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Hearing of the Senate Committee on Finance - Workforce Issues in Health Care Reform: Assessing the Present and Preparing for the Future

CHAIRED BY: SENATOR MAX BAUCUS (D-MT)

WITNESSES: DAVID GOODMAN, DIRECTOR OF THE CENTER FOR HEALTH POLICY RESEARCH, DARTMOUTH COLLEGE; ALLAN GOROLL, PROFESSOR OF MEDICINE, HARVARD MEDICAL SCHOOL, HARVARD UNIVERSITY; FITZHUGH MULLAN, MURDOCK HEAD PROFESSOR OF MEDICINE AND HEALTH POLICY, GEORGE WASHINGTON UNIVERSITY; STEVEN WARTMAN, PRESIDENT AND CEO, ASSOCIATION OF ACADEMIC HEALTH CENTERS,

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SEN. BAUCUS: (In progress) -- "Don't live in a town where there are no doctors."

Our question today is, will there be enough doctors, nurses and other providers in the towns for the future? And there's reason for concern. Already, America has too many towns without doctors. There are too many underserved areas; too many in parts of rural America. HHS says that in rural America, we have roughly 7,000 fewer primary care doctors than we need.

Yet a recent study found that in only 1 in 50 medical students plans -- only 1 in 50 -- plan a career in primary care internal medicine. That's down from more than one in five in the early 1990s. That's a ten fold change in the wrong direction, and that's just as the need for primary care doctors is increasing.

Between 2005 and 2020, the number of Americans over age 65 will grow by 50 percent. As Americans live longer, the burden of illness and disease will continue to grow, as well. Our aging population require a stronger primary care system to help patients effectively manage and coordinate care. And yet, current payment policies place a higher value on specialty care; higher than on primary and preventive care.

We need to invest in our primary care system, to help improve quality and lower costs. I've also heard from hospitals in my home state of Montana and elsewhere about continued problems recruiting nurses. Despite this shortage, nursing schools had to turn away more than 40,000 qualified applicants in 2007 due to shortages in faculty and other constraints.

Today, we look at ways to strengthen our nation's health care workforce. Our nation's health care providers, doctors, nurses and other professionals are on the front line of caring for patients. For health reform to succeed, we need a strong health care workforce. We must ensure that health care workers have the necessary training and skills to provide quality care.

New technologies such as telemedicine, that can help be part of the solution. I do not want to (understate ?) that. There is a huge role for telemedicine to address the shortages in certain parts of the country, but that is clearly in no way is going to be a complete solution. We just need more people in the primary care areas that I mentioned.

We cannot expect to improve patient health, if we are not training providers in key areas, such as care coordination. We need to take a hard look at the way that we pay health care providers. As part of that examination, we should ask first, do today's payment systems properly reward providers who offer high quality care.

Second, do these payment systems encourage medical students to choose careers in critical fields, like primary care?

Third, do payment systems encourage medical residents to train in settings like community clinics where many patients are receiving care?

Where the answer is no, we need to make a change. We should work to revise our payment systems. We must also step back and ask whether we have a solid, national strategy to strengthen our workforce.

Volumes of research have been published on the problems facing our national health workforce, but there is clearly no strategy. We must address these challenges head on, we need to take steps now to place our nation's health care workforce onto sound footing.

Today, we are going to hear from four experts in the field. This discussion can provide a solid foundation for the work ahead. So, let us get to work now, to ensure that more folks will not have to live in towns where there are no doctors. We must do what we can to ensure that doctors get the training and skills necessary to provide quality care, and let us do what we can to ensure that there will be good health care in town in America's future.

Senator Grassley.

SEN. CHARLES GRASSLEY (R-IA): Thank you, Mr. Chairman.

Any discussion of health reform has to include an examination of health care workforce. As we embark on this important issue of health care system, and our reform of that, we have to understand these important workforce issues, and one obvious area of focus is what impact expanding coverage to all Americans will have on the health care workforce in of future.

It is easy to see that increased health coverage is useless without a workforce to provide that care. The experience in Massachusetts provides a useful example of how important these issues are, dealing with workforce. In Massachusetts, health care reform efforts have increased the number of people covered, but there are reports that many people are now finding it difficult to find and get appointments with primary care providers.

The challenge of finding primary care providers has put tremendous pressure on the emergency rooms and will almost certainly increase health care costs in Massachusetts. Future health care reform efforts ought to proceed with the health care workforce in mind in order to avoid unintended consequences such as those in Massachusetts.

These workforce issues are driven by a multitude of factors, as we are going to hear today, and they have multiple effects our entire system. These issues and how to respond to them, affect not only the basic access to health care but they also impact the quality and the cost.

There are many projections of the workforce challenges we face. We have the Association of American Medical Colleges estimating an overall physician shortage of 124,000 by 2025. The Health Resources and Services Administration project that the nation's nursing shortage will grow to more than one million by the year 2020. According to a study last year in the Archives of Surgery, the number of general surgeons per 100,000 people fell 26 percent during the past 25 years.

As our population ages, health care workforce shortages are predicted for nursing staff, technicians, general surgeons and allied health professionals. Rural areas -- that's like my state of Iowa and probably even more rural in Montana -- are at greatest risk for health care workforce shortages. According to the Health Resources and Services Administration, approximately 20 percent of the United States population lives in rural areas, but only 9 percent of the physicians practice there and, as we have a shortage of primary care providers within our existing workforce.

Disturbing reports continue to show the dwindling percentage of medical students who plan to become primary care people. It is as low as two percent of current medical students, according to a study in the Journal of the AMA and our country is becoming increasingly reliant on foreign medical graduates to fill these gaps, particularly in underserved areas. The increased cost of education and a lack of sufficient financial incentives for primary care are a significant factor in this decline.

These workforce challenges don't just affect the availability of health care; they also have significant impact on how the health care delivery system performs. The Dartmouth Atlas Project and others have shown that regions with greater primary care presence have lower costs, higher quality, and reduced socioeconomic and geographical disparities.

So, we need to change incentives to promote emphasis on primary care. Patients would then have better access to a provider who can coordinate their care. We are very interested in delivery system reform as part of the larger health care reform efforts. The fragmented incentives in place for education of medical professionals only reinforce the fragmented silos of care that we are trying so hard to change.

We shouldn't expect changes in the delivery system if we don't pay more attention to the education of medical professionals. The socket has to match the plug. So, in addition to reimbursement, we need to look at how federal programs promote workforce development.

Over the years, the federal government has developed several programs that seek to influence the education, training and retention of the health care workforce. We should consider reforming Medicare and Medicaid Graduate Medical Education to more effectively foster broader workforce goals.

With that, I yield.

SEN. BAUCUS: Thank you, Senator.

Now, I'd like to welcome our witnesses. First, we hear from Dr. Fitzhugh Mullan, Murdock Head Professor of Medicine and Health Policy at George Washington University.

Next, Mr. Steven Wartman who is the president and CEO of the Association of Academic Health Centers --(inaudible)-- actually, you're a doctor aren't you? Dr. Wartman, president and CEO of the Association of Academic Health Centers.

Our third witness is Dr. David Goodman, director of the Center for Health Policy Research at Dartmouth College.

Then we'll finally hear from Dr. Allan Goroll -- did I pronounce that correctly -- Director of Medicine at Harvard Medical School.

You all have written statements I presume, which have automatically been included in the record and I ask you to proceed -- I believe we're going to be starting with you, Dr. Mullan.

We --(inaudible)-- about five minutes.

DR. MULLAN: Good morning Mr. Chairman, members of the committee.

I am honored to have the opportunity to address you. I've been charged with giving an overview of the workforce and I will move rapidly to do that; five minutes is a challenge. We'll see how well I do.

I have served as a primary care provider, as an administrator and a researcher in the field of health workforce research in my life; having been Director of the National Service Corps and Assistant Surgeon General of the Public Health Service and now, a Professor at G.W. So, I come at these issues from multiple perspectives.

Health care reform needs health care workforce reform; without it, reform will not succeed. Massachusetts, as observed already, is a living experiment in that; you increase coverage and the folks aren't there to provide it. That will be the case around the country as we move forward. I want to talk a little bit about the size, shape and key sufficiency of the current work force.

I ask you to think about it as a life cycle in a diagram here, that I'm afraid is smaller than it might be. We suggest three portions of that life cycle and that would be in terms of physician, medical school, graduate medical education and practice. Innovations and change needs to take place in each sector; without corollary changes in each sector, we will have far less than the outcomes we want.

SEN. BAUCUS: (Inaudible)-- have a copy of that slide do you?

DR. MULLAN: It's in the -- on the back pages of my testimony.

SEN. BAUCUS: We have it; thank you.

DR. MULLAN: The key in many ways and often overlooked -- the key element is actually graduate medical education, over which this committee has a very important -- with which this committee has a very important role.

GME is the keyhole through which everybody has to go, which means U.S. allopathic medical school, U.S. osteopathic medical school and foreign medical school graduates. So, it is the size and shape of graduate medical education that determines the workforce of the country; I ask you to bear that in mind in your deliberations today and the future.

The trends in our workforce are that over the years, it has grown -- the physician workforce. We currently are 280 physicians per 100,000; that puts us at about in the middle, a little below the middle, of the density in developed countries. A few are higher; a few are lower. That has grown steadily and we'll level out at about that level with our current inputs.

