Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Fringes, such as gym memberships, and extras such as that. The bill basically provides that there be no reductions in guaranteed Medicare payments. There is a long list of what guaranteed Medicare payments are. Even the Medicare Advantage companies, which are private companies with officers and they have stockholders--they have to report to their board of directors, and they have all these administrative costs, very huge admin costs. The reductions to Medicare Advantage--the application of reductions to Medicare Advantage plans are at the discretion of the officers. The officers can decide they are not going to cut the fringes; that is, the fringes and the extras that are beyond, in addition to the guaranteed Medicare benefits. If an officer wants to, it is his discretion, I am assuming--

Mr. BAUCUS. Will the Senator yield?

Mr. BAUCUS. It is true--first of all, we need to back up. Isn't it true that the MedPAC commission came to the conclusion that the Medicare Advantage plans are overpaid?

Mr. BAUCUS. It is also true that it is their recommendation that the Medicare plans overpaid by the amount of 14 percent.

Mr. BAUCUS. That is true. They are overpaid.

Mr. BAUCUS. If they are overpaid, doesn't that necessarily mean there are reductions in payments attributable to each beneficiary by definition?

Mr. BAUCUS. If they are overpaid--

Mr. BAUCUS. Absolutely. In 2003, I made the mistake and agreed to give the Medicare Advantage plans way more money than they deserved. And as the Senator from Oklahoma has said, they are overpaid.

Mr. BAUCUS. Mr. President, I ask unanimous consent that Senator Whitehouse, Senator Stabenow, Senator Dodd, and I be allowed to engage in a colloquy.

Mr. BAUCUS. Mr. President, who has the floor? We are all talking.

Mr. BAUCUS. I ask my colleagues, is it not true that basically in America, although all of America spends about $2.5 trillion on health care, basically it is 50/50. It is 41 or 42 percent public and about 60 percent private. We in America have roughly a 50-50 system today; is that right?

Mr. BAUCUS. This legislation before us basically retains that current division. What we are doing is coming up with uniquely American ideas. We are not Great Britain, France, or Canada. We are roughly 50-50--a little more private in fact. In 2007, it was 46 percent public and about 54 percent private. Roughly, that is where we are. It might change ever so slightly. But we are not those other countries, we are America. This legislation before us maintains that philosophy; is that correct?

Mr. BAUCUS. But isn't that a pretty good system--don't put too many eggs in one basket? Doesn't each keep the others on their toes a little bit?

Mr. BAUCUS. Doesn't this legislation provide for more competition than currently exists?

Mr. BAUCUS. For example, with exchanges, with health insurance market reform and with the ratings reform.

Mr. BAUCUS. I ask my colleagues, is there anything in this legislation which will interfere with the doctor-patient relationship; that is, to date people choose their own doctors, whichever doctor they want. They can, by and large, go to the hospital they want, although the doctor may send them to another hospital. Is there anything in this legislation that diminishes that freedom of choice patients would have to choose their doctor?

Mr. BAUCUS. What about the procedures doctors might want to choose for their patients? Is there anything in this legislation which interferes with the decision a physician might make as to which procedure to prescribe, in consultation with his or her patient?

Mr. BAUCUS. I might ask my friend--that is very true--Could he explain maybe how doctors may be, in this legislation, empowered to have better information to help them provide even better care? What are some of the provisions?

Mr. BAUCUS. I think it is important not to overpromise because some of these initiatives, some of these programs will take a little time to take effect. In fact, some of the provisions do not take effect for a couple, 3 years. But still, wouldn't my colleagues agree that some of these are going to probably yield tremendous dividends in the future, especially generally the focus on quality, not outcomes, reimbursing physicians and hospitals based on quality, not outcomes, the pilot projects, the bundling, the counter care organizations and other similar efforts in this legislation. One of the two or both may want to comment on that point. I think it is a point worth making.

Mr. BAUCUS. Very.

Mr. BAUCUS. Right. Some people are worried, perhaps, gee, there they go back there in Congress. They talk about waste--which is good; we want to get rid of waste. But then when they talk about waste, they talk about cutting out the waste, some think: Gee, if they are cutting out the waste and they are cutting health care reimbursements, gee, won't that hurt health care in America? Won't that harm health care in America? Won't that reduce quality? If they are cutting so much, $600 billion, $700 billion, $800 billion--that is a lot of money--aren't they going to start cutting quality health care in America? I see my good friend, the chairman of the HELP Committee, on the floor. He may want to join in this discussion as well, adding different points as to why the legislation we are putting together increases quality, does not cut quality, but it increases quality at the same time it reduces waste. I wonder if my colleagues might comment on all of that because it is an extremely, I think, important point to drive home our legislation improves quality health care.

Mr. BAUCUS. I think my colleague is exactly right. As he was speaking, I was thinking of that article a lot of us have referred to often, the June 1 New Yorker article by Atul Gawande, comparing El Paso, TX, and McAllen, TX. They are both border towns. In El Paso, health care expenditures per person are about half what they are in McAllen. And yet the outcomes in El Paso are better than they are in McAllen. One might ask: Why in the world is that happening? Why is there twice as much spent in McAllen than El Paso and the outcomes are different? The answer is we have a system which allows the McAllens in the system, that allows payment in basic quantity and volume as opposed to quality. I believe it depends on the community what the culture is. Some communities have a culture of patient-focused care. The current system allows that, but, unfortunately, if the culture in the community is more to make money, our reimbursement system today allows for that as well. So I think one of the things we are trying to do is to get more quality in the system--reimbursement to pay doctors and hospitals--more quality, as you have said--and that is going to even out a lot of the geographic disparities that have occurred in the country over time and so the quality will increase and the cost and the waste will decrease.

Mr. BAUCUS. There is no doubt about that. In fact, it is interesting the Senator mentioned his name because not too long ago I asked him that question. I said: Why, Dr. Berwick, is it that in some communities they get it and some they do not? His answer was that sometimes there is somebody--maybe it is a hospital or someone who is a pretty dominant player--who kind of starts it out and gets it right, and that is true. He invited 10 integrated systems to Washington, DC, to kind of talk over what works and what doesn't work. These are not the big-named institutions; they are the lesser named institutions. In fact, one of them I can probably say is the Billings Clinic, in Billings, MT--not too widely known, but they participated last year--the same process and integration with the docs, the acute care, and the postacute care. They have significantly cut costs, they have significantly improved the quality, and they are very proud of what they have done.

Mr. BAUCUS. I have very direct experience in this. My mother was in the hospital 3 years ago--in another hospital, not the Billings Clinic--and there was no discharge plan. There was no way to help deliver health care for her when she left the hospital and went into a rehab center--sort of a nursing home. Sure enough, she didn't get the proper meds, she didn't get the proper attention, the doctor did not see her every day or after that, and, lo and behold, she had to be readmitted to the hospital. She had a gastrointestinal issue, and, sure enough, they took care of her back in the hospital. But once she was discharged, they did it right. They improved upon the mistakes they had made. So I saw it firsthand, and it irritated the dickens out of me, frankly, in seeing how they did not pay sufficient attention to my mother. If this happens to my mother, my gosh, I bet it is even worse in lots of other situations.

Mr. BAUCUS. Well, she is now home and getting great attention. I made sure of that.