Baucus, Max S.

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University of Montana

University of MontanaScholarWorks at University of MontanaMax S. Baucus Speeches Archives and Special Collections3-15-1983American Psychiatric Association (3)Max S. BaucusLet us know how access to this document benefits you.Follow this and additional works at: https://scholarworks.umt.edu/baucus_speechesThis Speech is brought to you for free and open access by the Archives and Special Collections at ScholarWorks at University of Montana. It has beenaccepted for inclusion in Max S. Baucus Speeches by an authorized administrator of ScholarWorks at University of Montana. For more information,please contact scholarworks@mso.umt.edu.Recommended CitationBaucus, Max S., "American Psychiatric Association (3)" (March 15, 1983). Max S. Baucus Speeches. 235.https://scholarworks.umt.edu/baucus_speeches/235Printing, Graphics & Direct MailONBASE SYSTEMIndexing FormSenator * or Department*: BAUCUSInstructions:Prepare one form for insertion at the beginning of each record series.Prepare and insert additional forms at points that you want to index.For example: at the beginning of a new folder, briefing book, topic, project, or date sequence.Record Type*: Speeches & RemarksMONTH/YEAR of Records*: March-1 983(Example: JANUARY-2003)(1) Subject*: Health(select subject from controlled vocabulary, if your office has one)(2) Subject* American Psychiatric AssociationDOCUMENT DATE*: 03/15/1983(Example: 01/12/1966)* "required information"CIK, TO PkIN.TBAUCUSAPA.EDT 14-MAR-83 16: 41REMARKS OFTHE HONORABLE MAX BAUCUSBEFORE THEAMERICAN PSYCHIATRIC ASSOCIATIONMARCH 15, 1983INTRODUCTIONTHANK YOU VERY MUCH FOR INVITING ME TO BE WITH YOU TODAY*THIS IS AN ESPECIALLY GOOD TIME TO DISCUSS HEALTHLEGISLATION* JUST LAST WEEK, THE SENATE FINANCE COMMITTEE, ONWHICH I SERVE, TOOK ACTION ON THE SOCIAL SECURITY REFORM PACKAGE*ATTACHED TO THAT PACKAGE, WAS A PLAN TO CHANGE THE WAY MEDICAREPAYS HOSPITALS .FOR THE CARE THEY PROVIDE*THE APA TESTIFIED ON THIS PROSPECTIVE REIMBURSEMENT PLANBEFORE MY HEALTH SUBCOMMITTEE* YOU MADE SEVERAL SPECIFICRECOMMENDATIONS ABOUT HOW PROSPECTIVE REIMBURSEMENT WOULD AFFECTPSYCHIATRIC FACILITIES AND PSYCHIATRIC TREATMENT IN ACUTE CAREHOSPITALS*BASED ON THIS TESTIMONY, WE ON THE FINANCE COMMITTEE DECIDEDTHAT THESE PSYCHIATRIC FACILITIES AND UNITS SHOULD NOT BE COVEREDUNDER THE NEW PROSPECTIVE REIMBURSEMENT SYSTEM*YOU SHOULD BE PLEASED THAT YOUR REPRESENTATIVES MADE SUCH ANEFFECTIVE PRESENTATION BEFORE THE FINANCE COMMITTEE. I HAVEEVERY REASON TO BELIEVE THAT THE FULL SENATE WILL AGREE WITH.THEFINANCE COMMITTEE