[Senate Hearing 112-865]
[From the U.S. Government Printing Office]







                                                        S. Hrg. 112-865

                      IS POVERTY A DEATH SENTENCE?

=======================================================================

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON PRIMARY HEALTH AND AGING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                           EXAMINING POVERTY

                               __________

                           SEPTEMBER 13, 2011

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions





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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland        MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico            LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington             RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania   RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina         ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon                 JOHN McCAIN, Arizona
AL FRANKEN, Minnesota                PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado          LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island     MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut      

                    Daniel E. Smith, Staff Director
                  Pamela Smith, Deputy Staff Director
     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                 ______

                Subcommittee on Primary Health and Aging

                      BERNARD SANDERS (I), Vermont

BARBARA A. MIKULSKI, Maryland        RAND PAUL, Kentucky
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania   JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina         ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon                 LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island     MICHAEL B. ENZI, Wyoming (ex 
TOM HARKIN, Iowa (ex officio)        officio)

                Ashley Carson Cottingham, Staff Director

                Peter J. Fotos, Minority Staff Director

                                  (ii)
























                            C O N T E N T S

                               __________

                               STATEMENTS

                      TUESDAY, SEPTEMBER 13, 2011

                                                                   Page

                           Committee Members

Sanders, Hon. Bernard, Chairman, Subcommittee on Primary Health 
  and Aging, opening statement...................................     1
Paul, Hon. Rand, a U.S. Senator from the State of Kentucky.......     3
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    17
Merkley, Hon. Jeff, a U.S. Senator from the State of Oregon......    48

                            Witness--Panel I

Kemble, Sarah, M.D., MPH, Practitioner and Founder, Community 
  Health Center of Franklin County, Turners Falls, MA............     6
    Prepared statement...........................................     7
Hulsey, Tim, M.D., Practitioner of Cosmetic and Plastic Surgery, 
  Bowling Green, KY..............................................    10
    Prepared statement...........................................    12
Adams, Garrett, M.D., MPH, Practitioner and Founder, Beersheba 
  Springs Medical Center, Beersheba Springs, TN..................    13
    Prepared statement...........................................    15

                           Witness--Panel II

Braveman, Paula, M.D., MPH, Professor of Family and Community 
  Medicine, University of California San Francisco, Director, 
  UCSF Center on Social Disparities in Health, San Francisco, CA.    22
    Prepared statement...........................................    24
Cannon, Michael F., Director of Health Policy Studies, The Cato 
  Institute, Washington, DC......................................    31
    Prepared statement...........................................    33
Zolotorow, Phyllis, Ellicott City, M.D...........................    38
    Prepared statement...........................................    40

                                 (iii)

  

 
                      IS POVERTY A DEATH SENTENCE?

                              ----------                              


                      TUESDAY, SEPTEMBER 13, 2011

                                       U.S. Senate,
                  Subcommittee on Primary Health and Aging,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:08 a.m. in 
room SD-430, Dirksen Senate Office Building, Hon. Bernard 
Sanders, chairman of the subcommittee, presiding.
    Present: Senators Sanders, Whitehouse, Merkley, and Paul.

