Thursday, March 12, 1998
Discussion: Draft Chapter Ten: Reducing the Impact of Errors
Secretary Shalala: Let's move on to the next, let's move on to the next, the last chapter. And I'd like to ask Sandra Hernandez and Gail Warden to begin the discussion, and I think Sandra is going to begin it. The chapter is called "Moving Towards Error Free Health Care."
Commissioner Hernandez: Thank you, Madam Secretary.
Since the commissioners last saw this chapter there has been obviously significant re-revisions of it. The subcommittee had two conference calls since our last meeting which the majority of the subcommittee participated on, as well as a number of other commissioners who have sat with us during sort of our extended subcommittee meetings looking at the specific issues both related to reducing errors and trying to create an environment where errors are more readily identified and therefore potentially corrected from a systematic point of view and then on the more difficult issue of remedies and compensation.
What you see before you today I would characterize as the very small piece of common ground that we could achieve given strongly divergent opinions about this issue that were represented on the commission.
I think it is important, as you mentioned Secretary Shalala, that this commission has worked on 12 full chapters of I think a phenomenal analysis and policy, recommendations that are highly relevant and in may ways readily applicable. And the work of the commission overall has been to find that common ground.
Despite that, I think that the question about whether there is an evenness or inequitability in remedies is one for which we have again very strongly divergent opinions on this commission. And I think that what this chapter tries to do is not to detract from the considerable work of the rest of the report, but to really to try to identify that area that constitutes that small piece of common ground that we could agree to.
I don't believe, contrary to some of our discussion at the last meeting, that more conference calls, more testimony from experts, or more committee meetings would have identified a broader common ground on this issue for better or for worse. Likewise, I don't think any commissioner believes that this issue is resolved outside of this room. And I think what we need to try to do today obviously is resolve it inside the room as a full commission as best we can. But ultimately I think consumers and stakeholders and ultimately legislators will have to take this debate the next step forward.
I do think that it is important for all of us who play whatever role it is we do in the health care industry, whether that's as providers or policy advisors, as advocates, or as consumers, to recognize that we do share some responsibility in what is the least common denominator for those unfortunate individuals which we've sometimes characterized as anecdotal cases for whom injuries, sometimes serious, sometimes not, but do occur that are potentially preventable. And I think from a quality perspective, which has been the orientation of our work, that we all need to sort of look at those unfortunate cases, not so much as anecdotes for which more or less analysis might ought to be needed, that those individuals really reaped the most unfortunate aspects of our health care system and that ultimately we share some responsibility in helping the policy move forward around some better resolve for that.
The chapter's recommendations, the two recommendations that are identified on page one in the revised version, which everybody should have a copy of, I think there was little disagreement about at our last meeting. There was discussion on the conference call about the extent to which we would want to discuss in any way, shape or form, an ongoing dialogue which was in our third recommendation about the questions of remedies. In some ways that's a moot point because that ongoing dialogue is going to occur with us or without us, and with the recommendation, without the recommendation.
Nonetheless I would sort of put the chapter in the hands of the committee at this point and simply say it does represent the least common denominator of common ground that we could identify, given the very strongly differing opinions.
Secretary Shalala: Gail, do you have anything to add?
Commissioner Warden: Not a lot. I think Sandra has articulated it very well.
I guess I would only remind the commission that there has been a tremendous amount of effort put into trying to forge a document in this chapter that on the one hand identifies the issues, but at the same time is sensitive to the arguments on both sides. And we've tried through testimony with five different panels in which we heard a lot of conflicting opinions among the people on those panels. We've tried to back up and articulate some principles that we thought might be a way of addressing this issue going forward. And we've also tried to use language in the chapter that tries to be steer away from being judgmental about the issues on either side of the arguments.
And I think that, as Sandra said, this is probably the closest we can come to what we think are a chapter that on the one hand isn't silent, but on the other hand identifies the terms of the debate, as the Secretary said, and with the hope that it will raise the issues that then will be addressed in time.
Secretary Shalala: Good.
Steve, and then Bob Georgine.
Commissioner Sharfstein: Yes, I'm a member of the subcommittee. And I think Sandra put it very well that this the small common ground and least common denominator on this very contentious subject. One concern is that by reading this one may assume that there is possibly a consensus that everything is okay when it comes to remedies available under ERISA, and there was no consensus on that. Everything is not okay, and there are strongly held feelings on the other side of that.
But we could not, despite a tremendous amount of effort, and very long telephone subcommittee meetings, and I was on a car phone and ended up in a parking lot on the car phone, and I must have looked like I was quite crazy talking for that long in the parking lot, but there was no consensus on what could or should be done given the cost and benefits of potential change. So that's why we are where we are.
Secretary Shalala: Bob?
Commissioner Georgine: Unfortunately I wasn't able to participate in the conference calls, and I think Sandra pretty much touched what I was going to ask in her opening remarks. But the third recommendation where we agreed that we should engage in a national dialogue regarding the form of compensation methods for individuals who are injured in a wrongful care decision, I'm assuming by what Sandra said that we're going to have dialogue on that anyway. And is that why it was left out?
