Pete Stark

Mr. STARK

Mr. STARK. Mr. Speaker, today, a number of House members are introducing the Medicare Early Access Act of 1999 to help people between 55 and 65 years of age obtain affordable health insurance. The proposal is almost fully funded over time through a requirement that beneficiaries pay for their own coverage. But there is an initial start-up cost to the program, and a temporary subsidy is necessary to mitigate ``adverse selection'' costs attributable to the fact that sicker-than-average individuals who are desperate for health insurance may sign up in disproportionate numbers for the program. To ensure that Medicare's trust funds are not hurt by this new program, I am introducing a package of anti-fraud and administrative improvement provisions that will raise more than enough money to fund the start-up of the Medicare Early Access Act. These provisions are changes that we ought to be making anyway to strengthen the program, and I am pleased that they fund this important new expansion of health insurance. Over the long run, enactment of these provisions will help reduce Medicare's long-term financial problems. Below is a brief description of the provisions. The bill will: Pay for covered Medicare drugs on the basis of actual acquisition cost instead of the artificially high level of average wholesale price minus 5%, which was established by the Balanced Budget Act of 1997; Lower Medicare payments for Epogen from $10 to $9 per 1,000 units. Epogen is now Medicare's most expensive drug, and taxpayers pay more than 80% of the cost; Reform Medicare's partial hospitalization benefit. In a recent audit, the HHS Inspector General found Medicare payments for partial hospitalization services had a 90% error rate; Improve the accuracy of Medicare's secondary payer provisions to require health plans and employers to provide insurance data on covered enrollees; Allow Medicare to get a volume discount by contracting with HHS- designated ``Centers of Excellence'' for complex operations at hospitals that have better-than-average outcomes.

Mr. STARK

Mr. STARK. Mr. Speaker, in the 104th and 105th Congresses, I introduced legislation to provide assistance in obtaining health insurance to those 55 and older. Today I rise again to introduce legislation that will help many individuals who find themselves without health insurance as they enter the later stage of their lives. The COBRA Extension Act for 55-to-65 Year Olds extends the COBRA health continuation program to cover more individuals between age 55 and when they become eligible for Medicare at age 65. Under current law, individuals can keep COBRA coverage for 18 to 36 months, depending on the circumstances. That means that a person can be laid off from his or her job, receive 18 months of COBRA, and then find him or herself running out of COBRA coverage at age 55 with only limited, and expensive, places to turn for other health coverage. One option available to these people is to find an individual health plan in the private market, but the cost of doing so is extremely prohibitive. Rates and availability of coverage in the individual market vary widely, with a person's health, age, and other factors being taken into account. For those in their 50's and 60's, there are large disadvantages and huge expenses in trying to obtain individual coverage since most insurance premiums rise sharply with age or pre- existing conditions. For example, in the San Francisco market, Blue Cross of California offers a basic, barebones in-hospital plan with a high deductible in the range of $2,000. For a couple under age 29, the cost is $99 per month. But the cost soars to $389 for a couple between 60 and 64. This is an outrageous fourfold increase in insurance rates for the older couple--and it is by no means a comprehensive policy. Group health insurance is much less expensive than individual policy insurance, and that is why the current COBRA benefit is so vital and useful. The difference in annual cost for obtaining group versus individual health insurance can easily be several thousand dollars. Under current COBRA rules, people age 55 and over who are reaching the end of their COBRA coverage and who cannot afford to enter the private market face the prospect of being without health coverage for up to 10 years--until the time they are eligible for Medicare. At that late point in their careers, the task of finding a new job with employer based health coverage can be close to impossible. Some people, such as widows receiving coverage through their late spouse's employer, may need to re-enter the workforce for the first time in years. Unfortunately, many near-elderly individuals have faced this situation in the recent past. Increasingly during the 1990s, losing one's job due to downsizing and lay-offs has created a gap in health insurance coverage for individuals over age 55. More near-elderly individuals may face the frightening reality of this situation as the number of people between the ages of 55 to 65 nearly doubles, from 23 million today to 42 million by the year 2020. There exist numerous examples that help demonstrate the significance of the situation to older workers: At AT&T, 34,000 jobs had to be cut in 1997. This is down from the original prediction of a cut of 40,000 jobs, but still a significant number. Workers were to receive a lump sum payment based on years of service, up to one year of paid health benefits and cash to cover tuition costs or to start a new business--but what happens to health coverage after one year? Two giant New York City banks, Chase Manhattan and Chemical recently combined and 12,000 jobs from the combined banks were subsequently cut. Last year, Massachusetts-based Polaroid reduced its workforce by seven percent, cutting over 2,400 jobs. In December 1998, Citicorp announced it was slashing 10,400 jobs, six percent of its total workforce. All in all, over 625,000 jobs were eliminated in 1998. When the near-elderly lose their jobs in this manner, too often the unfortunate consequence is that they and their spouses also lose their health insurance coverage. In order to assist these individuals over age 55 in maintaining health coverage, and provide an option for them that is better than entering the individual market, my bill modifies the current COBRA law by extending COBRA coverage until the age of Medicare eligibility for individuals who are age 55 or older at the time that their COBRA coverage would expire under current law. Under this formulation, the maximum coverage available would be 13 years--a spouse who begins her 36 months of coverage at age 52 would then begin coverage under this bill at age 55 and be guaranteed health coverage until the point she becomes eligible for Medicare. In order to compensate employers for the cost of this new COBRA continuation coverage, my bill calls for age-55+ enrollees receiving an extension of their COBRA benefits to pay 125 percent of the group rate policy (compared to 102 percent for most current COBRA eligible individuals and 150 percent for disabled COBRA enrollees). This provision recognizes the fact that this age group is more expensive to insure and compensates business accordingly. I realize that the cost of paying one's share of a group insurance policy will still be too much of a burden for a number of Americans. Many of them will be forced into the uncertain mercies of State Medicaid policies. But for many others, this bill will provide an important bridge to age 65 when they will be eligible for Medicare. While we are taking other steps to resolve this burgeoning problem, this step is crucial to any long-term resolution. As greater numbers of baby-boomers enter their mid-to-late 50s, it becomes even more apparent that we need to act now. We cannot allow our early retirees and their spouses to be left without this important option for health coverage. I look forward to working with my colleagues to enact the COBRA Extension Act for 55 to 65 Year Olds.

Mr. STARK

Mr. STARK. Mr. Speaker, as this Congress debates Medicare reform, we need to ask ourselves what kind of reform do we want? Is Medicare a program that has worked for our nation's seniors? Is it something we should build upon or is it something we should tear down and start over? I stand here today with 80 of my colleagues to say that Medicare is a program that works and that can and should be improved. In that vein, we are introducing the Medicare Early Access Act, legislation that was first introduced in the last Congress with the support of President Clinton. Rather than raise the eligibility age of Medicare like some in this Congress would seek to do, this bill would expand access to Medicare's purchasing power to certain individuals below age 65. The Medicare Early Access Act is self-financed, through enrollees' premiums; it is not a publicly financed program. It simply would enable eligible individuals to harness Medicare's clout in the marketplace to get much more affordable health coverage than they are able to purchase in the private sector market that currently exists. The bill would provide a very vulnerable population (age 55-64) with three new options to obtain health insurance: Individuals 62-65 years old with no access to health insurance could buy into Medicare by paying a base premium (about $300 a month) during those pre-Medicare eligibility years and a deferred premium (per month, about $16 for each year of participation in the early access program) during their post-65 Medicare enrollment. The deferred premium is designed to reimburse the early access program for the extra costs for the sicker than average enrollees. It would be payable out of the enrollee's Social Security check between the ages of 65-85. Individuals 55-62 years old who have been laid off and have no access to health insurance, as well as their spouse, could buy into Medicare by paying a monthly premium (about $400 a month). There would be no deferred premium. Certain eligibility requirements would apply. Retirees aged 55 or older whose employer-sponsored coverage is terminated could buy into their employer's health insurance for active workers at 125 percent of the group rate. This would be a COBRA expansion, with no relationship to Medicare. Through these changes, the Medicare Early Access Act would provide health insurance for some 400,000 people at a vulnerable point in their lives when the current health care marketplace is leaving them out. These are not people whom the current health care marketplace is scrambling to cover. Insurance companies don't want them and we are increasingly seeing employers drop coverage as well. It is time for the federal government to step forward and solve the problem of diminishing access for early retirees and workers who simply cannot buy adequate insurance in the private market. In addition, the Medicare Early Access Act has only a small start-up cost that is fully financed through companion legislation to curb waste, fraud and abuse in Medicare that I am concurrently introducing today. In this way, we will expand coverage options to people between the ages of 55 and 64 at no cost to the American taxpayer. The Medicare Early Access Act isn't the total solution for people age 55-64 who lack access to health insurance coverage. However, if passed, it would make available health insurance options for these individuals at much less than the cost of what is available today. This is a meaningful step forward in expanding health insurance coverage to a segment of our population that is quickly losing coverage in the private sector. It is a solution that has no cost to the federal government. The Medicare Early Access Act is legislation that we should be able to agree upon and to enact so that people age 55-64 have a viable option for health insurance coverage. A more detailed summary of the Medicare Early Access Act follows: Medicare Early Access Act of 1999 Summary title: help for people aged 62 to 65 Sixty-two to sixty-five year olds without health insurance may buy into Medicare by paying monthly premiums and repaying any extra costs to Medicare through deferred premiums between ages 65 to 85. Starting July, 2000, the full range of Medicare benefits (Part A & B and Medicare+Choice plans) may be bought by an individual between 62-65 who has earned enough quarters of coverage to be eligible for Medicare at age 65 and who has no health insurance under a public plan or a group plan. (The individual does not need to have exhausted any employer COBRA eligibility). A person may continue to buy-into Medicare even if they subsequently become eligible for an employer group health plan or public plan. Individuals move into regular Medicare at age 65. Financing: Enrollees must pay premiums. Premiums are divided into two parts: (1) Base Premiums of about $300 a month payable during months of enrollment between 62 to 65, which will be adjusted for inflation and will vary a little by differences in the cost of health care in various geographic regions, and (2) Deferred Premiums which will be payable between age 65- 85, and which are initially estimated to be about $16 per month for each year or part of a year that a person chooses to enroll between age 62-65. For example, if one enrolls for only two years, the Deferred Premium will be roughly $32/ month [2 x $16] between age 65-85. The Deferred Premium will be paid like the current Part B premium, i.e., out of one's Social Security check. Note, the Base Premium will be adjusted from year to year to reflect changing costs (and individuals will be told that number each year before they choose to enroll), but the 20 year Deferred Premium will not change from the dollar figure that the beneficiary is told when they first enroll between 62-65--they will be able to count on a specific dollar deferred payment figure. The Base Premium equals the premium that would be necessary to cover all costs if all 62-65 year olds enrolled in the program. The Deferred Premium repays Medicare for the fact that not all will enroll, but that many sicker than average people are likely to voluntarily enroll. The Deferred Premiums ensure that the program is eventually fully financed over roughly 20 years. Savings from the anti-fraud proposals (introduced separately) finance the start-up of the program and protect the existing Medicare program against any loss (see Title IV).

