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Health Summit 2010

Sen. Tom Coburn discusses cost containment at the White House health summit

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Thursday, February 25, 2010; 12:03 PM

MCCONNELL: Mr. President, since some liberties have been taken here, let me just make a quick observation. Then I'm going to call on Dr. Coburn to make our framing statement on the issue of cost containment.

One thing I think we need to be acutely aware of, ladies and gentlemen, we are here representing the American people. And Harry mentioned several polls. I think it is not irrelevant that the American people, if you average out of all of the polls, are opposed to this bill by 55-37. And we know from a USA Today-Gallup poll out this morning they're opposed to using the reconciliation device, the short-circuit approach that Lamar referred to that would end up with only bipartisan opposition, by 52-39.

Now, I'd like to call on Dr. Tom Coburn who's been a practicing physician for many years, to address the cost-containment issue.

COBURN: Thank you.

Well, Mr. President, thanks for having us do this. I think today's going to be enlightening.

The first thing I would do is put out a caution to us because what I see the Congress doing and what I saw this last year is us actually performing bad medicine. And that is that we get stuck in the idea of treating the symptom rather than treating the disease.

And whether you go to Harvard or whether you go to Thomson Reuters, here's -- there are some facts we know about health care in America. And the facts we know is one out of every three dollars that gets spent doesn't help anybody get well and doesn't prevent anybody from getting sick.

The second thing we know is, from the Congressional Research Service, that most of the mal-drivers (ph) today in health care come from government rules and regulations. The government now directs over 60 percent of the health care in this country. And if throwing money at it and creating new government programs could solve it, we wouldn't be sitting here today because we've done all that. It hadn't worked. So what I thought we ought to do is maybe talk about why does it cost so much, because the thing that keeps people from getting access to care in our country is cost.

You mentioned Malia and Sasha. The fact is, is with young kids going to the E.R., whether they have meningitis or asthma, they're going to get treated in this country. But they may get labeled with a preexisting illness after that. And that's another thing I'd be happy to talk about at a later time.

But the fact is, is we know how to treat acute asthma. What we don't do a good job of is preventing children from getting acute asthma. We don't do the good job of prevention.

So when you break down the costs, what we know is 33 percent of the costs in health care shouldn't be there.

And how do we go about doing that? And what are the components of that cost? And when you look at, when it's studied, if you look at what Malcolm Sparrow from Harvard says, he says 20 percent of the cost of federal government health care is fraud. That's his number.

If you look at Thomson Reuters, when they look at all of this, they say at least 15 percent of government-run health care is fraud.

Well, when you look at the total amount of health care that's government run, you know, you're talking $150 billion a year.

So tomorrow, if we got together and fixed fraud, we could cut health care 7.5 percent tomorrow for people in this country.

So what we ought to do is do the Willie Sutton thing. We ought to go for where the money is.

What's the other area? What we do know -- and I'm guilty of this, Dr. Barrasso's guilty of it, Dr. Boustany is guilty of it -- is a large portion of the tests we order every day aren't for patients. They're for doctors. And the reason they're there is because we are risk averse to the tort system and extortion system that's out there today in health care.

And there are a lot of ways to fix that. But I just went through last night, if you add up what Thomson Reuters, which looked at all the studies that have been done and combined them in, they say between $625 billion and $850 billion a year of health care dollars are wasted.

So it seems to me if cost is the number one thing that's keeping people from getting care, then the efforts of us, as we go after cost, ought to be to go to those areas where the cost is wasted.

And there's a philosophical difference in how we do that. One wants more government-centered approach to that. I would personally prefer a more patient-centered, market-orient approach to that. But nevertheless, there's where we can come together, just on those two areas, where we could cut costs 15 percent tomorrow. And that's for everybody in the country.

What would -- what would happen to access in this country if tomorrow everybody's health care costs went down 15 percent? Access would markedly increase.

So what I would hope we would do is that we would go back and concentrate on the areas that have the biggest pot of gold for us. And the biggest pot of gold is, is we don't incentivize prevention. We don't pay rewards for great management of chronic disease. We have a system throughout the country where we're encouraging lawsuits that aren't productive for the country, and what they actually do is cause the cost of health care to go through the roof.

We also know there's some other real things that we ought to address. There are conflict of interests within the medical field. There's nothing wrong with addressing those and taking those off (ph).

We know that we do not -- we absolutely do not incentivize prevention. And I'm not talking about creating walking paths. I'm talking about paying people who actually do a good job to do prevention.

Talking about changing the school lunch programs where it meets the needs, nutritional needs of Americans. Changing the food stamp program where it incentivize people to eat the right things, not the wrong things. We actually create more diabetes through the food stamp program and the school lunch program than probably any other thing, because we're not feeding a -- offering and incentivizing a great response.

COBURN: So I think if -- I think it's great that we're coming together. But the gold is in where's the cost excesses? And what I would hope we would do is we would look at that and say, How do we come together and actually achieve a reduction in the extortion that goes on in this country in terms of medical malpractice? And there's lots of ways to do that without us mandating states to do that.

How do we do that in terms of creating an elimination of fraud?

You know, when you compare the private sector fraud rates, it's 1 percent compared to Medicare and Medicaid. You know, there's estimates that there's $15 billion worth of fraud in Medicaid a year in New York City alone.

So we haven't attacked that. We haven't gone where the money is. And my hope would be that we would look at where the money is. And if truly it's accurate -- and I don't know many people that will disagree that $1 in $3 doesn't help somebody get well and doesn't prevent it, then we ought to be going for that $1 in $3.

And we ought to do it by not creating a whole bunch of new government programs, but by creating an incentive to reward people. In your new bill you have good fraud programs, but you lack the biggest thing to do. The biggest thing on fraud is to have undercover patients so that people know we're checking on whether or not this is a legitimate bill. And you don't know who's an undercover patient and who's not. And all of a sudden you start changing your attitude of whether or not you're going to milk Medicare or you're going to milk Medicaid.

REID (?): Mr. President, if I could just say, I'm not an expert on much, but I am filibusters. And we've got 40 members of Congress here.

OBAMA: Tom, you made some powerful points. You want to just wrap up real quick?

COBURN: No, I'll just finish with that is $1 out of $3 not helping everybody, we ought to go for where it is.

OBAMA: Well, Tom, I appreciate what you said. I think we're going to have Steny Hoyer go next. I just want to make this quick point: Every good idea that we've heard about reducing fraud and abuse in the Medicare and Medicaid system, we've adopted in our legislation.

So that's an example of where we agree. We want to eliminate fraud and abuse within the government systems.

Let's recognize, though, that those savings in the government systems, which will help taxpayers and allow us to do more, doesn't account for the rising costs in the private marketplace.

Now, the private marketplace, you mentioned the issue of medical malpractice and, you know, frivolous lawsuits. And I -- as you indicated, these are areas where Secretary Sebelius has already begun to try to give states some incentives to do that.

On the prevention side, there's a whole host of provisions inside the legislation that's been passed by the House and Senate, and I think Steny will talk about it.

So we've identified some areas we agree on. And then the question just is does that help the average family in the individual market who potentially can get costs.

But, Steny, why don't you...

COBURN: Let me just respond to one thing. You get cost shifted every penny that gets wasted on Medicare.

OBAMA: Absolutely.

COBURN: And that gets cost shifted to the private sector. So if, in fact, we're wasting...

OBAMA: It would help.

COBURN: ... in the public sector, we're shifting it to the private sector.

OBAMA: You and I agree.


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