The Medical Independance, Privacy and Innovation Act
House of Representatives - June 24, 2003
Washington, Jun 24, 2003 - I have a piece of legislation that I would like people to consider and that I would like them to look at; it is H.R. 2544. It is a piece of legislation that I believe offers a whole new approach to medical care and health care in America.
Unfortunately, all too often, the discussion of medical reform legislation has been focusing on the allocation of more funds. Sometimes those funds would help in our society those who are lacking resources to purchase their own adequate health care and medical care; but at other times when we are talking about spending more funds, what we are not talking about is helping those who really need it and cannot provide for themselves, but what we are talking about is subsidizing everybody, whether or not they need it. Rarely does Congress, when they are focusing on just spending more money, whether or not someone needs that help, rarely do we focus on how can we do things more wisely and more efficiently, and how can we bring down the costs of getting health care that would make more people able to take care of themselves. Rarely does government focus on how to create an environment which would spur the supply of medical services, and rarely do we focus on encouraging cost-cutting innovation or to provide incentives for those who create and innovate and bring up new, cost-effective methods of dealing with illness in our society.
In essence, what government does, and what this body often does, is focus on medical care demand rather than on medical care supply. This focus all but guarantees the price of drugs and hospital care and medical treatment will continue to soar and outpace the ability of many Americans to afford the price of being healthy and; certainly, as it brings the price of health care up, it then creates even more Americans, a pool of even more Americans who cannot take care of their own health care costs. So it is a cycle that leaves even more Americans dependent on the government, and then the government creates a situation where even more Americans cannot take care of themselves.
The Federal Government took over responsibility for the health care of America's seniors back in 1965. When Medicare was first enacted into law back in 1965, very few people remember what it was like back then. But before then, our economically disadvantaged were taken care of by tax dollars. Yes, they were. But most Americans who became seniors were expected to take care of themselves. And we need to ask ourselves, what has happened to the price of health care since the government assumed responsibility of taking care of all Americans over a certain age? What has happened to our health care since the emergence of Medicare?
Today, I dare say the price of health care is so high that it is inconceivable that most of our seniors can take care of themselves. Before Medicare, people were expected, if they could, to take care of themselves. Medicare came in and decided to take care of everybody. Now, almost nobody is able to take care of themselves.
Of course, the massive escalation of health care prices have hit the rest of the population as well as our seniors. Now, the same can be expected, I might add, of the price of prescription drugs if, indeed, we end up having the government take over, providing prescription drugs for all seniors, whether or not those seniors can afford to take care of themselves. What will happen is the price of drugs will soar, not only for seniors who will be paid for by the government, but by everyone else as well, again, making it even more difficult for people, for American citizens, to take care of their own health needs.
Last week, I introduced a bill entitled the Medical Independence, Privacy, and Innovation Act of 2003. This legislation combines a creative mix of market-oriented reforms that will encourage independence and, hence, wise personal medical care choices. If enacted, this legislation will further expand the protection of our medical care privacy. It makes long overdue changes in the Federal Drug Administration procedures that will encourage innovation and invention of new pharmaceuticals and, thus, will have a major effect on bringing down the cost of health care. This legislation, if enacted, will expand the variety, quantity, and availability of medical innovation. It is innovation, new technology, and our creative genius that will enable Americans to overcome the monumental challenge of providing health care to the baby boomer generation as this generation slips into its senior years. Today, the entire system of health care delivery needs to be reshaped if we are to prevent a collapse as the baby boomer generation begins to retire and to go on Medicare.
In my legislation, I propose a program of reforms based on sound economic principles that are vital to improving medical care in America. It assures that people make choices for themselves rather than accept bureaucratic or political mandates. Today, nonseniors, as with seniors, in fact, find that health care decisions are being taken out of their hands. So even our nonseniors now, much less our seniors, are finding that they do not control their own destiny. They do not make those health care decisions that are so important to their lives. What we have done to the nonseniors in America, while co-opting the decision of every senior in America by just suggesting no one will be taking care of themselves, even those who could, we have now taken over full responsibility and taken the decision out of their hands; but we are doing that, in a way, to the people before they become seniors.
What we have done is structured a system where the employer has become the primary source of a health care service through employer-based health insurance plans. That is a fact of life, and we just had to accept it. Well, unfortunately, it means so many resources and so much power has been co-opted that consumer sovereignty and responsibility has been all but negated. Most people really do not have a choice. It is what the boss offers. If the boss offers it, it is take it or leave it.
