Ensuring the Future Physician Workforce Act of 2007

Madam Speaker, I come to the floor of the House tonight as I frequently do to talk a little bit about health care.

Tonight, I will be filling the leadership hour of the minority side, and I

certainly thank the House leadership for providing me the opportunity to speak to the Chamber over this hour and talk a little bit about health care, perhaps give a little bit of historical context, perhaps talk a little bit about our current situation, perhaps talk about the prospects for change in the future, talk about what principles are important to maintain in a health care system, whether it be public or private, the principles of affordability, accountability and advancements.

Madam Speaker, I hope to spend part of this hour talking about the things that I think will improve the delivery of health care in this country, regardless of who the payer is, because we are perhaps perched on a historical time.

Madam Speaker, I believe with all my heart that we are perched on a transformational time in American medicine, a time that we've seen perhaps similarities with before, perhaps three times in the last century. We'll detail those in just a moment, but it is a time like any other.

When the rapidity of the scientific information is coming at such a rate, the rapidity of scientific change is coming at such a rate, and at the same time we're poised to perhaps have a significant impact on the delivery of health care in this country by how we craft our public health policy, our health policy in this body, think about in the preceding century we had three, I believe, transformational times in the 20th century.

You think about the status of medicine in the days of the late 1800s leading up to the early 1900s, and it was not always a pretty sight. Blistering, burning, and bleeding were treatments that were not only tolerated; they were, in fact, embraced by the medical mainstream, the best minds in medicine at that time. But those heroic efforts were beginning to be supplanted by people who rigorously applied the scientific method and began to investigate as to whether or not these heroic methods were, in fact, yielding or returning a positive benefit for the patient. In fact, they found that they were not.

And at the same time, you had scientists working on concepts such as sterility, sterility during surgery, vaccinations, improvements in public health, sanitational water supplies, as well as just a decade before you had the introduction of anesthesia which, obviously, radically changed the prospects for being able to perform surgery.

There was also a crisis of confidence in American medicine, because there was no standardization in American medical schools. They were all over the map as far as their embracing scientific method or scientific philosophy. This body, the United States Congress, in 1910, commissioned a study that was ultimately called the Flexner Report, which detailed the problems inherent in American medical schools and how value to the patient could be improved by standardizing the training and making the training more rigorous and adhering to the scientific process.

Well, not quite midway through the century, in the 1940s, we saw, again, a transformational change occurring in American medicine. How did this change come about? Actually, there were some discoveries that preceded the 1940s by a little bit. Sir Alexander Fleming discovered penicillin in 1928. At the time, it was just more or less a laboratory curiosity that the growth of a mold in a Petri dish could inhibit the growth of a bacteria, but it was American ingenuity and American know- how that took this concept and made possible the distillation and production of large amounts of this compound.

Prior to the 1940s and prior to the intervention of American know- how, only small amounts of penicillin were available. Again, it was more of a laboratory curiosity than a useful treatment that could be made available to a broad spectrum of patients.

With the introduction of new techniques for bringing this medicine to the public, large amounts of medicine were made available, the price plummeted and, as a consequence, we ushered in the new antibiotic age in the early part of the 1940s. It was terribly significant. Many of our soldiers who were wounded during the invasion of Normandy on D-Day had wounds that ultimately would have been much more serious had infection become a problem, but now, because of the availability of penicillin, many of those infections could be treated, life and limb could be saved and spared. It was, indeed, a change that medicine had not previously seen.

There was another rather dramatic development during the 1940s, about the same time, Percy Julian, who was an African American scientist who we honored in this body during the last Congress. He didn't discover cortisone. Cortisone had previously been discovered but was only available by a labor-intensive process. You had to get it from the adrenal glands of an ox.

Cortisone was very difficult to obtain, very expensive and really wasn't available to treat much in the way of a large number of patients. It was available only as an experimental effort.

But Dr. Julian, who had experimented in biochemistry for a number of years and worked extensively with soybeans and soybean products, found a way to make a precursor to cortisone and, in fact, found a way to apply this for the commercial production of cortisone. Suddenly, this medicine, this miracle drug which had been available only in very small supply and terribly expensive, now became generally available to treat patients.

So we had the advent of anti-infective agents in the antibiotics and anti-inflammatory agents with cortisone, all of which occurred around the mid-1940s. What else happened in the mid-1940s? Of course, we were a country at war. As a consequence, the workforce in this country was severely contracted. In an effort to keep employees, what employees were available on the job, employers wanted to pay higher and higher wages to keep the employees there and keep them satisfied.

But the Federal Government, the President of the United States, President Roosevelt said, we are going to get in trouble with inflation if we are not careful, and put in place a series of wage and price controls to kind of keep the lid on this rapidly expanding sector of the economy. He felt it was justified because of a wartime situation.

Well, employers still wanted a way to attract employees, to hold employees, to keep employees, keep them happy, keep them satisfied, keep them healthy and well so they stayed on the assembly lines and stayed in the workforce. They devised a plan to offer health insurance and retirement benefits to employees that were under their employ.

Well, it was kind of controversial as to whether or not this would be something that was even available, whether or not it violated the spirit of the wage and price controls that were in place at the time, and, if it was something that could be made available, is this a benefit that would be taxed or not taxed? The Supreme Court in a historic decision in 1944 decided, number one, that this did not violate the spirit of wage and price controls. Just as importantly, they determined that these benefits provided as health insurance benefits and retirement benefits, in fact, were not taxable benefits. Thus, the era of employer-derived health insurance was born.

After the war, it continued because it was very popular. People liked that concept. They liked the fact that you, at the time you went to work, you received health insurance; so that was one worry that was lifted off of you that you didn't have to contend with. It changed forever the face of how medicine is practiced in this country, as much, I submit, as the introduction of penicillin and as much as the introduction of large-scale production of cortisone.

So we will quickly fast-forward to the 1960s. In the 1960s, again, we were seeing a big transformation in medical care, a big transformation in science, the newer antibiotics were available that could treat more and more diseases, more aggressive diseases. The whole era of chemotherapy began to be ushered in. Antidepressants were available for the first time, as well as antipsychotics, which had a profound effect on the census in psychiatric hospitals.

What else happened in the 1960s? Well, a little over 40 years ago, this Congress, at the direction of a fellow Texan, Lyndon Johnson, developed the Medicare and then subsequently the Medicaid programs to provide a social safety net for our seniors. Then, ultimately, with the introduction of the Medicaid program, it provided a social

safety net for people who were too poor to afford health insurance.

So there was greater access, greater access for the aged, for people who were disabled, and for people who historically had been not allowed into the medical system because of a poor financial situation. But, the government established for the first time an enormous footprint in the practice of medicine in that for the first time it paid for a significant amount of the practice of medicine.

Now, the current situation is that about 50 percent of the health care dollar is derived from the United States Congress, from the Federal Government. The other 50 percent is not all private pay; it's private, commercial insurance as well as people who pay bills out of their pocket, self-pay individuals, and I will actually include the 4.5 million people that own health savings accounts. I would include them in that group as well.

Of course, there are people who just simply do not pay the bill; there is bad debt. There is also charitable care that is given by a doctor or a hospital to a patient and no payment is expected.

Now, the big question before us is can this hybrid system that has just sort of grown up, can this hybrid system be sustained? The tension that exists within this system, I think, creates a dynamic for continued change and for medicine to continue to evolve and continue to reinvent itself.

But, as I said, we are on the brink of a time of transformational change. I believe that in the early part of the 21st century we will see and we have seen changes in medicine as a result of cracking the genetic code. Genomic medicine, which was a phrase that I wouldn't even have been aware of during medical school or residency, now is part of our regular parlance.

Diseases that used to be treated only with surgery are now treated with medicines. There are going to be vast changes on the horizon as far as the treatment of disease goes as we begin to understand more about how the human genome affects the course of health and disease, how we can intervene earlier at a lower cost to prevent disease and, quite honestly, extend life over time.

But, we are also poised at a time where it looks as if, because of frustrations with the current system, because it doesn't provide all of the coverage that we think it should to every person who we think needs it, we are poised here in this Congress to begin debating an ever greater expansion of the Federal Government's role in health care in this country.

It will ultimately be up to us to decide is this a good thing or a bad thing. Since we live in a representative Republic, it will be up to the American people to decide is this something that we want to see more of or less of. They will, of course, register those thoughts with their votes, not only in the 2008 election but in the 2010 election.

I would submit to you that it is important that we keep in mind really where the fundamental unit of production is in this vast medical machine that we have in this country. What is the widget that is produced by the vast medical machine?

Well, my impression is that it is the interaction that takes place between the doctor and the patient in the treatment room, whether you like to say the operating room or the emergency room, but, nonetheless, it is the interaction between the doctor and the patient. That is the fundamental unit of production in American medicine. How do we interact that?

Well, my opinion is anything that will deliver value to that interaction is one of those things that we ought to encourage. Anything that detracts from value or anything that serves to drive apart the doctor-patient interaction is something that may be seen as pernicious. It's all about empowering the patient and not an insurance company, not the Federal Government. We need to focus on those policies that will bring that power back to the patient, will bring that value back to the doctor-patient interaction.

A lot of people would argue that we need health care reform. In fact, remember, that was a big argument in 1992 in the Presidential election and in 1993, the year that followed, and then, ultimately, nothing was accomplished and the situation stayed as it is. But they kept talking about health care reform, health care reform, health care reform.

Well, reform is what you need if the system is working just jim- dandy, just working extra special well, and you only need some marginal changes around the edges. But since we are upon a time of great scientific advancement, changes in how we handle information technology, changes in how we even approach medicine, the whole era of personalized medicine is just a little bit over the horizon, and we may well see that in my lifetime, certainly in my children's lifetime.

Medicine is on the cusp or the threshold of some big changes. Is reform going to be enough to enact the social policies that we need here in Congress as well as permit those transformational changes that are occurring in science and occurring in the delivery of medical care?

Now, I would submit that only by keeping a portion of the free enterprise system involved in health care, only by that method are we likely to continue to generate the kind of instability we need in a system in order to foster change, in order to foster growth, in fact, in order to drive that transformational process.

If, suddenly, we are at complete equilibrium and there is no tension on the system anymore, what's going to cause it to grow? If, in fact, we devolve to a single-payer system where the Federal Government picks up the entire tab for medical care from cradle to grave, and there are some people who think that would be the correct response, the correct way to go, what will change? What will be the impetus to change? What will be the reason to change anything about medicine?

What you see today, if you enact that system, is what you will see 20 years from now, 40 years from now, 60 years from now. The transformational change that I think will be responsible for some of the greatest gifts that medicine could give to humankind, suddenly the spark, the spark of incentive would be removed and we would have a steady state that would be well paid for, a lot of people would be well taken care of, but the improvements, the advancements would be lacking in such a system.

If we move toward a system that is more patient driven, rather than one that's driven by insurance companies, rather than one that's driven by governments, I think we will usher in that new era of transformation in American medicine.

During the course of that, we have got to keep health care affordable. We have got to keep the monitor on the person in the middle, the person who acts as that barrier between the doctor and the patient, what we describe as a middleman. We have to keep that very close tab on what's happening in that arena. That's one of the things that prevents a patient from knowing the value of care they receive. It's one of the things that prevents a doctor from knowing how much the care they are ordering is going to cost or what burden that patient will have to bear. We have anesthetized everyone by putting a third- party payer in the middle of that mix.

Now, questions do come up as to how we bring about those changes and not obstruct changes that we want to see happen, but, again, keep in mind things like the advancements in medicine that are going to occur as a result of discovery of the human genome and further elucidation of the human genome, concepts like rapid learning. When I was in medical school, we all just worshipped at the altar of the double-blind crossover study in order to prove that something was effective or not.

But we live in a time when computational speed and capability is so vast, and the speed of learning is so fast, that, you know, it may no longer be as necessary as it once was to select the correct sample size and go out and do all the statistical tests. We can just simply monitor everyone, everyone who is on Lipitor, everyone who is on a statin, see what their complications are, see what their health benefits are that people who are on statin live as long or longer than a closely matched age and gender-matched group of individuals who are on no such therapy. We can begin to develop those concepts, and the data is there and will accumulate rapidly because of advances that are being made in health information technology.

That's the way that, ultimately, we're going to be able to curtail some of the costs of taking care of chronic diseases and, in fact, beating chronic diseases; and I would include cancer in that group. And above all, we do have to ensure an adequate workforce to be able to provide that care.

Now, I alluded a few minutes ago at the point of transformational change, but we also run the risk of getting caught up in transaction. You know, if you think back to 1993 and the changes in health care that were discussed at the time, we really weren't talking about any kind of health care change. We were talking about change in the administration of insurance policies.

As a result, since we got caught up, in this body, in the transactional, we forgot about the transformational. And again, as a result, there really wasn't much happened, except we left the field essentially empty, and HMOs and managed care came in, took over a large market share. And that was the time, at least in my experience as a physician, when some of the worst excesses of HMOs and managed care occurred: care being denied, patients being put out of the hospital too soon. And then Congress was in a very reactive mode: you've got to have this many days after delivery, this many days in the hospital after a mastectomy.

Well, that clearly wasn't the way to go about it, but that is the risk that we run if we focus on the transactional and forget the transformational. So all three things, affordability, accountability and advancement, must be considered and must be given equal weight in any change that comes about.

Within the concept of affordability, it's really not how much money you spend; it's how you spend it and are you getting value for the dollar that you spend in health care. And I would circle back and bring it back to that interaction between the doctor and the patient in the treatment room. How do we deliver value to that fundamental unit of production of medical care? And if a policy that we propose delivers value, then that is something that really should be looked at and one that should be carefully debated and perhaps enacted into law.

But if you look at that fundamental interaction between the doctor and the patient in the treatment room and it is fundamentally deleterious, well, maybe that's something that we should not be doing. We see examples of this within the insurance environment all the time.

And I would use the bill that we voted on last week, the State Children's Health Insurance Program. Good things in the bill, but some bad things in the bill. Some of the bad things is we tend to take children off of private health insurance and move them onto the State's Children's Health Insurance Program; and we do that for successive, for families who earn excessively larger and larger incomes.

Now, we can argue what the top line was; the top line reported in the bill was $60,000. But on the floor of this House, the chairman of the Energy and Commerce Committee admitted to me that States could disregard $20,000 income for housing, $10,000 in income for clothing, and $10,000 in income for transportation. We're up to over $100,000 with the income set-asides that some States could develop.

Well, what's going to happen to taking all these children off of private health insurance, perhaps coverage that the employer provides their mom and dad and moves them on to an SCHIP policy? Many pediatricians around the country find that the reimbursement for a State Children's Health Insurance policy in their State reimburses at a fundamentally lower rate than the private plans. Even though the private plans aren't great, they're better than the State Children's Health Insurance policy.

So what if a pediatrician's earnings or gross bookings for their practice go down by 30 or 40 percent on that segment of patients? Well, if you make that segment of patients successively larger, it's going to be more and more difficult for them to make up that gap; and what they will do is what doctors have always done: they'll open a little earlier, they'll stay open a little later and they'll kind of squeeze a few more patients into every hour.

Now, I ask you, is that a way to drive up the value in that doctor- patient interaction? I don't think so. I think if you squeeze more and more patients into that hour, if you increase that doctor's work day so they're having to make decisions on less and less rest with more and more stress, we are ultimately likely to negatively affect the value of that doctor-patient interaction.

So certainly that's one aspect of the bill for me that was extremely important for us to fully evaluate; and, unfortunately, we didn't get to evaluate it. We didn't get to debate it. We didn't get to do it in committee. We didn't get really to debate it on the floor. It was kind of an up-or-down vote: take it or leave it. And that's fine if that's the way you want to run things. But for me it was a fundamentally flawed idea because it damaged the value of the doctor-patient interaction.

Other programs that may improve the doctor-patient interaction, I'm aware of a large employer in my district back home, school district, to be precise, that has a number of employees under their insurance policy that provides a $20-a-month premium reduction for anyone who undergoes some pretty basic screening, blood pressure, weight and doing a little blood work. So there's a $250 value returned to the enrollee in the health plan over a year's time. So obviously that's a value. It's a value to the insurance company because now they're able to identify perhaps that silent person with a cholesterol up to here or a blood sugar that's an undiagnosed and unmonitored diabetic.

They can identify those individuals; and if the individual is desirous of help, they can get them into the proper type of care that will lower the likelihood of a heart attack with the attendant time in the intensive care unit, perhaps coronary artery bypass grafting, perhaps even the risk of sudden death or the complications of untreated diabetes, problems with eyesight, the problems with circulation, leg amputation, all of the kidney disease that goes along with untreated diabetes. Perhaps we can begin to get a handle on this earlier in the course of the disease so that the disease course may be modified and ultimately less costly.

Well, I would submit that that insurance company has found a way to deliver value to the doctor-patient interaction; and, in fact, I would think that's behavior that this body would want to encourage, not discourage, amongst private insurance players.

But these are just two examples of where value for the doctor-patient interaction can be increased or decreased. And as a consequence, when I apply that test to any health care policy, my decision about that, whether or not to support that health care policy, is likely to be based on the fundamental question, are we delivering value to the doctor-patient interaction? If the answer is yes, that's a program that's worthy of further study, debate, and perhaps enacting. If the answer is no, then it becomes fairly easy for me to say that's not a policy that I would be inclined to support at the present time.

Now, one of the things we move on to or other aspects of affordability that we should talk about, I did allude earlier to the fact that there are now, according to recent data that was released last April, 4.5 million people who are covered under health savings accounts. That's up about a million and a half from the year before. And, certainly, while it is not a vast segment of coverage, the reality is we could cover a great deal more people who are uninsured if they just simply knew about these products.

In the mid-1990s when I went to look for an insurance policy for an adult child, it was just almost impossible to get a private individually owned insurance policy for someone in their mid-20s. No one wanted to talk to you about one single policy. We won't even discuss it unless you've got a group of five or 10, and then we're going to charge you a great deal for that. Now, I was ultimately able to get insurance for that individual.

But what a change 10 years later. Any individual getting out of college today, mid-20s, off their parents insurance for the first time in their life, maybe they want to go start a business. Maybe they haven't quite found that right job yet; but rather than going without health insurance, they now have an option. They can go to the

Internet and in the search engine of choice type in health savings account and very quickly they'll be taken to sites that will provide them a vast array of choices in high deductible insurance policies. These policies are typically paid for with after-tax dollars, which is a limitation, I admit, and one that this Congress should take up and deal with. But oftentimes we're talking about individuals who are not in the higher income earning brackets or perhaps pay no Federal income tax at all. So the fact that it's not a tax deductible expense is not of great import to them.

But the fact that you can get a high deductible insurance policy that, with a $2,000 to $5,000 deductible that ranges in price from about $55 a month to $75 a month, well, that's a pretty significant savings over what we typically associate with the cost of insurance, which is obviously much greater than that.

So that young individual who's just starting out doesn't need to start out life without insurance coverage. It's not something that they need to forego. Yeah, it's a high deductible policy, so guess what? If you go in for a flu shot or you go in for some relatively minor difficulty likely as not that's going to be something that will have to be borne by the individual.

But if that individual has a catastrophic event, a motorcycle accident, an accident or pregnancy and requires prolonged hospitalization, that hospitalization is covered after the deductible is met. And how powerful is that to be able to put that type of protection in the hands of a whole segment of society that 10 years ago had no choice at all, no option. You just simply cannot buy or find insurance no matter how big a check you're willing to write, because I was willing to write a big check to get insurance coverage at that time, but it just wasn't available. Ten years later it's readily available. It's up on the Internet. And because of competition on the Internet, we've driven the price down, so affordability obviously has improved.

Now, the other great things about a health savings account is you can put money away. If you do pay taxes, you can put away money with pre- tax dollars, put money into essentially a medical IRA, or a health savings accounts. You can actually begin to accumulate dollars in that health savings account. And the good news is that over time, if that money is not used for medical expenses, it can only be used for medical expenses, but if it's not used, it doesn't go back to someone else at the end of the year. It doesn't even go back to the Federal Government if you die too soon. That money is yours. It is yours to use for your health expenses, or it is then delivered on to your heirs and assigns if you meet an untimely demise, but that money is yours. It doesn't belong to the Federal Government. The money you put into that health savings account stays under your command and control for the rest of your life as long as it is spent for health care expenses.

So you can see, even a young individual who doesn't have the financial wherewithal to contribute the full amount, say the $2,000 or the $5,000 every month to a health savings account, still can put some number of dollars away that will grow over time. And since we're talking about young individuals, well, the time value of money comes into play. And if you begin such an account when you're 25, by the time you're 65 and ready to face retirement, there may be a significant accumulation of dollars in that account. And the good news is there is no one can take that away from you.

Now another thing that we've worked on in this Congress and something that I would argue would be a positive in the values section for delivering value to the doctor-patient interaction are what are called association health plans. Now, association health plans by themselves are not going to drive down the cost of the, or the number of the, uninsured; but they will help control the ever-rising cost of health insurance which, of course, is what drives a lot of small businesses out of the business of providing health insurance. So association health plans have been voted on in the two previous Congresses several times since I arrived here in the beginning of 2003.

And the concept is pretty simple. It just says small businesses can kind of group together to get the purchasing power, the purchasing clout of a much larger organization and use that ability to aggregate themselves to get a better deal with an insurance company, to get a better deal in providing insurance to their employees. So if you have, say, a group of Realtors, a group of dentists offices, for example, a group of chambers of commerce employees, you can put this group together as long as they have similar business models. That's why the term ``association'' is used. They can be put together to go out and purchase or to make bids on the commercial insurance market and, again, get a little bit more of that purchasing clout that large organizations have.

And one of the reasons that association health plans have been contentious in this House is because for them to be effective, particularly in medium and small-sized States, you've got to have the ability to go and take in a group of people that may cross a State line. Now, a State as big as Texas, which at one time was its own country, that's not as big an issue. But still you will get a better economy of scale if you are able to draw in more people into this association that then goes out and buys insurance.

For whatever reason, we passed it in the House, three or four times in the last 4 years, but unfortunately it never did pass in the Senate. They had Senator Enzi, who was at the time chairman of the Senate Health Committee, make a good run at it last year, got all the principals in the room and tried to get them to craft an agreement on that, but ultimately was not able to get that done. And that's a shame, that's too bad because again this is one of those things that would fundamentally deliver value to the doctor-patient interaction because it would hold down the cost, the ever-increasing cost, bend that growth curve a little bit on the increasing cost, the ever-increasing cost of health insurance, and allow more people to keep and retain their insurance coverage.

Now, the President brought up in his State of the Union message here last January, and it's been talked about on and off again over the past six to eight months, the issue of equal tax treatment for employer- derived insurance and insurance that's owned by the individual. We've really not made any great progress, but I do believe the concept is one that's worthy of study, that's worthy of debate in this House. I already alluded to that fact a little earlier in the talk that once you have the employer-derived insurance as a pre-tax expense, that alters the playing field and it, in fact, encourages the use of that type of insurance and maybe even encourages the use of that type of insurance a little too much.

It encourages people to be overinsured because, look, I can't really pay you any more without distorting my salary structure but I will give you this more generous insurance package. And as a consequence, more insurance benefits are added to that person's benefits package, and it may, in fact, be more insurance than they actually need. So they are paying for something that they don't actually need.

On the other end of the spectrum, you have the individual who is out there pricing insurance now in the private market, and perhaps they do earn enough money to pay income taxes, and it would be great to extend or expand their purchasing power for that insurance by allowing them to pay for that with pretax dollars.

There is going to be a lot of debate on that over the next several years, I expect. In my mind, it is the only sane and smart way to go to, again, decouple the insurance product from the tax code and kind of put everybody on an equal footing. It's either deductible for everyone or not deductible for everyone. But let's put everyone on the same playing field there because only in that way will we get true equity and only in that way will we get the demand for the type of products that, again, ultimately will have the competitive forces that will push the price down. And after all, the kind of competition that is available on the Internet, the same type of competition that's available now with health savings accounts, and since they are after- tax items anyway, they are not under the same restrictions, but to get that same type of

competitive influence from pricing on the Internet that will help keep the cost of health care coverage more affordable for more people. It's kind of analogous to the people who sell car insurance and who say 15 minutes can save you big bucks on your car insurance if you are willing to invest 15 minutes on a telephone call to a particular insurance company. They have done a lot of clever things with their advertising with animated lizards and unfrozen cavemen and the like, but the reality is they have taken the concept of the type of competitive edge you can get by utilization of the Internet with car insurance. If we had the same ability to do that with health insurance, how much better would that be? Because we could drive the price down, because now people would be competing with large volumes, large numbers of patients. Now companies would be competing with large numbers of patients, and, in fact, I think we would see an improvement on the price structure rather than this continued year-after-year increase in prices and this continued year-after-year of picking only the people that we want to insure and leaving others out. This is a way of broadening the base and lowering the rate. We liked that concept in our tax policy; we should like that concept in our insurance policies as well.

