Congressman

Collin C. Peterson

Minnesota - 7th District


FOR IMMEDIATE RELEASE: October 15, 1999
Contact: Jordan Rapp @ 202-225-2165
Statement of
Congressman Collin Peterson

 “HMO Reform: Wrong Solution for Rural America ”

 “I will abstain from harming or wrongdoing,” states the Hippocratic Oath.  I set this simple guideline for myself as I considered the various managed care proposals voted on by the House of Representatives.  After months of study, debate and meetings, I decided to oppose the barrage of health care legislation considered by the House of Representatives for the simple reason that the measures would not improve the health care provided in the 7th district of Minnesota — and in fact, could do more harm than good.

The most urgent problem we’re struggling with in Minnesota’s 7th District is the current Medicare payment system — not managed care, after all, there’s essentially no managed care in N.W. Minnesota.  Medicare is expected to go bankrupt in the next decade and the government, in an effort to save money, has ratcheted down Medicare payments to hospitals, nursing homes, and home health care providers.  Our hospitals are struggling.  Unless there is some kind of re-examination of the Medicare payment system for rural facilities, I’m afraid we might see some of them close.

Rural hospitals are hit hard by payment cuts because a large portion of their patients are Medicare beneficiaries — often 60-80 percent.  Urban hospitals can offset their Medicare patient losses by charging higher prices for their non-Medicare patients.  Rural hospitals do not have this option.

Adding to the health care problems of Medicare beneficiaries in the 7th district —this is where managed care could help — and the rest of rural America is the lack of accessibility to prescription drugs.  At a time when prescription drugs are an integral part of 20th century medicine, 35 percent of seniors do not have prescription drug coverage and the Medicare program doesn’t provide that coverage.

For many of America’s seniors, prescription drug coverage can be obtained by enrolling in a Medicare + Choice (managed care) plan.  However, the 7th District of Minnesota doesn’t have Medicare + Choice options because federal law provides no incentives for these managed plans to come to our district.

In fact, 96 percent of Minnesota’s rural Medicare beneficiaries have no access to Medicare + Choice plans.  The managed care legislation that I opposed would do nothing to address this, and would only exacerbate the problem.

Managed care plans participating in Medicare are paid by the government based on a complex formula called AAPCC.  While the government pays managed care plans in Miami, FL $700 month per beneficiary, the payment rate in the 7th District is below $400. Thus, plans are unwilling to operate in N.W. Minnesota, and much of rural America.  Without a change in this payment formula, the 7th district will never see Medicare + Choice plans.

The managed care legislation neglected these inadequacies and would do nothing to bring managed care to the 7th district.  Rather, they would increase the cost of health care, thereby further limiting accessibility in rural areas.

At a time when the number of uninsured is unacceptably high — the U.S. Census Bureau just reported there are 44.3 million uninsured Americans — legislation that could exacerbate this problem is the wrong prescription for the country, and especially for rural America.

All three of the health care bills we considered in the House were certainly well-intended, as were the people who supported them. However, none of the bills, including the “Dingell-Norwood” proposal that passed the House, would do anything to improve health care access, delivery, or affordability in rural Minnesota.

Clearly the health care system can be improved.  In an effort to contain costs, managed care companies have often gone to extremes, and left medical decisions in the hands of accountants, rather than doctors.  But “reforms” that increase premiums and diminish the number of insured Americans will hurt the very people we’re trying to help.

In this debate, both sides staked out their ground — and as a result, forgot about rural America and the problems we’re experiencing.   Supporting a health care reform bill that does nothing to improve the health of the constituents of the 7th district would contradict the guideline I set out for myself: to do no harm.  As the Hippocratic Oath dictates, “...should I trespass and violate this Oath, may the reverse be my lot!”

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