There is an old economic truth, by the way, and that is, if the cost of a private or public good approach is zero, that means if you are being offered something and there is no cost to you taking advantage of it, there will be overuse and a waste of that good.
Today's system leaves us with almost no personal choices, but it leaves us with a system that does not rely at all on personal responsibility. We have no choices, and there is no personal responsibility as part of the system. It leaves people, American citizens, with a sense of helplessness and hopelessness and resigned to whatever is going to happen to them that is totally inconsistent with our heritage as a free people.
We spend more and more money on health care. We spend, in fact, more money on health care supposedly than any other country of the world. So as you are listening to people debate the issue of Medicare and debate the issue of prescription drugs and debate the issues of health care in America, remember we already spend more money by far than any other country of the world.
Perhaps part of this is due to the fact that individual responsibility has all been extracted from the system because what it is is we spend more money but we do not have the best health care system in the world and our people are not getting what they pay for or what is being paid for in the United States of America. We have, as I say, all but extracted from our system the idea of individual responsibility and personal authority over one's destiny, not to mention, of course, the profiteering and exploitation of the system by lawyers.
Now, it is time to make a new approach and our system and my bill does not reflect on the exploitation of our system by lawyers. That is another bill. That is a whole different area. But those are obviously one group of people who siphon money out of the system that should be going to people's health care. It is time to take a new approach and, again, over and above the medical malpractice situation.
It is time to take a new approach and what we need, for example, in my legislation, I am proposing that we establish medical checking accounts that incorporate both deductions and credits into our system so that our people will be free to control their own destinies.
Many American families would benefit through the ideas that I am proposing in my legislation. They would benefit by being able to purchase high deductible catastrophic health insurance plans and pay for the year to year or day to day doctor, dentist and pharmaceutical costs out of a medical checking account.
I have sat in my office with self-employed constituents who would love to be able to design their own package of medical care coverage. This approach would protect their family against the huge costs of serious medical illness, of accidents or some type of illness or disease, but it would allow them to pay out of their pocket for normal month to month costs.
Now, imagine how the intelligently a consumer spending his money would help to limit overspending and over-utilization of insurance coverage. Imagine in a society where individual families could shop around for medical insurance plans that suit their needs and not have to squeeze their life-styles into their employer options. My bill would, for example, in the end and it would end the unfair discrimination against individuals who seek independent alternatives to their employer health insurance plans that are mandated in many big businesses or many normal businesses as well, I might add. It would naturally integrate market discipline through personal choice and responsibility into Medicare spending.
My plan creates a medical checking account plan where the account base of $4,000 per family or $2,000 for an individual is built with tax deductible dollars and the estimated yearly variable costs are built in with a $1,000 tax credit replenished on a yearly basis. Now, we are beginning to find out that once we have been relegated, as we are in our current system, to cogs in a machine, either big government or big business machine, that the rights of privacy are no longer paramount or even considered. My legislation would reestablish the principle that a person owns his own medical history and must consent before it is passed on to others.
The emergence of big government and big insurance as the dominant force in health care has eroded the ideas of medical privacy, if not totally just extinguished it. It is time to swing the pendulum back. My bill restores the issue of prior consent and protects the private relationship information relationship between patient and doctor. It eliminates loopholes in the current law that will result in unsolicited merchandising, disclosures of private medical information and the diminishing privacy for millions of Americans.
Americans have visited their local pharmacy and many millions of have visited the pharmacy in the past several months and have been asked to sign a new HIPAA notice. Do these Americans realize that what they are signing is a set of rules that undermines their right to disclose or not to disclose their private and personal medical history?
This country was at one time based on the principle that you owned your medical history and that your property is your property and without your concept that that information should not be placed in the hands of another, whether that person is in big government or private corporations. We need to go back to that principle. When big government starts taking the power, of course, to protect us from ourselves, and that is what they always say, they are trying to protect us from ourselves, not just protect the people who cannot help themselves but protect everybody. They are protecting us from ourselves, you better watch out.
The government can and is protecting us to death. Not from death. They are protecting us to death. Today, for example, FDA approval standards require new pharmaceuticals not just be safe, new pharmaceuticals coming on the market, the requirement is not that they be safe, they have to be nearly 100 percent effective for everyone. It is a 96 percent efficacy rate that is demanded by the Federal Government. That makes it dramatically longer more difficult and more costly for a new drug to get on the mark. By doing this we are condemning hundreds of thousands of people to needless suffering with these overly high standards, we create hurdles to development of new drugs urgently needed and we end up preventing the use of drugs that are already available to help people, but it might only help 75 percent of the people. But if it only helps 75 percent, that cannot go on the market because the rule is it has to be 96 percent effective.