                  Opening Statement of Senator Sanders

    Senator Sanders. Thank you all very much for coming. We 
expect other Senators to be entering. There they are. OK. Thank 
you very much for coming for what is going to be, I think, an 
extremely interesting and important hearing. And I want to 
thank everybody for being here, especially the witnesses who 
are taking time from very busy schedules and have come from 
different parts of the country.
    The reason that I called this hearing this morning is that 
the issue that we are discussing today gets far too little 
public discussion. It's something I just wanted to bring up and 
get out before the public.
    It is very rarely talked about in the media and it's talked 
about even less in Congress, yet it is one of the great 
economic, and more importantly moral issues, moral issues 
facing our country.
    Today, there are nearly 44 million Americans, living below 
the poverty line, and that is the largest number on record. 
Since the year 2000, nearly 12 million more Americans have 
slipped into poverty.
    Now, I understand that, generally, from a political point 
of view, it's not terribly wise to be talking about poverty. 
Poor people don't vote in many cases. Poor people certainly do 
not make campaign contributions.
    So from a political point of view, we kind of push them 
aside as not being relevant. But that's not what I think this 
country is supposed to be about.
    According to the latest figures that I have seen from the 
OECD--and that's the Organization for Economic Cooperation and 
Development--the United States has both the highest overall 
poverty rate and the highest childhood poverty rate of any 
major industrialized country on Earth.
    This also comes at a time when the United States has, by 
far, the most unequal distribution of wealth and income of any 
major country on Earth, with the top 1 percent earning more 
income than the bottom 50 percent, top 400 individuals owning 
more wealth than the bottom 150 million Americans.
    According to the latest figures from the OECD, published in 
April 2011, 21.6 percent of American children live in poverty. 
This compares to 3.6 percent in Denmark, 5.2 percent in 
Finland, 5.8 percent in Norway, 6.7 percent in Iceland, etc, 
etc, etc.
    I suppose we can take some comfort in that our childhood 
poverty rates are not quite as bad as Turkey, 23.5 percent, and 
Mexico, 25.8 percent.
    When we talk about poverty in America, I think a lot of 
thoughts go through our minds. We think about people who may be 
living in substandard housing. Maybe they're homeless. We think 
about people who live with food insecurity, and worry about how 
they're going to feed their families today or tomorrow.
    We think about people who, in States like mine where the 
weather gets very cold, are worrying right now how they can 
stay warm in the coming winter. We think about people who 
cannot afford health insurance or access to medical care.
    We think about people who cannot afford an automobile or 
transportation to get to work or get to a grocery store. We 
think about senior citizens, who often have to make a choice 
between buying prescription drugs or the groceries they need.
    Today, however, I want to focus on one enormously important 
point. And that is that poverty in America leads not just to 
anxiety, it leads not just to unhappiness, or discomfort, or a 
lack of material goods.
    It leads to death. Poverty in America is, in fact, a death 
sentence. And tens and tens of thousands of our people are 
experiencing that reality.
    Now, let me just toss out some facts. At a time when, as 
everybody knows, we are seeing major medical breakthroughs in 
cancer and other terrible diseases for the people who can 
afford those treatments. The reality is that life expectancy 
for low-income women has declined over the past 20 years in 313 
counties in our country. Women are dying at a younger age than 
they used to.
    In America today, people in the highest income group level, 
the top 20 percent, live, on average, at least 6\1/2\ years 
longer than those in the lowest income group, 6\1/2\ years. If 
you're poor in America, you will live 6\1/2\ years less than if 
you're wealthy or of the middle class.
    In America today, adult men and women who have graduated 
from college can expect to live at least 5 years longer than 
people who have not finished high school. In America today, 
tens of thousands of our fellow citizens die unnecessarily, 
because they cannot get the medical care they need.
    According to Reuters, September 17, 2009,

          ``Nearly 45,000 people die in the United States each 
        year, one every 12 minutes, in large part because they 
        lack health insurance and cannot get good care, Harvard 
        medical researchers found, in an analysis released on 
        Thursday.''

    That's dated September 17, 2009. Forty-five thousand 
Americans die because they lack health insurance.
    In 2009, the infant mortality rate for African-American 
infants was twice that of white infants.
    Now, I recite these facts because I believe that, as bad as 
the current situation is with regard to poverty, it will likely 
get worse in the immediate future. As a result of the greed, 
and recklessness, and illegal behavior of Wall Street, we are 
now, as all of you know, in the worst recession since the Great 
Depression of the 1930s. Millions of workers have lost their 
jobs, and have slipped out of the middle class, and into 
poverty.
    Further, despite the reality that our deficit problem has 
been caused by the recession, and declining revenue, two unpaid 
wars, and tax breaks for the very wealthy, there are some in 
Congress who wish to decimate the existing safety net which 
provides a modicum of security for the elderly, the sick, the 
children, and lower-income people.
    Despite an increased poverty, there are some people in 
Congress who would like to cut or end Social Security, 
Medicare, Medicaid, food stamps, LIHEAP, nutrition programs, 
and help for the disabled and the elderly.
    To the degree that they are successful, there is no 
question in my mind that many more thousands of Americans will 
die earlier than they should. In other words, they are being 
sentenced to death without having committed any crime, other 
than being poor.
    What is especially tragic and reprehensible is that with 
the kind of childhood poverty rates we are seeing today, unless 
we turn this vicious circle around, we are dooming a 
significant part of an entire future generation to unnecessary 
suffering and premature death.
    This is not what America is supposed to be about and we 
must not allow that to happen.
    Senator Paul.

