Burdensome Red Tape: Overregulation In Health Care And The Impact On Small Businesses
Summary
Transcript of a hearing on July 19, 2023, titled Burdensome Red Tape: Overregulation In Health Care And The Impact On Small Businesses, before the Subcommittee on Oversight, Investigations, and Regulations of the Committee on Small Business, United States House of Representatives, Small Business Committee Document Number 118-021. Chairwoman Beth Van Duyne presides, and she and Ranking Member Kweisi Mfume give opening statements, joined by Chairman Roger Williams. The witnesses are Dr. Brian Miller, Dr. Henry Anthony Punzi and Matthew Fiedler. The statements cite a 2017 American Hospital Association report of $39 billion in annual regulatory costs, and the appendix lists prepared statements and material submitted for the record.
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“Burdensome Red Tape: Overregulation In Health Care And The Impact On Small Businesses.”
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[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
BURDENSOME RED TAPE: OVERREGULATION IN HEALTH CARE AND THE IMPACT ON
SMALL BUSINESSES
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND REGULATIONS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JULY 19, 2023
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-021
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
52-560 WASHINGTON : 2023
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MORGAN MCGARVEY, Kentucky
MARIE GLUESENKAMP PEREZ, Washington
HILLARY SCHOLTEN, Michigan
SHRI THANEDAR, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Beth Van Duyne.............................................. 1
Hon. Kweisi Mfume................................................ 3
WITNESSES
Dr. Brian Miller, MD, MBA, MPH, Assistant Professor of Medicine,
Johns Hopkins University, Nonresident Fellow, American
Enterprise Institute, Washington, DC........................... 6
Dr. Henry Anthony Punzi, MD, FCP, FASH, Medical Director, Trinity
Hypertension & Metabolic Research Institute, Punzi Medical
Center, Carrollton, TX......................................... 7
Mr. Matthew Fiedler, Senior Fellow, Schaeffer Initiative for
Health Policy, Economic Studies Program, Brookings Institution,
Washington, DC................................................. 9
APPENDIX
Prepared Statements:
Dr. Brian Miller, MD, MBA, MPH, Assistant Professor of
Medicine, Johns Hopkins University, Nonresident Fellow,
American Enterprise Institute, Washington, DC.............. 25
Dr. Henry Anthony Punzi, MD, FCP, FASH, Medical Director,
Trinity Hypertension & Metabolic Research Institute, Punzi
Medical Center, Carrollton, TX............................. 32
Mr. Matthew Fiedler, Senior Fellow, Schaeffer Initiative for
Health Policy, Economic Studies Program, Brookings
Institution, Washington, DC................................ 38
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
APTA Private Practice........................................ 50
ASCO - Association for Clinical Oncology..................... 52
MGMA - Medical Group Management Association.................. 57
BURDENSOME RED TAPE: OVERREGULATION IN HEALTH CARE AND THE IMPACT ON
SMALL BUSINESSES
----------
WEDNESDAY, JULY 19, 2023
House of Representatives,
Committee on Small Business,
Subcommittee on Oversight,
Investigations, and Regulations,
Washington, DC.
The Subcommittee met, pursuant to call, at 9:38 a.m. in
Room 2360, Rayburn House Office Building, Hon. Beth Van Duyne
[chairwoman of the Subcommittee] presiding.
Present: Representatives Van Duyne, Williams, Alford,
Crane, Bean, Mfume, and Gluesenkamp Perez.
Also Present: Representative Molinaro.
Chairwoman VAN DUYNE. Good morning, everyone.
I now call the Committee on Small Business to order.
Without objection, the Chair is authorized to declare a
recess of the Committee at any time.
I will now recognize myself for an opening statement.
Welcome to today's hearing on the harmful impacts of
overregulation in healthcare, which is hurting small
businesses.
I want to thank our witnesses for joining us today, and I
am eager to hear from you and discuss how we can cut through
some of the red tape that I have heard so much about.
Unfortunately, burdensome reporting requirements and rising
compliance costs, coupled with an overreaching regulatory
landscape, have led to small healthcare providers having to
close their doors for good. This is absolutely unacceptable.
As we have heard time and time again, overregulation can
shutter the doors of any small business. But small healthcare
providers are disproportionately impacted.
I will never forget the meeting we had--and you may have
been there. There was a physician who had--had to sell her
practice.
She said: You know, I went into so much debt in medical
school. I know my patients. I know my patients' history. I
spend time talking to them.
She said: But I could not afford to have my doors open. So
I became an employee.
And she said: With all of these regulations, I am no longer
practicing medicine. I am now following protocol.
She said: A monkey could do my job.
She almost cried. It was that impactful.
And, during the roundtable that I have hosted with doctors
in north Texas, I have always made a point of asking them how
much of their time is in front of a screen versus face to face.
And I think at the last roundtable, one of the physicians said
it is about 70 percent of her time is in front of a screen.
I said: Now keep in mind, when you walk into the exam room
and you are having to be in front of computer--and we have all
been there as patients--and your doctor is in front of a
computer, and he is asking you questions, but he is not looking
at you; he is typing into his computer.
And I said: If you consider that time, how much of your
time is really face to face in front of the patient versus
being on the computer and a screen.
And they said: If we do that, it is maybe 10 percent with
the patient and maybe 90 percent.
And, you know, it is shocking to hear how much of their
time is spent on compliance, time that they would strongly
prefer to be spent with their patients. And I know, as
patients, we would rather have that one-on-one time with our
physicians.
In 2017, a report from the American Hospital Association
revealed that the massive amount of regulations placed on
healthcare providers cost them $39 billion each year. And to
put this number in perspective, if you took an average
community hospital with about 160 beds, that would be $7.6
million per year spent on compliance.
And, moreover, we know that the constantly changing
regulatory environment causes issues with proper compliance and
harms patient care. Frustratingly, the regulatory environment
has only worsened since the AHA's 2017 report.
The Medical Management Association's 2022 Annual Regulatory
Burden Report showed that 89 percent of respondents feel the
regulatory burden has increased in the past year.
When regulatory costs reach the point that it is no longer
feasible for small, private healthcare practices to keep their
doors open, it leads to one thing, and that is consolidation.
And, when proponents of consolidation claim that healthcare
mergers decreased costs and improve access to care, the reality
is quite different. Far too often, consolidation decreases
quality of care. It eliminates competition, which increases
costs. And it removes the possibility of physicians owning
their own businesses, thereby crushing the American dream.
Small healthcare providers have in recent years been hit on
all sides. We know that, on top of severe overregulation, the
COVID-19 pandemic played a significant role in consolidations
as well. More than 22,000 physicians left independent practice
to join bigger hospital systems after the onset of the
pandemic.
Unfortunately, small providers bear a disproportionate
amount of the regulatory burdens and administrative costs that
are associated with healthcare compliance. And this leads to
rising costs, increased administrative costs, and more
consolidation. This leads to the elimination of many small
providers.
And we cannot continue to allow overregulation to shut the
doors of small care providers, and I am glad that our Committee
is focused on finding solutions to provide better and more
affordable patient care.
I ask unanimous consent to waive Representative Molinaro
onto the Subcommittee for the purpose of asking questions in
today's hearing.
And, with that, I would now like to yield to our
distinguished Ranking Member from Maryland, Mr. Mfume.
Mr. MFUME. Thank you very much, Madam Chair. Good morning.
Thank you for calling this hearing and for your leadership on
this issue.
I want to also thank those witnesses who are here today as
we try to put in context in a very real way why this is such a
problem for so many of us.
