private insurance mechanism. but in sure at the same time a social contract that our democracy has stood for and others around the world. that's how we got to and will benefit, and player sponsored benefits. it was good then and it's good now, so i come to this table the usa way, not the u.k. way. i believe an employer sponsored benefits and i would hope we would look at that and how to build on that. at the same time of, these were the big guys. my father was a little guy. he ran a little grocery store. my grandmother was running baker shops where my uncle is one of whom was a bronze star winters had come back to work. they had no access to health insurance. they were too little. it cost too much. but my father, my own goals believed in two things.

they believe in capitalism and they believed in their government. what happened was their government stepped in and my father for the first time in my uncles had access to social security. my father was so relieved though he had a private insurance to protect my mother should something happen to him that social security was the safety net. he believed in public options. but also what we invented again because of our genius, because not for private insurance along came something which was a new approach called blue cross and blue shield which was insurance companies to be run by the nonprofit sector. dad was thrilled he could finally by hospital insurance. it was called hospitalization which would protect him or any member of his family. so my father then again had a public auction in addition to a private option for his income security but he now had a

private auction run by a nonprofit but the long profits went as you. five years ago in maryland blue cross and blue shield blitzed out. they went from nonprofit to profit to profiteering. the ceo was quick to sell the blues, get a $14 million golden parachute. the blue cross board of maryland was making more than the enron board. restricted? the maryland general assembly. so now we have private insurance that was to be a long private toole that needed the requirements of either a general assembly or state legislature with backbone to stand or a governor who wanted to ensure to protect the people. so now we are back on track and i am very proud. but what did that mean? it meant the blues could or could not be a tool they could

go one way or the officer when we go the nonprofit group we have got to know how the nonprofit roots go but that let's look where we were in the 60's a. we knew we could not pass again, the u.k. way, nor did we want to go that way. but we wanted to pass something to protect seniors who were terrified if they went into a hospital day would go bankrupt. so we passed medicare and we also passed medicaid to be the safety net for people who could not afford private insurance. the same arguments we are hearing against medicare. are the same arguments we are hearing now. the same arguments against medicare are the same arguments we are hearing now. government controlled, centralized bureaucracy, ho-hum, hum-ho. we've heard that before they give you tried to cancel medicare. and also in cannes private

insurance with medpac. well, we know what happened in the 90's. it didn't turn out well but now we have a chance in the 21st century. so we have tried every time to come up with new ideas. they have served the public well. they often have requirements and refinements that this is the time where we close the gap and build on what we know we can do. public and private options, a public auction that holds the private options accountable so we don't have to depend upon the background of the state legislature or be worried about the philosophy of the governor and to the point as a state insurance commissioner. that is why i am for public auction. but i believe we have no option not to do anything the time is now. the need is compelling. i don't sit here represented interest or institutions.

though i represent some pretty terrific ones and ih, fda in my state, daughter of space agencies in my state where those bureaucrats we got to look out i've got a nobel prize winners who work for the federal government and i also have water men and farmers so i am here today thinking about maryland. i am not thinking about centralized this or private that or whatever. i'm thinking about the people who sent us here and i would hope we would think about this people. let's find this common ground. let's find a sensible center. let's come up with it. i feel about the 60-year-old woman who was a clerk in a saturn dealership i went to talk with. negative dealership is now going to close. she is married to a 62-year-old man who worked for one of the defined benefit companies. to find benefit now means to find bankruptcy. they don't have health

insurance. coburn of this or that. they don't mean anything to them so its 60 and 62 they have no place to go. they should be able to turn to us. they believe in the government and the believe in free enterprise. i think about a self-employed guy with an autistic son, to others and to other children in the family he is so stressed between lower profits, rising profits, he needs and mental health benefit. their marriage needs counseling. the tension and aggravation and fear they are working under. he needs to be able to have health insurance for his family and also have the mental health benefits. i think about the young girl who is 24-years-old with crones disease, a law student, public interest law working part-time. if she doesn't have access to a doctor, she's going to get sicker and did that in the hospital. she could face even death. what about the watermen and

