| 00:00:166 min. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Good morning, ladies and gentlemen. We welcome you all to this hearing of the U.S. Senate Special Committee on Aging. We have a very important... |
| 00:06:521 min. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Well, thank you, Mr. Chairman, and, of course, we welcome all of our witnesses today. This hearing will kick off a series of Committee meetings... |
| 00:08:46 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator Kohl. |
| 00:08:4623 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
Thank you, Mr. Chairman. Mr. Chairman, I think I mentioned to you back when I was director of the Oregon Gray Panthers, we used to... |
| 00:09:09 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator. |
| 00:09:092 min. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
I think it is well understood that escalating health care costs are hitting America like a wrecking ball. This was seen again yesterday... |
| 00:11:37 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator Wyden. |
| 00:11:371 min. |
Talent, James - U.S. Senator, [R] Missouri
Thank you, Mr. Chairman. I want to echo what the other Senators have said about the importance of this hearing. Medicaid is a vital... |
| 00:13:26 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator. |
| 00:13:263 min. |
Stabenow, Debbie - U.S. Senator, [D] Michigan
Thank you, Mr. Chairman. I want to particularly thank you and Senator Kohl and all of my colleagues for beginning this series which... |
| 00:16:381 min. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator Stabenow. Let me also now introduce, as well, our other witness who is the Governor of the great State of Arizona, Janet Napolitano.... |
| 00:17:489 sec. |
Napolitano, Janet - Governor, [D] Arizona
Senator, thank you for that. I would like to hear from Mr. Wagoner first and then I will dive in, and then we will get to questions from... |
| 00:17:57 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you so much, Governor. Mr. CEO of General Motors, thank you so much for being here, and we invite your testimony now. |
| 00:17:579 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Thank you very much. I very much appreciate it. Chairman Smith, Senator Kohl, members of the Committee, it is an honor to have a chance... |
| 00:27:53 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Mr. Wagoner. Governor. |
| 00:27:534 min. |
Napolitano, Janet - Governor, [D] Arizona
Well, thank you, Mr. Chairman and members of the Committee, for inviting me to be with you today. I am sorry I can't be there in person,... |
| 00:32:1015 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Governor, and we will include your full statement and we value very much your participation and your insights. Did you... |
| 00:32:2530 sec. |
Napolitano, Janet - Governor, [D] Arizona
Yes. This is based on a study done by the Lewin Group looking at how we manage our health care costs versus other States in the Medicaid... |
| 00:32:5515 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, that has been my point all along through the Medicaid debate earlier in this Congress, and I have to say $83 billion is--by the way,... |
| 00:33:10 |
Napolitano, Janet - Governor, [D] Arizona
Ten. |
| 00:33:1052 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Ten years. That is enough even to get the attention of the U.S. Senate. But I think even more important than the budget number, my point... |
| 00:34:0239 sec. |
Napolitano, Janet - Governor, [D] Arizona
Mr. Senator, I think it is a little too soon to know what the DRA really has done. What I do think we need to communicate to HHS and the... |
| 00:34:4110 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Are other States learning from you, asking these questions, and specifically the State of Oregon? |
| 00:34:5128 sec. |
Napolitano, Janet - Governor, [D] Arizona
I can't speak to Oregon, but I can say that States and other Governors have been speaking with me. Of course, we are all speaking with the... |
| 00:35:1938 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, obviously the way you have worked it out, it serves health, Medicaid and the budget, and I think that that is the better approach... |
| 00:35:5715 sec. |
Napolitano, Janet - Governor, [D] Arizona
Thank you, Senator, and I would be happy to be speaking with you as we go through the implementation of the Deficit Reduction Act. I am... |
| 00:36:1214 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, that is terrific, and I hope that my Udall cousins are all treating you well. Turn them over to me if they are not. |
| 00:36:26 |
Napolitano, Janet - Governor, [D] Arizona
Your Udall cousins are treating me very well and we could use more of them. Thank you. |
| 00:36:2639 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
I think I have about 5,000 of them in Arizona. Mr. Wagoner, thank you again. You know, as I listened to your testimony and have considered... |
| 00:37:051 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
We haven't, Senator, added them up. Frankly, I think as the Governor mentioned, it is a little bit of, in some sense, a dicey practice of... |
| 00:38:0611 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Are you mindful of Fortune 500 companies or perhaps even your competitors following similar enlightened models as General Motors is in health... |
| 00:38:171 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Yes. I think different companies have begun to seriously focus their best thinking on health care costs at different times because I think,... |
| 00:39:461 min. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Richard, 2 weeks ago we had in this Committee a most fascinating hearing on a topic called medical tourism. We had testimony from an ESOP-owned,... |
| 00:41:0010 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I have to say I am familiar with it, having read about stories such as those you are citing, but it is not something that we have studied. |
| 00:41:10 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Is it something you will have to look at? |
| 00:41:1031 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
It is not something that we are looking at in detail right now. I would say just from the practical perspective, as we see it, because of... |
| 00:41:41 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
All the pre-ops were done by teleconferencing, like we are doing with Governor Napolitano. |
| 00:41:41 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Right. |
| 00:41:4117 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
