[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
SUBSTANCE ABUSE TREATMENT PARITY: A VIABLE SOLUTION TO THE NATION'S
EPIDEMIC OF ADDICTION?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CRIMINAL JUSTICE,
DRUG POLICY, AND HUMAN RESOURCES
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
OCTOBER 21, 1999
__________
Serial No. 106-138
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
__________
U.S. GOVERNMENT PRINTING OFFICE
66-251 WASHINGTON : 2000
______
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Criminal Justice, Drug Policy, and Human Resources
JOHN L. MICA, Florida, Chairman
BOB BARR, Georgia PATSY T. MINK, Hawaii
BENJAMIN A. GILMAN, New York EDOLPHUS TOWNS, New York
CHRISTOPHER SHAYS, Connecticut ELIJAH E. CUMMINGS, Maryland
ILEANA ROS-LEHTINEN, Florida DENNIS J. KUCINICH, Ohio
MARK E. SOUDER, Indiana ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
DOUG OSE, California JANICE D. SCHAKOWSKY, Illinois
DAVID VITTER, Louisiana
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Sharon Pinkerton, Staff Director and Chief Counsel
Steve Dillingham, Professional Staff Member
Mason Alinger, Professional Staff Member
Lisa Wandler, Clerk
Cherri Branson, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on October 21, 1999................................. 1
Statement of:
Conley, Michael, chairman of the Board of Trustees, the
Hazelden Foundation; Michael Schoenbaum, economist, RAND
Corp.; Kenny Hall, addiction specialist, Kaiser Permanente;
Capt. Ronald Smith, M.D., Ph.D., vice-chairman, Department
of Psychiatry, National Naval Medical Center; Peter
Ferrara, general counsel and chief economist, Americans for
Tax Reform; and Charles N. Kahn III, president, Health
Insurance Association of America........................... 51
Ramstad, Hon. Jim, a Representative in Congress from the
State of Minnesota......................................... 27
Rook, Susan, media consultant................................ 41
Wellstone, Hon. Paul, a U.S. Senator in Congress from the
State of Minnesota......................................... 5
Letters, statements, et cetera, submitted for the record by:
Conley, Michael, chairman of the Board of Trustees, the
Hazelden Foundation, prepared statement of................. 53
Ferrara, Peter, general counsel and chief economist,
Americans for Tax Reform, prepared statement of............ 83
Hall, Kenny, addiction specialist, Kaiser Permanente,
prepared statement of...................................... 71
Kahn, Charles N., III, president, Health Insurance
Association of America, prepared statement of.............. 87
Mica, Hon. John L., a Representative in Congress from the
State of Florida, letter dated Novemebr 12, 1999........... 97
Mink, Hon. Patsy T., a Representative in Congress from the
State of Hawaii, letter dated October 20, 1999............. 9
Ramstad, Hon. Jim, a Representative in Congress from the
State of Minnesota, prepared statement of.................. 31
Rook, Susan, media consultant, prepared statement of......... 43
Smith, Capt. Ronald, M.D., Ph.D., vice-chairman, Department
of Psychiatry, National Naval Medical Center, prepared
statement of............................................... 79
Sturm, Roland, Ph.D., RAND Corp., prepared statement of...... 61
SUBSTANCE ABUSE TREATMENT PARITY: A VIABLE SOLUTION TO THE NATION'S
EPIDEMIC OF ADDICTION?
----------
THURSDAY, OCTOBER 21, 1999
House of Representatives,
Subcommittee on Criminal Justice, Drug Policy, and
Human Resources,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. John L. Mica
(chairman of the subcommittee) presiding.
Present: Representatives Mica, Barr, Souder, Hutchinson,
Ose, Mink, Kucinich, Tierney, and Schakowsky.
Staff present: Sharon Pinkerton, staff director and chief
counsel; Steve Dillingham and Mason Alinger, professional staff
members; Lisa Wandler, clerk; Cherri Branson, minority counsel;
and Jean Gosa, minority staff assistant.
Mr. Mica. I would like to call this hearing to order this
morning. We do have a full schedule, and so we will go ahead
and proceed.
The subject of today's hearing is Substance Abuse Treatment
Parity: A Viable Solution to Our Nation's Epidemic of
Addiction, is the question that is asked and before our
subcommittee. I am pleased that we have three panels of
witnesses who are providing testimony.
I will start today's hearing with an opening statement and
then yield to our ranking member and other Members who will be
joining us, but we do want to go ahead and proceed since we do
have a lengthy schedule.
The Subcommittee on Criminal Justice, Drug Policy, and
Human Resources convenes today to discuss our country's war on
drugs from a perspective that is different from that of
previous hearings. Recently, we have held a number of hearings
on topics that impact the supply of drugs in our Nation. Our
hearings have ranked from international narcoterrorism
developments in Colombia to interdiction operations and
resource needs across our southwest border. Last week, we held
an important and insightful hearing on what is being done
through our now federally funded media campaign to reduce the
demand for drugs.
Today, we will examine another important component of
national efforts to reduce the demand for drugs. We will focus
on drug treatment and funding options that might be affordable
and make a difference in the drug war. Treatment generally
receives less coverage in the press and is often misunderstood.
We will examine carefully how treatment might be used to reduce
drug-related deaths and destruction.
Today, we will hear more about the positive consequences of
successfully treating drug abuse. We are especially grateful to
our witness who has come forward to tell us about her personal
experiences. Her testimony will illustrate how some people with
alcohol and illicit drug addictions have broken those terrible
chains and regained control of their lives.
We all agree that the number of such positive outcomes from
addiction should be increased to the greatest extent possible.
Accordingly, drug treatment benefits and funding options
deserve our close attention.
Since 1996, Congress increased Federal spending from $13
billion to almost $17.8 billion for drug control programs and
activities. Most of this increased funding has been targeted
toward reducing demand. Of the $4 billion increase, 26 percent
was set aside for improving treatment options.
However, despite the commitment of more dollars and an
emphasis on treatment and reducing the demand for drugs,
alarming trends demonstrate the need for further action. We
know, for example, that from 1993 to 1997 the number of
Americans reporting heroin use rose from 68,000 to 725,000--
more than quadrupling.
With an estimated 26 million Americans addicted to drugs
and alcohol, the human toll is ever present. In mid-August,
drugs claimed the life of a young 13-year-old in central
Florida. The soon-to-be eighth grader, Jonathan Hilaire, died
of a cocaine overdose while visiting Disney World in Orlando.
How can this happen? What can be done to save these young
lives? I think we can all agree that more action is needed.
Mrs. Mink, I don't know if you saw, we have the most recent
statistics on drug-induced deaths; and it has now climbed to
over 15,000, I think it is 15,200, which is a 7.8 percent
increase over last year.
In fact, combating substance abuse requires the best
efforts of our Federal, State and local governments; our
families and communities; our social and religious
institutions; and our employers and private sector businesses.
In recent years, some observers have adopted the view that
drug addiction should be considered as a brain disease, because
of accompanying biological changes that occur in the brain.
Others argue that addiction is primarily a behavioral disorder,
often as the result of personal or character weaknesses over
which individuals can and should exercise personal control.
These differing views also must factor in the realization
that we expect the criminal justice system to respond to drug-
related crimes--and to encourage law-abiding behaviors. This
responsibility often includes the treatment of offenders for
drug addictions. Numerous studies indicate that the longer a
person stays in an attempt program, the better the outcome will
be. Treatment options enforceable under the law provide added
leverage to ensure an abuser's participation.
Today, we will discuss options for including substance
abuse treatment in employee health plans.
Too often, we stereotype drug addicts as being people
unable to hold down regular jobs. A Bureau of Labor Statistics
report released earlier this year reports that more than 70
percent of those using illicit drugs and 75 percent of
alcoholics do, in fact, hold down regular jobs. This represents
a significant portion of the country's substance abusers. Many
of these employees have, or may acquire, access to some form of
employer-provided health care coverage.
Today, it has been estimated that only about 2 percent of
substance abusers are fortunate enough to be covered by health
plans that provide for adequate treatment. I recognize that a
handful of States already have passed legislation that includes
substance abuse parity provisions. I also fully realize that
unwise Federal mandates can disrupt markets, cause
inefficiencies, and have other unintended negative
consequences. For these reasons, any new Federal mandates
should be considered only under exceptional circumstances of
demonstrated need.
In light of the impact of drugs on our lives and
livelihood, we must consider all appropriate and promising
measures. If affordable and effective, employee access to
substance abuse treatment through employee health plans might
be a viable weapon in reducing the demand for drugs in this
country. The National Institute for Drug Abuse [NIDA] estimates
that drug treatment reduces use by 40 to 60 percent and
significantly decreases criminal activity after treatment.
In addition to preventing human misery, promoting substance
abuse treatment potentially could have significant economic
benefits.
The costs of both drug and alcohol addiction to society--
including costs for health care, substance abuse prevention,
treatment for addiction, combating substance-related crimes and
lost resources resulting from reduced worker productivity and
deaths--are enormous. Estimates range from $67 billion annually
up to $246 billion--almost a quarter trillion dollars.
The Substance Abuse and Mental Health Administration
[SAMHSA], claims that dollars spent on substance abuse
treatment can have tremendous savings--saving society as much
as $4 to $7 for each dollar that is wisely invested in
effective drug treatment. If accurate, spending a comparatively
small percentage of our business dollars for prevention and
treatment--an amount less than what would be needed to recoup
the costs of lost productivity due to addictions--might be a
wise and cost-effective investment.
Legislative proposals for providing substance abuse
treatment in employee health plans have taken varying
approaches. The different proposals introduced in this Congress
focus on providing insurance benefits for substance abuse
treatment that are equal to benefits for other medical and
surgical care. While these bills promote access to substance
abuse treatment through employee health plans, consensus has
not been reached regarding the scope of coverage and the cost
that employees and employers must bear.
The panels of witnesses before us this morning will discuss
treatment successes, studies, legislative proposals and
possible treatment payment options.
In some instances, comparisons will be made to the Mental
Health Parity Act of 1996 and how that law has impacted
employers, insurers, treatment providers, participants and
others. The act imposed a national minimum benefit standard for
mental health benefits on employer-sponsored health insurance
for the first time.
Key questions we must consider are whether the approach
taken with mental health treatment benefits is working and
whether this approach is fully applicable to alcohol and
substance abuse treatment benefits.
Our first two panelists are very respected Members of
Congress. We are very pleased to have one individual leader on
this subject from the U.S. Senate and another fellow colleague
of ours who has been a champion in the House of
Representatives. Each has worked long and hard to promote
substance abuse treatment parity at a national level. We look
forward to hearing their thoughts and proposals on the subject,
and I will introduce them in just a minute as our first panel.
The panelist on our second panel has graciously agreed to
come and share her personal story of addiction. Her remarks
will serve to enlighten us about the difficulties faced by
those who struggle to overcome substance abuse, and we will
hear her personal success in meeting that challenge.
Our third panel is made up of experts from the field who
will discuss the costs and benefits of treatment and their
ideas and concerns regarding substance abuse treatment parity
in health care plans.
These officials, experts, and persons with firsthand
knowledge of addiction and treatment will give us a better
understanding of this critical issue and how we might promote
effective substance abuse treatment in our efforts to combat
addiction and illegal narcotics. We look forward to hearing
this testimony.
I am pleased at this time to yield to our ranking member on
the panel, the distinguished gentlelady from Hawaii, Mrs. Mink.
Mrs. Mink. Thank you, Mr. Chairman. I especially want to
commend you for holding these hearings on substance abuse
treatment. I want to thank Senator Wellstone and Representative
Ramstad for coming and taking the time to give us their own
perspective on this very important issue.
Mr. Chairman, we all know that there are a wide variety of
approaches toward this drug menace in our country. Law
enforcement, interdiction, and prevention programs are all
important. However, when the individual becomes addicted to
drugs, we must have in place access to treatment.
The Office of National Drug Control Policy reports that 50
percent of the adults and 80 percent of the children who need
substance abuse treatment do not receive it. That is really the
heart of our hearing today. Numerous studies show that
treatment is both effective and cost effective in saving lives.
Therefore, Congress, I feel, should move quickly to require
private coverage. This is certainly one area which, if we
ignore, vast numbers of people who are uninsured may not be
able to get the treatment that they need.
I hope that as a result of the hearings today, Mr.
Chairman, that we will not only have a greater understanding of
the problem, but come closer to finding a solution so that
those individuals who need treatment have access to them out of
national policy as well as State and local.
Thank you very much, Mr. Chairman.
Mr. Mica. Thank you.
We will allow other Members to submit their opening
statements or statements for the record. We will leave the
record open for at least 10 days for submissions.
I would like to proceed now with our first panel which
consists of two very distinguished Members of Congress, one
from the Senate and one from the House, two leaders who have
fought to bring the problem of chemical dependency to the
forefront of the Congress and the Nation.
The first individual I will recognize is a leader from the
Senate side. He is the senior Senator from Minnesota. His
committees include Health, Education, Labor and Pension
Committee. He is also on Foreign Relations, Small Business,
Indian Affairs and Veterans Committee. In the 105th Congress,
he was the author of the Substance Abuse Treatment Parity Act
of 1997. In the 106th Congress, he was the sponsor of the
Fairness in Treatment, the Drug and Alcohol Addiction Recover
Act of 1999.
We certainly applaud your leadership on these issues and
welcome you to our panel over on the House side this morning.
We would like to recognize you at this time.
STATEMENT OF HON. PAUL WELLSTONE, A U.S. SENATOR IN CONGRESS
FROM THE STATE OF MINNESOTA
Senator Wellstone. Thank you, Chairman Mica and Ranking
Member Mink, for the opportunity to speak to this subcommittee
on the important issue of parity for alcohol and drug addiction
treatment.
I want to thank my colleague, Jim Ramstad. It has been
productive and really a very rewarding experience to work with
him on this legislation, and I think he has really been one of
the leaders in the country because he has used his own very
empowering and personal experience as a successful and I think
as a highly respected representative who speaks out about what
he has been through, and I think his voice is terribly
important.
I also want to thank Michael Conley, the chairman of the
Board of Trustees of Hazelden from Minnesota.
You mentioned Susan Rook, Mr. Chairman. I would like to
thank Susan for her courage as well.
And I want to make a quick apology to the panelists. There
are a lot of people here, and you speak and you leave, and it
almost seems like you don't care. I am not even going to get a
chance to hear Jim's testimony. I have two committees and a
vote that is coming up in the next 20 minutes, and so I will
try to be brief.
