that is the reason that we have a product in front of you. but i think it is much wiser to proceed with you can say in advance this is where we're going to go. wong @ gáa#@ @ @ @ @ @ @ @ @ @ @d that. the -- this going to be hard enough.

we don't need to make it harder by engaging in senseless ke bait about whether people adequate time too look at what we're considering. i appreciate your comments. we'll proceed in a way we're dealing with titles or secs in a way that we can exhaust our efforts in those areas before moving on to the next, barring some reason for us to deal with it otherwise. but that would be my intention, how to proceed with this, so that members and others following this -- this bill has been put on the web. it's available for the entire world to look at. i don't want any -- i won't complete transparency in this. as we go through this and any changes are made, they'll be put up. all 600 pages are available for minute in the world to look at, to examine as well. as i think it's an important way for us to proceed so there's no questions as to what we're engaging in. i really appreciate your comments on that matter and my intention would be to follow it and provide plenty of time for people, particularly for the minority on this committee to

feel comfortable about the opportunity to examine what we're proposing with adequate time to respond to that as well. senator hagan, we thank you immensely. appreciate having you on the committee, too of. >> thank you, mr. chairman. i want to thank you for your leadership on this issuement i kn know you and many of the members have worked for years on health care reform. i think it's just very important as a new member of this committee that we all tackle this issue and that we certainly are very interested in the outcome of this bill. and to senator kennedy, i certainly wish -- want him to know our thoughts an prayers are with him and we look forward to his return you to this committee. i want to start out by saying that, without question, america's health care system is broken and that it needs to be reformed. the united states, we spend over $2 trillion on health care each year, nearly twice as much as every other developed nation.

the amount that we spend on health care is growing at unsustainable rates. spending on health care the way we are right now is going to bankrupt our country if we do not act now. middle class families have born the brunt of this disturbing trend. every year they see their premiums rise with no end in sight. over the past nine years, premiums for employer-sponsored health insurance have more than doubled. american families report spending more on health care than on housing or food. when we talk about small businesses, health care costs are choking our small businesses. i know a lot of small business owners. they want to do right by their employees and their employees' families by offering them affordable health insurance, but they are also struggling with skyrocketing health care costs. due to these ballooning costs, we've seen the percentages of small businesses offering

coverage drop from 68% in 2000 to 59% in 2007. in one national survey, nearly three-quarters of small businesses did not offer benefits. they cited high premiums as the reason. among the small businesses that do offer coverage, 40% report spending more than 10% of their payroll on health care costs. i know personally that states are definitely struggling to meet the demands of health care costs put on their budgets. in the last ten years, u.s. spending on medicaid has grown by 13% and in north carolina medicaid spending has increased 15%. at the county level in north carolina, medicaid spending has far outpaced inflation and population increasing more than 63% over the past five years. among 48 counties, they spend more of their local share on

medicaid than they spend on public school construction. medicaid spending in my state, north carolina, is almost $10 billion and crippling many of the local communities. i don't think we can afford to wait another year to pass reform that's going to bring fairness and stability back into this health care system. i think the fundamental promise of this effort to the american people has been and should continue to be that if you've got health insurance now, you're happy with it, you can keep it. not that you can keep it until you have to change jobs or you can keep it until it's not affordable, but that you can keep it, period. middle class families have enough to worry about. if they have themselves and their children, if they're in a plan that works for them, they shouldn't have to worry about losing it. if they don't have access to a plan that works for them, we should be making it as easy as possible for them to get into a plan that does work.

we also need to make it easier for businesses, especially small businesses, to do the right thing. i want to make sure that small businesses are able to offer their employees affordable health insurance coverage. this bill provides small businesses with a tax credit for offering health care coverage. i think that's an important first step. but accomplishing all of these fwoel goals is easier said than done. there are so many moving pieces and getting everything right over the next couple of months is going to be an incredible balancing act. it involves making sure that everyone is pitching in, setting appropriate rules for insurance companies to follow, such as not excludeing coverage for people with preexisting conditions. we need to support the private insurance industry so that people who have insurance that they're happy with can keep it, while also providing a backstop option for people without access to affordable coverage.

