affordable. But you can
appeal these decisions, as you know, and, as you know,
particularly in New York State, that is being run by the State,
and State insurance is regulated by the State, and you can
appeal to the New York State Insurance Commissioner, and I
would be happy to work with you in setting up such meetings if
you would be so interested. But have you appealed the decision?
Dr. McLaughlin. There was not an opportunity mentioned in
that letter for appeal, it was a unilateral decision. There was
no notice in there that I even had a right to appeal. I must
say also that I had an amended contract to my United Healthcare
participating status, and that also said that because I was not
in an Oxford Liberty current network, I would not be put onto
the Affordable Care Act insurances. So that was an automatic
opt-out. Not an automatic opt-out; I wouldn't be in it. And for
those doctors who were in the Oxford Liberty current plan, once
they see their fee schedule, they could then opt-out.
Mrs. Maloney. And you can also get a navigator to help you
or broker to determine what plan would be best and to help you
with your appeal, but I would be delighted to help you with an
appeal if you are so interested.
Chairman Issa. I thank the gentlelady.
We now go to the gentleman from Oklahoma, the head of our
Energy and Healthcare Subcommittee, Mr. Lankford.
Mr. Lankford. Thank you, Mr. Chairman.
Thank you all for what you do and the way you are taking
care of patients. You are going through a lot of paperwork and
a lot of process right now that I can imagine the incredible
amount of frustration that every day you are getting a new
regulation, a new rule, or a new something that is coming out
at you while you are trying to just take care of people and
patients, what you love to do. So I want you to know from us we
appreciate what you are doing and how you are trying to focus
on taking care of people.
The problems are very, very real you all are experiencing
on the ground. We hear about them in our offices all the time.
The numbers are out. For the first two months of enrollment in
the Affordable Care Act in my State, in Oklahoma, they are now
up to just over 1,600 people have been able to sign up in my
entire State. To give you a point of reference, 1400 companies
got a letter two months ago that their insurance was canceled
because they were in a small business group just in Oklahoma
City. So just in one town in my district 1400 companies
received a letter all in the same day that they had all been
canceled because their association is no longer legal and they
are out looking. And now we have had 1600 people total in the
entire State have been able to sign up.
One of those was a small car dealership in Oklahoma City
with 14 employees. They now are having to select a different
insurance policy, a different company, and as the owner of the
car lots told me, we can either select a plan that is much more
expensive than what we had last year, but keep our doctors, or
pay the same as what we had last year, but we all have to
switch doctors. But we can't do both. We can't both keep our
plan and keep our doctors or keep the price and keep our
doctors; we have to choose on it. And it has been a very
difficult process for them as a small business, as it is facing
a lot of small businesses across our area.
Dr. McLaughlin, you mentioned that even with your own
practice. That is becoming a big issue. It is one of those many
things that is out there.
So let me just ask a couple questions about processing. By
one count, this law creates about 159 new boards or agencies.
We asked the Congressional Research Service to try to determine
how many boards or agencies are created by this. They said it
is not knowable at this point exactly how many.
Dr. English, you mentioned multiple times the difficulty of
decisions being made in Washington, D.C. and getting passed on
to you, and I have direct family members that have MS, and I am
very familiar with the process and the drugs and what is going
on. So I am trying to process through 159 different agencies
that are all setting these different rules and you get
instructions about how to take care of your patients. What does
that do for you day-to-day?
Dr. English. Well, let me give you an example. I have, for
the first time in my career, had patients who are healthy
previously not walking, etcetera, on a medication doing great
who are crying in my office. People are really afraid, as you
are seeing as well. They don't know whether their medication is
going to be covered. I am filling out forms. Patients who are
stable on medications, but they are not on the list anymore of
the restricted provider list.
Mr. Lankford. So we are talking about people that are
currently under medication doing better, stabilized in the
process, that instructions are coming down to them to say we
may have to switch the regimen for treatment to a different
drug or a different treatment regimen when they are currently
stabilized right now.
Dr. English. Correct.
Mr. Lankford. That sounds like someone in Washington
telling you how to take care of a patient that is doing well
with their treatments, and saying we are going to experiment
with a different way to do this with your patients.
Dr. English. And in the Georgia State exchange we have no
idea what medications are going to be available to those
patients and then, again, we are less than a month away from
patients coming to my office on those insurance plans.
Mr. Lankford. And the current system, as it has been set
up, is there a discouragement to take the more complicated
patients. So the more complex the case is, the more that that
is discouraged financially and in every other way from the
Federal Government and from the system, is that correct?
Dr. English. The current system in the ACA, the current
system before----
Mr. Lankford. The current system, ACA, that is coming at
us.
Dr. English. As we discussed in my testimony, there are
many things that will be discouraging me to take care of the
sickest patients, yes.
Mr. Lankford. Dr. Novack, you mentioned before all the
issues with Medicaid that are out there based on the
reimbursement rates and the number of physicians that do that.
Half of the people that have now signed up for insurance
nationwide are not signing up for private insurance, they are
in State Medicaid programs. While they have access to care on
that, what are the issues that they are going to face in the
days ahead?
Dr. Novack. Well, I think the first issue, again, I think
the crowd-out issue is something we really can't discount.
Jonathan Gruber, who was really the architect of Romneycare and
he was really an architect of the Affordable Care Act, his own
research that he did originally in the 1990s and then repeated
in 2007 showed half the people who ended up on the Government
program lost private care. Again, the more recent study from
Austin Frakt, I believe from one of the Boston area
universities, showed that up to 80 percent of the people who
will end up on expanded Medicaid will lose their private health
insurance.
When you look at the smaller networks, when you look at the
lower payment rates that discourage people to accept it or
create long waiting lists to get access to it, I think, again,
there will be a few winners, but ultimately the number of
losers is going to be a lot greater. And we see in orthopaedics
in Arizona that access to certain kinds of durable medical
equipment, access to getting physical therapy after an injury
in terms of limits, access to certain medications, all of those
are severely restricted under Medicaid relative to what was
existing in the commercial market.
Mr. Lankford. There is a tremendous difference between the
hope of what this would be and the reality of what it actually
is on the ground.
Dr. Novack. Yes.
Mr. Lankford. With that, I yield back.
Chairman Issa. I thank the gentleman.
We now go to the gentleman from Pennsylvania, Mr.
Cartwright.
Mr. Cartwright. Thank you, Mr. Chairman, and thank you for
all the witnesses appearing today. I believe the Affordable
Care Act is a landmark law. It is obviously, by no means,
perfect, it needs a lot of work, but all of us need to roll up
our sleeves and work together and make it better.
I had planned to ask all of the witnesses questions about
provider networks, including Dr. Feder, but, unfortunately, the
Majority didn't inform us they decided to change the panel
structure today. They didn't inform Dr. Feder, either. Dr.
Feder was here and ready to testify at 9:30. I would say that
the fact that she is here and waiting for the second panel,
while we are not including her now, is disappointing.
But, Dr. McLaughlin, I was interested in your testimony and
your comments, and I would like to follow up on some of the
things that Congresswoman Maloney covered with you. It is my
understanding that--well, a large part of your testimony has
surrounded the fact that you got dropped by Empire BlueCross
and BlueShield, right?
Dr. McLaughlin. As a participating provider in the new
plans that they are developing for small businesses off the
Affordable Care Act exchange, as well as those serving the ACA.
Mr. Cartwright. All right. And not to put too fine a point
on it, you are still waiting to hear about the larger
employers, whether you will be included in that coverage.
Dr. McLaughlin. No, I am completely in that.
Mr. Cartwright. You are in that.
Dr. McLaughlin. For now, yes.
Mr. Cartwright. Okay. So we want to look into why these
things happen. You got less than a full explanation from Empire
BlueCross and BlueShield, am I correct in that?
Dr. McLaughlin. Yes. And everyone who is on my associated
hospital staff had the same letter. This is not an isolated
letter, this is clear across the board.
Mr. Cartwright. Right. So if I am not mistaken, you got the
Empire BlueCross Blue Shield letter on October 29th of this
year, am I correct in that?
Dr. McLaughlin. Yes.
Mr. Cartwright. Okay, so I want to talk about what efforts
you have made in the couple of months since then to go over
what the situation is and see what light you can help us shed
on the situation. So I think you said you saw about 150 names
of ophthalmologists who are included in the system, is that
correct?
Dr. McLaughlin. That is correct.
Mr. Cartwright. Did you make an effort to compare different
sets of facts, for example, compare your own credentials with
those of the other ophthalmologists who made the list? I assume
you are board certified, for example.
Dr. McLaughlin. It is not based on that. We are all equal.
What the basis clearly is is the original fee schedule of the
networks that the doctors are in. And, as I said, if you are a
complete solo practitioner, not part of a large group who
negotiates a fee schedule with the insurance companies, you get
what is called the standard rack rate from the insurance
company, and those preferentially are those doctors that are on
this network, they are the lowest paid of the physicians, and
that is clearly what the decision is.
Mr. Cartwright. I don't mean to belabor the point, but are
you saying you haven't really engaged in a comparison of your
own credentials with those of the 150?
Dr. McLaughlin. There is nothing to compare. This is across
the board. Everyone who is at my hospital was not offered the
status. We are all of equal rankings, do the same work, the
same exams. That is not what this is about.
Mr. Cartwright. So you think it is more about pricing, it
is about money.
Dr. McLaughlin. It is clearly about money.
Mr. Cartwright. All right. Well, let's take that, then.
Have you compared the pricing? Have you compared how much it
costs people to get treated by you and the other people who got
dropped versus the people who got accepted into the system?
Dr. McLaughlin. Well, first of all, I would have no way to
compare that. There are quite a bit of regulations on us, also,
as far as fee schedules. We have antitrust regulations and we
are not allowed to collectively negotiate, so, in honesty, I
would have no idea to know pure facts as to what someone is
being paid compared to myself.
Mr. Cartwright. Well, obviously somebody engaged in that
comparison; that is why some people made the list and some
people didn't.
Dr. McLaughlin. That is right. That is maybe for you to
find out.
Mr. Cartwright. Thank you.
Dr. McLaughlin. You are welcome.
Mr. Cartwright. But another thing you mentioned was this
idea, and I had heard it before, that if you want to protect
yourself as a physician, you want to join groups, and the
bigger the group you are in, the more protection you have as we
enter the new age. You are a solo practitioner, am I correct in
that?
Dr. McLaughlin. That is correct.
Mr. Cartwright. So intertwined with that thinking, you have
the least protection of anybody entering the new age, and I
want to ask you hadn't you heard this, hadn't you heard what I
had heard, that you were going to protect yourself by joining
medical groups?
Chairman Issa. The gentleman's time has expired. The doctor
may answer.
Dr. McLaughlin. Well, let me just share this with you. I
had been, for eight years, a full-time faculty member at a
major hospital in New York and enjoyed my time there. But I
also saw the benefit of being able to be a physician, to make
choices for the patient care in a way that I see fit, and the
best care that I see fit for the patient that works for me and
my patients. I don't want to give up that freedom by joining a
larger group that has a non-physician administrator telling me
how fast I have to see a patient and what I can or cannot do
for them. That is a choice that I have in this Country, thank
God, and I want to keep it for my patients' sake.
Chairman Issa. I thank you.
We now go to somebody who knows about patients' care, first
on the list, Dr. Gosar.
Mr. Gosar. Thank you, chairman.
Dr. Novack, can you discuss for me the confusion your
patients are feeling about Obamacare, your services, and then
also touch a little bit about urban and rural? You know, we are
from Arizona, so there is definitely a dichotomy going on here.
Dr. Novack. Sure. I think that if there is one term,
regardless of your political party preference, that describes
whether it is providers or patients or administrators or staff,
it is confusion, because no one really knows. And I have 100
patients a week coming through, the bulk of whom will actually
ask that question, because they know I am involved in different
policy issues, and my answer is we just don't know. They don't
know what plans are going to be available. They don't know what
services are going to be available. They don't know what
medications are going to be covered. They don't know which
hospitals they are going to be allowed to go to.
So the issue here is basically abject confusion, and no one
knows what is going to happen January 1st. And to say that that
was an unforced error because of political realities, the great
tragedy are really the tens of millions of Americans and
hardworking American families that have been suffering
emotionally because of the uncertainty that the law has
created, because of work that was not done, the lack of
transparency, the unwillingness to release regulations.
I have patients who work for insurance companies, and I was
hearing from them throughout the summer that they didn't even
know the requirements that they were going to be forced to put
into the software that they had to write. We are hearing that
they are being required to be responsible for the data on these
servers, but they are not allowed to get access to the servers
to be able to test the integrity of the data that they are
being held responsible for.
So at every single level, unfortunately, the claims that
were made to pass the law are not the reality, and the losers--
this is not about the three of us up here, it is not about the
dentists, it is about the fact that we do need to do something
about preexisting conditions, but that was a small part of the
population. The same amount of people basically that folks have
recently been saying that, oh, it is a small number, don't
worry about them that are getting their policies canceled, it
was really only 10 to 15 million people that had these chronic
conditions, and we could have addressed that. Instead, we have
totally uprooted essentially everybody.
