S. Hrg. 103-576 HEALTH CARE REFORM Y4.SM 1/2: S. HRG. 103-576 RINGS Health Care Reform S.Hrg. 103-576,... BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST AND SECOND SESSIONS ON FIELD HEARINGS ON HEALTH CARE REFORM DECEMBER JANUARY AND 9, 1993, 20 21, 1994 Printed for the Committee 6ri fewfoffeiiti&m . j. U.S. GOVERNMENT PRINTING OFFICE = 78-384 WASHINGTON 1994 : Forsale by theU.S. Government PrintingOffice SuperintendentofDocuments,Congressional SalesOffice, Washington, DC 20402 ISBN 0-16-044503-5 S. Hrg. 103-576 HEALTH CARE REFORM Y 4.SM 1/2: S. HRG. 103-576 RINGS Health Care Reform S.Hrg. 103-576,... BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST AND SECOND SESSIONS ON FIELD HEARINGS ON HEALTH CARE REFORM DECEMBER 9, 1993, JANUARY 20 AND 21, 1994 Printed for the Committee o AUG 6 19$, ,c^£yr#iQp GOVERNMENT PRINTING OFFICE U.S. 78-384 -= WASHINGTON : 1994 Forsale by theU.S. GovernmentPrintingOffice SuperintendentofDocuments,Congressional SalesOffice,Washington, DC 20402 ISBN 0-16-044503-5 COMMITTEE ON SMALL BUSINESS DALE BUMPERS, of Arkansas, Chairman SAM NUNN, of Georgia LARRY PRESSLER, of South Dakota CARL LEVIN, of Michigan MALCOLM WALLOP, Wyoming TOM HARKIN, of Iowa CHRISTOPHER S. BOND, Missouri JOHN F. KERRY, of Massachusetts CONRAD BURNS, Montana JOSEPH I. LIEBERMAN, of Connecticut CONNIE MACK, Florida PAUL DAVID WELLSTONE, of Minnesota PAUL COVERDELL, of Georgia HARRIS WOFFORD, of Pennsylvania DIRK KEMPTHORNE, of Idaho HOWELL HEFLIN, of Alabama ROBERT F. BENNETT, of Utah FRANK R. LAUTENBERG, of New Jersey JOHN H. CHAFEE, of Rhode Island HERB KOHL, of Wisconsin KAY BAILEY HUTCHISON, of Texas CAROL MOSELEY-BRAUN, of Illinois John W. Ball III, StaffDirector Thomas G. Hohenthaner, Minority StaffDirector (II) CONTENTS DECEMBER 9, 1993 LITTLE ROCK, AR Page Statements of Senators: Bumpers, Hon. Dale, a U.S. Senator from the State ofArkansas 1 Statements of: Miller, John E., Arkansas State Representative, District 67 3 Kumpuris, Dr. Drew, chairman, Governor's Task Force on Health Care Reform 10 Brown, Greg, chairman and CEO, Union Bancshares of Benton, Incorpo- rated, Benton, AR 18 Murry, Tom, owner, Kawasaki Sports Center, Incorporated, Little Rock, AR 24 Abney, Keith, owner operator of McDonald's Restaurants, Little Rock, AR 26 Nelson, Vernon, president of the Nelson Group, Incorporated, Little Rock, AR 27 Yukon, Norine, executive director, Prudential Health Care Plans of Ar- kansas 37 Cabe, Robert, senior vice president, External Services, Arkansas Blue Cross/Blue Shield 41 Madigan, Stephen, vice president, Seabury and Smith, Little Rock, AR 46 Feild, Dr. Charles, Fellow, American Academy of Pediatrics and Associ- ate Professor of Pediatrics, chief, Community Pediatrics and Public Policy, University of Arkansas for Medical Sciences and Arkansas Chil- dren's Hospital 52 Ward, Dr. Harry, chancellor of the University of Arkansas for Medical Sciences 56 Fraizer, Lee, executive vice president, St. Vincent Infirmary Medical Center 59 Busfield, Dr. Roger, Jr., president and CEO, Arkansas Hospital Associa- tion 61 Kirsch, Nancy, director, Public Health Programs, Arkansas Department of Health, Little Rock, AR 68 McGrew, Charles, director of Health Facility Services and Systems, Ar- kansas Department of Health, Little Rock, AR 75 Shuler, Betty Gay, executive director, Mainline Health Systems, Port- AR land, 77 Jackson, Dr. John, associate director, Family Medicine and director of Obstetrics, Mainline Health Systems, Eudora, AR 83 Corbitt, Dr. Mary Louise, neurologist and cofounder of the Neurology Group and the Arkansas Headache Clinic 87 Baker, Dr. Glenn, president, Arkansas Medical Society, Little Rock, AR.... 93 Weber, Dr. Jim, president-elect, American Academy of Family Physi- AR cians, Jacksonville, 95 Bingaman, Herb, president, Arkansas Seniors Organized for Progress, AR Little Rock, 99 Malone, Cecil, State director, AARP, Little Rock, AR 102 Pugh, Johnnie, State chair, Association of Communities Organized for Reform Now (ACORN) 114 (Hi) Page JANUARY 20, 1994 JONESBORO, AR Statements of Senators: Bumpers, Hon. Dale, a U.S. Senator from the State of Arkansas..... 