[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
KEY DESIGN COMPONENTS AND
CONSIDERATIONS FOR ESTABLISHING
A SINGLE-PAYER HEALTH CARE SYSTEM
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, D.C., MAY 22, 2019
__________
Serial No. 116-9
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Printed for the use of the Committee on the Budget
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on the Internet:
www.govinfo.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
37-608 WASHINGTON : 2020
COMMITTEE ON THE BUDGET
JOHN A. YARMUTH, Kentucky, Chairman
SETH MOULTON, Massachusetts, STEVE WOMACK, Arkansas,
Vice Chairman Ranking Member
HAKEEM S. JEFFRIES, New York ROB WOODALL, Georgia
BRIAN HIGGINS, New York BILL JOHNSON, Ohio,
BRENDAN F. BOYLE, Pennsylvania Vice Ranking Member
RO KHANNA, California JASON SMITH, Missouri
ROSA L. DELAURO, Connecticut BILL FLORES, Texas
LLOYD DOGGETT, Texas GEORGE HOLDING, North Carolina
DAVID E. PRICE, North Carolina CHRIS STEWART, Utah
JANICE D. SCHAKOWSKY, Illinois RALPH NORMAN, South Carolina
DANIEL T. KILDEE, Michigan CHIP ROY, Texas
JIMMY PANETTA, California DANIEL MEUSER, Pennsylvania
JOSEPH D. MORELLE, New York WILLIAM R. TIMMONS IV, South
STEVEN HORSFORD, Nevada Carolina
ROBERT C. ``BOBBY'' SCOTT, Virginia DAN CRENSHAW, Texas
SHEILA JACKSON LEE, Texas KEVIN HERN, Oklahoma
BARBARA LEE, California TIM BURCHETT, Tennessee
PRAMILA JAYAPAL, Washington
ILHAN OMAR, Minnesota
ALBIO SIRES, New Jersey
SCOTT H. PETERS, California
JIM COOPER, Tennessee
Professional Staff
Ellen Balis, Staff Director
Dan Keniry, Minority Staff Director
CONTENTS
Page
Hearing held in Washington D.C., May 22, 2019.................... 1
Hon. John A. Yarmuth, Chairman, Committee on the Budget...... 1
Materials submitted for the record....................... 4
Prepared statement of.................................... 107
Hon. Steve Womack, Ranking Member, Committee on the Budget... 109
Studies submitted for the record......................... 111
Prepared statement of.................................... 213
Mark Hadley, Deputy Director, Congressional Budget Office.... 215
Prepared statement of.................................... 218
Hon. Pramila Jayapal, Member, Committee on the Budget, letter
submitted for the record................................... 253
Hon. Sheila Jackson Lee, Member, Committee on the Budget,
statement submitted for the record......................... 279
Hon. Steve Womack, Ranking Member, Committee on the Budget,
questions submitted for the record......................... 284
Hon. Chip Roy, Member, Committee on the Budget, questions
submitted for the record................................... 290
Answers to questions submitted for the record................ 292
KEY DESIGN COMPONENTS AND
CONSIDERATIONS FOR ESTABLISHING
A SINGLE-PAYER HEALTH CARE SYSTEM
----------
WEDNESDAY, MAY 22, 2019
House of Representatives,
Committee on the Budget,
Washington, D.C.
The Committee met, pursuant to call, at 10:04 a.m., in Room
210, Cannon House Office Building, Hon. John A. Yarmuth
[Chairman of the Committee] presiding.
Present: Representatives Yarmuth, Moulton, DeLauro,
Doggett, Morelle, Horsford, Scott, Jayapal, Peters, Khanna,
Cooper, Schakowsky, Sires, Panetta, Jackson Lee, Womack,
Woodall, Johnson, Flores, Stewart, Roy, Meuser, Timmons, Hern,
Norman, Burchett, Crenshaw, and Smith.
Chairman Yarmuth. The hearing will come to order.
Good morning, and welcome to the Budget Committee's hearing
on ``Key Design Components and Considerations for Establishing
a Single-Payer Health Care System.''
I want to welcome our witnesses with us today from the
Congressional Budget Office.
This morning we will be hearing from Mr. Mark Hadley,
Deputy Director at CBO. He will make an opening statement.
After his opening statement, he will be joined by Dr.
Jessica Banthin and Dr. Jeffrey Kling. Dr. Banthin is the
Deputy Assistant Director for Health, Retirement, and Long-Term
Care Analysis at the CBO, and Dr. Kling is the Associate
Director for Economic Analysis at the Congressional Budget
Office.
Members may direct their questions to any of the three
witnesses.
Now I yield myself five minutes for the opening statement.
Once again, I would like to welcome our witnesses from the
Congressional Budget Office. Thank you for joining us. I
appreciate the opportunity to dive into your recent report on
single-payer health care systems.
Ensuring access to quality, affordable healthcare remains
one of the greatest policy challenges of our time. The
Affordable Care Act has given us a great foundation on which to
build. Since it was enacted, 20 million more Americans have
been able to gain meaningful health coverage. Currently, 89
percent of Americans under 65 are insured, and that's a
historic high.
But even with these dramatic gains, 30 million Americans
still live without health insurance. And even for those
Americans with health insurance, many are underinsured and
still struggle with high deductibles and copays. Too many
American families still must make the impossible choice between
going to the doctor or putting food on their table, filling
their gas tank or refilling a prescription.
We cannot accept this tragic reality as the status quo.
Progress must produce more progress. And we must begin to
pursue the next wave of health care reforms.
That's why last summer I promised that if I became Chairman
of the Budget Committee, we would hold a hearing on single-
payer health care.
In January, I requested a CBO report on key policy
considerations to lay the groundwork for advancing legislation
to expand quality and affordable health coverage. Earlier this
month, CBO released this report, and today we will examine its
findings.
My goal for this hearing is to work through some of the
policy issues laid out in this report, including what
eligibility would look like and what benefits could be covered,
how the system could be financed, how a single-payer system
might affect the price of prescription drugs, what kind of
transition period would be needed to allow health care
providers and other stakeholders time to prepare.
Major reforms like the ones outlined in this report would
mean major consequences for the health of our citizens, as well
as the health of our economy. They must be done carefully and
methodically but not without urgency. Access to affordable
health care isn't just a policy proposal or a political slogan.
It is life or death for millions of Americans.
I also hope to review what we as a country spend on health
care now and what we get in return, as well as our long-term
fiscal outlook with or without major reforms.
Last year, health spending accounted for 18 percent of our
economy. We spend upwards of $3.5 trillion annually as a nation
on health care, more per person than any other country. Yet,
our outcomes are some of the worst among developed nations. Our
wasteful and inefficient system has led to skyrocketing
prescription drug prices and out-of-pocket costs for consumers,
all while insurance companies and CEOs continue to post massive
profits.
A single-payer system could expand access to care, decrease
our nation's total health care spending, and help grow our
economy. The trick is closing the information gap on what
single-payer health care truly is so that we can close the
health coverage gap for millions of American families.
I know that the advocates here today and across the country
have been at the front lines of this fight for years, and I
want to thank you for that hard work and dedication.
I have also talked to small business owners and numerous
CEOs of Fortune 500 companies. They privately tell me they are
all for a single-payer system. They know we are the only
country that provides health care the way we do.
Last year, the average U.S. employer spent more than $5,700
for a single employee plan and more than $14,000 for a family
health plan. These CEOs know that a system of employer-based
coverage puts them at a disadvantage with their global
competitors.
There is a consensus among economists that our system of
employer-based coverage displaces wages. Relieving employers
from the burden of providing coverage will empower American
companies to raise employee wages, expand their businesses, and
help to grow our nation's economy.
Given all these reasons, it is incumbent upon us to begin
to work through the opportunities and tradeoffs involved in a
single-payer system, as well as other ways to achieve universal
coverage, many of which have been proposed by Members of this
Committee. I strongly believe it is not a matter of if we will
have universal coverage, but when. The CBO report and this
subsequent hearing are designed to advance that timeline.
Before I close, I would like to request unanimous consent
to submit materials from the American Academy of Actuaries,
American Hospital Association, Health Over Profit for Everyone,
Healthcare Leadership Council, National Association of Health
Underwriters, National Nurses United, Partnership for Employer-
Sponsored Coverage, and Public Citizen in the hearing record.
Without objection, so ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. I thank our witnesses once again for
helping us with this important discussion, and I look forward
to your testimony.
I now yield five minutes to the Ranking Member, Mr. Womack,
for his opening statement.
[The prepared statement of Chairman Yarmuth follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Womack. I thank the Chairman.
And good morning, everyone.
Chairman Yarmuth, thank you for scheduling this hearing
today. If I read Politico correctly, I understand that there is
a chance we can have another hearing on the Jayapal proposal,
which I certainly would look forward to, and, hopefully, we can
make that happen.
Deputy Director Mark Hadley, welcome.
And to the other two witnesses, thank you for your team
being here today.
We are here to discuss a sobering report developed by CBO,
at the request of our Chairman, that details some of the risks
of imposing a one-size-fits-all, government-run health care
system as proposals like Medicare for All would do.
What is noticeably missing from the report is a cost
estimate for specific proposals. My friends across the aisle
didn't ask for one. I think I know why.
While the score would be useful, we already know how much a
one-size-fits-all health care system would cost the American
people. Independent analyses from economists across the
ideological spectrum, including George Mason University, the
Urban Institute, the American Action Forum, have projected
single-payer type proposals, such as Medicare for All, to cost
at least $32 trillion.
That number bears repeating, $32 trillion, on top of what
we are already spending on health care. That is at least $10
trillion more than our nation's astronomically high $22
trillion debt. That is roughly $10,000 per every American per
year and is equivalent to 11 percent of GDP each year.
CBO states very clearly in its report that government
spending on health care would increase substantially under a
single-payer system.
How could the federal government pay for these substantial
spending increases? Well, the report outlines four methods. The
government could impose tax hikes. It could increase premiums.
It could rely more heavily on cost sharing, which is another
way of saying out-of-pocket costs such as copays. Or it could
just add this enormous price tag to our existing debt without
any pay-fors at all. My guess is all of the above.
Now, if you are someone who subscribes to the modern
monetary theory, maybe the debt doesn't matter to you. That's,
of course, not the way I see it.
Putting aside discussions about how to finance such a
costly proposal, this report has been especially helpful in
showing that these ideas will never work in America. Imposing a
single-payer health care system would eliminate private
insurance. That includes the health care 158 million Americans
receive through their employer or their union.
The CBO report even warns that under this type of system,
patients would not have a choice of insurer or health benefits,
and the public plan might not address the needs of some people.
Further, the CBO report also explicitly points out the
broader impact the proposal could have on health care. For
example, by reducing payment rates for providers, that is,
payments for doctors, hospitals, and so on, the report
explains, there will not only be a reduction in the quality of
care, there would be a reduction in the supply of care,
hampering access to the treatments and services people need.
It is clear proposals like Medicare for All will chase a
lot of doctors out of health care. That is not only my strong
opinion; it is backed up by hard facts.
These are just a few of the findings from the CBO report,
and I expect to discuss many more with our witnesses today.
I hope my colleagues and the public will listen carefully.
The consequences of what health care could become under a
Democrat-controlled government will be articulated very clearly
here today.
With that in mind, I urge all my colleagues not to look at
this report in isolation, but rather to look at this report in
the context of existing proposals, including the Medicare for
All Act of 2019.
Toward that end, when considering other proposals, the
other side admits that more limited expansions of existing
federal programs, a Medicare buy-in or a Medicaid buy-in, for
example, are, in fact, a step towards single-payer, government-
run health care. They admit this openly.
This is the direction some lawmakers want to take your
healthcare, and it will have consequences that ripple through
the most personal aspects of American life, from fewer doctors
and longer wait times to less access and no choices. That is
why this conversation today is so important.
Before I conclude, I would like to ask for unanimous
consent to enter into the record the three studies I mentioned
earlier from George Mason University, the Urban Institute and
the American Action Forum. Additionally, I would like to seek
unanimous consent to enter into the record a study of the
impact of single-payer proposals on our nation's hospitals.
Chairman Yarmuth. Without objection.
[The information follows:]
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Mr. Womack. And with that, Mr. Chairman, I yield back.
[The prepared statement of Steve Womack follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Yarmuth. I thank the gentleman for his opening
statement.
In the interest of time, if any other members have opening
statements, you may submit those statements in writing for the
record.
I would like to thank our witnesses for being here this
morning.
Mr. Hadley, the Committee has received your written
statement, and it will be made part of the formal hearing
record. You will have 10 minutes to deliver your oral remarks.
You may begin when you are ready.
STATEMENT OF MARK HADLEY, DEPUTY DIRECTOR, CONGRESSIONAL BUDGET
OFFICE, ACCOMPANIED BY DR. JESSICA BANTHIN, DEPUTY ASSISTANT
DIRECTOR FOR HEALTH, RETIREMENT, AND LONG-TERM ANALYSIS,
CONGRESSIONAL BUDGET OFFICE, AND DR. JEFFREY KLING, ASSOCIATE
DIRECTOR FOR ECONOMIC ANALYSIS, CONGRESSIONAL BUDGET OFFICE
STATEMENT OF MARK HADLEY
Mr. Hadley. Chairman Yarmuth, Ranking Member Womack, and
Members of the Committee, thank you for inviting me and my
colleagues to come and testify today about the Congressional
Budget Office's recent work on single-payer health care
systems.
Some Members of Congress have proposed establishing a
single-payer health care system in the United States. Many more
people would probably have health insurance as a result. But
the government would take much more control over the health
care system. The effects of such a system on its participants
and total health care spending could vary greatly, depending on
the details of the system's structure and operation.
Earlier this month, CBO released a report on single-payer
health care systems. That report describes the primary features
of single-payer health care systems and discusses some of the
considerations for establishing such a system in the United
States. It represents our first step in a broader effort to
support you as you consider the issue and build our capacity to
estimate the cost of specific proposals.
I want to convey two main points this morning.
First, moving to a single-payer system would be a major
undertaking. It would involve significant changes for all
participants, individuals, providers, insurers, employers, and
manufacturers of drugs and medical devices.
Because health care spending currently accounts for one-
sixth of the nation's economic activity, those changes could
significantly affect the overall U.S. economy, and the
transition toward a single-payer system could be complicated,
challenging, and potentially disruptive.
Second, to establish a single-payer system, lawmakers would
need to make many decisions and would face complex tradeoffs.
The first figure in our report, which you have in front of you
is a handout, identifies some of the major questions that would
need to be answered.
With the balance of my time, I will focus on three sets of
issues that illustrate the complexities involved in designing a
single-payer system.
The first set of issues relates to coverage. In a single-
payer system that achieved universal coverage, everyone
eligible would receive health insurance coverage with a
specified set of benefits regardless of their health status.
People who currently have private insurance would enroll in a
public plan.
Under the current system, an average of 30 million people
per month are projected to be uninsured in 2019. Most of those
people are U.S. citizens and would be covered by a public plan
under a single-payer system.
Policymakers would have a lot of choices to make about how
to extend coverage, particularly if each state administered a
separate plan. One of those choices would be whether
noncitizens who are not lawfully present would be eligible, 11
million people in 2019, and about half of them have insurance
under the current system.
The second set of issues relates to cost. Under a single-
payer system, the government, federal or state, would pay a
larger share of all national health care costs.
In 2017, private sources, such as businesses and
households, contributed just under half of the $3.5 trillion of
total national health care spending. Shifting such a large
amount of expenditures from private to public sources would
significantly increase government spending and would require
substantial additional government resources.
Total national health care spending on a single-payer
system might be more or less than it is under the current
system, depending on key features of the new system, including
the services covered, patients' cost-sharing requirements,
provider payment rates, and administrative costs. And I will
turn to each of those briefly.
The benefit package could be designed to cover services
that are typically covered by private insurance and Medicare.
Alternatively, it could be expanded to cover additional
services, such as dental, vision, hearing, or long-term
services and supports. Expanding the benefit package to cover
additional services would tend to increase health care
spending.
Cost-sharing affects beneficiaries' financial well-being
and total health care spending. People use more care when their
cost is lower, so having a lower or no cost-sharing requirement
would tend to increase the use of services and lead to
additional health care spending.