RECOMMENDATION WHEN WE CONSIDER IT LATER THISWEEK-IN ADDITION, THE HOUSE AND SENATE BUDGET ARE PUTTING THEFINAL TOUCHES ON NEXT YEAR'S BUDGET TARGETS. THESE RESOLUTIONSWILL SET FORTH SAVINGS GOALS FOR SPENDING PROGRAMS -- LIKE2MEDICARE AND MEDICAID -- AND THEY WILL PUT IN.PLACE REVENUE GOALSFOR TAX PROGRAMS*THE BUDGET RESOLUTIONS WILL LAY THE FOUNDATION FOR THEDEBATE ON SPECIFIC HEALTH PROPOSALS--LIKE CATASTROPHIC INSURAN-CE,BENEFICIARY COST-SHARING, AND THE EMPLOYER TAX CAP--THAT WILL BECONSIDERED LATER THIS YEAR*FURTHER, SOME OF US ARE BEGINNING TO GIVE SERIOUS ATTENTIONTO THE PROBLEMS FACING THE HOSPITAL INSURANCE TRUST FUND, THAT'STHE FUND THAT PAYS MEDICARE HOSPITAL BENEFITS* THE SOLVENCY OFTHIS TRUST FUND HAS CONCERNED ME FOR SOME TIME* BUT ONLY IN THELAST WEEK OR TWO HAS THERE BEEN ANY MEDIA ATTENTION GIVEN TO THISPROBLEM*I WOULD LIKE TO SPEND SOME TIME TODAY SHARING MY VIEWS WITHYOU ON THE PROBLEMS FACING MEDICARE IN THE NEXT FEW YEARS*HEALTH COSTSI DON'T NEED TO TELL THIS GROUP THAT WE HAVE PROBLEMS WITHTHE HEALTH CARE SYSTEM* YOU KNOW, AS WELL AS I DO, THAT TODAY WEARE SPENDING MORE THAN EVER FOR HEALTH CARE, BUT GETTING LESS FOROUR MONEY-HEALTH EXPENDITURES--BOTH PUBLIC AND PRIVATE--ARE CONTINUINGTO INCREASE EVEN THOUGH THE ECONOMY IS SHOWING VERY LITTLEINFLATION*NATIONAL HEALTH EXPENDITURES--THE AMOUNT WE AMERICANS SPENDON HEALTH--ROSE LAST YEAR TO $287 BILLION. THIS IS VERY CLOSE TO10 PERCENT OF THE GROSS NATIONAL PRODUCT--UP FROM 6 PERCENT OFTHE GNP IN 1965.IF WE LOOK CLOSELY AT THESE EXPENDITURES, WE FIND THATSPENDING FOR HOSPITAL CARE IS THE LARGEST COMPONENT OF THESE3OUTLAYS* SO, WHILE THE CONSUMER PRICE INDEX TUMBLED FROM ALMOST13 PERCENT To 5 PERCENT IN THE LAST TWELVE MONTHS, WE FIND THATPROGRESS AGAINST INFLATION HAS STOPPED AT THE HOSPITAL DOOR-IN 1982, HOSPITAL COSTS WENT UP THREE TIMES THE NATIONALINFLATION RATE* FEDERAL OUTLAYS FOR MEDICARE ROSE 21.5 PERCENTLAST YEAR. AND THE COST OF PRIVATE HEALTH INSURANCE ROSE 15-9PERCENT IN 1982--THE BIGGEST INCREASE EVER*RISING HEALTH COSTS ARE A NATIONAL PROBLEM. FEDERAL, STATE,AND LOCAL GOVERNMENTS--WHO PAY 42 PERCENT OF THE HEALTH CAREBILL -- ARE WRACKING UP RECORD BUDGET DEFICITS TO MEET THESOARING COSTS OF MEDICARE AND ME.DICAID*AND HOW DO INCREASED HEALTH EXPENDITURES AFFECT THE PRIVATESECTOR? WORKERS DRAW LOWER WAGES THAN THEY OTHERWISEMIGHTBECAUSE EMPLOYERS MUST PAY HIGHER HEALTH INSURANCE PREMIUMS*AND CONSUMERS PAY HIGHER PRICES FOR GOODS BECAUSE COMPANIESHAVE TO PASS ON MUCH OF THE HIGHER HEALTH INSURANCE PREMIUMCOSTS*IN SOME CASES, THESE COSTS HAVE CONTRIBUTED To AMERICANINDUSTRY'S LOSS OF COMPETITIVE