in writing, we believe there are some first time savings that would be realized that would begin to reduce the base on which we are growing. we believe that we can change the internal dynamics of this system to move it closer toward more cost-effective, quality-driven health care. and we believe further that we start with so much waste and unnecessary costs in the system. dr. co-op has estimated maybe $2 million worth that we can get this system stabilized and begin to reduce the increases in the rate of growth in a reasonable manner over time. and we will be happy to share with you all of the data that you requested, all of our calculations, our economic models and the like. we have worked as hard on this particular question, congressman, as any, because you're absolutely right. it is the key. and we believe we've got enoughly way that if we decide a

gdp growth rate as low as we think can be accomplished, should be phaseded in it more gradually, we think we can do that. but we want to start with the firm conviction there is waste in this system, there is better utilization that we can obtain in this system. there is better quality to be given to the citizens of this country if we reorganize the way we deliver health care more efficiently. >> thank you. thank you, mr. chairman. >> the time of the gentleman has expired. the chair recognizes now the gentle woman from illinois, chairman of the subcommittee, mrs. collins. >> thank you, mr. chairman. i too want to extend my heart felt thanks that you are here at our hearing, mrs. clinton. as always, you bring a certain perspective with you that we certainly learn from. one of the things i'm concerned about right now, a number of issues is red lining, what i call medical red lining at this point in time. as i look at what i perceive to be the kind of plan that we're

looking at, if we are, it seeks to address redlining by health alliances by preventing states from drawing those health alliances in a manner that would discriminate against segments of the population on the basis of ethnicity or economic status. but i wonder how the plan would prevent individual health plans within the alliance from attempting to draw service areas that would, in fact, be redlining against those kinds of situations. >> well, congresswoman, we have worried about that, because we do not want to in any way permit discrimination against providers or against patients. and we think as part of the framework for determining what an accountable health plan is, there should be built-in protections against the kind of redlining and discrimination that you are talking about. it happens too frequently now in the insurance industry when people are eliminated from coverage because of who they are

or whether they've been sick or where they live or who they work for. and we think that both by combining the changes in the insurance market that we intend to propose, plus protections built in so that accountable health plans will be offering their services in geographic areas and to everyone who is in that area, and there won't be discrimination against people who live in different areas, we will be able to protect against the dangers that you rightly have pointed out. >> there is a community health center in my district called the -- i can't think of the name of it right now. but it's a health center just outside of downtown chicago. and it was closed for a long period of time. it's been reopened. all of the people in that health center -- in the neighborhood used that health center for primary care, for children and everything else and so i wondered if that is the kind of center martin luther king health center, the kind of center that essential provider center and more about

that would be helpful to me. >> yes, that is what we anticipate. that community health centers that serve underserved populations in both urban and rural areas will be considered essential providers. and they will become part of larger networks that will serve the entire population. but they will have relationships with hospitals and clinics and others so that the people who use the community health centers as the primary care-gives will therefore be able to be referred on to a specialist or to a more complicated kind of care that they might need. whereas now, for too many people who use our community health centers, they may go to the community health center for primary care, but because they are uninsured or underinsured, they have no real recourse, except the emergency room, which is their entry into the additional health services they may need. so we doin' tend for those linkages to be developed. >> thank you. i gave the wrong name.

it's the miles greer health center. doesn't make much difference but that's the name. finally, i have great concerns about the power that insurance companies can gain in the program that -- and the plan that i've seen so far. and i believe that during his speech, the president noted that there was some 1,500 companies that are now providing health insurance in the united states today. but some of the reports i have received suggest that a number of the insurance may eventually shrink to about 100. if that happens, that puts an awful lot of power in the hands of just a few insurance companies. i have had personal experience with insurance companies, bluecross blueshield, for one, when i had to have a cataract surgery. they decided i couldn't have it done in the hospital, even though my doctor wanted to do it in the hospital for various medical reasons. some clerk in their office said, no, they weren't going to allow that, and they overruled my doctor. i'm concerned about that kind of thing happening when you have so few. i'm wondering if there are going to be antitrust laws to keep these few from becoming one and an og opposely and two, from

having too much power from the insurance providers. >> well, what you're describing is what's happening right now. that insurance companies are very often overriding doctors' opinions and making decisions based on insurance coverage instead of clinical judgment that the doctor would like to bring to bear. that is happening right now. we believe that moving toward the system that we've envisioned, there will be less of that, and, in fact, doctors will, we hope, regain some of the autonomy and authority they have had to give up. but the antitrust laws will still guard against mondopolistc practices. we do want to make changes to prevent doctors and hospitals to have the same kind of opportunity to organize to deliver health care that insurance companies have. you know, we want to have alternatives to insurance company-governed plans. we want to have the catholic hospital association or the mayo clinic or the local medical school, to have the same kind of opportunity to join together