I have introduced a full parity bill, S. 1447, and
basically what we are talking about is full parity or ending
discrimination in insurance coverage for drug and alcohol
addiction, and I am pleased to say that this bill was
introduced with Senator Daschle, who is our minority leader in
the Senate, Senators Kennedy, Moynihan, Inouye and also Senator
Johnson.
The bill provides, and this is I think really the key
point, for nondiscriminatory coverage of drug and alcohol
addiction treatment service by private health insurers. The
bill does not require that drug and alcohol be a part of any
health care benefits package. It doesn't require that. So in
that sense there is no mandate whatsoever. It prohibits
discrimination by health plans who offer such benefits but all
too often place restrictions on the treatment that are
different from other medical services.
It is my full intention to move this bill forward in the
Senate, and I am looking forward to working with you all on the
House side. I want to applaud the administration's efforts
during the last year to recognize the need for this coverage
for Federal employees. I think that was a positive step
forward.
I want to applaud the work of General McCaffrey and to
recognize his efforts to end drug addiction; and the point that
he makes which is he will not be successful if we just focus on
the supply side, although we must, but we must also focus on
the demand side and you mentioned that as well, Mr. Chairman.
I will gloss over the statistics. I think we all know them.
The disease, I use that word deliberately, of alcohol and drug
addiction, costs our Nation $246 billion annually, $1,000 for
every man, woman and child; and the fact of the matter is that
it doesn't tell us anything in personal terms about broken
dreams and broken lives and broken families and all of the
people who, if they had treatment like Congressman Ramstad,
could live such a productive life, could do so much for our
country and do so much for our community.
I would like to thank Congresswoman Mink for her statistics
on those who don't receive the coverage. Therefore, I am not
going to go over those figures at all.
The question that is posed in the title of the subcommittee
hearing is this: Is substance abuse treatment parity a viable
solution to the Nation's epidemic of addiction? The answer, Mr.
Chairman, is yes. Not only is it viable, but it is necessary.
At this point the crisis of drug and alcohol addiction in this
country warrants solutions from all sectors of our society, all
levels of government, the insurance industry, education and
health care as well.
Now, most private health insurance plans that cover alcohol
and drug treatment, this is the problem, set discriminatory and
unrealistic annual lifetime and visit limits on the treatment,
and these limits fly directly in the face of the scientific
recognition of addiction as a chronic, recurrent condition.
As a result of these limits, most people who seek treatment
who seriously want to end their addiction can't get the
treatment. I think Congresswoman Mink made this point very
well. That is really what this is about. Proper medical
treatment for the disease of addiction is an essential part of
this recovery.
When privately insured individuals have no benefits, or
when you have a plan which does not provide any coverage for
this addiction, quite often the public sector has to pick it
up. That is what happens. Or, I am very sorry to say that all
too often children and sometimes adults basically wind up in
correctional facilities for their treatment program, which is
wrong--and that kind of treatment is terribly inadequate.
Now there will be others who talk about the cost issue,
just to mention that the RAND study is extremely important. As
a matter of fact, the costs for full parity for drug and
alcohol treatment addiction are very low, but the costs for
failure for treatment are terribly high. That is what we want
to say.
Finally, let me conclude this way. I want to emphasize the
research. I want to emphasize the data, and the scientific
evidence, the work that is being done at NIH, the National
Institute on Drug Abuse and the National Institute on Alcohol
Abuse and Alcoholism which basically say that treatment is
effective. We know from this research that addiction causes
long-lasting changes in the brain, changes that in fact
contribute to relapse. We are talking about a chronic and
relapsing disease that can be treated if there is that
treatment, and what we want to do in this legislation is not a
mandate but just end the discrimination.
Now, the principle of ending this discrimination in
insurance coverage for treatment has received strong support
from the White House, from General McCaffrey, former Surgeon
General C. Everett Koop, former President and Mrs. Gerald Ford,
the U.S. Conference of Mayors, Kaiser Permanente Health Plans
and many leading figures in medicine, business, government,
journalism and entertainment who have successfully fought this
battle of addiction with the help of treatment.
We had hearings last year in the Senate which were very
helpful, and that is why I appreciate these hearings. We had
hearings in the Senate Appropriations Committee and in the
Committee on Labor, Education and Pensions which highlighted
all of the recent major advances in scientific information
about the disease, the biological causes of addiction, and the
effectiveness and low cost of treatment, and the many painful
personal stories of people, including children, who have been
denied treatment. That is part of the record of the Senate.
It is time for this disease to be treated with fairness,
and it is time to end the discrimination against those with
this disease. I commend this subcommittee for holding this
hearing today. I commend you for bringing this important issue
to light. And, most important of all, Mr. Chairman, by forming
an alliance between those who support supply and demand side
solutions, we as a country will be able to help millions of
Americans affected by this disease. I think that is what this
hearing is about.
I thank my colleague, and again I apologize to other
Congressmen that have come in that I have to leave, but thank
you very much.
Mr. Mica. Senator, before you scoot, and I know that you
have to get away, if we could get just one or two quick
questions. There are about eight States I think that have
adopted similar measures. I am not really that familiar with
what each State has to what you are proposing, including
Minnesota.
One of the constant things that we hear is that there may
be significant additional costs in premiums to the insurance
insurers and those paying the premiums. To your knowledge, in
the eight States or Minnesota, has there been any significant
difference in costs since they passed these parity
requirements?
Senator Wellstone. I appreciate the question, and Jim may
have the exact figures. It is a perfect question to ask and a
perfect question for me to answer.
Actually, in Minnesota we have done both the mental health
and substance abuse in ending discrimination, and all of the
reports have been that it is extremely cost effective, hardly
any rise in premiums. But there is also, and you may have it,
Jim, the estimates of the savings for the State. In other
words, these costs are no longer dumped on the public sector,
and the productivity of people who have been treated adds to
the cost effectiveness.
So the reports that we have out there show very strong
support both by Democrats and Republicans, and we have not had
that problem at all.
I think Ronald Sturm is going to be testifying for RAND
Corp. about the study of the costs nationally.
The interesting thing is that in this particular area every
study I have seen, every analysis that I have seen, including
independent analyses, points out that not only can the
treatment be effective but it is quite cost effective as well.
In Minnesota--one problem is that we can't get self-insured
plans. That is the whole ERISA question, in which case people
look to us in Congress to try to pass some kind of legislation
that will deal with this discrimination.
Mr. Mica. Mrs. Mink.
Mrs. Mink. Mr. Chairman, I don't know if you are putting
this letter from General McCaffrey into the record.
Mr. Mica. We would be so glad to. Without objection, so
ordered.
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Mrs. Mink. And in response to your inquiry, which I think
is very critical, in this report it says that the studies show
that the average premium increase is only 0.2 percent, so it is
very minimal. So I don't think that it is a cost factor. There
is some hang-up someplace else.
Senator Wellstone. I think, Congresswoman Mink, and I leave
on this, and you will find this in the hearing today and many
of you already know it, you have this disconnect or lag between
the scientific evidence, the data, and the perceptions that
people have, both about what we are talking about, also about
the nature of this disease and also about the treatment and the
cost of it. The consequences are really tragic of our not
trying to end this discrimination and getting some coverage for
people.
Thank you very much.
Mr. Mica. Thank you, Senator, and we will let you scoot.
I would like to now recognize our champion on this issue,
someone who is really the leading force in our conducting this
hearing today, who has been just tireless in trying to bring
this issue before Congress. As we all know, this is a tough
venue, but there are individuals among us who will take an
issue and just hammer away and work at it, and Jim Ramstad, who
has himself had problems and is a survivor from chemical
dependency, I have heard him talk about it, has turned a
difficult personal experience into something very positive for
himself and also for our country and has been the leader since
he came to Congress on this issue.
He is also on the Ways and Means Committee and on the
Health and Trade Subcommittees and House Law Enforcement Caucus
and Medical Technology Caucus, and he is in the author in the
105th Congress of the Substance Abuse Treatment Parity Act of
1997 and sponsor of the Substance Abuse Parity Act of 1999 in
the 106th Congress. And, again, just an untiring champion. And
we thank you for your persistence and are pleased now to
recognize you.
STATEMENT OF HON. JIM RAMSTAD, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MINNESOTA
Mr. Ramstad. Thank you very much, Mr. Chairman, Ranking
Member Mink, and members of the distinguished panel. I
appreciate your leadership and in particular, Mr. Chairman,
your kind words. Also, I want to thank Sharon, Mason, and Steve
from your staff for helping put this hearing together, as well
as Megan from my staff.
Mr. Chairman, members, we are talking about the epidemic of
addiction in America, dealing with an epidemic, and I use that
term advisedly because 26 million Americans are presently
addicted to drugs and/or alcohol. Of these addicted, 16 million
people are covered by health insurance plans, but only 2
percent of these 16 million, as the chairman pointed out, can
access effective treatment.
That is because of, as Senator Wellstone explained,
discriminatory caps, artificially high deductibles, limited
treatment stays and copayments that don't apply to any other
diseases. In short, only 2 percent of alcoholics and addicts
covered by health plans are accessing treatment because of
discrimination, discrimination against people with addiction.
Now every day we all hear talk around here of the goal of a
``drug-free America.'' But we will never even come close to a
drug-free America until we knock down these barriers of
discrimination, these barriers to chemical dependency
treatment. We can build all of the fences on our borders, all
of the prison cells that money can buy, hire border guards,
other drug enforcement officers, but simply dealing with the
supply side of the drug problem will never solve it.
Mr. Chairman, your words in your opening statement were
very refreshing. You recognized the need to deal with the
demand side, to deal with treatment as well as the supply side.
The American Medical Association first recognized in 1956
that chemical addiction is a disease, and it is a fatal disease
if not treated properly. If we are serious about reducing
illegal drug use in America, we must address the disease of
addiction by putting chemical dependency treatment on par with
treatment for other diseases. If you believe what the American
Medical Association told the Congress and the country in 1956,
then you can't justify the discrimination. And that is why
Senator Wellstone and I introduced the Substance Abuse
Treatment Parity Act named after Harold Hughes in the Senate
and Bill Emerson in the House with whom many of us served.
Their recoveries from addiction certainly inspired thousands of
chemically dependent people, including myself. We now have 50
co-sponsors in the House for this legislation.
And this the bill that we are bringing forward would enable
16 million Americans to receive treatment without significantly
increasing health care premiums. It is the right thing for
Congress to do, and it is clearly the cost effective thing to
do.
I am a recovering alcoholic, and I know that the treatment
works, and I know firsthand the value of treatment. I have been
in recovery for over 18 years, and I am absolutely alarmed by
the dwindling access to treatment in America. Over the last 10
years, over 50 percent of the treatment beds are gone. Even
more alarming is the fact that 60 percent of the adolescent
treatment beds in America have disappeared in the last 10
years.
Why do we have youth violence? Why do we have so many
problems with juvenile crime? Let's look and treat the
underlying cause--addiction. Any police officer will tell you
that 80 percent of it is related directly to addiction. Now,
over half of the treatment beds are gone for adults, 60 percent
for adolescents. Why? Because only 2 percent of the alcoholics
and addicts covered by health plans are able to access
treatments.
It is time, Mr. Chairman and members of this panel, to
reverse this alarming trend. It is time to end the
discrimination against people with alcoholism and drug
dependency. It is time to provide access to treatment by
prohibiting the discriminatory caps, the high deductibles, the
copayments that don't apply to any other disease.
We have all of the empirical data, including actuarial
studies, to prove that parity for chemical dependency treatment
will save billions of dollars nationally while not raising
premiums, as you explained, more than two-tenths of 1 percent
in the worst-case scenario. Dr. Roland Sturm is here, the
senior economist with the RAND Corp., to testify on the cost
savings from parity for treatment. Because that is the first
question I asked when I was approached by people with addiction
and others from my district to champion this legislation. The
first thing I asked, what is it going to cost in terms of
increased premiums?
In addition to savings billions of dollars, every dollar
spent for treatment saves $7 in health care costs, criminal
justice costs, lost productivity, injury, sub par work
performance, and so forth. A number of studies have shown that
health care costs alone are 100 percent higher for untreated
alcoholics and addicts compared to people like me who have had
the benefit of treatment. Think of that. Health care costs for
these 26 million untreated alcoholics and addicts today in
America are 100 percent higher than they are for people like me
and Ms. Rook, who will testify shortly, who have had the value
of treatment.
Mr. Chairman, I would like to address one last point which
has been raised in opposition to this critical legislation, and
that is the argument that it imposes a mandate. H.R. 1977, the
Substance Abuse Treatment Parity Act, does not require
insurance companies or health plans to cover anyone for
treatment of chemical dependency. It simply bans discrimination
by saying that addiction must be treated like any other
disease. Plus there is an exemption option. If the sky fell in
and for some reason health care costs increased 1 percent or
greater, then the parity requirement is off. No parity. And of
course businesses with 50 employees or fewer are exempted under
this legislation.
Let me just say in closing, Mr. Chairman and Members, that
I truly do appreciate this hearing today. The fact that you
accommodated my requests for many of the witnesses here today,
you are going to hear from some incredible people, and I hope
many of you can hear their testimony. They are vital
stakeholders in the battle against drugs and alcohol addiction,
recovering physicians and people, employers and insurance
company representatives. They know, like the American Medical
Association told us in 1956, that we are dealing with a
disease. If you believe that, if you accept that, then there is
no way that we can justify the continued discrimination against
people with addiction. We cannot justify discrimination against
this disease.
We also know and I know firsthand that this disease, if not
treated, is fatal. It is a fatal disease we are dealing with.
And I am very grateful as a recovering alcoholic, because I
know, Mr. Chairman, without any doubt at all if it weren't for
treatment, I would be dead. I would not be here because of the
quantities of alcohol that I was consuming over a 12-year
period of time.
I didn't want to be an alcoholic. I had two uncles who died
of this addiction. One was a doctor who did very well on my
mother's side of the family. The other was a very successful
businessperson, my uncle George in Alaska, who died after
making millions of dollars in the construction business, who
died on Skid Row in Anchorage drinking wine out of a brown
paper bag.
I didn't want to be an alcoholic. Nobody chooses to be an
alcoholic. There are various components to this disease, and I
trust that this panel understands the disease nature of
addiction.
I truly hope that each one of you will work hard with me,
with Mark Souder, with others who are championing this
legislation because, believe me, it is not my battle alone. We
have 50 cosponsors bridging the ideology gap in the House, from
some of the most conservative friends and Members on the far
right to some of our most liberal friends on the far left, and
a lot of us who are more centrist.
