THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Doc Contents      

As a Republican, I just have to offer a polite voice of dissent, because the plan that passed this House is simply not going to work. It relies heavily on

[Page: H7984]  GPO's PDF

   What is the solution? Well, I have a bill before Congress that has several important points, but two of them I think are very important: One is for that senior citizen who is right on the margin of being in poverty but is not in Medicaid as well as Medicare, we ought to do something to help that senior citizen with their high prescription drug costs. We could do that simply, not by creating a new bureaucracy. There already is a program in place for poor senior citizens and that is the Medicaid program. Every State has a Medicaid program for those senior citizens who are below the poverty line. And every Medicaid program that I know of has a drug benefit.

   And just about every State that I know of has negotiated discounts with the pharmaceutical companies for those drug programs. So we ought to look at including those senior citizens who are above that poverty line, maybe up to 175 percent of poverty and include them in that Medicaid drug benefit. No new bureaucracy, they simply get a card. We could pay for that from the Federal side so that we would not be talking about an unfunded mandate on the States. It would be significantly less expensive than what we are talking about with the other proposals and we could get it done today. We could implement it tomorrow. Yes, it would not be comprehensive for everyone but it would certainly help those who need it the most in Medicare.

   But what could we do for everyone?

   The second thing that we should do to help with the high cost of prescription drugs, not just for senior citizens but for everybody is to readdress a law that Congress passed in 1980. It was signed into law by President Reagan, but he did so with grave reservations. He was concerned that that law would generally prohibit certain types of beneficial competition in the sale of pharmaceuticals by hospitals and other health care providers that would allow consumers to benefit through increased choices and lower prices. What was that bill? It was a bill that gave the pharmaceutical industry special protection, something that, as far as I know, no other industry in this country has and, that is, that you cannot reimport into the United States drugs that are made in the United States and packaged in the United States. It is against the law. Anyone who does that, brings drugs across the border, prescription drugs, could be prosecuted, fined. Senior citizens who have done this have gotten very nasty, threatening letters from the Customs Service or from the Food and Drug Administration. Even though senior citizens do cross to Mexico and do cross to Canada and do buy prescription drugs, they are breaking the law.

   I got a letter the other day from a senior citizen in Des Moines, Iowa. He is a volunteer at a hospital that I used to work at, and he participated in a drug study at the University of Iowa for an arthritis medicine called Celebrex. That medicine worked really well for him. So he went to his doctor, he got a prescription, he went to the hospital where he is a volunteer, went to the pharmacy there and with a volunteer discount could get that prescription for about $2.50 a pill. Well, this gentleman is a pretty smart guy. He got on the Internet that night and he found out that he could, with about $10 or $15 of shipping and handling, get that prescription from Canada from a pharmacy for about half price. Same thing from a pharmacy in Geneva, Switzerland. And from Mexico he could get that medicine for about 55 cents per pill, made in the United States, packaged in the United States.

   Look at this chart. Here are some drugs with a U.S. price and a European price. Let us say Coumadin, that is a blood thinner medicine, twenty-five 10-milligram pills in the United States will cost you $30.25. Over in Europe, $2.85. From $30 to $3. How about Prilosec? Twenty 28-milligram pills in the United States, $109. In Europe, $39.25.

   How about Claritin? Claritin is a good antihistamine. It is advertised night and day. I guarantee my colleagues that if they watch any TV or look at any billboard, they are going to see Claritin advertised. The marketing budget by the company that makes this is astronomical. Why? Because they are making a ton of money on it. They are also trying to get an extension of their patent , which this Congress should oppose. But Claritin. For 20 pills in the United States, $44. In Europe, and this is not a Third World country. In Europe, $8.75.

   I can go down this whole list. This is just representative of the difference in the cost between what we pay in the United States and what they pay in Canada or Europe, not to mention in Mexico. Why is there such a differential? Because there is not any competition, any global competition. We are subsidizing the high profits of the pharmaceutical companies in this country because of that law. Changing that law to allow a reimportation of those medicines is part of my bill. But I have to tell you that others have been involved in this issue, also. The gentleman from Oklahoma (Mr. COBURN), who is a physician; also, the gentleman from Maine (Mr. BALDACCI); Senator JIM JEFFORDS, and several others have been interested in this. We have now passed amendments to appropriations bills that would overturn that law that prevents prescription drugs from being reimported back into the United States.

   In the House, we had a vote. We had a vote in the House that was 370-12 in favor of doing that. There was a vote in the Senate that was 74-21 to overturn that law. 370-12 in the House; 74-21 in the Senate. Why? Because I think intuitively we realize that if we could get in on a 1-800 telephone number or get on the Internet and be able to order our prescriptions filled from Canada or from Europe at a lower price, we know what would happen to the prices in the United States. In order to be competitive, they would come down.