farmers that i represent. we all want to eat local well we also have to have water men and farmers to be able to do that. you don't think about me representing farmers but i do and i represent watermen, they are called fisherman in your state, watermen and mine, and patti, i am not sure what they called you in seattle. [laughter] but at the same time i know their wives are working in small business to get health insurance so them and can be on the land or out on the water. and those small businesses are shrinking. so let's remember the people. let's work to find the sensible center. right now former leaders are off talking. tom daschle, bob dole, howard baker. if they can talk together and work together and find that common ground and sensible solution so can we. so for 50 and 60 years we've been struggling with how to do it. we are not going to go the u.k. way. we are the usa.

we do believe in capitalism. we do believe in the government, but let's be able to come together now and be able to find that way. if you don't like this, then don't try to judge, let's come in with it and let's say goodbye to the invasion of the body snatchers. thank you. >> senator burr. >> awesome. [laughter] thank you, mr. chairman. >> chris, listen to this, i'm about to compliment you. chris? >> yes, sir, i'm sorry. >> i'm about to compliment you. [laughter] >> take your time. [laughter] use as much time as you would like. [laughter] >> you know i have deep respect for you, and for all the colleagues on this committee. and i personally feel that you have been stuck with something that if you had control over we wouldn't be here right now.

we would probably still be in the process of exchanging ideas to come up with a consensus bill. we are not doing that. and there's not a consensus approach. there have been no input from this side on this which is part of the bill. i find it unbelievable that we could start a markup where at some point tomorrow the most contentious parts of the bill are quite be shared with us and i take the chair at his word that we will have ample time to offer and construct our amendments. on a bill of this magnitude, on a bill that affect 70% of gross domestic product of the country, how long is that? today's?

a week? kump? it can't be a month because there is an artificial deadline in six weeks that the president wants a bill on his desk. are we willing to sacrifice something this good for a time line? if we do it will be the first time i've seen that happen in washington and 15 years i've been here. over the past several months we've been told about bipartisan meetings. meetings between the majority and minority. yeah, they're have been some meetings amongst the staff. but incorporated in this first part of the legislation, there's no minority thoughts. hopefully through an amendment process of 300 some amendments may be some of our ideas will get in. i fear this will be a process where we will have a vote after vote after vote that is right down the party lines and we all know the outcome before we even start, which makes it a little

less inviting to participate. but the truth is the american people have elected us to come here and represent their interest. i don't believe we are representing their interest as we do this markup. i believe we owe it to them to be more thoughtful than what we are attempting to do and a very short timeframe. today we do have technical comments on the bill before us, we don't call from the administration. we have a technical comments from health and human services from the secretary. the agency that will be in charge of implementation of many aspects of this legislation we have no comments. my colleagues have covered and i will cover in a little more depth the words and remarks from

cbo. even yesterday i think the white house began to actually distance itself from the product on the hill. yet we have a weekend house of scheduled markups that it's basically been said we will have this bill finished at the end of the process. all i am not sure how you can arbitrarily attempt to do something this big in that amount of time. now, true health care reform has to guarantee that all americans have the opportunity at affordable coverage. there are a lot proposals how we get there. there are already proposals on the table how we pay for it. paying for it is an important thing and i know that you are quick to hear that from our side numerous times and we realize it is not the responsibility of

this committee to lay out how this is going to be paid for. but mr. chairman, you said earlier at some plight i can't remember the date in the future, 24 cents of every dollar will be spent on health care. let me remind the colleagues 46 cents of every dollar we spend today we borrow. 46 cents of every dollar we spend at the federal government level today we borrow. so as you begin to look at the rising cost of health care understand that the resources that we have to fix the problem are not unlimited. they don't come without an out your obligation for a country that is already obligated to $5 trillion in interest payments over the next ten years. at some point we have to stop and take a deep breath and say how much can we spend that we

don't have? and i am not sure that we have explored the options how to fix health care without just focusing on how we throw money at. true health care reform for our health care dollar rather than imposing new tax or passing a new obligation to future generations. it must transform the health care system so that we focus on keeping people healthy and well incidentally treating them when they get sick. now there is a tremendous amount of disease specific legislation in this bill and most of that authored by people on this committee some of which i co-sponsored. i want to say this for my colleagues, don't mistake in this process that when you pass disease specific legislation you have assured yourself of prevention well as or chronic disease management.

