DOUGLAS L. WOOD, M.D., Committee Chair
Mayo Clinic
Rochester, MN

JEFF BLOOM
Washington, D.C.

G. KRISTIN CROSBY, M.D.
Vice President and Chief Medical Officer
Olympic Health Management Systems, Inc.
Bellingham, WA

BRUCE DEVEREUX CUMMINGS
President and CEO
Olean General Hospital
Olean, NY

GARY C. DENNIS, M.D.
Howard University Hospital
Washington, D.C.

RONALD W. DOLLENS
President and Chief Executive Officer
Guidant Corporation
Indianapolis, IN

MICHELE M. EVINK
Director of Pharmacy
Clarke County Hospital
Osceola, IA

EUGENE ANTHONY FAY
Vice President of Reimbursement and Government Affairs
Province Healthcare Company
Brentwood, TN

JOHN FINAN, JR. (Participated via telephone)
President and Chief Executive Officer
Franciscan Missionaries of Our Lady Health System, Inc.
Baton Rouge, LA

LISA K. GIGLIOTTI, J.D.
Administrative Law Judge
Administrative Law Tribunal
Department of Community Health
Lansing, MI

THOMAS R. HEFTY
Chief Executive Officer
Cobalt Corporation
West Allis, WI

HEIDI MARGULIS
Senior Vice President, Government Relations
Humana, Inc.
Louisville, KY

NANCY H. NIELSEN, M.D.
Orchard Park, NY

DR. ERIK OLSEN
Mesa, AZ

SUZANNE R. PATTEE, J.D.
Vice President
Public Policy and Patient Affairs
Cystic Fibrosis Foundation
Bethesda, MD

GARY B. REDDING (Participated via telephone)
Commissioner
Department of Community Health
Atlanta, GA

JACK A. ROVNER, J.D.
Michael Best & Friedrich LLC
Chicago, IL

JUDITH A. RYAN
President and Chief Executive Officer
The Evangelical Lutheran Good Samaritan Society
Sioux Falls, SD

PATRICIA OSBORNE SHAFER, R.N., M.N.
Beth Israel Deaconess Medical Center
Boston, MA

JUDITH G. SUTHERLAND
Visiting Nurses Association
Littleton, CO

WILLIAM TOBY, JR.
Rockville Centre, NY
KAREN B. UTTERBACK, R.N.
Hattiesburg, MS

PATRICIA M. WALDEN
Southington Care Center
Southington, CT

KERN C. WILDENTHAL, M.D.
President
University of Texas Southwestern Medical Center at Dallas
Dallas, TX

MARGARET SPARR
Executive Coordinator
Regulatory Reform Initiative
Office of the Secretary, HHS

C O N T E N T S

 

Call to Order

Douglas L. Wood, M.D. 
Committee Chair

 

Committee Adoption: Executive Committee Consent Agenda

 

Committee Adoption: "Bringing Common Sense to Health Care Regulation: Final Report of the Secretary's Advisory Committee on Regulatory Reform"

 

Comments, Reactions, Lessons Learned:

Final Report and the Regulatory Reform Initiative

Presentation of the SACRR's Adopted Report to the Secretary

Douglas L. Wood, M.D.

 

Comments by the Secretary

Tommy G. Thompson 
Secretary, HHS

 

Comments, Reactions, Lessons Learned (Continued)

Public Comments

Eduardo Siguel, M.D.

Karen Morris, R.N.

Gary Stein
American Association of Health System Pharmacists

Janet Wells

Dede Spitznagel
Healthcare Leadership Council

Candace Schaller 
American Association of Health Plans

Tracey Moorhead 
Alliance to Improve Medicare

 

Closing Remarks

Douglas L. Wood, M.D.

 

P R O C E E D I N G S (8:02 a.m.)

DR. WOOD: Good morning, everyone, and welcome to the final meeting of the Secretary's Advisory Committee on Regulatory Reform. I'm pleased to welcome the members of the public to this meeting. We will spend the morning reviewing some final items of business and then the draft final report. Secretary Thompson will be here to make some remarks, and for the balance of the morning we will spend time sharing with each other some of our thoughts about this process, and I would particularly be pleased for each of the committee members, as we go through the morning, to share insights about what each of you thought we did well or didn't do well, and in particular we'd be anxious to hear your thoughts about next steps and what the future might be. All of your comments, of course, will be part of the record, and as we finish the work of this committee, then the full record of what we have done from the beginning that is on the website will also include your final comments.

So I'm looking forward to hearing these particular insights. Those kind of nuggets or kernels of wisdom that are sometimes hard to put on a printed page in a report.

We have with us this morning almost everybody who has started on the committee. There were a couple of people who have conflicts because of board meetings. John Finan in particular had a board meeting and is going to try to join us by conference call, and Gary Redding has a new governor and so he's at work in Atlanta and is going to try to join us by phone as well.

John or Gary, are you both on?

MR. FINAN: Yes, I'm here, Mr. Chairman.

DR. WOOD: Good morning, John.

Gary?

MR. REDDING: Here, Mr. Chairman.

DR. WOOD: Okay. Let's see if we can increase the volume on the phone.

There are a number of items that we have covered in the course of our business, and most of you know that we've been in the process for the last several weeks of trying to go through all of our recommendations and make them action-oriented and to tidy them up, and so the first item of business for us this morning is to review the remaining items from the Executive Committee Consent Agenda.

Let me remind you that as has been our routine, that we have these items for the consent agenda, for consent adoption. Any one of you may ask that they move to discussion. Because of the time involved, however, if we move them to discussion, we will simply then also move them to our category of unfinished business or issues that will require additional work for the future and then they would not become adopted by the committee.

So with that introduction, let me ask if there is a member of the Executive Committee who might make a motion for the adoption of the Executive Committee Consent Agenda.

MR. FAY: So moved.

PARTICIPANT: Second.

DR. WOOD: Is there any member of the committee that would like to move any or all of these items to discussion?

(No response.)

DR. WOOD: Seeing none, there is a motion for their adoption and a second. All those in favor, aye.

(Chorus of ayes.)

DR. WOOD: Any opposed?

(No response.)

DR. WOOD: There are no dissents. They are adopted.

The next item that we have is the Draft Report and you have received that in hard copy, and I've seen it several times in electronic versions. So, we would be grateful for a motion for adoption of the report.

MR. FAY: So moved.

PARTICIPANT: Second.

DR. WOOD: And with that then, all of those members in favor of the adoption of the report, please signify by saying aye.

(Chorus of ayes.)

DR. WOOD: Are there any members who dissent?

(No response.)

DR. WOOD: Thank you, ladies and gentlemen. The report is adopted. Congratulations.

(Applause.)

DR. WOOD: Now, I would like to take some time to hear from each of you about this particular process and comments you might want to make about the report. I would like to give each of you five minutes. We'll have to break when the Secretary arrives, but we'll try to keep on a schedule from there, and so let me simply begin by going around the table and with that in mind, let me ask Dr. Wildenthal to begin.

DR. WILDENTHAL: I have been remarkably impressed at the effectiveness of this committee. I suspected when I agreed to serve on it that it would be the advertised two or three meetings and not much work.

(Laughter.)

DR. WILDENTHAL: The members of the committee and its leadership and the staff have done a remarkable job, and I believe the product is something that all of us who have participated, most of you much more than I have in fact, is something that we can be very proud of, and I have much greater confidence than I did going in that this will not be one of those reports that sits on a shelf unacted upon.

I think, if I had one request for the leadership and the staff to do, it is to make sure that the members of the committee as well as the leadership and the people above ourselves continue to look at it and issue regular reports on progress toward implementing these steps because I think the country will be well served if they are implemented.

Thank you.

DR. WOOD: Thank you.

Patricia?

MS. WALDEN: Thank you, Mr. Chairman.

I, too, was under the impression that this was going to be three meetings and possibly one hearing and would not take a lot of time, and I'm actually very pleased that it did not turn out to be that because I think it's been much more meaningful with all of the work and the collaboration that's gone into the process.

We were talking last night at dinner about the diversity of the group that's come together and the fact that it really is an apolitical group for the most part. We are representing our individual areas of expertise and because of that and because I think there's been an absence of real personal agendas, we've been able to very cleanly come together and talk about what needs to change and because of that, I would really hope, as Kern said, that the recommendations that have been made would be taken in that light and recognized as part of a process to really improve health care.

I also feel that this is the tip of the iceberg and that we have just begun a process and there's much more work that needs to be done. I think the work that needs to happen really needs to come from a higher level and a policy standpoint where if we can put the consumer in the center of the picture, not just as part of what we hope to do but what we actually do and then design our systems around the needs of that individual, I think we'll be much more closer to where we need to be.

It's been my pleasure to serve. Thank you.

DR. WOOD: Thank you.

Dr. Olsen?

DR. OLSEN: Thank you.

It has, I confess, been a great privilege to serve on the Secretary's Advisory Committee. We found many ways to make the regulations protect both our quality and access work better for both consumers and providers, and on balance, I support the committee's final report because the bulk of our work is both thoughtful and constructive and the Secretary is already acting upon several recommendations in positive ways, and I refer to "The proposed changes have been published to address problems in EMTALA in those regulations," and it's been done without, in my view, weakening the guarantee to access to emergency care for the uninsured.

Secondly, the OASIS Home Health Assessment Form is being shortened without weakening its potential for improving the quality of care, and then maybe almost a personal thing here, the 1-800 number on the Medicare card and the website are very important to beneficiaries so they can have access to this important source of information.

However, as you might guess, I have some reservations about some of the committee's proceedings, and I'd like to place those on the record. Number 1. We did have limited input from consumers. The vast majority of committee members and of those testifying before it have been providers, yet the vast majority of no votes on adopted recommendations were cast by consumers. Some of those recommendations may have been different or not adopted at all if more consumer voices had been involved in our proceedings.

Secondly, I'm concerned that we have not heard from all sides on every issue. With our broad scope and limited time, we may well have missed some pertinent data. For example, the committee voted to abolish Medicare Evaluation and Management Guidelines without input from Medicare officials. The Guidelines may well need to be changed, but we did not hear sufficient evidence to conclude that they should be abolished.

There were substantive disagreements which were not reflected in the final report. Most recommendations were unanimous but some were not. The recommendation that Medicare+Choice risk adjustment be budget neutral had strong opposition. There is reason to believe Congress did not intend for risk adjustment to be budget neutral because plan enrollees have been healthier and less costly than average. The very concept of risk adjustment, paying plans more for sicker, costlier patients and less for healthier enrollees, implies that results will not be budget neutral when most enrollees have been healthier. It also requires that results not be budget neutral to ensure that payments for sicker enrollees are high enough to ensure that plans will not have an incentive to avoid them in the future.

The final report's description of OASIS as a process-oriented requirement is inaccurate and arguments that it be limited to only Medicare and/or Medicaid patients are troubling. OASIS's greatest value is in helping to improve the quality and thus the outcomes of care. Medicare plays an important leadership role in promoting health care quality efforts by all insurers and for all consumers. All home health consumers, not just those in Medicare or Medicaid, should benefit from the improved outcomes that OASIS can stimulate.

It is not correct to state as the final report does that no health care organization can undertake quality measurement and improvement requirements or that the number of such efforts undermines their effectiveness. Quality of care is a major challenge facing our health care systems. All providers, including doctors, hospitals, health plans, nursing homes, and home health agencies, must step up to the plate and be accountable through a combination of quality improvement projects and public reports. These are legitimate and necessary efforts and in fact progress is being made. Health plans are working to improve the quality of care they provide in response to measurement efforts, and home health agencies are working to incorporate OASIS results into better care practices. Better coordination and more research on effectiveness are warranted, but it would be a shame to take the committee's final report language in this area as an excuse for back tracking on these critically important efforts.

