Health Care Reform
Madam President, I appreciate the opportunity to speak. I ask unanimous consent to speak as in morning business. Madam President, I feel compelled to say a word on the heels of our colleague from Alabama, whom I salute as he heads off into…
Madam President, I appreciate the opportunity to speak. I ask unanimous consent to speak as in morning business.
Madam President, I feel compelled to say a word on the heels of our colleague from Alabama, whom I salute as he heads off into the setting Sun. I wish him well and to have a good break.
When I was in the Navy during the Vietnam war, when we weren't flying a lot of missions off the coast of Cambodia and Vietnam, we flew into a lot of other countries, including Japan. I have always had an interest in Japan in terms of the way they provide health care. One thing that intrigues me about that is that they spend half as much money for health care as we do. They spend 8 percent of gross domestic product. We spend 16 percent of gross domestic product. They get better outcomes--everything from longer life expectancy to lower rates of infant mortality--and they cover everybody. They cover everybody. It is not socialized medicine. They have a private health care delivery system and private health insurance companies as well as we do, but they get a better result for about half the money we do, and we have to compete with them.
It is not a fair competition. We have our businesses that are competing directly with the Japanese and, frankly, with other countries as well. But when they are spending half as much money for health care, and we are trying to compete our businesses against theirs, it is not a fair fight. It is like having one arm tied behind our back.
For years, Presidents, Members of Congress--Democrat and Republican-- have talked about this challenge--the fact we spend so much more money for health care than the rest of the world, and we don't get better results and, in a lot of cases, we get worse results and we don't cover everybody. We have a lot of people uncovered. That is not smart.
For years, for decades, nobody took it on. They tried during the Clinton administration but gave up during that course. They didn't have the kind of bipartisan support that is needed. Frankly, we didn't have the bipartisan support I would like to have had on health care reform when we took it up during the earlier part of this current administration.
A lot of people have focused on the individual mandate as being constitutional or unconstitutional. I am not a lawyer. I don't pretend to be an expert on that stuff. I studied a little economics when I was a Navy ROTC midshipman at Ohio State. When I got out of the Navy and moved to Delaware to get an MBA under the GI bill, I studied some more economics and all, but I don't pretend to be a lawyer. But I do know this: Health insurance companies have said to all of us--Democrats, Republicans, Presidents, now and in the past--look, if you expect us to provide health insurance for folks with preexisting conditions, you have to make sure the pool of people we have to cover includes not just people who have preexisting conditions--not just people who are sick or have illnesses or conditions that are expensive to treat--you have to make sure we have a pool of people to insure that includes some healthy people.
The way some countries deal with this is they mandate for everybody to have coverage. We didn't want to do that. We didn't want to mandate that everybody have coverage, but we wanted to incentivize people, including healthier people--including healthier young people the ages of my sons who are in their early twenties--to make sure at least some of those young men and women end up in that pool, so healthy people end up in that pool.
So part of the request from the health insurance industry, in return for doing away with preexisting conditions and basically screening out sick people, saying they are not going to provide coverage for them, was to make sure a lot of healthier people ended up being in that health insurance pool.
The way we decided to do it in the health care bill, in the law rather than just mandate people get coverage, was to incentivize them. If they choose not to, that is their business. If they happen to be poor, we will help them pay down their cost for health care. But if they are not poor, and they have the financial means, we would like for them to get coverage. We are not going to mandate it, but the first year we have the means to be able to have coverage and they choose not to, there will be a fine or a penalty of some kind--maybe a couple hundred bucks, and that will increase not to $1,000 or $2,000, but it will go up several hundred dollars in order to encourage people to get the coverage.
At the end of the day, some people will say: I am paying $600-- whatever it ends up being. Maybe instead of paying this fee I should just go ahead and get some health insurance coverage. The idea is to provide some plans that are reasonably affordable so folks can take advantage of them.
So that is the issue of the mandate. The Supreme Court will decide whether under the commerce clause of the Constitution that just as we compel people to pay into Social Security, it can be a similar kind of compunction to say we would like people to get covered for health care, but in this case not to mandate it, as we do with Social Security. So we will see how it works out in the Supreme Court.
They heard arguments this week, and I am sure the arguments will continue on the air waves, at townhall meetings, and on television for months to come and maybe beyond that. Who knows. But the heart and soul of the health care reform legislation has less to do with mandates for me than it does with how to get better health care outcomes for less money. For me, that is it--better health care outcomes for less money.
