Speeches & Floor Statements

Hearing Statement: Health Care Costs

Posted on June 18, 2019

Nearly a year ago, Dr. Brent James from the National Academies testified before our Senate health committee with a startling statistic: up to half of what the American people spend on health care may be unnecessary.

Let me repeat that: up to half of the $3.5 trillion the United States collectively spent on health care in 2017 was unnecessary.

That is $1.8 trillion – three times as much as we spend on all of our national defense, 60 times as much as we spend on Pell grants for college students, and about 550 times as much as we spend on national parks.  

A recent Gallup poll found that the cost of health care was the biggest financial problem facing American families.

Like every American family, both Democrat and Republican United States Senators are concerned about the cost of health care.

Health care has become a tax on family budgets and on businesses, on federal and state governments.

Warren Buffett has called it “a tapeworm on the American economy.”

Over the last two years, this Committee has held 16 hearings on a wide range of topics related to reducing the cost of health care – specifically, how do we reduce what the American people pay out of their own pockets for health care. 

These included hearings on the cost of prescription drugs; on the 340B drug discount program; on primary care and the importance of vaccines.
Last December, I sent a letter to experts at the American Enterprise Institute and the Brookings Institution, and to doctors, economists, governors, insurers, employers, and other health care innovators, asking for specific steps Congress could take to lower the cost of health care.

We received over 400 recommendations, some as many as 50 pages long.

In May, Senator Murray and I released for discussion the Lower Health Care Costs Act of 2019 -- a package of nearly three dozen proposals from 16 Republican senators and 14 Democrat senators – that is designed to reduce what Americans pay out of their own pockets for health care.

Since then, we’ve received over 400 additional comments on that draft legislation.

Today’s hearing was scheduled to hear your feedback on this legislation, which will reduce what Americans pay out of their pockets for health care in three major ways:

First, it ends surprise billing;

Second, it creates more transparency – there are seven bipartisan provisions that will: eliminate gag clauses and anti-competitive terms in insurance contracts, designate a non-profit entity to unlock insurance claims for employers, ban Pharmacy Benefit Managers (PBM) from charging more for a drug than the PBM paid for the drug, and require patients to be given more information on the cost and quality of their care. You can’t lower your health care costs until you know what your health care actually costs.

And third, it increases prescription drug competition – there are nine bipartisan provisions to help bring more lower cost generic and biosimilar drugs to patients.

Here are a few of the ways this legislation will lower health care costs:

Ensures that patients do not receive a surprise medical bill – which is when you receive a $300 bill, or even a $3000 bill two months after your surgery, because one of your doctors was outside of your insurance network. 

Many senators, including Senators Cassidy, Hassan, Murkowski, and Enzi, and many others are interested in ending surprise billing.
Lowers the cost of prescription drugs by:

Helping biosimilar companies speed drug development through a transparent, modernized, and searchable patent database. Senators Collins, Kaine, Braun, Hawley, Murkowski, Paul, Portman, Shaheen, and Stabenow worked on this provision. 

Improves the Food and Drug Administration’s  drug patent database by keeping it more up to date to help generic drug companies speed drug development, a proposal offered by Senators Cassidy and Durbin

Prevents the abuse of citizens’ petitions that can be used to unnecessarily delay drug approvals, from Senators Gardner, Shaheen, Cassidy, Bennett, Cramer, and Braun

Clarifies that the makers of brand biological products, such as insulin, are not gaming the system to delay new, lower cost  biosimilars from coming to market, from Senators Smith, Cassidy, and Cramer; and

Eliminates a loophole that allows drug companies to get exclusivity just by making small tweaks to an old drug, a proposal from Senators Roberts, Cassidy, and Smith.

Bans gag clauses that prevent employers and patients from knowing the price and quality of health care services. This proposal from Senators Cassidy and Bennet would allow an employer to know that a knee replacement might cost $15,000 in one hospital and $35,000 at another hospital.

