Glenn Thompson

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Correct.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Let me reflect on my experiences as someone who was a manager of health care services in a rural hospital, skilled nursing, rehabilitation service--across the board, on what this means. Because you talked about increased costs to the taxpayers of this country. I have to tell you, what I see there is a nightmare in terms of costs for hospitals and for providers. Hospitals alone, when you look at over 1,990 pages of new text, and that is just the bill. The regulations to be promulgated as a result of over 2,000 pages of law will be--it will just take a forest to be able to print those regulations. Those regulations all need to be administered. Here is my prediction: For those hospitals that are not bankrupt in the near future, they are going to have to add tremendous employees to deal with that bureaucracy. Those employees' only job will be to interact with all those agencies, not health care, not people providing direct care. They will have to lay off people who provide direct care to be able to afford what will be required to administer those regulations, to make those regulations work within a hospital. That is not good health care.

Mr. THOMPSON of Pennsylvania. Absolutely, $289 billion is what the Medicare agency----

Mr. THOMPSON of Pennsylvania. I thank my good friend from Missouri. I came here in January, and I came here knowing that I had a pretty good handle on health care. I worked in health care for almost 30 years. I actually think we have a pretty good health care system, but it can be improved. And much of the improvements that I saw was getting government out of the way. The frustrations I had as a health care professional, as a health care manager, as a therapist, as a nursing home administrator, is when the government was creating problems, preventing access to cost-effective care, increasing costs because of these arbitrary ways that it gets involved. To me, I think, as my good friend Mr. Bishop talked about, it is about the wisdom that our Founders had, and it is about free market. You look at all the Republican proposals we have; they are free market proposals. It is not about inserting more government; it is getting government out of the way. And it is about the arbitrary rules that we have on where we can buy our health insurance from. The government tells us we can only buy within the confines of our own State, and it is about the government telling us we can't group together and form association health plans, that we have to endure medical liability. That becomes legislated and codified into our lives and adds just hundreds of billions of dollars of waste onto the health care system. I am just so proud of the proposals that Republicans have put forward. I don't know how many in total we have, but between 35 and 40, I believe.

Mr. THOMPSON of Pennsylvania. You know what? I have asked that question many times since I came here in January, how does the math work in this Chamber, because it doesn't add up.

Mr. THOMPSON of Pennsylvania. That's overhead. That's the complete opposite of access to quality care. That's preventing access.

Mr. THOMPSON of Pennsylvania. I appreciate that, Mr. Akin. To that point on Medicare, because of the baby boomer generation, utilization is going up. Those costs are climbing. But just this past week we heard from the Centers for Medicare and Medicaid Services. They released their 31-page actuarial report on the Pelosi health care plan on what would this do to Medicare. You know what? You're going to have to make that poster a little larger because what the Centers for Medicare and Medicaid Services--which is the Medicare agency, and they're nonpartisan. That's not a partisan report. It comes from the people who actually run the Medicare and Medicaid systems in the country. As they looked at this bill when they scored it, they said that this would increase costs to the Medicare program over the next 10 years by $289 billion. So I'm afraid we're going to have to budget for a little larger poster, because with the Pelosi health care bill, it's going to take quite a steep climb beyond where Medicare is already on-- --

