APPEARANCES:
Committee Members
G. KRISTIN CROSBY, M.D.
BRUCE DEVEREUX CUMMINGS
GARY C. DENNIS, M.D.
SUSAN DESMOND-HELLMANN, M.D.
RONALD W. DOLLENS
MICHELE M. EVINK
EUGENE ANTHONY FAY
JOHN FINAN, JR.
APPEARANCES:
LISA GIGLIOTTI, J.D.
THOMAS R. HEFTY
HEIDI MARGULIS
MARY M. MARTIN
HON. STEPHEN H. MARTIN
GARY S. MENDOZA, J.D.
NANCY H. NIELSEN, M.D.
DR. ERIK OLSEN
GARY B. REDDING
APPEARANCES:
JACK ROVNER, J.D.
JUDITH A. RYAN
LEONARD D. SCHAEFFER
PATRICIA OSBORNE SHAFER, R.N., M.N.
JUDITH G. SUTHERLAND
WILLIAM TOBY, JR.
KAREN B. UTTERBACK, R.N.
PATRICIA M. WALDEN
KERN C. WILDENTHAL, M.D.
APPEARANCES:
DOUGLAS L. WOOD, M.D., Committee Chair
Also Present
CHRISTY SCHMIDT
Executive Coordinator
Regulatory Reform Initiative
Office of the Secretary, HHS
JEFF BLOOM
C O N T E N T S
PAGE
Introductory Remarks and Swearing
in of Committee
Tommy Thompson
Secretary, HHS 9
Bobby Jindal
Assistant Secretary for Planning
and Evaluation, HHS 20
Statement of the Committee Chair
Douglas L. Wood, M.D. 25
Committee Member Introductions 36
Panel One: Perspectives from the Field:
Beneficiaries and Providers
Margaret Barron, M.D.
Providence Hospital 116
Christine Shamloo, R.N.
Washington Hospital Center 124
Sean Gallagher
Washington Hospital Center 129
Cecilia Moore
Washington Hospital Center 130
Eileen Mulaney
Carroll Manor Nursing Home 134
Michelle Holzer
Program Officer, Senior Health Insurance
Assistance Program (SHIP)
Maryland Department of Aging 141
Questions and Answers 150
C O N T E N T S
PAGE
Public Comment
Steve Hitov
National Health Law Program, Inc. 167
Diana Zuckerman, Ph.D.
National Center for Policy Research
for Women and Families 171
Robert Britain
National Electrical Manufacturers' Association 175
Robert Griss
Center on Disability and Health 178
Discussion 182
Panel Two: Perspective from the Government:
Overview of the Regulatory Process from
Legislation to Operations
David Cade
Office of the General Counsel, HHS 191
Linda Fishman
Centers for Medicare and Medicaid Services 204
Bill Hubbard
Food and Drug Administration 214
Questions and Answers 221
Panel Three: Perspective from the Office
of the Inspector General
D. McCarty Thornton
Chief Counsel to the Inspector General, HHS 242
Questions and Answers 252
C O N T E N T S
PAGE
Panel Four: Perspective from External Bodies
Jonathan Blum
Staff, Senate Finance Committee 271
Pat Morrisey
Staff, House Energy and Commerce Committee 274
John McManus
Staff, House Ways and Means Committee 279
Murray Ross, Ph.D.
Executive Director, MedPAC 285
Leslie Aronovitz
Director, Program Administration and
Integrity Issues, GAO 294
Questions and Answers 302
Overview of Second Day Work Plan
Douglas L. Wood, M.D. 306
P R O C E E D I N G S (9:14 a.m.)
SECRETARY THOMPSON: I would like to get started. First I would just like to say good morning to all of you and thank you so very much for coming in, and thank you so very much for being willing to take on this task. I think it's going to be fun. I think it's going to be a lot of hard work, I really do, and I think it's going to be fun to the extent that every one of you around this table has, on occasion, complained, and you've said, "If I had the power, if I had the chance to change one form, God, I would love to be able to do that." Isn't that true? You have that opportunity, and that's what I want you to do.
I want to certainly thank Sister Carol Keehan. She is our hostess today, and she has just taken me and a few of you, some of us, over to the emergency ward where we had an emergency patient already come in this morning.
I want to thank you, Carol, for your willingness to be the hostess, but also your hospitality, and also your tremendous knowledge and your expertise in this field. Thank you so very much for the job that you're doing.
I also want to thank her staff and all the other individuals who made this possible.
I certainly want to thank my friend, Doug Wood, for his willingness to serve on this committee, because Mayo Clinic is an outstanding clinic and absolutely a wonderful resource for the country. He's the chairman of it and he's got the responsibility to make sure that this advisory committee is able to carry out its responsibilities and duties and is able to make sure that we are successful, and I'm sure he will.
I also would like to thank my colleague, Bobby Jindal, who you're going to hear from later. He's the Assistant Secretary for Planning and Evaluation at HHS.
Where is Bobby? Right over here?
Bobby, at the age of 24 -- he's a boy genius from Louisiana. Now, some people might say something about that --
(Laughter.)
SECRETARY THOMPSON: -- but he was the head of their whole health department.
I wouldn't, but some people would, Bobby.
But Bobby was the head of their whole health operation by the age of 24. He ran the Medicare reform package at age 25, was the head of all of their colleges and universities in Louisiana at the age of 28, and now he's the Assistant Secretary. He's brilliant, and he's going to be driving this in the Department. He is here also along with Ms. Schmidt, who is in his division, and we're here to serve you. I'm certainly appreciative of Bobby's willingness to come up from Louisiana, and he's going to have his first child, I believe, in a couple of weeks. So, Bobby, I thank you so very much for joining me.
I'm also happy to see a friend from Wisconsin, Tom Hefty. Tom has worked with me on many projects when I was Governor of the State of Wisconsin, and he knows that I like change. I abhor the status quo and I love common-sense solutions. So, Tom, you're here, and I thank you so very much. He's the head of the Blues in Wisconsin and does an outstanding job. He's going to bring that same commitment to excellence that he gave me in Wisconsin to this committee.
But I also want to recognize three people who used to work at HHS. Mary Martin served at our department for 32 years.
Mary, thank you so very much. You must have started when you were six years of age.
(Laughter.)
SECRETARY THOMPSON: Len Schaeffer had a distinguished career as the administrator of what is now the Centers for Medicare and Medicaid Services. It's the old HCFA. When I went out there, the biggest problem I had getting confirmed was all the Democrats and all the Republicans and Independents all told me that they hated HCFA. I had to commiserate with them and tell them that I did the same thing as governor. I went out to HCFA and I said, "You know something? Nobody likes you." I got all the employees together when I went out to visit and I said, "Nobody likes you." I said, "How could anybody like something called the HCFA?"
(Laughter.)
SECRETARY THOMPSON: So we changed the name, and I hope it's responding.
We also have Ruben King-Shaw here from the new Centers for Medicaid Services, and I appreciate the job that he's doing. He wants also to make sure that you're very successful.
And also, Bill Toby, who led the New York HCFA office and was acting head of HCFA in the early '90s.
I thank all of those. Thank you very much. You three can't get away from HHS, and I'm appreciative of that. Thank you again for your continued commitment to the people of our country.
I'm also very pleased to be with all of you to launch what I consider this very important responsibility. It's going to work to find places where we can make it easier to provide health care while still maintaining high standards of accountability. We're committed to reforming our roles to better suit the needs of local health care providers and the type of patients being served. We can clarify and simplify confusing regulations to make life easier for patients and consumers.
As I toured Providence this morning, I asked the individual doctor in charge of the emergency ward, I said, "If you were a benevolent dictator, what would you do?" She said, "I would use common sense." Doesn't that say it all? I'm reminded why regulatory reform over there this morning is so vital to the health and well-being of the American people.
One has only to look at the advanced medical technologies now available and meet the dedicated people who administer them to know that we have to free America's health care professionals from the crushing burden of paperwork. That burden often prevents them from doing what they do best, provide the highest quality care in the world to the American people.
The purpose of this commission is not to do away with all regulations, which play a very important role in the way our health system operates and protects consumers and patients. Instead, this commission will focus on the rules and the paperwork that serve little purpose, that discourage efficiency and deplete the time and energy of health care providers.
Let me cite just one example. Many of you are familiar with the Medicare Cost Report. While the intention behind the report is a good one, the amount of time required to complete the report outweighs any benefit that it produces. These are the cost reports for the Washington Hospital Center. That's the one over here. These are all the cost reports that haven't been filled out for one year at the Washington Health Center. I don't know how you do it, but I think we need to change that, and we're in the process of doing that.
Our host, Providence Hospital, which has 382 beds, has to fill out this report, the middle one. Blue Hill Memorial Hospital, which is a 25-bed facility in rural Maine, 25 beds, they have to fill out this amount of reports every year. Just imagine the cost and the hours, the energy and the money filling out this massive collection of paperwork demands. Putting this simply, the regulatory burden is too great and the paperwork burden is too heavy. It's time to recalibrate the whole regulatory system, and that's why you're here.
The Department of Health and Human Services has already taken some significant steps. We developed an on-line model waiver application for state plan amendments. When I came in, we were behind. Some waivers were all the way back to 1986. We are now current with all of the waivers, and we're in the process of putting in place procedures so we respond to every waiver within 90 days within the Department.
The FDA changed the label requirements on all over-the-counter drugs to make it easier for consumers to locate information when choosing a product. The new label provides consumers information in an easy to read bulleted format, unlike the old hard to read paragraph format. The FDA has cut roughly 700 pages of regulations under mandate from the FDA Modernization Act of 1997.
But we can do more. That's what the advisory committee is all about. In addition, we recently changed the rules for the Medicare secondary payer questionnaire, and I learned about that when I went to a hospital down in Chicago. Previously we required hospitals to ask beneficiaries about secondary payer status at each visit. Now we changed the frequency to every 30 days, and I think we should expand that to 60 days, and then to 90 days. We can do better, but it's a start, and that's why you're here.
Overregulation undermines the quality of care in health care delivery by using scarce resources unproductively. By bringing some basic common sense to the regulatory process, we can improve patient care. We can also reduce the number of reports and ensure that the data that we collect are used to improve programs, cut back on unnecessary recordkeeping, and generally bring greater coherence to the regulatory regime.
New regulations also have to meet a high standard. They should not impede innovation or treatments or the access to care. In light of September 11th, it is especially important that we eliminate the regulations that interfere with the public and private sectors' ability to respond to and prepare for emergencies. Yet, we can't fix the system until we have input from people who work with patients every day, and from people who receive those services, the ordinary men, women and children who are treated in our hospitals, in our doctors' offices and clinics all across America.
So we're all here today to swear in the advisory committee with exactly these people in mind. The committee is charged with addressing a broad range of regulatory issues. These include regulations that affect health delivery systems, research, operations, pharmaceutical, biological and device development that apply to providers, consumers, insurers and manufacturers. That's essential, since the committee's ultimate goal will be to identify, prioritize, and to modify or eliminate regulations that form barriers and discourage health care providers from doing what they are trained for and are committed to, delivering safe, high quality care, service, and products to our patients and consumers.
This committee is the framework for an integrated cross-departmental regulatory reform initiative that we've already undertaken throughout the Department of Health and Human Services. It will not duplicate work already being done but will help to complement it.