we also need to improve our national health by promoting prevention and wellness. these are two key areas that i think will save us billions of dollars in this country, prevention and wellness. protecting and building upon what is already working in our health care system, like the patient-centered medical homes pioneered in north carolina, and the great work being done by our community health centers is very, very important. an, above all, taking steps to lower cost in the long run in part by making our health care system more efficient and effective through health information technology. that is going to be a big saver over time. the bill that we're considering today is a good start towards achieving these objectives. i know that today is the beginning of a very long process, which we've obviously seen in the opening statements. it's my belief that the best way to accomplish what we need to do

is by working together over the next few months with all of our colleagues along the full ideological spectrum to incorporate the best ideas we have, put them into a reform package that we'll all be proud to support. i've spent a lot of time talking to other moderate members about health care reform, as many of my colleagues on this committee have. many of them share my belief that health care reform represents our best and maybe our last chance to put our country back on a sustainable fiscal path for the long run. and in the long run, the rising cost of health care puts the health and economic security of every american family at risk. we cannot afford to pass up on an opportunity like this. but having said ha, we also need to be cognizant of the magnitude of the up-front cost required of us here. we need to be vigilant about keeping these costs under

control and when the time comes to send this bill to the senate floor, we need to work with our colleagues on the finance committee to truly figure out a way that we're going to pay for this. regardless of many of the things that we disagree about, we can agree that we have a responsibility to act. i look forward to hearing the proposals of many of my colleagues and obviously getting down to work and having the bill. thank you, mr. chairman. >> thank you very much, senator hagan. appreciate it very much. our in-house physician here, the only doctor on the panel, tom coburn. tom, hks very muthanks very muc. you and the senator i thi thought had a tremendous conversation the other night back an forth. we spend i think an hour and a half or two hours on that matter. i learned a lot as a result of that conversation. i appreciate very much your willingness to engage in that kind of a discussion and thank you. >> thank you. i thank you for allowing us the

freedom to express our thoughts aas we go into this mark up. and i want to say to my colleagues, i don't think what we all want in terms of an outcome is all that different. but there's a tremendous difference in how we get there. i'm reminded of the stimulus package we spent and where speed is causing waste right now. tremendous amounts of waste. we need a stimulus package. we got one. but the speed denies the fact that sometimes we get it right. so i'm going to say some things this afternoon that are going to be pretty tough. but i believe in the goodwill of my colleagues that we actually all want the same thing. we want no one to ever lose their home from health care. we want no one to ever file for bankrupt bankruptcy. we want everyone to have high-quality access.

we with want the costs controlled. we want a viable health care industry that continues to produce 75% of the world's innovations in health care. now, i practiced medicine for almost 26 years. most of you don't know that prior to that i ran a business producing medical kwiesdevices. so i have the experience from being on the supplier side as well as the provider side. what is broken in this country is not health care. what is broken is the federal government thinking that we have answers and we provide solutions when there's very little information that goes into that process and it's limited information. it's circular knowledge. it lacks the test of what's happening in the real world. the problem in health care, a lot of it can be directed to medicare. we heard testimony about the

lack of primary care physicians. why do we have a lack of primary care physicians? we have a lack of primary care physicians because medicare payment made it that way. a government program that we all think is necessary caused the shortage in primary care medici medicine. now we're going to be about trying to evincentivize, rather than fix the real problem, we're going to try to treat the symptoms instead of treat the disease. the disease is us. you know, the assumption that state insurance commissioners are powerless to control health insurance companies is ludicrous to me. and the idea that we think we can create a health insurance company, whether it be co-ops or otherwise, that are going to be more efficient than the -- including profit -- than the average health insurance company

is poppy cob. when you really look at the cost of medicare and medicaid their overhead costs are 25%, they're not the 3% to 6% we quote because we don't consider the capital, there's no profit in it. which was miscoated by senator alexander. the hearing we've had, medicare is at least 40 billion now. we know from ngo that's a hard underestimate of the fraud. so when you -- the assumption is that we can do it better. you know what? we can't. and we won't. we can pass this bill and what we're going to have is another headache because we thought we could do it better than the way we do everything else in this country, truly allowing forces to allocate scarce resources. senator hearken cares immensely about prevention. i do, too. we don't get out of this unless we fix prevention.