Finally, I urge the Secretary to seek out and carefully weigh additional consumer perspective as HHS evaluates our recommendations. We have heard a great deal more about the problems with regulations than about the serious problems in quality and access they were designed to address. Full consideration of all perspectives on how changes could impact quality and access is needed to make the most of what the Secretary, my fellow committee members, and HHS staff have worked so hard to achieve through this committee.

Mr. Chair, I'd also like to recommend, if it's possible, that the remarks of the committee be, if it's possible, be included in some type of addendum, not to the report but some kind of addendum that would be delivered to either the Secretary or those who are continuing this work.

Again, I want to thank you very much for the opportunity. It's been a real pleasure. Thank you.

DR. WOOD: Thank you, Dr. Olsen.

For those of you who also might be interested, the report of the Institute of Medicine entitled "Leading by Example" begins to specifically address the role of the Federal Government in moving quality initiatives forward and really, I think, provides the beginning of a blueprint in the manner that Erik has suggested, and it was released just two weeks ago. We couldn't really talk about that very much as we went along because the information was held closely by the IOM. I had the privilege to sit on that group, and I think it will address precisely the concerns that you have reflected, and hopefully leaders in HHS will begin to use that report, along with this one and some others, to accomplish the goals that have been identified.

Ms. Margulis?

MS. MARGULIS: Thank you, Mr. Chairman.

I think, first, I'd like to start with a thank you to you, Mr. Chairman, and to certainly the Secretary for the privilege to serve and also to the staff of HHS for supporting us in a way that has been truly helpful to this process and has opened many doors for us.

Secondly, I believe that the thoughts that Erik has just conveyed represent the diversity of thought and vision that this committee has undertaken, and Mr. Chairman, I think you might be the Kofi Annan of the United Nations of Health Care represented around this table because it truly is unique to have those of us from almost all sectors of the health care industry and consumers come together to think about where we are today and where we need to be.

Probably over the last 10 months, what has become increasingly clear to me is what I didn't know about the health care system or the lack of a system. I've learned so much from each and every member of this committee, far more than I brought from my own experience within it, and my hope going forward is that not only these recommendations that we have put forward, which I think go more to not tinkering at the edges but represent an incremental step forward, that the staff and the Administration and all of us take a look at what truly needs to be done to move the system even farther forward, and I would urge that that lies in finding a way as my colleagues have said to indeed put the consumer in the center of a system that ties us all together and that gives all Americans a fair shake in the health care system.

I believe that if some of the recommendations that we have put forward that lie in the area of technology are enacted, that perhaps we will reap savings from the current system that can drive an effort forward that truly does build a system of health care, and I think technology gives us that opportunity.

I want to thank the members of my subcommittee for their work in the area of regulatory flexibility and just another thank you to the Secretary for giving me the opportunity to serve.

DR. WOOD: Ms. Utterback.

MS. UTTERBACK: Thank you, Mr. Chair.

I, too, want to thank the Secretary for the opportunity to serve and like Heidi certainly benefitted from the ability to sit around the table and hear the perspectives that were able to be shared from this group, and, as been said several times already, the diversity was very clear, and I think it is groups exactly like this that will allow those incremental and more significant changes that in my view absolutely need to occur to happen, and while I think the work that we accomplished was really quite remarkable, I have very personal concerns going forward that we did actually just tinker around the edges, and when I look at the consumers and the approaching demographics of what health care is really going to mean across this country, I am severely concerned that we aren't prepared. The Government's not prepared. The payer system is not prepared. We as providers aren't prepared.

We have in my view got to sit down and really start to envision what it's going to take, and as Erik challenged us with, it's really going to take that consumer input and the things that I think personally in my 25 years of nursing we were trained and conditioned to believe about human need and illness are only the fringes of what we actually need as individuals in our health care as we go forward.

So I think it's been a remarkable experience. I think as a group, we accomplished work that I never envisioned we would be able to do in this kind of time frame, but I do want to leave that serious reservation on the table, that we haven't done enough.

I want to particularly thank Heidi as our chair. She did an outstanding job of coordinating our efforts and keeping us focused and on track, and to you, Mr. Chairman, for your efforts and especially to the staff who, without your support, this could not have taken place.

Thank you.

DR. WOOD: Ms. Sutherland.

MS. SUTHERLAND: Well, I'd like to echo everything that's been said so far, so I won't go into those details, but I would like to thank Heidi, you did a great job, and you, Doug, did a great job, and Peggy and all the rest of you, thank you so much.

But I would also echo what Karen has just said. You know, I, first of all, learned a whole lot about how hard it is to change things, and I have much greater appreciation about what we were all up against, but then I started thinking as we went through this process, my goodness, I'm going to be the person that's going to be wanting this care and wanting to be taken care of and it's not going to be too far in the future that that's going to be the case, and is it going to be as difficult for me in the future as it is for many people today, and so the message, the main message that I would like to leave on the table is this does need to be an ongoing process. We have only reached the tip of the iceberg and whatever we can put in motion to continue to work toward the consumer being at the center, I would wholeheartedly approve of.

Thank you so much.

DR. WOOD: Mr. Bloom.

MR. BLOOM: Thank you, Mr. Chairman.

First of all, I'd like to thank you for your leadership on this, it's been terrific, and also to my subcommittee chairman, Jack Rovner, who's done an excellent job in our subcommittee.

I think the things that have been well and that have left me with the biggest impression is the field hearings that we've had and going out and seeing that there are things that work outside of Washington and that there are a whole lot of solutions and different ways of delivering health care that this system's not set up to take care of, such as seeing Mona Counts in her Appalachian rural setting where the town owns the clinic and she's a nurse practitioner but she's struggling to make things work because she can't get deemed as a doctor and can't get those fees and she's fighting with the same people trying to work at the clinic going to go work in the city instead, and also seeing things like in Pittsburgh, where they have a system, a regional health care system, where they have been able to reduce medical errors and in hospital infections.

So I think we've really seen a great deal of things where there are the best practices out there, we just need to learn about them, and it's a question of getting that information and passing it on and sharing it and incorporating it, and I think a lot of the recommendations are really good in that regard. I'm particularly proud of the recommendations that involve dual eligibles and the recommendations about adverse events, adverse drug reporting, and medical errors, and I think if those things alone move forward, it represents literally billions of potential dollars that can be of savings of health care that can go back into health care instead of paying for the consequences of those things.

I would hope that the working groups that are recommended in this report do actually occur and that these recommendations don't just lay on a shelf, but we've recommended an awful lot of working groups be established for different things, and it would be very nice to see this actually come to fruition. It's been a great experience in that regard.

I think the things that we didn't do well were we did not do well in getting information out early and getting the things well publicized and having more consumer input, through no fault of this staff. The staff did a great job. They didn't have enough staff. That was one of the problems. So this was an enormous task and I think the Department, because of budgetary constraints obviously, was very, very difficult, and I commend the staff for doing yeoman's job, each of you probably did 10 people's jobs work, and it's incredible that you've been able to do the amount of work that you've had with the limited resources. But this is a first step, and I do think it is a lot of tinkering around the edges and there are some big challenges coming up, and I really hope that this report is a starting point and that the recommendations do turn into something, and I for one am willing to work on the working groups for the recommendations that were part of mine.

So I would make that commitment to it, but it's been a great experience, and I'd like to thank the Secretary for involving us in this and I'd like to thank Dr. Wood as well and I wouldn't have traded it for the world. I really learned a tremendous amount. It was terrific.

Thank you.

DR. WOOD: Ms. Gigliotti.

MS. GIGLIOTTI: I'd like to thank the Secretary for the opportunity to serve on this committee. We were able to accomplish an extraordinary amount of common sense resolutions because we gave each other mutual respect and consideration, listened to each other's ideas.

I'd also like to express gratitude for the members of public who took their time, their effort, energy, to come here in front of us and give us a lot of really front-line information and the hundreds and hundreds of pages of documentation they submitted. I thank HHS staff and our subcommittee chair, Mr. Rovner.

When we began to look at some either very detailed resolutions or some of the broader picture solutions to process, et cetera, we discovered that some of the solutions could not be done administratively. Instead, there needed to be statutory fixes which were outside of the purview of this committee. So in Appendix C, there's some unfinished business with some of our suggestions, and we ask that the Secretary look at these and urge Congress to also take a look at some of the statutory changes that need to happen to break loose, to give flexibility, to have a step-back and think of maybe not a concept of regulation but how can we provide services to people, make sure they're safe, but also prevent fraud and abuse in a way that's not so heavily regulated.

Thank you.

DR. WOOD: Dr. Dennis.

DR. DENNIS: Yes, thank you very much.

First of all, I would like to thank Secretary Tommy Thompson for this opportunity as well as the entire staff and, of course, Leslie worked very hard, too. We've got to mention that. But Dr. Wood, you really have been an excellent chair, and I think that this has been a pleasure to be involved with such an eclectic group of consensus builders, I mean, very, very wonderful experience, especially also thanks to Erik Olsen who did a fabulous job chairing our subcommittee.

I think that this has to be an ongoing process for regulatory reform and review. There's always a process for review of new regulations but existing ones need to be reviewed and updated, and I think this kind of process should continue. There's, of course, some unfinished business, there always is, but what we were able to accomplish, I think, is a tremendous amount. Some areas that we really need to look into or need to be looked to into the future, again medical education, not enough there, not enough with the National Practitioner Databank. We didn't look at that at all and there's some significant regulatory changes that need to occur there.

So I think that all in all, it's been a fabulous experience and again I'd like to thank you all for working so hard and also for the privilege of serving.

DR. WOOD: For our two members who are on the line, let me see if Mr. Redding -- are you there? Gary Redding?

PARTICIPANT: Mr. Redding is coming in from a meeting. He should be joining you shortly.

DR. WOOD: We will come back to him later then.

Mr. Finan?

MR. FINAN: Thank you, Doug.

I don't have much to add to the other comments. I do believe this. It was an awesome task. We came, we saw, I don't know whether we conquered or not, but we, I believe, made significant contributions and progress. Your leadership and the committee chairs and Secretary Thompson and Bobby Jindal and their encouragement was just outstanding in this as well as the support from the staff who were, I think, incredibly professional throughout the entire process.

As I think about the key learnings from this, the one that sort of screams at me is the complexity of the regulations and the effect that it has when those regulations flow through to the effects on the delivery system itself, and I'm not sure that disconnect is the right word, but the intent of Congress, the desires of the regulatory agencies and leadership and then what actually occurs when, as we heard testimony from people about how the regulations work in the trenches, that process needs to be strengthened and tightened, I think, in the future.

I, too, hope that there will be some ongoing effort to continue to work at a total redesign of this system. I'm not sure what number of pages we had of Medicare and Medicaid regulations when we began and what number we have if all of these changes are implemented, but my sense would be that the net effect has been a growth. So while we've made an improvement, we've not really slowed the tide, if you will, and I just hope that there will be a process going forward to continue to monitor what's in place and what's proposed.

But thank you again for the opportunity. It's been very special, and I'm grateful for having been here, and it's been a pleasure to work with all of my colleagues on the committee. It really has been an awesome experience.

