Sen. Max Baucus Holds a Hearing On Improving Health Care Quality

SENATE COMMITTEE ON FINANCE HOLDS A HEARING ON HEALTH CARE QUALITY

SEPTEMBER 9, 2008

SPEAKERS: SEN. MAX BAUCUS, D-MONT. CHAIRMAN SEN. JOHN D. ROCKEFELLER IV, D-W.VA. SEN. KENT CONRAD, D-N.D. SEN. JEFF BINGAMAN, D-N.M. SEN. JOHN KERRY, D-MASS. SEN. BLANCHE LINCOLN, D-ARK. SEN. RON WYDEN, D-ORE. SEN. CHARLES E. SCHUMER, D-N.Y. SEN. DEBBIE STABENOW, D-MICH. SEN. MARIA CANTWELL, D-WASH. SEN. KEN SALAZAR, D-COLO.

SEN. CHARLES E. GRASSLEY, R-IOWA RANKING MEMBER SEN. ORRIN G. HATCH, R-UTAH SEN. OLYMPIA J. SNOWE, R-MAINE SEN. JON KYL, R-ARIZ. SEN. GORDON H. SMITH, R-ORE. SEN. JIM BUNNING, R-KY. SEN. MICHAEL D. CRAPO, R-IDAHO SEN. PAT ROBERTS, R-KAN. SEN. JOHN ENSIGN, R-NEV. SEN. JOHN E. SUNUNU, R-N.H.

WITNESSES: PETER LEE, EXECUTIVE DIRECTOR, NATIONAL HEALTH POLICY, PACIFIC BUSINESS GROUP ON HEALTH, SAN FRANCISCO, CALIFORNIA

SAMUEL NUSSBAUM, EXECUTIVE VICE PRESIDENT, CLINICAL HEALTH POLICY, CHIEF MEDICAL OFFICER, WELLPOINT

GREGORY SCHOEN, REGIONAL MEDICAL DIRECTOR, FAIRVIEW NORTHLAND HEALTH SERVICES, PRINCETON, MINNESOTA

KEVIN WEISS, PRESIDENT AND CEO, AMERICAN BOARD OF MEDICAL SPECIALTIES

WILLIAM ROPER, DEAN, SCHOOL OF MEDICINE, UNIVERSITY OF NORTH CAROLINA, VICE CHANCELLOR, MEDICAL AFFAIRS, CEO, UNC HEALTH CARE SYSTEM

[*] BAUCUS: May we come to order?

Aldous Huxley once cynically wrote, "The quality of moral behavior varies in inverse ratio to the number of human beings involved." Today we focus on the quality of health care, and even though a lot of human beings are involved, well look for ways to improve its quality. As we have been exploring ways to improve the health care system, we have been hearing about a three-pronged approach: controlling health care costs, expanding access to care, and improving quality.

Over the last few months, the Finance Committee has held a series of hearings on health reform. Previous hearings have explored ways to control health care costs and ways to expand access to care, and before the end of the month we will hold two more health reform hearings.

Today we look at quality, and today our health care system does a poor job of encouraging and rewarding quality. Medicare rewards health care providers based on the volume of services that they provide. The more patients they see, the more revenue they bring in; that's regardless of the quality of care.

Most policy experts and health care providers recognize that we need to shift our focus onto quality. We need to encourage better patient outcomes. This effort would improve the health and longevity of patients, and improving patient outcomes should also help to reduce costs and rein in health care spending.

Health care spending has been growing at roughly 7 percent a year. The overall economy has been growing at less than 5 percent a year, and general inflation has been rising at less than 2.5 percent a year.

With health care costs growing this quickly, we simply cannot afford to continue paying for inappropriate or inadequate medical care. We need to encourage high-quality and high-value care, and we need to reward health care providers who deliver it.

We've made some progress. Over the last few years, Medicare has encouraged hospitals to track and report on a variety of clinical activities that have been shown to improve quality and outcomes.

For example, do heart attack patients consistently receive aspirin when they arrive at the hospital? Medicare pays hospitals more if they measure and report these activities.

We have also tried some other approaches. For example, the Medicare Hospital Quality Incentive Demonstration program goes beyond just paying or reporting. This program links Medicare payments to hospitals' actual performance on a variety of clinical and quality measures.

This nationwide demonstration program has involved more that 250 hospitals. The program has shown that focusing on quality results in marked improvements for patients suffering from heart attack, heart failure, or pneumonia, and for those undergoing hip or knee replacements. Similar efforts are also underway to encourage doctors to track and report quality and clinical improvement activities.

In Medicare, we have worked to establish the Physician Quality Reporting Initiative, or PQRI. This program asks doctors to report back to Medicare on their compliance with ...

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