hospitals and offices use a bold purchasing, negotiating fee schedules for physicians and putting hospitals unpredictable global budgets. . . technology is doomed to fail because it is dependent on a complex, fragmented health care financing system. in contrast, consider taiwan as geri noted where everyone has a smart card. your smart card carries a medical history and can be viewed by any doctor in taiwan. their national database allows them to identify the few outliers who try to abuse the system rather than hassling millions of dollars and patients. what the internet has done to transform telecommunications across the world is what single payer will do to transform how we deliver health care in america. a national public health database would allow the

resources to the greatest need. advance our national health goals, embodied in healthy people 20/20 and reward communities that help achieve those goals. this would encourage health care professionals and hospitals to work together with local health departments to advance national health objectives. president obama has stated if he were to start over again he would favor single-payer system book argues it is too radical. well i come from philadelphia where revolutionary ideas are celebrated, not dismissed. our most famous radical document begins with these words: we, the people. not we, the insurers but we, the people of the united states in order to form a more perfect union to promote the general welfare and secure the blessings to ourselves and prosperity to ordain and establish this

constitution for the united states of america. this nation captured the world's imagination with a bold ideas that the people first. it's time for our own and generations revolution. thank you. [applause] >> thank you, dr. tsou. we are privileged to welcome dr. gratzer, you are on. >> thank you, mr. chairman and the committee members of congress. mr. chairman of, i'm delighted to have received such a warm introduction listening to the accomplishments he spoke of i was reminded a former colleague who commented me that on paper i seemed quite interesting. [laughter] mr. chairman and members, i've been here for a few moments as have you and i've had the opportunity to hear from a few

of your colleagues and a few of my panelists and curiously i have yet to hear the name mentioned once. perhaps so surprising because he has been out of office and when he was an office in fact he wasn't even american, a canadian. but his name jumps to mind today at these hearings because his thoughts on the government health care and as we move forward in congress to debate something larger in the coming months. he is somewhat of a heroic figures in the 1960's he was tasked by the quebec government to consider what would be inappropriate way to organize health care. his report called for a single payer system. he is known as the father of

quebec medicare because of the report and then in an unusual turn and twist he was actually elected to office and appointed minister of health and implemented his own report. quebec for decades thereafter referred to the government issued a health card in his honor. last year he was tasked by the government to review the system and recommend proposals for reform. he did not mix his words. he suggested the system is quote on quote crisis and the days of throwing money into the system and rationing care ought to be over and he argued for a more robust role for private sector health care. he went so far to advocate on just co-pays but to suggest hospitals all to lease out unused office space in of our worst to private physicians and the boss stoke the fires of

entrepreneurship. he has changed his mind and put that in perspective when the father of quebec medicare changes his mind is as the white don't know, john maynard keynes on his deathbed in 1946 in england said just maybe there's a problem with socialism. why would this gentleman change his mind on government run health care? well, let me outline a couple of things in canadian newspapers over the last couple of weeks. not reports i've written or right wing of the tanks or watchdog groups but things that have appeared in the newspapers and you can grow cool this later if you felt when suggesting. there's a couple of quebec entertaining a lawsuit against the government because you see at 5:00 in the morning in hospital in active labor the boz the nurse and no one came. the end up delivering their own child without any medical assistance. this wasn't a rural hospital,

this was one of the largest in quebec. i guess that is consumer driven health care, canadian-style. one is aware according to ontario's government guidelines three-quarters of patients requiring urgent surgery don't get it in a timely manner. according to my standards, but according standards outlined by the government, and of course there are the issues around value and quality where in quebec there is an intense review going forward suggesting that maybe one in every for breast cancer test results were tainted and less on reliable. one in four. mr. castonguay changed his mind and certainly i appreciate where he comes from. i was born and raised in canada as well from a little town smack dab in the middle of the prairies, winnipeg. on a cold winter's day it can drop to 40 below on the

prairies. i guess i am the son of castonguay, not literally, but someone a generation younger than him i correlate under socialist medicine and i & white people would believe in a single payer system. why they would believe it would be compassionate and more equitable than the system of the united states but unlike mr. castonguay, i changed my mind because i saw the reality in canada and in britain and across europe. we should also speak of statistics today. cancer outcomes are better in the united states and canada. survival rates are better for low birthweight children, even the income and equity health gradient is better in the united states than in canada and pretend you get i understand the temptation of single payer because i used to believe in it but as congress moves forward and we discuss this option but also government public plan option which might swallow 120 million people from the private insurance market i would