Mr. STARK

Mr. STARK. Mr. Speaker, the biggest social problem facing America today is that one in six of our fellow citizens have no health insurance and are all too often unable to afford health care. About 44 million Americans have no health insurance. Despite the unprecedented good economic times, the number of uninsured is rising about 100,000 a month. It is unimaginable what will happen if and when the economy slows and turns down. One health research group, the National Coalition on Health Care, has estimated that with rising health insurance costs and an economic downturn, the number of uninsured in the year 2009 would be about 61.4 million. The level of un-insurance among some groups is even higher. For example, in California it is estimated that nearly 40% of the Hispanic community is uninsured. An article by Robert Kuttner in the January 14, 1999 New England Journal of Medicine entitled ``The American Health Care System,'' describes the problem well: ``The most prominent feature of American health insurance coverage is its slow erosion, even as the government seeks to plug the gaps in coverage through such new programs as Medicare+Choice, the Health Insurance Portability and Accountability Act (HIPAA), expansions of state Medicaid programs, and the $24 billion Children's Health Insurance Program of 1997. Despite these efforts, the proportion of Americans without insurance increased from 14.2% in 1995 to 15.3% in 1996 and to 16.1% in 1997, when 43.4 million people were uninsured. Not as well appreciated is the fact that the number of people who are under-insured, and thus must either pay out of pocket or forgo medical care, is growing even faster.'' Does it matter whether people have health insurance? Of course it does. No health insurance all too often means important health care foregone, with a minor sickness turning into a major, expensive illness, or a warning sign ignored until it is fatal. Lack of insurance is a major cause of personal bankruptcy. It has forced us to develop a crazy, Rube Goldberg system of cross-subsidies to keep the `safety net' hospital providers afloat. Mr. Speaker, what is wrong with us? No other modern, industrialized nation fails to insure all its people. I don't believe we are incompetent, but our failure to provide basic health insurance to all our citizens is a national disgrace. Personally, I would like to see all Americans have health insurance through an expansion of Medicare to everyone. I am also a co-sponsor of Rep. McDermott's single payer type program, which is modeled on Canada's success in insuring all its people for about 30% less than we spend to insure only 84% of our citizens. But these efforts are not likely to succeed in an conservative Congress or in a closely-divided Congress. Therefore, yesterday I introduced legislation, H.R. 2185, to try another approach--a refundable tax credit approach--which I believe can be made to work and which is similar to a number of bills recently introduced by various Republican members. Unfortunately, many of these earlier tax credit bills don't work. They either throw money at people who already have health insurance (e.g., 100% tax deductions for health insurance for small employers), provide a pitiful amount of money that wouldn't buy a fig leaf of a policy (e.g., a $500 credit bill), or if they do provide enough money, waste it by providing no `pool' or `wholesale' market and forcing people into the retail market where insurance companies take 20-30% off the top, refuse to insure the sick, and raise rates on older people so that the credit is woefully inadequate. The failures in these bills can be addressed. I think my proposal solves many of these problems. The idea of a tax credit approach to ending the national disgrace of un-insurance is a new one, however, and we desperately need a series of detailed, thoughtful hearings to design a program that will provide real help and not waste scarce resources on middlemen. The Health Insurance for Americans Act I introduced: Provides in 2001 and thereafter a refundable tax credit of $1200 per adult, $600 per child, and $3600 total per family. These amounts are adjusted for inflation at the same rate that the Federal government's plan for its employees (FEHBP) increases. The credit is available to everyone who is not participating in a subsidized health plan or eligible for Medicare. The credit may only be used to buy ``qualified'' health insurance, which is defined to be private insurance sold through a new HHS Office of Health Insurance (OHI) in the same general manner that Federal employees ``buy'' health insurance through the Office of Personnel Management. Any insurer who wants to sell to Federal workers through FEHBP must also offer to sell one or more policies through OHI. OHI will hold an annual open enrollment period (similar to FEHBP's fall open enrollment) and insurers must sell a policy similar to that which they offer to Federal workers (but may also offer a zero premium policy), for which there is no-pre-existing condition exclusion or waiting period, for which the premium and quality may be negotiated between the carrier and OHI, and which must be community-rated (i.e., it won't rise in price as individuals age). Mr. Speaker, a refundable tax credit sounds like an easy idea, but as in all things in America's $1.1 trillion health care system, there are some serious problems that have to be addressed. The major problems with a refundable credit are: (1) How to get the money to the uninsured in advance, so that the uninsured, who tend to be lower income, can buy a policy without waiting for a refundable credit? (2) How to make sure that the credit is spent on health insurance and there is no tax fraud? I solve both of these problems through credit advances to insurers administered through OHI. (3) How to limit the credit to those who are uninsured, and avoid encouraging employers and those buying private insurance on their own from substituting the credit for their current coverage? By limiting the size of the credit, most people who have insurance through the workplace or are participating in public programs will want to continue with their current coverage. The credit is adequate to ensure a good health insurance plan, but most workers and employers will want to continue with the current system. Having said this, there is no question that this credit is likely to erode gradually the employer-based system. It is hard to see employers wanting to offer new employees a health plan, when they can use this new public plan. Indeed, it is likely that an employer will say, ``I will pay you more in salary if you will go use the tax credit program.'' But is this bad? The employer-based health insurance system is an historical accident of wage controls during World War II where in lieu of higher wages, people were able to get health insurance as a fringe benefit. This system is collapsing. No one today would ever design from scratch such a system where your family's health care depended on where you worked. It is, frankly, probably good that this system would gradually erode--if there is something to replace it. The Health Insurance for Americans Act provides that replacement. To the extent that workers have better health care through their employer, the employer can continue to provide increased pay for the purchase of ``supplemental'' or ``wrap-around'' health benefits and can even help arrange such additional policies for their workers--and both workers and employers come out ahead. The bill I am introducing does not force an overnight revolution in the employer-provided system. But the current system is dying, and my bill provides a transition to a new system in which employees will have individual choice of a wide range of insurers (instead of today's reality, where most employees are offered one plan and only one plan). (4) How to make the credit effective by allowing the individual to buy ``wholesale'' or at group rates, rather than ``retail'' or individual rates? (5) How to make sure that individual who most need health insurance-- those who have been sick--are able to use the credit to obtain affordable insurance? (6) How to minimize the problem created when the healthiest individuals take their credit and buy policies which are ``good'' for them (e.g., Medical Savings Accounts), but ``bad'' for society because they leave the sicker in a smaller, more expensive insurance pool (that is, how do we keep the insurance pool as large as possible and avoid segmentation and an `insurance death' spiral)? Again, the OHI/FEHBP idea largely solves these 3 problems, by giving individuals a forum where they can comparison shop for a variety of plans that meet the standards of the OHI and achieve efficiencies of scale and reduced overhead. These questions are the single biggest problem facing the refundable credit proposal. Even if we are able to `pool' the individuals, will insurers offer an affordable policy to a group which they may fear will have a disproportionate number of very sick individuals? We may need to develop a national risk pool `outlet' to take the expensive risks and subsidize them in a separate pool, so that the cost of premiums for most of the people using OHI is affordable. Another alternative, and probably the one that makes the most sense for society, is to mandate that individuals participate in the OHI pool (if they don't have similar levels of insurance elsewhere). Only by getting everyone to participate can we ensure a decent price by spreading the risk. The danger that young, healthy individuals will ignore (forego) the tax credit program may be serious enough that it will cause insurers to price the OHI policies too high, thus starting an insurance ``death spiral'' as healthier people refuse to participate and rates start rising to cover the costs of the shrinking pool of sicker-than- average individuals. As I said earlier, the different Republican tax credit proposals fail to deal with these key questions and problems. But their bills have helped focus us on this national crisis. Through hearings and studies, I hope we can find ways to ensure that these technical--but very important questions--are addressed. There is one key, monstrous question left: how to pay for the refundable credit so we may end the national disgrace of 44 million uninsured? I have not addressed this issue in the bill, but am willing to offer a number of options. I would like to see the temporary budget surpluses used to start this program--but those surpluses are temporary and we need a permanent financing source. The problem of the uninsured is largely due to the fact that many business refuse or are unable to provide health insurance to their workers. The fairest way to finance this program would be a tax on businesses which do not provide an equivalent amount of insurance to their workers. Such a tax, of course, would slow the tendency of this program to encourage businesses to drop coverage. Since many small businesses could not afford the tax, we will need to subsidize them. Another approach would be to apply the next minimum wage increase to the payment of health insurance premiums by those firms which do not offer insurance. A 50 cent per hour minimum wage increase dedicated to health insurance would pay most of an individual's premium. Other financing sources could be a provider and insurer surtax, since these groups will no longer need to be subsidize the uninsured and will be receiving tens of billions in additional income. Finally, to end the national disgrace of un-insurance, a small national sales or VAT tax would be in order. Again, Mr. Speaker, I have said that the earlier tax credit proposals have serious structural problems. The biggest problem they have is not saying how they will pay for their plans. Until Members talk about financing, all of these plans are sound and fury, signifying nothing. These tax credit bills are obviously expensive, but so is the cost of 1 in 6 Americans being uninsured. In deaths, increased disability and morbidity, and more expensive use of emergency rooms, American society pays for the uninsured. If we could end the national disgrace of un- insurance, we would save billions in improved productivity, reduced provider costs, bad debt, personal bankruptcy, and disproportionate share hospital payments. Mr. Speaker, it is time for America to join the rest of the civilized world and provide health insurance for all its citizens.

Mr. STARK

Mr. STARK. Mr. Speaker, I rise today to actively support both H. Con. Res. 124, which seeks to protect the citizenship rights of Asian Americans, and H. Con. Res. 111, which seeks to condemn all forms of discrimination against Asian Americans. In response to recent allegations of espionage and illegal campaign financing by the Chinese government, H. Con. Res. 124 conveys the very important point that all Americans of Asian descent are vital members of our society and that they are to be treated fairly and equally as American citizens. It is our duty to make the clear distinction between our relations with the government of China and how we treat Americans of Chinese descent. We must work together to prevent the rise of tensions similar to those existing during the World War II era with the internment of loyal Japanese Americans. Asian Americans have made and continue to make significant contributions to our society in areas, such as the arts, education, and technology. H. Con. Res. 111 fully supports the continued political and civic participation by these citizens throughout the United States. Organizations like the Oakland Chinese Community Council (OCCC) of the East Bay area work to not only help Americans of Asian descent assimilate into American culture, but help them to maintain their Asian heritage and identity as well. More specifically, OCCC has developed programs for career referral, voter registration, and training in efforts to aid new immigrants with successfully attaining their goals upon entering the United States. I ask my colleagues to join with me in the outward condemning of discrimination against Asian Americans and in the protection of their rights as American citizens so that they may be treated with the equality and fairness that is rightfully expected and deserved.

