colleagues. we go -- oh, will it ever be the same? but i have great admiration for the system. the system works. it gives us the opportunity to make sure it is works the right way so the new justice will be able to take some instruction from our example if we are doing its the right way. and i'm sure our new justice can always ask the question -- well, what are you doing this for? and then we have to think about whether or not we should continue to do it. >> hear from other justices during supreme court week as c-span looks at the home to america's highest court. starting october 4th. now a house hearing on regulating the bottled water industry. we'll hear about the differences and differences between bottled washington and tap water. bob stupak chairs the house commerce subcommittee on oversight and investigations.

this is two hours. . today's hearing on bottled water hits close to home. my district contains more shoreline and any of the congressional district except alaska. we have a keen ordinance of

water quality issues. michigan is home to a large water bottling facility that has not been without controversy over the years in 2008, americans consumed 8.6 gallons of bottled water. it is a billion dollar a year industry, with sales of more than 83% this decade. many americans believe that the water they drink from the bottle is healthier than the water that comes from the bosses. the foundation found that nearly 56% of bottle water drinkers site health and safety as a primary reason they choose it over tap water. americans are willing to pay top dollar for bottled water, which cost 1900 times more than tap water and uses 2000 times more energy to produce and deliver. bottled water has been recalled over the past several years due to contamination by our sncc, cleaning compounds, mold, and

bacteria. in april, a junior high was sickened after drinking bottled water from the been the machine. consumers may not realize, but many of the regulations that apply to tap water do not apply to companies that produce bottled water. i would like to put up a chart to outline some of these differences. for example, municipal tap water suppliers are required to other consumers within 24 hours if they find dangerous contaminant that exceed federal levels. this is not apply to bottled water companies. laboratories must be used to test tap water better certified. bottled water has no similar requirement. tap water suppliers to provide their consumers with annual consumer reports that detail the sources of the water, any contamination found, because of contamination, and any health

effects. bottle water distributors are not required to provide reports to consumers. instead, bottled water consumers relied on limited information on labels or on company web site. some companies exacerbate this problem by exacting claims about the health benefit of their product. for example, poland springs explains the history of its water by saying of a joke when joseph was revised from his death by drinking the springs water and lit another 52 years, the water benefits became legendary." now valley water provides similar council stating, " hospitals demonstrated improvements in the health of patients offering -- suffering from kidney disorders and rheumatism as a result of drinking mountain valley water."

been the claims that aqua mantra use the design of the level to affect the molecular structure of the water. today we will hear questions why the regulations governing bottled water are weaker than those governing tap water as well as widespread public perception of of of water is healthier than water from the tap. the first is a report by the government office that was requested by her former colleagues. in this report, they examines whether authorities are adequately insuring the safety of bottled water and the accuracy of claims regarding the benefit. a second report is by the informant working group, which

conducted an 18th month survey of bottled water labels and website and concluded that just two of the 180 bottled water companies survey provided consumers with information on the source of their water, the manner it is treated, and any contaminants found. the subcommittee is sending today a dozen companies letters requesting information on the source of their water, their treatment methods and results of their contaminant testing for the past two years. even water is treated and then bottled, there still may be questioned about contaminants such as pharmaceuticals that may be present in the water. in bern to working group's report >> that 20 -- an environmental working group reports that they are drawing from supplies that contain 206 pollutants.

drugs found in samples across the country -- officials in philadelphia discovered 56 pharmaceuticals or byproducts in treated drinking water. anti-aids i.t. medications were found in drinking water -- and i anxiety medications were found in drinking water. -- anmtnti-anxiety medications were found in drinking water. i am proud to be the original cosponsor of the food and 60 act of 2009 which passed out of this committee last month that provides fda with much needed

authority to assess the testing records of food and water suppliers i look forward to these hearings. i ask for unanimous consent that report issued today be entered into the official record without objection, they will be entered in objection -- into the record f. >> thank you. we are home to a number of water bottlers. [unintelligible] these businesses are in many cases providing much needed job opportunities in areas of organ that had been hit by the weak economy. our unemployment rate is second only to yours in michigan. this raises some ballot questions in the regulations

between the epa and the food and drug administration regarding bottled water. with all the life-threatening priorities facing the fda including complications with the system and then -- acetaminophen, this does seem a little lower priority was. there are two reports of the focus of the hearing a point of a few noteworthy findings but cannot assess the safety of the bottled water itself. knighted the government accountability office nor the of our mental group conducted any testing of the bottled water for the bottles themselves while completing their report. the regulations to differ from those on tap water. bottled water is considered a food product. it is regulated by the fda. tap water is regulated by the

firm into protection agency. fda does require that the standards of quality for bottled water must be no less protective of public health than the epa's standard. they must follow good manufacturing practices. they require more safeguards in water bottlers and other food processors. under these good practices, and they must test their source of water once a week for microbiological contaminants and test finished bottle of water weekly for a biological contaminant. some of the water bottlers in my district follow a practice of testing the water every hour. the they are doing our early water testing for do i do have a few questions. -- so, they are doing early --

our leave water testing. i do have a few questions bur. the fda has yet to establish a standard for this contaminant even though the ap did over a decade ago. they are examining the contaminations. i want to ask the commissioner when can we expect a ruling from your agency? the next question is about recycled bottles themselves. i have had some tommy that the use of recycled bottles perhaps produces more leaching or what ever it is that comes out of the plastic. i'll be curious to know if that is the case. inspections are one way they make sure the bottlers are following regulations.

i would be curious to know if the legislation passed unanimously that expand at the's expansion process, if it would apply in these cases and you will get new authority at the house and senate. i would like to hear from the deputy commissioner as well on how the agency approves the inspection process and if you need new authority. we need to know exactly what the agency needs and what. but lawyers are not required to disclose the source of their water for the treatment process used. should they? i look forward to your response on that. i will conclude by thanking you for this hearing. i would also like to raise the issue that july 8 is come and gone. a number of us on this side of the al reyes question regarding bottled science. we expect the epa to respond to or increase -- to our inquiries

and why his report was not allowed to be considered if the epa is unwilling to respond in a timely manner i do hope that our request to have an oversight hearing on what appears to be the bustling of of science will be granted. we will be coming back to you on that issue. i thank you for your time. >> opening statement? >> i want to thank our witnesses for being with us today. as you have heard, we are all concerned about bottled water. we are concerned about tap water and the work the epa does. i will submit a written statement. i want to take my time to say i would prefer that we be spending

this time to look at other issues that are important to our constituents that the fda and epa deal with. there are other committee issues that we could be looking at such as the options for reducing health-care costs for our constituents. and looking at how you did that through patient driven health care. we should be looking at the medicare trust fund and the pressures that are on that trust fund. the ballooning costs of medicaid if we move to a public auction -- option or even the lesson that should have been learned from other care which is hillary clinton health care in 1994. my state still has this. it is the greatest help failure in the country. that would be a great opportunity for us to look at what is affecting us.

there are certainly more pressing issues. we are appreciative of your time. well we are all concerned with bleaching chemicals that come from plastic and bottled water, we are very concerned with what we see as sequestering evidence from epa employees. we are concerned with what we see in health care issues that are affecting all our constituents there is a lack of willingness to address those in a patient centered, consumer driven manner. i yield back my time. >> let me just respond. we had a hearing before we broke here. company's recent health care to people who have it. next week is scheduled all week for the healthcare markup the bill. i'm sure we will have plenty of opportunities to speak of health

care. people in congress could likely have never have seen what medicare would become in terms of price. would you maybe in better shape today bit more care was taken back in 1965? the object lesson is of we need to take good care and exercise as we structure this major fundamental change to american health care for the. we could have had a hearing on medical devices. i have asked for that for some

time. there are ways we could have made use of this time today. here are. we are gonna talk about what killed water. that is important. normally i have a bottle of water so if i get parched -- but now we are stuck with in d.c. water. there used to be a sign that said do not drink the tap water. i do know if that is changed. a pretty broad definition of food would be one that included bottled water. this is a $11 billion industry. the average american consumer is unlikely to think the fda would be the primary regulator, but it is the response is split between the environmental agency and the food and drug cosmetic act.

as much as i appreciate collegiality and willingness to appear here today, it does seem odd to only have the fda here to answer tough questions and not have the environmental protection agency to answer questions that will fall in their jurisdiction. currently bottle water requires a higher threshold of testing. bottled water is currently one of the few standalone industries with its own code of federal regulations regarding good manufacturing processes.

