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Events, Speeches &
Floor Statements

Klobuchar Calls on Health Care to Reward Quality, not Quantity

September 15, 2009 | Watch

Mr. President, I will be speaking about health care, but I did want to note, I was listening to my colleague and friend from Tennessee. I have invited him before, but in Minnesota we think our wind turbines are so beautiful, we have opened a bed and breakfast near Pipestone. Come, stay overnight, and wake up in the morning and look at a wind turbine. I guess it is all in the eye of the beholder. We are excited about the power that wind has brought to our State.

I wish to address the very important issue of health care. I first want to commend my colleague who is here with me today, Senator Cantwell, for her commitment to passing a pro-consumer health care bill that is focused on reducing cost so that it makes health care more affordable to all people.

I rise to speak about an issue that is an economic imperative—true reform in the way we pay for health care. If we don’t act, costs will continue to skyrocket. The country spent $2.4 trillion on health care last year alone; that is, $1 out of every $6 spent in the economy was spent on health care. By 2018, national health care spending is expected to reach $4.4 trillion, over 20 percent of our entire economy. These costs are breaking the backs of our families and businesses. Premiums have doubled in just the last 10 years.

We can see from this chart, in 1999, single coverage and family coverage. For single coverage in 1999, the premium was $2,196, the premium an individual would pay. Now it is up to $4,704. A family in 1999 paid $5,791. Now they are paying $12,680, a doubling of the premiums for families. All of the statistics, all the studies show if we don’t do anything, if we just put our heads in the sand, we will see a doubling of those premiums again.

A recent study by the Council of Economic Advisers found that small businesses pay up to 18 percent more than large businesses to provide health care insurance for their employees, often forcing these businesses to lay off employees or cut back on coverage.

I met with farmers today. I have met with cattle ranchers. I met with people who are farming and trying their best—self-employed. I have met with a small business up in northern Minnesota in Two Harbors called Branite Gear, a backpack company. They make fine backpacks for our troops. Do you know how much the owner of that company now pays for health care for his family of four: $24,000. He said he now employs 15 people. If he would have known this back 15 years ago, when he started that company, he wouldn’t have started it then. He is proud of that company, but his small business cannot afford to pay this kind of money.

These costs are also breaking the backs of American taxpayers. At the current rate of spending, Medicare, such a crucial program for our seniors, a safety net, something they must have, is scheduled to be in the red by the year 2017. So those people who are 55 years old and want to have Medicare should care about cost reform. If you are 65 years old and you plan to live a great life until you are 95 or 100, you should care about a strong Medicare that isn’t going in the red.

A recent Congressional Budget Office estimate shows that the majority of the projected $344 billion increase in Federal revenues in 2010 are scheduled to go automatically to cover the rising cost of health care. To put it simply, my bottom line for health care reform is that we must get our money’s worth from our health care dollars. Right now that is not happening.

With 92 percent of our population covered, Minnesota is fortunate to have one of the highest coverage rates of health insurance in the country. Part of that is we have very good health care. We have a lot of nonprofit health care insurance agencies. We also have Minnesota Care which extends coverage to so many of our people who can’t afford it. As any Minnesota family or business knows, the price of health insurance coverage has been going up faster than almost anything else, much faster than wages. People are worried about the stability of their coverage. That is where I have found unity between Democrats, Republicans, and independents. People want stability. They don’t want to be thrown off because their kid gets sick. They want coverage, and they want their kid to have coverage. If they change jobs, they want to keep their coverage, and they also want more affordable health care.

I have been pressing Senate colleagues and the administration to make sure we have reform that results in more affordable and more accessible health care coverage. The problem is, we are paying too much. We are not getting a good return all the time on what we pay. The solution must be to get the best value for our health care dollars; otherwise, costs will continue to wreak havoc on the budgets of government, businesses, and individual families.

The root of the problem is that most health care is purchased on a fee-for-service basis so more tests and more surgeries mean more money. Oftentimes those surgeries and tests are completely unwarranted. We want quality, and we want outcome to be the measure of good health care. Quantity, not quality, is what pays right now.