DR. WOOD: Thank you, Mr. Finan.

Ms. Shafer.

MS. SHAFER: Thank you, Dr. Wood, Secretary Thompson, Mr. Jindal.

When I joined this group, I was kind of skeptical of kind of what the intended outcome would be and even the process. I came in wearing many hats as a nurse, as a person with a disability representing disability groups and with a lot of industry and providers, one of which I was, I really was not sure what was going to come out of this, and I think I was very pleased to see and hear the very diverse comments and to hear my colleagues really reach over the table and to see that the patient-centered focus at the end was really coming out I was truly gratified for.

I would have preferred to see much more input and participation from the disability community. Some of that, I think, should have happened at the table here. Some of that should have happened when we had the hearings around the country, and I was kind of dismayed that some of those opportunities weren't taken advantage of. I would hope that the Secretary and all of HHS think about the disability community as equally as we do with our older community when we're thinking about the Medicare reform.

I also was kind of gratified to see that we're talking not just about hospitals and doctors but we're talking about the range of health care professionals that are needed in such a complex health care delivery system, and I really hope that that emphasis continues.

I also was pleased to see kind of the focus on the technology, and Tony, you were continually coming up with some new and different ideas and challenging us to look at these things, and you see some of that really coming out and reflected in the recommendations, but I think that that needs to happen more. We have recommended a number of work groups to take on some thorny issues. I would hope that when you really do have those work groups and kind of brainstorming ideas, that we try to bring representatives of the technology sector right on those work groups to really hear what's possible out in the real world and going forward and they really understand the complexity of the health care system and the consumer voice. So I hope that that can happen.

Lastly, I never thought this would happen but to really see in the document the emphasis and the need for simplicity and consistency in communications is very gratifying.

I thank Erik Olsen as our leader for the communications, Peggy Sparr who helped shepherd our group and now has shepherded all of us through all of this, as well as you, Dr. Wood.

Thank you.

DR. WOOD: Ms. Evink.

MS. EVINK: Well, the challenge as we go around the table is that so many of the things that were important to me about this have already been said but I'll try and not repeat too many of the things.

I would like to thank the Secretary for the privilege of serving and for the opportunity that it provided to meet such a wide variety of people within the committee and out at our hearings. I found that to be a huge privilege, and I think that it will be one of the biggest things that I take from this experience and I'll be the most thankful for.

When we were initially contacted about the opportunity to serve, it didn't seem quite so like it was going to be quite such an undertaking.

(Laughter.)

MS. EVINK: Even though I knew that it was going to be huge when I began thinking of a year to address things like Medicare, Medicaid and the FDA and other HHS issues, and at the same time, you know, a couple of meetings in Washington and one regional hearing really didn't sound so awful, but I think that once we began to get into the process and started discussing the issues and the indication of how important this became to me was that here in the middle of being very ill during -- while I was pregnant, I could not see not going to the public hearings because the issues were so important and so critical, especially when we started talking about things like rural health and HIPAA and all of the other things that make such a difference in the way that we provide care in my setting, but around the nation, and as we started to talk about the way that things needed to be changed and we continued to talk about policies that need to meet the needs of all of the consumers and all of the providers, which is a huge challenge, and I think that we've certainly done our best to begin to address that.

I really appreciate the work of the people that I worked with most closely, my subcommittee, and Tony for his assistance with getting that and the staff that worked so hard to help us accomplish those issues and get together the information to put forward. I was very impressed that initially when we came together, I had the impression that we would all take such personal perspectives and agendas into the process, that it would make it difficult to meet any kind of consensus, and I was very impressed that everybody worked hard to bring information and reach consensus without putting up walls based on their personal and professional perspectives that made it difficult to progress and that impressed me a lot and is something that I've commented to nearly everyone about.

Initially when I was appointed, the first thing that happened was pretty much everybody in my circle approached me about issues that they were concerned about and one of the largest areas of frustration seemed to be when policy just didn't make sense, that in the real world, the application of a policy was making it difficult to even care for a person, and I think that we worked hard to try to help align some of those issues but as hard as we worked, I think that we also found, and I'm taking out of my experience, that it's something that does need to be continually worked upon because it's not anything that's going to change without continual attention.

One of the things that I'm proudest about of our accomplishments has been our recommendations regarding drug product labeling and especially addressing drug product naming. I have said to many people that if that is again the one thing that comes out of this, it would make such a huge impact on the provision of care because it would prevent so many misadventures, and I'm extremely proud of the group's willingness to address that and thank everyone for their assistance with that.

So thank you again for the privilege of serving and for your hard work, Chairman Wood, and for everybody's input and opportunity to get to know everyone.

DR. WOOD: Mr. Toby.

MR. TOBY: Chairman Wood, I would like to begin by commending you and Heidi Margulis, my chair. She did an outstanding job, but I want to commend both of you for your outstanding leadership and for conducting this committee with what I consider to be real purpose. You never let us get away from the goals and objectives that were set to you by Secretary Thompson.

I think that your leadership showed very rare dignity. It showed extraordinary grace. The fact that we all still talk to each other shows the grace that you showed. I think we owe you a profound sense of gratitude, all of us on this committee, and for getting us to where we are and setting a path for the future, and I think the public owes you that and the Secretary owes you that, the nation owes you that, and like everybody else, I know behind this report is an awful lot of work. All of us, done by this committee and done by the staff.

One night, I remember jokingly saying to my wife over dinner, "Chairman Wood is driving us like we're slaves. Somebody ought to give him a nudge that President Lincoln freed me as a slave in 1863."

(Laughter.)

MR. TOBY: Because I felt that very strongly. I had never done so much work outside of being in the government perhaps.

I approached this committee at the outset in part as a CMS former regulator, and after all, I am sure had a hand during my 32 years in HHS in writing some of those cumbersome regulations that we heard about from testimony throughout the country, and I feel very strongly that there is a lot to argue about those regs, a lot of weaknesses in them, but I do think for the most part, that we identified the problems and the process. I'm very proud about that.

I also would like to thank all of my committee colleagues here, and I'd like to congratulate all of you for a job well done. I think you, too, deserve applause as well.

I read the final report again last night, and I was reminded again in terms of learning about how regulations tend to have unintended consequences, and I think EMTALA was a very good example of that. MDS was another good example of that. I worked in this department for 32 years. I know the people who write the regulations, and I think when we started this process, there wasn't an appreciation beyond myself of the fact that the people who write these regulations in this department and in FDA and CMS are really good people. They are decent people. They think they're doing God's work, but they have to justify their jobs, and they are only as good in terms of justifying their jobs as the leadership above them. I have worked for administrations who felt that we were under-regulating. I have worked for administrations who felt we were over-regulating. Secretary Thompson thought we were over-regulating and he's done something about it. But these people need that kind of leadership. That is, I'm talking about carrying out our recommendations. They need Secretary Thompson and his staff to continue, I think, with their belief that the system is broken and it ought to be fixed.

I want to give a sense of thanks to Bobby Jindal for giving us the resources, I think, to get our work done. Peggy has done an outstanding job with her staff. Leslie Norwalk, indispensable, knowing the bureaucracy, as I know we couldn't have got done what we got done, especially EMTALA, without Leslie. She was the go-between, and I think that was important. I want to thank even Paul who worked so closely on this process. When I was feeling so alone, Paul would always be there to answer my questions. So that's to Bobby Jindal's credit. You deserve that.

With regard to the report itself, I think consumers are going to find it very useful. I think providers are going to find it very, very useful, and I think it shows the intent of this committee, which was to produce a report that would give a path to how to have an environment within the federal system producing regulations that are very sensible and predictable. I think we've achieved that and I feel very good about that.

In the end, I just want to say finally that it is my profound hope that attention will be given to these recommendations and that the Secretary, whom I know cares about this process a great deal, will give it the attention it needs and that his successor will also carry out these intentions.

Thank you very much.

DR. WOOD: Thank you, Mr. Toby.

Mr. Rovner.

MR. ROVNER: Thank you, Mr. Chairman.

I obviously would want to echo the comments of my other committee members in thanking Secretary Thompson for the opportunity and privilege to serve on this committee. It has been an eye-opener for me.

Mr. Jindal for the support his department has given this committee and certainly staff and the hard work they've done, the members of this committee for their cooperative spirit, for bringing their experience and learning to all of us in an effort to keep to the goal that were asked to fulfill.

I want to really thank the members of the Coordination Subcommittee for an awful lot of very hard work on their part. It made me proud to be in the position to chair that committee and, I think, produce some outstanding recommendations, and to Chairman Wood, I thank you for sprinting us over the last nine months to this finish line. I am taken aback to hear all the folks who thought they were going to have a couple of meetings for this thing. I didn't actually come into it that way, but I never thought it was going to be the way it ended up either.

(Laughter.)

MR. ROVNER: When I look at what we've done, I agree with a lot of the comments that have been made about that I don't think we've really nibbled at the edges but we have addressed discreet items and I thought that's what we were about. That's how I wanted to come into this committee. I wanted us to be able to demonstrate that if you focus on things, you can actually start making changes and all changes start with, you know, first steps and we've actually done 255 steps in nine months and that's rather impressive, I think.

As I look forward to where we've come to and look at all we've learned really in coming up with those 255 recommendations, I think we've learned a lot about the process of delivery of health care, the funding of it, what it has done, what it's intended to do and how it is missing the mark and how it really ought to be put back on course to get to the mark, and that brings me to a statement that's in our report on page 81, which I find is a guidance for all of us looking forward and for us to think about and to think how we can contribute to continually improving the process.

It says, "The time has come for all stakeholders in the health care system to begin a process of redesigning the regulatory system to improve its effectiveness and address systemwide problems."

I look at the diversity of this committee and if you actually do the numbers, you'll find that there are like four representatives of physician or the practitioner ranks, four from the hospital ranks, four from the health plan ranks, four from the consumer ranks, and a couple of lawyers in private practice.

(Laughter.)

MR. ROVNER: We apparently got the short end of the representation on that, but this committee was, as has been said before, was able to come together and bring each individual's background and experience to a common cooperative effort to try to move this process forward, and what struck me about the sentence in the report that I just read is what I've now come away truly believing, what I hope we all will believe and we will put our efforts like you drove us in this committee towards, is for all stakeholders to come together in good will and collaboration to try to in fact make this process work better for the beneficiaries and the consumers and the American public that it's all really designed for, and if we can bring that kind of collaboration to the entire delivery system, we can accomplish a great deal, like this committee did in its 255 recommendations.

I thank everyone for the great privilege of being part of this committee. Thank you.

DR. WOOD: Mr. Cummings.

MR. CUMMINGS: Good morning, Mr. Chair and colleagues.

This has been a pleasure and I would like to, in addition to commending the Chair and staff, make a point of thanking my colleague Tony Fay for his imaginative range and competence as the subcommittee chair. I also think he has just the nicest smile, too.

(Laughter.)

MR. CUMMINGS: I have nothing to add with respect to the process. I think my colleagues have already addressed that very well, and for me, it was a comfortable process, although I did change jobs and found that under that old adage, be careful what you wish for, you might get it, when we started this sitting in this room some months ago, I said, "Gee, I hope this really will be a very substantive activity, a lot of work outside of it," and then I changed jobs and said, "Oh, gosh. Now we have the work and I don't have the time."