to get true prevention, wellness and chronic disease management you have to make an investment on making it work. and if you look at the self insured companies across the country, safeway has been mentioned, dell computer, companies that self insure, what do they find out? they found out that if they use flexibility and innovation as to how they take individuals with chronic disease and not just designing the disease management treatment for -- form but treat the employee to get in the program, their company saved money. they saved money because they kept their in police well --

employees will be we were trying to get expansion of care for medicare and was put back to five things that i sound incredible that already were not covered by medicare. psa, colonoscopy, diabetes management, i can't remember what the fifth one was. tom burke. but the rest of the list was next, why? because it cost money. let me say again. if we want to do prevention, wellness and disease management correctly, then you've got to design and architecture that invests in people participating in a. if you talk to safeway when they offered for free disease management to their employees about 20% of those with a chronic disease enrolled. it wasn't until they wrote a

check to enroll they actually got their participation level up above 80% and the same is true at dell and sass and most self insured companies around the country. as a matter of fact, at del monday decided to do this in 18 months for every person who enrolled, dell saved $17 per every employee that and rolled and my point is we are talking about how to design a health care so that it's a sustainable and to the future. i think we all agree. 70% of gdp is too high. 19.5% at 2020 is going in the wrong direction. 34 cents of every dollar at some plants in the future is the wrong direction. how do you actually get percentage down? there's only three places. prevention, wellness, and disease management. they are a cost drivers for

downward pressure on health pier costs. can private insurers do this? they are doing it right now. they are sacrificing profits to their shareholders at investing and provincial wallace and disease management. will the other ones do it? let me suggest to my colleagues one simple change, portability. we always think of portability be a benefit for an employee because with portability for all walked to an employer because of your health care coverage. put yourself in the position of being an insurer and you get a covered life that's 25-years-old. and you are assured you have the shot keeping them ensured until they're 64 when they go on medicare. instead of three to four years which is the average today what's your willingness to invest in them to stay healthy and then making the right decisions? all of a sudden your investment

on the part of the insurer changes because they want to keep the covered life. they want to keep them insured but they also want to keep them healthy and well. all of a sudden the dynamics of the system changes with just one little change. it doesn't have anything to do with expansion or anything to do with disease management. it has to do with the way insurers look can they get their investment out. that is just one aspect. true health care reform has to guarantee that health care is accessible when people want it and where people want. i heard you say if you like the health care to get you get to keep it. but i've got to go for a second to the cbo preliminary review of this piece of legislation. and i think everybody is it on a, a trillion dollars to cover 16 million people. what's alarming is when you dig

down it says those with coverage through an employer with equine by 15 million or 10% of the covered work force. though we say if you like and you can keep it by passing this legislation cbo says with exception of the 15 million bader landaluze their health care through their impleader because the dynamics change for them and cbo went on to say coverage from other sources would fall by an additional 8 million. so, we are actually losing 23 million americans, not quite 20% that the statement a few like it you can keep it just won't hold true. 20% of those in short today won't be able to experience the promise of if you like it you can keep it. well, we know that cbo has in

the preliminary review estimated that this piece of the bill is going to cost a trillion dollars. and the likely more expensive part is yet to be reviewed by cbo unless the majority already house the score. 39 million individuals with octane coverage. but as i said, 23 million individuals would lose coverage which leaves u.s. 16 million. 16 million covered with $1 trillion. another letter from cbo said yesterday in response to congressman kemp request cbo also expressed doubt about industry stakeholders at the behest of the white house to help hold down health care spending. in that letter mr. elmendorf states and by quote the industry leaders attention to the schools and agreement that significant savings can be obtained are no doubt welcome. however, most of the proposals