As of 2021, healthcare spending consumed about 18 percent
of the gross domestic product here in the U.S., nearly double
the 9.6 percent average across other similarly developed
nations. It also accounted for nearly a quarter, a whole
quarter, of the government spending.
Yet, despite these high costs, both independent providers
and patients have come to us and have complained over and over
and over again about their situation.
The U.S. often archives worse health outcomes than many of
our peer nations, which I still find hard to believe. We stand
alone among our peers by not guaranteeing healthcare coverage
as a right. And, while many factors underpin our country's high
healthcare costs, none of them seem to carry such a healthy
price tag as the administrative bloat permeating every
interaction between a patient and their doctor.
In many ways, our pursuit of extensive healthcare plans and
choices has given rise to a complex and fragmented multiplayer
system that is very, very difficult to navigate for patients,
difficult for doctors, and difficult for small businesses
alike.
Our country, as has been stated in a lot of different areas
and studies, spends between 15 and 30 percent of all national
medical expenditures on administrative costs primarily through
billing and insurance-related activity. Nearly half of that
spending, between $250 billion and $570 billion a year, could
be avoided through streamlined practices. In fact, one analysis
found that the United States' administrative costs per capita
is about $1,055 per year, over five times the average of
similarly developed nations, those that I had referenced
earlier.
Now not only do these costs get passed on to consumers
through higher premiums, as most of you know, and out-of-pocket
expenses, they are also passed on to independent physicians
whose small businesses provide essential healthcare for Members
of their community. However, and regrettably, this growing
overhead pushes many physicians away from their private
practice and toward hospital employment.
While private practice was once a shining cornerstone of
the small business community, only 3 in 10 physicians now
remain independent. And that is in part due to the
administrative and financial burdens that I referenced a moment
ago that we continually place on these small firms.
As a result, hospitals have become increasingly
consolidated and corporate entities, which have absorbed
numerous practices all across our nation, every State involved,
and though this consolidation streamlines administration, it on
the other hand decreases accountability and further accelerates
the closure of independent practices.
It also endows hospitals with a sort of monolithic--excuse
me--monopolistic pricing power in insurance negotiations. And
most, if not all, studies show that more concentrated hospital
markets have 5 percent higher insurance premiums than those
that are less concentrated. And so, while administration is a
major reason for growing costs, we can't undervalue regulations
also in mitigating cost growth.
The Affordable Care Act made great strides in slowing the
growth of insurance expenses and keeping small firms in the
market. Between 2002 and 2012, the rate at which small firms
offered health insurance declined by over 10 percent. And,
between 2013 and 2020, that decline was just about 2 percent.
So, while we are still dealing with complex challenges in
our healthcare system, it is important to recognize the
essential role of regulation in ensuring that we provide
stability to our markets and protection to our consumers, no
matter where they may be.
Again, I want to thank the witnesses for coming to testify.
We look forward to your comments. There will be obviously
questions or observations, but we all look forward to a
productive discussion this morning.
And, Madam Chair, I want to thank you and yield back my
time.
Chairwoman VAN DUYNE. Thank you very much.
I would like to now yield to the Chairman of the full
committee, Chairman Williams, for an opening statement.
Mr. WILLIAMS. Good morning--and I want to thank my fellow
Texan, Congressman Van Duyne--for holding--holding today's
Subcommittee hearing on regulations within the healthcare
industry and its impact on small businesses, and to our
witnesses for being here today.
Today's hearing is critical in examining the impact of the
industry's overregulation on small businesses and small
providers. We are eager to discuss what this committee can do
to help minimize the regulatory landscape and ease the impact
on small providers.
Throughout recent years and especially during the pandemic,
we have seen how stifling regulations can suffocate any small
business, especially those in healthcare. I have a business of
hundreds of employees back in Texas. We supply healthcare.
There are issues.
From burdensome reporting requirements to rising compliance
costs, many small providers have been forced to close their
doors or be brought by--bought by larger companies. So, far too
often, consolidation decreases quality of care, eliminates
competition, which increases costs, and removes the possibility
of physicians owning their own business.
So I am looking forward to today's discussion. I hope this
hearing shines a light on the burdensome red tape currently
restricting our small healthcare providers.
So thank you again, Chair Van Duyne, and I yield back.
Chairwoman VAN DUYNE. Thank you very much, Chairman
Williams.
We will now move to the introduction of the witnesses.
Our first witness here today is Dr. Brian Miller. Dr.
Miller is a nonresident Fellow with the American Enterprise
Institute here in Washington, D.C. In addition to his role at
the American Enterprise Institute, he is a practicing
hospitalist at the Johns Hopkins Hospital and Assistant
Professor of Medicine in Business at the Johns Hopkins
University.
Dr. Miller has previously served as a medical officer in
the Office of New Drugs at the Center for Drug Evaluation and
Research at the FDA and is a special advisor to the FTC's
Office of Policy Planning.
Dr. Miller graduated from the University of Washington a
with Bachelor of Science in Chemistry and Biochemistry and
completed an internal medicine residency at Georgetown
University Hospital with a public health residency at Johns
Hopkins University.
Dr. Miller, thank you very much for being with us today,
and we look forward to hearing from you.
Our second witness is Dr. Henry Punzi. Dr. Punzi is a
Medical Director of Punzi Medical Center located in Carrollton,
Texas. With over 40 years of experience, Dr. Punzi has
firsthand knowledge of the impacts of overregulation within the
medical industry. Dr. Punzi attended medical school at the
University of Buenos Aires and completed his residency at the
University of Texas Southwestern Medical Center.
I really appreciate you being here. I appreciate you
participating, as well, in roundtables on healthcare within our
district. And I look forward to hearing from you today.
I now recognize the Ranking Member from Maryland, Mr.
Mfume, to briefly introduce our last witness appearing before
us today.
Mr. MFUME. Thank you very much, Madam Chair.
Matthew Fiedler is a senior fellow at the Brookings
Schaeffer Initiative on Health Policy. His research examines a
range of topics in healthcare, economics, and healthcare
policy.
Prior to joining Brookings in 2017, he served as chief
economist of the Council on Economic Advisors where he overall
the council's work on healthcare policy, including the
implementation of the Affordable Care Act's health insurance
and healthcare payment reforms. He holds a Ph.D. in economics
from Harvard University and a B.A. in mathematics and economics
from Swarthmore College.
Mr. Fiedler, thank you very much for joining us today. We
look forward to your testimony.
Chairwoman VAN DUYNE. Thank you.
We appreciate all of you being here today.
And, before recognizing the witnesses, I would like to
remind them that their oral testimony is restricted to 5
minutes in length. And, if you see the light turn red in front
of you, it means your 5 minutes have concluded and you should
wrap up your testimony.
I now recognize Dr. Miller for his 5-minute open remarks.
STATEMENTS OF BRIAN MILLER, M.D., MBA, MPH, NONRESIDENT FELLOW,
AMERICAN ENTERPRISE INSTITUTE, ASSISTANT PROFESSOR, JOHNS
HOPKINS SCHOOL OF MEDICINE; ANTHONY PUNZI, M.D., FCP, FASH,
MEDICAL DIRECTOR, TRINITY HYPERTENSION & METABOLIC RESEARCH
INSTITUTE, PUNZI MEDICAL CENTER; AND MATTHEW FIEDLER, SENIOR
FELLOW, SCHAEFFER INITIATIVE FOR HEALTH POLICY, ECONOMIC
STUDIES PROGRAM, BROOKINGS INSTITUTION.