Real quickly about the Medicare Advantage issue. There is
nothing tangential to the changes in Medicare Advantage as it
regards the Affordable Care Act. Remember that the Affordable
Care Act cuts between $130 and $150 billion out of Medicare
Advantage this decade, and that is why you are seeing these
cuts to Medicare Advantage networks.
Mr. Gosar. So when you are talking about preexisting
conditions, I am going to ask you and Dr. English, we just
exchanged, as the ranking member talked about, a prejudice to
preexisting conditions, we just traded one prejudice for
another. Would you agree with that?
Dr. Novack. Correct.
Mr. Gosar. Dr. English, would you agree with that?
Dr. English. Correct. You haven't, in my opinion, increased
care, you shifted care, and that is quite obvious.
Mr. Gosar. Well, I want to get to that and I really want to
applaud you. I have family members and dear friends that have
MS, so thank you very, very much. But there is prejudice now
because we are talking about acute care versus chronic
conditions, right, Dr. English?
Dr. English. Correct.
Mr. Gosar. So you are handicapped when we are talking about
chronic care, are we not?
Dr. English. Correct.
Mr. Gosar. And so we are asking you to decrease time,
reduce reimbursement, reduce the possibility of drugs, reduce
your opportunity to individualize individual treatment
modalities. But I have a question for you. Did you see any tort
reform in this bill?
Dr. English. No, sir.
Mr. Gosar. Dr. Novack, did you see tort reform in this
bill?
Dr. Novack. No.
Mr. Gosar. Dr. McLaughlin, how about you?
Dr. McLaughlin. Absolutely no.
Mr. Gosar. Have you ever heard of solving a problem without
putting everything on the table, Dr. English?
Dr. English. Say that again, please?
Mr. Gosar. Have you ever heard of solving a problem, but
not putting everything on the table?
Dr. English. No.
Mr. Gosar. It is foreign to me.
Dr. Novack. And the law did actually approve the
opportunity for some demonstration programs for medical
liability reform, but in the law, the plain language of the law
says you may not do any demonstration program that includes any
limits on non-economic damages. So the constraints were fairly
significant.
Mr. Gosar. Dr. McLaughlin, I want to go back to this.
Reducing time for physicians to see their patients, we are
reducing the reimbursement rates, we are reducing the panels,
all choreographing hurting the patient. Would you agree?
Dr. McLaughlin. Absolutely.
Mr. Gosar. You made the comment that you want to practice
medicine your way. You want to individualize, take your time,
how you see fit, individualize the treatments, right?
Dr. McLaughlin. Yes, sir.
Mr. Gosar. How do you feel most patients would like it,
would they appreciate your thoughtfulness?
Dr. McLaughlin. Absolutely, because over and over again I
will have patients returning to me, perhaps even out of
network, as they go to some of these larger group practices
where physician extenders are employed to process patients
literally through a quicker assembly line so that that facility
can reap more benefits, cost-wise, out of the poorer
reimbursements, but they may actually only have two to three
minutes of face-to-face physician time in that. And most people
are often told to bring a companion with them, because when you
are the one that is seeking care, you are only observing half
of the response from that physician, and you are losing the
other half, which is why most of us actually face umpteen phone
calls after the fact, because there is something they forgot to
ask or something they didn't understand. So you can only
imagine how that problem is magnified with only two minutes of
face-to-face time with the doctor. Patients are generally
nervous under those conditions.
Chairman Issa. I thank the gentlelady.
Dr. Novack, I just want to make sure the record is clear.
When you were talking about what wasn't in the Act in tort
reform, you were talking prohibition on MICRA, like they have
had in California since the 1970s, limitations on things over
and above full compensation for actual loss, is that correct?
Dr. Novack. Correct. I think there is a little bit of money
for demonstration projects in the States, but in the law it
actually says those demonstration projects may not include any
demonstrations that include any limits on non-economic damages.
Chairman Issa. Thank you.
The gentleman from Nevada, Mr. Horsford.
Mr. Horsford. Thank you, Mr. Chairman. The title of this
hearing is Obamacare's Impact on Premiums and Provider
Networks, but the majority of the opening testimony has largely
focused on inadequate reimbursement from Medicare and Medicaid
rates, which private insurance companies use, in large part, to
set their own rates. So weren't the issues related to
reimbursement rates under Medicare and Medicaid issues for the
provider community before Obamacare and the Affordable Care Act
were even law? Yes or no?
Dr. Novack. There is no question, but I think, and I will
speak a little bit, is that if the title is about provider and
provider networks, we need to look at this is not about us,
right, it is about how do we get the maximum number of people
the best personalized healthcare we possibly can. And the
practical reality is our large group employs nearly 500
people----
Mr. Horsford. With all due respect, my question was are
Medicare and Medicaid reimbursement issues issues that the
provider community were dealing with prior to the Obamacare,
Affordable Care Act ever becoming law, yes or no?
Dr. Novack. Yes.
Mr. Horsford. The rest of the panel?
Dr. McLaughlin. Yes.
Dr. English. Yes.
Mr. Horsford. So isn't the real issue that you all, as the
provider community, want this Congress to focus on, as many of
the doctors in my district in Nevada have talked to me about,
is the need to reform the reimbursement rates under Medicare,
specifically the SGR? Isn't that the focus that would help to
address a large part of this problem?
Dr. Novack. I will speak for myself, and I would say,
Congressman, I don't think so. This isn't about creating a new
Washington system to have to figure out how to pay people to
provide care. This is much more broadly about how do we
establish policies to allow patients and families to remain in
control of their healthcare and healthcare decisions. So----
Mr. Horsford. So why did you guys bring up the
reimbursement rates under Medicare and Medicaid as one of the
reasons why there is this lack of adequacy of network providers
within some of the plans?
Dr. Novack. I would say it is one of the reasons, so it
makes an impact.
Mr. Horsford. So if the Congress could help address the
reimbursement rates and reform SGR, would that help or hurt the
process?
Dr. Novack. I think it all depends upon how it is done. And
again I would refer you back to the position of the Obama
Administration, who said in a court filing this year that there
is no general mandate under Medicaid to reimburse providers,
including hospitals and that, for all or substantially all of
their costs. So the position of the Administration seems to
be----
Mr. Horsford. But SGR is focused on Medicare.
Dr. Novack. But I am just saying that the position is----
Mr. Horsford. It is not the same thing. You are giving me a
reference that is not my question. My question is on the SGR,
which is largely the basis for how reimbursement rates to
doctors are established by the private insurance companies.
Dr. Novack. I think that things would be improved if there
was not an annual uncertainty every year for us to say that on
January 1st, 2014, we are getting a 25 percent cut, so we tell
our patients that under those conditions we cannot continue to
see you, so we have to decide if we are going to be willing to
see Medicare patients until Congress chooses to fix the problem
every year.
Mr. Horsford. So if the Congress worked to fix the problem
with the lack of reimbursement to cover the cost to the
providers providing care under Medicare and Medicaid, that
would help, not hurt, correct?
Dr. Novack. I think it would--depending upon how it was
done, it might help, but there is always the possibility that
new policies could not be helpful.
Mr. Horsford. Okay. Well, later today we will be voting on
a budget deal that includes a rule on the SGR extension for
another three months. Not reforming it, not increasing the
reimbursement rates like doctors in my State of Nevada want us
to do because they are not covering their costs, it is just
extending it for another three months. So I would just hope
that at some point in the Government reform part of this
committee we would work to bring forward those bills. I have
signed letters with my colleagues on the other side in favor of
these reforms. I am prepared to work on legislation to bring
these needed reforms forward.
But instead we are having kind of these dog and pony kind
of show hearings that don't get at any of the real reforms to
make the law work better, or to address other issues that are
unrelated to the law. Medicare and Medicaid reimbursement
issues for doctors were a problem before Obamacare, before the
Affordable Care Act was put into place, so to somehow suggest
that it is because of the Obamacare that these issues are
happening is to fail to recognize the history of the problems
in the healthcare system to begin with.
Chairman Issa. Would the gentleman yield?
Mr. Horsford. No, Mr. Chairman, I just want to conclude
my----
Chairman Issa. The gentleman's time has expired.
We now recognize the gentleman from Tennessee, Dr.
DesJarlais.
Mr. DesJarlais. Thank you, Mr. Chairman. I would be happy
to yield a minute to you to finish your thought.
Chairman Issa. Thank you.
I was only going to say that I wasn't here in 1997, when
they scored a big savings based on a theoretical reduction in
the cost of doing business. You weren't here. It is something
that I agree with the gentleman, we need to realize that simply
paying doctors less, and then reneging on agreeing to pay them
less when the real cost-savings didn't occur because we never
legislated or did anything to help drive down the cost of
delivery, is in fact a very good point, and I agree with the
gentleman that that fundamental change, which was scored before
you and I got here, is not about just paying doctors more,
because we did say we are going to find ways to be more
efficient in what drives their cost up. So I look forward to
working with the gentleman on that. It won't come to our
committee, but I would certainly be happy to work with the
gentleman to try to drive down the cost of doctors delivering
quality healthcare.
And I thank the gentleman for yielding.
Mr. DesJarlais. Certainly. Reclaiming my time. I will also
add that we just had a Doctors Caucus meeting this morning. As
you know, there are markups pending in Ways and Means and
Energy and Commerce dealing with an SGR replacement. There is
going to be a three-month patch, but we are working with the 15
members of our GOP Doctors Caucus, as well as our dentists and
our nurses, and we are going to try to find something that has
a sensible approach to reimbursing physicians, unlike the SGR,
which over the past 15 years has yielded nothing, I think, but
a 1.9 percent increase; and I think most industries would have
a hard time making that work with rising costs in other areas.
I wanted to put up a video, if we could.
[Video shown.]
Mr. DesJarlais. Okay, I am sure this is probably something
most everyone in this room has seen or heard, maybe everyone
across America, and practicing primary care medicine for the 20
years before coming to Congress, I know that a lot of my
patients who had insurance probably believed the President. If
you had an insurance plan that you liked and you had a doctor
you liked, and you were given that clear assurance over and
over again, right up through 2012, right before the election, I
am sure a lot of your patients were secure that maybe this
healthcare law wasn't going to impact them. Well, now they are
finding out that that is simply not the case.
So I would ask you--we can just go down the line--what are
your patients finding and feeling when they, all of a sudden,
realize they have been duped?
Dr. English. Well, again, there is fear because they have
an established relationship and patients will follow their
doctors. What is wrong about the last part of that video is, as
I said, if you are in a different part of Georgia and your
exchange does not have me, but then you go into that exchange
three hours away, now your primary doctor is three hours away
too. So you can't just pay more to see us anymore; you are
excluded if we are not on that list. And United Healthcare's
website says I am non-preferred, so you can still see me, but
you have to pay more because your doctor is being penalized
because he takes care of sick people.
Dr. McLaughlin. The patients are numb. I think that is
about all I can say.
Mr. DesJarlais. Okay.
Dr. McLaughlin. And many of the patients who had a State
subsidized plan in New York called Healthy New York received
letters that that plan would end and they would have to go into
the New York marketplace. I actually approached many of those
patients that were in my practice; they never bothered to open
the mail. They didn't even know that their plan terminated; I
was the one that informed them. So these patients are numb,
they are upset. And as you know as a primary care doctor, you
don't work alone, you work with specialists. So Rahm Emmanuel
had said that you can pay more for a plan that has your doctor.
Well, it may have your doctor, one of them, but it may not have
the four or five specialists that you see also. So there is a
discontinuation of care no matter how you look at this.
Mr. DesJarlais. Dr. Novack, I am going to finish because
you bring up a great point. Supporters of the healthcare law
claim that 30 million people will gain insurance. Can you
explain the difference between having a health insurance card,
particularly one for a Government program, and having access
for care? And I will just preface that with I came to Tennessee
in 1993, a year before TennCare was instituted, which was a
model for what we are experiencing now, and it didn't work. So
I think you know very well that somebody can come in with that
card and they need maybe an orthopaedic surgeon, and if you are
in a rural area, they may have to go 100 miles or more to try
to find that doctor and you might have to hire extra staff just
to stay on the line at night, after clinic hours, trying to
find a referral or someone who can accept it.
What are your experiences with that? Do you think it is a
good idea to reform healthcare based on the expansion of
Medicaid?
Dr. Novack. I don't think the data suggests that is a
particularly good idea, and I think it is the unfortunate
reality. And to touch on what you said, I know Congressman
Gosar, the last time I was here, made that point exactly in his
opening remarks, that what we are seeing, unfortunately, is
that a plan that was supposedly designed to help those who need
the most, we are seeing in rural areas there are fewer and
fewer doctors available, and we are seeing in inner cities the
closure of clinics, the moving out of primary care doctors, the
near complete absence of specialists in many cases. So,
unfortunately, the groups that we really do want to do things
to be able to help, unfortunately the law, while well intended,
I just think we need to recognize is not doing what it said
needed to be done. So this is beyond tinkering to make it
better; this needs essentially a complete revamping and address
the real problems.
Chairman Issa. I thank the gentleman.
We now go to the gentleman from Virginia, Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman, and thank you to our
three panelists.