the state and local governments ensure the safety and sanitation the quality of water. this industry has existed in a compliance oriented manufacturing system, rarely practicing bad things. they created a product that had an unquenchable need for convenient and transportable water. the good idea has been met with a significant market. we must ensure that the trust and faith that consumers places bottled water are not misguided. more americans drink bottled water than milk and beer combined. if there is any step in this process to deliver this for the trust and faith is myth allocated, of afford to having this science point to a solution. any deficiency and potential fraud and any environmental

issues -- and the transportation costs -- we will certainly look forward to seeing what is sure to be proof. thank you for your indulgence. >> i did not want you to get parched. on the health subcommittee, we did hold a hearing on medical devices last month. those hearings are being taken. >> i will submit the report part of that as not being done to my satisfaction. at a visibility program place to have that. we also have the whole question of by some lawyers out there. -- biodiesels killers out there. there is steps we could be doing. >> absolutely. this committee has been very active for the past two years we hold any hearings.

it dovetails what we have been doing for the last couple of years. all that is contained in this hearing. it is not just bottled water and false advertising. this is what this is about it wraps it will we have been doing for the last few years. mr. barton. >> thank you. before i give my prepared statement, let me say how much i personally appreciate you. do not take what i'm about to say to personally. i think it does say something, given the serious issue which you have traditionally tackled as your subcommittee chairmanship that today's

hearing does not rank at the top of that list. it shows how much support you have. they may all be here, but they are disguised as empty chairs. >> most of the committee is down in consumer protection. that is why we started late because i am also on the committee. >> i will take over if you want to go down there. >> can we have a vote on that? today's hearing does have several interesting questions between bottled water and tap water. these differences arise and approaches as well as in process and treatment. several witnesses will discuss the possibly debate ways in which bottled water regulations should be change and possibly improve. other witnesses will discuss how

the industry can be more transparent and response. i do not have a problem with transparency. i am pushing transparency in the upcoming health care debate. i am certainly pushing transparency in the affirmative protection agency or we have as the epa to release the documents concerning their suppression of the epa report within its own agency debating whether there really is an endangerment finding with regard to co2. those of us on the minority are concerned whether this particular hearing is the best use of our limited oversight hearing time. we have confronted the issue of swine flu pandemic. we have confronted safety products like tylenol. this one does not seem to be up to that standard of excellence which you have established. i hope that after this hearing

he will consider supporting mr. walden and myself on getting information about the epa's suppression of the carving gate document regarding the cdt -- co2. i talk to but doing more hearings and action items on the automobile closure issue. i know that is important to you personally. we will wait for your response. mr. chairman, we always appreciate when you hold a hearing. we always participate. we are looking forward to going on to a little more intense issues in the future. thank you for holding this hearing. we are having this hearing because maybe we assume because it is in a bottle like this that is healthy and it is clean and pure.

that is an assumption we erroneously are making. we are doing a hearing to try to get to the issues here. i do not think we have to wait to an outbreak of acquiescing the salmonella lester. we cannot say there is your risk. between 2002 and 2008 there were 23 recalls a bottled water. that is about one every quarter. most was from arsenic and remic. both cause cancer. the fda issued three letters for violating regulations. that is a relation to other problem is found. in 2007, the fda issued a press release against drinking mineral water from our yemenia, because the arson that level was the the times greater than the federal standard. last month in southern

california, we have girls sit at a high school for buying bottled water out of a vending machine. this is the problem the we have recovered. willie have to 3 employees devoted to. just because it comes in the bottle we assume it is healthier for us. we find that is not the case. all the the hearings we have done this year on salmonella -- we have a lot going on. cuts just to point. i did not mention, but i know that water is an ingredient in many other drinks. just because it is clear, how is that treated verses of it is colored injured -- colored and sugared and perhaps carbonated? are there different standards?

the junior high students -- might understand is that the fbi may be involved and it may be more of a tampering issue. is that correct? what they are involved. no one has reached a conclusion. >> i was not tried to jump to a conclusion. i understand. we have our first panel of witnesses. we have the director of national resources prepar. we have the principal deputy commissioner at the u.s. food drug administration. we have the senior vice president for research of an arm into working to. -- working group. is the policy to take all testimony under oath. please be advised to have the right to be advised by counsel during your testimony.

do you wish to be represented by counsel? >> no. >> know. >> no. >> know. >> do you swear the testimony they you are about to give it the whole truth and nothing but the truth? let the record reflect witnesses have complied to the affirmative. you are now under oath. we would hear five minute opening statement -- we will hear find an opening statement. >> thank you. i am pleased to be here to discuss the quality and safety of bottled water. over the past decade, the consumption in the u.s. has more than doubled up to 29.3 gallons per person in 2007.

that is over 200 bottles a year for every man, woman, and child. with this increase comes several questions and concerns over the quality and safety. my testimony is based on the report we are issuing today. it will be publicly released. we found the fda consumer protections are less stringent for bottled water and then tap water. what the standards for bottled water generally mirror it for all regulations, there is one notable exception. it is a plasticizer used to stop them -- to stop them plaster. it has been regulated by the epa since 1992. fda deferred action in 1996 and has yet to adopt the standard.

because it is used in food packaging as well as bottles of water, this is a broader issue that the fda is still sitting. our report recommends the fda promulgate the standard of off the water. we have found that fda does not have a statutory authority to require bottlers to use certified laboratories for water quality tests or their test results, even if violations are found. several states have requirements but they are less comprehensive than tap water. while labelling required for similar -- they provide consumers with far less information about the sores and quality of water and what epa requires a public water systems. public water systems was an

early provide consumer confidence reports that summarize information about the sources, contaminants, and compliance with chinking water regulations as well as information of searching contaminants. fda does not require companies to provide similar informational. in a steady in 1996, fda concluded that it was feasible for the industry to provide the same type of an from asian consumers the public water systems must provide. they were not required to act on findings. 50 states showed that consumers have misconceptions about bottled water, leaving it is healthier and safer. we found a comparable to what public water systems are required to provide. it is available for a small percentage of a bottle labels.

we believe that consumers would benefit from better information on the quality and safety of bottled water. in examining the effects of bottled water, we found that only 25% of bottles are recycled. the remaining percentage are discarded in landfills where they never decompose and remain for ever. while this -- it represents less than 1% of the municipal waste. another issue is the amount of energy used to transport bottled water. the energy used at five. a maguey joules per liter. [unintelligible] it is 1000 times the energy used per -- compared to tap water.

michigan and other states have passed laws to minimize the impact of stream levels. i would note that some of our findings are indicative of the overall food safety problems the lead to it being a high risk area in 2007 and 2009. he called for a fundamental re- examination. we believe that the lack of authority to regulate bottle water should be part of the re- examination. that concludes my summer. i will be happy to answer questions at an appropriate time. >> thank you. >> you might want to pull the microphone up a little more. >> thank you. i appreciate if he finished with exactly two seconds left. i've never seen that before.

i'm the principles of the commissioner of the fda. i want to thank the committee for your work on a wide range of health issues and for the opportunity to discuss the regulations of bottled water. as has been mentioned, but the water and tap water are regulated by two separate agencies. the epa regulates tap water. epa has regulations on production, and this tradition and -- and reporting requirements. fda has for the jury of 30 over food and bottled water is a part of that. manufacturers are responsible for producing safe, wholesome, and truthfully labeled food products. it is a violation of a lot to introduce misbranded products.

fda has established specific regulations for bottled water. these regulations include standard identity regulations that define different types of bottled water like spring purchase mineral. -- spring verses mineral. fda has established a good manufacturing practices. labeling for food also applies for bottled water. fda has established standards for more than 90 contaminant and in some cases such for letter copper come and get day limits are structure for bottled water than municipal water. -- are stricter for bottled water the municipal water. the way of testing it different. any test that is done on fda

regulated water -- for municipal water, and is only a percentage of the sample is above the certain level. they are allowed to have certain the years and not have it as a failure. it just illustrates that there is a different approach that is taken in context. inspections occur approximately once every 1-3 years. the agency inspects firms more frequently. the field offices follow up on a complaint and other leads. as for other types of food, they periodically collects water and foreign bottled water.

