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 (2)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 (2)" (March 15, 1983). Max S. Baucus Speeches. 234.https://scholarworks.umt.edu/baucus_speeches/234Printing, 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-1983(Example: JANUARY-2003)(1) Subject*: Medicare(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"CLICK TO PRINTBAUCUSREMARKS OFTHE HONORABLE MAX BAUCUSBEFORE THEAMERICAN PSYCHIATRIC ASSOCIATIONMARCH 15, 1983INTRODUCTIONTHANK YOU VERY MUCH FOR INVITING ME TO BE WITH YOU TODAY.THIS IS AN ESPECIALLY 6 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 INSURANCE,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 T.S 1 ,I WOULD LIKE TO SPEND SOME TIME TODAY SHARING MY VIEWS WITHYOU ON THE PROBLEMS FACING MEDICARE,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 SPEND'nJA''s A60(4TFON HEALTH--ROSE LAST YEAR TO'$287 BILLION-10 PERCENT OF THE GROSS NATIONAL PRODUCT--UP FROM 6 PERCENT OFTHE GNP IN 1965.PENDING FOR HOSETA CA THEE [ARESNTU COP NE N OFHASPENDING 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 I6PERCENT 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 MEDICAID-AND HOW DO INCREASED HEALTH EXPEND.I.TURES AFFECT THE PRIVATESECTOR? WORKERS DRAW LOWER WAGES -+K BECAUSE EMPLOYERS MUST PAY HIGHER HEALTH INSURANCE PREMIUMS.AND PAY HIGHER PRICES 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, - 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 OURS.S RO KE NG H LTH E OST AFF T OF -E PLOYN M OY , P SIC A PAT EN HE TH RE I LAT 0S OT ISS - ULDZ T OYLY E4SUBC MITT S 0CO RE- IT A NA ,ON L PRb LEM, A ROB MCO RIBU/ NG TH FED.L EF CI A RO M THA -IPHO OFEDE RES ES F OM T E F T 0 MY, ROB NOCON NED PU L sC P RAM -ADMINISTRATION BUDGET PROPOSALSFOR THE PAST THREE YEARS, THE REAGAN ADMINISTRATION HASCITED -9AT4A:S:W-GS SIMILAR TO THE ONES I JUST DISCUSSED- 4^ ANSWER-' IS-TO RISING COST OF HEALTH CARE,CUTS IN MEDICARE BENEFITS- CpR S ARS, .E M IST T N H (9 Y0 A W R A T AR C TS: A E A RIC LD LYSHQ D-R U - . 0 HEI ME' L BIL S-THE ADMINISTRATION HAS DEVELOPED SOME PROPOSALS THAT. APPEARTO BE TARGETED AT HEALTH CARE PROVIDERS--DOCTORS AND HOSPITALS--BUT 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-L+T's=L ee-A4-- eCe. IN 1981, ABOUT 80 PERCENT OF THE1MCHANGES MADE IN MEDICARE ATHAT 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 NEWC ONES-LETTING THIS ADMINISTRATION S HEALTH POLICYMAKERS WORK ONSrLAfl"W6fNG W N AIO -1 HEY SITs A IFMEDICARE IS KIND OF LIKE PEELING AN ONION- ^ THEY STRIP AWAY LAYER5AFTER 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 BENEFICIARY,COST-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--COPAYMENTS-ON DAYS IN THE HOSPITAL IN EXCHANGE FOR CATASTROPHIC COVERAGE--ISQ NOT 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 $2.2 BILLION MORETHAN UNDER CURRENT LAW- { uc.COTHE~ADMI~NIT$N ES PLAN- IS COLD-HEARTED S MISLEADING,AND T IS NOT AN ANSWER TO THE REAL PROBLEM WITH MEDICAREK H O S P I TA.LAS.U.RA-_NCE-.-So, SEE T THE F MAJOR DING B IN HEC DMINI RAT ON' MED CAR PROP SALS IS LA ELE A SW P, UT I , NRE L Y, A SAVIN TEM FO E GOVERN T--A SA NGS ITE OF610IL I .1 LLION T OF 4E PO5J JEH PI EDE RLY CANTHE SECOND-MAJOR BUILDING BLOCK IN THE ADMINISTRAT.ION'SMEDI.CARE..PROPOSALS IS TO F-REEZE PHYSI-CI-AN 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 OLDER 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 t FEDERAL .DOLLARS 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 MEDICARERECIPIENT 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 MEDICAREASSIGNMENT WILL BE DISCOURAGED BY THIS PROPOSED FREEZE FROM- --- PARTICIPATING ANY LONGER- IF THIS PROPOSAL FOR A PAY FREEZE GOESTHROUGH, I EXPECT PHYSICIAN ASSIGNMENT RATES TO DETERIORATE-7- IN 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 40TrHEQuF_5-o/6J )PERCENT OF THE HEALTH EXPENSES OF ELDERLY AMERICANS- HOW MUCHCOST-SHARING IS ENOUGH?~il4T, 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-44-P-L-E TT______________F_ F~ 2 E~4mPL F)TW- EEVT tROGRA41- I UNDERSTAND THAT APA CONTRACTS WITHMORE THAN A DOZEN THIRD PARTY CARRIERS--INCLUDING THE DEFENSE.DEPARTMENT'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 QUARTERS F 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 MEDICARE.PROPOSALS 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 ADMINISTRATIONS DO- NOT ADDRESS THE REAL PROBLEM WITH MEDICARE--THE SOLVENCY OF.THE 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. TACTUARIES 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 .ATTRIBUTABLE TO MEDICARE BENEFICIARIES 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---AroT '/5A S FASTTHE CBO PROJECTS A TRUST FUND BALANCE OF $1.3 BILLION AT THEEND.OF 1986. WITH NO CHANGE IN EXISTING LAW, THE TRUS-T 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 THEQ.. _TASK 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 SURE THAT SOME-BENEfTTS-WILL -AVE 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 FIRESTORMM4LAA'C1DTO PROD THE ADMINISTRATION TO ESTABLISH A BI-PARTISAN APPROACH TOSOLVING SOCIAL SECURITY'S LONG-TERM PROBLEMS- I'M SUGGESTING TO"g7APSAN AL NCc:bYOU TODAY THAT WE NEED A SIMILAR APPROACH TO MANAGE THECHALLENGES FACING MEDIARE.~A--EitAT- EmoCCRA-TiswE--A-RE PREFA~RE--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 (2)

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American Psychiatric Association (2)

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