POSITION* U*S. STEEL, FOREXAMPLE, ESTIMATES THAT THE COST OF HEALTH BENEFITS ADD AN EXTRA$20 TO THE PRICE OF EACH TON OF STEEL THE INDUSTRY PRODUCES. ANDAMERICAN AUTO COMPANIES FIGURE THE COST OF EMPLOYEE HEALTHBENEFITS TO BE AS MUCH AS $400 ON EACH CAR PRODUCED. THAT'S MORETHAN ONE-QUARTER OF THE REPORTED $1500 COST ADVANTAGE THATJAPANESE CARS HAVE OVER OUR OWN*SKYROCKETING HEALTH CARE COSTS AFFECT ALL OF US--EMPLOYERSAND EMPLOYEES, PHYSICIANS AND AS PATIENTS* HEALTH CARE INFLATIONIS NOT AN ISSUE THAT SHOULD INTEREST ONLY THE HEALTH14SUBCOMMITTEES OF CONGRESS* IT'S A NATIONAL PROBLEM, A PROBLEMCONTRIBUTING TO THE FEDERAL DEFICIT, A PROBLEM THAT SIPHONS OFFNEEDED RESOURCES FROM THE REST OF THE ECONOMY, A PROBLEM NOTCONFINED TO PUBLIC PROGRAMS*ADMINISTRATION BUDGET PROPOSALSFOR THE PAST THREE YEARS, THE REAGAN ADMINISTRATION HASCITED STATISTICS SIMILAR TO THE ONES I JUST DISCUSSED* IN ANSWERTO RISING COST OF HEALTH CARE, THE ADMINISTRATION HAS PROPOSEDCUTS IN MEDICARE BENEFITS*FOR THE PAST THREE YEARS, THE ADMINISTRATION HAS HAD ONLYONE ANSWER TO RISING HEALTH CARE COSTS: MAKE AMERICA'S ELDERLYSHOULDER MORE OF THE BURDEN FOR PAYING THEIR MEDICAL BILLS*THE ADMINISTRATION HAS DEVELOPED SOME PROPOSALS THAT APPEARTO BE TARGETED AT HEALTH CARE PROVIDERS--DOCTORS AND HOSPITALSBUT CLOSE EXAMINATION SHOWS THAT THESE PROPOSALS RESULT INNOTHING MORE THAN COST-SHIFTING TO HEALTH CARE CONSUMERS* SoLONG AS FEDERAL OUTLAYS ARE REDUCED, THE HEALTH POLICYMAKERS INHHS AND OMB ARE CONTENT.LET'S LOOK AT THE RECORD* IN 1981, ABOUT 80 PERCENT OF THECHANGES MADE IN MEDICARE THAT YEAR'S RECONCILIATION ACT MEANTMORE COSTS FOR AMERICA'S ELDERLY. LAST YEAR, IN 1982, CONGRESSREJECTED AN ADMINISTRATION BUDGET CHOCK FULL OF BENEFIT CUTS AND,INSTEAD, DRAFTED A HOSPITAL COST CONTAINMENT PLAN. AND THISYEAR--TO NO ONE'S SURPRISE--THE ADMINISTRATION HAS PROPOSED THEBENEFIT CUTS THAT WE REJECTED LAST YEAR, AS WELL AS A FEW NEWONES*LETTING THIS ADMINISTRATION 'S HEALTH POLICYMAKERS WORK ONMEDICARE IS KIND OF LIKE PEELING AN ONION. THEY STRIP AWAY LAYER. " 5AFTER LAYER, YEAR AFTER YEAR--UNTIL ALL YOU'RE LEFT WITH IS THETEARS*LET'S LOOK AT THE TWO BIG MEDICARE COST-SAVERS PROPOSED BYTHE ADMINISTRATION THIS YEAR*FIRST, THERE IS THE RESTRUCTURING OF PART A HOSPITALINSURANCE. THE ADMINISTRATION IS PROPOSING*TO PROVIDECATASTROPHIC HEALTH INSURANCE IN EXCHANGE FOR GREATER BENEFICIARYCOST-SHARING*.OF COURSE, THE ELDERLY, ON FIXED INCOMES, ARE RIGHTFULLYAFRAID OF BEING BANKRUPTED BY HIGH-COST HOSPITAL CARE* WE ALLARE*BUT THE "TRADE' THE ADMINISTRATION IS PROPOSING--COPAYMENTSON DAYS IN THE HOSPITAL IN EXCHANGE FOR CATASTROPHIC