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Madam Speaker, lately we have heard from the Centers for Medicare & Medicaid Services about the Pelosi health care reform measure. Their 31-page actuarial report, released over the weekend, reads that the bill would increase costs over the next 10 years by $289 billion. This is not a partisan report. It comes from the people who run the Medicare and Medicaid systems in the country. They warn that the provisions of the bill could lead to doctors and hospitals turning away Medicare patients. They warn that some 18 million Americans will choose to pay a much lower fine than buy expensive health insurance coverage, because when they get sick and truly need insurance, they can buy it, since they won't be turned down for preexisting conditions. They warn that a crush of new patients would shock the system. They warn that the plan to cut more than $500 billion from future Medicare spending would sharply reduce benefits for some seniors and could jeopardize access to care for millions of others. CMS should not have to issue warnings about the impact of a major piece of legislation that promises to change our entire system of health care and make it worse.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, I rise today in opposition to H.R. 3962. I came to Congress this past January following 28 years in nonprofit health care. In January, the Democratic majority quickly moved the SCHIP reauthorization. I supported the final passage of the bill. SCHIP was modeled after Pennsylvania's CHIP program, a bipartisan public-private partnership to offer private insurance to my State's most vulnerable population. CHIP works in Pennsylvania. Mr. Speaker, I am dismayed to learn that this bill will scrap the SCHIP program. This will jeopardize coverage and increase costs for scores of Pennsylvania's needy children. Families who rely on Pennsylvania's CHIP program will faces higher costs when their children are forced into plans offered through the exchange. We have heard from my colleagues about cuts to our seniors, small businesses, family farms, and agriculture. Now you are hearing about the cost to our children. As a health professional, I urge my colleagues to vote ``no'' on this measure, and I would like to submit a letter from five of my Republican colleagues from Pennsylvania on this issue. Congress of the United States Washington, DC, November 7, 2009. Hon. Nancy Pelosi, Speaker, House of Representatives, The Capitol, Washington,

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, I would like to draw your attention to a letter from the Pennsylvania Farm Bureau. It concisely sums up many of the problems in the Pelosi health care bill for our small family farms. According to the letter, ``The employer mandate and 8 percent payroll tax will place an enormous burden on a significant portion of agriculture and its related industry. Although some tax incentives are provided in the legislation, farmers are price-takers, not price- makers. They do not have the option of merely passing along those mandated costs.'' The letter continues, ``It is concerning that there are no allowances for seasonal workers. Requiring coverage for seasonal workers would have significantly adverse economic effects on many farmers across this country.'' And finally, ``Our Nation cannot afford the projected costs of H.R. 3962, especially considering the growing deficits and other fiscal calamities with entitlement programs that must be dealt with in the immediate future.'' This legislation makes little sense when many farmers around the country are struggling with high feed costs, unsustainable energy prices, and a difficult national economy. I urge my colleagues to reject H.R. 3962.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, on Tuesday of this week I was here in this Chamber with my freshmen Republican colleagues, and we were preparing to do Special Orders about all the concerns we have with the 1,990-page Pelosi health care bill, and I had this bill with me, and it was in this bag. I was sitting in a chair and I was standing in the row next to it. I was approached by one of the fine, dedicated public servants we have, employees here in this Chamber that are dedicated to our safety and security. They came up to me because somebody had observed this rather large unidentified object from the gallery and wanted to make sure that it wasn't something left there intentionally, a hazard. I assured him this was not a hazard to the Members here, that this was a 1,990-page Pelosi health care bill. Though, on second thought, it was a hazard, a hazard to anyone carrying it around, being as heavy as it is but a hazard to our health care system here in the country. Mr. Speaker, my background is health care. Twenty-eight years I worked on rehabilitation services serving older adults, mostly, licensed as a nursing home administrator, dedicated to make a difference in the lives of individuals facing life-changing disease and disability. I am here with tremendous concerns on behalf of our seniors tonight on what this bill does to them. Let me talk a little bit about Medicare. My Democratic colleagues must consider that Medicare is overfunded. I can tell you that it is not. Medicare today pays on the average of only 80 to 90 cents for every dollar of costs that a hospital or a doctor has, 80 to 90 cents. From the time that entitlement program was created, it was systematically underfunded. This is a primary reason, actually, that commercial insurance is so expensive because of the underfunding of Medicare. Yet my Democratic colleagues consider Medicare overfunded. Well, how do I know this? Because the bill, this bill in front of me, has over a half a trillion dollars in Medicare cuts. It must be overfunded in their minds if they can make half a trillion dollars in Medicare cuts. Where do those cuts fall at and where will they impact seniors? Well, it is going to impact seniors that go into hospitals, Medicare part A, significant cuts there, $175 billion, a minimum of that. That's cuts to those hospitals, and I know hospitals in my district are lucky to make a 1 to 3 percent margin annually. Out of that, they hopefully give cost-of-living increases and invest in new life-saving technology. But they don't stop there. The Democrats go on to cut Medicare in terms of skilled nursing facilities. Now that's an area where I was licensed as a nursing home administrator. People who go into nursing homes today are the sickest of sick. That's the only alternative they have when they need that high level of skilled care. To cut services there, that's just unacceptable. Let's move on to Medicare part B. Those are physician services. They are also outpatient services like rehabilitation. When an older adult, a senior citizen, has a disease or disability and they need rehabilitation, well, that's funded by Medicare part B. But Medicare part B, also, under the Democratic plan is scheduled and slated for significant cuts. Another one that is under Medicare part B is hospice services. Mr. Speaker, hospice services, that's a service that reaches out and provides services to people that are in their end days, people who are in the process of dying. Hospice service allows people to die with compassion and surrounded by friends and pain management. Yet the Democrats feel that Medicare is so overfunded that we can actually make cuts to hospice services. Medicare part D. Pharmaceuticals. Well, I never heard anybody say that our seniors actually have more than enough resources coming into pharmaceuticals, but that's one of the lines within this. Then there are wheelchair taxes, medical devices, medical devices that are innovations that help people live with dignity, help people live with independence, to live outside of institutional settings, which are certainly more cost-effective places. Medical devices allow people an opportunity to be able to age in place for seniors. Now, I assume my Democratic colleagues will assume that the people they tax, that will just come out of their pockets, but we know how that works. Taxes get passed on. And this will be passed on to the people on fixed incomes in this country, and that's unacceptable. I want to talk briefly about the flawed math that went into this. One of my Democratic freshman colleagues, a Democrat that's on the Rules Committee, I heard him make a statement about how this bill is so much less expensive than the previous version we saw back in July. I have to tell you that's flawed math. This bill was based on the fact that the Medicare growth rate would be at 4 percent. The average growth rate is 7 to 8 percent. In 2008, Medicare grew at 9 percent.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, on rollcall No. 858, I was unintentionally late upon return to the House Chamber and consequently missed this vote due to a meeting with my constituents who traveled to Washington, DC, to voice their opposition of pending health care legislation. I most certainly share overwhelming sense of the House in honoring and recognizing the service and achievements of current and former female members of the Armed Forces. Had I been present, I would have voted ``yea.''