Secretary Shalala: I think that they couldn't get consensus on the third recommendation either. So I think that just by raising the issues in some ways the commission starts the dialogue, and that others including the people around this table will have to continue that dialogue. This is clearly an issue in which we're taking a smaller step forward than we are in some of the other issues.
And I made the point that some issues are ready for big steps where you could build the consensus, and some issues clearly aren't. And I know people are disappointed, but if you look at the overall document, look at it in the context of that. So I think these are the -- what you see here is what the subcommittee could agree on, and in a sense that we could not get wider consensus on the commission. So I think that's the answer to the question.
Commissioner Sebelius: Thank you, Madam Secretary.
I also am a member of the subcommittee and I think that Bob's question is important for the group to understand. If you recall at the end of the last meeting we left and the staff left with the direction that the chapter would be reformatted around the three recommendations which were in the original chapter ten which you all saw at our February meeting.
We reached a fundamental roadblock at the first conference call where it was very clear that there was no consensus on the third recommendation, which if you'll recall talked about moving the dialogue toward a standard where remedies would be equitable, fair, exact, and that became a key point. So if you start with no consensus on that point and back out of that, you arrive where we are today.
I think that is sort of a different sense than a lot of the commission members had as we left the last meeting, but it becomes very clear after I would say an hour into our first conference call that there really wasn't consensus about that third recommendation, that we could not move forward assuming that that was the goal that we were all trying to reach, and so anything that referred to that goal or led us toward that goal has now been removed from this chapter.
Secretary Shalala: Betty?
Commissioner Bednarczyk: I just want to say that this is such an important issue, and while I appreciate the diversity of the views and the extent of the severity of the problem, to not call for some type of action even in the form of a national dialogue to figure out the solution I believe would be a serious omission to our work.
Secretary Shalala: Do you want to recommend that to see if we can get consensus on the national dialogue, the call for a national dialogue?
Commissioner Bednarczyk: Yes.
Secretary Shalala: Okay. I'll take comments on that as well as on anything else you want to have come in.
Does anyone else have any additional comments?
Commissioner Weil: Madam Chairman, I have a couple of specific on the text, but I guess maybe it would be better to do --
Secretary Shalala: No, no, this is specifics.
Commissioner Weil: Go, okay. Well, sorry.
Secretary Shalala: Give me the language on the national dialogue too so I can read it.
Commissioner Weil: Let me start with a couple of specific comments on the
text, and I am not working -- sorry, I marked up a document called "Draft
chapter ten revised 3/10/98 not to be confused with draft chapter ten revised
3/10/98" which --
Secretary Shalala: Do you have the redlined version?
Commissioner Weil: No, I have a clean version, but not the one that was on our desk this morning. It was the one that came to us yesterday or the day before.
Secretary Shalala: I'm sorry for the confusion. We should change the date on it. There is one that's in front of you today that has some very minor changes on it. I mean you can take a look at it. They are redlined, so they're easy to spot. Redlined means blacklined. The blacklined here. You'll see it right away because there is a sentence added right at the beginning under "Evidence of errors."
No sooner did we send out the 3/10 draft, the day before yesterday and we did get some comments both from Ben Lytle and from Randy MacDonald, and we've incorporated to the extent that we could those suggestions that we thought made the document stronger and were consistent with the discussions thus far on the subcommittee. There is one issue that I'll raise in a couple of minutes that was in a letter from Ben Lytle that we did get some information from the general counsel on to clarify the legal issues. But you should be looking at the one in front of you, and there are just minor changes I believe, and you will see them redlined.
Commissioner Weil: Okay, so if I work from the blacklined copy that was on our desks today, on page two after the four bullets is a sentence that says "Much less is known about the incidents of injuries." It seems to me that after that sentence we need to say "One reason we know so little is that there is no systematic mechanism for gathering information about such injuries." This is not just sort of --
Secretary Shalala: That's fine.
Commissioner Weil: -- magical, there is a reason we don't know.
Secretary Shalala: That's fine.
Commissioner Weil: At the end of that second page, the first sentence says "Although
the efforts of plans to reduce over utilization have likely had a positive overall impact on cost and quality." I don't know that we got evidence of that, and I would feel more comfortable if we said "Efforts by health plans to reduce over utilization when based on evidence showing that certain procedures or services are unnecessary may have a positive impact on cost and quality." That's consistent with our view of the definition of quality as opposed to just utilization.
Secretary Shalala: That's fine.
Commissioner Weil: In two places, one in the sentence that follows the one I was just referring to --
Secretary Shalala: Are you still on page two?
Commissioner Warden: -- it's now the sentence that carries from page two to page -- I'm sorry, yes, the very last line of page two.
Secretary Shalala: That starts "An inappropriate" --
Commissioner Weil: "An inappropriate," yes, "an inappropriate decision."
Secretary Shalala -- "An inappropriate decision," okay.