For example, our other regulatory reform projects, such as the new Freedom Initiative, which will break down regulatory barriers that impede the disabled community; our Open Doors program at CMS is something that Tom Scully and Ruben King-Shaw and myself are dedicated to accomplish; the Physicians' Regulatory Issues Team, in which we reach out to the physicians and find out what's bothering them in regards to CMS; and the 24/7 consumer hotline that is being received tremendously by people all across America are all part of our efforts to make HHS and its agencies function more effectively for the tens of millions of Americans that we serve.
The advisory committee faces a formidable task, one they can only fulfill by establishing clear priorities and working with focused energy. We have set a clear deadline, and I know that Dr. Wood, who will speak to us shortly, shares my vision that the committee will complete its work by this fall. I should note that if this initiative proves to be successful, as I know that it will, I will certainly consider continuing its work beyond this fall.
But let me be equally clear that I don't want to wait nine months to hear good ideas that can be implemented quickly. Washington takes a long time to get anything done. So if you've got a good idea today, don't wait until tomorrow. Get it to me, and get it through this committee, and let's start acting on it. Let's start making changes immediately.
I ask this committee to let me know whenever it hears a good idea or develops a plan for implementing a change that can make a difference. We don't need to wait for the better part of a year to get things done.
That underscores two other key points. First, the committee should make every effort to develop recommendations about issues or problems that have the most significant and the most direct effect on improving care and services to patients and consumers. Second, the committee should focus on problems that I can fix personally administratively. So as proposals come forward, I plan to act promptly. Of course, the committee will identify areas that require legislative action as well. That takes time.
In order to find administrative changes, the membership of the committee has been drawn from all over the country and it represents people with a wide cross-section of concerns and interests, and we will be inviting additional representation from health care consumer members as the committee progresses. But although the membership of the committee is diverse, it has one goal: to improve health care for patients and consumers by reducing the regulatory burden.
The committee will achieve that goal by holding hearings throughout the year, by getting input from people with front-line experience as providers, as well as consumers of health care products and services. This committee will also read public comment which will be submitted in response to a Federal Register notice which is posted in the last week, on January 4th. By focusing and refocusing not only on the regulations themselves but also on the intent behind them, the committee can recognize competing objectives and interests in the regulatory system and determine how those interests can be best served.
The committee will not focus on recommending changes to existing laws but instead on how the implementation of current laws can be made more efficient, more streamlined, and less cumbersome. That goal is also shared by my colleague at HHS, Bobby Jindal, the Assistant Secretary for Planning and Evaluation. Last June in Chicago, I kicked off this regulatory reform effort, and I asked Bobby Jindal to take the lead.
Let me ask you to come and share your thoughts and visions about the advisory committee, Bob, and take it from here. Thank you so very much.
(Applause.)
MR. JINDAL: Thank you, Mr. Secretary.
I'm not going to speak long. I really want to do two things. First, I certainly want to thank the members of the committee for your agreeing to come and serve the Department, but truly serving the country.
I want to show you first a little bit of the Secretary's desire behind regulatory reform. You've heard him speak about why this is important, why we have excessive regulations and burdensome paperwork. Not only has it hurt our providers, not only does it hurt our physicians and our hospitals, our nurses and other providers, but it truly hurts patients, truly reduces quality of care.
I want to give you just a couple of examples of actions the Secretary has already taken, because I want to tell you from inside the Department that he truly is a man of action. Many of you have had the chance to come and meet with him one-on-one or have seen him in small groups, and you know that more often than not he'll ask you to turn a problem into a solution. If you come and tell him that you don't like the way something is, and he did it on his tour this morning, he'll tell you don't just come to me and tell me something is broken, tell me how you think I should fix it, and that's absolutely what he's doing with the creation of this commission.
Already in the summer, the Secretary made several announcements in terms of trying to reduce the paperwork that providers face every day. For example, in the summer, in testifying before the House Commerce Committee, the House Ways and Means Committee, he talked about the fact that he's eliminated a requirement for hospitals and skilled nursing facilities to report overhead for old and new capital costs in our cost reports. That's just one example of outdated information that sometimes a department is collecting but doesn't even use any longer. As reimbursement models have changed, we continue to collect information that doesn't get used in any meaningful way. Those are the kinds of changes he has already implemented. He has already decided that we don't need to do that.
He has already eliminated Form 339. You heard him talk about the Medicare secondary payer question. He has reduced the data that SNFs have to collect. He's done things like limited the amount of information that plans have to provide on competitors in terms of their marketing materials. He has taken several steps already in two different hearings. He went to the members of Congress and gave them dozens of steps he's already taken.
I tell you this from inside the Department, because in addition to thanking you for agreeing to this service, I want to let you know the service will be very, very meaningful. He absolutely intends to take your suggestions, take your recommendations. If you will give him concrete and specific recommendations, he is committed to implementing them.
The second thing I wanted to do for you today is just to introduce very briefly a few of the staff members you've got here, because these are the people, these are the men and women you'll be working with. I want you to feel free to call on them throughout your process, throughout these several months. Certainly, you should feel free to call on me and Ms. Christy Schmidt, who I know many of you met last night and you will be spending some time with today and tomorrow. We're very fortunate to have her working full time on this regulatory reform initiative. She's a very senior ranking official from HHS. She's worked in several different capacities. I'll let you get to know her better one-on-one, but we're very excited that she has agreed to work full time on this initiative, and she will probably be your point of contact for most of your contacts with the Department.
But I also want to introduce you to a few people over here who are also here from the Department. Working with Christy is Bela, who is also coming from ASPE and who you'll work with very closely. Forgive me if I miss a couple of people. John Hoff and Ann-Marie Lynch within ASPE are also senior appointees brought on by the Secretary to work with us on different health care issues. Many of you know them both. They've got extensive backgrounds in health care issues.
The next three individuals you see work with the Office of General Counsel. We're pleased to have Alex, who is actually the Department's general counsel. Sitting with him are Paula and Peter, who has the distinction of also being from Louisiana, Mr. Secretary. When you were making your remarks, I looked over to him.
We're very pleased to have not only the general counsel but also his senior staff here, as well. We've got Linda Fishman who, with Ruben, is a senior official from CMS. We also have Ann Agnew, the executive secretary. Again, I'll apologize. I may have missed a few people.
I'm sorry. Bill Hubbard is here as well from FDA. Again, I apologize if I missed a few people. I wanted to introduce the people you've got in this room because you've got very, very senior people from various departments within the Department, various agencies within the Department, and their presence here reflects the Secretary's personal commitment to making regulatory reform a success.
So thank you very much for agreeing to serve. I just wanted to let you know of the Secretary's personal commitment and how, from inside the Department, we've seen him take your recommendations and put them into action.
(Applause.)
SECRETARY THOMPSON: Thank you, Bobby. I just would like to, once again, reiterate my thanks for you coming up. I appreciate all the things that you did in Louisiana and I thank you so very much for your leadership in this regard.
It's now my pleasure to present the person who is going to be chairing this advisory committee, Dr. Doug Wood. Dr. Wood is a practicing cardiologist at the Mayo Clinic in Rochester, Minnesota, chairman of the Medicare Carrier Advisory Committee in his home state, and Dr. Wood has worked diligently with the peer review organization in Minnesota, has been active on the Practicing Physicians Advisory Council for CMS. Most importantly, Dr. Wood is dedicated to ensuring that patients' needs remain the highest priority for that advisory committee, which is why I have such high confidence in his leadership.
Please join me in welcoming Dr. Wood to this podium for his remarks.
(Applause.)
DR. WOOD: Good morning, everyone. I am privileged to serve the Secretary in this role as Chair of the committee, and I can assure the Secretary and all of you here that the committee members are enthusiastic about the work that lies in front of us. There is a substantial amount of work for us to accomplish in a very short time, and we will do that only by hard work and keeping our eye on the long-term vision, and that is to bring forward suggestions that will truly improve the work of CMS, FDA, and other federal programs.
The regulatory complexity in Medicare and Medicaid, the FDA and federal programs now creates an air of mystery among consumers and beneficiaries, too often a sense of fear and distrust among providers, and I might say frustration among medical directors and staff members of CMS and other agencies whose responsibility it is to make sure that Americans who are served by this program get the best care and service that they deserve. But more important, when regulatory burdens become a barrier and become an impediment to success, we must find immediate solutions to restore our ability to achieve these goals.
I have learned this first-hand in my daily practice when I have to struggle to remember how I should write my notes so that its structure matches the documentation guideline rather than trying to think about what it is I'm trying to say that would improve the care of patients. I struggle with it when I have to try to explain to a patient why they may not be able to have a certain treatment or a certain technology that is available to someone else just because their insurance program may be somewhat different.
I can tell you that I struggle with it in daily activities in answering questions from patients about coverage rules, and the most difficult questions to answer are those from my mother-in-law when she tries to find out from me why it is that Medicare won't cover this or that or why her physician does this or that, and I can't give her the answer.
So it's clear to me, then, that these rules have become daunting for those people that these programs serve. We have heard already in the work that our committee staff has done in listening sessions that there are problems with regulation and its impact on those these programs serve. There have been a number of illustrative examples that have come from these listening sessions. We have heard advocates express concern that the overinterpretation of existing regulations by intermediaries have kept beneficiaries from receiving needed services. We've heard examples of rules that are in conflict. We've also been told that there are too many circumstances where people are now mystified by the system and they wonder why Medicare and Medicaid and other programs can't work more like private insurance.
We've heard, too, from listening about regulations in the Food and Drug Administration that there are serious concerns that the regulatory burden may keep the FDA from accomplishing its important missions. Indeed, the examples that we've seen this morning in the tour especially of the emergency room are a very good example of where regulations can, by their sheer nature, create impediments. All of the resources that are wasted on managing paper serve not only as a waste of valuable resources but a great distraction from more important issues.
An example that we were shown this morning is to maintain the competency of doing a simple test and the importance of making sure that the paperwork was done that this test is done the right way by the physician or the provider every quarter or every year. But the question was not asked: "How many patients get this appropriate test, and with what frequency?" Which is, indeed, the most important.
At the Mayo Clinic, where I learned the art and science of medicine and where I'm privileged to work, our daily activities are guided by the maxim of one of our founders, Dr. Will Mayo. He said the best interest of the patient is the only interest to be considered. As we approach our body of work, we will work hard to find those regulatory problems that indeed interfere with the ability of physicians, of nurses, of pharmacists, of hospitals, of home health care agencies and others to provide the care to beneficiaries that is the best quality and is available in an understandable and effective way, and we will work hard to find ways that we can simplify programs so that barriers to access and service are eliminated.
I'm extremely heartened by the comments that the Secretary has made and the enthusiasm and energy that Mr. Jindal brings to this effort, and I can assure you that we have organized our work so that this committee will identify immediate opportunities that we can send to you rather than waiting for the end of our work in September, and we know that from the commitment that we have seen already this morning, that your commitment to our work is great, and all of us are grateful for your support, Secretary Thompson. Thank you very much for the opportunity. I know that I speak for all of us in that regard.
(Applause.)
SECRETARY THOMPSON: Now it's my great privilege to swear in the Advisory Committee on Regulatory Reform, and I would appreciate it if you would stand up and raise your right hand and repeat after me.