Madam Speaker, mandates are another issue that will come up from time to time. The health care program that was popularized in the State of Massachusetts, very famously, depends upon an individual mandate. It is your obligation and responsibility to have insurance, and you will have insurance or we will buy it for you and charge you for it. If you don't want to pay us, we will take that money out of your State income tax refund that you are due at the first of the year. So that is one way to get people to buy insurance, to be sure.

Now, in 1993, when the Clinton health care plan was discussed, they talked about employer mandates: We're going to require every employer to participate in an employer-derived health insurance program or they are going to have to pay a large amount in order for their employees to get coverage elsewhere.

So employer mandates and individual mandates are certainly techniques that have been tried in the past, and we may see them tried again in the future.

State mandates are where a State says any insurance policy that is written in the State, you have to provide coverage for these items. It varies from State to State. Some States are quite generous, and as a consequence, their insurance rates are high. Some States are more spartan, and as a consequence, their insurance rates are more reasonable. But State mandates, individual mandates, employer mandates, in my opinion, have the ability of driving up the cost and limiting the care because they remove the competitive influences that otherwise would be brought by the competition that's available in the open market and just keeping free enterprise involved in medicine.

I guess the counterpart to mandates, for all its faults and for all of the sort of anguished discussion that we had about Medicare part D over the past several years, Medicare part D now provides pharmaceutical benefits, pharmaceutical coverage to 90 percent of the Nation's seniors, and it does so with a 90 percent satisfaction rate. And there is not a mandate in the program. And how do they do it? They provided programs that people actually wanted. That would be a novel approach. Instead of a mandate, you make something that is marketable. You make something that's desirable. You make something that patients and families are going to say that's a good idea and it's reasonably priced and I am going to do that. Mandates, on the other hand, tend to drive things in the other direction. And ultimately, although there may be a transient reduction in price long term, it has a negative influence on price and causes prices to inflate and increase over time.

Madam Speaker, I can hardly come to the floor of the House and talk about changes in our health care system without at least briefly talking about changes in the way the medical justice system is handled in this country. And the reason that it is so important to me is my State, my home State of Texas, changed the nature of the argument 4 years ago and since then has been reaping the benefits of fundamental and sound medical liability reform.

Now, the Texas legislation that passed in the legislature that convened in 2003, and subsequently we had to undergo a constitutional amendment in September of 2003, it provided a cap on noneconomic damages. The so-called Medical Injury Compensation Reform Act of 1974, as passed by the State of California, was adopted and modernized in the Texas plan. But it was a Medical Injury Compensation Reform Act-style reform that was done in my home State of Texas.

Now, caps on noneconomic damages out in California in 1975 were set at $250,000. In Texas, with the passage of this legislation, there was a cap set at $250,000 for a physician if the physician was involved; $250,000 set for the hospital if a hospital was involved; and $250,000 for a second hospital or a nursing home if one was involved. So there was an aggregate cap of $750,000. At the same time, there was no cap placed on actual damages, real damages, that were sustained in a medical liability suit and no cap placed on punitive damages if those were awarded by a judge in a medical liability suit.

The result of all of this was that a State that was in turmoil, a State that was in chaos in the year 2002, today is eminently stable when you talk about its medical justice system because of these commonsense reforms that were enacted back in 2003. The benefits that we have seen for my old insurer of record, Texas Medical Liability Trust, my medical liability premiums had been increasing by double digits every year, year after year for about the 4 years before I concluded my practice and came to Congress. The very next year after the passage of this bill in 2003, prices dropped. They dropped 12 percent. They have continued to drop. So the aggregate reduction in premium prices over the 4 years since this passed has been 22 percent for physicians insured under the Texas Medical Liability Trust. And that is in addition to double-digit increases that were happening every year up to 2003. Now we have had a 22 percent reduction. That's a significant change.

One of the most important things, though, was the number of medical liability insurers that existed in the State of Texas had gone from 17 down to two. You are not going to get much in the way of a competitive edge if you have only got two people willing to write medical liability insurance in your State. So by the start of 2003, we were truly in crisis with the fleeing of medical liability insurers from our State.

What happened after the law passed? The insurers started to come back in. Now, many of them wanted to come back in and say, we're going to have to charge you more money because Texas is still an unproven deal and we're not sure we want to come in at the rates you are going to set. But Commissioner Montemayor, who was then the Commissioner of Insurance in the State of Texas said, if you are going to come back in, you're going to come back in at reasonable rates. And as a consequence today, I'm not sure of the top number of Texas insurance companies, but certainly above 15 and may well be above 20 insurance companies that have come back to the State, and, most importantly, they have come back without an increase in their rates.

One of the unintended beneficiaries of this reform was the smaller not-for-profit hospital in the State of Texas. Smaller and medium-sized hospitals, self-insured, they had to put a lot of money away against a possible bad outcome in a court. With the passage of this law and with some return of sensibility and stability to what their actual outlay may be if they lost a case, smaller hospitals and medium-sized hospitals were able to take some of that money that they had put away in accounts to guard against a possible adverse finding in court, and now they were able to take that money and use it for capital expansion, nurses' salaries, the kinds of things you want your smaller not-for- profit hospital to be doing in your small and medium-sized community.

So it was a very big boon not only to physicians but also to hospitals. And, again, I would submit is that a win or a loss for someone who wants to deliver value to the fundamental doctor-patient interaction in the treatment

room? Obviously, it's a win. We have more doctors coming to the State. We have so many doctors coming to the State, the Texas State Board of Medical Examiners can't keep up with the pressure, with the demand on new licenses for doctors who want to get licensed to practice in Texas. So that is a good thing. Texas as a whole has been underprovidered, if ``providered'' can be used as a verb. Texas as a whole has been underprovidered for some time. The national average is 260 doctors per 100,000 population. Texas sits at about 186. But the situation is improving month over month because of some of the commonsense changes we made in medical liability insurance.

And one last thing I would add. If I'm from Texas and we've already done this, what do I care about the rest of the country that their medical justice system perhaps remains with the scales uneven and tipped to one side or the other? Well, the reason I care is because now, as a Member of Congress, we have to deal with the Federal budget every year. We have to decide how much money we are going to give Medicare and Medicaid every year. Consider this: A study done back in 1996 at Stanford University looking at the cost to the Medicare system for treatment of heart disease, the additional cost for the treatment of heart disease when factoring in the cost for defensive medicine, back in 1996, that cost was calculated to be just under $30 billion. Well, that was 12 years ago. I rather suspect that number would be higher today if anyone went back in and recalculated those figures. So it is significant. That is practically 10 percent of the money we budget every year, the money we appropriate every year to pay for the Medicare system. It is a significant savings to the Medicare system if, in fact, we can capture these savings.

Just the Texas bill alone introduced in the House of Representatives was scored by the Congressional Budget Office as saving $3.8 billion over 5 years just with the language of the Texas bill, to say nothing of what it would do on putting negative pressure, downward pressure on the cost of defensive medicine. And $3.8 billion is not a big figure when we talk about money up here in Congress. It's usually tens or hundreds of billions of dollars. But I have got to tell you what, $3.8 billion is real money, and in a year where we are scratching around trying to find every dollar that we can, that $3.8 billion is significant. And, again, I, frankly, do not understand why the House wouldn't consider taking this up, because this is a commonsense solution to a problem that vexes many States around the country.

And perhaps one of the even more pernicious effects of the medical liability crises in some States is the fact that it directs the best and brightest of our young people in a career path other than medicine. If I am going to spend all that time in school, if I'm going to accumulate all that student debt, and then when I get out, I have got to pay these high liability premiums and you go to court and they make you look like a bad guy, I don't think I want any part of it. It does have a negative effect on attracting the best and brightest into our physician workforce.

The physician workforce is important. I want to talk about that in greater detail. But just consider this: A residency program director out of one of the big hospitals up in New York a few years ago, when I asked her, ``Does the medical liability crisis impact your residency training program at all?'' she told me that, well, currently we are taking people into our residency program that we wouldn't have interviewed 5 years ago.

In other words, the pool of available applicants for their residency program had contracted because of the chilling effect, the negative effect of the medical liability insurance in that State. And these are our children's doctors; these are our children's children's doctors. I fail to see how the advancement of medical care is furthered by allowing policies that have that type of an effect on our physician workforce.

But let's talk a little bit about the physician workforce in the time that remains because this is another important part of where we go with health care reform, health care transformation in this country. And three bills that have recently been introduced, H.R. 2583, H.R. 2584 and H.R. 2585, deal with the problems surrounding the physician workforce.

Now, just a little bit less than 2 years ago, Alan Greenspan, as one of his last trips around the Capitol, came and talked to a group of us one morning. And a question was posed to him: What do you think about Medicare? Are we ever going to be able to pay for the unfunded liability of Medicare in the future? And he stopped and thought for a moment and said, Yes. I think when the time comes Congress will make the hard choices, make the hard decisions, and, indeed, we will be able to salvage and pay for the Medicare system. And he paused for a moment and then went on to say, But what concerns me more is, will there be anyone there to deliver the services when you require them?

And that, Madam Speaker, is a crucial point in this discussion. And that is the point behind the three bills that were introduced earlier this year to create incentives for hospitals to provide residency programs, to create incentives for medical students to go into medicine in the first place and, finally, to encourage physicians who are more mature in their practice to stay in their practice.

Creating more residency programs. There are some hospitals in the country that would welcome a residency program. They have the patient load. They could get the accreditation from the American Council of Graduate Medical Education, but the barrier for entry is just simply too high, the cost of starting a residency program is too high.

So this bill would provide loans to hospitals to begin residency programs where none have existed in the past, particularly in fields in high-need medical specialties in medically underserved areas, things like general surgery; things like family practice; things like obstetrics and gynecology. This would be the subset of residency programs that would be encouraged with this legislation.

And, as a consequence, since it is a loan program, the money would be paid back and over time would recirculate so more and more programs could be added to the Nation's training programs, particularly, again, for high-need primary care specialties in medically underserved areas.

H.R. 2584 dealt more with the younger individual who is either in medical school or perhaps thinking about a profession in health care. And this bill would provide incentives, it would provide scholarships, it would provide loan forgiveness, it would provide tax relief for individuals who, at the time of their conferring of their degrees and the beginning of their practice, would agree to practice in areas that are medically underserved and, again, in high-need specialties.

Now, this concept is actually an older concept. It was around when I was in medical school, but we need to modernize it for the 21st century.

And what really brought it home for me was visiting the gulf coast area after Hurricane Katrina. So many doctors had left, and so many more doctors were contemplating leaving. How in the world are they ever going to maintain a health care workforce in that part of the country unless they grow their own doctors in place? This is a way to allow that to happen, and of course there are other medically underserved areas around the country that might benefit from this as well.

Again, back in my home State of Texas, the Texas Medical Association puts out a periodical called ``Texas Medicine.'' This was the cover of their March issue, which raised the specter or the question: ``Running Out of Doctors.'' And these two bills were largely inspired by the work done in this article.

And one of the concepts that was put forward in this article was that medical residents tend to stay where they train; they don't go very far. The fruit doesn't fall very far from the tree. So a medical resident who trains in a town is likely to set up practice within 50 or 100 miles of that town. That is the concept behind setting up these residencies in smaller and medium-sized communities, smaller hospitals that have the need and have the patient load that will allow for the training and teaching and allow those physicians to stay in that practice area.

Well, you might ask, how does this deliver value to that doctor- patient

interaction that I've talked about several times tonight? Well, there are several ways. Number one, in just having the availability and the access of a physician. You can't deliver value to the doctor-patient interaction if you don't have a doctor there to interact with the patient. So that is certainly one very fundamental way that it can improve it. But another way, and perhaps a less tangible way, is if a doctor goes into practice within 50 miles of where they did their training, what do they know about that place? Well, they know the community. Their family, their wives and their children are probably going to be more comfortable in that community, so there is increased job satisfaction that the doctor will have in that community. I'm sorry, I should have said wives or husbands would have in that community. So there is increased personal satisfaction.

But the other thing is, you know the doctors in the area, you know who's good and you know who's not so good. Referral patterns that are established during a 3- or 4-year residency can be continued. And this is the additional value that this type of training will bring to our young physicians in the State and allow them to be better physicians when the time comes for them to begin their practice.

The final bill, 2585, deals with a problem that we've had in this Congress for as long as I've been here, in fact, before I got here, and that is the problem that we have with reimbursing physicians in the Medicare system. The current Medicare system of pricing is one that is not based on any sort of reality. Hospitals, drug companies, HMOs each get sort of a cost-of-living adjustment every year for their funding sources; but physicians, for whatever reason, don't get that cost-of- living adjustment. They don't get what's called the Medical Economic Index. What they get is called the Sustainable Growth Rate Formula, which generally pushes their reimbursement rates down year over year. And over the next 10 years time, the budgetary projection is for physician payment rates for Medicare patients to be reduced on the order of 30-38 percent. Well, that's untenable. No doctor can continue to practice; they can't even plan for their practice. They can't plan for hiring; they can't plan for the purchase of new equipment all of the time they're laboring under that type of restriction.

2585 would repeal the Sustainable Growth Rate Formula in 2 years' time. It resets the baseline for 2008 and 2009, which does allow for a positive update for physicians in 2008 and 2009, with no smoke and mirrors, no fancy footwork. It is just something that could be done.

And then we aggregate all of the savings that accrue to the Medicare system because we are doing things better, cheaper, and faster in the Medicare system currently. As a consequence, that savings can be used to offset what is described as the cost of repealing the Sustainable Growth Rate Formula over 10 years' time.

Consider this, the Medicare Trustees Report from last June said that the bad news is Medicare is still going broke, but the good news is it's going to go broke a year later than we told you last year. The reason for that is 600,000 hospital beds were not filled last year because doctors are doing things better in their practices, they are keeping patients out of the hospital, they are doing procedures in an ambulatory surgery center; and as a consequence, the overall cost price pressure on the Medicare system has reduced. The problem is that doctors don't get to have any credit for that reduction. It all goes to the hospitals, drug companies, nursing homes and HMOs, not to the part B of Medicare, which is, after all, where physicians are paid.

We need to change this. We need to make those savings only attributable to part B. And as a consequence, we can drive down the cost of repealing the Sustainable Growth Rate Formula. And by postponing that repeal for 2 years' time, but at the same time providing a positive update for 2008 and 2009, I believe we have a system in place that can be a win-win for Congress, for doctors, and for the American patient, the Medicare patient, who has increased difficulty with finding a Medicare physician.

Two other proposals in that bill, 2585, would be to provide positive updates for doctors who voluntarily improve information technology in their offices. We all know this is something that is going to have to happen. This is something that is going to have to occur. Let's give a little bit of a positive update, a little bit of a positive bonus. Yes, patients who aren't in the Medicare system will also benefit from that, but we're not getting a tremendous amount, about a 3 percent bonus per year for voluntary improvements in health information technology.

Let's also make available for physicians who voluntarily report quality measures, let's also make a positive update available for them as well. And the consequences of that is people will begin to focus on the quality aspect if you just simply make a physician aware of what their expenditures in the Medicare system were for the past year. That information is confidential. It's not something that's published; other people aren't aware of it. But doctors tend to be relatively competitive, and if they have that number available to them, they are likely to behave in a way that will try to drive that number down. Doctors are goal-directed, doctors are competitive, doctors want to be the best at what they are. Well, let's give them the data and see if they can't compete on that level.

The other thing is I think we need to make that information available to the patient as well: What did it cost the patient to provide for the treatment over the cycle of care for the past year? And, again, these are less defined, but equally important, ways we can begin to deliver value to that doctor-patient interaction.

The health information technology is so important. Many doctors are sitting on the sidelines right now. It's like buying a VCR in the mid- 1980s: Do you go with Beta or VHS? And it's hard to know what the technology is going to look like in 5 years; and the person who guesses right will be rewarded, the person who guesses wrong will be penalized.

So there is a lot of tension, a lot of nervousness out there when you talk to physicians' offices. And there is no question about it, these things add a lot of time to the doctor's day, time that is not readily compensated in any other formula. So we need to consider adding that positive update, such as was done in H.R. 2585.

Well, Madam Speaker, we cannot rise to the transformational change required in this country without keeping the best doctors involved and without incentivizing and training the best doctors for tomorrow. This is going to require a near-term, a mid-term and a far-term, a long-term strategy. We will not be able to master the transformational changes and challenges without America's best and brightest still involved in the teaching and in the practice of medicine.

This is a bipartisan issue. It doesn't affect only one side of the aisle. It doesn't only affect the other side of the aisle. It requires each of us to work together.

Madam Speaker, I will submit our congressional approval ratings right now are at historic lows; and the reason they're at historic lows is not for the reason that most people think up here. The reason they're at historic lows is because we won't work together to get a single thing done for the American people, and this is one of those things that they want done.

Now, I left my beloved profession a little over 4 years ago to come and serve here in Congress. I didn't come to just sit and watch as things happened and things were brought to us by other people. I came to be actively involved in the process, and I intend to remain involved in the process.

I have outlined numerous solutions here tonight. I am grateful to the leadership on my side for giving me the opportunity to talk about these things and would only submit that there is a great deal more to discuss, and there will be more to come later.

Madam Speaker, I come to the floor tonight to talk, as I often do, a little bit about health care, the state of health care in this country, where we are, where we've been, where we're going.

Tonight, I do want to focus on one particular issue that is before this Congress. It's a critical issue facing our doctors in this country who provide care for Medicare patients, because if this Congress does not act before midnight on December 31, those physicians are facing a rather significant reimbursement reduction, and that would have an adverse affect on their ability

to see patients, to care for patients and, indeed, would have an adverse effect upon access.

So I do want to spend some time talking about that, why that is the case and what we in this Congress can do about it and what we need to do about it. And again, that action has to take place prior to December 31 of this year. It's not something we can punt into next year and then come back and try to collect our thoughts and make another run at it. We have to fix it with the time we have remaining in this first half of this Congress.

Another issue that I want to address is the issue of the physicians workforce. Of course, the Medicare reimbursement rates directly affect the physician workforce, but we can't forget physicians who are at the very beginning of their training, physicians in residency, and we certainly can't forget those individuals who might even be contemplating a career in health care and how can we help them make the correct decisions.

I do want to talk a little bit and focus a little bit on medical liability reform because that does play an integral role in the overall quality and makeup of the physician workforce.

I'd like to talk a little bit about the history of medicine, some of the things that have happened in the last 100 years and some of the things I see just happening and just over the horizon as we begin the dawn of the 21st century.

And finally, I do think we need to talk a little bit about the status of the uninsured and, again, some of the other current events that surround health care in this Congress.

Madam Speaker, we pay doctors in our Medicare system under a formula known as the sustainable growth rate formula, and this has been the case for the past several years, and it has led to problems, certainly every year that I have been in this Congress, and I took office in January of 2003, and the problems actually predate that for some time.

The difficulty with that formula is it ties physician reimbursement rates to a number based upon the gross domestic product which, in fact, has no bearing on the cost of delivery and the volume and intensity of medical services delivered.

And Medicare, of course, many people know Medicare is supposed to be an integrated program but, in fact, in many ways it is high load. You have part A that's paid for with a payroll deduction just much the same as Social Security. Part A, of course, covers hospitalization expenses.

Part B covers physician expenses. That is paid for out of member premiums that citizens purchase every year, and it is paid for out of, 25 percent by law by the premium dollar and 75 percent comes out of general revenue.

Part C, the recently enacted Medicare prescription drug benefit, had money budgeted for that purpose. Remember that was all the fight of November of 2003 when we enacted that law, but money was actually on the budget and dedicated for that purpose. And those moneys exist and, indeed, are appropriated automatically year over year. I beg your pardon, part C is the Medicare HMO. Part D is Medicare prescription drug. Part C is funded again, likewise, out of the general Treasury.

Part A, part C and part D each have essentially a cost-of-living adjustment that's made every year. So that the cost of delivering the care doesn't exactly keep up, but it more or less keeps up with the costs and with medical inflation, but not so part B, which pays the physician. And the part B part of Medicare is governed under this sustainable growth rate formula.

And really, Madam Speaker, I know I'm not supposed to talk to Members directly, only supposed to address the Chair, and I will confine my remarks to the Chair, but just talking to the Chair, if I were able to talk to people directly, I know I run some risk of people turning off their televisions, but I do want to take you through what is known as the sustainable growth rate formula because I think it's instructive. Even though not every person can understand every nuance of the formula, I think it's instructive to actually look how the formula is constructed and how we come up with the dollar figure every year.

Madam Speaker, I know people who are particularly astute will notice there is a typographical error on this graphic. I would point out that the typographical error was actually made by the Congressional Research Service and not by my crack staff. Again, the very gifted will be able to pick that up right away, but we'll get to that in just a moment.

Here's the calculation of the payment formula under the physician's fee schedule. Here we see payment equals and here's a whole bunch of letters that follow along, and the explanations are given underneath the formula. The relative value unit for work versus, rather multiplied by a geographic index; a relative value unit for practice expenses, again multiplied by another fudge factor for geographical location and geographical practice expenses; a relative value unit for the cost of medical liability insurance, again also adjusted for geographic location; all multiplied then by what's called the conversion factor, CF, at the end. And this CV down here actually should say CF, and that would stand for ``conversion factor.''

Well, that's all very interesting, and obviously the conversion factor plays a big role in this, so let's just dig a little bit deeper into how that conversion factor or that adjustment factor is calculated. And here we see a sample calculation for the formula for the year 2007, and again, we won't get into all of the nuances of this formula, but you see the update adjustment factor, UAF, the prior year adjustment component plus a cumulative adjustment component, and the formula for 2007 is calculated as follows, where the target 2006 minus the actual spending in 2006 divided by actual spending in 2006 multiplied again by conversion factor.

I want to draw your attention, Madam Speaker, though, to the fact that every year the prior adjustment component, and then added into that is the cumulative adjustment component, that's significant, because every year for the past 5 years that I have been here the United States Congress has come in at the last minute, at the last minute with some way to prevent these physician cuts from going into effect.

But as the Congressional Budget Office calculates this number year over year, this cumulative adjustment component grows over time such that we are told in order to repeal the cost of repeal of the sustainable growth rate formula, when I first came to Congress in 2003 was around $118 billion over 10 years.

A pretty significant amount of money, no question about it. But that number has increased with every year that we have postponed the cut, that we have come in at the last minute, the last of December and prevented the cuts from happening. Those moneys actually don't just go away. The moneys that were to be saved in that cut don't just disappear. The Congressional Budget Office adds them onto the total expense of the repeal of the sustainable growth rate formula such that the price tag for repeal of the sustainable growth rate formula last year, the last session of Congress, when I introduced a bill to repeal the sustainable growth rate formula, was $218 billion. It increased almost $100 billion over 3 or 4 years' time, and this year is calculated to be $268 billion. If we do manage to get something done before the end of the year, those moneys again the Congressional Budget Office will add on with that cumulative adjustment component.

One last graphic on this issue is the calculation of the update of the conversion factor, where, again, we see the current year is equal to the prior year plus the conversion factor update. And the conversion factor update is calculated as being 1 plus the Medicare economic index increase divided by 100, multiplied by 1 plus the updated adjustment factor.

You can see this is pretty complicated stuff, and for that reason many Members, when you try to talk to them about changes in the sustainable growth rate formula, will just simply tune you out because we all have a little place where we put in our minds things that are too hard to deal with. And the SGR formula is one of those things that most Members will put into the too hard box. It's something that I have got to come back to later because I really don't understand it. And it is

an understandable human reaction to a situation that's terribly complex.

But, Mr. Speaker, let me just illustrate for you what will happen if Congress does not do its duty and does not do something to prevent the physician cuts, the Medicare payment cuts, that are already on line to occur January 1 unless Congress acts legislatively prior to that time. The Center for Medicare and Medicaid Services on November 1 of this year, after running through the formula, they said, okay, this year based on what we budgeted for and what the actual spending was, we are going to have to downwardly adjust physician payment rates by 10.1 percent. That's 10.1 percent, a pretty significant amount of money. If we don't do something, that's what is going to hit January 1.

You say, well, okay, Medicare payments aren't that great anyway and a lot of physicians' offices don't rely just strictly on the Medicare reimbursement they get to keep their doors open; so it won't really affect my doctor's practice. But one of the things that we forget in this House of Representatives, one of the things that we just conveniently again stash away in that part of our brains where we put things that are too hard, almost every commercial insurance company in the United States pegs their reimbursement rates to Medicare. So what happens when Congress or the Center for Medicare and Medicaid Services mandates a 10 percent physician fee cut in Medicare and we don't do anything to correct it before the end of the year? That has an extremely deleterious effect on almost every practicing physician's office in this country. There are very few who will be absolutely isolated from that. I realize some in academic medicine may not actually feel it. Some doctors who practice in federally qualified health centers may not see that or may not feel it. But the bulk of the practicing physicians, the men and women who are out there every day seeing us when we get sick, seeing our kids when they get sick, those are the ones who are going to feel the brunt of this inactivity by this Congress.