One might be forgiven, looking at this panel and the
theater of it. Frankly, if Democrats had had the chance to put
together a panel of three doctors, I guess we could ask you to
wear your white coat. And I guess we could find three doctors,
I know we could, who would praise the plan. But the idea, and
this doesn't in any way disparage the value of your opinion or
your experience, but the idea that your experience is to be
generalized as universal is false, and it is a false premise
and it does a disservice, in my opinion, to this discussion.
None of you are policy experts and none of you universally
speak for your profession. You were asked at one point, by one
of our colleagues, about how difficult it is to sign up. Well,
if we are going through anecdotal experience, I can tell you
that I and my entire staff must go on the exchange on
Obamacare. All of us signed up, met the deadline. If you are
under a certain age on my staff, the average premium cut ranges
from 30 to 70 percent. They are happy as clams. The deductibles
are comparable or better; the copays are comparable or better.
I can tell you in my district of small businesses, who are
crowing about the fact that when they went on the exchange they
had better choices than they have currently. I talked to one
the other day with four or five employees; he is going to save
$6,000 to $7,000 a year.
It isn't an honest intellectual pursuit to deliberately
cherry-pick facts and to deliberately put together a panel of
critics of a piece of legislation that is admittedly complex.
You were asked about tort reform, as if tort reform was
dispositive on the cost of healthcare. It is not. It is a
factor, but, of course, what the questioner didn't say as a
prelude to his question was, of course, on our side of the
aisle we decided, a priori, to oppose it no matter what was in
it. We didn't give it a chance. And the fact that an entire
party decided to take a powder on a major piece of legislation
precisely meant tort reform wouldn't be at the table in a
meaningful way, at least as determined by them. Of course not.
We had a prominent Republican Senator in the other body who
said if we defeat healthcare--this was before we even knew what
was going to be in it; it didn't matter--it will be Obama's
Waterloo. That tells you everything you need to know. It wasn't
about healthcare. It wasn't about the quality of healthcare. It
wasn't about whether you are in a plan or you are properly
reimbursed. It was about a political game to try to make him a
one-term president, and it didn't work.
I hope some day we have a substantive hearing where we
actually, as Republicans and Democrats, try to find out what is
working, what isn't, and make it better. That is the history of
transformative legislation in this field. Unfortunately, it is
not the history here. We spent 46 votes in this Congress to
simply repeal it, defund it, or gut it; not based on
substantive analysis, not based on experience, but based on a
political predilection to oppose this bill and this President,
even though there are elements in the bill that actually came
from Republican think tanks, the individual mandate being one
of them. Not a Democratic idea; a Republican idea.
So I am glad you are here. Certainly have enjoyed listening
to your testimony, but I have to put it in a different context.
You will forgive me. And it is too bad that the panel couldn't
have been more balanced and it is too bad Dr. Feder is kept
waiting, when she was under the impression, as were we, that
she could join this panel to provide a different perspective.
I yield back.
Chairman Issa. I now ask unanimous consent that the
gentleman from Virginia, Mr. Connolly's website, which I will
put up there, from 2010 be placed in the record, in which he
says, for the past years my constituents have told me we want
health insurance reform, but only if it meets certain tests,
Connolly said. Will it bring down premiums for families and
small businesses, will it reduce the deficit and will it
protect choice of plan and doctor?
Without objection, so ordered.
Chairman Issa. We now go to the gentleman from----
Mr. Connolly. Could I inquire of the chairman?
Chairman Issa. Yes.
Mr. Connolly. Is it going to be the practice of this
chairman to start to actually individually put members'
websites into the record? Because we would be glad to return
the favor on this side of the aisle.
Chairman Issa. I have no problem at all. I asked for it
because it was germane to your anecdotal statement of objection
to their anecdotal statements, so it just seemed appropriate.
And good staffing, as you know, Gerry, somebody looked and
said, heck, Gerry used to be for what these people are
testifying we are not getting, that is all.
Mr. Connolly. I stand by the website. Those were the three
criteria I used, and that is why I voted for the bill and
continue to support it, Mr. Chairman. So happy to have it. Just
wanted to make sure----
Chairman Issa. No, we put it in because it was a historic
piece. And, candidly, the requested individual from your side
of the aisle is on the next panel, along with all the other
non-medical doctors, and that is the reason it was divided.
Medical doctors who were giving their anecdotal examples of
what they see as practitioners, current practitioners, and then
the think tank crowd will be next. And hopefully you will not
disparage the think tank crowd for not being doctors.
Mr. Connolly. No, Mr. Chairman, absolutely not.
Chairman Issa. Thank you.
Mr. Connolly. There was no disparagement of doctors, there
was just a cry of the heart that some Democratic doctors not be
at the panel.
Chairman Issa. If you had suggested one, we might have had
him.
Mr. Cummings.
Mr. Cummings. Just for a second, Mr. Chairman. I would
hope, Mr. Chairman, that we would not be engaged in putting
members' campaign website stuff up or whatever.
Chairman Issa. This is not a campaign. We would not----
Mr. Cummings. Whatever.
Chairman Issa. No, we would not put a campaign website.
Mr. Cummings. What was that?
Chairman Issa. This is in fact official property of the
House of Representatives.
Mr. Cummings. I just want to make sure. I am just so
concerned that we stay focused on this and not be distracted by
certain things. I thought it was a website campaign, and I
think--but thank you very much.
Chairman Issa. No, no, I appreciate it. But the reason we
chose this was that it was said on the floor of the House, it
is on a Government site, and it is pursuant to exactly why we
chose this question, which is what is the impact to doctors. I
know a couple weeks ago, when we were looking at failures of
the website, something that we all are working on reforms to
fix, we had a discussion about what about what about the
fundamentals of the healthcare.
Mr. Cummings, I will say something to you here today. You
and I do not control, we were not the committee of jurisdiction
for the Affordable Care Act, but the exact problems that these
doctors are talking about are what we have to take a leadership
role in fixing. Mr. Horsford has left, but a lot of it began in
the 1990s, when we thought we could simply pay less from the
Federal docket in Medicare and Medicaid reimbursement. These
are problems that are longstanding. The reason I am having them
here today is I agree with what you said to me in a sidebar,
which is when are we going to start fixing some of the
individual parts of it. The Affordable Care Act is not going
away in totality, but these doctors, and I take Dr. English
particularly, are telling us about a chronic problem, which is
are doctors being incentivized not to take the tough patients.
And in some cases, and Mr. Cartwright alluded to this, in some
cases it is our Government reimbursement. In some cases it is
how insurance companies are reacting.
And I will pledge to you today I will treat how the
Government acts and how insurance companies act the same in
trying to get these doctors to be able to practice what they
do. And we can have a discussion about how much reimbursement
comes out of tax dollars, but hopefully today, both in the
first and second panel, we are dealing with what is happening
currently so that we can fashion some legislation that has to
be bipartisan if we are going to fix it.
Mr. Cummings. Well, thank you, Mr. Chairman. I just want to
make sure we stay on track. I keep going back to what Dr.
McLaughlin said. She said fix it, and it can be fixed. By the
way, Mr. Chairman, I appreciate what you said to Congressman
Horsford, because he did raise some very legitimate concerns
and I think that we can work in a bipartisan way. We can help
these doctors be effective and efficient in what they do and
help the American society. So thank you very much.
Chairman Issa. Thank you.
The gentleman from Georgia.
Mr. Woodall. Thank you, Mr. Chairman.
I thank you all for being here. My colleague from Virginia
characterized you as Obamacare critics. I would not
characterize you that way. I don't know how you would
characterize yourself. I would characterize you each as patient
advocates. And if that leads you to be critical of the
Obamacare legislation, then fair enough. But to the gentleman's
point, I thought he was exactly right: find out what is working
and what is not, and make it better. I wish that had been the
counsel this Congress had applied before the passage of the
President's healthcare bill, because each of you has made
testimony about patients that you had, patients that were
receiving care, patients that were given the individual
attention that they need, who will no longer because of this
new legislation. Those folks weren't having problems; we
created those problems. And you all are in the caretaking
business much more than I am.
But the stories that you tell that touched me the most are
the tales of the problems that we create, the uncertainty that
you mentioned, Dr. Novack. There is no way to take those fears
away. Those fears are real for those families today. If, six
months from now, those fears turn out to be unrealized, we
still won't be able to take away the pain and frustration those
families have experienced today.
I tell everyone at town hall meetings that I thought the
President identified exactly the right challenges; that
healthcare costs were rising too fast and that many Americans
did not have reliable access to care. I thought he crafted
exactly the wrong solution to do that. I think we can work
together to solve those problems. The concern is that,
certainly from your testimony and from the experience of my
constituents, we have created a whole new batch of problems.
I am going to ask you, Dr. English, you know my good friend
Todd Williamson in Gwinnett County, Dr. Todd Williamson. He is
a neurologist as well. He told me the other day--he is just a
little bit older than you are--that here we are the largest
county in the southeastern United States, one of the fastest
growing. He has been in practice for more than 20 years. He has
not seen a new neurologist come into Gwinnett County. I tried
to look at the ages of folks in your practice. Are you the
youngest in your practice or have you found some young
neurologists coming in?
Dr. English. I am not the youngest anymore. I wish I was.
Mr. Woodall. Because that is one of those challenges. I
look at the dollars that we have poured into the President's
healthcare bill. Just today the headlines: Chicago Tribune,
Only 7,000 Illinoisans Enroll in Obamacare Plans in the First
Two Months; Weekly Standard, HHS Awards Another $58 Million to
Obamacare Navigators. The list goes on and on. Bergen County
Record in New Jersey, Many New Jerseyans Stuck In Healthcare
Limbo as December 23rd Deadline Nears; AP, 398 Alaskans Pick
Marketplace Plans, Despite Untold Millions Spent There; Oregon
Signs Up Just 44 People for Obamacare, Despite Spending $300
Million.
What would have happened if we had spent those $300 million
on community health centers? I happen to be a huge community
health center advocate. I believe folks are entitled to a level
of care and I believe we can provide that interesting sliding
scales, ability to pay. We already had such a mechanism in
place.
My colleague from Virginia called this a pony show. When
the question came to you, Dr. English, does Obamacare limit
your patients' treatments and the answer came back yes, I don't
know why that is not the end of the conversation. I don't know
why there are not 435 members of Congress who say, you know
what, we care about people and we care about people having
access to care, and we want to improve the access to care for
folks who don't have it; but if you have access to care today
and we are doing things in this body that limit the medical
professionals' ability to treat their patients, why can't we
all decide that is wrong and that we should go back and take
another crack at that?
The Affordable Care Act is important legislation, I heard
from one of my colleagues, because it deals with preexisting
conditions and access to care. I want to ask you, since you
have been characterized as Obamacare critics, is there one of
you, is there even one of you who does not believe that we
should deal with preexisting conditions and that we should
improve access to care? I will start with you, Dr. English.
Dr. English. Of course we have to do all those things.
Mr. Woodall. Have to do those things. Have to do those
things.
Dr. McLaughlin?
Dr. McLaughlin. Sir, physicians have always given charity
care, love of their heart, to people who couldn't afford it.
Always did.
Mr. Woodall. Always did.
Dr. McLaughlin. And always will continue to do so. But what
this has created, sir, is a roadblock of unsurmountable
proportions. The high deductibles that were imposed on these
patients is nothing more than them not having insurance. Can we
understand that?
Mr. Woodall. Dr. Novack?
Chairman Issa. The gentleman may answer, of course, doctor.
Dr. Novack. I agree with you.
Mr. Woodall. Mr. Chairman, I know my time has expired, but
we have found that collection of ideas on which we can agree,
and I agree with my colleagues on the other side of the aisle;
we should begin working towards those goals and we should do
that immediately. I yield back.
Chairman Issa. I thank the gentleman.
We now go to the gentleman from Massachusetts for five
minutes.
Mr. Tierney. Thank you.
Thank you for being here today. I wanted to ask. I think it
was Dr. McLaughlin who made a comment that the insurance
companies did not renew a patient's policies and, as a result,
that was an issue. I wanted to ask you whether or not, when you
were having this discussion with your patients who had their
policies not reissued by their insurance companies, whether or
not you looked and saw if those old policies had, as part of
their coverage, the following services and benefits: ambulatory
patient services, emergency services, hospitalization,
maternity and newborn care, mental health and substance abuse
disorder services, including behavioral health treatment,
prescription drugs, rehabilitative and habilitative services
and devices, laboratory services, preventative and wellness
services, and chronic disease management, pediatric services,
including oral and vision care. Did your patients in each case
have all of those benefits and services?
Dr. McLaughlin. Sir, I can only speak of my small business
plan because I----
Mr. Tierney. Well, let me ask you. You gave me information
about your patients and what you thought were their situation,
so I am asking you, before you reached a conclusion or an
opinion on that, did you look at their policies to see whether
or not they actually covered all of those benefits and
services.
Dr. McLaughlin. The policies I referred to is Healthy New
York, or State-run, and, yes, they had all those benefits.
Mr. Tierney. All of those services were in those.
Dr. McLaughlin. But the reason why the State canceled----
Mr. Tierney. So you are going to tell me now that that
policy had each and every one of those services in it?
Dr. McLaughlin. Absolutely.