This is not a political issue. It should not be partisan.
It is a human issue, a life-or-death issue.
And, Mr. Chairman, again, let me express my gratitude to
all of you for holding this hearing today and working together
in a bipartisan, common-sense, pragmatic way to move this
legislation forward. Thank you.
Mr. Mica. Jim, I thank you for your very compelling
testimony and, again, your leadership on this issue. You do so
I think from the heart and from personal experience in trying
to bring some hope and resolution to the great personal problem
that you have had and so many others have experienced.
[The prepared statement of Hon. Jim Ramstad follows:]
[GRAPHIC] [TIFF OMITTED] T6251.019
[GRAPHIC] [TIFF OMITTED] T6251.020
Mr. Mica. I would like to see if you have any questions,
any questions from our side? Go ahead, Mr. Hutchinson.
Mr. Hutchinson. Thank you, Mr. Chairman.
I want to express my appreciation to Representative Ramstad
for his compelling testimony and personal experiences he
shared. I doubt that there are many Members of Congress who do
not have some family member somewhere who has been impacted by
this.
In my life, I have had a nephew, and I have very close
family members that have had substance abuse problems, and it
can be fatal. For my nephew, it was not a matter of access to a
treatment facility, it was a matter of it not being successful,
and he ultimately committed suicide.
I am certainly struck by your testimony. There has been a
decline in adolescent treatment beds, and I would like for you
to elaborate why you see that is the case. Is it simply a lack
of resources and people cannot afford these beds? And then what
obstacles are you running into getting this legislation
through?
Mr. Ramstad. Thank you for the comments and for sharing
your own family experience.
Each week on the average I get two to three calls from
people, mostly in Minnesota, but sometimes elsewhere, recently
in Oklahoma, Florida, from people with sons or daughters,
families who are suffering the ravages of addiction. Virtually
all of these people, most of them, although the one in Oklahoma
didn't, most are covered by insurance plans. One or two of the
parents are gainfully employed and covered for substance abuse
treatment. But because of the limitations placed on the plans,
they are not able to access treatment.
I wish I had all day, and I would like to share with you a
couple of those statements.
A family in Eden Prairie, a family in a town in Oklahoma
and a family in Florida who have been absolutely devastated,
and at least two of those families had insurance, but the main
problem is only 2 percent of the 16 million people covered
under health plans are able to access treatment because of the
limited treatment stays, on the average from 2 to 7 days.
Dr. Smith, a Navy Captain, is going to testify later today.
He is the expert. He knows more about addiction than anyone in
this country. He will tell you that no one can get meaningful
treatment in 2 to 7 days. The artificially high copayments and
the caps that don't apply to any other disease are what we are
trying to overcome and eliminate.
Mr. Hutchinson. This is a disease, but it is related to
behavior as well. Is there a comparison where other diseases
that are impacted by behavior is covered, but for this there
are all of these caps?
Mr. Ramstad. I am not sure that I understand your question.
Another disease that is caused by----
Mr. Hutchinson. For example, I can see people objecting
saying--and I think it is perhaps through a lack of
understanding--that substance abuse relates to behavior. You
start with a weakness, it leads to a disease, and so why should
everyone who is on a health plan subsidize someone else's poor
behavior habits. I am thinking this through in my own mind. You
have heart disease, also, but that is related to behavior
because you have not--perhaps not eaten correctly.
Mr. Ramstad. A good example is lung cancer caused by
smoking. We were told by the AMA about the direct link, the
cause-effect link, causal relationship between smoking and lung
cancer, but we don't discriminate against lung cancer patients
like we do alcohols or addicts.
I think the American Medical Association, based on the
chromosome research--and there are experts following me in the
testimony today who can testify as to the disease concept, but
I think they would question--I don't think that I am a weak
person. I never thought of myself as a weak person. But when I
had a beer or a glass of wine I responded differently from my
nonaddicted mother and sister, from other friends who are not
alcoholics or addicts. It is partly physical and partly
psychological and partly emotional.
Mr. Hutchinson. I yield back the balance of my time.
Mr. Mica. We only have 4\1/2\ minutes before this vote.
Mrs. Mink. Yes, I just want to say that I am certainly
impressed by your testimony, and if I am not already a
cosponsor, I will become one.
Mr. Ramstad. You are and thank you. Thank you for your
cosponsorship. I should have pointed that out.
Mr. Mica. Mr. Tierney.
Mr. Tierney. The cutoff point at 50 employees or less, how
many people does that leave out and was that strictly a
decision over what you could gather support with?
Mr. Ramstad. That was the pragmatic part of the bill, and
we made some other changes too.
Many changes we have made are positive. One provision
addressing faith-based treatment centers is appropriate. I am
close to a faith-based treatment center sponsored by an
Assembly of God Church in south Minneapolis, and I go there
frequently and share my story and listen to the kids' stories,
and their results are about the same as Hazelden or Fairview
Recovery Services or Turning Point or any of the other programs
that I am familiar with.
Mr. Tierney. Would that add a significant cost or is there
just the perspective of people that would add a cost that makes
you back off that on the bill?
Covering employees of 50 or less, would that add to the
cost of this whole operation, or is it just that people
perceive that so you want to stay away from it politically?
Mr. Ramstad. In working with the various groups in putting
this bill together and getting last year 98 cosponsors and this
year 50 already, we had to give and take a little bit. I would
just as soon not see that exemption, but to get the bill moving
and to bring in conservatives and others, we compromised.
Mr. Mica. We are down to about 3 minutes. If you want to
come back, Jim.
Mr. Ramstad. I would be happy to come back.
Mr. Mica. We will come back. In 15 minutes we will be back
here.
[Recess.]
Mr. Mica. We will call the subcommittee meeting back to
order here. I did not have a chance to ask questions and will
do so at this time.
Mr. Ramstad, one of the concerns is that, again, the
potential cost, increasing costs. I asked Senator Wellstone
about this, and you did tell me that you have a trigger in your
Substance Abuse Parity Act. That 1 percent premium increase
would allow companies to, I guess, exempt themselves from this.
Could you tell us how that would work, specifically?
Mr. Ramstad. How the exemption option would be utilized?
Mr. Mica. Right.
Mr. Ramstad. It is simply an option on the part of
business.
Mr. Mica. They have to experience a 1 percent, and then it
is triggered?
Mr. Ramstad. Exactly. Then the option is up to them.
Mr. Mica. All right. What about ERISA plans. Are they
covered?
Mr. Ramstad. ERISA plans, yes, similarly.
Mr. Mica. All right. And, as I mentioned, we have eight
States that have now adopted some type of parity provision,
somewhat similar in requirements. Why do you believe the
Federal Government should get into this particularly mandated
requirement, as opposed to allowing each State to pursue its
own legislative remedy?
Mr. Ramstad. Well, for several reasons. I reviewed my good
friend Chip Kahn's testimony last night. Chip is not supporting
this legislation on behalf of the Health Insurance Association
of North America, but he will after we educate him as to the
cost effectiveness. I haven't spent enough time with Chip yet.
But as Chip's testimony pointed out, Mr. Chairman, even he
recognizes that the State laws are inconsistent and incomplete.
In his statement he notes that among the States with substance
abuse parity laws, quoting from his testimony, requirements
vary as to who is eligible for the expansion of benefits and
what benefit levels are required to be covered. Because of
those inconsistencies, we are not realizing the full cost
savings.
To complete the answer to the question that you posed to
Senator Wellstone and he deferred to me, and there will be more
extensive testimony from the representative of RAND Corp., but
let me put it this way so everybody can understand. For less
than the price of a cup of coffee per month, we can treat 16
million addicts in America. That is the bottom line. For less
than the cost of a cup of coffee per month, increase in
premiums, two-tenths of 1 percent, we can treat 16 million
Americans addicted to drugs and/or alcohol today.
The RAND Corp. study found that removing the annual limit
of $10,000 per year on substance abuse treatment is estimated
to increase insurance payments by 6 cents per member per year.
The RAND Corp. study also found removing a limit of $1,000
increases payments by $3.40 per year, or 29 cents per month. I
don't know any coffee you can buy for 29 cents.
Mr. Mica. Thank you.
Let me see, Mr. Barr was here and was about to ask a
question. Then we will go to Ms. Schakowsky. Mr. Barr.
Mr. Barr. Thank you, Mr. Chairman. Starbucks' coffee costs
considerably more, which is what I drink.
Mr. Ramstad. It sure does.
Mr. Barr. But I guess you get what you pay for.
Jim, you used a lot of statistics this morning, and one
that I am not sure that I caught correctly was one you
mentioned, in talking about law enforcement, 80 percent is
related to addiction. Is that the figure--I have heard the
figure from a lot of law enforcement people that 80 percent of
the crime they see is drug-related, which is not to me
necessarily the same as addiction. A lot of that is drug
trafficking, money laundering, sales, so-called recreational
use and so forth.
Is that what you meant by the 80 percent, or is there
something----
Mr. Ramstad. I was alluding to the Columbia University--the
recent 10-year comprehensive study of crime in America
conducted by the Institute of Criminal Justice at Columbia
University in New York City, and their finding, exhaustive
research, is that 80 percent of all criminal activity in
America is related directly or indirectly to drugs and/or
alcohol addiction, to drugs and/or alcohol.
Mr. Barr. I think I would be a little bit suspect with
that.
Mr. Ramstad. I can also show you six other studies that
corroborate the Columbia University study. More importantly, or
just, I think, Bob, as importantly, come and ride with me in
north Minneapolis or south Minneapolis or St. Paul or my
district, certain parts, and any police officer will tell you--
and I spent 1,600 hours riding in squads since 1984 and
chronicled every hour--every cop tells you the same thing.
Mr. Barr. I am not saying 80 percent of the crime is drug
related--it's not. I understand that. That was pretty much the
figure when I was the prosecutor and so forth. I don't accept
the fact that it is addiction-related. I think it is drug-
related. It may be how broadly one defines ``addiction.'' I may
not agree with how they conducted their studies using the term
addiction.
But to me somebody that sells a joint of marijuana is
violating the law, and that is a crime that is related to
drugs. It is not necessarily a crime related to addiction. I
don't think that everybody that uses drugs is addicted to them.
I think a lot of people choose to use drugs, and the same as a
lot of people, I understand that some people--I think a lot of
people choose to use alcohol. If one says that people can't
choose not to be--don't choose to be an addict or an alcoholic,
one also has to accept the fact that a lot of people, even
those who grow up in families with a history of alcoholism,
choose not to become alcoholics.
So it plays both ways. I think we have to be very careful
in the use of some of these statistics. I am not saying you are
not being careful, but one really has to look at the terms on
which these studies are based. I think it might very well be
valid to say that 80 percent of crime is drug related. To me,
that is not necessarily if we simply took care of those who are
suffering true addiction, the crime problem would go away. I
don't think that would happen.
Mr. Ramstad. Certainly you believe the statistics from the
American Medical Association, and they have been corroborated
as well by other studies, by 10 or 12 studies that I have seen,
that there are approximately 26 million--obviously you can't
quantify it to the person, but approximately 26 million people
in America today addicted to drugs and/or alcohol. That is a
fact. One out of 10 Americans is addicted to drugs and/or
alcohol. Nobody disputes that, that I know of.
Mr. Barr. There are an awful lot of people, far too many
people, that use drugs and alcohol.
Mr. Ramstad. I am talking about those addicted. You are
right, there are recreational users, I hate that term, but that
is what everybody understands, that aren't chemically dependent
people. I know a lot of people. Most of my friends will have a
beer or glass of wine. They don't have disastrous consequences.
They are not chemically dependent. They can stop after one
glass of wine or two, or a beer or two. They are not addicts,
chemically dependent.
I didn't choose to be chemically dependent. I wish I
weren't. I would love to have a beer after running my 3 miles.
Of course, that would defeat the run, but playing tennis or
whatever. I didn't choose to be chemically dependent, any more
than I choose to be a male versus a female. It is not something
I chose.
I think if you look at the research and the report to the
Nation, to the Congress, in 1956 by the American Medical
Association that explains the disease nature, and then look at
the followup research that has been done, the Bill Moyer series
last year on public television that went to identifying the
genes and the chromosomes that are different from people like
me, who are chemically dependent, and people like my sister,
the commissioner of corrections in Minnesota, who is not.
Mr. Barr. Thank you.
Mr. Ramstad. Thank you for your question.
Mr. Mica. Thank you.
The gentlelady from Illinois.
Ms. Schakowsky. Thank you, Mr. Chairman.
Mr. Ramstad, I am proud to be a cosponsor of your
legislation and couldn't agree more on whether we want to
dispute some dollars. It seems to me everyone, all experts in
the field, are in agreement that it is the most cost-effective
way to deal with this issue, is through treatment and
prevention.
I wanted to ask you a question about the 1 percent waiver.
Is that in our bill because you are confident that most won't
achieve that 1 percent? We certainly don't want to set barriers
that are going to----
Mr. Ramstad. You know, when I talk to small businessmen and
women back home, most of them realize, who have programs that
cover chemically dependent employees, they realize the value in
this. They would be willing to pay increased premiums to have
their people treated. They realize that absenteeism drops
markedly when people are treated; productivity increases
dramatically when people are treated who are chemically
dependent.
The empirical reason for that--I explained the political
reason to get the bill moving. The empirical reason for that is
some small employers are having trouble getting insurance, as
we all know, and we don't want to put another burden. We want
to give the employers the option if costs for, let's say, I
said before, if the roof fell in and costs did increase more
than 1 percent because of parity, we want to give them that
option to be exempted.
Ms. Schakowsky. When we say premiums have increased because
of parity, in your discussions with the insurance industry has
there ever been clear documentation or justification or
explanation of why insurance premiums go up? It is kind of a
mystery I think in many cases.
Mr. Ramstad. That is why Mr. Kahn is here today, to answer
that question. I hope you ask it, because that is a fair
question and one that needs to be answered.
I think there is a certain shroud of mystery surrounding
the increases. Some of the costs are certainly justified and
easily quantifiable and understandable, and others I don't
think are. But the most compelling evidence and the most I
think compelling justification for this legislation from a cost
standpoint came from the Family Research Council.
Listen to this. The Family Research Council--a very
credible organization and credible study--found that, ``Alcohol
and drug addiction in economic terms cost the American people
$246 billion last year. American taxpayers paid over $150
billion for drug-related criminal and health care costs
alone.''