Commissioner Weil: Yes, we can fix that. "Not to authorize where it is ultimately determined that the service was medically necessary." I would like us to remove the term "medically necessary and," because I'm not sure that we should be adding force to the use of medical necessity as the standard for coverage in insurance contracts when so many services, particularly for people with chronic needs, are not in the strict definition of medical necessity, but are necessary for functioning. It seems to me we ought to be fitting the contract terms, not relying on medical necessity in our deliberations. I don't know if that makes sense to people.
Secretary Shalala: Randy?
Commissioner MacDonald: I guess I'm having a problem. I'm having a difficult time understanding the differentiation. I mean why would we -- something? We just got done talking about procedures that are not necessary --
(Whereupon, microphone malfunctions.)
Secretary Shalala: Randy, you're going to have to put your microphone on. I'm sorry.
Commissioner MacDonald: There's a conspiracy here. You put me off guard now.
Alan, I mean I guess where I'm having a problem, if we're talking about unnecessary medical procedures, then I think the contrary to that is, is that we're calling for medical necessary procedures, and I think that was our intention about putting it in.
I'm not quite sure where you're going from the contract language standpoint. I don't want to argue it on a legal basis. That's all I'm trying to say.
Commissioner Weil: Let me see if I can clarify. The sentence says "Inappropriate
decisions where it's ultimately determined that the service was medically necessary and covered by the plan." If the plan, most plans say it must be medically necessary to be covered, so it's superfluous to say that it has to be medically necessary. Because if the plan says it must be medically necessary and it's not, it's not covered by the plan.
My problem is there is great peril in the term "medical necessity," as the linchpin for coverage decisions, and I don't think we've talked about whether or not that's the appropriate standard. And I don't feel that we should be echoing a standard that we've not discussed with respect to what services should be covered, so I'd rather just rely on the plan.
Secretary Shalala: Alan is taking the more conservative position than you are.
Let's see if anyone else wants to get into this.
Tom, specifically on this issue?
Commissioner Reardon: Yes.
Secretary Shalala: Yes, okay.
Commissioner Reardon: I'm having difficulty agreeing with Alan because I think the issue is where insurance coverage or where the determination was medically necessary and as a covered service and wasn't provided.
I'm not sure I'm understanding, Alan, where you're coming from because medical necessity, not medically necessary is a very commonly used term of why we provide services. I mean would we provide services when it's medically unnecessary?
Commissioner Weil: The issue is not necessity, it's the medical. If you have a benefit for long term care services and those services might improve your functioning or might make you more able to live independently, and you've purchased a contract that's designed to improve your ability to live independently you might have a medical necessity test for certain services. And I think that's a good thing. It's not that I want us to be paying for unnecessary services, it's just that there are contracts that cover things other than medical services. And so to put the word "medical" in our definition of what should and shouldn't be covered seems to me a stretch.
I will gladly drop this, if I am alone, but --
Secretary Shalala: Let me go to Peter, Kathleen and Ron.
Commissioner Thomas: You're not alone. You're talking my language at least.
And this is an issue that comes up time and time again with disability, with services that are provided to people who need ongoing supports, and types of health and health related services that enable them to be functional. This is right down what I have been trying to talk about for months and in fact years.
And I support Alan. It's difficult to raise this issue on the last day in kind of this way, but the fact is, is that he's not alone.
Secretary Shalala: Kathleen?
Commissioner Sebelius: Ditto. And I don't think, Randy, given the fact that, as Alan said, covered by the plan encompasses a determination often of medical necessity because that's often written into the contract language. We're not really changing the import of contracts. But I think the debate that often comes to our office is what does medical necessity mean, how is it determined if it differs between the medical director and the primary care doc who makes that determination.
So this is probably the most contentious term in any insurance contract that I see on an ongoing basis. It often limits benefits to mental health services where somebody has 30 days of outpatient care, but they can't get it because of some kind of gatekeeper.
So I think removing that still says, and covered by the plan which incorporates that kind of decision, but it doesn't give an additional endorsement to the terminology of medical necessity, which we really haven't discussed or examined in any kind of detailed way.
Secretary Shalala: Randy, do you want to respond to that and then I'll keep moving?
Commissioner MacDonald: Yes, it's interesting.
(Whereupon, microphone malfunctions.)
Secretary Shalala: There will be more debate.
Commissioner MacDonald: Thank you for the promise.
I guess where I keep getting hung up is that something can be covered by the plan and a person can ask for it, but if it is not medically necessary, it shouldn't be given. And perhaps all of you are right, that we have not used the term "medically necessary," I mean I don't recall that, and I'll take it for that, for your word, but it is quite common in my mind from a fiduciary standpoint of what I look at in that regard.
And so I guess all I'm worried about is that just because something is covered doesn't necessarily mean, I think to Tom's point, that I have to provide that service. And that's the issue. A person can come in and say I can have this taken care of, but if it is not necessary to do, then why perform it. Because one of the things that we're trying to do is to get waste out of the health care system, we're trying to eliminate that which is unnecessary. And we know there has been evidence that has been provided to us that there are things are done that are inappropriate. And so consequently I think that's why this language has been added.
Secretary Shalala: Yes, I think we may be -- we actually don't have a disagreement on the substance, we're trying to figure out how to say it. And I think some of you are talking about medically appropriate as opposed to coverage.