The question that that raises is, is it sufficient. Well, certainly we have huge distributional problems, both geographically as observed, and in primary care versus specialty care. The basic size, I will testify in my belief, is sufficient and the notion of doubling it again as we did in the past, or even increasing it by half again, is a very expensive and ill-conceived plan.

This nonetheless takes into account the fact that we do have an aging population -- a growing population -- but my judgment is with several caveats the relative level have is sufficient. Those caveats are that we need to organize it better and get better effectiveness out of our physicians in terms of distribution and type, and we also should make even more use of two American inventions.

We pioneered the physician assistant and the nurse practitioner. They are very effective; there are about 70,000 PA's and about 100,000 nurse practitioners in practice today. They are more quickly trained and more agile in many ways. They work extremely well as part of the healthcare team and I think that's where we need to look to buffer our future needs, as well as reorganization.

Additionally, we have instruments already in place for deployment and use of physicians, but they are, in the case of the first, the National Service Corps, way under used and in the case of the latter, Community Health Center's happily getting some attention; but between those two, we have very good instruments in place. Funding and support is important for deployment.

To spend a quick moment on medical schools issues at hand; they are expanding. This is good. Title 7, which has been the instrument of the Public Health Service Act to get more primary care, more minorities and more better distribution, has been way underfunded and been a target for elimination in the recent past. It needs to be reinvigorated, re-conceptualized and refunded.

Of course, the National Health Service Corps needs support as well.

On the graduate medical education level, there are modest reforms that call out to be made and I would characterize these as -- (inaudible)-- reduction to community and ambulatory practice and incentivizing that. In the major reforms category, right now Medicare GME is without a brain; that is, it doesn't function as an instrument of directing or shaping the workforce.

It is $8.5 billion, which is by far the largest federal investment in health professions education. It needs a new allocation system that aligns Medicare GME with the workforce needs of the nation.

Finally -- and you'll hear from others on this -- practice reform is key; payment reform, organization and health information technology. Finally, two concepts that have been raised in various settings; happily, some of the new legislation that's been proposed -- and I think my colleague Dr. Wartman will speak about this -- in National Health Workforce Commission is an excellent idea, but a National Center for Health Workforce Studies that would really do much better census and analytic work than we have the capability of doing now is necessary as well.

For healthcare reform, we need enhanced primary care workforce that is smart, well supported, flexible, IT enabled and accessible throughout the nation. All of which are achievable goals with modification and redirection of legislation and funding that, by in large, exist today.

Thank you.

SEN. BAUCUS: Thank you, Doctor. That's very interesting; provocative too.

Dr. Wartman.

DR. WARTMAN: Thank you.

Good morning everyone. Thank you Mr. Chairman and I want to thank the committee for inviting me here today. I also want to thank my wife Gina for coming; thank you, Gina.

SEN. BAUCUS: Yes, thank you for that. We all thank you Gina.

(Laughter.)

I wanted to point out to the committee that the Association of Academic Health Centers is the only organization that represents all the educational, research and clinical components of academic health centers. We're not discipline specific, but we represent all these specialties and all the fields of healthcare. Our members are responsible for educating the next generation of health professionals, providing comprehensive healthcare and cutting edge research.

The message I want to convey to the Committee this morning is that health system reform cannot be successful without simultaneously reforming how we make and implement health workforce policy. It is critical that a reformed health system has sufficient numbers and types of health professionals who can provide the high quality care needed to best improve the health of patients and the public.

The AAHC report,  Out of Order, Out of Time: The State of the Nation's Health Workforce , discusses many aspects of current health workforce policy that are out of order and why we are running out of time to change. The AAHC report concluded there is a systemic flaw in our century-old approach to health workforce policymaking. Responsibility for planning and managing the nation's health workforce is fragmented among literally hundreds of federal, state and private stakeholders that rarely coordinate their policies or activities.

I am basically here to say, if we don't change how we make and implement health workforce policy at the same time we reform the health care system, the promise of health reform will be seriously undermined.

Allow me to summarize briefly why I believe this is true.

First, even without health system reform, the health workforce is already under tremendous stress from powerful social and economic forces, including the aging of the population and the markedly increased need for chronic and long-term care.

Second, there are serious concerns involving the selection of careers in the health professions, including admission practices, education debt, workplace conditions, reliance on international health care workers and current payment policies that steer health professionals away from choosing the kind of careers and communities where they are most needed.

Third, our current health workforce policymaking and planning infrastructure is not adequate to meet these challenges because it is hopelessly fragmented among a wide variety of stakeholders that respond to immediate needs largely in isolation and with little coordination.

Fourth, health system reforms under consideration by this committee add further stress to already daunting health workforce challenges because, for example, expanding coverage to will surely increase expectations and demand for services from health professionals already in short supply. Implementing health information technology and comparative effectiveness research will require large scale training of health professionals in order to maximize safety, quality and cost effectiveness.

Fifth, we are already behind the curve and need to act now.

All this leads me to conclude that comprehensive health workforce reform is an essential element of effective health system reform and that we need to make workforce reform a national priority in conjunction with system reform.

I recommend immediate appointment of a national health workforce coordinator to begin mobilizing current resources more effectively as an interim step, followed by creation of a permanent, multi- professional, multi-disciplinary national health workforce planning body to bring together all stakeholders to address the challenges we face in a comprehensive, coordinated and strategic manner.

A permanent national health workforce planning body allows us to assemble all the pieces of the workforce puzzle so we can see the whole picture. A national body can harmonize public and private standards, requirements and prevailing practices across jurisdictions. A national body can address access to health professions education and the ability of educational institutions to respond to economic, social and environmental factors that impact the workforce. A national planning body can identify unintended consequences among public and private policies, standards and requirements.

My concern is that we will press forward with health reform without full consideration for the health professional workforce -- all the players in the health workforce -- that will be needed to make these reforms successful. I urge you to incorporate a new integrated and coordinated approach to national health workforce policy as health system reform is considered.

On behalf of the nation's academic health centers, I look forward to working with you toward that goal.

Thank you.

SEN. BAUCUS: Well thank you, Doctor; I think your wife's very proud of you.

(Laughter)

Dr. Goodman.

DR. GOODMAN: Mr. Chairman and members of the Committee, thank you for the invitation to talk about the health workforce and its relationship to health care reform.

Policy about the health workforce to date has focused nearly exclusively on physician numbers and has assumed that simply adding more physicians will improve accessibility and quality.

These policies ignore two truths; one, that current growth rates in health care expenditures are unsustainable and will be worsened by indiscriminate growth in physician numbers and two, that the workforce we train today will shape -- for good or bad -- tomorrow's health care system.

What do we know about the physician workforce? In brief, what doctors and nurses do is very important for patient outcomes. Much less important is the number of doctors and nurses providing services in a given region or health care system. Let me explain this.

The notion that there is a single, right number of physicians for the U.S. is challenged by the finding that the number of clinically active physicians per capita varies dramatically across regions for every specialty. You can see this on the map; these are the Dartmouth Atlas of Healthcare Regions and they show both for primary care and specialists physicians, very dramatic variation. This variation in physician supply is not explained by differences in patient illness levels or in population health, but by where doctors prefer to practice and live. The last 20 years of growth in physician supply has shown that for every physician that settles in a low supply region, four settle in a region with already high per capita supply. This means that lifting the Medicare funding cap on GME will perpetuate today's variation as new doctors settle in places with very high numbers.

Multiple studies in a variety of settings have shown no benefit in a high --now this doesn't speak to very low supply, which is a bad thing for patients, but no benefit with a very high supply of physicians. This is true for both the care of ill newborns as well as the care of Medicare patients. Nor is a higher supply of physicians associated with better perceived access to care, better technical quality, or higher satisfaction with the care.

How can it be that more physicians are not always better? Much of what we do as physicians directly improves the heath and well being of patients, but we know that regions with a higher supply of physicians have problems which can make care worse; greater unnecessary use of the hospital, greater problems with care coordination, because care is fragmented over many different physicians.

The lesson from places with modest physician supply is that health care systems are very adaptable to different workforce staffing levels.

If physician supply is not of paramount importance, then what workforce policies will advance health care reforms efforts? First, invest in improving what doctors and nurses do. We already have the knowledge and the means to improve birth outcomes and lessen the impact of chronic illness. We also know how to better inform and involve patients in treatment decisions through shared decision making. We need to invest more in these activities.

Second, to strengthen primary care. We know that medical care provided within health systems dominated by primary care have excellent outcomes at lower costs. Training more primary care physicians and fewer specialists will be necessary, but this does not mean that simply adding more primary care doctors to a region will reform a specialist based fragmented care environment.

Although the primary care medical home offers promise and demonstrations should be pursued, primary care performs best when other elements of the care system support primary care providers, as in many integrated delivery systems such as Kaiser Permanente, the Mayo Clinic, the Geissinger Clinic and the Cleveland Clinic. Once we train primary care doctors and nurses, we need to keep them from drifting into subspecialties by paying them fairly.

Third, our current GME financing system remains entangled with Medicare and favors hospital based training. All payers should participate in medical education funding.