I bring this up tonight not because we were inherently any better at doing it when the Republicans were in charge, but it's so important to get this work done and to get it done in the limited time that we have left this year.

I introduced just this week a resolution in the House of Representatives, House Resolution 863 for those who are keeping score at home, and House Resolution 863 is a pretty simple bit of legislative language. I will be honest. It doesn't do a whole lot. It doesn't really save any money. It doesn't spend any money. It's more or less like sending a get well card to the doctors who participate in our Medicare system and take care of our seniors. But the sentiment, just like when you send a get well card, the sentiment is important. And for Members who feel they could sign onto this bill, I think it would send a powerful message to House leadership over the next several days if we could, in fact, put a number of names with this House Resolution because I think that would get the attention of leadership. Even though leadership is of the other party than myself, I think they would have to pay attention if the bulk of the Members of House of Representatives sign onto this resolution.

And the resolution, as most go, is multiple whereases followed by a ``resolved.'' And the resolved says that it is the sense of the United States House of Representatives to immediately address this issue, the physician pay cuts under SGR, and halt any scheduled cuts to Medicare physician payments and immediately begin working on a long-term solution, and implement it by 2010, that pays physicians a fair and stable way and ensures Medicare patients have access to the doctor of their choice.

Fairly simple language. What does it mean? It means stop the cuts, repeal the SGR. We know we can't repeal the SGR straight up right now, that it will take a time line in order to do that, and that is why I suggest 2010. I would be open to other suggestions. But that seems like a good time line for us to follow. It gives us a little over 2 years to get that done.

When we face a problem as complicated as the formula that I put up in front of you tonight, some of those things are just too difficult to tackle head-on all at once. So you need a near-term, a mid-term, and a long-term strategy to deal with these very complicated problems, and I have outlined it here tonight. The near-term, the short-term strategy, stop the cut. Find some money. There's plenty of money. In a $3 trillion budget, you tell me we can't find someplace to save some money in a $3 trillion budget to pay the doctors what they are fairly owed for taking care of the patients we have asked them to take care of.

So the near-term solution is stop the cuts. The mid-term solution is we sit down and work together with the common goal of the long-term solution, which is the repeal of the sustainable growth rate formula, and begin to pay physicians on the same sort of schedule that we pay our hospitals, that we pay our HMOs, that we pay our drug companies. Put them on a cost-of-living-type adjustment. It's called the Medicare economic index. It's not something that is unique to me. I didn't make it up. I didn't make up the term of how it is calculated. But this is a known number put out by the Medicare Payment Advisory Committee, and year over year it suggests a modest update in physician reimbursement to keep up with the cost of delivering care.

Let's be honest. From a Federal Government standpoint, Medicare reimbursement rates were never meant to match private insurance rates. Someone explained to me one time if you practice medicine and do a lot of Medicare, you're going to go broke. You'll just go broke a little more slowly because we bleed you to death more slowly. Not a pleasant analogy, but Medicare never has been designed to completely cover the cost of delivering the care. The problem is we have now ratcheted that number down so far that physicians across the country are honestly looking at the situation and saying I don't think that this is something that I can legitimately continue to do. I've got to find other ways to make a living.

It's House Resolution 863, and I do urge Members to look that up on- line. It's up on Thomas. Have a look at it and see if it is not something that you can't support because, again, I think it would send a powerful message to House leadership. If over the next several days prior to the time that we are slated to adjourn for this year, I think it would send a powerful message that Members of the House want this fixed. And I know they do because every time I talk to a Member of the House, whether it be on my side of the aisle or the Democratic side of the aisle, if you just ask a simple, straightforward question: Do you ever hear from your doctors? Do your doctors ever talk to you about what is happening to them in Medicare reimbursement? And the answer is almost immediately, Oh, yes, I hear it all the time. Do you have something that will fix that? And the answer is, Yes, sort of. I've got something that will focus our attention, I hope, on getting this problem resolved.

It's a shame we didn't take this up earlier in the year. I introduced several pieces of legislation to try to do that both in the last Congress and in this Congress. It's a shame we didn't take it up this year. It seems like many times this year we'd rather fight about almost anything we can think of to fight about and not solve the problems that the American people sent us here to solve. Well, here's one we can work on, and cosponsoring House Resolution 863 would go a long way toward moving us in that direction.

Let me just put up another slide, and this one is a little bit dated. This slide is a year old, and I should update it for the current year except that I don't know what is going to happen in the current year. But this is illustrative. This is demonstrative of what happens to physician reimbursement rates under the sustainable growth rate formula for physicians. And this is a comparative payment analysis of the various updates that have gone on since 2002, the year before I came to Congress. And this particular graph goes up through an estimated fiscal year 2007. And, again, actually it needs to be updated for this year.

But as you can see, Medicare Advantage plans, they're doing pretty good. Hospitals, it's up and down a little bit, but generally their market basket update that they receive every year is hitting about 3.6 to 3.8 percent, and all

in all the hospitals are doing generally well under that scenario. Nursing homes, a little less generous. And, again, it does bounce up and down a little bit. But as you can see, year over year a positive update, certainly a positive update that's in excess of 2 percent. And many times for nursing homes it approaches 3 percent.

But look over here at the doctors in 2002, and this was the last year I was practicing medicine. And sure enough, we got a 5.4 percent pay cut just right across the board for any Medicare procedure that we performed.

Now, for the next several years, 2003, 2004, and 2005, we did manage to find the money to provide a little bit of a positive update. Notice even in these years when physician practices were flush with cash from Medicare payments, they really never even approached what nursing homes were receiving in updates and certainly were nowhere near what hospitals and Medicare Advantage plans received. Medicare Advantage plans, I would point out, did not exist prior to 2004. That's why they start with that darker line there.

Then in 2006 there is nothing recorded on the physicians. We euphemistically termed that a zero percent update. Anything else that we do in the Federal Government, if we say we are going to hold you at level funding for this fiscal year, people would be coming out of the woodwork crying that's a cut, that's a cut because you're not keeping up with the cost of living. It didn't seem to bother us a bit to do that to America's physicians. But at least a zero percent update is a whole lot better than that what was originally proposed in 2007, which was, again, about a 5 percent negative update. We actually were able to stave this one off and keep that again at a zero percent update for 2007. And now for this next year, 2008, whatever color we decide to put on the bar for that will dip down to almost the bottom of the chart because a 10.1 percent negative update is going to have a significant deleterious effect, a significant pernicious effect on our practicing physicians. Again, our physicians that we have asked to take on the burden of seeing our Medicare patients.

Now, I do spend a lot of time on the floor of this House talking about physicians workforce issues. This is the cover of the March 2007 periodical that is put out by my State medical society, the Texas Medical Association, appropriately titled ``Texas Medicine.'' And the cover story last March was ``Running Out of Doctors.'' And this was a fairly significant graphic for me when I saw that at the time.

About a year before this publication came out, Alan Greenspan, in one of his last trips around the Capitol right as he was retiring as Chairman of the Federal Reserve Board, Chairman Greenspan came and talked with a group of us one morning. And the inevitable question came up, how are we ever going to find the funding for the unfunded obligations that Congress has taken on? How are we going to pay for Medicare when the baby boomers retire? And the Chairman thought about it for a moment and he said, you know, ``when the time comes, I trust that Congress will make the correct decisions, and that the Medicare program will continue.'' He stopped for a moment, thought some more, and then added to that, ``What concerns me more is, will there be anyone there to deliver the services when you want them?'' And that is one of the critical issues facing us today.

And of course it's this inequity in supply and demand, supply and distribution of the physician workforce that's driving a lot of the problems that we find in health care today. And no question it has some effect of elevating prices, and just the fact that it takes so long to get in to see some types of physicians. There was a very compelling article here in the Washington area a few months ago about the travails and toils a reporter had with trying to get their child in to see a pediatric neurologist. You hear these sorts of stories. I travel, not a lot, but some around the country to visit with medical groups in the country, and you will hear all those stories from all over the country. It's not unique to one geographic location.

Three bills that were introduced earlier this year to deal with physician workforce issues, H.R. 2583, H.R. 2584 and H.R. 2585. Now, H.R. 2585 deals with what I like to term ``the mature physician.'' So, it deals a lot with the sustainable growth rate formula and the inequities of the sustainable growth rate formula as it pertains to how the Federal Government compensates its medical workforce.

The thrust behind 2585 was to, again, take that short-term, mid-term and long-term approach to the problem such that we would fix the problem, we would stop the cuts in 2008 and 2009 and 2010. We would gear towards absolute repeal of the SGR formula. Again, remember I said that it's going to cost money when that time comes. And that has always been the difficulty when trying to talk to Members about, I want you to help me repeal the SGR. The next question always is, Well, how much does it cost? You tell them, and, oh, my gosh, it's a bridge too far. We've got other priorities and we just can't get there. Well, let me tell you a little secret. That money that we have to come up with to repeal the sustainable growth rate formula, guess what? We've already spent that money. We've already sent that money to physicians' offices across this country and they've already spent it.

So, it is merely a bookkeeping adjustment that the Congressional Budget Office has to make to reconcile its books to compensate for, remember, that cumulative index that I showed you, one of those earlier poster boards. That is the difficulty. It's essentially a bookkeeping entry that has not yet been made. The money has been spent, it's gone. It's not sitting somewhere in the Federal Treasury drawing interest. It is a bookkeeping entry that has yet to be made.

We have to take this on. We have to do this. It's the moral thing to do; it's the right thing to do. We want our Medicare patients taken care of. They are arguably some of the most complex clinical situations that a doctor encounters on a daily basis, and we ought to do the right thing.

Now, how do you do that and be able to encourage Members to look at this seriously when the published price tag is so large? When I initially tried to do this in the last Congress, a bill I introduced called 5866, when, remember the cost of repeal was $216 billion, I thought at that time perhaps the correct way to go about this was just to work on the repeal straight up, maybe look for the pay-fors later as we got toward the conclusion of the process. And I was hopeful that hospitals, nursing homes, other medical entities that draw on Medicare funding would perhaps come forward with their own suggestions of where savings could be made because I don't think there is a single person in this Congress who doesn't feel that there are some inefficient ways that the Federal Government spends money in the Medicare system, and perhaps if we collected those together, we could find the monies to help cushion the offset expense of repealing the sustainable growth rate formula. But I was wrong, no one was willing to come forward. And as a consequence, I never really got the traction or the momentum that I needed on 5866. And again, the 109th Congress ran out before we could get anything done.

So, early in this Congress I thought, I need to get something out there quickly. I need to get people to understand this problem. We certainly don't need to leave it until the last minute this year, but unfortunately that's what has transpired. So, the idea behind 2585, introduced earlier this year, was to get that concept out there earlier, get Members talking about it.

How was I going to approach it? Well, 2008 and 2009, remember, we don't repeal the SGR. So, many doctors looked at that and said, Well, if you don't repeal the SGR formula in 2008 and 2009, I'm going to take significant hits those years, and I can't afford to do that. But actually, there is another bookkeeping entry you can do; it's called readjusting or resetting the baseline on the SGR formula. And by doing that, you actually then can score a modest positive update for 2008 and 2009 for physicians who participate in this program. In fact, interestingly enough, in 2008, it's almost equal to the Medicare Economic Index update. In 2009, it's a little bit less than that, but still a positive update, a fairly generous positive update of just under 1 percent for 2009.

During those 2 years' time, the run-up to the repeal of the sustainable growth rate formula, we recognize that we are saving money, we are doing things better in medicine today than we did yesterday. And how do I know this? What is a metric that I can use? Well, the Medicare Trustees Report that came out in June of this year pointed out that the bad news is Medicare is still going broke, but the good news is it's going to go broke a year later than what we told you the year before. So in other words, somewhere along the line there had been some savings in the Medicare system. And where did that savings occur? Well, one of the places it occurred, as identified in the Trustees Report, was 600,000 hospital beds weren't filled in the year 2005 that were expected to be filled. Why weren't they filled? They weren't filled because, again, the doctors were doing things on a more timely basis, more accurate diagnoses, the whole ability to timely treat disease with the prescription drug benefit now available for seniors in the Medicare program. All of these things had a bearing, and as a consequence, more patients were treated as outpatients, treated in the doctor's office, perhaps treated in an ambulatory surgery center, perhaps treated in a day surgery center, but these patients were kept out of the hospitals, and so those hospitalizations were avoided.

Remember when I talked about the funding silos for Medicare. Although we will talk about Medicare as an integrated program, part A, which pays for the hospital expense, is funded out of a payroll deduction just like the FICA tax, just like Social Security. Part B is funded out of member premiums and general revenue. By law, only 75 percent of it can be funded out of general revenue; 25 percent of that number has to come from member premiums.

So, if we're saving money on the hospital side, we're saving money for part A. But why are we saving the money? We're saving the money because we're working better, smarter, faster in part B. So it would only make sense to have CMS identify those savings that right now are going on the books as savings for part A, identify those savings, aggregate those savings, collect those savings, and use them to offset the cost of repealing the sustainable growth rate formula in part B.

You know, remember, Madam Speaker, the lock box from the year 2000, in the Presidential race everyone was talking about a lock box and they were going to put Social Security in a lock box, and with all the discussion of whose lock box was bigger than whose? But we've still got the lock box. We can put these savings that we're creating in part A, put them in a lock box, 2 years later open it up, and we offset some of the cost of paying down the so-called debt in repealing the SGR formula.

There were some other things that I identified in the bill as other ways to perhaps enhance savings. Certainly we asked CMS to try to identify the 10 diagnoses where most of the money was spent, and let's really focus our efforts on those 10 diagnoses and see if we can't create greater and greater efficiencies in treating those 10 conditions that lead to the greatest expenditures in the Medicare system. And let's look honestly at what we can do on the preventive side. Remember what our mothers always taught us, an ounce of prevention is worth a pound of cure. If we want that pound of cure, let's go ahead and spend a little bit for that ounce of prevention on the front end so we don't have to spend so much for that pound of cure on the out end. And then let's take that pound of cure that we've saved and use it to offset the cost of repealing the sustainable growth rate formula.

Well, another way we could save some money is, any of the monies that are recovered by the Department of Justice, the Inspector General for Health and Human Services, and the so-called Medicare audits, money that is fraudulently taken from Medicare and then recovered, again, that's money that's stolen from part B. Let's not just put that money into the coffers of somewhere else. Let's let that accrue as part of the savings that we put in that lock box that we use to offset the cost of repealing the sustainable growth rate formula.

Two other things that I did in the bill, which I think are important as far as gaining some overall efficiency in the system, was added some voluntary positive updates for physicians who were willing to voluntarily participate in quality reporting exercises, and physicians' offices who were willing to voluntarily participate in improvements of health information technology.

We don't have, and certainly in Congress, certainly the Federal Government does not have all the answers as to what creates the perfect health information technology platform. In many ways, private industry is light years ahead of where the Federal Government is. And maybe, you know, Madam Speaker, some days, honestly, I just wonder if we should get out of the way with some of our regulatory burdens, some or our stark laws and let private industry develop these platforms, because clearly, in the last 5 years that I've been here, we've had a lot of talk, we've had a lot of bills introduced, we've had a lot of debate, we've even passed some bills in the House during the last Congress, but we are no closer to having any sort of a national standard for health information today than we were when I first got here 5 years ago. I believe the individual's name was William Brailer who was in charge of that project. He is now, unfortunately, no longer with Health and Human Services.

The project has, for all intents and purposes in my mind, been a disappointment, but it doesn't mean that health information technology has just been stagnant. Other stakeholders, other participants in the health care system in the United States have created and drafted and are working on their individual platforms. And at some point they will reach critical mass in the private sector where there will be general acknowledgement that, yes, this is the health information technology platform of the future and the one to which we all should subscribe. It would have been a useful function of the Federal Government had we been able to do that, but honestly, I don't see us there yet, and I don't see us there in the foreseeable future. You would think the Federal Government would have had a significant role to play in that because if you look at health care expenditures in this country, almost 50 cents out of every health care dollar that's spent in this country has its origin right here on the floor of the House of Representatives.

When you consider what we spend in Medicare, what we spend in Medicaid, what we spend in the VA system, what we spend in Indian health service, the Federal prison system, a lot of health care dollars are generated through the authorization, the appropriation process in this Congress. And as a consequence, Congress has a big stake in trying to get some efficiencies and some improvements. But in this instance, in developing the health information technology platform of the future, I almost think that we need to get out of the way and let the entrepreneurs, let the bright folks who can do these tasks, let them proceed with that.

Let me just talk about a couple of things that will illustrate that.

I will just tell you, Mr. Speaker, I did practice medicine for 25 years. In fact, I started medical school 30 years ago this year in 1974. I can't tell you that I was a big acolyte of electronic medical records when I was a practicing physician. I dabbled in it some. I would listen to people talk who came to sell us various packages.

We had to buy a new computer right before the Y2K scare where all of our computers were going to lock up at midnight and we wouldn't be able to get anything done the next day. So like everyone else, I went out and bought a new computer system. I asked what it would cost to add an electronic medical records package on to the basic computer system that I purchased for my five-physician office. The basic computer system itself cost about $60,000 or $70,000. Some other contracts we had to sign for maintenance and upkeep were not cheap. Adding a medical records package to that was 30 to $40,000 for a five-physician practice. Quite honestly, at the time, it seemed way too expensive for a small group such as mine to participate in. So I really wasn't sold on the concept of electronic medical records. Then in the end of August 2005, we saw probably the

worst hurricane to hit the United States that certainly has happened in recorded history, Hurricane Katrina that hit New Orleans, and then the subsequent flooding after the levees broke. Touring New Orleans 5 months later with the Energy and Commerce Subcommittee on Oversight and Investigations, we were permitted to go into the basement of Charity Hospital into their records room. This was the basement of Charity Hospital. You can see the temporary lighting that they have got strung along the ceiling. There is actually still, it doesn't show in this photograph, there is still water on the floor 5 months into this process. And you can see the paper medical records. There was shelf after shelf after shelf.

Remember that Charity Hospital was one of the venerable old institutions in this country. It was one of the hospitals that has trained many of the premier physicians in this country. Charity Hospital had been there for a long time. They had multiple racks and stacks of medical records. But look at these things. This isn't smoke damage. This isn't fire damage. This is black mold that is growing on the paper, on the manila folders and on the paper in the medical records. Clearly, these are medical records that in all likelihood now are lost to the ages. I don't know. The water was up to the top shelf when the building was underwater. A lot of the ink and writing may well have washed off. But you honestly could not ask someone to go in here and pull a record and provide you some of the medical information that might been contained therein, because clearly it would simply be too hazardous to ask anyone to go in there and retrieve it.

Well, when I visited the basement of Charity Hospital that day, I became a convert for recognizing that medicine does need to come into the 21st century. It is going to be expensive. There is going to be a learning curve for, again, mature physicians like myself to have to learn this new technology and to have to learn how to use a keyboard. But it would be an investment that we would have to make.

I think we have to pay for it. I don't think we can simply say to a doctor's practice, you are going to have to just do this. It is part of the cost of doing business. And although you can't attribute any direct revenue increase to the fact you are making this $100,000 expenditure for a five-physician practice, you are just going to have to spend the money. Well, we are probably going to have to help that. Number one, we are not paying doctors enough, anyway, and number two, if we ask them to go out and do this, there will be a lot of resistance, and a lot of practices just simply won't do it. They will drop out of Medicare and whatever insurance company requires electronic medical records.

If we pay for it, if we allow an increase in reimbursement for physicians who voluntarily undertake this kind of training and upgrade, I think that's a very reasonable return on investment. So included in the bill that I introduced to initially repeal the sustainable growth rate formula was a 3 percent positive update for physicians who voluntarily undertake to modernize their recordkeeping and to embark upon the 21st century sojourn of creating electronic medical records.

But I think that is the way we have to do it. It has to be voluntary. You can't force people to do these things. You can't force them to learn these techniques. You can't force them to devote the time necessary to learn these techniques. It does have to be done on a voluntary basis. That is the correct way to learn things, not through mandates, but through creating programs that people actually want and getting their participation voluntarily, not because the Federal Government has said thou shalt.

Now, it stands to reason that after a certain period of time, part of that funding for that infrastructure will be completed. And this positive update does go away after a period of time, but it does provide a bridge for physicians who are using paper records today. It provides them a bridge, an opportunity to go into a electronic medical record system.

The reason I spend so much time on this is we had introduced in the Senate last week a bill that would require electronic prescriptions. Well, it's a good idea. The theory is a sound one, electronic prescriptions. The Institute of Medicine says that doctors' handwriting is terrible. I am here to tell you mine is. The ability, though, to whip off a written prescription takes about 10 seconds. The time involved for filling out an electronic prescription, even on a little handheld is going to be somewhat longer than that, particularly at the beginning of the learning curve.

Well, the average physician practice as I had back in 2002, you would have to see between 30 and 40 patients a day in order to pay the overhead and have something to take home at the end of the day. You add a minute or 2 on to every patient's encounter, and that is going to be adding about an hour a day on to that physician's practice time, an hour that they are simply going to be filling out an electronic form for E-prescribing. Clearly, again, they have to be compensated for that time.

The bill that was introduced I think recognized that and said there would be a 1 percent update for doctors, a 1 percent bonus for doctors who indeed undertook that. Well, just doing a little bit of the math, a moderately complicated Medicare patient return visit probably didn't pay as much as $50 a visit, but let's say for the sake of argument that is what it paid. Well, a 1 percent bonus for that patient's encounter if you use an electronic prescription will be, what, 50 cents. So you can see about four of those patients in an hour's time, so that is an additional $2 an hour that we are paying for that. It doesn't seem like a lot. I say that, too, because you look at all of the various stakeholders and interest groups, the insurance companies, the pharmacy benefit managers, the community pharmacists who want this done see value in it, and they see the potential for deriving great value, particularly the vendors who are selling the electronic prescribing modules. There is going to be significant financial return for them.

So why are we low-balling it at the doctor's end with simply a 1 percent bonus? And then the other part of that concept that I found disturbing was, it was kind of billed as a carrot and stick approach, the carrot was the 1 percent bonus, the stick was when 5 years, 4 years or 5 years, I forget which, Doctor, if you're not doing this, we're going to penalize you 10 percent. So wait a minute. I go from if I do this, I am going to make an extra 50 cents on that patient encounter or $2 an hour additional if I do this. If I don't do it in a few years, I am going to be down $20 an hour for not participating. The inequity of that just strikes me as being, again, ``disturbing'' is probably the kindest word that I can use in this context. I honestly think while, again, I will agree with the theory, the application is flawed, and we have to think of a better way to do that. That is why when I was crafting 2585 it was a voluntary participation. It stayed voluntary.

I think if you show physicians that you are able to deliver something of value, eventually, we are a very competitive lot. That is why we become doctors. And we will want to have the practice that has the newest and latest and greatest, and if other physicians' offices, hey, they are doing this e-prescribing and it is great, by the time I get to the pharmacy after my doctor's visit, the order has already been e- mailed to the pharmacist, it's been filled, it is sitting there waiting for me, and the insurance stuff is already filled out, patients are going to see value in that, and they will begin to ask that of their doctors. But to do this in a terribly punitive way, I think we are going to drive more doctors out of taking care of our Medicare patients, and that really should not be our goal.

The two other bills I introduced dealing with the physicians workforce dealt with physicians who might be contemplating a career in health professions and dealt with physicians who were in their residencies. We recognize that we are facing a shortage of primary care doctors, a shortage of general surgeons, OB-GYNs, gerontologists. And these bills were geared toward getting more of those doctors to consider medical school, getting more of those newly minted doctors into residency programs near their homes. Because doctors do possess a lot of inertia, and if you train those doctors in the places where they are needed, they are likely to stay within a 50-mile, 100-mile radius of where they

have undergone that training. That is one of the thrusts of the article from the Texas Medicine piece, that doctors do tend to locate close to where they are trained, so if we can expand the number of primary care residencies in medically underserved areas with high-need residencies, we will find that we actually attract more physicians to those areas. That is a vastly preferable way of dealing with some of the manpower shortages than just simply telling people where they have to go.