with physicians, to present services to the communities that will be covered. and we hope that we can strike the right balance in the laws to permit that. >> thank you very much. >> the time of the general it will woman has ex tired. theow the gentleman from florida. mr. stearns. >> thank you, mr. chairman. and thank you for allowing me the courtesy of offering my questions as the ranking member on consumer commerce consume protection and competitiveness. let me first of all say, mrs. clinton, i want to congratulate you. i've watched chairman green span show up to tables like that with a whole list of people helping him. and is i've seen cabinet officers from the bush administration. so you making a winning statement by showing up all by yourself on this table and i want to compliment you on that. my question goes a little bit further than my colleague's from virginia's question, concerning the limit on insurance premiums to the cpi and to the population. and we move that when we start

talking about insurance premiums in the commercial sector. you are in effect limiting the amount that doctors and hospitals can reimburse for hospital cares. and i -- my concern is, by this limit that you're doing, aren't you going to make the patients get less care, and in the end, this will lead to higher cost sharing on the part of the patient? >> well, mr. stearns, we do not believe so. and let me give you just a couple of examples of the great mass of evidence that would support our belief. first of all, there is such a wide disparity of costs of health care right now in this country. and there has been a great deal of research done to try to determine whether there are significant differences in quality or access between regions or communities that provide care at a higher price or a lower price. what we have found, in looking at all of the available

research, is that there is no discernible difference in quality between a lot of the high-priced care and more moderately priced care that is available in the country. at a hearing earlier today, i held up a booklet as just one example of the countless kinds of evidence we will share with you as the course of this debate goes forward. which is a consumer's guide to coronary artery bypass graft surgery that was put out by the pennsylvania health care cost containment council. pennsylvania started before the president was even elected for a number of years to collect information to try to answer the question that you are posing, and which is very important. if you look at just this one sim petition booklet which outlines how much it costs at every hospital in pennsylvania to perform this surgery, you will find that the cost ranges from 21,000 to $84,000. then if you look at quality

indicators, including the number of patients who died and who were expected to die, given the severity of their illness, you will find that there is no correlation between the high cost and better outcomes. in fact, the lowest cost of the operation in one hospital has some of the best results. what does this mean? what kind of operation from 21 to $84,000? yet there is no incentive in our current system to move those hospitals and doctors that charge more toward a more reasonable cost, because they don't get penalized, there is no budget that they have to in any way account for. they get all kinds of automatic pass-throughs, and if they aggregate all of the different tests and procedures, they get more money than if they say, here's the cost for a bypass in total. what we believe is that if we

could begin to reorganize our health care system so we brought down the cost, we would not in any way undermine quality. in fact, we would enhance it, because we could afford in one state, and therefore across the country, to perform more operations like this for more people. and there are countless examples of this, congressman, all over the country, where we are not delivering the kind of quality health care for the price we are charging ourselveses. >> but in all deference, wouldn't you think it would be easier and more appropriate to bring it down through competition than through the government itself, pushing and mandating and limiting? >> that's what we're doing. that's exactly what we believe will work. we believe that through competition and market forces, hospitals will begin to make these adjustments so that they will move toward lower costs and they will be motivated at the same time to take a hard look at what they are doing. what we believe is that there should be a federal framework.

that sets forth certain kinds of guidelines about how this system should operate. and then the government should get out of the way. but we also believe that given how much unnecessary costs, to be charitable, there is in the current system, to get from where we are to where we need to be, that if we have some kind of premium cap, and if we have some kind of budget targets, there will be a real incentive for hospitals and doctors and others to make the changes that so many others have done within the marketplace. in the absence, though, of some kind of budgetary discipline, to move some of our regions, which are 300% more costly than other regions to anything like a national average, in the time we need in order to get this system under control with its costs, we think we've got to have those extra tools. but we'll be glad to talk about

how they're defined and how they would be enforced. >> thank you, mr. chairman. >> the time of the gentleman has expired. the chair recognizes now the gentleman from indiana, mr. sharp. and then the gentleman from california, mr. moorhead. >> thank you, very much, mr. chairman. mrs. clinton, you and your task force are to be highly complimented for reaching out, learning and the rigor with which you have put together these proposals, and what everyone agrees is one of the most complicated and the most profoundly perm issue that we have ever had in the united states congress. and as the president and the vice president and the congress and others try to reinvent government, we all have your model to follow for quality work, which is what the american people want from the taxpayers. and i think are unquestionably getting. i must say too, i think that leadership has put us into a position that we can truly do something about this issue. but i think the onus is now on