Mr. STARK

Mr. STARK. Mr. Speaker, I am today introducing the 11th in a series of bills to modernize Medicare, obtain long-term savings, and make the program more efficient, without forcing beneficiaries to make radical changes. The bill would give Medicare authority to reduce capital payments 25% to hospitals in areas where we have more than an average number of beds and the occupancy rate is below the national average. Exceptions would be made if capital payments to these hospitals were used to merge or downsize or if the Secretary determined that special circumstances required a capital expansion. Mr. speaker, a major force making American health care the most expensive in the world is that we have way, way too many hospital beds. In California, occupancy has been below 50% for years. Throughout the nation, many hospitals are at 20 to 30% occupied. No one would run a modern factory at these occupancy rates-and certainly no banker would willy-nilly put more capital into such an industry. Yet the taxpayer consistently makes billions of dollars a year in automatic payments for capital to the nation's hospitals. Dr. John Weinberg of Dartmouth has just published the third in what is called The Dartmouth Atlas. He provides overwhelming documentation that in health, it is not so much demand, as supply that is driving the cost of the health care system. In other words, ``build it, and they shall come.'' Build a hospital, and doctors will find a way to use it. The more hospital beds available in a community, the more likely you will die in a hospital instead of at home, in a hospice, or in a nursing home. Yet we know that the public does not prefer a high-tech, prolonged death. At the moment of death, most people would like to be a familiar setting surrounded by family-not hooked up to a half dozen tubes in a hospital ICU. Capital payments also are used to proliferate fancy new services- rather than asking that expensive services (such as transplant or open heart surgeries) be concentrated at hospitals which do a large volume of operations and which have better outcomes. The data is overwhelming that the more operations a hospital does, the less likely they are to kill you. In other words, practice makes perfect, or at least very good. Yet in California, for example, we have about 130 hospitals doing open heart surgeries. Setting up an open heart program costs, I am told, about $10 million. Yet some of these heart centers only do 3 or 5 operations a month! They may be good for a local hospital's prestige, but they are almost a prime facie malpractice waiting for a jury. Medicare and taxpayers, again, should not be paying for this proliferation of local prestige: we are killing people through bad outcomes when we allow every Tom, Dick, and Harry hospital to do sophisticated operations. My bill is a simple proposal: where we have to many beds and they are going unoccupied, the taxpayer can save 25% in reduced hospital capital payments.

Mr. STARK

Mr. STARK. Mr. Speaker, Medicare HMOs are lobbying Congress, saying they are not being paid enough. The following memo shows that we are in fact overpaying most HMOs, largely due to the fact that most of them are enrolling much healthier than average Medicare beneficiaries. Nevertheless, a number of HMOs are recruiting enrollees to send in form letters to Members of Congress urging higher payment rates. What is annoying is that they are spending some Medicare money on this lobbying. They can lobby out of their profits and their CEO salaries if they want, but I don't think they should finance their lobbying out of taxpayer-Medicare payments. The enclosed letter from the Office of the Inspector General describes the problem. I am introducing legislation to correct the problem identified by the OIG. The bill will save the taxpayer from financing lobbying to spend more taxpayer money. It might also cause some of those lobbying HMOs to spend money on health care rather than lobbying. That would be nice.

Mr. STARK

Mr. STARK. Mr. Speaker, I rise today to introduce the Child Care Quality Improvement Act of 1999. As more and more families with infants and young children are forced to send both parents to work, the need for child care--especially infant care and care at non-traditional hours--continues to expand. As the need for care grows however, startling findings in a study on the cost and quality of child care by the University of Colorado at Denver's Department of Economics report that more than 80% of child care services in the U.S. is thought to be of poor or average quality. I want to make sure we're not missing the mark. Although it is true that child care is in short supply and is too expensive for many families to afford, we must not allow the demand for child care services to override the need for quality. It is critical that children receive care that promotes their healthy growth and development. We cannot allow them to be placed in substandard conditions. Today I am introducing the Child Care Quality Improvement Act of 1999, to help states increase and meet their child care quality goals. My bill would provide funding for Quality Improvement Grants to be transferred to local child care collaboratives. Grants would be made by the Federal government to states which have established goals for child care quality improvements in six areas: increased training for staff, enhanced licensing standards, reduced numbers of unlicensed facilities, increased monitoring and enforcement, reduce caregiver turnover, and higher levels of accreditation. States would then make grants to local child care collaboratives to make quality improvements. My bill take a benchmarking approach that helps states define quality targets and measures the states' progress toward meeting their long- term quality goals. State plans would be subject to the U.S. Department of Health and Human Services (HHS) for approval and monitoring. States would be required to report to the U.S. Department of Health and Human Services on their progress in meeting their quality goals in order to remain eligible for future funding. I am introducing this legislation in response to a report by the General Accounting Office (GAO) which found that most states lack strong standards for quality child car, such as requiring a sufficient educational training level of child care workers, keeping child to staff ratios low,and requiring safety and health provision on hand washing and playground equipment safety. The report further concluded that child care center staff turnover--which hurts the quality of care children receive--is very high and is largely due to the extremely low level of pay teachers in child care centers receive. I have sought the expertise of child care professional and early childhood development specialist across the country, including Dr. Edward Zigler, Sterling Professor of Psychology, former Director of which is now the Administration for Children, Youth and Families at the U.S. Department of Health and Human Service, and founder of the federal Head Start Program. Dr. Zigler tells us that a national policy to encourage an increase in state quality standards is of great value, and that the goal of this legislation--to improve child care services in the states--is both necessary and urgent. Congress has wrongly refused to require significant quality standards for the child care dollars we allocate each year. The federal government should give states the resources to raise state quality standards and improve child care quality at the local level, but only through a system of measurable indicators of desired outcomes. We must allocate these funds with the guarantee that incentive grants will continue to raise standards and improve the quality of care. As the father of a young son, I know the difficulty families face when choosing a caregiver for their children. My bill gives families peace of mind by encouraging the state and local facilities across the country to provide the high quality of care every child deserves.

Mr. STARK

Mr. STARK. Mr. Speaker, Healthcare facilities must comply with certain conditions in order to participate in the Medicare program. The Health Care Financing Administration relies on accrediting organizations to certify that healthcare facilities provide quality services to Medicare beneficiaries. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) is one such organization. A facility that receives JCAHO accreditation automatically meets the Medicare Conditions of Participation. I believe that there is a serious conflict of interest between the mission of accrediting agencies and their internal governance. Currently, the majority of members of these governing boards are representatives of the very industries that the agency accredits. While the accrediting agencies are likely to object and claim that the members of their governing boards are beyond reproach, I remain skeptical and wish to establish several basic checks and balances. Because accrediting agencies have a prominent role in certifying Medicare facilities, I believe that we have a vested interest to ensure that the accrediting process is as rigorous and quality-oriented as possible. Doing so will help ensure that all citizens may expect high- quality, safe, and effective medical treatment at any medical facility they use. Others share my skepticism. A July 1996 report from the Public Citizen Health Research Group charged that the JCAHO is ``a captive of the industry whose quality of service it purports to measure'' and ``fails to recognize the often conflicting interests of hospitals and the public''. In my home state of California, 29 JCAHO-approved hospitals had higher-than-expected death rates for heart attack patients. In some cases the rate was as high as 30-40% compared to a state-wide average of approximately 14%. What is particularly troubling is the fact that two of these hospitals received JCAHO's highest rating. In an analysis of New York hospitals, the non-profit Public Advocate presents strong evidence that hospitals circumvent JCAHO's annual announced survey visits--simply by hiring extra staff to make operations look smoother than they really are. In too many cases, the report finds that JCAHO's accreditation scores mask the truth--some accredited hospitals do not meet basic standards of care. For example, 15 accredited hospitals showed problems ranging from substantial delays in treatment of emergency room patients to outdated and broken equipment to overcrowded, understaffed clinics and unsanitary conditions. Given the critical role of health care facilities to our society, we must ensure that these facilities and the agencies that certify them are held publicly accountable. For this reason, I am introducing a bill that requires all Medicare-accrediting organizations to hold public meetings and to ensure that half of the governing board consists of members of the public. The intent of the bill I am introducing today is to ensure the accountability of accrediting boards--to guarantee that the public voice is represented in the organizations responsible for the safety and quality in Medicare's healthcare facilities. With these checks and balances we can assure all patients that they will receive high quality treatment in all Medicare-approved facilities. This bill has two simple provisions. First it requires that half of the members of an accrediting agency be members of the public who have been approved by the Secretary of Health and Human Services. These individuals are specifically prohibited from having a direct financial interest in the health care organizations that the agency certifies. Second, the legislation would require all meetings of the governing board be open to the public. Medicare and health care organizations operate in the public trust. Our tax dollars fund all Medicare benefits delivered by health care organizations as well as countless other medical benefits and programs. Therefore, the accreditation and certification of hospitals and other health care organizations must represent the interests of the public.

Mr. STARK

Mr. STARK. Mr. Speaker, I am pleased today to introduce the ninth bill in my Medicare modernization series: the ``Medicare Purchasing Flexibility Act of 1999.'' Medicare, the cornerstone of retirement for Americans, is in need of some improvements. When it was first created in 1965, Medicare was modeled on indemnity health insurance prevalent at the time. Since then, the health and medical fields have undergone significant change; both for the better and for the worse. But Medicare has largely lagged behind these trends. The problem is that Medicare's current administrative structure doesn't encourage testing or adoption of innovative market strategies. Instead, Medicare officials have to ask Congress to approve even the smallest change in administrative function, subjecting what should be common sense business strategies to the most rigid political battles. While Medicare has successfully provided health insurance to the elderly and disabled for nearly thirty-four years, it faces a financial shortfall due to rapid population growth. By 2035, Medicare will provide health insurance for twice as many retirees as it does today. Additional revenues will be needed in order to provide quality care for 80 million retirees. In the past, policy makers have focused on two ways to increase Medicare revenues: raising taxes or cutting benefits. Recently, however, Dan Crippen, Director of the Congressional Budget Office, alluded to a possible third way: creating administrative efficiencies. Dr. Crippen believes that substantial savings can be achieved by making Medicare more flexible and efficient. With these changes, Medicare will be able to improve the quality of services, while shoring-up savings for the long run. The private sector has adopted a number of cost saving mechanisms that have helped control health care inflation. Medicare should be given the same flexibility to keep up with these trends, and improve overall administrative efficiency. This bill grants the Secretary greater flexibility to administer the Medicare program including the following five provisions: First, expanded demonstration authority. Promotes high-quality cost- effective delivery of items and services by enabling the Secretary to test innovative purchasing and administrative programs within Medicare. The Secretary may use case management, bundled payments, selective contracting, and other tools she deems necessary to carry out demonstrations. If demonstration projects are successful, the Secretary is authorized to permanently implement programs. This section of the bill adopts language proposed by the National Academy of Social Insurance in their January, 1998 report, entitled ``From a Generation Behind to a Generation Ahead: Transforming Traditional Medicare.'' Second, sustainable growth rate (SGR). Gives the Secretary authority to adjust payment updates based on target growth rates and to apply such adjustments by geographic areas. This antigaming initiative would enable Medicare to control unjustified program inflation by region and by service (MedPAC recommendation). Third, outpatient payment reform. Allows the Secretary to pay the lower of hospital outpatient or ambulatory surgical center rates to ensure services in most appropriate setting. Fourth, most favored rate. Inherent reasonableness authority granted in the BBA is expanded to allow any amount of adjustment that the Secretary finds, after appropriate research, is appropriate to eliminate overpayments. The Secretary shall have the authority to request the ``most favored rate'' in cases where Medicare is the volume buyer in the market and other efforts at achieving a market price are not available. Fifth, use of appropriate settings. Allows the Secretary waive requirements which discourage or prevent treatment in a nonhospital or noninstitutional setting if she determines that an alternative setting can provide quality care and outcomes. For example, today Medicare does not cover care in a skilled nursing facility unless the patient has first had a 3-day hospital stay. Under this provision, if the Secretary finds that treatment of a particular disease or condition can be handled, with quality, in a SNF, she can waive the 3-day hospitalization requirement, thus ensuring treatment in a setting \1/2\ to \1/3\ less expensive. Medicare has been extremely effective in providing health insurance for the elderly and disabled, a population the private sector has refused to cover. In fact, over 30 years, its cost inflation has been less than that in the private sector and its benefit package has been improved. This social insurance mission must be preserved--and in the face of a doubling of the population it serves, we must do more to keep Medicare efficient and effective. By implementing the modernizations included in this bill, Medicare will be able to adapt and grow in the changing health care marketplace.