$150 billion for criminal justice and health care costs
alone. That is more than we spent on education, transportation,
agriculture, energy space and foreign aid combined. Think of
that. And that is what the insurance companies need to realize,
need to understand. That is what most small business people
understand, the cost if they don't do it is much greater than
any 29 cent increase per premium if they provide help.
Ms. Schakowsky. Add in some of that foreign aid, because we
are right now discussing a very substantial amount, several
billion dollars to Colombia possibly to fight the drug war, and
yet it seems to me that this is a more cost-effective way to
address the problem. I am not necessarily posing it as an
either or.
Mr. Ramstad. I don't think there is any question, we need
both. We need to emphasize the supply side and the demand side.
If you look over the last 12 years in America, two-thirds on
the average of the resources have gone to the supply side, one-
third to the other side. As General McCaffrey explained not
long ago, this single-step parity for substance abuse treatment
would do more than any other measure to cut down on the drug
problem in America.
We have got to treat the people already addicted. We are
emphasizing the supply side and new Border Patrol agents and
keeping the drugs out. What about the 26 million Americans
right now living and working, as the chairman pointed out, who
are already hooked, who are already addicted? We have got to
deal with them, because those numbers are increasing. If we
don't deal with the problem of addiction, if we don't treat
these people already addicted, we are never going to see an
improvement in this situation.
Ms. Schakowsky. Let me ask you a more specific question.
Many private insurers that currently cover substance abuse
treatment only cover expenses associated with detoxification
but don't cover expenses associated with ongoing support
services. How would your bill respond to the need for ongoing
support services?
Mr. Ramstad. Well, again, a person who is a diabetic or who
has heart disease or lung disease, much of that is up to the
providers, the diagnosis, the evaluation. For some people,
long-term treatment is necessary and is desirable. For others--
I spent 28 days in St. Mary's, it was then called St. Mary's
Rehabilitation Center in Minneapolis, undergoing treatment for
alcoholism. Then I went to recovery groups. I have been going
to recovery groups every week for 18 years. Others go to 6-
month programs and halfway houses. That is pretty much a
decision that needs to be made by the professionals, the
chemical dependency, chemical treatment professionals.
Ms. Schakowsky. Thank you.
Mr. Ramstad. Thank you for your cosponsorship and help on
this bill.
Mr. Mica. I would like to recognize the gentleman from
Indiana, Mr. Souder.
Mr. Souder. It is good to see you here this morning. I
don't have a lot of questions, but I am pleased we have been
able to work together on this bill.
I commend you for your persistence and your leadership.
Clearly, in keeping the bill moving forward, had you not been
willing to speak in conference, work with the leadership,
continue to push for hearings in many places and try to hear
the different concerns that people had, this legislation would
not be getting a hearing today. We would not be continuing to
gain cosponsors in the House. I want to congratulate you for
that, first off.
I also think you have accommodated a number of concerns
that are most frequently raised, which I am sure we will hear
today and which have come through in the testimony, about the
costs and about accountability. We all know that unless people
are accountable with this, they can easily burn up a lot of
dollars through drug and alcohol treatment when it is not a
personal decision to go. I think everybody is concerned about
that. You may want to make a few additional comments on that. I
am sorry I missed the first part.
I also think that, as we work through drug-free schools,
which is a prevention program over in the Education Committee,
as we work with the question of Colombia, because if we don't
address the amount of supply of illegal narcotics then the
price will go down, which means people use it more. We have all
those different things. But we also can't neglect the treatment
side. Because, ultimately, if our prevention works and if our
interdiction works, you still have a large pool of not only
those addicted to cocaine and heroin but to alcohol who are not
being reached, and ultimately a lot of the problems, whether it
is work productivity or crime in our society, are related to
those two things.
I mostly wanted to commend you at this point and thank you
for your work. If you wanted to comment on any of those points
further----
Mr. Ramstad. Thank you, Mr. Chairman. Thank you, Mark.
You know, you have truly been a leader here, and your
efforts in putting this bill together have been very, very
appreciated. We wouldn't have had 98 cosponsors last year if it
weren't for your leadership. We wouldn't have 50 cosponsors
this year if it weren't for your leadership. I appreciate
working together with you.
I want to work with all of you. We think we have enough
caveats, regulations here, so there aren't going to be abuses.
We don't want abuse. We don't want money wasted. This is about
saving money and saving lives.
Certainly some of the things you brought into the bill have
been very important in that regard. John Kasich, a cosponsor of
this bill with me, who has been very helpful from the dollar
and cents standpoint, John Kasich understands this problem, and
certainly you understand it and other members of this
committee. That is very refreshing.
Many of you have heard me say this many times in
conference, I wish we could turn Congress into one big AA
meeting where people say what they mean and mean what they say.
I think this panel does that. That is why I am confident that,
working together, we can get this done.
Mr. Mica. Thank you.
Mr. Kucinich.
Mr. Kucinich. Thank you, Mr. Mica.
To Mr. Ramstad, I want to add my voice to those of you on
the committee who are thanking you for the work you have done.
People ask me, Mr. Chairman, about serving in the House of
Representatives and about the people I serve with, and what I
have found in the 3 years now that I have been here is that we
are very fortunate to be serving with each other. We have
people here of depth and of character, people who are willing
to share their deepest experiences, not with just us but with
the Nation. And, through you, people all over this country are
going to be given an opportunity to transcend themselves, to
become bigger and better than they are and through their
experience to help a Nation lift itself up.
So, I think all of us owe you a debt of gratitude for your
courage, for your willingness to make your story parts of
America's story and to help the Nation recover. So I thank you.
I look forward to working with you on this.
Mr. Ramstad. Thank you, Dennis.
Mr. Mica. Mr. Ose.
Mr. Ose. No questions.
Mr. Mica. We certainly thank our colleague again for his
leadership, for his testimony today, and for his hard work in
bringing this very troubling issue before the Congress and the
American people. We thank you. We will excuse you at this time.
Thank you, Mr. Ramstad.
Mr. Ramstad. Thank you again.
Mr. Mica. We will move forward with the hearing. Our second
panel today is one individual who is going to offer her
personal testimony, and I will call forward as the witness
Susan Rook.
Susan Rook is a media consultant. Susan has covered most of
the breaking news stories of the last decade. She joined CNN in
January 1987 and became a nationally prominent news anchor
while co-anchoring crime news with Bernard Shaw. She was chosen
to pioneer the network's daily interactive town meeting, a show
that we know as Talk Back Life.
On Talk Back Life, Susan became the first journalist to
juggle both a live studio audience, newsmaker guests and a
nationwide high-tech audience into a quick-based interview and
discussion program.
She lives now in Washington, DC, and she has been willing
to come forward today and share with us some of her personal
experience with addiction and treatment.
I must say, first of all, that we welcome you. This is an
investigations and oversight subcommittee of Congress. We had
congressional Members. We don't swear them in. We will swear
you in and ask you at this time if you would stand, please,
raise your right hand.
[Witness sworn.]
Mr. Mica. The witness answered in the affirmative.
We are pleased to have you join us. We look forward to your
testimony, and you are recognized.
STATEMENT OF SUSAN ROOK, MEDIA CONSULTANT
Ms. Rook. Thank you, Mr. Chairman. Thank you, all of you,
for the privilege and the opportunity to speak to you today.
You mentioned my work on CNN. As a journalist, I have
always looked for stories that needed to be told. For two
decades I have reported on the so-called war on drugs. Well,
today I am here to give you a live report from the lines. I am
an alcoholic and an addict. I am in recovery. I am alive today
because I was able to get access to the medical treatment that
was required to treat my disease.
An overdose landed me in the emergency room. Without access
to drugs and alcohol, I started the withdrawal process. I
turned to this nurse that was there and I said, ``Why can't I
hold a glass of water without spilling it? Why do I feel so
sick?'' and I really was very physically sick. I asked her what
was going on.
She looked at me with a mixture of disgust and pity on her
face, and she said ``Because you are a drunk and a junkie. You
are detoxing. What do you think is happening to you?''
Until that moment, I did not know.
I thought I knew what drunks and junkies looked like, and I
certainly didn't fit that picture.
I am here today because I may not fit your picture of what
a drunk and a junkie looks like. I want you to see the face of
addiction, and I want you to see the face of recovery.
Until the comment from that nurse, I didn't know that I had
crossed the line from being a social drinker to being an
addict. Current scientific evidence shows that there is a line
that people with chemical dependency cross. Certainly that
initial use is voluntary, but that use triggers a biological
reaction that changes my biology, making it unable for me to
stop.
The right to have the choice of whether to have a drink or
not drink, or have just one drink, disappears. The obsession
and compulsion are the most powerful things I have ever seen or
experienced. I could not moderate my use of drugs and alcohol,
and I could not stop.
Treatment interrupted that compulsion, and it gave me the
opportunity for sobriety.
Top management came to the hospital, and they gave me a
choice. I could either stay in the hospital for the 72 hours
required for what was listed as a suicide attempt and go back
to work, or I could immediately go into alcohol and drug
treatment. I chose treatment.
Shaken by the look of pity by that nurse and armed with the
knowledge that I have a disease for which there is no cure but
there is the possibility of recovery, I went off to treatment.
About a week into treatment insurance ran out. I was
scared. Physically, I was still very sick. Trying to negotiate
the maze of the insurance company, that familiar hopelessness
reappeared.
CNN management and an effective and committed employee
assistance program coordinator stepped in and told me if I was
willing to complete the entire 28-day treatment program, CNN
would pay for anything that insurance did not cover. I stayed
in treatment and have been abstinent from drugs and alcohol
ever since.
Two things made the difference for me. I was lucky enough
to work for a company that treated my disease as a disease and
gave me access to the same kind of medical care that they would
give anyone who has another brain disease, like Parkinson's.
CNN did that. The insurance company did not. According to
the Hay Group study, substance abuse benefits have decreased 75
percent in the last 10 years. I called where I went to
treatment, Ridgeview, outside of Atlanta. I called Ridgeview
yesterday and I said, say, do you guys still offer that 28-day
treatment program? They said, no, managed care won't allow it.
We don't even have it.
If I got into treatment today, I couldn't go and get the
comprehensive medical care, even fully paying for it myself or
my company paying for it, because it is not there.
As you go into your business today, I ask you to look
around you. Studies show that 7 out of 10 people are affected
by this disease, 1 in 10 people have it. I want you to wonder
how many people are living a double life, as I did when I was
giving you the news and when you watched me and when I was
doing all the things that you mentioned in the bio. I was
drinking and using illegal drugs, and chances are you certainly
didn't know it, and nobody else did.
As you go in your cars to go home and go about your
business, I want you to look around you and wonder, who is in
that car next to me? This is the face of addiction.
I applaud your efforts to reduce the supply of drugs coming
into this country. I think that is a very important component
of this, and I urge you to put greater emphasis on demand
reduction techniques like treatment and prevention.
Mr. Chairman, you have the power to lead this country in
moving the conversation of alcoholism and drug addiction from a
moral arena to a medical arena where it belongs, and I ask you
to use that power to do that.
Please make treatment a visible component of our Nation's
drug policy. This is the face of addiction. Can you afford to
ignore it? This is the face of recovery.
Thank you for seeing it.
Mr. Mica. Thank you for your testimony and your coming
forward and giving us your difficult experience.
[The prepared statement of Ms. Rook follows:]
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Mr. Mica. I want all the Members--also, I have heard her
saying that I have the power to change this. As chairman, I
want you to vote in lockstep with me.
Mrs. Mink. Yes, sir. Yes, sir.
Mr. Mica. I wish it was that easy. Sometimes I feel like I
am drowning in a sea trying to get--and failing--in trying to
get the attention of the Congress and the American people, and
it is a tremendous drain on our society. The cost is just
unbelievable, not only in dollars and cents, but in human
tragedies, as you have cited.
One of the difficulties we have is trying to sort out how
we can do things that will be most effective, and the question
before us today is do we mandate insurance coverage for
substance abuse and chemical dependency. When I say mandate,
bring the Federal Government into the arena. And then there is
the question of the effectiveness of what is done.
You almost sort of presented a dream case today because
most of the cases--you are very fortunate. It sounds like you
went into a treatment plan, you had 7 days' coverage and then,
through the largesse of your employer, they went on and covered
you, and you have since maintained recovery.
But the unfortunate story we hear is so many of the
treatment programs are not working. You feel, though, that the
7 days--you went on to 28 days--were adequate at least for you.
If you had stopped at 7, what do you think the outcome would
have been?
Ms. Rook. I don't think I would be sober today if I had
simply detoxed. The obsession and compulsion are incredibly
powerful. When I was talking to the insurance company, and I
really thought that I was going to have to leave, I was scared.
I was scared. But that 28--what that 28 days bought me was a
little bit of time and distance, a little bit of foundation, of
security and safety. That was completely invaluable. I mean, I
can't even measure that.
Mr. Mica. Mrs. Mink.
Mrs. Mink. Yes, thank you very much for your very
compelling testimony.
In reference to the 28 day treatment, if we at least did
that in terms of our insurance coverage, do you feel that that
would be an adequate first step, if we weren't able to move to
a more comprehensive type of coverage?
Ms. Rook. First, let me address the issue of mandating
health care. The parity legislation is actually about being
straight with people who are getting health care. A $10,000 cap
does nothing. What I would really love to see is insurance
companies look at people and say, you know what, we are
actually pretending to give you insurance coverage, but here is
the deal: We are not.
So if you are going to use this coverage, you need to be
aware of it. I would like honesty in the advertising. I wonder
how many companies are paying for something that they are
actually not getting?
I was lucky enough to work for a company that stepped in
and said we will do the difference. But I wonder how many
companies and business people out there think, I am looking out
for my employees, and then bump up against that cap?
I am not a proponent of Federal mandates. I don't want the
Federal Government to step in and say everyone who is an addict
or alcoholic, you need to trot into treatment for 28 days. I
don't want the Federal Government messing in lives like that. I
didn't want--I would not want it messing in mine. So I am not
advocating that.
I am advocating, one, truth in advertising; two, an
opportunity and a commitment on the Federal level to have
treatment as an available option for the people who want it;
and, third, it is cost effective. When you put somebody in
jail--so a 28-day program at Hazelden, for example, is about
$15,000. When I went through, it was about $20,000. So for a
month it is $39,000 to keep someone in prison.
Now, when they get out of prison, do you want them making
their decisions drunk or sober? The decision to go in and check
with the parole officer, the decision of whether or not to
really go look for a job or, hmm, let's just boost that car and
toss the kid out who is in the back seat. How do you want
people to make their decisions?