Let me keep going around the room and then we'll figure out how to resolve this because I don't hear a big disagreement.
Commissioner Pollack: I just wanted to reserve my spot on the cue for the discussion of the whole chapter, not on this particular point.
Secretary Shalala: Okay, all right.
Okay, Kathleen, Beverly?
Commissioner Malone: I want to speak in support of Alan's statement. And particularly I think some people may equate prevention with waste.
So, Randy, I'm concerned that those folks who would say that preventive services are not medically necessary so therefore they shouldn't be covered, and as well as the mental health piece. So those kinds of concerns, and I don't think we would be taking away the essence of those things that are medically appropriate within the plan, but we wouldn't be adding that emphasis, those boundaries that would actually limit and give people permission to move away from the kinds of activities that I believe are central, such as prevention.
Secretary Shalala: Let me go to Nan and then to Steve, and then I'm going to let Janet make a recommendation.
Commissioner Hunter: Madam Secretary, I really have a process point, it's not directly on this point, but if you would be so kind perhaps as to call on me when we resolve this particular point of language, I would like to suggest something about process for the discussion.
Let me just say it. My suggestion, it will be so anti-climatic after that.
Secretary Shalala: Go ahead.
Commissioner Hunter: My suggestion is that perhaps on this chapter we, rather than call on individuals for all of their comments, that we proceed perhaps by portions of the chapter that I think that might lead to a more kind of coherent discussion. And so perhaps we could sort of start with any overall comments and then the chair could divide it in so much --
Secretary Shalala: Okay, I actually was going to go back to overall comments and then move through the chapter. So we just got into something specific right away.
Commissioner Sharfstein: One suggestion would be to say that it's ultimately determined that a needed service was covered by the health plan. I mean that would be one way to resolve it. Don't use the word "medically necessary," use the word "needed service" and --
Secretary Shalala: Is everybody okay with that?
Commissioner MacDonald: Who determines need?
Commissioner Sharfstein: There was no indication here who would determine what was medically necessary, so I think to say "a needed service," so I think that's -- I mean you leave it, that becomes the discussion.
Secretary Shalala: Janet, do you have --
Executive Director Corrigan: I was just going to say that it seems like the term "medically necessary" is quite loaded. And similar to where Steve was going, what about just saying "Determined that the service was appropriate and covered by the plan" so it's a bit more general, not getting into the details and legal explanations of medically necessary.
Secretary Shalala: Appropriate --
Executive Director Corrigan: But you're still speaking to the fact that it should be an appropriate service.
Secretary Shalala: Sandra and then Tom?
Commissioner Hernandez: Yes, I think, Janet, that's a good suggestion particularly because this chapter goes out of its way to emphasize inappropriate decisions. And we took the liberty in this chapter to try to define what that was. I think in this version to put "appropriate" works with the other language and semantics we've been using in the chapter and is less loaded.
Secretary Shalala: Okay, Tom?
Commissioner Reardon: I think we're going to have to come to a compromise,
but I'm still concerned because we've had a system for three or four decades where patients could demand what they wanted and generally receive it whether it was necessary or not because insurance covered it. And that's an argument that we always hear in the exam room, is well why can't I have this, I want it and my insurance covers. And it's becoming more and more clear that the physicians are having to say well I'm worry, I know you want it, but it isn't necessary.
And so to say that just because it's covered you're going to provide it, we're trying to get that out of the system. So there's going to be a compromise, but I think we need to understand that. That, you know, we can provide more care and the patients can demand more care than we can possibly afford, and somewhere along the line we have to make some decisions about what's necessary.
Secretary Shalala: Let me close down this discussion, unless you've got something specific, Steve?
Commissioner Sharfstein: No, just that's why I like the word "needed" because appropriate is very broad. There are a lot of services which could be appropriate, but may not be necessary. So I think that that's why "needed" is important, "needed service," and that's what I would prefer.
Secretary Shalala: Without objection, done.
Okay, what I'd like to do now is to let everybody give us whatever their general comments are in the chapter, then I will move through section by section in the chapter. Make your general comments, but if you have specific recommendations for changes, I will take those as I go around the room on specific areas.
Let's start with Ron.
Commissioner Pollack: Thank you, Madam Secretary. Let me just say before I get into my comments, I want to express thanks to two different sets of people here.
First I want to reiterate the thanks that you expressed, Madam Secretary, to the staff. And I think not just work on the entire commission, but the efforts to try to resolve differences I thought were done in an honest and open and in a way that I deeply respect and appreciate.
And I also want to express my appreciation to the subcommittee, and particularly the co-chairs of the subcommittee, Sandy and Gail. Clearly you had an impossible mission when it comes to dealing with remedies aspects of this chapter, and I very much appreciated the openness with which you've conducted this effort.
The ability to have this discussed and have the hearings that we've had, the last two sessions, I just want to say, as I expressed my disappointment about the chapter, I want to be clear that I very much appreciate the work of the co-chairs and the subcommittee and I don't want that lost in this discussion.