Requires health care facilities to provide a summary of services when a patient is discharged from a hospital to make it easier to track bills, and requires hospitals to send all bills within 30 business days, to prevent unexpected bills many months after care, a provision worked on by Senators Enzi and Casey.  

Requires doctors and insurers to provide patients with price quotes on their expected  out-of-pocket costs for care, so patients are able to shop around, a proposal from Senators Cassidy, Young, Murkowski, Ernst, Kennedy, Sullivan, Cramer, Kennedy, Braun, Hassan, Carper, Bennet, Brown, Cardin, Casey, Whitehouse, and Rosen.

Increases vaccination rates and prevents disease outbreaks through two proposals worked on by Senators Roberts and Peters.

There are other proposals:

For example, banning anti-competitive terms in health insurance contracts that prevent patients from seeing other, lower-cost, higher-quality providers. The Wall Street Journal identified dozens of cases where anti-competitive terms in contracts between health insurers and hospital systems increase premiums and reduce patient choice.

Banning Pharmacy Benefit Managers, or PBMs, from charging employers, health insurance plans, and patients more for a drug than the PBM paid to acquire the drug, which is known as “spread pricing.” 

Eliminating a loophole allowing the first generic drug to submit an application to the FDA can block other generic drugs from being approved.
Provisions to help Americans stay healthy by preventing obesity, and improving care for expectant and new moms and their babies.
Provisions to make it as easy to get your personal medical records as it is to book an airplane flight.

And provisions to incentivize health care organizations to use the best cybersecurity practices to protect your health information privacy.
And other senators may have additional ideas that we hope to be able to vote on at a markup later this month.

For example, Sen. Murphy and Sen. Cassidy are working to improve access to mental health care, building on their work in the HELP Committee last year that became law as part of the SUPPORT Act. I am optimistic we can get agreement to include something in the bill on that.

Other committees are also working on their own packages of legislation to lower the cost of health care.

Since January, Senator Murray and I have been working in parallel with Senator Grassley and Senator Wyden, who lead the Finance Committee.
They are working on their own bipartisan bill, which they plan to markup this summer.

The Senate Judiciary Committee is working on some bipartisan bills to address high drug costs and has held a hearing on consolidation in health care.

And the House Energy and Commerce, Ways and Means, and Judiciary Committees have all reported out bipartisan bills to lower the cost of prescription drugs.

Secretary Azar and the Department of Health and Human Services have been extremely helpful in reviewing and providing technical advice on the various proposals to reduce health care costs. 

And the president has called for ending surprise billing and reducing the cost of prescription drugs.

The Administration has also taken steps to increase transparency so families and employers can better understand their health care costs.  
For the last decade, Congress has been locked in an argument about the individual market, where six percent of Americans get their health insurance.

Especially for Americans without subsidies, the cost of health insurance remains way too expensive.

But we will never have lower cost health insurance until we have lower cost health care, which is why our Lower Health Care Costs Act of 2019 takes steps that will actually bring down the cost of health care that Americans pay out of their own pockets.

This bill will lead to doctors, hospitals, insurance companies, and employers providing Americans a better experiences and better outcomes at lower costs.

I want to thank Senator Murray, and her staff, led by Evan Schatz [pronounced “shots”] and Nick Bath, and my staff, led by David Cleary and Grace Graham, who have worked together to find about three dozen proposals that Democrats and Republicans agree on to reduce health care costs.

This is not unusual for our Committee, because we have found a way to provide solutions to difficult problems that most members of BOTH the Democrat and Republican caucuses could support. 

We did that with fixing No Child Left Behind, with  the 21st Century Cures Act, with user fee funding for the Food and Drug Administration, and most recently, with our response to the opioids crisis that included input from 72 senators of both political parties.

Our goal for this legislation, the Lower Health Care Cost Act of 2019, is to be another example of that cooperation because the American people expect us to work together to provide ways to reduce what they pay for health care out of their own pockets.