Mr. STARK

Mr. STARK. Mr. Speaker, I am pleased to introduce the Medicare Paperless Claims Promotion Act of 1999, the 10th in a series of Medicare modernization bills designed to improve program administration and the quality of the health care for Medicare beneficiaries. The Health Insurance Portability and Accountability Act of 1996 (HIPPA), included a number of administrative reforms for Medicare. The submission of electronic claims to Medicare instead of traditional paper claims is one of the main aspects of those administrative simplication efforts. Currently, a large majority of providers submit their claims utilizing an electronic system. In fact, as of January 1998, about 96 percent of all Medicare Part A claims were submitted electronically while 80 percent of all Medicare Part B claims were submitted in electronic formats. These numbers have continued to increase in the past year. While these numbers are commendable, the providers who have not yet begun to submit claims electronically are a real concern. Allowing paper claims to be submitted indefinitely will require duplicative systems that will create additional costs and inefficiencies for the Medicare system. The Administration has responded to this situation by proposing that by the beginning of fiscal year 2000 (October 1, 1999), any claims not submitted electronically will be subject to an administrative fee of $1. Since that announcement, they have assumed an additional 6 month delay in implementation due to Y2K activities. Unfortunately, however, such action is likely to have a disproportionate effect on smaller and rural providers that have been less aggressive in developing electronic information systems in their offices. I understand that developing such systems is labor intensive and expensive. Therefore to accommodate those providers who have not yet developed the capability to submit paperless claims, my bill proposes that the administrative fees charged for claims submitted in paper format would become effective as of January 1, 2003. In addition my bill would also grant the Secretary the power to waive the imposition of this administrative fee under certain circumstances, as she deems appropriate. To facilitate the implementation of electronic submission, my bill would also require the Secretary to make public domain software readily available at no charge. Converting to an all electronic claims system is a critical aspects of modernizing the Medicare program. In doing so, we must also be certain that we do not unfairly penalize providers in this process. My bill would allow providers ample time to get up to speed with the process prior to the imposition of administration fees for non- compliance. The Paperless Claims Promotion Act of 1999 is the 10th in my series of Medicare modernizations. It is a sensible change to current law to move us an electronic filing system.

Mr. STARK

Mr. STARK. Mr. Speaker, a number of us have introduced H.R. 1495, a bill to provide a prescription drug for everyone in Medicare. A provision in that bill requires a system to prevent drug errors and the use of contraindicated drugs. Over-prescription and reactions among multiple prescriptions costs Americans billions of dollars a year in illness--and thousands of deaths. If we can reduce those errors, the total health care system can make enormous savings. A new article in the May/June 1999 issue of the Journal of the American Pharmaceutical Association provides another example of why we should improve the quality of drug use among all Medicare beneficiaries. Following is the abstract of Rajender Aparasu's study entitled. ``Visits to Office-Based Physicians in the United States for Medication-Related Morbidity.'' Objective: To examine the prevalence, nature, demographics, and resource use associated with visits to office-based physicians in the United States during 1995 for medication- related morbidity. Design: A nationwide cross-sectional survey of ambulatory care visits to physician offices, based on data from the National Center for Health Statistics' 1995 National Ambulatory Medical Care Survey. Setting: Physician office-based settings in the United States. Patients: Patients visiting office-based physicians for principal diagnoses of adverse effect of medications (ICD-9- CM E-code 930.00-947.9). Main Outcome Measures: Weighted measures of prevalence, nature, demographics, and resource use associated with visits related to adverse effects of medications. Results: An estimated 2.01 million (95% confidence interval, 1.69 to 2.34 million) visits for medication-related morbidity were made to office-based physicians in the United States during 1995, representing an annual rate of 7.70 visits per 1,000 persons. Medication-related visit rates were greater in women, in patients between 65 to 74 years of age, and in the Midwest. The most frequently cited reasons for medication-related visits were skin rash, nausea, and shortness of breath. The therapeutic agents responsible for medication-related visits were most often hormone and synthetic substitutes (13.32%), antibiotics (11.55%), and cardiovascular drugs (9.30%). Medication-related visits most often involved diagnostic services and medication therapy. The majority included instructions for a scheduled follow-up, and fewer than 1% resulted in hospital admission. Conclusion: Medication-related ambulatory care utilization can pose a significant burden on health care resources unless specific strategies are initiated to control medication- related problems. The provision of pharmaceutical care can play an important role in reducing medication-related problems and associated health care costs.

Mr. STARK

Mr. STARK. Mr. Speaker, as part of a series of bills to provide for the modernization of Medicare, I am today introducing a bill to set the goal that by the year 2010 Medicare develop and use a single, united prospective payment system for post-acute hospital services. Currently, payment for post-acute care is a Tower of Babel, with different PPS and non-PPS systems used depending on whether one goes to a non-PPS hospital, a skilled nursing home, a home health agency, or some other form of therapy. The different payment rates and systems greatly increase Medicare's complexity and makes the system vulnerable to `gaming'--the placement of a patient where the provider will get the most money, not where the patient will get the best care. The Congressional advisory commission MedPAC, and other health experts, have long-warned that the proliferation of payment systems makes it evermore difficult for us to know what we are buying and how well patients are being treated. But moving to a single, unified, and simpler system is not easy. In many areas, the data or basic research is not available. Therefore, my bill sets out a long-term goal for Medicare to move in this direction. I hope that HCFA can develop these simplifications and cross- comparisons sooner, but if not, the bill sets a `hammer' of requiring the provider communities and HCFA to come together to achieve this goal by the end of the next decade. In the long run, this effort should yield savings and improve quality measurement. My introduction of this bill is a signal that this is the direction we should be moving. Following are some quotes from the March 1999 MedPAC report to Congress on why this wonky issue is also an important issue: To guide the development of consistent payment policies across post-acute care settings, MedPAC recommends that common data elements be collected to help identify and quantify the overlap of patients treated and services provided. Further, it is important to put in place quality monitoring systems in each setting to ensure that adequate care is provided in the appropriate site. We also support research and demonstrations to assess the potential of alternative patient classification systems for use across settings to make payments for like services more comparable. . . A lack of readily available data on patient function and health status limits the ability to identify where differences and overlaps in patients occur and to compare costs and payments across provider types. In particular, policymakers are concerned that payment policies may furnish incentives for providers to place patients in settings for financial, rather than for clinical reasons. A core set of common data about patients in all post-acute care settings will improve considerably the ability to monitor and make policy decisions about post-acute care.

Mr. STARK

Mr. STARK. Mr. Speaker, today I rise to introduce the seventh bill in my Medicare modernization series: the ``Medicare Clinical Practice Patterns Act of 1999.'' This bill would give the Secretary the authority to document patterns of clinical practice in the Medicare program, determine the effectiveness of treatment, and bring medicare policy in line with that of the private sector. If implemented, the ``Clinical Practice Patterns Act'' would help to standardize the delivery of health services within Medicare, thereby improving the quality of care provided to Medicare beneficiaries and achieving savings for the program overall. Earlier this year, I introduced H.R. 1544, the ``Patient Empowerment Act of 1999.'' The ``Patient Empowerment Act'' was the first step toward eliminating the wide variation in treatment patterns across the U.S., as identified by Dr. John Wennberg in the Dartmouth Atlas. The ``Clinical Practice Patterns Act'' builds on this theme by developing evidence-based clinical guidelines to assist providers in treating various illness. Mr. Speaker, there are literally millions of doctors, nurses, and health administrators working in thousands of different hospitals, all trained at different schools in different communities, who provide care to the 39 million elderly, disabled, and ESRD patients covered by Medicare. With all of these elements interacting together, it's no wonder that we have such wide variation in treatment patterns across the United States. Medicare is a combination of both art and science. For most treatments, there are no empirical data on clinical effectiveness that suggest one method is better than another. In these cases, providers use their ``best guess'' to make treatment decisions--relying on their individual knowledge, preferences, and the resources available to them. This ``art'' of medicine exacerbates the variation in treatment patterns, and Medicare expenditures, across the U.S. Yet, as Wennberg notes, there is virtually no difference in health outcomes between low and high spending areas. If less expensive treatments are available, why aren't we prescribing them more readily? By collecting and distributing data on clinical effectiveness, and encouraging providers to use treatment guidelines, we may be able to minimize practice variation. We simultaneously may be able to achieve substantial savings for Medicare. Following is a portion of an interview from the May/June 1999 issue of Health Affairs by Princeton professor Uwe Reinhardt with HHS Secretary Donna Shalala discussing how Medicare's financial problems would be greatly reduced if the variation in clinical practices were minimized: Reinhardt. ``Count on me to be a real thorn in the side of the status quo, then, because I believe that if everyone in America could consume medical care while spending at rates similar to those of Minnesota, Oregon, and Wisconsin, providing health care to the aging baby-boom generation would be a piece of cake, wouldn't it?'' Shalala. ``Absolutely, and the doctors would feel as though the system were fairer. But once the infrastructure is built and physicians get comfortable with consuming a certain level of resources, it's very difficult to work your way out unless you buy yourself out, as we have attempted to do with the downsizing of medical residency positions through HCFA's New York demonstration.'' Clinical practice guidelines are being used more and more throughout the private sector to improve the quality of health care as well as to increase the efficiency of the health industry. This practice does not in any way diminish the art of medicine, it only improves the science behind treatment decisions. Medicare is a natural candidate for clinical practice guidelines. With an outstanding database of information on beneficiaries across the country, and the resources of the NIH and AHCPR at hand, Medicare could effectively implement a program to improve clinical effectiveness and achieve savings through efficiency.

Mr. STARK

Mr. STARK. Mr. Chairman, I rise in strong opposition to the Coburn amendment to the Agriculture Appropriations bill that would ban the Federal Drug Administration from using funds to test, develop, or approve Mifepristone (RU-486)--a drug which has been found to be safe and effective for early, non-surgical abortion. This is yet another political vote and political debate on a drug whose benefits have been scientifically proven. This amendment is an unwarranted intrusion into the work of the FDA, whose job is to decide whether to approve RU-486 or other drugs based on health and safety-- not abortion politics. Medical abortions and RU-486, if approved, would allow more choices to women seeking abortion. Medical abortions are a better health option for some women. Medical abortions allow women to avoid surgery as well as protect their privacy--women can receive RU-486 in pill form in a regular doctor's office, and be spared the trauma of protesters and violence that continue to stigmatize these women for exercising their constitutionally protected right to choose. Approval of RU-486 is critical so that doctors may use this procedure when they believe it is the safest way to end a pregnancy and leave the woman with the best chance to have a healthy baby in the future. New contraceptive development would also be targeted. Many anti- choice groups believe that some contraceptive methods cause an abortion. This is untrue. If that contention were accepted as fact, research and development of man new contraceptives would come to a halt. This amendment would deprive women of the benefits of significant contraceptive advances. Make no mistake, a vote for this amendment endangers the health of women, and adds to the long list of barriers set by the majority in Congress that make reproductive health services more dangerous and difficult to obtain. I strongly oppose the Coburn amendment.