Under a single-payer system, provider payment rates could
be based on rates paid by Medicare, Medicaid, commercial
insurance, or some other measure. Medicare payment rates are
substantially lower than commercial payment rates on average.
If provider payment rates were set at Medicare's rates rather
than average commercial rates, then total national health care
spending would be lower. But the amount of care supplied and
the quality of that care might diminish.
When fully implemented, a single-payer system would
probably have lower administrative costs than the current
system because it would consolidate administrative tasks and
eliminate insurer profits.
To give a sense of scale, the federal government's cost of
administering the Medicare program accounted for 1.4 percent of
total Medicare expenditures in 2017. When you include the
administrative cost of Medicare Advantage and part D plans,
total administrative costs for the Medicare program accounted
for about 6 percent of its expenditures. By comparison, private
insurers' administrative costs averaged about 12 percent in
2017.
But other possible features of a single-payer system,
including efforts to coordinate patient care and eliminate
fraudulent spending, could add administrative costs.
A single-payer system could affect the cost to providers
and individuals in other ways. It could reduce the amount of
uncompensated care, for example, and unlike private insurers,
which can experience substantial enrollee turnover, a single-
payer system would have no turnover.
For that reason, a single-payer system would have a greater
incentive to invest in preventive measures that have been shown
to reduce costs. Whether the system would act on that incentive
is unknown.
The final set of issues relates to people's access to
health care.
An expansion of insurance coverage under a single-payer
system would help more people receive more health care. People
who are currently uninsured would receive coverage, and some
people who already have coverage would use additional services,
particularly if those had lower out-of-pocket costs.
Whether the supply of providers would be adequate to meet
the greater demand would depend on various components of the
system. If the supplies of services was not sufficient to meet
the demand for care, patients would face increased wait times
and reduced access to care. The government, however, could
implement policies to encourage the provision of services, and
in the longer run, providers might deliver more care more
efficiently.
Under a single-payer system, people who are currently
covered by private insurance might have more providers
available to choose from. Participants would not have a choice
of insurer or health benefits, however. The public plan would
provide the same set of health care services to everyone
eligible, so it might not address the needs of some people.
For example, the public plan might not be as quick to cover
new treatments and new technologies as would a system of
competing private insurers. Policymakers could try to design
the single-payer system to mitigate such risks.
As I said at the start of my testimony, CBO has worked to
build our capacity to support this Committee and the Congress
as you consider these issues. We look forward to being helpful
to you and your staff. My colleagues and I are happy to answer
your questions. Thank you.
[The prepared statement of Mark Hadley follows:]
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Chairman Yarmuth. Thank you, Mr. Hadley. I appreciate your
testimony.
And now we begin the question and answer period. And I now
recognize the gentlelady from Connecticut, Ms. DeLauro, for
five minutes.
Ms. DeLauro. Thank you very much, Mr. Chairman.
And I thank our panel and our speaker this morning.
I think it is fair to say that the shared goal of my
Democratic colleagues on health care is looking at the way in
which we achieve universal health coverage in the U.S.
Now, we do have several iterations. The one that I have
introduced is Medicare for America, which ensures universal,
affordable, high quality health care coverage by building both
on Medicare and Medicaid and to expand that covered benefits
and services.
Under the current system, health care benefits are largely
dependent on your ZIP Code in Medicare. What we try to do is to
fix that in this legislation.
Universal coverage needs to include long-term services and
support, because we have got millions of Americans who live
with disabilities and those taking care of an aging loved one.
So we can't keep long-term services and supports separate from
our health care system.
Third, what we try to do is to achieve the universal
coverage through a combination of individuals and employers
choosing Medicare for America, auto-enrolling Americans at
birth, and the uninsured into Medicare for America and
employer-sponsored insurance. We look at trying to bring the
cost down for families. Premiums cost no more than 8 percent of
individuals' or households' monthly income. There are no
deductibles. And it simplifies cost sharing and will, in fact,
bring down cost for families.
We ban private contracting, which has created that two-tier
system of health care in America, one tier for people with
health insurance and another for the wealthy who can afford to
pay for their care without any insurance.
And just a couple of items. Student loan forgiveness
program for health care providers that accept Medicare for
America forgives 10 percent of student loan debt each year for
a health care provider, an institution, for a provider that
accepts Medicare for America payment rates. So we want to make
sure that there are health care providers.
And finally, a workforce development program for
individuals who work in home and community-based long-term
services and supports. So we are going to increase the number
or try to increase of number of caregivers to be able to take
care of the increasing number of seniors and those disabled.
Let me just, going back to benefit design, you know, which
is a tremendous concern when you consider any universal
coverage plan. If you live in Connecticut or Mississippi, Utah
or California, everywhere an American should have
comprehensive, affordable health care.
In Connecticut, our Medicaid program covers things like
dental care for adults. Alabama, Texas does not. Missouri,
Pennsylvania does not cover physical therapy. Connecticut does.
Arkansas covers eyeglasses for adults. California does not.
Just correct me if I am wrong. A single-payer system that
delegates benefit design to the states could lead to
inequalities. If this is true, what safeguards need to be put
in place to ensure that benefits are standard across the
country for all enrollees?
Mr. Hadley. Yes. As we said in the report, in the section
on administration, one of the key questions is whether this
would be administered by the states or the federal government.
And there can be lots of variation that policymakers choose
from how that would be done. So even if a program were
administered by the state level, it could delegate some
authority to states to make some decisions. Alternatively, if
there was a program administered by the states, the federal
government could supervise and highly regulate the benefit
design.
Ms. DeLauro. Doesn't that--just a final question because I
have used my time--but doesn't that continue this patchwork
that we have in this country with regard to health care
services and the inclusion of long-term services of the
disabled?
I think one of the fundamental problems is that, again, it
is your ZIP Code that is a determination of what kind of care
and what kind of services that you get. Doesn't it make more
sense to have something that is uniform and that it is directed
centrally?
Mr. Hadley. Well, we don't make policy recommendations, but
it is a policy choice for you all to decide whether there would
be one uniform set across the country or whether it would be
controlled at a more local level.
Ms. DeLauro. Well, I understand that we do make policy, but
I am sure that you have got views that I would have hoped that
you might share with us as to how we do get to standardized
care for people in this country. But thank you very, very much.
Mr. Chairman, I yield back, and I thank you.
Chairman Yarmuth. I thank the gentlelady.
I now yield five minutes to the gentleman from Ohio, Mr.
Johnson.
Mr. Johnson. Thank you, Mr. Chairman.
And I want to thank the panel for joining us today. I
appreciate the opportunity to move past the, quote, ``free
health care'' tagline and talk about the actual reality of
implementing Medicare for All.
I am an IT guy, spent 30 years in information technology
before coming to Congress. Mr. Hadley, in your report, you
describe a standardized IT system that implements portable
electronic medical records.
So question number one. In the U.S., we have a lot of
different health IT systems that would have to be merged
together to achieve a standardized system. Would this be
similar to what the VA and DoD are trying to do today?
Mr. Hadley. Yes, Congressman, they are trying to create a
system so that DoD and VA's medical records can be
interoperable, meaning they can be transferred between the two
organizations with a minimal amount of transactional work done
to interrupt them.
Mr. Johnson. So it is a similar process.
How many records are being merged in the VA and DoD
systems? And if we were to cover every single American under a
single-payer IT system, how many records would that be?
Mr. Hadley. I don't have the exact number of the records at
VA that are being merged, but if we were covering the entire
United states, it would be--the population is 329 million
people, substantially more than are covered by the VA and DoD
now.
Mr. Johnson. Well, I have the number here for you. It is
about 18 million records is what the VA and DoD are doing.
It is my understanding that since 2011, the VA and DoD have
been attempting to merge their electronic health records with a
10-year estimated cost of $16.1 billion.
What are some of the challenges a national standardized IT
system would face?
Mr. Hadley. Well, I think the key one is going to be
interoperability. But there has been an attempt over the last
several years to have more providers move to having more
electronic medical records, but they sort of diverged into
different directions when they did that. And so at the moment
they are having real problems having those systems talk to each
other.
Mr. Johnson. Yeah. I certainly agree with that.
Interoperability is rarely thought about up front, and it winds
up biting us in the backside at the end.
Do you have any idea on cost? I mean, if the VA is spending
$16.1 billion over 10 years for 18 million records, have you
got any idea what the cost of a standardized system to cover
everybody in this country would be?
Mr. Hadley. I don't at this time. The system that you are
describing would be similar to the one that is in Taiwan, but
there are many countries that don't have a fully developed
system that is similar to that one.
Mr. Johnson. Okay. Let's talk about security a little bit.
You know, if such a system were implemented, would the security
of the databases and the networks that house such a system and
records, would that be a concern for you?
Mr. Hadley. Yes, absolutely. I would expect the government
would invest heavily in trying to protect those systems.
Mr. Johnson. Okay. Is there a precedent for large-scale
government data breaches in government-run databases?
Mr. Hadley. Yes, Congressman.
Mr. Johnson. Okay. Yeah. Because we saw that in 2015, both
OPM and VA experienced data breaches which exposed an estimated
22 million and 26.5 million people's personal data,
respectively.
Is it necessary for the government to manage all of the
electronic health records----
Mr. Hadley. No.
Mr. Johnson.----to run a system of this size?
Mr. Hadley. It could be run in different ways. It could be
a simpler design of electronic records. So, for example, it
could be more like a billing system, such as we see with
Medicare fee-for-service.
Mr. Johnson. Okay. What would happen if there was no
central database? You talk about interoperability, and we saw
early on in the journey for an electronic health record the
lack of interoperability and how that was being such a negative
around our health care community.
If there was no central database, with all the problems of
cost and security and interoperability that we just described,
would quality of care decrease in such a system?
Mr. Hadley. Well, so, yes, I think you would be foregoing
some of the benefits you might get from such a system, and
those would include patient care coordination, but also
eliminating duplicative services.
Mr. Johnson. You know, one of the things--and I will wrap
up here, Mr. Chairman--one of the things that is widely known
by IT professionals is that the lifecycle cost of a system is
one number. Seventy-five percent of that lifecycle cost is in
operations and maintenance.
The easy part, believe it or not, as complicated as this
is, the easy part is the upfront part of designing and
implementing. Seventy-five percent of the cost is in the
operations and maintenance, and I submit that it is a monstrous
cost to do what we are talking about here.
Thanks, Mr. Hadley.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Massachusetts, Mr.
Moulton, for five minutes.
Mr. Moulton. Mr. Chairman, health care is a human right.
Everyone in America deserves good, affordable health care. And
we all know that that is not the case today.
I was having a health care debate with a Republican
colleague not too long ago, and I asked him if he thought that
the children of billionaires, say, Donald Trump's children,
should have better health care than the marines I served with
in Iraq. He considered the implications of the question for a
minute and then said: Yes, if they can pay for better health
care, then they should have it.
Well, I disagree. I don't think that the sons of
billionaires should have better health care than the sons and
daughters of America who risk their lives for our freedom. I
think veterans deserve the best health care in the world,
period. Frankly, in the greatest country this world has ever
seen, all Americans deserve the best health care in the world.
Now, Democrats agree on this, but we do have differences on
how we get there. Perhaps the closest model for a single-payer
system in America today is the VA. When I was elected to
Congress, I made a commitment to go to the VA myself, to
continue going there with my fellow veterans, because I said,
``Look, until we fix this system, I am going to go through what
they are going through and see it firsthand.''
Well, I have seen the good, the bad, and the ugly of
single-payer health care at the VA. There are some things the
VA does really well. For example, the VA negotiates
prescription drug prices, which Medicare does not do, and that
means our prescription prices are lower and the system is very
efficient.
I also had surgery not too long ago at the VA. And after
the surgery, I was sent home with the wrong medications.
Now, they were supposed to give me a strong painkiller, and
they just sent me home with a bottle of Advil, which was not
what the prescription was for.
But imagine if it had been the other way around, where I
was supposed to get a moderate drug and instead was sent home
with something much more powerful or addictive.
We have all heard the stories of veterans literally dying
on waiting lists. That day I checked in at the VA, first of
all, they couldn't find my record, and they said they couldn't
prove I was a veteran but would consider taking me as a
humanitarian case. Then I sat down next to a Vietnam vet who
had been sitting there for five hours.
Personally, I think President Obama had it right, which is
to have a public option, and that is what he had in Obamacare
before Congress took it out, a public option that competes
against existing private insurance options.
I don't think the American public would be thrilled if the
new President and the new Congress came in and said, ``You know
what? We are going to just put FedEx and UPS out of business
because we don't like that competition in the postal system.''
No, competition is good. And just like we have options for
delivering packages, I think we should have options for
delivering health care.
Yale economist Zack Cooper found that if you stay in a
hospital facing no competition that your bill will be $1,900
higher on average than if there are four or more competitors.
Reasonable regulation and competition among providers improves
outcome for health care recipients, and I believe the same is
true for health care coverage.
Mr. Hadley, the report suggests that substitutive private
insurance, which seems to be the closest analogy to the program
I am advocating, might also improve the quality of care for
people in both private and public plans. Can you share how
competition among private and public insurance plans could
increase outcomes, improve outcomes, and lower costs, and share
a little bit of your evidence for that?
Mr. Hadley. Sure. As we discuss in the report, one of the
ways in which you might have an increase in quality from having
substitutive insurance is that if the substitutive insurance
selected providers based on their quality. Then you might see
other providers, all providers, competing with each other to be
selected, and through that competition having an increase in
quality overall.
Mr. Moulton. Great. Mr. Hadley, thank you very much.
I believe that competition is good. It is American, and it
should be part of our health care system, and I thank you for
your work on this report.
With that, Mr. Chairman, I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Texas, Mr. Flores, for
five minutes.
Mr. Flores. Thank you, Chairman Yarmuth and Republican
Leader Womack for holding today's important hearing to discuss
what the government takeover of America's health care system
would look like for hard-working American families.
The conclusions that we can draw from the CBO report
confirm what we already know, and that is that this type of
upheaval abandons free market principles, severely restricts
the incentive for young Americans to join the health care
field, and then leaves the American people with no choice,
longer wait times for treatment, a rationing of care, and
significantly higher taxes.
This flawed thought process would build the single largest
bureaucracy in the history of this country to control a sixth
of our economy.
Mr. Hadley, I thank you and your colleagues for being here.
My first question is this. Do you feel a feel for what the
aggregate spending would be for a single-payer system? I know
you don't have a bill to look at, but what do you have? What
would that be like?
Mr. Hadley. We don't have an estimate yet, in part because
it would depend on so many of the design choices that you could
make in terms of who is covered and what kind of services they
receive.
Mr. Flores. Thank you.
In the report, the CBO states that the transition toward a
single-payer system could be complicated, challenging, and
potentially disruptive. Can you spend about 20 seconds on each
of those terms, complicated, challenging, and potentially
disruptive?
Mr. Hadley. So it would be complicated. We talk about some
of the complications in the design choices. But in the
transition, particularly if you are moving so many people from
one insurance plan to another, there would be an initial
upheaval as you try to reassign all of those people and get
them enrolled in the new plan.
In terms of disruption, depending on the payment rates and
the services that are covered, there would be shifts in the
economy for who would be employed, and there would be shifts in
the demand for different goods and services, and so it would
affect the overall economy as well.
Mr. Flores. We just heard some comments about the VA. It
was called the good, the bad, and the ugly. And one of the
single largest set of issues that we have to deal with in
constituent services back in the district are VA claims.
And so the VA takes care of roughly 9 million Americans. It
has a bureaucracy of about 378,000 federal employees to do
that. So the ratio of beneficiaries to federal employees is
about one to 24.
If we were to use that same ratio to cover 372 million
Americans, would that imply--I mean, that implies a federal
bureaucracy of about 16 million people, compared to the
Department of Defense, which is the currently largest federal
agency with 2 million people.
What is the accurate number of bureaucrats we would be
looking to hire to take care of Americans' health care?
Mr. Hadley. Again, I don't have an answer for that, in part
because we don't know how the system would change from--if you
look back in history, in 2017, the total health care spending
was $3.5 trillion all in.
Mr. Flores. I guess, suffice it to say it could be massive.
It could be easily the single largest federal bureaucracy in
the government.