(The oath was administered to the Secretary's Advisory Committee on Regulatory Reform members.)
SECRETARY THOMPSON: Thank you so very much, and please be seated.
I'd just like to finish up by telling you in my own words how important I think this really is. I can't tell you, when I testify on Capitol Hill, when I talk to doctors in my home state -- I go to hospitals and clinics and find out the complaints, the frustration, the feeling of why do I have to do this, does anybody listen, and why does this form have to be filled out when it doesn't make any sense whatsoever. It still continues on, and you get more rules and regulations each and every day.
So what I did when I started out as Secretary, they sent me -- I don't know, it must have been 25 pages of verbiage on a rule, and I'm a lawyer. I'm not a doctor, I'm a lawyer, and I think I should be able to understand it. I read it and I got so confused, I said how can I expect a doctor, a hospital, an administrator, a patient to understand this when nobody else can understand it? So I sent it back and I said, "When you simplify it and get it down to one page and make it so I can understand it, I will approve it."
Do you know what's happening? It's working. You get rules sent back to you that you can actually read and understand and make some sense.
The second thing I want to point out -- and I'd point that out to the bureaucracy and the Department. But the second thing I'd point out to you is that every one of you in your capacity, you look at a rule that comes through -- and I keep telling this to groups that I speak to -- if you've got something that really bothers you, sit down and write me a letter and complain about it. Bitch about it if you want to, but complain about it, and at the same time come up with a solution.
How could you do it better? That's what I want you to focus on in this committee. How can you do it better? You've all had the same frustrations, and can you imagine the other people out there with the same frustrations. When I set up this committee, I can't tell you how many people wanted to serve because they wanted to do something to change the system. You're in the position to be able to accomplish that for not only yourself and your own institutions, but for what you can do for people like you all over America.
The third thing is I'm trying to push, and I'm going to send it out here, is sort of an example for you to look at, because I'm a big believer in technology. I think we can reduce a lot of patient errors, improve the quality of patient care that all of you want to do if we could somehow figure out a way to capitalize and get more computers, more and better technology into the hospitals.
I tell people that I think grocery stores sometimes are more technologically advanced than hospitals, which doesn't make any sense at all, and we should be doing something about it. So I'm suggesting, just as one example -- and there are many other examples that I want you to look at. Maybe we should take some of the patients, the fraud and abuse money, and plow it back in as incentives to computerize and get more technology into the system, and be able to do it so that the systems can work better.
All of these kinds of things -- I don't want you to just be saying, you know, I've only been here set up for these rules and regulations. I want you to look at the health care system. You've got some good ideas and suggestions and common sense. Get them to the chairman, get them to Bobby and Christy Schmidt and to my office, and let's see if we can really make a difference. This is a blow for freedom, ladies and gentlemen, an opportunity for us to do our part to improve the quality of health care in America.
People are saying that the cost of the paperwork, the cost to the health care system is from somewhere between 15 to 30 percent. I don't know what the exact amount is, but we know it's a large amount. With the cost of health care today, if we could do our job to reduce that 15 to 30 percent by some percentage, we've accomplished a great deal for the American public and for the taxpayers and for everybody in this room.
So I'm excited that you're willing to serve and I thank you so very much for your dedication.
Dr. Wood, thank you for leading this, and good luck to you. Let's win one for the small person.
(Applause.)
DR. WOOD: Ladies and gentlemen, let me announce a 10-minute break so that we can get a little bit reorganized and back on the committee schedule. So we'll pick up again at five minutes to the hour.
(Recess.)
DR. WOOD: Welcome back. There are a couple of immediate housekeeping items that I would like to address. The first is the mechanisms of how we can communicate with each other. In a large group, there are several courtesies that we need to follow, particularly for those who have the responsibility of trying to get all of our wise words on paper ultimately. It has to get there, obviously, through the venue of some recorded medium, and so when you speak, the microphones in front of you have an on/off button that you should press before you speak. When you are finished, please press it to turn it off so that it remains clear for those who are transcribing. The red light on the microphone will light when it is on.
I would like to begin this morning, actually, with a review of where each of us are basically coming from; that is, a recognition of what our biases happen to be. In that context, we have a lot to cover, so we'll each get three minutes to do that.
We have a timing system. I'm going to introduce you to a few scientific things, but at scientific meetings you get basically a few minutes to make your point, and then you have to sit down and let the next person make their point. From that perspective, then, we'll be following this system a little later. There is a green and a yellow and a red light. The green light is go, yellow light means it's time to summarize, and red is stop. In order to keep us on time, I will potentially have to wield the chair's prerogative of cutting off your discussion, but I will try to be polite about it.
The necessaries from the perspective of men's and women's rooms, if you have not found them already, they're out the door, men's to the left, women's a little farther and to the right.
The first issue of getting introduced to a regulation is that the employment paperwork for each of you is in front of you in a folder that says "Employment Package." You are to fill it out and turn it in tomorrow, and if you wish, the last piece of paper is not there, but you are invited to pen your suggestions as to how this could be simplified.
(Laughter.)
DR. WOOD: I haven't filled out the first one for that reason. But we expect that in the spirit of the committee, there should at least be a few suggestions that would then come back.
I wanted to begin by giving you my thoughts about how we will approach the work in front of us. It is clear to all of us, I think, that there are really quite substantial goals that the Secretary has laid out for us, and if we consider the volume of regulation that exists, if we were to simply go through and look at every regulation and try to decide its benefit or lack thereof, it would take us years to accomplish this task.
The goal is for us to identify a series of immediate solutions or fixes. Now, one of my ground rules here is no whining, okay? We are here to provide constructive solutions. The issue of whining is basically done. We were picked for our ability to provide a specific perspective. We are a diverse group. We have a number of tremendous people and great talent, and we need to channel all of that energy into constructive solutions.
I also have the goal that we will approach this by identifying at every meeting a series of what we think are immediate solutions that we can give back to the working group and Mr. Jindal to take back to the Secretary for immediate action. You heard this morning the commitment to rapid action, so we will take advantage of that.
We will also identify a series of intermediate fixes -- that is, things that might require more than a couple of months. They might require, say, four to six to eight months. I am sure that as we go through this, we will identify a series of things that we think could be improved. In particular, decisions about how this entire process of developing regulations should be considered for the future is an important legacy for us. I do not want us to finish our work without leaving behind a framework for how future regulations should be developed.
My own thought about that is that if we keep track of what it is we're trying to accomplish in these programs -- that is, providing the best service access and ability to improve outcomes -- then our regulatory process should follow that. I don't want to prejudice the work of the committee but simply to give you the circumstance of my view of our long-term objectives.
We do have a tight time frame, and for that reason we will have to work hard, we will have to stay focused. We do not have the luxury of getting diverted. I will expect each of you to contribute in several ways. We will break into subcommittees, and on the subcommittees every one of you will have a responsibility. We will take some time tomorrow to talk about how we want the subcommittees to work and lay out the plans for how the subcommittees will then respond to this large committee and make recommendations back to the working group.
We have tried to organize the day today so we'll have an opportunity to hear some testimony. There are some work assignments for you for tomorrow that we will review later on this evening.
Beyond that, Christy, are there any other housekeeping things we should cover?
MS. SCHMIDT: That's it.
DR. WOOD: Okay. Let me go to my seat and we'll start the formal process of introduction.
From the perspective of this approach, I'd like to begin in the best Institute of Medicine tradition of identifying biases. I'm a practicing cardiologist at the Mayo Clinic, and one of my biases in particular is that when I see a patient, I ought to really be able to decide what I need to do from a medical perspective and not have to worry about how I write my note so that I can be free of some sort of regulatory review or, even worse, a fraud and abuse action a little bit later on.
I'm also concerned about to what extent we do not fully take advantage of the opportunities to integrate activities and really work to improve the quality of care for beneficiaries. All of the resources that we spend on things like documentation are not available to use to invest in information systems that help patients and physicians make better choices about their care.
So from that perspective, those are my professional biases. I have tried to avoid over the years actually developing biases for device and drug manufacturers, and for other groups I specifically avoid holding specific financial interests in any medical-related company. The other groups that I serve, including groups like the American College of Cardiology, where I chair the coding and nomenclature committee, and the American Medical Association, where I help with things like CPT coding, as well as the PRO of Minnesota, my approach is to try to be as constructive wherever possible and be quick to identify where there are specific problems from all sides of the equation. As is the case in most circumstances, there are multiple solutions.
I will tell you one other bias, and that is the following. Although we have heard this morning a great deal about regulation and the criticisms about regulation, I will tell you that CMS sometimes, from my perspective again, gets blamed for things that it doesn't have anything to do with. I mean, it does not have control over everything that happens.
So as we look at our opportunities, we have to make sure that if there are ways that we could improve the functioning of certain things, and it's not going to be in CMS, we need to make sure that we understand clearly who the stakeholder is or who the responsible party is and find ways that we can work with that group.
Last, I think that we need to consider strongly how we're going to maintain integration. Particularly for Medicare beneficiaries, there are a number of programs that are regulated but may not affect me daily as a physician in terms of the regulation, but they do impair the ability of the patient to get the resources that I think are necessary. So we have, I think, the opportunity in this group to be able to overcome that particular problem, and we will need to help each other to do that.
End of my bias. So let me then ask Mr. Bloom to begin.
MR. BLOOM: Thank you. Thank you very much, Dr. Wood, and thank you for inviting me to sit in on the committee today. I appreciate the opportunity to be here to let you know a little bit about myself.
In my previous life for 10 years I was a CEO and CFO of a multi-million-dollar corporation, so I'm familiar with the business world. Since my retirement in 1994 from complications from HIV -- I have myelopathy, a permanently disabling neurological condition, which I thankfully have almost completely recovered from, which is a miracle in itself -- I have a lot of experience with a lot of the things that we're dealing with. I'm a social security recipient. I'm in Medicare. I've been a patient advocate since 1995 in Washington. I've served on several FDA advisory committee hearings, testified before Congress and done many, many things in this regard.
One of the things that I was very pleased to hear in the opening remarks is that this is not just about regulatory rollback, but it's about making things better for patients. I think that's very, very important because I think there is a perception out there in the patient and consumer community that this is really an attempt to roll back regulations to make things easier and cheaper. I think anything that we can do to dispel that -- we must always remember that the people we do this for represent some of the most vulnerable of the populations. So any of the changes that we do, we must always keep that in mind. That's my bias.
DR. CROSBY: Good morning, and thanks for inviting me to be here. I'm Kristin Crosby and I'm a family physician by training, and I am currently working as chief medical officer for Sterling Life Insurance and Olympic Health Management, which provides insurance products and services strictly to the Medicare population. My background as a family physician was primarily in maternal and child health, so my career has spanned the age spectrum, and for the past eight years I've been in the insurance industry, the last two years working exclusively with Medicare.
I've taken note of the fact that it took us almost two years to go from our CEO's idea of a private fee-for-service Medicare plan that was enabled by BBA '97. It was almost two years from the time we initiated discussions with then-HCFA to the time we got a license, and that was much longer than anyone had predicted. It's because there were voluminous pathways and regulations to move through, some of which could have been foreshortened and made it a quicker path to provide a new alternative to the Medicare beneficiary. That was the intent of BBA, and I'd like to see that happen more easily.