they may test the water for chemical contamination. the fda has promulgated in number quality standards for the u.s. for the of is a role there require they have -- that a test source water and the finished product. they are requiring that before it bottler can use it, the bottler must take measures to rectify or eliminate the cause of the problem. the much -- they must keep records of such actions for th. the fda is aware of the j zero reports and how there are a number of issues that they face. [unintelligible]

let me address some of the issues. while i do believe that the of the oversight has been successful. i believe there is room for improvement. they found at the has not set a standard for the -- for a few ingredients. time did not pursue this legal issue. where now revisiting the decision and intends to pursue a standard as anticipated under the law. they found that the labeling regulations for bottled water provided less information about the quality of water the more required. the fda has found that it would be feasible for manufacturers to provide such information to consumers. the fda act does not provide a mechanism to require bottlers to make that information available. congress would have to take

additional action. their concern the fda cannot require the submission of results to the agency. this is a fair idea. it is part of the oversight of water and food in general that should be strengthened. it would be strengthened by the safety administration. they pointed out that the day does not have the authority to mandate the use of certified laboratories. this is a reasonable idea. the fda does require methods that are of these as sensitive as their method. i would also mention that the food safety legislation provides preventive controls that will complement the practices for facilities and a generally shrink in it.

been we will continue to work with the committee on legislation, which we think it is very important. i am pleased to be here. >> would you pull the microphone over? >> i and the senior vice president for research and environmental working groups. where a nonprofit organization. thank you for holding this hearing. we are releasing an 18 month survey of labels and website for 180 bottled water companies. consumers spent about 1900 times more for bottled water than tap water. the often have no essential facts about what is actually in the bottle. only two of 180 water's are

made public. these are the specific name rings, purification methods and things remain in the water after treatment. i enjoy a regulatory holiday with near complete latitude and where to send information. everyone in the nation's 52,000 municipal water suppliers produce an annual water quality report, giving results as required under the safe drinking act. the consumer have the right to know about water quality. it is unfair to consumers who have a right to know the water -- to know what is in the water

they buy. many buy because they are worried about the safety the tap water. they believe it is free of contaminants. into many cases, they have no way to check if that is what they are actually getting. our survey found that 30% of the water finds no information about the water source on the label. 37 term fully divulge them. the remaining 33% bid to merrick -- give generic affirmation. look at your package. this is a brand that is doing the right thing. it is great value. it is a smaller brands. it is distributed by walmart prada you can see the source on the level. you know exactly where it comes from. you also see the treatment method, reverse osmosis.

on this label you will see the product is pure and it is crisp and has a fresh taste. nowhere will you find the source of that water. the sunny is one of 30% of the brand not giving any information. how was bottled water purified? companies and not required to disclose what if any methods are used to purify it. the fun of 44% provides no treatment on a level. -- we found the 44% provide no information on treatment. ozark is doing the right thing. in the water comes from houston municipal water supply. it is further treated by reverse osmosis, carbon filtration and

micro filtration. let me read what you'll find on a few key label. the purest water comes from the paris club. our rainfall is purified by trade winds as it travels across the pacific ocean to the filing -- to the island of fiji. that is one of the companies that claim purity but do not say how they purify it. every top water utility publishes a report listing group port for the year. corn 18% of bottled waters to the same. -- only 18% of bottled waters do the same. consumers are left with marketing claims. you have heard poland springs -- mountain valley became a

remedy for it out. and beyond claims the water is a symbol of health and general well-being -. [unintelligible] path when you pay a premium for bottled water, you deserve more. we recommend labels and websites disclose the same information that the law requires the municipal utilities and that this be mandatory. consumers have a right to know where their bottled water comes from and the pollutants that it contains. thank you for your time. >> thank you. co[inaudible] >bottled water -- [inaudible]

[nno microphone]

>> to update the food safety laws. we support a risk based inspection system that will require inspections every six months-three years. a requirement to have a hazard analysis. all members are aged this as a condition of membership. granting fda a 32 mandate to recall. we support consumers to have correct information.

all packaged food and beverages are subject to extensive fda labeling requirements that provide consumers with credit quality of commission. for two all bottled water products included phone number on the label that consumers can use to contact the company. we contingent fda in 2001 to require all bottled water labels to include a phone number on the cable. we believe that the most feasible way for consumers to obtain information not already on the label is to send a request to the bottle. consumers can go to the website to obtain contact information or want to quality information for all brands. consumers have many options in choosing which brand to drink. if a company does not provide them with the and permission they want, they can choose another brand of bottled water. that is not the case with tap water. consumers cannot choose which system is piped in their homes. that is the fundamental issue,

consumer choice. many people want this to be bottled water versus tap water issue. the people of drinking water, that is a good thing. consumers should be free to choose. setting pfizer rep consumers to drink bottled water also drink tap water. with the increase in diabetes and heart disease and united states, any actions that would discourage consumers from drinking water are not in the public interest. companies have always responded to the need for clean and safe drinking water after natural disasters such as hurricanes and floods. the bottled water industry cannot exist only for disaster response. the majority of companies in the united states are primarily family owned and operated small businesses that depend on a viable commercial market to

provide the resources necessary to respond in emergency situations. 90% of our members have sales of less than $10 million a year. bottled water is a safe and healthy product that is comprehensively regulated at the federal and state level. we stand ready to assist the level. thank you for considering our issues. >> we will start with questions. thank you for your comments. is it true that 80% of the water bottlers are part of your organization? >> i would say we probably represent 75% of the actual facilities. >> is coca-cola or dasani? >> and not dasani.

>> coke, pepsi, and nestle are the largest companies. to the three are not part of your organization. your standards which crack many the thing we recommend, that is voluntary standards. he tried to have your members comply? >> we have always tried to have the highest possible safety. we have a mandatory requirement for our members. if they do the meet the standards committee cannot be a member. >> do you do anything on the advertising and? >> that is not an issue we deal with. that is a case by case situation. region and do anything in that regard.

>> they inherently penetrate the molecular structure of the water. you do not condone any of that? >> we do not do with advertising issues. that will be led to the state and federal authorities. >> the company went on to say that they consulted with a doctor who wrote a book called "hidden messages in water." the company said he should is the basic principles of quantum theory were the molecular structure was a change by monks thought. he uses the design on a flyball to affect the molecular structure of california natural spring water to make it more refreshing and wholesome. is there any water study that a azaan among the can change the molecular structure? >> i cannot speak to what the company has come for them to do not know that there remember.

-- for them. i do not know if they are a member. >> have you seen anything quite like this? the thing that should be part of a labeling of water? >zen monks thoughts can change the structure of water? >> i would be highly skeptical. >> we have seen these are like fantastic claims -- are the legal? can they do that underneath your misbranding were false advertising? >> we will definitely look into this. in general, misbranding pertaining to whether people are claiming to treat disease. that is the big one. that is where we put a priority. if they say this tors cancer, then people may not --

>> like the man who had and recklessly recovery and it was good for his liver and kidney. >> the one with the historical fable -- the other one where you said used in clinical studies -- that one we would like to see. that strikes me as pretty worth our evaluated. i think that would definitely fall into that. but how but the other one, and the makers of 820 -- h2-ohm. they play music in charge the water with vibrating frequency. would that be ms. advertising? >> i was still expressed skepticism. i think that -- this is about

things that -- we focus on things that will pose a public health threat. the issue of whether it treat kidney or liver disease really does raise that issue. >> when my one of but this back on the board. different reports talk about the regulations. the bottlers discovered dangerous contaminant. they do not have to other the public. but lawyers to not have to use certified labs. -- water bottlers and do not have to use certified love this. -- certified labs. looking at this, their claims

are not too outrageous. it is in hand with minerals for a fresh taste that cannot be beat. finnicking go to the website. -- then you can go to the website. it is bottled by ctda waters, llc, wilson bird pennsylvania. then they have cp #992nv07354ny hsd173 - ct --with at the connecticut? nv --with that the nevada? it is not a thing about sources. you do not know where it came from. >> i cannot decipher that for you.