COVERAGE--ISNOT A FAIR DEAL AT ALL*THE COST TO THE GOVERNMENT TO PROVIDE THE CATASTROPHICCOVERAGE THE ADMINISTRATION WANTS IS MINIMAL. THE COST TO THEELDERLY, WHO WOULD HAVE TO PAY'MORE OUT-OF-POCKET FOR HOSPITALCARE WOULD.BE GREAT*ONLY ONE-HALF OF ONE PERCENT OF HOSPITALIZED MEDICAREBENEFICIARIES WOULD BE HELPED* MEANWHILE, THE OTHER 99 1/2PERCENT OF HOSPITALIZED BENEFICIARIES WOULD PAY $2.2 BILLION MORETHAN UNDER CURRENT LAW*THE ADMINISTRATION'S PLAN IS COLD-HEARTED, IT IS MISLEADING,AND IT IS NOT AN ANSWER TO THE REAL PROBLEM WITH MEDICAREHOSPITAL INSURANCE*So, WE SEE THAT THE-FIRST MAJOR BUILDING BLOCK IN THEADMINISTRATION'S MEDICARE PROPOSALS IS LABELED A SWAP, BUT IS, INREALITY, A BIG SAVINGS ITEM FOR THE GOVERNMENT--A SAVINGS ITEM OF6$710 MILLION IN 1984--$710 MILLION OUT OF THE POCKETS OFHOSPITALIZED ELDERLY AMERICANS.THE SECOND MAJOR BUILDING BLOCK IN THE ADMINISTRATION'SMEDICARE PROPOSALS IS TO FREEZE PRYSI-CIAN FEES FOR NEXT YEAR*THIS PROPOSAL IS ATTRACTIVE TO MANY BECAUSE THEY SEE $700MILLION IN SAVINGS. BUT LET'S TAKE A CLOSER TOOK AT WHAT THISPROPOSAL MAY MEAN FOR OLDER AMERICANS.THE PROPOSAL DOES NOT MEAN THAT PHYSICIANS' CHARGES WILLREMAIN LEVEL--IT ONLY' MEANS THAT FEDERAL OUTLAYS WILL NOT RISE*THE PROPOSAL MEANS THAT ABOUT HALF THE SAVINGS ' THEGOVERNMENT WILL ACHIEVE UNDER THIS PROPOSAL--ABOUT $350MILLION--WILL COME FROM OLDE.R AMERICANS*ONLY ABOUT HALF THE CLAIMS FOR PHYSICIANS' SERVICES UNDERMEDICARE ARE "ASSIGNED' CLAIMS--THAT IS, CLAIMS WHERE PHYSICIANSACCEPT MEDICARE'S DETERMINATION OF REASONABLE CHARGES* IN THESECASES, THE PHYSICIAN PAY FREEZE WILL MEAN THAT LESS FEDERALDOLLARS WILL GO TO DOCTORS*HOWEVER, FOR THE OTHER HALF OF THE CLAIMS FILED--WHERE THEPHYSICIANS DO NOT PARTICIPATE IN MEDICARE, AND WHERE PHYSICIANSCHARGE MORE THAN WHAT MEDICARE SAYS IS REASONABLE--THE MEDICARERE.CIPIENT WILL HAVE TO PAY MORE*THE ADMINISTRATION'S PROPOSAL DOES NOT STOP PHYSICIANS FROMRAISING THEIR FEES* THE PROPOSAL ONLY LIMITS MEDICARE OUTLAYS*WHERE FEES GO UP--AND THEY WILL GO UP--THE ELDERLY WILL HAVE TOPAY MORE. AND EVEN THOSE PHYSICIANS WHO DO ACCEPT MEDICAREASS-IGNMENT WILL BE DISCOURAGED BY THIS PROPOSED FREEZE FROMPARTICIPATING ANY LONGER* IF THIS PROPOSAL FOR A PAY FREEZE GOESTHROUGH, I EXPECT PHYSICIAN ASSIGNMENT RATES TO DETERIORATE*7IN YOUR OWN FIELD OF PSYCHIATRY, WHERE THE MEDICARE BENEFITIS EXTREMELY LIMITED, I'M SURE YOU SEE THAT A PHYSICIAN PAYFREEZE IS YET ANOTHER DISINCENTIVE TOWARD PROVIDING CARE TO THEELDERLY*THE ADMINISTRATION SEEMS TO FEEL THAT MEDICARE PATIENTSSHOULD PAY MORE IN HOPES THAT THEY WILL USE HOSPITALS LESS--THATINCREASED COST-SHARING