According to researchers at Dartmouth Medical School, nearly $700 billion per year is wasted on unnecessary or ineffective health care. That is 30 percent of total health care spending.

My favorite story is about an HMO in the southwestern part of the United States that said: Let’s look at a better way to treat diabetes. Instead of having people trying to get in to see their doctors, we will have them seen by nurses and nurse practitioners, and we will have it overseen by two endocrinologists. They actually saw health care professionals more often and quality went up. Costs went down. And guess what. They got reimbursed less for that system because of the way our current system rewards quantity over quality.

This chart says $50 billion. The reason it says $50 billion is that an independent study from Dartmouth looked at how Mayo Clinic, one of our premier health care institutions, treats chronically ill patients in their last 4 years of life. Quality is incredibly high. What they looked at was the Mayo protocol; if we use that in hospitals all over the country, how much would we save? You would think it would cost more because it is higher quality. You would actually save $50 billion in taxpayer money every 5 years just for this set group of patients, if the Mayo protocol was followed, because they have integrated care. They work as a team, and they are careful and do what the patient wants. They put the patient in the driver’s seat.

In Minnesota we have several examples of this coordinated, outcome-oriented system, not just the Mayo Clinic but also St. Mary’s in Duluth and Health Partners that has done some groundbreaking work with diabetes. As this chart shows, on spending per patient, just using the Mayo protocol for chronically ill patients, $50 billion would be saved every 5 years.

To begin reining in costs we need to have all health care providers aiming for high-quality, cost-effective results. We must take significant steps to ensure that Medicare remains available for future generations. I want to be able to get Medicare and so do those people who are 65. To do that, we have to make the system efficient and cost-effective with the highest quality. Let’s reduce those hospital readmissions, have less infections in the hospitals. Let’s put those kinds of Mayo quality standards in place like we see at the Cleveland Clinic and other places across the country.

These policy changes are important steps to make sure Medicare is paying for the outcome of treatment, not the number of treatments.

We have seen basic outlines from the Finance Committee bill, but we haven’t seen it yet. I support the committee’s efforts to develop a national program on payment bundling. In too many places, patients must struggle against a fragmented delivery system where providers duplicate services and sometimes work at cross-purposes. To better reward and encourage this collaboration, we need to have better coordination of care and less incentive to bill Medicare purely by volume. Increasing the bundling of services in Medicare’s payment system has the potential to deliver savings and start encouraging quality integrated care.

When it comes to improving care, changing who pays the doctor isn’t as much the issue right now, when we are looking at improved care, as it is changing that payment system.

The lesson of high-quality, efficient States such as Minnesota is that someone has to be responsible for the care of the patient from start to finish. Bundling will help encourage hospitals, doctors, and post-acute care providers to achieve savings for the Medicare Program through increased collaboration and improved coordination.

One of the interesting things I don’t think people always know about is, they say: If we save money, will that mean worse care? The answer actually is no. It is the opposite.

Does higher spending equal better care? In fact, when we look across the country, higher spending does not equal better care. In fact, it is the opposite. Here we have a chart that shows the highest quality care in the country with the lowest utilization, where they are most cost efficient.

Maybe you know your doctor well. You go to the specialist they refer you to so you are not running around with your x-ray to 15 different specialists not knowing who is better. Look at this: highest utilization has the lowest quality care.

Research has shown moving toward a better integrated and coordinated delivery system would save Medicare alone up to $100 billion per year. Because Medicare is the single largest purchaser of health care, linking payment to quality outcomes is essential to improve health care outcomes for everyone.

We must also stop paying for care that doesn’t result in quality results. Reducing preventable hospital readmissions—and I am hopeful this will be in the Senate bill—is vital to curbing the wasteful health care spending plaguing our national budget. In one year, hospital readmissions cost Medicare $17.4 billion. A 2007 report by MedPAC found that Medicare paid an average of $7,200 per readmission that was likely preventable. Who wants to go back in the hospital? I don’t think anyone wants to go back in the hospital. So not only are we getting lower quality care because certain quality parameters are not met, we are also spending more money for it.