I would ask you to imagine a triangle, three angles, three legs of the stool, in which regulation represents one of those three and that has been the purview of this committee, and the other two ones that were not part of our purview but I think ultimately bear upon our enterprise, first is kind of the social expectations, the philosophical constructs around health care. Is it a private benefit or is it a public good? We have not as a society addressed that question squarely, and the second leg is the financing of health care, and ideally, regulation and that third leg mediates those first two. It's in sync. Each reinforces one another.

Well, we as a country have not addressed either the first or the second well. We have rationing but we're not honest about it. We have fragmentation but we're reluctant to acknowledge it. We have huge gaps, both in quality and access, and so when I submit that that is largely driven by the fact that we have not wrestled with that first leg, is health care a private benefit or a public good? So I would hope even though it's not part of our purview that the Secretary, using the bully pulpit of his office, would lead a national dialogue to squarely address the first. If we can address that, then maybe we'll actually have the financing system that is more consistent than what we have today.

So I think we've done as much as we can do as well as we can do it with our charge, which was the regulatory framework, but we ought not be surprised that what we found was a very daunting task fraught with almost unimaginable complexity and I submit that that is ultimately grounded in the fact that we have a very curious financing system in this country and we've not been honest or direct about that first leg, the philosophical construct, to provide health care.

So I hope the Secretary will consider looking at both of those in addition to the report we put before him today, and finally, I would hope, and I think one of my colleagues earlier alluded to this, that this report is only as good or as effective as it's actually acted upon, and for my part, I would be thrilled if the Secretary after determining which of these recommendations his office will accept to, say, at six-month intervals over the next couple years post on the website or e-mail us -- no, actually don't e-mail us --

(Laughter.)

MR. CUMMINGS: -- the Department's progress in acting on these, and again I thank you.

DR. WOOD: Mr. Dollens, although I might interrupt you if the Secretary arrives, but would you please?

MR. DOLLENS: Mr. Chairman, you can interrupt me any time you please.

I would also like to thank the Secretary mostly for his vision of establishing this group. I think it was fundamentally important that he understood that this kind of work could happen and could be beneficial for our country. Also thank you for the leadership, Mr. Chairman, and your understanding of the process and continuing to have the focus on the efforts that were at hand. Also like to thank Jack really for his understanding and insight of the system and the process that he brought to it.

I would say one thing somewhat contrary to what we've talked about before in that there's been expressed concern about the follow-through and the follow-up and will anyone listen to the recommendations. I was somewhat pleasantly surprised that the Department and the agencies of the Department were almost lockstep with hearing the same thing we were hearing. There were even actions that were instituted before we could get them written down, which I found a little bit compelling, and again I was shocked and then wondered whether we ought to bother writing them down or not. But anyway, especially as related to, I think, the FDA/CMS kinds of issues.

I would also make a final observation, that said, I think it was important that this group focused on tactical kinds of issues and things that could be implemented and things that could make a difference and some of us have thought that that may not be enough, and so I guess my suggestion would be that because this group is so diverse, diverse in terms of constituencies, diverse in terms of interests and perspective, that it would be most appropriate for us to think about moving backwards, and what I mean by that is could a group such as this be offered to the Secretary or to other interested parties to have this -- I don't want to volunteer these people but volunteer the groups they represent be involved in what I would say would be to focus on really the overarching policy requirements in terms of a health system, make sure that we can establish what are first principles in terms of a health system, and it would not be as productive as what we've done today, but I think it could be fundamentally important, and I would just offer that as a suggestion.

DR. WOOD: Ms. Ryan.

MS. RYAN: I would echo the comments of my colleagues. Thanks to Secretary Thompson for the wisdom of appointing a group as diverse to identify common ground, for the continuing commitment and presence of senior staff leadership. Names have been lifted up individually but it's just been a great privilege to have the opportunity both to develop those relationships and to engage in substantive dialogue all the way along these nine months, and to other members of this group because I think we have been disciplined in our dialogue. We have listened carefully, and I have experienced numerous incidences of these same behaviors being held by CMS and HHS staff, and I think that is what has really enabled us to be productive.

I would just reflect a little bit about the process when we think about lessons learned. I think, Mr. Chairman, Peggy and your predecessor Peggy, to have decided to organize the work of this committee by cross-functional, cross-cutting themes, rather than organizing us by provider or consumer or sector topics was just very wise. I think our decision to schedule the regional hearings and related site visits just was an overwhelming task for staff to try to organize both here within Washington and in the HHS regions, but I really believe it was worthwhile, in terms of looking at the lack of synchronization between the intent of regulation and the way in which it was really playing out. So I think that was so useful.

I think the public comment and the careful attention that the various professional provider, business and other sectors gave to again discipline, public testimony, brings a richness and a robustness to the report that will be part of the whole. I think that the encouragement on the part of the Chair and staff for us as individual committee members, to orchestrate input from those with whom we had connections was well done, and I know in several cases, there have been professional societies that literally named staff to follow the work of this committee and to help to coordinate input, so that there's been a huge effort that doesn't show so much on the surface.

I think the other part was the whole committee structure and the work of the Executive Committee and each of the chairs and then keeping the work going between the specialized subcommittees and then asking each of us as members of the individual committees to work with one another has just been a huge effort, and I think those have been lessons learned and would be a process that could be replicated.

I would observe, Dr. Olsen, with you lifting up the concern about quality, a comment more like yours, Bruce, I guess is that almost since the passage of OBRA and balance budget activities, we've been more engaged nationally in debate about financial policy than we have really about good health policy, and I think in many ways, the public, when they express their concern about a fragmented, highly specialized, uncoordinated system of health care in which they are accessing quality issues, has no one to turn to except to the government and the government's tools in terms of quality are external regulation while the reality of providing quality of health care in human service occurs locally.

So it seems to me that we are trying to move a ship from an environment that has been almost punitive or litigious in its relationships between the consumer, the professional provider, the related business community, and the regulatory bodies, and I think one of the things that has really happened because we've identified common ground is we've got a new understanding of quality that we're trying to put forth which is really fourfold, which says we need a professional commitment to remarkable improvement in the quality of care and services. That means we've all got to commit to principles of continuous improvement and management of quality. I think the consumer has to commit to informed choice and exercising that. I think that the government has to commit, like Bill observed, to avoid the unintended regulations or unintended consequences of regulation and that means they've got to stay connected to the real world so that they can observe those for themselves, and then out of all those commitments I think comes the commitment to technology and to information systems.

I just would make a couple of observations about that piece. We have to have data in order to improve. We've got more data probably in health care than any other sector has, but we're not using it to improve, and we are so, I think, in many ways hung up on the issues of privacy and careful professional attention to confidentiality that sometimes other sectors are taking data that we've documented and really have available to us to use, but we keep it so secret, if you would, but insurance companies, claims adjustors, marketing groups, use our data and probably know more about us and physician practice profiles and trends in disease than we do, and I just think somehow we have to make a professional and a disciplined commitment to the use of data.

I think our subcommittee, under Tony's leadership, has just tried to do that, and I would be willing to suggest that the recommendations about launching a pilot smart card project, using the Medicare card, to enable providers of services and the business and vendor community to begin to get into this game of trying to build the health care information system in this country will have great impact.

I was also struck as we had an opportunity as the Data Subcommittee to read the work of the recommendations that have come to Secretary Thompson from the bureau trying to put together the health information system for this country. The recommendations in that report are excellent, but they call for the Federal Government to do this work and they call for HHS to appoint new structures to coordinate that work. I'm wondering if the smart card pilot won't help to move that along years faster and millions of dollars less costly, if we can involve the real operating world in that process.

And finally, I would just say that one of the really distressing things, and Bruce alluded to it in big macro terms as we did our regional hearings, is you didn't see much consensus across the country about how we ought to organize the health care system, about how we ought to deliver services, about how we ought to staff those services and credential the people and certainly not about how we ought to pay for it. But there was an "aha" that I think that really came out of our work and that was that America is aging, that we are trying to provide services to an aging America out of a health care system that's been primarily designed for acute episodes of care, that we have got to integrate the consumer's experience with the delivery not only of health services but of related human services that we need as we age, and our report lifts up both health and human services in our discussion.

So I would hope that two things happen. One, that we see the outcome that will better interface the work between the Medicare and the Medicaid programs, that we will cast aside artificial differences as to which program staff resources need to be devoted to. Secondly, that the smart card will bring about some of that integration and finally, that the questions are so complex, that I'm not sure we can solve them from the top down but hopefully we'll support pilot projects and waiver systems, both under the Medicare and Medicaid programs, that enable us to demonstrate things that work locally.

Those would conclude my comments, Mr. Chair.

DR. WOOD: Thank you.

Mr. Hefty.

MR. HEFTY: Thank you, and I'll begin by thanking you as Chair, also, for herding this group to the finish line, and a thank you to the staff and the Secretary and our subcommittee chair Tony Fay.

I was reminded, Mr. Chairman, that I think all the good things that can be said about you have been said, but we have not all said them yet, and so --

(Laughter.)

MR. HEFTY: -- we will finish that up.

Just two comments, and I think at the very end of some of the other discussions about the report, to me, this is a victory of singles and doubles, and perhaps regulatory reform is about singles and doubles, and I think it's a good report and solid progress, and yes, there's additional work to be done and the recommendations on following through.

The second piece and the comment, the diversity of this group work, which was good. The information was a reminder and even those of us in the middle of it, the diversity of the country and the health care situations across the country, and whether that's by region or by state and even down to the community level where you have great successes going on, despite the regulatory barriers or perhaps working with them more effectively, and I think the lesson coming out of this and it's incorporated in a number of the recommendations is how you build on that diversity of the successes and learn from the diversity of the efforts that are not as successful, and so I think whether you call them waivers or pilot programs or what I like to refer to as the Big 10 solution for health care, it would be easier if we organized around football conferences than around some of the other government regions, because those regions, I think, reflect the community, reflect the cultural patterns, and we saw some great successes, and I think the challenge ahead is how you build on them in this world of singles and doubles.

So thank you for the opportunity to serve and congratulations on a victory.

DR. WOOD: Dr. Nielsen.

DR. NIELSEN: Thank you to those at the front table, to Peggy, to Dr. Wood, to Bobby Jindal, and in particular to Leslie Norwalk who was extremely helpful in trying to understand and negotiate some of the things that each of us was seeing as we all stood and looked at this elephant and we described it from our own vantage point.

It's been alluded to earlier, but I found it very helpful that we were able to, I believe sincerely, Erik, get beyond labels of who's a consumer and who's a provider and who represents a hospital and who represents pharmacy and nursing and so on. I believe the construct of the subcommittees helped that, but I also think there was an enormous amount of good will among the people that worked together for the better part of this year.

When we first started, we were told what we couldn't address. You remember that? We couldn't talk about anything that would take more money and we had to really restrain ourselves and deal with regulations, and I thought that was going to be a real problem. Well, you know, once you have leadership at the top and you have the Secretary who clearly wants change and has communicated that quite emphatically, I believe, to the Department, and we have seen evidence of that in fact as things have changed in the process of this committee's work, I found that very interesting and very exciting actually, and after yesterday when the Senate went home, I will tell you that I will take regulation over legislation any day.

(Laughter.)

DR. NIELSEN: Any day of the week.

I do have a concern. One is what happens next when this committee is gone. What happens now when groups of either patients or other members of society who have a vested interest in problems run up against a regulation? What are they to do? To whom do they go?