Fourth, we need to introduce competition and innovation in GME. The NIH is a model of competitive peer review. I believe that we can improve physician training and increase the number of primary care physicians through the gradual introduction of competition for federal GME funds.

Finally, I agree with Dr. Wartman, that we need a new structure for the development of workforce policy. Currently, the most active federal entity is the Council on Graduate Medical Education, but its charter has greatly impaired formulation of public policy.

In an editorial published last year in JAMA, I advanced the idea of a permanent health workforce commission to craft evidence based policy that improves access to care, health outcomes and the quality and affordability of care. Three key components -- the membership of the commission should extend beyond physicians, include experts in public health and patient centered care, as well as nurses and consumers, health care systems and payers.

The commission should consider policy not just related to physicians, but to the broader health workforce. Then, effective policy will indeed require a dedicated staff that's independent of professional societies and trade associations.

So, here is workforce policy that will help not hinder reform. Promote the dissemination of medical care and health systems already shown to be effective and train greater numbers of primary care physicians, but also implement financing reform that encourages coordinated care; the coordinated care that patients want and need.

Thank you.

SEN. BAUCUS: Thank you, Doctor, very much.

Dr. Goroll.

DR. GOROLL: Chairman Baucus, Senator Grassley, members of the committee, thank you for having me here this morning.

I am a primary care doctor of 35 years, I have taught generations of Harvard medical students, I am an author, I've been a president of a medical society and a reformer. I'm here today because it has broken my heart time and time again to see our fine medical students who came to medical school interested in being physicians, primary care physicians, who will have an impact on people's lives, tell me,  Dr. Goroll I'm sorry. I can't go into the field. It is just not doable.

So, I am thrilled that you have taken up the mission to fix this problem because as everybody has said here today, the issue is not how many people, its what they're doing and the perverse incentives that we currently have, which are not dissimilar from what's happened in the banking industry and in finance.

I think today, my message is going to be that the workforce issue has to deal with the payment issue, and if we're going to solve workforce, we're going to have to solve payment. And payment is mostly distorted, most distorted in the area of primary, and I'll go into that in just a minute.

Another reason for my being here today is I'm from Massachusetts and we have saying that it is easier to get your son or daughter or grandson or granddaughter into Harvard than it is to get a primary care doctor. So we have a problem and I think there are very important lessons, especially as regards if we're going to solve access to health insurance what else do we have to solve, and that gets at the issue of how we sequence health system reform.

So let me start with the diagnosis and with a question. Why is there a serious and growing shortage of U.S. medical school graduates choosing careers in primary care? And by the way, when you look at the GAO report on number of primary care physicians, it is somewhat misleading unless you read the fine print. It says we have plenty of primary care doctors, the problem is that many of them come from overseas, many of them are from third world nations, so we are actually sucking the talent, the medical talent of the world into our country because we can attract our own U.S. medical graduates into this role.

A lot of the issues are very well described. There was a GAO report, there was a recent Graham Center(PH) report, they include the indebtedness of students, they include low pay for primary care, lack of prestige, heavy time demands.

But in speaking with my students, what they really say is I came to medical school as I mentioned a minute ago to do something significant, to have an impact. And what they find is is that the real problem, putting all those other issues aside, is that the primary care job today is not doable. What they see are doctors who are struggling, there is high visit volume, rushed care, and inadequate time to do the job properly.

And as I've alluded to, this sorry state of affairs derives from a dysfunctional, and that term is used over and over again to describe our payment system, and it's dominated by Medicare's fee for service system, RBRVS. Being a Harvard faculty member, I do have to take responsibility because RBRVS was designed by my colleagues Bill Hsiao and Peter Braun at the Harvard School of Public Health to actually fix the problem that we have right now, which is to rationalize payment and to rebalance the imbalance between procedural care and evaluation and management services.

But it got distorted in its implementation and you folks are expert in knowing that we pay disproportionately for procedures and we greatly undervalue is the terms that's used in the GAO report, the basic doctoring, evaluation and management services that are the heart and soul of primary care.

Medicare's fee schedule basically physician fee schedule basically sets the standard for all health insurance in the United States, so fixing Medicare is essential for fixing health insurance in general and for the payment system in particular.

And as we all know we get exactly what we pay for. We are number one in the world in cost and we are number 25th to 35th in health outcomes because we have high volumes of expensive procedures and we have too little doctoring. And it's totally predictable.

Now the problem is is that we pay everybody out of a single pool as you know. All physicians get paid out of a single pool. And what's been happening is that the ever increasing proportion of Medicare dollars that go for expensive procedures decrease the proportion of dollars available for primary care for evaluation management services. And by the way, there are other physicians who are specialists who are non-proceduralists who also have the same problem, neurologists, rheumatologists, others have this, this is not unique to primary care but it is central to primary care.

Consequently we get exactly what we pay for as I've mentioned and how do primary care practices respond? Well the only way they can respond, they respond by increasing volume and now we're in a death spiral because as the volume goes up, the time for talking with patients goes down, the time for diagnosis disappears, and what do we end up doing? Harried physicians find that they basically do nothing more than triage, they over-order elaborate diagnostic tests both to meet patient's needs because patients don't have time with their doctors, and finally they end up making referrals at a very low threshold for things that they've been trained to do.

Finally, also, they cannot afford the multi-disciplinary teams, the health information technology, the infrastructure that is always talked about as essential for high performing health care. The net result, we've taken our quarterbacks if you will and we've turned them into gate keepers, that old term, but that's exactly what they're doing right now.

So now put yourself in a position of our very talented, very excellent medical students and ask the question if you were a smart, perceptive person would you choose this as a career? And the answer is obvious. But would you choose this as a career if we fix it and the answer is absolutely yes.

So I think that we have an opportunity here, I'm going to stop right here and talk about the treatment plan later in the context of our conversation. But I think we have a wonderful opportunity right now to fix and ensure health system reform by fixing the primary care base and since it is the base of our health care delivery system that we start with fixing primary care. It is very doable and I think it is bipartisan and something that we can all agree upon.

Thank you.

SEN. BAUCUS: Thank you, Dr. Goroll. I don't know whether you intended this or not, if you did it's very clever, my first question will be for you to now give our solution. (Laughter.)

What do we do? You've all described the problem very, very well.

MR. GOROLL : Well let me --

SEN. BAUCUS: I talk to primary care doctors, I hear the same thing and I wonder myself, I see their appointment schedule, how in the world can they do it? They just, people just, 20 patients come in and it's like churning. I don't know how they do it, a lot of them don't but what do you think some of the solutions to this --

MR. GOROLL : Well we have to reorient the payment system. Right now it pays for volume, it pays piece meal.

SEN. BAUCUS: Right.

MR. GOROLL: And primary care is comprehensive work. Can you imagine if you only got paid for seeing constituents --

SEN. BAUCUS: Right.

MR. GOROLL: -- and that's our life.

SEN. BAUCUS: Yeah.

MR. GOROLL: And yet your job description is a very comprehensive one.

SEN. BAUCUS: We know that part of the problem.

MR. GOROLL: Okay. That's number one.

So essentially what I would do and let me talk very technically for a moment, I would tease out the from Medicare and Medicare is the proverbial 800 --

SEN. BAUCUS: Right.

MR. GOROLL: -- pound guerrilla --

SEN. BAUCUS: Right.

MR. GOROLL: -- I would tease out RBRVS for payment for primary care, but I would do it in a transitional way, in other words, practices that are prepared to transform because those of us who are thinking about this understand there has to be a new social contract. Primary care practices have to beef up. They have to be able to be more capable than they are right now. They have to organize differently if we're going to meet the demands without a greatly increased number of physicians, they're going to have to learn to work in modern systems, with modern teams.

And that means that if they do that, that's the so-called practice transformation medical home model we're talking about. I would make those people eligible for a different payment model, one that I think will enhance their practice, we might call it a risk R model but there are many, many different kinds that can be tested, would be a risk adjusted comprehensive payment with a major bonus for desired outcomes.

So we align the payment system with the desired outcomes of improved access, cost containment and higher quality. And I think if we combine that with insurance reform, then we won't have the situation we have in Massachusetts which is now we have all, as you folks have pointed out, so we would now empower the practices, we would give them the money that they can now use for investment to be high performing practices as Karen Davis and her folks at the Commonwealth Fund have pointed out, and I think that we then begin to build a strong foundation in the country.

And by the way, if we re-empower the primary care folks, we'll get the best and brightest of our medical students to go into this, not the people who don't have any other choices. And that solid foundation I think will start to build the base to do the other parts of health system reform that we have to do in the other parts of the system.

I would not start a food fight with the specialists on you're overpaid.

I think what we do is we cut down the unnecessary work we're doing, the savings from that I can achieve by having time to talk with a patient, examine them, and make an intelligent decision. That's what I'm trained to do. And --

SEN. BAUCUS: What'd you do about GME?

MR. GOROLL: I think GME would, I wouldn't set quotas, I would let the market take care of itself. If we fix primary care, they will come and they will put demands on primary care training programs. But I think we need to support the faculty, I think we also need to support undergraduate medical education. Title VII dollars are not even a decimal point in the federal budget and yet they've had tremendous impact.

So I think we need to look at them. I like the idea of bringing a commission together to look at what kinds of resources need to be targeted. There's a lot of data on the impact of these programs over the years.