So now let me turn to the merits of chapter ten. And in doing so I think I need to say just a few words about ERISA itself. All of us understand --
Secretary Shalala: Ron, I hope you can keep, everybody can keep their comments brief because we've got a lot more work to do.
Commissioner Pollack: I'm going to try to do that.
You know, as we all understand the ERISA statute not merely preempts states from establishing remedies from health plans, but it actually creates what is purported to be a remedy that from a consumer's standpoint is wholly ineffective. It only entitles one to the service denied even if that service is no longer useful, and really belies the notion of any rights because rights without any real remedies are simply not rights.
Now, one of the things that we've heard from numerous witnesses is that we've heard that there are judges all across the country exasperated by their inability to correct what they believe are clear injustices. When I conclude what I say I am going to ask the staff to circulate just to give you a sense of these are not isolated incidents. I've listed here over 20 relatively recent federal court cases which illustrate this phenomenon.
The only recourse that these judges tell us that's applicable to these injustices is amending the ERISA statute. And so let me just say that for the bad apples among HMOs the ERISA statute is the only thing that makes the National Basketball Association's treatment of Latrell Sprewell seem like harsh punishment. For recalcitrant plans ERISA offers a virtual license to wrongfully deny or delay care. Now, what does that mean in terms of what we have in the chapter that's in front of us?
I don't have any illusions, nor do I think anyone else around this table has any illusions about the commission's ability given the uniminity rule to achieve a consensus recommendation on the matter of ERISA. But after this issue has received more commission time and attention than any three issues combined, after one lengthy hearing in Chicago and two here in Washington, after thorough briefings from experts on all sides of the issue, and after we had clearly promised that we would be addressing this issue in our final report, I find it incomprehensible and inappropriate that we fail to issue a clear presentation about the alternative decisions that can be made together with their strengths and weaknesses from different perspectives.
Those alternatives range from retaining the status quo to the implementation of stringent deterrent measures to more moderate remedies. But I would suggest to you that through our silence about these alternatives, we offer only one alternative and that's the status quo. Without an honest and balanced presentation of the alternatives, including the differing views around this table about those alternatives, I cannot agree with the action we are supposed to take today.
This is, as others have said at previous meetings, a defining issue. Through some process, whether we do it jointly, separately, or through some other mechanism, we should lay out the choices as part of this report and make those choices clearly understandable for future decision makers. There is nothing mysterious about what those choices are. We know what they are. The choices have received considerable expert commentary in our proceedings. It behooves us not to shove this controversy about choices under the rug in our final report.
And let me just conclude that when it comes to these choices, silence is not an option.
Secretary Shalala: Thank you.
Other comments, other general comments on the chapter?
Commissioner Reardon: I'll be very brief. I am disappointed that we didn't deal with the ERISA issue more explicitly. I think we do talk about the problems. But more than that, the original chapter had in it some comments about the professional liability issue, and I should say -- and the various ways of resolving that. I had thought that was going to be a consideration, at least that we were going to lay out the problems, not necessary to make recommendations or solutions.
Executive Director Corrigan: The section on page three "Reducing treatment related injuries," it begins the second paragraph, it's the letter, it's the second half of page three. It was just moved up under the whole discussion of errors.
Commissioner Reardon: Well, it was a much more detailed discussion, Janet. I know there was a page and a half in the previous one. That was my concern.
Executive Director Corrigan: Yes.
Commissioner Reardon: It laid out the various alternatives, and then it was cut down. I appreciate the fact that there is some mention.
Secretary Shalala: Okay, additional comments?
Commissioner Pardes: Well, extending that a little further, I wonder if it would be possible, since I share Tom's concern about putting one additional thought into that section, and that is that we take note of the fact that a number of states have made some moves which I would construe in a constructive direction. And I would raise the question of our being able to say something like those should be seen as models from which a national discussion might emerge or that might be instructive for other states.
Secretary Shalala: Sandra?
Without objection, we'll have to look at the words.
Commissioner Sebelius: At least in our discussion we certainly did not discuss endorsing a national no fault model. Nor did we have any testimony on what has happened to the states that have done this, have errors been reduced, or anything else. So I would be very reluctant to transfer what was attempting to be just a capture of what has happened. States have capped malpractice awards, states have capped punitive damages. That's an accurate statement, and make that into any kind of recommendation because that certainly was never discussed. We didn't have any testimony on that, we didn't have any evidence presented. And I for one would be very uncomfortable recommending any national preemption of state law in this arena.
Secretary Shalala: Herb?
Commissioner Pardes: Well, I'm not sure that we couldn't find a bridge between your comment and mine, Kathy. My main point is that one, take note of it, I think you should take note of any adverse as well as positive results of it. My only point is that one just doesn't stop and say it happened.
Secretary Shalala: Okay.
Commissioner Pardes: I'm happy with some statement which says --
Secretary Shalala: You know, let me ask the staff to draft a statement, and when we get to that section we'll take a look at some language on that. But right now I'd like some general comments on the chapter so I can start moving through.
Commissioner Hunter: Yes, I want to make a different proposal in terms of how to resolve this issue. I mean I totally agree with what --
Secretary Shalala: Which issue are you talking about?