I am encouraged that the Finance Committee’s outline includes a provision that calls for reduced payments to hospitals for preventable readmissions. We know there are some readmissions that are going to happen. It happens all the time—preventable readmissions. Paying for quality results also means reducing hospital-acquired infections. We should not have to pay for an infection that comes as a result of a hospital stay itself. No one wants to get an extra infection in a hospital, and there are vast differences among hospitals in those infection rates. So let’s put those quality protocols in place.

Third, we need to better reward integrated care systems. At places such as the Mayo Clinic, a patient’s overall care is managed by a primary care physician in coordination with specialists, nurses, and other care providers as needed. It is one-stop shopping.

It reminds me of a football team. We do not have 10 wide receivers running around, running into each other, just like we would not have 10 specialists in health care. We have one quarterback who is a primary care physician, and then we have a team that works together. That is what we want to encourage in the health care system to save money.

To better reward and encourage this collaboration, we need to encourage the creation of accountable care organizations. These are groups of providers that work together, as they do in Minnesota, to deliver quality, coordinated care to patients. We want to put incentives in that reward this kind of care.

The President stood before his health care summit and asked: Why should Minnesota be punished when it rewards, when it creates this kind of good, high-efficient care? The sad thing is, right now it is because when we just base pay on volume and we do not pay any attention to what the results are or what the infection rates are or what the readmission rates are, we are not getting that kind of quality care people deserve.

The last thing I want to focus on is something Senator Cantwell, who will be speaking after me, and I have been so focused on right now; that is, putting some kind of quality index in place. The proposal here is to move us toward a system that links quality to cost. Right now, we do not have that in place. I believe we need to do more in the finance bill than we even have in the House bill to get this value index in place. This is a bill I have introduced.

Senator Cantwell is one of the lead sponsors, as well as Senator Gregg of New Hampshire.

The indexing will help regulate overutilization because those who produce more volume will need to also improve care or the increased volume will negatively impact fees.

This legislation will authorize the Health and Human Services Secretary to create a value index as part of the formula used to determine Medicare’s fee schedule.

By adding a value index, our bill uses cost measures that are structured to allow areas with justifiably higher costs—and we know there are different costs around the country—to compete on an equal playing field with lower cost areas. Rewarding value in this way would give physicians a financial incentive to maximize the quality of their services instead of the quantity.

Linking rewards to outcomes creates the incentive for physicians and hospitals to work together to improve quality and efficiency. This proposal would also work in tandem with other proposals—like those being advocated by others and those I have mentioned today, the coordinated, integrated care, the bundling, and other ways—to improve the Medicare payment system.

We know there are also other ways, and I will end with just mentioning these—that we can improve efficiency in health care spending: One, as a former prosecutor, I care a lot about this, to reduce Medicare fraud. Law enforcement authorities estimate that health care fraud costs taxpayers and costs those seniors on Medicare more than $60 billion every year. This is as much as 20 percent of total Medicare spending. There are ways, and we have some bills that have already been introduced, to greatly reduce this.

Secondly, something the President raised in his speech before Congress is this idea of looking at malpractice reform. I can tell you, in Minnesota, in 2006, we had the lowest malpractice premiums in the Nation. Areas like ours, with more efficient care, tend to have lower malpractice premiums, and that is what our doctors want.

One of the things we have is a certificate of merit system that has been implemented in a number of States and goes hand in hand with efficient care, requiring a medical expert to sign off on any complaint, and it has worked.

We need to reform our health care system. I am so proud to be in the Chamber with my colleague, Senator Cantwell, a member of the Finance Committee, who has been, day to day, night by night, advocating for this kind of reform. We want our seniors to stay on Medicare and have the kind of safety net they deserve. We want people who are 55 years old to be able to get Medicare when they are the age to get Medicare. The way we do this is by actually increasing quality and decreasing costs.

We do this in the State of Minnesota. We know we can do it in other places of the country. I plead with my colleagues on the Finance Committee that we have to look at the long-term costs if we are going to bring reform. We have outlined some ways to do this today. We look forward to working with people from all over the country. But this has to be a major element of reform.

I yield the floor.