Under the issue of medical liability reform, let me just share briefly some of the experiences we have had in the State of Texas because it has been a good story. The State of Texas in 2003 passed some reforms that were based off of the 1975 law that was passed in the State of California called the Medical Injury Compensation Reform Act of 1975, you see the acronym for Medical Injury Compensation Reform Act, and this has been an astounding success in the State of Texas. Medical liability insurers were leaving the State in droves. We were down to two liability insurers my last active year of practice 2002, and let me tell you, you don't get much price competition when you have only got two liability insurers in your State. By invoking this bill and passing a constitutional amendment that allowed the bill to stand placing a cap on noneconomic damages, $250,000 for the doctor, $250,000 for the hospital, $250,000 for a second hospital or nursing home, if one is involved, by trifurcating that cap for noneconomic damages, we really feel that we have a system in place that does adequately compensate patients who are injured, and at the same time provide some stability in the medical liability insurance market that they needed to be able to look to Texas as a place where they wanted to do business. And they have. They have come back to the State. We have got many more insurers now than we, in fact, had before the exodus started in the early 2000s.

Most importantly, they have come back into the State without an increase in premiums. Texas Medical Liability Trust, my old insurer of record, the premium reductions and the dividends paid back to their shareholders aggregate to about a 22 percent reduction in medical liability insurance. And mind you, my last year of practice, I recall medical liability premiums going up by significant amounts year over year over year, and now we have seen an aggregate 22 percent reduction since passage of this bill in 2003.

A lot of times when I talk about medicine, I talk about the fact that I am optimistic. I think medicine is on the cusp of a significant transformation. When you look at the last century, and there was kind of some instructive periods, the period of 1910 when, boy, we are really coming out of the dark ages of medicine. Prior to that time, the accepted methods of practice, blistering, burning and bleeding were what were practiced by physicians, and everyone thought you were a good doctor if you did those things. We were leaving those days behind. We were coming into the time of anesthesia, we were coming into the time of modern blood banking, vaccinations had become available, new ways of looking at public health and public sanitation. And at the same time, all those advances happening in the science of medicine, we had some social change that was occurring as well, and part of it occurred up here at the United States Congress with the commissioning of a group called the Flexner Commission. Ultimately they produced what was called the Flexner Report that directly addressed the discrepancies in medical training and in medical schools across the country. It was the standardization of medical school curricula as a result of the Flexner Report, and albeit that function was then taken over by States, but it was that standardization of medical curricula that allowed for medicine to capitalize on all those good things that were happening around that time.

Well, jump ahead to the middle of the 1940s, we are in the middle of the Second World War, penicillin had been discovered a few decades before, but it wasn't really commercially available because no one had really perfected the process.

During the war, an American company working in this country was able to produce penicillin on a scale never before imagined. It was cheaply commercially produced for the first time in 1943 or 1944 and, in fact, was available to treat our soldiers who were injured at the landing of Normandy, and many lives and limbs that otherwise would have been lost as a consequence of infection following those wartime injuries were, in fact, saved because of the introduction of penicillin. It went from being a laboratory curiosity to something that was readily available, inexpensive and available to almost any doctor practicing.

At the same time, cortisone, again introduced many years ago before but a commercial process developed by Percy Julian, a Ph.D. biochemist, an African-American that we honored in this House during the last Congress because of his contributions to medicine. He developed a way to mass-produce cortisone using a soybean as a precursor.

So suddenly you had an antibiotic and you had a potent anti- inflammatory. These two powerful medical tools placed into the hands of our practitioners in this country, and, again, at the same time you had a significant social change because of the Second World War and wage and price controls that President Roosevelt put into place to prevent inflation, those wage and price controls were putting a damper on employers being able to keep their employees satisfied and happy. So they said, look, can we offer benefits like retirement plans and health insurance. The Supreme Court weighed in and said yes, you can, and not only that, you can provide those as a pretax expense.

Well, suddenly you go just almost overnight to the era of employer- derived health insurance. And it was extremely popular, extremely popular. It persisted after the war was over and wage and price controls were removed. But, again, it was a time when the science of medicine was changing rapidly and the social structure around medicine was changing rapidly.

The same can be said for the middle 1960s. For the first time we had anti-psychotic medications available. Prior to that, we had only restraints to treat people who were badly mentally ill. We also had the introduction of antidepressants.

We had the introduction of newer hypertensive drugs. Remember, just a generation before we lost our President, Franklin Roosevelt, to the ravages of unchecked hypertension. In the 1960s we could treat that.

At the same time, we had the introduction of Medicare and then subsequently Medicaid. Suddenly the Federal Government had a large and profound footprint and a profound influence over the practice of medicine.

Mr. Speaker, I think we are on the cusp of just such a transformational time right now. I think the changes occurring in information technology, the speed with which we learn things, is now unlike any time in this country's past.

Think of this: People are going to be able to go and with a relatively inexpensive test have their human genomes sequenced. They will be able to know, as more and more is found out about the human genome, what diseases may pose a risk for them in the future, what things they are not at risk for, powerful information that is going to be in the hands of our patients.

They are going to come to the office with this information in hand. It won't be a test that we order them to take or that we request them to take, but think of the difference in the practice of medicine. In the 1980s, I would tell someone a diagnosis. They would ask me what I was going to do about it. In the 1990s, I would give a diagnosis. They would go home, look it up on the Internet and come back and tell me what I was supposed to be doing about it. Now patients are going to come in with genetic information in hand say, this is what I am at risk for. What are you going to do to prevent it, doctor?

It will be an entirely different way, an entirely new paradigm, an entirely different way of approaching the practice of medicine, a transformational time. Yet, at the same time, if Congress does not, does not invoke the right policies, Congress is inherently a transactional body. We heard the House Policy Chairman talking about that in the last hour. Congress is inherently transactional. We redistribute income. We take things from one group

and give it to another. The transactional can become the enemy of the transformational.

Our former Speaker, Newt Gingrich, is famous for saying ``real change requires real change.'' I believe that to be true. I think that is his second principle of transformation. And, more to the point, this is a time of real change, and medicine is really changing under our feet. Whether we like it or not, whether we think we can control it or not, it doesn't matter. Medicine is changing. That real change requires us to change how we think about and how we approach these problems. The old ways, the SGR formulas of the 20th century, aren't going to work in the 21st century. They cannot be allowed to impede the incredible transformation that stretches before us.

Mr. Speaker, before I wrap up, I do want to mention one additional bill that I introduced recently, and Members may want to consider adding themselves as cosponsors. It is H.R. 4190.

This is an interesting bill, because we talk in this House about what are we going to do about the uninsured. And we all sit back and think big thoughts about what we are going to do about the uninsured. Well, H.R. 4190 actually moves that process along in kind of a different way.

H.R. 4190 would take health insurance benefits away from Members of Congress. Yes, it would provide a voucher to Members of Congress to buy health insurance, but we would no longer be participants in the Federal Employee Health Benefits Plan. We would become uninsured, and it would force us to look at the market, what is available for someone who doesn't have insurance.

It might cause us to be a little more clever about some of the things we do in our Tax Code, and perhaps we wouldn't be so punitive toward people who want to individually own their insurance policy as opposed to someone who wants to get it from their employer. So it would be an entirely different way for Members of Congress to approach this problem. Quite honestly, I don't expect a long line of cosponsors when I get back to my office later tonight, but I would like for Members to think about this.

It is terribly difficult for us to come up with solutions when we are sitting back in a situation where we are insulated, we are anesthetized, where we are never going to have to face those types of decisions and those types of problems that our constituents face on a daily basis.

We also need to be more careful about how we talk about people who are uninsured. We toss around numbers and basically use them as political bludgeons or political wedges. We need to be more specific when we talk about the specific demographic groups that are contained within that large number of people who are labeled ``the uninsured.''

A significant number, 10 percent in some estimates, are people who are university students or just graduated from the university. These are people who are generally healthy and relatively inexpensive to insure. We ought to find a way to make that happen. We ought to find a way to at least allow the possibility and ability for that demographic group to purchase insurance. Twenty percent of the number actually earn enough money to buy health insurance. They just don't see the reason or necessity in doing so.

A lot of that is cost driven. It is price driven. We have done things to insurance policies to make them so expensive. We are unequal in our tax treatment for individuals who want to individually own their policies.

We need to look at those things, because, again, if we made the product affordable, if we made it desirable, again, if we put products out there that people would actually want, then they are more likely to participate. I think that is vastly, vastly superior to simply saying there is going to be an individual mandate or a State mandate or an employer mandate where people will be required to line up and file into these programs.

Let's approach it differently. Let's create the programs so that people want them, rather than creating the condition that forces people into programs that maybe they want and maybe they don't want, but we will never know because we never ask.

But we can be more insightful. In fact, we can be more valuable to the American people if we will think about things in terms of who is involved in the demographics of that large group of the number of uninsured, and how can we best approach that in a way that we are producing or providing the environment for them to be able to have that insurance coverage that they desire.

Well, there is a lot left unsaid at this point. I do appreciate the indulgence of the Chair.

Madam Speaker, I want to also thank and commend my friends for their discussion of the suburban agenda. I am coming to the floor tonight to talk about health care, and of course they've already covered a lot of those issues in their discussion that preceded in the past hour.

I want to talk about some concerns we have in the delivery of health care services throughout the country. The future of medical care in this country is going to be front and center over the next 18 months time. The elections of 2008 will be about a lot of things, but they will also be a lot about health care.

Three bills that I want to focus on this evening as well, H.R. 2583, H.R. 2584 and H.R. 2585. The first, H.R. 2583 deals with residency programs. The second, H.R. 2584 deals with loan forgiveness and tax abatements for medical students and newly minted doctors. And the third, H.R. 2585, deals with physicians in the Medicare program who are adversely affected by reimbursement reductions every year under a formula known as the sustainable growth rate formula.

Well, as we go through these next 18 months and deciding which avenue through which our health care system is going to go, we have two choices on the table. We've got a public sector, the government side, which already has about half of the responsibility for health care in this country. And we've got that which is comprised of the private sector, as well as that care which is just simply delivered without expectation of compensation, what used to be known as charitable care.

Under the option to expand the government's role, the government's side, the government's sector involvement in the delivery of health care, typically that's known as universal health care. In the 1990s we called that ``Hillary Care.''

But could we also approach it from a standpoint of encouraging the private sector to stay involved and to improve their products and make them more flexible and user friendly in order to provide more for our health care dollar in this country.

My opinion, having worked in the system for well over 25 years, is the United States does have the best health care system in the world, and it is my obligation, my charge to help it remain the best health care system in the world.

Now, I know there's plenty of people in this body who would contest that statement. And there's plenty of issues around to call it into question.

My predecessor in this office, former Majority Leader Dick Armey used to be fond of saying, you know, the numbers don't lie; but if you torture them long enough, they'll admit to almost anything.

But let's talk about some of the different principles that are guiding the debate about public versus private and the delivery of health care services. And maybe we ought to spend a little time talking about the background. How did we get into this? How'd we get to where we are today?

You almost have to go back over 60 years to go back to the time coming out of World War II when the United States, of course, was the victor; came out of the war with a flourishing economy.

But during the war, President Roosevelt, in an effort to keep down trouble from inflation, put into effect rather stringent wage and price controls across the country. The employers wanted to keep employees, so a lot of employees, of course, had been drafted and were serving overseas, so those employees that were left the employers wanted to keep them working. But they were constrained. They couldn't offer raises. They couldn't offer the money that would be required; they were worried that someone across town might outbid them.

Well, they went and came upon the idea of providing a health care benefit, and, in fact, the Supreme Court ruled that that was okay; that that did not violate the spirit or the intent of the law that Franklin Roosevelt had passed governing the wage and price controls. So during the war, the concept of employer-based insurance was begun.

The war ended. The United States was blessed with the postwar economic boom that started, and what began as a necessity born out of a wartime economy continued. It was extremely popular. Health care insurance provided by the employer turned out to be one of the most popular employee benefits that has ever been seen in this country. And up until the early 1980s it just worked wonderfully.

Contrast that, of course, with Europe. Even the parts the Europe that were victorious in the Second World War, the battles were fought in their back yard. Their economies were devastated. They needed to quickly stand up a health care system that would take care of a population that had been deprived by 5 years of war or longer. And these countries decided to promote the single payer system that you see that's so prevalent in Western Europe and in England today.

But that was born of necessity also, because, again, the country's economies were devastated or, in fact, they had not been victorious in the war, they had lost the war, but they needed to quickly stand up a system that would take care of their citizens.

We go from 1945 to 1965. Presidency of another Texan, Lyndon Baines Johnson. During that time, President Johnson enacted the Medicare statute, a little over 40 years ago. The Medicare and the Medicaid programs were signed into law during his administration. These were large government-run programs that were created to focus primarily on hospital and physician care for elderly and basic health care services for the people who were this poverty.

Decades later, almost 40 years later, it was evident that the government-run Medicare program, extremely slow to change, very difficult to change a large government program; and anything that that caused any change within the program was going to be incredibly expensive.

Already difficult to operate.

But in 2003, in fact, my first year to serve in this Congress, my first State of the Union message that I heard the President deliver in this House, he talked about how the need for, or the time for a Medicare prescription drug benefit had arrived; and this was too important an issue to be left to another President or another Congress. It was work that we were going to take on that year, 2003, and get that benefit delivered to the American people. And indeed we did.

We worked on that bill in various committees throughout the year 2003. Right at the end of the year we passed the bill. There was initially a prescription drug discount card that was available, but over the next 2 years the Centers for Medicaid and Medicare Services put together the plan that we now know as the Medicare Part-D plan. And in spite of all of the problems that it had getting started, arguably it is one of the better functioning government-run health care programs ever seen to date.

But the government needed to catch up to a private system that was already focused on prevention, timely treatment of disease and disease management. So finally Congress put the Medicare prescription drug plan, that focused on giving seniors access go needed medications forward, and the program has been successful and provided benefits for seniors. It's come

with, obviously, considerable discussion, and a big push for success, a lot of it delivered by the private sector.

So here we sit at the crossroads today. Again, the government pays for half of the health care administered in the country with a current gross domestic product, the GDP of 11 to $12 trillion.

The U.S. Department of Health and Human Services, through their Medicare and Medicaid services alone, pay $600 billion. Add to that the VA system, add to that the Federal prison system, the Indian Health Service, and you have about half of the health care expenditures in this country.

The other half of health care is broken down with the primary weight being carried by private insurance. There is some charitable and there is some self-pay accounting for the rest. I think you'd probably include bad debt in that other 50 percent.

Well, as the numbers increase, the overall cost of health care for the entire country, as that number increases the Federal Government continues to funnel the American taxpayers' dollars into these efforts, and we have to ask ourselves, what is the wisest and best use of taxpayer dollars?

Is the government doing an excellent job of managing your money?

It's not their money. It's your money. Do you think the government is better suited for your health care needs?

Whose going to handle or who is better equipped to handle the growing health care problems crisis, if you will, in this country?

The government only or the universal health care system, to me, almost is unsustainable. And it certainly is likely to hamper innovation, and hamper the delivery of some of the most modern health care services that the world has ever known.

Now, two examples of that, one very close to home, that would support the notion that a private-based system is better equipped and more flexible and less expensive than a government system, look to our north. Look at Canada.

Canada boasts a universal health care system. But what it fails to highlight is the tremendous wait for treatment that its patients must endure. In fact, in either 2004 or 2005, the Canadian Supreme Court ruled that access to a waiting list did not equal access to care because the waiting times were so long in that country. Their access to care is limited by the length of time that one must wait for care.

Now, in Canada they actually have a pretty good safety valve, and that safety valve is called the United States of America. One of the longest borders in the world is our northern border with our northern neighbor of Canada. And, in fact, if someone has the means to pay outside the system and feels that the wait is deleterious to their health, they can leave Toronto and go to Henry Ford Hospital in Detroit and have that MRI, have that CAT scan, have the stint placed in a coronary artery if they don't feel the wait is in the best long-term interest of their health.

So you can take your money, cross the southern border of the United States, and receive care almost immediately, waiting for bypass surgery where you go to the hospital that puts you on a waiting list or puts you in a hospital and put you in a cath lab and gets the problem fixed. When it comes down to your health and a serious health problem, who wants to gamble?

Also, look at the National Health Service in Britain. They really have developed within their country a two-tiered system. Indeed, the wait times are a significant problem within the National Health Service. You can go outside the National Health Service, stay in the country of Britain, go outside the National Health Service and go to one of the private physicians. Physicians work in their offices at the time they are required by the government and then operate a private practice on the side. Some of the most expensive health care in the world is available right alongside the free system in the National Health Service. And the fact that it is able to run, the fact that it is able to go, certainly speaks to the fact that it is serving a need that people want filled.

The other thing you have to ask yourself, if you have someone who is going to have to wait 6 or 8 months for a CAT scan or an MRI, if you have someone who is going to wait half a year or a year's time for replacement of an artificial hip and that person is nearing the age of 80, a year's wait is a significant period of time of the number of days that that person has left in their life. It is a sad reality but, nevertheless, true.

Again, I come back to the notion that the private sector is more nimble and more financially responsible and it is the better way to build the future of our health system. It is a complex relationship. And how Congress should do its job to ensure that we have the best health care system possible is going to be the central part of the debate that we have over the next 18 months. In my opinion, Congress has to promote policies that keep the private sector leading the way with some interaction that leads to a well-run government system.

You can hardly talk about health care in this country without coming up against the problem of the uninsured. The Census Bureau right now estimates that some 46 million people in this country are uninsured.

Now, uninsured does not always mean lack of access to health care because we all have heard stories about people who use the emergency room for relatively modest problems. It is one of the more expensive ways to get care. There is also a disadvantage too in that if you wait until a modest health care problem becomes an emergency, then you are oftentimes not going to get the best health care bargain or the best bargain for your health care dollar. You are also possibly going to jeopardize the health outcome. So no one would argue that just simply relying upon our Nation's overstretched emergency rooms are a method of dealing with the problem of the uninsured. But I think it is important to point out that doctors and nurses in hospitals on the front lines every day see people and take care of their medical needs, fully recognizing that there may not be a reasonable expectation of payment for those services. And we owe those individuals a debt of gratitude for continuing to do that, sometimes in the face of some rather severe Federal regulations and an extremely hostile medical liability climate.

One of the other things that we will talk about, in fact, we are required to do in this Congress is the reauthorization of what is known as SCHIP, the State Children's Health Insurance Program. This is a program that was started some 10 years ago. It had a 10-year authorization and requires that the Congress reauthorize it this year.

The two gentlemen who were here before me talking about the slow pace of things in this Congress could have added the slow pace of the reauthorization of the current SCHIP language to that list of things that they were concerned about. This is legislation that, again, Congress is required to reauthorize prior to September 30 of this year when the authorization expires. There is no continuing resolution. There is no IOU or Band-Aid we can put on this program. We simply must reauthorize the program if we want it to continue. And it has been a good program, and I would argue that virtually everyone within this body wants it to continue.

Not to say there are not some areas for improvement. A bill that I introduced earlier this year, H.R. 1013, the purpose of this legislation was to ensure that the SCHIP funding that Congress has made available be used to cover children and pregnant adults with this coverage. Right now we have four States that are covering more adults than they are children with their SCHIP funding. That stands the whole program on its head. It is cheaper to cover children with health insurance than it is adults. In fact, the ratio is it costs about 60 cents to provide what otherwise would cost a dollar's worth of health care insurance for adults. So we get a lot of mileage for our dollars when we put that coverage into children. If we take that coverage away from children to then cover adults who otherwise would not belong in the system but get in through some type of waiver, we are not doing a good job with the moneys that we intended to put forward to cover children. And the reality is until we have covered all the children who need coverage in this country, we shouldn't be taking those dollars away from the children to cover

adults in the system. Once we have covered all the children in the country, then perhaps it is time to talk about a waiver. If we want to cover other nonpregnant adults, let's find another program to do that. Let's not steal money from the SCHIP program to provide that coverage.

Another thing that we don't really talk about a lot on the House floor, last year in my committee, the Committee on Energy and Commerce, we reauthorized the federally qualified health center statute. We never got that completely finished in the House. We should take it up again this year. It should be taken up by the Senate, and this is a program that fully deserves reauthorization by this Congress.

The federally qualified health center statute provides in federally qualified health centers coverage for about 15 million uninsureds. That is access to medicines, access to a medical home, access to mental health services, access to treatment for substance abuse, a significant set of services that are available to people who otherwise would not have access to medical care. Federally qualified health centers do a good job. Both SCHIP and the federally qualified health center system deserve to be taken up and reauthorized by this Congress. If there are improvements that we can make, then by all means let's have the debate and make those improvements necessary, but let's not let those two programs languish and by default be sunsetted and not continue.

Now, the two gentlemen that were here talking earlier were talking about some of the problems that people get into when they lose their health insurance and wanting to extend COBRA benefits, a noble exercise. One of the things that I have really thought is a forward- looking way to go with health insurance, and it kind of gets at what they were talking about, that is the individual ownership of an insurance policy.

The point made by Mr. Kirk of Illinois, gone are the days where a person gets out of high school or college, works in one job, one factory, one manufacturing plant for the remainder of their work life, then retires and gets a gold watch and goes off to a well-deserved retirement. People change jobs in today's economy. Their health insurance ought to be able to be flexible to change with them, to move with them. One way to ensure that is to allow an individual to own their health insurance policy.

Back in the days when I was practicing medicine in the middle 1990s, this Congress passed a bill called the Health Insurance Portability Act of 1996, the Kennedy-Kassebaum bill. In it, it provided for a demonstration product for what were then called the medical savings accounts. Bill Archer, chairman of the Ways and Means Committee at the time, was a champion of the old MSA. I had an MSA when I was a practicing physician. It allows you to build a tax-deferred savings account that is dedicated to your medical expenses. You buy an insurance policy that is yours. You do pay for it with after-tax dollars, but the advantage is that since it has such a high deductible, it typically has a lower premium.

Now, there are some problems with the previous MSAs that were first passed by this Congress. This Congress put a lot of regulations on those insurance policies, and as a consequence, in my home State of Texas, we only had two insurers who were willing to take people on with a medical savings account. When we did the Medicare bill that I referenced earlier in the talk, back in 2003, when we did the Medicare Modernization Act, included within that language was language that allowed for a significant expansion of what we now call health savings accounts. The central concept is still there. It is a high deductible insurance policy owned by the individual, not the employer, or the individual can own the policy. Some employers have now begun to offer health savings accounts. A high deductible policy with a lower premium, and you put money into a tax-deferred savings account. Remember Albert Einstein said there is no power in the universe as strong as the miracle of compound interest. Put that as a pretax expense, and that can be something that grows significantly over time. Imagine that. A health-based IRA or a health savings account, an account that is dedicated only to your health care needs. Start that when you are young. It grows over time, and that can be an incredibly powerful tool to combat problems that might occur with health later in life.

But even if someone has a high deductible policy in their younger years and maybe they don't have quite as much stored up in that health savings account that would cover the deductible, still you get into a catastrophic situation, or it doesn't even need to be a catastrophic situation. In today's environment you have a single car accident and the medical costs can just be astronomical after spending an afternoon in the emergency room, a couple of hours in the CAT scanner, maybe a day or 2 in the intensive care unit, 3 or 4 days in the hospital, and by the time you get out, you have got a bill that will literally shock you. And a health savings account would provide that type of catastrophic coverage.

Why is this important? Say a young person just getting out of college decides they want to go off on their own and they want to be the next Bill Gates. They want to be an entrepreneur. They want to develop their own company. They don't want to work for a large company with its attendant benefits and health care insurance. They just want to go out on their own. Ten years ago you went into the private individual market and said, I want to buy some health insurance because I am going to work for myself and start a small business and be my own boss, you couldn't get anybody to talk to you for any price. There just wasn't a policy available.

Fast forward to the present time, and with the changes we made with health savings accounts in the Medicare Modernization Act of 2003, you can go on the Internet. You can type in ``health savings account'' into the search engine of your choice. And in my home State of Texas for a male age 25, just out of college, nonsmoker, you can pick up a high deductible policy in the range of $65 to $75 a month. Not an astronomical expense. Sure, there is a high deductible associated with that. So if you want a flu shot next fall, you are probably just paying for that out of pocket. But if you get pneumonia and you end up in the hospital in the ICU for several days, you are going to have coverage for that so-called catastrophic event because, even though it is a high deductible, your medical expenses will quickly exceed that. So that is a good thing to have so that you do have coverage.

For a young family where a husband and wife want to have the coverage, want to do the responsible thing if they have small children, a health savings account may provide the way to do that and have that coverage beginning at an early age. And over time the money will grow in the actual savings account portion of that. It grows tax deferred. It can accumulate quickly. And as a consequence, the specter of having a very high deductible is something that is now not such a big deal because there is easily money within that health savings account to pay for those health care needs. Even the routine care if someone chooses to do that, the dollars are there to be spent for that purpose.

The popularity has grown a lot. When I first got mine back in 1997, my old Archer medical savings account, I worried because they said we're going to put a cap on this; we're not going to allow more than 750,000 of these to be sold in the United States of America. I thought golly, I better get out there and get one fast or they are going to all be snapped up. It turned out I didn't need to worry because those original insurance policies, probably less than 100,000 were sold.