I was astounded by what I learned in that hearing and I just simply note it to you because there is a lot of difference between $6,000 and... |
| 00:41:5853 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I think, Senator, if I could comment, I think perhaps something that we would learn from that is why can they do that for $6,000. Certainly,... |
| 00:42:5113 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, there are a lot of Republican and Democrat Senators wondering the same thing. So, anyway, my time is up and I want to note Senator... |
| 00:43:0446 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Thank you very much. Mr. Wagoner, you talked about the cost of health care spending, of course, and the fact that almost 40 percent... |
| 00:43:501 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Senator, I think you have stated our position very well. Our experience is as you suggest and we do think there has been progress in enhancing... |
| 00:44:579 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
In your statement, did you give us an estimate on, in your judgment, what generic drug usage in your company is saving you? |
| 00:45:0653 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Well, yes. We said that of all of the formularies that offer generic drugs, generic alternatives, we have had about a 90-percent success... |
| 00:45:5921 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
So can I conclude that you would suggest that we need here--to the extent that we are in a position to influence the process, we need here... |
| 00:46:2042 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Our experience has been very good. It has got, obviously, to be done on a thoughtful basis. I think that has worked out very well from our... |
| 00:47:0233 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Thank you very much, Mr. Wagoner. Governor Napolitano, some States that have expanded home and community-based services, such as your State,... |
| 00:47:351 min. |
Napolitano, Janet - Governor, [D] Arizona
Yes, Senator, thank you. We have avoided the woodwork effect because we use a pre-assessment screening tool, which is a very effective device.... |
| 00:48:4017 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Do you think that the relatively smaller size of your State, as opposed to the really larger States in our country, gives you a somewhat... |
| 00:48:5738 sec. |
Napolitano, Janet - Governor, [D] Arizona
We are the 17th largest State in the country, so we are at least medium, and we have a large senior population. In fact, by the year 2020,... |
| 00:49:35 |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
That is very good. Thank you, Mr. Chairman. |
| 00:49:3521 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you, Senator Kohl. So you won't think we are rude, they have called a vote. I would propose that Senator Kohl and I rush over and... |
| 00:49:5659 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
Mr. Chairman, thank you. Mr. Wagoner, as you know, since 1945 and Harry Truman, this country has been trying to come up with a way to make... |
| 00:50:5557 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I obviously can't speak for everybody, Senator. I can say from General Motors' perspective--and certainly I talk to my colleagues... |
| 00:51:5243 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
Tell me your thoughts about the idea of shared responsibility, that there is a role for a government, there is a role for the private sector... |
| 00:52:351 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Well, obviously, our model, Senator, is one that involves the three parties really working together to fund the health care expense, and... |
| 00:53:4834 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
I think you are right, and my seat-mate, Senator Clinton, has done very important work in the technology area, but I do want to come back... |
| 00:54:2257 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Well, again, I don't think I am in probably a position to tell you what should be required of all employers. You know what we do. My experience... |
| 00:55:1956 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
Let me ask you about one idea that I am looking at with respect to the role of the employer. I hear constantly from businesses that their... |
| 00:56:1541 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Well, I know that some companies have done that. We have done that at specific sites and I think have had some success doing it. I think... |
| 00:56:5613 sec. |
Wyden, Ronald "Ron" Lee - U.S. Senator, [D] Oregon
My time is up and, as you know, my seat-mate has a longstanding interest in this issue, as well, and I am going to give her the gavel and... |
| 00:57:09 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Thank you. |
| 00:57:09 |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Thank you. It is good to see you again, Mr. Wagoner. Governor, welcome. We are delighted to have you be part of this hearing as well. |
| 00:57:0910 sec. |
Napolitano, Janet - Governor, [D] Arizona
Thank you. |
| 00:57:1913 sec. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
GM does business all over the world. You obviously are an American company with global reach and we hope that continues. You have employees... |
| 00:57:32 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I would say we have employees probably in 40, 45 countries. |
| 00:57:3210 sec. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Have you done an analysis of your health care costs in those other 44 countries? |
| 00:57:42 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
We have. It is concentrated primarily on the, let me say, 20 countries where we have most of the employees. |
| 00:57:4212 sec. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Do those include Canada, European countries, as well as Asian countries? |
| 00:57:54 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
They do, Senator, yes. |
| 00:57:5410 sec. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Is that information that could be made available to this Committee in some non-proprietary way for a basis of comparison? |
| 00:58:04 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
We would be glad to share that information with the Committee. |
| 00:58:043 min. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Obviously, what I am trying to get at is that I think American companies are being put in an impossible position when it comes to a global... |
| 01:01:4960 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Senator, I share many of your views and I think your analysis is correct that if you compare the cost of health care that we pay for employees... |