   Every farmer in my district knows what the price of soybeans is and they know that that price is determined by the world market. But on prescription drugs, we have given the pharmaceutical companies a special interest protection. That should be changed. If we allow competition on a global basis, the prices will come down. They will come down for everyone, not just senior citizens. They will come down for the businesses that are providing the health insurance to their employees. The pharmaceutical companies have profit margins that are three and four times higher than any other group of companies in the country. Believe me, they will still make plenty of money if we introduce some competition. And that is not setting any prices. That is not a government price-setting mechanism. That is simply allowing the market to work.

   My friends on the Republican side of the aisle, all of them who voted for this, who believe in free markets and that free markets and competition bring down prices, they and all of our colleagues on the Democratic side who voted for this bill should insist with such support from both the House and the Senate that those amendments not be stripped from the conference bills on those appropriation bills that come back for our vote.

   The pharmaceutical companies are lobbying night and day to get those provisions removed. If the leadership of the House or the leadership of the Senate accedes to the pharmaceutical companies' desires and strips out provisions where overwhelming majorities in both the House and the Senate have expressed their will, we are not talking about a narrow vote margin, we are talking about a margin where only 12 Members in this House voted against that, where only 21 Members in the Senate voted against that provision. If the leadership in the House, the Republican leadership in the House and the

[Page: H7985]  GPO's PDF

   This is not a time to bow to special interests, big corporate, soft dollar contributions.

[Time: 16:30]

   This is a time to stand up for every American who is paying outrageously high drug costs compared to the rest of the world. To buy a very simple remedy, bring down the costs of prescription drugs for everyone. If the conference bills come back, one of them is the agricultural appropriations bill, if that comes back with this provisions stripped out, I can grant my colleagues that I will be here on the floor, the gentleman from Oklahoma (Mr. COBURN) will be here on the floor, the gentleman from Maine (Mr. BALDACCI) will be here on the floor.

   We will be pointing out to all of our colleagues that the leadership in this House and the leadership in the Senate, which is giving directions to that conference committee, is trying to subvert the overwhelming Democratic majority, the overwhelming majority of both Republicans and Democrats on a very, very important policy issue.

   That is something we can get done. The administration, the Secretary of Health and Human Services, Donna Shalala, has said we can agree to that provision; we think we might need a little more money to make sure that the Food and Drug Administration can oversee, to make sure that there is not a problem with those reimported drugs.

   The last figure I saw from Secretary Shalala was that her estimate was that maybe this would cost an additional $24 million in appropriations to the Food and Drug Administration. I tell my colleagues that is a drop in the bucket compared to the billions and billions of dollars that American citizens could save if we remove that special protection and let the price of prescription drugs come down because of competition.

   My constituents back in Iowa who have those high drug prices will be watching to see what happens. I will be doing what I can, just like I am in this speech, to try to make sure that the will of the House and the will of the Senate is not contravened by a small minority of leadership subverting the will of the House and the Senate.

   Now, let me talk about another very, very important issue that is coming up. We are going to be dealing with a bill very shortly, maybe as soon as next week, that will provide additional funding for Medicare. In 1997, we passed a bill involving Medicare, the Balanced Budget Act of 1997. Back in 1995 and 1996, I was one of the first Republicans to say be careful, do not cut those programs too much or we could see some real hurt.

   At a committee hearing, I said, you know what, we are looking at deficits; but we have to be careful with that tourniquet. A tourniquet can stop bleeding, can keep a patient from bleeding to death; but if we put that tourniquet on too tight, it can cause the loss of blood supply to the extremity, and we can end up with gangrene.

   We have found that there have been more savings from that 1997 Budget Act than we anticipated, and the consequences for certain groups that are involved with Medicare have been more than we planned for. And so I think it is entirely appropriate that we use part of our surplus, projected surplus, to go back in and fix some of that.

   I have hospitals in my district in small towns in rural Iowa where the hospitals are right on the margin. They take care of very high percentages of Medicare patients, so they rely very much on the reimbursement that they get from Medicare; and they do not have, you know, a large population base to try to make that up with, say, charitable donations. We need to go back and give those hospitals some help.

   One of the areas that they are having problems with is in keeping their nurses, because the funding formula for rural hospitals, they get paid less as a price index for their nurses than a hospital, for instance, in a metropolitan area, like Des Moines or Chicago or Minneapolis or Omaha; and so those areas can offer nurses significantly higher salaries, and they tend to just pull those nurses out of those small town hospitals.