But the health savings accounts, when the conditions changed in 2003, have been significantly popular. The last year for which I have accurate and verifiable data is 2005. But by December of that year, the end of calendar year 2005, 3.2 million individuals had coverage through a health savings account; 42 percent of those individuals had families with incomes below $50,000 purchasing an HSA type of insurance. Certainly that is indicative that this is an affordable option. In addition, the number of previously uninsured HSA plan purchasers over the age of 60 nearly doubled, proving that the plans are accessible to people of all ages. And again, out of that number, over 3 million, probably about 40 percent of those

individuals were previously uninsured. So it did have the effect of, at least temporarily, bending the growth curve of the uninsured in this country.

Of those 46 million people that we talked about before that are uninsured, over half, 60 percent, are employed in small businesses. Some of these individuals prefer a more traditional health plan. They would like to have what we talked about earlier, an employer-derived health insurance. But their employers, their small business employers look at those premiums going up every year and they say, you know what, I just cannot do it anymore, and so they drop the benefit because it is simply too expensive.

Now, Congress has had before it, over the last 4 years I think we've had at least three votes on this concept; it has always passed the House of Representatives; it always stalled in the Senate. I don't know if we will take it up this year, but I think we should because I think it is fundamentally a good idea. And maybe at some point we will get some cooperation from the other body.

But to unburden small business owners, Congress has devised the concept of what are called Association Health Plans, essentially allowing a group of small businesses with a small business model to band together to get the purchasing clout of a big corporation. It is really not too hard a concept for most people to understand. It is, again, something that has passed this House at least three times that I am aware of. It is a sensible solution. It allows the spread of the insurance risk amongst a larger group. A small employer, say a realtor in your hometown who has 3 or 4 people working in the office, very difficult, very expensive for them to get insurance, if they can find it. Well, imagine if you let all the realtors in Texas band together and form a single group that was negotiating for the sale of insurance. Now imagine that you couple that with the realtors in Oklahoma, Louisiana and New Mexico. Then you've got a group of people that really is beginning to have some significant financial clout and may be able to get a much better price in the group health insurance market. Well, all of this, from the insurance side, is extremely important. You've got to worry though, are we putting the cart before the horse?

About a year and a half ago, Alan Greenspan, just as he retired as Chairman of the Federal Reserve Board here in Washington, D.C., met with several groups. He met with a group of us one morning, and he was asked the inevitable question, well, Chairman, what about the ability of the Federal Government to pay for Medicare in the future. He alluded to how that was going to be a problem that was going to have to be faced. But at the end of it all, he felt that Congress would be able to come up with an equitable solution to that. And he paused and he said, what concerns me more is will there be anyone there to provide the services that you want when you get there. That is a pretty profound statement, certainly something that has stuck with me since that time.

No question about it in my mind, our country faces a crisis in health care manpower, a physician shortage, if you will, in the future. We need to ensure that the doctors who are in practice today, those physicians I like to call ``mature physicians'' at the peak of their clinical abilities, at the peak of their diagnostic abilities, at the peak of their surgical expertise and abilities, we've got to be sure that they stay in the game, that they continue to practice, that they don't retire early, that they don't wander off and do something else. We need to keep them involved.

At the same time, we need to ensure that the younger physicians, the doctors of tomorrow, those that are in residency programs today, those that might be thinking about going to medical school or into nursing, that those individuals stay involved and in fact pursue their career dream of working in health care.

The first issue that always comes to my mind when I think of what are some of the things that drive doctors out of practice or keep people from going into the practice of medicine, and that is, of course, the conundrum of medical liability. Again, we faced it in this House of Representatives probably four times in the time that I have been in Congress. It is an issue that has never gotten through the other body. Again, I believe we need to continue to push that as an issue because in so many ways we just need some commonsense medical liability reform to protect patients, stop the escalating costs associated with lawsuits that are not well-grounded, and to make health care more affordable, ensure that health care is in fact even available to Americans all across from coast to coast in Alaska and Hawaii, and make sure that those physicians stay in the game and continue to provide the needed services.

I believe we do need a national solution. State to State coverage is always going to be tenuous. My home State of Texas did a great thing as far as medical liability reform is concerned back in September of 2003, but you worry every time the State legislature comes into session every 2 years, is something going to happen that undoes those great steps forward that were taken back in 2003.

I do think that modelling after the concept that was developed, actually originally in the State of California back in 1975, the Medical Injury Compensation Reform Act of 1975, signed into law by Governor Jerry Brown, a great step forward that put a cap on noneconomic damages in medical liability suits.

Fast forward to 2003, and the Texas plan came forward. Indeed, the basis of the program or the basis of the reform does lie in a cap on noneconomic damages, but I like to say it's got a 21st century angle to it. There is a $250,000 cap on noneconomic damages for the doctor, a $250,000 on noneconomic damages for the hospital, and a third cap of $250,000 for noneconomic damages from a second hospital or nursing home, if one is involved. In fact, the original cap legislation that worked so well in California, in Texas it has been trifurcated. It is in the aggregate of a $750,000 cap.

Well, how does that work? Did that fix the problem that the State of Texas faced the year I ran for Congress 2003? Well, in Texas, we've gone from 17 medical liability insurers down to two. My personal situation, running my own practice, really having not had a problem that would take me into the courts, but my rates were increasing by 25, 30, 40 percent a year. Well, in 2003, the Texas legislature passed medical liability reform based off that California law, again, updated for the 21st century, for an aggregate cap of $750,000. What has happened since then? Well, remember I just said, we dropped from 17 liability insurers down to two because of the medical liability crisis. We are back up to 14 or 15 carriers. And most importantly, those carriers have returned to the State of Texas without an increase in their rates. They have held their rates down.

My old insurer of record, Texas Medical Liability Trust, between rate reductions, rebates and dividend payments to physicians over the 3\1/2\ years since this law was passed, the actual net effect is a 22 percent reduction in premiums for physicians across the board in the State of Texas. Again, remember premiums were going up by 20, 25, 30 percent or more a year, now they are coming down, and over the last few years they have come down 22 percent.

One of the most significant, unintended benefits of this was what happened with the small not-for-profit, community-based hospitals, those hospitals that were essentially self-insured for medical liability. They have been able to take money that was in those escrow accounts against the uncertainty of the medical liability climate that they faced in 2001, 2002 and early 2003, now that money has been able to go to hiring nurses, capital improvements, just the very things you would want your smaller not-for-profit, community-based hospital to be able to do. This is certainly one of the good news stories. And again, the smaller hospitals were not the intended beneficiary of this legislation when it passed in the State of Texas.

I took the language of the Texas-passed medical liability reform, worked it into the type of language that we have to have here in the House of Representatives, ran it through legislative counsel and offered it to Mr. Ryan, Paul Ryan, the ranking member of the Budget Committee on the Republican side, when we were doing our budgetary work in March. He had that bill scored by the Congressional Budget Office. And the Texas plan, as applied

through the House of Representatives language, applied to the entire 50 States, would yield a savings of $3.8 billion over 5 years. Now, not a mammoth amount of money, but when you are talking about a $2.999 trillion budget, savings is savings. And these are monies that we are in a sense just going to leave on the table in this budgetary cycle that could have gone to some of the other spending priorities, some of which I have already alluded to in the SCHIP and the Federally Qualified Health Center statutes. But anything, even those things not dealing with health, $3.8 billion, as the old saying goes, you keep leaving that amount of money on the table and pretty soon you're going to be talking about some real dollars.

And also consider this: A study done in 1996, that's over 10 years ago, out of Stanford University, revealed that in the Medicare system alone, the cost of defensive medicine was approximately $28 to $30 billion a year. The cost of Medicare, not the entire cost of the health care infrastructure of the United States of America, the cost to Medicare was $28 to $30 billion a year 10 years ago. I submit that that number has likely increased today. We can scarcely afford to continue this trajectory that we are on with regards to medical liability in this country.

And again, remember when I started this part of the discussion talking about are we going to have anyone there to provide the services when we want them. And another consideration is that young people today entering college, in college, just getting out of college, who wanted to consider a career in health care, are looking at the crisis that we face in medical liability in this country, and it's keeping them out of the game, and that's not right. One of the obstetrics residency directors from a big New York program was down here actually a couple of years ago now, and I asked her, is the medical liability crisis, is it having an effect on your residency classes that you're recruiting? And she told me that right now we are taking people into our residency program that we wouldn't have interviewed 5 years ago. In other words, we are lowering the class and the capabilities of those people who are willing to go into obstetrics as a specialty. Well, these are our children's doctors, these are our children's children's doctors that are being trained in the residency programs today. I fail to see how it advances the case for patient safety and the well-being of Americans to continue to allow this condition to exist without addressing it.

Again, we voted on the bill several times in this House over the past several years. My understanding is the bill was just recently reintroduced last week. I hope we will have a chance to address it in this House. And I hope we can get some activity from the other body. I am not optimistic, but I believe this is so important that we have got to continue to try to get this done.

This brings me to one of the things I initially spoke about, one of three health care bills, H.R. 2583, the so-called Physician Workforce and Graduate Medical Education Enhancement Act of 2007. There is a Washington-type title that everyone can love. Well, part of ensuring the future health care workforce in this country is going to be to make certain that there are the types of residency programs in the types of communities in which we want doctors to consider going into practice. You know, the funny thing about physicians is they do have a lot of inertia. They tend to stay where they're dropped; that is, they tend to work and have their practice in communities where they trained or close to where they trained.

A lot of us have followed that trajectory, and I suspect there is nothing unique about that. It will continue to be the way physicians behave for probably well into the future. So the bill introduced just last week was designed to get more training programs in areas that are underserved, like rural areas, inner-city areas, to get young doctors- in-training in locations where they are actually needed.

The Physician Workforce and Graduate Medical Education Enhancement Act of 2007 would develop a program that would permit hospitals that do not traditionally operate a residency training program that will allow them the opportunity to start a residency training program and in fact build that physician workforce of the future on site in those communities where they are in fact needed.

On average, it costs $100,000 a year to train a resident, and that cost for a smaller hospital is clearly prohibitive. Because of the cost consideration, the bill would create a loan fund available to hospitals to make residency training programs where none has operated in the past. The programs would require full accreditation and be focused obviously in rural and suburban inner-urban or other smaller community- type hospitals. I can think of several communities in the congressional district that I represent that might benefit from such a program.

Clearly, it is one thing to say we are just going to educate more doctors, but to get them to practice in the areas where they are needed, and, boy, an area that comes to mind is the area around New Orleans, Louisiana. They have lost doctors. The wholesale loss of doctors since the twin hurricanes of August of 2005, it is going to be very difficult to encourage people to come back to that area. But the reality is if someone trains in that area, the likelihood of them staying in that area is increased.

It is all well and good to create new residency programs, but if you don't have anyone interested in filling that residency slot, it is not going to be really something that does all that much good. So the second bill, H.R. 2584, the High Need Physician Specialty Workforce Incentive Act of 2007, would help locate young doctors where they are needed to solve part of the impending physician shortage crisis that likely could affect the entire country.

We have got to consider training doctors for high need specialties. This act will establish a mix of scholarships, loan repayment funds and tax incentives to entice more students to medical school and create incentives for those students and newly-minted doctors to help them go into healthcare. The program will have a established repayment program for students who agree to go into family practice, internal medicine, emergency medicine, general surgery or OB/GYN, and practice in underserved areas. It will be a 5-year authorization at $5 million a year and it will provide additional educational scholarships in exchange for a commitment to serve in a public or private nonprofit health facility determined to have a critical shortage of primary care physicians.

Again, the Gulf Coast area comes to mind, but there are plenty of areas in my home State of Texas, West Texas and in fact East Texas, that would fit the bill for something like that. It is very similar to what used to be called the Berry Plan. The armed services used to offer a scholarship and some loan forgiveness to encourage physicians to go into one of the branches of service. This is modeled after those plans that were so popular in the early 1970s. Again, it is an important step in getting doctors into the communities where they are actually needed.

The third bill of the three that I introduced last week, H.R. 2585, really deals with the heart of the problem, which is stabilization of the current physician workforce.

When we talk about the current physician workforce, discussing things like medical liability, placement of doctors in locations of greatest need and financial concerns, encouraging doctors to remain in those high-need specialties, the next step is to fix on that largest group of doctors in the country and certainly the largest and still growing group of patients, those baby-boomers that you heard Mark Kirk talk about in the last hour.

Baby-boomers are going to continue to age. They are going to retire, and the demand for services has no where to go but up. If the physician workforce trends continues as they are today, we may no longer be talking about trying to fund the Medicare program. We may be talking about trying to find the Medicare physician. We may be talking about the fact that there is no one there to take care of America's seniors.

Year after year, there is a reduction in reimbursement payments from the Center for Medicare and Medicaid Services to doctors for services that they provide their Medicare patients. This is not a question of doctors just simply

wanting to make more money. It is about a stabilized repayment for services that are already rendered. It is about a question of fundamental fairness. And it is not just affecting doctors. It is affecting patients, and it becomes a real crisis of access.

Not a week goes by that I don't get a letter or fax from a physician back in Texas who says, you know what? I have just had enough of this, and I am going to retire early. I am no longer going to see Medicare patients in my practice or I am going to restrict the procedures that I offer to Medicare patients.

In fact it happened to me while we were home on the Memorial Day recess. A woman came up to me, someone I had trained with, and said, look, I just can no longer do these long, involved operations and be paid literally a pittance for the service, when I could spend my time doing other things that would actually pay for the cost of running my practice.

I certainly understand that. I certainly sympathize with that. It is a difficult situation for doctors to find themselves in, because they want to do right. These are difficult operations that they trained for years to be able to provide for people. Now, the fact that they are so poorly compensated by Medicare, they are simply having to turn their back on these challenging, technically difficult procedures, and say I will just see the well patient in the office and stay out of the operating room. I saw it happen in the hospital environment before I left the practice of medicine to come to Congress.

But I hear it in virtually every town hall that I do back in my district. Someone will raise their happened or come up to me afterwards and say, how come on Medicare, you turn 65 and you have to change doctors? The answer is because their doctor found it no longer economically viable to continue to see Medicare patients because they weren't able to cover the cost of delivering the care rendered. They weren't able to cover the cost of providing the care.

Medicare payments to physicians are modified annually. They use something called the sustainable growth rate formula. A lot of the people around here call it the SGR rate. Because of flaws in the process, the sustainable growth rate formula, mandated physician fee cuts in recent years have only been moderately averted by last-minute machinations and fixes that the Congress has provided. In fact, if no long-term congressional action is implemented, the SGR will continue to mandate cuts for physician reimbursement as far as the eye can see, cuts in aggregate between 35 and 40 percent over the next 10 years.

Now, unlike hospitals, who are reimbursed under essentially a cost of living adjustment every year known as the Medicare Economic Index, physicians are reimbursed under the SGR, which says there is a fixed amount of money to pay for all of the doctor-derived healthcare in this country, and there is more demands on that volume, then the slices of that pie are just going to get successively thinner year after year.

Medicare payments to physicians cover only about 65 percent of the cost of providing the patient services. That doesn't figure in anything for the doctor's take-home pay. That is the cost of providing the services. That is the office rent. That is the nurse's salary. That is keeping the lights on. That is paying for the medical equipment. That is buying the syringes and the medicines that might be administered in that office.

Can you imagine any industry, any business, any company that would continue in business if they received only two-thirds of the cost of what it costs them to provide the services? Currently the sustainable growth rate formula links physician payment updates to the Gross Domestic Product, which actually has no relationship whatsoever to the cost of providing those services.

But simply the repeal of the SGR, one of the big stumbling blocks for that is it is very, very costly when figured in the overall Federal budget. But the reality is we have to do it. Maybe if we do it over time, perhaps we can bring that down to a level that is in fact manageable.

Paying physicians fairly will extend their careers for many of those doctors now in practice and those who would otherwise opt out of the Medicare program or seek early retirement or restrict those procedures that they offer to their Medicare patients. It also has the effect of ensuring an adequate network of doctors available to older Americans as this country makes the transition to the physician workforce of the future.

In the physician payment stabilization bill, the SGR formula would be repealed 2 years from now, in 2010. There would be some incentive payments based on quality reporting and technology improvements installed to protect the practicing of physicians against the 5 percent cut that will likely occur each in the years 2008 and 2009. Those things would be voluntary. No one would have to do them. No one would be required to participate in the quality program or the technology improvement, but it would be available to those doctors and those practices who wanted to offset the proposed cuts that would occur in physician reimbursement over the 2 years until a formal repeal of the SGR would be allowed to happen.

Now, for most doctors, that is unacceptable. They say, well, I want the SGR repealed now, not 2 years from now, and I want it repealed this year and I want a positive update or I am going to stop seeing Medicare patients.

The reality is that possibly if we do this over time, we will be able to get it done. The other reality is I wish we had started this when I first got to Congress 4 years ago, and we might be well on our way or well past the where we would have in fact solved this problem. So, it is time to begin that journey of 1,000 miles with the very first steps, and we do have to focus on the fact that this is a long-term solution.

A lot of people say why do it that way? Why not just bite the bullet and get the SGR out of the way and get it repealed? It costs a tremendous amount of money. The other unfortunate aspect of that costing a tremendous amount of money is it may make the premium for the Part B recipient, it may make that premium go up significantly.

In Congress, we are all required to submit legislation to the Congressional Budget Office to find out how much it costs. If we are going to spend the taxpayers' money, how much are we going to spend, over what time will we spend it?

Because of constraints at the Congressional Budget Office, we are not allowed to do what is called dynamic scoring. We are not able to look at changing a program or a new program and say if we did things this way, we would save money in the future. That is well and good, but we can't claim those future savings to offset the cost of doing it a new way. And that is what static scoring tells us, and that is why dynamic scoring would be so beneficial in a situation like this. But we are not able to use that.

If we look at some of the things we have done already in the Medicare system we can say, you know, if we do it this way, we are actually going to save some money. We are not allowed to capture those savings.

The Trustees Report that came out just a few weeks ago, there were 600,000 hospital beds in the year 2005 that weren't filled because of things that doctors and hospitals are doing better, improvements that have been made in the healthcare system. 600,000 hospital beds that weren't filled. Do we get the financial credit for those 600,000 hospital beds that weren't filled? No, we can't claim that. That is just something that is absorbed by the system, and we go on and reset things for the next year and continue on our merry way with the SGR.

But the reality is if we could capture those savings, if we could aggregate those savings, it is not just in hospital beds, there are other areas where savings are occurring at the same time, if we could capture those savings, aggregate those savings, and use those savings to offset the cost of the SGR repeal, we might very well come down to a much more manageable number.

The old bank robber, Willie Sutton, was famous for saying he robbed banks because that is where the money is. Well, let's go after the procedures where most of the money is spent in CMS, identify where the savings are in delivering the care for people who are in those diagnostic groups, and let's keep that money, capture that money, and use it to offset the cost of the SGR.

I think that is the greatest return on investment that we could expect from those savings that we are likely going to see from Medicare in the future.

The same considerations apply to the Medicaid program as well. Again, it could be a useful exercise to go through and identify the top 10 conditions and see where the easy savings are in taking care of patients with those conditions. How can their care be better managed? How can things be prospectively managed? What types of intervention might keep a patient out of an expensive hospitalization or away from an expensive dialysis unit? These are the times of savings we need to gather.

I see that I am going to run up against some time constraints. I just want to mention health information technology is something that we do have to pay some attention to.

In the SGR reform bill that I introduced, there is some language about moving us down the road on information technology, embracing information technology. I haven't always been a big proponent of that. When I was practicing medicine, if someone had come to me with proposals like that, I would say, you know, that is going to increase the number of hours I spend every day, not increase my payments to any great degree, and I just don't see how it is going to be economically useful to me as a physician.

That was before I traveled to the City of New Orleans for the second time in January of 2006 and was taken into the records room at Charity Hospital shortly after they had gotten all of the water out of the records room at Charity Hospital.

It looked like the records room of any big city hospital. There were rows and rows, perhaps hundreds of thousands of records in this large room, tens of thousand of square feet devoted to the storage of medical records. They were ruined. They had been ruined by the water and by the black mold growing on the manilla folders. There was not enough protective gear to protect someone to go in and pull the charts out of the racks and begin to go through them to get the patient's medical history.

Clearly, the time has come where we need to have the concept of computerized access to medical records. It is something this country needs to embrace.

The old adage when I was in college, you could say, the dog ate my homework. No student today would do a report, a term paper and keep one single paper copy. They have it on a flash drive, on a hard drive, on a floppy disk. They have printed it out several times. They live in the electronic age. It would make no sense to the medical student of today to have a single paper copy of a term paper or lab report that they would have to turn in for a grade. It would never cross their mind.

Some of the other things, the interoperability of our systems is key. Right after the Walter Reed story broke, I was there visiting. Yes, the physical conditions were one thing; but one soldier told me the biggest concern he has is as he prepares his records, he is on medical hold and as he is looking to go back to join his unit or be discharged, he has to put in order his medical records to make the case for staying in the service or get the disability to which he is entitled if he is discharged from the service.

The biggest fear they have is they will spend hour after hour putting records together and highlighting critical areas, have them sit on someone's desk until they are lost, and then have to start over again. Their biggest concern was the inability of the Department of Defense and the Veterans Administration to interact with each other on the transfer of medical records. Clearly, that is a concept whose time has come.

Price transparency. I have talked about HSAs. If we are going to have health savings accounts work for Americans, we are going to have to be able to allow them to access information about price, cost and quality of medical care and procedures. I introduced legislation dealing with price transparency earlier.

My home State of Texas has gone a long way in this regard, providing information up on the Internet about the costs at various hospitals throughout the State and how they compare to other hospitals in the State. There is a lot of information. It is technically complex. It may even be boring to listen to, but nonetheless it is part of an incredibly important story. The story of how the most advanced, most innovative health care system in the world itself is in need of a little attention.

The last chapter should read happily ever after. How do we get there? The last chapter may read private industry leads to a healthy ending. We are in a debate that will forever change the way health care is delivered in our country. The next 18 months will spell that out for us. We have to understand what is working in our system. How do we make it work better, and how do we extend that to areas where we don't find excellence in our system, whether those areas be public or private. We can't delay making changes to bring our health care system into the 21st century.

I believe the only way this can work is to allow the private sector to lay the foundation for further improvements. The pillars of the system we have have to be rooted in the bedrock of a thriving public sector, and a thriving private sector, not in the shaky ground of a public and private system always at war with each other, and many times are inefficient.

We need to devote our work in Congress to building a stronger private sector in health care. History has proven this to be a tried and true measure. We can bring down the number of uninsured, increase patient access, stabilize physician workforce and modernize technology if we simply have the political and institutional courage to take the steps necessary.

Mr. Speaker, I come to the floor of the House tonight, as I often do, to talk a little bit about health care, the status of health care here in America.

Tonight, if we could, I would like to talk a little bit about the past, talk some about the present, and maybe just look a little bit into the future.

Mr. Speaker, as I see it, over the last 70 years there have been three transformational times in American medicine: one in the 1940s, one in the 1960s, and I believe we are on the threshold or the beginning of another transformational time here early in the 21st century.

Mr. Speaker, medicine itself, the science of medicine, is pretty highly ordered, highly structured. It's very scientific. The scientific method is always employed in medicine. And when you get to government politics, government policy in regards to health care, in regards to medicine you would expect it to also rest on a firm foundation of science. But I have to tell you, Mr. Speaker, after being here for less than 5 years, you oftentimes see where that intersection of health care policy and health care reality sometimes creates more confusion than shedding light on the subject. And the thing is, Mr. Speaker, when we create these policies in Congress, we affect things not just today, not just for the time the bill-signing occurs, but we affect things for decades into the future. And that is the responsibility that we hold in our hands here in this House of Representatives when we talk about changes in the health care system.

Now, Mr. Speaker, I referred to the 1940s as a transformational time in medicine. Obviously there were a lot of things going on in the world in the 1940s. But just prior to the 1940s, Mr. Alexander Flemming, an Englishman, made a startling discovery. He made a discovery that a mold, the penicillin mold, created a substance that was diffusible across an auger plate that would inhibit the growth of bacteria. He further found that this substance apparently was not harmful to humans. So we have the concept of selective toxicity, something that will attack a microbe and not hurt the host; the first time that science had delivered that type of hope, that type of promise to the world.

Now, Sir Alexander Flemming, receiving all the accolades he did for discovering penicillin, really created, at that point, something that was in such short supply, was so difficult to produce and so expensive that it really had no practical utility. It was almost like a medical trick or parlor game, but it was not something that could be generally used by the public, who was ill and needed access to the medicine. But American scientists, working in this country, created a system whereby they could grow large quantities of this mold, remove the substance from the vats that surrounded it, and purify it in large quantities. This occurred in 1942. We were in the middle of World War II. What a phenomenal discovery. Now this wonder drug that had only recently been discovered but was so rare, so scarce and so expensive that it had no practical utility, now it was cheap, readily available and, in fact, probably made a significant difference in the recovery of some of our soldiers who were wounded in the landing in Normandy. Battlefield infections were notoriously bad for causing loss of life and limb, and now we had an agent that was capable of treating those.