                       Statement of Senator Paul

    Senator Paul. Thank you, Senator Sanders, for holding these 
hearings. I agree with you that poverty is an important issue. 
I also agree that we need to understand what causes poverty and 
what causes prosperity, or we won't be able to fix the problem.
    Kwashiorkor is a condition in which the abdomen swells 
because fluid leaks from the vascular space. Kwashiorkor is a 
phenomenon associated with starvation and lack of protein. 
We've all seen the sad and horrific pictures of famines in 
Africa.
    Kwashiorkor is no longer present in the United States. 
Capitalism in our country vanquished starvation along with 
smallpox and polio. Anyone who wishes to equate poverty with 
death must go to the third world to do so. Anyone wishing to 
equate poverty with death must seek out socialism and tyranny.
    Those who wish to see death from poverty in our country are 
blind to the truth. While we all hope to lessen the sting of 
poverty, we need to put poverty in America into context.
    Robert Rector, of the Heritage Foundation, recently put 
together a profile of the typical poor household in America. 
The average poor household has a car, air conditioning, two 
color televisions, cable or satellite TV, a DVD player, and an 
Xbox. Their home is in good repair and is bigger than the 
average non-poor European.
    The average poor person reports that, in the past year, 
that they were not hungry. They were able to obtain medical 
care and had sufficient funds during the past year to meet all 
essential needs. This is the average poor person in America.
    An American citizen can expect to live a decade longer than 
the world average and nearly twice as long as some African 
countries. Infectious diseases such as AIDS decimate third-
world countries, while American citizens are often immunized 
from disease or easily treated for these conditions.
    While more than 750,000 people around the world die each 
year from malaria, the United States has zero deaths from 
malaria. At the turn of the last century, life expectancy in 
the United States was about 46 years of age. Life expectancy 
now approaches 80. By all measures, this is a great success. 
Mortality due to infectious diseases affects 50 percent of 
children in Africa and is now less than 1 percent in America, 
an extraordinary success.
    One of our witnesses today, Michael Cannon, will explain 
how, over time, poor Americans became healthier than wealthy 
Americans of a previous generation. Only in America would we 
label it as a death sentence for the children of poor families, 
to have a reasonable expectation of growing up healthier than 
the adults of wealthy families did in the immediately preceding 
generation.
    To the extent that poverty is a social determinant of 
health, much of it can be attributed to behavioral factors. 
Over 30 percent of those living below the poverty line smoke, 
compared to 19 percent of the rest of the population. Consider 
that it costs between $1,500 and $2,000 per year to smoke a 
pack of cigarettes a day. This is nearly 20 percent of an 
individual's income at the poverty line.
    Obesity rates among the poor are higher than the general 
population. We're not talking about kwashiorkor in our country. 
We're talking about obesity, an unimaginable problem for those 
starving in North Korea or Somalia.
    An interesting example of culture's influence on health is 
known as the Hispanic health paradox. According to a National 
Institute of Health study, despite higher poverty rates, less 
education, and worse access to healthcare, health outcomes 
among many Hispanics living in the United States today are 
equal to or better than those of non-Hispanic whites.
    Researchers do not argue that the Hispanic health paradox 
has anything to do with genetics. In fact, most researchers 
believe the differences in smoking habits and a strong family 
support structure explain much of the so-called Hispanic health 
paradox.
    This context, while important, does not negate the fact 
that there are truly needy Americans. We all want to halt 
poverty. We all want to help those in need. I am suggesting 
today, though, that with a national debt of $14.3 trillion, we 
must be more precise in how we talk about poverty in America 
and whom we should target with scarce Federal resources.
    We need to ask, are we targeting Federal programs to those 
most in need? Are Federal programs accomplishing their goals? 
Are we doing what's needed and are we doing it appropriately? 