As the chief medical officer, my role is to formally run our quality management program, and then being a physician, and in fact the only physician in the company, to see that we do everything in our power to provide quality care, to enable quality of care for our beneficiaries. My personal philosophy from many years of private practice -- and, as the Secretary suggested this morning, I've complained more than once about if only I had the chance to change this or that regulation.
But as a private physician, I strongly believe that the best way to get high-quality care for patients is to have an informed patient who has a financial interest, and then a physician who is unencumbered by a lot of interference from third-party insurers. Our Sterling private fee-for-service product provides exactly that option, and I moved my whole family across country to the Pacific Northwest because I was committed to that philosophy of informed patients and physicians that were unfettered by network restrictions and referral management.
I'd like to see our quality efforts and our research on quality of care for patients in our quality improvement projects move forward with some assistance from the feds, and then perhaps generalize to the Medicare fee-for-service environment, because our private fee-for-service model is most closely resembling original Medicare. Even though we are a Medicare Plus Choice plan, we don't have much in common with the HMOs.
So proving that our model is the best way to deliver quality of care, and then allowing that to be expanded to enhance quality of care throughout the spectrum is my personal axe to grind.
DR. WOOD: Bruce? Mr. Cummings?
MR. CUMMINGS: Good morning, Mr. Chairman and colleagues. I'm Bruce Cummings. I'm CEO of a small primary care organization on the coast of Maine. We consist of a critical axis hospital, a 25-bed facility. We participated this morning. One of our props is the cost report that you see up there. We're also a home health agency, a hospice, and a nonprofit group practice that consists of five rural health clinics. As our auditors often like to characterize us, we're small but complicated.
Unfortunately, by virtue of being involved in these different elements, each of which have separate conditions of participation, we've had a lot of experience with regulation and the silos that are set up.
I have two particular interests that I'm eager to pursue through this committee. One is in the area of home health and hospice, particularly the nexus with patient care, and more specifically the problems with the OASIS form, the hospice six-month limitation, and the home-bound criteria. It's probably unfair to have two props in the same morning, but just to illustrate the hospice conundrum, this is a file for a 49-year-old lady dying of ALS. This represents six months of queries by our fiscal intermediaries where they've evaluated her and us because she's not dying fast enough.
The second interest area I have is with respect to the cost report generally and critical axis hospitals in particular. As some of you may know, Congress intended in the BBA to provide improved reimbursement and less regulation for the small, fragile species of rural provider. Unfortunately, neither the cash flow has obtained and certainly the regulation is no less since the advent of that program. So I'll have by tomorrow some very specific recommendations about the critical axis hospital program.
More broadly, one of the things that I hope will obtain by the end of our exercise is a set of coherent principles, a doctrine, if you will, that would guide future regulation. I understand through talking with someone during the break that there have been some 700 changes to the Medicare program since 1996 alone. So I think to the extent that we limit our focus just to responding to specific insults, real or imagined, or specific regulations, we will not really advance the cause as much as if we try to create a framework for the Department for future regulation. Thank you.
DR. WOOD: Dr. Dennis.
DR. DENNIS: Yes, I'm Gary Dennis, and thank you very much for involving me in this process. I'm the chief of neurosurgery at Howard University in Washington, D.C., so you know that I have a bias toward surgery, and also neurosurgery, and, of course, all the issues related to the hassles that not only physicians go through but all of us go through in terms of documentation is one of my biases. But in addition to that, the emergency problems that we were confronted with today on our tour of the emergency room are just kind of the tip of the iceberg in terms of the way hospitals, physicians and all those that treat patients in emergencies have to go through. So the regulations are very much one of my biases.
But I'm also the chair of the medical records committee of my hospital, so I've been really responsible for the quality of documentation of my hospital for many years, and clearly the quality of documentation is really not good. So we don't want to throw all the regulations away, but what we need to do is focus on the kind of documentation that supports clinical decisionmaking, and I'm hoping that through this process we can begin to not reinvent the E&M guidelines but look at ways to improve our understanding of what needs to be documented and what doesn't, so that it improves health care for patients.
My last bias. I am the chair of the local peer review organization for what's now called the quality improvement organization for the District of Columbia, and I'm also on the board of one in Maryland. What I would say is a process like this, which includes stakeholders, but especially consumers, is I think quite refreshing, and I hope what we can do is look at a permanent process that integrates these kinds of stakeholder problem-solving, brainstorming groups, that integrates all the other advisory committees and comes up with a final common pathway so that you'll get what you want, Dr. Wood. Thank you.
DR. WOOD: Dr. Desmond-Hellmann.
DR. DESMOND-HELLMANN: I'm Sue Hellmann, and I'm chief medical officer at Genentech, which is a biotech company in California. I will, as Dr. Wood did, start with my biases. First of all, thank you very much for inviting me to be on this committee.
My bias really is a giant passion for using scientific innovation to bring better drugs for patients. Part of that bias is trying to get rid of things that interfere with our ability to leverage those new innovations. I'm an oncologist by background, and this year I'll celebrate my 20th year as a physician. I spent most of those 20 years taking care of patients with cancer and AIDS, so I think that's where that passion comes from.
A couple of the things I'm really interested in hearing about is thinking about the transparency of our FDA process. I'm really glad we have regulations. I think we have safe drugs, we have drugs that Americans can have confidence in. So I think it's good to be regulated. I'm one of the people in my industry who thinks that we benefit by those regulations. But transparency and clarity -- and I like the common-sense approach that the emergency room physician took this morning. I think that's terrific.
I'm also interested in talking a little bit about patient privacy regulations and how patient privacy regulations are very, very important. But I'm concerned about anything that gets in the way of us leveraging our knowledge about the human genome. So that balance between patient privacy and our ability to leverage the new information to make the kinds of medical breakthroughs that desperate patients really are looking for. So I'm pleased to be on the committee and looking forward to working with all of you.
DR. WOOD: Mr. Dollens.
MR. DOLLENS: Yes, thank you. Let me outline some of my biases. First of all, I'm Ron Dollens, CEO of Guidant Corporation, a cardiovascular medical technology company. Unlike Dr. Wood, I'm heavily invested in the industry, in my company only.
I would make a couple of other observations. One is that I did just have a recent birthday, but given that I'm not quite that long in the tooth, it's interesting that all the therapies that we're associated with weren't here when I started in the business, and I think that's very insightful and something that causes this exercise to be important. As we look forward, we've got to be able to get some assurance that technology is going to be available for patients. This used to be a relatively easy job as a manufacturer, where you would just design and develop novel technology and you'd make it available, and the clinicians would decide whether to use it or not.
As Dr. Wood pointed out earlier this morning, that decision of use is dictated by coverage and payment and coding. It's no longer just a clinical decision. So we as manufacturers then have to accept the responsibility to make sure, as we bring technology forward, that we also need to be able to assure payment for that technology. So health policy ends up being our number-one strategic issue as a firm and I think as an industry.
The concern ends up being that the provider network also is -- as we would estimate, over a third of the hospitals are losing money currently, and therefore we've got a real challenge bringing new technology into those hospitals. If I look three years from now, everything we will be selling is really technology that is not available today. At any point in time, two-thirds of what we sell are products less than 12 months old.
So we've got to make sure that we have both an approval system and a payment system that can accommodate that kind of innovation. From an FDA standpoint, we've had statutes passed that talked about least burdensome approaches to regulatory approval. Currently I spend 30 to 35 percent of our R&D budget strictly doing clinical trials. So of the $400 million we will spend this year, 30 to 35 percent goes for clinical trials. That doesn't quantify the amount spent for compliance kinds of activities on top of that. So it's substantial.
But again, I would say our number-one challenge ends up being on the payment side, on the reimbursement side. We've got to define a mechanism that lets us transfer from product approvals to product payments. The FDA looks at safety and efficacy. The CMS looks at reasonable and necessary. As I've told many people, I've got two great children, but many times we disagree on both what's reasonable and what's necessary. So those are somewhat nebulous terms for us.
Anyway, thank you.
DR. WOOD: Ms. Evink.
MS. EVINK: Thank you, Mr. Chairman. I'm Michele Evink, and I am a pharmacist. I serve as director of pharmacy in a rural hospital, and I mean rural. We are 35 miles from Des Moines, but we go from half a million people in Des Moines to 10,000 in my county. We have 68 beds, but in actuality if we get more than about 15 patients, we're looking at the hall as a serious option for placement. On one occasion we did actually convert the family lounge into a patient room when we got a little tight.
I would certainly say that coming into this committee I have a bias toward maintaining, preserving, and considering rural access to care for patients. In Iowa, we have a unique opportunity because of a demographic collection that the University of Iowa takes charge of, and one of the things that they do is assess where the practitioners are in the State of Iowa. There are 99 counties in Iowa, perfect little squares up and down, so it's very easy to see distribution and say that counties are pretty equal size-wise. Pharmacists represent the only practitioner that is present in every county in Iowa.
Because of that, we represent such a unique access and urgent access for patients that I always bring that into any discussion that I have. I can't help it. In a rural hospital, we offer also a unique access to care for people, emergency care for people, and general care. I've been very pleased to be at a rural hospital where I can really feel like we're taking good care of patients.
I'm so pleased that this committee represents such a broad spectrum of opinions and backgrounds, because when I approach patient care problems or problems in general, I think that bringing a variety of different views to the table helps so much. In my years at a larger hospital, I found that those times that the multidisciplinary care conferences brought me a lot further down the road to taking good care of the patient than really looking at their drug therapy. Sometimes that's difficult because pharmacists don't always have the full information.
One of the biases I bring is that pharmacists are not recognized as providers under Medicare. So the distribution of information and the ability of pharmacists to continue to provide care is sometimes kind of difficult.
Another bias that I feel like I always have to bring up is that also in looking at solutions, I see that one of the most important things to look at is how sometimes short-term fixes are not the best way to take care of problems. I actually have a personally invested interest in a company that provides patient not just pharmaceutical products but pharmaceutical services to patients, and I've been so pleased to see how really taking a look at the whole patient and how what we're doing day to day affects those patients, not just today but in the long term, financially, in their quality of life, and in many other ways.
So those are a couple of the biases that I bring, and thank you again.
MR. FAY: Mr. Chairman, I'm Eugene Fay, but I'm from Tennessee, and I go by "Tony" because in Tennessee you'd be Eugene.
(Laughter.)
MR. FAY: Hence, ever since I was a young kid, I've gone by the name of Tony.
I work for Providence Health Care. We're an investor-owned hospital chain based in Nashville, Tennessee. As recently as six months ago, I actually did Medicare cost reports. I was director of reimbursement for our company and transitioned into a different role about six months ago. But I have with my own hands done cost reports. I've worked on our billing systems. I was heavily involved in the transition to out-patient PPS and all of the new CPT codes and things like that we had to set up on the charge master. So I sort of feel like I've got pretty recent experience with some of the regulatory issues.
Now, one of the issues with cost reports, as you can see behind you, is just the complexity of them. With cost-based reimbursement going away from most providers, the question really becomes why do we even need cost reports anymore? I understand that CMS is going to need data, because they've got to calibrate DRG rates, and that MedPAC needs data, because that's how they come up with their update recommendations. But I would advocate some kind of a gap-based cost report. It would be more than just a simple financial statement. It would be departmental, but this would allow providers to file sort of a final gap-based cost report within 90 to 120 days after year end, and that data could be uploaded to a Website such as the EDGAR Website that the SEC has, and be made immediately available to all stakeholders.