121 Statements of: Rose, L.D., owner, Pocahontas Aluminum, Pocahontas, AR 126 AR Scurlock, James, owner, Jonesboro Concrete Pipe, Jonesboro, 127 Stanley, Penny and David, farmers, Augusta, AR 136 Yates, Robert, M.D., Obstetrics-Gynecologist, Northeast Arkansas Women's Clinic, P.A., Jonesboro, AR 143 McDaniel, Marion A., M.D., family practitioner, Helena, AR 146 McBride, Mike, administrator, Randolph County Medical Center, Poca- hontas, AR 154 Taylor, Ramona, administrator, Crittenden County Health Unit, West Memphis, AR 166 Eason, John, director, Lee Co-op Clinic, Marianna, AR 169 Hogue, Wanda R., area XI area manager, area XI health office, Walnut Ridge, AR 175 JANUARY 21, 1994 FAYETTEVILLE, AR Statements of Senators: Bumpers, Hon. Dale, a U.S. Senator from the State of Arkansas 191 Statements of: Vining, Robert, owner, Ozark Imports, Springdale, AR 193 AR Phillips, Kanna, owner, 1st Choice Realty, Clarksville, 194 Cole, Jason, co-owner, Professional Therapy Services & Razorback Sports and Therapy Clinic, Fayetteville, AR 196 AR Kelley, Jo, CEO, Razorback Federal Credit Union, Fayetteville, 198 Keith, Sister Judith Marie, CEO, St. Edward Mercy Medical Center, Fort Smith, AR 207 Klepper, Dr. Charles, internist, Harrison, AR 209 Hall, Dr. Ben, family practitioner, Lincoln, AR 212 Johnson, Dr. Dan, Fort Smith Rehabilitation Hospital, Fort Smith, AR 217 Proffitt, Dr. Danny, AHEC physician, Public Health Medical Consultant, Fayetteville, AR 224 Jaggers, Kathy, RNP, Women's Health Practitioner, Area 3 Health Office, Russellville, AR 228 Marsh, Nancy, RN, administrator, Madison County Health Unit, Hunts- AR 233 ville, Williams, David, administrator, Ozark Guidance Center, Inc., Fayette- AR 237 ville, ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Letter to Senator Bumpers, from David W. Dubbell, president, Pel-Freez, Inc. with enclosure 250 (IV) HEALTH CARE REFORM THURSDAY, DECEMBER 9, 1993 U.S. Senate, Committee on Small Business, Little Rock, AR. The Committee met, pursuant to notice, at 9 a.m. in the Hershel Friday Courtroom, University of Little Rock Law School, Little Rock, AR, Hon. Dale Bumpers (chairman of the Committee), presid- ing. OPENING STATEMENT OF HON. DALE BUMPERS, A SENATOR U.S. FROM THE STATE OF ARKANSAS The Chairman. Good morning. I am going to keep this hearing on time today. We have enough witnesses to take us well into the afternoon, and maybe even evening. So it is important to other wit- nesses who will be coming to testify later that we be ready for them when they get here. First I want to thank all the witnesses. I apologize for my voice, but it is much better than it was. I thought for awhile I was going to have to cancel this hearing. I want to thank all our witnesses for the time they spent on their state- ments, and more importantly for their concerns about health care and health care reform. The primary purpose of this hearing is to hear the concerns of small business owners about the impact the various health care plans will have on them and their ability to continue in business. But we would be remiss if the Committee did not also hear from providers, consumers, the insurance industry and others, simply be- cause we cannot evaluate the small business impact in a vacuum. We need to know more about how the plan is going to affect ordi- nary citizens, the States, those presently self-insuring their employ- ees, the public health clinics and myriad other questions. Is the present definition of small business, 75 employees, a proper level or should it be higher? Should every citizen have a right to a doctor of his choice? The health care costs have skyrock- eted to the point that we now know that in the past 25 years it has consistently doubled and quadrupled the inflation rate. A few statistics to illustrate a point. In 1980 health care spending represented nine percent of our gross domestic product. By 1992 that number had increased to 14 percent and it is expected to rise to 18 percent by the year 2000, almost one out of every five dollars we spend in this country by the year 2000, if we do nothing, will be for health care. No other country in the world spends more than 10 percent of their gross domestic product for health care. We could (1) very conceivably be spending twice as much per capita or a per- centage of our GDP as any other nation on earth. This year the United States will spend as much on health care as we spend on the combined cost of all fuel oil, natural gas, electrici- ty, gasoline, transportation, including all new and used car pur- chases, furniture and household equipment. Health care spending for each worker in America will cost over $7,000 in 1994. Without reform the cost per worker will increase to $12,386 or 25 percent of their total compensation by the year 2000. Insurance premiums and Worker's Compensation payments by employers have increased over 200 percent after inflation over the past 20 