In Wyoming, we have community health centers and they serve a great role. For underserved areas across the nation, they are absolutely critical. I wish there was more that we were doing in the area of community health centers and I think it provides some better solutions than some of the other things than we’re doing in this bill. Wyoming is considered to be underserved. The whole state is underserved. Even the bigger cities are considered underserved. And we are missing every single kind of medical provider, including veterinarians. And usually when I make that comment, somebody says, “People don’t use veterinarians, do they?” I say, “As far as our distances are, some people are happy to get to a veterinarian to get health care in an emergency situation.” So we do have some different situations across this country that need to be taken care of. And one of my concerns of course is that we’re doing this huge Medicaid expansion, and when we do the Medicaid expansion, we already have it priced for doctors so that 60 percent of the doctors won’t take Medicaid patients. If you can’t see a doctor, you don’t have insurance. Period. I don’t think we’re doing enough to take care of that difficulty prior to expanding this population so we’re going to shove more and more people out of getting any health care.
I rise in support of Sen. Judd Gregg’s amendment, which would prevent the Medicare cuts in the Reid bill from being used to pay to create a new entitlement programs to cover the uninsured.
Yes, I want to have the uninsured covered. I do not oppose covering the uninsured. Nor do I oppose reforming the Medicare program. We need to do those things. We absolutely need to do those. But we shouldn’t do it on a system that’s going broke. We shouldn’t take the money from a system that’s going broke to do new entitlement programs. And I know the senator from Montana this morning admitted that if the Gregg amendment were to pass that it would limit some of these entitlements, that they wouldn’t be able to do them. Again, we’re not opposed to doing those new entitlements. We’re just opposed to paying for them with Medicare money because Medicare is going broke. Everybody agrees with that. They do say that if we put these extra burdens on Medicare, that we will extend the life of it. You can believe that or not, but we could extend it even more and we could solve some problems that are in Medicare if we took the Medicare money and we used it for Medicare. Medicare needs changes. Medicare needs to have money that we’re now going to move away and put into other programs. But don’t worry about it because we’re going to form a Medicare Commission and that Medicare Commission every year is going to come and tell us what we ought to do to make more cuts. Before we start doing more cuts, maybe we ought to make sure that the cuts we’re doing go to what we anticipated needed the most help. So I’m not opposed to covering the uninsured. I don’t oppose reforming the Medicare program. We should do those things.
What I oppose is the Reid bill. This is the wrong approach to solve these problems.
The Gregg amendment would go quite a ways to solving some of my discontent with the bill. The amendment offered by my friend from New Hampshire highlights the main problems with the Reid bill, and suggests a better approach.
His amendment would protect the savings from the Medicare program, and prevent them from being used to create a new entitlement.
This would mean that this new program would not have to rely on cuts to Medicare to fund its operation. It would also reserve all of the money taken from Medicare so that it could be used to fix the problems in the Medicare system.
Earlier we had an amendment and it said that the money for Medicare would go to Medicare. Let’s see, every single program that we allocate money to, we have inspector generals that are supposed to make sure that the money for that program goes to that program. But this is a different situation. What we’re saying here is that we want the money from Medicare to go to Medicare. The money for Medicare has to go to Medicare. But we’re going to take money from Medicare. And I say if we’ve got that money that we can take from Medicare, we ought to put it to Medicare and only to Medicare until we have the Medicare problem solved. Our seniors are relying on that. So don’t be caught up by the little words in do-nothing amendments that say the money for Medicare is going to go to Medicare. What we want to see is that the money from Medicare goes only to Medicare. It’s a very important part.
If you take money from a program and give it to something else, you have less money in that program. And if it’s having problems – and we admit that Medicare does have problems in the long term, seven or eight years out there it’s going broke. Maybe we can extend it a year or two. If we took money from fraud and abuse and put it into the Medicare program, we should give assurance to seniors that we’re doing something for seniors. That’s where a lot of the concern comes from in this country. On fraud and abuse, if there’s all this fraud and abuse out there, how come we haven’t been getting that fraud and abuse in the past and putting it to some kind of good use.
All of the sudden we’re saying there’s all this fraud and abuse and we’re going to take this extra fraud and abuse and we’re going to put it in there. I took a look at some of the fraud and abuse and I noticed we’ve increased the number of fraud and abuse we’re capturing, but we did that by changing the definition. We didn’t capture more money, we just claimed more fraud and abuse. That’s one of the problems with having a government bureaucracy do things that really have no value in doing. If government agencies find money, it doesn’t come back to their programs, so they’re not very excited about doing it. We keep passing fraud and abuse things around here and they fraud and abuse never gets found to any extent and the money can’t be used if it can’t be found.
As an accountant, what I’ve always suggested is we have a separate fund set up and when we find that fraud and abuse we put it in that fund and we only use the money where we say we’re going to have fraud and abuse money because we have no incentive in government to go out and collect the money. It’s a huge problem we have around here.