suggest the answers are not on 49th parallel the u.s. needs and the made in the u.s. a solution. >> thank you for your participation. dr. angell, you are the wrapup witness for this morning. >> chairman andrews, members of the subcommittee, thank you for inviting me and for your leadership on this important issue. the reason our health system is in such trouble is that it's set up to generate profits, not to provide care. to pay for care, we rely on hundreds of investor owned insurance company that profit by refusing coverage to the sickest patients and plummeting services to the others. and they create roughly 20% off the top of the premium dollar for profit and overhead. our method of delivering care is

no better than our method of paying for it. we provide much of the care in investor-owned health facilities that profit by providing to many services for the well in short and too few for those who cannot pay. most doctors are paid fee-for-service which gives them a similar incentive to focus on profitable services particularly specialists who received high fees for expensive tests and procedures. in sum, health care is directed towards maximizing income, not maximizing health. most current reform proposals would leave the present profit the driven and inflationary system essentially unchanged and simply pour money into it. and unsustainable solution. that is what is happening in massachusetts where we have

nearly universal health insurance that the costs are growing so rapidly that its long-term prospects are bleak unless we drastically cut benefits and greatly increase co-payments. we are learning health insurance is not the same thing as health care. it may be too skimpy or too expensive to actually use. initiatives such as electronic records, disease management, preventative care and comparative effectiveness studies may improve care but experts agree they are on likely to save much money. promises by for-profit insurers and providers to mend their ways voluntarily are simply not credible. regulation is also unlikely to modify profit seeking behavior very much without a bureaucracy so large that it would create

more problems than it solves. in nearly every evidence country has a national health system that provides universal comprehensive care. expenditures are on average less than half as much per person and health outcomes are generally much better. moreover, contrary to popular belief, these countries offer a more basic services, not fewer. more doctor visits and longer hospital stays, more doctors and nurses but they don't do nearly as many tests and procedures because there's little financial incentive to do so. adis true there are ways for some elected procedures in some of these countries such as the u.k. and canada but that's because they spend far less on health care than we do. if they were to put the same amount of money into their

systems as we do know, there would be no way to. for the medicine to the system, it's the money. for us, it's not the money, it's the system. we already spend more than enough. it is often argued the first order of business should be to expand coverage and then worry about cost leader but it is essential to deal with both together to stop the drain on the rest of the economy and further erosion of health care. the only way to provide universal coverage and to control costs is to adopt nonprofit single payer system like that called for in h.r. 746. anything else would either increase costs or decrease coverage inevitably.

medicare is a single payer system with low overhead cost, but it uses the same profit oriented providers as the same system so its cost of rising almost as rapidly. setting up a medicare-like program to compete with private insurers is advocated by the president would have the same problem. and also not realize the administrative savings of a true single payer system. i also worry that the insurance industry would use its clout to under fund the public program and make it a dumping ground for the sickest costliest patience creaming off the profitable ones for themselves. i'm aware phasing out the private insurance industry would mean a loss of jobs but i believe the job loss in that

sector would be more than offset by job gains in the rest of the economy which would no longer be saddled with exhort and costs of an industry that offers almost nothing of value. thank you and i look forward to your questions. >> thank you very much. [applause] i think that each of the four of you validated our optimism you contribute substantially to the debate. we are going to begin with questions. 75% of health care costs are are attributable to chronic disease and about 80% of the 75% is attributable to for chronic conditions and disease, heart attacks and heart disease, cancer, diabetes and obesity related problems and asthma. but i would like to ask the panelists to do is for the single-payer advocates tell me how we would approach solving that under single-payer and then

dr. gratzer, whichever system you would support, tell how you think we could address these very serious chronic disease problems and i want to be sure dr. gratzer it's time so we will ask one of the single-payer folks to go first and then dr. gratzer. dr. angell, dr. tsou, ms. jenkins, whichever one of you would like to start. maybe a nurse would be better since you do primary care. >> i think inheriting the simple pair system is in prevention because it is the government -- if it is government funded the government has a vested interest to make sure you stay healthy because it is cost effective to prevent disease than to wait until they are sick and treated. so i think single-payer is a focus on prevention because it is more cost-effective, so i think that is a big plus for single payer and it tends to be way more preventive.