Mr. Hadley. You could end up with many more people working
for the federal government, but also having federal contractors
plays a significant role and might also be an option for
policymakers.
Mr. Flores. Do you have a feel for what the improper
payments are from Medicare percentage-wise, for every dollar of
Medicare payments, what the improper payments are?
Mr. Hadley. I don't have that number in front of me.
Mr. Flores. Okay. But we do have a significant percentage
of improper payments coming out of Medicare today. Is there any
reason to assume, if you had a government-run health care
system, that you would have a lower percentage of improper
payments on the $3.5 trillion dollars of health care spending?
Mr. Hadley. Well, it depends again on the choices and the
system. One of those choices is how much they are going to
invest in making sure that there are not improper payments. You
know, some improper payments are simply because of the failure
of paperwork and other ones are the result of fraud. And
depending on how much investment there is in fraud prevention,
it could be higher or lower than we have today.
Mr. Flores. But you still have the government running this,
and so you would have to assume that suddenly the government
gets a whole lot better at something it has struggles with
today, and you are creating something massively larger--not
you. I am talking about the federal government creating
something massively larger than the VA today or than the
Medicare system that we have today.
The CBO report states that in a federally administered
single-payer system the associated cash flows would be federal
transactions, in CBO's view, and the spending and revenues for
this system would appear in the federal budget. Can you explain
this further?
Mr. Hadley. Sure. One of the issues that we face when we
are thinking about the government interacting with a sector of
the economy is the extent of government control and at what
point should those be considered part of the federal budget.
Under a single-payer system, it is clear that those would
be governmental, and to the extent that it is administered at
the federal level, then there would be no question that all of
those are federal payments. So all of the spending that would
occur from such a system would show as federal spending and
then, depending on the financing that is used to help pay for
that----
Mr. Flores. I want to be respectful of my colleagues' time,
so I will submit all of my questions--the rest of my questions
supplementally, and you can answer them supplementally. But if
we had a government shutdown, theoretically, all the health
care payments could stop.
I yield back.
Chairman Yarmuth. The gentleman's time is expired.
I now yield five minutes to the gentleman from Texas, Mr.
Doggett.
Mr. Doggett. Thank you.
A great nation should not have millions without access to
quality health care, yet we have over 30 million Americans that
lack health insurance. In my home state of Texas, one out of
every four working adults are uninsured. This is just
unacceptable.
And out-of-control health care costs are impacting families
who have employer coverage. Over half of Americans with such
coverage say that they or family members skipped or postponed
needed care because of cost.
More and more Americans are finding that their health
insurance deductible is bigger than their bank account, and a
single illness can put someone into bankruptcy. Half of
patients with cancer diagnoses deplete their life savings
within two years.
Americans have so much skin in the game that they are
getting third degree burns. The system is unsustainable and
unacceptable. And amidst it all, the bright spot is Medicare.
Contrary to Republican attacks, the seniors on Medicare
aren't languishing on waiting lists, and they are not being
denied the care they need. Far from it. Medicare provides our
seniors with guaranteed cost-effective coverage that they can
always count on.
I know many people who would love to be on Medicare. They
are just a little too young.
To be sure, Medicare has some gaps. That is why I have
introduced bills to expand coverage to include dental, vision,
and hearing, and why I focused on prescription price gouging. A
Medicare for All system would begin by making Medicare more
comprehensive for those who rely upon it today.
Congresswoman Jayapal is the leading advocate for Medicare
for All. I salute her and Congresswomen DeLauro and Schakowsky
for their Medicare for America proposal and Congressman Higgins
for his Medicare buy-in proposal.
Each of these has some merit. We cannot transform health
care overnight. We will need to phase it in. And none of these
proposals is perfect. But each one has value.
Since efforts to improve the Affordable Care Act have been
blocked for eight long years, we need to move expeditiously to
achieve universal coverage. A single-payer Medicare for All
program would be a highly effective means of accomplishing this
goal.
In contrast, today's naysayers don't have any plan at all.
They have had eight years to present an alternative to
Obamacare, and what do we have? Republican nothing care.
And their great leader, President Trump, has promised a
big, beautiful health care plan that cuts costs and provides
better health care for everyone. But wait, that is the same
plan and almost the same words that he offered in 2016 before
he began attacking protection for preexisting conditions. And
now he says he has a secret plan that must remain under wraps
until after he is reelected.
A translation of the attacks that these Republicans are
making on Medicare for All amounts to this: Democrats want to
take over your health care coverage and make it as bad as
Medicare is today. Well, I know a lot of Americans who say:
Throw us into that Medicare briar patch.
Here in the Budget Committee, we are certainly concerned
about a sustainable system. There is no free lunch. The cost
projected for our current health care system is $50 trillion
over the next decade. We are paying that bill. It is a question
of how we pay for it and how we get quality services for it.
Mr. Hadley, is it true that the government is already
paying for most of the health care spending in the United
States?
Mr. Hadley. Yes. In 2017, the private sector contributed
just under half.
Mr. Doggett. And doesn't the report that you have given us
explain how a Medicare for All system could be financed more
progressively than what we have today? With more progressive
financing, isn't there a potential for many middle-class and
low-income working people to actually pay less for Medicare for
All than they do today for insurance through their employer?
Mr. Hadley. Yes. Depending on the design of the system, you
could change how progressive it is.
Mr. Doggett. As Chairman of the House Ways and Means
Committee Health Subcommittee, I have been particularly focused
on the high cost of prescription drugs. I am pleased that both
the Medicare for America bill and the Medicare for All bill
have both incorporated verbatim the text of my Medicare
Negotiation and Competitive Licensing Act as the best strategy
to deal with these pharmaceutical monopolies.
This is a bill sponsored by most House Democrats. It offers
a unique American solution to a unique American problem that we
are having to pay about the highest prices for prescription
drugs anywhere in the world.
We propose negotiation and competitive licensing to deal
with these monopolies. It is essential that the Congress move
forward on that this year and that it be included to deal with
one of the most pressing health care problems our families face
today.
And I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Utah, Mr.
Stewart.
Mr. Stewart. Thank you, Mr. Chairman, and to the witnesses.
I am going to go to kind of quickly because there is a lot
I want to cover. But before I begin, I want to say that as a
Republican, I love talking about this, because I think we have
got solutions that will help.
But again and again and again, I hear my Democratic
colleagues talk about how bad and how the system is failing
Americans, which is a dramatic admission on their part, I
think, because it is an admission that Obamacare failed,
because the current law of the land is Obamacare. And I think
it is a fair thing to point that out, you know.
And essentially what they are saying is, yeah, Obamacare
isn't very good, but give us $32 trillion and another chance,
and this time we will fix it, and this time we will fix it for
real.
In my last election, I talked a lot about this. It was an
issue we discussed all the time. And I didn't spend much time
talking about the $32 trillion price tag or the fact that you
have to double taxes for virtually every American and every
American business to pay for it. I think there is a more
devastating aspect to Medicare for All, and that is the thing I
want to focus on today.
Quoting from the CBO report: ``Because the public plan
would provide a specified set of health care services to
everyone eligible, participants would not have a choice of
insurer or health benefits.''
Something like 60 percent, I think it depends on who you
talk to, but it is close, 60 percent of Americans get their
insurance from a private insurance now. They are possessive of
that. They should be. They want to protect their choice and
their option of providing and buying a private plan.
Under the single-payer system, what do you mean when you
say that, quote, ``Participants would not have a choice of
insurer or health benefits''? Can you describe that quickly?
Mr. Hadley. Sure. We mean that the government, whether it
is federal or state, would set the benefits, and it would be
one set of benefits for all participants.
Mr. Stewart. One set, no choice. Is that true?
Mr. Hadley. Correct, as we anticipate it.
Mr. Stewart. You either opt in or you opt in. Those are
your choices. That's it.
Mr. Hadley. Yeah. That is a choice for policymakers. They
could choose to allow people to opt out or to----
Mr. Stewart. Well, and I am going to get to the opt out in
just a second. But, I mean, this is the key to this, and this
is what most Americans don't realize. It compels them. They
have no choice.
Right now, many of them think: Hey, Medicare for All, that
sounds wonderful, we should provide that for people. And then
you say: But you will not be able to have private insurance. It
is taking away your private insurance. You are compelled to go
on the government program.
Is that an overstatement to say that?
Mr. Hadley. Well, it depends on the design of the system.
Mr. Stewart. Right. But under the Medicare for All proposal
as we understand it now?
Mr. Hadley. You would have one set of benefits from the
government.
Mr. Stewart. Thank you. Okay. Thank you.
It eliminates private insurance. And I will quote again
from the CBO report: ``By contrast, proposals to establish
single-payer systems often prohibit substitutive''--i.e.,
private--``insurance because of concerns it might interfere
with the operation of the public plan.''
Well, again, I think that is where most Americans go
sideways on this. I think most of us--look, I think all of us
want to provide insurance for those who don't. I don't know a
single person who doesn't want to achieve that goal. But I also
know that something like 60 percent of Americans don't want to
lose their private insurance and don't want to be held outside
of the law if they were to choose to do that.
Now, let's suppose that they did, and this is my second
point. Quoting again from the CBO report--because some nations
do allow them to opt out, but here is what happens. The rich
opt out and buy private insurance and leave the rest of us to
suffer under the government program.
Quoting the CBO report: ``In England, private insurance
gives people access to private providers, faster access to
care, or coverage for complementary or alternative
therapies''--which the government doesn't cover--``but
participants must pay for it separately in addition to paying
for their individual required tax contributions to the NHS.''
So let me ask you this. This is a blazingly obvious
question, but I want it on the record. If you provide for
people to opt out after you have raised their taxes and doubled
them in order to pay for it, who is going to be able to afford
to do that?
Mr. Hadley. If they are required to pay those taxes and
they were also then required to purchase insurance separately,
then it would eliminate a lot of people from being able to
purchase that kind of insurance.
Mr. Stewart. Except for the elites and the wealthy. Is that
true? Is that an overstatement, do you think?
Mr. Hadley. I don't know about the elites, but I will go
with the wealthy.
Mr. Stewart. Okay. That sounds fair.
Look, under a single-payer system, using England as a
model, you do have the rich opt out. That's clear. They opt
out, they buy extra insurance through a private sector, and
they ultimately receive better care for that.
So you have the option of that, or you have the option of
where I started, and that is that you compel people, and I
think most Americans reject that.
And my time is up. I yield back my time.
Thank you for your response.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from New York,
Mr. Morelle.
Mr. Morelle. Yes. Thank you, first of all, Mr. Chairman,
for organizing this very important conversation. I have the
privilege of serving on the House Rules Committee, so this is
the second hearing that I have been involved in that relates to
proposed changes in the Medicare system.
I am going to dispense with my opening comments other than
to say this. First of all, I appreciate very much this report.
I think people on all sides of this debate, and I think we are
all spending a lot of time thinking about how to get to the
right place, whether it is more public investment, whether it
is a private system. There are many different options. I think
my colleague in front, Mr. Doggett, I think did a good job of
sort of identifying them.
But the one thing your report points out--and the first
part of it is, it is maddening because you don't get any
answers, right. We all would love to have answers here, and we
would like you to help give us the answers.
But I think the thing that it does point out is there are
so many considerations to get here, and with many things there
could be unintended consequences if you don't think through how
to get to wherever you want to go.
And so this is really a very good map, and I appreciate the
report. There are a lot of questions I think each of us have. I
have several, and in just a couple minutes here I would like to
get through a couple of them.
First, you know, it occurs to me, and you do touch on this,
that if you were to design a system that was a single-payer or
a public system from the start, one of the choices you could
make, and there would be some logic to this, is the question of
not only the insurers being public, but also the providers
being public. You do touch on this a little bit.
I just want to ask you if you could just talk a little bit
about what you see as the opportunities and challenges of
working on the other end and operating essentially public
hospitals and government-employed health care providers, which
is sort of like how we have in care for the military. So there
are some advantages to that. If you could just talk about that,
because this seems to be part of a logic of this, that might be
one way to approach it.
Mr. Hadley. Sure. There are many different ways, as we
discuss in the report, that you might compensate providers, and
one of those options is to have salaried physicians, and that
is an option that you see in some countries, particularly
physicians who are working in hospitals.
One of the questions then is about their incentives to
provide care and whether you can design that payment mechanism
as a way to encourage them to both provide more services and
also focus on patient health outcomes.
Mr. Morelle. Are you suggesting that might be a challenge
for publicly operated as opposed to privately?
Mr. Hadley. In both cases, it's a choice for how you
structure the incentives, but it is an important consideration
for both public and private.
Mr. Morelle. Right.
Mr. Hadley. You know, in a fee-for-service situation that
we have in many parts of our current system the incentive is to
provide more care and to continue to provide more services, and
there are studies that show that the incentive to do that goes
beyond what is optimal.
Mr. Morelle. May I stop you for a second, because it leads
into one other, the next thing that I wanted to ask you about,
which is sort of the concept of global budgeting.
So it does seem to me, if you have a fee-for-service
system, it is hard to have a control on cost. But this is,
obviously, if it is going to be a public system, whether it's
fully a public system or an expanded public system, cost is a
big issue. Your CBO report earlier this year on the size of the
deficit and the accumulated debt of the United States does
raise some questions about cost containment if you expand the
public system.
So have you given thought--I am not familiar. You mention
in the report the Maryland system, I am only vaguely familiar
with it, where they have essentially gone to global budgeting.
But there are risks in that.
I assume, at the end of the day, that those risks for
overruns on cost will be borne by the United States. Is there
another way of doing that? Would you penalize hospitals or
providers potentially?
Mr. Hadley. Yes. In England, where they had a global
budgeting system, they used that to constrain the growth of
health care costs, and it was successful in doing that. But one
of the consequences was that many of the providers ended up
running deficits in some of those years. And then there were
also increases in wait times.
Mr. Morelle. I want to also just touch on briefly, in just
the last few seconds, you note in the report, and this is
pretty well established, that the Medicare administrative costs
are 1.4 percent, Medicare, with Medicare Advantage and part D,
6 percent administrative costs, and then private insurers 12
percent.
Are those apples-to-apples comparison? And would you need
to go to a public system to reduce administrative costs on the
private insurance side?
Mr. Hadley. So one of the reasons why we presented both
numbers is they are not exactly apples to apples. The 6 percent
number is the full cost of the Medicare program, but if you are
trying to use that to figure out what Medicare is compared to
the private insurers, then 6 percent to 12 works very well. If
you are trying to figure out what would happen under a
different system with less investment, it is not as useful of a
number for that purpose.
Mr. Morelle. Thank you.
I yield back my time, Mr. Chair.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Texas, Mr.
Roy.
Mr. Roy. Thank you, Mr. Chairman. I appreciate it.
Mr. Hadley, I appreciate your time and that of your
colleagues being here to testify before us today.
I certainly agree with my colleagues, I think on both sides
of the aisle, that the American people deserve the best health
care in the world by virtue of our being Americans and by
virtue of our using our ingenuity and by using our system that
is before us to be able to produce that great health care.
We could have that care. But, unfortunately, my Democrat
colleagues believe in the magic health care fairy and believe
that where there is unlimited funding and believe that there
won't be any rationing in such a system.
And they then scare the American people about coverage.
They focus on coverage as being this sort of magic variable,
when they talk about insurance coverage or government coverage,
as opposed to health care, as opposed to focusing on the one
thing that matters, which is an individual in this county and
their families being able to go to a doctor and get care.
And that is going to happen much more effectively if we
drive down the cost of care and increase the one-to-one
relationship between doctors and patients instead of focusing
all of our time on government bureaucracies, and, frankly, with
all due respect, insurance bureaucracies in which the system we
have today is essentially single-payer health care being
managed by insurance companies, ineffectively and
inefficiently, by government strangulation by regulation.
I love that my Democrat colleagues are racing to push for
health care reform, especially Senate Democrat candidates for
President who are now racing for Medicare for All, universal
coverage, VA for all, whatever branding they want to come up
with, on the back 10 years into a system created by Democrats
that apparently isn't doing very well, and therefore, needs a
new system.
Mr. Hadley, let me ask you a question. Where in the
Constitution is the phrase dental plan found?
Mr. Hadley. It is not.