That is actually what my request is. Not a blanket Federal
mandate of going in and actually doing things, but a commitment
on the Federal level that when treatment is available and
people can get into it, it works.
Mrs. Mink. Thank you very much.
Mr. Mica. Mr. Barr, our vice chairman.
Mr. Barr. Thank you, Mr. Chairman.
I appreciate the hearing; and I appreciate, Ms. Rook, your
being here and our colleagues before you and the witnesses that
will come after. The only thing I would caution would be I
guess it all depends on what mandate means. I mean, the
legislation--and I am not saying I am for or against the
legislation, because I need to look at it a great deal more
carefully. But to say that it doesn't include mandates is
simply, I think, inaccurate, unless one uses a very unusual
definition of mandates, because it does mandate that group
health plans shall do certain things and cannot do other
things. So there are mandates in it.
I think we need to look at it, to weigh the mandates.
Obviously, there are a lot of laws that provide for a lot of
mandates, but it does contain some mandates. What we have to
weigh up here is the policy, the cost, and the policy
decisions. Do we want to remove any flexibility that insurance
companies might have for making sometimes legitimate perhaps
economic decisions? They may have a legitimate reason to treat
certain types of coverage somewhat different than others, based
on history.
I do think that saying we should remove this, the moral
component, completely may not be the best way to cast this
argument, because we do want to send a message to people that
alcohol is bad and the use of drugs is bad, and not to say,
well, it is OK and we can't have any stigma at all attached to
it.
So I think, from my standpoint, I just stay away from
saying we ought to remove any moral component. I think it is
important to have a moral-ethical component. That should be
reflected in the policies that Congress sends. That is just my
reaction.
I do appreciate your being here and appreciate your work in
the media very much. Thank you.
Ms. Rook. Thank you, sir.
You mentioned legitimate economic decisions. I am very
compassionate to the insurance companies looking and saying we
don't want to increase costs. I am compassionate to the
employers who look and worry and say I don't want to increase
costs. But here is the deal: If people aren't sober, the
insurance cost that isn't going up over here comes over here.
So you are going to have to go back to your voters and explain
why you are going to have to build more prisons, and they are
going to have to pay for it.
Mr. Barr. Well, I certainly try to and think I succeed
fairly well at listening to my constituents, and they are a
compassionate constituency. They believe in fairness. They also
believe in tough law enforcement. They don't like drugs. They
don't like alcoholism either. They want to strike a balance,
and that is what I try and do, also. Because there are some
very good reasons for what you are saying. But to me it isn't
simply that, well, we have alcoholics and drug addicts out
there. Therefore, we must mandate that they be taken care of.
I think it is a little more complex than that. We need to
weigh in a lot of different factors. The economics of it, you
are right, may in the great cosmic scheme of things, everything
we do irons out in the end. We save some money here, we cause
further problems over here. But we still have to make those
decisions.
I will look very carefully, Mr. Chairman, at this
legislation. I think it is important. I appreciate it coming
up, and I appreciate your being here.
Ms. Rook. Thank you, sir.
Mr. Mica. The gentleman from Arkansas, Mr. Hutchinson.
Mr. Hutchinson. Thank you, Mr. Chairman.
I do not have any questions. I just want to express my
appreciation for your testimony today and for sharing your
story with us. Let me thank the chairman also, just for having
this hearing, because I had not focused on the legislation, and
this allows us to do so. I look forward to doing that and
hopefully moving this forward. Thank you for your testimony
today.
Ms. Rook. You are welcome.
Mr. Mica. Mr. Ose, the gentleman from California.
Mr. Ose. Ms. Rook, thank you for coming. I appreciate it.
I want to explore a little bit the insurance side of the
thing, because we have a lot of debate going on here in the
House about access and availability and what have you.
Clearly, CNN offers a health insurance program for its
employees. Do they give you a choice, or is it just kind of
this is the program, period?
Ms. Rook. I don't know what they do now. I left CNN 2 years
ago.
Mr. Ose. When you were there.
Ms. Rook. When I was there, we got a choice. Employees
could look and say, I want this plan, this plan or this plan. I
don't know what they are doing now. I would imagine it is the
same. They have got a really good commitment to quality of life
for their employees.
Mr. Ose. So CNN gave you a choice, and the final decision,
the employee would pick which of those programs best suited
their needs.
Ms. Rook. Yes.
Mr. Ose. It wasn't crammed down, if you will----
Ms. Rook. No.
Mr. Ose. And then the amount of cost, if you will, the
premium reflected the services or the benefits that were in
each of the programs I imagine.
Ms. Rook. Yes. I had the Cadillac deluxe plan. I don't
remember what it was or what the insurance company was, but I
checked the one that said, yes, you get everything covered,
whatever you want.
Mr. Ose. OK.
Ms. Rook. And substance abuse coverage was $10,000.
Mr. Ose. Was capped at $10,000.
Ms. Rook. Yes.
Mr. Ose. And if I understand your point today, it is that,
No. 1, the cap is too low, and, secondarily, businesses should
be offering the substance abuse treatment because from your
perspective it is a disease over which you don't have any
control.
Ms. Rook. Yes.
Mr. Ose. I am accurate on that?
Ms. Rook. Yes. Not just the cap is too low, but let's be
straight about it. People think they are buying insurance, and
they are not. It would be like if I have breast cancer and I go
in and they say you can get treated for your breast cancer, but
only $10,000, which will not cover much. Just be straight about
what you are offering the people. That is not insurance. That
is a double bind.
Mr. Ose. That is the part--I don't mean to be
argumentative, but that is the part I don't quite understand.
You are able to cite the provisions very clearly today, and
from where I sit $10,000 worth of coverage is better than zero
coverage, even though it doesn't address the problem in its
entirety. But the ultimate decision as to which of those
programs--I presume some of the other programs had zero for
substance abuse treatment. The ultimate decision for that,
which plan you chose, was left by CNN in the lap of the
employee, if I understand you correctly.
Ms. Rook. Yes, correct.
Mr. Ose. Thank you, Mr. Chairman.
Mr. Mica. The gentleman from Indiana, Mr. Souder.
Mr. Souder. I wanted to followup, too, because our
legislation doesn't mandate any particular line of coverage,
and while 28 days may have been essential for you, a smaller
program may have been enough for other people, and, in fact,
some people can go through three or four programs. Part of the
goal of this legislation is to make sure there is at least a
minimal option.
Could you describe--you said you have been drug and alcohol
free. Could you explain to us a little bit--because many people
stumble. When you are battling it, it is not easy just to go
cold turkey, even if it is 28 days, and suddenly not be tempted
by the sin and the same problems you had before. Could you
explain a little bit about how you felt previous, why you went
into this treatment, and what gave you the strength to then be
free after 28 days? That is a pretty amazing story.
Ms. Rook. I didn't go in willingly. I went in because I
overdosed and ended up in the hospital. I didn't think that I
had a problem. Everybody that I knew drank and did drugs. My
social life, my private life, was very--was completely separate
from the life on CNN, completely separate.
I did not know that I had an option of not drinking or not
doing drugs. I didn't know that that was even possible.
Treatment interrupted that and made me see, oh, look,
sobriety is even possible. It never occurred to me that other
people didn't live like I lived. It just didn't occur to me.
What I got in treatment was a group of medical
professionals skilled in what they do who were suggesting
things for me to do in my recovery in the 28-day program and my
recovery when I left treatment, when I actually left the
facility. They made the decisions. They made the suggestions.
And I guess that is one of the things that I am requesting that
you look at, who is actually making the decision. Is it a clerk
at an insurance company who is saying what is best or is it a
professional? And you are absolutely right. Not everybody needs
28 days. You can do it in less. If something else works, great.
Explore all of those options. But a trained professional making
that is, to my mind, the way to go, instead of like a clerk.
Mr. Souder. Are you part of an accountability group and did
your company do anything that further held you accountable that
if you did not change--tell me a little bit about that. It is
still dramatic. Most people who go through programs struggle
and often they make some progress each time they go through,
but it is a real battle.
Ms. Rook. I think Hazelden has a study that 50 percent of
people who go to treatment are abstinent for their first year,
and 80 percent are sober their first year, with one slip in
between. I will tell you, if you had those kind of results with
heart disease, adult onset diabetes and asthma, you would be
doing pretty good.
Personally, I do a personal program of recovery. I am not
going to talk about that in front of the cameras. I will be
glad to talk about that with any of you in private.
I learned what I need to do to stay sober in treatment, and
I do it. I am really clear. I did a lot of drugs. I drank a
lot. I am really clear. I pick up, I am dead.
Mr. Souder. Thank you.
Mr. Ramstad. If the gentleman would yield very briefly.
Mr. Mica. You are recognized, Mr. Ramstad.
Mr. Ramstad. Susan is right; and Mr. Mike Conley, who is
chairman of the Board of Trustees of Hazelden, will be able to
elaborate on that, I am sure. Recidivism, as the American
Medical Association studies have shown for chemical addiction,
it is amazingly the same as for diabetes. The amount of
recovery or recidivism, depending on whether you want to look
at the glass half full or empty, is about the same as it is for
diabetes. Recovery rates after treatment for addiction compare
very favorably to most other diseases, are about the same as
for diabetes, as was said.
Mr. Mica. Thank you, Ms. Rook. Thank you for coming forward
and providing us with your personal testimony today. Mrs. Mink
and I said that you are very fortunate to be in recovery and
through a treatment program that has been so successful for you
personally. Unfortunately, we had over 15,200 who died from
drug-induced deaths last year, and we have millions who are not
covered, who are hopeless and a tremendous burden on their
families, destroying their lives and not success stories. We
are pleased that you would come forward and tell a little bit
about your personal experience and maybe give some hope to
those other individuals out there.
We do have a vote in progress and just a few minutes left.
We are going to excuse you and thank you again for your
testimony.
The subcommittee will stand in recess until 12:15. We will
call our third panel at that time.
[Recess.]
Mr. Mica. I would like to call the subcommittee back to
order.
I would like to call at this time our third panel. The
witnesses on that panel consist of Mr. Michael Conley, who is
chairman of the Board of Trustees of the Hazelden Foundation;
Dr. Michael Schoenbaum, who is an economist with the RAND
Corp.; Mr. Kenny Hall, who is an addiction specialist with
Kaiser Permanente; Captain Ronald Smith, M.D. and Ph.D., who is
vice chairman of the Department of Psychiatry at the National
Naval Medical Center; Mr. Peter Ferrara, general counsel and
chief economist for the Americans for Tax Reform; and Mr.
Charles N. Kahn III, who is president of the Health Insurance
Association of America.
I would like to welcome all of our witnesses. As I
mentioned to our previous panel witness, this is an
investigations and oversight subcommittee of Congress, and we
do swear in our witnesses. If you would all stand, please, to
be sworn.
[Witnesses sworn.]
Mr. Mica. The witnesses answered in the affirmative, and we
are pleased to have each of you with us this afternoon looking
at this question of substance abuse treatment parity. We will
start right off with Mr. Michael Conley, who is chairman of the
Board of Trustees of the Hazelden Foundation.
Now since we have a large number of panelists, we are going
to run the light and try to stick to it. It is 5 minutes for an
oral presentation. If you have a lengthy statement or
additional report or information you would like to be made part
of the record, it will be included in the record by unanimous
consent request. So we just ask your compliance with that set
of time limits. We will put those complete documents in the
record.
With that, let's recognize Mr. Michael Conley, chairman of
the Board of Trustees of the Hazelden Foundation.
STATEMENTS OF MICHAEL CONLEY, CHAIRMAN OF THE BOARD OF
TRUSTEES, THE HAZELDEN FOUNDATION; MICHAEL SCHOENBAUM,
ECONOMIST, RAND CORP.; KENNY HALL, ADDICTION SPECIALIST, KAISER
PERMANENTE; CAPT. RONALD SMITH, M.D., PH.D., VICE-CHAIRMAN,
DEPARTMENT OF PSYCHIATRY, NATIONAL NAVAL MEDICAL CENTER; PETER
FERRARA, GENERAL COUNSEL AND CHIEF ECONOMIST, AMERICANS FOR TAX
REFORM; AND CHARLES N. KAHN III, PRESIDENT, HEALTH INSURANCE
ASSOCIATION OF AMERICA
Mr. Conley. Thank you, Mr. Chairman and members of the
subcommittee.
Good afternoon. My name is Mike Conley. I am here today as
chairman of the Board of the Hazelden Foundation, as a retired
health insurance executive, profoundly concerned with the
negative trends that I see in the chemical dependency
reimbursement systems, and as a grateful recovering alcoholic.
I would like to thank you for the opportunity to testify before
your subcommittee and would like to request that my entire
written statement be included in the record.
Mr. Mica. Without objection, so ordered.
Mr. Conley. Thank you.
I am testifying on behalf of the Partnership for Recovery,
a coalition of nonprofit alcohol and drug treatment providers
that include four of the Nation's leading treatment centers,
the Betty Ford Center, Caron Foundation, Hazelden Foundation,
and Valley Hope Association, collectively representing 250,000
individuals who completed treatment for alcohol or drug
addiction.
Today I would like to focus my remarks on three key areas:
one, that addiction is a treatable disease; two, that good
treatment is a cost-saving tool in the workplace; and, three,
that H.R. 1977, the Substance Abuse Treatment Parity Act, is an
important first step toward fully utilizing treatment benefits
to society.
My testimony reflects the strong need for a balanced
approach between demand and the supply side strategies,
including treatment, prevention, interdiction and criminal
justice measures.
Mr. Chairman, as a former businessman and health insurance
executive, I know that good substance abuse treatment is a
cost-saving tool in the workplace. A significant number of
American workers abuse substances, and some of them--some of
this occurs at work. Most current drug users age 18 and older
are employed--in fact, 73 percent. The costs of alcohol and
illicit drug abuse in the workplace, including lost
productivity, medical claims and accidents, is estimated to be
as high as $140 billion a year. Moreover, the societal costs
are staggering. Fortunately, the tools for addressing the
problem are available, as many enlightened employers have
discovered.
A couple of examples, Chevron Corp. found that for every $1
spent on treatment, nearly $10 is saved. Northrup Corp. saw
productively increase 43 percent in the first 100 employees to
enter an alcohol treatment program. After 3 years of sobriety,
savings per rehabilitated employee approached $20,000.
Oldsmobile's Lansing, MI, plant saw the following results 1
year after employees with alcoholism problems received
treatment: Lost man-hours declined by 49 percent, health care
benefit costs by 29 percent, absences by 56 percent.
