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THE NATIONAL BIPARTISAN COMMISSION ON THE

FUTURE OF MEDICARE

SENATOR JOHN BREAUX, Statutory Chairman

REPRESENTATIVE BILL THOMAS, Administrative Chairman

STUART H. ALTMAN, Ph.D.
SENATOR J. ROBERT KERREY
REPRESENTATIVE MICHAEL BILIRAKIS
REPRESENTATIVE JIM McDERMOTT
REPRESENTATIVE JOHN D. DINGELL
SENATOR JOHN D. ROCKEFELLER, IV
SENATOR WILLIAM H. FRIST
DEBORAH STEELMAN
REPRESENTATIVE GREG GANSKE
LAURA D=ANDREA TYSON, Ph.D.
ILLENE GORDON
BRUCE VLADECK, Ph.D.
SENATOR PHIL GRAMM
ANTHONY L. WATSON
SAMUEL H. HOWARD
BOBBY JINDAL, Executive Director

The Commission met at 10 a.m., at 1100 Longworth Building, Senator Breaux, presiding.

Present: Senator John Breaux, Representative Bill Thomas, Stuart Altman, Representative Michael Bilirakis, Senator Bill Frist, Representative John Dingell, Representative Greg Ganske, Senator Phil Gramm, Illene Gordon, Sam Howard, Senator Bob Kerrey, Representative James McDermott, Senator John Rockefeller, Debbie Steelman, Dr. Laura Tyson, Bruce Vladeck, Anthony Watson, and Bobby Jindal.

Senator BREAUX [presiding]. Will everyone please take their seats.

Good morning everyone. I'm very pleased to be able to call this first meeting of the National Bipartisan Commission on the Future of Medicare to order.

First, let me congratulate each and every one of our Commission members for agreeing to serve on this very important Commission.

I know that all of you are here because of your background and your expertise in health care in general and health care for senior Americans in particular.

This Commission, in my opinion, represents the finest collection of talent and expertise in the area of health care and Medicare programs of any Commission or any Committee of the Congress that has ever been assembled in our country.

It's certainly a time for everyone in our country and the Congress, I think, to end what I have called the medagoguery of Medicare.

It's time for us to work together to share our ideas and thoughts about the nature and extent of the Medicare program and to think up ways in which we can improve on the Medicare program, and at the same time, guarantee its solvency for the next generation and future generations to come.

We are charged by the Congress with a number of things, which are extremely important, and in improving the program. In my opinion, that doesn't mean that we're going to think of the program only in terms of economics or in terms of the solvency of the program, but it also means looking at the fundamental question of what we want Medicare to do and what kind of health care system we want for the elderly in our country, while at the same time addressing issues such as quality, equity, and efficiency of the program.

I was appointed Chair of the Commission about 7 weeks ago today, and at that time and since that time, I've worked very closely with my colleague, Congressman Bill Thomas, to establish the operational framework for our Commission.

I'm pleased to work together with Congressman Thomas and other members of our Commission.

I think that we have a good program and the way that this Commission has begun to work.

Let me say from the outset, I'm firmly committed to having this whole group work together in a bipartisan and inclusive manner, and we intend to operate that way.

I'm also very pleased that one of the first orders of business is the appointment of Bobby Jindal to serve as Executive Director.

He'll be presented by Congressman Thomas in a minute.

I've said before that everything would be on the table. We shouldn't begin our work by excluding or endorsing a certain option from the beginning. Every member of this Commission should know that his and her views are going to be considered.

The statute creating the Commission requires 11 of 17 votes in order to issue a report. So there cannot be a report that can only be supported by the Republican members or the Democratic members.

Indeed, we will not be truly successful unless we can get the agreement of the overwhelming majority of our Commission members.

As was said by our Commission members yesterday, if there is not a consensus, don't let it be your fault.

The process we are suggesting today for the work of the Commission is designed to be inclusive and to build the consensus that we need to be successful.

The task force is designed to help gather information in developing a range of options for consideration by the full Commission.

Congressman Thomas and I sent out a survey to the membership about how to structure the process, including the task forces, and many of the comments and suggestions that we have received are reflective of the documents that are in front of you this morning.

Please look at the documents as a conceptual outline for this Commission goal throughout the year.

As we have stated, the time line that we have presented to you is designed to be a tool, not a final work plan or a final product, to help focus the Commission's decisionmaking and the measure of progress.

We may find that it is necessary to change the agenda and have more meetings as we go through the year.

We may also expand or depart from these topics, depending upon our Commission's interests.

No one would dispute that we have a very difficult task ahead of us.

We have been charged by this Congress and by the Administration to make recommendations on ways to preserve and improve the Medicare program.

In order to do that, we must first come to an agreement on the scope and nature of the problems facing Medicare.

There may be some disagreement on this issue, as there probably will be on many issues that come before the Commission. But I am convinced that if we work together in a bipartisan fashion and put all the facts and suggestions on the table, we can have a constructive debate on the issue before us and produce recommendations to the Congress in a timely fashion.

I believe, further, there is no greater challenge that this country faces right now than how to preserve and improve Medicare for future generations.

While we have added a few years to the life of the trust fund, by actions of the Congress and the last Congress, I think we did not nearly enough to prepare for the 77 million baby boomers who will depend upon Medicare for their health care starting in the year 2010.

In the context of overall entitlement reform and how to go about preserving Medicare is very, very complex. Unlike Social Security, which promises specific levels of income, Medicare promises specific health benefits which are susceptible to the increases in medical inflation and the high cost of advances in medical technology.

Part of the scope of the problem is the unpredictability of estimate regarding such standards as economic growth and the underlying realities will not change.

We also know how politically sensitive the issue of Medicare is. That is one of the reasons why Congress created this Commission which we now serve on. To make some recommendations and fix the problems and make it easier for elected officials in the Congress to also take the tough political steps that will be necessary.

Of most of the things we do in Congress, the most important objective is to craft legislation. The primary effect of this Commission, I believe, should be to come up with the best possible proposals, and then worry about how to get them passed through the Congress through the legislative process.

I know there's been some attention recently given to the issue of expanding Medicare, which the Administration has called for, and allowing certain groups to buy in the program early.

First, let me iterate very clearly that this Commission has been particularly charged by the Congress in the legislation that set this Commission up with making recommendations on modifying the age-related eligibility to correspond to changes in age-related eligibility under the Social Security program and on the feasibility of allowing individuals between the age of 62 and Medicare minimum age to buy into the Medicare program.

This language in our charge was very explicit and this Commission will clearly explore that proposal and that idea.

As I've said several times in the past, I think personally, the Congress will ask the Commission to study the impact on the program before moving ahead in Congress. But that is a decision for the Congress, that is not a decision for this Commission to make.

Our Commission will do our job on that particular point.

There are an estimated 41 million uninsured people in our country and this is a very serious problem that affects everyone. Any efforts to decrease the level of uninsured people is a good and solid goal and should receive great consideration.

Let me close by saying that I'm optimistic we will share ideas and discuss differences and I think that's the way this Commission can get the job done, by working together in a non-partisan fashion, because the challenge absolutely dictates that we can do no less.

There are some who think that this Commission will never be able to accomplish what Congress has told us that we should.

I strongly disagree with that point of view. We have an excellent Commission of experts, good people with great backgrounds. And I'm very optimistic that we will be able to produce that result.

Medicare has been a success for 32 years. We have an obligation to ensure that the success of this program continues for the next 32 years as well as beyond.

Parents, grandparents have reaped the benefits of health security afforded by Medicare since 1965, and our children and our grandchildren deserve no less.

If we make this truly a bipartisan effort, we can accomplish that goal.

I'd like to now call on Congressman Bill Thomas for any opening comments he might have.

Mr. THOMAS. Thank you very much, Mr. Chairman.

I believe that the process has begun with you and it will end with Mr. Watson and in between everything will have been said, but not everyone will have said it.

That seems fairly appropriate because all of us want to begin this process by indicating to anyone who is willing to listen that all of us believe that in dealing with this difficult question, we can resolve, in a reasonable time frame, the financial concerns, the health care concerns that are wrapped up in the question of what do we do with Medicare.

I think, though, that we have to say a few words about the fact that we'll be discussing health care procedures in the context of public policy.

And one of the bywords in dealing with that, I believe is that people will consume as much health care as other people are willing to pay for.

And what we have to do is structure a system and a process to reconcile that fact.

I do believe that this Commission possesses an enormous amount of knowledge and talent. I have been very pleased with the willingness of a number of the federal and private groups and agencies who've come forward with proffered systems.

And after I introduce our Executive Director, you'll begin to appreciate the kind of resources that we have available to us.

I also think that the timing couldn't be better for this Commission to examine the question.

Although it is true, as you indicated, Mr. Chairman, that the balanced budget agreement changes to Medicare did create what we believe to be about a 10-year window, all of us have to be sobered by the fact that the primary reason the 10-year window was created was because there was a massive shift from the Payroll Tax Trust Fund, the Part A, the HI Trust Fund, over to the Part B, the Supplemental Trust Fund, which has 75 cents out of every dollar coming from the general fund.

So to a very great extent, notwithstanding all of the changes that we made, we simply borrowed from the general fund to enable us to make the kind of decisions that we're going to begin to make here today and over the next year.

We do have a year. That is a short period of time. But I do believe that it is enough time. As the Chairman indicated, his personal preference would be that Congress would not act on any major change that affected Medicare.

I think it's not only entirely appropriate, but I think it's essential, because we are not going to be able to put in context the kind of fundamental changes, like expanding the number of people eligible either through a particular health profile they might have, or in terms of age, and expect Congress to understand what they did, without the context of all the other changes that we're offering to suggest.

We talked to the President and he's identified the problem. His particular solution is not one I think ought to be dealt with in the time frame of the second session of the 105th Congress.

I believe that that would be a position shared by the majority of the Commissioners, but I don't think it's appropriate to push that question either.

So I look forward to working with all of you.