Mr. Tierney. Okay. Did you look to see whether or not any
of your patients that you are talking about had been advised by
their insurance company that they could go to an exchange in
New York and compare and contrast what they now were offered
with whatever else might be on that exchange as an alternative?
Dr. McLaughlin. They received notification of that, yes.
Mr. Tierney. Okay. And do you know whether or not they have
gone and checked that out?
Dr. McLaughlin. I can't tell you what patients do.
Mr. Tierney. And do you know whether or not your patients
were eligible for a subsidy, in other words, if they were
earning less than over 400 percent of poverty?
Dr. McLaughlin. Again, obviously, as a physician, we don't
know what a patient's earnings are, but I can tell you from the
careers that I see----
Mr. Tierney. Well, that wouldn't be fair because----
Dr. McLaughlin. Well, it would be fair.
Mr. Tierney. So did you ask them whether or not any of them
qualified for a subsidy and, if so, how much?
Dr. McLaughlin. Well, I can speak even of my own staff who
were covered. Yes, they checked.
Mr. Tierney. I want to know about these patients that you
were referring to.
Dr. McLaughlin. Yes.
Mr. Tierney. You weren't checking about your staff; you
told us about patients.
Dr. McLaughlin. Some checked.
Mr. Tierney. And some?
Dr. McLaughlin. And some had a subsidy, some did not.
Mr. Tierney. Okay. And do you know which of them or which,
how many of each, and whether or not it covered all or some of
what they thought was an increase in the policy?
Dr. McLaughlin. The closer that an individual, these
patients, get to the upper limit of what qualifies for that
subsidy, they were told that they would only save about $5 a
month on the premium. So a subsidy doesn't cover everything. It
depends on how far away from the maximum that is covered.
Mr. Tierney. That is the idea of a sliding scale and a
subsidy, right?
Dr. McLaughlin. Correct.
Mr. Tierney. Okay. Did you also talk with your patients
about the medical loss ratio part of the Affordable Care Act,
that part that says that insurance companies have to now use up
to 80 percent of their premiums for actual health services, as
opposed to overhead and management, things of that nature?
Dr. McLaughlin. With all due respect to the patient
population, sir, they don't understand a medical loss ratio.
Mr. Tierney. Do you?
Dr. McLaughlin. I do.
Mr. Tierney. Okay. So you are aware that in 2012 consumers
saved $3.4 billion through lowered premiums based on those new
standards?
Dr. McLaughlin. My plan did not have that; I got no refund.
Mr. Tierney. My question to you, though, was that if you
are familiar with it, do you understand that in 2012 consumers
saved $3.4 billion through lower premiums based on those new
medical laws.
Dr. McLaughlin. I understand that, yes.
Mr. Tierney. And do you understand that, in addition,
companies that did not meet those standards issued $500 million
in rebates?
Dr. McLaughlin. Yes, I do.
Mr. Tierney. Okay. Do you know whether or not any of your
patients were beneficiaries of those rebates?
Dr. McLaughlin. Some of them were, yes.
Mr. Tierney. Okay. I just want to close out. I am not going
to use all of my time on this, but with respect to a comment
that was made earlier from somebody on the panel here about the
history of this bill, and this was not a committee of
jurisdiction, I was on one of the committees of jurisdiction.
My memory is that during the coercive debate of this particular
bill, tremendous effort was made to try and have it be a
bipartisan measure, and we reached out and asked for
participation of both sides of the aisle and one side decided
not to participate. Incredibly, even when certain provisions
that people thought were generally good, bills that were drawn
by Republicans on that part were asked to be introduced,
Republicans refused to introduce them. And even when some 12 to
15 of them were put in as amendments, those people who had
drawn those original bills that were now the amendments voted
against them. So I think it is some indication of the effort
that has been made to try and have this be a joint effort all
across the aisle, with everybody working on this, shows from
the earliest parts of this whole exercise or whatever, a
concerted effort, I think, with one part just to not even be
involved in it and not participate in trying to make it the
best project it could possibly be, and I think that is part of
what we are seeing a continuation of here.
Chairman Issa. Would the gentleman yield?
Mr. Tierney. I am afraid I am out of time, according to
your strict standards, Mr. Chairman.
Chairman Issa. Okay. The gentleman's time has expired.
The gentlelady, Dr. McLaughlin, you were cut off several
times because of limited time, but is there anything that you
did not get a chance to answer?
Mr. Tierney. Mr. Chairman, is it your turn to question? Am
I missing something here?
Chairman Issa. It is the requirement----
Mr. Tierney. You just asked for me to yield to you and I
have no time to yield, so now you are just----
Chairman Issa. No, no. I am not asking any questions. The
prerogative of the chair under the rules is to make sure that
there is a full and complete, clear answer, and to correct the
record, if necessary.
Mr. Tierney. That is not at all accurate.
Chairman Issa. I am not correcting the record. This is a
longstanding practice under both Republicans and Democrats. The
gentleman had limited time. The gentleman, in his limited time,
cut you off several times. If the doctor had anything that she
felt was germane, I have always allowed witnesses to continue
answering even after time has expired.
Was there anything, doctor, that you felt you needed to
fully answer there was not time for?
Dr. McLaughlin. The purpose of this committee is to talk
about the limited networks and whether premiums were indeed
lowered or not, was it not?
Chairman Issa. That is correct.
Dr. McLaughlin. And as I said to Mr. Cummings, we have 20
days to fix how we are going to provide care to patients with
limited access, and there is no debating that. We talk about
MS. I will talk about ophthmalogy for a second.
Chairman Issa. I apologize. I would love for you to do
that. I just wanted to give you time on something that he had
asked, which included subsidies. He cut you off during your
statement on occupations of your patients and so on. Please, I
am only trying to make sure the record is full. If there is
anything you wanted to say about your patients and so on, that
was the line.
Dr. McLaughlin. The cutoff----
Mr. Tierney. Mr. Chairman, if it is an answer to my
question----
Chairman Issa. The gentleman is not in order.
Mr. Tierney. The reason that the witness was asked to move
to another subject was she was not being responsive to my
question. Now, if you want to ask a new question in a different
direction, get some time.
Chairman Issa. The gentleman is not in order, please.
Mr. Tierney. Well, neither is the chair, and I think we
have an issue here as to whether you are going to be some sort
of arbiter of what my questions were, and now you are going to
shut the microphone off.
Chairman Issa. Yes.
Mr. Tierney. You are just a model of leadership, I tell
you.
Chairman Issa. Thank you.
Please limit yourself to anything that you felt was asked
that you were unable to answer. I certainly want you to be
germane, that is why I did ask you to stay to what the
gentleman asked.
Dr. McLaughlin. Forty-five thousand dollars, I believe, is
the income ceiling in New York to attain a subsidy. Forty-five
thousand dollars in living in New York barely makes it. So most
of the people who are going to be getting these insurance plans
will not receive a subsidy, and they are going to have a
difficult time paying these deductibles and paying their
premiums. Thank you.
Chairman Issa. Thank you.
The gentleman from Georgia, Mr. Collins.
Mr. Collins. Thank you, Mr. Chairman.
Look, I just have a couple simple questions. I have a
daughter who fits the special needs category. Dr. English, I
appreciate you being here from our home State, as well as the
rest here. I am just going to ask a very broad sort of question
and give a personal experience. One, I have heard it said many
times, and I think one of the things that is being said here is
there are a lot of things out there to fix. Well, this is one
of the fixable laws, this is just one that is broken and it was
inherently flawed. And that is just a disagreement that both
sides of the aisle is going to have, and we are going to deal
with that. I don't believe it can, but there are things that
can be done. But we have to now deal with reality. Reality is
that, as in the case of my daughter, who has spina bifida,
early in life, before six years old, she had 30 major
surgeries, three of which went eight hours plus, ranging just a
vast array of different things. Now she is fine, she is 21
years old, and she actually rules the house if nothing else is
said.
But doctors in her life, especially early on, were very
important, and they still are. And we are making the
transition, as I had a chance this morning to speak with Dr.
English about the transition from pediatric to adult; and that
is hard for a father, so I will just leave that at that. But
she is a young woman.
The problem I have here, and I want you to address--I am
going to stop here and just sort of open it up, and then if you
don't have a lot to say, then, fine, we will be done and we
will move forward. But the plans are hurting the very ones I
believe they were intended to help, especially with the zones
and especially with the areas of access, and especially on
borders and especially those who need multidirectional or
multi-physician care. Could you speak to that? Not the politics
of this thing, but speak to what happens to a father who has a
daughter named Jordan who may not be at 21, they may be at 6 or
they may be at 5, and they are trying to get everything they
can so that their daughter or son can move within the
limitations of what you are now seeing. Can you speak to that
for just a minute?
Dr. English, would you start? And then anybody else who
would like to pick up.
Dr. English. I will start. The problem is, as you said,
this is the group of patients that we really need to provide
for. I know your area, you are about an hour from us without
traffic, depending upon the time of day.
Mr. Collins. Three and a half to four with traffic.
Dr. English. So that is not a far place to go for somebody
like that to see a pediatric surgeon. Boston if you are from
Massachusetts, going to Boston is not a big deal for anybody in
Massachusetts. But if you are out of the exchange district,
then you don't have access and patients like your daughter will
not have access; not to mention the Mayo Clinics of the world
and Walter Reed and all of those places where a subset of
patients have to go. So my concern is that, again, you have
that card, but because of where you live, that is even going to
restrict your access to the provider that you need.
Mr. Collins. And that actually increases cost because you
don't have the collaborative effort that you could do in, say,
a clinic setting or something else at times, and I think maybe
you have that experience.
Dr. McLaughlin?
Dr. McLaughlin. You see, it is a team approach in many
illnesses, and the whole team has to be with us, because this
was allowed to be created now as all in-network coverage.
Besides the high deductibles, all in-network coverage. That is
not saying you can't go to see a specialist like Dr. English,
but you would have to pay for it; and that won't go to
satisfying your deductible or your out-of-pocket. So there are
flaws in this. And I am not against the Affordable Care Act,
but there are flaws in this that are increasing the costs to
the patients, the very patients that you wanted to help, and
this needs to be fixed.
Mr. Collins. Dr. Novack?
Dr. Novack. There will be some families who will see some
improvement, but what we have changed with the law is really
the set of who the winners and losers are. And again certainly
to date, and there has been, frankly, not a shred of any
actual, real-life evidence that the number of winners are going
to even come close to approaching the number of losers.
Mr. Collins. And I think that is the concern that we are
seeing in my office. That is the concern that is coming on that
was just a natural outflow of this, and there are things that
have to be addressed. It is a passionate issue, not just for
the folks on Capitol Hill. In fact, for the 535 of us on
Capitol Hill, we are just reflections of, really, the people in
our districts who are dealing with this every day. The hearing
is entitled Obamacare's Impact on Premiums and Provider
Networks. Frankly, I appreciate the chairman bringing this and
the ranking member being here, and the differences on both
sides, but I would have to just say that Obamacare's impact on
premium provider networks is a generic term for Obamacare's
impact on the lives of people and families. And if we ever
disconnect our discussions of insurance and healthcare and all
this from the very people who need it, then we have made a
mistake, and that is why this hearing is important, because it
actually is dealing with those who actually need the help and
the doctors that they need for day-to-day living.
I appreciate you being here.
Mr. Chairman, I yield back.
Chairman Issa. I thank you, sir.
We now go to the gentleman from Illinois, Mr Davis.
Mr. Davis. Thank you very much, Mr. Chairman. I am pleased
to report that I just came from a markup in Ways and Means,
where, on a vote of 39 to 0, we voted to do a fix for three
months of the SGR and kind of looking after the needs and
concerns of doctors.
I also want to take a moment to just associate myself with
the comments of my friend from Georgia, Mr. Woodall, who just
spoke glowingly about community health centers and the
accessibility, as well as impact, that they have had. I happen
to have worked for two of them in civilian life and also had
the good fortune to be president of our national trade
association at one time, and I certainly think that they are a
tribute to what can happen in the development of ambulatory
care. So I just want to thank him for that comment.
As we begin, I want to make sure that we don't lose sight
of the fact that many of these policies that we have talked
about did not include basic services, such as hospital care and
prescription drugs. They were what many people call junk
policies that provided very bare bones coverage that would have
resulted in catastrophic medical debt if policyholders became
seriously ill. Back in September, a young woman named Aqualine
Lori requested to testify at a hearing before this committee,
and although she ultimately did not testify, Ranking Member
Cummings read part of her statement into the record.
Like millions of other Americans, Ms. Lori had a
preexisting condition, a rare blood disorder. In 2005 she
needed emergency gallbladder surgery and suffered complications
due to her condition. Although she had insurance at the time,
her insurance company dropped her, refunded her premiums, and
left her with a $50,000 hospital bill. Although she spent years
trying to appeal this decision, she was not successful.
Eventually, the hospital she was treated at decided to forgive
the bill.
My question to each of you, all of you are in the business
of providing healthcare. You clearly have all interacted with
insurance companies and know about insurance. Was this type of
policy recision common prior to the enactment of the reforms in
the Affordable Care Act? And what were your experiences in each
of your practices? And we could begin with you, Dr. Novack.