I would make the suggestion. We're talking about Erik's 1-800 number. I would suggest that HHS put together some sort of ombudsman 1-800 number. I don't care what you call it, maybe "Life Meets Regulation." You can call it whatever you want, but there really needs to be some mechanism that makes it easier to have common sense from a variety of real-life experiences as have been alluded to around the table when that runs up against the unintended consequences. How do we smooth the common sense approach so that the Department does what clearly the Department is willing to do now and that is to try to help.

So I want to conclude by one more thanks that I haven't heard anybody say and I suspect I speak for all of you. Every one of us here stands on the shoulders of a lot of other people who helped us. As we went through this year, we got help from staff and patients and experiences and organizations and individuals that we called. So thanks to all of those on whose shoulders every one of us stands.

DR. WOOD: Thank you, Dr. Nielsen.

Secretary Thompson is about to arrive. In fact, he's walking in the door. So we'll stop here and welcome him.

Well, Secretary Thompson, we appreciate your coming this morning. We've already started our work and have finished adopting the draft report that represents the culmination of the work of this subcommittee.

In January of this year, we gathered here in Washington for the first meeting of this Secretary's Advisory Committee on Regulatory Reform. After a dramatic visit to the emergency room, we came back to the meeting room and the Secretary asked us to accomplish several important tasks.

First, to clarify and simplify regulations to make it easier for patients and consumers to get better care. Second, make it easier for providers, health plans, device manufacturers, beneficiaries, and consumers to meet the requirements of health and human services. Third, customize HHS rules to better suit the needs of local health care providers and to the type of patients that are being served.

There was a substantial amount of work that was in front of us in order to accomplish our goals and to keep us on task, and I do apologize to my committee members for making them feel like they've been a little bit overworked and underpaid. We decided that it would be best if we would adopt a mission statement to guide our work as well as a set of principles that would guide our work and make us more effective.

Overall, we had a simple goal and that was to improve the level of services for patients and consumers and we thought we would try to do this by suggesting to the Secretary ways to cut red tape, remove obstacles to smoothly functioning relationships in the health care system, and to reduce burden appropriately, so that time and resources could be appropriately devoted to patient care, rather than being directed toward things that did not add specific value.

We recognized the need to enhance the trust of Americans so that they would be well cared for and served and protected. This committee undertook a very aggressive work schedule. We were privileged to visit all regions of the country, to listen to the concerns of the public as well as to learn more about how paperwork and regulations affect the system of health care delivery. We went to hospital emergency rooms. We saw critical care units. We visited rural health clinics. We went to nursing homes and we even went on nursing visits to homes to see how data collection requirements might interfere with the ability of nurses to provide care to the patients they serve.

In adopting a set of principles to guide our work, we decided to concentrate on those rules and regulations and paperwork that serve little purpose but which would decrease efficiency and deplete the time and the energy of health care providers. We did find areas where over-regulation undermined the quality of care and health delivery by forcing practitioners to use scarce resources that could otherwise have been better directed to patient care. We found opportunities to improve service to beneficiaries and their caregivers, and we've been pleased that the Department has tried to act on those as quickly as we have identified them. In particular, as we've crafted our recommendations, we did seek to improve health care for patients and consumers by reducing the regulatory burden. We have accomplished a lot.

Today, Mr. Secretary, I'm pleased to present to you our final report. It contains more than 250 recommendations. These recommendations are in several major areas that we believe will help beneficiaries and health care providers and which will give you a sense of our vision for the future. The comments that we had around the table this morning we hope will also be a supplementary piece of information that we will give to you later that will further crystallize some of our thoughts about the future.

The report does include recommendations that will help consumers and beneficiaries get information from HHS, to solve problems related to meeting the requirements of EMTALA regulations that were demonstrated to you in our very first visit to the emergency room at Providence Hospital, as well as to help home health care nurses do a better job in serving their patients. There are recommendations that will better position us to respond with speed and effectiveness in the event of bioterrorism. There are recommendations to reduce burden for nursing homes, for Medicare+Choice plans, hospitals and clinics.

This committee, in my view, has accomplished a considerable body of work. I am certain now after hearing the comments of the committee members around the table this morning that they did not have an inkling of the amount of work that was in front of them at the onset, but clearly their hard work in subcommittee and in committee meetings has been exemplary and it has been my dear privilege to have the honor of leading such an extraordinary group of people from all parts of health care.

Our efforts have been ably facilitated by dedicated staff. They all have had other day jobs, but they've worked at this in their seemingly spare time. I don't know where they found it, but they have done a tremendous job, and without the willingness of people from HHS to help us understand the original rationale for regulation and to help understand the nature of our recommendations in terms of the implications of moving forward, we would not have been successful and we particularly appreciate their willingness to educate us and to help us in our work.

Last, Mr. Secretary, we appreciate your support and your commitment to acting on our recommendations. You asked us at the beginning not to wait for a final report to give you ideas on which to ask, we didn't, and we are grateful especially at your response to our suggestions as we proceeded. Your staff, as has been recognized already by members of our committee, seemed to be moving faster than we could write down the recommendations, and we're particularly pleased by the announcements that you made to our meetings in Denver and in Minneapolis about things that you were doing to really move forward with the recommendations of this committee.

I speak on behalf of every member of the committee, it has been our privilege to have served you. We thank you on behalf of all Americans who rely on our health care system and we hope that we have at least met or perhaps exceeded your expectations in our work.

I'm particularly pleased to introduce to all of you Secretary Thompson. He is the leading advocate in this country of the health and welfare of all Americans. He's the 19th individual to serve in the role of Secretary of Health and Human Services, and I from Minnesota have had the opportunity to admire his work from across the border. I have grown up in Madison, in a part of the country that has been dedicated to improving the health of all of our patients and in particular, Secretary Thompson has shown his commitment as an elected official to be able to improve not only the health but the welfare of the citizens of his state.

Around the table this morning, we have talked about some of the difficulties that lie in front of us in the health care system and in particular, in the last few minutes, we have talked about a triangle of sorts or a three-legged stool that relies on a social contract, on financing, on regulation, and as I observed at least from the near distance of Minnesota to Wisconsin, I cannot think of an individual who perhaps had a better understanding of that and in his accomplishments as Governor of Wisconsin did more perhaps to integrate the social construct and the support of social services that are so much a part of health care, and as we look forward to the future, it will not be sufficient simply to talk about health care on the one hand and social changes on the other because they will have to be integrated.

Your vision in that regard will be invaluable. We have been pleased to work in your service, and I am pleased to be able to present to you this morning this draft report of our work.

(Applause.)

SECRETARY THOMPSON: Thank you very much, Doug. It's a pleasure for me to be able to call you a friend. It's much more of an honor for me to have you spend so much time leading this wonderful effort. I thank you and the country thanks you and health care is going to be improved because of your leadership.

I called you at one time the Brett Favre of rules and regulations, but since the Minnesota Vikings beat the Green Bay Packers last Sunday, I have to now change that to the quarterback for the Minnesota Vikings, which really irritates the hell out of me, but I thank you, Doug, for that, and I thank you so very much.

For the committee, I didn't expect you to work that hard. I really didn't. I'm absolutely amazed of how hard. I'm honored, I'm pleased, I'm in your debt, and I want to thank you.

I mean, I'm always amazed, ever since I set up my first citizen committee when I was Governor back in Wisconsin, how great it is in our democracy to have wonderful citizens who are so busy and are still willing to take on another job in order to benefit the citizenry at large and all of you have done that and I can't say enough, except to say just thank you. The system is going to be improved because of your dedication and because of your hard work. So thank you so very much. The country is in your debt and I really appreciate it.

You've done excellent work. The American people owe you their thanks for it and for your patience, your fellow citizens are going to enjoy and appreciate and certainly are going to receive better care because of what you've done here today.

I also have to thank my Assistant Secretary of Planning, Bobby Jindal, who flew all the way back from Europe to be here this morning. I think you probably came the longest way, Bobby. I appreciate that. You're just so bright and so dedicated, and I thank you so very much for assisting Doug and the committee. You've done an outstanding job.

I also want to thank Peggy Sparr. Peggy, you really are the quarterback. You're the Brett Favre, but since he lost, I've got to find a much better nickname for you, but I thank you, Peggy, Executive Coordinator of the Advisory Committee on Regulatory Reform, and the reform committee staff. All the staff and you, Peggy, are very much appreciated, and I thank you so very much. You were all instrumental in making this report happen. Thank you all for your dedication.

Last January, I charged this committee with a task of finding ways to make it easier to provide health care while still maintaining the high standards of accountability. We're committed to common sense government. We want regulations to serve people, not make people serve regulations. If we can clarify and if we can simply those confusing regulations to make life easier for patients and consumers, then we've known we're making some real progress.

The final report is not the end of regulatory reform and it's just merely the beginning. I thank you for this, and 255 recommendations to improve the system is outstanding and you did this in less than a year. Over the past year, some of our best minds, our most conscientious citizens, have given their time and their efforts to cutting the regulatory knots that tie up the health care industry, stifling progress and slowing innovation. I've always believed that while some regulations are necessary, many are not.

The final report has proven that view correct, and I thank the members so very much for it. You have provided a grand total of 255 recommendations for regulatory reform. I know what an enormous task it was to arrive at those 255 items. How 29 people of disparate backgrounds can agree on 255 things is to me in and of itself a miracle and you've done it and you're still here. You're still talking and smiling. I thank you. I know what an enormous task that was, how complex, how difficult it must have been. The fact that you accomplished it in less than a year is nothing short of amazing. You have my respect. You have my gratitude for the thoroughness and the swiftness of your work.

We didn't wait for you to finish to get started, as I indicated. To date, we have implemented almost 30 of the recommendations in the report. Seventeen of those were in CMS, and I want to commend the CMS Administrator, Tom Scully, who's not here so I can say nice things about him, and if he was here, I wouldn't do it, but I want to thank the CMS personnel who implemented the changes so quickly and so well.

We're getting ready to act on dozens more that I hope to report on in the near future. Let me go over the highlights of what we've already done.

We've streamlined paperwork requirements in the MDS form for nurses and other clinical staff and the staff that cares for Medicare beneficiaries in nursing homes. We cut the time needed to complete the Medicare Assessment Form in half while still collecting the necessary data. We proposed clarifying the requirements for hospitals to screen and treat emergency room patients under the EMTALA. If that is all you would have done, you would have been successful, and doctors and hospitals all over America would have thanked you, but you did a lot more.

In May, the Centers for Medicare and Medicaid Services proposed common sense improvements to ensure that patients with possible emergency conditions receive the appropriate care as rapidly as possible. We allowed hospitals to gather Medicare secondary payer information used to make sure the correct insurer pays each health care claim, that we do it just once every 90 days instead of every time that person comes in. This change allows hospitals to focus more time and resources on caring for patients instead of repeatedly collecting data.

We improved the efforts to educate Medicare beneficiaries using a variety of channels. Access to the Medicare Personal Plan Finder is now available online at medicare.gov.

All these changes mean less burden on the health care provider and more time spent on patients, and as I said earlier, it's just the beginning.

Our reform initiative is going to have a big impact on Medicare. We must bring Medicare into the 21st century. That's why the new Medicare cards, as you can see here, have already done what you've suggested. We have now both a 1-800 number and the Medicare website address printed on them. Suggestions that came from this committee. We want beneficiaries and their relatives to have quick and easy access to the most up-to-date information on Medicare. We're going to use technology and common sense to get the job done.

We're going to work on the other recommendations that the committee has made. We're going to streamline Medicare's paperwork requirements for home health nurses and therapists so that they can focus more on providing quality care to their patients.