Are some programs creating unnecessary and unhealthy dependence 
on government?
    We have limited resources. We have to ask these questions. 
We also need to understand that poverty is not a state of 
permanence. When you look at people in the bottom fifth of the 
economic ladder, those at the bottom, only 5 percent are there 
after 16 years. People move up. People do. The American dream 
does exist.
    In a University of Michigan study of 50,000 families, 75 
percent of those in the bottom fifth make their way up to the 
top 20 to top 40 percent on the socioeconomic ladder. The rich 
are getting richer, but the poor are getting richer even 
faster. U.S. Treasury statistics showed that 86 percent of 
those in the bottom 20 percent of the economic ladder move to a 
higher level.
    We need to be proud of the American dream and promote 
policies that encourage the economic growth that allows so many 
to rise up out of poverty.
    In the half of the century since LBJ's war on poverty 
began, we have spent $16 trillion to fight poverty. We now 
spend over $900 billion a year and have over 70 means-tested 
welfare programs under 13 government agencies, yet thanks or no 
thanks to the Federal Government, we now have more poverty, as 
measured by the government, than we did in the 1970s.
    An all-time high, 40 million Americans depend on food 
stamps and 64 million are enrolled in Medicaid. If poverty is a 
death sentence, it is a big government that has acted as the 
judge and jury, conscripting poor Americans to a lifetime of 
dependency on a broken and ineffective Federal Government.
    One of the fastest growing poverty programs is food stamps. 
The cost of the food stamp program has doubled just since 2007. 
There is evidence that the program actually leads to higher 
rates of obesity. An Ohio State University researcher has 
calculated that, controlling for socioeconomic status, all 
things being equal, women who receive food stamps were more 
likely to be overweight than nonrecipients.
    When we've tried to place restrictions and say, ``you can't 
buy junk food,'' Federal Government has said, ``no, we can't 
place restrictions on food stamps.'' A recent article pointed 
out that 30 percent of the inmates in Polk County, IA were 
receiving food stamps illegally. In Wisconsin, fraud is so 
rampant, prosecutors have given up going after the common cause 
of abuse, such as selling food stamp cards online.
    There's so much of it they can't even keep up with it. 
Leroy Fick won $2 million--I'm pretty close to finishing up; I 
have just another minute or 2, please--won $2 million in the 
lottery, and yet he still gets food stamps because there is no 
limit to food stamps based on assets.
    In America, capitalism has been so successful in 
alleviating poverty, that our doctors travel around the world. 
Doctors today that are here, such as Dr. Tim Hulsey, not only 
help indigent patients in this country, but travel to, many 
times, Guatemala to repair children with cleft palate.
    As a physician, both Dr. Hulsey and I have treated children 
from Central America. We have treated children from around the 
world. Not only are we doing such a good job treating poverty 
in our country, we're able to send our efforts around the world 
to help thousands of cataract patients, thousands of those with 
cleft palate.
    So what I would say here today is that not only is poverty 
not a death sentence in our country, capitalism has done such 
wonderful things to lift people out of poverty, that we are now 
helping the world, that really, there are still true pockets of 
poverty around the world.
    So I think, rather than bemoan or belabor something that 
really, truly is something that is overwhelmingly being treated 
in our country, we should maybe give more credit to the 
American system, the American dream, and give credit to what 
capitalism has done to draw us up out of poverty in this 
country. Thank you very much.
    Senator Sanders. Thank you very much. We have a wonderful 
and distinguished panel. Let me introduce our first witness, 
and that is Dr. Sarah Kemble, who is a practicing physician and 
founder of the Community Health Center of Franklin County in 
Turners Falls in Northfield, MA.
    In addition to providing direct care to the medically 
underserved population of Franklin County, Dr. Kemble is a 
hospitalist and vice-president of the medical staff at Bay 
State Franklin Medical Center and past chair of the department 
of medicine.
    Dr. Kemble, thanks very much for being with us. And why 
don't you take about 6 minutes each, if you could, please?

