Medicare Part D (click here for video)
U.S. Congressman Michael C. Burgess, M.D. (TX-26)
Vice Chairman, Republican Policy Committee
(Special Order – Thursday, January 11, 2007)

In the process of the first 100 hours, and I don't know where we are now, in my count it is about 44 hours into it, but it is a funny kind of timekeeping. We started this Special Order hour at about 6:00 in the evening, that is 5:00 back home in Texas. That means we will conclude the House business for the day in 2 hours; that is 7:00 back in Texas.

That is not really an onerous work schedule that we are under. We have just managed to spread it out, do a little less work and spread it out over more days to look like we are doing more.

But my purpose here this evening is to offer, really, a public service, a little bit of education, a little bit of history. Because many Members in the House are new, they were not here when we went through the Medicare Modernization Act of 2003. In fact, some of this story goes back even before Dr. Gingrey and I started here in 2003.

So let us take a step back to just a little while earlier in the decade and visit with one of the President's press releases when they talked about his vision for a new Medicare prescription drug benefit. It rolled out with a good deal of fanfare one day, that the benefit would be voluntary, accessible to all beneficiaries, designed to provide meaningful protection and bargaining power for seniors, affordable to all beneficiaries for the program and administered using competitive purchasing techniques consistent with broader Medicare reform.

That was the message that the President delivered at that time to the Senate to deal with major Medicare reform to provide a prescription drug benefit.

Let us go over it again, because it is important. Voluntary Medicare beneficiaries who now have dependable, affordable coverage should have the option of keeping that coverage, accessible to all beneficiaries. All seniors and individuals with disabilities, including those in traditional Medicare, should have access to a reliable benefit, designed to give beneficiaries meaningful protection and bargaining power.

A Medicare drug benefit should help seniors and help the disabled with the high cost of their prescription drugs and protect against excessive out-of-pocket costs.

It should give beneficiaries bargaining power that they lack today and include a defined benefit, assuring access to medically necessary drugs.

Under the administrative part of the communication to the Senate, it says very specifically, discounts should be achieved through competition, not regulation, not price controls, and private organizations should negotiate prices with drug manufacturers and handle the day-to-day administrative responsibilities of the benefit.

The press release goes on to talk about some other things. The President urges the Congress to act now.

It is instructive that this press release was issued March 9, cherry blossom time here in Washington D.C., March 9, the year 2000. This was a press release issued by then-President William Jefferson Clinton to Senator Tom Daschle with Clinton's instructions as to how he wanted this drug benefit drawn.

Well, I think it’s instructive to remember the past because there are some inherent dangers with tinkering with the program that is already working well.

But the real central question in front of us is, does ideological purity trump sound public policy? We all know it should not, but unfortunately it appears we are on the threshold of profound changes to the part D program. These changes are not being proposed because of any weakness, because of any defect in the program. The changes are being proposed because a viable program lacks the proper partisan branding.

Since the inception of the part D program, America's seniors have had access to greater coverage, lower cost, than anytime since the inception of Medicare over 40 years ago. Indeed, over the past year, saving lives and saving money has not just been a catchy slogan. It has been a welcome reality for the millions of American seniors and those with disabilities who previously lack prescription drug coverage.

Under the guise of negotiation, their proposals now are to enact draconian price controls on pharmaceutical products. The claim is billions of dollars in savings, but experts in the Congressional Budget Office, as evidenced in The Washington Post just today, deny that the promised savings will actually materialize.

The reality is competition has brought significant cost savings to the program just as envisioned by President William Jefferson Clinton and enacted by President Bush. Competition has brought significant cost savings to the program and subsequently to the seniors who are actively using the program today.

Consider that the enrollment of the part D program began in January of 2006, just a little over a year ago, and has proven to be a success. CMS reports that approximately 38 million people, 90 percent of all Medicare beneficiaries, are receiving comprehensive coverage, either through part D, an employer-sponsored retiree health plan, or other credible coverage.

Going back to the press release of 2000, there was concern because that credible retiree prescription drug coverage was leaving at a rate of about 10 percent per year. That was arrested with the enactment of the Medicare Modernization Act. Ninety-two percent of Medicare beneficiaries will not enter into the Medicare benefits drug coverage gap because they will not be exposed to the gap, or they have prescription drug coverage from plans outside of Medicare part D, or their plan coverage of the so-called gap, an important point as seniors go for their reenrollment, which they have just come through to make sure that their drugs, in fact, are covered in the coverage gap.

