Hearing of the Senate Finance Committee - Aligning Incentives: The Case For Delivery System Reform

Statement

SEN. ORRIN HATCH (R-UT): Well, it's easier said than done, I have to say. But I appreciate the efforts that all of you are making. Let me go to you, Dr. Campbell. Most drugs are administered orally or intravenously. And the information needed to physicians in administering a drug is fairly straightforward and can adequately be addressed through package labeling.

On the other hand, the safety and effectiveness or outcome for most high-risk devices, particularly implants, is highly dependent on the physician being properly trained to use the specific device. In fact, the FDA takes into consideration physician training when approving many high-risk devices. Do you feel that there should be a distinction between the valid education and training that needs to occur for devices versus drugs?

SEN. HATCH: I agree. Dr. Steele, I find Geisinger's proven care program refreshing and the results regarding patient outcomes thought provoking. Now, what you said makes a lot of sense to me, and I agree with you. I think you are onto something.

However, I do have one question, how did Geisinger determine which complications were preventable? To me, there would have to be instances where medical issues would arise that were unavoidable and not the fault of the medical provider. And in addition, how difficult would it be for a national health care program like Medicare or Medicaid to implement such a program nationwide, for instance, coronary artery bypass, graphs, hip replacements, or even cataract surgery? Or how would we be able to create a disease prevention model, similar to the one you described in your testimony, nationally?

And I appreciate your ideas regarding Medical Homes. But do you have any other suggestions or advice for members of the Finance Committee? And I would like you to continue to work with us, because I think we could benefit a great deal from your experiences.

SEN. HATCH: You remind a lot about Intermountain Healthcare. It's very similar.

SEN. HATCH (R-UT): Thank you, Mr. Chairman. Dr. Berenson, I had read with interest your testimony advocating integrated health care systems.

And as you probably know, they're mentioning it here Intermountain Health Care, which is headquartered in my hometown of Salt Lake City, Utah. Specifically, Dr. Brent James, who I think everybody recognizes, has been quite involved in examining issues associated with health care quality, and he told me over and over again, that 55 percent of health care expenditures may be attributed, or attributable to waste.

In addition, IHC is one of the top performing integrated health care systems in the country, and reimbursements for health care services are some of the lowest in the country. Yet, IHC has some of the best health care outcomes in the country. In contrast, Nevada, which is right next to Utah, has much higher reimbursement rates, yet some of the worst health care outcomes.

Last week, our committee had a hearing on quality performance, and the witnesses talked about the advantages and disadvantages of pay-for-performance. I would like to have your thinking about pay- for-performance. Would it improve health care outcomes in its integrated, you know, in an integrated health care system like Geisinger or Intermountain Healthcare? That's the question, but I am simply not convinced of paying a provider more or less for providing health care services will make a significant difference. I'd just like to know what you're thinking is on this issue, and after we hear from you, if there is time, I'd also like to hear the opinions of especially Dr. Steele.

SEN. HATCH: Mr. Chairman, can I ask just one other question that I'd like to get a --

Part of my prior life was defending in medical liability cases. And, naturally, when they did away with the standard of practice in the community and came to the current changes in laws, which mean doctors have to explain every possible outcome in advance, which is impossible to do, and then every case goes to the jury. We have spent a lot of time teaching doctors how to do everything they possibly could to have in their history, that they literally took every precaution there was. And in the process, and we had to give that advice under those circumstances. In the process, naturally, we all want defensive medicine. But how is the medical liability litigation in this country impacting and creating a lot of unnecessary defensive medicine. Has that affected you? And how doe that affect the total cost of these matters? We'll go right across the board, Mr. Miller, Dr. Miller.

SEN. HATCH: Well the AMA basically, in a number of years could estimate at about $60 billion a year. Now, if the AMA estimates $60 billion a year, could you imagine what's -- (inaudible)? So what you're saying, you don't have a measurable --

SEN. HATCH: -- practitioner, Dr. Steele?

SEN. HATCH: No, what are you saying about, with your practice with Geisinger? How do you corporate those high MedNOW premiums?

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