>> okay, dr. gratzer, we will have you go second. >> maybe i should go last. >> know you can go. >> fair enough. we are talking about rises of cost in american health care as you know they've come out with a report when an extraordinary difference it would make to a middle american family if we could hold back on the costs between 20 -- >> how do we do it? >> i think that is a great question. to be totally honest -- >> that's why i asked it. [laughter] >> i'm not sure it has that much to do with health care organization. i think people that advocate single-payer paid a magical picture that prevention is at the forefront, everyone gets to see a family doctor and hang out with a family doctor and pontificate if not smoke with their family doctors. look at canada and britain when one lax care where if he were

winning the town lottery would have to get your mortgage -- >> how do we do this? there is evidence that shows diabetics baguette thorough and good nutrition counseling have better outcomes than those that don't. how do we provide that kind of service if we don't do single payer? >> we need to move money more to the individuals and give him more control. >> how can we do that if the insurance companies are not willing to do it? >> we need to look at more consumer driven plans that doesn't necessarily mean private insurance. in north carolina they have a plan now that if you smoke or are obese repaid more penalties. i think that's part of it and part of this calls to public health care and medical support it falls to the individual responsibility. i don't do primary-care but when i did two primary care and i did meet with the young smoker and say tobacco was linked to cancer, never once did the kid looked back at me and say police mokes, no one ever told me this before. i think to say we have problems

in america due to diabetes and obesity and we are going to solve it with a government solution is a terrible mistake. >> dr. tsou, what your solution be? >> thank you for the opportunity to address a complex issue. people have thought about this as the guy edna lakner roof of a lot about organizing the care. a lot of it comes down to frankly as jerry said before setting up prevention. there is something that is missing and health care system today which i believe is a lot more community-based health care service. if i were the king of the world i would actually try to organize within neighborhoods based on a database that was available where we know the prevalence of diabetes or high blood pressure or other major conditions. we would organize neighborhood class is where we would teach people about restrictions and improving diet and how to take medicine properly and we would try to have individuals like

public health nurses who would check in on people have difficulty with compliance -- >> dee dee single-payer would facilitate that -- >> we would actually have enough money to pay for it. >> i'm going to give dr. angell the chance to answer and then go to mr. klein. >> i'm skeptical about your premise that 70% of care costs go to the chronic disease. >> its 80% and 75%. >> i know at least 30% goes to overhead, administrative costs and profits so all the rest don't go to these chronic diseases but still, to go to your point. we have as i've said a market-driven system that preferentially rewards specialists for doing highly paid tests and procedures. that's why we have more specialists and other countries, way too many specialists and why we have too few primary care doctors. a single payer system could take

care of that and change the schedule or change the way doctors are paid so that we would have more primary-care doctors who would do more to help people live with their chronic conditions if they have them or prevent them where it's possible so i think it is a matter of the market rewarding people for doing things and that's exactly what they do, tests and procedures. >> thank you. we will turn to the ranking member from minnesota, mr. kline. >> thank you, mr. chairman and i want to thank all the witnesses. it is a distinguished panel with three doctors and a registered nurse. i'm always glad to see a registered nurse. my wife spent her adult life as a registered nurse. she retired but i feel like we are still doing our part. i now have a niece that is a registered nurse and in the field. dr. gratzer, you were from canada. i from minnesota. i know something about negative

40 degrees as well and i also know about movement across the border for medical treatment. why do you think it is and would you agree there is travel and minnesota is also a destination state for medical care with rochester and matteo clinic. why do you suppose there is that travel from canada and the united states? >> click the old soviet system everything is free and nothing is readily available. canadians wait for any diagnostic test and some of taught by crossing the border. they do that at the mayo clinic but not exclusively so if you were in downtown toronto you'd find an office for the cleveland clinic, medical tourism cuts across the border. the >> and so we are sort of, the united states and i'm thinking in terms of minnesota right now a safety valve. if you can't get it, if the