>> can you help on this? >> i cannot say for sure. i'm not familiar the brand. and may be that all the states require the food registered. all food products and to have those registration information on the bottles. >> you have to figure out your lot number to figure out where it came from bur. the consumer has no way of knowing. this is one of the big bottlers. >> again, i can only speculate that is what is referring to. >> thank you very much. just like any food product regulated, dangerous contaminants are in the bottled water and then it will be

considered adulterated. it violates the law that it is sold to consumers. >> people can go to jail if they do it. >> if we are worried about some of these claims on the label, isn't that really under the jurisdiction of the ftc? >> i will have to get back to you on that. i do know i can answer that. i do think we have certain jurisdiction their progress i re. >> i would assume. it to be helpful if they were here today. >> one thing we might want to mention, in a couple of months but the a's went to launch a food registry that was part of legislation. when that happens, we are

anticipating september, companies will have to notify fda there is product release that could pose the risk to health. some of the gap will be filled by that. we really think that the passage of the safety of regulation makes it close.

returns from its recess is shailagh murray. thanks for joining us. that committee is one of the five senate and house committees working on the health care bill. we start off by giving our audience an overall picture on where we stand as congress gets set to return. >> four of those five committees have acted at this point. there are three committees with jurisdiction over health care and in the senate there are two.

the finance committee is the only one that has not completed its portion of that particular bill. reason being that health care encompasses so many different policy areas and finance, it oversees the taxing, medicare, medicaid portions of the bill. whenever there is money involved it takes longer. it is tougher to find consensus, but the health committee bill we will talk about has most of the policy. wellness prevention, a new framework for how people can buy health insurance and also guidelines for how to subsidize it. in the house, the three committees have acted. it was pretty ugly at the end getting it through the final

committee. house leaders will wait and see what happens before they moved that bill to the floor. they will have to rewrite the bill before it gets to the floor because of changes that were made. while health care reform is farther along than it has been in a generation come it is -- farther than it has been in a generation, it is just a big bill. >> we will focus on the senate health committee version. we touched on a couple of bullet points. what else is notable about this bill? >> the health committee's bill is the most straightforward, because it outlines -- a lot of folks don't understand the scope of this legislation. the health committee bill and a series of titles out lines how employers are going to be

penalized for not providing -- what size companies will have to provide coverage? what happens to employees if they do not? this will establish an individual mandate requiring people to buy health insurance. the finance committee has to create the mechanism for doing that but the health committee sets forward the policy. there are provisions on how to encourage and create incentives to get people to do the check ups and detect diseases like diabetes, which have set such enormous public health costs -- which have such enormous public health costs. a key to lowering health-care costs long term, which is the underlying goal, is to get a handle on these diseases and try to intervene with them before

they become explosive cost issues. >> you have two different committees on the senate side working on their versions. tell us about the process. once the finance version is finalized what is the next step? >> the finance bill has to emerge from the committee mid september. at that point, senate majority leader harry reid said he will create a committee or group of individuals to combine these two bills in order to put them on the senate floor. that is a process we usually associate with the end of the legislative process, but you cannot put both these bills on the floor and let the senate worked its will. >> that opening video was notable because senator dodd was in the chair for senator

kennedy. what has senator dodd -- what are his plans? >> we expect him to become the chairman of that committee. he has not indicated his preference at this point. he could remain chairman of the banking committee if he wants, but he has the seniority to take over that committee. he was very close to senator kennedy, and this week senator reid tipped where senator dodd was leading when -- where he was leaning when he thought he would become chairman. we don't expect that to happen until after congress returns. >> it has. i think a lot of people see that moment as an opportunity to

reassess this effort in a broad sense. it was distilled down to a lot of flash points over the recess. none of them were central issues to this effort, but i think people will have an opportunity to reconsider the magnitude of this effort. also, the way senator kennedy went about things, which over the course of the career earned him the respect of many of his colleagues, including a lot of republicans. >> one of the flash points was the mention of the worst public plan. in a moment we will show some -- the mention of one of the words public option.

>> it is the centerpiece of this health committee bill. it is the flash point of the debate and yet most people don't understand what it is. it is a government-backed health insurance option that would be offered in all markets in some form that would allow or at least provide a minimum option for people who don't have health coverage to purchase it so that they would not be forced to buy a more expensive private insurance plan. the idea is to introduce a consistent form of competition across these markets. and create some consistency in the way that benefits are is administered and offered so that people know what to expect.

people in montana have the same options as people in new york. that is the idea. to many people it sounds like the government moving further into the the committee passed the bill on a party-line vote. what about that particular element? does it have any republican support? >> not really. a lot of democrats are uncomfortable with the idea. one of the big holdups in the house and big challenge going forward for the house bill will be this public option. >> we will take a look at 20 minutes of debate on the public option from the senate health committee. >> this amendment would strike the public health insurance option as established in section 142 as indonesia -- as

envisioned in need bill. it would not save consumers money. that does not uphold the spirit that the president set out to do health care reform. they all but omitted that in their revised estimate wednesday said that community health insurance option -- when they said the community health insurance option was not projected to have premiums lower than those charged by private insurer plans. what is the point? martin mcclellan noted this auction falls short even of what supporters had envisioned. -- noted this option fall short. they can get lower cost by exerting power of their plans

don't have, or a can go the other way. -- lower-cost by exerting power of their plans don't have. -- other plans don't have. it does not meet the spirits of the president's objective. the reason why proponents don't want to overreach is because they know american people are opposed to a government-run health insurance option. by a 60-31 margin, americans prefer receiving health coverage by private insurers, according to national polls. some may have noted a recent poll indicating wider support of the government option, but that poll was over sampled. i would suggest this is a

confusing array of government controls for the sake of government controls. i think i agree with my colleagues. we need health care reform. it is desperately required for our system to be revamped, but we will not be affected if we think the government can do it and do it better. this is not fair competition. if a referee is also a player in the game that is not about competition. i would urge my colleagues to vote for the amendment and strike the community health insurance often. -- straight the community health insurance option. >> i vigorously oppose the gentleman from north carolina's amendment striking the option to enroll in a public health

insurance plan. it erodes an important principle we're trying to establish, giving consumers more choice for affordable insurance. the public plans that we are advocating is very much in keeping with the principles that the president stated. the health insurance markets, this is what president obama said. the health insurance markets severely lacked competition and ask them to consolidate power over decisions best left to doctors and patients and have a big impact on costs. what the public option will do is provide stability by being in every market, provides insurers to move in and out of market changes, make sure that they

have consistent providers. the public option definitely promotes efficiency. the community health choice bill can achieve growth and fair competition, and also promotes innovation. our current health care system does not deliver value in the private market in the way our system is set up. it will promote it. the public option in the committee, and ordinarily i don't quote newspapers, but i bring to the attention the june 21 article by the "new york times" which calls for a public option. it calls for its because it

talks about how we provide competition, comprehensive coverage and creating a new paradigm that rewards a culture of wellness and prevention, and also promotes innovation in that area. i would hope the gentleman's amendment would be defeated and look forward to other senators who wish to comment. >> madam chairman. >> i just wanted to call attention to this chart we passed out this is taken from a study the american medical association did in 2008 called "competition and health insurance." it goes state-by-state and tries to talk about the market share of the two largest health plans in 2006. it makes the point that in north

carolina, between 7% and 79% of the market share. -- between 70% and 79% of the market share is shared between the two largest health plans. in my state is was between 50% and 69% of the market share that was controlled by two largest health plans. those state-by-state and the point which i take away public n is a way to provide that additional competition and give people an additional choices, as

the chairwoman has said. i would strongly oppose the amendment. >> thank you madame chair. i would like to have my voice in strong opposition to this amendment. i found it very interesting to see that poll which said 72% of votes nationwide would like to see a public option. recently up in oregon i have a town hall in a rural conservative part of the state. many people rose to speak about health care because of some concerns they heard. after a dozen folks had shared their opinion i took a poll of the 120 folks gathered. a handful said they would prefer to have a single option. about 15-20 raised their hands to say they would prefer to have

only private health care options. the balance of 80 people raised their hands to said they would like to have the full set of choices so that they could choose. i think this makes a lot of sense. in oregon, we have a public option in workers' compensation. two decades ago the business community was concerned about the dysfunction in the private insurance market and decided to create a public option in workers' compensation. the result has been an outstanding improvement in the insurance market for workers' compensation in the state of oregon. more efficiency, the competition has produced lower prices. it just kept everybody on their toes. we have these sorts of arrangements for about our society. we have a public option on mail that competes with private

companies that deliver mail. i really think that taking away and options from the citizens to choose a health care plan they think would be better for their family is a huge mistake. it will result in the same runway prices we have right now, the status quo is destroying our nation. we have cost increases per year of 10%. we even had a major insurer had a year over year increase of 26% followed by 14%. can you imagine the number of small businesses with this cost increase that are saying we cannot continue to provide insurance? another piece that is attractive to the public option is there are areas where private insurance companies are not good

at doing. one is prevention and also disease management. they may not have that person as a customer 10 years into the future, so as the public option is structured, there will be influenced by local boards that can provide guidance on how that would work in their particular state. i think that is a very valuable possibility as well, so that states that would like to see more done on prevention, maybe more done in terms of the structure of payments so we have more integrated health-care providers reduce the return rate to hospitals. let's not take away a fundamental opportunity for the citizen to choose the health care plan that best suits their family. >> madame chair.