STATEMENT OF BRIAN J. MILLER, M.D., M.B.A, M.P.H.
Dr. MILLER. Thank you, Chair Van Duyne and Ranking Member
Mfume and distinguished Members of the Subcommittee on
Oversight, Investigations, and Regulations.
I am excited to be here today to talk about red tape and
overregulation in healthcare. There is so much of it, it is
actually sort of hard to know where to start, to be completely
honest.
I am a practicing hospitalist at Hopkins. I am a
nonresident fellow at AEI. I previously was a special advisor
at the FTC. I also worked at the CMS Innovation Center, the
FDA, the FCC. So I basically worked for every agency that
regulates our industry.
Disclaimer, I am here today in my personal capacity. The
views here are my own and don't necessarily reflect those of
Hopkins, the American Enterprise Institute, or the Medicare
Payment Advisory Commission, on which I am a commissioner.
So, thinking about consolidation, right, I looked up this
little story because what does consolidation look like?
In June 2022, MaineHealth decided to remove Maine Medical
Center from the Anthem, now Elevance, insurance network from a
contract dispute. The CEO of Maine Medical Center, a physician,
penned a nice op-ed in the local paper, and so I was curious.
Right? I looked it up at the time, and the Healthcare Cost
Institute, a nonpartisan research institute, said that the
market was highly concentrated by FTC and Department of Justice
standards.
A few months later, the plaintiff and the hospital settled.
And I was like, oh, okay, just another fight between a big
hospital and, you know, probably a local monopoly, for certain
a local monopoly, and a big insurance company.
And then, I started digging into it. And I saw that the
impoverished hospital that was the local monopolist received
over $40 million in COVID relief funds and that, during the
pandemic, they bought the D'Angelo's sandwich shop next door,
despite crying poverty.
So that is sort of monopoly in action. Right? You are a
monopolist, and you can beat up on other businesses or even
beat up on the government. Consolidation is bad. It raises
prices, lowers quality, results in a worse patient experience.
I sort of argue that we did this to ourselves, and it is sort
of our fault.
There was a move, and it was successful, to ban physicians
from owning and operating hospitals. Now we have a concentrated
hospital market in 90 percent of metropolitan areas. We are
worried about small practices being able to compete with large
delivery systems that have bought everything from clinics to
home care. We banned it through Stark Law. We banned physician
owned-and-operated integrated care delivery.
The important thing I think also is, is that, for those
practices that do remain, we regulate them into the ground. I
looked this up. CMS has 2,466 quality metrics, over 2,000.
There aren't even that many days in the year. CMS needs to go
on a quality diet and actually have a lifecycle for quality
metrics. Sort of a basic tenet of quality performance for
running an organization is that for your internal measures, you
need to see when they top out, when they are no longer working,
and if they don't have an impact.
We talked about how physicians don't spend time seeing
patients. The average physician spends, from a time motion
study published in JAMA Internal Medicine, 15 percent of their
day with patients.
So what does overregulations mean for small business? Well,
it crushes small business. And, you know, one of the things
that the American Association of Medical College CEO has
commented on is a lack of diversity in the medical workforce.
For physicians being able to own and operate their own
business, regulating businesses into the ground is another
barrier to entry.
Small practices are important. Why are small practices
important? It is not just an economic concept. It is a real
concept. I went to Northwestern for medical school. Great
facility, quaternary care. You can get plastic surgery. You can
get burns treated, everything, organ transplants. To go from
one side of the campus to the other is over a quarter of a
mile, and the outpatient clinic tower is 23 stories tall, not
exactly easy to navigate.
A small practice allows greater customization of your care
and also potential greater customization of the process of your
care delivery.
Thank you, and I look forward to questions.
Chairwoman VAN DUYNE. Thank you very much.
I now recognize Dr. Punzi for his 5-minute opening remark.
STATEMENT OF HENRY ANTHONY PUNZI, M.D., FCP, FASH
Dr. PUNZI. Good morning, Chair Van Duyne, Mr. Mfume, all
the Congressmen here.
It is a pleasure and an honor to be here in front of you.
My name is Henry Punzi, and I have been in the solo private
practice of internal medicine since 1984 and have firsthand
knowledge of the changes at CMS, as well as the insurance
industry. I have also been doing clinical research since 1986
and have worked closely with the Food and Drug Administration
and the National Institutes of Health.
As a result of numerous publications, studies from the--
publications from these trials, I have been a national and
international speaker and have worked with many pharmaceutical
companies and have seen the regulatory aspect of the FDA.
And, lastly, I am also an FAA senior Aviation Medical
Examiner, performing pilot physicals, and work closely with the
Federal Aviation Administration.
Now, as the prior witness said is what do all these
government entities have in common is that I am surrounded by
red tape, a lot of regulations. And, as a result of this
bureaucracy, to many physicians, medicine has lost a lot of
what made it desirable.
So the key here is, as a physician in private practice,
when I take time with my patient, that is the main thing I need
to do. And there are some research that shows that it takes,
for an average visit, about 15 minutes--that is kind of what
has been allotted--of which 5 minutes is specifically about one
complaint the patient has. And then there is 1 minute for the
other five complaints that they have.
So you can imagine that the time I have speaking to all of
you, I have got to examine a patient who is 77 years of age and
get their medical history and physical.
So, as my medical students--I am a clinical assistant
professor at UT Southwestern. So what I tell my students is
medicine is an art and a science. So the key there is being
able to do a good history and physical that allows me to
identify 80 percent of the problems that the patient has, but I
have to have time to do that.
The second thing I tell my students is that patients do not
go to medical school to tell us what is wrong with them. That
is the art of medicine. I have got to be able to extract that,
and you can imagine that, in 5 minutes, that is significantly a
challenge.
Now the other issue that plays into all of this is that
many visits patients come in for certain issues that may not be
related to their main complaint, and a lot of it has to do with
mental health. And, within that period of time, it is very
challenging to extract that from patients.
Now, on the flip side of that, when you look at the
electronic medical record, data shows that typically for every
hour that you are in contact with a patient, it takes about 2
hours of electronic health records to be able to kind of
identify that.
So really we are putting the emphasis in the wrong place
which is, as Chairman Van Duyne said, is that whenever I have
gone the VA with my cousin, and the physician is looking at the
screen, and we are behind him. And that really ends up being
kind of a big issue for me particularly, since being in
practice for many, many years.
Lastly, it is the prior authorizations. Right? There are
typically about prior authorizations per week. Now that does
not mean that you get them all resolved. So, from one week the
another, you have 45 that you add on, and that just can kind of
stockpiles. And the issue with prior authorizations is that the
data suggests that patients end up dropping their treatment.
I have got many diabetic patients. Now with diabetes, a
chronic disease, one visit does not really allow the patient to
understand the disease process. So, if they end up dropping
their medication because of prior authorizations, they
sometimes don't come back. And that ends up driving the cost of
healthcare.
I had a patient that I saw last week actually. And she was
walking her dog, tripped, injured her right foot, went to the
minor emergency center, had an X ray done, no fracture. She was
still hurting 3 days later, saw the orthopedist. He was trying
to get an MRI. It took about 2 and a half weeks to get that MRI
approved. Immediately she was called, say put your foot in the
boot because you have a fracture.
So those are things that we see on a day-to-day basis in my
practice and in many practices. So I think the key here is that
we have to be allowed to talk to the patient. Again, as I
emphasize with my students, and my medical professor in
Argentina always said: Henry, the history and physical, if you
don't know what is going on with the patient, then you do it
again, because sometimes people, when you talk to them, they
give you more information that allows you to make the right
diagnosis.