single-payer system in canada doesn't provide the service across the border and get help in minnesota. >> if you can afford it. >> then the question is what would happen if we are now canada and have the canadian system? where do they go? >> your compassion for canadians is outstanding. [laughter] >> well, when they come south for medical care systems to stop the mall of america and we are glad to have them. >> people from all over the world come to the united states because the excellence here. i guess we move forward and have debates how to inform the system it's important not just look at the bad but remember the good. meal is an outstanding leader if you're the king of jordan and have a health problem you go where but yes, when canadians need mri is having one third as the united states they cross the border. when canadians need to see --

when canadians need a quadruple bypass, they cross the border. >> sing lalinde system that has pretty serious shortcomings and we do see that because the border crossing and yet we've heard today other critics say the health care system scores low on measures such as life expectancy and others. can you address that issue? >> i would be delighted, sir. when you try to do international comparison it's complicated. i think all too often we tend to be simplistic and will get crude indicators. one example would be life expectancy. health care obviously is important on the influence of life expectancy but also reflects a mosaic of other factors, genetics whether a person smokes, whether a person exercises. a person's dalia and in fact it pains me to see this as a

physician probably one of the less important things is health care in the equation. one finds americans smoked much, drink too much and eat too much especially compared to their northern neighbors and in america is unusual in other ways. in the example there are eight times more murders per capita than and france. if you were to take out accidental and intentional death from life expectancy statistics and factor of murders as one example one would discover americans live longer than people in any other western nations and careful about the cruce statistics. >> thank you. we have several doctors and the panel looking forward to their chance to ask questions so i will yield back mr. chairman. >> thank you, mr. kline. mr. wu is recognized. >> i just have a couple questions. some of the studies i've read indicates technological drive is

a significant contributor to cost increases, and also the increasing administrative costs including that technological drive is perhaps 50% of cost increases and a majority of the other 15% may be administered costs including marketing expenses and i would like the different witnesses on the panel to address how you all think that a single payer plan would handle those different types of expenses, technological drive bursas administrative costs and including marketing costs, dr. angell, should we begin with you? >> if you start with administrative costs there is no question a single payer system would have much lower administrative costs. as i've mentioned, the administrative costs of the

biggest insurers average roughly 20%. that's administrative cost marketing profits compared with 3% in medicare so there is no question we realize great savings in administrative costs. if you look at the use of technology, it's not the technology itself. all advanced countries have the same technology. we have no secrets here. it's how we use the technologies we use them much more widely because it's profitable to do so. many of the technological tests and procedures are done and freestanding imaging centers, laboratories, outpatient centers in, and they are paid handsomely for using them so it is a matter of generating income, not targeting medical need.

in this country if you are willing short and can afford it you may get an mri you don't need. you might get many mri is you don't need because it is profitable for someone to do that. but if you are not well in short you may go without an mri that you do need, so it's the mismatch between the technology and the need for that technology that is so bad in this country. >> i am not as technologically focused as perhaps some of my panelists are. let me give flexible. death by cardiovascular disease has fallen by two-thirds in the united states in the last 60 years. part of that is because the drugs have changed but part of it is because high expense medical interventions in. to put things in perspective the revolution that occurred in health care, robert e. lee on

the battlefield 1864 hardtack and state-of-the-art care at the time was two weeks bed rest, nearly a century later about 90 years later when president eisenhower had a heart attack the state of the art careless six weeks that rest. today of course we do a hell of a lot more for you than bed rest. so we have more for technology. let's not forget the incredible advantages that have come with it but i think we would all agree we are not getting the value for the dollar. to many tests or order and there is quality difference amongst the different providers. the question is ultimately what are we going to do about that. the administration says we ought to set up a committee and they ought to guide the could guide doctors went to test and when to pay for it. i'm skeptical but open to that argument, but i think ultimately we will address this by moving away from people paying 14 cents on every dollar spent on health care. getting people more involved in

their decisions. i also think we need government to provide us with more transparency and accountability and information. that's the way to move away from the high expense not necessarily high quality care that we have. >> thank you dr. tsou? >> i think that it's ridiculous that dr. thomas st -- the truth is that we have to have a responsibility in government to actually do comparative effectiveness and figure out which things work and which don't and if we don't know which technologies are effective we should do clinical trials to determine that the that is one of the advantages that single-payer has comic read a large database that allows you to look at the health outcomes and you can see which ones actually work and which ones don't so i think single-payer helps advance the decision making around with their technology is advantageous or not.