| 01:02:4911 sec. |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Mr. Wagoner, I am so sorry, but they have told me if I don't go to vote, I am not going to get to vote. I would love to get the rest of... |
| 01:03:00 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I would be glad to do that. |
| 01:03:00 |
Clinton, Hillary Rodham - U.S. Senator, [D] New York
Thank you so very much for being here. |
| 01:03:0048 sec. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Yes, ma'am. Thank you. The Chairman [presiding]. Thank you, Senator Clinton. Before we let you go, just a couple of follow-ups I had. Governor,... |
| 01:03:4850 sec. |
Napolitano, Janet - Governor, [D] Arizona
One is we are really one of the largest purchasers of health care in the State and that gives us some market power. What we do is we have... |
| 01:04:38 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Did I understand you to say that you are the purchaser of prescription drugs as well? |
| 01:04:3836 sec. |
Napolitano, Janet - Governor, [D] Arizona
Well, that is part of the capitated costs. It is a full-risk, capitated program, and part of that is the pharmaceuticals. So we leave it... |
| 01:05:1431 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Richard, as you are no doubt aware, the Centers for Medicare and Medicaid Services have tried without a great deal of success to publish... |
| 01:05:451 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
We have been able to do this successfully, I would say, on a limited basis, in areas where obviously we have concentrations, high numbers... |
| 01:07:21 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Senator Kohl has a follow-up. |
| 01:07:2130 sec. |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Thank you. Just a word from each of you, if you would, on the importance of health information technology programs, their startup... |
| 01:07:5126 sec. |
Napolitano, Janet - Governor, [D] Arizona
Thank you, Senator Kohl. Over a year ago, I issued an executive order and what I did through that executive order was create task force... |
| 01:08:17 |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Very good. |
| 01:08:172 min. |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
I wholly endorse what the Governor said. I think she laid out the benefits. The case is compelling. You would be sensitive from your... |
| 01:10:18 |
Kohl, Herbert "Herb" H. - U.S. Senator, [D] Wisconsin
Those are good answers. I thank you both very much. I thank you, Mr. Chairman. |
| 01:10:1832 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Richard Wagoner and Governor Napolitano, we can't thank you enough for sharing your time on this very important issue, an issue that eventually... |
| 01:10:50 |
Wagoner, G. "Rick" Richard Jr. - Chairman and CEO
Thank you very much. |
| 01:10:50 |
Napolitano, Janet - Governor, [D] Arizona
Thank you, sir. |
| 01:10:501 min. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Thank you. Mr. Don Marron is the acting director of the Congressional Budget Office. We welcome you. Thank you, Don. He will... |
| 01:12:016 min. |
Marron, Donald B. - Acting Director
Thank you, Mr. Chairman. It is a pleasure to be here today to discuss the Medicaid program and the challenges it faces as a result of rising... |
| 01:18:40 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
It gets its name from people coming out of the woodwork for it? |
| 01:18:40 |
Marron, Donald B. - Acting Director
Exactly. |
| 01:18:40 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
All right. |
| 01:18:4023 sec. |
Marron, Donald B. - Acting Director
You may not get the reductions in overall spending that you might have thought just by comparing the per- capita costs of the two systems.... |
| 01:19:0341 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, on that issue--and I know that has been the problem with home care, is the woodwork effect, and yet it does seem to me if they are... |
| 01:19:44 |
Marron, Donald B. - Acting Director
Yes. |
| 01:19:4438 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Their report has shown that the Medicaid program would secure $83 billion over 10 years in savings if all the States moved to a full capitation,... |
| 01:20:2243 sec. |
Marron, Donald B. - Acting Director
Certainly. We took a very quick glance at the study this morning. We have not reviewed it in any great detail. What I took from it from... |
| 01:21:05 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Yes. |
| 01:21:0536 sec. |
Marron, Donald B. - Acting Director
As I understand it again basically just from a quick glance, their analysis presumes that these changes would essentially happen overnight.... |
| 01:21:41 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Why isn't it? |
| 01:21:4152 sec. |
Marron, Donald B. - Acting Director
Well, it is interesting. Arizona is clearly a very special case. As the Governor mentioned, they were the last entrant into the Medicaid... |
| 01:22:3316 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Can you give me an example of some challenges, say, hypothetically Arkansas would have adopting what Arizona has? Are there States that... |
| 01:22:498 sec. |
Marron, Donald B. - Acting Director
I think the primary challenge would be that Arizona has worked at managed care since 1982. |
| 01:22:57 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Managed care isn't as accessible in other States? |
| 01:22:5710 sec. |
Marron, Donald B. - Acting Director
That not every other State has chosen to go that far. So it is not something where you can easily just switch from a more fee-for-service-oriented... |
| 01:23:07 |
Smith, Gordon H. - U.S. Senator, [R] Oregon
It takes a more mature industry in health care to deal with their system. |
| 01:23:0717 sec. |
Marron, Donald B. - Acting Director
Yes, and then there may also be differences in the population covered, but I am afraid I don't have those details at my fingertips. |
| 01:23:2413 sec. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Do you ever do studies that actually make recommendations to CMS on these kinds of things or encouragement to give these kinds of waivers... |
| 01:23:3716 sec. |
Marron, Donald B. - Acting Director
We at CBO studiously avoid recommendations of any kind, if possible. Our job is essentially to serve you and to give you the kinds of information... |
| 01:23:531 min. |
Smith, Gordon H. - U.S. Senator, [R] Oregon
Well, obviously, we are going to have to do something continually on the whole entitlement category because eventually we will have no choice,... |