Mr. Roy. Uh-huh. How about prescription drugs?
Mr. Hadley. No.
Mr. Roy. Standard of care?
Mr. Hadley. No.
Mr. Roy. Copay?
Mr. Hadley. No.
Mr. Roy. Right. And so my question here is, is when we are
talking about my colleague that was talking about states and
talking about how we weren't going to allow states to be able
to provide and make decisions that are best for the people in
their home states, this question came up about, you know, how
we need a standard of care nationwide.
And my point is just simply this: How many people are in
the United States, roughly?
Mr. Hadley. Roughly 329 million.
Mr. Roy. Right. How many in Texas, do you know?
Mr. Hadley. I don't have that number.
Mr. Roy. About 28 million. How many in California? About 40
million.
And people talk about comparing systems. How many are in
Singapore? It is about 6 million. How many are in Switzerland,
7 or 8 million? Right.
We are comparing apples and oranges around the world when
we are trying to compare one health care system to another. And
our system was designed to be a Federalist system where we can
have differences of opinion, where we can have health care
systems that vary state to state.
Let's take Texas. Texas is very different than Maine. My
colleague, Mr. Doggett, he knows that very well, right?
How many people of the current uninsured population are
people who are present in the United States illegally? What
estimate do you all have for that?
Mr. Hadley. I am sorry, could you repeat the question?
Mr. Roy. How many people, of the people who are of the
uninsured population in the United States, are people who are
present illegally in the United States?
Mr. Hadley. Roughly 6 million.
Mr. Roy. Okay. And I have seen different numbers, ranging
up to 30 percent of those who are uninsured, that number, et
cetera. It is a sizeable piece of the pie, and particularly in
a state like, say, Texas or California, that have heavy
populations of those who are present illegally. Is that true?
Mr. Hadley. Yeah. As I said in the opening statement, there
are roughly 11 million people who are here unlawfully, and
about half of them have health insurance.
In slide 3, on the back side of your handout, we walk
through the components of who the uninsured are. And my
colleague, Dr. Banthin, can speak to those.
Mr. Roy. Well, without going deeply into that, just in my
limited time, I just wanted to highlight the fact that states
vary, we have different populations. And I would just add that
a significant portion--for example, in Texas, when we talk
about the uninsured, part of the reason we have a significant
uninsured population problem is that we have a significant
number of illegals, illegally present in the United States in
Texas, because this body refuses to do its job to secure the
border.
Let me ask a couple more quick questions with the limited
time I have left. Is it true that the report states that under
a single-payer system, if the number of providers was not
sufficient to meet demand, patients might face increased wait
times and reduced access to care?
Mr. Hadley. Yes.
Mr. Roy. Would you agree with the following numbers?
According to an analysis done by the Fraser Institute, wait
times in Canada, a single-payer system, is 8.7 weeks for a
specialist after referral from a general practitioner. The
analysis stated wait times of 4.3 weeks for a CT scan, 10.6
weeks for an MRI scan, 3.9 weeks for an ultrasound.
Do those sound right?
Mr. Hadley. My colleagues are more familiar with those
numbers than I am. But sort of in--to characterize generally,
in the United States we have lower wait times for specialists
in elective surgeries than in other countries.
Mr. Roy. When I was diagnosed with cancer, I got treatment
within 10 days of the time I got cancer treatment.
Thank you.
Chairman Yarmuth. The gentleman's time has expired.
I now recognize the gentleman from Nevada, Mr. Horsford,
for five minutes.
Mr. Horsford. Thank you very much, Mr. Chairman, for giving
us this opportunity to discuss this very critical issue.
I want to be clear, I support universal access to health
care, and I am committed to working with my colleagues to
achieve this goal. I commend my colleague, Congresswoman
Jayapal, for her work and advocacy for her Medicare for All
proposal, and the many other proposals that a number of my
colleagues have offered.
I believe that we must work together to protect health care
coverage for individuals who like their current health care
plans, expand coverage for Americans who still need it, and to
bring down health care costs for everyone.
I want to just get to a number of the questions that I
believe have to be answered in order for us to ever reach a
single-payer system.
First, though the Affordable Care Act has played a
significant role in insuring many more Americans, particularly
through Medicaid expansion, the Congressional Budget Office
estimates that 29 million Americans were still uninsured in
2018, 11 percent of U.S. residents under age 65.
My home state of Nevada was one of the first states to
expand Medicaid under the Affordable Care Act. In fact, my
governor at the time, Governor Brian Sandoval, was the first
Republican governor in the nation to expand Medicaid.
Since that time, our uninsured rate declined 42.1 percent
from 2013 to 2016. Nevada was ranked number two for the highest
rate of uninsured before we passed that expansion. Twenty
percent of our children were uninsured before the expansion of
the Affordable Care Act and Medicaid; today only 8 percent.
So I reject my colleagues who say that the Affordable Care
Act is not meeting its goals.
More than 640,000 Nevadans rely on Medicaid, which provides
health coverage to children, pregnant women, parents, seniors,
and individuals with disabilities.
My question: How many of these 29 million uninsured
Americans who fall into the so-called coverage gap might have
coverage if all states moved towards Medicaid expansion?
Mr. Hadley. So could we have slide 3, and then Dr. Banthin
will walk through.
So in 2019, we project the number of uninsured will be 30
million people.
Dr. Banthin. So, roughly, 4 million across the country fall
into the category they live below 100 percent of poverty and
they live in a state that did not expand Medicaid.
Mr. Horsford. And why those states choose to deny their
residents coverage is beyond me.
Employer-sponsored health care benefits were achieved
through a long and rich history of collective bargaining.
Today, 49 percent of Nevadans receive their health care through
their employer. Many of them were negotiated benefits. They
gave up wage increases in order to have the health care that
they have earned.
Can you speak to how individuals who receive their health
care through their employer would be impacted by a single-payer
system?
Dr. Banthin. Yes. It depends, of course, on the design of
the system. If they received public coverage as a replacement
for their employer-provided coverage, then we would expect that
employers who spend quite a bit on that coverage would return--
that is part of their employee compensation--they would return
that to employees, or most of it, in the form of wages or other
benefits, other tax-favored benefits.
But we would have to analyze the full effect of that change
because employees may then, of course, face higher taxes to pay
for the national health insurance, and that would depend on the
design of the whole scheme.
Mr. Horsford. Thank you.
In your report you note that the transition toward a
single-payer system could be complicated, challenging, and
potentially disruptive.
Health care spending in the United States currently
accounts for about one-sixth of the nation's GDP. Those changes
could significantly affect the overall U.S. economy.
What factors should we take into consideration in order to
avoid a major disruption from occurring within our health care
market?
Mr. Hadley. So some of the questions about how you would
get there depend critically on where you are trying to get to.
And so the design of the plan, how you want it to be structured
in terms of who is covered, what services they would receive,
are critically important, and how you are going to compensate
providers.
Another question then is, who is it that you are most
concerned about disrupting? So, for example, if it is the
employees who are currently employed by private health
insurance companies, you could look to having a longer time
period before switching over to a single-payer system, so there
could be kind of more notice and warning. You could also have
job retraining programs for those people.
If it is for doctors and other providers, you could look at
how you structure the payment rates. You could, for example,
bring down payment rates only to the level that has been
brought down by the administrative savings that they are facing
because they are only dealing with one payer, as opposed to the
current system where they are dealing with many payers.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from
Pennsylvania, Mr. Meuser.
Mr. Meuser. Thank you, Mr. Chairman.
And thank you, Colonel Womack.
And thank you, Mr. Hadley and the Congressional Budget
Office, for being with us.
I speak with my constituents in my district in Pennsylvania
on health care quite regularly. We very often discuss three
priorities that are important to their families. Those are the
ability to choose their own doctor, quality, and affordability.
I would like to focus my questions on these areas.
First, regarding choice. Deputy Director Hadley, page six,
your submitted report says, and I quote: ``Participants would
not have a choice of insurers or health benefits. Compared with
the options available under the current system, the benefits
provided by the public plan might not address the needs of some
people,'' close quote.
Can you expand on what you meant by that?
Mr. Hadley. Sure. So as I go on to say, one of the issues
is about technology and how quickly a new set of insurers might
adopt technology and changes in treatment patterns. And so, for
example, you might expect that if there were competing private
insurers, that one or two of them at least would have adopted
the new technology, and that would cause the others to follow.
And so you would expect, in general, you might have faster
adoption of new technologies than you would with one-payer.
Mr. Meuser. So more is better and competition is good.
Regarding quality, I have often heard the Canadian health
care system described as: It is terrific until you get very
sick.
People want to be able to go to the doctor of their choice
and know that the care they are receiving is excellent. I am
concerned that when the single-payer system removes choice, as
we have just discussed will happen, people will not be able to
choose the doctor that best suits their particular and personal
health needs.
Have you analyzed how the single-payer system could and
would negatively impact the quality of care that people
receive?
Mr. Hadley. Well, so we have thought about both doctor
choice and quality of care. So let me go through doctor choice
first.
So it is possible that if you had a single-payer system
there might be more doctors to choose from because essentially
all of the narrow networks would be combined and all providers
would be in one network, depending on design choices.
In terms of the overall quality, it depends on so many of
the other factors. But if there is a mismatch between the
demand for care and the supply of care, then you would end up
with increased wait times and problems with access to care. And
to build on that just a little bit, that might mean, for
example, needing to travel further distances to see doctors.
Mr. Meuser. So based on models that we are aware of,
quality would be compromised?
Mr. Hadley. Unfortunately, I can't answer that directly. It
depends on the design of the system.
But the extent to which you are expanding coverage and
expanding the services that are covered and reducing copays,
those would all tend to increase the demand for services. But
if the total cost isn't being controlled by reducing provider
payment rates, that would tend to cause a mismatch between
supply and demand.
Mr. Meuser. Let's talk about affordability. I am concerned
about the affordability of a government-mandated and run health
care system both for patients and the American taxpayer.
To pay for implementation of a government-run system, what
would be, coming from the Congressional Budget Office, some of
the ways that the revenues would be generated?
Mr. Hadley. We discuss three ways it could be financed,
through cash flows, and then there is a kind of a half. So you
could have additional copays or other cost-sharing by
individuals. There could be premiums paid or taxes in some form
or other.
And then the half is, you could have deficit financing that
would postpone when those services would be paid for and
shifted to another generation.
Mr. Meuser. All right. In a system with no cost-sharing,
such as copays and premiums, run entirely by the federal
government, the only method to generate revenue would be taxes
or deficit spending? No copays, no premiums, all paid for?
Mr. Hadley. If no copays and no premiums----
Mr. Meuser. Right. And this system I described in my last
question is what H.R. 1384 is all about, a bill cosponsored by
108 of my Democrat colleagues, including 10 from this
Committee, the Medicare for All Act of 2019. The bill contains
no cost-sharing; thus taxes are the only way to pay for it.
We know from independent studies that this will cost
roughly an additional $32 trillion over the next 10 years. That
is an average of $10,000 per person. A family of four in my
district would be paying $40,000 for such a plan, on top of
what we are paying now. That is simply not sustainable.
Based upon your testimony here today, a single-payer system
would result in the elimination--minimizing choice, quality
would be suspect, and $10,000 per person in new taxes.
Certainly not affordable.
One can conclude a government-run single-payer health
system creates a monopoly that will expand the role of the
federal government at the expense of patients and taxpayers.
I do appreciate the CBO taking the time to join us this
morning, and I urge my Democrat colleagues to work with us to
develop a plan that will actually deliver on what is being
asked for by the American taxpayer--choice, quality, and
affordability. Government takeover of health care will make our
system and many of us sick, $32 trillion sicker, not better.
Thank you, Mr. Chairman. I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Virginia,
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Chairman, we have been hearing a lot of complaints
about the Affordable Care Act, but we did note that, as one of
my colleagues pointed out, that after a decade of trying, the
best the Republicans could come up with was a plan that had 20-
something million fewer insured, costs go up 20 percent the
first year, covers less, and you may well lose protections for
your preexisting conditions--and they actually passed it.
Let me ask a series a questions, if I can get as many in as
I can. We just heard that this Medicare for All will cost an
additional $32 trillion. What we just heard, additional.
But, Mr. Hadley, I thought I heard you say that that was
not in addition to, but in lieu of what we are presently
spending on health care, and the total expenditures for health
care may, in fact, go down--maybe up--but it would be in lieu
of what we are presently spending, not in addition to.
Mr. Hadley. First of all, I want to say that that is an
estimate that was not produced by CBO. But also, yes, under the
current system, looking back historically at 2017, total health
expenditures were $3.5 trillion for that year.
Mr. Scott. One year. Ten years would be--go ahead.
Mr. Hadley. So 10 years would be, expressed in those year's
dollars, would be on the order of $35 trillion.
Mr. Scott. But that additional cost of whatever the
Medicare for All will cost will be in lieu of, not in addition
to?
Mr. Hadley. Some of the estimates that are out there are
looking at what the total health care spending would be, and
some of them are looking at what the net cost to the government
would be under that system.
Mr. Scott. But it is in lieu of what we are spending now as
a nation, not in addition to. Is that right?
Mr. Hadley. That is correct.
Mr. Scott. Okay. Now, you mentioned less administrative
expenses under a Medicare for All. Medicare, as I understand
you said, was 1.4 percent administrative, just Medicare itself,
and private sector was 12 percent. Is that what you said?
Mr. Hadley. The federal government's cost for Medicare was
1.4 percent.
Mr. Scott. Okay.
Mr. Hadley. So when you include Medicare Advantage and
part----
Mr. Scott. Well, just what government had control over was
1.4.
Now, we also heard there are a lot of improper expenditures
under Medicare. And does the private sector have any improper
expenses?
Mr. Hadley. Yes.
Mr. Scott. Okay.
You mentioned that prevention--investments in prevention
are--there is a disincentive because of turnover. You prevent
long-term expenses and they go with another insurance company.
Is there also a disincentive for prevention because the
private sector is worried about the quarterly earnings, in that
if you had a Medicare for All, there would be more of a--again,
more of an incentive to invest in long-term prevention?
Mr. Hadley. It is possible, depending on the design of the
system, whether you give the system the authority to act on
that incentive.
Mr. Scott. The public option, when the public option was
considered and passed the House and lost in the Senate, there
was a complaint that the public option would constitute unfair
competition, which I interpreted as could provide a better
product at a lower price. And the conclusion of some is, we
couldn't have that. And the conclusion of others is, that is
exactly what we want to do.
If that is, in fact, unfair competition, because it can
provide a better product at a lower price, what kind of market
share would a public option acquire?
Mr. Hadley. That is difficult to say until we see the
details of the plan, but if it is more attractive to consumers,
then you would expect more consumers to choose that plan.
Mr. Scott. And if we had that option and people could get
the benefits of the public plan, would it be necessary to
eliminate private insurance?
Mr. Hadley. No. You could have a public option in the
context of a multi-payer system.
Mr. Scott. And you could essentially get most of the
benefits of a Medicare for All, even allowing the existence of
private plans, so long as we didn't let them underwrite and
cherry pick. Is that right?
Mr. Hadley. So you would keep some of the elements of a
multi-payer plan, meaning you would still have to worry about
things like selective enrollment and the competition among
insurers and stability. But you could have a plan that provided
benefits to more people and achieve closer to universal
coverage that way.
Mr. Scott. And what would be the effect on Medicare for All
on the ability to control costs?
Mr. Hadley. So we haven't analyzed the specific plan that
is in legislation now, but through a single-payer system you
could have additional options that are very hard to pursue
today under a multi-payer system. There would be some options
that we discuss in the report that would become available.
Utilization management and global budgets are two of them.
Mr. Scott. And you would be better able to control costs
going forward?
Mr. Hadley. Potentially, depending on the design of the
system.
Mr. Scott. Thank you, Mr. Chairman.
Chairman Yarmuth. I thank you. The gentleman's time has
expired.
I now recognize the gentleman from Oklahoma, Mr. Hern, for
five minutes.
Mr. Hern. Mr. Chairman, Ranking Member Womack, thank you
for being here today.
To the witnesses, Director Hadley, I really appreciate your
time.
I am going to get right into some questions here. I have
got like, I don't know, 60 or so.