Mr. STARK

Mr. STARK. Mr. Speaker, recently, I introduced H.R. 1375, a bill to limit the amount of financial pressure an HMO can place on a doctor to discourage referrals and testing. A recent Federal Appeals Court case provides new documentation on why we should pass such legislation. Current regulations allow an HMO to withhold up to 25% of a doctor's compensation as a way to discourage ``unnecessary'' treatment. The problem is, such ``withholds`` can discourage necessary as well as unnecessary treatments and tests. My bill would limit any HMO ``withhold`` to 10% and encourage the use of quality measures as the basis of payments to doctors. On August 18, 1998, the US 7th Circuit issued a majority opinion in the case of Herdrich v. Pegram, Carle Clinic Association, and Health Alliance Medical Plans. Following are portions of that opinion--exhibit #1 for why we need a national policy limiting HMOs and medical plans for putting too much financial pressure on doctors. On March 7, 1991, Pegram, Herdrich's doctor, discovered a six by eight centimeter ``mass'' (later determined to be her appendix) in Herdrich's abdomen. Although the mass was inflamed on March 7, Pegram delayed instituting an immediate treatment of Herdrich, and forced her to wait more than one week (eight days) to obtain the accepted diagnostic procedure (ultrasound) used to determine the nature, size and exact location of the mass. Ideally, Herdrich should have had the ultrasound administered with all speed after the inflamed mass was discovered in her abdomen in order that her condition could be diagnosed and treated before deteriorating as it did, but Carle's policy requires plan participants to receive medical care from Carle-staffed facilities in what they classify as ``non-emergency'' situations. Because Herdrich's treatment was considered to be ``non-emergency,'' she was forced to wait the eight days before undergoing the ultrasound at a Carle facility in Urbana, Illinois. During this unnecessary waiting period, Herdrich's health problems were exacerbated and the situation rapidly turned into an ``emergency''--her appendix ruptured, resulting in the onset of peritonitis. In an effort to defray the increased costs associated with the surgery required to drain and cleanse Herdrich's ruptured appendix, Carle insisted that she have the procedure performed at its own Urbana facility, necessitating that Herdrich travel more than fifty miles from her neighborhood hospital in Bloomington, Illinois. The ``market forces'' the dissent refers to hardly seem to have produced a positive result in this case--Herdrich suffered a life-threatening illness (peritonitis), which necessitated a longer hospital stay and more serious surgery at a greater cost to her and the Plan. And, as discussed below, we are far from alone in our belief that market forces are insufficient to cure the deleterious affects of managed care on the health care industry. Across the country, health care critics and consumers are complaining that the quality of medical treatment in this nation is rapidly declining, leaving ``a fear that the goal of managing care has been replaced by the goal of managing costs.'' (Jan Greene, Has Managed Care Lost Its Soul? Health Maintenance Organizations Focus More on Finances, Less on Care, Am. Hosp. Publishing Inc., May 20, 1997.) An increasing number of Americans believe that dollars are more important than people in the evolving [HMO] system. Whether justified or not, this assumption needs to be taken seriously, according to keepers of the industry's conscience. University of Pennsylvania bioethicist Arthur Caplan argues that managed care should take a lesson from professional sports, which has alienated some fans because money and profits have eclipsed the reasons why fans are about the games: hero worship and the virtues of teamwork, loyalty and trust-worthiness. The same goes for doctors. ``People go to their doctor not because he's a good businessman . . . but because he's a good advocate, someone we can admire,'' says Caplan. ``If we have to struggle with him to get what we want, we will have no trust anymore.'' To regain trust, HMOs need to be more sensitive to the doctor-patient relationship and remove the physician from direct financial interest in patient care, says Caplan. Instead, doctors should have a predetermined budget and be able to advocate for patients without direct personal gain or loss. Another hot-button issue for HMO members is the fear that a lifesaving experimental procedure will be denied because of its cost. Caplan says the industry should follow the lead of the handful of HMOs that have established outside, independent panels to make final decisions. Even care providers fear that they ``have become somewhat preoccupied with [their] ownership status and consequently have not paid as much attention as [they] should have to improving [their] basic core competencies.'' (Id.) The specter of money concerns driving the health care system, says a group of Massachusetts physicians and nurses, ``threatens to transform healing from a covenant into a business contract. Canons of commerce are displacing dictates of healing, trampling our professions' most sacred values. Market medicine treats patients as profit centers.'' (For Our Patients, Not for Profits: A Call to Action, JAMA, Dec. 3, 1997, at 1773.) As one professional stated, ``It's too bad. We used to spend most of our time worrying about how to do a better job. Now we worry about doing a better job at a lower price.'' (Id.) Thousands of American physicians and nurses, outraged by the increasingly ``corporate'' nature of American medicine, recently staged a reenactment of the Boston Tea Party by symbolically dumping $1 million each minute into Boston Harbor to dramatize the amount of health care money that is being wasted to pay for HMO marketing, profits, and administrative salaries. See Id. The shift to profit-driven care is at a gallop. For nurses and physicians, the space for good work in a bad system rapidly narrows. For the public, who are mostly healthy and use little care, awareness of the degradation of medicine builds slowly; it is mainly those who are expensively ill who encounter the dark side of market-driven health care. We criticize market medicine not to obscure or excuse the failings of the past, but to warn that the changes afoot push nursing and medicine farther from caring, fairness, and efficiency. Another commentator observed that ``American `market theology' is being invoked as an excuse for the downgrading of patient care and the growing absence of compassion in health care.'' (Bob LeBow, Nation Needs to Take Control of Health Care System for Patients, not Profits, Idaho Statesman, Dec. 2, 1997, at 6A). Instead of providing health care, doctors are forced to ``spend many hours persuading health insurance companies that we are not trying to manipulate them into paying more money than Medicare does for kidney transplants.'' (Gabriel M. Danovitch, et al., And How the Decisions Are Made, 331 New Eng. J. Med., at 331-32 (1984).) In order to minimize health care costs and fatten corporate profits for HMOs, primary care physicians face severe restrictions on referrals and diagnostic tests, and at the same time, must contend with ever-shrinking incomes. Sixty percent of all managed-care plans, including HMOs and preferred-provider organizations, now pay their primary-care doctors through some sort of ``capitation'' system, according to the Physician Payment Review Commission in Washington, D.C. That is, rather than simply pay any bill presented to them by your doctor, most HMOs pay their physicians a set amount every month--a fee for including you among their patients. At Chicago's GIA Primary Care Network, for instance, physicians get $8.43 each month for every male patient . . . and $10.09 for every female patient. . . Some HMOs, such as Oxford Health Plans, Cigna and Aetna, have ``withhold'' systems, in which a percentage of the doctors's monthly fees are withheld and then reimbursed if they keep their referral rates low enough. Others, like U.S. Healthcare, pay bonuses for low referral rates. (John Protos, Ten Things Your HMO Won't Tell You, Inside, June 30, 1997, at 44.) There is ample evidence that the bottom-line mentality is taking over. HMOs refer to the proportion of premiums they pay out for patient care as their ``medical-loss ratio''--a chilling choice of words. The Association of American Medical Colleges reported last November that medical-loss ratios of for-profit HMOs paying a flat fee to doctors for treatment averaged only 70% of their premium revenue. The remaining 30% went for administrative expenses--and profit. * * * * * Along the same lines as its ``market forces'' argument, the dissent submits that the defendants' plan ``encouraged physicians to use resources more efficiently.'' Although we agree, at least in principle, with the idea that financial incentives may very well bring about a more effective use of plan assets, we certainly are far from confident that it was at work in this particular case. The Carle health plan at issue was not used as efficiently as it should have been. Indeed, the eight-day delay in medical care, and the onset of peritonitis Herdrich incurred as a result of such delay in diagnosis, subjected her to a life threatening illness, a longer period of hospitalization and treatment, more extensive, invasive and dangerous surgery, increased hospitalization costs, and a greater ingestion of prescription drugs. The dissent also somehow contends that ``ERISA tolerates some conflict of interest on the part of fiduciaries,'' and therefore, ``allowing a plan sponsor to designate its own agent as a fiduciary reassures the sponsor that, in devoting its assets to the plan, it has not relinquished all ability to ensure that the plan's resources are used wisely.'' * * * * * A doctor who is responsible for the real-life financial demands of providing for his or her family--sending four children to school (whether it be college, high school or primary school), making house payments, covering office overhead, and paying malpractice insurance--might very well ``flinch'' at the prospect of obtaining a relatively substantial bonus for himself or herself. Here, the Carle physicians were intimately involved with the financial well- being of the enterprise in that the yearly ``kickback'' was paid to Carle physicians only if the annual expenditure made by physicians on benefits was less than total plan receipts. According to the complaint, Carle doctors stood to gain financially when they were able to limit treatment and referrals. Due to the dual-loyalties at work, Carle doctors were faced with an incentive to limit costs so as to guarantee a greater kickback. * * * * * In summary, we hold that the language of the plaintiff's complaint is sufficient in alleging that the defendant's incentive system depleted plan resources so as to benefit physicians who, coincidentally, administered the Plan, possibly to the detriment of their patients. The ultimate determination of whether the defendants violated their fiduciary obligations to act solely in the interest of the Plan participants and beneficiaries, see 29 U.S.C. Sec. 1104(a)(1), must be left to the trial court. On the surface, it does not appear to us that it was in the interest of plan participants for the defendants to deplete the Plan's funds by way of year-end bonus payouts. Based on the record we have before us, we hold that the plaintiff has alleged sufficiently a breach of the defendants' fiduciary duty.

Mr. STARK

Mr. STARK. Mr. Speaker, I rise today with several of my colleagues from the Ways and Means Committee--Representative Matsui, Representative Lewis (GA), Representative Thurman, and Representative Becerra--to introduce the Anesthesia Outcomes Study Act of 1999. When the Health Care Financing Administration issued regulations to remove a Federal requirement of physician supervision of nurse anesthetists and instead leave that decision up to State rules, it threw a technical, medical debate into the realm of Congress. I have absolutely no idea who is right or wrong on the issue or whether there is a quality difference with or without physician supervision. Yet, we are being asked to choose sides and advocate for the nurse anesthetists or for the anesthesiologists on this matter. I am very uncomfortable with Congress making decisions about which type of health professional should provide which type of service. My colleagues and I advocate that this issue be resolved on a scientific, rather than political, basis. For that reason, we are introducing the Anesthesia Outcomes Study Act of 1999. This bill calls for the Secretary of HHS to conduct a study of mortality and adverse outcome rates of Medicare patients by providers of anesthesia services. In conducting such a study, the Secretary is to take into account the supervision, or lack of physician supervision, on such mortality and adverse outcome rates. This report is due to the Congress no later than June 30, 2000. Once again, our intent with this legislation is absolutely neutral. We are not medical experts and we do not know whether physician supervision is a factor in the provision of anesthesia services. This study will provide us with the facts that are lacking today so that the final decision on this matter is a medically appropriate decision. Congress should not take action without that data.