>> i would yield to the ranking member. i appreciate that. thank you. what we are talking about here is you call it public option and i call it government-backed. i don't think one plan is the answer to more competition. one plan takes away choices. pretty quickly we would have one plant and not two. we see a% of the market stunned by two of the largest health plans, we would have -- we have 80% of the market owned by two of the largest health plans and then we would have just one. we all agreed that a lack of competition is the problem, but don't eliminate lack of competition by doing one company that can have dominance over every other company and put the

rest of them out of business. we have medicare partd. when we started to go into this we said there are only two people in wyoming produce pharmaceuticals. what will i do if wyoming winds up without a provider? one of these solutions was thrown out there was having a program that would be done by the government that would be a backup in case there were not two companies that provided the insurance. we provided a lot of incentives for people to do it and i never had to worry about that because 49 companies wanted the business in wyoming. we went fromtwo to 49. it brought down the prices by 37% before it started. it has been below ever since it started. every time i went around the state and i did a bunch of town

hall meetings to get people to sign up for this. if you don't sign up, then you start paying a penalty. i am pleased that my amin was one of the record states for a signing up, -- i am pleased that wyoming was one of the record states for signing up. their first question was how come i cannot get the drugs i want? how come i can i get the drugs my doctor is prescribing? the program had not started so i said i bet you are a veteran. they would say yes, how did you know? i said the veterans organization is a government-run operation that takes bids. the only way you can do bids on different medications is to say to the producers of the heart medicine that they have to bid against each other. the doctors will say those drugs do something differently.

for my patients one of those is better than the other by one of them ends up with a contract. that one medication is the one that the veterans can get. i had 1000 veterans change from the veteran program to medicare part d so they could get the prescription they wanted. kent conrad suggested a way to increase competition. he talked about co-ops. but he got the idea from the wyoming farmers union who thought that a health co-op would help them. i hope he will take a look at that. that is a way to have more competition in every and even r. that we are able to participate in. that is nationwide but different

states have different requirements, so there is a smoothing technique and the costs are kept down. it needs more fleshing out but it does remind me of a program that i brought up in the senate called small business health plans. the way that that competition worked was businesses could group -- they could group together through their association across state lines and even nationwide. they could get a big enough pool so they could effectively negotiate with their insurance company. ohio has one of the lowest costs. they have enough population that they are able to do these plans without going across state lines. what was the effect? the effect was 37%

administration costs came down to 12%. that is a pretty big saving for any business but especially for a small business. that is what they can achieve by grouping together. that bill came up with the -- it came up in the senate and it got 58 votes. we never got to mn for those, so we never got to solve the problem -- we never got to ammend for those. people were working on something similar for a long time called associated health plans. with this, those organizations could form like a big company does and use derisive rather than other requirements. there was a lot of opposition to that, so that never went anywhere.

but the small business health plans has a lot of potential everywhere, a way to bring down costs, a way to increase competition. you mentioned that in some of these states cannot 50% of the market is by the two largest health plans. i bet that a lot of times the largest part of the market share in any business is held by one or two companies. i would like to reverse that. i think small business is where it is at. i wonder with the general motors' problem what would have happened if we said back in november, we are not going to give you any money. i think we would have had a short-term catastrophe and a long-term solution with many car companies developing out of that. each one trying to find their own niche and competitively

working. it would have been another example of how competition can work. one plan is not the answer to this. we are not adding options, we are taking away our options with a government plan. >> that was debate from a senate health committee. the amendment failed 10-13. shailagh murray, that we heard the senator talk about analysis by the congressional budget office on the public plan. he said it showed implementing that public option would not result in cost savings. >> that is probably the best republican argument against the public plan, that is difficult to illustrate under the terms congress relies on, which is the 10 year window that whoever is trying to pass a bill of this

scope is always unhappy because it never takes into account the variables. the democrats' argument is that a public plan would change the behavior of the insurance industry which would lower health-care costs in the long run and create less costs were the government through medicare and medicaid, and save businesses money and leave it to this economic tipping point, but it is hard to illustrate that. so what republicans are saying is this is a huge risk. we are taking the government further into the health-care business, yet we are not getting anything obvious back. >> just in recent days there was some talk about the cbo looking beyond 10 years and looking 25 years out.

is that going to go anywhere? >> i think a large number of senators in particular pay close attention to these issues, a lot of conservative republicans are just as focused on the deficit and getting government spending costs under control, but they cannot figure out how to change the system without making it look like they are trying to change it to benefit it for themselves, in this case to pass this bill. and some of the policy risks involved in it, too. there is a credible argument to be made that it is so all encompassing that you cannot take a traditional look at it, but they can agree on a non- traditional way of looking at the budget numbers. >> one idea reheard and a lot

more about is cooperatives. what our health care cooperatives? >> those would be modeled on the way that world electricity providers are organized, or the way telephone service used to be provided where you have lack of competition in a marketplace. consumers band together and provide a not-for-profit format service to themselves. these cooperatives would function that way like the bluecross blueshield model originally. that is how that company came into being. that is kind of what the supporters of cooperatives have in mind, but critics say the democrats who prefer the public plan say aren't cooperatives

just as big of a risk? the government would be responsible for these. >> there are democrats who are supporting co-ops, correct? >> that is the finance committee bill that is likely to create a cooperative model as opposed to a public plan, because finance committee members are more conservative and don't like the public plan. >> the public plan was subject to a number of amendments. another was cer. tell us about that. >> that is one of the provisions that scares people because one of the problems with the health care world is that it is an ad hoc. the type of service you get and how a disease is treated depends on what hospital and you end up

at 81 part of the country -- and was part of the country you are in. people have come to rely on that. they have come to see that as choice, and that is a reason the u.s. health-care system is so great and offers such great service, but it is also what is costing the system so much and leading to a lot of deaths and medical mistakes, and is partly what fuels the malpractice problems. competitive -- compared it affected this is a way to look at -- the comparative effectiveness is a way to look at procedures to see what works best and impose those procedures broadly.

disease management is the big bowl -- the big goal is to find ways to manage diseases like diabetes and heart diseases. >> it is not something new. it is happening now. >> exactly, and everyone in the health-care industry wants to become more efficient and safer and make people healthier. >> is this the issue republicans are focusing on and saying this is rationing health care? >> right, and it will take options away from you. if you want to have a c-section , that ought to be your right, even though statistically that is not the best option for you. there is a sense that -- we have a sense that we have all the options in front of us but not all of them are from us.