And that is what cause--decreases healthcare costs, making
the correct diagnosis.
Thank you.
Chairwoman VAN DUYNE. Thank you very much.
And I now recognize Mr. Fiedler for his 5-minute opening
remarks.
STATEMENT OF MATTHEW FIEDLER
Mr. FIEDLER. Madam Chair, Ranking Member Mfume, and Members
of the Subcommittee, thank you for having me here today.
My name is Matthew Fiedler, and I am a health economist and
a senior fellow with the Schaeffer Initiative on Health Policy
at the Brookings Institution, where I study topics including
health care provider payment and health insurance regulations.
My testimony will focus on ways that policymakers can make
healthcare providers' interactions with health insurers, both
public and private insurers, less burdensome.
As the other witnesses have alluded to, providers interact
with insurance in many ways, including when negotiating
contracts, collecting information about patients' coverage,
obtaining prior authorization for care, submitting claims for
payment, and reporting on quality of care. These activities are
costly.
Insurance-related administrative costs are estimated to
consume 13 percent of physician practices' revenue on average,
plus somewhat smaller fractions of other providers' revenue. In
total, that amounts to hundreds of billions of dollars per
year, costs that are ultimately borne by patients and taxpayers
in the form of higher prices. Due to economies of scale, these
burdens probably hit smaller practices harder than larger ones.
It is important to recognize that administrative activities
can be valuable. Billing processes are ultimately how providers
are paid. Prior authorization processes can help prevent
delivery of inappropriate services, and audit processes can
help uncover fraud. So, if we are looking to reduce
administrative burdens, we need to proceed thoughtfully.
In that spirit, I want to offer three targeted reforms that
could reduce administrative burdens with relatively few
tradeoffs. The first is eliminating Medicare's Merit-Based
Incentive Payment System, or MIPS. Under MIPS, Medicare scores
clinicians in several domains, including the quality and
efficiency of their care. Clinicians' payment rates are then
adjusted up or down based on their scores with the goal of
encouraging high performance.
Much of the information used to score clinicians,
particularly on quality, is reported by clinicians themselves,
often at high costs. A recent study estimated that practices
spent nearly $13,000 per physician reporting to MIPS in 2019.
But, despite these large costs, MIPS is likely not
improving patient care. One problem is that clinicians can
choose which measures they are evaluated on, which makes it
hard to meaningfully compare across clinicians. Plus, studies
of past programs like MIPS have found little evidence that they
actually improve care. Since MIPS appears to have large costs
but few benefits, I suggest eliminating MIPS and, ideally,
replacing it with a better-designed set of incentives.
The second reform is changing how provider-insurer payment
disputes are resolved under the No Surprises Act, the law that
protects patients from facing large surprise bills when they
unexpectedly receive out-of-network care. Under the law,
disputes over payment for out-of-network care are settled via
arbitration. Unfortunately, arbitration is costly with fees
that start at $900 per case.
At the arbitration volumes observed so far, providers and
insurers will incur hundreds of millions in dollars in fees per
year, not to mention the direct costs of participating in
arbitration. Congress could avoid these costs, while still
ensuring that providers are appropriately compensated for out-
of-network care, by doing away with arbitration and instead
directly specifying benchmark payment rates.
The third reform is improving the Medicare Advantage risk
adjustment system, which adjusts payments to MA plans based on
what health conditions their enrollees have. This system aims
to ensure that payments to plans are commensurate with the cost
of their enrollees' care. But plans have responded to this
system by working to document evermore enrollee diagnoses. This
has increased to payments to MA plans well beyond what the
Medicare statute intends, but it also increases providers'
administrative costs since MA plans often enlist providers to
help hunt for diagnoses.
Reforms to risk adjustment could make it less susceptible
to this type of gaming. One idea put forward by the Medicare
Payment Advisory Commission is to increase the number of years
of diagnosis data used in risk adjustment. This would increase
how many diagnoses are captured without MA plans' special
efforts, reducing administrative burdens. It would also reduce
federal costs by reducing the gap between how many diagnoses
get captured in MA versus traditional Medicare, the ultimate
benchmark for MA payments.
In closing, I want to zoom out and talk briefly about a
more ambitious potential reform. Providers appear to bear
larger administrative burdens in the United States than in
other countries likely at least in part because providers here
must deal with a menagerie of public and private insurers, all
of which set different rules.
Standardizing billing, quality reporting, or other
processes across insurers could reduce administrative burdens.
This approach would present real tradeoffs. In some cases,
different insurers may have good reasons to set different
rules, and standardization would only work well if the
standardized processes were well-designed. But requiring
greater standardization could likely reduce administrative
burdens by much more than the other approaches I have
discussed.
Thank you again for the opportunity to testify. I look
forward to your questions.
Chairwoman VAN DUYNE. And I really appreciate all of you
sticking to the 5-minute rule.
We are going to now move to Member questions under the 5-
minute rule, and I recognize myself.
Dr. Punzi, you talked a little bit about this in your
testimony. I know that we have talked extensively about this
during our roundtable meetings.
But can you talk to me a little bit on--on the
administrative burden that you are seeing in your office? You
talked specifically about the percentage of time that you spend
on that, but I am also interested in finding out about your
staff's work on that----
Dr. PUNZI. Right.
Chairwoman VAN DUYNE.--versus actually patient work.
Dr. PUNZI. So I have five staff Members. One is
specifically geared towards my research because, through the
FDA, the amount of paperwork that is utilized for the studies
has significantly increased. So she does specifically that.
And I have two employees, two medical assistants that help
me out. And then they split half and half. So half is being
able to see the patients. The other half is trying to do either
prior authorizations with medications or prior authorizations
with procedures, X-rays. So we are not really heavy procedure
wise, but we have got to do that.
Now the advantage I have in my clinic is that I end up
dictating. We still have to input data into the computer, but
that is one of the advantages that I have being in practice for
such a long time is I have got a service. Somebody will
dictate. So it makes it a lot easier for me to be able to see
the patient face to face and then do the dictation and get that
the next day.
So I think that, when you talk about burden, is--is, yes,
is it is getting worse from the point of view being able to
identify whom it is that I need to talk to, especially when you
do a prior authorization. It takes about three people. It is
myself, my medical assistant, whoever is on the other side, and
the insurance company and subsequently to the physician that
you talk to that may not be an internist.
So a lot of times it ends up being kind of a challenge from
that point of view.
Chairwoman VAN DUYNE. So part of the reason why I had these
roundtables to hear from you, hear what some of the complaints,
are but also to figure out solutions.
Dr. PUNZI. Yes.
Chairwoman VAN DUYNE. So, from your perspective, how would
you advise, you know, the Members here, Congress to be able to
respond to your criticisms----
Dr. PUNZI. Yes.
Chairwoman VAN DUYNE. But--also be able to provider better
patient care, better access, and higher quality?
Dr. PUNZI. Two things that I can think of.
One is that, with regards to electronic health records,
when I have a patient come to my office and request the records
and when I read them, I really don't quite understand
completely what the patient had done. And the reason being is
that a lot of these records are cut and paste. So it is very
difficult. So it is not that it actually helps, but it helps
documentation mainly from the point of view, the billing issue.
The second thing, for the prior authorizations, I think
that it needs to be somewhat streamlined. They are talking
about the reduction in waste. But, as a clinician, when I order
a test or when I order medication, I think that is best
practice for that particular patient. So I think that there
needs to be a little bit more leeway.
I understand insurance companies have to make their profit.