SEN. BAUCUS: Let me ask anybody else who wants to pipe up here. Dr. Wartman?

MR. WARTMAN: Yeah, thank you. I certainly agree that primary care is a centrally important issue in health system reform. But I think we need to remember that we're dealing with a lot of other health professionals that are very, very important and critical to any future health care that we have, whether it's nursing, whether it's allied health, pharmacy, psychology, dentistry, public health, you just name it, it's a very, very long list of dedicated and important individuals.

One of my colleagues gave me an analogy last week and he said you know it's like a big jigsaw puzzle, we keep putting pieces in the box called health care providers and we shake up the box and then we take it out and see what we have and we generally don't have a complete picture.

SEN. BAUCUS: That happens in Congress everyday. (Laughter.) You can shake it all up and it's different every day.

MR. WARTMAN: So you can relate to it. And I guess what I'm suggesting is that we really need to take an overarching look at all the different kinds of health providers and ask the question if we do indeed need more, what is it that we need them to do and to try to take those pieces out of the box and make them into a coherent picture.

SEN. BAUCUS: Why is there such a nursing shortage?

MR. WARTMAN: Well I think that nursing shortages is for a variety of reasons is it's real it's --

SEN. BAUCUS: Why?

MR. WARTMAN: Two things, one is that the ability of nursing schools I think educate and train the number of nurses that are needed is not there, there are faculty shortages --

SEN. BAUCUS: Why are there faculty shortages?

MR. WARTMAN: I would say that probably the incentives for nurses to become and stay on faculty with the salaries and --

SEN. BAUCUS: How do we change that?

MR. WARTMAN: Well I think you need to look at nursing not in isolation from the other professions and say what can we do to make salaries and other lifestyle issues more appropriate for those who would like to train the next generation of health professionals. But I'm arguing very strongly here this morning Mr. Chairman that overarching concrete look at the entire panoply of health professions and how they might best fit together --

SEN. BAUCUS: We understand that.

MR. WARTMAN: -- is what we need to do.

SEN. BAUCUS: We understand that. My time has way expired. Senator Grassley.

SEN. CHARLES GRASSLEY (R-IA): Dr. Goodman, you've suggested that the number of physicians is adequate, just poorly distributed. Dr. Goroll, your experience in Massachusetts however is that there is a severe shortage of primary care physicians in the wake of increased coverage, even though Massachusetts has the highest number of physicians per capita of any of the states. So could you help clarify whether or not there is truly a workforce shortage?

MR. GOODMAN: I think that Massachusetts is very instructive. What we haven't talked about very much today is just a reminder that not only does the supply of physicians per capita varies tremendously but the cost of health care per Medicare beneficiary. And I think there's been a wide recognition that there is substantial waste and disorganization in health care. And if you look at cost and you think of what money buys, the reality is it buys bricks and mortars and it buys people's time, it buys salaries, it buys physicians. Massachusetts is emblematic of the health care system that in some parts is extraordinarily good, has best academic medical centers in the country.

At the same time it is very subspecialty oriented, it is very high cost, very high volume and quite fragmented. In fragmented delivery systems, you can add doctors ever more, and Massachusetts is an example of that, and not result in care that is the care that patients want, not result in care with good outcomes, not result in care that feels accessible to patients. I share Dr. Goroll's interest in terms of reforming primary care but we need to recognize that it's within a context of a greater delivery system and of subspecialty supply. And primary care physicians can create their islands of rationality, but as long as they're in a sea of fragmented care delivery system that's driven by volume of subspecialty services, we will always lose the battle of quality of care outcomes and cost.

SEN. GRASSLEY: If he spoke for you and I quoted you accurately, then we'll just on.

MR. GOROLL: Brief comment.

SEN. GRASSLEY: If you want to say something, please go ahead.

MR. GOROLL: Yes. I think it represents the distortion of the decision making of our graduates. Yes, a lot of Massachusetts data is because we have a huge research commitment and a lot of our physicians even though they may be listed as internists and therefore as primary care doctors in category are hardly that at all. So the numbers are very deceptive.

The real way to measure this is how long does it take to get an appointment with a primary care doctor? And a Mass Medical Society commissioned a superb study that indicated that it's now about two months and that's if you can get one. In Eastern Massachusetts as I mentioned, it's almost impossible to find a primary care physician. Our local television station had a doctor who couldn't get a primary care doctor. So this was doctor and a lovely, wonderful, young physician who couldn't find a doctor.

So I think what we have is a long, I'd say a two decade distortion of the career choices of our young men and women. And by the way, again, this is not a generational thing. These people are as committed as our generation was and they are ready to go. But we have to build it and they will come. And I think that that's the mission.

SEN. GRASSLEY: Could I also ask Dr. Goodman, Dr. Mullan this will have to be my last question for this round, the geographic adjustment and Medicare payment are major factor and difficulties at rural states like my state of Iowa experience in recruiting and retaining physicians. Physicians in rural areas receive significantly lower Medicare payments than those practicing in urban areas.

This is especially ironic since Iowa's recognized as providing some of the highest quality care and I could quote a Dartmouth study but I won't go into that.

Question: in your view, what has been the impact of the current Medicare geographic adjuster on the shortage of physicians and other health care providers? And a follow up question: what changes in Medicare reimbursement would you suggest that might help increase the percentage of physicians and other health care professions practicing in rural America?

MR. GOODMAN: Right. I certainly would agree that hospitals in Iowa, hospitals in Montana as well have, hospitals in Utah, have some of the most efficient and high quality delivery systems and they do it with a very modest physician full time equivalent input into patient cohorts. They do it very well for a very modest amount of if you will physician labor. And so the current geographic adjustment really unfortunately penalizes efficient systems and perpetuates inefficient systems based upon volume.

Now I'm going to make a distinction because I've mostly talked about physician supply in the context of supply that is at least by say HRSA standard considered adequate if not ample. The issue of underservice, of health profession shortage areas or medically underserved areas is very real. It's real in my state, I'm a former National Health Service corps physician, it's a persistent problem but it's also one of all of our problems in our delivery system, one that we really have the best means to take care of.

And we do have programs that have been shown to be very effective, National Health Service corps, community health centers, we have unfortunately persistently underinvested in them. It involves a relatively small number of physicians to rectify these problems. And because of that, most of our work at Dartmouth has really focused on physician supply distribution beyond underservice because that's where some of our greatest opportunities are in terms of physician labor that is now really quite inefficiently deployed and could help to solve the problems, the needs of other patient populations without raising costs further.

SEN. GRASSLEY: (Inaudible.)

MR. MULLAN: No disagreement, quick add on, the Medicare incentives have been less effective than one might want which speaks to two issues. One is they could be stronger, they're not very well publicized, they're not very well used in certain areas. But the second item is the organization of the system. When we talk about practice reform, I think we need to talk about other ways not simply cash incentives within the current arrangements but ways to incentivize other care provision arrangements which in primary care will certainly help and probably in this system as a whole will help us as well.

SEN. GRASSLEY: Thank you, Mr. Chairman.

SEN. BAUCUS: Senator Wyden.

SEN. RON WYDEN (D-OR): Thank you, Mr. Chairman. This has been an excellent hearing and a great panel. Seems to me that thousands of Americans are losing their jobs at the precise time when thousands of new health care providers are needed. And sensible health workforce policies then provide multiple benefits. You've got American getting good paying jobs in their communities, jobs that cannot be outsourced, while at the same time patients and the health care system benefit from having fresh health care provider talent and advocates. So I want to start with some issues relating to the work force question.

I was interested in your comments Dr. Wartman because it really goes to something that has really concerned me greatly as I've gotten into this issue. And for example, under the Workforce Investment Act, the government spends close to $4 billion and it's not possible to see what is going in clearly to the health professions. For example, we'd like to know what's going into training nurses and nurses aides and areas where there's a consensus more talent is needed. I gather that you're very troubled about the fact that some of this money is not spent very efficiently and that's why you'd like someone to serve as a coordinator to try to gather exactly what is being done with the federal dollars today.

MR. WARTMAN: Well I'm a big vision person and I think that we need to have a much better overall vision and perspective on the whole picture and what's going on, what are the inputs, what are the outputs, in terms that everyone can understand in a very transparent sort of way. So yes, I would agree.

SEN. WYDEN: Now Dr. Goodman you all at Dartmouth have been doing very good work and I was interested in your idea of competition for GME funding. Now before a big brawl breaks out over that one -- (laughter) -- let me ask you if I might, would there be a way to insure that that could be structured so that everybody would have a fair chance to be part of it? Because I think, for example, what you all have done at Dartmouth is to show the tremendous value of shared patient decision making. And that ought to be one of the things that's taught and emphasized and as clear as Jack Winberg (ph) for example drilled that point home, we ought to be promoting it, how would you structure the competition so as to have schools promoting that sort of approach in their applications for GME funding and it was done fairly?

MR. GOODMAN: Thank you, I will try to be brief and I use the example of the NIH because I really feel that that is a model and that one can set programmatic aims and then you know, NIH funding is free and fair funding, I mean there is no favor really, it's a great model. Right now, GME is fossilized. Those who have had great training programs in the past or at least large training programs forevermore will receive funding for those programs. It's very little incentive for innovation, there's very little ability in terms of the government to be able to influence the specifics of training like incorporating shared decision making or a notion of population health or any other curriculum innovation.