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, in South America there is a tenacious parasitic plant that attaches itself to trees. As it climbs to the top of the tree canopy seeking the light, the plant thrives. But eventually, in the end, it kills the tree. That is what an unfunded mandate by the Federal Government does to States. Putting more people onto Medicaid arguably is a good thing that takes people off the roles of the uninsured. But the Pelosi health care bill will cost all of the States an added $34 billion in new burdens. My Pennsylvania colleagues and I warned our Governor back when we thought people at 133 percent of the poverty level would be eligible for Medicaid. That would have cost the State $2.2 billion over 10 years. Now we are looking at those at 150 percent of poverty level. That will add 15 million to the Medicaid program nationwide. Tennessee Democratic Governor Phil Bredesen called it ``the mother of all unfunded mandates.'' We may soon be saying our prayers for many of our States, when a program intended to help poor women, children, and the disabled turns out to be the death knell for a number of State budgets.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. This is a health risk, a serious health risk, for those of us who are carrying it around and, frankly, for the country. This is the Nancy Pelosi health care bill, 1,990 pages, and that's just part one. Part two, I am sure we will see within the next 24 to 48 hours; that will be the manager's amendment. That will be all the buyouts, the bribes, the deals that are being made right now by the Speaker and my Democratic colleagues to buy their votes to support this. I don't know what to expect. I don't know if my colleagues have a guess. We do a guess here in terms of the number of pages, this manager's amendment, which, frankly, will be all of the deals that are made. How many pages do you think the manager's amendment might be when we see this in the next 24, 48 hours?