You certainly have this in the investment community, where publicly-held companies file their financial statements with the SEC, you can go into the Web and pull those down. I think we can get there with Medicare, and I think this would be a vast improvement for both CMS and MedPAC in terms of having much more real-time data.
The second issue I'd like to bring to the table is the way regulations, or I would call them subregulations, are coming out practically every day. It is true that CMS publishes an annual hospital in-patient reg and an annual out-patient reg and an annual physician fee schedule reg, but what really underlies that are these frequent program memoranda and program transmittals that just come out every day. Sometimes they reverse previous ones, sometimes they add clarification, oftentimes they add new policy, and I would really advocate that the entire body of the subregulation be promulgated or issued once a year in a form.
This would be the hospital how-to guide, how to bill for Medicare, and that it not be changed or amended unless you met a certain threshold test. You sort of see this with the tax laws. You wouldn't, for instance, get a different answer if you filed your tax return in February than if you filed it in April. But I think if you filed a Medicare bill in February and one in April, you might get a different answer.
So those are two of the threshold issues I'd like to advocate.
DR. WOOD: Mr. Finan.
MR. FINAN: Thank you, Mr. Chairman. I'm John Finan. I have the privilege of serving as the president and CEO of the Franciscan Missionaries of Our Lady Health System in Baton Rouge, Louisiana. For those of you who don't know, we're the home of one of the top 10 college football teams this year, if you saw the Sugar Bowl recently.
We sponsor a number of Catholic hospitals all based in Louisiana, and we are sponsored by the religious community, so our first bias is naturally to those who are vulnerable populations and to the care of those in need. We have some 43 million uninsured in our country. We have 800,000 uninsured in the State of Louisiana and another 700,000 on Medicaid with limited access and challenges to access. We believe that the regulatory environment contributes in some way to those numbers and that if we can improve the regulatory processes and free up resources, that we can reduce those numbers.
Our second bias is towards the people who work in health care. We are blessed with a number of talented individuals in all of our facilities, professionals who came into their careers wanting to do a good job in taking care of people. Today we have high shortages of labor in many professional categories. We're seeing physicians leave practice earlier than they anticipated from their careers, and we have this tremendous resource that has become highly frustrated in simply trying to get done what they show up each day to do. We believe that that can change, as well.
Finally, we have a strong bias toward accountability, accountability for resources, accountability for outcomes, accountability for payments and for the responsibility to manage those payments well. As Mr. Dollens pointed out, last year and for the last several years, over a third of the hospitals in this country have, in fact, lost money. The bond rating agencies have had more downgrades than upgrades for the last several years of hospital credits. We believe that this is an industry that is particularly challenged right now, and that if we can improve the regulatory environment, we can free up resources to improve the financial position and the availability of those organizations to continue to provide care.
I tend to believe that there are adequate dollars in the system but that those dollars are just not being spent wisely or appropriately in all cases. If we can identify opportunities to preserve resources, we can do more for the populations that we're serving. There's no doubt that the resources will not be increasing in the future.
Finally, I want to thank you for the opportunity to be here. For those of you who have not had the experience of working with Bobby Jindal, it's a real joy. He brings a great depth of talent to this committee, and I think we have a great opportunity to make great contributions to the people of the United States.
DR. WOOD: Ms. Gigliotti.
MS. GIGLIOTTI: Good morning. I thank you too for the privilege of serving on this committee. I am an attorney and also a human services policy coordinator for Governor Engler in Michigan, and that's pretty much a fancy title for helping him and assisting him and overseeing his policies on health, welfare, children, families, and a lot of other similar issues.
In working for a governor who understands very well health issues, he also is very hands-on and personally involved in those policies. He's also chair of the National Governors Association right now. So I understand the importance of federal and state partnerships.
This morning I heard a lot about Medicare and regulations involving Medicare, but states, as you know, serve patient needs and their health care needs through the Medicaid program, and then again significantly in the dually eligible, both Medicare and Medicaid. So if I have biases here, it's going to be biases that work toward improving federal-state relationships in this regard, reforms that will help foster innovations for state programs, foster quality health care for states implementing their Medicaid and dually eligible programs, reduces inefficiencies and burdens.
Giving you an example is, obviously, I've been mentioning dually eligibles, and that intersection of Medicare and Medicaid policies when it involves the dual eligibles. Thank you.
DR. WOOD: Mr. Hefty.
MR. HEFTY: Thank you. I head Cobalt, which is publicly traded. We operate in Wisconsin, Blue Cross, several HMOs. One of the biases is we operate Mayo Clinic's HMO, a partnership with them on the Wisconsin side of the river.
We run computers that process health care data. We do Medicare for major Part A intermediary nationwide, Medicaid in Wisconsin, Blue Cross, HMOs, and workers compensation. So we run computers that process health care data.
Some of you may know our United Government Services subsidiary, either positively or in a different light. We're also the national auditor for CHAMPUS/TRICARE on a countrywide basis.
I think the bias comes from the Midwest. Wisconsin, where Governor Thompson served, and Donna Shalala was before, has one of the lowest uninsured rates in the country. We have no rate regulation on anything. We believe competition works. Hospitals are not rate regulated, nor are insurers or HMOs. So it's that Midwestern bias that there is such a thing called good government. It needs to be flexible and innovative, but good government actually does work.
A second bias is that health care technology, information technology is far behind other industries and that health care workers should have the same technology as the UPS delivery man. That isn't true today. So, with that, it's a Midwestern bias.
DR. WOOD: Thank you.
Ms. Margulis.
MS. MARGULIS: Good morning. Thank you, Mr. Chairman. I too appreciate the opportunity to serve on this committee. I am Heidi Margulis. I am the senior vice president of government relations for Humana. Probably a better piece of experience is that I'm the daughter of a pharmacist, an independent pharmacist, and the niece of a public hospital administrator who went to work for the investor-owned health care company that contracted only with chain drug stores and took over the public hospital.
What I learned from that experience has become a passion, and that is to be able to see the system as a whole and the interrelatedness of each of the health care sectors. From where I sit at Humana, a company that has been involved in the Medicaid program, the Medicare Plus Choice program, TRICARE, and the Federal Employee Health Benefits program, it's important to be able to understand that if one changes regulations or policies in one sector, it certainly has generally unintended consequences on another sector.
I also feel very strongly about the need to keep quality health care coverage affordable and accessible, and especially for the populations that we serve generally, which are more vulnerable populations on the government side. I feel that it's important to ensure that people understand their health care coverage, and that no matter how well intended regulations and policy guidances are, that there are unintended consequences generally and misunderstandings or nonunderstanding by the people who are intended to be served by it.
As a national health insurer, we certainly cover a lot of ground, and as well a lot of agencies regulate us. So I also have a bias toward uniformity and ways to begin to simplify or smooth and shorten pathways to care. I look at the binders on the stage there, especially the cost reports from the Washington Hospital Center, and think that's about half of the binders that are required for us to submit rate and benefit filings for the Medicare Plus Choice program. We do that once a year. So being that I have been at Humana for 16 years working in government programs the entire time, I had decided a long time ago to come back in my next life as the binder salesperson.
(Laughter.)
MS. MARGULIS: So my bias will be to get rid of binders.
Finally and I guess lastly, I feel strongly about thinking of the value of what we do to the end consumer, to the end user. What is the true value of the service or activity that we deliver? I think about that as I look at all of these binders and think that not too long ago we did a study of the non-value-added administrative cost to our company in the Medicare Plus Choice program and found that if we found better ways of doing those items, that we could deliver $100 more in a prescription drug benefit. So it's important to keep a perspective.
Thank you, Mr. Chairman.
DR. WOOD: Ms. Martin.
MS. MARTIN: Thank you. I'm Mary Martin and I'm chairman of the board of the Seniors Coalition. We represent senior citizens nationwide, not as many as Erik and AARP, but we are growing. We lobby at the federal, state, and local level, and petition vigorously on all of the entire broad range of issues that senior citizens are concerned with. One of our big concerns, of course, is access to health care, prescription drugs, and the affordability.
I don't think I have a bias particularly, but I rather prefer to think of it as a perspective. We want doctors and medical providers to be able to spend their time treating patients. They didn't get into business to fill out papers. I can assure you from my 32 years at HHS that federal employees don't enjoy reading them either. It's not our favorite thing.
Sometimes the system just kind of takes over, and I think it's a wonderful opportunity. I was very heartened by Bobby's appointment. When I saw that, I thought it was absolutely superb for the Department. I have the highest regard and affection for the Department and I've enjoyed spending time with Bill Toby reminiscing, and I'll see Bill later.
I did spend most of my time in the immediate office of the Secretary, so believe me, reviewing these was not fun.
I'm delighted to be here and, as I said, I'm heartened about Bobby's appointment. Thank you, Dr. Wood.
DR. WOOD: Steve?
MS. MARTIN: My cousin Steve.
MR. MARTIN: We introduced ourselves a little while ago as "The Martins."
(Laughter.)
DR. WOOD: I think we might want to separate you two.
(Laughter.)
MR. MARTIN: I'm Steve Martin. I have served in the Virginia General Assembly for the last 14 years, serving in the Senate today, and I want to commend this Secretary's office on pulling together so many folks from the private sector and so few of us from the public sector. That will probably help us get some things done here.
I have represented the General Assembly in the Virginia General Assembly again for the last 14 years, so of course my bias is going to be for my constituents' interests. I have always had the philosophy that I've done my job well if I've provided an environment and situation whereby my constituents and their children can be well educated and well employed, and I guess we can add to that that quality and affordable health care is available to them when they need that.
I happen to chair the Health Professions Committee of the Education and Health Committee in Virginia, as well as the Mandated Benefits Commission, as well as the Behavioral Health Care Commission, and I serve on other health care-related bodies.
My bias is, I guess you might say, is towards liberty and removing barriers, towards privacy and confidentiality, and towards trusting and having confidence in the provider and the consumer in that marketplace. I believe that those goals, especially on the employment side and quality and affordability of health care side of my interest, can best be attained as government gets itself involved as minimally as possible and tries to stay out of the way and let the private sector do its job.
DR. WOOD: Mr. Mendoza.
MR. MENDOZA: My name is Gary Mendoza. I'm a lawyer with the firm of Riordan & McKinzie in Los Angeles. I believe that while the complexity of federal regulation of health care may be good for lawyers, it may not be so good for the health system and the patients.
I have a concern about some of the impediments of federal regulations put in place with respect to the cooperation between various networks of providers. I know there's a lot of excitement and I was involved with some work with provider-sponsored organizations, but some of the burdens that were imposed as part of the balanced budget act I think were more barriers to entry than they were effective regulatory safeguards.
I've also plumbed the depths of the Stark II rules, which are incomprehensible and I think operate from the presumption that providers are effectively dishonest, which I think is a bias that we need to address.
Before I returned to private practice, I was commissioner for corporations for the State of California, so I was responsible for regulating the HMOs in the state, and I commend the Secretary for this effort because I always thought when I was commissioner it was important to talk to people who were tainted by practical experience, and I'm glad that this group is.