are steps that do not require the involvement of the federal government or are not specified at a level of detail that would enable cbo to estimate a budgetary savings. in other words $2 trillion may not be there is what cbo is saying. instead of saving $2 trillion savings proposals offered by the health care group might actually end up increasing the cost of health care. i think as we go through this we should adopt one consensus position. do no harm. and in fact cbo raced serious issues lot about what we are doing but about what the white house was able to get in commitments from those in the private sector about changes they could make. now mr. chairman, the president has included in the 2010 budget

proposal $640 billion. as a reserve, a prepayment on health care reform. does that suggest we've already given up on the fact that you could readjust the pipes, redesign the architecture of health care? change tax application and it wouldn't cost the taxpayers another dying? -- dime? we have got a plan that does it and i think would be offered as some point in the market but i don't expected to pass. but if we get to the point at the end of this process and members have the opportunity to add up what we are spending and you have any concern about the next generation i hope that you will at least then consider

alternatives a little more fiscally sound that accomplish everything it does senator kennedy's staff has set out to do assuring everybody has got access to affordable health care and those that don't have the means to pay for it have a subsidy that is provided to make sure the prevention and wellness and disease management actually work, to make sure that whenever we design is sustainable well into the future regardless of what the population is and regardless of the mix is. it struck me as i sat down to think about this last night i believe this bill still has an enactment date of 2013. well, whoever the president is well all of the sudden wake up and realize 2017 is the insolvent date on medicare.

three years from the insolvency date established by the medicare commission we will institute the most massive change in american health care. i dare say in 2013 we are going to be so consumed to figure out how to extend the life of medicare. the implementation of this will probably be poor at best. i'm not suggesting to my colleagues that we do nothing. i am suggesting to my colleagues 17% of gdp devoted to health care is unsustainable and well we are talking about is a massive expansion of the percentage of the award gross domestic product devoted to health care. 1962, the defense to spending

made up half the federal budget was defense. social security was 15%, medicare had yet to be enacted. by 2007 defense spending 20% of the budget while social security makes up 21% and medicare makes up 16% and it is rising at an alarming rate. the u.s. has a commitment to health care almost double any country in the world from the standpoint of the overall cost. it is unsustainable. we can do a much better job but it can't just be by spending money. mr. chairman, the national health care anti-fraud association organization of 100 private insurers, public agencies estimates 60 billion, about 3% of the total annual health care spending is lost to fraud every year. but the figure is considered conservative by the new england

journal of medicine. 2008 government why proper payments cost the united states treasury $72 billion or 4% of the total outlay for related programs. medicaid had an estimated improper payment rate of 10.5% or $18.6 billion for the federal share of medicaid expenditures. the highest rate of any federal program. and it is my belief that in the second half of the legislation that we are going to consider we are actually going to consider and i expansion of the medicaid program. and that it will probably be presented at the federal government is going to pick up 100% of the expansion cost for a period of four years and the states will be partners again. i think i know why we are not

seeing the legislation will in advance because the state's, the governor's regardless whether they are republican or democrat would be opposed because its medicaid that's not the bogeyman in the state budget right now. they've got to get control but we do nothing in this bill to address the problems that exist in medicaid and at the top of the list. it is $18.6 billion worth of improper payments. we have all been quick to come to a floor and point out of the administrative cost is of private insurance and where it is in medicare and medicaid. three, four per cent medicare, medicaid. but let's be truthful. we don't include waste, fraud, and abuse in the administrative cost of medicare and medicaid. it's accounted for differently.

you do in every private sector insurance plan and when you include waste, fraud and abuse into the medicare and medicaid side you are over 20 per cent. it's actually more expensive to administer those programs than it is for private insurers to administer private sector options. increasing the rate of public spending will only increase the wasteful government spending. because we are doing nothing to change at. mr. chairman, senator coburn and i will offer a full substitute to the bill but let me just point out for their colleagues that on this section we are currently in a have filed a number of amendments. they range from combating waste, fraud and abuse more effectively, insure and children are protected and building up our medical work force bef