That's why I directed CMS to eliminate elements of Medicare's required home health patient assessment, called OASIS, that was duplicative or unneeded to promote quality care or to ensure accurate payment. We created a technical expert panel to look carefully at the OASIS forms which are used for home health care services. The technical experts met for the first time in July 2002 and have already met several times since.

We are changing the way that we do business in this Department. This is just the tip of the iceberg, my friends. The release of your final report is a great day for all who care about health care in America. Quality care is important to all Americans and I'm passionate about making it happen and together, we're going to get it done.

I have asked Bobby Jindal to create an internal strikeforce to find out how many more and how we implement all of these recommendations that you've recommended, but I would also ask you, Doug, to make sure that you keep in contact with the strikeforce, with either yourself personally or with an executive committee, so that we can implement these recommendations as we go along. We need your advice. We need you to stay involved. I know that that's just exactly what you wanted me to say to you today, but I would appreciate it. You've worked so hard, now we have to continue on and make sure that we get this job completed.

I also wanted to tell you a few other things. I just want to thank you first for your concern and your professionalism and your dedication. This, as I indicated to you, is a giant step forward, ladies and gentlemen, but it's only the first step. I strongly believe and I think a lot of you, if not all of you, would agree that health care is going to become the Number 1 issue in America after the war on terrorists and so on is behind us. I think health care is going to be front and center. It's going to be the Number 1 issue. I believe that the health care delivery system is stretched and it is stressed, and I think it's time for us to take a real long hard look at the overall delivery of health care in America.

This is outstanding and this is the first giant step. The second giant step is to review all of the delivery systems, the technology, the liability system, the reimbursement system, and so on, and I have also decided, since you've worked so hard, I've asked another group to come in and go the next step, to take a look at the delivery system, the technology, and the liability system, and we're going to start that process this Sunday, and this is going to be incorporated into that particular meeting, and we're going to then move on to the next step and the third step is going to be, of course, going to Congress and asking for changes to the overall system.

We are adamant, and I am very adamant, about making sure that we change the system for the better, and I need your help. I applaud what you have done so far, and I'm looking forward to working with you in the future as we move together to modernize the health care system in America and improve it for all of our citizens and the uninsured, the underinsured as well.

So I thank you again for being here. I thank you for your dedication. I thank you for being such wonderful citizens. As President Bush called you, you are part of the armies of compassion in America, and you have done an outstanding job, and with your help, we will continue to work to improving the health care delivery system that all of us in this room love and cherish and work at, and with your help and assistance, I am confident that we can make it stronger and better tomorrow than it is today.

Thank you so very much.

(Applause.)

(Recess.)

DR. WOOD: Let's reconvene.

I'd like to pick up with our comments. Gary Redding has been so patient to sit through our last part of the program and so, Gary, good morning again. Are you there?

MR. REDDING: Yes, good morning.

Mr. Chairman, thank you, first of all, for this opportunity to speak and secondly for your leadership during this effort. I came in during, I think it was, Bill Toby that was speaking. So I have been on the line for awhile now.

I'm not into making a whole lot of excuses, but I do have a good one today for being late and for not being there in person. Something happened here in Georgia that hasn't happened for over 130 years. We just elected a Republican Governor for the first time.

(Laughter.)

MR. REDDING: All that time, and today was the day that he decided to have a breakfast meeting with all the agency heads. So I like all of you people, but I didn't think I could miss that. So I think that's a pretty good excuse, but I want to thank Secretary Thompson for making me a part of this group but also for his vision in putting this group together. I certainly heard his remarks and certainly appreciate them.

I guess, looking back on the process, when we went around the table at that first meeting and talked about what we'd like to see happen, I think, of course, I talked about Medicaid and the Medicaid program and sort of what I'd like to see the group do, but I think that certainly my theme was just flexibility, trying to see flexibility within these regulations, to allow providers, to allow administrative officials, to be able to do their jobs in the best way possible, including allowing for innovation, making sure that we're able to take advantage of the newest, latest and greatest, if you will, technologies, things of that nature, and I think that looking at the report and the recommendations that have been made, I think we've certainly done a great job in pulling that together.

I certainly want to commend Heidi for being the chair of our subcommittee and doing such a wonderful job in keeping us all in line, and Paul for his efforts in helping us get through the process and really all of the CMS staff. It was the first time that I can say as a state official that I've had that much cooperation from folks in CMS.

(Laughter.)

MR. REDDING: But we have a great relationship with our regional folks, but I was really struck by the level of commitment and the effort that was put forth by the folks at CMS and I was appreciative of that.

I would like to obviously see this report through in terms of the recommendations and some action that takes place and Secretary Thompson has certainly outlined the next steps and I think those things are great. I would like to make a comment just about the Medicaid program because sometimes it gets shortshrift, if you will. I believe right now that totalling all 50 states and the District and the territories, Medicaid probably enrolls more people than the Medicare program, and with that said, I just really encourage us to make sure that the Medicaid program does not get shortshrift and that Medicare certainly is important and I've even seen more evidently how important the Medicare program is even through this process, but let's not give Medicaid shortshrift. I think it's an extremely important program. It's a safety net for a whole heck of a lot of people, about 44 million to be exact, and with these regulations and the impact that it can have on the Medicare program, it has just as much or more impact to serve through Medicaid, but the process has been great. The people certainly have been great. It's been a wonderful opportunity for me.

You know, whether I'm in this position or not after the new Administration takes over, I'm sure I'll be in some capacity where these regulations will certainly impact me. So it's to all our best interests to make sure that things are done decently and in order as we like to say in the Baptist church, but with that, I appreciate the opportunity again and those are my comments.

DR. WOOD: Thank you, Mr. Redding.

Dr. Crosby.

DR. CROSBY: Thank you, Dr. Wood.

I'm not sure my voice will hold up to speak, but I'll give it a try. I have found the last nine months to be a tremendous learning experience. I've been in health care for over 30 years, and I've been a physician for 24 years, and what I've learned is how much I did not know about the regulatory process. I thought over the last months almost every day of John Donne, the English poet. He said, "As the island of knowledge expands, so do the shorelines of ignorance." The more I've learned, the more questions I've had. So it's been a great learning experience from the staff, from my fellow committee members, from the public comments, and the communities that we visited, I have learned so much, and I feel honored to have been able to participate and give a little back in my contribution to the committee report.

Also, this year has been a learning experience because I faced personally some serious illness, and as a physician, I am a relatively sophisticated health care consumer, but it's still been extremely difficult to negotiate the health care maze, and I think that it's an artificial dividing line between consumers and providers, between consumers and health plans, or whatever. The truth is we are all consumers and we all at some point will need medical care, and our system, as was pointed out in the Secretary's charge at the very beginning, does not always make it as easy as possible to get the care that you need.

We're fortunate we live in the United States where a lot of amazing care is available, but it takes quite a bit of effort to access it. Part of that has led to my experience this year as a sobering year. There have been so many regulations and it's been so complex and we've heard stories of very worrisome problems in the health care system, if you are even willing to call it a system. It's kind of task work. It's certainly not a well-organized system. We've heard a lot of the problems and it's been very worrisome to see some threatening changes in our health care system, but it's also been an inspiring year, and one comment I haven't heard so much in the comment period is thanks to the community members who invited us into their institutions. I found that tremendously inspiring and a more-than-positive balance to the sobering aspects of the committee work.

When you go to a clinic in Little Havana and see all the amazing work that they have done bringing private, federal, county and state efforts to bear to serve their community, I wanted to go back to clinical medicine immediately right there in that clinic. It was just wonderful and every one of the other site visits or I thought of them as field trips, but every other one that we did at all of the various hearings was equally inspiring about the capacity of our communities using their community resources, they can bring to bear some amazing changes and develop some amazing institutions.

It's been very inspiring working with this committee. It's been inspiring that Secretary Thompson has envisioned that we would all get together and brought together an excellent staff and Assistant Secretary who's been our guiding light. He's appointed Dr. Wood as the chair to keep us all -- you know, it wasn't that bad of slave labor, especially now that it's over, but it's been inspiring for all the leadership, the staff work, and the work of my fellow committee members. So I extend my thanks and appreciation for the privilege to serve. It has been a real privilege.

DR. WOOD: Mr. Fay.

MR. FAY: Thank you, Mr. Chairman.

As someone currently residing in the South, I've never been accused of talking too fast, and I have a good bit to say, but I did see Trent Lott on CSPAN last night, and I know it can be done.

(Laughter.)

MR. FAY: So I just want to give a big thanks to the folks I worked with on the subcommittee, Judy Ryan. Judy, you've been great, especially with the MDS, educating all of us and bringing us up to speed on that. Mary Martin. Tom Hefty who definitely educated us about the UPS man and how he's got the little handheld computer that's got all that information that you need to know about where every package is. Bruce Cummings who's been a great inspiration to me, just educating me on the day-to-day operations of running a rural hospital, and Michele Evink who has brought a lot to bear to the Data and Information Subcommittee on issues of pharmacy.

I also would like to thank Bela Sastry for the fine staff support and leading the subcommittee, did a super job there, Bela, do appreciate it, and also appreciate the rest of the staff from HHS as well as your leadership, Dr. Wood, but I'd also like to recognize the two true unsung heroes and that would be Vineeta Jain and Dianne Norcutt who handled all of these really ugly logistics and managed to get us to the right place at the right time with no hassles. So I think that's a job that often is unrecognized but do appreciate the good work there.

I've got four things in the report I just want to comment on briefly. The first one concerns smart cards and that was the recommendation we adopted today that is in the report. I think this is a great opportunity for HHS to be the leader in this potentially explosive evolution in technology by their ability to deploy smart cards on a widespread basis. Once the cards are deployed, the infrastructure is set, then one of the biggest barriers has been brought down.

Now, the recommendation in the report sort of has a two-sided recommendation. It leaves open the question of how the software and infrastructure for the smart card should be developed. Should it be developed through a more classical means of having a central committee that would take all the ideas and adopt them or reject them, and who would be on that committee and who would try to take it over, that kind of issue, or would it be an open source community-based model whereby people and vendors, academia, private individuals would be invited to participate, invited to write programs or create hardware and use them, submit them to the committee, a committee, a steering committee for some kind of approval or adoption, but by not adopting those recommendations, it would not preclude using this technology in the short run. I think the open source community-based model is the way to get this thing launched quickly with a lot of widespread volunteer support.

With respect to e-commerce, our report clearly says that there's still too much paperwork in the health care system and all steps need to be taken to remove that. In the short run, the recommendations made include making provider enrollment and beneficiary enrollment electronic, having a central repository of electronic forms that can be filled out and submitted electronically, electronic filing of cost reports, things of that nature. These are things that really have been done in private industry and it is really time that the leadership is taken to make this happen inside the Medicare program.

Data integration is another subject that was discussed in the report. It's a very broad subject, but we did have a specific example in there about MDS and OASIS being too similar instruments and they have too similar electronic protocols. One is called RAVEN, the other is called HAVEN, but neither the twain shall meet because they don't talk to each other. They're not compatible and that just means beneficiaries have to go through the process twice if they go from one setting to the other.

So I think it is imperative and once again, I think it's HHS's purview to take the leadership to start integrating these instruments, connecting the data, so that we can reduce the paperwork burden and the data collection burden, especially on beneficiaries.