>> which uses this cer the most? >> the idea would be it would work from the grass roots up. doctors and providers would start to make decisions based on this, and insurance companies, at their policies would reflect those decisions. >> there is 25 minutes of debate from the senate health committee on comparative effectiveness research. >> some of the conversations we have had especially during the round table was the fact that the cer section was to provide research that did not necessarily mandate standards or deny care. if you go to section1-13 -- section 10-13 which passed with bipartisan support, there should

not be any reason to oppose this amendment. what this amendment is designed to do was to not allow somebody besides you and your physician to decide what your care will be. as senator mikulski has correctly noted, i can give you 1 million examples why cer will not work. if we think it will work for any other reason other than to ultimately practice medicine at the federal government or use it as a tool to ration, one of the ways to secure that it will not do that is to adopt this amendment and embraced what happened in 2003 in the medicare modernization act. what this amendment would require that the director for the center of comparative of effectiveness research shall not

mandate any quality health standards. it does not mean they cannot study or recommend, but it means they will not mandate. the reason that is important is a question i raised when we were having a conversation, because if you mandate it and my patient should not be treated that way, you have created a liability for me that will be impossible for me to defend in a court of law because the government says this is the way you treat patients, not what my clinical experience says. it also prohibits cms from making any coverage decisions. that is the current law. it shall include a reference to the prohibition in any recommendations resulting from projects published by the director and any communication activities performed must

reflect the principle that doctors and providers should have the best available evidence upon which to make choices in healthcare. services, drugs, treatments, devices. it is the research must recognize that patient preferences may vary. all given the same outcome. if we have the assurance this is not meant to ration care and our purpose in doing this is to find out what we think is best most of the time for the average patient, and we want to put that out, then fine. but if we're going to tell doctors what they will do and patients what they will do, it is not fine. because it is not based on the best care, it is the best based on cost as well as outcome.

without this amendment i would like to know what section of the bill prohibits the government from using cer to decide what treatment the patient can and cannot have. what section prohibits the government from developing rationing methodologies like they use in england? i trust that your intent is good, but where is the protection? i will go back and remind the of that today medicare -- i will remind you that a medicare patient today cannot have a virtual colonoscopy per orders of the dictate of cms. cms has decided that is too expensive for the benefits that we get, so no medicare patient

can have it. we are already starting to see inside cms the utilization based on cost data but not necessarily outcome data because things cost too much. the data on costs compared effectiveness is clear. all you have to do is look at cancer survival rates. all you have to do is look at lifetime -- the first coronary artery and then. it is clear. i am happy to have cer in there if we have protections that says we will not have a bureaucrat telling a patient what they can and cannot have. i am not against good practice guidelines. i think we ought to do everything we can. but a mandate is a totally different thing. when we mandate it, what we do

is we say medicine has checked the box and we deny the fact that medicine is personal, that past medical history is pertinent, that a physical exam at the time of considering past medical history as well as the clinicians experienced with the patient, should have an overriding position as to what that patient decide. i don't think we have those protections in here and i think we ought to have them. we already have language that protect that, and on a bipartisan basis we agree to it. i suggest we expect this so we offer the assurance to the american people that they can true they have what is best for them as decided by then and

there provider. >> you have amendment numbered 9, and some of the aspects of that that i like and others that give me great concern, but i will deal with the washington bureaucrats. like every time this discussion comes up about washington bureaucrats deciding, washington bureaucrats are not going to decide anything. they are going to publish reports. let's talk about who we are talking about when we talk in washington about who does research. washington bureaucrats are called nih. those washington bureaucrats are called fda. those washington bureaucrats are called the institute of medicine. i don't happen to think they are washington bureaucrats. . .

. . ready. . clear clear would save lives and improve lives. could we get off of this washington bureaucrat stuff? >> the question is -- >> i am beginning to find it on their behalf, offensive. i represent people who work at the national institutes of health. i represent people who work in fda. they are doing their best to come up with those ideas that either will save lives or extend lives. you have given examples of cancer and virtual colonoscopy is. where do think that came from? that came out of a lot of government-sponsored research or government doing research so

that the private sector could use it. when we talk about aren't we the latest and greatest? we are in the top five of medical expenditures in the world but we are in the bottom 37 in terms of health outcomes. the whole idea of what is coming out of comparative effectiveness is to enable more evidence in the practice to -- evidence informed practice to occur. the people who are going to be providing a lot of this research will be coming from these iconic institutions in our country. they are iconic, that they are known around the world as incredible institutions. we are finding it convenient to turn to the institution of medicine to do a study, but when we are talking about comparative

effectiveness we call them washington bureaucrats come out like they are people -- washington bureaucrats, like they are people who are incompetent. i would like us to get off of that. the second thing is we continually say that in this legislation, and i have given chapter and verse that we do not mandate clinical practice. >> there is nothing that prohibits the mandate. there is no language that says we prohibit the mandate of this interfering between a doctor and patients decision. please name the section where you mandate that a prohibition that you will not have. >> go to page 323 and tell me where that says it is not construed as whether that is sufficient.

then its says what you want to do in your and then it is safe not mandate national standards of clinical practice. there is nothing in here that requires a mandate. quality health care standards could be any number of things. one of which could be the development that the effectiveness of various checklists like the famous one that you know and i know has improved outcomes surgical arenas and saved lives. i think michigan told us it saved $200 million. it is not the clinical practice that i worry about, it is the quality health care standards. >> may i ask you a question? >> i would like to finish because we could have enlisted questions. >> we need to have endless questions on this. >> what is it about quality

health care standards? you have said over and over, using the same arguments. let's go to the quality health standards. >> i want to read you the text. recognition shall not be construed as mandates. that is a big difference than saying they will not be used as mandates. bay i make a suggestion? -- may i make a suggestion? let me make my point. let me make my point for a minute. we are in medicare -- where in medicare law do we have the right to tell an 85-year-old woman that she cannot have a virtual colonoscopy? and yet that is exactly what we're doing.

that is what is happening at cms today. as the pressure builds on them as we get to 2017, we will see more of that. >> could we come back to quality health standards? >> sure. >> because i don't know what you object there in establishing a standard in quality health care. >> here is where i object. we decide that we convene people in washington from very iconic

institutions. we set a standard and then we will expect to put that out and now we will have a national standard for care that is going to be [unintelligible] not because it is mandated. because the -- if you go against the quality of care he will expose every physician who does not do it exactly that way, even though their patient should not have it done that way, to liability. all of a sudden we now say there is one white where to do this -- there is one right way to do this, and it still does regards the patient history, clinical history, experience of the physician and all those

combined. >> according to the sections in this bill where we talk about national quality standards, we're talking about patient safety, the reduction of medical errors and things that happened inadvertently. i sincerely disagree with you. what you do have been here that is good is to conduct research on the proven methods of disseminating information. i think that is good because we have to know how best we communicate this in a way that people could be broadly informed, but evidence informed and not the practice mandated. also, on the last 21 through 25 , we are back to prohibiting cms may not use data obtained in

accordance with this action to withhold treatment or prescription drug. i believe we have covered that. >> can you offer me a way where we can give providers protection if the art of medicine says at this instance i should not do what the government recommends? >> let's turn to the national academy to do that, because you know more about the practice of medicine. i know more about the administration. >> i am talking about in the legislation. >> throughout this legislation i have turned to the national academies for advice to be sure we do not interfere. i have great respect for clinicians and the responsibility they assume, and their training and dedication.

if you're looking at how to do that, i would like to ask them how they think is best done rather than a back and forth here. >> there may be exposure to physicians based on what we will do. >> based on what we did in the american recovery package and what we're doing here, i think we met that need. if other national academies of clinicians, whether they are pediatricians or cardiologists say we think we have a better way, i would be open to hearing it. right now i don't want to change what we have in the law based on a back and forth. there are also some other illegals wordings, but i think we need to look at that. >> mr. chairman? i will ask unanimous consent that on page 323 of the bill

line 5 where it says these should not be construed as mandates for payment coverage, that the word on line 6 be stricken and that the bill would -- the bill should not be used as mandates for treatment. i think that would satisfy a lot of the concern raised here. >> that is exactly the suggestion by senator harkin. >> i call that the harkin rule. >> i will be sure i know the consequences because words have meaning. i don't want -- i would like to reserve the right to object if we could -- >> could we leave this open as a possible suggestion? >> that is exactly right. >> the acting director of nih,

not a washington bureaucrat, stated that cer would be used to contain costs, as did very summers and kathleen sebelius. -- as did larry summers. >> if we can leave this open, that is great. >> i appreciate -- >> i withdraw my request under the circumstances. >> this is a very important section of this bill. medicine is personal. medicine is individual. it does not fit in a box. >> but it does fit practicing guidelines. national academies of clinicians -- >> can i finish my point? guidelines are important but they are just that, they are

guidelines. if in fact you pass this bill out here with this, you will raise the cost of medicine, because now what we will do is here is the guideline that you need to follow as sorted out and implemented. the people who will implement this will be bureaucrats. the first rule of the bureaucrat is never do what is best when you can do what is safe for your own job. that will be the logo under which they operate and administer whatever comes out of cer. and when we deny the fact that medicine is personal, that it is individual and guidelines are just guidelines, and we create a situation where physicians have another step in the process, here is the government guidelines so now i have to back up what i am doing with this other stuff because i know from