Mr. THOMPSON of Pennsylvania. Six hundred. Do I have another bid?

Mr. THOMPSON of Pennsylvania. The gentlewoman from Wyoming says 800 pages. How about my good friend from Minnesota?

Mr. THOMPSON of Pennsylvania. Now, that was a rather safe guess; a rather safe guess. Yes, that manager's amendment is coming. And there are lots of just flawed approaches to health care here. Speaking as someone who worked in that field for almost 30 years as a manager in rural hospitals and a skilled nursing facility and many different settings, I want to talk just briefly about some of those, because it has to do with one of the charts you had up there about the promise to not add a dime to the debt, not a dime to the deficit. This bill was based on the premise of Medicare growth being held at 4 percent. Now, why is that important? Well, Medicare is a significant amount of money, so 4 percent of Medicare is a lot of money. But let's talk about reality here, and that is what this bill lacks is a good dose of reality. Medicare growth rates have been steady at 7 to 8 percent a year. That is just the reality of it. If you think about it, those in the baby boomer generation who are now retiring, becoming qualified beneficiaries under Medicare, that is a significant number of people adding to the Medicare rolls from this point forward. So, 7 to 8 percent. If we just look back a year to 2008, the Medicare growth last calendar year alone was 9 percent, 9 percent, and yet this bill was based on holding Medicare at 4 percent. I think that is pretty flawed math. That is not even fuzzy math. That is just wrong. We know that this is built on half a trillion dollars in new taxes, and you talked about some of those. Small businesses. Taxes on individuals who choose not to buy in, to buy insurance, are penalized. Medical devices will be taxed as an excise tax. The other part of the funding mechanism is a half a trillion dollars in Medicare cuts. We have talked about that during other forums here, when already Medicare systematically has been underfunded from almost the day it was created. Medicare only pays today about 80 to 90 cents on every dollar of health care costs that a hospital or doctor has. And to do another half a trillion dollars in Medicare cuts, that is just wrong. The people that are going to suffer from that are the providers and older adults. This will bankrupt hospitals.

Mr. THOMPSON of Pennsylvania. Well, I thank the gentlelady from Wyoming. I think innovation is one of the things that our health care system fosters in this country. When you look at the advancements that we have had, whether it be in medical devices or lifesaving technology, diagnostic, invasive, noninvasive, lifesaving interventions, that comes out of the type of health care system that we have today. It is the way it has been designed and the way it works. It provides those encouragements. I have a number of similar small businesses that started very small, I don't know if they started in somebody's garage, but started as small operations, and they developed tremendous innovations, innovations in terms of prostheses for individuals who have lost limbs. Actually, one of them is an incredible small company developing a limb that is not just a powered limb, which is the cutting edge for a prosthesis, an artificial leg, but this one actually self-charges. In the use of it, that friction builds up the power. The application of it is just tremendous, starting with our wounded warriors who rehabilitate and return to the field. This is an artificial limb and you don't have to plug it in at the end of the day. It recharges while you use it. We wouldn't get that innovation. Any time we tax something, we repress it. We hold it back. We destroy it. This tax on medical devices is just, well, I agree, it would be a nail in the coffin of innovation for health care in this country.