Then the last thing I'd like to say, and it's been said many times before around this table, is the process of regulation is one of seeing the need for regulation, promulgating regulation, enforcing regulation, but the work of this committee has been to revisit regulation, and I'd like to just echo my colleagues, that that is really a continuous process, one that needs to happen over and over continuously so that the regulations just do not layer themselves one upon the other.

Thank you, Mr. Chairman.

DR. WOOD: Ms. Pattee.

MS. PATTEE: Thank you, Dr. Wood.

While I echo many of my colleagues' comments, I also want to bring forth some thoughts of mine obviously. I have been pleased with the chance to serve. I did join the committee late, and it was a great privilege to be included and to be included warmly even in my first meeting in Arizona, and then I was very pleased with the opportunity to work specifically on the FDA issues towards the end of our summer where we needed to take an action on those, and I was pleased that Peggy and Dr. Wood were confident in my abilities to do so, and I appreciate the great help of Tom McGuiness at FDA, Laina Bush at HHS, for helping to make that work possible and help us to get those recommendations in the final report.

I mentioned to Dr. Wood that I still do have a couple minor edits to the report. In particular, it has been important to make sure that when we look at Medicare beneficiaries, we do include people with disabilities in addition to seniors, and there were some language in there that needed to be included again.

I was recently visiting the office of Senator Specter and he has a huge chart on his wall that's probably a story or two high that is the blueprint for the Clinton health care plan, and I do recall that being one of the graphs in front of the Congress, but I was really hoping that we could put the graph of the current health care system right up next to it, so we could see what we are dealing with right now.

I do agree that we need a real national dialogue to look at the entire system and make sure that we can come to some real reform that will make a difference for access for all because none of us is and should be pleased that we have so many large holes in our safety net programs.

Many of the changes I think we've done have been common sense, but they're also not common sense because the devil is in the details, and to the extent that something may look very obvious to change, it's not necessarily as obvious and that's perhaps why we are here to look at all the options.

I'll bring forth two examples and the pros and cons of flexibility, and I do think flexibility is important and it can have benefits for patients but also can be a barrier for patients. One would be my concerns about coming together with consistency in the local medical review policies for Medicare. I think while that may sound logical, there was admission at the Minnesota hearing that that could also have a negative effect on access to new technologies and new medical devices, and as a patient with diabetes who uses an insulin pump that has actually made it possible for me to come to all these meetings in the last year, I found it to make a huge difference in my quality of life and my ability to keep the crazy hours I've been keeping.

On the other side, state flexibility can be a problem, and I've been concerned with the potential for inequities that can develop as a result of that and that can just be the basic things, such as the different poverty levels that are covered with Medicaid in the different states, as well as different issues with access to medications, and I know it does depend on where you live or what kind of health care you get, but we should have some basic principles that we can all come together on and hope that everyone could do the right thing, but when money's involved, we have to make tough decisions, and I have always been impressed that Oregon's helped to bring that debate to the forefront.

As far as the unfinished business, we do have 75 more recommendations that if we could stick around after lunch maybe and approve a few more.

(Laughter.)

MS. PATTEE: But I got an e-mail from Jack Rovner saying okay, enough, no more.

I do think as far as important thoughts of taking to the next step things that will make a real difference in the health care system is the use of technology, information technology, to reduce the chance for human errors and reduce medical errors as a result, that can really make a huge difference.

I'd also like to hope that we can take another look at the impact of the HIPAA privacy rule on medical research. That was an issue we talked around in circles but weren't able to really address and that's a critical issue to the research community. As a patient obviously who's hoping to benefit from more research and new technologies, I don't want to see that avenue of research closed off because of the valid concerns for confidentiality.

The other thing I think will make a huge difference if it's done properly obviously because the devil's in the details is the smart card, and I do hope that that can help us to come forward to a patient-centered health care system, where the patient is not having to be subjected to different kind of OASIS forms or MDS forms or whatever and can take the smart card technology with them to whatever health care setting they need to go at whatever time in their life because any of these situations is very stressful and it's hard to be able to remember what you have to do to get the coverage you need when you're stressed out from your health care.

But it's been a real privilege and a very great learning experience and I hope for the continued opportunity to help to be a part of the larger dialogue as we continue to look at what happens next.

Thanks.

DR. WOOD: Thank you.

I'd like actually to give the other folks here at the front table a chance to share their insights. They've been with us through a lot of work. I'm suffering a little bit of separation anxiety here because my counselor is too far away from me to discreetly ask what do I need to do to stay out of trouble.

But Leslie.

MS. NORWALK: Thank you.

When I inherited this task, I wasn't really sure what to expect. I missed the first meeting because someone who preceded me, Linda Fishman, who's gone to the Senate now, had the privilege of helping you all, and she said, "Well, Leslie, I'm leaving and now it's in your hands." Hmm. I had no idea what I was getting into, but I must say that it has far exceeded any expectation I had.

Every single individual around this table and on this committee has, I think, really made substantial contributions and in particular the subcommittee chairs who I know from conference call after conference call have really diligently worked to get their subcommittees together, to make a productive contribution and, of course, Dr. Wood, that's certainly no surprise. All of you know how much he has put into this effort.

Just to second Nancy's comment about the people whose shoulders we stand on to look good, the CMS staff, all 4,000 some of them, really make me look good. So when you're complimenting me, it's really to the benefit of the staff that those compliments go and thank you for that and not to mention the ASPE folks, not just Bobby but Ann Marie and John who've also worked very hard on these recommendations and in particular getting this report together in a way that I think makes some sense and picks up some themes, and talking about themes, I think from my perspective, there are a number of things that people have mentioned I'd just like to highlight.

First, we are all in this together. I consider this process of governing to be one where all stakeholders need to be involved and that's not just the providers, it's also the consumers, it's the taxpayer, it's really a broad construct, and hopefully this process I felt for the most part really tried to encompass all of those different components.

I think the consumer-driven care model is the way we'd like to go going forward and I appreciate that your recommendations consider that. Certainly increasing quality while reducing the regulatory burden is ultimately where we want to be in the long run and focusing on the outcomes is one way to look at that while the actual nitty gritty and the devil's in the details is certainly the case. I think while we need to be very careful that the quality of care is provided and need to have some regulation to ensure that that's the case, maybe in terms of specifics so that we have equality and the like, I also think that looking at, well, gee, what happens at the back end with, for example, our nursing home quality initiative that we rolled out in full a couple weeks ago, looking at what is really happening in these nursing homes, in addition to our normal survey and certification process. Giving people access to information is another way to change the system without necessarily putting in the cash that both states and Federal Government are lacking in addition to the rest of the economy.

Hopefully that will turn around and I can certainly say that one of the things that I never realized was how much the three-legged stool was important, and sitting in this role, certainly the financing and the decisions made about financing, how the perspective would impact how you might make those changes and, sitting here, I can tell you it's a very, very difficult choice we have to make every day, determining where the health care dollar goes.

Nevertheless, I think what you were chartered to do to help us reduce regulations is such an important part of what I need to have to do my job and all of us actually at HHS because we're reacting to so many things. It's terrific to have a group come in and instead of saying gee, Leslie, I want more money, which certainly happens on a regular basis, here's some regulations that don't work. Here's why they don't work and here's a way to make them work better. It's terrific to have that opportunity because it lets me be slightly more proactive than I am on a normal basis and I like being proactive. I think that's a role that the government can be given that opportunity.

I think there are 222 of the 255 recommendations relate to CMS. We're working on a whole lot of these now. I know that the Secretary mentioned that 20 some odd are actually underway and over half of those are CMS recommendations. I want to assure you that the rest of them haven't been put on a back shelf. In fact, I don't remember the specific number but just under half, I think, are actually currently underway and there will be others that are under consideration.

I think as Erik pointed out earlier, as well as a couple of other committee members, a lot of this requires more thought before we actually act on the recommendations. You've done a terrific job of pointing out problems and giving us some suggestions about solutions, and while we might not take your exact solution as you've recommended it, I think that your ideas have been terrific and have given something to us for us to go on moving forward.

As the Secretary said, this is a first step. I know most of you will not be shy to pick up the phone and call me or drop me an e-mail when you discover something else that's really horrific that needs to be changed and I would encourage you to do so, and as to Nancy's point about a 1-800 number, while I don't know if we've set that up or how we might do that, we do have these open door forums that Tom has put together, so that industry groups at least and a number of beneficiary groups can call us once a month and say hey, we've got a problem, can you help us, and it's a way for anyone to have access to the Department no matter who you are without a $400-an-hour attorney or a lobbyist or whomever. So we hope that that process will continue and you'll feel free to either call me individually, drop me an e-mail, or to use the open door process.

You know, the real world is hard to see often as we sit inside the Beltway, and your perspective is invaluable in helping us change things and help us understand when we implement or when a regulation is out there, how it does affect you and impact you. So I would greatly appreciate hearing all of your perspectives and look forward to the continuing dialogues, so that when we not only just these 222 recommendations that are CMS-specific, not just those but other things in the future, you can help us reduce the burden in a way that makes a whole lot of sense to all the stakeholders involved.

And thank you for letting me provide occasional guidance. You've been terrific.

DR. WOOD: Mr. Jindal.

MR. JINDAL: Well, I certainly want to add my voice to many others thanking you for your time and hard work.

I had a particular interest in this committee. You may remember the very first meeting this committee started off in Providence Hospital, I actually had to leave you early because of the birth of my first child, a baby girl who's now 10 months. It's amazing for me to think about how long and how quickly this time has gone by measured both by this committee's work and also my daughter's own progress.

You may also remember in Minneapolis, I celebrated my birthday with you back in June. So we've certainly invested more than just several hours working in this committee, but more seriously, this committee was something that we've taken in the Department very, very seriously, and you've got many ideas and you think about many things, and you implement them and you have no idea how they're actually going to turn out, and so this committee certainly sounded like a good idea in terms of why don't we bring the nation's experts and bring people from outside of Washington to come tell us how to make the programs work better.

Before today's meeting started, Doug and I were talking and he asked me my opinion on how had things gone, how you all had done, and I remember very clearly and somebody referenced this, what the Secretary asked from you back in January. He asked you for something very specific, but he also asked you not to do other things, and somebody reference that fact, that he knew even back then that inevitably there'd be so many tempting opportunities to go beyond the scope, as busy as you were and as much work as you had, it was very tempting to want to do everything and unfortunately end up accomplishing nothing, and I applaud you for not going into those diversions. I applaud you and the reason I think this committee has been so successful is the Secretary very specifically asked give me concrete specific things that I can do, give me specific things that I can change.

You may remember, he said, "Don't come together and merely complain," and he brought out the shopping cart filled with regulations and said, "Don't simply send me a report saying how bad everything is, but rather I want to only ask you for your solutions." This is something he does whenever he meets with people. People come to see him every day from across the country and before they leave his office, one of his requirements is if you've come to me with a problem, if you've come to me with a complaint, I want to know how you would fix it. I want to know what your solution is, and so to answer Doug's question and answer to each of you, I think you've been extremely successful as measured by the fact that you've given us over 250 very specific recommendations. It would have been very easy for this group to spend the better part of a year complaining about the system and giving us a very high-level report that says the system's awful and we think you should fix it, but by the way, that's your job to figure out how to do it. So I applaud you for not doing that but rather doing the hard work of getting into the weeds and that's what caused you to have to spend so many hours together. That's what caused you to have to do those regional field visits. That's what caused you to have to spend so much time not only visiting sites but also hearing from people, the beneficiaries, the practitioners, that are affected and live in the current system.