Mr. STARK

Mr. STARK. Mr. Speaker, I am very pleased today to introduce the sixth bill in my Medicare modernization effort: the ``Medicare Preventive Care Improvement Act of 1999.'' This bill carries forward the overall theme of modernization: to improve the quality of health services for Medicare beneficiaries, and achieve potential savings for the program. Medicare should provide state-of-the-art health services to its beneficiaries. But in order to achieve this, Medicare needs more flexibility to adapt and change with today's ever-changing health sciences. Currently, Medicare relies on Congressional decision-making for too many of its day-to-day operations. For example, my colleagues and I have often been asked to consider whether or not to include additional services in Medicare's benefits package. In order to do this, we have to weigh the costs and benefits of highly technical information that we know virtually nothing about. Often, our decisions are based more on political motivations than sound scientific analysis. This is no way to run a health insurance plan. Fortunately, we have experts in the Department of Health and Human Services who are qualified to make these decisions. Now we just need to give them the authority to do so. The ``Medicare Preventive Care Improvement Act of 1999'' would allow the Secretary of Health and Human Services to make decisions about whether or not to cover new preventive health measures. If the Secretary determines that covering a new preventive service would be cost effective, she may implement that coverage without seeking an Act of Congress. Granting such administrative flexibility is the cornerstone of my modernization effort. In 1997, Congress passed a series of preventive health initiatives for Medicare including: Yearly Mammography Screening; Increased coverage of Screening Pap Smear and Pelvic Exams; Prostate Cancer Screening; Colorectal Cancer Screening; Diabetes Self Management and Training Services (and coverage of blood test strips and glucose monitors); and Bone Mass Measurement tests (osteoporosis screening). Recognizing the importance of preventive health care to the Medicare population, the BBA also provided for a study to analyze the potential expansion or modification of preventive and other services covered under Medicare. Unfortunately, the BBA did not take this commitment to preventive care one step further by allowing the Secretary to implement preventive services that are found to be cost effective. This bill leaves the technical, medical, cost-benefit analysis issues up to the Secretary and the expert doctors in the Department to resolve. If we want Medicare beneficiaries to avail themselves of preventive services, we must make it simple and affordable for them to do so. This bill also makes two necessary improvements in that regard. Currently, some preventive services are subject to the $100 Part B deductible while others are specifically exempted from the application of the deductible. The Medicare Preventive Care Improvement Act would standardize the policy so that all preventive benefits are exempt from the deductible. In addition, under current Medicare rules, providers can balance bill for some preventive services, but not others. This legislation would firmly establish in law that balance billing for all preventive services is prohibited. What type of preventive care services might be allowed under the bill I am introducing today? In recent years, I have received a number of letters and reports from kidney disease specialists saying that if Medicare were more flexible in providing care to those approaching end- stage renal disease, we could in many cases delay the onset of ESRD and the need for dialysis by months or even years. Each year a person is on dialysis with terminal ESRD, it costs Medicare and the taxpayer $40,000 to $60,000. ESRD patients are consistently the most expensive patients enrolled in the program. Yet experts have said that dietary consultation, occasional dialysis, and early placement of dialysis access, are all tools which can save money, pain, and improve the quality of life of ESRD patients. I do not know if these claims are valid. I am not a doctor. But HHS has the experts, and if the Department's physicians and researchers find these claims are true, of course we should start to cover those preventive services. The Secretary should have the flexibility to provide these services when she finds that the evidence supports their use as cost-saving, quality-improving actions, without requiring an Act of Congress. Another example of a qualified preventive service is independent living services for the blind. When someone is stricken with blindness, they can access several training programs that help them learn to live independently. Without this training, blind persons risk becoming institutionalized. Until this bill, if the Secretary determines that rehabilitation such as this would prevent a blind person from having to move to a more intensive setting, she may cover such services. Modern medicine keeps developing new miracles to delay or prevent terrible illnesses. If Medicare is to be a modern health insurance plan, it must be able to cover these preventive care services quickly. Forward looking treatments like those included in the BBA take the position that a disease prevented is a dollar saved. Logically, if we prevent diseases from occurring, Medicare will save money in the long run. In the case of Medicare, the savings can be considerable. The bill I am introducing today gives the Medicare Administrator the tools to use modern health advances to save lives and money. The BBA of 1997 was a good first step, but did not go far enough toward improving the overall service available to Medicare beneficiaries. The ``Medicare Preventive Care Improvement Act of 1999'' provides for greater flexibility to adopt preventive health measures without having Members of Congress play doctor.

Mr. STARK

Mr. STARK. Mr. Speaker, I rise today in support of the Democratic motion to recommit H.R. 1259 so that it can go through the normal Committee process and we can actually save the budget surplus for Social Security and Medicare. This bill appears to protect Medicare and Social Security from the cavalier spending of Congress, but it merely creates shelter for Congress when our constituents ask us why Social Security and Medicare are facing financial failure. Let's be honest with the American people. We must devise an honest approach to financing and strengthening the two systems. This bill did not go through the normal legislative process so it does not have the enforcement provisions it could have had if the Ways and Means Committee was allowed to debate and amend it. Furthermore, we must stop blaming the President and take responsibility for enacting-- or avoiding--responsible legislation. Not one dollar of taxpayer funds can be spent by the President unless Congress approves it. Finally, we must take this opportunity as a first step in real debate to strengthen Social Security and Medicare. I. Let's Take A Look At Process So Far with H.R. 1259 H.R. 1249 did not go through the regular Committee process. It was pulled from the Committees with jurisdiction and brought directly to the House floor without any normal deliberation. The Republicans avoided sending H.R. 1259 through Ways & Means so the Committee was not able to debate or amend the bill prior to coming to the floor. Had we used the normal legislative process, today's bill might have the enforcement measures needed to address Medicare and Social Security's insolvency problems. The Speaker promised to meet us half way when he took office. He also promised to play by the rules. Neither promise has been honored in this case. Clearly, we will move back to regular order only when it is convenient to do so. Had the Ways and Means Committee considered the bill, I would have offered an amendment to more clearly define what would qualify as ``Medicare reform''. H.R. 1259 makes the ``lockbox'' provisions of the bill effective until Medicare and Social Security are saved. However, it does not define ``saved.'' This allows Congress to raise the age of eligibility, to force people into HMOs, and to reduce benefits as the means of ``extending'' the financial life of the program. Medicare is a vital program for our nation's seniors and disabled populations. In my mind, reform cannot include reductions in benefits like some would like to achieve. Some Members may believe that this is an adequate definition of ``saved'' but I don't. We cannot sacrifice the health and well-being of the American workers for the sake of balancing the books. II Congress--not the President--raids the Trust Funds I might point out that Social Security has already been taken ``off- budget'' by three separate public laws: by the Social Security Amendments of 1983; by the Balanced Budget and Emergency Deficit Control Act of 1985; and once more by the Budget Enforcement Act of 1990. If Congress has been able to circumvent the spirit of the law for this long, what makes us believe that anything will change this time around? The GOP has been blaming the President for raiding the Social Security trust funds. This is simply not the case. This body is responsible for passing all spending bills. Just last week, we spent $12 billion for Kosovo in the Emergency Supplemental bill. Congress spent twice as much as the President requested for a war that the GOP refused to authorize. This is a clear case of hypocrisy. On the one hand, Congress doesn't want to authorize the war, but on the other hand they'll spend an exorbitant amount on pork for the mission. On the one hand, Congress claims they want to save the budget surplus for Medicare and Social Security but right after, they spend it on a war they don't support. Let's be honest. Congress controls the spending and we have always been able to control whether it goes for needed programs like Social Security and Medicare or programs like the National Missile Defense system. III. Strengthen Social Security and Medicare I agree that there should be a lockbox for Social Security and Medicare. But I want all surpluses to be used for these programs. First and foremost we must strengthen Social Security and Medicare and ensure their solvency. Before any tax bills are brought to the floor of the House, we must guarantee the American people that their Old Age, Survivors and Disability Insurance is as strong as they need it to be for a happy and healthy retirement. We must guarantee them that their health care needs will be met with quality in their golden years. We must lock up all of the budget surpluses until these two systems are strengthened through bipartisan legislation. The big tax cut for the wealthy must be postponed until the American worker is assured that his or her health and retirement insurance is safe for years to come. The only way to do this is by giving this bill some teeth. We must send this bill back to committee and give it the enforcement provisions it needs. Let's really lock up the surplus until Medicare and Social Security are solvent for the long-term.

Mr. STARK. Mr. Speaker, I rise today in support of the Democratic motion to recommit H.R. 1259 so that it can go through the normal Committee process and we can actually save the budget surplus for Social Security and Medicare. This bill appears to protect Medicare and Social Security from the cavalier spending of Congress, but it merely creates shelter for Congress when our constituents ask us why Social Security and Medicare are facing financial failure. Let's be honest with the American people. We must devise an honest approach to financing and strengthening the two systems. The bill did not go through the normal legislative process so it does not have the enforcement provisions it could have had if the Ways & Means Committee was allowed to debate and amend it. Furthermore, we must stop blaming the President and take responsibility for enacting-- or avoiding--responsible legislation. Not one dollar of taxpayer funds can be spent by the President unless Congress approves it. Finally, we must take this opportunity as a first step in real debate to strengthen Social Security and Medicare. I. Let's Take A Look At Process So Far with H.R. 1259 H.R. 1259 did not go through the regular Committee process. It was pulled from the Committees with jurisdiction and brought directly to the House floor without any normal deliberation. The Republicans avoided sending H.R. 1259 through Ways & Means so the Committee was not able to debate or amend the bill prior to coming to the floor. Had we used the normal legislative process, today's bill might have the enforcement measures needed to address Medicare and Social Security's insolvency problems. The Speaker promised to meet us halfway when he took office. He also promised to play by the rules. Neither promise has been honored in this case. Clearly, we will move back to regular order only when it is convenient to do so. Had the Ways and Means Committee considered the bill, I would have offered an amendment to more clearly define what would qualify as ``Medicare reform''. H.R. 1259 makes the ``lockbox'' provisions of the bill effective until Medicare and Social Security are saved. However, it does not define ``saved.'' This allows Congress to raise the age of eligibility, to force people into HMOs, and to reduce benefits as the means of ``extending'' the financial life of the program. Medicare is a vital program for our nation's seniors and disabled populations. In my mind, reform cannot include reductions in benefits like some would like to achieve. Some Members may believe that this is an adequate definition of ``saved'' but I don't. We cannot sacrifice the health and well-being of the American workers for the sake of balancing the books. ii. congress--not the president--raids the trust funds I might point out that Social Security has already been taken ``off- budget'' by three separate public laws: by the Social Security Amendments of 1983; by the Balanced Budget and Emergency Deficit Control Act of 1985; and once more by the Budget Enforcement Act of 1990. If Congress has been able to circumvent the spirit of the law for this long, what makes us believe that anything will change this time around? The GOP has been blaming the President for raiding the Social Security trust funds. This is simply not the case. This body is responsible for passing all spending bills. Just last week, we spent $12 billion for Kosovo in the Emergency Supplemental bill. Congress spent twice as much as the President requested for a war that the GOP refused to authorize. This is a clear case of hypocrisy. On the one hand, Congress doesn't want to authorize the war, but on the other hand they'll spend an exorbitant amount on pork for the mission. On the one hand, Congress claims they want to save the budget surplus for Medicare and Social Security but right after they spend it on a war they don't support. Let's be honest. Congress controls the spending and we have always been able to control whether it goes for needed programs like Social Security and Medicare or programs like the National Missile Defense system. iii. strengthen social security and medicare I agree that there should be a lockbox for Social Security and Medicare. But I want all surpluses to be used for these programs. First and foremost we must strengthen Social Security and Medicare and ensure their solvency. Before any tax bills are brought to the floor of the House, we must guarantee the American people that their Old Age, Survivors and Disability Insurance is as strong as they need it to be for a happy and healthy retirement. We must guarantee them that their health care needs will be met with quality in their golden years. We must lock up all of the budget surpluses until these two systems are strengthened through bipartisan legislation. The big tax cut for the wealthy must be postponed until the American worker is assured that his or her health and retirement insurance is safe for years to come. The only way to do this is by giving this bill some teeth. We must send this bill back to committee and give it the enforcement provisions it needs. Let's really lock up the surplus until Medicare and Social Security are solvent for the long-term.