This would also allow for places that traditionally have not had large GME training programs. Places like Utah or Montana to begin to expand their training programs without the assumption that places that have always done it should always do it just because they have done it.

SEN. WYDEN: We'd like to follow up with you on that. Let me see if I can get you Dr. Mullan on one last point. I think it's well understood that there's tremendous promise with what a lot of people call the medical home. I like to call it the health care home because I think we ought to be saying that in a lot of instances, individuals other than physicians ought to be the medical team leader.

So if you take the proposition Chairman Baucus has focused on it in the White Paper, a lot of Senators are interested in this, who do you think would be the best, where do you think would be the best place at the federal level to say this is where we ought to lead the effort to train people to head health care home or be the medical team leader? Would Medicare be the best place to do this, or what would be the appropriate place at the federal level to lead that effort to get the medical team leaders?

MR. MULLAN: A good question, Senator Wyden. The Medicare has had the leading role, de facto role in health workforce policy because of the enormous impact of Medicare GME. But it's been a role that has not been an active one in the sense of having either the mandate or the capacity to do analytic work or projections or then to move the money around as Dr. Goodman has suggested.

The bureau of health professions in HRSA has had a more cerebral role, but no money or mandate to move out in an aggressive way in this regard. So I think you'd need a reorganization or a separate unit set up within the government. I think funding traditionally for workforce programs has come through Title VII to HRSA which is a different authority, different jurisdiction which while we're on the topic is I'm delighted this hearing is as broad as it is for those of us working in the field, the jurisdictional issues between finance and help for instance have prevented a big picture look at issues like --

SEN. BAUCUS: Well not this year.

MR. MULLAN: Yeah, well --

SEN. BAUCUS: Not this year.

MR. MULLAN: This is wonderful for those of us who have been here. So, in answer to the question I think you put your finger on a real problem in an area for growth in public policy.

Right now the agencies in HHS neither one has all of the abilities to do it. Between them, that is HRSA and CMS, there needs to be responsibility for this and that could be a joint effort or lodge neither one with correct authority.

SEN. WYDEN: Thank you, Mr. Chairman.

SEN. BAUCUS: Thank you. I'm going to interrupt our proceedings right here. We have a quorum present to report out the nomination of Mr. Kirk to be USTR representative, quorum is now present and I thank my colleagues for adjusting their schedules, we absolutely now do have a quorum.

So the business before the committee, and I might tell our witnesses this will be very brief. The business before the committee is the nomination of Ronald Kirk to be United States Trade Representative. And I'll now entertain a motion to report the nomination.

SEN. GRASSLEY: (Inaudible).

SEN. BAUCUS: Yes, is there any debate? If there's no further debate, the committee will vote on the motion to report the nomination. Those in favor say aye.

(Aye.)

SEN. BAUCUS: Aye. Those opposed no.

The ayes have it and the nomination is ordered reported.

SEN. GRASSLEY: Mr. Chairman, I have an absentee that wanted to be recorded as a no vote and that's Senator Bunning so would you have the record show that?

SEN. BAUCUS: Yes, sir. The clerk has so noted.

Senator Grassley, I believe you have a brief statement to make.

SEN. GRASSLEY: Yes, it's not necessarily brief so I hope that my colleagues will bear with me because I think our committee staff --

SEN. BAUCUS: I might tell everybody that when Senator Grassley is finished with his very appropriate statement, that maybe Senator Kyl might have a --

SEN. JON KYL (R-AZ): No, Mr. Chairman, I just make a ten second comment here since I will have to necessarily leave, I very much wanted to ask this very distinguished panel some questions. If I could submit a couple questions in writing, I'd appreciate that very much.

SEN. BAUCUS: Absolutely.

SEN. KYL: Thank you very much.

SEN. BAUCUS: But then we'll get back to the hearing right after Senator Grassley's statement.

SEN. GRASSLEY: I think there was an article in political March the 9th that was unfair to our staff on both sides and I want to speak to that.

The article reports citing anonymous sources that staff is the driving force behind this committee's vetting of nominee tax returns. I found it interesting that while these sources didn't shy away from blasting finance committee staff, they chose to remain anonymous but the political isn't the only publication in town that didn't get the committee's process right. The Washington Post reported March 4th that finance committee staff reviews all tax returns of all nominees coming before the Senate and conducts full fledged IRS audits.

I want to set the record straight, the Senate Finance Committee only reviews tax returns for those nominees that come before this committee and does not conduct audits in that process. Since this committee has jurisdiction over tax return issues, or over tax issues, it's only right that it reviews all tax returns for nominees coming before this committee.

I want to stress that the Finance Committee is not doing anything different now for what it has always done under the leadership of either Senator Baucus or this Senator. We are vetting nominees for the current administration the exact same way that we vetted nominees in previous administrations.

We have always asked for the last three years tax returns and reviewed them with the assistance of the Joint Committee on Taxation then as now. Many nominees have had to answer questions arising from the review of returns. Some nominees were not able to be confirmed and some perspective nominees were not nominated as a result of the vetting process.

The tax issues of the nominees considered by the committee this year came to be public only because nominees chose to proceed. Chairman Baucus and I agree that if a nominee chooses to proceed after tax issues are identified, then the public should be informed of those issues. In every case, the nominee is aware that we will make this information public. If there's a disparity between what it might appear to have been done during the Bush Administration versus this one, we've had two or three during the Bush Administration that decided not to go forward when their tax information, when we discovered things wrong with their taxes, and if it didn't go forward then obviously that information was not made public.

The Finance Committee has an obligation to thoroughly vet every nominee. Many if not all of these individuals will make decisions that will impact the lives of many people. The purpose of the vetting process is neither to embarrass anyone, nor to further inject politics into the process. Rather, the purpose of the vetting process is to ensure that nominees may be trusted with the responsibilities that come, if the senate confirms them. By ensuring that these individuals are paying their taxes, something which they should be doing anyway, we are ensuring they are, at a minimum, complying with the rules that in many cases they will help to create and administer.

I feel that much of the criticisms leveled at the Finance Committee is based on misunderstanding of what the committee actually does, or it could be a deliberate attempt to create distractions from tax problems that recent nominees have had. One of my colleagues in the senate, not on this committee, according to one press account, was concerned with the maze, we quote, the maze of forms and the onerous reviews for nominees  (inaudible) -. Now if there is a maze of forms this individual is referring to, the IRS form 1040, then I agree that it is maze like.

But we shouldn't hold the people who are literally running this country to lower standards than the hundred and thirty million individuals and families that file tax returns every year. Those criticizing the committee's vetting process have taken the cowardly approach of attacking committee staff. I think it's ridiculous I even have to say this. But Chairman Baucus and I drive the vetting process for these nominees. Committee staff either work for Chairman Baucus or this senator, and staff does not, does what we ask them to do. It's unacceptable for anyone to attempt to blame the nominee's tax errs on individuals who discovered or asked questions about those errs. And the rest of my statement I'll put in the record.

SEN. MAX BAUCUS (D-MT): Thank you senator, very much. I might say in this subject, the papers of nominees are often set up late. I might say, for example, the papers for the nominee to be HHS Secretary Sebelius have not yet been received by this committee. And we have to see the papers before we can look at them. And I just urge everyone whose involved here to help all the way around to get those papers up here so we can look at them. We look at them, we look at them thoroughly, but also very expeditiously without compromising the thoroughness, I think. I think we do a very good job, frankly. But thank you, senator. We'll now return to our regularly scheduled programming.

Senator Nelson, you're next.

SEN. BILL NELSON (D-FL): Thank you, Mr. Chairman. You all had testified that we need more primary care physicians. And I agree with you, and I understand that. But that does not answer the basic geographical dislocation of a high growth state that was suddenly frozen in its number of residents back in the 1990's, and rewards those states that have not grown with the result that a state like mine, Florida, Nevada is also in this category, we educate the doctors, but then we don't have the residency slots. And we can address the specialty over utilization of specialties that you're talking about.

But then, once we educate them they have to go find a residency outside of the state of Florida. And of course, you know that a doctor will usually practice where they've done their residency. Now, that's what we're trying to get at with lifting the cap. Now, what do you all think about that?

DR. GOODMAN: Well, since I've taken a very strong stance on this thing, I just point to the fact, let me, let me agree that this is a problem, and which is one of the reasons why I suggested that we have a competition for GME funds. If we look at the last twenty years, in the last twenty years we have grown physicians supply dramatically in this country. But physicians continue to settle, I'll say it again, for every physician that settled in a low supply region, four physicians settled in a region with already very high supply. So, just lifting the cap is not going to rectify the geographic disparities or the specialty disparities. It needs to be more nuanced than that.

And because we all, I think, bristle against the idea of a commission or an individual who would decide where these physicians go, I think that the fairest way, and we know the most effective way, is a peer review competitive system. There's no reason why Florida should be disadvantaged because New York got there ahead of them. Florida needs to grow. New York needs to make its case, would be my point.