One of the interests I have is, because we have a short time frame, to try to define what our problem is, so we can make relatively rapid advance by talking about what we think it is not. And if we get broad agreement on what it is not, we can then deal with the other issues.

Frankly, I have a whole list of areas that I think we should ask Congress and the Administration to re-think that have historically been attached to Medicare, but clearly I believe we should not. Graduate medical education is one of those, and I don't want to go into it for lack of particulars at this point, but that kind of a discussion I think will serve us very well early on.

Let me stop there in terms of any particular opening remarks, and tell you that it is with great pleasure that I would like to introduce to the Commission and to those individuals who have some concern about the direction of the future of this Commission, the Executive Director that has assisted in helping us shape the very difficult task we have in front of us.

In my discussions with Chairman Breaux about the kind of executive director that we would want for this Commission, both of us were in agreement that it is absolutely necessary to get the American people to understand that this is a societally-based problem. It isn't just seniors, it's young people as well.

That doesn't mean that we went out looking for a young executive director. It just turns out that with all the other qualities we were looking for, we got someone who is relatively young. And some of us thought he was looking younger than we thought he would.

When you look at Bobby Jindal's credentials, he is obviously an exceptional scholar. Having gone to Brown University as a Rhodes Scholar, let me just indicate that he turned down admission to Harvard and Yale Medical Schools and Harvard and Yale Law Schools.

I've asked him why three times now but his answer every time has been the one that you'd like to hear. He wanted to get on with solving the problems of the system, and he felt that the reason credentials were useful was that you could help on the basis of what you had to go forward.

And that's where I found him, down in Louisiana, having turned around Louisiana's Medicaid program from an enormous red-ink program to a black-ink program with better service to the individuals in Louisiana.

There may be a question as to how I looked in Louisiana. I will tell you, it has nothing to do with the gentleman to the left of me. It has to do with two of my colleagues, Bob Livingston, the Congressman from Louisiana, who is cochair of the Appropriations Committee, and Jim McCrery, who is on the House Subcommittee Ways and Means, and someone I work closely with and respect.

Both of them said that he's the best person they ever worked with. I put a call in to Governor Foster, and I said, can I take your person, and he said, no. He said we just got this thing up and running. It looks good, and he's got to continue making us look good.

I said, you don't understand. I need him for our Commission so that we can look good. We have a national problem that we need to work on and to solve.

After a series of conversations, I suggested to Senator Breaux over lunch that I thought Bobby Jindal would be the person we needed. John looked at me and smiled and said, I can live with that.

So it's my pleasure to introduce to you formally the Executive Director, someone who I believe will assist us in too many ways to mention from his knowledge of the recent experience from his background, but primarily and most importantly for his ability to work with people, to create solutions that are not only created by a group, but are clearly appropriate, directed toward our solution of the problem.

Mr. Jindal?

Mr. JINDAL. Thank you.

I do come from a state, Louisiana, where a large portion of the population is dependent on Medicaid or Medicare. I also come from a state, Louisiana, which had a tremendous financial pressure on their program.

I'm proud to say that the state has overcome that financial pressure while also keeping its commitment to high quality care.

So I'm very proud to be a part of this Commission and help you in your work and to support you in your work as you grapple with even larger issues on a national scale.

I've met with each of you, the Commission members, either you or your staff, and I'd like to reiterate what I have told you privately: I really have two goals in terms of the staff role and purpose in this Commission.

First, as the Chairman indicated, it's very important that we build consensus. So, the first thing I said is that it is important for staff to be absolutely committed to the entire Commission, everybody simultaneously, and also to make sure that we're not perceived and we do not operate in a partisan fashion.

The staff will be absolutely committed to helping you build that consensus, and we're going to do that by working with everybody on this Commission as equals.

The second thing, and you heard Mr. Thomas allude to this, the second role and an important role for the Commission staff is to provide you with professional level information, information you need to make the decisions that will be important for this country.

We felt that it was important to get that type of information into your packets. For example, today, we've got some information from CRS.

We've got some representatives from the CRS. We've got Mr. Shipp, and Mr. Protte, so if they could stand so the Commission members could see them.

I've also got a bibliography of their work, and I'd like to review that bibliography. If you are interested in ordering any of the publications listed or requesting any information, please contact me.

The bottom line is helping build consensus and also giving you the credible information you need.

Thank you.

Mr. THOMAS. Mr. Chairman, let me just say, thank you very much and I look forward to hearing from the Commission members.

Senator BREAUX. Mr. Chairman, thank you. I know Bobby personally and know the credibility he brings to the staff, although every Commissioner should know the staff works for you, he doesn't work just for Bill Thomas or myself. This man works for each and every one of you. They're your staff, we want you to use them.

The staff is totally non-partisan and will work with each member of this Commission.

What we'd like to do now is to hear from each one of our Commission members, then we'll talk about the task force and go through the rules as part of our agenda.

We'd like to ask if we could leave our opening comments to maybe 5 minutes, and we'll hear from all our Commission members.

The Senate has a vote at 11 a.m., and so this Senator's going to sneak out and return. Mr. Altman, you have the floor.

Mr. ALTMAN. Mr. Chairman, thank you very much.

First, let me indicate how pleased I am to be a member of the Commission. It's been a lifetime of professional work on my part. Therefore, I'm particularly appreciative of the fact that the President selected me to be part of this effort.

Let me say at the outset that I consider Medicare to be one of the finest federal programs this country has ever enacted, and also by far, one of the most complicated. Therefore, our job of modernizing it and making it work better for our future seniors is not going to be easy.

While I am open for any kind of solution or proposal that would make Medicare a more effective program, I want to make it clear that I am committed to preserving Medicare as a social insurance system designed to protect beneficiaries from what could be financial ruin by the high cost of medical care.

However, while most of our attention needs to be focused on this protection, and making sure that there's a proper balance between the needs of beneficiaries and the needs of individuals who pay for the program, we must not lose sight of the fact that Medicare has become a major financier of our health care system. And, therefore, what we recommend can have a significant impact on the future health care system for all Americans.

When I speak to my students, who are much younger than those who qualify for Medicare, I explain to them that this is not a problem that they don't have to worry about for 40 or 50 years. How this country restructures Medicare will affect the careers of those who wish to be employed in the health care system, the taxes all will pay, and the type of health care system they all will use.

So as we think through the many issues that are on our agenda, we should not for a minute think that we're just dealing with an insurance program. What we are dealing with is both the financial health of future beneficiaries and taxpayers, and our basic health care system.

With that, I don't have anything further to say except to again indicate how honored I am to be a member of this Commission. The staff has been great so far, and I'm anxious to work with all of you.

Thank you.

Senator BREAUX. Thank you.

Congressman Mike Bilirakis?

Mr. BILIRAKIS. Thank you, Mr. Chairman.

I too consider it a privilege to be a member of this Commission. By way of background, I serve as Chairman of the Health and Environment Subcommittee in Congress. I also represent probably the oldest Congressional District, the oldest meaning most elderly, on this Commission, certainly one of the top three or four in the country.

And I spend a lot of time--I have been involved in health care issues for years here in Congress, and I'm very much involved in what I call the Bilirakis Health Care Bill and certainly with Medicare.

Once again, we've been given a monumental task of course. It's a wonderful opportunity to strengthen the Medicare program, not so very much for today's seniors because they're not going to be affected, but mostly for our children and grandchildren.

As the Commission develops its recommendations, I believe the Commission members should remain open-minded to these concepts. Everything should be on the table.

And despite the fact that we all have biases, it's very important that we try and put those aside so there's no closed doors during these discussions--no suggestion should be disregard.

This is all a principle, Mr. Chairman, of development. Good, solid principles are developed with creativity and open mindedness. Our senior citizens and future beneficiaries have great expectations for the Commission. Let's not disappoint them.

Thank you, Mr. Chairman.

Senator BREAUX. Thank you very much, Congressman.

Now I recognize the person who I think everyone should know, who was the Chair when the Congress of the United States passed the Medicare bill in 1965, Congressman John Dingell.

Mr. DINGELL. Thank you, Mr. Chairman.

First of all, my congratulations to our two Chairmen and all the members of this Commission who have a great responsibility and a great challenge and a wonderful opportunity, and the ability to carry out all those responsibilities in the best way possible.

I want to say this is an enormous opportunity for us to see to it that our senior citizens are a part of this. It is a great national treasure and an enormous success. There are other great programs that we do need. We'll make the changes that need to be made and deal with problems that happen to exist.

The basic structure is sound. The basic idea is good. And it is still one of the best programs in the country. I look forward to working with you and my colleagues, Mr. Chairman, to achieve a success in the way the system works, so that it works well into the 21st century with the kind of success that we want to see for it.

Senator BREAUX. Thank you, Congressman Dingell.

Next, we'll hear from Senator Dr. Bill Frist.

Senator FRIST. Thank you, Mr. Chairman.

I too look forward to the challenge that's set before us. It is a daunting challenge but one I thought this Commission could step up to boldly and evolve some constructive suggestions that will take us up to the next century.

As a physician, I've always been taught that the first task is to make a very careful diagnosis and that is the initial charge, I think, to this particular Commission. We need to make sure that the diagnosis that is made is made on a sound understanding of the fundamentals of the science.

Our science isn't quite as sophisticated as we would like, and the policy that's around Medicare. I think it's important for us to distinguish very early on, as we do in medicine, between the symptoms and signs. The symptoms of heart disease being chest pains, and the signs being the pain and what is actually presented, looking at the heart disease, behind the symptoms and signs.

Over the last 3 years in Washington, I've been a little disappointed in that we do pretty well in looking at the symptoms and signs and treating those, but we never go back and treat the disease.

I think the opportunity this Commission has, with the distinguished people around the table, and the thought that they represent with their varied backgrounds, we have the opportunity to go out and make a real diagnosis, not just of the signs, but of the disease, a careful diagnosis of the underlying processes.

Where do we start?