The Democrats didn't ask for a price on this when they put
it in the plan. I have read through your report, highlighted,
and made tons of notes.
But going to the extreme of single-payer system, no private
option, what is the anticipated cost? Do you argue with the $32
trillion, or could it be more? All in, all in. Sure, you are a
budget office, sure you have looked at everything is all in,
owned by the government, no private option.
Mr. Hadley. But it still depends on the choices, the other
design choices, such as cost-sharing and, critically, how the
providers are paid, right? So if costs were controlled through
payment rates to providers, it could bring down costs sort of
in two ways, both the direct effect and also if there was a
shortage of providers.
Mr. Hern. So the narrative would be is that we would
continue paying the providers less until we got to a point
where we could afford it? Because I think you say in your
report also that doctors, the reimbursement rates would go
down. Therefore, the demand would overtake the supply, and
doctors would probably be less likely to want to stay in a
business where they are making less.
Then you also go on to state in the report that the
government could step in and educate more doctors. So this is a
gift that keeps on giving, where the government is more and
more engaged in the process of making this work.
Mr. Hadley. So, yes, graduate medical education and how
that is funded is one of the key issues that we highlight in
the report.
Mr. Hern. And nobody has asked that question yet, by the
way. Nobody has talked about how you are going to prop up the
supply side.
Mr. Hadley. And that is not the only way that could be
done. It could also be done, there are some other methods that
one could pursue, for example, allowing physicians assistants
and nurses to carry out services that are currently done by
doctors.
Mr. Hern. So have less doctors and just keep pushing down
the requirements. So we would sort of devalue the expertise we
have in the medical field, people who have gone a long time to
school to give us what some would argue the greatest health
care in the world.
And I know my friends across the aisle argue that, but we
have people coming from these great countries like Canada and
Europe, coming here to have specialized treatments done,
because, as my colleague from Texas said, they can get it done
in a timely manner, as opposed to possibly dying before those
procedures could be done.
I have spoken to people in England who have the two-tier
system. And when they have these immediate needs, because they
can afford it, they go use the private insurance and not the
national health insurance.
Mr. Hadley. That is right. In England you can buy private
insurance that helps have faster access to care.
Mr. Hern. And much of that is provided through these evil
companies that are allowing their employees to actually buy
that private health care. Is that correct?
Mr. Hadley. Those are through public plan--or private
plans, excuse me.
Mr. Hern. Also in there you state that, quote: Single-payer
system could force compliance through an existing automatic
payroll withholdings and taxes. Is that right?
Mr. Hadley. That is correct.
Mr. Hern. Sounds like an individual mandate that we had in
ObamaCare, that when was removed, people made the choice not to
actually buy insurance. Nobody kicked them off, they just
decided they didn't want to buy it anymore. Is that what you
could see happen as well?
Mr. Hadley. So in the context of the single-payer system,
what we were envisioning was that there would be taxes that
would be withdrawn from the economy, not--but I see your point
about an individual mandate.
Mr. Hern. So I have got so many here, but you also said in
there about rural hospitals and about taking over the
hospitals. Is it true that one of the driving forces behind
negative profit margins in many of the hospitals is due to
reduced Medicare reimbursement rates?
Mr. Hadley. Yes, that is correct, that when the Affordable
Care Act put in place a change in the way that those providers'
payments rates are set, that it now includes an increase for
the cost that they face and a decrease for the total level of
productivity within the economy as a whole.
Mr. Hern. I really appreciate your work in this. And,
again, I read the report a couple times. It is safe to say that
socialized medicine is and has always been the Democrats' end
game since go all the way back to 2000 and--well, you can go a
lot farther back than that.
A one-size-fits-all health care comes with an unbelievable
price tag that we have seen through reports, $32 trillion on
the low end cost estimates over 10 years. Even without
expanding Medicare from its current role, the Medicare Hospital
Insurance Trust Fund will be insolvent in 2026.
I support putting programs like Medicare and Medicaid on a
fiscally sustainable path so it will be available for current
and future generations.
If we cannot afford Medicare as is, why are the colleagues
making empty promises to the American people we could afford
Medicare for All. The problem with Medicare for All is the
exact same problem with socialism. The system collapses on
itself.
And I would ask my colleagues to be truthful to the
American people and don't be, I guess, overtaken by the empty
promises that big government--that this is not Medicare for
All. This is Medicare for none.
Mr. Chairman, I yield back. Thank you.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from California,
Mr. Khanna.
Mr. Khanna. Thank you, Mr. Chairman. Let me just commend
your leadership for having this hearing and helping educate the
Committee Members and the American public about Medicare for
All.
Mr. Hadley, do you believe Medicare for All is socialism?
Mr. Hadley. We haven't drawn a conclusion about socialism.
Mr. Khanna. Do you think anyone would pass Economics 101 if
they gave that answer in any major university in this country,
MIT or University of Chicago? I mean, I studied economics at
University of Chicago. Do you think if someone in first year
Economics wrote a paper saying Medicare for All is socialism
that the great free market economists then would give them a
passing grade?
Mr. Hadley. Well, CBO doesn't have a specific--its own
definition of socialism.
Mr. Khanna. Just given the economic definition, which is
that you control the means of production, I mean, do you think
that this is socialism under common economic definitions?
Mr. Hadley. Well, so it would involve more government
control over one aspect of the economy.
Mr. Khanna. So you can't say that it is not socialism?
Mr. Hadley. No. I--it is--we can't speak on it either way.
Mr. Khanna. Okay. I mean, I think 99 percent of the people
with a Ph.D., economists in this country, would say it is not
socialism.
As you know, the employer average premium is $12,951 of
cost to an employer under the current health care system. Most
economic studies show that the stagnation of our wages for the
last 40 years are directly tied to increasing health premium
costs.
Can you speak to how much increase there would be on wages
if employers weren't being burdened by the $12,951?
Mr. Hadley. Well, as my colleague can explain further, you
would expect a significant portion of that to be passed back to
the employees.
Dr. Banthin. Yes. We would expect employers to pass back
most of that in the form of other compensation or wages.
However, employees would then face taxes related to the
national health insurance.
Mr. Khanna. Do you think that one of the biggest things our
country can do to deal with wage stagnation of the bottom 50
percent of income earners is to reduce the burden that
employers have in premiums?
Dr. Banthin. So the bottom 50 percent of earners do not
always receive health insurance through their jobs.
Mr. Khanna. The bottom 50 percent who have health insurance
through their jobs. Do you think one of the biggest things we
could do, in terms of wage stagnation, is to reduce employer
costs on health care?
Dr. Banthin. I don't know what would happen to growth and
wages over time. It would certainly cause a change during the
transition from private to public health care.
Mr. Khanna. It would be a massive raise for most Americans?
Dr. Banthin. We would expect to see an increase in wages.
But if the scheme were financed through payroll tax, they may
not take all of that home in their paycheck.
Mr. Khanna. Sure. But even if it was funded through a
payroll tax, it would be a net increase for most Americans,
correct?
Dr. Kling. I am sorry. That would depend on the details of
the tax system, sir.
Mr. Khanna. I mean, there is no way that a tax would be
$13,000 on any--I mean, any economic study--you have testified
earlier to Mr. Doggett's questions that most Americans would
actually--who are making under $75,000--would save money by
having less costs of premiums than they would have to pay in
the payroll tax. Isn't that correct?
Mr. Hadley. Well, so I think what I said was that you could
design a system that would be more progressive than the current
system if you were considering what they are currently paying
for health care as a tax.
But that is really a choice that policymakers have in front
of them, not a conclusion that we can draw about the choices
that you have already made.
Mr. Khanna. But you could design a system, in your view,
that the ordinary American who is watching this would pay less
money in terms of the fees to the government than they
currently are paying to health care, and they would get more
money in their pockets in terms of increased wages? I mean, it
is possible to design that system?
Mr. Hadley. It is possible to design a system that would do
that for some people, yes.
Mr. Khanna. And most economists would not describe that as
socialism, I mean, unless you believe that reducing people's
costs and increasing their wages is socialism.
You get the last word.
Mr. Hadley. No, they would not describe that as socialism.
Mr. Khanna. Thank you.
Chairman Yarmuth. Thank you. The gentleman's time has
expired.
I now yield five minutes to the gentleman from South
Carolina, Mr. Norman.
Mr. Norman. Thank you, Mr. Chairman.
Mr. Hadley, thank you and your colleagues for coming.
You know, the way to predict the future is look to the
past. I think we all remember during the Obama years, during
ObamaCare, the statement: You can keep your own physician. How
did that work out? Not too well.
I think we remember the statement that we are going to have
reductions in our deductibles. How did that work out? Not too
well.
In my state of South Carolina, we have got that single mom
who is supporting two or three children, her premiums
skyrocketed 62 percent, not 15 to 12 percent, as I have heard.
How did it work out when they promised lower deductibles?
Not too good.
Let's look to the other countries that have--you can call
it not socialism, but government-run systems in anything is
pretty much socialism, if you really look at it and get down to
the bottom line.
Let's look at Great Britain. Look at the shortages in
physicians, 11,500 physicians short, 42,000 nurses short.
Let's look at Canada. As Mr. Roy said, he had his treatment
for cancer in 10 days. How does the Canadian system work out?
Well, it took patients 8.7 weeks to see a specialist, 4.3 weeks
to get a CT scan, 10.6 weeks to get an MRI scan, and 3.9 weeks
to get an ultrasound.
My son-in-law from Canada, when they had heart trouble,
guess where he came. Not Canada. He came to the United States
of America.
So, you know, the old system is not sustainable under
ObamaCare. So I welcome this discussion to get into how are we
going to improve it. It is not government-run health care.
Mr. Hern and I are in the private sector. He has
restaurants. I am in the construction world. You think
government can do it cheaper than we can? No. Competition is
what makes a better product at cheaper prices.
I keep hearing this word ``free.'' Okay, I am for free
medical care, with the caveat, get the doctors to work for
free. I am for free education, get the professors who are
tenured to work for free. Get us as Congress to work for free.
So this is what we are talking about, and I am glad to have
this discussion.
Incentives. Has there been any study on the incentives?
Would you get more people in the medical profession if you cut
their pay? Have you done any type work on that, Mr. Hadley?
Mr. Hadley. I haven't, but my colleagues have looked at
that issue and they have seen that in the context of a multi-
payer system--I think we need to come back to that in a
second--that if you cut the compensation of providers, they
provide less care.
But the caveat is that was in a context of a relatively
small change within the context of a multi-payer system. They
had other places to go. It is hard to know exactly how that
would play out in the context of moving to a single-payer
system.
Mr. Norman. But you would agree, if you cut the incentives,
you are not going to have the physicians getting into the field
to practice their skill if you cut their pay. Does that make
sense?
Mr. Hadley. In general, we would expect that fewer people
would enter the medical profession. And whether that would
result in a shortage of services would depend on the incentives
faced by the people who remain and also the extent to which we
have foreign-trained doctors.
Mr. Norman. Do you agree, if there is a shortage of
physicians, that would mean less doctors to see patients that
need care? So the patient would ultimately suffer?
Mr. Hadley. It could result in reduced levels of care, in
part because of wait times.
Mr. Norman. Okay. And, finally, you know, our nation's debt
is now $22 trillion. It has been estimated that the single-
payer system would add $32 trillion. Bottom line, you can say
that it adds to it. It is net. But bottom line, you are looking
at a big number, and you are looking at a number that is
unsustainable as we look forward, as we try to get a system and
get this country back on a firm financial footing and not
finance it with a credit card. Would you agree?
Mr. Hadley. So, two things.
One, it would be a very large shift to move all of the
private payments that are currently financing the health care
system to become public payments, and that would require
substantial additional government resources.
But more generally, the current level of debt and deficits
are ultimately not sustainable.
Mr. Norman. Not sustainable, not going to be for the United
States as it hasn't been for any of the socialistic countries
who are basically going broke.
I would say that anybody that believes that a government-
run health care system provides better health care at lower
prices, I got some land that is underwater I need to sell you
for high-rise condos.
Thank you so much.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentlelady from Illinois,
Ms. Schakowsky.
Ms. Schakowsky. All this talk about socialism. That is
exactly what we heard when Medicare was suggested. In fact,
Ronald Reagan was the lobbyist who went around the country
against Medicare because it was socialism.
I don't know about the VA. That sounds like a socialist
system to me, too. That is a single-payer system provided for
our veterans.
Social Security, oh my, that is definitely socialism,
according to my Republican colleagues.
And a single-payer system would not be any more socialism
than any of those current government-run programs that people
like.
And, in fact, the idea of Medicare for All is really
popular out there. It polls really well. Be careful of your
slams against socialism. People want to have health care.
The United States of America currently pays more for health
care than any other country. Is that right, Mr. Hadley?
Mr. Hadley. Yes, that is correct, both on a per capita
basis and as a percent of GDP.
Ms. Schakowsky. Thank you. And isn't it also true that in
terms of outcomes, we are lower than most of the industrial
countries in the world? Is that also true? Or longevity? Let's
talk about maternal mortality. Is that true?
Mr. Hadley. So for longevity, yes, among the OECD
countries, the United States is below----
Ms. Schakowsky. We are the only industrialized country
where actually our maternal mortality has gone up instead of
down. Is that not true?
Mr. Hadley. That is correct.
Ms. Schakowsky. That is true. So we need a bold plan here.
And I am on every bill to improve health care. I have been for
Medicare for All since many of you have been born. But I am
also the cosponsor of Medicare for America. I helped write the
Affordable Care Act. I am for improving it. I am for all the
plans, because what we have now is not working.
My colleagues talk about wait lists. But your report, Mr.
Hadley, showed that 29 million Americans don't have--are
uninsured right now. They are not even in line. So there are
people who never are going to get the kind of care that they
need right now if they can't pay out of pocket. Isn't that
true?
Mr. Hadley. That is correct. Although, they do seek care
through other sources, charity care and--so there can be some
uncompensated care. But more generally, there are also people
who have insurance that forego medical care because they can't
afford the out-of-pocket.
Ms. Schakowsky. A lot of people. So people are waiting five
weeks, five months, or whatever he said about Canada. How about
your entire life waiting, because we see people die. And in
fact, before the Affordable Care Act came in and Medicaid
expansion came in, people were actually dying, and when we
opened it up, we saw people who had stage four cancer, because
they had avoided going to the doctor.
There was a really bad editorial yesterday, I thought, by
Mr. Scalise, talking about how bad a Medicare for All system
would be.
What effect would that have, if we had Medicare for All, on
women's health care and the full range of reproductive
services? Someone answer that.
Mr. Hadley. So it depends critically on the design of the
system and the services you choose to cover. So in the context
of a single-payer system, we lay out those as design choices,
but we haven't analyzed any of the specific proposals.
Ms. Schakowsky. Did you want to say anything?
Dr. Banthin. Yes. Well, the uninsured women would then get
access to coverage and benefits. So that would be an
improvement.
Ms. Schakowsky. I mean, we have, before the Affordable Care
Act, being a woman was a preexisting condition.
I also just wanted to say to my colleagues, the idea of
choice. You know what, Americans don't love picking an
insurance company. They don't love insurance companies.
Americans want a full, comprehensive package of benefits. You
say they want to choose benefits. No, they want to know that
those benefits are there.
What Americans want is a choice of doctor. And what I heard
you say, Mr. Hadley, was that if there were Medicare for All,
there actually might be more choices of providers. Is that
right?
Mr. Hadley. That is correct. As you could imagine, that all
of the different networks that exist today would be sort of
combined, so that all of the providers would participate and be
potentially available.
Ms. Schakowsky. I yield back.
Chairman Yarmuth. The gentlelady's time has expired.
I now recognize the gentleman from South Carolina, Mr.
Timmons, for five minutes.
Mr. Timmons. Thank you, Mr. Chairman.
I am going to begin by talking about Blockbuster. I went to
Blockbuster all the time as a kid. I loved it. I got two or
three movies. My parents were happy, I shut up, and I was
downstairs watching television.
Blockbuster doesn't exist anymore because Netflix, Apple,
Amazon have driven them out of business. They provide a better
service, higher quality service, cheaper price. That is the
free market. That is capitalism. That is what in many respects
the American system of enterprise stands for.
So what we are talking about today is literally going to
evaporate trillions of dollars of wealth.
