Senate Finance Committee holds first in series of Congressional hearings on U.S. health system overhaul

The Senate Finance Committee on Tuesday hold the first of at least eight congressional hearings focusing on strategies to reform the U.S. health care system, featuring testimony by former HHS secretaries Tommy Thompson and Donna Shalala, CQ HealthBeat reports.

Thompson said the committee should first focus on changing Medicare before addressing the entire U.S. health care system, according to CQ HealthBeat. Thompson recommended changing Medicare by cutting benefits, increasing revenue and raising the age for eligibility. He noted that Medicare's hospital trust fund will begin paying out more than it is taking in by 2013 and it could be insolvent by 2019. Thompson said, "How should we make these difficult decisions? I am calling for the creation of a bipartisan commission, similar to the base-closing commission. This commission should be charged by Congress and the next president to recommend solutions." Thompson added that "Medicare is going broke."

Shalala disagreed with Thompson's recommendations for the commission and to raise the eligibility age requirement. She said that the "political system" would have to address the changes to Medicare. "I think extending the age for Medicare is a very dangerous issue," Shalala said, adding, "As people get older they get sicker and that's the last thing we want to do in our society."

Responding to suggestions from Committee Chair Max Baucus (D-Mont.) and other senators that the focus should be on addressing health care costs in Medicare and health care in general, Shalala made a "vigorous argument" that streamlining Medicare -- including requiring the use of electronic health records -- should be part of an overall strategy to implement universal health coverage in the U.S., according to CQ HealthBeat. "You'd be very surprised how much the private sector follow Medicare. It's very important as part of the strategy to use what you can control, and that is the Medicare system," she said, adding that if Medicare were to use EHRs, "you will get a bump in the private sector."

"This committee must prepare for the challenge of building consensus" on an overhaul of the health system, Baucus said, adding, "I am confident that this time we will succeed." Baucus said that using payment incentives to motivate quality care and cost efficiency standards, encouraging physicians and health care providers to switch to information technology systems and EHRs, and pushing for increased research to determine treatments that are more cost effective and efficient "are just a few proposals that can transform our delivery system."

Finance Committee ranking member Chuck Grassley (R-Iowa) said it would be important not to drastically change the current system, adding that "people are used to their employers providing health benefits." He added, "I think we need to look into whether we can expand health care coverage by making the current unlimited income tax exclusion for employer-provided health insurance more equitable, while increasing the tax benefits for taxpayers purchasing non-group coverage."

Shalala highlighted the importance of simplicity in a health plan, adding, "There ought to be limited elements -- you ought to pick the ones that matter to do universal coverage."

According to CQ HealthBeat, the committee expects to conduct two more similar hearings before it hosts a summit on health care on June 16 for all congressional lawmakers (Reichard, CQ HealthBeat, 5/6).