SEN. NELSON: Well, the fact is that Florida is going to surpass New York in total population in the year 2012. And the last, from 2012 back to the date that there was the freezing, which is going to be some 14, 15 years, New York has shrunk in population, and Florida has exploded in population. And we're meeting that population. I want to hear from some of the rest of you. Some of you were shaking your head agreeing with me. I want to hear from you.

MR. : I think the problem you point out is a real one. And it will get worse for exactly the reasons you suggest. Freezing or capping GME funding by Medicare was, as I understand it, an effort to prevent continued cost escalation by more residents who has (ph) no particular plan. And it was, it served at the moment. And you raised a question of the future, and I think it brings up the key question about graduate medical education, which as you recall, I suggest it was the governor, was the regulator of what we got in the way of work force eventually.

And it does need a more nuanced, as Dr. Goodman suggests, approach. It needs to be not simply formulaic, with a cap that rises or falls, but it needs a more specific plan. Whether that plan is national, regional or local, we need to insert accountability planning and accountability into that system. Simply raising the cap under the current circumstances would certainly help in areas of fast growth. But as a national policy would, for the reasons we described, in my judgment, not make sense.

SEN. NELSON: Dr. Goroll, I want to hear from you before my time. And I want you to tell the chairman how we do this nuanced report, so that we're not constantly behind the eight ball in states like, high growth states.

DR. GOROLL: Well, I can only speak for primary care, but I would tell you that I think the standard should be not a political one, but it should be accessed to, in my field, to primary care. And there are validated measures of that. And if there is, if the state is found to have inadequate access, and I think since primary care is the foundation. One might say that's a first target that you'd want to work on, then that could then, go to Medicare as an application, or a criterion for application for additional slots. And one could also apply that to other specialties. There are some standards as to what's an appropriate referral rate. And for example, in you state you may have an oversupply in certain specialties, but not enough in primary care. So I think there's a rational way to do this, and getting around just an outright cap.

SEN. NELSON: Can we work on that, Mr. Chairman?

SEN. BAUCUS: We have to, senator. This is a hugely important problem. Senator Hatch.

SEN. ORRIN HATCH (R-UT): Thank you, Mr. Chairman. I want to congratulate the panel for being a great panel and helping us to understand these matters a little bit better. Mr. Mullan, Dr. Mullan, excuse me. You've mentioned the need, you feel we need a commission, and could you just elaborate a little bit more on what having a commission might yield for us?

DR. MULLAN: Well there are two levels of commissions. One would be a federal commission, which would, with better information develop long term recommendations for workforce development in medicine and other health disciplines. There have been many experiments in or on, growing numbers of experiments in state based activities. And I think Utah is really showing the way with Utah Medical Education Council, which, as I'm sure you're aware, is under a demonstration authority with Medicare, has essentially taken responsibility for graduate medical education planning and funding in a local area, a state in this case.

I think that begins to talk about the nuances that we need for planning and how Medicare could begin to move in a way that was more specified, and would have flexibility as the demographics of the country move, they move west in particular, or south, to move our residency support in concert with that. So I think that's a very instructive example on a regional level, and it would be good if we had a kind of brain trust on the federal level that could work with it.

SEN. HATCH: Great. Dr. Goodman, we have been told that there are geographic differences in the utilization. How does the physician mix, or the availability of certain specialties influence the high use of services in some areas?

DR. GOODMAN: Well we have a great deal of information about this now. And it's not what we would expect. Let me say that we know that in general, that high physician supply is associated with high utilization of services, but with a particular characteristic. Its services tend to be one, much more hospital based, a lot of intensive care unit days, and fragmented over many, many different types of physicians. The irony of the geographic variation is that there's a strong correlation in the per capita supply of primary care physicians at this regional level, broad regional level, as there is of specialist physicians. Where you find more of one you find more of others. But if you look within health care systems where the care tends to be dominated by primary care, so the ratio, if you will, favors primary care, this is where care become much more efficient, Senator Hatch.

SEN. HATCH: Thank you. I think this panel's been very helpful of the committee and, we've got some very tough issues ahead of us, and a very short period of time to resolve major health care reform issues. But with your help we may be able to do some good in this area. Let's, and I've appreciated every one of your testimonies here today. Thanks Mr. Chairman.

SEN. BAUCUS: Thank you, Senator. Senator Carper, you're next.

SEN. THOMAS CARPER (D-DE): Thank you, Mr. Chairman. I just want to say I fully concur with what Senator Hatch has just said. We have a lot of witnesses to come before this panel, and almost without exception the panel's  (inaudible). So thank you for being here. In my last job, I was privileged to serve as governor of my state of Delaware. And we, in education reform efforts, I sought to harness information technology and bring it into not just every school, but every school classroom. I think we're the first state to, to offer  (inaudible)  every public school classroom in our state. And we work hard to fund and to bring computers into our state.

And I think we had the best ratio of students to computers of any state in America. At one time we may still have that. We found that, having done all of that, that a lot of our teachers use the computers for sending email, but not much else, because they've never been trained to use the technology. They weren't familiar how to bring it into the classroom, how to use it to bring the real world into the classroom, and to enrich the learning (ph) for other students.

We entered into a partnership with state wide Delaware Technical Community College to offer training for our veteran teachers. And that training was augmented by new graduates from colleges and universities who are becoming teachers, and they were familiar with the technology. And interestingly enough, they trained the veterans, when it usually works the other way, when people join a school.

But Dr. Mullan, I think you mentioned the need for health IT training.

And given the experience that we've had with respect to our education at schools, I couldn't agree more. The congress provided and recently adopted stimulus package, some 19 billion dollars of funding to advance health IT at hospitals and at doctor's offices. But implementing a health IT program is not enough. For us to see the maximum benefit from our health IT system, doctors, nurses, other health care providers are going to need to learn how to use it effectively, much as we did in our school classrooms. And my question of you is, what do medical schools do now, or maybe you can, not just medical schools, but schools training nurses too, but what do they do for health IT training? And do you believe that medical schools or residency programs need to do more, can do more?

DR. MULLAN: It's a good question. And I, I think I can speak definitively about it. But I will say we have two things going for us. One is that many academic health centers and teaching settings now have adopted a much more electronic format for information management. So those of us who grew up with the electronic medical record will be much more effective at using it and critiquing it towards the future. And second is we're blessed with a generation of young people coming on who are much more computer literate themselves, who participate in the changing and growth and development of the application of the technologies.

SEN. CARPER: Sort of like my sons do with me. Anyone else want to 

MR. : Yeah. I just wanted to mention that we're involved with a project with the American Medical Informatics Association, in which we've put together a grant proposal to develop a informational, a teaching course in informatics for all clinical students in every health profession as an integrated phenomenon. And it's really a ground breaking kind of proposal. I think one of the central problems in IT is that there is no single consistent platform that everybody uses, from office to office, from state to state, and around the country. And I'd like to, I would like to think of IT more like the inner state highway system. You know, you can get on the highway in Delaware, or you can get on it in Montana, and you pretty much know the rules of the road. Speed limit may change a little bit, but you know how to get there.

SEN. BAUCUS: I don't know if they have a speed limit in Montana.

MR. : Yeah. So I, I'm just saying, I think it would be great to have some type of a uniform national standards for IT, so that everybody can talk to each other and work the system.

SEN. CARPER: All right, thank you. Another one, back to in a moment, if others want to comment please feel free, but I think you, you mentioned a proposal, I believe it was in Title Seven, to use those funds there, to create reaching community health centers, I think that's what you called them. Essentially partnerships for training purposes between medical schools and -- (inaudible) -- supported community health centers, which enjoy a lot of support around here. Could you describe this initiative in more detail for us? And tell us how it would work effectively with the National Health Service Core, to help improve training and to recruit new primary care doctors, especially to underserved areas.

MR. : Teaching in community health centers has always been a challenge, because, of course they're not basically teaching institutions, they're service institutions, and usually hard pressed. So to have the supervision in the way of clinicians to teach, the space, in order to have extra rooms to have students, and the communications capability to work with the students and their sending (ph) institution, are all add ons, and many community health settings are simply not possible, or if they are they're really ragged.

This isn't to say that a lot of teaching hasn't gone on and doesn't go on, but this could be much more industrialized. It could be part of what we do, investing in both the health center side and the medical school or teaching hospital side. We've never had an initiative like this, that made the teaching community health center a primary concept supported by financial incentives.

This could be a great asset in both the teaching side and on the health center side. And finally, the National Service Core, which should be much more prominent in all of this if there were more core members, would play a role as many of them do work in health centers. A minor issue to that is, they are required to do 80 percent time clinical work. Now, if they can teach in that, that's good, but certainly giving them recognition for teaching as part of their clinical work would be an important asset to harmonizing the whole system.

SEN. CARPER: Thank you very, very much. And thanks to all of you.

SEN. BAUCUS: Senator Lincoln.

SEN. BLANCHE LINCOLN (D-AR): Thanks Mr. Chairman. And thanks to our distinguished panel. We appreciate your willingness to be here and help us solve these, these problems. Being married to a physician who's been in academics and research, and now in private practice, I hear an awful lot of your side of the story. But we're glad you're here. And I'm glad that you're here on behalf of a lot of (ph) your colleagues. Many of you'd made the point that there are downsides to simply growing our physician supply without making the much needed changes to the way that we deliver care and pay for care.