Mr. STARK

Mr. STARK. Mr. Speaker, in the Balanced Budget Act of 1997, Congress provided that for 10 hospital diagnosis related groups (DRG's), we would not pay the full DRG if the patient was discharged to further treatment in a nursing home, home health agency, or to a rehab or long- term-care hospital. I include at the end of my statement the conference report language describing this provision. Note that as originally passed by the House and Senate, it applied to all hospital discharges-- not just 10 DRG's. The administration and the Congress were worried that some hospitals have been gaming the Medicare hospital prospective payment system. They have been discharging patients early to downstream treatment facilities (which they often own), collecting the full DRG payment, and requiring Medicare to pay for longer and more expensive treatments in these downstream facilities. Many of the nation's hospitals are lobbying for the repeal of this discharge provision--even though repeal would cost Medicare billions of dollars in the years to come. The intensity of the lobbying on this issues shows that early discharge to subsidiaries has become a major strategy of many hospitals. It may have been part of the Columbia/HCA scheme to maximize Medicare revenues. Mr. Speaker, I think we should return to our earlier decision and apply the policy to all discharges, not just 10 DRG's. The HHS inspector general has found that hospitals that own nursing homes discharge patients much earlier than average, and the patient then stays in the nursing home longer than average--an extra 8 days (OEI-02-94-00320). The OIG has also found that patients' stays are shorter when they are discharged to a home health agency. With about half the nation's hospitals owning a home health agency, this is another way to double dip. The bill I am introducing will save Medicare billions of additional dollars in the years to come, and it will remove a temptation to abuse patients by pushing them out of hospitals too soon. I hope that this legislation--one of a series of bills I am introducing to modernize Medicare and make it more efficient--will be enacted as part of our efforts to save Medicare for the Baby Boom generation. Certain Discharge To Post Acute Care Section 10507 of the House bill and Section 5465 of the Senate amendment current law PPS hospitals that move patients to PPS-exempt hospitals and distinct-part hospital units, or skilled nursing facilities are currently considered to have ``discharged'' the patient and receive a full DRG payment. Under current law, a ``transfer'' is defined as moving a patient from one PPS hospital to another PPS hospital. In a transfer case, payment to the first PPS hospital is made on a per diem basis, and the second PPS hospital is paid the full DRG payment. house bill Defines a ``transfer case'' to include an individual discharged from a PPS hospital who is: (1) admitted as an inpatient to a hospital or distinct-part hospital unit that is not a PPS hospital for further inpatient hospital services; (2) is admitted to a skilled nursing facility or other extended care facility for extended care services; or (3) receives home health service from a home health agency if such services directly relate to the condition or diagnosis for which the individual received inpatient hospital services, and if such services were provided within an appropriate period, as determined by the Secretary in regulations promulgated no later than September 1, 1998. Under the provision, a PPS hospital that ``transferred'' a patient would be paid on a per diem basis up to the full DRG payment. The PPS-exempt hospital or other facility would be paid under its own Medicare payment policy. Effective Date. With respect to transfer from PPS-exempt hospitals and SNFs, applies to discharges occurring on or after October 1, 1997. For home health care, applies to discharges occurring on or after October 1, 1998. senate amendment Similar provision, except defines a transfer case as including the case of an individual who, immediately upon discharge from and pursuant to the discharge planning process of a PPS hospital, is admitted to a PPS-exempt hospital, hospital unit, SNF, or other extended care facility. The provision does not include home health services in the definition of a transfer. conference agreement The conference agreement would provide that for discharges occurring on or after October 1, 1998, those that fall within a specified group of 10 DRGs would be treated as a transfer for payment purposes. The Secretary would be given the authority to select the 10 DRGs focusing on those with high volume and high post acute care. The provision would apply to patients transferred from a PPS hospital to a PPS-exempt hospital or unit, SNF, discharges with subsequent home health care provided within an appropriate period (as defined by the Secretary), and for discharges occurring on or after October 1, 2000, the Secretary may propose to include additional post discharge settings and DRGs to the transfer policy. Payments to PPS hospitals would be fully or partially based on Medicare's current payment policies applicable to patients transferred from one PPS hospital to another PPS hospital (per diem rates). The Secretary would determine whether the full transfer policy or a blended payment rate (50% of the transfer per diem payment and 50% of the total DRG payment) would apply based on the distribution of marginal costs across days, so that if a substantial portion of the costs of a case are incurred in the early days of a hospital stay the payment would reflect these costs. For FY 2001, the Secretary would be required to publish a proposed rule which included a description of the effect of the transfer policy. The Secretary would be authorized to include in the proposed rule and final rule for FY 2001 or a subsequent fiscal year, a description of additional post-discharge services that would result in a qualified discharge and diagnosis-related groups specified by the Secretary in addition to the 10 diagnosis- related groups originally selected under this policy. The Conferees are concerned that Medicare may in some cases be overpaying hospitals for patients who are transferred to a post acute care setting after a very short acute care hospital stay. The Conferees believe that Medicare's payment system should continue to provide hospitals with strong incentives to treat patients in the most effective and efficient manner, while at the same time, adjust PPS payments in a manner that accounts for reduced hospital lengths of stay because of a discharge to another setting. The Conferees expect that the application of the Transfer policy to 10 high volume/high post-acute use DRGs will provide extensive data to examine hospital behavioral effects under the new transfer policy

Mr. STARK

Mr. STARK. Mr. Speaker, today I am introducing legislation to stop the use of taxpayer funds from subsidizing the U.S. defense industry at international air and trade shows. Prior to 1991 the federal government avoided any direct military involvement in air shows and arms bazaars. For the first time, during the Bush administration, military personnel and equipment were permitted in foreign air shows and weapons exhibitions. The aircraft used, during these air shows and weapons exhibitions, is paid for with American taxpayer dollars. The fees involved include the cost of insurance, ramp fees, transportation to and from the show and payment for government personnel needed to attend and monitor the show. In June of 1991 the Secretaries of Defense and Commerce changed the practice that the Pentagon had previously followed of leasing U.S. aircraft to industry at air shows. The practice adopted allows for the loan of the Department of Defense (DoD) aircraft to defense contractors free of charge. This means that taxpayers pay for the cost of industry participation at air shows and arms bazaars. If taxpayers are not sharing in the profits made during the air shows and arms exhibitions, why should they share in the cost? An example of this wasteful practice occurred in Singapore in 1992, during an air show intended to demonstrate new marine aviation technology. The Marine aircraft crashed and the American taxpayers were left with a bill of $18.9 million. In response to the crash Congressman Howard Berman sponsored an amendment to the FY93 Authorization bill which puts a limit on the government's ability to participate in air shows. The amendment requires the President to notify Congress 45 days prior to any participation in further air shows. It also requires that participation be in the interest of national security. In addition, the amendment requires a cost estimate to be submitted to Congress as well. In order to side step the Berman amendment, DoD sends aircraft and personnel to air shows on so called ``training missions.'' This fulfills the requirement that the air show be in the interest of national security. It is important to look at the total cost of foreign air shows in order to realize the abuse by the federal government on the American taxpayer. A conservative calculation of the total cost of taxpayer subsidies for 1996 and 1997 was at least $68.4 million. That is an average of $34.2 million per year wasted at foreign airshows and arms bazaars. This figure is up over 31 percent over the period from 1994 to 1995. The Clinton administration has been underreporting cost and involvement to the U.S. by excluding transportation costs to and from the foreign shows. The costs reported by the Pentagon to Congress are 15 to 20 times less than the actual costs, leaving the U.S. taxpayer to pick up the tab. An example of this practice is the transfer of a B-2 bomber from the United States to France for a demonstration at an air show in Paris in 1995. This flight to Paris involved at least a 24-hour round trip ticket. The cost to operate the plane for one hour is $14,166, for a cost of over $330,000. The total cost submitted to Congress by the Pentagon to cover the entire show was underestimated at $342,916. The bill I am introducing today, the ``Restrictions on Foreign Air Shows Act'' bans any further direct participation of Defense personnel and equipment at air shows unless the defense industry pays for the advertising and use of the DoD wares. The bill prohibits sending planes, equipment, weapons, or any other related material to any overseas air show unless the contractor has paid for the expenses incurred by DoD. If a contractor decides to participate in the air show, he or she must lease the equipment, cover insurance costs, ramp fees, transportation fees, and any other costs associated with the air show. If a contractor is making a profit by showing the aircraft, they will also be required to pay for the advertisement and use of the aircraft. In addition, military and government personnel will not be allowed at the show unless the contractor pays for their services during the air show. This bill in no way outlaws the use of U.S. Aircraft or other equipment in foreign air shows or other trade exhibitions. The bill simply takes the financial burden off of the American taxpayer and puts it on the defense contractor. I strongly urge my colleagues to support this bill.

Mr. STARK

Mr. STARK. Mr. Speaker, I rise today to express my grave concern over the safety of medical devices and the effectiveness of government agencies directed to protect the public from unsafe products. We have all read stories in the newspapers about drugs that have been recalled because they were rushed to market without adequate testing. Many critics of our current policies argue that we have put the profit motive ahead of the health and well being of patients. I agree and have yet another example that the system may have failed to protect the health of patients. Ethicon is a subsidiary of Johnson & Johnson and makes surgical equipment. It is the nation's largest manufacturer of sutures used for deep tissue surgeries. In 1994, Ethicon recalled over 3.5 million boxes of its Vicryl sutures because the sutures may have been contaminated during the manufacturing process. What I find especially disturbing about this episode is how the company and FDA responded to the problem. Early in 1994, Ethicon began to use a new sterilization process for its sutures. Shortly thereafter, the company discovered that several batches were contaminated. The company decided to resterilize these sutures and then distribute them on the market. This practice continued for several months. Eventually, Ethicon stopped using the new procedure and switched to other sterilization techniques. During this time, Ethicon officials never contacted FDA to report the problem it was having with the sterilizer. Indeed, the FDA did not discover the problem until it conducted one of its routine inspections. These routine inspections occur once every two to three years. The FDA did send a Warning Letter to Ethicon citing significant deviations from Good Manufacturing Practices. By September, Ethicon decided to recall the sutures it had produced. In other words, many months passed between the initial problems with the sterilization procedure and eventual recall. I can only speculate what would have happened, or not happened, if the FDA had not caught the problems with the sterilizer. The next sequence of events is what I really find troubling. Ethicon issued its recall according to FDA regulations. However, the letter of the law requires only that Ethicon contact distributors and hospitals, not the surgeons who use the sutures. This means that surgeons across the nation were performing operations and using sutures that were subject to a national recall. While Ethicon followed the letter of the law, I would think that a corporation dedicated to the health of patients would have take a more aggressive stance to ensure that its sutures would be removed from supply rooms and surgical kits. According to FDA documents only 2% of the suspect sutures were recovered in the recall. Somehow, leaving 98% of the suspect sutures on the market and unaccounted for seemed to be acceptable to the FDA. They considered the recall completed and closed in June of 1995. Since 1994, over 100 cases of severe postoperative infections have occurred in patients who claim that the infection was due to contaminated sutures. Lance Williams of the San Francisco Examiner has written a series of articles (2/21/1999 & 2/22/1999) describing the pain and suffering that these people experienced. Ethicon has settled many of these cases out of court with exceptionally strong confidentiality requirements. Because the records are sealed, we cannot determine the potential threat to public health by examining the details of the cases. We may never know with certainty whether the sutures were contaminated and lead to the postoperative infections. According to a letter from the FDA, ``Since typically, 20 units are tested per batch, the finding of ten units were positive results is not conclusive. It is difficult to conclude whether these results mean that the sutures were contaminated or that contamination occurred during the testing.'' Even more amazing is the fact that Ethicon destroyed all the sutures recovered in the recall. Therefore, we cannot know if the recalled sutures were contaminated or sterile. Our constituents depend upon sound federal regulation to protect them from harm. Few of us have the technical expertise to determine which drugs are safe to treat what ails us or the ability to know how we may be infected by contaminated surgical devices. Rather, we must depend upon a sound system of checks and oversight to ensure that the medicines and tools our physicians use are good and will not harm us. In addition, corporations that make their money selling health products have the moral and ethical obligation to take every precaution to protect consumers.