WILL SPUR THEM TO LOBBY PHYSICIANS AGAINSTUNNECESSARY PROCEDURES*THE ELDERLY ALREADY ARE SUBJECT TO A GREAT DEAL OFCOST-SHARING--MUCH MORE THAN THE DEGREE OF COST-SHARING EXPECTEDOF WORKING AMERICANS. THEY ALREADY PAY A GREAT DEAL THROUGHEXISTING DEDUCTIBLES, AND PREMIUMS, AND COINSURANCE* IN FACT,STUDIES I HAVE SEEN SHOW THAT MEDICARE COVERS ONLY ABOUT 40PERCENT OF THE HEALTH EXPENSES OF ELDERLY AMERICANS. HOW MUCHCOST-SHARING IS ENOUGH?FEDERAL PROGRAMS DESIGNED TO HOLD DOWN HOSPITAL UTILIZATIONAND TO PROMOTE HIGH-QUALITY CARE ARE OPPOSED BY THISADMINISTRATION AS UNDUE INTERFERENCE WITH THE PRACTICE OFMEDICINE*WHY SHOULD GOVERNMENT BE PREVENTED FROM TAKING EVERY STEP ITCAN TO BUY ONLY THE BEST QUALITY CARE FOR THE CLIENTS IT SERVES?WHY SHOULD GOVERNMENT BE PREVENTED FROM MAKING SURE THAT IT PAYSONLY FOR HEALTH CARE THAT IS MEDICALLY NECESSARY?I'M PLEASED TO NOTE THAT THE APA CURRENTLY IS INVOLED IN ITSOWN PEER REVIEW PROGRAM* I UNDERSTAND THAT APA CONTRACTS WITHMORE THAN A DOZEN THIRD-PARTY CARRIERS--INCLUDING THE DEFENSEDEPARTMENT'S CHAMPUS PROGRAM--TO PERFORM PEER REVIEW OFPSYCHIATRIC CASES* GIVEN YOUR GOOD EXPERIENCE WITH PEER REVIEW,8I AM SURE YOU SHARE MY COMMITMENT TO A SUBSTANTIALLY WIDERAPPLICATION OF PEER REVIEW--TO ALL OF THE MEDICAL CARE PROVIDEDTO MEDICARE BENEFICIARIES*THREE QUARTER OF THE SAVINGS ATTRIBUTABLE TO THE PROPOSALSPUT FORWARD BY THE ADMINISTRATION THIS YEAR WILL COME FROM THEPOCKETS OF AMERICA'S SENIOR CITIZENS* WE SHOULD NOT BE.FOOLED BYTHE ADMINISTRATION'S RHETORIC* WE SHOULD SEE THESE MEDICAREPROPOSALS FOR WHAT THEY ARE--AN ATTEMPT TO BREAK THE COMMITMENTTHAT WAS MADE BY CONGRESS IN 1965 TO GUARANTEE THE ELDERLY ACCESSTO HIGH QUALITY MEDICARE CARE*MEDICARE TRUST FUNDFINALLY, THE CUTS IN BENEFITS PROPOSED-BY THE ADMINISTRATIONDO NOT ADDRESS THE REAL PROBLEM WITH MEDICARE--THE SOLVENCY OFTHE PART A HOSPITAL INSURANCE TRUST FUND. THIS TRUST FUND ISFINANCED BY PAYROLL CONTRIBUTIONS PAID BY EMPLOYERS, EMPLOYEES,AND THE SELF-EMPLOYED*THE MOST RECENT PROJECTIONS MADE BY THE CONGRESSIONAL BUDGETOFFICE INDICATE THAT WE. FACE SERIOUS FINANCING PROBLEMS FORMEDICARE LATER IN THIS DECADE* CONTINUED SOLVENCY OF MEDICARE'SHOSPITAL INSURANCE TRUST FUND WILL REQUIRE VERY SUBSTANTIALINCREASES IN REVENUES OR CUTS IN MEDICARE OUTLAYS--THAT IS CUTSIN BENEFITS OR REDUCED PAYMENTS TO HEALTH PROVIDERS--THAT AREMUCH LARGER THAN ANY PROPOSALS CURRENTLY UNDER DISCUSSION INWASHINGTON*LET ME GIVE YOU SOME NUMBERS TO ILLUSTRATE MY POINT*ACTUARIES PROJECT THAT BALANCES IN THE MEDICARE HOSPITALINSURANCE TRUST FUND WILL BE EXHAUSTED SOMETIME DURING 1987*19871 THAT'S FOUR YEARS FROM