Commissioner Hunter: -- the issue of how the chapter should address the
Secretary Shalala: Okay.
Commissioner Hunter: As Sandra said, I think what the chapter now is or could be at least potentially is basically the lowest common denominator of sort of where we all stand. And it seems to me as a process point we really have a fundamental choice. One is to go in that direction, whether it's in the form of questions or whether it's in the form of outlining what the policy possibilities are. I mean we've all spent an enormous amount of time trying to word smith this document in a way that everybody can put one toe on to this smallest piece of common ground.
And I would suggest, and that's ultimately what we're going to end up with, and I think frankly there are too many documents, and especially too many government documents, that end up with that kind of avoidance mechanism, frankly, of what is a central issue I think for most of us. And I would suggest that as an alternative we state not in neutral terms, but state in very strong terms what the positions are. I think there are fundamentally two positions, I could be wrong, but I would suggest that we state in an equal amount of space with no description about how many people agree with what position, what those arguments are. I think that's a clearer thing to do, I think it's more -- I think it's closer to taking responsibility for the kind of policy consideration that we are supposed to be doing.
And I think there are a lot of people here on both sides of this issue who have an enormous amount of expertise. And I think it's kind of sad actually to have this group of people come out with a document on this issue that none of us feels is really a quality statement of what the issues are. So that's my proposal for a way to try and deal with this.
I mean otherwise we're going into a discussion, I mean I can't live with the questions as they are now worded. We will, I'm sure, have a lot of discussion about, you know, shifting and whether this word or that phrase is value laden, and we can engage in that exercise, but I think it's important to realize we do have a choice, we could go a different route.
Secretary Shalala: Other comments?
Commissioner Weil: When I think about on the conversations we've had, those who felt that the current system works better than any alternative that was raised, they suggested two things that made it impossible for us to come together, other than actual disagreement which I think is really what prevents us from coming together. And the two things they raised were, we don't have enough information and we don't really know what the choices are.
And this document now I think does a credible job of identifying the areas where we don't have information. It lists a series of questions that are worth examination. And I agree with Nan, I would probably present some of them differently, but at least it does do that.
But what it does nothing to help the debate is take all of the information that we gathered and convey to those who are going to have to take this the next steps, which may include doing nothing, and helping them understand what the options are.
ERISA is so easy to say to say it's so complicated no one can understand, therefore there is nothing we can do. And what I think we heard from a lot of testimony from people with very varied perspectives is that actually the number of alternatives, including doing nothing, is quite limited. And they can be distinguished from each other with some clarity, and then people who have to make decisions can pick from among them.
And it's not just that this is a soup, it's actually a puzzle, but we know what the pieces look like. And I don't see how we can take all of what we learned and not at least lay out the pieces of the puzzle. We can then say that even looking at the pieces of the puzzle there are a lot of questions we need to answer in order to put the puzzle together.
But I would go back to where Ron was and say how can we walk away from all the time we spent on this issue without at least making the questions for policy makers more clear. I don't think that is too much to ask for the process we've gone through.
Secretary Shalala: Don?
Commissioner Berwick: I was listening carefully to Nan and others, and I think I join Nan in her suggestion. I have been quite persuaded that ERISA is very complicated and that this commission hasn't done the work necessary to suggest exactly what needs to change. I have also been persuaded as far as I can be that something is wrong. And the current draft doesn't say something is wrong forcefully enough for me.
People are being denied rights that they should have. I would find those who oppose changes in ERISA more credible right now if they would, and I would urge them to do so, say yes something is wrong, but we need to address the remedies very, very carefully. I think we backed too far up in the current draft. Where possible to put the kind of language Nan has in mind in, I'd be a little more comfortable.
Let me also say I don't wish to jeopardize, nor do I think anybody else in the group does, the entire report based on this issue. I just would rather see my views reflected in that document better.
Secretary Shalala: Other comments, other general comments?
Jerry, then Kathleen?
Commissioner McEntee: Madam Secretary, we were also disappointed over the fact that the chapter really didn't more directly take on the ERISA issue. We realize it's very complicated. We realize with the process that we have adopted here in terms of basically uniminity being defined as consensus, and we all essentially agreed to that, it's very, very difficult to find that middle ground on ERISA. But at least we would like to identify, starting with Ron's position and then moving to Nan's position, and the one that Don endorsed, we would like to see ourselves identified with that, and that something on this issue, whether it's opposing views or whatever it happens to be, we just believe should be covered in this particular chapter.
We, and Bobby Georgine can attest to this, we in the AFL-CIO, all the unions, have had real difficulties, I mean we have had conflicting views on ERISA in this particular area. And I guess over the course of the last month or so we have come together basically on our differences within the federation. That's a rather defining moment for the unions and the federation. But I think if we could find that common ground within the federation, at least in the commission's report we should say more and we should at least very basically define the issues and the alternatives.
Secretary Shalala: Thank you.
Tom and then Kathleen?
Commissioner Reardon: I'm sorry --
Secretary Shalala: Kathleen?