But I think at the same time is we need to come to consensus on
being able to diminish either the time or the--or the
investment in trying to get these things approved.
Chairwoman VAN DUYNE. So you are--so you are recommending
that people who actually have medical degrees be the ones who
are making the decisions on medical care?
Dr. PUNZI. That would be correct, Chairman.
Chairwoman VAN DUYNE. Dr. Miller, you know, you have heard
about some of our conversations that we have had. We have
talked about a lot about regulatory burden.
But how are small practices or solo practitioners expected
to comply with these increased burdens?
Dr. MILLER. They are expected to comply, and they are
unable to. And, therefore, they then sell their practice to the
large health system down the street, which is the consequence.
That is one of the reasons why I am a big fan that CMS needs to
have a quality metric lifecycle.
If you have to comply with hundreds of quality metrics a
year, you have to hire staff. You have to have IT
infrastructure that can support that. That then changes how you
practice, because you are practicing to document rather than
practicing to treat the patient.
And so, if we eliminate some of the out-of-date quality
metrics, put a cap on the number of quality metrics, and
require CMS to regularly review quality metrics to see if they
are still performing as intended and actually improving
clinical practice whereas, in some cases, some of them have
actually resulted in increased mortality, the Hospital
Readmissions Reduction Program, for example, we could massively
improve patient quality, actually allow physicians to spend
time with their patients, and decrease paperwork.
Chairwoman VAN DUYNE. Excellent. Thank you very much.
I now recognize the Ranking Member for 5 minutes of
questions.
Mr. MFUME. Thank you, Madam Chair.
One of you, I don't remember who, said something that I
thought--should we--that we ought to take a look at in a
different sort of way and that we are regulating practices into
the ground.
Was that you----
Dr. MILLER. Yes.
Mr. MFUME. Okay. I just thought it was significant, and I
didn't want it to go by without some attention. I am going to
come back to it in a minute.
On the other side of that, a Kaiser Family Foundation
survey found customer experiences with a lot of different
problems of their own. With health insurance, they found that
the majority of the insured adults said they have experienced
many problems using their healthcare insurance over the past
year. Some of those problems are denied claims which, you know,
debatable one way or the other; provider network problems which
clearly can be dealt with--I know you talked, Mr. Fiedler,
about standardization; I want to come back to that to see
whether there can be some amplification there; and, of course,
the good, old prior authorization problems.
Can you, Mr. Fiedler, sort of dive down into these
authorization problems and network problems and speak also
about this need for standardization and to some extent audit
performances?
Mr. FIEDLER. Starting with prior authorization, I think one
thing that is important to just recognize as a starting point
is that----
Chairwoman VAN DUYNE. Can you speak----
Mr. FIEDLER.--prior authorization is actually much more
common in private insurance than it is in Medicare. Traditional
Medicare, for better and for worse, I would argue, actually
makes fairly little use of prior authorization. And so it is
really about Medicare Advantage plans and plans in the private
market.
I think one of the challenges with prior authorization is
there are very real tradeoffs here. There is no question it
creates very large administrative costs for providers and for
patients. At the same time, there is evidence that, in some
cases, it can shift patients toward lower cost treatments or
prevent delivery of unnecessary care that ultimately saves
patients money.
So I think exactly how to strike that balance and how
policymakers can strike that balance is a hard question that I
think there are no ready answers to.
I do think one path you could think about going down is
trying to standardize these processes across different payers.
So, rather than every different payer having its own prior
authorization process that requires submission of slightly
different information and slightly different forms through a
slightly different channel, you could think about whether there
are ways to sort of harmonize these processes across insurers
so at least, you know, that might reduce the administrative
burden to some degree.
Mr. MFUME. And it was your testimony also that, with
respect to arbitration, I thought I heard you correctly when
you said you would advocate doing away with it.
Could you talk about that?
Mr. FIEDLER. I think the use of arbitration under the No
Surprises Act is creating a lot of administrative burden for
both providers and insurers to resolve these payment disputes.
And we could do that in a much more direct way by setting
payment benchmarks without compromising the accuracy and the
appropriateness of the compensation for out-of-network care.
Mr. MFUME. And what about risk adjustment and the notion of
changing the number of years, scaling them one way or the
other? What are the benefits there?
Mr. FIEDLER. The benefits there are that if you start with
more years of data, you are more likely to sort of just
automatically capture the diagnoses that enrollees have rather
than having MA plans and their providers go out to hunt for all
these different diagnoses. And so that has the potential to
reduce the amount of administrative burden involved in the
risk-adjustment system.
It also would reduce overpayments to MA plans. We have
quite a lot of evidence that we are paying MA plans a lot more
than the Medicare statute intends at the moment, and that is
ultimately obviously increasing federal costs quite a bit.
Mr. MFUME. Thank you.
Dr. Harris, I want to go back to your statement about that
we are practically running practices in the ground, which I do
not dispute at all. But I wanted to get your take on the
concept of standardization, and does that have any value in
doing just the opposite?
Dr. MILLER. Standardization of--you mean of the prior
authorization process or quality metrics or all of the above?
Mr. MFUME. Of practices.
Dr. MILLER. Standardization--of the prior authorization
practices?
I mean, I think having the insurance industry and
physicians work together to create an automated or standard
data interchange would be good. I would be reticent to have the
government do that, given the history of the government running
technology programs. Say setting up the ACA exchanges was one
example that did not go well.
Mr. MFUME. Let me just jump in real quick because my time
is just about up.
What about standardization of billing practices? Any
thoughts?
Chairwoman VAN DUYNE. You can answer.
Dr. MILLER. May I?
I think standardization--do you mean billing practices like
the actual claim form, because the claim forms are relatively
similar already to begin with.
Mr. MFUME. I am just trying to get you to talk more about
standardization across a number of different claims. And so,
yeah, billing would be one of those and anything else, except
that we are out of time. So I am going to have to come back in
my next round.
But thank you very much.
Chairwoman VAN DUYNE. All right. Thank you.
I now recognize Mr. Bean from Florida for 5 minutes.
Mr. BEAN. Thank you very much, Madam Chair. Good morning to
you.
And good morning, Small Business Committee.
You know, if somebody is in the hallway right now, they
might just be listening to us singing in harmony up here, which
doesn't happen very often because we are hearing on both sides,
recognizing there is a problem. There is a problem.
People forget that doctors are small businesses. I used to
be a community banker, and I had the privilege of banking
several doctors and coaching them and trying to become
efficient and it is tough. They get it from all angles and just
to juggle what they do.
I used to have a joke that, you know, I used to say: What
do doctors need to stay in business a long time? And the answer
is they have to have lots of patients to stay in business a
long time.
Thank you. I will be in town until tomorrow.
So but they are losing patients. And one of those, it is
just the other day, one of them lost--sold out, just sold out.
I talked to him.
And sure enough, he said: I just couldn't do it anymore. It
is--it is so good to go home at 6:00 o'clock without having to
worry.
And he said: Yeah, there is hoops I have to jump through.
But so it is just a toss-up question. Are--we seeing that
we both agree on both sides that we agree that there is a
problem. Is it always been--are we just saying it has always
been this or are we seeing a massive pileup of regulations in
the last couple of years due to COVID?
Anybody?
Dr. PUNZI. So I was reading that CMS put out 200 different
kind of regulations during the time of COVID. And it is very
hard to try to keep up with what is going on, let alone in your
office with whatever's going on regulatorywise.
