Speeches & Floor Statements

Reducing Health Care Costs: Improving Affordability Through Innovation

Posted on November 28, 2018

The Senate Committee on Health, Education, Labor and Pensions will please come to order.

Senator Murray and I will each have an opening statement, and then I will introduce the witnesses.

Then we will hear from the witnesses and senators will each have 5 minutes to ask questions.

International Paper, a 120-year old company headquartered in Memphis, has, since 2004, used a variety of tools to manage the cost of health care for their 33,000 employees.

One tool International Paper uses is encouraging employees to use, at no cost, Best Doctors, an independent company International Paper works with.

For example: when an International Paper employee’s doctor recommends a hip replacement, the employee can call and ask for a second opinion from Best Doctors.

Best Doctors reaches out to get the necessary medical records from the employee’s doctor, sends the records to medical professionals who review the case, and then either reaffirm the hip replacement or recommend a different course of treatment, such as physical therapy.

The use of this voluntary program saved International Paper over half a million dollars in 2017 by preventing unnecessary treatment.

In June, this Committee launched a series of hearings on the rising cost of health care – an issue that is at front of every Americans’ mind.

According to a Gallup poll released days before the midterms, 80 percent of registered voters rated health care as “extremely” or “very important” to their vote – a higher percentage than any other issue polled, including the economy, immigration, and taxes.

At our first four hearings, we looked at: first, how much health care costs in America; second, how to reduce what we spend on unnecessary health care tests, services, procedures, and prescription drugs, and, how to increase preventive care; third, how to reduce administrative burdens imposed by the federal government; and fourth how to make information on the cost and quality of care more easily available.

Secretary Azar has been passionate about giving patients more information on the cost of their care as a way to reduce health care costs.

For example, the Centers for Medicare and Medicaid Services is beginning to require hospitals to post the amount they charge for services online and to keep that information up to date.

While there may be a role for government to play, at today’s hearing – our fifth in this series – we will examine ways private companies, doctors, and states are taking innovative steps to disrupt the health care system and reduce health care costs.

Employers are the largest purchasers of health insurance in the country – 181 million Americans, or roughly 60 percent of the insured population, get their insurance on the job.

We heard at a previous hearing how employers have incredible purchasing power when buying health care for their employees and are more motivated than ever to take advantage of that purchasing power.

One way employers can reduce health care costs is through wellness programs – which encourage employees to lead healthier lives.

There is a consensus that wellness – lifestyle changes like eating healthier and quitting smoking – can prevent serious illness and reduce health care costs.

And it is hard to think of a better way to make a bigger impact on the health of millions of Americans than to connect the consensus about wellness to the health insurance that 181 million people get on the job.

Another way to reduce the cost of health care is to give employees access to additional resources, such as what International Paper is doing with the Best Doctors program.

A third way is for employers to band together, like our witness The Alliance, a regional organization of employers that are circumventing traditional insurance to negotiate better deals on laboratory testing such as CT scans and MRIs, surgeries including knee and hip replacements, and other health care for their employees.

These are a few examples of employers harnessing their power to affect how much they and their employees pay for health care.

Private health care companies also have the ability to reduce health care costs.

For example, HCA Healthcare, another witness here today, has 178 hospitals and 119 freestanding surgery centers located in 20 U.S. states and the United Kingdom.

HCA has implemented new techniques to reduce the spread of MRSA [MER-sa], a drug-resistant bacterial infection, in Intensive Care Units (ICUs).

These new techniques have reduced cases of MRSA by 37 percent in HCA hospitals, and have been so effective that the World Health Organization and the Centers for Disease Control and Prevention have added them to their best practices.

According to HCA, this reduction in MRSA infections saves $170,000 for every 1,000 patients. Those savings are shared among the hospital, insurers, and patients.

Dr. Perlin, our witness from HCA Healthcare, has been on the frontlines of this and other innovations, showing what a smart doctor can do when given the resources to impact an entire system, such as one as large as HCA.

Today, we’ll hear more stories like these about how the private sector is working to address America’s high health care costs and hearing what Washington needs to do to get out of the way of private sector innovation.

Going forward, I plan to take what we’ve learned from our hearings, and ask leading health care policy experts, including economists, doctors, nurses, patients, hospital administrators, state regulators and legislators, governors, employers, insurers, and health care innovators, for specific ideas on how the federal government can reduce the cost of health care.