years, and for many small business employers, the cost of coverage is now beyond their means. One item proposed in the administration's plan and universally applauded is to cover the medical portion of Worker's Compensa- tion under the new plan. The President deserves a lot of credit for taking on this very dif- ficult task of reforming the system. It is universally agreed that this has to be done. Next year the Congress will consider essentially four proposals, there will be many on the table, which represent widely different approaches to expanding health care coverage and controlling costs. Some will simply provide for tax incentives to encourage pri- vate coverage, others, notably the Clinton plan, will mandate that employers provide benefits. I might add that this is an item that drives small business up the wall. Some will institute a single payer national insurance system, similar to Canada's. I cosponsor the President's bill with the clear understanding that it will have to be amended extensively before final passage. While I support the goals of the administration's proposal, I also recognize that there are many different ways to achieve those goals. No ap- proach will be painless. There is no magic bullet. Our challenge is to find the right balance between short-term pain and long-term benefits. Because this issue is so important, I want to stay in close touch with the people of our state as the Congress begins this work. Today is the first of a series of hearings I plan to hold throughout the state. Because of the large number of witnesses, I have asked them to limit their testimony to 5 minutes so we will have more time for questions and answers. I recognize that given the complex- ity of the health care issue, 5 minutes is woefully inadequate and I appreciate the effort all of you have taken to prepare very thought- ful statements, most of which I understand. The President's propos- al alone is over 1,300 pages long. Four other comprehensive bills have been introduced just during this past session. So, I do not expect anyone to be a consummate expert on these reform propos- als. All of us simply use our deep and abiding concern for what is best, not just for each of us, but for our country and for the people of Arkansas. In doing so, we need only use our common sense, based on our practical experience in arriving at our conclusions. Finally, I would like to point out that 85 percent of the people in this country have health care coverage of one extent or another. Roughly 37 million have no coverage. They represent about 15 per- cent of our population who have no coverage. Of the 85 percent who do have health care coverage, a vast majority of them are un- happy with the system. Many of them are apprehensive because even though they may have a quarter million dollars in the bank, they know that even in the best of circumstances, that could be wiped out under today's system. In addition to that, they are not always satisfied with the effi- ciency of the system. There is this fear, and everybody champions what the President is trying to do but it is the President's and Con- gress' responsibility to convince these people that what they are going to get is better than what they have got. Unless we are able to do that, this reform is going nowhere. You cannot ask people to give up a known quality and a known quantity for something they do not really understand. When you look at the 1,300 pages of this proposal with as yet no real summary with illustrations answering the thousands of questions that people have, obviously we have our work cut out for ourselves. Not only from a substantive standpoint in drafting a really substantive new health reform bill, but also in convincing the American people that they are going to be better off with it. On our first panel we have Representative John Miller, my long time friend and chief aide when I was Governor of the State of Ar- kansas. He is a co-vice chair of Arkansas Health Resources Com- mission. And Dr. Drew Kumpuris, chairman of the Governor's Task Force on Health Care Reform. If someone were to introduce my one of sons as Senator Bumper's son, he would be offended, but he is Frank Kumpuris' son. We welcome both of you and we thank you very much. John, since your name is first on my list, would you please proceed? STATEMENT OF ARKANSAS STATE REPRESENTATIVE JOHN E. MILLER, DISTRICT 67 Mr. Miller. Senator Bumpers, thank you very much. It is a real honor and a privilege to be here and to attempt to advise you on things