No, this is not fair and it is not right. And it is no coincidence that families of victims of leukemia, cancer, AIDS and other diseases plead to no avail for the abilities to use drugs that were legally available throughout the world. I have sat if my office with constituents who have children with leukemia or siblings with AIDS or patients with cancer who beg for us to do something to allow them to have those pharmaceutical products that are available to people in other countries. Tragically at the same time, as new drugs are provided, or excuse me, are approved for both safety and efficacy, those drugs who do manage to jump all the hurdles and become effective for almost everybody, it ends up where the price is sky high and very few people can afford them.
Then there is the case, of course, where inventors often place on their shelves and innovators and researchers and developers and scientists, they put on their shelves unused and undeveloped many innovative potential technologies and products because they can not afford the exorbitant costs of passing all of these FDA efficacy tests and are making it absolutely prove that 96 percent of the people will be totally cured by this drug.
Well, that makes no sense if 85 percent of the people are going to be cured by a drug, and I have sat in my office with inventors who have told me horror stories of these new inventions that they have but they will not bring them out because they cannot jump over these FDA hurdles.
Well, why does the FDA regulation concerning, for example, drug cocktailing today block the availability of new innovation? Why are we so afraid of new innovation? That new invasion can be set on the standard of it does no harm. I am proposing that we have the standard of it does no harm rather than a 96 percent or 100 percent efficacy rate. That is, it seems to me that that is what we should leave in the hands of the American people, the right to choose drugs that will do them no harm and they should have a right to take them if they feel, especially with the doctor's prescription that they can take that drug and treat themselves even if only 85 percent are cured rather than 96 percent.
Today, websites, consumer interest groups, investigative reporting will make the people of our country, with the help of their doctors who can help them with prescriptions and give them advice, they help the American people fully able to make these choices that were not possibly available to them or maybe the American people could not do it in the past.
Another oddity in the current system that drives up the price of drugs, not just this 96 percent efficacy standard that is insisted upon, one thing that drives up the price for drugs for Americans is the way we deal with the ownership rights of inventors, of those very same inventors and innovators that develop new drugs and find new ways of treating people more efficiently and for less costs in the long run.
What we do, if an individual or a corporation invests tens of millions or hundreds of millions of dollars in developing a new health alternative, all too often it takes years for them to get through this FAA approval process and the other governmental restrictions, and by the time a new drug or health care technology can be sold to the American people, almost all of the ownership time that the innovator and the patent owner has has been used up. So you only have about 20 years or 17 years with a patent, and if it takes them 15 years to get through the process, the company has to immediately charge a huge amount of money for that drug in order to cover its cost of development, to get it back, and then, of course, the drug has been held up for all of these other years. So it has not been available to the public; and then, of course, when it gets on the market we end up putting the company in a situation where it has to charge even more money to recoup its investment.
My bill speeds up the process. It basically establishes that the patent clock does not start ticking against that company until the drug can be put on the market, until it is actually sold. Thus, new drugs, rather than waiting for 20 years or waiting for 15 years, can be put on the market sooner because people want to get this thing on the market because they have lowered those FDA restrictions and the company will make money over that time period.
My bill also makes sure that once that patent term runs out, unlike today, there are many legal maneuvers these companies can play in order to keep the generic drug manufacturers from coming in and producing their drug. We eliminate those maneuvers.
So what we have done is put a drug available on the market and in the hands of the American consumer earlier and cheaper, and then we make sure that the drug companies can make a profit, and we end up making sure that the generic manufacturers can jump in earlier without being deterred by legal maneuvers.
In the end, my bill gives the people more access, more time with the drug. It can cure more people. Hundreds of thousands of people, if not millions of people, will be available to be treated with a new, innovative approach, drug, or a new health technology if my legislation sets these new standards and we move forward with a system based on those standards, rather than protecting the people of the United States to death, which is precisely what we have been doing. When we hear the FDA say we are approving the drug today and it is going to save the lives of 10,000 people a year who are dying from this disease, and then you find out it is taking 10 years for the drug to get on the market, that FDA official has just admitted that they have been in the process of participating in the unnecessary death of 100,000 people. That is ridiculous.