NOW!9MEDICARE'S BASIC FINANCIAL PROBLEM AROSE BECAUSE HOSPITALCOSTS WERE GROWING MUCH FASTER THAN THE EARNINGS TAXED TOGENERATE REVENUE FOR THE TRUST FUND.HOSPITAL COSTS-ATTRI.RUIABLE T0 MED-D.CARE BENEFI-CIARIES AREPROJECTED TO INCREASE OVER THE 1982-1985 PERIOD AT AN AVERAGEANNUAL RATE OF 13.2 PERCENT* COVERED EARNINGS WHICH PROVIDEREVENUE FOR THE TRUST FUND ARE PROJECTED TO GROW BY ONLY 6.8PERCENT*THE CBO PROJECTS A TRUST FUND BALANCE OF $1.*3 BILLION AT THEEND OF 1986. WITH NO CHANGE IN EXISTING LAW, THE-TRUST FUNDWOULD SHOW STEADILY GROWING DEFICITS--$7.6 BILLION IN 1987 AND$70.2 BILLION. IN 1990--RISING TO $221-5 BILLION IN 1993 AND$402.9 BILLION IN 1995.THESE ARE SOBERING FIGURES. AND THE POSSIBLESOLUTIONS--RANGING FROM HIGHER PAYROLL TAXES, TO HIGHER CHARGESFOR MEDICARE SERVICES, TO HOSPITAL COST CONTROLS--WOULD HAVE TOBE MUCH MORE STRINGENT THAN ANYTHING PROPOSED TO DATE IF THEY ARETO KEEP MEDICARE SOLVENT*THERE IS NO QUESTION THAT MEDICARE WILL HAVE TO BERESTRUCTURED IN ORDER TO MAKE IT SOLVENT. BUT THREE YEARS OFADMINISTRATION BUDGET PROPOSALS HAVE IGNORED THE LOOMING CRISISIN MEDICARE*THE BUDGET PROCESS IS NO WAY TO DEVELOP THE OPTIONS THATWOULD SET MEDICARE ON A SOUND FINANCIAL BASIS- WE NEED ANATIONAL COMMISSION--JUST LIKE THE SOCIAL SECURITY COMMISSION--TODRAFT A ,LONG-RANGE PLAN FOR MEDICARE. AND THEN TO UNDERTAKE THETASK OF BUILDING THE POLITICAL SUPPORT NEEDED TO GET IT PASSED*LAST WEEK, SENATE DEMOCRATS FORMED A TASK FORCE TO LOOK AT10THIS ISSUE* As CHAIRMAN OF THIS TASK FORCE, I INTEND TO DEVELOPA "ROAD MAP FOR MAKING SURE MEDICARE IS FINANCIALLY SOUND IN THEFUTURE*I AM-S-URE THkT SOME-BENEFITS WILL HAVE-TO BE REORDERED--ANDTHAT RISING HOSPITAL COSTS AND PHYSICIANS FEES WILL ALSO HAVE TOBE CURBED--IF MEDICARE IS NOT TO GO BROKE*I THINK THAT WE CAN NO LONGER AFFORD TO DELAY ACTION ON THISMATTER* YOU AND I BOTH KNOW THAT IT TOOK A POLITICAL FIRESTORMTO PROD THE ADMINISTRATION TO ESTABLISH A BI-PARTISAN APPROACH TOSOLVING SOCIAL SECURITY'S LONG-TERM PROBLEMS* I'M SUGGESTING TOYOU TODAY THAT WE NEED A SIMILAR APPROACH TO MANAGE THECHALLENGES FACING MEDIARE.As SENATE DEMOCRATS WE ARE PREPARED TO FACE THE MEDICAREFUNDING PROBLEM HEAD ON, AND TO BEGIN TO FORGE A REALISTICSOLUTION* I ONLY HOPE THAT THE ADMINISTRATION WILL ABANDON ITSEFFORTS TO GUT THE PROGRAM WITHOUT THE PROPER NATIONAL DEBATE,AND THAT IT WILL JOIN US IN TAKING CONSTRUCTIVE STEPS NOW--BEFOREIT IS TOO LATE TO SAVE MEDICARE*

American Psychiatric Association (3)

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American Psychiatric Association (3)

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