In my own mind, the perspective that I look for is you have to look at costs: Look at the cost of the technology, look at the demographics, but also, if we start with this model, it will carry us a long way, and that is look at the practice of medicine, look at the individual patient, look at the quality for that individual patient. Remember it's their welfare.

We've made it last 30 years in Medicare. It has been the welfare of the patient. That is the view that I at least hope goes into our discussion; what is best for that individual patient or senior citizen who might become a patient.

And to look at the costs, it really boils down to something very simple. At the end, I've had to witness my own practice for over 20 years and my dad's practice over 60 years, and that is today, with great technology and great advances, we can do so much more for an individual patient than we can afford in this society.

There are artificial hearts and people on respirators. We can keep people alive almost indefinitely, not quite indefinitely. We couldn't do that 30 years ago or 40 years ago, or even when we started Medicare in 1960, and today our society simply cannot afford that option.

So our really only option is to do things in new ways with greater efficiency, new ways. We've got to think out of the box, which is we can't do what we tend to do in Washington too much. That is, let's ratchet this down 1 percent, this down a half percent.

We really do need to be thinking of new ways and greater efficiency. People ought to be able to access the very best care that's out there. They want the best. They don't want to say, well, don't put me on a ventilator, don't try the new drug, don't put me on the new technology.

In other countries, maybe not quite so much; in this country, they will.

No. 2, their resources are limited. It comes back to good care, greater efficiency.

We're going to come back to quality. I want to talk about quality today. We talk about it a lot in Washington, but the Commission can hardly cover quality. You have to be very careful in that regard.

On the other hand, we do have to make sure that there's an appropriate linkage and coordination and integration and networking. In the process, quality can be considerably improved over time.

Medicare, what Medicare has before it is that Medicare will lead the rest of the world in health care in this country. That is how important Medicare has become.

Medicare will affect health care delivery to other senior citizens. It's not a time for timidity, it's time for bold reconsideration and I look forward to the task.

Senator BREAUX. Thank you very much, Senator.

Next, we'll hear from Dr. Congressman Greg Ganske.

Dr. GANSKE. Mr. Chairman, I look forward to serving with you and the other distinguished members of this Commission.

We know the problem. Many future recipients and limited resources. But in dealing with this dilemma, I think we need more than green eyeshades. We need to examine some fundamental questions.

What is Medicare's ethical vision?

What ethical vision do we, both as a Commission, and as society, have of Medicare reform?

I think there are several parts to that vision.

First, I think we should acknowledge the individual's fundamental right. Each senior citizen has a right to certain services necessary to promote health, to receive treatment for illness and trauma, to carry on with life when confronted with chronic disease, and to be comforted when dying.

The basic dignity and safeness of each person requires that society enable them to pursue their own purposes in life, but as the saying goes, "without your health, you ain't got nothin".

A second element of any ethical vision must also include a commitment to the community. This vision must be shaped by the realistic understanding of the resources available for health care.

After all, community health depends not just on medical services, but also on education, housing, creating jobs, cleaning up the environment, reducing violent crime.

A third ethical concern we should consider is whether physicians, hospitals, or other providers will have to take on the role of agents of the state in rationing care.

The doctor/patient relationships rests on a series of ethical standards. Providers are expected to be professional, they're expected to adhere to standards, to undergo peer review, but most of all, they are expected to serve as advocates for their patients' needs, not to be governed by insurance policies.

It is in the interest of our citizens that their doctor fight for them and not be, quote, the company doctor.

Part of our ethical challenge is to maintain the integrity of that doctor/patient relationship while, at the same time, living within the constraints of limited resources.

That is not going to be an easy task for us.

Mr. Chairman, I would add that the responsibility for financial solvency is not just our responsibility. All physicians must ask what would happen if every doctor acted for every patient as I am about to act.

Patients and families must ask themselves what would happen if everyone demanded the ultimate in services and resources that I am asking for.

Mr. Chairman, as we consider the economic redirections, the reform proposals, the legislative language, we need to be aware of our ethical obligations.

Let us set aside self interest and seek solutions to improve individual and community health. We will be making some serious decisions and I suggest that we pray for guidance as these decisions will surely have serious consequences for our nation.

I see this Commission as a real opportunity to make Medicare better for its beneficiaries.

Thank you.

Senator BREAUX. Thank you very much, Congressman.

Ms. Gordon?

Ms. GORDON. Thank you, Mr. Chairman, for this opportunity, and I do appreciate the opportunity of serving on this Commission.

I have a lot of confidence that we can do our task and do it well.

I work in Mississippi. I deal with people of every age group with Medicare problems. I've seen their needs, their concerns, their problems.

And from what I've heard already from this Commission, I think that we will be able to look at people in a way that will be very good for these people. I think we need to bring these problems to the table.

Their concerns are deep, and I think we should look at them very, very carefully. These are real people living in the real world, and they have real problems.

And I appreciate this opportunity very much.

And we look forward to working with each and every one of you.

Senator BREAUX. Thank you.

Senator Phil Gramm.

Senator GRAMM. Thank you, Mr. Chairman.

I want to thank the members of the Commission, and I want to say I'm honored to have an opportunity to join each of you.

There are few programs in American government that are cherished more than the Medicare program, and we have the opportunity to help strengthen and preserve that program, not just for our parents, but for our children.

I take this opportunity and obligation very seriously. In Medicare, we have two problems. One is exploding per capita costs. In the last quarter century, Medicare has grown in cost over twice as fast as medical care generally in the country. This is unsustainable, and I think it clearly exists because of the absence in the traditional Medicare system of incentives to control costs and be efficient.

When my mother goes in the hospital, during the first 90 days, she makes no copayment. Yet, on the 90th day, and again on the 160th day, she is charged a massive copayment.

But if she's in the hospital for 90 days, she's so sick, she's incapable of responding to those copayments.

The structured incentives for traditional Medicare, in my opinion, have to be changed. It can't be reasonable that the Department of Veterans' Administration routinely, every day, buys medical equipment for less than half of what the Medicare system pays.

And the reason is obvious to a blind man. The VA has a budget. Medicare has no budget. We never vote on the total amount we spend on it. The Presidents are loathe to make any changes in it because it's not part of the budget.

Clearly, these things have to change.

The second problem we are faced with is a demographic time bomb. We currently have about four workers per retiree. That is going to change over the next 30 years to two workers per retiree.

In the last 30 years, the cost of Medicare has risen 39-fold. We are looking today, in the best of circumstances, at a payroll tax to pay Medicare rising from 2.9 percent of all wages to 14 percent of all wages.

I don't believe we can allow that to happen and still maintain the kind of life for working Americans that we want. I think we've got to change the system structurally, and we have to find a way to let workers make real investments or have investments made on their behalf in their working years, to help defray the costs of their Medicare benefits.

I want to say something about the issue that you mentioned in your opening statement, Mr. Chairman. And that is we find ourselves in an unusual situation in that we have a Congressional and Presidential mandate to review the system and make recommendations to maintain and strengthen it, and yet at the same time, the President has proposed a most dramatic proposal to expand Medicare.

I believe that this Commission needs to take a stand that looking at expanding Medicare to the non-elderly, non-disabled is an issue that should be part of our deliberations.

In our statutory mandate establishing this Commission, it mentions make recommendations nine times. One of the recommendations we need to give to this Congress is, don't expand Medicare to the non-elderly without giving us an opportunity to look at the current program, much less massive expansions.

Additionally, the Congress is looking at cutting Medicare this year in this budget to fund other programs. When the system is going bankrupt, I don't think that's a thing that we need to do.

So I want to first thank you, Mr. Chairman, for your leadership. I think you have established great credibility for yourself and the Commission by being willing to take a stand on this Medicare expansion.

I would like to see the Commission reward your stand, and I thank you for your leadership.

Senator BREAUX. Thank you, Senator.

Mr. Howard?

Mr. HOWARD. Thank you very much, Mr. Chairman. It's an honor and a privilege, and I'm humbled by the opportunity to work with you on a program that affects the lives of so many Americans.

My hope is very simple. My hope is that we come up with a series of steps to strengthen Medicare against insolvency for the beneficiaries, but that we further improve the opportunities for them to select from a variety of plans, just like the federal program.

That's one of the goals I had in mind this year, as you know. And I'm going to ask us to explore some other systems that we have in this country which do not lead to waste, fraud, and abuse.

And we'll take what can apply from these systems and apply them to Medicare.

I'm honored to serve, and honored with the opportunity to work with the people on the Commission.

Senator BREAUX. Thank you.

Senator Bob Kerrey?

Senator KERREY. Thank you, Senator.

Senator BREAUX. I think Bob has a movie he wants to show us.

Senator KERREY. Let me associate myself with the views of the Chairman and Vice Chairman as well, that show us both the systems of the health care and the human dimension of health care, especially for people over the age of 65.

What I'm going to do, though, is put on the green eyeshade and talk about something I hope that we'll address and we can identify what the problems are.

I think unless we solve the problem which I'm going to identify right now, it's going to be very difficult for us to claim any kind of success.

This 20-year problem, when the baby boomers were born, is the 2010 to 2030 problem. We all know we look great in the short term. The 10-year budget window looks different from the 30-year budget window. And what we'll see is the crowding out by entitlements of discretionary spending. [Slide.]

It's not caused by secular humanists, it's not caused by Ronald Reagan. The problem is the baby boom generation born from 1945 to 1955 followed by the baby bust generation. There were 5 million new workers to support 22 million new retirees. That is a fundamental problem.

Some have argued for all sorts of creative solutions to that, but that's the fundamental problem we're facing in 2010 to 2030. [Slide.]

You see a 10-year budget when everything looks pretty good. The Census Bureau of Statistics for over the age of 65 gradually 34 million in 1998, 36, 39.4, 2010, but 2010, this is what happens. It's a huge change in demographics.

And it will alter permanently our capacity to afford, under current employment, mandatory programs. [Slide.]

This is another way of showing it. [Slide.]

We look at 10-year budget windows, not at 30-year budget windows. [Slide.]