us to follow that example, do the same kind of thorough, rigorous work. and most importantly, consult with our people back home. and you and the president have again led in this in a critical way, because the lesson we learned from catastrophic health insurance was, with a democratic president and democratic congress, we repealed the act one year later. and the reason we did that is because of the massive failure in this country to bring into the process the very people who would receive the services and have to pay the bill. and they were extremely confused and extremely upset as a result of that exclusion. so to make this work, it is incumbent upon all of us to make a part of the process those people. i certainly applaud and support the broad goals that you and the president voluntary outlined. we must provide health security for our people. all of us have had hundreds of conversations with people who

thought they were in good financial straits only to find that their families were tortured and tormented by the absence of coverage or the loss of insurance. and i'll be submitting and talking with you and your task force about the circumstances -- of very specific individuals here in our office, how their business will be affected, because we have to examine it through their eyes as we judge this. but there are broader systems questions that have been asked here, and we'll be asking about how the system will work, the incentive structure. and let me just put to you very quickly one of the questions that will come up that there's been a lot of quick criticism by people that i don't know how they could have possibly analyzed the proposal. but quick criticism. and it's the question of bureaucratization. and that is whether or not with the plans, the health alliances, the national board, we simply will be adding new layers of bureaucracy that might restrict individual choice or doctor choice or what not in the process, when clearly one of your goals and the president's is simplification.

could you comment on that? >> yes, congressman. of course, we think this will simplify and debureaucratize, if that such a word, the system. because we are doing two things. we are eliminating a lot of the micro management and overregulation that comes from both the public and the private insurance systems right now. the health alliances, as we envision them, are to be the conduits for premiums that will be paid into them, and then health plans will bid for the business by putting out their services and each of us individually will choose. so that the way it would work is, under our plan, most americans, as they are now, would have their premiums paid from their employment. the employer's contribution and the employee's contribution would go into the health alliance. and then accountable health plans would come, much as the federal employee health benefits plan works now, with brochures

and presentation, so that each of us individually would then choose the plan that we thought was best for us. we don't envision much bureaucracy attached to that. we believe that every qualified health plan should be permitted to compete for my premium dollar. and we don't envision the alliance eliminating any health plan, so as long as it is qualified. the national health board is a feature that is found in both the senate republicans' approach, as well as the president's, because we believe there needs to be some place where a lot of the decisions about benefits, how they're actually defined in individual cases, when a treatment moves from being experimental to clinically provable. those kinds of decisions need to be taken out of this body. they need to be taken out of politics. and that's one of the rule -- the roles we see for the national board, as does the

senate republican version. and, again, we don't anticipate a lot of extra bureaucracy or extra staff needed, because there will be a lot of the staff already in place in hhl -- hhs and elsewhere in the government that will be reporting to this board, and the board will be kind of acting like a board of directors to be making decisions that will then be implemented by the rest of the government. >> thank you. the time of the gentleman has expired. the chair recognizes now the gentleman from california, mr. moorhead. five minutes. >> thank you, mr. chairman. mrs. clinton, you have certainly been generous of your time over the last few months, coming to the congress. i don't know of any witness that's come to us and to as many different groups on the hill as often as you have done. so some of these questions i'm sure that you've been asked before. but the question that is coming up time and time again, on the

radio, on television, press, is the financing. i know you've been asked similar questions before. but there was one broadcast are this morning, charles osgood said if you would spend $300 billion more in the next ten years and still be able to cut $400 billion out of it, he has a car that will run only on water that he'll be happy to sell you. and that's the kind of sale you have to be able to make. because the public is very, very concerned about that particular issue. i was particularly struck by the comments recently made in a radio interview by a well-known liberal economist, henry a ron of the brookings institute. he expressed concern of the stricken jebt restrictions on health care spending and what they would mean in the real world. particularly at a time when new technologies are becoming more and more expensive and the number of very old americans is dramatically rising.

he drew what i thought was a very down to earth analogy between these spending limits and a family and a family budget. he said, if you and your spouse have ten children and your family budget's growing very rapidly because you're having more children and because the con suchgs of each child is rising, you're planning on having more children but you're told that your budget cannot grow at all. what are you going to do? we know that you're spending on the children's going to have to dramatically decline. in terms of the health care system, he believes these budget limits mean fewer diagnostic services, fewer therapeutic services. he states that the real question is whether a sufficient quantity of the services physicians now provide patients are just purely wasteful and unnecessary and can be done away with with absolutely no loss in health benefits. could you please comment on

this? >> yes, i would be pleased to, mr. moorehead. i would just ask that the comment tayors and others look at examples in our country that are doing exactly what we think should be done on the national level. for example, if you look at mayo clinic. mayo clinic has one of the finest reputations in the world. it has kept its cost increases for last year below 4%. that's inflation plus a very little bit at 3.89%. if you look at the very large california pension and retirement system it has kept its increases for the last two years even below that. if you look at rauchester, new york, which has a number of large employers and a dominant insurer in that community, they have kept their costs down. if you look at the state of hawaii, which insures nearly