A couple of things I focused on that I think we could focus on here is the duplication of regulatory oversight and the redundancy of regulation in an increasingly dynamic private sector environment. When the regulations that were now before us were put in place, many of them, there weren't the type of accrediting bodies that there are now, there weren't the type of private review organizations that there are now. I think if we put more reliance on those types of organizations, I think we might be able to lessen the regulatory burden without compromising patient care.
I'm also concerned about the duplication of reporting requirements and the redundancy in the reports. Certainly when you're dealing with health care, some degree of redundancy may be appropriate, but six layers of redundancy probably isn't.
One structural bias I have is that I think the third-party payer system itself has a fundamental flaw, for some of the reasons that Dr. Crosby alluded to. I think informed patients, empowered patients and providers can more effectively make health care decisions than people operating four or five steps removed from the locus of the decision.
DR. WOOD: Dr. Nielsen.
DR. NIELSEN: I'm Nancy Nielsen. I have three day jobs that I'll tell you about quickly, and you can figure out what the biases are that I bring to it. I'm a practicing internist in Buffalo, seven feet of snow.
(Laughter.)
DR. NIELSEN: I'm am associate medical director for quality at the largest HMO in Buffalo, which does have a senior product, and I'm also assistant dean of the medical school and have concerns, as do all educators, about the regulations that address the supervision, and we need to take a look at all of those. So those are the biases from my day jobs.
My passion is organized medicine, and I've been active at the local and state and national levels, and I'm currently vice speaker of the American Medical Association. In that role, twice a year I stand at the podium and I hear from physicians all over the country, from every specialty, the concerns that they have about their relationship with their patients and the things that get in the way of that relationship.
You've already heard a bunch of them today, the alphabet soup of EMTALA, of ERISA, of HIPAA. My son says, who is a lawyer here in D.C., that HIPAA and ERISA is the full employment act for lawyers and consultants. I think physicians really feel that way. They feel very disheartened by the relationship that they have had since Medicare has begun in many ways. I will tell you that the physicians who were at the AMA meeting in June, when Secretary Thompson came and spoke, were heartened in a way that I haven't seen in a long time, because this is a Secretary who really believes in reducing the regulatory burden.
We believe that and we are pleased to be here, not to whine but to be part of the solution.
DR. WOOD: Erik.
DR. OLSEN: My name is Erik Olsen, and I don't have a day job. I'm retired, have been for 10 years. I'm a Medicare beneficiary but also serve on the board of directors of AARP, so I guess in some ways I speak for the 35 million or so, many of them who have Medicare.
I also have a background that -- even though I've been retired 10 years, I do bring a background of experience in the health administration field. I ran Delta Dental of California and I was a chief executive. We have over 30 million coverage, so I do appreciate some of the problems that you all are facing.
Biases. My biases I guess need to be that we remember that the consumer is the end user of this activity we're talking about and that we need to protect their access to care and to improve the quality of care. My specific bias is probably going to be that there probably hasn't ever been a regulation written that didn't have a good start and a good purpose to begin with, and in the interest of brevity, as we consider all of these, somebody will put in one sentence, whatever that was, 10 years ago or whenever it started, because it's important that we know why it was started. Now it may be outdated, it may be able to be replaced by technology, or maybe we should just throw it away. But I think it's really important that we get a brief, one-sentence reason of why somebody in their infinite wisdom thought that was necessary in the first place.
Now, we did go for a tour this morning, and we saw this wonderful emergency room, and the issue was is your physician going to be color-blind looking at the little report there. Clearly, we don't want someone spending hours testing these physicians about being color-blind. On the other hand, as a patient, I hope the doctor isn't color blind. So there's got to be some easier and more effective way -- and, by the way, that scene maybe was a joint commission thing. So here we get into that cross-hatch deal, and this lady of course was giving her problems.
I think it illustrated several of the problems that we will face. Why was the regulation in there? We want a color-blind doctor, I guess. Is it really Medicare? No, it isn't probably, but maybe if that's an issue, we deal with it and pass it along.
So those are basically my biases. Again, I would just point out that my primary bias is that we all try to remember, though we come from different backgrounds and experiences, that the end user in this activity is the patient and they will be the ones who will eventually benefit if we can streamline this whole process.
DR. WOOD: Mr. Redding.
MR. REDDING: Thank you, Mr. Chairman. My name is Gary Redding and I am from the Georgia Department of Community Health. It's a department that has been formed for two and a half years now, and Governor Barnes, once he was elected, had this vision to have this large entity in the state, large agency that was responsible for most of the health care purchasing within the state, and our entity was formed.
We serve about 2 million people in Georgia, which is about 25 percent of the population in the new Census numbers. About 1.3 million of those folks are in the Medicaid program. Another 170,000 or so are in our children's health insurance program, which is called PeachCare in Georgia, and we have another 600,000 or so that are covered under the state health benefit plan, which is the plan that covers most state employees. Then finally we have administrative responsibility for what's called the Board of Regents Health Plan, which is the university system's plan. So we're responsible for health care coverage for about 2 million people.
Obviously, I'm a regulator myself, so a part of what I'm here for is to sort of take a look in the mirror, if you will, and as we're listening to folks and as we're thinking about what needs to be changed, I'm looking at it not from just the standpoint of my relationship or the state's relationship with CMS but also our relationship with the providers that we partner with in Georgia and those eligibles and recipients that we cover.
But I am also looking at it from that standpoint of the federal-state partnership, and I guess the buzzword that's been used which we certainly use in Georgia and in most other states is flexibility. We want to have the flexibility as a state to address whatever the needs are that we know of in that state. We want to do that, obviously, within the rules that are set forth, but some of those rules need looking at. We're going to keep a close eye on what's going on with the State of Washington right now. We know that they've submitted a waiver request into CMS to be able to do some pretty innovative things, and we in Georgia are going to take a close look at that.
It's pretty interesting, especially in light of the financial and economic picture around the country and in our state. We know that we have to prioritize, and certainly what the State of Washington is doing is a step in that direction. When you say prioritization, people think of rationing. We're not looking at doing that, but we certainly have limited resources as a state and we've got to make sure that those resources are being put to the best use.
Thank you, Mr. Chairman.
DR. WOOD: Jack?
MR. ROVNER: Thank you, Mr. Chairman. I'm Jack Rovner. I'm a partner with Michael Best and Friedrich in Chicago, and my prejudices are pretty much informed by over 20 years of representing health care clients in all aspects of health care, from doctors, hospital systems, hospitals, and payers. I look at this opportunity of this committee as a way to try to tackle what I think is -- despite the comments that many regulatory schemes appear to be the full employment act for lawyers, I think that right there is a problem that we are facing, that too many regulations are impenetrable, they're excessive, they're vague, they overreach, and they could probably use some English teachers to teach them how to write in plain English.
If we took all the regulations that we deal with in health care, it would rival some of the binders that are up on the stage, and I think that when you impose that kind of regulatory overage on the health care industry, it gets in the way of the development of efficient delivery organizations. The mention of the Stark regs is a good example of that. I think it gets in the way of better care management on a system-wide basis, and particularly diverting resources and money that could be used to improve the delivery of health care for the benefit of patients and Americans.
So my prejudice basically is that it is not necessarily true that he who regulates too much regulates best.
DR. WOOD: Judith?
MS. RYAN: Judith Ryan, president and CEO of the Evangelical Lutheran Good Samaritan Society, headquartered in South Dakota.
I have a bias that is focused on consumer-focused, community-based care for the disabled and elderly, and a fair amount of Midwest populist bias that has a lot of confidence in market reform.
I'll tell you just in a minute about how I got there. I'm Midwest, my background, clinically based in terms of public health nursing in inner city, very interested out of that experience in access to health care for minority and disadvantaged populations, have been director for public affairs with the Minnesota Nurses Association, and was part of the comprehensive health planning advisory group in that state for some five years when it was still focused on health care planning.
I served on the Congressional Commission on Huntington's disease and its consequences when there was early interest in degenerative neurological disease as a public policy issue. I also served on what was called Project Breakthrough to Nursing, which was looking for experience and access to higher education in the health sciences for minority students.
I had some of my most interesting experiences as executive director of the American Nurses Association, in which we've worked hard to create a presence for nursing research within the National Institutes of Health, within which we created the community nursing organization concept, limited as that might be, because it was limited to amending existing Medicare and Medicaid statutes. Then I was the convener of the American Academy of Nursing Expert Panel on Quality.
I was director of nursing education at Mayo Clinic and then went to become senior vice president for Lutheran General Hospital in Chicago, in which we developed the Parish Nursing Program and in which I served as that organization's representative within the fledgling Institute for Health Care Improvement, and was chief quality officer ala continuous improvement in that setting.
Then I went to become associate director for the University of Iowa Hospitals and Clinics and associate dean for the School of Nursing there. I intended to retire from there but was called to become the president and CEO of the Evangelical Lutheran Good Samaritan Society.
I giggled at the observation that someone said we're small but complex. We are small in that we're heavily rural, large because we've been around for 80 years as a society, not a corporate structure. So we are now the largest provider of senior housing and long-term care that is not-for-profit in the country. We serve about 27,000 residents and 240 campuses of care in 25 states.
So my bias is to try to make long-term care a part of this consideration in which we are engaged. We've got to have a level playing field here, and the first place the demographics are now catching up with us, all of us are going to need these services within the next 20 years. Long-term care is almost never mentioned and has not been this morning in the litany of those hospitals, physicians and other providers. We've even said home health out loud, but we've not said long-term care services in their breadth.
The margins in long-term care are zilch. I serve on hospital boards in which we are concerned about 6.5 or 11 percent margins on Medicare patients. In long-term care, we're doing well if we break even. The mandates to invest in technology for long-term care are even greater than they are in acute care. Long-term care is defined by regulation. There is no margin within which to invest in the technology and the applications that we must have.
Finally, our focus on workforce development in long-term care is different because we are primarily reliant either on the informal caregiver -- the family, the spouse, the community -- or on the entry-level caregiver, and that's the bottom quartile of our population who are trying to take care of some of the most complex, interactive comorbidities that we've got in some of our most vulnerable populations. So we just have to consciously make long-term care a part of our consideration.
I have a very particular bias toward quality, and the Good Samaritan Society has pulled together leaders in long-term care under what we've now incorporated as the Institute for Long-Term Care Improvement to work together and not competitively around issues of quality; and then finally a real bias toward thinking about rural health care. Many, many, many of our sites of care are in communities of 500, much less 10,000, and that's 27,000 folks.
I was 65 years old on September 11th. I have been on this horse for 40 years. I intend to give it all I've got on this committee so that we make a significant difference, and I'm delighted to be here. Thank you.
DR. WOOD: Thank you.
Mr. Schaeffer.
MR. SCHAEFFER: Hello. I'm happy to be and glad to be asked to serve on this group, but these kinds of things always bring up an unfortunate situation, which is that I am usually requested to be here because of my inability to hold a job for any length of time.
(Laughter.)
MR. SCHAEFFER: I'm one of the few people who has been on all sides of this particular thing. I've been a federal regulator, I've been a state regulator, on the provider side I've run hospitals, been responsible for medical clinics, as a payer I've been involved with HMOs and insurance companies, both for-profit and not-for-profit. Currently I'm associated with what I guess is a large insurance company that does medical insurance, health insurance, and a bunch of other things.