It's very much like being on the Titanic and not giving binoculars to the crew. That's what we're facing right now in Congress.

I appreciate those of you very much in the private sector who are here. We're dealing with a budget wall, but right now we cannot see the iceberg ahead. [Slide.]

What does this mean? What does this demographic change mean? [Slide.]

Here's what it means. It means mandatory spending is consuming a growing percentage of our budget, crowding out resources that would otherwise be available for investing in our future. [Slide.]

We're shifting away from investments into spending on the entitlement side. We're shrinking the federal government down to becoming essentially an ATM machine. [Laughter.]

That's what's happening. [Film shown.]

Senator KERREY. He was able to do that. He was able to talk about doing that kind of thing because in 1963, 30 percent of the budget was mandatory. Seventy percent was available to Congress and the President for discretionary spending.

Now some have argued that has it altered this? Yes. In 1963 it was 30; in 1977, it was 45 to 55; 1983 it's 56 percent; 1993, 61 percent; 1998, it's 68 percent. And the CBO is saving it's going to be 74 percent in 2008.

I don't know how it's going to grow that slow. But that's the current forecast.

When you have 74 percent mandatory in 2008, it's hard to be able to deal with the generation who's going to retire. [Slide.]

Now the redline of our entitlement program, Social Security, Medicare, Medicaid programs, it's these big mandatory programs that are all in red.

The yellow is in interest. That assumes we pay down the debt. We may not do that.

And the rest of it in light blue is discretionary spending. Again, 2010, things look relatively good, but from 2010 to 2030, before the baby boomers have completely retired, the green line represents the amount of income that we've taken from the GDB to spend on general programs every year except during World War II, when it went over 20 percent.

There's a reason for that.

I don't support Constitutional changes, but I do support keeping in line at about 20 percent, and I have seen a lot of people raising their hands these days to push beyond that.

What's happening is that if you look at 74 percent of the budget and 26 percent discretionary, it's $115 billion in the current year. [Slide.]

I don't believe anybody can come up with a list, just to give you an opportunity to experiment, I'm going to go rapidly through this.

It either can become all mandatory or the growth of mandatory spending is going to force taxes to an unacceptable level.

Those are the two choices that are going on out there.

Again, one of the things that we ought to be thinking about is turning our country back into an endowment society away from an entitlement society. [Slide.]

Why should this Medicare Commission address Social Security? I also think we need to think about Social Security.

Why? A couple of reasons.

One, personally, Medicare beneficiaries see Social Security and Medicare as the same--pardon me--as two sides of the same coin as far as the beneficiary is concerned.

But in addition to two sides of the same coin, we know that there's a connection between wealth and the need for entitlements, because there's broad support for an income test on Medicare Part B.

Seventy-seven percent of Americans who identify themselves as Democrats support putting an income test on Part B. They say, by the way, specifically over $75,000. Why? Because they recognize that association pretty well between wealth and capacity to be able to pay your own bills without the aid of the Federal Government. [Slide.]

You can see in terms what happens to Social Security beneficiaries. Sixty percent depend on Social Security for part of their income; 90 percent, 50 percent, another 36 and I'm going very rapidly here. All this would make the case that without Social Security, we'd have a significant percentage of Americans who would be living in poverty.

But if you flip that around and say, imagine converting Social Security to something that will enable people to acquire wealth and not eat budget entitlements--[Slide.]

One of the things I believe long-term is the answer to our problem. Thinking out of the box, thinking of helping Americans long-term acquire their wealth so they don't need budget entitlement as much.

I put a number of proposals, all funded by the way, on payroll tax deductions, that would enable people over the course of their working lives to acquire in excess of a million dollars, even if they only make minimum wage, so these individuals long term will not need that entitlement as much.

Anyway, I appreciate your allowing me to come forward on that. I've reached my own conclusions about what can be done with it, but more importantly than anything, we need to identify I think this long-term budget problem, and it's not very long-term. Twelve years is not very far away.

And even in the short-term, discretionary spending is going to be very substantially squeezed unless we make changes.

Senator BREAUX. Thank you.

It's very disturbing but very necessary to consider.

Next, we'll hear from Senator Rockefeller, the former Chairman of the Medicare Commission and the Chairman of the National Commission on Children.

We're anxious to hear your thoughts.

Senator ROCKEFELLER. Thank you, Mr. Chairman, very much.

I thank all of our leaders.

And I want to start out by saying that I very much share in the optimism that I think has been expressed around the table, that this will be a successful Commission as indeed it needs to be.

What Medicare does generally in health care is generally followed 2 or 3 years later by the private health care system, so what we do on this Commission is probably what ought to be happening.

On the other hand, we're going to have to be persuasive with Congress.

Now I want to say one or two things. There's been a lot of talk around the table about non-partisanship, and I absolutely would agree with that.

I don't think being non-partisan is the problem. I think the problem is that all of us, and those in the Congress who are elected, and those from outside the Congress who have written a great deal and thought a great deal are, in a sense, attached to the views they've written. That's obviously the way they feel about it.

But we're all a product in a sense of who it is we represent and what our thought patterns have been, and how it is we in Congress approach the Commission. We have strong views.

There's no one around the table who doesn't have strong views. I think it's a strong views problem. And it's one that we're going to have to find a way to reconcile obviously.

I'll just give you an example.

I represent a State, but on the other hand, I'm also a United States Senator. The average senior in Mississippi and Louisiana has about $10,700 of annual income of which they pay 21 percent for health care.

That's point 1.

Point 2, I've heard much more unanimity than I was prepared to hear around the table about the need for quality.

I listened very closely to our two physicians, Dr. Frist and Dr. Ganske, and they feel very strongly about that. And I need to say that I do too.

This is not just a problem of how this will work out financially but how it's going to work out so that we can keep our traditional concern for the patient and the quality of care that that patient needs.

Long term, Medicare and technology does all kinds of things very different and what it's going to be like in the year 2030, Heaven only knows.

Is it going to be cheaper, is it going to be more expensive?

But I hold those two sets of vistas. One is that we have to find out a way to afford this, one way or another.

And we're also going to have to make sure that our people are really getting good health care.

Let me say one word about process. I really do think process is very important. I'm very pleased that our Chairman has agreed to open up the process a little bit more when they discuss a task force.

And we have a little thing of course saying each member will be a member of one task force.

Well, a task force is very important. And I'm of the view, as Senator Breaux indicated, having chaired four national commissions over a number of years, that the task force should be predated by general discussion within the entire Commission as to what we all feel about the task force, so that the five members, let's say, that may become a member of that task force looking at a radical new structure of the Medicare program, and some suggested they can change here and there, and others have suggested that there's in a sense that the task force is being driven by the Commission, not the Commission by the task force.

I feel very strongly about that because I've always felt that the Commission should be driven by the members and not by the Staff. I think that's terribly important.

And the expertise and the knowledge around this table make that true.

Anyway, a final two thoughts.

One is that it's very, very important to be honest with each other, and it's also very easy to be honest with each other. That's probably the reason why I think and I hope that the Chairman, and I believe the Chairman believes that there should be enough meetings so that we can come to know each other.

Now we do know each other in one sense, but we don't know each other in the sense that really makes a difference for this Commission. That is, to be able to adjust our views in light of information.

There are views that we haven't taken sufficiently into account. Things that you may bring to our attention that the people in Mississippi or elsewhere are thinking about.

That requires time, that requires interaction. That requires a sense of trust which we have to some degree. We are all professionals. We either know each other or we've read each other, but we don't know each other.

And this Commission is about developing broad consensus. So I think it would be terrible to waste such a remarkable group, and I don't think we will.

Having said that, let me also say that I like very much what I believe Chairman Thomas said, and that is that we get the best possible proposal. That should be our aim.

I couldn't quite understand Senator Kerrey's giant penny speech up there, but I think I know what he was saying.

But if you want to go to the--we're not going to go to the moon--but for 70 million seniors, this is of the same dimension except it's a lot more important.

I think we should go to the moon, do the best possible job we possibly can and still reach substantial consensus.

Then, as Chairman Thomas said, let Congress turn to pursuing whatever Congress wishes to do with that, but let us not worry about Congress; let us worry about Medicare and its recipients.

Thank you.

Senator BREAUX. Thank you, Senator Rockefeller.

Congressman Jim McDermott.

I took Senator Rockefeller out of turn because the Senate's supposed to have a vote at 11:00 and I wanted to get all our Senators in.

Congressman?

Mr. MCDERMOTT. Members of the House are used to that. [Laughter.]

Mr. Chairman, members of the Commission, I am very pleased and honored and optimistic to be here. I was raised in Chicago, and was taught to believe that you had to wait til next year.

However, I think we can't wait til next year, and I'm very pleased that we are underway.

We were all asked to fill out a questionnaire about what are the goals the Commission should set for itself.

I thought about the issue quite awhile. We don't want to get bogged down in the minutiae of Medicare.

I really thought I'd talk about some of the four goals, and I decided to speak about those for a second here.

The first of my goals is I believe this Commission has to get outside the Beltway.

If we do everything in this room or in this area, and never engage the public, we will have, I think, not done the best job we can for the people of this country.

If we fail, at least we will have educated the public, and increasingly the public will know what it was that we put together.

The second of my goals is before all things, first do no harm. And the worst thing this Commission could do is harm the Medicare program by eroding the values which were guaranteed to the beneficiaries under the current system.

Beyond those basic goals, I think we cannot be afraid to modernize Medicare. We need to ensure that Medicare has a seamless benefit package which matches the current employer health care benefit packages.

This package should include prescription medications, control of out-of-pocket costs, national cost sharing, hospital care, home health care, and a variety of issues I think ought to be considered beyond the present.

We've got to look at the whole system. In modernizing it, we cannot abandon the concept which holds Medicare together, and that is that it's a social insurance program. Medicare has to remain a program which provides everyone with adequate health care that is affordable.

Medicare must continue to cross-subsidize the rich and poor, healthy and sick. And I think that that can be done. I'm optimistic that we can get this done.