And while we may not need a gross increase in the number of physicians nationwide, you also have to recognize, I hope, that we have some serious workforce struggles in rural America. I represent a state that is predominately rural. We are also a snapshot of where the rest of the country is going to be in the next ten to fifteen years. We are disproportionately elderly. Our elderly are disproportionately low income, and they disproportionately live in rural areas where they are more difficult to serve. And so, it's critically important for us to get it right now.

Because, again, we are already where the rest of the country hasn't gotten to yet. And it's important. In realigning payment incentives towards primary care, high quality and coordination of care, is that really enough in terms of getting practitioners out into rural areas? We've had difficulties, we still have problems getting providers to stay in the communities that have made matches for their, you know, once they meet their match requirement they're ready to go somewhere where a spouse can get a better job, or there's better schools, or there's, you know, better cultural life, a whole host of different things. Are those three things enough to really see an increase of primary care physicians out there in rural areas -- (inaudible).

MR. : There's some very interesting data from the Graham (ph) Center, that is just been collated on the effectiveness of various interventions, for having people stay in rural areas. And one of the most powerful is the National Health Services Core. Because these folks become part of communities, and in their service. And many of them go on to stay. So I think forming bonds and ties, I think, is very, very important in becoming part of a community, which might overcome some of the other cultural problems and barriers for people who would come out there.

By the way, that's why I, I am not in favor of just a loan forgiveness problem, a program for a certain number of years of service.  Cause nothing is more disruptive than somebody who becomes a primary care doctor for four years, and then says I've done my duty, and I'm out of here. I think if we're going to fix this problem we're really going to need smarter strategies and longer term financial inducements. For example, may we'll give somebody a pension if they stay their career, just like we do in the military. You serve thirty years, you'll be financially secure there after. But I think the, the simple minded things of, well, these students have a lot of debt, let's just give them debt relief. Actually the data shows that there's no correlation between debt and going into, or not going into primary care. It has to be --

SEN. LINCOLN: In the rural area it does.

MR. : I'm talking about --

SEN. LINCOLN: Not just primary care, but --

MR. : Right.

SEN. LINCOLN: Service in the rural area. There's definitely a --

MR. : Separate, separate issue.

SEN. LINCOLN: Right. That's my issue.

MR. : I understand.

But I think the National

SEN. LINCOLN: - (inaudible).

MR. : What the data does support is the National Health Services Core being, and I think Dr. Mullan alluded to this being reenergized. Remember that show Northern Exposure, that was on television? That was, but that was an example of somebody becoming part of the community.

SEN. LINCOLN: Right. But we try really hard, whether it's in the matches or the loan program or whatever. Those communities desperately need those physicians. And they make every effort to make them a part of the community. But when the incentives become greater, and other areas, there's a whole host of different things that, I just think it's an important issue that we have to address, because that's critical. And before I recognize, I just like to throw out my second question before I lose my time. Inadequate Medicare reimbursement for geriatric based services, such as Care Coordination, Geriatric Assessment, I think is one of the leading disincentives to beginning and continuing a career in geriatrics.

We have seen in a recent report from the Institute of Medicine, in Arkansas alone there are currently only 56 geriatricians available to care for more than 385 thousand adults, 65 and older, an estimated shortfall of 142 geriatricians. And it's also estimated, in addition, that we will need 337 geriatricians in the year 2030, when the projected population doubles in the terms of that age over 65. So, what type of training do we need to think about to support primary care providers, so that they are adequately prepared to provide the kind of geriatric assessment, care coordination to service these types of populations? Because it's going to be huge.

MR. : I'd like to respond to both questions if I can by emphasizing that I think it's really important for the committee to look behind physicians to solve these problems.

SEN. LINCOLN: Absolutely.

MR. : And we've heard mostly talk about physicians today. There are a host of other professions that are out there that can be very, very helpful. And in fact, in some models that I have seen instrumental in bringing care to needed populations, whether they be in the nursing profession at a variety of levels, or whether it be in the physician assistant programs, pharmacy in the community, psychology, things of that sort. It's all out there. And in moving beyond just looking at the physicians, we need to consider all health professionals as we put this together.

And then you bump right into the problem that I alluded to earlier in my remarks, which is that there are a lot of barriers to making that work well. And those barriers could be everything from health workforce laws, standards, scope of practicing, licensing, credentialing, things of that sort. How do you reimburse team care, what does that mean? How can we make that, how can we improve that? So I think there's a real, a good opportunity here to begin to look at the big picture of all the providers that are out there, and figure out ways to overcome the barriers that keep them from working very effectively together. My opinion is that we will, if we rely solely on physicians we won't have a solution that work.

SEN. LINCOLN: Absolutely. Mr. Chairman, if I can just comment quickly. You're so right. And we're working hard on bills now that will provide additional training for nurses, nurse practitioners and others for specific areas of geriatric training that could be something that would really be night and day in terms of their ability to really focus on the geriatric population. There's great other institutional settings like the geriatric education centers, the AHEC (ph). I don't know how familiar yall are with AHEC, but it's a wonderful system with our medical school in Arkansas, where we can actually get people out into those areas.

But I would also say that it's going to be critical if we're going to use these other medical professionals, that the insurance or the delivery has to be able to accept them, because you've got communities where you've got a whole population of people who has made, may have worked for the same company, and have the same insurance. And if it doesn't, the coverage doesn't cover a PA or whatever, they're going to still have to travel for two hours to get the health care somewhere else. So, it all has to fit together. So we appreciate your help and look forward to working with you on that. Thank you, senator.

SEN. BAUCUS: I'd like to ask Dr. Mullan, is, with (ph) respect to GME programs, do we make better use of GME by encouraging the programs to provide, to teach providers to learn new skills like health IT, care coordination? I think you said GME doesn't have a brain. And, so, it we were to give it a brain, and assuming it's an intelligent brain, what would intelligence, what would, how could an intelligent GME brain operate to help solve some of the questions we're talking about here?

DR. MULLAN: A very good question, Mr. Chairman. And a tough one. There are two levels on which the brain could be activated. One is the distributional level, in terms of allocations. The second would be a content level in terms of influence on what is taught. On the latter level, one would have more difficulty with the institutions or the professions or the specialties not wanting intrusion by the feds or outside forces as to what we ought to teach. The issue, nonetheless, is an important one, because there is a group, the ACGME, the accreditation council for graduate medical education that accredits programs.

And they have attempted some degree of course correction with a set of competencies that are now required of all residency programs. And I think in the judgment of most, those have had some impact. They've certainly had an impact in terms of what gets done. The outcome's a little harder to judge. Now is there a federal role in that? I think that would deserve debate.

SEN. BAUCUS: What do you think?

DR. MULLAN: I think it would be beyond some large indicators of we're concerned with the absence of instruction in patient center care, or care coordination. That would be good. To get into managing which program does or doesn't do it would become, I suspect very entangling very quickly. But as part of the allocation process, which I think is unavoidable, that somehow we're going to have to work out a system in which somebody, some brain is saying we need more residency training in Utah, and less in somewhere else. As part of that there could be content as well. And I'm increasingly persuaded by, that should not be done from Washington, that it should be done with intermediate organizations.

Whether they are state based or regional based, or consortia of some sort, which requires medical educators, in this case graduate medical education, folks responsible for graduate medical education, to both look to the needs of their region or their state, and talk to Washington about what is warranted in terms of support. So you'd need the ability for Medicare to work through it immediately.

SEN. BAUCUS: (Inaudible) -- I remember Dr. Goroll earlier saying something to the effect don't reform (ph) GME, just build it and it will come, or something on one of those lines. That is, change incentive so that medical school students want to go into primary care. And then the GME system, GME allocation, or content and/or allocation will follow. I'll give you a chance to -- (inaudible). Dr. Goroll, what do you think about what Dr. Mullan said?

DR. GOROLL: There's also another way to drive the GME agenda. I sat on the ACGME for six years, and it is very focused on training physicians in terms of, by the way, it's the only education accrediting body in the country that is not public. That is, it is run by the profession and not by a government body. It's very interesting in terms of where it stands educationally. They're very thoughtful people there, and it has become outcomes based instead of process based for the applications. So I think they are a potential, very constructive force. But I wouldn't have the federal government saying there should be training in X, Y or Z. What I would do is have payment based on outcomes for a substantial amount of physician payment, and now, those outcomes are the patients 

SEN. BAUCUS: Are you talking about GME payment outcomes 

DR. GOROLL: Yeah, I 

SEN. BAUCUS: You're talking about reimbursement, physician reimbursement.

DR. GOROLL: Right, but the way you affect GME is you change the rules of the road for your professional life, and if you're now going to get paid according to patient satisfaction and access, and efficiency and cost effectiveness and quality of care, then you as a trainee want from your training program the skill set that's going to allow you to be successful in that. Right now, all it is, is we're going to train you to do a catheterization, and we're going to train you to do as many as you can possibly do, and what I am suggesting is, if you change the rules for payment, you will change the agenda in these other areas.

SEN. BAUCUS: Dr. Goodman, you wanted to say something?