But I think if you look at physicians, about 2019, 75
percent of new graduates are going to be employed. So we are
seeing a decrease in that. And I think going back to your
comment is that it is that work-life balance, the only problem
with that being in private practice. And, if I would get asked,
``Do you want to sell out,'' you know, the grass is always
greener on the other side. But the problem with that ends up
being, all of a sudden, I am working for somebody else and now
my patients are no longer my patients.
And I think that is the main key, again, is the art of
medicine. They are no longer my patients. So now, all of a
sudden, I have got to do things that I may not find that are
appropriate at least from my perspective. I have got to see so
many patients an hour. I have got to do these things.
And I think that is one of the challenges that you get into
is that the grass is always greener on the other side.
Mr. BEAN. That is exactly right, but it is a challenge.
We--yesterday in a hearing put on by Chair Williams, we
heard about the current administration, not just medicine but
all, all small businesses, $375 billion in new compliance
regulations. That is the cost.
Are we seeing it, Dr. Brian? Are we seeing the States
jumping in, too? Is it just----
Dr. MILLER. Yeah.
Mr. BEAN.--States getting in on this regulations action,
too?
Dr. MILLER. I think it is actually worse than all of what
we are--it is actually really bad because the problem is every
time we see a problem the healthcare policy, we design a
static, regulatory, administrative, agency-driven solution. And
then, a couple of years later, just like we heard about with
surprise billing, that problem--that problem is still there.
And the solution that we had is broken, and the solution is
another administrative intervention.
So what we are experiencing now with all these small
practices leaving is we are seeing the cumulative effect of 30
years of administrative, state-driven interventions in
healthcare policy.
And the problem is that when people design these solutions,
they are thinking about a static market. They are designing a
solution that is not dynamic and not flexible over time.
Mr. BEAN. Very good.
Madam Chair, without objection, the physical therapists,
the physical therapists' association of America, APTA, have
said: Please enter this in the record. The list, they have got
two pages of bullet points where they are being overloaded.
And, without objection, I would like to enter that in the
record.
Chairwoman VAN DUYNE. Without objection.
Mr. BEAN. Thank you very much.
Now some will say: It's great. It is great.
In fact, let me go on to my last question. I was going to
say: We--we like choice.
Americans like choice. And, if we streamlined all
professions, we lose that choice. So we have got to--this is
our lightning round. I have only got a few seconds left.
So, if we were to take out our Small Business lifesaver,
what is an easy target we need to slash first?
Dr. Henry.
Dr. PUNZI. Actually it is going to be the issue of
reimbursement.
Mr. BEAN. Very good. Okay.
Dr. Brian.
Dr. MILLER. Quality regulations.
Mr. BEAN. Very good.
Dr. Matt, jump in.
Mr. FIEDLER. I am actually going to go outside of
administrative burden. It is how we pay hospitals when they buy
up physician practices. We pay them a lot more.
Mr. BEAN. Very good. Thank you so much.
Madam Chair, so many questions, so little time.
So I yield back to you.
Chairwoman VAN DUYNE. Thank you very much.
I now recognize Ms. Gluesenkamp Perez from Washington for 5
minutes.
Ms. GLUESENKAMP PEREZ. Thank you.
And thank you to the Chairwoman and Ranking Member for
holding this hearing.
We have heard a lot today about the administrative burdens
that exist for small, independent healthcare providers.
I guess I would like to focus a little more on how that
burden impacts particularly rural healthcare providers. Like we
have seen just a real loss of our providers. We know that they
are consolidating to bigger or leaving the market entirely.
So, Mr. Fiedler, if you could explain how the closure of
independent physician practices might particularly impact
access for rural and underserved communities.
Mr. FIEDLER. One of the things I think we know generally
about administrative burdens is that there are economies of
scale. And, obviously, if you are in a more rural area, taking
advantage of those economies at scale is a lot harder.
And so we would expect these burdens to fall harder on
smaller practices no matter where they are located. But that is
going to be a much more acute problem in a rural area relative
to an urban area in practice.
And in an urban area, you might end up with the variety of
problems that come from the consolidation from a small practice
that gets bought out; in a rural area, you might just end up
with gaps where there is not care available at all.
So I think those are respects in which it potentially bites
a lot harder in that settling.
Ms. GLUESENKAMP PEREZ. You look like you have something to
say here.
Dr. MILLER. Definitely. First of all, I am from Washington
State. So I am very excited.
I don't think that there are necessarily administrative
scale efficiencies in most delivery systems. If anything, I see
diseconomies of scale with administration where administration
in large health systems or even moderate health systems just
begets more administrators, more PowerPoints, more meetings,
more committees to not actually solve clinical operational
problems.
I think it is even harder with regulations in rural areas
because you are faced with quality regulations. You are faced
with conditions of participation. Then you have to make sure
you are in network for all these insurers, and then you have
new telehealth regulations. And then and it is just like one
thing after another.
It makes it impossible to run a business, and so you sell
out your business to the large health system down the street.
This has happened in many rural areas. I practiced for a year
in Cooperstown, New York, a village of 1,200 people with one
stoplight. So, I know what it's like, and I think that we need
to decrease regulatory burden so that rural healthcare can
continue to exist.
Ms. GLUESENKAMP PEREZ. I guess I am interested in hearing a
little bit more about what it might look like to take out the
merit-based incentive program. Yeah, you feel this is a need
that is already met by other programs?
Mr. FIEDLER. I think that we have other ways of
incentivizing improved performance from physicians that
actually are working in the Medicare program. A substantial
fraction of Medicare physicians are now in accountable care
organizations and other types of models where we actually do
have clear evidence that those models are moving the needle at
least in improving the efficiency of care and if not improving
the quality of care.
I think moving our focus away from MIPS, which is an
administrative disaster but not really improving patient cares,
towards these models that are improving care would be the
direction I would want to move.
Ms. GLUESENKAMP PEREZ. Uh-huh. I mean, it's striking.
Right? We spend more and more on healthcare every year, and the
quality of American health is the lowest. We are just not
getting--we are not getting wellness out of this system.
I guess I am curious to anyone who has insight what some of
the biggest expenses are and how Congress can work to ensure
smaller firms are able to stay competitive.
Dr. PUNZI. So I think the biggest expense, as an individual
practitioner, so I have got to do my rent. I have got to do my
building maintenance. I have got to pay my employees. But then
the issue ends up being reimbursement. So I have got to be able
to make enough money to be able to do that and then maintain
myself.
So, if the practitioner is worried about when his next
payroll is coming and am I getting enough money to do that and
when you talk about the issue of patients, losing patients,
then that ends up being a significant challenge for me as a
small business.
Ms. GLUESENKAMP PEREZ. So you are saying this is a cash
flow, as well?
Dr. PUNZI. Reimbursement. So, basically, we know that, as
years have gone down, you mentioned that you have had a
decrease in quality of care, but we have also had a decrease in
Medicare reimbursement.
So when I started back in 1984, I am getting paid less for
Medicare patients now than I did almost 40 years ago.
Ms. GLUESENKAMP PEREZ. Thank you all so much for your time
and insight.
Chairwoman VAN DUYNE. Thank you.
I now recognize Mr. Crane from Arizona for 5 minutes.
Mr. CRANE. Thank you, Madam Chairman--Chairwoman. Excuse
me.
I appreciate the opportunity to be here today and thank you
for everybody that has come to testify.
You know, when I listened to your testimonies, it sounds a
lot like this place to me. The bureaucracy grows, more
regulation, more red tape, and the focus is no longer where it
should be on the very people we are supposed to be taking care
of.
Would you gentlemen say that that is accurate?
Dr. PUNZI. I agree.
Dr. MILLER. Yes, sir.