But as I said, it's very needful that we also get the public involved. This Commission will fail, in my view, if we limit the discussion purely to money. A big part of the fight before Congress is about whether or not Medicare is a welfare system.

No. Concentrating our discussion simply on quality, once we've turned it into a struggle between those who want dollars and those who don't, we'll be losing an opportunity if the focus is money.

In conclusion, I would say that this situation has to take a look at how well Medicare managed care programs are taking care of seniors.

Senator Rockefeller brought it up. Senator Frist, Congressman Ganske all talked about quality. It's no secret that whatever this Commission proposes, it's most likely more seniors will wind up in managed care proposals when it's all done.

That's not to say managed care is bad. We in the Pacific Northwest are quite proud of our health care system, and we rely on the managed care more than any other part of the United States.

If you were to take our cost figures in Washington State, we would have no problem because we are 8 percent below the national average, using managed care for 40 years. So it's not anti-managed care but we have to look at the quality.

There are other systems that have not assured both access and quality and I think the quality issues must be addressed in this process.

I look forward to working with all of you on this issue. I am very optimistic. I think the motto of what was it, Apollo 13, failure is not an option, I think that really is where we are in this Commission.

We cannot fail in this Commission, because if we don't do it, the seniors of the future are going to have a very difficult time.

Mr. THOMAS [presiding]. Dr. Tyson.

Ms. TYSON. Thank you very much.

Well, I can at least add my words to those around the table.

That I'm honored to be a member of this Commission.

I'm very honored that the President chose me to represent an effort of the country which I think is very important.

I want to make just a few points: First of all, I believe this Commission has a challenge, but it also has a luxury.

One luxury is, we do have a 1997 agreement, balanced budget agreement, which I believe does do something significant to Medicare. I do not think it is simply a matter of shifting funds from Part A to Part B.

There are various things and there are numerous other reforms which I think have not only changed the way the situation looks over a 10-year period, but actually give us the luxury of learning about some of these reforms.

The second kind of luxury we have is that agreement requires a spirit of bipartisanship, and I think we have inherited that spirit of bipartisanship, and I think we should work with it.

Now, a second point I want to make is a point about services. As an economic forecaster, I am extremely sensitive to issues of uncertainty.

One of the things that I learned over the last several years in my 4 years of government, was the extent to which numbers did not come true. This was particularly important in health care.

If you look at numbers in health care, both private sector cost trends, and public sector cost trends, there were huge surprises, even in a 4-year period.

And we did better in some areas than we thought and we did worse in some areas than we thought.

Indeed, the budgetary surprise outweighed some of the costs savings that we wanted to get from various proposals.

I think it's very important that this Commission, however it proceeds, takes into account the reality of the uncertainty of forecasting.

We all talk about the certainty of the demographic timeline. That is the only certainty we have. And even that is not a certainty in the following respect:

A 65-year-old in the year 2030 is likely to have very different health care issues and health experience and longevity predictions than a 65-year old in the year 2000. So, we are going to have to take into account, the fact that we don't really don't know all of the things we know simply by looking at graphs of changing ages and portions of the population.

The population will not be the same out into the future, not in terms of age demographics, but in terms of health characteristics.

Essential, of course, to uncertainty, is technology. The escalation of costs in the health care system, whether it be in Medicare, Medicaid, or the private health care system, has been driven primarily by cost per capita.

It has not been driven by entitlements. It is not the case that in Medicare that the cost reductions going forward are the cost projections we have seen in the recent past, or even in the past 20 years, which have been primarily driven by the aging of the population.

They have been primarily by increases in the cost per capita of delivering health care, whether that is to the elderly or that is to a young worker, or that is to a title or that is to a middle age worker.

So, we have to think about the issue of what is driving costs per capita and what we can do in the Medicare system when we're dealing with an overall system of health delivery, which has also experienced very dramatic growth.

Finally, another source of uncertainty going forward is the structural change in the system. We have seen a managed care revolution. Frankly, we do not know the long-term consequences of the managed care revolution to the rate of growth of health care spending per capita.

What we know is what has happened over the past few years. That is a very short experience, so we have to be very positive that we are going to have to, as a society, learn from experience over the next 10 years.

That learning is going to have to somehow influence what we do in the year 2030 or 2040 or 2050.

Now, what comes out of my uncertainty is both a realization, but also the sense--one of the main things that we think about here or think about as a society is how to set up the process or mechanism whereby we regularly review how our public health care system, that is, Medicare and Medicaid, is performing relative to our private health care system.

We are one of the only advanced nations that has two separate systems. We have a private system and a public system, and what is to be the standard by which we judge the public system?

Is it going to be the share of GDP, the share of the budget? Is it going to be the share of something else?

I think it should be what impact it has on the overall health care system in which Medicare functions. One of the keys issues for me is going to be to talk about the mechanism whereby we evaluate our public programs against what the society is doing.

A final point concerns the question which has come up over and over again: What is the appropriate share of the resources of a society that should go to health care? What is the share of resources that the budget should devote to health care?

There are no economically meaningful answers to that question. These are, if we think about it--society as rich as ours makes choices and for ethical reasons, for religious reasons, we tend to put on health care spending a higher value than many other societies do.

If you predicted what understanding we would have on health just based on income, we're overspending on health. We're already overspending at least a thousand dollars per person on health relative to a prediction based on income alone.

Well, that is sending a very strong signal that our society values health care services. So, I want to suggest that what we need to think about is efficiency, whether we're getting as much for our health care dollars as we could possibly get, rather than, say, the share of GDP or share of the budget.

Look at efficiency. Could we make the Medicare system more efficient? What can we learn about the private health care system to make Medicare more efficient.

But in doing that, let me emphasize that there is also the issue of efficiency and fairness. There is, I think--in some discussions, these two issues get confused.

What is efficient delivery, and then what is the appropriate way society should fund and transfer and move around these resources so that everyone has access to adequate health care?

Fairness needs to be distinguished from efficiency. This Commission needs to do both.

Let me make two very specific comments: I certainly want to make clear that I believe that Medicare has been a tremendous success. I believe the American health care system has been a tremendous success.

My role here will be to try for it to be even better for the future. It's a quality issue, it is a modernization issue. It is not for me, a green eyeshade issue or a limit.

It is about efficiency, it is about quality. It is about our notions of fairness.

Let me say that, secondly, a small point but an important one is, a number of people have spoken to the issue of the President's proposals for extending Medicare choice to people before they retire at age 65.

I have a couple of things to say to that: No. 1, it is my understanding that this Commission will give advice to the President and the Congress. But we are not advising right now on how to proceed.

So, if the Congress wishes to proceed with this proposal, I would find that not inconsistent with our Commission.

Secondly, I think the Commission should and will evaluate the proposal. The GAOP has evaluated the proposal and has concluded that it is a proposal that essentially pays for itself, or to the extent it doesn't pay for itself, it's no more costly than some of the Medichoice proposals that were included in the balance budget agreement and the PSOs.

So I would say that we should evaluate it, but I don't feel I'm in a position to tell Congress what to do on this, if the Congress decides it's a good proposal. I think Congress should proceed with the proposal. Thank you very much.

Mr. THOMAS. Ms. Steelman?

Ms. STEELMAN. Thank you very much, Mr. Chairman.

I'd like to say I would be proud, certainly, to serve on the same Commission as Mr. Dingell who helped create this program and improved so many people's lives over the last 30 years. It's a real honor.

I would like, however, to express my disappointment at the selection of Bobby Jindal as the Staff Director, because as the youngest member of this Commission, I had fully intended to play the part that every middle aged woman wants to play, and now I won't be able to do that.

I'm looking forward to Bobby to even further broaden the generational expectations of this Commission. As one who was born smack in the middle of the baby boomers, I will try to express the concerns that I hear from many of my peers, and that is to improve the Medicare program in such a way that it will help us to make sure that the quality of health care for future seniors, not just in my generation, will not be compromised by any of the changes we make in the Medicare program.

We tend to forget that Medicare has such an enormous share of health care services, it's not just a great influence on health care, but also the amount of investment that goes into the creation of health care and technology.

Thirdly, I think future taxpayers will not bear any greater burden than the ones we pay today. I think it will require changes in many areas inside the box of Medicare.

I think tax policy--and I agree with Senator Kerrey also, that this will require changes in benefits responsibility of taxpayers and beneficiaries.

Now, I do not think that these changes as an exercise in painful choices. I do not think that these changes are anything to fear.

We live and die very differently than we lived and died when Medicare was first designed in the 1960s. Just in the last decade, we have witnessed unprecedented change in the delivery of health care and the pace and degree of that change will only intensify as science changes Medicare.

I think that I would prefer--but I believe that practical medicine will be rendered virtually unrecognizable in terms of the kinds of changes we'll see with health care patterns as we learn more about how to live longer.

So, I really don't see that these painful choices--I look at this Commission as having an indication of a major promise.

I think we will be remembered for our success in marrying the promise of Medicare to the wealth and freedom of our people, to the needs of all generations, those who will retire today, and those who will be in retirement.

I think it's a really exciting mission for the next year.

Mr. THOMAS. Thank you. Just in case some folks were worried about getting off on the wrong foot, I'll go to Dr. Vladeck and then to Mr. Watson, although we've been alternating side-to-side.

Mr. VLADECK. It has been my pleasure, Mr. Chairman, to have worked with you last year on the Medicare portions of the Balanced Budget Act, and I think you would agree that that was a much more enjoyable process than that which we experienced in 1995 and 1996.

Some of the other members of this Commission have suggested, and I am very hopeful that they are right, that the process and precedent that was established during that period in terms of working together to solve problems and concerns will stand us in good stead for the work of this Commission.

And certainly what everyone has said and done in the last couple of days is consistent with that. Let me, if I might, just say a couple of additional things, perhaps a little more personal in nature.