I am going to start with insurance companies. So the
largest insurance company in the country is United Health care.
They have 300,000 employees. Last year, they had $226 billion
in revenue.
Shockingly, it is actually headquartered in a member on
this Committee's district. It is headquartered in Minnesota.
And that member is actually a cosponsor on this legislation.
What would single-payer do to United Health care, to their
employees, to their revenue?
So I guess I am just going to start, Deputy Director
Hadley, is it safe to say that a transition to single-payer
health care would be extremely disruptive to the hundreds of
health insurance companies in this country?
Mr. Hadley. Yes. I mean, depending on the role that was
left to them by the system. And most of the single-payer
systems that we have looked at in the world have a very limited
role for private health insurance. And if there is a much more
limited role, then you would expect a substantial reduction in
share value and employment within the health insurance
industry.
But by that same token, there would be the need to have
more people administer the single-payer plan. And so some of
the people who currently administer the health insurance plans
could be employed by the government or its contractors as it
administers the plan.
Mr. Timmons. I guess if we are going to legislate them out
of work, they probably will be looking for a job. Might be able
to find them one in the new system. But it would still
evaporate hundreds of billions of dollars of investment from
the private sector.
So I am going to go next to medical device sales. Fresenius
is a German-headquartered company, but 70 percent of the
revenue came from North America. That is $20.7 billion. They
have 270,000 employees worldwide. But again, 70 percent of the
revenue is from North America. You have to assume that many of
them are here in the United States.
So the next question, Mr. Hadley, is, is it safe to say
that the transition to single-payer would be extremely
disruptive to the medical device sales industry?
Mr. Hadley. Yeah. I mean, we would expect there would be
substantial changes to all of the participants in the health
care system. How the providers of medical devices were
compensated would determine how affected they were, and that is
a design choice for policymakers.
Mr. Timmons. So, again, billions of dollars legislated out
of existence, billions of dollars of private investment
legislated out of existence, and tens of thousands of employees
free to pursue new opportunities. That doesn't seem American to
me. We don't nationalize things here. That is what socialist
countries do, and we have seen how that has gone.
I am going to go last to clinicians. So I spoke to the CFO
of the largest health care provider in South Carolina this
morning, and she told me that it was just virtually impossible
that clinicians would not see a reduction in their compensation
if we went to single-payer. Not to mention the fact that we
would be conscripting them into federal service and likely
result in fewer people being interested in becoming a doctor or
a nurse. That doesn't seem to be a good outcome for the health
care system in this country.
So, I guess, we have been talking about what is wrong with
this, this proposal, and we don't really have a very good
alternative. So the question is, what do we do?
And I would say that the answer lies in aligning the
interests of the interested parties. So you have the individual
who needs to have personal responsibility and make sure that
they are as healthy as possible, diet and exercise. And you
have the government, you have pharmaceutical companies, you
have medical device sales, insurance, hospitals or health care
providers, and clinicians.
So these are the seven interested parties, and we have to
align their interests to reduce costs, maximize the output, and
make our society healthier. We can do it at a lesser cost, but
we have to work together.
And it seems that all we are doing is talking about
Medicare for All, and some people think it is great, some
people think it is terrible. But it is not a solution. It is
not an American solution. It is not a viable solution. It will
never pass Congress.
So we need to work together to find a real solution, and I
look forward to working with everyone willing to align the
interests of all the different parties and find a way to make
our society as healthy as possible.
So thank you, Mr. Chairman. I yield back.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentlelady from Washington,
Ms. Jayapal.
Ms. Jayapal. Thank you so much, Mr. Chairman, for driving
this conversation forward on single-payer health care, and to
the CBO for producing what I think is a very helpful document
and guidance towards what that system should look like.
As Chairman Yarmuth said in his statement, it is not a
question of if, it is a question of when our country has
single-payer health care. And I, along with 109 cosponsors
now--we just added 1, and we will continue to add a couple more
over the next several weeks--have introduced a single-payer
proposal called the Medicare for All Act of 2019.
It had its first historic congressional hearing ever in the
House of Representatives in the Rules Committee. We look
forward to doing that here. I understand I have bipartisan
support for that hearing, because I actually think that this is
exactly the kind of proposal that does address many of the
things that have been laid out in the CBO report.
So, Mr. Hadley, according to the CBO report, how much did
we spend on health care in 2017?
Mr. Hadley. $3.5 trillion.
Ms. Jayapal. $3.5 trillion. And how does that $3.5
trillion--and that is annually, correct?
Mr. Hadley. That was the 2017--that was the amount spent in
2017.
Ms. Jayapal. In 2017. So over 10 years, if we continue to
spend $3.5 trillion, it would be $35 trillion. We are going to
talk about that in a second.
How does that $3.5 trillion, which takes up 18 percent of
our GDP, compare to other peer developed countries?
Mr. Hadley. It is significantly higher.
Ms. Jayapal. Significantly higher than what other countries
are paying for their health systems. So our current system
costs $3.5 trillion. It is actually projected to cost $6
trillion by 2027, the most in the entire world by far.
And yet, we have 29 million people without insurance, which
you pointed out in your report, and another 44 million who are
underinsured. Almost one-quarter of our country, the richest
country in the world, is unable to access health care.
Is a single-payer system capable of providing coverage for
everyone and achieving universal health care?
Mr. Hadley. Yes, a single-payer system could achieve
universal health care.
Ms. Jayapal. That is a yes. I like your answer so much, I
am going to repeat them. A single-payer system can achieve
universal health care. Great.
So unlike our current system, if we move to a Medicare for
All system, or a single-payer system, depending on its design,
of course, we could achieve health care for everyone.
Let's talk about what it can do for costs. The CBO report
provides a great list of design choices for single-payer that
could bring savings for our system, such as administrative
costs. In your testimony you describe the potential for
considerable administrative savings because single-payer
insurance, like Medicare, has significantly smaller
administrative costs than for-profit insurance.
Our doctors and hospitals also have administrative costs of
25 to 30 percent, while hospitals in the single-payer countries
spend less than half of that.
This is a huge drain of time and resources spent dealing
with for-profit insurance and billing at the expense of the
health of patients.
And another great benefit of a single-payer system is that
when you bring everyone into one system, you gain significant
market leverage.
So compared to a for-profit insurance company, would a
single-payer system have more leverage to negotiate better
prices for hospital costs?
Mr. Hadley. Yes. Under the current system insurance
companies' market power is fractured. If that were combined in
a single-payer system, there would be more leverage, and it
would depend on the design of the system to see how the
government would act on that leverage.
Ms. Jayapal. So we could use the tremendous leverage of
government power and a large marketplace, essentially, a large
system of consumers, to negotiate the best prices for the
American people, which I think is exactly what people want us
to do.
And a single-payer system like Medicare for All would also
bring us universal health care coverage, as well as market
power, to generate even more savings from hospital costs. And
we can use the same principle to reduce drug prices so that we
are not paying twice what other countries are paying as we do
now.
So there is a clear economic case for Medicare for All. And
I wanted to read from a letter that came from over 200
economists yesterday. This is Economists in Support of a
Medicare For All Health Care System, an open letter to the
Congress and people of the United States. And I will just read,
Mr. Chairman, from the first paragraph.
``As economists, we understand that a single-payer Medicare
for All health insurance system for the United States can
finance good quality care for all U.S. residents as a basic
right while significantly reducing overall health care spending
relative to the current exorbitant and wasteful system. Health
care is not a service that follows standard market rules. It
should, therefore, be provided as a public good. And evidence
from around the world demonstrates that publicly financed
health care systems result in improved health care outcomes,
lower costs, and greater equity.''
I ask unanimous consent to introduce this into the record.
Chairman Yarmuth. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Jayapal. Thank you, Mr. Chairman.
I will just end by saying, here is what--people who are
tuning in--here is what you get from a Medicare for All
universal health care system.
First of all, you get comprehensive benefits, like medical,
dental, vision, mental health, prescription drugs, long-term
care, all of this with no copays, private insurance premiums,
or deductibles, and you get more choice than you have now
because there is no out-of-network hospital or doctor. Everyone
is in network, and the same hospitals and doctors you see, you
never have to cut pills again or be the one in five who skipped
prescriptions because Medicare for All would actually negotiate
those drug prices down.
So, Mr. Chairman, I can't wait to have the hearing on my
bill. I can't wait to take on the Republican colleagues across
the aisle who think that this is somehow a bad thing. The
American people want this, and I am ready to work to deliver
it.
Thank you so much.
Chairman Yarmuth. The gentlelady's time has expired.
I now recognize the gentleman from Tennessee, Mr. Burchett.
Mr. Burchett. Thank you, Mr. Chairman, Ranking Member, and
members of this panel.
I would, knowing coming in here, I would probably rather
take a beating than come in here. And I have taken a beating,
you can ask some of my colleagues on my side of the aisle. And
I appreciate you all, your all's willingness to be here.
And, Mr. Hadley, these are some questions I have for you.
I know that you have previously served as general counsel
for the CBO. Is that correct?
Mr. Hadley. That is correct, for eight years.
Mr. Burchett. Yes, sir. Okay.
The CBO report states: By owning and operating hospitals
and pooling physicians, the government would have more control
over the health care delivery system. They would also take on
more responsibilities.
I am sure you are aware of the Takings Clause under the
Fifth Amendment, I believe it is the last clause in the Fifth
Amendment. Has the CBO mentioned or referenced those issues
from a budget perspective in past records, scores, or studies?
Mr. Hadley. So Fifth Amendment takings issues have arisen
in previous cost estimates, and when we have looked at them it
has typically been in the context where a government action was
going to be clearly taking private property, and we estimated
the cost that the government would pay.
So within the Treasury, there is what is called the
Judgment Fund. It is a permanent, indefinite appropriation to
pay claims against the United States. And one of the types of
claims that that fund can pay are constitutional violations
like a Fifth Amendment taking. And so we have, on occasion,
estimated the cost of the federal government of paying that
compensation.
Mr. Burchett. Okay. Would you be able to show those in a
cost estimate of one of the specific proposals that are out
there?
Mr. Hadley. We would be happy to send you one of the--one
of those cost estimates.
Mr. Burchett. Great. And what design considerations do you
weigh relating to the federal government taking property and
compensating private sector entities?
Mr. Hadley. Well, so, if we are talking about a physical
taking of property where they were actually taking over the
property themselves, then the analysis is mostly on the side of
trying to figure out how to value that property and what its
value before the taking was. If it is a, as you know, if it is
a regulatory taking, then it is a more complex analysis.
Mr. Burchett. Right. Of course, they would be taking a
hospital. There would be physical property. And I assume there
would be some formula for that?
Mr. Hadley. We would try to figure out what the
compensation was owed for the value of that asset.
Mr. Burchett. Okay.
How would you approach those issues if the government were
to take these hospitals just for public use? Would there be a
separate way of doing that or would there be something out
there that you could rely on?
Mr. Hadley. Well, in both cases we would be looking at the
degree to which government control was being exercised.
So when we think about the boundaries of the budget and
what is included within the federal budget, we look to the
degree of federal control as one of the primary factors for
when all of the activities of an entity are included within the
budget.
So there are a few instances where there are private
entities that are so thoroughly controlled by the federal
government that all of their cash flows are considered to be
federal cash flows.
Mr. Burchett. And what would you think of if they were to
take one of these hospitals or private companies without
compensation for the takings?
Mr. Hadley. Well, we would look at the specifics of the
legislation and of the action, and it may be difficult for us
to gauge exactly what a current administration or a future
administration would do with the authority that they are given.
But with those caveats aside, we would look to see what the
legislation would do and how much it would cost. And one of the
components of the cost that we would consider would be claims
against the government.
Mr. Burchett. Okay. Thank you, Mr. Chairman. I yield back
the remainder of my time.
Chairman Yarmuth. The gentleman yields back.
I now yield five minutes to the gentleman from California,
Mr. Panetta.
Mr. Panetta. Thank you, Mr. Chairman. I appreciate this
opportunity.
And let me take this time to thank the witnesses for being
here, as well as their preparation in order to be here. Thank
you very much. I apologize for coming in late. I had another
hearing, so bear with me if I ask questions that you have
already heard.
Obviously, I would like to not only thank the witnesses,
but again thank the Chairman for holding what many here in this
room and many here across this country consider a very
important hearing. Obviously, it is important to the families
in my district on the central coast of California who are very
worried about their health care.
And we all understand that the Affordable Care Act was
clearly an important step in the right direction. We also know
that there is a lot more work to do.
Unlike 97 percent of California's residents, many of my
constituents are unable to shop around on the individual market
in order to choose the best insurance for themselves and their
families. In two out of the four counties in my district,
Monterey and San Benito Counties, there is only one insurer on
the exchange marketplace. As you know well, that lack of choice
sharply increases premiums, puts many of my constituents in
high deductible plans, and it creates a lot of high out-of-
pocket expenses.
To make matters worse, Congress reduced the individual
mandate penalty to zero, and the Trump Administration proposed
policy changes that would promote insurance plans that do not
meet CBO's definition of health insurance.
These actions have left many, many of my constituents
without health insurance and actually provided limited options
for many of them who want to seek insurance on the marketplace.
Can any of you explain what role the Trump Administration's
expansion of short-term limited duration, STLDs, as we know
them, those types of plans and association health plans, what
they have played on expanding coverage in the individual
market, in the sense that have these actions increased access
to quality health insurance, or have they helped people with
preexisting conditions? If you can talk about that.
Dr. Banthin. So we believe that short-term limited duration
plans will become more common starting this year because of the
change in regulations.
Some of those plans will not provide coverage that meets
what we consider to be coverage. Our definition includes a plan
that provides some comprehensive major medical benefits, that
is, would cover a serious illness. So some of these plans have
limitations on what they pay, and so we don't consider them
coverage.
However, we do think some of them will continue to provide
major medical benefits, often with very high deductibles, even
higher than those in the marketplace.
They are underwritten. They will sell them to everybody,
but if they decide you have used that coverage for a
preexisting condition they may not pay that bill retroactively.
Right now, those plans are small in number, we estimate
fewer than 2 million.
Mr. Panetta. Understood.
Now, in my area, there is, obviously, a good amount of
rural area, and so we have a lot of rural hospitals as well. I
was wondering if you could address what a single-payer system
would do to help reduce costs for these types of hospitals in
those rural areas.
Dr. Banthin. So many rural hospitals, I don't know about
your district, are in--they are called critical access
hospitals, and they receive higher payments than would be
otherwise provided under Medicare because they are recognized
as critical access.
They often treat a lot of public pay patients, as well as
patients who are uninsured. It is possible under a single-payer
that some of those rural hospitals would actually see--be
better off and get more payment for their patients than they do
today because some of them are uninsured.
Mr. Panetta. Other countries that have single-payer
systems, how have they dealt with the rural hospitals, and how
has that contributed to the rural hospitals, if you know? Sorry
to put you on the spot.
Dr. Banthin. I am sorry. I don't know about rural hospitals
in other countries.
Mr. Panetta. Okay.
Dr. Banthin. We can look that up and get back to you.
Mr. Panetta. Okay. I would appreciate that.
Anybody else?
Voice. No.
Mr. Panetta. Okay. Thank you.
Mr. Chairman, I yield back.
Chairman Yarmuth. The gentleman yields back.
I now yield five minutes to the gentleman from Texas, Mr.
Crenshaw.
Mr. Crenshaw. Thank you, Mr. Chairman. Thank you for this
opportunity. I think it is time to put to rest the many false
promises of Medicare for All and single-payer systems.
Mr. Hadley, I want to start with talking about supply. On
page 22 of the report from the CBO, you say: Studies have found
that increases in provider payments rates lead to a greater
supply of medical care whereas decreases in payments rates lead
to a lower supply.
Is this correct?
Mr. Hadley. That is correct. That is what the report says.
Mr. Crenshaw. So price controls, which are necessary when
moving everyone under one payment rate, it affects supply,
correct?
Mr. Hadley. Yes, it can.
Mr. Crenshaw. A single-payer system, using current Medicare
reimburse rates, decreases the number of doctors. They simply
don't get paid enough to keep up with expenses.
Second point, triage. Under single-payer systems, do
providers typically bill for whatever they want, or is there an
approved treatment list?