but us deciding how to fix prevention is a whole lot different than what a steve byrd has done at safeway. and we will mess it up because we don't have all of the knowledge an we don't have the right motivation, which is healthier, happier, longer living employees paying less money. what we'll have is a program. so senator harkin's intention, his heart is pure. but will it be efficient? name me one efficient, effective federal government pral thograme set up you. name one that's efficient and effective. a pilot is effective when we put him if an f-18. but is the pentagon efficient? no. and we have that all across the federal government. so if our answer is we've got the answer and we're going to tell everybody else how to do it, ki promise you right now we're goinging to fail it. of and i don't think we should fail. it's too important. we have big problems in health

care, and we immediate to come together based on what the real facts are out ñç?ñ well, guess who ends up you caring for most of the -- out the 4,000 babies i delivered, 2,500 of them have been medicaid. but what happens is that shifts down and so what we promise in

terms of care and coverage is just a promise. it's hollow. because they don't get equal coverage. they don't get the same care. they don't get the same attention. yet we've promised it to them, but we don't deliver it. the reason we don't deliver it is because we don't put the resources behind it. because we're living within a budget. and we ignore market forces. market aren't the total answer to that, but they're some. we'll never solve the problems in health care until we reconnect the purchase of health care to some small amount of economic pain with the person ha's making the decision receiving the health care. you can deny that all you want, but everything else in our country works that way. as long as we ignore that, we with ignore it to our own peril you even with a government plan. you know, we're taught in medical school three basic tenets, and it would be wise for this committee to pay attention to them. the first is, listen to your patient and every time they'll

tell you what's wrong with them. if you listen well enough and ask the right questions, they'll tell will you. well, we with haven't done enough listening to everything going on out there. we're also, when we listen, are not hearing. number two, if it's been done already and it ain't working, don't do it again. we're getting ready to do it again. and the third thing is, don't do any harm. we truly have one-sixth of our economy we're talking about now, and we have no idea what the long-term ramifications of what we're talking about doing in this committee is going to have on that economy. we think we do, but we don't know. so we're throwing the dice for what we want, but we haven't listened to the patient, and we're doing things that we've already done that don't work very well are. $39 trillion on medicare is small. a child born today in this country owes $400,000 in

benefits they're never going to receive a thing from because we've not done what we should have done in ed i care and medicaid and social security. and we're getting ready to create something new. i'm all for working with all of my colleagues, both sides of the aisle, but we ought to do it on what the real facts are out there and what we have learned. you know, we know that if we incentivize prevention the proper way that we'll get a ton of savings. an we also know that if we don't do that in terms of the management of chronic disease, it doesn't matter what we do. we can do what senator sanders wants and create an absolute single-payer system. but you know what? the costs aren't going to go down unless we incentivize the management of chronic disease. they won't go down but continue to rise because disease prevention is the way to get out of this. and unless you this bill has

that for the primary focus, the sustainability of it, getting out of this problem, we won't cut the 7.2% inflation rate in health care, especially with the demographics of people aging. you know, sheltering children, as bob casey said, that's important. we just modified schip and rejected a senate amendment that would have covered all of those kids and not raised taxes at all. yet we've got 16 million kids out there today that are eligible for schip and medicaid and they're not on the roll. why? because we're not listening to the patient. we're not listening to what we're doing wrong and we're getting ready to make the same mistake again. 16 million of them. so why are e.r.s loaded with kids with an ear infection when they're already

medicaid-eligible? because we haven't oversighted and neither have the states in terms of enrolling those people to where they have a primary care. and we have a medicare payment system that says, if you're a medical student you graduating in this country, you don't want to go into primary care because there's a 300% payment differential versus you spending another year or two in training, you'll make 300% more. so only the most altruistic of our physicians go into primary care. it's obviously not about money because they could be an engineer and make twice as much with less time and a lot less school debt. i would just ask my colleagues, as we walk down this, i agree to walk with you, to truly fix the problem. senator and i have a totally different look at cost comparative eblcompar comparative effectiveness. i'll tell you the other reason i think health care in this country is pretty good and good for my medicaid patients and

good for patients with no health insurance. because when somebody gets cancer, most of the time we get them well. most of the time we get them well. some fall through the cracks. that's true. but as a two-time cancer survivor, i think this health care is pretty damn good. i think it's pretty dang good. i have atrial fib. if we have what dr. mccull 60 wants to do, i've been through seven medicines trying to get it controlled. but if we follow comparative effectne effectness, i would have never gotten to the seventh medicine. it would have just been tough, taking couple adin the rest of my life, and ran around with atrial fib, which would cut my life expectancy seven years. we won't consider that because that denies the art of medicine. it denies that we will use chairman dodd's gray hair, somebody's long-term education, their wonderful years of experience, and the history of that patient with which to make a decision that is best for that

patient. not which is best to save the government money. and that's what comparative effectiveness is. clinical comparative effectiveness is a totally different thing. we spend muns of millions of dolla dollars every year paying for programs on long-term studies through the nih to find the answers to clear question wis. but to think we're going to have some ivory tower bureaucratic doctors look at the data over a short period of time and tell the rest of america what's good for them, that's poppy cock. what it's set up for is so we can manage the costs, so we can ration the cost of care in this country. there's nothing wrong with a single payer system. but just remember the way you control the cost in that is deny care. ha's what england does. that's what france does. that's what canada does. they deny care. we're going to make an is'sment in washington about how much