As we expand the ability of our drug innovators to create and make available new drugs that will, under my legislation, be protected, they will be able to make a profit at what they are doing; and the public will actually have more choice in their hands, and what we need to know, by the way, on the other hand, if the taxpayers end up financing, and there are some drug companies, we have to admit, they get money from the government to try to develop new drugs, they are subsidized by the taxpayers in developing new drugs. My bill will say if a company does that, if a private company does that, they will be subject to price controls, meaning if Uncle Sam pays the price of research and development, Uncle Sam will tell you what is a reasonable price to have on that drug; and the consumers will be protected right off the bat, even though there will be a reasonable profit margin made as well, but my bill insists that the government then put a reasonable price on that drug if the taxpayers did pay for that research. If a company pays for its own research and development, which we want to encourage more companies to do, they will not be limited by this type of price control.
By encouraging private investment, and whether it is in the development and research of drugs or in other types of health care technology, we will thus be increasing the supply of health care of those things in our society which treat people's illnesses. By increasing that supply, it should help bring down the cost and thus the price of health care to our people. More new drugs and more new technology that can help bring health to our people being introduced on the market, that means a healthier life and a more affordable healthy life for our people.
The medical reform bill I have introduced is a creative package of reforms. I urge all of the Members and fellow colleagues to study these proposals and to support this legislation. As health care costs are obviously going up and even ordinary Americans are struggling to pay the bill and many Americans, of course, cannot pay it all, it is imperative that we begin to seriously think about new approaches to health care.
If the only thing that comes to us while we are looking at the Medicare system and the problem of health care in America is just the only thing we come up with is spending more and more money, we are going to increase the demand for drugs in our society. For example, if all we are doing is taking now a financial situation where the people who can pay for their own health care and their own prescriptions do so and we end up having the government take over all of that, we are going to end up not only dramatically increasing the price of drugs for the government but those people outside the government, younger people, the price of their drugs will dramatically go up.
No, we cannot just simply handle this Medicare system, of course, by dramatically increasing the price of drugs, which will happen, will make sure the Medicare goes bankrupt much earlier than is scheduled. Right now, in the outyears, we can try to do something to keep Medicare solvent. If we are just going to take responsibility for everyone, even the people who can take care of themselves in terms of a drug benefit, it is going to bankrupt the system; and we will all be worse off, and the price of drugs will soar for ordinary families who are not seniors.
We ignore half the problem if we only try to spend money. We need to free up the supply end of the medical care system, the supply of people who will be producing more health care for America. Yet we also have to be, of course, concerned about the escalating costs; but we cannot be stampeded into easy answers, quick fixes, because those just spending more money without creating any innovation in the system or any reforms in the system, it will make all of our problems worse. Backing up the Federal dump truck and just pouring in a mammoth load of tax money is not a quick fix. It will not work; and with new expenditures, it is going to bankrupt the system and cause the price of drugs to go sky high for all the American people, not just the seniors.
No, the tooth fairy is not going to leave the money that is going to be spent on health care and improving our health care system under our pillow. Each and every one of us will pay. So it is irresponsible not to try to make the system more competitive, less bureaucratic, more innovative as we are talk about expanding Medicare and trying to take care of those people who need prescription drugs but cannot afford it.
Our focus should be on those who cannot afford it rather than coopting this whole field and trying to take care of everybody. A government that tries to do everything for everybody is not going to be able to do anything for anybody in the long run as this economic insanity takes hold and has its effect on our society. We are going to make our problems for insurance worse if we do not try to make our system more effective and cost effective.
One last note about health care in America. In recent years, Americans have witnessed an explosion of alternative health care health-related nutrition, acupuncture, chiropractic, vitamins, exercise, mental health programs that are based on self-help and individual responsibility. These are exciting, new alternatives; and most of them are not even covered by insurance, much less being paid for by the tax dollars. The American people need to have these available to them, these and other vehicles for a good healthy life; and we must use mass communications and the Internet to make sure our people know what their alternatives are, but instead, now what are we focusing on here in the Federal Government, instead we are just trying to focus on spending more money.
New opportunities are needed. We do not need to just regulate these new approaches and these new things that people can do for health care. We do not need to regulate it, control it or ration it. We need, like my legislation will do, is to open up new opportunities. My legislation is based on the principles of freedom and the incentives of the market. This at least will have to be part of the solution, if not the entire solution, we seek to the challenges we face today