Dr. Novack. Sure. In my 13 years of practice and then 5
years of training before that up in the Seattle area, I have
not seen it, and I have taken well over 1,000 days of on-call
at multiple hospitals and seen over 50,000 patients. Most
States actually have laws already that preexisted the ACA that
prevented inappropriate recisions, so that is a different issue
that I think is being conflated a little bit incorrectly. So
laws against canceling people's policy because you get sick
have been against the law in most States for a long time. That
is a different problem than this idea of people's insurance not
being renewed.
Now, the idea that people who had preexisting conditions
not being able to find affordable insurance, there is not
likely a person in this room, there is not a person I have ever
come across in my 25 years of taking care of patients that
doesn't feel like we need to do something or make policy
changes to address that. The conclusion, however, is that the
policies that were put forth through the Affordable Care Act
are actually making these problems worse, and not better.
Mr. Davis. Dr. McLaughlin?
Dr. McLaughlin. It was illegal to cancel the policy because
of increased utilization of it for a serious medical illness.
This wholesale nonrenewal of policies is shocking. It has been
reported that the insurance companies felt that small
businesses were a losing proposition to them economically, and
this probably became a great opportunity to just rewrite those
policies, which is why we are where we are today with so many
small business policies being not renewed.
Hospitals, again, have always taken care of acute care
conditions when somebody is uninsured, but we have to fix the
problem that we are facing now, as much as it laudable to see
the people who have preexisting conditions can have insurance.
Thank you
Mr. Davis. Dr. English?
Dr. English. Due to time, I don't really have much more to
say than Dr. Novack. Obviously, we agree that there are changes
that needed to occur, and now we are just pointing out that,
unfortunately, this plan is having huge amounts of unintended
consequences.
Mr. Davis. Mr. Chairman, with your indulgence, could I just
simply ask the panel if they would agree that many of these
policies were in fact junk policies that we have been talking
about?
Dr. Novack. I don't think that there is any evidence to
date that the 5.5 million people who have had their policies
cancelled, I haven't seen exact numbers, what percentage those
are ``junk policies.'' A lot of them were ones because they
didn't actually contain some of the new mandates in the law.
Dr. McLaughlin. No one in my practice had a junk policy.
Dr. English. I have nothing else to add.
Mr. Davis. Thank you very much.
Mr. Gosar. [Presiding.] I thank the gentleman from
Illinois.
I would now like to recognize the gentleman from Michigan,
Mr. Bentivolio.
Mr. Bentivolio. Thank you, Mr. Chairman. Mr. Chairman, we
now know that you can't keep your insurance, even if you liked
it. You can't keep your doctor, even if you have been seeing
him for the last 30 or 40 years. You can't keep your hospital.
Premiums are increasing and we have higher deductibles.
Obamacare raided $700 billion from Medicare, including $300
billion from Medicare Advantage alone, to pay for the ACA.
2,250 physicians were terminated from Medicare in Connecticut
alone. Most of the orthopaedic surgeons in Dayton, Ohio
dropped. In Florida, 250 physicians from one medical center
dropped.
In January, Mr. Chairman, I am sure we will discover
thousands, if not tens of thousands, of people, to their
dismay, that they thought they signed up for the ACA, but
because of a glitch in Healthcare.gov did not. Mr. Chairman,
the website itself is in question. A website that asks the most
personal, intimate questions does not have the proper security
protocols to ensure the personal medical data of our citizens
that are safe and secure.
Obamacare created a panel of 15 unelected bureaucrats,
called the Independent Payment Advisory Board, who have the
power to control the types of treatment seniors receive through
Medicare. And according to Dr. Jason Fullmer and Dr. David
Gratso, this unelected body will have the unprecedented ability
to singlehandedly change the allocation of healthcare resources
should Medicare spending exceed medical inflation, which, for
the record, it consistently does.
Dr. Novack, what are your views on this IPAB, I believe it
is called, the Independent Payment Advisory Board?
Dr. Novack. Sure. As I mentioned earlier, I just think it
is a serious area of concern. I don't think that for those of
us, and actually for most families, that creating another new
layer of bureaucracy that are making determinations about
accessibility is a step in the right direction. I would add
that I think that there is fairly significant bipartisan
opposition to the Independent Payment Advisory Board because of
the way it is structured and how their decisions effectively
have the ability to bypass Congress.
Mr. Bentivolio. Do you have evidence that competition and
choice is a better way to increase value and reduce cost than
Government bureaucracy and experts?
Dr. Novack. I think there is a fair amount of evidence that
if we increased transparency, provide more information to
patients, that a lot of patients will make better decisions.
That is also true on the physician side. And a lot of those
solutions are a lot simpler and cost a lot less than the $2.5
trillion to $3 trillion we are spending on the Affordable Care
Act over the next 10 years.
Mr. Bentivolio. Thank you. Do you think that many people
signing up for coverage don't know that their doctor or their
children's doctor will still be in their network and they will
still be able to visit their family doctor?
Dr. Novack. I think the evidence of this panel is not only
do the patients not know, but we don't know either.
Mr. Bentivolio. Mr. Chairman, we are consistently
unearthing the lies, half truths, and distortions of this
poorly conceived law.
Dr. Novack, what do you anticipate will occur next year
when people go to their doctor and find out they are no longer
covered?
Dr. Novack. Well, congressman, it gets back to this
uncertainty issue, that already, on the provider side, we spend
enormous amounts of time, as was mentioned, enormous number of
phone calls trying to sort through some of these very
complicated issues regarding health insurance. And, by the way,
this is not just for people in the private market; it is not
just for people on Medicaid; it is equally true for people with
Medicare and the 130,000 pages of regulations that go along
with Medicare.
This is only going to grow. So at least for our practice,
since we have no idea what the exchange will bring, and this
90-day grace period issue is such an enormous issue for us that
we don't feel that we can actually see patients under these
exchange contracts that we were pushed into without choice
until this body or other bodies actually figures out what the
rules are going to be so we can continue to provide services
and be able to pay our staff.
Mr. Bentivolio. Thank you very much.
Chairman Issa. [Presiding.] Would the gentleman yield?
Mr. Bentivolio. Yes.
Chairman Issa. Dr. Novack, I just want to make it clear.
Under this 90-day plan, if you have, let's say, a $2 million
practice, including the pay you pay all your people and so on,
you could end up with, 90 days, one-quarter of that, $500,000
of patients that aren't covered and don't pay. That is the kind
of exposure you could have, is paying all your people, paying
out $500,000, and getting back none of it. That is the
uncertainty that was in the law, is that correct?
Dr. Novack. Right. And the concern is almost all insurance,
is my understanding, there is always a 30-day grace period,
right? Because sometimes we forget to send a check in. Things
happen. But under the law the exchange plans have a 90-day
grace period. For the first 30 days the insurers are required
to actually pay the bill. But when we go do an insurance
authorization on day 31, it is going to look like the patient
has insurance, but the insurance company is going to hold
payment, and if that premium is not paid by day 90, the
insurance company says, well, it is not our problem, go collect
it from the patient. And generally speaking, in those settings,
talking to hospital people as well, your collection rate is
about one or two cents on the dollar for that money.
Interestingly, we had a conversation with one of the newer
insurers that is going to be on the exchange in Arizona and we
said we would like some kind of protection against this exact
problem. We didn't have an issue in terms of what the payment
rate was going to be for services, we just said we need some
kind of protection; and they were unwilling to provide us that
protection, so we walked away from that contract.
Chairman Issa. I want to thank all our witnesses today. I
certainly think that we closed on a good note. The fact that
there is something that I think all the people on this side of
the dais can agree on is that we certainly need to make sure,
just as if you were taking a Visa or Mastercard and you checked
it and it was good, your expectation is that when you let the
gas or the other product leave your store, that it would be
honored, and not that 60 or 90 days later you would find out,
retroactively, you weren't going to get paid. So as we look at
the many problems presented here on this first panel, I think
that is certainly a good example of one that we look forward to
working together to try to fix and fix quickly.
Again, doctors, I thank you for remaining in this industry,
remaining in your practices, and offering us some ideas of
where we need to keep from driving you and doctors like you
out.
And I recognize the gentleman from Maryland for a closing.
Mr. Cummings. Thank you very much, Mr. Chairman.
I want to thank all of you, too, for what you do every day.
You have very, very important jobs. You bring a quality of life
to life and in many instances save lives, saving sight. It is
so important. I want you to be paid. I want you to be paid for
what you do. At the same time, I also want people to have an
attitude of staying well and, if they get sick, knowing that
that insurance card that they have means something. And I heard
what you said, Dr. McLaughlin, about the various situations
that you found yourself in with your mom. So some kind of way
we have to balance all of this.
You know, Congressman Tierney was so accurate. A lot of
these things probably could have been resolved when the bill
was being put together, but there was a lot of give and take
and a lot of things happened that I think we could have avoided
a lot of what we have here now. There are problems, but you are
right, we have to fix this, and it has to be a can-do attitude,
and not one of just throwing up our hands. Because you know
what? The people who suffer are the very people that you try to
help everyday.
So I thank you for what you do. I also thank you for
bringing the passion that you bring to your professions. We
understand. You are just trying to help people, to get them
well and keep them well, and we really appreciate you. Thank
you.
Dr. McLaughlin. I thank you so much for this opportunity.
Chairman Issa. Thank you all. And, again, you will have
seven days, if you want to put additional statements or other
material in the record.
We will now take a short recess for the second panel.
[Recess.]
Chairman Issa. I want to thank all of you for your
patience. We will now welcome our second panel of witnesses.
Professor Judith Feder is a Professor of Public Policy at the
McCourt School of Public Policy at Georgetown University and a
Fellow with the Urban Institute. Mr. Edmund Haislmaier, welcome
back, is a Senior Research Fellow for Health Policy Studies at
the Heritage Foundation. And Dr. Avik Roy, M.D., is a Senior
Fellow at the Manhattan Institute for Policy Research.
As you saw on the first panel, pursuant to the rules of the
Committee, would you please rise and raise your right hands to
take the oath.
Do you solemnly swear or affirm that the testimony you are
about to give will be the truth, the whole truth and nothing
but the truth?
[Witnesses respond in the affirmative.]
Chairman Issa. Please be seated. Let the record reflect all
witnesses answered in the affirmative. Dr. Roy?
STATEMENT OF AVIK S.A. ROY, M.D.
Dr. Roy. Chairman Issa, Ranking Member Cummings and members
of the Oversight Committee, thank you for inviting me to speak
with you today about the Affordable Care Act.
My name is Avik Roy, I am a Senior Fellow at the Manhattan
Institute for Policy Research, in which capacity I conduct
research on health care and entitlement reform.
I am an advocate of market-based universal coverage. I
believe that the wealthiest country in the world can and should
strive to protect every American from financial ruin due to
injury or illness. Furthermore, I believe that well-designed,
subsidized insurance marketplaces are among the most attractive
vehicles for achieving these goals. It is for these reasons
that I am deeply concerned about the way the ACA's insurance
exchanges have been designed and implemented. Most of all, I am
concerned that the law will drive up the cost of health
insurance, especially for people who shop for coverage on their
own.
As you know, the ACA makes substantial changes to the
individual health insurance market. The law broadly bars from
charging different rates to the sick and the healthy and
requires insurers to raise rates on younger individuals in
order to partially subsidize care for the old. It mandates that
insurers cover a broad range of services that individuals might
not otherwise choose to purchase. The law taxes premiums,
pharmaceuticals and medical devices in a manner that has the
net effect of increasing the cost of insurance.
Earlier this fall, I and two colleagues from Manhattan
Institute completed the most comprehensive study to date of
individual market premiums in 2014 relative to 2013. We
examined the five least expensive plans available in the
individual market for every county in the United States,
averaged their premiums and adjusted the result to take into
account those who, due to pre-existing conditions, could not
purchase insurance at those rates. We examined premiums for 27,
40 and 64 year old men and women.
We then compared those rates to the five cheapest plans on
the ACA exchanges, apples to apples comparison. Our analysis
found that the average State would see a 41 percent increase in
underlying premiums prior to the impact of subsidies. Among the
States seeing large increases are Nevada, 179 percent, New
Mexico, 142 percent, North Carolina, 136 percent, Vermont, 117
percent, and Georgia, 92 percent. Our analysis did find that
eight States will see average premiums decrease under the law,
including Massachusetts of negative 20 percent, Ohio, negative
21 percent and New York, negative 40 percent.
Of the six categories we studied, 27 year old men face the
steepest increases with an average hike of 77 percent; 40 year
old women received the mildest increase with an average of 18
percent.
We also studied the impact of the law's premium assistance
payments on exchange premiums. Our analysis found that for
individuals of average income, taxpayer funded, insurance
subsidies primarily flow to those nearing retirement. This is
because the elderly will stay pay more for insurance on average
than younger individuals and because the subsidies are designed
to fix a percentage of one's income devoted to paying health
insurance premiums.
Taking subsidies into account, 64 year old men will pay on
average 19 percent less for insurance under the ACA system,
whereas 27 year old men will pay 41 percent more.
The Manhattan Institute analysis indicates that we are
indeed likely to see a fair amount of adverse selection on the
exchanges. People who consume an above average amount of health
care services, such as sicker or older individuals, have a
compelling economic incentive to enroll in the ACA
marketplaces. Healthier and younger individuals, however, have
less of an incentive, even when one takes into account the
individual mandate.