Some Democrats have argued that we are not creating a new entitlement program. They are simply wrong. Just like Social Security, Medicare and Medicaid, this bill will commit the Federal Treasury to paying for these new subsidies for the uninsured forever.
When we start a program around here, we don’t put an end date on it. And as soon as we’ve passed it, the people say, “Wow, thanks, that’s really great. Now what are you going to do for us?” We look around and say maybe we can do like Medicare Part D. Then we pass that. And they say, “You gave us Medicare Part D but you’ve still got that doughnut hole, what are you going to do about that?” So, yes, we take care of that. We keep adding to the entitlement regardless of how the money is coming in. That’s how Medicare has gotten in trouble.
Once these subsidies are given, they are never taken back, only expanded. There is no appreciation for what has been done. As I mentioned, Medicare Part D. Now they want the doughnut hole closed. And we’re going to do kind of a phony thing to close the doughnut hole. Pharma said they would give $50 billion that can be used as a subsidy as people go through the doughnut hole.
Pay attention to this. They said you can only use this subsidy if we can pay it directly to the customer – that way they keep in contract with the customer – and you can only use it if they stay with our brand name. Okay, so they get it though the doughnut hole. Then the taxpayer picks up the money for it and they’re stuck with the brand name out there. That’s why pharmaceutical companies can make so much money.
If they can get them to not switch to that generic and make good economic decisions as they go through the doughnut hole action they can make a lot more money once it’s on the taxpayer outside of the doughnut hole. I’m really upset with the pharmaceutical industry for doing that. This is the reason they’re putting all the money into promoting this.
That means that, as federal spending continues to grow, this new program will continue to grow. It will crowd out other federal spending priorities, like education and national defense.
The states will tell you that it’s already crowding out education. When we put these new Medicaid requirements in there and they have to pay for them, they have a limited budget too. And what they’ve done is take money away from colleges, so colleges have had to increase tuition dramatically in order to cover the money that they had to give to Medicaid. So when we do some of these things, we’re affecting a lot of things. Other spending priorities like education and national defense.
Any future attempts to modify or restrain this growth will be met by cries of indignation, arguing that cuts would devastate access to health care. If anyone has any doubts, they should look at the transcripts from our debate on the Deficit Reduction Act.
In 2005, Congress tried to reduce Medicare spending by about $20 billion and enact modest reforms to the Medicaid program. These programs would have strengthened the long term solvency of these programs and helped reduce the federal deficit.
In response, Senator Reid called that bill an “immoral document.” The junior Senator from California said she strongly opposed the cuts in the bill, because they would “cut Medicare and Medicaid by $27 billion.”
The media quotes the majority more often and here in DC, the volume of quotes is often equated with being right. Well, that doesn’t actually work that way.
Yet today, these same Members and the rest of my Democratic colleagues want to create a new entitlement program that will spend hundreds of billions of dollars. And they would pay for it by cutting $464 billion from the Medicare program. That is enough money to run the state of Wyoming for 320 years. We don’t understand how much money we’re talking about here. You can’t take that kind of money from a program and give it to other programs – and we recognize that. That’s why we put this Medicare Commission in there that annually is supposed to suggest extra cuts.
Well, let’s see, we made a deal with the hospitals that we weren’t going to cut them anymore. We made a deal with the pharmaceuticals that we weren’t going to cut them anymore. We made a deal with the doctors that we weren’t going to cut them anymore. Although we never followed through on any of the doctor stuff because their deal, as I understand, and these are hidden deals, their deal was supposed to be that they would either get a one-year fix on the doc fix and medical malpractice or they would get a ten-year fix on the doc. That isn’t in either of the bills, so I don’t know if they’re going to stick with the hidden deal that they made. And I don’t know what other hidden deals there were in this thing.
I believe these facts highlight why we need to adopt the Gregg amendment. We should be very careful creating a new entitlement program, which will permanently obligate our children and grandchildren to pay its costs. In fact, the way we maxed out our credit cards, we’re talking about the seniors having to pay for these other new entitlements, so grandma and grandpa are going to be paying for that too. Not just our grandkids and our children. If my colleagues insist on doing it however, at a minimum we need to guarantee that any new program has a stable and reliable source of funding.
The Medicare cuts in this bill are neither stable nor reliable.
My Democratic colleagues have spoken at length about how the Medicare provisions in this bill will bend the growth of heath care spending. That is unfortunately far from accurate.
If you don’t believe me, listen to what other nationally recognized experts have to say.
According to the New York Times, the CEO of the world renowned Mayo Clinic dismissed the reforms in the bill. Dennis Cortese said the Reid bill only took baby steps towards revamping the current fee-for-service system.
The Dean of the Harvard Medical School, Jeffery Flier, said that the bills being considered in Congress would accelerate national health care spending.
I wish there were more actual reforms in this bill. I applaud some of the efforts that Sen. Baucus included that will create incentives for coordinated care and rewarding providers who provide higher quality. I believe those are exactly the types of things that we should be doing to improve the Medicare program.