We don't have to look at Japan and other countries to figure that out. All we have to do is look at places such as Minnesota's Mayo Clinic, in Ohio the Cleveland Clinic, Pennsylvania's health care delivery system, which is called Geisinger, Utah's Intermountain Healthcare, and California's Kaiser Permanente. What do they have in common? They get better health care outcomes for tens of millions of people for less money than most other health care delivery systems in this country. Better results for less money.
How do they do it? Well, they have figured out what works, and they do more of that. They figured out what doesn't work to get better health care outcomes for less money, and they do less of that. They have moved away from what we call a fee-for-service approach to health care.
People get sick, they go see a doctor, they go see a nurse. They have visits and get shots or they get lab tests done or get x-rays or MRIs. We treat people when they get sick. For years, that is the way we have done health care in this country, including Medicare and Medicaid. Much smarter ideas have come out of Cleveland's clinic, and they have a huge health care clinic in northern Ohio, the Mayo Clinic, Geisinger in Pennsylvania, Intermountain in Utah, and Kaiser Permanente mostly in California.
Here is what they do. They do not just incentivize health care providers--doctors, nurses, and hospitals--to work on people when they are sick. Their incentive works entirely different. What they do in those places is focus on how to keep people healthy, not just how to incentivize the doctors, hospitals, and nurses to keep people healthy, but how do we incentivize the patient, the person whose health is at stake, how do we incentivize them to take personal responsibility for their own health care.
In my mind that is the heart and soul of the health care reform right there. Among the smart things that work are large purchasing pools. We have an 8-million-person pool for us that we are part of. Members of Congress, our staffs, all Federal employees, Federal retirees, and our dependents are part of a huge purchasing pool called the Federal Employees Health Benefits Plan. It is approximately 8 million people.
We don't have 8 million Federal employees, but we have 8 million people when we add in retirees and dependents and so forth. We are part of this big health care purchasing pool. We get lower prices.
It is not free. We pay about 28 percent of the cost of our premiums as Federal employees and servants, if you will, to people in our respective States, and our employers, the taxpayers, pay the other 72 percent or so.
But what we are going to do is provide the opportunity for individuals, for families, for businesses--small and midsize businesses--all over the country, in less than 24 months, to be able to join a similar kind of purchasing pool. We are going to start them, and every State--New Hampshire, Delaware, Alabama, and every other State-- will have the opportunity to have their own large purchasing pool to be able to take advantage of lower administrative costs.
The administrative costs for our Federal Employees Health Benefits Plan is $3 out of every $100 of the cost of the premium. So $3 out of every $100 of premium costs goes for administration. In most plans for individuals, for families and small businesses, it is more like 20 or 30 percent. So 3 percent for our large purchasing pool, and we will have those available, in fact, in every State.
The other thing we have going for us in the Federal Employees Health Benefits Plan is we use private health insurance plans. We are not using socialized medicine or stuff like that. The private health insurance plans in the country can sign up and say they want to be able to offer their plans to the folks who are Federal employees with dependents, to Federal retirees, and so we can choose among them. So there is a lot of competition between those health insurance companies, and we get the benefit from that competition. It drives down cost. Competition helps drive down cost and improves the range of opportunities.
The other thing I like about the law is that, for the most part, insurance can't be sold across State lines. But we make an exception. I will use Delaware as an example. We are boundaried on the west by Maryland, to the north by Pennsylvania, and to the east by New Jersey. When we establish our own health insurance pool in 2014, we will have about 900,000 people. So we will have a huge health insurance pool, but we are sure not going to have 8 million people.
But what we will have under the law is the opportunity to create an interstate compact between Maryland or Delaware or Delaware and Pennsylvania or Delaware and New Jersey or maybe all of the above and have a multistate purchasing pool or exchange. The great thing about this approach is we, No. 1, will have a bigger pool, which will drive down administrative costs and increase the competition.
The health care that would be available in Delaware plans could be offered in Maryland, could be offered in Pennsylvania or offered in New Jersey. So we would have a larger purchasing pool, more competition, and a better deal for the consumer. I think that is another part of the heart and soul.
So two things, and I will close on this and then turn to what I came to the floor to talk about. But I was inspired by my friend from Alabama. In terms of the key reforms in the health care legislation, No. 1, move away from fee-for-service--just paying for treating people when they are sick. Migrate away from that. We still need to treat people when they are sick, but migrate to a system like we have at Mayo, Cleveland Clinic, Geisinger, Intermountain Health, and Kaiser Permanente where they focus on how we keep people well. Focus on prevention and wellness and focus on treating people in a coordinated fashion as a team, not as individual providers. Very smart.
The other key element is this idea of creating these large purchasing pools and trying to incentivize people to be part of the health care delivery system by taking better care of themselves. So those are the two keys.