Mr. Hadley. Typically, there would be an approved treatment
list.
Mr. Crenshaw. Thank you.
Generally in single-payer systems, is the government or a
government body in charge of listing out national guidelines
and standards for practice that doctors must follow?
Mr. Hadley. So usually it is a set of standardized
practices, but that can be done sometimes by an independent
advisory board and sometimes----
Mr. Crenshaw. Somebody has to do it.
Under these systems, what are common methodologies for
deciding what is listed on the national guidelines or
standards? Is it a cost-benefit analysis?
Mr. Hadley. Yes. They look at cost effectiveness, but then
for the prices for those sometimes it is through negotiations.
Mr. Crenshaw. Sure. So what we get to--maybe it is a
government bureaucrat, maybe it is a third party--but a
bureaucrat is using a cost-benefit analysis formula that will
decide what a patient is approved for.
The third thing I want to hit, innovation. So we have two
issues here so far. We have lower payments to providers and a
government-run list of approved care options. So we have to ask
ourselves, why would anyone invest in new, cutting-edge medical
technology or medications? You won't get paid as much. You are
not even sure the government will allow doctors to use your new
innovation. How do you think that changes the calculus of
investors? It changes it enormously.
The fourth thing I want to hit, quality of care. In your
report, you write: If the number of providers was not
sufficient to meet demand, patients might face increased wait
times and reduced access to care. Is this correct?
Mr. Hadley. That is correct.
Mr. Crenshaw. And later in your report you say: Public
plans might not be as quick to meet patients' needs, such as
covering new treatments. Correct?
Mr. Hadley. Correct.
Mr. Crenshaw. If we measure quality of care in wait times
and innovative new care, wouldn't we agree that quality is
decreasing? So there is less providers, there is less
innovation, longer wait times, and overall less quality.
This isn't even the worst part. Let's move on to who this
might actually hurt the most.
Director Hadley, in your testimony you write: The public
plan would provide the same set of health care services to
everyone eligible, so it might not address the needs of some
people. For example, the public plan might not be as quick to
cover new treatments and technologies as would a system with
competing private insurers.
In your testimony, you are saying that a single-payer
system might not address the needs of some people who need
access to new treatments and technologies, correct?
Mr. Hadley. That is correct, depending on the design of the
program.
Mr. Crenshaw. Would you say that some of these people who
need new treatments, they could be patients with cancer,
genetic disorders, patients who suffer from two diseases, like
fatty liver disease or diabetes, all of them have very
complicated, complex conditions?
Mr. Hadley. It would really depend on how quickly and which
technology or treatment was being provided and which group that
affected.
Mr. Crenshaw. Sure. But in your testimony you said some
people, and it could easily include these people.
Could those people that I just listed also be described as
people with preexisting conditions?
Mr. Hadley. Yes.
Mr. Crenshaw. So a single-payer system is worse for people
with preexisting conditions. A private system is better for
people with preexisting conditions than a public system.
Let's talk about what we have learned here. Let's summarize
it.
A single-payer system has to set prices, and if set at
current Medicare rates, which all plans call for, then this
drastically cuts the money going to doctors and hospitals. They
will have to cut resources. They will hire less. They will buy
less equipment. It is simple economics.
Because there are less doctors, wait times will increase.
With this newfound world of less doctors and more patients, the
government will have to carefully screen or triage who gets
care and who doesn't and what kind of care they get, all based
on bureaucratic cost-benefit analysis.
Innovators will be less likely to invest in a system where
the payoff is significantly less because they can't be sure
whether the government bureaucrat will even allow doctors to
use that new medical device, medication, or new procedure.
And, counterintuitively, the system ends up hurting the
patients with the most unique conditions, also known as
patients with preexisting conditions, because their care
requires flexibility and innovation, both of which are
drastically reduced in a single-payer system.
Thank you, Mr. Chairman.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Missouri,
Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman.
Welcome to the Democrat House Budget Committee. We are 37
days past the statutory deadline for a budget, and CBO is here
today to discuss an analysis of a bill that would overhaul our
health care system so dramatically that they can't even
estimate how much it would cost.
Without a budget and without talking in real numbers about
how much this bill would cost the American public, we are
wasting our time today. But since you want to talk about
single-payer health care systems, let's look at the results of
government-run health care.
Canada is celebrated by my liberal friends as a prime
example. If a Canadian sees their primary care doctor for a
checkup and their doctor recommends that they go see a
specialist for a closer look, it could take nearly 20 weeks.
Twenty weeks.
If a patient has knee problems and is struggling to walk,
after their first doctor's visit it will take 39 weeks to have
their knee surgery. If their knee problem gets worse while they
are waiting, they might not be able to walk. That is when
people miss work, when they miss their wages, and they can't
attend family events like their kids' sporting events.
How about cancer? The median time for a patient with cancer
to start treatment is nearly a month. Nearly a month. Imagine
being diagnosed with cancer, having to wait four full weeks
before getting treated in Canada.
In England, in England's single-payer health program, the
British National Health Service cancelled 50,000 nonemergency
operations, like cataract surgery and hip and knee surgeries,
including replacements.
Bottom line, single-payer would impose long wait times and
delays even for basic procedures and emergency medicine.
What about cost? CBO hasn't even attempted a cost estimate.
Medicare for All by other projections will cost $32 trillion
over 10 years. That would cost every household in America
$25,000 a year. Every household in America $25,000 a year.
Our seniors who currently rely on Medicare would have their
care disrupted, too. After a lifetime of work to earn their
Medicare benefits, America's seniors would be forced into a
one-size-fits-all government-run health care system no longer
tailored to the needs of our older citizens, but one that
rations care and limits their access.
CBO says it themselves, quote: ``Patients might face longer
wait times or a decrease in quality,'' close quotes, and could,
quote, ``worsen if provider payment rates were simultaneously
lowered or more stringent cost containment methods were
implemented,'' close quotes.
You thought IPAB was bad. We are talking about the real
life death panels right here.
This is what Medicare for All gets you. Americans would
have no choice but to pay more to wait longer for lower quality
care.
Let's talk about access to care for rural Americans. Mr.
Hadley, an alternative scenario reported--published earlier
this year by the Medicare Trustees showed that looming
physician cuts and cuts to hospitals due to ObamaCare's
productivity cuts would put most providers out of business.
My question is, what happens in this scenario when we
assume all providers get Medicare rates?
Mr. Hadley. That is a complicated question for thinking
about what it means for rural providers. So in general you
would expect that the total amount of compensation going to
hospitals would go down because right now commercial rates are,
on average, higher than Medicare rates. So if you went to the
lower level, compensation would go down, and so margins would
go down.
But there is an important caveat for all hospitals, which
is what is the degree of uncompensated care that they are
currently providing, and if that became compensated care, then
that would make up some of that difference.
In addition, in the context of rural hospitals, a greater
proportion of them have lower margins than urban hospitals, and
a greater proportion of them are running negative margins than
the urban hospitals, but that is in part because they already
serve a greater share of patients with public insurance plans.
And because of that, they are already both receiving less, they
would be somewhat less effective, but they also have less
margin to work with.
Chairman Yarmuth. The gentleman's time has expired.
I now yield five minutes to the gentleman from Georgia, Mr.
Woodall.
Mr. Woodall. Thank you, Mr. Chairman.
I am a little embarrassed. I hadn't thought about what Mr.
Smith said, that we are here talking about doubling the size of
the federal budget, and here on the Budget Committee we haven't
passed a budget yet.
I know it is tough to find 218 votes on one side of the
aisle or the other. But I have said it before and I will say it
again, you are the right leader, colonel Womack is the right
leader to bring a bipartisan group together around a budget.
It just seems silly that we are going to take over one-
sixth of the American economy, and that takeover is going to be
conducted by a government that can't even figure out how to pay
its own bills year to year. We can do it; we just haven't done
it.
Let me start, Mr. Hadley. I had the pleasure of being on
the first Medicare for All hearing on the Rules Committee, and
we learned there that Medicare for All abolishes all of the
Medicare Advantage programs, which about half the seniors in my
district take advantage of. So that Medicare for All means
something for all, but you are going to lose access to Medicare
Advantage.
What you say in your report, if I am reading it correctly,
is thinking about utilization management as one of the cost
containment procedures. You say it would impose new constraints
on the choice of health care services for those who were
previously enrolled in the Medicare Fee-for-Service program. Is
that correct?
Mr. Hadley. That is correct. You could have--I mean, using
utilization management as a technique to control cost is an
option for policymakers, and there are a variety of different
strategies you could pursue, and we detail those in the report.
Mr. Woodall. But our current Medicare beneficiaries, those
who have been paying in through their entire life payroll tax,
largest tax 85 percent of American families pay, folks today
are not burdened by that constraint. Is that correct?
Mr. Hadley. Correct. In general, most of Medicare's fee-
for-service or voluntarily----
Mr. Woodall. They either opted into a plan that is going to
go away even though they chose it, or they have stayed in
general Medicare, which is also going to go away because it is
not subject to those utilization procedures.
You said something in response to a question earlier about
improper payments. The question was whether or not improper
payments would be higher under a Medicare for All system, and
you said it would depend. Improper payments could be higher or
lower than today depending on the investment in fraud
prevention.
You all look at our numbers every year. Is it CBO's
position that we have not yet reached the maximum utility of
fraud prevention efforts in the Medicare system, that if we
hired more fraud preventers we would get more than a dollar-
for-dollar return on that in today's system?
Mr. Hadley. Yes, that is correct.
Mr. Woodall. About how much elasticity is there? Where are
we? Are we 10 percent short in fraud preventers? Are we 20
percent short? It just seems like among the things that we
could all agree on, nobody wants to see improper payments go
out the door. It is wasted resources. How short are we?
Dr. Kling?
Dr. Kling. I don't have the exact numbers, but we are not
that close to the threshold.
Mr. Woodall. I would appreciate that. You don't have to
create, reinvent the wheel for me, but if you could point me in
the direction after the hearing, I would love to try to build
some bipartisan consensus on fixing that issue. I think that we
could.
The report says a single-payer system that collected
comprehensive data on patients' use of health care services
could potentially manage available resources more efficiently.
That certainly makes sense, I don't think that was a radical
conclusion. But what was surprising is you went on to say, in
the United States public programs, those single-payer systems
that we have today, have implemented few utilization management
programs.
Why do you think that is, that you have identified an area
where we could do better, and yet, in the programs where we
have an opportunity to do better run at the federal level, we
are not doing that?
Mr. Hadley. Well, so one of the reasons is in general we
are still operating under fee-for-service in many areas. But
also, in order to have that degree of coordination, you need
more providers talking with each other. And that means, you
know, one way to get there would be having an IT system with
medical records that are completely interoperable. But that is
not the only way. You could do it in some other ways.
But I think kind of the two main reasons are that so far we
have chosen to do things as a fee-for-service or we have
struggled with our own systems.
Mr. Woodall. Well, I would point that out, Mr. Chairman. I
think Mr. Hadley is right. In our programs like Medicare, like
Medicaid, that are single-payer systems, for whatever reason,
the political folks who craft those programs, the policymakers,
have chosen to keep them as fee-for-service systems, to not
implement aggressive utilization management.
We would have to implement aggressive utilization
management to bring down costs in a Medicare for All single-
payer system. I would like to explore why it is that we have
not done that in places that we could do that today to bring
down costs. And if it is because the American people are averse
to it, perhaps we should learn that lesson first with a smaller
pool before we expand it to a larger pool.
I am not sure you all changed anybody's mind today, but I
believe that CBO makes it a point not to try not to change
anybody's mind and just provide good data. So thank you very
much for doing that.
Chairman Yarmuth. Exactly. That was not their role, to try
to change people's minds.
I thank the gentleman.
And now I yield 10 minutes to the Ranking Member, Mr.
Womack.
Mr. Womack. Thank you, Mr. Chairman. And again, I
appreciate the opportunity to have this conversation today, and
perhaps there will be more to come on these types of programs.
I want to go to my last thought first, and that is, Deputy
Director Hadley, let's assume for the sake of the argument that
the United States of America did move to a Medicare for All
type structure, universal health care. Is that something that
can be done as an experiment with the population at large, 329
million people? Or, if we went to that program and it didn't
work, what then? So in that scenario, what would happen? In
other words, we either have to be all in or not all in. Is that
correct?
Mr. Hadley. So you could have an extended period of
transition. But if you go all in and then that results in
insurance companies dropping in value and the disruptions to
workers, all of that that we detail in the report, if that
occurs, then how we would respond is very difficult to
understand.
And I think this is one of the reasons why, looking at
Taiwan, they thought about moving to their system for several
years before they started to implement it.
Dr. Kling. So it would certainly be possible for a state or
a group of states to implement a single-payer system and have
the rest of the country observe how that was going and then
make other decisions later. That is a choice that is up to you.
Mr. Womack. Kind of a pilot type project. All right.
Deputy Director Hadley, name me something that the federal
government does really well, really efficiently, good cost
efficiency.
Mr. Hadley. It is very efficient at distributing Social
Security payments.
Mr. Womack. Okay. So Social Security. That is a good topic.
What is the health of Social Security right now?
Mr. Hadley. It is going to--the trust fund is going to run
out of resources early in the next decade.
Mr. Womack. Okay. Can you pick another? What else do we do
well?
Mr. Hadley. We defend the country.
Mr. Womack. We defend the country. But defending the
country requires a lot more than just the federal government's
share of it, i.e., there is a defense industrial base that has
a certain role in it, correct? I mean, they build airplanes,
they build ships, tanks, those kinds of things.
Mr. Hadley. That is correct.
Mr. Womack. Would the government need to own that in order
for it to be better?
Mr. Hadley. No. And we talked about as one of the key
features, the key choices for policymakers, you could have a
single-payer system that operated, was administered by federal
contractors, or it could be done by federal employees.
Mr. Womack. Let me ask this. How does the federal
government do in the area of border security right now? There
has been a lot of talk about that.
Mr. Hadley. It is my impression that it is not meeting the
goals of some policymakers.
Mr. Womack. Okay. What about in terms of infrastructure?
There has been a lot of talk about infrastructure. How are we
doing there?
Mr. Hadley. It is my impression that it is not meeting the
goals of some policymakers.
Mr. Womack. Okay. My friend Mr. Woodall talked briefly
about budgets and appropriations. I mean, we are almost four
months away from the beginning of a fiscal year, October 1, and
we don't have a budget. We don't have agreed-upon numbers, yet
the Appropriations Committee is marking up to numbers that have
not been agreed to. So how are we doing in the area of budgets
and appropriation?
Mr. Hadley. So we have often missed the deadlines for
providing appropriations on time.
Mr. Womack. Why is that?
Mr. Hadley. So I think, in general, it is because of the--
we haven't found the political will to find agreement.
Mr. Womack. So in the expansive world of policy, we do have
the political piece of this thing with which to deal.
So explain to me why health care would be any different. If
we are not doing very well at some of the other fundamental
jobs that are in front of Congress, and I would argue that
budgets and appropriations is the most fundamental, then how
can we expect that government-run health care, as is being
suggested by the other side, is going to be that one area where
we do extremely well, very cost-efficient, without the
political implications that go with some of the other policy
issues? How, then, can we expect that government-run health
care is going to be a good deal for Americans?
Mr. Hadley. Well, we say in the report that there are a
couple of areas where it is unclear what would happen in part
because of political pressure. So, for example, we talk about
in negotiating the prices of prescription drugs that it is not
clear what would happen in terms of actually exercising that
power with the threat of excluding drugs from the formulary.
Similarly, we talk about this idea that a single-payer
system would have a greater incentive to invest in preventive
services that are shown to reduce costs, but it is not clear
whether the system would act on those incentives. But it is up
to you and your colleagues to decide how to design the system
to act and what discretion to give it and also what choices to
make for it.
Mr. Womack. In my opening statement, you heard me talk
about the expected cost of government-run health care and how
would we pay for it, and so we talked about things like, well,
we could raise taxes. That is one way we could pay for it. We
could reduce the benefit structure. That is another way we
could do it. We could introduce copays and this sort of thing.
And then I said at the end of my comment, in those four areas
that I talked about, that likely it would be all of the above.
Would you agree or disagree with that?