Despite the significant efforts of this subcommittee as
well as others to improve the outlook for drug-free workplaces,
small businesses unfortunately fall far behind when it comes to
addressing substance abuse. The data is clear. Most small
businesses will at some point be faced with an employee who has
a substance abuse problem. Given that small businesses
represent a large majority of employers, the work site is one
of the most effective places to reach Americans. In short, good
treatment and recovery policies are sound business investments
for large and small employers alike.
We believe that H.R. 1977 is the landmark legislation that
takes an important first step toward giving people suffering
from the disease of alcoholism and drug addiction increased
access to treatment. This legislation does not mandate that
health insurers offer substance abuse treatment benefits. It
does prohibit health plans from placing discriminatory caps,
financial requirements or other restrictions on treatment that
are different from other medical and surgical services. H.R.
1977 will help eliminate barriers to treatment without
significantly increasing health care premiums, and you will
hear about it in a minute, but the RAND study did show that
this could be made available to employees for $5.11 a year or
43 cents a month.
Mr. Chairman, my statement details what the Partnership
believes are some of the key ingredients for a public policy
that effectively addresses the essence of the addition problem:
Acceptance of the disease as a critical public health issue and
a public policy with a balanced emphasis on treatment and
prevention as well as interdiction and criminal justice.
Our Federal drug policy should also recognize that all
persons, regardless of their illness, should be treated with
human dignity. H.R. 1977 goes right to the heart of the need
for fair and equitable treatment for people suffering from this
disease, and we believe it is a step in the right direction.
And if I can just speak strictly for myself as a recovering
alcoholic, it breaks my heart to know that so many people out
there who need help are not getting help because of the system.
They are not statistics. They are living, breathing people like
me, a recovering alcoholic, with a potential of being important
contributors to their families, workplaces and communities. You
folks have the power to help get this back on track, and I
sincerely appreciate your letting me share this with you today.
Thank you.
Mr. Mica. Thank you for your testimony.
[The prepared statement of Mr. Conley follows:]
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Mr. Mica. We will hear all of the witnesses and then go
through for questions.
I recognize next Dr. Michael Schoenbaum, who is an
economist with RAND Corp. Welcome, and you are recognized, sir.
Mr. Schoenbaum. Thank you.
I am an economist at RAND. I am here today in place of my
colleague at RAND, Roland Sturm, who ruptured his Achilles
tendon and was unable to come. He has prepared a written
statement, and I would ask that be entered into the record.
Mr. Mica. Without objection, so ordered.
Mr. Schoenbaum. Thank you.
[The prepared statement of Mr. Sturm follows:]
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Mr. Schoenbaum. RAND is a nonprofit institution which helps
improve policy and decisionmaking through research and
analysis. This statement is based on research funded by the
Robert Wood Johnson Foundation and the National Institute on
Drug Abuse. The opinions and opinions expressed are mine and do
not necessarily reflect those of RAND or of the research
sponsors.
As we have heard today, substance abuse imposes major
economic burdens to society, and empirical studies document
that some treatment programs can be effective. However, largely
because of cost concerns, treatment for substance abuse has
been excluded from recent Federal and State legislation
mandating parity, equal coverage for mental health and other
medical conditions. These concerns stem from assumptions that
do not reflect current treatment delivery systems under managed
care.
We examined--in the research that I am going to present, we
examined the use and costs of substance abuse treatment in 25
managed care plans that currently offer unlimited substance
abuse benefits with minimal copayments--parity level benefits--
to their enrollees. However, in those plans, care is managed
and services must be preauthorized and received through a
network provider to be fully covered. I will note that the
plans in our study did cover a comprehensive range of substance
abuse treatment services.
Our research indicated that providing unlimited substance
abuse benefits in these plans cost employers slightly more than
$5 per plan member per year. The actual number is $5.11 per
member per year.
A $10,000 annual cap on substance abuse benefits reduces
the cost of providing substance abuse treatment coverage by
only 6 cents per member per year. A $5,000 annual cap reduces
the cost by 78 cents per member per year, compared with the
cost of providing unlimited managed substance abuse treatment
benefits.
To put these numbers in perspective, if we assume that a
typical group health insurance premium is approximately $1,500
per member per year, substance abuse benefits under unlimited
coverage represent three-tenths of 1 percent of this cost.
Furthermore, the potential savings associated with benefit
limits is even smaller relative to unlimited but managed
benefits. A $5,000 benefit limit, for instance, reduces the
overall cost of providing health insurance by less than $1 per
member per year.
We conclude in this study that limiting benefits saves very
little but can affect a substantial number of patients who do
need additional care. Patients who lose insurance coverage are
likely to end treatment prematurely or switch to public sector
coverage which may increase costs in other areas.
In sum, parity for substance abuse treatment in employer-
sponsored health plans is not very costly under comprehensively
managed care, which is the standard arrangement in today's
marketplace. However, I do want to note for the record that the
results of our study do not apply to unmanaged indemnity plans,
and also the employers in our study were relatively large
employers, so the results may not hold for individuals or for
smaller groups buying insurance.
Thank you.
Mr. Mica. Thank you.
We will now recognize Mr. Kenny Hall, who is an addiction
specialist with Kaiser Permanente.
Mr. Hall. Mr. Chairman, I would like to thank you and your
committee for allowing me to speak on a matter that is very
dear to my heart, and that is adequate treatment for
individuals seeking treatment for chemical dependency.
Before I go on, I have to apologize to the committee. I
have a 2 flight that I must take back to California. I am
really committed to my clients to be there tomorrow, so I
actually apologize----
Mr. Mica. Are you leaving from National?
Mr. Hall. Yes.
Mr. Mica. No problem. Go right ahead.
Mr. Hall. What I am going to present this afternoon is a
study from a pilot project that was conducted by Kaiser
Permanente in California in 1994 in offering treatment to
Medicaid clients and the results of that particular pilot
project.
For the last 3 years, I have been blessed to be part of an
organization which I believe has become a pioneer and innovator
in the arena of chemical dependency treatment and recovery.
That organization, I am proud to say, is Kaiser Permanente in
California. I am part of an incredible team of professionals
with the Kaiser Vallejo Chemical Dependency Recovery Program
which is on the northern end of San Francisco Bay in Solano
County.
Kaiser Permanente is the oldest health maintenance
organization in the country, a pioneer in the concept of
prepaid, capitated health care over 50 years ago. Kaiser
Permanente is also the Nation's largest nonprofit HMO, with
almost 9 million members, 6 million members within the
California division.
Kaiser Permanente is a staff group model HMO with all
Permanente Medical Group physicians and other health care
professionals providing services exclusively to Kaiser members
within Kaiser's own hospitals and outpatient clinics. This
greatly enhances their ability to operate in an integrated and
cooperative manner, which significantly improves the overall
quality of care offered.
Kaiser Permanente's California Division is also
distinguished from many other managed care organizations in
that it provides a very comprehensive chemical dependency
treatment benefit which is part of the basic health plan
benefit for all members. Chemical dependency services are
provided within the integrated organizations, not by a carve-
out company. The benefit includes various levels of care, from
inpatient detoxification through day treatment, which is
partial hospitalization, and intensive outpatient programming
to long-term follow through treatment. It also includes family
and codependency treatment, as well as adolescent treatment
program. These services are provided at multiple sites and are
generally accessible for initial evaluation and treatment
within 24 hours. Services are well integrated with other
hospital and outpatient medical services, and efforts are made
to assist all primary care physicians within Kaiser Permanente
to identify and refer chemically dependent patients and their
family members in a timely and effective manner.
In 1989, the county's public hospital closed and since that
time the county health department had been involved in
discussions with the private hospitals in the county over
reimbursement for publicly funded and indigent health care.
The largest of those hospitals is a part of Kaiser
Permanente. Other private hospitals and large physician groups
as well as a number of previously unaffiliated private
physicians were also participants in these discussions and
planning processes. As the California Department of Health
Services became more encouraging of public-private partnerships
and managed care arrangements, the Solano Partnership Health
Plan was created.
SPHP, which began operations in 1994, was a Partnership of
all public and private health care providers in the county and
was constituted as an independent health authority. SPHP
contracted with the State government to provide a capitated
health plan for all--approximately 40,000--Medicaid recipients
within the county. Based on negotiations to determine ``fair
shares'' of recipients, 10,000 of those clients were assigned
to Kaiser Permanente and enrolled as members.
When the agreement was reached to enroll 10 Medicaid
recipients as Kaiser members, concerns were raised by Kaiser
physicians about the exclusion of chemical dependency benefits
in the agreement. Kaiser physicians had come to rely on the
services of their own chemical dependency program and were
loathe to give up the prerogative to utilize it with this group
of patients.
I want to highlight the result of this study. After 2
years, we had gained sufficient data in working with this
particular population, and there was a striking result. The
results indicated a 50 percent reduction in hospital days
utilized, from 117 days during the 6 months before treatment to
58 days during the post-treatment period. What that meant, in
the beginning, our Medicaid clients utilized the services at a
much larger proportion than our commercial users did, but after
a couple of years it leveled out to the same level. There was
this pent-up urge for treatment, and these clients were able to
utilize these services that were denied to them for so long. As
a consequence, the medical savings that Kaiser experienced was
very, very significant.
In closing, I would like to say it must be reiterated that
the strongest arguments for the provision of high quality,
universally accessible chemical dependency treatment services
is a personal benefit of the recipients of these services.
After spending 20 years addicted to heroin and traveling the
path that addiction leads one down, I can personally attest to
the influence that chemical dependency can have on one's life.
It has been 15 years since my last shot of heroin. The
protracted suffering produced by chemical dependency can be
eliminated by successful treatment enhancing the health and
quality of life of patients, families and society.
Thank you very much, Mr. Chairman.
Mr. Mica. Thank you.
[The prepared statement of Mr. Hall follows:]
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Mr. Mica. We will now recognize Captain Ronald Smith, vice
chairman of the Department of Psychiatry with the National
Naval Medical Center.
Dr. Smith. Thank you.
My name is Ronald Earl Smith. My remarks do not represent
necessarily the Navy's position. They are my opinion as a
physician, and some of this is the Navy's position.
I am a Navy captain and doctor of medicine. I am currently
a consultant in psychiatry, addictions, and psychanalysis at
the National Naval Medical Center, the Pentagon and the U.S.
Congress. I teach and supervise residents, interns and medical
students at the Uniformed Services University. I am certified
by the American Board of Internal Medicine, the American Board
of Emergency Medicine, the American Board of Psychiatry and the
American Society of Addiction Medicine. I have a doctorate in
the philosophy of psychoanalysis.
It has been my honor, pleasure and pain to work in the
field of addiction for about 27 years. This work has been in
academic centers, in emergency rooms, critical care units,
psychiatry wards and addiction units. I have worked in private
practice, in the military, the Federal and State systems.
Over these years, it has been my sad experience to watch
our culture decrease money for active primary treatment in
addiction and mental illness. The limited funds remaining after
budget cuts have been moved to other forms of
institutionalizations, primarily jails and prisons. Instead of
hospital beds for treatment, our culture builds prison beds.
The bulk of the homeless population within 5 miles of this
Capitol are there because of inadequately treated substance
abuse and mental illness.
I have watched mental health units close in my private
hospital in Newport Beach, CA. It closed 35 beds for mental
health because the funds were not there. Five years ago in the
national capital area--and this is in our own military system--
we had three inpatient units, one at Walter Reed, one at
Bethesda and one at Andrews. We now have two outpatient units,
and this is a result of money being cut back.
We know that treatment works. The Navy--I will ask that my
statement be submitted for the record, but I want to talk just
candidly about my experience. We know that treatment works. The
Navy is not exactly in the humanitarian business, and we wanted
sober pilots in our planes on carrier decks, and we got in the
treatment business for that reason. The submariners, we wanted
them to be sober and clear-headed, and 85 percent of those
pilots who later go on to fly for Northwest and American and
fly you in and out of this town are sober because of the
treatment programs in the Navy. The pilots actually do the
best.
We treated 220 physicians over the time that I was there in
Long Beach, and 80 plus percent of those remain sober. And we
wanted sober doctors in the Navy taking care of the pilots, and
we insist on that.
These diseases--sooner or later, the Federal Government
picks up the tab. Sooner or later, it goes up in Social
Security, it goes up in Social Security disability, it goes up
in prison beds. Sooner or later, people within a culture which
believes that we ought to take care of one another, and we do,
and ultimately the bill is passed onto the Federal system.
Now why ask private insurance for help with this? Simply
because they can do it pretty well. But I think in my
experience they kind of need a nudge to say go ahead and do it.
I do believe that the health care--that they do it well, but in
my private practice in Newport Beach it became harder and
harder to get care. Plans which promised 50 outpatient beds,
you had to beg for 4 and 10, particularly in the matters of
substance abuse. The reality was that the funds were withdrawn.
All of us are responsible--the Navy for decreased units,
the Federal Government for decreased funding in Social Security
for healthcare. It is very hard to get someone treated in an
inpatient unit through the Social Security system.
Private industry I don't think is any more responsible than
all of us in this room. But this is a culture with a paradigm
shift that is, in the age of deinstitutionalization of the
mentally ill and substance addicted, to homelessness or to lock
them up. We are doing the reverse of what was done in the
enlightenment when we began to take better care of one another,
and we need to notice that. This committee needs to notice
that. Private industry needs to notice that.
Now, the reality is that it is treatable. The reality is
that an alcoholic affects seven people really. It is the most
important thing since Social Security. Because you treat 16
million alcoholics, you treat 100 million Americans. The
children get off Ritalin for ADD. The work compensation goes
down. The prison beds empty out. The courtrooms empty out. It
is just efficient, and it is humane, and it is kind of
wonderful, and it is a hell of a lot of fun to treat it in the
early stages.
But, as a critical care physician, an 18-year-old
paraplegic because he was drunk on a motorcycle is probably as
expensive a way to burn dollars as we can do it. AIDS is a
terribly expensive way to die. There is probably no more
expensive way to die, and this is preventable stuff.
All we are asking the private insurance industry to do is
help us out. The Southern Bell study was not quoted. They
opened the door for treatment for mental health and substance
abuse, and that portion goes up a little bit, but guess what
happens to the total health bill? It goes way down, and it
takes a while to realize that. Wall Street shows real immediate
response and when you have to show profit on Wall Street you
sometimes won't take that long delay. It takes 3 or 4 years to
go down, but it does.
Thanks for letting me speak.
Mr. Mica. Thank you. Without objection, the balance of your
statement will be made a part of the record.