STATEMENT OF SARAH KEMBLE, M.D., MPH, PRACTITIONER AND FOUNDER, 
 COMMUNITY HEALTH CENTER OF FRANKLIN COUNTY, TURNERS FALLS, MA

    Dr. Kemble. Thank you. I very much appreciate this 
opportunity to address the question, is poverty a death 
sentence? Since time is short, today, I'll just share a few 
clinical stories from my experience in Franklin County, MA, 
where I founded a rural community health center in 1995.
    One of our first board members was a woman in her 50s who 
was very committed to our health center. She was also our 
patient, having spent more than a decade uninsured and without 
access to routine medical care.
    On her first routine exam, there was a large irregular 
abdominal mass. She died a year later from colon cancer, a 
preventable disease that we routinely screen for in primary 
care. She would not have died if diagnosed earlier.
    This patient taught me one important point about access to 
care for the working poor. She and many of our patients came to 
us because the health center was open to all. She felt that she 
was both using, but also contributing, to a community resource, 
not asking for charity. And she was correct.
    Many working people make this distinction and will not seek 
charity care. Another case was a man in his 50s with aortic 
stenosis. Aortic stenosis is a common degenerative heart valve 
disease in which the valve becomes sclerotic and stiff over 
time. Eventually, it will no longer open, despite the heart's 
increasing efforts to pump against it.
    When this occurs, the patient experiences chest pain 
followed by sudden loss of consciousness. Usually, death 
follows within minutes. Medicine alone is useless for this 
condition and can even be harmful in the late stages. The only 
treatment for aortic stenosis is surgery to replace the damaged 
valve.
    This patient worked for a local transportation company 
which did not provide paid sick leave or health insurance. When 
he first came to our office, he could barely walk and used a 
cane. The diagnosis was easy to make on the first visit. Within 
a few weeks, medicines were effective at removing over 40 
pounds of fluid from his body.
    This gave him significant relief from his fatigue, 
swelling, and shortness of breath. He was able to get rid of 
the cane and said he hadn't felt so good in years. I insisted, 
at each visit, that he needed valve replacement surgery or he 
would die. He allowed me to refer him to the cardiothoracic 
surgeon and he learned what the surgery and rehab would entail.
    More than once, he considered scheduling the operation, 
only to postpone it, as he could not figure out how he would be 
able to afford the out-of-pocket cost or the time off from 
work. About 2 years after his diagnosis, he died one morning at 
work.
    Today, I understand there is discussion here about shifting 
even more costs onto patients. You can see, from my 
perspective, this makes no sense. For anyone lacking resources, 
the natural consequence of any out-of-pocket cost is that they 
withhold needed care from themselves with devastating clinical 
consequences and at high cost to society.
    I will end with one more patient. This was a young man in 
his 40s, admitted to the intensive care unit with a massive 
heart attack. His cardiogram and blood work indicated the heart 
attack had started a couple of days earlier. He admitted he'd 
tried to tough out the chest pain at home, but could no longer 
do so once he found himself unable to breathe.
    The disease had most likely destroyed a large area of his 
heart muscle. He reminded me that a couple of years earlier, he 
had seen me once in our office, where I'd advised him to take a 
low-dose aspirin and prescribed a blood pressure-lowering beta 
blocker. Both of these are inexpensive medications with good 
evidence that they protect patients from stroke and heart 
attack.
    He was a truck driver with no benefits or health insurance 
and he could neither afford his medicines, nor take time off to 
follow up with his care. Paradoxically, without routine medical 
care and a couple of generic medications that might have 
prevented his heart attack, this patient would most likely 
become disabled, never again able to resume his occupation.
    In concluding, these are just three patient stories, but 
there are many, many more. Any rural primary care doctor could 
tell you hundreds of their own and I think our urban colleagues 
might have a slightly different twist, but the moral of the 
story is the same.
    Our healthcare system can do much better for our people of 
this country. I wish you all the best in your efforts to enact 
better healthcare and social policies for us all, and I thank 
you for this opportunity to provide my perspective today. I 
look forward to your questions.
    [The prepared statement of Dr. Kemble follows:]
             Prepared Statement of Sarah Kemble, M.D., MPH
    The title of my presentation today is borrowed from medical slang, 
``Found down'' is a frequently documented reason why patients, 
particularly the elderly, are brought to hospital emergency 
departments. I will say more about this later, but want to begin and 
end by saying that our health care system, in particular our primary 
care, should also be ``found down'' by you today.
    I appreciate the opportunity to come before you in order to address 