Unfortunately, the savings from these actual reforms are a few pennies compared to the dollars of arbitrary payment cuts included in this bill.
According to the Congressional Budget Office, all of the savings from the various policies to link Medicare payments to quality and encourage better coordination of care in the Reid bill provide less than $20 billion in total savings.
In contrast, the Reid bill includes over $220 Billion in arbitrary payment cuts to health care providers, including hospitals, nursing homes, home health agencies and hospice providers. We made a point of making it known how much those are and it is going to take away services people expect. The Reid bill also includes an additional $120 billion in cuts to Medicare Advantage plans. We talk about wanting to provide catastrophic care for everybody. That was one of the goals. Well, Medicare people do not have catastrophic care. They can buy catastrophic care through Medicare advantage. But we’re talking about making some substantial cuts to that that are either going to decrease benefits or in some cases make the whole service go away.
Those are not reforms. Instead they represent the best efforts of folks in Washington to guess how much it actually costs real doctors and nurses to provide health care services to Medicare beneficiaries.
We are not experts in the health care field. But we are going to guess at how much extra revenue they’re getting. And I want to emphasize the word revenue. As an accountant, there is a difference between profit and revenue. We’re going to cut substantially into the revenues which is going to eliminate profits which is the point at which people say, “Why am I doing this?” People that are looking at being doctors and nurses are going to say, “Why would I want to do that?” Well, there’s going to be a huge demand because the baby boomers are coming up and they’re going to need services. So cuts like the ones to doctors and nurses and home health and all of those are an excellent example of how government price controls don’t work.
Medicare does not negotiate payment rates with providers, like private insurers. Medicare uses price controls to set payment rates. Now when I first went into the shoe business, Nixon suggested that we should have price controls. That the cost of goods was going out of sight. And at that time, you could buy a man’s dress show for $10. And they put in price controls. But, like this, they couldn’t put the price controls in immediately because it takes a while to pass the bill. What did everybody that was manufacturing shoes do? They raised our prices, which forced us at the retail end to have to raise our prices too. By the time that went into effect, that $10 shoe was $20. So price controls don’t work. I’ve experienced it. And it was dramatic and it was terrible for the customer. And we’re talking about customers here again.
Medicare uses prices controls to set payment rates. Experts in Washington then look at various reported costs, revenues, and profits of health care providers and then decide how much we should pay health care providers. I often said that everyone thinks that they know everything about a business until they actually have to run it. Unfortunately, we’ve been taking over a lot of businesses and our expertise is showing.
I’m kind of fascinated by Cash for Clunkers. That was a little business that we decided to set up on behalf of the government. We said that it would last for four months and it went broke in four days. Any of the numbers that anybody around here is considering, we ought to take a look at. Because as a former small business owner, I want to assure them, it’s actually a lot harder than it looks. The simplest business out there, if you scratch the surface a little bit, you’ll find out those people are making dramatic decisions on a daily basis just to keep in business, which means hopefully paying themselves but definitely paying their employees because that’s not an option. If it was as easy as we think it is around here to do a business, everybody would be going into business.
The Medicare cuts in this bill are based on the efforts of folks in Washington to decide how much it costs to run a nursing home in Cheyenne or a home health agency in Gillette or any of these businesses in much smaller communities. Based on their past track record of Washington, I don’t have much confidence in their abilities and I don’t think America does. I think that’s showing up in the polls. I think that’s showing up in the town meetings.
In 1997, Congress passed the Balanced Budget Act. It contained Medicare payment cuts. Lots of really smart folks in Washington made arguments similar to those we are hearing today about how these cuts would not harm providers or beneficiaries.
What happened after these cuts went into effect? Within two years, these cuts had driven four of the largest nursing home chains in the nation into bankruptcy.
Vencor, Sun Healthcare, Integrated Health Services and Mariner Post-Acute Network all filed for bankruptcy. Between them, they operated 1400 nursing homes that provided care for hundreds of thousands of Medicare beneficiaries. That was historic. Well, let me show you the historic arrogance of that time. What happened after these cuts went into effect? After two years these cuts have driven four of the largest nursing home chains in the nation into bankruptcy. Between them, they operated 1,400 nursing homes that provided care for hundreds of thousands of Medicare beneficiaries.
Similarly, the bill also included cuts in payments to Medicare and Choice plans. After these cuts went into effect, one out of every four plans pulled out of the Medicare program. Millions of beneficiaries then lost the extra benefits that these plans had provided.
Given this track record, I have grave concerns about what the Medicare cuts in the Reid bill would do Medicare beneficiaries and the doctors, hospitals and other providers who treat them.
I have even greater concerns about using any estimated savings from these cuts to fund this new entitlement program for the uninsured.
That is why we should pass the Gregg amendment. Rather than relying on cuts that could devastate the Medicare program, let’s find a stable and reliable funding source that we could use to pay for health care reform.
The Gregg amendment says that savings from any Medicare cuts should be reserved for the Medicare program. That way, if the Washington experts again got it wrong, we will not have already spent all the savings on another program.