Now, another discovery that occurred in the 1940s, cortisone had been discovered before the 1940s, but again, a laborious process for actually extracting this anti-inflammatory medicine. In fact, Mr. Speaker, they extracted it from the adrenal glands of oxen. So you can imagine how labor intensive that process was. And so only small amounts of this compound were available to treat injured individuals.

But in the 1940s, an individual, Dr. Percy Julian, a Ph.D. biochemist, in fact we honored Percy Julian on the floor of this House as one of the outstanding African American scientists of the last century. I think we did that during the last Congress. And I was very happy to vote for that because Dr. Julian's contribution to American medicine was nothing short of astounding. He was able to use a precursor of a soybean and create cortisone in a laboratory and mass produce it. Once again we had a wonder drug that previously was available only in such small supply as to only be of benefit to a handful of people; now, suddenly, it was readily available, and available to large numbers of people at a reasonable price.

So the 1940s ushered in the era of anti-infective antibiotic agents and anti-inflammatory agents, two true wonder drugs that, again, American medicine had not had available prior to that time.

Now, Mr. Speaker, today we get sick, we go see the doc, he or she writes out a script, tears it off, sends you on the way to the pharmacy, you get it filled and you never give it a second thought. But prior to 1940, that wasn't an option; it didn't happen. Again, our soldiers landing in Normandy who were injured had available for the first time an anti-infective agent that was of such caliber that it provided many of those wounded men to gain back the use of limbs that otherwise would have been placed in peril by battlefield injuries.

The discovery of cortisone really revolutionized at that time the treatment of illnesses such as Lupus and rheumatoid arthritis. There are other medications that are available now. Cortisone, of course, has some side effects and some problems, but still, cortisone is in widespread use in a number of areas in medicine today. So still, these are concepts that we benefit from.

When you also think of the 1940s, what else was going on? Well, of course, the Second World War. We were in the middle of a two-front war. The American workforce was severely contracted because of the number of men and women who were fighting for our country, so employers back in this country who wanted to produce the material for the war, who wanted to continue to operate their businesses, were pretty hard pressed to find employees to work there.

One of the things that was happening during the war, because of this shortage of workforce, was that compensation for workers started going up pretty fast. President Roosevelt saw that and felt that he needed to put some brakes on the rapid growth of wages; otherwise, the economy would get out of control and inflation would spiral out of control. So he put in place wage and price controls, and he did so because, again, the country was at war and the severe contraction of the workforce caused disruption of the labor market, and the President sought to correct that.

Now, employers said we want to do things for our employees that make them want to work for us and make them not look for other employment in other locations, so if we can't offer

wages, can we offer benefits? Could we, perhaps, offer retirement benefits? Could we, perhaps, offer health benefits? And the United States Supreme Court ruled in 1944 that, indeed, those benefits could be offered and they would not violate the spirit of the wage and price controls. And furthermore, they should be available to the individuals as a pretax expense. And hence, the era of employer-derived health insurance as a pretax expense was born and survives to this day. And many people are very satisfied with that as a method of having insurance for their health care. And it has its roots back in 1940. Again, a truly transformational time in American medicine. We've got new medicines to treat infections and inflammatory conditions, and we've got a new way of paying for health care for Americans in employer-derived health insurance.

The 1960s; what do we see then? We see the introduction of new generations of antibiotics, antibiotics that were more potent. Some bugs had developed resistances to the old antibiotics; we had new antibiotics that were less prone for bacteria developing resistance. We had new antipsychotic medications. We had new antidepressant medications, medications to treat conditions that heretofore had not been treatable. There had not been a rational or a viable treatment available to those patients.

What else did we see in the 1960s? We saw in this House, in 1965, the enactment of a law that we now know as Medicare for protection of United States seniors. For the first time the United States Government was in a position to finance a large portion of health care in this country. In fact, since 1965, over the last 42 years, the portion of health care that is paid for by the Federal Government, about 50 cents out of every health care dollar, begins right here in Washington, D.C. You've got Medicare/Medicaid, the VA System, the Indian Health Service, TRICARE, Department of Defense, as well as the Federal prison system. A lot of health care is paid for and it originates here in the United States Congress.

The other 50 percent, commercial insurance to be sure, some self-pay. And I would actually include the newer health savings accounts in that part that I would designate as self-pay. And then of course there is some care that is just simply not paid for, and some that is given as charity by the hospital or the doctor who provides the care and does not expect compensation.

And now, early in the 21st century, I believe, again, is a transformational time in American medicine. And I think it extends before us really as far as the eye can see. Mr. Speaker, I think this transformation will occur whether we want it to or not. Whether we lead it or not, the transformation will happen. Changes in information technology, concepts like rapid learning, changes in the practice of medicine regarding genomics, protein science. A new era of personalized medicine extends before us. And as we usher in this new era in medicine, how can we facilitate or at least not obstruct the scientific discoveries and allow this important process to go forward? And nowhere will this be more starkly apparent than in our ability to provide this new care at an affordable price to the majority of Americans and ensure that there are the doctors involved who will deliver that care.

Now, as I see it, the problem right now is that most health care is administered through some type of third-party arrangement so the patient and, quite honestly, the physician is generally aware of the cost of care that they receive. This arrangement has created an environment that permits the rapid growth, the rapid escalation of prices in all sectors of health care. So how do we improve the model of this current hybrid system, this public/private partnership that we have right now? How do we improve the current hybrid system that involves both public and private payment for health care but at the same time anesthetizes most of us to the true cost of that care?

Now, Mr. Speaker, we hear it all the time here on the floor of this House that we're just entering into the first retirees of the baby boom, and this is all we can see demographically for years and years to come. There will be more demand for medical services. Medical procedures and techniques and pharmaceuticals will tend to cost more because there is the advancing complexity of what we're able to do. Medicine is going to continue to evolve as it always has.

Now, Mr. Speaker, Alan Greenspan, former Chairman of the Federal Reserve, right around the time that he was retiring spoke to a group of us one morning, and the inevitable question came up to Mr. Greenspan, ``How in the world are we ever going to pay for the liability that we have in Medicare in the future?'' And Mr. Greenspan was quite circumspect about it, but eventually he offered the opinion that, when the time came, the Congress would find the courage and the resources to do what was necessary, and he thought that Medicare would be solvent into the future. He then stopped and went on to add, ``What concerns me more is will there be anyone there to deliver the service at the time you need it?''

Now, Mr. Speaker, I will tell you that those words have stuck with me these last 2 years and caused me to devote a great deal of time and study to the concept of the physician workforce in the United States. Let me just share with you, Mr. Speaker, the Texas Medical Association, back in my home State of Texas, puts out a magazine every month called ``Texas Medicine,'' and this was their March issue of this year, and the title story was, ``Running Out of Doctors.'' My State is far below the national average when it comes to physicians. The national average is 230 per 100,000 residents; Texas' ratio is 186 to 100,000 residents. The American Academy of Family Physicians predicts serious shortages of primary care doctors in five States, including Texas. And further, they go on to say that ``all States will have some level of family physician shortage by the year 2020.'' That's 13 years from now, three Presidential elections from now.

The Council on Graduate Medical Education, a congressionally authorized entity, estimates that after 2010, growth in the physician workforce will slow substantially, and that after 2015, the rate of population growth will exceed the rate of growth in the number of physicians.

Now, what do we do? My opinion, I think there is a three-part approach, a three-part solution to mitigate this shortage in the future.

First and foremost, and it seems so simple that I cannot believe that it doesn't occur to more people, we need to construct a payment system, particularly on the governmental side, that pays doctors fairly to keep them in practice longer. Additionally, improved assistance to medical students, to encourage college students and medical students to go into medicine and practice in high-need specialties in medically underserved areas. And then finally, to increase the number of residency programs, especially in rural or suburban areas, to keep the physician pipeline open.

And the real crux of this article, Mr. Speaker, in ``Running Out of Doctors,'' was the observation that doctors tend to have a lot of inertia. We don't tend to go very far from where we're hatched. And doctors who go through a residency program tend to practice within 50 to 100 miles of the location of that residency. That's why, if we can encourage the development of more residency programs in underserved areas, we will encourage the growth of the physician workforce in that area.

So, before we go completely into the three-point solution aimed at mitigating the possibility of an even greater solution in the future, let's talk about some of the basic principles that I had in mind as I developed this concept of physician workforce reform.

Now, Mr. Speaker, I believe that Congress must develop physician workforce initiatives that ensure future patient access and sustain a robust physician workforce, and this must be both separate, but complimentary, to Medicaid physician payment reform. Why do I say that? Well, Mr. Speaker, as you know and many in Congress know and many across America know, in Medicare we have different payment systems for part B as opposed to part A, part C and part D. In A, part C and part D, there is sort of a cost of living adjustment every year for hospitals, for HMOs, for drug companies. There is a cost of living adjustment that occurs every year so that these institutions, these entities are reimbursed based upon the cost of inputs.

But part B, the physician part, is under an entirely different formula that is coupled to the gross domestic product. Furthermore, it is a finite, a finite, number of dollars that are available to pay physicians who participate in the Medicare program. What happens over time, since that doesn't grow, what happens over time, the individual payments to physicians are scheduled to shrink 5 to 10 percent a year over the next 9- to 10-year budgetary cycle.

This program is so unfair that it causes physicians to retire early, stop seeing Medicare patients and leave the physician workforce. The solution is very, very simple, and it is one that is so simple that, quite frankly, it oftentimes gets lost in all of the other talk and debate. The solution to this problem is stop the cuts, repeal the formula, and then replace it with the Medicare economic index, the cost-of-living formula that hospitals, HMOs and drug companies are paid with.

Now, the current Medicare payment system exacerbates negative physician workforce trends. That is why I feel that the sustainable growth rate formula must be eliminated. Let me just show you a little graph of that. Mr. Speaker, I think this graph accurately represents what I am talking about. Again, we talk about the physician payment as compared to HMOs, hospitals and, in this bar graph, nursing homes. You can see over the years 2002 to 2007 increases in HMOs, hospitals, and nursing homes and very flat increases for a few years for physician payment after an initial decline, and actually this was projected for 2007. We actually held physician payment at a zero percent update, which anywhere else other than in Washington, D.C. let's be honest, that would be a cut but we call it a zero percent update because we like to be euphemistic when we talk to our physician friends. Again, I submit, stop the cuts, repeal the formula.

Now, any new system that we create has to be able to adjust for growth in services, but it has to be agile enough to determine what constitutes appropriate care in service and service volume when growth results in better patient outcomes. Any new coverage decisions by law or regulation must be accompanied by additional financial sources relative to their value for the services.

Now, Mr. Speaker, we spent a lot of time in my committee, Committee on Energy and Commerce, last year having hearings about physician payments. And one of the things that is obvious when you look at recent trends in Medicare outlays is that in fact the trustees report that came out last June talking about the year 2005; 600,000 fewer hospitals beds were filled that year. Why? Because the physician component is doing things better, more timely treatment of disease. I will submit that perhaps some of the new Medicare prescription drug program is playing a role in that as well; doctors are doing more procedures in their offices in ambulatory surgery centers.

The net effect of that, Mr. Speaker, is to keep down the costs for part A, but then that expense occurs in part B. So how could we get the savings that we are managing for part A, how could we get that back for part B? That is really the challenge that is before us.

Now, the Congressional Budget Office and all of the budgetary people who work up here on Capitol Hill will tell you that you can't prospectively go out and say, since you are going to save so much money, you saved so much money last year, and you are going to save so much money next year and the year thereafter, but you can't get credit for that until it actually happens. My belief is that savings will occur. It will accrue.

So what if we pay it forward, so to speak, we don't repeal the SGR in 2008 or 2009, we will repeal it in 2010. But in the meantime, 2008 and 2009 whatever savings occur because the physicians in part B are doing things better, cheaper and safer and saving money for part A, part C and part D, that those savings be sequestered and they be walled off. Remember the famous lockbox for 2000 everybody talked about for Social Security? Let's drag up that lockbox and put the savings in the lockbox, and we will open it up in 2010 and reduce the cost of repealing the SGR formula.

That has been the obstacle, Mr. Speaker. The Congressional Budget Office estimates the cost of repealing the SGR today right now at $268 billion. Last year when I tried a different approach to this same problem, the cost for repeal was the $218 billion. It goes up every year. One of the reasons it goes up every year is that every year we come swooping in at the last minute with some sort of last-minute fix. But all that money that we used to come in for that last-minute fix gets added on to the budgetary out-years. So we compound the problem. Every year that we don't fix it, we compound it. That is why it is so critical to fix that date that we repeal the formula.

Now, in the bill 2585 that I have introduced, we actually do that. We actually capture and sequester those savings and use that paying it forward to bring the cost of repealing the SGR down.

Now, just a couple of other points in general about physician workforce, preserving the physician workforce. You know, I said the SGR formula, the sustainable growth rate formula, is linked to the growth in the gross domestic product. There is a reason for that. That needs to be delinked. Quality reporting. What about quality reporting? We hear a lot about that. We hear a lot about pay for performance here on the floor of this House. Well, Mr. Speaker, I would submit to you, pay for performance is keeping the mature physician involved in the practice of medicine. If we drive all of our talented and experienced doctors out of the practice of medicine because of what we are doing with the Medicare formulas, it is going to be pretty tough to pay for performance.

Now, I do think some type of performance indicators need to be included in whatever process is going forward. We don't need to reinvent the wheel every time we sit down to talk about this. Many of the specialty organizations have already developed their own criteria. We have the QIOs. The quality improvement organizations have been in existence really I think for 20 years since the latter part of the second Reagan term. So these measures are all available to us.

What I would submit is that if a doctor or a physician group would voluntarily report to one of these quality measures, that there be some positive adjustment, in whatever formula we give them, that there be some positive adjustment for participating in that quality activity.

Similarly, I talked a little bit about this in the beginning. We are in a transformational time. What is one of the things that is going to drive that transformation? It is going to be changes in health information technology, whether we want it to or not. We struggled with the health information technology bill last year. We talked a little bit about one this year. The fact remains, it is happening whether Congress is involved or not. As a consequence, I think we ought to do what we can to encourage physicians' offices and individual physicians to begin to embrace this, to begin to investigate this and an additional positive update would be available to physicians who voluntarily participated in improvements in health information technology and their individual practices.

You know, Mr. Speaker, one of the things that I think would make a lot of sense and I don't know why we haven't done it, we ought to share with our Medicare beneficiaries what did your care cost last year. I get a statement from the Social Security Administration about what my Social Security contributions have been year over year since I first started paying that FICA tax. We could do the same thing with our Medicare patients: What did you contribute over your working lifetime? And now what are expenses attributable to you that are incurred to the system? That information should be confidential. You obviously don't publish that, but give back to the patient that information on what the cost of their care was over the past year because otherwise they have no benchmark. They have no way to know are they, in fact, getting value for their dollar or not.

So there are three bills that I've introduced to help tackle these problems and get at the essentials of what is creating the near havoc situation in the physician workforce. I think these bills are essential to ensuring that America will always have a good supply of

qualified, satisfied doctors to address the growing health care needs of an ever-growing population.

Now, we have already talked a little bit about the sustainable growth rate formula. Getting Medicare payment policy right is the first point to make in any type of reform that is going to affect the physician workforce. Paying physicians fairly will extend the careers of many doctors who otherwise would just simply opt out of Medicare or opt out of the practice of medicine entirely. Paying physicians fairly also has the effect of ensuring an adequate network of doctors. That adequate network of doctors is available to treat some of those complex patients we have in this country, and that is the elderly patient on Medicare and as this country makes a transition to the workforce of the future.

Now, the bill I introduced, 2585, Ensuring the Physician Workforce Act of 2007, modifies the Medicare physician reimbursement policies. It is important because you do have to pay doctors fairly for their services so that they will want to go into medicine, they will want to continue to practice medicine, and maybe even practice medicine to a later point in their life. So we extend the effective practice life of physicians who are already out there practicing.

Now, the fundamentals of 2585 we have covered already a little bit. But I like to think of it as a workforce solution for the mature physician. It provides sustainable Medicare reimbursement now and in the future by getting out of the chasm created by the sustainable growth rate formula and completely eliminating the sustainable growth rate formula by the year 2010. It includes truly transformational incentives to further the development and implementation of quality measures and health information technology in a way that makes sense to the business aspect of the practice of medicine.

Furthermore, in 2008 and 2009, physicians could opt to take advantage of those bonuses, return value back to their practices, and, in fact, return value back to the taxpayer by participating in those measures. Quality measures would be built around high-cost conditions and strive to improve the quality of care for those conditions and ultimately drive down the cost of delivering the care in the Medicare program. The bill would also include a Federal incentive to implement health information technology along with provisions providing safe harbors for the sharing of software, technical assistance and hardware as well as the creation of a health information technology consortium.

That last point is important because there are laws and regulations that Congress has passed in the past that prevent hospitals and doctors working together to develop the type of health information technology network that is really going to be necessary to manage this sea change that we are going to see in medicine in the coming years.

I will confess, Mr. Speaker, let me put another chart up here. Mr. Speaker, I will readily acknowledge that I have not always been a firm believer in things like health information technology and electronic medical records. In fact, right before I left practice, my practice in medicine, we were given a charge to beta test an electronic e- prescribing sort of format and there was certainly no financial outlay on our part. We were simply to use these little hand-held devices and report back as to their utility. There were obviously some plus sides. You knew right away if there was a drug interaction or a patient had an allergy that wasn't apparent on their chart. The computer knew and it would flag that for you. But it slowed you down. It slowed you down in that it took about a minute or 1\1/2\ minutes to add this information in for the patient.

Mr. Speaker, when I first went into private practice after I completed my residency at Parkland Hospital, went into private practice in 1981, reimbursement rates were such that if you saw 15 to 17 patients a day, you pay your overhead and have a nice amount to take home at the end of the month. With everything that has happened with HMO declining reimbursement rates, from private insurance declining reimbursement rates from the government-funded sector of health care to be sure and a growing government sector of health care that historically underfunds their component and undercompensates their component, what has happened over time in order to maintain that similar amount of money that is needed to pay for overhead and have something to take home at the end of the month, physicians are now finding that instead of seeing three patients an hour, they have to see five. Instead of working 7 hours in the office, they now need to work 8 or 9.

So if you are not seeing 35 or 40 patients a day, you may not be measuring up as far as covering that overhead and having something to take back to your family. After all, they put up with the sacrifice and aggravation of having you, their husband or father as a physician, meaning you are frequently gone from home, you go and leave in the middle of the night to attend to problems. And we always do that willingly and lovingly; but at the same time, it does create wear and tear on families, and certainly any doctor's family can tell you that. Doctors, over time, have tended to be fairly well compensated. As a consequence, families have been ready and willing to accept that. But in order to maintain that same level, we have gone from a time where we were seeing 15 to 17 patients in a day to 35 to 40 patients in a day.

Let me go back to the e-prescribing. If it is taking you 1\1/2\ minutes to enter in the patient data and hit the send key to send the e-mail to the pharmacy to provide that prescription for that patient, that is another hour you have added on to that physician's day.

How are you going to pay the doctor for that? None of this has ever been worked out. If you go even further and say we're going to go with a full-on electronic record, there's a learning curve there. It's going to take some time, and it's going to slow that doctor down. Not only will it slow him down so he is able to see fewer patients, it slows him down so that there's less face time, if you will, with the patient, less time to listen to what the patient is saying, to look the patient in the eye and make sure you're getting the straight story so that you come to the correct diagnosis.

Mr. Speaker, I was late to come to the table as far as electronic medical records. I will tell you the sentinel moment that changed my mind, that shifted me on this issue, and said, you know, it is going to take more time; there has to be a way to compensate doctors for the time involved in doing that e-prescribing and creating those electronic medical records.

Well, 2 years ago, of course, we were suffering in the aftermath of Hurricane Katrina. Two years ago next January our Committee on Energy and Commerce had a field hearing down in New Orleans, and one of the places we went on that field hearing was to Charity Hospital, one of the venerable old teaching institutions in this country. Many of my professors at Parkland Hospital had been trained by professors at Charity Hospital. It was truly an icon in American medicine. It was absolutely devastated in the flooding that followed Hurricane Katrina in New Orleans.

Mr. Speaker, we went into Charity Hospital. We went down to the basement where the records room typically is in a hospital. And here, Mr. Speaker, is the medical records department of Charity Hospital. Now, this isn't fire or smoke damage on these charts. It's black mold. You really can't send someone down there to retrieve medical data without putting the medical records transcriptionist at risk.

These records are essentially lost forever, if the ink hasn't washed off all the pages. Remember, this was all completely underwater, because this was in the basement. You remember how much water was standing in the streets of New Orleans. So completely underwater. We don't even know if these are readable. But who is going to get in there and risk disturbing all the black mold and getting the health consequences that would result from it?

So all of this medical data is lost. Who's to know? Maybe there is a kidney transplant there, some important data. Maybe someone being treated for non-Hodgkin's lymphoma here, and important clinical data lost. Maybe there was a child with a rare illness that,

again, no one would be able to retrieve those medical records. This is the reason why I have now become a believer in the electronic medical records system.

Furthermore, when a large number of persons who were evacuated from New Orleans and brought to the Metroplex in the north Texas area, north Texas physicians turned out in great numbers to receive people who had been in the domed stadium in New Orleans, the Superdome I guess it's called, as well as other individuals who were evacuated from the Convention Center, and they were brought in buses to downtown Dallas and doctors met them as they were coming off the bus.

One of the large pharmaceutical chains set up there with their computer system, and if that patient had gotten their prescription at that chain drug store, they were able to recreate not their entire medical record, but at least their prescription history, which a lot of times will give you a great deal of insight into what a patient's conditions are and what they are being treated for.

So the availability of that, albeit very limited pharmaceutical data, provided a great deal of service to the doctors who were on the ground receiving these individuals who had to be evacuated out of the city of New Orleans. Again, it really made a believer out of me that that data needs to be retrievable wherever you are, wherever you go.

Mr. Speaker, all too often we run into in medicine the fact that, yes, the patient went down somewhere and had a CT scan, and now they're seeing a different doctor and that CT is not available because it's only a written, typed report and it's locked up in some other office and they are now closed. So we either go on a hunch without the information, or you repeat the test and spend another $1,000. It is so critical to have that information where it is readily retrievable by any doctor involved in taking care of the patients.

Mr. Speaker, I have digressed just a little bit from the physician workforce issues, but I do think this is such an important issue, and that is why I included in H.R. 2585 bonus payments for doctors who are willing to begin to make that change into improved health information technology and perhaps consider electronic medical records, perhaps consider e-prescribing.

There is no question that our handwriting as physicians is generally abominable. I will tell you, Mr. Speaker, it doesn't improve with age. Medication errors that are because of poor handwriting or illegible handwriting on the prescription pad, we have all encountered it during our practices.

It is so critical to be able to have that information in a legible, reproducible form and have it available when a patient goes from city to city, as these individuals were because of a crisis in their hometown, where they had to leave and go to another town. But even just for someone on vacation who develops a problem, if you have the availability of accessing their medical records online or through some service, that is going to make a tremendous difference.

Now, Mr. Speaker, one of the things we talked about, too, when I first began this discussion on the workforce issue is how do we help the physician who's through with medical school and pondering a residency, or in fact in a residency. Could we develop a program that would permit hospitals that do not now currently have a residency program to begin a training program where none has existed previously.

So the second bill, H.R. 2583, would create a loan fund available to hospitals to create a residency training program where none has operated in the past. These programs, of course, would require full accreditation by the appropriate agencies and would be focused in typically medically-underserved areas, rural, suburban, frontier community hospitals.

Mr. Speaker, on average it costs about $100,000 a year to train a resident. For a lot of small hospitals, that is a barrier to entry that they just cannot meet.

Two, the Balanced Budget Act passed by this Congress long before my service here, back in 1997, 10 years ago, placed the cap on residency slots Medicare would fund, making it very difficult for some programs to expand and hospitals to create residency programs. So, especially for smaller hospitals that are interested in creating a residency training program, federal regulations, federal regulations stop them cold, dead in their tracks, from creating that residency program.

Again, these are some of the things that were done in the Balanced Budget Act, but these regulations need to be streamlined. We need to have a second pathway for these hospitals to follow to establish a residency training program. It is a major financial investment for small hospitals to undertake, and frequently they just simply have to forego, because they can't afford it, even though their community might very well benefit from having such a training program.

Now, in the bill before the Congress, H.R. 2583, loan amounts would not exceed $1 million and the loan would constitute startup funding for new residency programs. The start-up money is critical here. Since Medicare graduate medical education funding can be obtained only once a residency program is firmly established, the cost to start a training program for a smaller, more rural or suburban hospital is cost prohibitive. The barrier to entry is just too high, because these hospitals operate on much narrower cost margins.