Mr. THOMPSON of Pennsylvania. If the gentlelady will yield, you are going down a tremendously important road here in terms of what this legacy of costs that we are passing along to our children and our grandchildren and great-grandchildren at this point is, on top of all the other deficits that have been accumulated by this Democrat-led Congress since January. I had the opportunity to spend some time this morning with a former Congressional Budget Office director. And going back to the point of the flawed math here, of saying that growth in Medicare will be held at 4 percent, when we know that it is an average of 7 to 8, 9 percent last year, his estimates are this cost will actually be at somewhere around $1.8 trillion in terms of math. To give us some idea, I just want to point to a project that actually is literally under our noses. It was a project that did not occur on our watch. This was years past, and it is a beautiful place to visit and we take our constituents there, the Capitol Visitor Center. I certainly encourage people to come to Washington to visit that, but there is a prime example of estimates that were made, and in the end it was 300 percent more expensive than what the original cost estimates were. So even if we're at a trillion or $1.2 trillion or $1.8 trillion, and we know that we cannot afford that, where could these costs go once this legislation passes? Just based on the example of a project that we should have pretty good oversight on because it was being constructed right under our noses.

Mr. THOMPSON of Pennsylvania. I thank the gentlewoman for yielding. I just want to build quickly on affordability. And our Democratic colleagues have recognized this with this bill, and I just call attention to page 25, section 101, which is the national high-risk pool. These are the folks we should be doing something for. They're high risk, preexisting conditions. They have a difficult time accessing health insurance. And the language that's built into this, our Democratic colleagues recognize this isn't going to be sustainable. We're not going to be able to fund this. Within the legislative language it says, given once the money is spent and goes beyond the premiums checked, it allows the Secretary of Health and Human Services, if all are exhausted, to do three things: cut benefits, increase premiums, and create waiting lists. Page 25, section 101. I think that's a general acknowledgment early in this bill. And if we can do that type of rationing for folks who are most at risk, who we should be doing health insurance reform for, what does it mean for the rest of us? I thank the gentlewoman for coordinating tonight.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. I thank my good friend for the opportunity to join you tonight to recognize Congressman John McHugh. Unlike my colleague from New York, I didn't know Congressman McHugh when he served in the State legislature, nor previously prior to January, at my arrival here in Congress. I got a chance to know Congressman McHugh since January--and his leadership record. And I stand today not just as a Member of Congress to mark all of his contributions, but, frankly, as a father of a United States soldier in the U.S. Army. I am so appreciative of what Congressman McHugh's service has been as now he has been sworn in as the 21st Secretary of the Army, that swearing-in occurring on September 21. Today, in his new role, being responsible for the Army's annual budget, more than $200 billion, what a tremendous responsibility that is, a workforce of more than 1.1 million active duty Army, National Guard, and Reserve, that includes 221,000 Army civilian employees and 213,000 contracted service personnel. Additionally, in his new role, Secretary McHugh will be a steward for more than 14 million acres of land under the jurisdiction of the U.S. Army. He served more than 16 years as a Member of Congress representing northern and central New York. Over those last 8 years, McHugh had made 10 official visits to Iraq and four visits to Afghanistan and other deployed locations to visit U.S. forces. And quoting at his confirmation hearing about wounded warriors, ``I've been so struck how these heroes, facing pain and loss and uncertainty, ask one question, `What else can I do to serve?' '' He served as the ranking member of the House Armed Services Committee and previously was chairman of the House Armed Services Committee's Military Personnel Subcommittee. As chairman of the Military Personnel Subcommittee, Congressman McHugh exercised leadership on overseeing our military forces, personnel policies, compensation, health care, morale, welfare, recreational activities, dependent schools, and other benefits. He advocated for the military's people and programs. When Congress passed the fiscal year 2006 National Defense Authorization Act, H.R. 1815, Congressman McHugh had a role in developing a bill that does so much for the members of our Armed Forces. The measure provided the basis for our Nation's defense policies and programs. This legislation relieved the tremendous pressures placed upon our military services, active Guard and Reserve alike. The military personnel provisions aim to improve quality of life for active duty and Reserve troops through pay and bonus increases, improvements in living and working conditions, and enhancements in health care coverage. This legislation reflects Congressman McHugh's commitment and dedication to serving not just his constituents in New York, but the men and women serving as our heroes in the Armed Forces. During his nine terms in the United States House of Representatives, Representative McHugh has been a champion of fiscal responsibility and lower taxes, protecting Social Security and Medicare, providing stronger and better schools, and protecting America's farmers. We wish him well in his newfound role as the 21st Secretary of the Army. I thank my good friend for yielding.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Mr. Speaker, if you like your current plan, it had better not be Medicare Advantage because the Democrat health plan proposal cuts $162 billion from that program for our seniors. The reason is twofold; they need cuts to pay for their new government-run health care program and they think insurers in the program are overpaid by 14 percent. Tell that to the 25 percent of seniors who are enrolled in the program nationwide. I guess they weren't included in the folks who can ``keep their plan if they like it.'' Perhaps the Democrats didn't look at the plus side of Medicare Advantage. Studies show that those in the program spend fewer days in the hospital and experience fewer readmissions. A study in California showed that those enrolled in Advantage plans spent 30 percent fewer days in the hospital and were 15 percent less likely to be readmitted to the hospital. I would say that accounts for a huge savings. The Congressional Budget Office also says the Democrats' health care plan would increase seniors' Medicare prescription drug premiums by 20 percent over the next decade. I thought reform was supposed to be improvements, not a plan to soak our seniors.