So absolutely this has been a successful project, way beyond our expectations, and I applaud you as measured by the very, very specific recommendations you've given us. I also want to applaud you. This is probably the most diverse group I've seen of individuals coming together to work on health care. Now, certainly there are many health care task forces, committees, groups, academic think tanks. There's certainly many people in this country that study our health care system, but of all those groups and all those activities I've participated in and watched, this has got to be one of the most diverse groups from a variety of perspectives, in terms of the people you represent and experiences you bring to the table, but in addition to bringing those diverse experiences, I also applaud you for going beyond your own individual experiences, and I applaud your chairman for setting that tone from the very beginning.

I never once heard and I don't think any of us heard anybody speaking at the table saying, well, because I'm representing the hospitals or the doctors or this type of patient or this type of beneficiary group, rather each of you took very seriously the mandate to think beyond your own backgrounds and your own day jobs and really took very seriously this opportunity to look at the entire system. So I do congratulate you and applaud you for doing that.

I would like to close by saying, and I'll borrow very badly from a phrase, we've talked a lot about our health care system and there's a phrase and I was reminded of it because I've just come back from OECD meetings and that's where I was, where the Secretary referenced making this long trip, really talking to people from 30 countries about their different health care systems, and the phrase I want to borrow and still was originally applied to democracy, as much as we hate our health care system, as much as we think that it's awful and broken and has many things that need to be improved and fixed, which is absolutely true, it's certainly better than any other alternative.

The one thing that we're constantly reminded of, one of the things that drives us to work so hard, is we see the glimpses of the opportunity when our health care system works at its best, it's better than any health care system in the world, and what motivates us to be around this table is the desire to make sure that it continues to reach its potential and that it offers that potential to every one of our citizens and so that everybody enjoys the innovation and the incredible patient control.

When you hear some of the stories from my fellow colleagues, you're just reminded, whenever we think and this is not an excuse for inaction or complacency, but whenever we think our bureaucracy has gotten bad or when we think that the system is too bureaucratic, all you have to do is look at some other systems to be reminded that we do have it better, and one of the things the Secretary mentioned in his remarks was that this is one step and a very important step in a process. Many of you mentioned the desire to look at the broader questions on the health care system, looking at quality, technology, really looking at restructuring the health care system.

Doug, your chairman, mentioned the IOM report. I know the Secretary is very serious about taking IOM-specific recommendations but also now is setting forth a process, including public field hearings and other activities, to take that broader look and he will be talking about those details in the near-term future. I don't want to get ahead of that, but I do want you to know he's very serious and he's talked very seriously about doing just that.

So you've given him some very, very valuable lessons in terms of specific recommendations, but you've also, I know, you've encouraged him in his desire to revamp our health care system. The President, I think, put it best last February when he said it's really about putting the patients and their doctors, their providers, back in control of health care and that's really what your group has helped us to do and so again I thank you very much for your work and I applaud you for your specific recommendations.

DR. WOOD: Peggy?

MS. SPARR: I'm going to be pretty brief.

I've been associated with the group now for, I guess it is, over a year. God, I didn't think it would be that long. I was very happy being back in CMS at the time but more recently, as your Executive Coordinator since June, and I want to thank you all very much for all of your work, all of your dedication. We have, all of us as staff, very much enjoyed the opportunity to interact with you. We've learned. We've been most impressed with your creativity, the dialogue that you have with each other, your constant quest to understand and sometimes frustrating for us with all of the questions, but it helped us because it kept us very focused on trying to keep you guys focused, and I think that's what's resulted here because you were able to keep your focus on your vision. You were able to come up with the 255 recommendations. So that's a tremendous extraordinary amount of work, and certainly we've all worked to help support you, and I know you've thanked me and I appreciate that.

I want to just specifically mention the staff, the core staff, who've been working for you all year. Bela Sastry, Paul Hughes, and Vineeta Jain have been here borrowed to work on this initiative all year, and they have done a lion's share of this. Many sleepless nights to produce work for this initiative.

In addition, we've had Erin Palmer, Caroline Washburn, Laina Bush, George Greenberg, Emily Loriso, and Scott Douglas more recently on a detail working again either part-time or at least a dedicated chunk of time for most of the year.

Of course, our two liaisons to the two biggest agencies involved, which was FDA and CMS. We had Nora Andrews, who did a wonderful extraordinary amount of work to try and help pull together efforts from all of the staff and all of the nitty gritty pieces of the 4,000, et cetera, employees in CMS, and Tom McGuiness, the same way in FDA, to help us get information, making people stop at the drop of a hat to get you what you needed.

So we appreciate your lauding us, but really, as Leslie and others have said, without them, we could not have been able to produce it in this kind of turnaround, and I personally want to thank the CMS Internal Advisory Committee for working with us all year and just again providing us extraordinary information, and the Department Steering Committee, who have been extraordinary in terms of helping us keep focused and to help keep going back and forth between directions you all wanted to go, how does that fit into the bigger agenda and back and forth and listening to each other.

So we appreciate the guidance that everyone has offered and I think that it has produced a very concrete workable visionary task. So thank you.

DR. WOOD: Thank you, Peggy.

Now we've come to a time in the agenda where we have the opportunity again to hear comments from the public. There are several people that have come this morning to comment and as I call your names, would you please come to the microphone in the center of the room and identify yourself and who you might represent?

I will give each of you five minutes for your remarks, and I'd like to begin with Eduardo Siguel.

DR. SIGUEL: Thank you.

I'm Eduardo Siguel. I represent myself. I have about three years of experience in health care administration and I want to give you some ideas about things that I believe you may have overlooked to simplify the system.

People sometimes don't realize that the Federal Government has extraordinary power in changing the federal bureaucracy and changing the way health care works across the country because most of the money is federal money. I have a medical degree and a Ph.D. and a law degree and my education is in performance and systems design, and I happen to have a unique talent with numbers. I could do 6- and 12-digit by 12 in my head when I was a kid, no longer, and I do score pretty high on the SATs and things like that.

I worked for the HEW many years ago. I was the fellow who put together the HMO program, the calculations for HMOs and the savings from the different health care programs, and I ran one of the largest health aid assistance where we collected data from about 1,500 clinics, about 100,000 people every month, and I was able to cut the costs by about one-tenth of what they were and reduced the time for reports from about one to two years to about a few hours. So I have a little bit of experience in simplifying the system.

One of the things that we know is that creating optimal regulatory policy is very tricky. Well-intended policies applied to complex systems tend to produce undesirable results. HIPAA has unleashed an army of over 100,000 bureaucrats that are fighting the war on simplification. Never in the field of health wa so much complexity created by so many to simplify so little.

There are over 10,000 committees, probably more than 100,000 committees, working in HIPAA. Over 300,000 websites. For those of you who don't know, and I go to many conferences, there are thousands of people out there marketing ways to implement HIPAA. If you don't know it, it's not going to make any difference. At my request, the Medical Society of Massachusetts created a task force several years ago to review HIPAA implementation. We heard from most of the major providers and health payers and I can tell you it's a mess. It's not going to make life better for any patient, and I don't think it's going to make much of a simplification.

Let me give you a few other things that you could do to make a difference. First, I will give you the outcome measures, you can tell. The outcome measure is how many websites are on HIPAA, how many reports? They are building CDs on how to implement HIPAA. In the last year, the number of people who are selling measures and procedures to implement HIPAA has gone up since you've been working to simplify the system. So look at it a year from now, count how many and you see we have gone down. If it's still up, you're just working for the coffee machine.

What you can do is you can -- to simplify the system, what I could do in a few months, I will eliminate most of this work. First, there should be uniform criteria for what it means to comply with the privacy regulations. There should not need to be 10,000 CDs for doctors out there on how I can implement privacy. Just the HHS gave the mandate, gave the rules, tell them what does it take to do it. How do you comply?

Claims processing. You have simplified part of the claims processing, but how many of you are aware there are over 100,000 decisionmaking rules to determine whether to pay or to reject a claim? That's about the number of some of the computer companies who are building software for payers they claim they have and they're going to go over 100,000, more close to a million, decisionmaking rule differently implementing in each state by each different payer and the different circumstances. So I as a doctor may be facing more than a million different decisionmaking rules to determine whether my claim will be paid or rejected. You as patients are going to find that all your activities will be compared to other patients and other doctors and you're going to be rejected and then you're going to have to come up with the medical justification for why is it necessary to cover and the paperwork is astounding. This could all be eliminated by requiring that the decisionmaking rules be uniform according to payers, that they be made public.

Consent forms. I don't know how many of you have gone to a hospital, to a doctor and had to complete the consent form. There's zillions of consent forms out there. Some of them, they have been copied maybe 5,000 times and it's not possible to read them, but it doesn't make that much of a difference anyway. If you ever go to the hospital and I had an accident recently in the District of Columbia and I had to go to Washington Hospital Center, I have an accident in my eye and I couldn't see. So I had to sign a consent form that pretty much told them they can do anything they want to with my life, with my health care, with my medical records or whatever, otherwise they wouldn't even register me or give me iodine, which is all I was asking at that time.

And you can eliminate all this by merely having a manual or uniform consent forms. That's what it takes. It's not that difficult, but if you do it, if you create it and the Assistant Secretary for Planning and Evaluation says this meets HIPAA requirements, and if you follow them, we won't sue them, then people will probably do it, particularly if you sell it for 50 cents instead of $10,000.

DR. WOOD: Your time is up. Could you wrap up, please?

DR. SIGUEL: Outcome measurement for you to evaluate how effective you are in all the things you're doing. This is my diagnostic kit for medical care. It's a little rope that I put around my waist and I tell patients when I lecture that this helps you do a diagnosis of how healthy you are. If you need a bigger rope, then you're not so healthy, and then these are the treatment methods I use. You put this in your mouth and you take it like this and don't eat for awhile. Now, this costs negative dollars because you save money and this costs about five cents. I think that when you put together your recommendations, you want to see if you can compete with my method.

Thank you.

(Applause.)

DR. WOOD: Thank you.

Karen Morris.

MS. MORRIS: Good morning. Thank you.

I'm Karen Morris and I am the physician liaison for a very small 65-bed hospital in Florida. I just found out about this committee in September, which is why I missed it when you all were in Miami, I would have loved to have taken a trip to Miami, but I was coming to D.C. and even though I realize that your committee has finalized its plan, I wanted to come and speak with you anyway.

We have a problem. If you're wondering what a physician liaison does at a little 65-bed hospital and why we need one, my position was created to help physicians, patients and our staff members understand medical necessity and coding guidelines that are necessary to get our reimbursement from Medicare.

I have a degree in nursing, formal training and experience doing outpatient coding and experience with reimbursement. Experience in all three of these areas were necessary for me to be able to fully explain how the system works to beneficiaries and to physicians.

The biggest problem where I spend most of my time with is LMRPs. According to Chapter 13 of the Medicare program Integrity Manual, the LMRP is an administrative and educational tool to assist providers in submitting correct claims for payment. LMRPs outline how contractors will review claims to ensure that they meet medical coverage and coding requirements. Contractors publish LMRPs to provide guidance to the public and medical community within a specific geographical area. If a contractor develops an LMRP, its LMRP applies only within the area it services, while another contractor may come to a similar decision, CMS does not require it to do so.

The latitude CMS allows for mediators and carriers in the development of LMRPs gives rise to considerable differences among the carriers' medical necessity requirements. In most areas of the country, beneficiaries and providers do not even know that there is more than one intermediary or carrier. They assume, the people I have talked to, t