Actually, there's a deja vu element about this, and I was wondering why, and it occurred to me that I was at HCFA so long ago that it is now referred to as "the good old days."
(Laughter.)
MR. SCHAEFFER: People have actually said, boy, we remember when you were at HCFA, everything was great.
I mean, everything was terrible, but it was so long ago that I was younger than Bobby, and that's a long time.
(Laughter.)
MR. SCHAEFFER: Anyhow, my observation is that the health care system in this country is the intersection of science and economics, of social values -- a lot of what we're going to be talking about is social values -- of patient needs and patient expectations which are different, of professional needs and professional expectations which are different, and of the law and politics. As you will soon see, my bias is that we ought to be able to come up with a better balance on science, economics, social value, patient and professional needs, but the law provides some issues that are very difficult for us to grapple with.
By the law, I mean the combination of legislation, regulation, and litigation. One of my observations is that an awful lot of us are doing an awful lot of things to both avoid litigation or to win in litigation. I had, for me, the unusual opportunity a month ago to actually go to an outpatient facility, to have a procedure done in an outpatient facility, and I filled out all the forms you're supposed to fill out, and I thought it was all going to be insurance forms. It was mostly forms clearly written by the hospital's lawyers to protect the hospital and protect the physician and protect the staff, and a little bit to protect me. I mean, they were trying. It was a very, very interesting experience.
But elected officials need to do things for their constituents. There's a tendency toward reacting to what is anecdotal as opposed to scientific evidence, and we get an awful lot of laws.
So my biases are the following. I think there is a role for government. I'm a slightly reformed government bureaucrat, so I think there are things government can and should do. I think there are too many lawyers and too many laws probably, too many regulations, and too much concern with litigation, because it frightens everybody, and I think that's really what shapes behavior and causes, I think, things we'd like to see not to happen.
I also think that we have to remember that no single entity is responsible for the health care system. For us to leverage the health care system, we're talking about a very complicated set of players. One of the things I think we're going to get into over time is how broadly can we cast our net if we really want to get something done quickly.
So my vote would be for some focus early on to see if we can have influence on the things that will have leverage and not try to take on the entire system. So I look forward to working with all of you.
DR. WOOD: Patricia.
MS. SHAFER: Thank you. The Shafers here are going to compete against the Martins for the floor.
(Laughter.)
MS. SHAFER: No relation, really.
I'm Patty Osborne Shafer from Boston. I've been a nurse for 23 years, with a Masters in neuroscience nursing. Welcome to neurosurgery here. I've specialized in the epilepsy field for a long time. I'm a clinical nurse specialist at a comprehensive epilepsy center. I'm primarily ambulatory based and worked with JCH and all of the other kinds of regulations. I have experience with all of the documentation and the coding problem and trying to get patients the care that they need across settings, working from the inpatient setting to ambulatory to the home care and long-term care issues.
My other hat is that I've been involved with the Epilepsy Foundation as a board member and now the chair of their professional advisory board, so I'm kind of balancing the professional needs, but also really how to protect the consumer, and particularly those with chronic illness. I myself have epilepsy and I now have a son with epilepsy. So I would like to see all of this system a little bit better by the time he's older and possibly needs to be negotiating the system.
Whether it's as a nurse or as an advocate in the nonprofit role, I find myself increasingly teaching people how to negotiate a system rather than teaching them how to improve their health, and I don't think that's right as a nurse, that we need to get back to the business of improving people's health and find better ways to help them learn to negotiate the system. I don't think we're going to make it completely easy, but it can be a lot more user friendly. I really would like to see a greater role for improved technology in all of this, and keeping in mind that there is a spectrum of health and HHS isn't going to be able to deal with all of it.
I think what burdens patients and families may be affected by a lot of other agencies in our government, and I hope that as we identify issues that cross-cut into other agencies, maybe we can think of ways to influence or link with them. Thank you.
DR. WOOD: Ms. Sutherland.
MS. SUTHERLAND: Hello. I'm Judy Sutherland and I'm the president and CEO of the Visiting Nurse Corporation of Colorado. I also serve as the chair of the Visiting Nurse Associations of America. My passion, quite plainly, is home care and taking care of patients. I just want to give you one quick little story about some changes that our board of directors have made.
I've been with the agency about 20 years, and our mission is to take care of patients regardless of ability to pay, regardless of what their affliction or disease is. We had done that very successfully for 114 years.
The mission was amended about 15 years ago to include the phrase that to the extent that the VNA could afford to take care of these patients. Within the last five years, technically we haven't done it but in reality we have, we've put in bold those last few words, and we've underlined them and put some exclamation points beside them, because our ability to provide care to the needy has been severely curtailed. Unfortunately, it's been curtailed by regulation as much as by any other thing you can think of.
I'm not a nurse, but I see my role as paving the way for our nurses and our therapists and our home health aides to take care of the patients. So I've become, more than I ever dreamed I would, very involved in understanding regulations and understanding the cost of regulations, and I too, like all of you, believe in quality. But I also believe the major portion of our home care dollar should, in fact, be to take care of patients and help them live a quality, dignified life.
So I have some specific biases, if you haven't caught that by now. To be very specific, I think I agree with you, Bruce, that the cost report makes no sense anymore. OASIS is an onerous tool that is being used by home care, and unfortunately not just for the Medicare program. It's been required to be used for all patients, regardless of who the pay source is. So I think those are two quick things that we can address right away.
I'm also very concerned about how regulations have impacted our ability to find staff. We do have a nursing shortage, and the nursing shortage is made worse by the fact that the nurse spends half of her time doing documentation rather than doing patient care. So we've seen a huge exit of nurses from home care, and I'm sure that's been true of hospitals also.
So I'm delighted to be on this committee, and I thank you very much.
DR. WOOD: Mr. Toby.
MR. TOBY: Mr. Chairman, my name is Bill Toby. I'm very pleased to be a member of this committee. As some of you know, I spent 31 years of my life in HHS, so that makes me a reformed bureaucrat, I guess. I spent all of that time with Medicaid and Medicare, so I literally grew up in the bureaucracy with both of those programs, and I'm very pleased that Secretary Thompson put me on this committee.
I'm now a private consultant in New York, and my most painful moments are when my clients ask me what idiot wrote those regulations.
(Laughter.)
MR. TOBY: This is really no joke. It happens to me all the time, and I'm inclined to say they were done on Len Schaeffer's watch.
(Laughter.)
MR. TOBY: But you and I know that Len Schaeffer left the government too long ago.
Like everyone here, I have my own biases. I have one or two. We are all, I guess, products of our backgrounds, products of the entities that we represent, and I think the objective for all of us is to try to get over whatever views we bring to this table and try to adjust our views as we go along to whatever facts become known.
I would like to say that my first bias is to do no harm, and I say that because I think it's very important to say that because we don't want to actually take the position that the bureaucrats have created this mess. In the spirit of what Dr. Wood said earlier about not blaming the bureaucrats, I would just like to say that I spent a lot of years in HCFA, and I can assure you that there are no gremlins in the bowels of CMS or any other agency itching for ways to complicate the ways of providers. The people I worked with are well meaning. They're not cynics. They come to work every day to do a good job in public service.
What happens -- and I think this dynamic gets lost -- is that most bureaucrats have to justify their jobs, and that's when we get into trouble and have to have regulatory reform committees, because they have to justify their jobs, and they perhaps go too far. There's no question about that.
I'd like to say that when I managed HCFA, it was one of the most humble points of my life. I learned at that point that I didn't know very much about anything. I learned something about public service in terms of trying to make an agency which was hated, as Secretary Thompson said this morning -- when I walked in the door in 1992, the bureaucracy was under assault. It wasn't responsive. In a very short period of time I was able to turn it around. Why? Because I tried to instill a sense of responsiveness, as Secretary Thompson is trying to do, and the same as Tom Scully is trying to do in CMS, as well as Ruben King.
So my second bias, if there is any, is to try to fix those things that were unreasonable as perceived during my watch in running HCFA and to try to, I guess, adjust or atone for some of the unreasonable things that happened.
One of my biases is that I'm very interested in HIPAA from the standpoint of an institution like this, which is very small, not to change the law, because that's not our charge, but to find some way, if possible, to find a way bureaucratically to get extensions for small providers who cannot meet the time frame. There are many small physician offices out there. But like Len Schaeffer mentioned, I know perhaps too much about the internal workings of government, and that is that almost every regulation in HCFA -- and HCFA produces over 200 regulations. At almost any given time, they are there waiting, 200 regulations.
I know that hardly any of those regulations are there because some bureaucrat wants to regulate. They're all legislative mandates. Congress is very prescriptive, and as a result there isn't a lot of discretion. But there are a lot of things we can do to ease the lives of providers and beneficiaries, and you heard Secretary Thompson talk about them this morning.
So I'm here to see what I can contribute in terms of identifying maybe Medicare forms that can be changed to make it easier for providers. Dr. Wood talked this morning about the fact that he's got to think about medicine at the same time meeting the regulatory requirements. I'd like to see what can be done to look at a variety of regulations that may be in the pipeline that we ought to learn about as part of this committee, because we cannot do our jobs without information. We need to know what is going on in the components in terms of struggling with the same issue that we're charged with. Thank you.
MS. UTTERBACK: Good morning. I'm Karen Utterback. I am vice president of operations for a home health agency that operates eight provider numbers in four states.
I have three passions. The first of those is that I am a nurse by education, and I have a huge passion for nursing and the things that nursing can bring to the health care system. The second passion is for the elderly, the vulnerable population of the elderly. As Judith mentioned, the demographics tell us that our current structure is inadequate to meet the needs that are going to be ever present as we look forward over the next 10 to 20 years. My third passion is for technology. We've heard around the table several times already that health care is not anywhere close to where it needs to be in terms of technology, and while I too have serious issues with the OASIS data set, and though I'm sure it's comparable to issues that we'll hear about from the long-term care side with the MDS tool, the reality is that we do need data to make good clinical decisions, and the way we go about getting that data I think currently in most institutions is archaic. However, without the data, we don't make good decisions. One of the issues that I've seen through the years in terms of home care is our inability to set or prove our value to the system, and that is largely because we don't have good data about the outcomes that our patients do receive.
So as far as specific issues, OASIS and data collection is a huge issue. Cost reporting, as has already been mentioned, is an outdated tool, and I appreciated the comments about the SEC and why can't we work that way. When we look at the shortage and likely worsening shortage of health care professionals, they do spend upwards of 50 percent of their time filling out paperwork, and that's not why they went to school. They went to school to render patient care, and that's where the consumers that we serve expect them to be, and many times if I hear a complaint about staff, it's that all they do is fill out paperwork, or all they do is stay on the phone. We use a telephony product. All they do is stay on the phone to record their data.
That needs to change. We need the information, but we need to balance that with ways to get it and how to use it.
I hope that we can see the forest for the trees in this process so that we do have a vision for what future regulation looks like so we do come out of this with a template so that what efforts we do put forward can be carried on into the future.
We have a big task ahead of us, and many times when I think about the regulations, they are purely the result of legislation. So we will have to be very careful about what we look at and who we assign things to and how we move forward with the task in front of us.