I had the extraordinary privilege to have had 4 years serving as the Secretary for the Hospital Insurance and Supplemental Medical Insurance Trust Funds, and to sign the Annual Trustees' Reports. And I think it is fair to say that all of the Trustees, as well as the Secretary, took with great seriousness the responsibility inherent in that role, not only for the current beneficiaries, but to all the American taxpayers for those funds.

We took seriously the taxpayers' expectation that part of the contract was a guarantee of high quality health care when they retired or they become disabled. I'm hoping that that same sense of trusteeship and stewardship can infuse the work of this Commission.

In that regard, I would just say two other things: The first is, I do think, as some of my colleagues have suggested, that we have an extraordinary responsibility to take this conversation outside the Beltway, whether we meet ourselves outside the Beltway or not.

As for the logistical implications, I know you and Chairman Breaux have considered that already. The fact of the matter is that in my experience over the last number of months, what the issue is about with the Medicare program, and what the problems are with Medicare, are two different sets of issues, two different sets of problems, depending on whether one sits inside this city or elsewhere in the United States.

We talked today in terms of not just wearing a green eyeshade--I think that's sometimes a euphemism for looking only inside the Beltway on these issues.

Critically, as we work towards our recommendations, we need to convey to the public, not only the issues, but the information that they seem to be asking about.

In that regard, I believe that the single greatest contribution this Commission can make on public policy in this country is to determine what the facts really are, and make those facts as clear and widely understood as possible, make them available more broadly. I must say, I've heard a few statements this morning that are not entirely consistent with what my understanding of the facts on the issue are.

This is not the forum to get into arguments about those issues. I'm not sure that this should ever be the forum to get into arguments on the facts, but it's been my experience that there's a lot of misinformation and mythology floating around about the Medicare program and its relationship to health care costs.

I think that the choice of the Executive Director of the Commission has been an enormous help. We'll be able to utilize the resources so that least we among ourselves can help the public ascertain the facts.

When we come to make recommendations, we will be successful to the extent our findings are based on the facts.

Senator BREAUX. Thank you, Dr. Vladeck. Next we'll hear from Mr. Watson.

Mr. WATSON. I want to emphasize my agreement with the new cochairmen. I believe that the outstanding individuals appointed to this bipartisan commission will insure our success.

As we go forward, there needs to be a recognition that America is not experiencing a managed care revolution. What we are confronting, and for the first time, is a health care revolution.

But as we undergo that health care revolution, there is a significant problem. We do not have a national health care policy. The consequence of that failure is that we have a thousand experiments going in as many directions that are wasteful, costly, and inefficient.

If we look at the Medicare system thoroughly, we will find that there are adequate resources available through mitigation of waste, fraud and abuse to address many of the basic concerns.

That is not to suggest we will not encounter difficulties. The medical societies, hospital associations, and the health insurance companies will always find reasons to retain the status quo.

We have to restructure Medicare, and there can be no sacred cows. It is worth considering that at the end of the day, when we complete our work, any great nation, any great society, is judged by the way it treats it elders.

Senator BREAUX. Thank you, Mr. Watson, and I thank all the Commission members for their opening comments. I think they were very helpful.

The next item on our agenda is the adoption of the Rules of the Commission. The Rules of the Commission are very straightforward.

They have been drafted and taken from the models that we used for previous commissions that were started by the Congress, including the President of the Commission, and the title of the Commission, which Senator Kerrey has cochaired, and the IRS Restructuring also that Senator Kerrey also chaired.

Many of you, Senator Rockefeller and others, have severed on the previous commissions. They're basically adopted from previous commissions as far as the conduct and operations of the commissions.

I would suggest they're pretty straightforward in how the meetings are to be held. We are required, as you all know, to report anything. We have an 11-vote majority, instead of just a simple majority.

Also, we're talking in terms of having our meetings and hearings published in the Federal Register before any Commission meeting. There is no concept here of majority or minority parties here. We're going to try and have everybody on this Commission in alphabetical order.

Mr. THOMAS. Mr. Chairman, I indicated to the Vs and Ws at the end of the table that the next meeting will be in reverse alphabetical order.

Senator BREAUX. The Commission report, again, I mentioned that you need 11 members, and you have to have 11 members in order to pass and adopt an amendment to any pending measure.

Amendments would also be subject to amendments, but a second-degree amendment would not be amendable under the proposed rules, which are taken directly from previous commissions. Those may be by voice vote or recorded vote.

Anybody can ask for that vote. We can have a recorded vote.

Does anybody have any comment on the proposed rules?

Dr. Vladeck?

Mr. VLADECK. Mr. Chairman, I'd like to raise a question based on my experience in another setting.

I had the experience a number of years ago of chairing a committee for the Institute of Medicine, in which what began as a minority report was not permitted to be published in conjunction with the Commission report.

Two things ensued from that: One is, as a result of the decision by the National Academy of Sciences not to have a minority report, the minority report became the majority report.

Second, it was published outside the auspices of the National Academy and received substantially more attention than the report itself.

This document does not contemplate minority views or supplemental views. I very much hope this is a hypothetical discussion and an entirely theoretical one, but it may be easier for us to reach consensus on important recommendations if individual members feel they have a safety valve.

Senator BREAUX. I won't let that happen.

That's the intent of the Chair. I think our cochair would agree on that.

As I mentioned, this does not prohibit that.

Mr. MCDERMOTT. Mr. Chairman, if you would yield, I think the word he's having trouble with on page 2 is "of only those recommendations approved by 11." If you struck the word, "only," you would allow, if, unfortunately, we come to that point, at least we'd have the ability to have some minority reports.

Mr. THOMAS. The only problem I would have is the underlying statute, which requires us to make recommendations, and we would only make those recommendations that reach 11 votes.

If you structure it in a way that minority reports are contained with the recommendations when they go to Congress, then we've got a problem with the underlying statute, because we can only report recommendations that have 11 votes.

I think what we are trying to say, in fact, I hope, as Senator Kerrey indicated, we want to talk about Social Security, we want to talk about a lot of other things, but we may be making suggestions for any other term other than recommendation that may not be 11 votes, that we would want to move forward with as suggestions for change.

But I do think that the term, recommendations, if we're required to provide 11 votes to make a recommendation to Congress, would be a problem, if you amend it to say that you put in a minority vote.

That's not to say we shouldn't be able to make minority reports in any way. But there are views that we couldn't achieve 11 votes on, but to attach them to a recommendation which is a statutory requirement doesn't work.

Senator BREAUX. I think Congressman Thomas is technically correct on that. I think his explanation should be satisfactory in the sense that we are required by statute to have 11 votes to make a recommendation to the Congress.

But that does not prohibit a minority, assuming that we have 11 to six votes, that the six would not be able to have their views heard and have their views published, but that could not go to the Congress as an official report.

Senator KERREY. Mr. Chairman, I think it's a fairly important distinction here. The language here says that the Commission's reports shall contain only those recommendations approved.

You're going to want to attach an addendum with comments, and all sorts of other things besides just those things that were approved.

You'll have the report recommendations of the Commission, and then you'll have additional things in the report besides the recommendations of the Commission.

But I do think what Congressman McDermott raised was a good point. It would otherwise restrict what you could produce in the report.

Mr. MCDERMOTT. The language in the law says a detailed--the Commission report shall contain a detailed statement of only those recommendations concluded by the Commission. I doesn't say you can have minority reports that are not detailed.

I mean, I think it's a very tight reading to say that you only put----

Senator BREAUX. Since we're not ready to make those recommendations at this meeting, why don't we ask the Staff to come back and take those considerations----

I happen to agree with what has been said. It should not necessarily be in the final report. I would hope that it would necessarily in reality--it should be available to anybody--and accept that for approval at the next meeting by the Commission.

Mr. DINGELL. I think you're hitting a very important point. I think that for the recommendations of the Commission to be valuable, they obviously have to conform to the majority.

In my opinion, you're going to have some matters that will be discussed by members who are not in the majority, minority views, supplemental views, comments.

I think----

Mr. THOMAS. I think we're dealing with some words of art here, John, in terms of reports and recommendations. Clearly we want as much information generated by this Commission, even if it's one position to be disseminated, because we're going to look at a number of issues.

I think it's a question of report recommendations, and we will fine-tune that so that there is a comfort level. Clearly, positions that are generated will be part of the understanding of the Commission's thinking in that process.

Senator BREAUX. It can be published and disseminated. We will come back at the next meeting with some language, hopefully which will address this.

Mr. GANSKE. Mr. Chairman, I'd like to address, on page 3, under Commission Recommendations--I understand that the statute by Congress says that the recommendations have to be by 11 members, but I don't think it specifically goes on to say that amendments to draft recommendations have to pass by 11.

Senator BREAUX. Any discussion on any other parts?

Mr. MCDERMOTT. There was one other question here. I don't expect this will ever happen, knowing you and Mr. Thomas's experience, but it does say here in the next line that in order to offer an amendment, a Commission member must be recognized by the Chairman.

I've never seen that kind of language in any rules in any committee I've ever served on. I'm not quite sure----

If Mr. Watson wants to offer an amendment, why would he have to be--I know that technically the Chairman has to indicate, but, you know, you have to have a blind eye.

Senator BREAUX. It's a good point. I would assure anybody at this point right now in public, that if anyone has an amendment, they will be recognized to offer it. I'll give that assurance up front.

Mr. THOMAS. Since the language says one of the Chairmen, I'm available for anyone he doesn't recognize with his bad eye. [Laughter.]

Senator BREAUX. With that assurance on the record, we will so state.

Senator GRAMM. Mr. Chairman, let me just say that I think we want to have rules that everybody can feel comfortable with. I think we need to be sure to try to satisfy everybody's concern about minority reports and those kinds of issues.

But we must stick with the law. The law is very clear. It says only those recommendations, findings and conclusions of the Commission that receive approval of at least 11 members of the Commission.

Now, what that says to me is that Congress didn't intend this to be a debating society. We have plenty of minority views on saving Medicare, which is why we have no program.

