Floor and Committee Statements

Tuesday, January 18, 2005

U.S. Senator Johnny Isakson (R-GA)
Hearing on the nomination of Michael Leavitt to serve as Secretary of Health and Human Services
Health, Education, Labor, and Pensions Committee

Sen. Johnny Isakson (R-GA): Thank you, Mr. Chairman.

Governor, welcome.

I have to tell you, last night when I got on the airplane about 8:15 to fly to Washington, much to my surprise, I sat next to the former director of the Department of Medical Assistance in Georgia, an old friend of mine, Russ Tolles (ph), who in the course of the conversation, I told him where I'd be at 10:00 and he said, "Well, you tell Governor Leavitt that he is the best choice the president of the United States could have possible made." He's a big fan.

Mr. Michael Leavitt: Thank you.

Sen. Isakson : Because he said that and it gave me a great opening, I decided I would ask him, "Well, if you could ask the governor any question, what would you ask him?" And he was very complimentary of what we did in the Prescription Drug Medicare Modernization Bill. But he asked the question, "In Medicaid, there is a rebate program on pharmaceuticals, based on volume. As you implement through this year the prescription drug plan for Medicare beneficiaries, can we do the same thing?"

Mr. Leavitt: Well, Senator, that is a well-informed question, and one that I'm not sure, given the limited exposure that I've had at HHS on the nature of it on this side of the equation that I'm in a position to really knowledgeably respond to. I will tell you that, again, as in the question we referred to earlier, this is a -- these are tensions I'm very well-acquainted with, having dealt with them as governor. And my experience has been there's a balance that has to be found.

We have to provide means by which we can create both the incentives necessary and the economic structure for continued innovation. At the same time, people deserve to have safe pharmaceuticals, to have them delivered in an innovative way, and to do it -- I would seek balance. I don't think I can give you an answer beyond that. I'm just not well-acquainted enough yet with the issue.

Sen. Isakson : Well, as you work on it, I'd be happy to work with you. I supported the program. I think it's a brilliant move in terms of the future of healthcare, pharmaceutical coverage for seniors. In the long run they actually save us money over the higher cost of hospitalization and more intensive care.

Secondly, as governor of Utah, your use of technology was nothing short of tremendous in distance learning in your education department, which I'm familiar with, and other areas. I want to go back to what Senator Kennedy said about -- and Chairman Enzi, talking about health information and using technology. It seems to me that, as we have spiraling costs of healthcare, one of the embedded costs that's growing is the paperwork cost and the redundancy of doing the same thing over and over again, almost to the level of insanity.

I mean, I recently made two trips to the doctor, and it's after January, so I filled out health information forms ad infinitum, which could have been available on a health ID card that could be just as secure as my ATM card. And I know you indicated earlier, and I want to applaud you for it, we need to work as fast as we can. That is one component of the cost of healthcare that it seems to me we could foster quickly to help bring down some of the costs and actually improve the quality of both information and care for those who receive it.

Mr. Leavitt: Senator, I've heard estimates that range as high as 20 percent, that there could be 20 percent additional efficiency, and I believe them. It's everywhere I look in the healthcare delivery system. I don't think there's a person on the planet who hasn't dealt with a healthcare issue.

Last night I was looking through a medical bill of mine on a medical device I bought in July, and I have -- I first of all found that the health insurance company was charged $900 for this device. I could have bought it online, the same device and the same person for $400. And we've been going back and forth. There's a more efficient way to do this, and it all comes down to technology and coming up with interoperable systems.

This is a problem that the entire economy is going through. We've come through a period of industrialization, we've gone through the information age. We're now moving into the age of interoperability. We've learned to make machines work together, now it's can we get the people to work together? Can we find systems from government agencies and private providers and hospitals and physicians and cause them to work together in a way that will create that efficiency.

This is a complex, demanding problem, and I believe there's an entirely new set of skills that we're having to learn as a society. But the efficiencies are there to gather, and I believe we can and must pursue it, because it's not just a function of good healthcare, it's a matter of economic competitiveness as a nation. When 15 percent of our entire gross national product is being consumed in healthcare services, unless we are able to do it efficiently, it could become a drag on our productivity as opposed to the boost that it can be.

Sen. Isakson : Thank you very much. My time is up, Mr. Chairman.

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Sen. Isakson : Just one and a comment. The large -- one of the largest contributors to the rising cost of healthcare for those who are covered in terms of the cost of their insurance and their co- payment is the rising cost of the uninsured. The SCHIP program -- and you did a great job in reaching out to get those children insured who are in large number the insured in Utah. Do you have any suggestions as to what you would recommend or think we ought to focus on to try and increase the number of insured and decrease that burden on the number of -- those who are insured and paying at higher rates?

Mr. Leavitt: Senator, I do have. I want to describe something for you that I don't intend to imply is a solution on a national basis, but it troubled me greatly that we had 400,000 people in our state who didn't have any healthcare insurance at all. In my state, if you want to have the richest health benefit program, you'll go to Medicare.

It's about 143 percent in terms of benefits of what a person would earn if they went to work at a car dealership or a mill. If you want the second richest, you'll go to Medicaid. It's about 139 percent, or at least those were the percentages when I was dealing with this.

We went through a period of time -- it was a very difficult period -- like most states, where we were simply pressed to balance our budget.

And we actually had to reduce benefits for vision and dental on a small population of our Medicaid recipients. I noticed today in the paper that the governor -- the new governors has money now and he's going to go put those back, and I'm glad for that. But at the same time, we concluded, what if we were to have that program on Medicaid not be 139 percent richer but what if it were only 125 percent richer, and we were to take those dollars and provide a benefit to people who are without coverage at all.

I got a waiver from HHS. We now have 18,000 families who are working at one or two or three jobs who had no health insurance who now have it. We took the same dollars -- we provided them with healthcare, frankly, that was not the kind of healthcare we would aspire to have them receive, but they have healthcare. They have basic healthcare.

We used our community health centers to provide it, created a policy that provided preventative care, basic healthcare, the community got together. It was a very solid success and we're learning from that. So I don't represent it to be the wave of the future, I simply hold it out to be what it was, an effort on our part to take limited resources and to provide basic healthcare to all of those who don't have it.

Sen. Isakson : Well, it's a good example of why you're the appointment of the president, thinking outside the box, and I appreciate that. I just have a comment, Mr. Chairman, and that is you can't come from Georgia and talk to the future secretary of Health and Human Services without thanking him for acknowledging CDC's brand and making the statement that the Congress and the president during the last four years have done a remarkable job in funding the new construction, the laboratory work, and the hardening of what is really the world's public health asset. And I appreciate very much your acknowledging that and look forward to working with you to continue to grow CDC and its capability and its reach around this country and around the world.

Mr. Leavitt: Thank you.

Sen. Isakson : Thank you very much.