[The prepared statement of Dr. Smith follows:]
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Mr. Mica. I would like to recognize Mr. Peter Ferrara, who
is the general counsel and chief economist with Americans for
Tax Reform.
Mr. Ferrara. Thank you, Mr. Chairman.
Americans for Tax Reform strongly opposes any government
mandate requiring health insurers to cover substance abuse
treatment. There are several reasons for this position.
First, the American people ought to be free to decide what
they want in their health policy coverage. If they want
substance abuse treatment coverage in their health policies,
they can buy it in the marketplace. Insurers will be more than
happy to provide the coverage the market demands. But if they
don't want the coverage or don't want to pay the cost, the
government should not force them to buy it.
Let us think about this for a minute. Is this any way to
decide what is in people's health insurance policies? You have
these committees in Washington and you have these various
interests that come before them, and then this small committee
decides for every American in the country this is what benefits
you will have in your health policy, and these are the benefits
you will pay for, and you will learn to like it.
I would submit that a central planning approach is neither
efficient nor does it have the proper respect for the freedom
of choice that the American people should have.
We have heard a lot of testimony today about how efficient
and cost effective this kind of coverage is. Well, let me
submit that those who buy the health insurance in America don't
agree with that position. They are the ones who should be
deciding.
Now, all this discussion about how efficient and cost
effective it is should be submitted to the insurance companies
and should be submitted to the employers and should be
submitted to the purchasers of health insurance across the
country, and maybe they will change their minds and they will
buy it, but that is the way that the system ought to work. We
should not have a group in Washington dictating to the American
people what the benefits are in their health insurance
policies.
Second, if the government mandates the inclusion of this
coverage in health insurance policies, that will raise the cost
of health insurance. This additional cost burden on working
people is objectionable in itself. Indeed, in our view, this
cost increase is quite analogous to a tax increase to fund
increased government spending for substance abuse treatment.
Of course, there is one difference with the tax increase.
You can avoid the increase by just refusing to buy health
insurance at all, and that is what many people will do if you
impose this type of mandate on health insurance policies. More
working people will decide they don't want to buy it, more
small businesses will decide that they are going to drop it,
and the result is an increase in the number of uninsured.
The decision of how much to tax the American people for
substance abuse treatment programs should be made in the
regular budget process. It should not be made by this committee
through a back door health insurance mandate. If it is so cost
effective, then you should do it openly and directly. And maybe
you should have more government programs for substance abuse
treatment and maybe you should cut some other government
spending to pay for it, but then we can judge this openly as
part of the general political process and we can hold people
accountable for their taxing and spending policies. And if it
is so cost effective, then it is not going to cost you
anything, and we have heard all this testimony about how much
it is going to save you. Well, you investigate that and find
out if that is true, and that then is part of your budget
control policy.
But as a matter of health policy, what you should be doing
in health policy is quite the opposite of what you are
considering here today. One of the few helpful things that
Congress could do with health policy is to enact legislation
removing all government mandates on what benefits are included
in health insurance policies. This would reduce the cost of
health insurance, and it would enable more people to buy the
essential health coverage that they really need. It would
reduce the number of uninsured, and so it would go a great ways
toward helping to address that problem and expand the freedom
of choice for the American people.
Thank you very much.
Mr. Mica. Thank you.
[The prepared statement of Mr. Ferrara follows:]
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Mr. Mica. I would like to recognize Charles Kahn, and he is
president of the Health Insurance Association of America.
Welcome, and you are recognized.
Mr. Kahn. Thank you, Mr. Chairman and Mr. Ramstad.
I am Charles N. Kahn III, president of the Health Insurance
Association of America [HIAA]. Our members provide health,
long-term care, disability, dental and supplemental coverage to
more than 123 million Americans.
I am pleased to be able to address your committee today on
this issue of parity for substance abuse in health coverage.
The costs of addiction and substance abuse are enormous, but
they are costs of mandated benefits, and I think that the
argument has been made today, and a very compelling one, that
services to help those overcome substance abuse work, are
essential and provide a societal good as well as an economic
good.
My issue with this matter is not substance abuse. It is a
question of health policy and insurance--and Federal policy
toward insurance. An increasingly persuasive body of evidence
shows beyond any reasonable doubt that mandated coverage for
treatment or services not historically covered in other major
medical plans do increase costs and that these costs are passed
on to consumers in the form of higher premiums, increased cost
sharing or both. And these higher costs resulting from benefit
mandates lead directly to more uninsured Americans.
I think this is very important to make the point that many
employers provide coverage for services like those provided
today. Others don't.
I think if we go back to Ms. Rook's testimony, I think--I
don't want to be a victim here, but in some ways her
characterizations of insurance were unfortunate. The fact is
that CNN purchases her health insurance, probably pays the
whole price for it. They made the choice as to what the
benefits were. The insurer offers a product to--or a set of
products to CNN, and they decide how much they want to spend
for their employees.
Second, under the law, under the ERISA law there are
requirements for CNN to make the benefits available, a
description of those benefits available to employees. And for
those of you who are going through open season in FEHBP right
now, if you look at the book, it tells you how many days you
get under substance abuse.
I have sympathy, and who cannot empathize with her
situation, but on the other hand the company made a decision
about the health plans, and the company probably made a very
sound decision for an important employee with an employee
assistance program, but that was not necessarily--but I guess I
am a bit taken aback that necessarily the insurer is held
responsible for what is an employer decision.
Let me make a few points about that.
First, we have a voluntary health insurance program in this
country. In a voluntary system, costs do matter. Employers are
not required to offer coverage to their workers, and
individuals are not required to sign up for coverage. Yet the
private employer-based system in this country provides coverage
to nearly 160 million Americans, and another 13 million buy
their insurance privately.
We all know that health insurance costs are continuing to
climb, and that is driving up premiums to both employers and
consumers, and each year employers must decide whether or not
it will still be economical to provide any health insurance
coverage. And I make the point any health insurance coverage,
whether it is for substance abuse or basic med-surg coverage,
and that their employees must decide whether they want to
continue to enroll.
A recent study showed that, of the uninsured, 20 percent of
them have access to employer-based coverage and because of cost
sharing have chosen not to take that coverage.
A recent study by Doctors Gail Jensen and Michael Morrisey
showed that the number of State mandates has increased 25 fold
during the last two decades, making health insurance
disproportionately more expensive for small businesses and
causing as many as one in four Americans to lose their
insurance.
According to Jensen and Morrisey, chemical dependency alone
increased insurance premiums by 9 percent on average. I am not
arguing against coverage for chemical dependency. If that is
what the employer or the premium payer wants to purchase, then
they ought to purchase it. But the mandate for this cannot be
isolated.
First, there are many mandates. The Federal Government has
begun to adopt more mandates and, as time proceeds, I can
envision the cumulative effect being very great on the total
cost of health insurance.
The second point I would like to make is that the RAND
study, which I am sure represents the value of these types of
services as well as the services provided by Kaiser Permanente,
are in a managed care environment. And going back to my
cumulative--my concern about the cumulative effect of mandates,
we also have with--and I will call it the assault from our
standpoint by Congress on this--the Nation's health insurance
system with the patient protection legislation. The State
legislatures are doing the same, and what the trial attorneys
are about to do in class action suits against the insurance
industry and the managed care industry, they are basically
dismantling managed care.
And so the techniques and opportunities managed care offers
I would argue are not necessarily going to be around, and the
costs of mandates are clearly higher for small business and
others who tend to buy plans with more choice, PPO plans and
other kinds of plans where you don't have the tight control of
managed care.
Mr. Chairman, my time has expired, and I will conclude with
just a thought that, in isolation, who can argue against
coverage for substance abuse? I am not making that argument. I
am making the argument that public policy that leads to
mandating coverage is in a sense nothing more than a tax, as
Peter described. And at the end of the day it is not going to
help us get more Americans covered, which we see generally as a
public good and something that we all ought to be seeking. We
need to provide other kinds of ways of providing these
services, and hopefully those can be found through other public
policy.
Mr. Mica. Thank you for your testimony.
[The prepared statement of Mr. Kahn follows:]
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Mr. Mica. Mr. Hall, you are going to have to leave, so we
have 2 or 3 minutes here before we excuse you. I will ask a
couple of questions, and then we will let you scoot and catch
that plane.
You had indicated that when your coverage, I guess Kaiser
Permanente, had gotten into offering some of this treatment,
that there was sort of a pent-up demand and that quite a few
folks took advantage of that. Were there substantial increases
in that first year or two from this increased usage? Was that
reflected in cost, premium costs?
Mr. Hall. I am trying to understand your question. When you
say substantial usage----
Mr. Mica. You testified--you said when you first got into
this coverage, I thought you said that there was some pent-up
demand or there were some more people taking advantage.
Mr. Hall. A particular population utilizing it at a higher
rate.
Mr. Mica. Right. Was there--were there substantial costs
involved in that?
Mr. Hall. No. Because part of our program has a cap on what
everyone pays when they come into our treatment facility which
is like a $5 cap.
Mr. Mica. You testified that there was this pent-up demand,
and people were taking advantage of it. And then it leveled
out?
Mr. Hall. Yes.
Mr. Mica. With that demand with the treatment, how were the
costs covered? Who absorbed that?
Mr. Hall. Kaiser Permanente did. We weren't reimbursed by
the State.
Mr. Mica. But you did say that, after a period of time,
there was a reduction, I think you said 50 percent of hospital
days. Can you clarify that?
Mr. Hall. Medical utilization during the 6 months prior to
treatment was compared to utilization during the period 6
months post-treatment. And the results indicated a 50 percent
reduction in hospital beds--in other words, hospitalization.
Mr. Mica. Well, those are my major questions to you.
Mr. Ramstad, did you have any questions for Mr. Hall at
this time?
Mr. Ramstad. No, I just want to thank you, Kenny, for
coming all of the way from California for this hearing today
and all of your important work in this area. You have been a
key leader nationally in this area, and I appreciate all of
your efforts.
Mr. Hall. Thank you. Congressman Ramstad, I thank you for
your courage also in this area.
Mr. Mica. We may have additional questions for all
panelists. I am going to excuse you. Did you have a final
comment that you wanted to make?
Mr. Hall. If I can get permission from the committee, I
promised a young lady who was part of that initial pilot
program that I would read a letter that she would like me to
read for the record.
Mr. Mica. Read it or submit it for the record.
Mr. Hall. I would like to read it.
Hello, my name is Diana. I participated in the Valleho
Chemical Recovery Program in November, 1996. As of November 10,
1999, I will have 3 years drug free. I could never express my
gratitude on a piece of paper. There are so many wonderful
aspects of this program. The qualified and dedicated staff are
the best. This program is the best thing that ever happened to
me. And through this program comes the most important aspect,
my children have their mother back. I owe this to Kaiser's
chemical dependency recovery program and its irreplaceable
staff. Forever gratitude, Diana D.
Mr. Mica. Thank you. We will excuse you at this time. Thank
you again for your participation.
Some of our other witnesses, I have heard so much about
Hazelden treatment and you also said that you represent, sir,
several other very prominent treatment facilities, Betty Ford
and others, Mr. Conley?
Mr. Conley. Yes.
Mr. Mica. And I guess you have a pretty good success rate.
What is your success rate?
Mr. Conley. Collectively, as a group, we look at a success
rate varying from 51 to 75 percent abstinence from alcohol and
drugs after 1 year.
Mr. Mica. You also have a pretty hefty price tag. These
clinics that were cited or treatment centers are some of the
highest in the Nation; is that correct?
Mr. Conley. Well, I don't know if I can comment on the
others. I can comment on Hazelden. The going retail rate if you
are in for 28 days of treatment, $15,000. The net effect of the
cost is somewhat lower because we do get patient aid out for
those that don't have the insurance and so forth to handle it.
Mr. Mica. What is your average treatment cost for your
patients? Could you give us a range?
Mr. Conley. The average for the full 28 days would be right
around the $15,000 range. But after we factor in on the average
the patient aid we give out, I would guess--and I won't swear
to it--I guess it would be around $11,500, $12,000, or
something like that.
Mr. Mica. Of the patients that you see, what percentage
would you say have insurance coverage that covers all or part
of that?
Mr. Conley. I think it would depend on what part of
Hazelden they went to, if they went to the primary care for
adults or adolescents. I believe we are reimbursed 30 to 50
percent of the patients go through and get some reimbursement.
I can get you those numbers. I don't have it.
Mr. Mica. I think we would like to have those for the
record, and maybe alcohol and also drug dependency if they are
broken out in that fashion.
[The information referred to follows:]
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Mr. Mica. You heard some testimony from our last two
witnesses that felt that this coverage should be left as an
option and it does result in an indirect tax increase or fee
increase for everyone when it is imposed or mandated. How would
you respond to that criticism if we were to adopt a Federal
parity requirement?
Mr. Conley. Well, I used to be in that end of the business,
and my company was a member of HIAA at one time, so I have a
certain amount of sympathy for that position. But I guess the
question I really have to say is we haven't had these mandates,
and as I look at society now, I see a $146 million price tag to
the work site. I see prisons full. I just see this as something
that has to be done. I respectfully disagree, I guess, with
their position.
Mr. Mica. We heard the gentleman from Americans for Tax
Reform oppose this as an additional mandate which would, in
fact, increase costs, which would also diminish the number of
people who have health care coverage. As the cost goes up, we
have X number of people, 43, 44 million now, uninsured now with
no coverage. We would have actually fewer people covered
because of the increased costs mandated.
Mr. Conley. Uh-huh.
Mr. Mica. What do you think about that?
Mr. Conley. I would make two comments to that.
No. 1, the incremental cost of this benefit, if the RAND
study is right, isn't going to be so high that it is going to
drive people out. That is my first reaction.
My second reaction, and I would invite HIAA members to
think about this, is the cost shift to employers in other
areas. For instance, if people were treated effectively, the
productivity, the absenteeism, the workers comp claims, the
liability, the risk exposure, would be less. So what you are
doing, in effect, is you are robbing Peter or cutting back on
the treatment end, but that cost is being shifted to employers.
And I think it would be a fascinating study to see what
happened after a year or two if the macro health costs would go
up and drive people out of the market. I don't think that is
the case.
Mr. Mica. Your people under treatment are all there
voluntarily?
Mr. Conley. Pretty much, although some are through
interventions from employers or families. So when I say
voluntarily, they may not be jumping for joy that they are
going to Hazelden.
Mr. Mica. One of the problems, Captain Smith, we adopted a
policy of deinstitutionalization of mentally ill or people who
have substance abuse problems. Many were forced into treatment
and actually almost incarcerated into some of these programs
some years ago against their will. And today we--that is not
allowed. It is not permitted.