The real question is, do we have a majority view? Will 11 members, in the end, agree? I think that's the view we care about.

If we do have 11 members, that is the recommendation that we're going to make to Congress. We have free speech, and if someone has other views, they have all kind of other opportunities to say it.

I just want to be careful that we don't structure ourselves into a kind of meaningless debating society where we all break up into these small cliques and each write our own minority report, and in the end, we're back where we started before Congress established the Commission.

Senator BREAUX. Obviously we want everybody's views to be heard, both during the meetings as well as after the Commission debates. After deliberation, there can only be one report that will go to Congress, and that report will be one that requires 11 votes of our own members to agree to it.

That is not to say, however, that there are not other views on the Commission which people can express, put in writing, but they will not be an official report that will go to Congress.

The only thing that will be in the official report of the Commission will be a report that gathers 11 votes. Other views are going to be expressed, and they can be expressed in writing.

They obviously are free to do so, and no one should discourage that. But you're correct that the only thing Congress can receive from us is subject to 11 votes.

Further discussion on the rules?

Mr. DINGELL. I'm not trying to convert this into a debating society. I'm not trying to have us be in a position where the minority cannot--I'm trying to understand the rule.

That is, will people who do not agree with the majority, have an opportunity to present their views as part of the report?

Senator BREAUX. Let me read the statute and let me see if we can't follow what we're under. I'm just trying to make sure that the rules apply.

In the statute of Congress it says that the Commission shall submit a report to the President and Congress which shall contain a detailed statement of only those recommendations, findings, and conclusions of the Commission that receive the approval of at least 11 members of the Commission.

I think we could argue about the wisdom of Congress doing that, but that isn't what the statute says we have to comply with. It says only those recommendations that get 11 votes can be submitted to the Congress and to the President.

Now, what I suggested is that people who are not at that level, should that occur, should be able to express their views, express them in writing, et cetera, et cetera. But according to the statute, unless that's what we intended, the only thing they can go to, if the President and Congress has a report, is something that receives 11 votes.

And I don't know how they change that, other than to say that anybody who has a minority--and, gosh, I may be part of that--will be able to so state, will be able to put it in writing, will be able to discuss it and argue.

But under the statute, as I read it, it cannot be submitted as a report to the President or Congress.

Ms. TYSON. This is the sort of thing I had not thought much about before, but I think there is something in the wording. It's a worst-case scenario. If there would be----

The thing I'm grappling with here is, suppose that in the worst-case scenario, there really was what would be the equivalent of a minority report. If it said the only report of the Commission must be the majority report, does that really preclude a minority getting together and writing its own report and submitting it under basically a different name, a minority group?

Senator BREAUX. Of course not. I think that would be the flexibility that we'd all have.

Ms. TYSON. I think that's important. The way the law is written, it may require that, but when you're under that rein, the two things it does is, No. 1, it may lead people not to be willing to be part of the 11 because they really can't get their views expressed effectively.

Two, it may lead to a group saying, well, this is our report, it's separate, and we're taking it separate. We're the minority.

Senator BREAUX. It does give us a great deal of flexibility. If it's a group that doesn't represent the 11, and wants to do a report, I don't think there's anything that anyone should try to do to stop that, or anything to discourage it.

The question is, under the statute, the only thing that can be officially reported would be something that has 11 votes.

So, John?

Mr. DINGELL. You always have minority views within the report of the committee when the report is filed. It's my understanding that if there is a minority view and somebody wants to express it, that will not be treated as a minority view?

Senator BREAUX. My own interpretation is--I hear what you're saying, but that would be the normal way committees operate and, I think, most commissions operate, except the statute that created us doesn't say that.

The statute says the Commission shall submit a report to the President and to the Congress containing only those recommendations that get 11 votes.

Mr. MCDERMOTT. In the rules here it says that it's anticipated that Commission hearings will be open to the public, except two or more Commissioners may meet solely to gather information.

Does that mean that Mr. Howard and I can go to Tennessee and have a meeting of Medicare commissioners and receive information?

Senator BREAUX. I think that the original idea behind that was to allow the task forces to conduct their work and have meetings and receive information, and the task forces would not necessarily have to be public meetings.

The operation of the task force would allow other functions as a task force and not to have to have a full-blown Commission meeting.

Mr. MCDERMOTT. That's when you could receive information in closed settings, but does it include--do these rules preclude, in your reading of them, that we would go to Nashville and have a meeting and, say, Commissioner from the Bipartisan Commission are here in Nashville--close the door to everybody, once you come in.

Senator BREAUX. My initial reaction would be that members who want to gather information on their own are certainly encouraged to do so.

Mr. THOMAS. The rules are silent on that. I'm still wrestling with the comments that were made initially because I sensed disagreement about how we should go around talking to people. I apologize to the members of the Commission who are not members of the House or the Senate, especially the House, because we do compose a portion of this Commission.

You folks will be denied the ability to do things that normal Americans do because we're denied in terms of utilizing the resources out in the system.

There's a lot of ways, teleconferencing and other ways, we could do it technologically. There will be ways, and I'm asking the appropriate committees, lawyers and others, what it is that we are going to be able to do to utilize resources to allow us to go out in the country.

I don't think anything in here precludes those who wish to come together for particular interests and go to particular places. The only sensitivity, obviously, is, as you would understand, using the name of the Commission in a way that was not supported by the Commission. So it would be more just an administrative informational clearance structure, but, yes, I think that's one of the things we can do, not just task forces, but individuals who have interests and are able to get information.

Our job is to be as outwardly-directed as possible within the budget constraints that we're dealing with. All of us understand that the basic funding of this Commission actually is based on trust funds.

Mr. MCDERMOTT. The reason I asked the question is, in reading the agenda, how else could we meet outside the Beltway?

Senator Gramm comes to Seattle and he and I sit on the dais and listen to what people say. Could we say that we were two members of the Bipartisan Commission?

Mr. THOMAS. We'll give you one additional meeting.

Now, obviously, if that occurs, we would want to do that, but I guess what I'm saying is, if you do it, it would be nice to feed it back through so that everyone knows what it is in kind of a structured way.

It's a question of freelancing. In the spirit of cooperation and communication, we would encourage that, but that same encouragement includes getting back so we know what's happening.

Senator GRAMM. Mr. Chairman, I don't know how deeply we want to go into this here, but it seems to me that having field hearings with a subset of the Commission, is a good idea.

But I think that we should have a vote of the full Commission before we do it. We don't want to be in a situation where we have individuals going out and holding hearings of some self-chosen subgroup.

I think if you had two or three members who wanted to do it, that we would approve of it. But I think you need to reserve for the Commission, the right to say when hearings are going to be held and whether or not any of these are going to entail some costs.

Senator BREAUX. That's a good point. Obviously it's going to have to be subject to approval by the full Commission. We certainly do not want to discourage anybody from gathering that information and making themselves as well informed as possible, but I think it would be appropriate to hold field hearings.

I mean, they're Commission hearings. They should be approved by the Commission.

I think it is an opportunity for some really innovative telecommunication type of hearings and bringing people to the Commission from other states through television and telecommunications.

We're going to explore that idea. Any other discussion?

Senator Rockefeller?

Senator ROCKEFELLER. It has been reflected in my comments at the beginning, but also I thought in some conversation that has taken place in the past 24 hours, that there would be more than just the possibility of having hearings.

I just want to make sure that when I vote on the rule, that I think the six meetings would really be four substantive meetings, which I think is wholly insufficient, that we do have that.

Senator BREAUX. The rules--we will discuss that when we talk about the task forces.

Anybody else?

Mr. DINGELL. On this question of field hearings, I assume that we have an understanding that this will be done with the approval of the Commission.

Senator BREAUX. The Congressman is correct.

Mr. DINGELL. What about the records, transcripts, and so forth with regard to the Commission and with regard to any field hearings?

Mr. THOMAS. Those would obviously be part of the discussion. The question is, where are you going? It would be part of a function of how large the subgroup wanted to do it.

As you know, the resource has to be--to formally transcribe information, that would be relatively costly, but if you're talking merely about the collection of data, we want to--as much support as we can. We're begging and borrowing and stealing a number of staffers, and we're getting resources from other areas as well.

But all of those questions would be dealt with in the context, not of a hypothetical discussion, but with whatever specific example was given to us. But we'd do everything we could to support that necessary background support, to make these successful and appropriate to transmit information.

But having done this so often, that's exactly one of the problems. There are too many of them in too many places, not being able to be supported adequately.

Mr. DINGELL. Just one more question: It says here that--above the language you were talking about, it says that for purposes of cost-related training--I'm still trying to find out what will happen if we get one or two--if some of my colleagues decided they wanted to submit a minority view, could they?

Mr. THOMAS. If they were minority views, obviously they would be presented to the Commission, and it would be recorded in the Commission's proceedings. They'd be disseminated and published in a number of different ways.

But what we're dealing with is the statute that says the Commission report and recommendations included, and that then precludes the inclusion of a minority report as part of the total process.

If your concern is who is going to print the, the Commission proceedings are certainly going to be printed, and any minority positions would be part of the Commission proceedings.

How, where, and whether or not it's in one volume or two, or three, or five, are obviously discussions----

Senator BREAUX. The Commission would have a minority report, but what we have to send to Congress----

Mr. MCDERMOTT. Mr. Chairman, could I just follow up on that point of the public record question? I don't see a reporter here, so I assume there is no notes being take about this meeting, who is doing that?

Mr. THOMAS. We have the long suffering staffer trying to understand what we're saying, and make an accurate----

Mr. MCDERMOTT. So, will these all be published, what is said around the table? Is that what will be published, or will it be some extract.

Senator BREAUX. You're talking about the report that goes to Congress?

Mr. MCDERMOTT. Or available to somebody in the public.

Senator BREAUX. As in normal hearings, we will record everything that goes on in the hearing, and the report will be submitted to the Congress.

Any other discussion.

Mr. THOMAS. I'm sure you'll get a videotape copy from CSPAN. [Laughter.]