Commissioner Sebelius: Thank you, Madam Secretary. I think again I'd like to sort of weigh in on the notion that we made another attempt to re-craft the chapter. I was struck by Secretary Shalala's description of the various accomplishments of this commission, and her statement that there were some issues contentious enough that what we did was outline the terms of the debate.
And I for one don't feel chapter ten adequately outlines the terms of the debate of what will be on the table for Congress to deal with and ERISA. I don't believe that we will reach consensus on the goal of that debate. And I do believe that there are very strong and compelling arguments that really are premised on the fact that the debate should not begin. And that's, I guess, the frustration that we found in the committee.
The status quo position on ERISA really believes that having any debate in a legislative arena is too dangerous because it will open Pandora's Box and somehow everything will be lost. And so that I think we found ourselves doing as a subcommittee often was not even being able to articulate questions clearly because those questions led to a debate which should not start. And I think unfortunately that is what's reflected in this chapter.
I do think that we were able to put on the table other contentious issues, the issue of how to deal with the uninsured, the issue of lifetime caps. We were able to say at various points in this document, we couldn't reach agreement on this, but this is a serious issue, it needs to be addressed, we can't walk away from the table without recognizing that there are Americans who are uninsured.
We don't do that in ERISA. And I guess having an attempt to say this is an issue we could not reach consensus in our group about, but here are the outlines of the debate, here are the positions in the debate, and then call for a national dialogue I think would be very helpful.
Secretary Shalala: Okay, thank you.
I've asked people to start drafting something that might reflect this debate so that we can at least have an open discussion of something that I think probably would substitute, something a little stronger that would substitute for the section called "Issues for consideration," which is really where people are focused, but that's much too weak of a set of words to really point out both what the points of view are as well as what the issues are for the debate.
And let me have that drafting done, and meanwhile I want to collect any other general comments on the chapter as well as I'm going to move through the chapter and get some specific comments with the exception of that focus.
(Whereupon, microphone malfunctions.)
Commissioner MacDonald: This thing is not working today. I remember this feeling, well it was tenth grade English class and Ms. Coocher called on me and I felt like all eyes were focused on me, and I guess that's a little bit of what's happening today because it's real obvious to me that I'm perceived as being on the other side, and that's probably a fair perception.
Secretary Shalala: But no one has ever perceived you as being on the other side of an open debate and laying out the principles that we're doing.
(Whereupon, microphone malfunctions.)
Commissioner MacDonald: I will be just a tad longer than perhaps you want to me to be, and I don't mean to be, but I'll try to speed it up.
But let me tell you one of the things that I have felt that has worked very well in this commission is the sense of candor and honesty. And part of what is driving me to worry about the definitiveness of what we put in this chapter is by some unknown ability to take a position that others may use in a stronger term to push through the political process.
Where I come from is that in my mind what we should be focusing on all the time is the outcomes. That's what this commission was all about, is the outcome of the health care system, and that we should do everything in our power to stay out of the political process. Because we are not serving, if you will, in my mind at least, and maybe I am naive, but we are not serving the political process, we're serving our fellow citizens and we're trying to improve a health care system that by the way is pretty damn good already and we're just trying to make it better.
What I worry about is, is that if we somehow put in a document in a very strong way, and some people have expressed it that way, "in strong terms" was an expression, that we will create a cost or an unattended consequence that none of us understand. Let me give you an example. If we somehow endorse the concept of a remedy, there is a couple of choices that will occur, and I will use my company as one. That cost somewhere along the line has to be passed on. It's passed on in this instance to the employer. I have a couple of ways of looking at it. I can eat that cost, I can pass it on to the employee, I can pass it on to the produce or the service we provide, or I can eliminate coverage. That's the last thing this commission wants to do is to eliminate coverage. And I'm not threatening that, I'm just saying that's a potential alternative, we talk about alternatives.
There is another way, if we pass it on to the employee, the employee then has a decision to make, whether they can afford it. And we know by testimony that some employees who have health care coverage are rejecting health care coverage are rejecting health care coverage because they don't want to pay for it.
So what I'm trying to say to the commissioners here is that let's be very careful. I mean I can sense where everybody is coming from, and I will try to your point, Madam Secretary, to create a dialogue, but the issue of the strong terms and the strong positions I think is very dangerous. If I can paraphrase Ron Pollack when he said a right without a remedy is no right, I would suggest to you that a right without coverage needs no remedy, and that's what I'm really afraid of.
Secretary Shalala: That's a fair enough point. And let's see, I think the point that was being made is that to strengthen this chapter we may have to be clearer about what's in the arena for the broader discussion that needs to take place in this country, and let's see if we can get some language that will accommodate that and let's see if we can work through it.
Commissioner Berwick: Madam Chair, may I ask Randy a question just in the spirit of dialogue?