H.R. 2583 is a bill that has been introduced as part of the physician workforce package of bills. It will allow smaller hospitals to establish residency training programs.

As I said earlier, Mr. Speaker, doctors tend to have a lot of inertia. We don't fall far from the tree when it comes time to start up practice. We tend to go into practice within 100 miles of where we did our residency. That would be the reason to move the residency programs into the areas of States, into the areas of the communities where doctors are most needed.

Two, this program could be a recruiting tool for small communities to recruit essential professionals to consider a residency program in their town and then hopefully stay around once the training program is finished, because, after all, you know all the referring doctors, you know the personnel in the hospital, and that arduous task of setting up a practice becomes perhaps just a little less daunting because you are working with known entities.

The third point of assuring availability of an adequate future workforce is providing medical students or college students who are considering a career in health professions, to provide them with assistance and incentives to practice in shortage areas in shortage specialties.

The third bill, H.R. 2584, would establish a mix of scholarships, loan repayments and tax incentives to encourage more students into medical school and beyond. It also creates incentives for those students and newly-minted doctors to become family docs, general surgeons, geriatric doctors, OB-GYNs, and practice in shortage areas such as rural and frontier areas.

H.R. 2584, the High Need Physician Workforce Initiative Act of 2007, amends the Public Health Service Act to alleviate critical shortages of physicians in the fields of family practice, internal medicine, pediatrics, emergency medicine, general surgery and OB-GYN. H.R. 2584 would establish additional loan and scholarship programs and would assist underserved communities to build a pipeline for the medical professionals of tomorrow.

Mr. Speaker, I spoke already about the medical records situation in New Orleans. Also as an outgrowth of actually several trips I made to the New Orleans area in the fall of 2005 and the early part of 2006, you really began to see the attenuation of the physician workforce in that area and you really saw the arduous task of rebuilding the physician workforce in that area.

Mr. Speaker, it is almost as if a physician or his spouse, if they weren't from the area, they likely weren't staying. They had to have significant family ties to make them consider staying in the area. That is so unfortunate, Mr. Speaker. But not only do we have the unspeakable horror of the hurricane itself, but then we had the slow response in getting aid through State and Federal and local agencies to physicians in private practice and they were left to fend for themselves. They ended up spending their own savings to keep their practice open and they reached a point where they simply could not sustain that any longer. It will be hard to entice people back.

So the reality is the physician workforce of tomorrow, especially in an underserved area like the City of New Orleans, is going to require growing your own. And part of growing your own is this mix of scholarships, loan forgiveness and tax incentives to encourage physicians to go into the health professions, and as part of the loan payback, they agree to serve in a medically underserved area in a high- need specialty. This bill provides targeted incentives to develop medical students and encourages the growth of specialties that will be in high demand in underserved or emerging communities.

So, Mr. Speaker, those are the three bills, H.R. 2583, H.R. 2584 and H.R. 2585, that deal with the problems that I see as emerging with the physician workforce. Remember, we are in a transformational time. We are in a time that is just as transformational as 1940, 1965, or even some of the earlier transitional times that we didn't have time to talk about tonight. We are in a transitional time that is going to require us, require us as legislators, to be at the top of our game so we don't obstruct this process and, dare I say, we enhance this process, we further this transformation, we make the transformation proceed in an orderly fashion, in a fashion that is beneficial.

But, Mr. Speaker, I can hardly, hardly, talk about physician workforce issues and not address the number one issue that is so pernicious to physician practice and drives more doctors into early retirement, and that is the state of the medical justice system in this country.

Texas in 2003, September of 2003, a little over 4 years ago, passed what I considered a very reasonable bill to put some caps on noneconomic damages in medical liability cases.

Texas was in crisis. When I was running for Congress in 2002, we had really hit rock bottom as far as medical liability issues were concerned. We had gone from 17 medical liability insurance companies down to two. They were leaving the State in droves. If you only have two companies, it is difficult to have competition. Premiums were going through the roof. Every year I was seeing premium increases of 20, 25 or 30 percent. And the reality was that reimbursement rates were not keeping up and doctors couldn't keep up.

I remember when I was campaigning in 2002 at an event I ran into a young woman who was a radiologist. I say young woman, she had been through medical school and residency. She said, I hope you can get something done about the liability situation because as a radiologist, I lost my insurance because my company left the State and I can't get insurance with the two remaining companies. As a consequence, I cannot practice interventional radiology without liability insurance. I can't accept that kind of risk, taking care of high-risk patients without some type of liability coverage.

So the State of Texas paid to educate this woman. The woman went to a State-supported school, so taxpayers partially paid for her education because she went to a residency program at one of the State universities, and she was lost as a provider to the State of Texas because of the liability situation.

Texas, fortunately, stepped up to the plate and recognized they had a serious problem. Across the board in Texas, everyone was talking about the crisis in medical liability. So they passed a bill in 2003 that put a limit on noneconomic damages in medical liability suits. It was patterned after the Medical Injury Compensation Reform Act of 1975 which affects the State of California and has done a good job in California as far as keeping doctors involved in practice and keeping medical liability rates low.

Well, in California, the Medical Injury Compensation Reform Act of 1975 put a cap on noneconomic damages at $250,000. That was a tall order in Texas. They were not able to achieve the same level of cap on noneconomic damages, but they went about in a way so that a $250,000 cap on noneconomic damages exists for the doctor, for the hospital or nursing home or a second hospital. So each provider named is going to be capped at $250,000, and a maximum of $750,000 that could be awarded to a plaintiff in noneconomic damages. Actual damages, punitive damages, are not affected by this law. So average compensation for patients is still going to be very, very high, but it removes a lot of the uncertainty that was present in the medical liability market. And as a consequence, it provides fair compensation for injured patients and their families. It has been a success in Texas. Liability premiums have dropped. Competition has invigorated the insurance market, and patients once again have access to the doctors they need. Remember, we dropped from 17 down to two insurers. The next year we were back up to 15, and I believe the number is substantially higher today.

The best news is they came back to the State without asking for an increase of premiums. Texas Medical Liability Trust, my old insurer, has provided a 22 percent reduction in premium expenses for physicians since 2003. Remember, we were going up by 20, 25, 30 percent a year every year prior to 2003, so this has been a dramatic turnaround in Texas.

Remember, I talked about Texas as being one of the States that is medically underserved. Remember that figure of 186 doctors per 100,000 population. But since this law took effect, things are on the upswing as far as physician workforce in Texas. Over 10,000 new physicians have been licensed, including a record 3,300 doctors licensed in fiscal year 2007. The Texas State Board of Medical Examiners can scarcely keep up with the demand. Several have asked what is taking the Texas State Board of Medical Examiners so long, and there is a lot of demand. When you have to ask how big are you winning, that is a good thing, and Texas is winning big with this legislation.

Doctors are moving back to areas that were underserved and critical specialties are moving back into the State. Doctors who practice a specialty called perinatal medicine where you take care of the most complicated pregnancies and the sickest babies, these doctors could not get insurance at any price in 2002. And I remember talking to a young doctor at a hospital who said, I am going to have to stop practicing. I have all of these loans to pay back, and I can't practice because I can't afford the liability premiums.

Our whole trauma network in north Texas was put at risk because 50 percent of the neurosurgeons, that is one out of two who were available, said he got his six-figure premium notice, and he said, That's it, I can't do this any more. With him leaving, leaving only one neurosurgeon in the trauma network, it put north Texas in a serious position for how they were going to be able to handle trauma cases in north Texas.

Since the passage of this law in Texas, that perinatologist has gone back into practice. He went to work for a computer firm, believe it or not, and now he is back in practice and probably saving babies today that wouldn't have been saved without his care and expertise. I am sure he did a good job taking care of computers, but babies are more important than computers.

New neurosurgeons are attracted to the north Texas area, preserving the trauma network we have in the north Texas area. It was very much put at risk by the crisis in medical liability.

One of the unexpected beneficiaries of this law in Texas has been the smaller, not-for-profit hospital that is self-insured. They were having to put so much money away to protect against future losses because the upper limit was unknown. Now they are able to take some of that capital and reinvest it in capital equipment, nurses' salaries and outreach and education, the very things you want your hospital to be doing. They are able to do those things because of sensible reform that happened in the State of Texas.

Claims and lawsuits have declined, and the current situation that exists in some States only drives up the cost of health care and forces doctors to treat every patient as a potential lawsuit.

Mr. Speaker, the Founding Fathers suggested that the States could function as laboratories for the rest of the country, and I think this is one of those instances where we have seen the function of the laboratory, that is Texas in medical liability, function in every way as we would want it to. In fact, when we were going through the budget process last March, I provided the ranking member, our ranking member of the Budget Committee, the legislative language that would be the

Texas law if it were written by legislative counsel here in the House of Representatives.

And they took the bill and did a back-of-the-envelope score and came up with a $3.8 billion savings over 5 years that would be available to the budgeteers had they chosen to accept that. In other words, do medical liability reform like we did in Texas across the country, and you are going to save some money.

It is not a huge amount of money. I know in Washington-speak $3.8 billion doesn't resonate like some other figures, but it is real money and it is available to us. All we have to do is enact some type of sensible medical liability reform across the country like we did in my home State of Texas.

So I took that language that ran through legislative counsel on the Texas liability law and actually introduced the Texas medical liability law. It is H.R. 3509, the Medical Justice Act of 2007. It is now available. Members may cosponsor it. I recognize in the current climate in the United States House of Representatives it is going to be very difficult to get any type of medical liability reform passed, but at the same time, this is important work and we shouldn't shy away from it. We should at least have the discussion and the debate. Let's clash in the marketplace of ideas here. Here is a system in Texas that is delivering real value to the patients of Texas and to the doctors of Texas.

Mr. Speaker, we can't rise to the transformational challenge that stretches before us without keeping the best doctors involved and recruiting and training the best and brightest doctors who are coming behind them, recruiting and training those doctors for tomorrow. This is going to require a near-term, a mid-term and a long-term strategy. Mr. Speaker, we have to work together, both sides of the aisle. This is not a partisan issue. This is going to face every single one of us in our district as we go through this next several years. And we are not going to be able to master the transformational challenge that extends ahead of us without America's best and brightest staying involved and providing care for patients in this country. The best and brightest men and women of medicine, we need to keep them on the front lines. I stress, this is a true bipartisan issue. There is not a single party label attached to this concept.

So let's sit down, both sides of the aisle, and work together to insure a healthy future for all Americans. The bottom line is we have to make certain that doctors are continuing to practice, they are satisfied with their compensation and satisfied with their ability to deliver services to the patients.

You hear the phrase in Washington, ``well, we will cross that bridge when we come to it''; in other words, we won't act until we absolutely have to act.

Mr. Speaker, this is a transformational time. I think this calls for a different type of thinking. We are going to have to build a bridge while we are crossing it, not wait until we get there. We are going to have to build that bridge ahead of time, and I think we can.

I visited a group of scientists at the National Institutes of Health and they talked about the challenge of working through the genetic sequence of the human genome and sequencing the base pairs in the human genome. And they started this project in the 1990s, a very labor- intensive project, and they didn't have the Internet. They didn't know that they needed the Internet. Fortunately, the Internet came along while they were in the process of cracking the genetic code. But if it hadn't been the Internet, they wouldn't have been able to share information with other scientists around the world on a real-time basis. And I don't know if by today we would have cracked the genetic code, so an example of building the bridge while you are crossing, and certainly those scientists at the National Institutes of Health really did take that to health.

Why wait any longer? Why should we keep doctors and patients waiting? Sensible legislation is before us now. Again, I repeat, I urge my colleagues to look at this, talk to me if you have questions about it. It is extremely important for those students who are looking to go into health care as a profession, those in medical school now, those doctors in residency, and again, what I would refer to as the mature physician. It is important to the whole continuum of the timeline of the physician workforce.

We don't want to end up in that day that Alan Greenspan looked into the future and saw a couple of years ago. We don't want to arrive at that day where there is no one there to take care of America's seniors because we didn't pay attention, we took our eye off the ball back here in the year 2007.

Mr. Speaker, I am coming to the floor tonight to talk, as I often do, about health care, the state of health care in America, some of the things that we face as a country, as a Congress. And, Mr. Speaker, we have reached a point where it is kind of a unique time, and it occurs from time to time in our Nation's history in political cycles that we have the political reality of unfettered election-year politics meeting head on with the perennial challenge of redefining or reforming America's health care system.

Mr. Speaker, the history of health care in America over, say, the past 60-plus years going back to the 1940s is that of a very highly structured, highly ordered scientific process coupled with a variety of governmental policies, policies each aimed at achieving a specific objective; but rarely do we get the opportunity to reexamine the policies and what follows on from those policies and how they continue to affect things years and decades into the future.

Mr. Speaker, if we go back to that time in the middle 1940s, the time of the Second World War, some significant scientific advances occurred. In 1928, for example, Sir Alexander Fleming rediscovered penicillin. It actually had been discovered in the late 1800s, but Sir Alexander Fleming in England discovered that the growth of a bacteria called staphylococcus could be inhibited by the growth of a certain type of mold on the auger plate. Well, it took some additional research. It took some additional input from other scientists who actually came to this country and developed the process of fermentation that allowed for the large-scale production of that compound that we now know as penicillin, a compound that when it was first discovered was priceless. You couldn't get it at any cost and by 1946 had come down to about 55 cents a dose, all because of American ingenuity coming into play in the mid-1940s. In fact, soldiers injured during the invasion of Normandy on D-Day were oftentimes treated for their wartime-acquired wounds that became infected with penicillin.

Another individual, an individual we have honored on the floor of this House during the last Congress, Dr. Percy Julian, an African American scientist or, actually, an organic chemist, who didn't discover cortisone. Cortisone had been discovered earlier. But the extraction of cortisone from the adrenal glands of oxen was a laborious time-intensive process, and as a consequence, cortisone was only available as a curiosity, as an oddity. But Dr. Julian perfected a methodology for building cortisone out of precursor molecules that were present in soybeans and, as a consequence, ushered in the age of the commercial production of cortisone.

So there in the 1940s, we had the development of two processes that allowed for the commercial application of an antibiotic, an anti- infective agent, that previously was unavailable on the scale that it was made available after the Second World War, and an anti- inflammatory, cortisone, for treating things like rheumatoid arthritis, Addison's disease. Cortisone now on a commercially available basis. These changes profoundly affected the practice of American medicine starting at about the time of the Second World War.

But what about on the policy arena? Did anything significant happen during the Second World War? Well, you bet it did. What happened during the Second World War is President Roosevelt said in order to keep down trouble from inflation, he was going to enact some very strict wage and price controls on American workers. And he felt it was necessary to do that because, after all, the country was at war.

Well, employers were looking for ways to keep their workers involved and keep them on the job, and they came up with the idea, well, maybe we could offer benefits. Maybe we could offer health insurance, retirement plans. It was somewhat controversial as to whether or not these could, in fact, be offered at a time of such strict wage and price controls, controversial as to whether or not these added-on benefits would be taxed at regular earnings rates. Well, the Supreme Court ruled that they could, indeed, be offered; that they did not violate the spirit of the wage and price controls, and, in fact, they could be awarded as a pretax expense.

Fast forward another 20 years to the mid-1960s, and now the administration and the Congress are locked in the discussion and the debates that ultimately led to the passage of the amendment to the Social Security Act that we now know as the Medicare program. Suddenly we have a situation where the body of scientific evidence,

the body of scientific knowledge is expanding at an ever-increasing rate. We have got some fundamentally different ways of paying for health care, some in the private sector and now some in the public sector, all leading to what is happening currently at the present time.

Now, again, going back to the Second World War, most health care was paid for at the time of service, and that was a cash exchange between the patient and the physician or the patient and the hospital. Now, with the advent of employer-derived health insurance and with the interposition of now this large government program, most health care is now administered through some type of third-party arrangement.

Now, this is useful. It protects the individual who is covered from large cash outlays. But there is a trade-off, and this covered individual is generally unaware of the cost of the care that is rendered, as well as the provider who is quite happy to remain insensitive as to the cost of the care that is ordered. This arrangement has created an environment that permits rapid growth in all health care sector costs.

We have a hybrid system. America's challenge then becomes evident. How do we improve upon the model of the current hybrid system, which involves both public and private payment for health care and which anesthetizes most parties involved as to the true cost of this care? It's also wise to consider that any truly useful attempt to modernize the system, any attempt to modernize the system, the primary goal has to be, first off, protect the people instead of protecting the status quo.

Now, we must also ask ourselves if the goal is to protect a system of third-party payment or provide Americans with a reasonable way to obtain health care and allow physicians a reasonable way to provide care for their patients. Remember that the fundamental unit of production is the interaction that takes place between the medical professional, the physician, and the patient in the treatment room. That fundamental interaction is the widget that is produced by this large health care machine, and sometimes that concept gets absolutely lost in translation.

Now, the current situation subsidizes and makes payment to those indirectly involved in the delivery of that widget, and ultimately that drives up the cost. Now, currently in the United States, we spend, depending upon what you read, 15, 16, and 17 percent of the gross domestic product on health care, amounting to about $1.6 trillion a year. Within that total amount of spending, the government accounts for approximately half. When you add together the expenditure of the Medicare, the Medicaid system, the Federal prison system, VA system, Indian health service, all of those things together equal about 50 cents out of every health care dollar that is spent in this country.

The other half is made up by commercial insurance, self-pay, and I would include health savings accounts in that grouping of self-pay. Certainly some percentage is made up by services that are just simply donated or never reimbursed. We might call it charity care.

A lot of money is spent in health care, but only a fraction on direct patient care and oftentimes too much on an inefficient system.

Now, the test before us, the test before this Congress, the test before this country is to protect the people instead of providing protection to special interests. Define that which ought to be determined by market forces, market principles, and that which of necessity must being left in the realm of a government or public provider; that balance between the public and private sectors, and how in all of this process we preserve the individual self-direction instead of establishing supremacy of the State.

Additionally, we must challenge those things that result in the extortion of market forces in health care and acknowledge that some of that extortion is endemic, some of it's built into the system, some of it's hidden and not readily changed, and some of it is, in fact, easily amenable to change. And we need to know the difference, and we need to know what is worthwhile to try to effect change.

Now, the key here is how to maximize value at the production level; again, where that widget is produced, the doctor-patient interaction in the treatment room. How do we place a patient who exists on a continuum between health and disease, how do we shift that balance more in the favor of a state of continued health, which is obviously less expensive than paying for disease? Do we allow physicians a return on the investment, which opens up a host of questions relating to future physician workforce issues, and I am going to touch on those in more detail in just a minute.

How do we keep the employer, if the employer is involved, how do we get them to see value in a system, things like a quicker return of an ill employee to work, increased productivity, better maintenance of a healthy and more satisfied workforce? In regards to health insurance, how to provide a predictable and manage risk environment, remembering that insurance companies are, of necessity, they tend to seek a state of a natural monopoly; and if left unchecked, they will, indeed, seek that condition.

And finally, how do we balance the needs of hospitals, ambulatory surgery centers, long-term care facilities and the needs of the community, as well as the needs of doctors, nurses and administrators?

Now, Mr. Speaker, some legislation has already been introduced to try to effect some of these changes. I want to make reference at this point to a publication that's produced by my home State organization, the Texas Medical Association. Last March, this was the cover of their publication, Texas Medicine. It referenced that the United States may, in fact, be running out of doctors.

So I've introduced three pieces of legislation geared toward the physician workforce and how do we keep the workforce involved and engaged. Alan Greenspan, talking to a group of us right before he retired as chairman of the Federal Reserve, came in and talked to a group of us one morning and was asked the question: How in the world are we ever going to pay for Medicare going into the future? And he thought about it for a moment and he said, if I recall correctly he said, ``Well, I'm not sure. But I think when the time comes, you will do what is necessary to preserve the system.'' And I believe he is right. But he went on to say, ``What concerns me more is will there be anyone there to provide the services that you require.''

Well, Mr. Speaker, in an effort to be certain that there are the people there to provide the services that we require, I introduced legislation such as 2583. This establishes low-interest loans for hospitals seeking to establish residencies in high-need specialties, primary care, general surgery, OB/GYN, gerontology in medically underserved areas. It turns out one of the thrusts of this article is that doctors tend to have a lot of inertia, they tend to go into practice close to where they had trained. So if we can establish residency programs where none currently exist in communities of moderate to small size and allow those physicians to undergo their training in those community hospitals, they're very likely to settle in or very close to those communities, thereby driving the equation in favor of supplying physicians in high-need specialties in medically underserved areas.

Another piece of legislation, H.R. 2584, is more geared at the medical student or perhaps even the student in college, the student who's considering a career in health professions. And this expands the old health professions scholarships, provides the availability of scholarships, provides the availability of low-interest loans, provides the availability of favorable tax treatment if an individual is willing to go into practice in a medically underserved area in a high-need specialty.

And then finally, the third piece of legislation, 2585, deals with more of what I would describe as the mature physician, that physician who has been in practice. But one of the problems of our publicly financed side of health care, one of the problems in the Medicare side is that reimbursement rates for doctors are decreased year over year as an effort to control costs in the overall program, but the result is it tends to drive doctors away from practice. So this bill would have at its heart the repeal of a payment formula that is referred to as the ``sustainable

growth rate,'' or SGR formula, which I believe is critical. I believe we have to repeal that formula if indeed we're going to keep physicians involved in the process.

Mr. Speaker, another component of this bill, 2585, does allow for some voluntary compensation if a physician or group wishes to participate in a system to upgrade health information technology. And I put this slide up here, Mr. Speaker, because this is the records room at Charity Hospital in New Orleans taken in October of 2005. You can see that, although the records themselves were not disturbed by the wind of that particular storm, that records room is in the basement and it was completely under water for several days. And you can see there, this is 2 months after the storm, probably a month after the water was removed from the downtown area of New Orleans and removed from the basement, you can see the destruction evident on those paper records. And clearly, that's a situation that has to be addressed. If we are going to move America forward into the 21st century, that's a condition that has to be addressed. And I have attempted to do that in H.R. 2585, as it deals with the medical workforce; it also deals with some bonus payments to allow physicians who wish to voluntarily participate in an upgrade of health information technology, allows them the freedom to do that.

Other legislation that is out there, H.R. 3509. H.R. 3509 is a medical liability bill. And this bill was crafted after legislation that was passed in my home State of Texas in September of 2003. This was legislation that was crafted, it was styled after the Medical Injury Compensation Reform Act of 1975 passed by the State of California and then modernized for the 21st century. And what this bill does is provide a cap on noneconomic damages. It is a cap that is shared between physicians, hospitals, a second hospital or a nursing home, if one is involved. Each entity is capped at a $250,000 payment for noneconomic damages, or an aggregate cap of $750,000.

Now, the reason I bring this up, the reason I introduced this legislation that is similar to the Texas-passed legislation in the House of Representatives, is, after all, our Founding Fathers said that the States should function as laboratories for the country. So here we have the State of Texas functioning as a laboratory for meaningful liability reform in the health care sector. And the results are in and the results are clear; 4 years after this legislation was passed we have held rates down for premiums for medical liability insurance for physicians. More importantly, a State that was losing insurers at a rapid rate, we had gone from 17 insurers down to two by the end of 2002, which was my last year of active practice, and now we're back up to numbers in the twenties or thirties. And these liability insurance carriers have come back to the State without an increase in premiums. In fact, the Texas Medical Liability Trust, my old insurer of record, has lowered rates by about 22 percent at the time of my last calculation.

This is critical for getting the young individual who is in high school or college interested in a career in the health profession. The crisis in medical liability that exists in many areas of the country serves as a deterrent, a repellant that keeps young people from even thinking about a career in health care. And that is, in fact, one that we do desperately need to change.

Let me, just for a moment, go back to the Texas Medical Association hypothesis, ``are we running out of doctors,'' and the comments of Chairman Greenspan as he spoke to our group early that morning, now probably some 18 months ago. Will we run out of doctors? No. The answer is we probably won't. I guess we should ask ourselves: If we make the climate too inhospitable, if we make the climate too difficult, what will the doctors of the 21st century look like? Well, I don't know. But from time to time I allow myself some internal speculation as to what the medical workforce of the future might resemble, and sometimes I come across this young individual, kind of a health care entrepreneur from a famous American sitcom that is seen on the Fox Network. I don't know. But it's not worth running the risk of running out of physicians and not attracting the best and brightest into the practice of medicine.

Now, that brings me to what I would describe as a set of principles that for any health care legislation that I endorse, that I embrace, that I put out there myself or that I cosponsor, what are the principles that I need to see? Well, certainly, first and foremost, you have to have freedom of choice. American patients, they want to see who they want to see, they want to see them when they want to see them, and if hospitalization is required, no one objects to an incentive. But freedom of choice must remain central to any system, whether it is private or public, in this country.