Senator BREAUX. There are a lot of recordings, I'm sure.

Any other discussion?

Mr. DINGELL. I assume that if a subcommittee goes off on assignment, that it's an open process?

Senator BREAUX. The intent in the rules is that all meeting will be open meetings. That is not to say that there will not be opportunities for private discussions about members, which I happen to think is a vitally important forum for operations.

But any official business to be transacted, obviously will be open to the public.

Further discussion? [No response.]

All in favor please say aye. [Chorus of ayes.]

Opposed? [No response.]

The rules are adopted.

The next area that we have to discuss is the question of task forces. The intent of the Chair and the Commission is that the task forces be responsible for gathering facts and generating policy options, and presenting a range of options to the full Commission.

The intent here is that the task force will not make final decisions. They will not be able to implement recommendations in and of themselves. They will present recommendations to the full Commission.

The Commission will debate those recommendations and take action on those recommendations, as well as other suggestions as well.

The Commission should direct and guide the work of the task force. That is the intent, not the other way around. The task force will not drive the Commission; the Commission hopefully will receive recommendations and make appropriate decisions.

We have suggested, and you have in your packet a one-sheet page on suggested task force preferences.

The first, as I stated, would be a modeling task force which will analyze Medicare's place in the overall health care system, the economy, the program's past and current success, challenges and impacts of changing certain assumptions, external health care system.

The modeling task force will define the problem and then help the Commission members educate the public about the issues. The focus will be on presenting a range of data from existing, credible sources, rather than making controversial assumptions.

The second task force is what we would call a reform task force, which would review options to strengthen the current Medicare program and prepare for future changes.

The program has obviously has many successes in the past, which people mentioned in their opening comments.

The next task force will organize its work around four topics: Eligibility, benefits structure, and finance and cost.

The third suggested task force would be one that would deal with fundamental restructuring to approach Medicare, a blank sheet of paper concept.

Health care, obviously, has changed dramatically since 1965 when it was created. And it may be useful to review and consider a few options and new ways of delivering adequate quality health care to the seniors in our country.

This task force will also organize its work around four topics: Disability benefits, structure, financing, and cost.

There have been suggestions that there may be an additional task force or more that may be necessary in order to make the work of the Commission more functional. We are open to that.

There is also a suggestion from one of our Commission members that we need to look particularly into graduate medical education as a task force, potentially. That's something that may need discussion.

I have talked with a number of Commissioners and also with Chairman Bill Thomas about the prospect of having an April meeting for the Commission which would, in fact, bring in experts who would be of help to the task force, and set up their agenda and how they would be able to operate.

The suggestion is that in April, in order to keep the continuity of the Commission, we would come in as a Commission and receive expert testimony on the problems facing Medicare, as well as the successes of Medicare, and talk about where the successes are and where the problems are.

It has been suggested that that would be very helpful to the task force, to the direction of the Commission as to what the task force should be involved in.

I think that's something we need to discuss as well, so I would very much like us to consider which task force you would like to be on. We will not appoint task forces today, but if you see the one you'd like to serve on, we're going to try to set up these task forces to be as balanced as we can possibly make them.

It's important to note that any member of the Commission, any staff person, should be able to participate in task force discussions, even though you're not on the task force, and make recommendations.

The task force is only going to recommend to the Commission, so everybody should feel available to participate. The idea is that these are task forces that will be going on for some time, so that everybody's on the task force.

I mean, that's the concept. It's just a suggestion that is before the Commission at this time.

Chairman Thomas, any comments?

Mr. THOMAS. The only comment I would make is, if there is a very particular one, in terms of all the staff and all the Commissioners participating, obviously if the Commissioners have staff that want to participate, it would be at the table with the Commissioners on some issues.

Senator BREAUX. Any discussion?

Senator ROCKEFELLER. I think the matter of the task forces is extremely important. When you go down, for example--we came up with a list of 11 different fundamental areas. To me, those will all be regular task forces, but if one were saying that a Commissioner can only belong to one task force, and that the task forces shall meet concurrently, that, No. 1, puts such a tremendous responsibility on the two Chairs to make sure they are balanced because people will not be----

For example, it might very well be that somebody is not as interested, let's say, in fundamental restructuring of the task force, because they think doing a whole new concept of Medicare would be impractical.

On the other hand, it's a very interesting proposal. All I'm saying is, maybe, just so we're allowed to be on two task forces, and that we work out, as most of you consider this, that not everything will be structured, literally, concurrently so as to include anybody that can participate in more than 20 percent.

Senator BREAUX. Why don't we get Bob to comment on that.

The task forces, by the way, would have a time deadline on them, 90 days to report to the full Commission.

Mr. JINDAL. The Senator is right. The task forces should never have concurrent meetings. The view on concurrency was that you wouldn't have the task force wait 6 months, but some of the topics are going to be somewhat sequential. You shouldn't have to wait for one task force to be done to start work on the next, but we will also prevent task forces from meeting at the same time.

Before we as a group, the Commission as a group, defines an individual problem--one suggestion is that the full Commission should agree to the work plans of the task force before they start, so that there would be direction from the full Commission.

So even though a member could attend other task force meetings, he or she will be sure that he or she knows exactly what's happening.

Senator BREAUX. Senator Kerrey?

Senator KERREY. It seems to me that what you've done is try to answer the question of how we're going to submit this--you mean, 30 days from now, come back and say that these task forces aren't working? I don't know.

In order for them to work in some meaningful way, we won't know. This discussion could go all the way into detailed rules for task forces, who votes, who doesn't vote. That really is up to us. What we've got to do is work. We've work in creative ways to reach agreement on things where we can reach agreement.

So, I think, to make a good faith effort, I think the suggestions of Senator Rockefeller are good as well. We need to stay open to whatever it is.

Senator BREAUX. Congressman?

Mr. THOMAS. Chairman Breaux started by saying it was a living structure and it will evolve. I'm especially interested--as we structure this, in the process of structuring this, I think it will point out some areas where we can get--I'm thinking again, like graduate education, where that would be a spinoff, and a decision made that may or may not elevate to a task force.

If other issues pop up, there's no reason why we can't evolutionarily restructure what we're doing, as long as we go back. The idea of an April meeting, where we think this goes a second time, is a good one, so that we have a reaffirmation of the Commission as we move forward in this.

Senator BREAUX. One other quick point: The task force is not to recommend to the Commission, a final verdict or one verdict. If the members of that Commission have different ideas, that should come through, and a report of the task force will be received.

We're not saying that the task force has to have a structural role, and they can only report the--we'll leave it to the Commission to make a decision.

Senator GRAMM. Mr. Chairman, it's my understanding that the full committee meeting, the next full committee meeting will be a hearing where we're going to hear from witnesses. I'm Chairman of the Health Subcommittee on Finance, and I've held a number of hearings on Medicare.

I just want to comment that I don't think we need lecturing about the Medicare system. I know in my own meetings, I felt we needed a little bit of such commentary.

But I think we're wasting our time in doing that here. I had people appearing before my Subcommittee, and basically when you go through all these terrible numbers that Senator Kerrey went through, their basic reaction was, how dare you talk that way about Medicare? Don't you know what a great program this is?

I want to urge you that who we need to hear from is people who have ideas about how to solve the problem, not people who are just going to tell us that this is a great program. We all agree with that.

Senator BREAUX. We want to hear from both sides, and we want to hear from every side. Hopefully we'll be able to do that in the April meeting.

The idea here is to come up with really a work plan for the task forces following that April meeting.

Mr. THOMAS. Just 30 seconds on that. Back to Bruce Vladeck's discussion about one of the reasons we moved so successfully in the first session of the 105th was, in part, because we began to talk to each other and bring in experts as we're talking about doing, who could assist us in framing the discussion in a realistic way.

I think that's more what we're talking about, not to lecture about how good the program is, but to allow a significant interaction with members of the Commission and people who have looked at this, both in terms of what's good and what hasn't been so good, and where there might be suggested changes.

Not that we don't all possess that same ability, but as provocateurs as much as people telling us the way to work this.

Ms. STEELMAN. I'd like to echo Senator Kerrey's comments. I think he did a very good job of giving us some options.

So, I think this is a great place to start, and I just kind of go to the next step. Do you need a motion?

Senator BREAUX. Thank you very much. I think we've had a good discussion on how these will be structured and what we'll be doing in April.

I would receive a motion to adopt the task force structure.

VOICES. Second.

Senator BREAUX. All in favor, say aye. [Chorus of ayes.]

Those opposed, no. [No response.]

The ayes have it. This will be the structure we will be dealing with.

Mr. GANSKE. I have just a point of clarification. Let's say one of the members would like some additional information on what's going on in the task force? Is there any problem with him showing up?

Senator BREAUX. A good point. Every member will get the work file of every--there will be shared availability with every member who will be on that task force.

Any further discussion? [No response.]

If not, at the next meeting, No. 1, please fill this out. This is very, very important. I want to receive your preferences, and we will work with you and your staff to decide the form they will take at the next meeting.

I understand the Medicare Commission is supposed to have this available in April in time for our next meeting.

Mr. HOWARD. Mr. Chairman, I'd like to get some other data, how many people are on Subcommittees, a 1-page profile of these.

Senator BREAUX. Lots of luck.

Mr. THOMAS. A good point. Anyone--and, obviously to get those materials, those questions, the desire to structure, we would utilize whatever resources we have and provide it to you in the form that makes sense to you, and then circulate it to everyone else so we can see what other people are thinking.

We have a lot resources, not just the Congressional Research Service, but the Congressional Budget Office, the Office of Management and Budget, and we have staff who have now been assigned to the Commission--without their knowledge. [Laughter.]

Who can create databases for us at your request.

Senator BREAUX. With that, I thank each and every one of you for your patience and your contributions. This will conclude the first meeting of the Bipartisan Commission on the Future of Medicare.

[Whereupon, at 12:15 p.m., the Bipartisan Commission on the Future of Medicare was adjourned.]

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