that you know much more about than I do or ever will know about, so do not take what I say as trying to tell you that I am the authority on this issue. The Chairman. There are no authorities, John, do not apologize. Mr. Miller. But, as you know, I am deeply concerned about pro- viding adequate health care. I remember very well that the first time I met you was when you were signing up in the Secretary of State's office to become our Governor. The Chairman. Do not say how long ago that has been, John. Mr. Miller. I am not going to talk about that, because I had al- ready been in politics awhile. So I sure do not want to let that get out. The next time I really visited with you at any length was in my family's store in Melbourne when you were up there campaigning, and I was impressed and have always been of the depth that you go to try to learn about the needs of people all over this state, particu- larly in the rural areas. One of the subjects that we discussed that afternoon in Melbourne, Arkansas was the need for doctors out in the rural areas, and you have been a champion of that ever since I have known you. I do not know what your ideas were before I learned of you. I have always been impressed with your wife and the efforts that Betty has made in the immunization of children. I guess if we are talking about trying to save money and deliver quality health care, the first thing we have to do is try to prevent illnesses and try to prevent disease. The Chairman. John, let me interrupt you just a moment to pay tribute to Betty since you mentioned her. She is more deeply in- volved in immunizations now than she has ever been. Mr. Miller. I do not know how she could be, hardly. The Chairman. And she has been attending seminars all week. As you know, in the last 2 years, she and Rosalyn Carter have had a program called Every Child by Two. Children cannot start school until they are immunized, and there is no problem immunizing children before they start to school. That is not the problem. The problem is how do you get these infants immunized? She and Rosa- lyn thought they had an idea. They did have a good idea. It is not just their efforts, there is a national awareness. Yesterday morning at breakfast she told me we have not had a measles case in 3 weeks. Unprecedented, unheard of. So far this year, I do not believe we have had a single death due to measles, and the incidents of measles is going to be by far the lowest in this year in the history of this country. In 1990, we had 27,600 cases of measles and 32 deaths. Absolutely every one of them was prevent- able. But you think of the cost of treating those children, you think of the man hours lost with parents staying home with sick chil- dren. And the only reason I mention that, John, is to pay tribute to Betty because she has worked so hard on it. I will also say most of these problems are solvable, we have the determination to attack. I apologize for interrupting. Please proceed. Mr. Miller. Well, I am glad you did because I feel so strongly about that issue that I was talking to the executive director of the Arkansas Health Care Resources Commission, and told her about Betty's activities regarding immunization. And it has distressed me the last few years because there have been times that we have said the money was not available to buy the shots to immunize these children. We all know that that has to be our number one priority. Another thing that is very important, and you addressed it when you were Governor, in fact, you addressed about all the issues that I know of when you were Governor, so I am not telling you some- thing that you do not already know and that you have not already addressed. I am only trying to remind you of those things and let you know that there i—s support out here for these kind of things. And in the early 1940s is that a time limit? The Chairman. That is a Washington system, John. Mr. Miller. Okay. We were admitting 89 and 90 students to medical school, which was on this ground here, this was the campus of the medical school. And that continued on at least until your administration, when we addressed that program and Senator Howell, myself, others and you tried to educate more doctors, to make doctors more available. We now have that program up to 150. And that is one of the things that I think that we must do in order to make health care available to our citizenry. We Another issue is the nursing program. have established the One Plus One program. I do not know how familiar you are with