Mr. CRANE. My question to start with is for all three of
you. Is it possible in your opinion to shift back from this
model that seems bent on consolidation, monopolization, topdown
control, and back towards a healthcare system that is focused
on our patients?
Sir, we will start with you.
Dr. PUNZI. I think we can. And, again, we go back to, as a
small business, being able to survive and stay afloat. So I
think that, if the issue of reimbursement really kind of
improves, especially with the issue of CMS, I think that would
be very helpful to allow individual physicians to stay in
practice.
Mr. CRANE. Mr. Miller, Dr. Miller.
Dr. MILLER. Absolutely. We have to dive down into the deep
regulatory weeds and sort of clean out the garden. We also have
to look at sort of big-picture market dynamic questions like
physician-owned hospitals and Stark Law.
Mr. CRANE. Sir.
Mr. FIEDLER. I think it is actually possible to make
progress on these questions. I think part of that is reducing
administrative burdens. I think part of that is addressing
other problems in our system like the fact that if a hospital
buys up the local physician practice, it can now charge more
for those services than it could before, which is a powerful
incentive pushing towards consolidation.
Mr. CRANE. Dr. Miller, which--if--and Mr. Bean was talking
about this a second ago. If you had to take this light saber
that he referred to and start with the top three regulations
that you would like to see slashed, what would those be?
Dr. MILLER. The ban on physician-owned hospitals is number
one. I would said CMS quality regulations in the fee-for-
service practice program is number two. And then the third,
because you asked about--Mr. Bean asked--or Representative Bean
asked about the State level--is certificate of need.
Mr. CRANE. What about you, Dr. Punzi?
Dr. PUNZI. Again, I think the regulatory burden from the
prior authorizations, I think that is number one. Number two is
the issue of reimbursement. And third is the issue also that we
have to keep in mind as a physician, which is going to be
medical liability.
Mr. CRANE. Dr. Miller, I thought it was sad when you
pointed out that that study that showed that only 15 percent of
a doc's time is spent each day with their patients.
Have you--how has that changed since you started
practicing?
Dr. MILLER. It has gotten worse. As a hospitalist, I refer
to myself as a desk jockey because I spend most of my time
typing. And, in fact, when I was a resident, one of my
colleagues was already planning their retirement.
Mr. CRANE. Wow. And you also said, sir, that you-all are
now practicing to document and not practicing to treat
patients. Is that correct?
Dr. MILLER. Absolutely.
Mr. CRANE. Do you feel the same way, Doc?
Dr. PUNZI. Yes, sir, same way.
Mr. CRANE. How do you think that that affects the accuracy
at which you are able to treat your patients?
Dr. PUNZI. Again, going back to my professor, medicine is
an art and a science. And I think that the ability to be able
to do a good history and physical, and if you look at the time
constraints, we can't do that.
As I tell my patient--as I tell my students, 80 percent of
the diagnosis you can make by doing a good history and
physical. And what that does is it allows me to identify what
the problem is, take care of the patient at a much lower cost
and within that one visit.
Dr. MILLER. I was just going to say it means I have two
jobs: One, the hospital gets paid for, which is the
documentation, and that is how the system gets reimbursed; and
the other is treating the patients. So it means I have to
divide my time.
Mr. CRANE. Thank you.
Sir, would you like to comment on any of those question?
Mr. FIEDLER. I agree. I think some of the quality reporting
burdens are not generating value and are generating a lot of
costs. So streamlining those, both in public programs and in
private insurance, I think would be a high-value step.
Mr. CRANE. Thank you. I yield back my time.
Chairwoman VAN DUYNE. Thank you very much.
I recognize Chairman Williams from the great State of Texas
for 5 minutes.
Mr. WILLIAMS. Thank you, Madam Chair.
And I am interested in two things. First of all, Dr.
Miller, have you been to the Hall of Fame?
Dr. MILLER. I have not.
Mr. WILLIAMS. You need to go, go with Beth Van Duyne. She
is going up there. I played with the Atlanta Braves, but I am
not in the Hall of Fame. Let that clear out.
And also, listening to this testimony, back home in Texas--
I am a car dealer. I own car dealerships. And it is almost like
we are in the same business. You know, I am fixing cars. You
are fixing bodies.
But I see that the same thing is happening in our
industries: Margins are getting squeezed, more regulations,
telling you what to charge. It is a disaster, and we need to
fix it.
And so, Dr. Miller, you are not only practicing medicine at
Johns Hopkins, but you have extensive experience working for
government agencies.
As I am sure you are aware, when agencies pass regulations,
they are supposed to be taking into account the impact on small
business and take steps to lessen the additional burdens. Many
times you hire somebody for compliance that has nothing to do
with you--creating income for you.
Now, on this Committee, we have been looking to how
seriously agencies are taking this important responsibility to
insulate small businesses from government overreach. And,
unfortunately, it seems like many agencies are falling short.
For example, earlier this year, we wrote a letter to the
FTC about a rule that would have imposed significant new costs
on eye doctors and hurt many small practitioners.
So, Dr. Miller, a question. Given your past experience with
government agencies--and you have talked some about this
today--again, how do you think we can ensure agencies take
their responsibility to lessen the impact on small business as
they develop new regulations, understanding that less
regulation means more margins, more service, better business?
Dr. MILLER. I think aggressive, healthy, and intellectually
curious oversight, especially of CMS. The rules are 2,000 pages
long, and I think that that in and of itself says how
challenging the space is.
Mr. WILLIAMS. Well, you have heard today this past
administration has imposed $375 billion worth of regulations on
small businesses. And to take care of that is $220 million man-
hours. And we have got to fix that.
So today small providers, like all small businesses, are
facing significant economic challenges: Inflation--we know
about that--supply chain issues; and labor shortage, to name
only a few.
And, unlike additional small businesses, however, small
providers face an even heavier regulatory burden with distinct
requirements to comply with Medicare, to comply with Medicaid,
and private insurance companies, and all this while you are
trying to provide quality to your patient, have a
relationships, and foster meaningful physician-patient
connections.
So, Dr. Punzi, can you walk us through how challenging it
is to balance these various demands on your practice? You have
done that, but just remind us what a problem it is.
Dr. PUNZI. So, again, the issue is right now--whenever you
do a visit, just a regular visit, the average time is about 15
minutes, of which 5 minutes is one complaint. And then in some
clinics is one complaint per visit. In this study, they had six
complaints, of which five 1-minute address. And, again, I have
5 minutes here.
And you can imagine, as I mentioned earlier, if I have a
74-year-old patient that I have got to do a history on, it
definitely ends up being challenging.
The other thing, too, is the administrative burden that
comes after you see the patient. Instead of identifying what is
wrong with the patient, now you have got to go and try to
document what you have just done in a timely manner. And then
the issue also ends up being billing. So now you have got to
send the billing, and then you may not get paid for 30 days, 60
days, sometimes 90 days. So those are the big challenges that I
identify in my practice.
Mr. WILLIAMS. A lot of fix to this is competition.
Dr. PUNZI. Yes.
Mr. WILLIAMS. And whether it be my business or your
business or your, it is competition. None of us shy away from
that.
Dr. PUNZI. Uh-huh.
Mr. WILLIAMS. Competition will drive prices down, services
up every time, won't it?
Dr. PUNZI. Absolutely correct.
Mr. WILLIAMS. Without government regulation.
So my last question, Dr. Miller, the consolidation of
healthcare practices is on the rise, and small providers are
becoming rarer and rarer. In rural America--and I have a rural
district, Fort Worth. You know where it is, out West. In rural
America, oftentimes small providers are the only healthcare
option.