Mr. THOMPSON of Pennsylvania

Mr. THOMPSON of Pennsylvania. Absolutely, and I really appreciate that question. It's been one of the biggest disappointments. I came to this body out of health. I thought I would actually retire from nonprofit community health care, which meant my hospital would have provided me a discount on my nursing home bed. But instead, I have the privilege of coming here to work on behalf of the citizens of Pennsylvania's Fifth District. And I came here knowing that we've got a pretty good health care system. And we can do better, and we can improve it, and improve on all four principles: access, affordability, quality and patient choice. So I was excited when the President said we were going to work on health care. And I get here, and do you know what we're working on? We're working on access to health insurance; we're not working on access to quality health care. That's what we should be working on. That's what the American people deserve: we work on things like we've been talking about, H.R. 3400 and the different bills that are presented here that would improve health care in all four dimensions. But instead, we're talking about health care insurance. And I guess I should have had some indication of that when I looked at the individual that was selected.

Mr. THOMPSON of Pennsylvania. Well, thank you. And actually, the commission is a body of individuals. But even more frightening to me is just the one lone bureaucrat, the Health Insurance Commissioner, as defined within House Resolution 3200. And as we worked our way through this thousand-plus bill in the Education and Labor Committee over a course of 20 hours back in the very end of July, I found that many times there was so much left undefined, and everything was referred to according to the Health Insurance Commissioner, the Health Insurance Commissioner, the Health Insurance Commissioner. Well, you know, our health care is, there's probably few things that we could debate on this floor that's more intimate than our health care, and certainly few things that are as large a part of our economy. And our colleagues who were here just the previous hour from the Progressive Caucus talked about how those of us who oppose, those of us who oppose their health care plan, those of us who would support more smart government solutions, more free-market solutions to health care, that we have these scare tactics, and one of them is rationing. Rationing could never occur. Rationing just won't happen. Well, I've got news for them. Rationing happens today. And where does it happen? It happens, first and foremost, under the government plans. Let me tell you about Medicare part B. You know, part of my background is I've had the privilege of working with older adults for my entire career, in rehabilitation services. The last number of many years of my career, 15 years I worked in skilled nursing as well, and I became licensed as a nursing home administrator. And I've talked briefly about the cuts to Medicare part B. Medicare part B is slated for additional cuts of $130 billion. And Medicare part B--think about the individuals who come into a nursing home. They come there because they're the sickest of the sick. They're there because they don't have any other alternatives in terms of the care, the health care that they require. They have intense needs. These are folks who have just a lot of very intense needs. And today, the government, under Medicare part B, if you need therapy services, it arbitrarily puts a number. There's a maximum amount of dollars. And now I've been out of that for about 10 months, but it was somewhere around $1,800 a year, $1,800 to $1,900 a year of therapy services. Arbitrary number. Now, that's rationing, in my line. You know, it doesn't matter the fact that you have maybe suffered a stroke or you have fallen or you have a debilitating weakness that you develop. Once you max out on that Medicare part B benefit, that's it. That's the upper limit of what you receive. So we have rationing today, and rationing occurs under the current, one of the current government programs for Medicare part B. So I don't know where you--when you look at--you know, I've worked in the inpatient hospital side for almost 30 years as a part of my practice. As I said, a 2 to 4 percent margin is a banner year, okay? And out of that, you want to be able to, out of that 4 percent, give cost of living adjustments so you continue to retain the best and the brightest. Personally, if somebody's going to use a scalpel on me, I want them to be the smartest person in the county, and we want to be able to retain, recruit, and retain those individuals. So 4 percent margin. Most of my hospitals, I would say, are probably not doing that well, and most hospitals across the Nation are probably challenged and not doing that well. And then you have skilled nursing facilities where, honestly, nobody's getting rich operating skilled nursing facilities. They're providing good, compassionate care. They're treating people with intense needs, and yet, those are slated for significant cuts. Specifically, in skilled nursing, $14.6 billion in designated cuts. Now, this is out of the Senate Finance bill, the Baucus bill, Senator Baucus' bill, and so those cuts have to come somewhere, and they're going to come out of services. They're going to come out of--it won't come out of the compassion, because the people that work in those areas, they're truly dedicated to serving the needs of older adults and people with needs. But they will come out of the care. Those dollars have to impact access to services.