Randy, help me out here. I really have heard the level of concern about what might be torn apart by mistake if we get too invasive here. What I haven't heard is a clear statement from those who are most worried about that, about whether there is a problem. I mean it would seem to me at a minimum our report and the commission as a whole ought to be able to say that something really is a problem here. We don't know what to do about it, and we've got to be very, very careful. I don't want to put you too much on the spot, but let me do it. Well, please I respect your point of view completely, Randy, and you have been a great colleague, but don't we have a problem here and shouldn't we as a country really take a look at this and be very cautious and listen carefully to all sides, but can't we at least say something needs to be worked on here other than just putting a bunch of interrogatives out?
Commissioner MacDonald: I keep pressing this. This is broke, whoever is running it.
(Whereupon, microphone malfunctions.)
Secretary Shalala: What control she's got.
Commissioner MacDonald: You know, one of the things that I would try to do, Don, in particular is quite often when I look at, you know, my family and I would say to myself, you know, what would happen if it happened to me because I have to make those decisions day in and day out. I can't, I'm not a naive man, nor am I going to not be very credible and say there is no problem, that would be a lie. I mean we've had testimony that says there's problems. What I'm intellectually trying to understand is, if I solve one problem, am I creating more problems.
And that's really all this is about, is that if I'm in the business of providing health care coverage to a group of employees, whether I'm negotiating it with the unions or I'm just doing it because it's a competitive issue that I do, I want to kind of understand that where does my liability end. I mean, you know, there is a debate going on right now. I mean it sounds warped, but there is a debate going on right now within the halls of many circles that say where -- you know, it's like, if I provide single coverage and I provide family coverage and family coverage costs me $7,000.00 and single coverage costs me $5,000.00, should I really be paying that extra $2,000.00 or should I just be giving everybody $5,000.00. The whole issue comes down to is, where does my liability stop?
And if we start dealing with the issue of remedies in a way that begins to push liability to the employer community, what I'm saying to my fellow commissioners is look out. We may be creating yet -- we may be back here a year from now dealing with a bigger problem. That's all. And I can't predict that, Don. I'm just trying to say to you, yes there's got to be problems. We have (x) millions of Americans, there's going to be statistically problems. I just don't know how big one is to be solved versus the other one that we may create.
Secretary Shalala: Secretary Herman?
Secretary Herman: Picking up on what Don just said, Randy, I just want to push for some additional clarification here. Because as I listen to the discussion what I'm hearing is basically a threshold acknowledgement of the issue as opposed to perhaps, as I've listened to what you're saying and obviously I'm very much aware of the concerns on the employer's side here as well as what the unions have struggled through, you really are further down the road in terms of solutions and issues and what the current debate is around what we ought to be doing.
And I hear the commission asking for threshold acknowledgement as opposed to moving the ball further down the court, if you will, to be much more hands-on in terms of what we do about the problem. So I'm hearing whether we acknowledge as opposed to what we do. That's really the interpretation of what I hear is taking place around the table. And I'm asking basically for clarification from you just in terms of what I'm hearing.
Commissioner MacDonald: I think that's, I think that's a fair characterization. But again I just want to keep nailing the point that we've got to be careful in the use of our English language of how we indict what may be indeed going on. I think that we get too often hung up with focusing on the negative and not having some level of balance about what is also right. And, you know, if you can --
(Whereupon, microphone malfunctioned.)
Secretary Shalala: Apparently we --
Commissioner MacDonald: I'm troubled because it can go beyond that. I mean we're focusing on remedies right now, but ERISA even goes beyond that.
Secretary Herman: Yes, I know.
Commissioner MacDonald: And that's the other concern. Is that I am faced, and I'm not going to get into this debate, but I am faced with issues where right now I am charged with whether it be city, state ordinances which are telling me now how to manage my health care system, and I do say that I am not obligated to follow that because I'm under ERISA.
If I have to pay attention in a major corporation to all of the liabilities that I may ultimately have state by state, I'm out of the business. I am not going to put this corporation or any corporation that I represent into a situation where that the value of the corporation is at risk with the liability that I have going forward, and that's what the issue is here.
And then when you make it from a business case, you then have to step back and say what does it do for the rest of the country, what does it do for the employees including my family because I too have a selfless interest here. And that's the emotion that I'm trying to draw out here. I just want to make sure that we have done a very good job, especially in the Bill of Rights, of trying to find balance, and we had enormous dialogue where we disagreed, but we never made an indicting comment in my mind in the Bill of Rights.
And that's what I'm worried that will come out here with ERISA, is that we overly indict a process that fundamentally has worked, fundamentally is allowed innovation, and we could lose all that in one fell swoop because we don't know what we're saying.
Secretary Shalala: Okay, let me -- I happen to think after listening to all
this discussion that we actually can accommodate everybody's views and move to a much stronger statement. So I'm going to call a break for ten minutes because there are a number of people drafting, and have us all come back. When we come back I want final -- we're going to have some language for us to look at, I want final comments on chapter ten.
And if there is anything else on the previous chapters that isn't just an editing correction, would you tell Janet now because I'd like to sort of move through those fairly quickly. If you've got editing comments, I assume you've given them to her already. If there is some substantive thing that they haven't drafted that you thought were going to be in another chapter, tell her now so I can go to specific people.
(Whereupon, at 11:16 a.m., a recess until 11:45 a.m.)
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