So what do you see, quickly, as the long-term consequences
of this trend of consolidation continues? And how do you see
telehealth potentially filling the void?
Dr. MILLER. The answer is that folks will have to drive 3,
4, 5 hours to see the doctor. Telehealth can help, but you
can't--we are not technologically in a space where we can do
remote surgery from 5 hours away. So that--the Star Wars/Star
Trek world is probably about 40 years away. So we need to
preserve rural options.
I think looking at repealing the ban on physician-owned
hospitals or looking at Stark Law to allow physicians to own
integrated care delivery is a great potential solution.
Mr. WILLIAMS. Free markets are--the start of business
America is what the country was built on.
Thank you all for coming.
I yield back, Chairman.
Chairwoman VAN DUYNE. We do have a little bit of time left.
So I want to run through a second round of questions if anybody
has them.
When were you in Cooperstown?
Dr. MILLER. 2013.
Chairwoman VAN DUYNE. You have not--I actually--my dad did
his internship and residency at Imogene Bassett Hospital in
Cooperstown.
Dr. MILLER. That is where I was.
Chairwoman VAN DUYNE. So we were there for 3 years. It is a
great community.
I don't have any further question. I am going to ask you. I
am going to give everybody an opportunity: Was there a request
that you prepared for that was not asked today that you want
to--I am just going to go down the line.
Dr. PUNZI. I think, when you talk about rural healthcare,
there is about 64 million patients that live in areas that are
underserved. And two-thirds of the lack of physicians are in
those particular areas.
And, again, as you had mentioned, the issue of getting to a
physician, they are talking about drive time. So I think that
is challenging. Hospitals in that scenario, the turnover rate
for staff is about 20 percent.
So they have got many challenges, but the big thing is we
have got to allow those patients to have access. And I think
that physicians in private practice, in rural areas, if you
make it attainable, if you make it viable from a financial
point of view would definitely go a long way.
Chairwoman VAN DUYNE. Excellent. Thank you.
Dr. Miller.
Dr. MILLER. I would say the biggest regulation that we
haven't addressed is Stark Law or physicians' self-referral
law. So, if I am an orthopedist and I work for MedStar Health
as an employee, I can self-refer for an MRI or a physical
therapist or whatever within the MedStar system. But, if a
physician does that, that is statutorily prohibited.
Stark Law is over--and rules are over 900 pages long. I
know that because I fell asleep by the pool on vacation in
Florida one year trying to get through it. And so I think that
that is something that needs to be addressed, and taken apart
to allow physician-owned-and-operated care delivery to compete
fairly with these massive tax-exempt hospitals which have
bought literally every part of the healthcare supply chain,
from home care to ambulatory surgery centers to clinics to
imaging centers to critical access hospitals to urban
hospitals.
We should allow physicians to compete fairly on an equal
playing field.
Chairwoman VAN DUYNE. Thank you.
Mr. Fiedler.
Mr. FIEDLER. As we talk about consolidation in the health
care sector, I think one thing that is also driving that is
that whoever buys up a bunch of physician practices can often
charge a much higher price for the services than those
practices were charging before. And so figuring out what the
policy solutions are to that problem I think is a very real
one.
This may be a place actually where regulations has not been
aggressive enough. I think antitrust enforcement in particular
should probably be taking a more careful look at some of these
types of combinations than it does today.
Chairwoman VAN DUYNE. Thank you. I appreciate your
testimony.
I now recognize Ranking Member Mfume from Maryland for 5
minutes.
Mr. MFUME. Thank you mister--Madam Chair.
Just a couple of quick things and I am going to ask both
Dr. Miller and Dr. Fiedler to, if you can communicate back to
the committee or to me, because it is going to require a longer
response, and it is probably going to be a much more thoughtful
subject that I am sure you would want to expand on.
But beginning with you, Dr. Miller--and by the way, I am--I
am glad that you indicated that your views are your own, and
they don't represent Johns Hopkins or anybody else. Sometimes
we get into a position where that is not always the case, and
things leave out of this room that are not always factual.
And, you know, I served as a trustee at Johns Hopkins over
top of the hospital and the university for 12 years. And so I
know there are a lot of different views and visions and
positions. So I am glad that you indicated that yours today
were your own thoughts on that matter.
I want to talk about what I thought was an interesting
comment you made about the fact that we don't design responses
the way we should to problems, and I think you said that most
of them are being designed as state-sponsored or static. Is
that--did you use the word ``static''?
Dr. MILLER. I used the word ``static,'' not ``state-
sponsored.''
Mr. MFUME. Okay. Well, derived from a state activity or----
Dr. MILLER. No. Static versus dynamic.
Mr. MFUME. Okay.
Dr. MILLER. Thinking about whether a system is changing
over time versus a system in place.
Mr. MFUME. Right. And you also said that the better systems
would be the more dynamic and the flexible ones, as you just
said, over time.
If you could just write back briefly to the Committee your
thoughts, lay out how that would--should look if we were going
down that path and trying to create more dynamic and flexible
policies and practices and approaches, it would be helpful. It
really would, and I would appreciate it.
And you also indicated that, as I think I--Mr. Punzi, you
may have also--that more regulation was not the way to go. Am I
paraphrasing correctly there?
Dr. PUNZI. It is kind of like my patients. A lot of times
what they do is they add more medication on top of other
medication without identifying what the old medication was for.
Patients end up on 12, 13 medications. And they don't know why.
And I think, similar, regulations. We have got regulations
on top of regulations, but we don't realize why the first one
was done to begin with.
Mr. MFUME. And we don't have regulations that regulate the
bad regulations. That is really the bottom line. I don't know
that it is the numerical difference. I think it is the fact
that some of these have just come about over time and have
never gone away and so they add to the overall aggregate
number.
Dr. Fiedler, can you explain on the other side of that how
more regulation in health insurance space, in particular, could
lead to better experiences for the population most affected?
And, again, I am not advocating fewer regulations. I am
advocating a consolidation or policing of the regulations that
we have so that we can kind of get rid of the ones that are not
working and, if we have to add good ones, then add them in.
Mr. FIEDLER. Everything is about tradeoffs. And so we want
the good, and we don't want the bad, and exactly as you are
asking, how do we get there?
And I think one of the ways to get rid of bad regulations
is exactly the conversation we are having right now, bringing
attention to these things.
As a process matter, I think that is probably the most
effective way is having people both inside of government and
outside of government who are bringing attention to where the
problems are and identifying them.
I think the challenge is that, for any given regulation,
there is someone who is on the losing side of it, even if
consumers and other people are benefiting from that regulation.
So I think one of the challenges in some of these debates,
maybe less so in healthcare but in healthcare, as well, is
there are lots of people who want to tell you that any
regulation, including the good ones, are bad and costing them
money, even when they are generating a lot of value.
Mr. MFUME. Kind of like government programs. Once they get
started, they just never go away, even if they are not
effective.
So I am going to ask, as I asked one of your colleagues
here, if you can jot down some thoughts that further expand on
that and could submit them back to the Committee, that would be
great.
Mr. FIEDLER. Thank you.
Mr. MFUME. Thank you, Madam Chair.
Chairwoman VAN DUYNE. Well, seeing no other further
questions, I would like to thank our witnesses for their
testimony and for appearing before us today.
Without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witnesses to the Chair, which will be forwarded to the
witnesses. I ask the witnesses to please respond promptly.
If there is no further business, without objection, the
committee is adjourned.
[Whereupon, at 10:45 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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