Our analysis did not directly examine the degree to which
exchange-based plans have higher deductibles and narrower
provider networks relative to plans available in 2013. There
have been, however, many anecdotal reports of people paying
higher premiums for plans with higher deductibles and narrower
physician networks than the plans they previously enjoyed. In
particular, prestigious academic medical centers that
specialize in the most complex cases in the various diseases
tend to provide costlier care than the typical American
hospital. These facilities have been mostly excluded from the
exchange-based provider networks.
It is not inherently a bad thing for individuals to choose
plans with higher deductibles and narrower networks, especially
if those choices allow Americans to reduce their monthly
premiums. In theory, by encouraging price competition among
health care providers, exchanges could exert a downward
pressure on overall health costs.
The problems is that in the case of the ACA, many
individuals are reporting higher premiums for less attractive
health coverage in a way that will all in all increase national
health spending. It would be one thing if the ACA was forcing
Americans off their old plans, and offering them more
attractive plans at a lower price. But millions of Americans
are likely to see less attractive coverage at a higher price.
If they do, then the Affordable Care Act will not live up to
its name, and its goal of universal coverage will remain
unfulfilled.
Thank you.
[Prepared statement of Dr. Roy follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. Thank you.
Ms. Feder?
STATEMENT OF JUDITH FEDER, Ph.D
Ms. Feder. Chairman Issa, Ranking Member Cummings and
members of the Committee, I welcome the opportunity to speak
with you today about the Affordable Care Act. My views are my
own, not those of Georgetown University or the Urban Institute,
where I have spent much of my career. And over my career there
and elsewhere, I, like you, have watched the millions of
Americans without health insurance rise to 50 million people
and go without care, even as Americans who have health
insurance spend more and more to hold onto it. At long last,
the Affordable Care Act enables us to assure Americans access
to affordable health care. We have a simple choice: effectively
implement the law or resign ourselves to the unacceptable
status quo, a status quo that I believe is quite different, the
evidence tells us, from the rosy picture that we were left with
in the last panel, where everybody gets their care and their
doctor and all is well.
My own research has contributed to a substantial body of
literature demonstrating that insurance matters. Americans
without health insurance get less care, get it later in the
course of the illness and are more likely to die than Americans
without it. And to the extent they get care, that care is paid
for by those of us who have health insurance and our insurance
premiums and through our local, State and Federal taxes.
Who are the uninsured? They are mostly workers, or in
families of workers, who are not offered coverage through their
jobs the way most of us are. Pre-ACA, they have few options to
protect themselves. Coverage in the non-group or individual
market with denials of coverage for pre-existing conditions and
limited benefits and non-renewals simply does not work for
people with they get sick. Far from living up to the promise
that people who have this insurance can keep their doctor or
their doctors paid for, Mr. Chairman, as I heard you argue, the
limits on their annual payments as well as other limitations
frequently leave them high and dry, and that is what the
evidence tells us.
And while Medicaid provides an invaluable safety net for
people who are eligible, it is far from an empty cart or an
empty promise, and research shows us it actually does get
people access to care. Except in a few States with waivers from
Federal law, Medicaid excludes coverage of adults who are not
parents of dependent children, no matter how poor they are. So
the very same low and modest earners who can't get coverage
through their jobs can't get public protection.
It is these giant holes in our health financing structure
that the ACA aims to fill. As Avik said, the ACA requires
insurance to end discrimination based on pre-existing
conditions, gender and other factors to cover the range of
services health professionals typically provide and to
eliminate dollar caps on annual and lifetime benefits. And so
that people don't wait until they get sick to enroll, the ACA
accompanies these requirements on insurers with requirements on
individuals, to purchase coverage or pay a penalty. And to make
that requirement feasible and coverage affordable, the ACA
provides tax credits and other protection to limit people's
premiums and cost-sharing as a share of income.
These policies together make it possible to transform what
is an empty card in individual America today into what
insurance is supposed to be: available, adequate and
affordable. And the ACA addresses the holes in Medicaid by
expanding its eligibility to people with incomes below 138
percent of the poverty level, regardless of their family
status. Until 2017, that expansion is fully financed by the
Federal Government with Federal financing gradually dropping to
90 percent for 2020 and subsequent years. States will
ultimately pay 10 percent.
Analysis shows that the expansion will make States
financially better off by reducing the burden of uncompensated
care, while contributing to the overall health of State
economies. Indeed, research shows that because taxpayers in all
States contribute to financing for the ACA, citizens in States
that choose not to participate in Medicaid will actually pay
for benefits in other States, without reaping any of the
benefits for themselves, in addition to Federal funds.
And while the ACA expanded coverage by improving the market
outside employment, it is important to emphasize that the law
leaves the employer-sponsored insurance that most of us depend
on fundamentally as it is today. Despite claims to the
contrary, the analyses by CBO, Rand and my colleagues at the
Urban Institute show that employer-sponsored health insurance
will remain the core of the American health insurance system.
Essentially, we have left roughly 150 million people who rely
on employer-sponsored insurance, their coverage is the same as
it has been, not with some improvements, and not more
effective. They were not the group that we were talking about
this morning, and that is the coverage outside of employment.
At the same time, I see my time going, we are seeing the
slowest cost growth that we have seen in history, in part a
function of the ACA's elimination of overpayments to Medicare
and promotion of initiatives to support efficient, higher
quality care. And that is affecting everyone.
By filling the gaps in our current financing structure and
slowing the growth in our health care costs, the ACA has
enormous potential to address the flaws in our health care
system that all of us decry. The biggest barrier I see to
realizing the law's potential is the political resistance to
its Implementation, with too many States unwilling to establish
their own marketplaces or to expand Medicaid, despite the
enormous advantage to their own citizens.
Come January 1st, millions of Americans will for the first
time have access to affordable insurance they can count on when
they are sick, along with the benefits people are already
reaping from the ACA.
Chairman Issa. The gentlelady's entire statement will be
placed into the record.
[Prepared statement of Ms. Feder follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. We now go to the gentleman----
Ms. Feder. May I finish the sentence? I thought you said
earlier that everybody got to finish their sentences.
Chairman Issa. You may finish the sentence, but not the
entire script. You are one minute past, and you did say you
were wrapping up. The gentlelady will finish the sentence.
Ms. Feder. I will be glad to. Along with the benefits that
we see people already reaping, we need to move forward to
implement the real promise of the ACA. Standing in its way and
standing for the unacceptable status quo is simply wrong.
Chairman Issa. I thank the gentlelady. We now go to the
next witness, Mr. Haislmaier.
STATEMENT OF EDMUND F. HAISLMAIER
Mr. Haislmaier. Thank you, Mr. Chairman, Ranking Member
Cummings, for inviting me to testify today.
I am focusing my testimony on the issue the committee asked
me to talk about of limited provider networks in the exchange
plans under the Patient Protection and Affordable Care Act. You
have a copy of my written testimony. I will simply summarize a
few of the points.
Obviously, as you have heard in the panel before, provider
contracting si nothing new. It is a two-way street. It is up to
both the insurers and the providers to come to terms. If one of
them doesn't like the terms, you don't have a contract. That
shouldn't surprise anyone.
Is there something significant or different about the
contracting and the networks in plans in the health insurance
exchanges under the Patient Protection and Affordable Care Act?
There appears to be, based on the widespread news reports, and
by that I mean from all sectors of the Country and involving
all different types of providers. With that said, nobody has at
this point any definitive, conclusive handle on the extent to
which those provider networks are different from the ones that
we see out there today. We just simply don't know, in part
because some of those networks are still being built, or those
contract negotiations are still ongoing.
What we do know, though, is that in a number of cases, the
insurers are offering network coverage that is significantly
less than what they offer in plans outside of the exchanges.
The thing I would direct the committee's attention to as a
policy matter is that what I see driving at least some of this,
because the assumption has been that well, the consumers would
be price sensitive, and the insurers are trying to keep prices
down so they exclude providers.
But I think the design of a portion of the law actually
drives this. I am specifically referring to the cost-sharing
subsidies. Most of the attention has focused on premium
subsidies. But the law has a second set of cost-sharing
subsidies that pays the insurer to reduce the cost-sharing for
lower income enrollees.
The problem with that is that because the cost-sharing for
a significant portion of their expected enrollees is nominal,
the insurers have reason to expect that there will be higher
utilization, and indeed, HHS confirms that, HHS is adjusting
the cost-sharing subsidies to reflect their estimate of higher
utilization.
Essentially what is happening is the insurers will get
paid, but the are no longer able to use a tool of cost-sharing
to steer patients to be more prudent consumers. Thus they must
rely on other tools, and that is, I think, one of the reasons
we are seeing narrower networks in these plans.
The other interesting thing that I found in research that I
did which was published at the beginning of the month, and I
think I am the only one who has done this so far, is I analyzed
all of the insurers who are participating in the exchanges and
looked at them and their businesses in the State today and sort
of the insurers that are not as well, to see what kind of
patterns emerge.
One of the interesting patterns that has emerged from that
is 20 percent of the carriers who have gone into the exchange,
their principal business in the State where they went into the
exchange is Medicaid managed care. And indeed, we do find
evidence that these plans recognize a structure, meaning the
patient faces very low premiums and only nominal cost-sharing
for a generous benefit package that looks a lot like what they
are dealing with in Medicaid managed care. Indeed, I quote one
of the CEOs of those plans saying, yes, it looks essentially
the same, that is why we went in.
Given that, my expectation of how this plays out is that
individuals at the lower end of the 100 to 400 percent of
poverty that would be subsidized, 100 to 200 percent will
probably gravitate towards the silver plan, particularly if you
have been uninsured. The tradeoff of low premiums and low cost-
sharing for limited provider access is not necessarily
something that you are going to be terribly upset about,
especially if you are coming from not having insurance.
However, somebody who is used to having insurance, who
makes more money, who is maybe 300 to 400 percent of poverty,
paying higher deductibles and co-pays for a limited provider
network is not going to be attractive. So I expect those
individuals would probably move to bronze plans or, certainly
above 300 percent of poverty the subsidies are quite small,
they might just look for coverage elsewhere.
So I think that is going to be the dynamic that plays out.
At this point it remains to be seen how many of these more
limited networks we see in the coming days. But I expect that
that will probably be fairly prevalent.
My time is about to expire, Mr. Chairman, so I thank you
again and would be happy to answer questions.
[Prepared statement of Mr. Haislmaier follows:]
[GRAPHIC] [TIFF OMITTED]
Chairman Issa. Thank you.
I now ask unanimous consent that an article in Bloomberg in
September of this year be placed into the record. It is
entitled Recession, Not Health Law, May Be Responsible for Cost
Curbs. Without objection, so ordered.
Dr. Roy, you mentioned free market as a better way to get a
working system. Earlier on the first panel, I asked all three
doctors about the practice that the Federal Government, in its
reimbursement, pays different rates for the identical treatment
depending upon where you have it. Isn't that an example of an
inherently flawed system in that if a hip replacement done in a
clinic that specializes in it does therapeutically and equally
good or better job with equal or better results, and does it
for a more efficient way, whatever that term means, less
overheard, generally, that by paying them less and by paying a
hospital more, you are essentially driving up the cost of
health care by subsidizing hospitals, even if they have higher
overhead? Isn't that correct?
Dr Roy. It is. And it is a distortion that Medicare
introduced into the market and has been around, and has gotten
worse over time as Congress tries to tweak that problem and
make it better. Sometimes there are unintended consequences
that make it worse as well.
Chairman Issa. In my own State of California, we are seeing
hospitals buying up clinics and physician practices at a high
rate, paying them essentially as much as they, more than their
practice is really worth, not because they are generous to the
doctors, but because the anticipated revenue growth means that
the same doctor doing the same job in the same facility, once
they become part of a hospital, pays more. Therefore, the
hospital is doing this in order to increase its revenue.
Is that something that, in a small way, we should be
attacking as part of our reform?
Dr. Roy. We should. In fact, I believe MedPAC has
recommended, modifying the reimbursement structures that Part B
and Part A pay the same rate in that instance, so that this
arbitrage can't continue. I would also mention that hospital
consolidation broadly, provider consolidation broadly,
something that the ACA actually accelerates, is a serious
problem which is driving up market power for these providers
and driving up prices in the commercial market.
Chairman Issa. One last question, and I think for a couple
of witnesses, in 1960, we spent 5 percent of GDP, a then
smaller GDP, on health care. And we lived about 7 and a half
years less long than we do today. Today we are spending roughly
18 percent of GDP, that is not just almost five times, four
times the amount, but actually with GDP growth in constant
dollars, we spend about five times as much on health care as we
spent then.
I will start with you, Doctor. As a physician, is there a
real justification, in spite of all the improvements, is there
a real justification for spending five times as much in real
dollars on health care, or have we essentially built
inefficiencies into the system? And if so, does the Affordable
Care Act attack any of those inefficiencies?
Dr. Roy. The Affordable Care Act increases the amount that
we are going to spend on health care, unfortunately. And I do
agree that it would be nice to spend less. We don't need to
spend as much. There is an enormous amount of inefficiencies in
the way we deliver and pay for health care. These are
longstanding problems which some things about the Affordable
Care Act may address, we hope. But broadly speaking, it goes in
the other direction.
