Opening Statement of Hon. Jim Ramstad, a Representative in Congress from the State of Minnesota

Hearing on Medicare's Geographic Cost Adjustments

July 23, 2002

Thank you, Madame Chairwoman, for holding this important hearing today.

Medicare reimbursement policies shape the health care delivery system in every state and in the public and private health care market.  For this reason, geographic disparities impacts every sector of health care in Minnesota, and has become one of the most important federal policy issues we face today.

Minnesotans are cheated by the underlying rationale that care provided by a physician, nurse, hospital, therapist or any other provider is worth more in some areas than in others.  Most diseases and illness do not distinguish between geographic localities, and the value of health care does not vary either.  For the person whose life is saved through an angioplasty or spared a bout with cancer because of an annual check-up, the life-saving care that a person received carries the same weight, regardless of where it was received.  

But the value of health care is not reflected in our Medicare reimbursement policies.  The current system creates a complex formula that determines what a doctor is worth in a particular area or what a nurse should be paid if every assumption in the formula is correct.  Although the underlying rationale of our reimbursement polices look good on paper, these policies cheat Minnesota’s health care providers and patients. 

I regularly hear from physicians who cannot afford to treat Medicare patients, and I know they want to serve these patients.  Unfortunately, as a result of geographic differences in Medicare reimbursement rates that favor certain areas, there is an incentive for physicians to leave Minnesota and practice in higher paying areas.  

This is wrong!  Not only will Medicare patients suffer, but every person regardless of age will be affected, as the same physician who treats Medicare patients often treat a variety of people and conditions.   

The only solution is to rethink how we value health care and work together to devise a fair system that ensures that every Minnesotan has the care they need and deserve. 

Thank you, Madam Chairwoman, for holding this hearing, and I look forward to working with you on this very important problem.