your life is worth and then we're going to tell you whether or not you can have the care. that's where we're going with this. there's no denial of that. i mean, if we're going to do cost comparative effectiveness, we're going to tell you what you can and cannot have or what is recommended under the washington-based insurance plan. and we're going to do that in medicare and we're going to do that in medicaid. just remember we're rationing right now in medicare. seniors, if you're out there, listen to me. if you've got a complicated health condition and you need to have a colonoscopy no longer as a medicare patient can you have a virtual colonoscopy that puts you at nearly zero riskment you have to have a procedure that puts you at greater risk, that actually costs more. because somebody in washington decided that was too expensive. if you have lymphoma or leukemia or cancer and your blood count drops, don't forget that your

doctor doesn't get to really make a decision about when you get aridge row poiten, something to bring your counts back up, because medicare has already decided when you can have that. without consideration of your con come dunt other problems. that's where you're walking with this. if you like that, if america likes that, then let's do it. just remember it's rationing. we're saying, you're not worth great health care. i think every american is worth great health care, and i think competition in terms of professional quality, in terms of delivery of services, and competition among the insurance industry is not where it should be. and i think we ought to drive it where it should be because i think it will help us allocate resources. nothing should happen to somebody like patricia irvin that senator casey talked about. we failed. but we crated a lot of inflation in health care by cost shifting medicare and medicaid costs on

to the cost of private health insurance. it's at minimum $1,800 a family a year because we won't put the money into medicare, we've made private health insurance cost 1 arcti1$,800 more per family. you get to pay your medicare tax, your income tax, and then you get to pay a whole lot more for health care because we have government programs that we refuse to fund adequately or manage properly. that's the truth and you cannot deny it. we have cost shifted hundreds of billions of dollars into the private sector. the other problem that i see that i want to share is the assumption that we know best. you know, we don't. we're tasked with a mighty, mighty task if we're going to adjust health care. we don't know -- we haven't begun to know what we need to

know to make the decisions that have to be made on health care in this country. and the idea that we're going to do this in a fitch xed period o time to put a fire out with a very high risk of getting it wrong, to me doesn't compute. mon none of us want to hold up fixing health care. we agree there are big problems and people who are suffering because we haven't fixed it. but to pretend that what is on the table is not going to take away the insurance that people presently have that they want, even cbo agrees with that. it's going to drop it like a rock. so you can take cbo, having half the information, or you can take the lieuen group which says 119 million people are going to lose the insurance that they have today that they want to keep. those are -- both of those we rely on. they're fairly reputable.

they don't have a pig in this football game. why would we take a risk of that if we really want people to have what they want? i'll close with a couple of other things. what is behind the scenes in all of this that nobody will speak is mandatory physician participation in government programs. that's what's coming. it's thought about. the kennedy staff talks about it a lot. massachusetts mandates it. that's what's coming. we're going to say, we're going to create a government program and if we don't get enough people participating, we'll pass it along and say you have to. can we fix health care and still let true liberty and freedom survive? i think we can. it it's hard work, freedom. it's hard work depending on what we know works in terms of setting forces at odds with each

other to get the best quality at the best price. it's hard work. but it's coming. we're going to tell everybody what they have to do. and we haven't even begun to talk about what senator sanders would like, which would be all the physicians working for the government. because that's what they do in all the other countries. they work for the government. our average federal cost as of yesterday for a federal employee is $119,000 a year. twice what the average cost is for everybody else that works in this country. has great implications in terms of why the cost of government is so big. finally, i would say this -- this is my last final, mr. chairman. if you want everybody covered with quality care and you you want everybody to have affordable care and if you want to make sure we incentivize

prevention so we control costs so we can truly manage chronic disease, if you want to make sure nobody ever goes bankrupt, nobody ever loses their home over health care, if you want to eliminate the tragedies patricia irvin, all children covered and immuneized and having well child visits, if you want the states to save at least a trillion dollars over the next ten years and if you want to not spend the trillion dollars that's in this bill, if you want to preserve the medical innovation that this country is known for, read the patients' choice act. read the -- just read it. you don't have to agree with it. nobody on the other side of the aisle has done that. haven't even looked at the ideas, the innovation in terms of satisfying the trial lawyers but still lowering court costs, lowering liability costs. we just transferred $250 billion a year in defensive