   We need to significantly re-adjust the pay scale index for those hospitals to bring up the funding so that they are providing their nurses with a competitive salary so that they will stay and help take care of those patients in those hospitals in the rural areas; otherwise, those hospitals are not going to make it.

   If a small town does not have a hospital, we cannot keep our doctors there; and if we do not have doctors and if we do not have a hospital, we cannot keep our businesses there.

   We are talking not only about whether patients would have to travel 80 miles or 100 miles to take care of a heart attack or to deliver a baby, we are talking about whether that community stays viable economically, continues to survive. So this is important. We need to do that.

   I am troubled by what I am hearing on what the funding is going to be for this sort of emergency

   Medicare giveback bill, because the HMOs have been lobbying to get a huge percentage of this instead of getting it to those rural hospitals or to the teaching hospitals or to the inner city hospitals that take care of a lot of indigent parents or to other areas that need it. The HMOs want to take the majority of this, and I have a real problem with that.

   I will tell my colleagues why a GAO, a General Accounting Office, report just published in August shows that the HMO program in Medicare has not been successful in achieving Medicare savings. It is called Medicare+Choice. And Medicare+Choice plans attracted a disproportionate selection of healthier and less expensive beneficiaries relative to the traditional fee-for-service Medicare program. That is called favorable selection.

   Consequently, in 1998, the GAO estimates that the Medicare program spent about $3.2 billion, or 13.2 percent, more on health plan employees in HMOs than if they had received the same services through traditional fee-for-service Medicare. And, yet, I am hearing from my colleagues, oh, we have to give so much more money to the Medicare HMOs.

   This is about the fourth study that we have had from either the Inspector General's office or the General Accounting Office that has shown that the average Medicare patient in a Medicare HMO costs the Medicare HMO less than what a fee-for-service patient would. Consequently, they make a lot of money off of it.

   Then we had another report that came out, not too long ago, by the Inspector General's office. This was in February. What did they find? Here is the headline there from USA Today: ``Medicare HMO hit for lavish spending.'' One insurer, one Medicare HMO spent $250,000 on food, gifts and alcoholic beverages; four HMOs spent $106,000 for sporting events and theater tickets and another leased a luxury box at a sports arena for $25,000. Customers, insurance brokers, and employees at one HMO were treated to $37,303 in wine, flowers, and other gifts.

   As the Inspector General said, the administrative costs for some Medicare managed care plans are clearly exorbitant. Why did they say that? Well, because they found in the study that some Medicare HMOs are doing an okay job. They are spending as little as 3 percent administrative overhead on their plans.

   I do not mean to say that all Medicare HMOs are the bad guys, but other Medicare HMOs were spending up to 32 percent on administrative overhead. Think of that, 10 times the amount on administrative overhead. I guess that takes into account why some of these Medicare HMOs are buying luxury sports boxes in sports arenas, or why some of them are giving away expensive gifts on wine and flowers and other gifts and others are literally funding big parties for their employees. That is all money that should be going for patient care, not for the fat of the Medicare HMO.

   And so my suggestion would be that, you know what, we ought to be very careful about providing additional dollars to those Medicare HMOs. We ought to use that money to get back directly to the people who are taking care of those patients. Yes, maybe some of these Medicare HMOs with the low administrative overheads do need some help, but I would be very careful about

[Page: H7986]  GPO's PDF

   We know from past studies in the past few years that when a Medicare HMO patient leaves an HMO, a Medicare HMO, and goes back into the fee-for-service, that it costs the fee-for-service plan significantly more than what the average Medicare HMO patient costs.

   What is happening? Well, the Medicare HMOs are just fine for people who are healthier who do not have a problem, who do not need to see a particular doctor; but when a patient gets sick, then they transfer back to the fee-for-service side because they have more choice, they can get better treatment, and then that transfers a sicker patient back into the fee-for-service but keeps a healthier group for those Medicare HMOs.

   I will tell you what, I am going to shine the light on this problem when this bill comes to the floor, unless we have a reasonable funding level for those Medicare+Choice plans and unless we provide the type of help we need for groups like our rural hospitals.

   Now, let me briefly talk about HMOs. Last week I saw in USA Today on the front page one of those little charts that they have. This was from a Gallup poll on the confidence that the public has in certain institutions. At the top was the military: 64 percent of the public feel that they have confidence in the military as an institution; 56 percent, organized religion; 47 percent, the Supreme Court. Congress is down there at 24 percent.

   HMOs are at the very bottom. Only 16 percent of the public think that HMOs are worthy of confidence or only 16 percent of the public have trust in HMOs as an institution. That is reflected, as it so frequently, in jokes and cartoons that we will see.

THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Doc Contents