Ownership. We hear a lot about the ownership society, things both good and bad. But I will tell you something, from having myself had a medical savings account starting back in 1997, when they first became available, until the time I left private practice in 2002. The whole concept of having a health savings account or, if you will, a medical individual retirement account, a medical IRA, and being allowed to accumulate savings in that account to offset future medical expenses, that's a fundamental desire of many people in this country. And many Americans in this country feel the same way, and, in fact, I'm of the opinion that that should be encouraged. The dollars accumulated in those accounts, and this is the great thing about them, even if you no longer have the account, which I no longer am insured through an HSA because when I came to Congress they weren't generally available. Now they are and I haven't switched back, but that money is still there. It still grows month by month at the regular savings rates. Right now I think it's about 4.5 percent, so a reasonable rate of return on that investment. But that money is there for me and my family to use in the future should any medical expenses arise that maybe aren't covered by other insurance.

Well, what happens if I get to the end of a long and happy life and I've never had to tap into those savings, what happens to them then? They stay in my family. They're available to my heirs and assigns for the coverage of their care going into the future, and all the while continuing to grow in value, tax deferred because that's the way the law was written back in 1997 when I first opened that account.

These dollars are dedicated to health care, they're owned by the individual, and they don't, by default, go to some governmental entity upon the death of the individual who's covered.

Now, another principle that I think is just critical to any discussion of health care is independence. There has to be preservation of autonomy. The patient or the patient's designee should ultimately be responsible for their care and the ability to accept or decline medical intervention.

High standards, one of the things that we pride ourselves on in this country, one of the underpinnings of the American medical system has always been high standards of excellence, and nothing in any future change should undermine that. And, in fact, pathways to facilitate future growth in excellence really ought to be encouraged.

Mr. Speaker, we have to preserve innovative approaches. American medicine has always been characterized as embracing innovation, developing new technologies and treatments. Clearly innovation must be preserved in any process going forward.

Another key is timeliness. Access to a waiting list does not equate to access to care; so spoke the Canadian Supreme Court to its medical system in 2005. We must diligently seek not to duplicate the most sinister type of rationing, which is a waiting list. And that can be, unfortunately, involved with any large health care system, whether it be a nationalized single payer system or, indeed, a very, very large private system.

We have to keep it market based and not administrative. Pricing should always be based on what is actually indicated by market conditions and not what is assumed by administrators. Remember, in general, mandates lead to a restriction of services. State mandates cause more harm than good, impede competition and choice, drive up the cost of care and can actually limit the availability of health insurance. Another type of mandate, we heard a lot

about it in 1993 when health care reform was discussed last decade, employer mandates and individual mandates are likewise restrictive. A discussion of mandates should include an accounting of cost and whether the mandates limit the availability of insurance for those who may operate a small business, for example, for those who may be self- employed or self-insured.

Mr. Speaker, it is worth remembering that Medicare part D in its first year of existence, the year 2006, achieved a 90 percent enrollment rate. They didn't do that with mandates. How did they do it? With education, incentives, competition, but certainly not mandates. Well, what about premium support? That is something you hear about from time to time. In fact, premium support was a big part of when President Bill Clinton talked about how to modernize the Medicare system. Bill Thomas who recently was chairman of the Ways and Means Committee, Bill Frist who was Senate majority leader, Bobby Jindal who serves as a Member of this House currently, these individuals were on a task force appointed by President Clinton to try to improve the Medicare system. One of the concepts they came up with was premium support to help someone who doesn't make quite enough money to pay a health insurance premium, help them, support them in purchasing that premium or buy down the cost of that premium. A subsidy, yes, but I prefer to think of it in terms of support.

Now, people also talk about tax credits. It is a similar rationale for helping an individual who can't quite afford the premiums on their health insurance. Mr. Speaker, I just submit that our Tax Code is currently complicated enough. We don't need to do anything that further complicates the Tax Code. That is why I move in the direction of premium support as opposed to tax credits or other incentives. One of the things we ought to do, though, when we do talk about mandates, and certainly that has been one of the stories coming out of Massachusetts, the plan that Governor Romney talked about when he came and addressed our House Policy Committee a couple of years ago when that program was first established, one of the mechanisms they had at their disposal was the ability to, because they have a State income tax, the ability to help someone understand the validity of buying insurance. I don't know. Maybe we ought to look at that when we provide money to individuals through the earned income tax credit. Perhaps a portion of that money ought to be earmarked for at least a catastrophic policy or a high deductible policy, those that can be had generally at lower expense. Maybe it is time to think outside the box in that regard and provide those individuals an earmark, if you will, of that tax credit so that they, in fact, do purchase health insurance if they are going to be covered under the earned income tax credit.

Then finally, and this is a terribly difficult concept and a lot of people just tune me out when I talk about it, but we have to balance the way we handle our anti-trust laws. We have to balance anti-trust enforcement, and we have to prohibit overly aggressive anti-trust treatment under the law. Exemption or enhanced enforcement is only likely to further distort the market. It means the desired results are never obtained because we are always providing this market distorting influence by either protecting one side or one group and potentially punishing another side. Creating winners and losers via our anti-trust law erodes the viability of our American health care system. Again, I think we would do well to pay some attention to that and prevent that from being part of our lexicon in the future.

Now, as far as the specific policies for health care within the public sector model, the transformation after the experience with Medicare part D has, in fact, been instructive. Six protected classes of medication were required of all companies who wish to compete within the system. That allowed for greater acceptance by the covered population and certainly greater medical flexibility as far as the physicians were concerned when treating patients. At the same time, the competitive influences brought to bear in that part of the program, in fact, managed to bring down cost.

In fact, the projection of $130 billion over the 10-year budget window less than was originally outlined was a success story. That is solely the result of competition. I feel certain that, in the future, we are going to get benefits for more efficient treatment, timely treatment of disease. I think there are additional successes out there to be had, but certainly competition within the first year or two of the existence of part D program certainly showed where competition can pay off.

Now, one of the most important points of lessons learned in the Medicare part D program is that coverage can be significant without the use of mandates. Ninety percent of seniors now have some type of prescription drug coverage. That was achieved by creating plans that people actually wanted. It was achieved by providing the means and incentives to sign up in a timely fashion. This emphasized that personal involvement and responsibility was there, was important to maintain, and it was important to maintain credible coverage. There was, in fact, a premium to pay if someone signed up after the initial enrollment cycle.

Mr. Speaker, employer-derived insurance will continue to be a significant player in the American health care scene. It adds value. It adds value to the contract between the employer and the employee. It rewards loyal employees and builds commitments within the organization. Businesses can spread risk and help drive down cost. A feature of the proposed association health plans have been, in fact, proposed in this House in every Congress that I have been a Member of since the beginning of 2003. In fact, the first time I heard about the concept of association health plans, Mr. Speaker, was when it was actually delivered from the rostrum here in this House of Representatives. The concept was delivered by President William Jefferson Clinton in September of 1993. It is a concept that I believe we ought to explore. We ought to be able to discuss it rationally without impugning each other's character, because after all, it was brought to this Chamber by a Democratic President. It has been endorsed and supported by Republican Congresses in the past.

Again, the concept of association health plans is one that I think going forward could provide a great deal of utility as far as preventing the inexorable increase in health insurance premiums that are faced by small businesses and individual employees. These are people who don't get the benefits of spreading out the risk through a large insurance market.

Now, Mr. Speaker, regardless of whether the system is public or private, vast changes in information technology are going to occur. They are going to need to be facilitated. We are coming up to a time of rapid learning. Because of improvements in health care technology, the ability to manage databases and retrieving data in a timely fashion are going to be critical for the delivery of health care and for the protection of patients.

Mr. Speaker, let me share this picture with the House of Representatives. This is Master Sergeant Blades. I met the master sergeant at building 18 at Walter Reed Hospital last January. Of course, everyone remembers The Washington Post story about building 18 and how there was great concern that some of our soldiers were not being properly cared for, individuals who were on medical hold at Walter Reed and awaiting a ruling on their request for going back in with their unit or their request to have a disability claim evaluated.

Those individuals on medical hold became the subject of a good deal of discussion in the press here in Washington, D.C. Well, like many Members of Congress, I decided to go see for myself. I went out to Walter Reed. I went through building 18. The paper was right: it was crummy. But Master Sergeant Blades drew to my attention something that he said was, in fact, more significant and more important and, in fact, more of a frustration for him and his men who were there on medical hold. And that is the fact that there was no interoperability between medical records contained within the Department of Defense and that of the Veterans Administration.

You see here the master sergeant is preparing his medical record. It may not show up that well, but here is a medical record that he is going

through with a yellow highlighter. He is making his case for, again, either going back and joining his unit or making his case for perhaps a future disability claim. What he told me that day is that he can go through a medical record that may be the size of several stacked phonebooks on top of each other, go through and painstakingly pull out the bits of data that he thinks will be important to his case. This paper record will then go to someone's desk. It might sit there for a week, two or three, before it is opened. And then at some point it gets lost, and he has to start all over again, or his men have to start all over again.

So his admonition to his men who are under his command there at the medical hold unit at Walter Reed was to prepare several copies of your medical record. Don't leave your future, whatever it might hold, don't leave your future in the hands of a single medical record and at the discretion of someone who might be cleaning off a desk one night, think they are doing everyone a great favor by moving some charts or papers off to the side or some other location, where, in fact, they become lost and not retrievable. Again, I bring this up to just point to some of the problems that are out there.

We are in the 21st century. Rapid learning and rapid turnaround of data is something that is just expected. We go into an ATM in a foreign country. We swipe our card. We punch the number in. If it takes more than 12 seconds for the money to come out at the other end, we wonder what the problem is. We need to be moving to that same type of system within our medical information system because it is truly to the point where it is untenable. We saw that as, again, Master Sergeant Blade so eloquently pointed out to me that day at the Walter Reed Hospital. But we see it over and over again replicated in tests that have to be duplicated. Someone goes into a hospital emergency room late at night. They have had a CT scan earlier in the week in the physician's office, but it is not available to the emergency room doctor who then orders another test and, oh, by the way, there is another $1,000 spent by some insurance company, government or perhaps even the hospital itself if that patient is uninsured.

Another thing that I think really is something that we are going to have to really concentrate on in the future is introduced legislation, H.R. 1046, to modernize some of the quality reporting systems that are present in this country. I think quality reporting is going to be part and parcel of medical care going forward. I think it should be voluntary at this point. I think while we are in the mode of gathering data, a physician or group who wishes to voluntarily associate themselves with some type of quality reporting scheme, I think that should be rewarded at this point. I don't know that we have developed enough of the systems to require that. Now, State Quality Improvement Organizations, QIOs, were actually developed back in the '80s and early '90s across the country. They were developed to primarily deal with quality issues within the Medicare program itself.

But there is no need to reinvent the wheel here. These organizations are already out there. They exist. They do a credible job. If they need to be modernized for the 21st century, then so be it. But H.R. 1046 is an effort to bring those Quality Improvement Organizations into the 21st century and allow concepts like a medical home and allow concepts like the accumulation and utilization of data so it can be for the benefit of all of the physicians who attend the patient and of course the patient themselves.

Now, this approach was a component of the Medicare physician payment update proposal by then-chairman Joe Barton on my Energy and Commerce Committee when he offered it right at the end of 2006. I thought it was a good proposal then. I think it is one that certainly bears further exploration.

Mr. Speaker, within the individual market, and that is going to include for the purpose of my discussion both individuals who are paying their freight themselves out of pocket and those individuals who own a health savings account, introduced legislation, H.R. 1666, to provide for increased price transparency within the medical pricing system.

Information is going to evolve rapidly. It's going to evolve rapidly for individuals who are paying cash for their procedures, as was certainly the majority of cases back before the 1940s. But, again, we may see a growing, increasing segment of the population who hold medical savings accounts and will be the primary dispensers of their health care dollars, so those dollars will be spent much the same as a self-pay individual would handle their medical affairs. But it's going to require that the adequacy of reports and the detail of information that is available to patients on things like cost, price and quality, and, yes, there is a difference between what a procedure costs and what its price is, and quality information is going to be increasingly important for health care consumers to make best decisions about the health care of their families and how they wisely spend their health care dollars. This information needs to also be linked to data detailing perhaps complications and other issues, like perhaps infection rates, so that families and individuals are able to make the best decisions.

Now there are some Web-based programs that are out there right now. Again, in my home State of Texas on the Internet there's something called texaspricepoint.org, except it is abbreviated to txpricepoint.org. The individual who lives in the State of Texas can go to that Web site and, after the obligatory legal disclaimers that you have got to scroll through to ensure that you understand the data that you're about to call up, you can get some significant data on the difference in cost and price between hospitals in a given county, different hospitals that perhaps are offering the same procedures, something as simple as a fractured leg without complications. You can click on the appropriate button, scroll through the appropriate number of screens and get a cost comparison between all of the hospitals that exist within a given county and what the difference in cost is at each of those facilities.

Now someone who is truly on a third-party payment such as Medicare, Medicaid, SCHIP, they are not going to be perhaps so interested in that, but they might be from just a quality perspective. If one hospital is a lot more expensive than the others, that may be a quality issue that is driving that increased expense.

So I can see that that information would be useful to individuals who aren't in fact even the target population who's paying out-of-pocket for their own care. But certainly the individual in a family who's paying out-of-pocket, they're financing their health care out of cash flow, or the owner of a medical savings account, that individual is likely to be very interested in what that information on cost, price and quality is as it becomes available. I think we are going to see increasing utility of programs such as these going forward.

As we have talked about crafting a readily affordable basic package of insurance benefits, it's something that this Congress really ought to set itself seriously to do. Now we have had discussions in the 109th Congress. Sometimes those discussions got kind of rough. Let's remember, we, Congress at one time has agreed upon what exactly is a basic package of benefits that ought to be available to an individual who subscribes to a program, and that program is the program under the Federally Qualified Health Center statute. The statute is probably about 35 years old and it details at a significant level of detail what benefits ought to be available to the individual who goes in for their care at what is known as an FQHC, or Federally Qualified Health Center.

What if we were to get together and decide that same basic package of benefits ought to be available to an individual, but they wouldn't necessarily have to go into the Federally Qualified Health Center? Maybe it's embedded in a card that they take into a clinic or provider's office within their community who agrees to participate in the program. Clearly, there is some out-of-the-box thinking that can go on here in trying to provide a meaningful, affordable product for individuals who are currently lacking health insurance.

One of the things, again, that drives the cost up is all of the mandates that

we put on insurance companies. But maybe if we agreed on what should be the basic package of benefits, Republican and Democrat alike, sit down and agree on what should be that basic package of benefits and allow individuals to access that type of care within their own communities.

One of the problems with Federally Qualified Health Centers, and I am a believer in the concept, in fact, I am trying mightily to get a second such facility in my part of Tarrant County. I'd like to see one in Denton County, another county that I represent that doesn't have such a facility available. What has happened is we have picked winners and losers across my State, across the country. Some areas are replete with Federally Qualified Health Centers; other areas are seriously lacking in that type of care.

Maybe we need to take that thinking to the next level. Maybe we ought to, instead of building the bricks and mortar of a Federally Qualified Health Center, simply provide the patient with, ``Here's the card, here's the list of individuals that participate in the program in your community, and they will accept the card at any one of these facilities that you see.''

That would also have the advantage of perhaps separating out, once again, some of that special interest stuff that tends to keep things as they are, to keep things from moving forward, to keep any meaningful progress from coming into any of the arenas and delivery of health care to low-income individuals, but particularly in this particular arena.

The other thing is I will tell you, as a practitioner of medicine, you look at some of the rules under which these facilities have to be set up, and it becomes very, very difficult to construct a business model that will actually be able to stay afloat, given some of the restrictions and regulations that are placed on these facilities. Again, if we would allow perhaps a little bit more of that hybrid-type system that you could have coexistence between a private facility and a government-paid program, providing each side was willing to behave by some mutually agreeable guidelines.

Well, providing truly affordable basic coverage to individuals in this country I think is a concept that insurance companies, I think is something they would want. I can't believe that an insurance company doesn't look at a figure like 47 million people who are uninsured and not say, ``that is a lot of market share I could have,'' if we would only allow them the ability to construct a policy that is affordable to the individuals who fall into that group.

Another concept, Mr. Speaker, and this is one that I have held for a long time, a lot of clinics, a lot of doctors, a lot of medical practices, a lot of hospitals simply donate their time and their efforts. Their actions are truly charitable. Well, maybe we could organize and provide a tax credit for those services that are truly charitable and donated. We could provide perhaps additional protection under the Federal Tort Claims Act, maybe a safe harbor from lawsuits, wherein good faith, charitable care is provided, and allow other providers to participate and fill the vacuum for indigent care.

Another area where this might be extremely useful is in times of national emergency, national crisis. Maybe if we had some type of emergency credentialing facility, and I know the CDC is looking into that, but if there were a way for a practitioner to precredential if there were a national emergency in their area, or they traveled to an area where the next Katrina hits so that they could be immediately credentialed within that area and begin to help provide that care. Again, also allow them some relief from liability under the Federal Tort Claims Act.

This could help fill the vacuum that exists sometimes in care. We don't want people to stay away from where actual help is needed in time of a national emergency. We don't want doctors and nurses to stay away from those areas for fear that, number one, they will be sent away because they are not credentialed, or, number two, out of fear that they might bring on some condition of liability that they would then have to defend for months, years, decades after.

The admonition of Ronald Reagan, ``trust but verify.'' Trust the market to make the correct decisions, but to the extent that some distortions are there, acknowledge that they are there. Sometimes there are going to have to be some protections that can only be provided by the Federal level. Some guidance for market principles will always be required, whether the system is public, private, or is a hybrid system.

Finally, as part of this discussion, there needs to be a rational breakdown. We always talk about the number of uninsured. As near as I can tell, this is a formulaic number that simply goes up by the addition of 2 million people every year.

I don't know that any of us really knows what is the makeup of this number. It is pretty hard to craft public policy to deal with the number of 45, 46 or 47 million uninsured when you don't know what makes up that population. Are some of these young individuals who are simply between college and their first job and haven't yet found it a wise investment or necessary to get insurance? Are part of these individuals who have serious long-term medical conditions who find medical coverage unavailable to them at any level, at any place?

Obviously, those are two very different populations. You can't craft a policy to help one that is not terribly distorted by the time it is applied to the other. We need to know what the makeup of that number is. So agencies like the Census Bureau need to do a better job for us as far as detailing and delineating what exists within the parameters of that large number that simply gets added to every year, and a lot of times you wonder if it is not just added to for political reasons. But, nevertheless, we need accurate data on who is encompassed within that population.

Finally, I will just leave this segment with a point of contrast. There are some people in this House who think it is a good idea to expand the culture of dependence, dependence on the State. There are other individuals in this Chamber who want to expand the number of individuals who can actually participate, direct and own their own health care.

Mr. Speaker, I don't have to tell you what side of that question I come down on.

Finally, Mr. Speaker, I want to talk just a little bit about, again, I said I was going to talk about health care in America. I have talked a lot about health care. Let's talk a little bit about America. Let's talk about American exceptionalism.

Mr. Speaker, the American health care system has no shortage of critics, here in this House, across the country, and certainly in foreign countries. But, Mr. Speaker, I would emphasize, it is the American system that stands at the forefront of innovation and new technology, precisely the types of systemwide changes that are going to be necessary to efficiently and effectively provide care for Americans for today and into the future.

Now, Mr. Speaker, I don't normally read the New York Times, so please don't tell anyone in my district that I did. But last year, in fact just about a year ago, October 5, 2006, Tyler Cowen wrote, ``When it comes to medical innovation, the United States is the world's leader. In the past 10 years, for instance, 12 Nobel Prizes in medicine have gone to American-born scientists working in the United States, three have gone to foreign-born scientists working within the United States, and seven have gone to researchers outside of this country.''

Remember, Mr. Speaker, when I first started this discussion I talked about the contributions of Sir Alexander Fleming, albeit an Englishman, but it was a lab in Peoria, Illinois, that developed the ability to mass-produce penicillin, and it was that ability that allowed the clinical trials to go forward. It was that ability that allowed penicillin to become part of our modern lexicon.

Percy Julian, again, an African American biochemist honored in this House during the last Congress. Remember, it was Percy Julian, he didn't invent cortisol, he wasn't the first to identify the compound, but he was the first to delineate a formula by which this compound could be mass-produced and available to much, much greater numbers of patients than would have ever been possible with the old animal

extraction method that had preceded it. All developed within and because of the United States.

Tyler Cowen goes on to point out that five of the six most important medical innovations of the past 25 years have been developed within and because of the American system.

Mr. Speaker, comparisons with other countries may, from time to time, be useful. It is important to remember that the American system is always reinventing itself and seeking improvement. But it is precisely because of the tension inherent in a hybrid system that creates this impetus for change. It drives the change.

A system that is fully funded by a payroll tax or some other policy has no reason to seek improvement, and, as a consequence, faces stagnation. Indeed, in such a system, if there becomes a need to control costs, that frequently is going to come at the expense of who? The provider. Precisely the person you need to stay involved in the system.

Mr. Speaker, I have got one final slide, and I ask your indulgence to let me put this up here.

This just shows the Medicare comparative payment updates for physicians, Medicare HMOs, hospitals and nursing homes. The years are delineated there in separate colors.

The year 2007, when the slide was developed, was in fact an estimate for physicians. The reality is this number actually came back to zero because of some changes we made right at the end of last year.

Under physicians, you don't see a number for 2006 again because that number in fact was zero for 2006. You stop and think about that, this reduction was planned but never happened, but physicians were held to a zero percent update for the past 2 years.

Mr. Speaker, what do you suppose the cost of delivering that care in a doctor's office, what do you suppose has happened to that over the last 2 years? Well, their electricity prices probably went down because they went down all over the country. Cost for gasoline to go to the office every morning probably went down because the cost of gasoline went down everywhere across the country. I don't think so.

The Medicare system is designated to reimburse at about 65 percent of cost under ideal conditions, but the reality is there has been significant erosion of that. This is important because hospitals, nursing homes, and to some degree the Medicare HMOs, their prices are adjusted every year based on essentially what is called the Medicare economic index. That is a cost-of-living formula. Only this group, the physicians, is under a separate formula that is somehow tied to changes in the gross domestic product.

The sustainable growth rate formula penalizes physicians and has the perverse incentive of driving doctors out of the practice of medicine. As was detailed to us by Alan Greenspan many months ago, there is only so long that can go on before ultimately you reach a place where it is going to be very, very difficult for the people who need the care to get the care.

Mr. Speaker, the United States is not Europe. American patients are accustomed to wide choices when it comes to hospitals, physicians and pharmaceuticals. It is precisely because our experience is unique and different from other countries, and this difference should be acknowledged and embraced, particularly when reform is contemplated in either the public or private health insurance programs in this country.

Mr. Speaker, one final point illustrated in a recent news story covered by a Canadian television broadcaster. It was about a Canadian member of Parliament who sought treatment for cancer in the United States. The story itself is not particularly unique, but the online comments that followed the story, I thought, were instructive. To be sure, a number of respondents felt it was unfair to draw any conclusion because, after all, this was an individual who was ill and seeking treatment and therefore deserving of our compassion, and I wouldn't argue that.

But one writer summed it up: ``She joins a lengthy list of Canadians who go to the United States to get treated. Unfortunately, the mythology that the state-run medicine is superior to that of the private sector takes precedent over the health of individual Canadians.''

The comments of another individual: ``The story here isn't about who gets treatment in the United States. It is about a liberal politician that is part of a political party that espouses the Canadian public system and vowed to ensure that no private health care was ever going to usurp the current system. She is a member of Parliament for the party that has relentlessly attacked the conservatives for their `hidden agenda' to privatize health care. The irony and hypocrisy is that position supports the notion that the rich get health care and the rest of us wait in line, all because of liberal fear-mongering that does not allow for any real debate on the state of health care within the country of Canada.''

One final note from the online postings: ``It has been sort of alluded to, but I hope everyone reading this story realizes we do have a two-tiered health care system. We have public care in Canada and for those with lots of cash, we have private care in the United States which is quicker and better.''

Mr. Speaker, this is a discussion that will likely consume the better part of the next two years of public dialogue, certainly through the next Presidential election. The United States is at a crossroads. It is incumbent upon every one of us who believes that the involvement of both the public and the private sector is best for the delivery of health care in the United States of America. And it is incumbent upon us to stay educated and involved and committed.

Mr. Speaker, we have all got to be at the top of our game every single day. This is one of those rare instances where it is necessary to be prepared to win the debate, even though those of us on my side may lose when it is taken to a vote here in the House of Representatives. But if we adhere to principles, we may ultimately post a win for the health of the American people, and not just the American people today, but for generations to come.