And we do have--you can--just as you said, you can walk
blocks from here and you will see otherwise healthy human
beings who have been victimized by chemical dependency and
substance abuse, and we have no way to get them off the
streets, no way to get them into these programs, and they will
not voluntarily go. That is the bulk of our homeless population
right now. What do we do?
Dr. Smith. That is a superb question. Whenever human rights
and individual choices interface with government control and
the very Constitution, those are significant questions. Do we
round up everybody and make them take lithium? No. But treated
in the early stages--and this is my astonishment. My colleagues
never complain about paying the bill for a paraplegic from a
motorcycle accident or about AIDS bills. They don't complain
about liver transplants.
When you are treating that stage, the ball game is gone.
But you can treat it early and so efficiently, and I think
$15,000--do you have any idea how long it takes to spend
$15,000 in an intensive care unit? I was an internist. I was
there. Half of the people in ICU are there because of drugs or
alcohol at the wrong time. And we can run through $15,000 in
about 12 hours.
And you can treat--this is the reason that the Navy got
into the business. You have $2.5 million in a pilot, and our
pilots like to drink, and you train him that much, you get a
return on investment that is significant. It is the same for
IBM or the insurance companies. They train these executives.
These are good people.
All we are saying is, let's shift the money to an earlier
stage. Let's let industry help us with this. If these guys
would open up their doors to chemical dependency and mental
health, the total budget would go down. It has been done too
many times by Kaiser, Northrup, Southern Bell, but they are not
saying come in and we will treat you. And if they were we would
not be having these hearings.
What is the responsibility of the Federal Government to say
hey, help, it is not working? And if you want to know it is not
working, look at the largest mental health hospital in this
country today is the L.A. County jail.
The prison beds I don't need to tell you that the decline
in substance abuse beds, adolescent beds comes like this, the
jail cells go up like that. They cross right there. Where do we
want to turn it around? I think this is a wonderful way because
I think these guys can do it well, but I do think that you have
to say help us in the early stages. Once it gets to
homelessness and the liver is gone, it is a done deal.
Mr. Mica. I heard some conflicting testimony today on the
costs. One of our witnesses and a Member of Congress and some
others testified to a less than 1 percent cost increase were
projected. I believe the last witness, Mr. Kahn, talked about a
9 percent increase. Could you explain what that was for?
Mr. Kahn. The researchers that I was quoting looked at
State legislation that had been put in place and made
comparisons between States that did and didn't have such
legislation, and that is the difference that they came up with.
That was directly attributable to that benefit requirement.
Mr. Mica. It was.
Mr. Ramstad. Would the gentleman yield?
Mr. Mica. Go ahead.
Mr. Ramstad. Those studies reflected mental health parity
cost, not substance abuse treatment parity.
Mr. Kahn. That----
Mr. Mica. This gentleman in the back in the audience is not
sworn. If you want to comment, we will be glad to have you be
sworn and comment.
If you want to provide the testimony, Mr. Kahn, you are
recognized.
Mr. Kahn. The study is included, and I can make it for the
record. It refers to the amount and explains the methodology
and----
Mr. Mica. Specifically substance abuse and parity
legislation.
Mr. Kahn. Yes, and that is explained in here.
Mr. Mica. Can you identify the title?
Mr. Kahn. It is the Mandated Benefit Laws and Employer-
Sponsored Health Insurance.
Mr. Mica. Without objection, that report will be made a
part of the record.
[Note.--The report entitled, ``Mandated Benefit Laws and
Employer-Sponsored Health Insurances,'' may be found in
subcommittee files.]
Mr. Ramstad. Who commissioned that study?
Mr. Kahn. We commissioned the study, but it was done by a
professor at Wayne State and the University of Alabama at
Birmingham.
Mr. Ramstad. It flies in the face of the RAND Corp. study,
the California study, the Rutgers study, the Columbia
University study, the Minnesota study, States that I am
familiar with, so I would truly like to sit down and talk to
you about that because I have some serious questions about that
study.
Mr. Kahn. I would not necessarily argue that this study is
in contradiction to the other studies. This study is looking
broadly at all types of coverage in given States. If you look
at very specific types of coverage, you can find that there are
savings or the cost is marginal. Our problem is that when you
do a one-size-fits-all mandate, are you mandating that on fee-
for-service coverage, on PPO coverage as well as on managed
care coverage? That might be sort of tightly controlled and
that makes a difference.
The amount of flexibility that an insurer has in
determining what--under what circumstances benefits will be
provided is critical to the cost, and I think even in the
testimony on the RAND study there was precertification and
other hurdles that had to be overcome for someone to get the
treatment.
Mr. Ramstad. If I may just ask, I didn't support Dingell-
Norwood, and this is not Dingell-Norwood, and I am usually with
the groups represented by the last two witnesses, and I have a
lot of respect for them. But per your definition, every bill is
a mandate. Every bill in Congress from the beginning required
someone to do something or not to do something.
I want to point out that this bill does not mandate an
employer-plan-covered substance abuse treatment. As Susan put
it so well, if you say you cover it, cover it.
And to answer your question, and Susan is not here so I
would take the liberty of answering the question, Chip, that
you raised. CNN was totally unaware of the cap until Susan was
in that detox center. They were told and they thought they
bought the Cadillac package, the whole package. And treatment,
if it were as available as most plans say, we wouldn't be here
today.
Let me ask you a question. Why do most plans offer chemical
dependency treatment but not make it accessible? Why not tell
people what the definition of medically necessary care is?
Mr. Kahn. It is hard for me to imagine, although I am sure
if you say it is the case it's the case, but a major
corporation in this country that I am sure has a staff of more
than 10 or 15 people in their human resources department that
are overseeing health benefits, and I assume that they are
self-insured, so probably the carrier was in a sense
administering the benefit, and for them to say that they didn't
understand their benefits, I don't think that is the insurer's
problem, I think that is CNN's problem. And I would argue that
they were probably in violation of the ERISA laws if they were
not making clear what those restrictions were to their
employees from the git-go when those employees made an annual
choice as to their plan.
Second, I can't sit here and argue against the success of
this kind of treatment. I wouldn't sit here and argue against
the success of drug treatment for cholesterol and the effect
that has on heart disease.
I take Pravachol and watch my diet so I know in terms of my
heart disease that there are treatments that deal with that. I
am not going to argue about that. But I would be concerned----
It is fine to say, let's mandate this. We could have a
hearing at which I could make the same argument that drug
coverage ought to be mandated because every person with heart
disease ought to have through their insurance coverage access
to Pravachol or other kinds of cholesterol drugs which are
high-cost drugs. I could make the same argument, and we can
come here and show all of the cost-saving value of people
taking cholesterol drugs rather than at the end stage needing
whatever they get--bypass or whatever.
I am not arguing the utility of it, but the fact is that if
you go down this road of requiring it here, before you know it
you are going to have to require drug benefits and you are
going to have to require other things. Because all of the
compelling arguments that are being made here can be made about
many of the things that are offered in our wonderful health
care system.
Mr. Ramstad. I know Captain Smith is anxious to respond.
Dr. Smith. The response I had--and I love so much of what
Mr. Kahn said, but what the bill is asking, as I understand it,
is if you have a myocardial infarction, you are going to have
to pay 10 percent of what the care is. If you get in a crisis
with drugs, they will ask you to pay at least 50 percent of the
cost. The bill is asking for parity. I have a much better
success rate with substance abuse than your cardiologist does
with cardiovascular disease because I have been in both
businesses.
What the bill is asking, look, just treat this one the
same. The reason that people don't demand high levels for
substance abuse treatment is the denial. If someone has
alcoholism, he doesn't have the disease so he doesn't care what
the number is. It is one of those few instances because of
denial inherent in the disease--that is what treatment does. It
breaks through the denial.
You are asking a sick brain to decide how much we need to
treat it. How much money is needed to treat it? And nobody is
going to sit there--and particularly an alcoholic. His spouse
may read it carefully, but the alcoholic is not going to care
how much money there is in the policy for alcohol treatment
because he doesn't have it because of the denial.
And those are the points that I would make.
Mr. Mica. Mr. Ferrara wanted to comment.
Mr. Ferrara. Mr. Chairman, you have heard testimony today
about it is going to cost less than 1 percent, cost 9 percent
increase in costs. And you know what? You don't know. I know
you don't know. You know you don't know. You are not going to
know because that is the wrong question to ask. That is a
central planning question we are never going to know.
That is why the decision needs to be left up to the
marketplace where, A, you have people putting out their own
money directly and have to be convinced directly of the
benefits that they are going to get back and they will very
carefully evaluate and make their own choice; and, B, different
people can make different choices so some people might try it.
Wow, it reduced our costs or General Motor's costs and Kaiser
Permanente's costs. And then other people do it, and that is
the right way to do this. You don't try to have a committee in
Washington make the decision for everybody.
I am not making an argument for or against a particular
kind of treatment or for or against a kind of bill. I am making
an argument on process. This decision needs to be left up to
the people buying the health insurance. If there are some
effects on the government and the government budget, maybe this
is a decision that you need to make explicitly in the budget
process. But don't engage in these activities where you shift
the cost off budget onto other people and then you hide it from
accountability.
And in the situation where quite--I don't mean this
negatively--you don't know what you are doing because in this
kind of model you don't know, sitting here in Washington. This
needs to be made on a decentralized basis by people across the
country who are putting their own money on the table and will
do so when they are clear they are going to get the benefit
back.
Mr. Mica. Dr. Schoenbaum.
Mr. Schoenbaum. Yes, I would like to respectfully disagree
with what Mr. Ferrara just opened with, that we don't know and
can never know what the costs are of legislation such as this.
Respectfully, we do know, at least on average and under some
assumptions that we can articulate and that seem fairly
reasonable, approximately what the costs are that we can expect
from legislation like this.
In the RAND study we looked at data from behavioral--from
the third largest behavioral carve-out insurance carrier in the
country, I assume a member of HIAA. Of people with private
insurance in this country, 75 percent received their coverage
for substance abuse and mental health services through a carve-
out company.
RAND has negotiated an agreement with United Behavioral
Health, the third largest behavioral carve-out company in the
country, for unrestricted access to their claims and
utilization data. Those are the data that we based our study
on. We identified the plans in that study that provide
unrestricted, although managed, substance abuse treatment
benefits. That I would argue is the standard of care, the
standard of practice that is currently prevailing in this
country--managed carve-out health insurance.
Under those circumstances, across the range of employers
that we looked at, which were in a number of different
industries, had employees in 38 different States, we were quite
clear about the cost of providing unlimited substance abuse
treatment benefits. Three-tenths of 1 percent of members in an
employed population use any substance abuse treatment benefits
in a year. Of those, the number who use--the fraction who used
a fairly high amount in a given year is yet smaller.
So it stands to reason that, under practice patterns like
that, we are not talking about enormous amounts of money for
providing the benefit. The issue is that managing services,
utilization review, the practices, the technologies that the
carve-out companies have developed for targeting services to
the people who need them are a more effective way of allocating
care than benefit limits which have the unfortunate feature
that they affect the people who need the largest amount of
services.
Mr. Mica. Let's see. Has everyone had a shot at this?
Mr. Ferrara. Do I get to respond briefly?
Mr. Mica. Captain Smith, did you want to respond? And then
we will go back to Mr. Ferrara.
Dr. Smith. I would just say to Mr. Ferrara, these are the
best people in the world, but it has been left to the
marketplace to solve this problem. That is why the beds are
gone. That is why your beds are now in prison. That is why you
have homelessness all over this country. The marketplace has
had its shot at it, and by my value system it has failed
miserably.
Now are they going to spontaneously open the doors? No, I
don't think that they are. I think Congress has to say, hey,
help us, open up the doors. They have no problems asking us to
build more prison beds. They have no problem when someone is
fired and becomes homeless. That is a high consumer of health
care cost to the private insurer, and ultimately it is the
Federal system that picks up the tab. You are saying, help us
when this disease is treatable cheaply.
Thank you.
Mr. Ferrara. Captain Smith says this is a great deal, and
it works out wonderfully, and I tried to explain it, and they
are not buying it, so please Mr. Smart Federal Government, you
force them to do it, tell all of these people they are wrong.
If Mr. Schoenbaum is right and Captain Smith is right, go make
the case to the employers and to the insurance companies and
tell them about all the great money that they are going to
save, and if they think you are right, they will risk their
money on it. The point is, who is going to make this decision,
not who is right or wrong, and the decision needs to be made by
the people buying the health insurance.
Mr. Mica. Their point is that they are not saving the money
by instituting this. Or if it is not required by the Federal
Government for coverage, what happens is that the rest of us
are picking it up as taxpayers in some more costly fashion.
Mr. Ferrara. If that is the case, you need to examine your
substance abuse health treatment programs and deal with it in
the context of the Federal budget. If there are government
savings and government effects or broad or societal effects,
then deal with it explicitly in the budget process where you
consider it overall against all of the considerations of how
much taxes you are going to raise and other demands in the
budget, and then you make your priorities. That is where it
needs to be decided. Don't hide it by saying we are going to
make someone else pay for it. They ought to be able to decide
what is in their health insurance policy and what is not.
If you are convinced after doing a thorough investigation,
gee, this is extremely cost effective and the employers don't
take into account all of the costs that accrue to them and
insurance companies don't take into account all the costs that
are going to accrue to them, that is when you have a government
program to do it.
Mr. Mica. Mr. Ramstad, do you have additional questions?
Mr. Ramstad. I don't, Mr. Chairman.
Mr. Mica. Well, we haven't solved the problem of parity for
those afflicted with substance abuse or what are our national
legislative direction will be on this issue today, but we have
aired some opinions and heard some good testimony I think from
a number of folks and hopefully moved the debate a little bit
forward and possibly a legislative resolution.
We will keep the record open for 10 additional days for
additional statements. We may have some additional questions
for some of those who have testified before us today.
If there is no further business to come before the
subcommittee--Mr. Ramstad----
Mr. Ramstad. Just one last word, Mr. Chairman. I want to
thank all six witnesses on this panel, including the two who
vehemently disagree with my legislation, because this is the
way that the process should work. Thank you for coming forward
and being part of this discourse.
Mr. Mica. In conclusion, I did want to thank each of the
witnesses who are on this panel and the other witnesses and
Members of Congress who testified today. I appreciate again
your helping us make the process work.
As I said, there being no further business to come before
the subcommittee this afternoon, this meeting is adjourned.
[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
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