Mr. Hadley. That is again a choice for policymakers, but
the more you spread the cost across different financing
structures, the less disruptive any one of them would be.
Mr. Womack. I would also like to ask a question about what
I call the suppression of ingenuity or the suppression of
ideas. I think Mr. Crenshaw referred to it a little bit.
And that is, in a government-run area where we have a
prescribed list of things that we, the government, would deem
as acceptable or appropriate in treatment, that the impact it
would have, government-run health care, on suppressing
innovation, ideas--we talked a little bit about the provider
network, we have a lot of young people today that are going off
to school and incurring obscene numbers that I have seen on
student debt in order to become professions--how would a
government-sponsored, government-run health care suppress
innovation, ideas, and the ability for the--or the desire for
people to want to get into the trade?
Mr. Hadley. Well, this is largely dependent on the set of
choices that policymakers make. But if, for example, they chose
to constrain costs by lowering provider payment rates, that
could drive some innovation to be more efficient to live within
those rates.
But if we take, for example, the context of prescription
drugs, on some level--prescription drugs are a global market.
The United States is the largest market that companies turn to.
If the prices paid in the United States are substantially
lower, they might be less likely to enter the United States
market.
Also, because the revenues have gone down, they might try
to shift those costs to other countries by raising their costs
there. But if they are unable to do that, then we might see a
reduction in research and development as a result of the
reduction in payment rates.
Mr. Womack. A couple of final questions.
Under a Medicare for All structure, who would own
facilities? Who would own hospitals?
Mr. Hadley. That is a choice for policymakers. In some
countries, they are private not-for-profits. In some countries,
they are owned by the national health service.
Mr. Womack. And we talked about the takings issue, that if
the government chose to own those, then there would be a
compensation factor for the present hospitals out there, I
suppose.
And, Ms. Banthin, you talked about the fact that you
thought that rural hospitals, critical access hospitals, and I
have got a couple in my district, could benefit. Can you
explain how they would benefit?
Dr. Banthin. Yes. Because they take care of so many
Medicaid and Medicare and uninsured patients today, they treat
a greater share of uninsured patients than some more urban
suburban hospitals do. They could actually get more revenue
under a single-payer if Medicare payment rates were provided
for every patient.
Mr. Womack. And then, lastly, if I could just take a couple
of more seconds. It was also stated earlier that under a
universal coverage like this that the likelihood is is that
private business out there would pass along the savings, as it
were, to the employees in the form of higher wages.
How confident are any of you that there will be anything
left over, that the cost associated with initiating universal
coverage would, indeed, be a tax increase on these people? How
confident are you that there would be any residual benefit that
would be passed along to the everyday consumer?
Mr. Hadley. It really depends on the design of the system.
But I think what Dr. Banthin was referring to was the idea that
if they didn't have to pay premiums to purchase health
insurance, that that cost would be eliminated. But on the other
hand, the tax increases or premiums paid to pay for the single-
payer system would increase.
Mr. Womack. To me, that seems a bit problematic, but
anyway.
Mr. Chairman, I again thank you for the opportunity to have
this hearing, and hopefully, we will have more discussions.
Chairman Yarmuth. Absolutely. Thank you, Ranking Member.
I yield myself 10 minutes for my questions.
First of all, let me thank you all again, not just
individually, for your responsiveness and your testimony, but
also to CBO as a body. I think this report was extremely
professional, was extremely thoughtful and comprehensive, and I
think it will be very useful for all of us as we continue to
discuss the delivery of health care in the country. So I
applaud you for that.
You know, I have been now involved in health care
legislation in the House of Representatives for 10 years. Some
of my colleagues on the other side, as a matter of fact most of
them, have not been involved in it for that long, at least not
in this body.
And it has been fascinating to watch the discussions on
health care with regard to my Republican colleagues, because
when we spent all of 2009 and part of 2010 writing the
Affordable Care Act, the Republicans in the House then gave us
absolutely no input, no cooperation, and basically no interest,
but lots of opposition.
And I don't know what their resistance to trying to find a
better way to deliver health care in this country was, but it
was very, very obvious.
Then we lost the majority in 2010. And then, for the next
eight years with Republicans in the majority, we got 65 or so
votes to repeal the Affordable Health Care, or aspects of it,
and never an alternative proposal. I assume that they wanted to
go back to pre-ACA days.
And I remember well in 2009 when premium rates on the
commercial system across the country were rising at 38 percent,
where 18,000 unnecessary deaths occurred because of lack of
health care, where 800,000 bankruptcies occurred because of
health care costs.
I suppose that is the glory days for Republicans in
Congress. They are not for me. They are not for my colleagues
on the Democratic side.
And I challenged them on many occasions. I remember sitting
in the Rules Committee one day testifying. I said, you know,
there is a reason you don't have an alternative to the
Affordable Health Care. The only alternative is a single-payer
system, and you don't want to go there.
That is still the case. And if there had been an
alternative somewhere in those eight years, I suspect Heritage
Foundation or Club for Growth or Cato or somebody would have
come up with an alternative plan for delivering health care in
this country.
Oh, by the way, part of the ACA came out of the Heritage
Foundation. So I was amused a little bit when--I forget which
member, I think it was Mr. Roy, talked about, oh, the ACA, all
Democratic ideas. Actually, the insurance part of it was a
Republican idea, that we embraced, that they opposed. It was a
good idea when Mitt Romney introduced it in Massachusetts, but
not when we tried to incorporate it in a plan for America.
So I find this discussion very interesting. And a lot of my
colleagues today, because I think we would do it, too, if they
got a big number, like $32 trillion, that they are going to
make the most of it. They spent a lot of time talking about
that, the Mercatus study, which is the cost of single-payer
health care.
However, they neglected to mention the report's findings
that I find most interesting. The authors of the Mercatus
report said that national health spending would be 4 percent
lower in 2031 under a single-payer system compared to current
law. So while that $32 trillion sounds like a lot of money, and
it is a lot of money, it was significantly less than if we
hadn't made a change to single-payer.
They have, I know, kind of tried to mock the fact that we
didn't ask for a score on the Jayapal bill. Well, two reasons
we didn't ask for a score.
One is we have several bills represented on this Committee.
As we have seen through your report, there are thousands of
ways you could construct a single-payer system and that a score
on one combination of those, which is never going to be done
exactly the way it was introduced, is not particularly useful.
But there have been analyses done of single-payer bills in
addition to the Mercatus Center. The University of
Massachusetts at Amherst at the end of last year issued a 200-
page report which focused on the first Medicare for All bill,
which was introduced by Senator Sanders in 2017.
Among the findings of that report, it would lower cost for
people at lower and middle incomes and increase costs for those
at higher incomes. Middle-income families would see their net
costs for health care fall by 2.6 percent to 14 percent.
But it also said that overall cost of the system--again,
this is Bernie Sanders' bill--would drop by 19 percent. That is
a pretty substantial saving, a 19 percent saving.
Again, what we have seen from this hearing, and once again
I applaud you, is that there are so many ways of doing this
that there will be an enormous matrix with a lot of different
numbers on it. And when we actually sit down and try to
legislate in this area, we won't be doing it on this Committee,
we will be considering all of those.
There are a number of things that have been said today that
I absolutely have to comment on. It is one advantage of going
last, I guess. And I am sorry most of the members have left,
because I would love to ask them about it.
But Mr. Crenshaw came up with some of the most tortured
logic I have ever heard to get to the point, to the claim,
that, as I understood what he was saying, that people with
preexisting conditions would be worse under a Medicare for All
system.
Is that the way you understood what Mr. Crenshaw was
saying? Did you get the same impression I did, Mr. Hadley?
Mr. Hadley. So it was my impression that he thought that a
Medicare--the single-payer system would be worse for people
with preexisting conditions.
Chairman Yarmuth. Can you imagine how that would be
possible?
Mr. Hadley. It could be possible depending on the design of
the system.
Chairman Yarmuth. Would any system that Republicans have
devised be better off for people with preexisting conditions
than a Medicare for All system would be?
Mr. Hadley. I don't know. It is hard to make that
comparison.
Chairman Yarmuth. So he also made the point that people
under a Medicare for All system might not have access to the
latest technologies and innovations. Do patients under today's
system or yesterday's system have access to the latest
innovations and technologies?
Mr. Hadley. Some do.
Chairman Yarmuth. Some do. Many are rejected. Many
experimental procedures are not approved for many individuals.
Isn't that correct?
Mr. Hadley. That is correct.
Chairman Yarmuth. Correct.
I also thought it was interesting that Mr. Stewart said
that citizens don't want to change their insurers. They don't
want to choose--they want to choose their insurers. And I
thought that was interesting because just a couple years ago
Utah decided to-- the people of Utah voted to expand Medicaid,
which would mean a lot more people would be out of the private
insurance market and into expanded Medicaid.
So a substantial percentage of the population in his state,
at least, thought a Medicaid system that expanded to cover more
people was desirable, and those people probably don't care
about choosing their insurers.
With two minutes left, I want to dive a little bit deeper
into this issue of taxes. It is very convenient to divide $32
trillion by 300 million people and get a number and say this is
what it is going to cost everybody. Is that a reasonable or
thoughtful analysis of what the cost would be, Dr. Banthin,
since you are shaking your head?
Dr. Banthin. Sorry. No, that is too simple. There are lots
of details involved in devising a tax financing system.
Chairman Yarmuth. But when you consider financing the
taxing system, you are looking at somebody who now is paying
their share of the premium through their employer. They have
copays. They have deductibles. And those things would net out
of any additional tax increase if they weren't paying it as
part of a single-payer system, correct?
Mr. Hadley. That is correct. When we are looking at the
total burden on people, we would be looking at how much they
are paying net. But I also want to be clear that this would be
an estimate that the Joint Committee on Taxation and CBO would
do together. Remember, we look to them for their expertise in
tax policy.
Chairman Yarmuth. Right. And also, presumably, we could
construct and probably would construct this plan to pose an
additional burden on employers since if we didn't, we would be
ridding them of--it would be one of the greatest corporate
bailouts ever if we took the responsibility for paying for 160
million people off of them and put it on the taxpayers. That
would be a pretty good gift to corporate America, wouldn't it,
if we didn't charge them more some way?
Dr. Banthin. I mean, economists believe that workers, not
employers, bear the ultimate cost of their health insurance.
But it would certainly save employers a lot of administrative
costs, yeah.
Chairman Yarmuth. One final thing. Canada is mentioned a
lot of times and in a very mocking way. I just want to share a
story that I heard or read not too long ago. It is in a book
called ``The Healing of America'' by T.R. Reid, which is a
fantastic look at how insurance is provided across the world.
And if anyone reads it, I think they would be envious of a lot
of other places.
But there was a poll done in Canada a few years ago as to
who the most famous, most important Canadian in history was.
And finishing by a wide margin in first place, beating out
Wayne Gretzky and Celine Dion and many others, was the
gentleman who invented the Canadian health care system.
So despite all these stories of gloom and doom about the
Canadian system, the Canadians are very happy with their
system. Not that we are trying to emulate that in any respect.
Ms. Jackson Lee. Mr. Chairman?
Chairman Yarmuth. Ms. Jackson Lee.
Ms. Jackson Lee. I don't want to interrupt you, but I did
not want to miss the opportunity for a moment.
Chairman Yarmuth. All right. The gentlelady is recognized
for five minutes.
Ms. Jackson Lee. Mr. Chairman, did you finish getting your
point.
Chairman Yarmuth. I was just going to conclude the hearing.
Mr. Womack. His time has expired.
Chairman Yarmuth. My time has expired.
Ms. Jackson Lee. Then let me express my appreciation to
you, Mr. Chairman. I was not dilatory. I was in a markup. I
apologize to the Committee. But my passion for this work
warranted a sprint over to this Committee.
So let me, first of all, indicate that I am sure you have
heard from our members how committed and sincere we are on the
basic question of health care for all Americans. And we do that
on the basis of those that we see with preexisting conditions,
for example.
But let me tell you what I base it upon. I base it upon
having been here as a senior member for more than two decades
and seeing the transition of what we had to offer. And then it
looks like almost two years of hearings that I participated in
on the issue of the Affordable Care Act.
I am reminded of a family that actually took their 8-year-
old to a particular insurance company's office because she had
leukemia, and she could not get coverage, or they could not get
coverage, because there were no protections for individuals
with preexisting conditions, and unfortunately and tragically,
she died.
I had to listen to a mother whose son was a lawyer, but,
unfortunately, he got hooked on drugs and got hepatitis and
only wound up in medical care when he wound up in the emergency
room in the Atlanta public hospital. He ultimately passed away.
These were witnesses, of course, telling their stories.
So I want to see a situation where we do have health care.
And so I am going to ask a question very quickly to Deputy
Director Mark Hadley about your assessment of how many
Americans are underinsured, meaning that they have health
coverage, but they still face high health plan deductibles and
high out-of-pocket medical expenses. They might even face
having insurance policies, which I have heard of before, that
does not cover hospitalization.
Mr. Hadley. We don't have our own separate number, but if
you look at some of the studies that are in the research
literature, it is clear that there are many, many people in
that category.
So, for example, there is a Commonwealth Fund study that
shows that 27 percent of people who have health insurance
decided to forego care because of its cost.
Ms. Jackson Lee. And does that include also the high cost
of prescription drugs plays a role in that?
Mr. Hadley. I believe so, but we can get back you to about
the specifics of the survey questionnaire that they used.
Ms. Jackson Lee. If you would.
Dr. Banthin, why don't you comment?
Dr. Banthin. So, yes, the Commonwealth finds about 29
percent of people with coverage report having to delay or
forego medical care, including prescriptions, due to the cost.
The Peterson-Kaiser survey finds a lower number, but that
includes people--all people under 65 also delay or forego
medical care.
Ms. Jackson Lee. And that creates a burden on the health
care system.
Dr. Banthin, I am just going to continue.
That burdens the health care system, does it not, because
they come sicker to the health care system?
Dr. Banthin. If they are foregoing prescribed treatment,
yes, it can be a burden.
Ms. Jackson Lee. Would you comment on the single-payer,
single approach Medicare for All concept in terms of helping
these both underinsured and expanding access to health care?
Dr. Banthin. So, of course, the answer depends critically
on how the benefit package is designed and the choices made by
the Congress, but a single-payer system would provide coverage,
insurance coverage, for everyone. That is the key goal. And so
certainly people would have coverage, and depending on the
design of the benefit package, they could have fewer out-of-
pocket costs that would be barriers to care.
Ms. Jackson Lee. I am interested in saving lives, and so
more lives could be saved if they had a package that worked for
them.
Doctor?
Dr. Banthin. That is correct.
Ms. Jackson Lee. Dr. Kling, you are on the economic side of
it.
Would you care to see how that construct would work in
terms of making sure that we had far-reaching health care for
everyone in this nation?
Dr. Kling. It would certainly have a big effect on the
economy. I wasn't sure what your question was.
Ms. Jackson Lee. I am interested in the impact on people
having health care.
Dr. Kling. So if people are healthier, they would be more
productive, yes.
Ms. Jackson Lee. And I will answer your question on the
economy. If they are more productive, if there are more people
in the system, if there are more people buying the product, the
prescription, going to doctors--you know, I hear the issue
about the economy. I would almost say that we could counter it
by constructing something that would take into consideration
the challenges that it might be to the economy.
We are ahead of this now, we are not behind it, and our
idea would be to make sure that we had everyone in it. That
means healthy people would be in it, younger people would be in
it. They would use it less and therefore maybe complement and/
or contribute to the system not crunching, because they would
provide sort of the extra wings to the system.
Would it not be that kind of construct?
Chairman Yarmuth. The gentlelady's time has expired.
Ms. Jackson Lee. I thank you. I have answered my own
question, Mr. Chairman. I think we can handle this Medicare for
All single-payer and save lives.
And I yield back. Thank you.
Chairman Yarmuth. Thank you.
Again, I want to thank all our witnesses for being with us
today. Please be advised members can submit written questions
to be answered later in writing. Those questions and your
answers will be made part of the formal hearing record. Any
members who wish to submit questions for the record may do so
within seven days.
Chairman Yarmuth. Without objection, this hearing is
adjourned.
[Whereupon, at 12:50 p.m., the Committee was adjourned.]
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