Mr. STARK

Mr. STARK. Mr. Speaker, I am pleased to join with my colleagues, Marge Roukema, George Miller, and Rob Andrews to introduce the Health Care Worker Needlestick Prevention Act, a bill to prevent dangerous, costly and preventable needlestick injuries to our nation's health care workers. For far too long, we have stood by and watched as health care workers suffer needlestick and sharps injuries in our nation's hospitals and health care system. According to a 1997 report by the Occupational Safety & Health Administration (OSHA), approximately 800,000 hospital- based workers are injured annually from accidental needlesticks. Many of those injuries infections from bloodborne diseases, the worst of which include HIV/AIDS, and Hepatitis B & C. OSHA estimates that approximately 16,000 needlesticks are contaminated by the HIV/AIDS. As of December 1998, the Center for Disease Control (CDC) had documented 54 cases of HIV seroconversions from needlesticks and more than 110 ``possible'' cases among U.S. healthcare workers. In addition, according to the International Health Care Worker Safety Center at the University of Virginia, there are an estimated 18 to 35 new occupational HIV infections of health care workers occurring from accidental needlesticks each year. These injuries are largely preventable through use of newer technologies that use engineering devices to minimize accidental needlesticks. Hundreds of hospitals across the country have already converted to the use of these devices, but there are still thousands that haven't done so. Our legislation would make such safety devices the norm rather than the exception. The Health Care Worker Needlestick Prevention Act is modeled after a California state law. Last year, California became the first state in the nation to require needlestick protections. The legislation was signed into law by then-Governor Pete Wilson and was endorsed by a wide coalition including the California Health Care Association (the state hospital trade association), Kaiser Permanente, health care workers, and labor unions alike. The California Occupational Safety and Health Administration (Cal- OSHA) has estimated that each needlestick injury costs between $2,234 and $3,832 for treatment, testing, and prophylactic drugs. Cal-OSHA has also estimated that the California safe needles and sharps law, passed last year and effective this August, will save affected businesses and facilities over $100 million per year in excess of the cost of the new devices. Similar bills are now pending in state legislatures across the country. While states are stepping to the plate to address this pressing concern, this is a national crisis and it deserves a national solution. The Health Care Worker Needlestick Prevention Act would amend OSHA's bloodborne pathogens standard to require the use of safe needle technology as the means for preventing needlestick injuries. It is a real-life solution that recognizes that these technologies are still not available or appropriate for use in every situation. To that end, it includes an exception process if the device would interfere with patient or worker safety, interfere with the success of a medical procedure, or if no such device is available in the marketplace. It would also require stricter reporting of needlestick injuries and creates a new clearinghouse on safer needle technology within NIOSH (National Institute for Occuaptional Safety and Health) to collect the data and to assist employers with training curriculum and other advice on available technologies. We stand here today with broad-based support similar to that which made the California law possible. Our legislation is endorsed by numerous organizations including: the Service Employees International Union; the American Nurses Association; the American Federation of State, County and Municipal Employees; Kaiser Permanente; The Consumer Federation of America; Becton Dickinson, a major medical device manufacturer; and the Emergency Nurses Association, the American Public Health Association, and AIDS Action. It is time to take the appropriate step of protecting our health care workers. They simply should not be forced to risk their lives while trying to save ours. Mr. Speaker, I want to especially thank Congresswoman Roukema for her leadership on this issue and urge my colleagues on both sides of the aisle to join us in support of this crucial effort. Attached is a more detailed summary of the bill. Health Care Worker Needlestick Prevention Act of 1999, Introduced by Reps. Pete Stark and Marge Roukema Bill Summary Purpose: This bill would correct a dangerous problem in today's health care system in which health care workers suffer preventable needlestick injuries because appropriate technologies to prevent such injuries are not being utilized. The bill would require the use of engineered safety mechanisms for needles and sharps in the health care arena to protect health care workers from life-threatening injuries caused by needlesticks and other sharps injuries. OSHA Amendment: The bill amends OSHA's bloodborne pathogens standard to require that employers utilize needleless systems and sharps with engineered sharps protections to prevent the spread of bloodborne pathogens in their workplace. In carrying out this requirement, employers are to work with direct care health care workers who use such devices to ensure the appropriate selection of technology. Exceptions: Safe needle technology will not be immediately, universally available and appropriate for all uses in the health care arena. Recognizing this fact, the bill provides for an exceptions process if an employer can demonstrate circumstances in which the technology: Does not promote employee safety; interferes with patient safety; interferes with the success of a medical procedure; and is not commercially available in the marketplace. Exposure Control Plan: Employers would develop written exposure control plans to identify and select existing needleless systems and sharps with engineered sharps protections and other methods of preventing the spread of bloodborne pathogens. Sharps Injury Log: While we know that more than 800,000 health care workers suffer needlesticks every year, there is currently no uniform collection of data on sharps injuries to enable these incidents to be tracked, learned from, and prevented. The bill would create a sharps injury log that employers would keep containing detailed information about any sharps injuries that occur. Training: Employers would be required to adequately train direct care health care workers on the use of needleless technologies and systems with engineered sharps protections. National Clearinghouse on Safer Needle Technology: The bill would establish a new clearinghouse within the National Institute for Occupational Safety and Health (NIOSH) to collect data on engineered safety technology designed to help prevent the risk of needlesticks and other sharps injuries. NIOSH would have access to the sharps injury logs in order to carry out these duties. The clearinghouse would also create model training curriculum for employers and health care workers. In order to carry out these new tasks, the institute is authorized $15 million in new funding. Application to Medicare Hospitals: HHS would promulgate new regulations regarding conditions of participation in Medicare for those hospitals that are not covered by OSHA so that all hospitals across the country would, in effect, be covered by these new bloodborne pathogens requirements.

Mr. STARK

Mr. STARK. Mr. Speaker, on behalf of myself and Representative McDermott, I am pleased today to introduce the fourth bill in my Medicare modernization package: permanent competitive bidding authority. As with the other bills in this series, competitive bidding will save money for Medicare, while also improving the quality of health services provided to Medicare beneficiaries. These modernizations are a template for meaningful Medicare reform that allows us to avoid radical, untried theories that could endanger the program's future. The promise of managed care is coordinated, comprehensive, cost- effective health services. Medicare+Choice plans are not currently living up to this promise. For some time now, Medicare has over-paid Medicare+Choice plans. Current overpayments are estimated to cost Medicare and taxpayers $2 to $3 billion per year. This is because Medicare+Choice has attracted only the healthiest beneficiaries--people who would have cost next to nothing had they stayed in the traditional fee-for-service plan--leaving a much sicker population in the traditional program. In addition, managed care plans are disenrolling beneficiaries who need expensive services, such as heart surgery, and then re-enrolling the beneficiary after the fee-for-service plan has paid the bill. The OIG estimates that in 1991 through 1996, Medicare spent $224 million for inpatient services furnished to beneficiaries within three months of their disenrollment. Had these beneficiaries not disenrolled, Medicare could have spent only $20 million in capitation payments. That's $204 million in savings Medicare could have realized. ``Cherry picking'' such as this has forced fee-for-service costs to rise. Because Medicare+Choice payments are tied to fee-for-service cost, rather than the actual cost of providing care to beneficiaries enrolled in managed care, Medicare continues to over-pay health plans. De- linking Medicare+Choice payments from the fee-for-service program will enable Medicare to pay a more realistic price for managed care services. Fostering greater competition through competitive bidding will help to achieve this goal. Competitive bidding would take place in both the managed care and fee-for-service Medicare programs. Under this bill, the Secretary of DHHS would have the explicit authority to select items, services, and geographic areas to be included in a bidding or negotiation process based on the availability of providers and the potential to achieve savings. To protect quality, the bill would require that providers meet specified quality standards in order to participate in the bidding process. Competitive bidding is almost universal throughout the private sector and in many other areas of government contracting. However, HCFA is still forced to go through tortured demonstration processes to ``test'' this basic tool of capitalism. At this moment, HCFA is trying to get three competitive bidding demonstration projects off the ground: two Medicare+Choice demonstrations, one in Phoenix and one in Saint Louis; and one fee-for- service demonstration for durable medical equipment (DME). Unfortunately, the industry is blocking HCFA's attempt because they know that competitive bidding will force them to charge a more realistic price. This is not about cutting services to beneficiaries or lowering quality standards. It's about helping the taxpayer so that society has the money to improve Medicare for everyone while extending the life of the program. Competitive bidding can work. It has worked in the public and private sectors for centuries. We should make it work for Medicare too. As we search for ways to secure and improve Medicare, it is appropriate to consider increasing the efficiency of the program through competition. Introducing competition into the managed care equation will achieve greater efficiencies, higher quality, and cost savings, and will enable Medicare managed care to live up to its promise. Following is a portion of an interview from the May/June 1999 issue of Health Affairs by Princeton professor Uwe Reinhardt with HHS Secretary Donna Shalala which describes how different it has been to make progress on this simple, basic, free enterprise approach to health care: The Controversy Over Competitive Bidding Reinhardt: In my time, Medicare has been a pioneer in innovating with the DRG (diagnosis-related group)--based hospital payment system, which has been copied worldwide, and the Medicare physician fee schedule, which has been copied by private American payers. If we are ever going to really test managed competition by having health plans compete fairly for enrollees, only HCFA (the Health Care Financing Administration) can actually show the way, because the private sector has not yet done it so far. Do you share that view? Shalala: I share that view, but the political system has to buy into it. For instance, we've announced a competitive- bidding demonstration in which we have some consensus among the experts as to where we ought to go and how to organize our experiment with managed competition. Phoenix and Kansas City are our two sites. Reinhardt: HCFA has attempted such demonstrations in Baltimore and Denver but was forced to abandon both efforts by private interests that were opposed to them. Shalala: Yes, in Denver we had bipartisan support to try it. But when we got specific and picked the places, we immediately had political opposition. However, Congress directed us (in the Balanced Budget Act [BBA] of 1997) to try again. We set up an advisory panel on which all of the political interests were represented. And now we're proceeding again. Reinhardt: I suppose that we should never expect the managed care industry to voluntarily acquiesce to a competitive-bidding process because people instinctively don't like to compete. They prefer administered prices because such prices can be manipulated politically. Who is it, in general, that opposes competitive bidding? Shalala: One source of opposition is the managed care industry. The companies in that industry believe that such a process will undermine their profits. So the private sector-- the famed competitive marketplace--doesn't want competition. They keep saying things like, ``Health care is different; we can't predict our costs.'' We have to have a system that is more nimble, more flexible. Managed care plans would not oppose a competitive-bidding process if they could modify the package of benefits. But if HCFA locks them into a benefits package, they want to be able to negotiate the price, rather than making competitive bids.