I appreciate being here.
MS. WALDEN: It's still morning. Good morning. I'm Trish Walden. I'm here from the Hartford, Connecticut area. I'd be remiss if I didn't make a plug for the Yukon Women Huskies, and my apologies to Tony over there. They beat Tennessee, which was their big concern, on Saturday.
I'm a nursing home administrator and I'm very pleased to have been invited to participate in this process, partly for the reasons that were previously stated, that oftentimes long-term care is lost in the shuffle of looking at the health care delivery system. I am administrator of a 130-bed facility in Southington, Connecticut, a nonprofit organization, and I also oversee a 114-bed skilled nursing multi-level of care facility in the New Briton area. We are part of a nonprofit hospital system that includes home care, skilled nursing, and most recently assisted living.
I'm also part of a demonstration project or one participant in a demonstration project for the State of Connecticut for affordable assisted living, and I think that really needs to be looked at as another option and avenue to reduce costs, particularly since assisted living was designed not to be regulated the way that we have regulated skilled nursing environments.
In some of my previous experiences I did some teaching in preparing prospective nursing home administrators for licensure in the State of Connecticut. I remember telling the students that the nursing home industry is the second most regulated industry in existence, and everybody sort of wondered what could be the first if nursing homes were the second. I don't know if it's still true, but at that time nuclear power was the first. When you think of that, it kind of puts things in perspective.
I have a number of interests. One of them has to do with the survey process. I know we're not here to change regulation, but when we have a survey team come in to a skilled nursing environment -- we have, as I said, 130 beds -- we have been over the 12 years that I've been administrator of this organization, we've had six years of deficiency-free surveys, and the other five years of minimal, minor deficiencies in this last go-round, and I'd venture to say that we're better today than we've ever been. This last go around we had nine surveyors walk into the building over a five-day period of time and our nursing staff was just totally beside themselves. I'm sure their focus was not on patient care delivery during that process but rather following what the surveyors were looking for, which had much more to do with documentation of minute issues.
When we're facing a nursing shortage in this country and retention and recruitment are such major issues, to have this regulatory process, the survey procedure, be such an onerous and threatening and difficult process just adds to the problem. So that's one interest that I have.
Speaking of nurse recruitment and retention, we have brought nurses in from the Philippines and from other countries around the world, and obviously with what has happened on September 11th, it's even more difficult to get through the immigration procedures. So I have a particular interest in that as well.
My accountant would shoot me if I came back and didn't say that I mentioned cost reporting as a particular concern, especially when you look at not just the Medicare cost report but the Medicaid cost reporting, what things are no longer applicable, what does not contribute to determining what the actual reimbursement ought to be, and how can we eliminate some of that.
Finally, I have an interest in HIPAA. We've just gone through a series of workshops and programs, and I was amazed to hear that when HIPAA was first introduced, that the federal government had thought that it would cost about $500 per provider to implement these regulations. So obviously I think that's a bit off the mark, and we need to take a look at how we're going to implement the good parts of those regulations, and how we're going to get reimbursed for them.
Finally, I'm also, as Lisa had mentioned, interested in how the Medicare and Medicaid systems dovetail and coincide at the state level. For example, if the government is enforcing HIPAA regulation and expecting states and providers to implement it, is there going to be additional reimbursement in order for that to happen? If not, then where do we get the money from? It's obviously going to come out of something else that probably is going to impact and effect patient outcome.
I'm very pleased to be here. I felt, in looking at everyone's credentials, that I was sort of the lightweight in the group, but it's a pleasure to be a part of this process. Thank you.
DR. WOOD: Thank you.
Dr. Wildenthal.
DR. WILDENTHAL: Thank you. My name is Kern Wildenthal. I'm formerly a cardiologist, now president of the University of Texas Southwestern Medical Center in Dallas, which includes a medical school, various other health professional schools, a research enterprise, physician services at about a half-dozen affiliated hospitals.
With that background, you can imagine my bias, which is probably most similar to Dr. Wood's, in fact, and it has to do with coming from a perspective of a comprehensive academic medical center and an interest in being sure that we try to preserve all the three traditional components of such centers -- education, research, and clinical care -- without any one set of problems in one sector resulting in severe damage to any of the other important factors that we do.
My background and training is not such that I have any special expertise in what we're about, other than that my job makes me more or less the common final pathway for complaints, from doctors, affiliated hospitals, nurses, our long-term care facilities, the home health care company, and our employees who are health care consumers. Actually, we even for a time had a small HMO in-house, which we thankfully no longer do.
So I do get a fair number of complaints which I can filter, and I would say that one of the problems clearly, which has already been alluded to, is that we've got far too many regulations and far too many complaints for us to individually analyze each of those, and I hope we can focus on a few special areas that we can make a difference in.
The number one complaint I think in general that I hear the most is about the multiplicity of forms and redundancies of processes that theoretically are aimed at providing exactly the same information and safeguards but are done too many times. That's forms and processes for patients, for credentialing, for accreditation, for cost reports, et cetera.
The second most common complaint -- maybe it's a tie -- is that the documentation requirements in all of their aspects need rationalization, simplification and consistency. Those are two recurring themes.
Not yet a complaint but certainly a constantly expressed concern is that the new privacy regulations under HIPAA may be not only expensive and burdensome but even potentially dangerous for patient care, and I think that's a concern that we need to keep in mind.
I would say I have a worry as an institutional administrator that I would share with you. The expenses that we have as an institution that have increased the most over the past few years on a percentage basis are those associated with our billing and collection, documentation and compliance activities. The second area that has increased the most percentage-wise has been our health insurance premiums. Whether those are related or not, I don't know, but they may well be.
One final semi-gratuitous comment I would make is that the regulatory burden which we're here about is that which we experience from HHS and CMS. But I think it's important, as has already been mentioned a couple of times, to remember that there are many other agencies and entities that are part of that. OMB and DOD and DOJ and the VA, not to mention the states and the private sector are, in many ways, a large part of the problem. HHS may be the largest single entity, but in our experience, very candidly, it's not the worst. So I don't know what we can do about all the others, but insofar as we can think about an integrated fix, I think that would be important.
Thank you.
DR. WOOD: We're a little bit ahead of schedule, so I'd like to move on to some other items. The first one, actually, is thinking about how we organize our work. Now, we've talked this morning about being able to provide specific suggestions for resolution of problems and improvement, and to then prioritize those. As the staff and I had started working on this issue many weeks ago, and I had the chance to talk with Bobby and others, it was clear that we needed to find a way to identify immediate actions.
So in that regard what we've done, maybe in the best tradition of creating paper, I'm not sure, but it's the easiest way I could think of, I've tried to develop a simple way to categorize these things, and that is to identify the issue, and then I've got them organized in terms of immediate fix, what we think could be done right now, intermediate, which still could be done by an administrative process within the agency but we might have, for example, some concerns about either the infrastructure or what I've heard around the table this morning, which is integration and avoiding the unintended consequence. So if we think it might be something like that, that might be where you would put that one.
The last one is long term, and that would be something that would require either a major legislative solution or we think might be rather expensive or it might require expenditure of more dollars, require additional legislative authority or whatever, and I think it was fairly clear from the Secretary's comments that we don't want to spend our work right now concentrating on developing anything new, although it is appropriate for us to identify where we think things should be done so we can get them on the list.
The other thing I would say here is that the last column is staff assignment. As you look at this here a little bit and think about it, especially over lunch, I'm not sure that Christy or Bela or Paula are actually quite prepared to say who ought to have it, and ultimately it goes back to the work group anyway, if I understand the organization of this approach, and the true staff assignment would actually be made at the agency. But I think all of us have recognized as we've gone around that not everything that we deal with is actually solely within the realm of CMS.
So if there is something else that we identify, I mean, if it looks like it's something that also should be done from a joint commission perspective or from an AMA perspective or whatever, or if it should be a Medicaid perspective or it's an Inspector General problem or a DOJ or an IRS problem, if we went through the cost reports, I think it would be more than just CMS and the long term. We should probably try to identify those as well, so we know where we can concentrate.
So if you would for a minute take a look at this and think about it, then what I would like us to do is every meeting that we do, we will keep track of this, and each one of you should be able to put on this piece of paper an issue, and then at the end of the meeting what I would like for us to be able to accomplish is to somehow prioritize these, especially if it turns out that we identify some fairly frequent issues. Those would be fairly easy to prioritize so that they can go back to CMS for immediate action.
It would then also, from the perspective of an intermediate fix or long-term recommendations, if there's something we don't understand and we need the staff to help clarify something, or if there's something else we need, that would give us the opportunity to ask some very specific questions of the staff to get us more appropriate information, and they're extremely capable in that regard. They've already responded to a lot of my questions in that way.
So what I'd like you to do is to take a few minutes to look at that between now and the time we come back to start this afternoon, because this may be the best way for you to make notations or suggestions. We've heard, actually, as we've gone around the table some very specific suggestions about cost reports, and I think to the extent that you can specifically say what you think the solution is, that would be even more helpful to the staff in that regard.
Now, the next thing I'd like to do is to move ahead on the agenda a little bit and have you go to Tab V in your books.
Lunch is at 12:00, so we have a few minutes for us to think about organization, particularly in regard to what it is we're trying to do in the long term.
I thought it would be helpful for us, because the amount of work is potentially so large, to have a vision that we could articulate in the form of a mission statement, and the reason for that is that if we are going to be successful, we need to be able to come back to something we can touch. Our ability to come back to a touchstone I think will make sure that we are successful in the long term.
This is a draft statement, as you'll notice, for committee discussion, and what I've tried to do is to get the important objectives identified in this statement. But I'd like to take a little bit of time for you to look at this and tell us your thoughts about it, where it could be made better, where it seems to be quite satisfactory. If you didn't have a chance to look at it, I'll give you a few minutes to look at it right now, and then I'll ask for your specific thoughts or comments.
Gary?
DR. DENNIS: First of all, thank you for doing this. Secondly, under the mission statement, I think the mission statement strikes at what needs to be done, and this is what needs to be done for CMS. But for this committee, this committee also needs to do this through a consensus-building process, so that somehow has to be incorporated into this statement, in my opinion.
MS. RYAN: I would just suggest that we put some limiting language around the level of services for patients and consumers, like health and human services, to improve the level of health and humans services, or some language that doesn't suggest it's that broad.
Secondly, in the statement number 3, where it says "so program requirements can be redirected toward patient care," I think maybe that's too restrictive, and maybe if the language could be similar to that used by the Secretary this morning, "to care and services for patients and consumers," and that we be consistent with the use of that language across documents.
DR. OLSEN: Maybe this is a clarification. I know the Secretary used this language. I understand what "patients" means, but what are consumers? Is there something beyond patients? What's the definition of "consumers"? I guess that's my question.
DR. WOOD: It's a good question, actually, and I think the circumstances here are ones, as we've talked perhaps from the very restrictive sense of patients as someone who might be obtaining direct health care services for either an acute or a chronic problem or for the maintenance of a level of function. I think we will have to try to be fairly inclusive because there are going to be many other circumstances where the issue is not that there, in fact, is even a patient relationship. I can imagine, actually, that if we thought about what was said earlier, and that is you want to have informed patients and informed physicians working together for the best outcome, then really it's informed consumers or users.
As long as