Mr. THOMPSON of Pennsylvania. Absolutely. I see three reasons, three primary reasons why commercial health insurance is so expensive. One is we need more competition, and that is allowing a broader pool. I am really interested in learning more about the model in Utah. It is intriguing. It sounds like a great model to look at. But more competition is important. Secondly, it is the need for tort reform. I talked about those numbers, $126 billion a year. It drives costs up. It drives the cost of providing care up. Therefore, commercial insurance goes up. Finally, there is the necessary cost-shifting that occurs. Now, some of my colleagues in this body, particularly across the aisle, when you hear the term ``cost shifting,'' they see that as an evil thing. When you come out of health care, you begin to understand what happens in health care. I would say the primary reason that health insurance is so expensive is because government creates an entitlement, Medicare, medical assistance, and then from day one, after they created it, discovers they can't afford it and they systematically underfund it. Let me talk about the numbers specifically. Medicare: For every dollar of cost that a hospital or a physician has, Medicare pays 80 to 90 cents, 80 to 90 percent. If it is medical assistance, that is 40 to 60 cents for every dollar of cost. If you are just operating on Medicare or medical assistance, a hospital and doctor, you could see, they have these costs and this reimbursement, they are not going to keep their doors open very long because they can't cover their costs. So what they do is negotiate with commercial insurance, and commercial insurance average, average across the Nation, pays at least 140 percent; 140 percent of cost. Now, why do they do that? Well, they do that because in the negotiation process, doctors and hospitals need to achieve that 140 percent from commercial insurance to offset what medical assistance and Medicare, what the government doesn't pay. So that is where the cost shifting occurs, because if you don't get that higher rate for commercial insurance, you are not going to be able to make payroll. You are not going to be able to invest in lifesaving technology. You are not going to be able to keep the lights on in the facility. So, the fact is the government creates these new programs, with the best intentions, I am sure, but quickly finds that the costs are just so tremendous that they begin to systematically underfund those costs. One of the biggest concerns I have with the public option, as I read H.R. 3200 in the Education and Labor Committee when we marked that bill up, is that the public option would pay Medicare rates. Medicare rates are 80 to 90 percent of costs, 80 to 90 cents for every dollar of cost. I do believe that the public option will be cheaper than commercial insurance because the public option will also underfund the cost of health care. And if the public option replaces the commercial insurance of today, that really today funds and keeps the lights on and our hospitals operating and our doctors in practice, we are going to lose health care providers.