Chairman Issa. Mr. Haislmaier, just a couple of questions.
First of all, you were at the table at Heritage during the
Affordable Care Act markup, were you not?
Mr. Haislmaier. I was at the Heritage Foundation, yes. I
wasn't participating in the markup.
Chairman Issa. I wasn't at the table either, despite what
Mr. Tierney said. But when you watched that process, were there
any ideas that came out of Heritage or other, if you will,
conservative Republican groups that you saw being accepted as
amendments from any source? Particularly I want to talk about
medical malpractice reforms such as MICRA.
Mr. Haislmaier. No, on medical malpractice, actually, we
had somewhat of a different opinion than some of our friends in
Congress who wanted a Federal solution. We thought it should
remain at the States.
Chairman Issa. But I am just saying, the Affordable Care
Act barred it.
Mr. Haislmaier. Yes, my observation is that frankly, the
bipartisanship ended right about, and I could look up the exact
date, it was July of 2009, it was the day they finished the
Health Committee markup in the Senate. In that markup, the
Republicans had made a number of substantive changes, all of
which were voted down on a party line vote, and then proposed a
lot of technical changes to which, in my opinion, was the
worst-drafted of all the bills that were considered. And they
accepted like a hundred of those and then announced they had a
bipartisan bill. I think at that point is when the Republicans
walked away.
Because I had been working with members and there were
things they were drafting to submit that at that point they
just didn't submit them. It was clear that there was not going
to be any meaningful input.
So the interest in doing something bipartisan pretty much
stopped about mid-July from what I can tell, because the
demands for me to help people draft things just evaporated.
Chairman Issa. Thank you. Mr. Cummings?
Mr. Cummings. Dr. Feder, according to doctors, for America
some States ``have much stronger requirements for general
providers and also for essential community providers.'' Some of
these stronger State requirements include the following. The
reason I am going to this is because the people on the panel
before basically blame the Affordable Care Act for the reason
why they may not be on a provider network. But these are some
State guidelines and requirements. A provider covered person
ratios by specialty or primary care, geographic accessibility,
waiting times for appointments with participating providers,
hours of operation, volume of technological and specialty
services available to serve the needs of covered people who
require advanced or specialty care.
Dr. Feder, so if there concerns within a State about the
adequacy of provider networks, who can consumers go to and what
actions can States take to address those concerns?
Ms. Feder. Mr. Cummings, you are rightly raising that the
Affordable Care Act actually establishes requirements or calls
for requirements for network adequacy. As in many areas of the
law, it leaves it to the State to enforce those requirements. I
think we need attention to them, it is a legitimate
requirement.
It does fall to the insurance commissioner in the State,
and States have different degrees of willingness and ability to
address it, and we are not seeing an active enough effort in
that regard, and we need to attend to it.
Mr. Cummings. You have decades of experience in assessing,
Dr. Feder, the health care system. We hoped to have you on our
first panel, but here you are. Dr. Feder, one of the most
critical features of the Affordable Care Act is the expansion
of Medicaid eligibility to millions of low income adults. Prior
to the ACA, Medicaid eligibility was restricted primarily to
low income children, their parents, people with disabilities
and seniors. In most States, adults without dependent children
were not eligible.
According to a study issued on October 23rd by Kaiser
Family Foundation, only about 30 percent of poor, non-elderly
adults had Medicaid coverage in 2012. Under the ACA, Medicaid
eligibility can be expanded to cover all non-elderly adults
with incomes below 138 percent of the Federal poverty level.
The Federal Government would pay the States 100 percent of the
costs for the first three years, and then phase down its match
to about 90 percent by 2020. Is that right?
Ms. Feder. It is correct, Mr. Cummings.
Mr. Cummings. Now, despite this huge level of Federal
assistance, as many as 25 States have decided not to be a part
of the expansion, leaving millions, literally millions of their
own citizens without health care, is that right?
Ms. Feder. That is absolutely true.
Mr. Cummings. Now, Dr. Feder, what is your opinion of
States that refuse to expand their Medicaid programs?
Ms. Feder. My opinion of the States, I am sad and
disappointed for their citizens, both the citizens who need
care and the citizens who are contributing to paying for care
through their taxes and other States that do expand. Expansion,
research shows from the Commonwealth Fund and the Urban
Institute ran how much in the interest of States this expansion
is. I believe it is only political opposition to this law that
is depriving these citizens of access to care and the States of
needed revenue.
Mr. Cummings. So by not participating, are they leaving
significant resources on the table that could be used for their
citizens?
Ms. Feder. They sure are.
Mr. Cummings. And sadly, a lot of these people are getting
sick and sicker, and sadly, some of them will die early?
Ms. Feder. We know of that. Essentially the Institute of
Medicine found that lack of insurance kills. So your statement
is correct.
Mr. Cummings. Why is the expansion of Medicaid an important
component of the Affordable Care Act? Why is that so important?
Ms. Feder. Well, we have a big hole, as you point out, in
our safety net coverage, our floor of protection. That is that
if you are not the parent of a dependent child or disabled or
old, you really are not eligible for coverage in most States.
That hole is a vestige of an old-fashioned welfare system that
kind of assumed that these people would get coverage through
their jobs. They don't get coverage through their jobs. They
are left out of employer-sponsored coverage, and they are left
out of the public safety net, and that is why they needed to
expand it.
Mr. Cummings. Now, the Commonwealth Fund issued a study
this month showing that States that expand Medicaid will gain
important benefits beyond covering poor people, such as
reducing uncompensated claims. Tell me something. I remember
reading something about Missouri, and a lot of the hospital
administrators came and said to the government, you have to
accept this because our hospitals are going to be in trouble if
we don't provide for Medicaid expansion. Can you explain that
to us?
Ms. Feder. Sure. Hospitals, although they don't provide
unlimited care, and people without insurance don't get all they
need, hospitals get stuck dealing with people who don't have
insurance coverage. And they have to provide emergency care, it
doesn't mean everything, but they are stuck and they don't get
paid.
What this law created was the opportunity they get paid for
patients who walk in the door and they are counting on it.
Mr. Cummings. Just one last question, Mr. Chairman. The
same study says by choosing not to expand Medicaid, some States
will lose billions of dollars, and I talked to Senator Cruz
about this the other day. Texas, for example, will forego an
estimated $9.58 billion in Federal funding in 2022, taking into
account Federal taxes paid by Texas residents. The net cost to
taxpayers and States in 2022 will be more than $9.2 billion.
Similarly, Florida's decision not to participate will cost
its taxpayers more than $5 billion in 2022, and Georgia, I
could go on. Dr. Feder, what will this mean with regard to sick
people in those States? By the way, in Texas, one out of every
four persons has no insurance.
Ms. Feder. That is where most of our insurance is and it is
going to stay there. Those people are left without access to
care, and as you said, they are more likely to suffer and more
likely to die as a result.
Mr. Cummings. Thank you very much. Thank you, Mr. Chairman.
Mr. Gosar. [Presiding] I thank the gentleman.
Dr. Feder, are you a physician?
Ms. Feder. No, sir.
Mr. Gosar. Is Medicaid financially sustainable? Yes or no.
It is an easy one.
Ms. Feder. It is not, actually.
Mr. Gosar. It is really easy.
Ms. Feder. No, it is not, because it is about long-term
care, largely, which is what----
Mr. Gosar. No.
Ms. Feder. Medicaid costs are growing very slowly. We have
too many low-income people----
Mr. Gosar. Based on reimbursement rates it is
unsustainable. Would you agree with that?
Ms. Feder. Not the--I thought you were talking about
financially.
Mr. Gosar. It is financially unsustainable. Dr. Roy, would
you agree with that?
Dr. Roy. It is unsustainable, I should just say, I am not a
physician, although I did go to medical school.
Mr. Gosar. Mr. Haislmaier, it Medicaid sustainable
financially?
Mr. Haislmaier. No, not in the present form.
Mr. Gosar. Not in its present form. Even expanding, it is
not either, is it?
Ms. Haislmaier. No, it is not sustainable in its present
form, and the expansion will simply add to that in a number of
ways. It could be, if you reformed it along different lines,
but that is a different subject for a different day.
Mr. Gosar. Dr. Roy, you heard the comments and you saw Ms.
Feder just talk about. What is your opinion in regard to, are
we not just chasing our tail with the expansion of Medicaid?
Dr. Roy. I recently published a book entitled How Medicaid
Fails the Poor. It details in 48 pages how the reimbursement
structure of the program, how it underpays physicians for care,
has led to very poor access for those individuals. That is
leading to poor health outcomes. So the most definitive study
on the score was conducted in the State of Oregon, was
published in the New England Journal of Medicine by a panel of
esteemed health economists, which showed that Medicaid,
compared to being uninsured, showed no Improvement in health
outcome.
Mr. Gosar. So because you actually get a card, does it mean
something when you have a card if you don't have providers to
see you?
Dr. Roy. You heard the earlier panel this morning, just
having a card that says you have health insurance is not the
same thing as access to care. And that is a distinction that I
fear that the Affordable Care Act has not understood well.
Mr. Gosar. So when we are reimbursing physicians below
market rates, they don't even make a profit, we just heard the
gentleman basically make a comment that it is up to the States
to enforce proper panels. So we are going to force physicians
to take fees that they can't even pay their own bills?
Dr. Roy. In Massachusetts, under the most recent health
reform bill they passed in 2012, they considered a provision
that would have required all licensed physicians in the State
to accept all forms of payment. The physicians rebelled and
that was not included in the law. But that is something that we
may see more of over time, an effort to do that. And that would
be problematic.
Mr. Gosar. So let me ask the next question. You are very
familiar with debt coming out of school. Are physicians coming
out of school with less debt or more debt?
Dr. Roy. More debt, unfortunately. The cost of medical
school has skyrocketed, it has increased perhaps more than
health inflation.
Mr. Gosar. So reducing their fees is going to help them
better pay that?
Dr. Roy. It has discouraged a lot of new physicians from
accepting Medicaid patients. And again today, all the studies
and surveys show the percentage of physicians who are willing
to accept new Medicaid patients is substantially lower than it
is for private insurance in particular and Medicare, where that
is also increasingly a problem. Over time, as States expand
their Medicaid programs, they will face further fiscal
pressures. The only real mechanism that States have to keep
their budgets under control under Medicaid is to turn down the
amount they pay physicians and hospitals to care for those
patients.
So this problem is only going to get worse over time, and
Medicaid expansion will accelerate that.
Mr. Gosar. We heard earlier in the panel, the earlier panel
talking about patient dumping. So this is like Federal patient
dumping onto States for that jurisdiction.
Dr. Roy. In my experience, physicians who are already
caring for patients are really reluctant to let that patient
go, just out of a humanitarian interest. But they are very
reluctant to take on new patients, to commit to new patients
under that reimbursement structure.
Mr. Gosar. Because it puts them in a harmful situation,
does it not? Because they can't abandon the patient, because
that is a litigation issue.
Dr. Roy. There are very ethical problems here
Mr. Gosar. So understanding rural and urban dictations, we
are really skewing the benefits for rural. I am from rural
Arizona. We are seeing huge catastrophic access issues. I mean,
in the previous Administration, we tried to look at federally
qualified health centers, which the gentlelady didn't bring up,
because they are not allowed to turn away anybody. It is a
sliding fee scale, if I am not mistaken, right?
Dr. Roy. Yes.
Mr. Gosar. They can't turn anybody away. So that was part
of the safety net. Unfortunately, I practiced kitty-corner
from, when I saw the patients they didn't want to see. Because
they skewed the results. What they did is they Medicaid and
Medicare patients and skewed them to a one percentage of the
day and they took fee for service patients and insurance
patients and they took them in at a regularly scheduled
appointment. Very skewed results.
Dr. Roy. One thing we should point out is that what the
market price would bear would really be in a free market system
for paying doctors and hospitals. We don't know, because we
don't have a free market for health care, because Medicare in
particular and also Medicaid have so distorted what the prices
are for a lot of services. The evidence suggests that in
general, the prices for these services in the United States are
higher than they are in other countries.
Mr. Gosar. And I am going to take the liberty, since I gave
the gentleman a little extra time, that is one of the reasons
why we don't have a lot of family care physicians, isn't that
true, is that government has skewed that process and the
reimbursement rate, so that everybody goes into the specialty,
because that is how you can make a living.
Dr. Roy. Which is what you will hear every physician say,
they get paid for procedures, for writing prescriptions, they
are not paid for their time. And that is what a lot of
physicians like about so-called concierge or retainer
practices, they are finally paid for their time and they can
spend more time with their patients. Unfortunately, the
evolution thereof may lead to a two-tiered system where you
have the doctors treating Medicaid patients who don't spend a
lot of time with those patients.
Mr. Gosar. One last question. We hear of this downticking
in expenditures for health care due to the ACA. I don't agree
with that, I think they have a lot to do with the economy.
Would you agree?
Dr. Roy. Yes, in fact, I have written about this. In
general, across the OECD countries and developed world there
has been a massive slowdown in the growth of health
expenditures, driven by the global economy. Also, there has
been substantial evolution in the United States of an increase
in the use of high deductible plans with health savings
accounts in the employer market. That is also leading to a
slowdown in spending.