DR. GOODMAN: Yeah, I don't disagree with you, but I think that for the nearly $10 billion in federal funds that go into GME, that some accountability is in order, and so that when programs go back to the federal government and seek more funds, there ought to be measurement, and there ought to be reporting and it ought to be against explicit goals and whether they've been achieved or not. And they could be curriculum goals or they could be distributional goals. It doesn't have to involve micromanaging. I think that the worry about micromanaging is really sort of a cover for our own profession's fear of any sort of involvement or any sort of, at times, quite frankly, accountability in this realm. GME decisions now are the brain, or the individual decisions of all the teaching hospitals in the U.S. Their individual decisions, collectively, in an uncoordinated way. These are tomorrow's physicians, so introducing some measurement accountability, I think, would augment and certainly complement exactly what you're saying.

SEN. BAUCUS: Dr. Goroll, what do you think of what Dr. Goodman said?

DR. GOODMAN: I think it makes excellent sense and I think that 

SEN. BAUCUS: Some measurements 

DR. GOODMAN: As long as it s tied into where we're going as a society altogether. So this is part of a consistent message. We have often, in medical school, had such mandates or actually such programs. We could name 100 of them. HIV testing, breast, women's health, on and on. There's a whole agenda, a social agenda, but they are not durable, because when people get out in the real world, the rules are different, and what I'm suggesting is that we make the rules and that includes payment but that also includes accountability to be consistent and thoughtful, and again, aiming at what are we really trying to accomplish?

SEN. BAUCUS: Thank you. Senator Grassley.

SEN. CHARLES GRASSLEY (R-IA): I just have two questions. The first one will go to Dr. Mullan and Dr. Goodman, and then the last one to Dr. Mullan. On the first case, one of the concerns I've heard over the years is the challenge of providing off-site training to residents. It makes sense for residents who plan on practicing in settings like community health centers or doctors' offices to train there. This seems more appropriate than spending the entire time at a hospital. Based on testimony we've heard this morning, it seems like GME funding rules play a part in this challenge, so can you provide more detail about how GME funding rules are an impediment to off-site training and what reforms Congress can make to promote off-site training?

DR. MULLAN: The current rules for Medicare GME provide a number of barriers to off-site training, in both indirect and direct portions. When they're different, they get complicated quickly, but essentially the systems in place, the default system is one that funds hospitals for residents that are in hospitals, and when they move off- site, the hospitals will lose funding for those individuals. Now it's a little different for direct and indirect, but that's the essential problem on the hospital side.

On the community side, the community health center, the private office, the public health office, they, by current law, do not get the benefit of the training dollars, which stay with the hospital or don't get funded at all. So we need to both reduce the barriers for moving out of the hospital, and provide an incentive or assistance to the community based site that would be doing the training for that period of time as well. So there are many fine points to that, but those are the essence of it.

SEN. GRASSLEY: Anything to add, Dr. Goodman? Okay. Then to Dr. Mullan, you testified that the U.S. primary care work force has become reliant upon international medical graduates. Would changes in the structure or education training and reimbursement of health care professionals have an impact on our reliance on international medical graduates?

DR. MULLAN: The major way in which we could move to become more self sufficient in the United States is by increasing the number of medical students we train, but not increasing the number of residencies. Right now, a quarter of our residencies are occupied by international graduates and about the same number of our physicians in practice are international medical graduates. So very briefly, we graduate about 18,000 medical students each year from U.S. allopathic and osteopathic schools and we have about 24,000 positions for interns, first year residents.

And the difference, that 6,000, is made up by very able, very eager international, very bright international medical graduates, and there are probably two or three times that many ready to take the jobs. It's an infinite supply of people who want the come. If we increase our medical school output, which is happening as we speak, happily in my judgment, but we do not raise the roof of the ceiling, as it were, of the GME dollars, or the GME positions, at least we don't raise it radically, gradually, the U.S. graduates will fill in more of those spaces and we will be more self sufficient.

That's good domestic policy and that's good foreign policy, because around the world there is considerable concern now as the world tries to get its medical house in order, that the United States and other northern nations are poaching the south relentlessly, and that we should, after all, be able to train enough of our own. So this is very good in terms of U.S. global positioning. This also increases opportunities for domestic students, and I think we're on a good trajectory.

SEN. GRASSLEY: Thanks to all of you for your fine testimony. We'll probably be getting back to you sometime. Thank you, Mr. Chairman.

SEN. BAUCUS: Thank you, Senator. Dr. Wartman, I want you to know, we have not forgotten your main issue. But you have to understand there are a lot more health providers in addition to doctors, nurses.

DR. WARTMAN: Thank you.

SEN. BAUCUS: We very much appreciate that and you gave some clue as to what some of the barriers were and I assume that therefore, that's included what some solutions are

DR. WARTMAN: Right.

SEN. BAUCUS: Addressing those same barriers. A couple more just general questions. You know, if we provide universal coverage where every American has health insurance, as one of you said, that's going to add more stress to access, I guess. We don't have enough primary care docs with all this new universal coverage. I guess that's part of the problem in Massachusetts. I assume that's right. This could further exacerbate the problem, the more this country moves toward universal coverage, where everyone has health insurance. Is that true? Is my conclusion accurate or inaccurate?

DR. MULLAN: It's accurate, in my judgment.

DR. GOODMAN: I think that it will just, you know, adding more, which we need, certainly universal coverage, but again without reforming the parts, if we're also interested in addressing costs and outcomes, we're going to have huge problems.

SEN. BAUCUS: Right, but isn't this going to be more costly?

DR. GOODMAN: It doesn't have to be more costly.

SEN. BAUCUS: I'm sorry?

DR. GOODMAN: It does not have to be more costly.

SEN. BAUCUS: Well some people looking at this and listening to this hearing, might say, oh, my gosh, that's going to add that much more cost to an already costly health care system in this country.

So what do we do to solve that one? Dr. Goroll?

DR. GOROLL: Well, if we have 30 percent waste, or even a fraction of that 

SEN. BAUCUS: And you think that's what we have?

DR. GOROLL: Well, I always depend on the Dartmouth data.

SEN. BAUCUS: Everybody looks at Dartmouth. Everybody looks at Dartmouth.

DR. GOROLL: But let's assume Jack Lindberg and his colleagues are off by 50 percent, and let's say it's 15 percent.

SEN. BAUCUS: Right.

DR. GOROLL: And if we can bring that down by five percent, we can cover a whole lot more folks, and if we can strengthen primary care, Barbara Starfield's data from Hopkins shows that costs go down when there is strong primary care. So I think that if we convert the waste into useful dollars well spent and we do that through strengthening the primary care base, we can almost go on a pay as you go basis. I don't think that it's hopeless but I think that if we do insurance without doing primary care, I think we'll have the Massachusetts experience.

SEN. BAUCUS: Right. And other comments?

DR. MULLAN: Well, I just think that if you consider the costs of people without insurance, when they do encounter the health system, those costs tend to be very high, because they haven't had any preventive care, etcetera, etcetera, etcetera. Brining them in, I think, is a very smart move. I think the real question is, who will take care of them, and what will be their distribution of specialty types, how will they work together and achieve the best health outcomes? I think that's the real question. And that could be very affordable.

SEN. BAUCUS: You know, that's what everyone's saying, and I just want to check 

DR. MULLAN: From a work force perspective 

SEN. BAUCUS: Whether you all four basically agree with that concept? Yeah?

DR. MULLAN: The basic arithmetic of your concern is absolutely unimpeachable. That is, more people, there are more problems, more services required.

SEN. BAUCUS: Yeah.

DR. MULLAN: But my suggestion, given the circumstance, would be lean is better. That is a lean work force will force creativity, force economies. The work force we have today has been characterized by one of our colleagues as an SUV in the sense that it is big, comfortable and very expensive, and an SUV is not an answer that we can afford and not an answer that we should look to. So strategies that will cause us to invest in those parts of the work force that need gearing up, that will force creativity, from the academics and the service sector both, in rearranging our system, I think is where the real savings and the real good policy of the future and the good patient care of the future will lie.

SEN. BAUCUS: One of you said something that caught my attention. I think I know what you're driving at, that is analogous to our problems in our national sector in our economy, and I think that the conclusion is going to be is that our incentives are in driving people to go to the wrong places. And maybe it was you, Dr. Goroll, who made that comment.

DR. GOROLL: Absolutely.

SEN. BAUCUS: One of you said something along those lines.

DR. GOROLL: I take responsibility for that.

SEN. BAUCUS: What'd you say?

DR. GOROLL: Well, it distorts, there are many parallels. Very briefly, it distorts the decisions of our best and brightest people and they're going to the wrong places. And as I started out by saying, they come to me almost ashamed, because they know what they'd like to do and what they want to do, and we have set up a perverse set of incentives and I think it's very fixable. It is very fixable. One comment about the cost. We have universal health care in the United States. It's called EMTALA. And emergency room cost is, just look at our emergency. If you go into any emergency room in any major city in the United States today, it'll look like World War III, and that's where universal care is being carried out right now, and it's extraordinarily expensive. So I think there are ways of doing this smartly and not saying that the net investment is not worth it.

SEN. BAUCUS: Good. I have to conclude this hearing, but I thank you very, very much, all four of you. This has been most helpful, and I urge you, frankly, just to keep following up to senators that have questions, but if you get some bright idea, don't hesitate, let us know. Give us a call. Okay? Good.

END.


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