In the State of the Texas, there are five plans that will cover drugs in the so-called coverage gap. Eighty percent of the Medicare drug plan enrollees are satisfied with their coverage, and a similar percentage says that out-of-pocket costs have decreased. Think of it, a Federal program, a program administered by a Federal agency with an 80 percent satisfaction rate, on time, under budget. When have you ever heard of a Federal agency delivering a program that was on time or under budget?

Again, consider, under the cloak of negotiation, the reality is that Federal price controls could have an extremely pernicious effect on the price, on the availability of current pharmaceuticals and those products that may be available to treat future patients. It is ideological branding so critical that it trumps providing basic coverage to our senior citizens.

Thus the challenge, would it not be better to continue a program that empowers the individual rather than create a new scheme which seeks to reward the supremacy of the State?

I see we have several speakers lined up, and I don't want to monopolize too much more time, but let me just go on with one other point. The American health care system in general, the Federal Medicaid program in particular, there is no shortage of critics both at home here and abroad. But remember it is the American system that stands at the forefront of new innovation and technology, precisely the types of system-wide changes that are going to be necessary to efficiently and effectively provide care for America's seniors in the future.

I don't normally read The New York Times, but someone brought this article to my attention, published October 5, 2006 by Tyler Cowan, who writes from The New York Times: ``When it comes to medical innovation, the United States is the world leader. In the past 10 years, for instance, 12 Nobel Prizes in medicine have gone to American-born scientists working in the United States. Three have gone to foreign-born scientists working in the United States, and just seven have gone to researchers outside the country.''

That is American exceptionalism. Mr. Cowan goes on to point out that five of the six most important medical innovations of the past 25 years have been developed within and because of the American system. Comparisons with other Federal programs such as the VA system are frequently mentioned.

It must be pointed out that a restrictive formulary such as employed by the VA system would likely meet significant public resistance because of the near-universal access of the most commonly prescribed medications under the current Medicare prescription drug plan. Some studies have estimated that nearly one-quarter of the medications available under the current Medicare plan would disappear under that restrictive formulary system.

The fact is the United States is not Europe; we shouldn't try to pretend we are Europe. In fact, most of us don't want to be Europe. American patients are accustomed to wide choices when it comes to hospitals. They are accustomed to wide choices in physicians and to wide choices in their pharmaceuticals. Because our experience is unique and different from that of other countries, this difference should be acknowledged when reforming either the public or the private health insurance programs.

The irony of the situation is that after 40 years, many Congresses, many Presidents have tried to add a prescription drug benefit. When Medicare was first rolled out, it was kind of an inconvenience if they didn't cover prescription drugs. But they only had penicillin and cortizone, and those were interchangeable, so it didn't really matter.

But over the years, as American medicine advanced, it became a critical, a glaring lack of having the prescription drug benefit covered. That is why it is ironic that a Republican president working with a Republican Congress, Republican House, Republican Senate passed meaningful and needed Medicare reform that included the prescription drug benefit, and it happened on the floor of this House at 5:30 in the morning, November 22, 2003. Dr. Gingrey and I were here and very proud to have been part of that.

One last thing I need to mention, and it is a public service, it is a safety tip from someone who has been here only a short time. But I want to remind my colleagues that recently The Third Way, a leading progressive policy think tank has circulated a memo warning those seeking to make changes in how Medicare pays for prescription drugs provided under part D of the program do so with an abundance of caution.

I might remind my colleagues, back in 1988, when the then chairman of the Ways and Means Committee, Dan Rostenkowski, enacted a significant long-term care benefit that cost seniors a great deal of money. He was met with concern and consternation and in fact could not drive his car away from the town hall meeting that he convened shortly after costing seniors so much money with that benefit.

The important thing, and I want to speak specifically to the new Members who are here on the other side of the aisle, don't let this happen to you. Don't try to improve on a Medicare program that is popular with the seniors and meeting their health needs. Seniors will resent having fewer choices that cost more under Medicare part D merely to score political points with your new Speaker by repealing Medicare’s noninterference clause.