Mr. Gosar. I thank the gentleman.
Mr. Cummings. Would the gentleman yield for just a second?
Mr. Gosar. I would happily yield.
Mr. Cummings. Why don't we want to give the President any
credit? Any credit? I mean, I hear this over and over again,
that the cost of insurance is going down, and you are trying to
say that President Obama and his efforts with the Affordable
Care Act have no effect?
Dr. Roy. As you know, sir, the bulk of the Affordable Care
Act has not been implemented yet. So it is very improbable that
the Affordable Care Act is having a system-wide effect on
health spending.
Mr. Cummings. Ms. Feder?
Ms. Feder. I think there are two challenges. I think we
agree a lot on the power of the recession in bringing costs
down. But what is missing from that picture is that Medicare,
that in the Affordable Care Act, by making Medicare a more
efficient, effective payer in terms of the reductions in
overpayments, and there may be room to go, but that made a big
difference to spending.
And that the whole thrust of the Affordable Care Act on the
cost containment side is to move to a more efficient delivery
system in many of the ways that people on both sides of the
aisle would like to see it move. That part has not had much
effect yet I would agree. Although the Administration does
point to the reductions in readmission rates to hospitals has
already shown an influence of those policies.
Mr. Gosar. Mr. Haislmaier, I would like to give you the
opportunity.
Mr. Haislmaier. This really gets to the core of the debate
over health care. The chairman was talking about the percent of
GDP. We all know that we as a country spend more per capita,
percent of GDP than any other country in the world on health
care. We also are all pretty much across the political spectrum
not satisfied with the results.
Mr. Gosar. Right.
Mr. Haislmaier. It is uneven, too many uninsured, et
cetera. So I do this in my general audience talks, I make the
observation that what we have here is a value problem. The
value is the relationship between what we are spending and what
we are getting, I don't care whether you are buying a hamburger
or you are buying health are. We are either paying too much for
what we are getting or we are not getting enough for what we
are paying.
So the central challenge in health care is how do you
improve value in the system. Ideally, what you would like to do
is get more and pay less. I think we would all agree on that. I
don't think there is any disagreement on that.
The problem comes in on how are you going to do it. As my
colleague just pointed out, there is a view point that she
holds and is embodied in this legislation that we can do this
by having better micromanagement of doctors and hospitals and
insurers and all the rest.
The other view, that I hold and my other colleague holds is
that the way you do this is to have Government limit itself to
what it is competent at doing, which is pretty much in this
case taking money from A and giving it to B and stay out of
trying to run the rest of it. If you want to give B a little
more money than C, that is fine too. But just move it to a
patient-centered system where people can pick and choose and
seek value and be rewarded for providing value.
I look at the system as do folks on the other side, and we
all look and we say well, gee, look at Merrill or Geisinger or
InterMountain Health or Cleveland Clinic, they all provide
better results at a lower price. And I look at the system and I
say, okay, if that is true, why aren't they eating everybody
else's lunch? Why aren't other hospitals having to come to
their standards or go out of business? Thanks to my office, I
have a BlackBerry, but they aren't so good, they are getting
their lunch eaten by Apple. Why isn't that happening in
hospitals? Because we are propping them up with all these
payments, et cetera.
The other side looks at it and says, look, we can go into
Merrill and study how they do it and then we are going to write
a bunch of rules that tells everybody else how to do it, then
we come out with the Affordable Care Act and the accountable
care organizations. It is just a difference of how you go about
doing it.
Mr. Gosar. I hear you. Thank you.
I now recognize the gentlelady from New Mexico, Ms. Lujan
Grisham.
Ms. Lujan Grisham. Thank you, Mr. Chairman, and I have to
say I really appreciate the panels and this committee. I am not
a doctor, although I have a J.D., and so Dr. Feder, thank you
for your graduate work. I will tell you that I think I can be
qualified as a health care expert for three reasons. I am a
patient. Every single day, all the time, more than I want to
be, try not to be, try to do everything right, doesn't matter.
Two, I am a primary caregiver for a chronically sick mother
who is incredibly complicated. I don't care what system you put
her in, she is all by herself, she is navigating it, she is
doing concierge, she is on Medicare, she is on Medicaid, she is
on indigent care, she is on U and M care, she is on her own,
she is married to a dentist, doesn't matter. It is exhausting,
complicated, so complex I could spend the rest of my life
explaining it to her. And she is a smart woman. Gave birth to
me.
But I can't do it. And I have done health care and policy
making for 30 years.
So here is, for me, what is telling. You say that there has
been an economic downturn, not that that is what you said, but
the economy itself has played a huge role in the reduction of
health care costs. CBO says exactly the opposite. We can work
every single day, and we can get experts from every single
place to give us a different opinion. We have the most
complicated, convoluted system in the world.
And the Affordable Care Act at least tries to level that in
many ways, but I am one of those policy makers that think we
need to go do a lot more. And I spent 20 years before the
Affordable Care Act and before States were figuring out how to
do Medicaid waivers, and before we made changes to Medicare. I
watched HMOs and provider networks shift and change every time
there was a profit motive to do that. Every single time.
I dealt with patients who were left out, left under, left
cold no matter how much they were privately paying for their
health care. It depends on who you are, where you live, what is
going on. And what I mean by who you are, you are more likely
to be chronically sick or not and are you living in an urban
center or not.
So we are going to have to do not one size fits all, we
have to do many sizes all the time. And this is a great
experience about many people get better care as a result of the
Affordable Care Act and get access. In New Mexico, we are
paying some of the lowest rates in the Country because of the
Affordable Care Act. Our problem is going to be insurance
regulatory oversight and we don't have enough insurance
companies. I never thought I would say that in my entire life.
But it happens to be true in this case, regardless of what my
personal opinions are. It is true in this case.
So what I am really interested in is using experts such as
yourself and others to start thinking about ways, because we
just cost shift in this Country. What we are even proposing to
some degree is more cost shifting. Costs shift back to the
States. Costs shift back to the individuals. Costs shift back
to business. Costs shift back to veterans. What do we have,
nine, ten, eleven independent systems of care that no other
country has, and a not very robust public or community health
system? Those are the real reasons that health care doesn't
quite work in the way that we want it to.
And we hope that all three of you stay dedicated to help us
navigate those critical next steps. Because I don't think the
Affordable Care Act is responsible for shifts and limited
access. I think it may exacerbate that in some cases. I don't
think coverage means access. And I that will improve it in some
way. I hope that we are wise and brave enough here to really
use experts such as yourselves. I never mean to do these
diatribes, but there are no simple questions, and there are
certainly no simple answers. There are not.
Except that if we don't start leveling the playing field,
and we don't start really focusing on consumers and we are not
brave enough here to deal with the folks who still have
significant problems before the Affordable Care Act, with the
Affordable Care Act, through the Affordable Care Act, I pay
more because of the Affordable Care Act. But that is because I
am required to go to the D.C. exchange. Not because I am a
consumer left to navigate through the Affordable Care Act rules
in my own State.
So it depends on the real details of those issues. So on
the one hand, I can tell you that I am one of those folks who
is complaining, and on the other hand, I can tell you that I am
really glad that more people are helping me help you pay for my
mother's chronic care procedures every single day. And I will
tell you that she is more than happy to help pay for
everybody's maternity care, so it all gets leveraged out.
Because I was also county commissioner.
Because it is not just Medicaid. Medicaid's gaps are paid
for by local government, which is paid for by taxpayers. It is
all paid for by all of us, every single day, all of the time.
So I guess my question is, and Mr. Chairman, thank you so
very much. Is there a way that this committee can continue to
work hard to get as much valid information about really what we
can do, starting today? Because my provider networks changed.
Because every time you do a reform we open a window for
somebody to legally do adverse selection and cherry-picking.
And that is not dealt with at the Federal level at all. And if
I was a for-profit insurance company, and it is legal, why
would I create a network that has the sickest patients? Why
would you do that? You cannot. So you don't.
And that is not all the reasons that occurs, but make no
mistake, in my opinion, there is no one here on any panel that
can demonstrate that that is not part of the reason that this
always happens. So thanks for being here, Dr. Feder and all the
other doctors on the panel. I thank you for my diatribe. I feel
great today, I can get my pens out of my finger and I am going
to try not to be one of the expensive high-end users of health
care no matter what I pay.
Thank you, Mr. Chairman.
Mr. Gosar. I thank the lady from New Mexico and I had hoped
that she would sign onto my bill on repealing McCain-Ferguson
after listening to you. One of the things that you have to look
at is getting to the least common denominator. And I will talk
to you about that in a second. Mr. Cummings?
Mr. Cummings. Just briefly, Mr. Chairman, I will close. I
want to go back very briefly to Dr. Roy, something you said. I
am not asking questions, I am just giving a statement. On
September 9th, 2013, CBO Director Doug Elmendorf issued a paper
entitled The Slowdown in Health Care Spending. Drawing from
multiple sources, the paper concluded that health care spending
growth had slowed dramatically across the Country. The slowdown
in health care cost growth has been sufficiently broad and
persistent to persuade us to make significant downward
revisions to our projections of Federal health care spending,
he said.
He goes on to say specifically, CBO found that relative to
a 2010 baseline projection through 2020, Medicare spending is
15 percent lower than projected, Medicaid spending is 16
percent lower than projected. Now, this is the CBO. And private
health insurance premiums, per enrollee, are 9 percent lower
than projected. He goes on to say, the paper also made clear,
by the way, that these reductions, and listen to this, are
apparently not because of the financial turmoil and recession
but because of other factors affecting, and this goes to what
you said, Dr. Feder, the behavior of beneficiaries and
providers.
And with that, I say this. Witnesses on the prior panel
said, we have to get it right, we have to fix it. Chairman Issa
a few minutes ago talking to one of our colleagues, Mr.
Horsford from Nevada, said that there are things we have to do
try to fix certain parts of this. And we have to. We have to
get this done and get it done in a way where there is a win-
win-win-win-win. I do believe that that is possible. And again,
I say, coming from having traveled some 20 hours on a plane to
go to Nelson Mandela's memorial, I have to tell you, I left
there saying to myself, we are so fortunate in this Country, we
are so fortunate to be where we are. We can accomplish
anything. We just have to put our minds to it.
And somebody once said, it is not that people don't know
what to do. It is whether they have the will do it and do it.
So again, I want to thank you all. Your testimony has been
extremely helpful. And we are going to go forward.
Mr. Gosar. I thank the gentleman. I would like to ask the
gentleman a question. Do you believe the actuaries from the
Centers for Medicare and Medicaid?
Mr. Cummings. Give me the specific question.
Mr. Gosar. Would you think that their oversight of spending
would be more deliberative and more accurate than CBO?
Mr. Cummings. I am not sure, but one thing I do know.
Mr. Gosar. They deal with it every day, this is their due
diligence, the actuarials deal with numbers.
Mr. Cummings. Well, the fact is, again, I quote what I just
quoted, I do again, the costs are coming down according to CBO.
And the reason why I got a little upset a few minutes ago, Mr.
Chairman, and I appreciate your question, but it seems like
this President gets no credit for anything. Nothing. Zilch. And
over and over again, when everything goes well, some say it
must have been a mistake, it must have been a fraud. If it goes
bad, it was his fault.
The fact is that there is a lot that can come out of this.
We just have to have the will to get it done. And we will get
it done.
Mr. Gosar. I just want to go back to my question. The
actuaries at the Centers for Medicare and Medicaid Services,
who do not answer to the White House, said yesterday in the
Journal of Health Affairs that the costs eased because of the
economy, not because of Obamacare. Would you agree with that,
Dr. Roy?
Dr. Roy. Yes, that is the overwhelming evidence. I would
just add that I am an admirer of the President. If the
Affordable Care Act is successful in achieving its stated
goals, I will be absolutely thrilled. My concern is that it
will not, and I think it is my obligation to alert the
committee to the concerns that I have shown.
Mr. Cummings. You asked me a question, I just want to
answer it in fairness to you. Earlier this year, the Centers
for, they also said this. The Centers for Medicaid and Medicare
and Services issued a report finding that national health
spending had slowed to only 3.9 percent in the years between
2009 to 2011. This represents the lowest growth rate in health
care spending since government began keeping these statistics
in 1960.
Mr. Gosar. Being a dentist, just so that I am fair about
this, I can tell you about that spending. And dentistry didn't
sell its soul to the Federal Government, for the most part. And
there are problems don't get me wrong. But the problem is
expendable money. We have seen it go down. There is nobody who
is flush with money in their pockets to buy increased care or
to do investing in health care. There is none.
I believe personally empowering patients. That is what
Nelson Mandela would have wanted. Because empowering patients,
not to make them cripples, but to make them entrepreneurs and
to hold onto their health care and demand that system to
benefit them. Patient centered, patient friendly. Has to start.
And that is not what was included before Obamacare or in
Obamacare. It is a government-dictated centric relationship.
I want to see the patient benefit and be empowered, not to
be a cripple. So I want to thank the witnesses for coming
forward. We appreciate it. With that, we will adjourn this
meeting.
[Whereupon, at 1:12 p.m, the committee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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