my experience and what the patient is telling me that she does not fit the guidelines. i will spend a bunch of money because i am not about to expose myself to a lawyer that will say you did not fire they -- you did not follow the guidelines. if we are trying to save money, you will actually increase the costs for everyone who doesn't fit guidelines. what is wrong with us saying we will not allow this to mandate the care and get in between a patient and a doctor? >> as i have been listening to this and senator mikulski has done the bulk of the work on this section, but unless i am missing something, i don't hear much of an argument here. maybe there is some language we will look at, but as senator roberts pointed out, if what senator mikulski has said repeatedly that it is page 323, and the word used would make it

clear on that, then the debate over. we are checking that out, but i don't think you are wrong at all. the question is does the language form to that goal? once it does i think we have answered the question. i think your point is taken. senator mikulski agrees with your point. the issue is whether this language -- i am asking if he knew something about the word i did not know and we did not get the answer to that. i hope that will solve this issue. >> it solved all the issue but the liability. >> that is different than this. >> the point is we are not going to fix the liability, so you will still increase the costs. >> the issue of guidelines exists, and i presume in every court of law were in action is

brought against a provider, that guidelines would be suggesting it you did not follow a guideline. i presume that is a course of action followed by a plan in any medical -- are you mandating something? i think we are all pretty clear that we are not because of the point you have made, but i presume some lawyer will make a case that guidelines have not been followed. . .

>> what congress is trying to do is to set forth in a system of grants and entities that will help to advance the developments of quality control measures and also the best practices that will effect the way all diseases are managed. people are focused on the end of life issues. the intent is to manage all kinds -- from the broken arm that shows up to the chronicle asthmatic -- to the chronic asthmatic child to cancers and heart diseases and the end of life issues that have attracted

so much attention. >> of the private organizations? >> the health committee bill would create a center for health outcomes research and evaluation within the government umbrella, under the government umbrella to conduct research on the effectiveness of health care procedures and provide information and a therapist. basically, pulling together all of this information and trying to make sense of it and get guidelines. people complain that they do not understand how the health care system works and they tried to ask the doctors and do not get straight answers. that has an effect on the economics of health care, as well. people are not able to control

their situations as effectively as they could or want to. this very complex title that has attracted so much attention is the goal. >> the next sec bring deals with the issue of requiring people -- the next section shows the issue of requiring people to buy health care. >> it would impose as would the house a bill and the senate finance committee, as well, would impose both an individual mandate requiring people to buy health care and there will be a penalty for people who did not have insurance. they see this as being administered through the tax code. it is not their jurisdiction. >> would anybody be exempt?

>> all kinds of people would be exempt. if you were eligible for medicaid, which would be expanded under this bill, you would be required to sign up for it. one of the big gaps in coverage right now are people who are eligible for government coverage, up 9 million >> one of the big gaps are those eligible but don't sign up for it. a lot of those are folk was chronic diseases that show up at emergency rooms and are costly uninsured individuals. the other goal would be to force them into the system.

>> what sort of cost burden especially can you impose on people that may be under insured or don't have insurance or don't qualify but for whom or maybe are not paying that much now and would have to pay more under

these bills. >> the out of pocket cost that is going to be hard to find room for. that's an issue that this finance committee bill is continuing to go back to over and over again. here's what the senate health committee had to deal with concerning this penalty on insurance. >> i would offer amendment 204. currently, the legislation includes the requirement that all individuals obtain coverage. ensures appropriate risk sharing. it is a major factor.

such a penalty could be as much as $2,000 or $3,000 an individual up to $16,000 for a family each year. in my view, that penalty is too high. the amendment i'm offering would reduce this cost to a more reasonable level of $750 per individual or a family per year. it's my intention the family would receive the incentives without creating the large

burden. the level of payment creates parode between payment that's an employee would have to make if he failed to obtain coverage and the payment made by employers, which is also $750 per employee per year ensuring that the same level of shared responsibility for employer, employee would improve the base bill and i urge my colleagues to support the amendment. >> have you looked at this as to what affect it would have as to the number of uninsured? >> i do not believe so. >> isn't it logical if you reduce the penalty by 66% as you represented for individuals and

more than that for families that people are going to opt for the penalty rather than buying insurance? >> i think it's logical that some would. the number, i don't know. at least based on my interpretation, they believe that the bulk of americans will go ahead and obtain coverage if there's a requirement in-law and a financial penalty for not doing so. the size of the penalty is a factor with some but is not the main factor. i think you would have some less compliance but i don't think it would be substantial. >> wouldn't the cost to the government go up significantly too?

when they go to the hospital or when they have an accident or when think contract serious or even marginal diseases, those costs will be eaten up by the government specifically. we'll end up with more uninsured. $750 is not going to cover the cost of their medical for the year. >> you are saying people who choose to pay the penalty and don't get coverage, they would then be running up the cost to the government, is that the argument?

this would provide coverage by going to the private sector. the main thrust would be to reduce the number who don't have

coverage. >> i personally don't feel comfortable supporting the ministry as substantial as the cost of the insurance is. i think that's an undue burden. i would much prefer to have the penalty imposed on individuals, the same level as those imposed on employers. >> i do think this kind of amendment has significant impact on two items, the number of uninsurance and the score of this bill.

>> you are saying -- what would be the penalty to a family? >> the penalty would be $750 for each adult individual required to obtain coverage. >> my question is family. you are defining it in terms of adult members of the household? >> i'm not changing the

definition of a family in this amendment. the family is defined in the bill. i'm taking that definition. >> how is the family? are we defining family or members of the house old? >> this is no stat torry definition of the family. the text refers to family coverage but there's no definition of what constitutions the family.

>> it would be a percentage of the applicable premium. it is harder to define. it would depend on what that premium would be. it would be no less than 50% of that. >> what happens if you have an extended family with two adults and their adult daughters who might all be living in the same household. they might be single. they might have children. if the adults are age 40, their daughters are age 40. they are living at home, et

cetera. all that's going to happen for $750. >> my intention is that any individual required to obtain coverage. that individual would have to pay $750 penalty if they did not obtain coverage. if there's a child not required to obtain individual coverage. the adult would still be obligated to obtain that coverage or obtain that $750. >> i believe that amounts to $36

billion to cover the cost of the bill. any mandate is a new tax. they are low income or middle tax. they have to pay this tax, i assume. i'm curious why you did not reduce the $750 as well. >> it seemed to me there was value of having that parode between the ability to obtain coveragend what an employer in the bill is required to pay for failing to obtain coverage for employees

>> when a dependent of a federal employee turns 22, they are no longer eligible to be on their parents' insurance. in most cases, those kids are in college. when those children when they are driven off the policy at age 22, would they nen fall under their own insurance.

>> the language as written would say if there were a failure with respect to essentially more than one household, the penalty would be a part of the family coverage under the basic qualified health plan. that does raise a question of how do you define that family grouping which does not provide any definition of a family. >> the change would alabama

albeeit the need. >> the requirement to obtain coverage, unless the penalty adheres to every adult and the extent of that adult and their eligible doesn't have qualifying coverage. the penalty would apply to all of that provided for the religious exceptions. dependent of the federal employee would be responsibly for a maximum of $750 fine $750.

if we didn't pass the plan, they would be exposed for the premium. >> partially. the 22-year-old would be eligible for their coverage. there may not be a case for this. the 22-year-old would have available coverage if they didn't have other options through the gateway. they would be able to pump through there. if for some reason they chose not to and had a young adult plan. if they chose none of those, then they would be subject to

the penalty. >> thank you and i thank the chair. >> i think that the question is insignificant. the dependent being covered up until age 25. there is a difference between the average family. this reduces the costs by zero.

you are now loading the pool up. >> there is a provision that provides and provides potentially paralleled forms. there is no way to conclude this in the dependent care coverage that exists in title a.

i would make the amendment to keep the score in terms of the bill. >> talking about the people mike has mentioned, you are talking about low income people. it may be high.