everyone through an employer-employee system they have kept their cost increases and the total amount they spend on a per capita basis for health care far below the rest of the country. i could go on and on because there are many isolated examples. if you look at the medicare system, you can see that in many communities that are relatively close together, like if you compare new haven, connecticut, and boston, massachusetts, a medicare recipient in new haven, costs the federal government about one-half of what a medicare recipient in boston costs with no disearnable difference many the quality of care. there are so many examples in both our medicare and medicaid systems and in our private system which show conclusively if we better organize how we deliver health care, if we are smarter about making the decisions that should be made, if we eliminate the unnecessary tests and procedures that too

often drive up the cost. that is a very large amount of money that can be better alindicated. one of the things that has struck me repeated is the difference between the people who are commentators inside washington and the people who run health care plans hospitals. this can be done because we have been doing it without any kind of help and what we would like is for the rest of the country to get in and get it done right. i am very confident that the kind of proposals because i have literally visited and talked with people who have done exactly what we are proposing.

>> the chair recognizes now the gentleman from oklahoma for five minutes. >> thank you, mr. chairman. >> miss clinton building upon what's right in america's health care system and correcting what's wrong is a message that i think oklahomians and americans have embraced overwhelmingly. but there are unique problems in rural oklahoma and rural america. there are three characteristings. one they're older, secondly they're poor. and finally they have the least leverage of anyone in the health care system to negotiate with providers as well as insurers. they fear that we won't be able to reverse the trends of dee tieruation of health care in the future with this planned a they fear they will be left behind and become second class citizens. describe for us the thinking of the task force with with respect to rural health care and how it will better serve rural america.

>> i don't think the president and i could go home to arkansas next door to arkansas if we had not paid attention to rural health care. everything you have said is absolutely right. in fact, a much higher proportion of rural residents are uninsured than urban residents. so we not only have the poverty, but we have less of a capacity for rural residents being able to get care. so we want to do a number of things which we think will improve access to care. and we have tried to strike the right balance between creating some kind of market in rural america, which is very difficult. that is one of the real challenges because there aren't that many providers who are willing to compete for the rural health care dollar. and creating an environment through some government assisted programs to create good health care facilities and providers in rural areas.

first of all, we think the fact that everyone would be insured will be a very big improvement in rural areas because if we can begin to provide a stable funding base, so it's not just the medicare and medicaid programs out there, but also the uninsured who now have funding streams that we will begin a create a marketplace. it won't be as big as you know, in some of the small towns in oklahoma as it will be in tulsa or oklahoma city, but there will be incentives for providers now to offer care where before there weren't. we also believe that by creating alliance areas that will cover both urban and rural populations. that the health care providers who want to compete for the urban dollar will also then feel compelled to compete for the rural dollar and they will provide opportunities for rural providers and hospitals to become part of networks. so that we will have connections between rural providers and urban providers we've never had

before. i've seen that already happening where some large hospitals in the state of minnesota, for example, or some of the large providers there are now making linkages and providing contracts with rural providers. secondly, we want to encourage more physicians and nurses to practice in rural areas. and we want to do that through increasing the opportunities for them to pay back their loans and for having loan forgiveness if they will go into rural areas. thirdly, we want to improve the technology between rural areas and urban medical care. i've seen some extraordinary examples of that where we now have some programs in an experimental stage where you can be 400 miles from the medical school in a state like texas out in west texas and you literally can hold up an x-ray to a screen which then can be read in the medical school 400 miles away so that the specialists can be right there on the spot helping the rural hospital or the rural

physician take care of that patient. and finally, i would say that part of what we believe is necessary is identifying community hospitals and clinics, community health centers as essential providers. because we know that during this transition, unless we protect the providers and hospitals that are already in rural areas, they may go out of business and there may not be anybody there to take their place. so we have some funds targeted to keep them going so that they can be there when the urban hospital and the network of providers wants to contract with somebody so that we'll have that essential service available in rural areas. i just think it's so important because i've visited as you have in so many rural communities that are getting less and less medical care than they used to have. ten or 15 years ago they maybe would have a doctor or hospital and now hay don't anymore. what we want to do is to create

the environment in which they will again. >> thank you. >> on monday, the supreme court starts three days of hearings on the constitutionality of the new health care law. hear are the oral argument for yourself in its entirety as the court releases audio at around 1:00 p.m. eastern each day with coverage on c-span 3 and c-span radio and at cspan.org listen and add your comments. our coverage starts monday morning live on c span with washington journal and continues through the day from the supreme court and then the oral argument on c-span 3. >> this weekend on the presidency on american history tv. >> think of the fdr memorial. it wasn't just three redesigns it was three plus designs before they got to a final -- final plan. and so i think that we shouldn't be afraid of looking at this issue because we are building something for the