>> all of those in favor of the amendment an aye. the ayes have it. i'll make notice of the implication of the scoring. >> you are watching some of the debate of the senate committee markup from this summer. how do the penalties matchup with what the house has worked on? >> the senate health committee bill would impose a tax of up to

$750 per individual that would allow the government to get more money. younger people who make a lot of money and don't have coverage. >> we talked a bit about individual family responsibility. what about employer's responsibility? >> other technical issue. the fundamental debate boils down to a question of what's the best way to incentivize employers? they've had lengthy discussions whether to cutoff whether it was

50 people or who to include in this mandate. the idea is to get as many people as possible into these employment based insurance pools. it's the way the system is organized. it would be best to maintain that system. >> there's a debate going on both house and senate.

>> the penalties would be for employers,? >> yes. over certain amount and subcities based on the income of employees. then there would be penalties if the employers didn't find coverage. they like this carrot approach with incentives for employers. in the meantime, they are exploring this penalty where you would sort of not interact with an employer if you were a

company with a lot of low wage workers that ended up in medicaid or s chip programs. you would be free loading off the government. that is very much of a live ball. >> let's look at some of the debate on penalties for employers who don't provide henl insurance. >> the amendments amend the employer responsibility.

employers with 25 or less employees. the minute they fire 26 employees, it would change. my concern is that it would encourage small businesses to stay less than 25 employ yoes. responsibilities will begin with the 26 employees. employees will only pay responsibility for employ yoes over the 25 employee exception. if a company employees 27 employees, the business will be responsibility for the extra two employees, not the whole 27.

while ensuring that employees will pay into a public option. >> i strongly endorse the amendment. it clarifies what we should be doing and that is to not have a cliff or a penalty when you fire your 26th worker that you would have to pay $750 a year for that 26th worker but you should not have to pay $19, 500 a year when you fire the 26th worker. it's my belief this is a have good amendment. i encourage people to support

it. i appreciate the efforts >> what is the number? 25, 50, 500? this small effort is helpful. >> yes. all of the arguments used could

be used against this one too. i have a question. we are not just excludeing the first 25 employees in small businesses now? it applies to all businesses? >> if you have 125 employees, you'd be paying with respect to the 1,000.

i may have the number right. that sounds great now. >> it is still $15 billion. you are still going to have golf trying to get the taxes raises in this country to pay this bill. this will be increasing. >> i would respond what did kovt this is all offering amendments.

i think the amendment i have offered does strike the right balance and does make sure we don't discourage. the 52 billion i don't want us to take from the country. i am struck be how we put some of the burden on employees for being too expensive. we will still accomplish this

bill. the reason we come is because we think it can be done in a better way that assures greater patient satisfaction and less burden on the economy and still cover all the goals president obama said he wants to cover. >> i'm eager to see analysis and see what that letter produces. >> let's keep moving. all those in favor of the mury amendment? the ayes have it. >> the debate from earlier this summer. what did the senate health committee timely decide in terms of penalties?

employers would be required to offer coverage or pay $750 for each uninsured employee that would be the penalty side of the provisions. it would be an incentive for employers who can't carry it themselves. >> $750 for full time and $350

for part-time. >> some would argue that this would lead employers to take the penalties, rather than pay the coverage. how do supporters count on that government they think it will become more of the norm for lower wage employers to offer health coverage.

>> one of theover all goals is to create more of these choices better suited for these individuals. cheaper and more inclined to buy the policy. >> we are going to share some debate from the committee on the expansion and medicaid. >> the health committee bill

would expand medicaid the house bill would only expand up to a certain percent. medicaid is administered by states and through a matching program. a lot of states have already expanded their medicaid program to offer coverage to people. that issue is very much left

hanging. coming up, about 20 minutes on debate on the expansion of medicaid. >> the amendment i would like to offer is simple. it says that if congress decides as a result of this work between this committee and the finance committee on this bill to expand and require states to increase what they pay physicians and hospitals who provide medicaid services, the congress will pay for it. no unfunded mandate. i'd like to start with a story. since my late friend once told me if i'd start with a story instead of making a speech, they might actually list tone me.

it's a good story. in 1981, i was in my third year as governor. i made an appointment to see president reagan. i came and said, mr. president, i have a proposal after looking at the state government a couple of years. why don't we make a grand swap. you take all of medicaid. we'll take the states all k-12th grade. my reason, i thought washington's interference was removing our own responsibility for making it better. i could see the split responsibility between the federal and state level.

every governor has struggled with finding a way to deal with the medicaid program. the costs have been dictated by well intentioned mandates from washington and those that take a year to do trivial things i sent a letter to the national

academies to ask them to take a look at the status of the research communities. my goal is to say if congress in its wisdom as a result. i know this is a finance committee decision to begin with.

just to say if congress in his wisdom decides the best way is to put another $20 million into medicaid to require states to pay more to doctors and hospitals and congress pate bill. this is especially important to understand because of the financial condition of the states. we have the advantage of having a printing press. states have to balance budgets. states have relatively small amounts of money these days. it was 1936 before the federal government spent more than the states did as a whole. the federal government used to be very small. in tennessee, the federal

dollars that the state sxends is $18-$19 billion. when we do anything that affects state dollars, most states, even smaller. i have tried give an example of that when would happen if we decided the medicaid pro gram be expanded it has been talked

about so that the medicaid program works. right now, this program reimburses doctors lower than private programs do. in our state and across the country, about 40% of doctors don't see medicaid patients. if we choose, we ought to make sure they have a doctor to see.

that's like saying here's a ticket for the bus but no bus. what would this cost? governor barber in mississippi said this would cost $300 billion a year. in florida, their rolls have grown for $2.6 billion.

those are the state costs of the medicaid program which are about 40% of the total cost. >> what does that mean in real dollars? i tried to compute that. if tennessee had to come up with $1 billion or more in two years that was cost shifted back to the states, that would be equated to the income tax. i doubt if pennsylvania or vermont or georgia has anything like that kind of money. i know it is assumed by saying we'll pay for it.

i want to make sure a federal government starts out paying for it and ends up paying for it. and that states don't find out that they have any money for community colleges or roads or that they have to have massive tax increases. that's the point of my amendment. i think this points up why the medicaid program is the wrong way to help low income americans. in my experience, it's poorly run, not accessible. a better approach would be what is represented by the greg bill or even the idea that senator

cornyn or hatch says which is to give them the money. saying senator widen doesn't have it to the senate. we know from the office. we have different views on? . i think medicaid is a ball ald

tiff. >> i'd have to pose the amendments. >> this is a finance committee issue. the reports make an effort for two problems. if any member to the finance committee mark offer it as an

amendment and have this committee trying to dictate what happens. i would oppose it on that ground. each of us has a responsibility in whole. we have marked with colors on

this bill. this is so fundamentally important to the whole concept. the way to deal with the people who could help themselves the least is to expand the med i kay

program. unless we say we understand that this is our strategy, concept and vision but we are not, we do not believe the cost should be dumped on the states. we have an obligation to be put in a position of whether we should pay for it or the states should pay for it. otherwise, we need to go back to this bill and review all of the provision that's might have something to do with another

committee. i actually think it would be the right thing to do today. there are some programs today for the americans request disability coverage. the medicaid responsibility audience to be a federal responsibility. if we do it this way, it's part of the single pay system.

i don't see how we could ignore that. >> let me say, we are not going to ignore the issue. we are not the only act in town on this whole healthcare debate. >> you are right, there's matters we have gone over. this is clearly the number of issue. we cannot complete the number.

the question is is this a matter that needs to be addressed. this is a problem i have. the issue is how to pay for all of this. i'm not disagree with the points you are making. i think as a mart of organization, we'll have to deal. one way or the other.

>> are we not going to disagree on the number of insured. your letter suggest that's we are going to dramatic increase the number of insured. the way we are going to do that is dump a lot more low income people into the medicaid program where doctors won't even see them. our bill combined with the work being done dramatically reduced

the number of the insured. >> we used a number there. >> this is not floating over there either. >> if you said to me, score this, i can't. if you are shifting the cost, go to the point many had made, i have not brought up a matter someone scored this is a major

point we have to grapple with. we are all going to be involved in that choice. >> a portion of the debate on the medicaid expansion. it failed. at the end that have debate, senator dodd made a point. >> they wanted to express themselves on the issue.

>> it's such a part of the effort to expand medicaid. it becomes a public option in a way? this would expand through all of the medicare changes if they can

inform those two programs and try to change the behavior of those programs and some of those comparative effectiveness is it fair to say how they would like to see the finance committee expand medicaid. >> they are concerned about the effect on their states and wanting to express