the urgent question: ``Is poverty a death sentence? '' As a rural 
general internist I can tell you that in my experience of the last 15 
years, in many instances, it is.
    The World Health Organization* has shown in a recent extensive 
study that the underlying health of any population is primarily due to 
social determinants. Health status is generally predictable for 
individuals based on their level of education, income, occupation, 
geography and gender. Poverty is one of the most powerful predictors of 
poor health status and outcomes. Dr. Braveman's presentation today 
describes some of the biological mechanisms for this. I will share my 
clinical observations from my experience spent caring for poor and 
underserved populations in Franklin County, MA, where I founded a 
community health center in 1995.
---------------------------------------------------------------------------
    * World Health Organization Final Report on the Social Determinants 
of Health, Geneva, Switzerland, 2008.
---------------------------------------------------------------------------
    While the poor literally start life with the cards stacked against 
their health and longevity, my life's work of creating access to care 
has convinced me that having access to medical care can mitigate, and 
lacking access can aggravate these predetermined disparities.
    Our health center was started with a planning grant from the State 
Medicaid agency. At that time there were large numbers of patients in 
our community who were enrolled Medicaid recipients but they 
nonetheless had no access to actual care, because there were almost no 
local physicians accepting Medicaid insurance. This showed me early on 
that access to insurance and access to care were not the same thing.
    Six months after opening the practice, we found that 75% of our 
patients were uninsured. Many were extremely sick. I remember a woman 
who came in complaining of rib pain. I only saw her once, as she died 
almost immediately of widespread lung cancer after receiving the 
diagnosis from a simple chest x-ray that she had not previously been 
able to afford.
    Another woman was brought in by her family over her increasingly 
feeble objections after she became nearly comatose. She had end stage 
liver disease and also died within weeks.
    One of our first board members was a woman in her 50s who was very 
committed to the health center. She was also our patient, after years 
being uninsured and having no medical care. On her first routine exam 
in years there was a large, irregular abdominal mass. She died about a 
year later from colorectal cancer--a condition that we routinely screen 
for in primary care, and should detect in time to treat effectively in 
almost all cases.
    An elderly man came to the health center with extremely disfiguring 
basal cell carcinoma of the face that had been present for over 20 
years. Basal cell carcinoma is the most curable cancer of the skin, and 
the slowest growing. It never spreads through the blood, only locally 
and only after decades when left untreated does it become capable of 
destroying adjacent tissue. This patient, a logger who lived in the 
woods, had come of age during the depression and never accepted 
anything for which he could not pay. When I met him his entire nose and 
left eye were destroyed by tumor, and he wore a patch over the left 
side of his face to conceal his gruesome appearance. He died soon after 
of overwhelming infection and encephalitis after the tumor finally 
spread through his eye socket, opening up a direct pathway for 
infection to reach his brain.
    This case illustrates an important point about access to care for 
the working poor. This patient only came to see me because the 
community health center was open to all regardless of income or ability 
to pay. The patient felt he was using a community resource, not asking 
for charity, and he was correct. Many people make this distinction.
    Most community health centers provide primary medical, dental, 
behavioral and pharmacy services, and we take the simple approach that 
dignified, high quality health care is a right in any wealthy and 
civilized society. Many of our patients sought help from us with this 
understanding, even after going for years or even decades without 
seeking care before our health center came into existence.
    Other community health center workers have had the same experience. 
Even so, for the patients who come to us with advanced cancers or 
surgical diseases, we can only bear helpless witness as, in many cases, 
they die.
    A relatively young woman who was unable to afford routine 
gynecologic care for nearly 20 years died of a huge tumor which was 
technically not even malignant, but had grown so large it had already 
destroyed numerous gastrointestinal and pelvic organs before she came 
to our office. This was not a subtle problem, and the patient knew that 
she had it for years. She obviously could have gone to an emergency 
room at any time. But she was so worried about financial catastrophe 
for her family, she kept this problem a secret until it was too late.
    There is literally an odor of death that we learn to recognize in 
our work. The odor hit me when I first walked into the exam room with 
this young woman, before I even said hello. Since health centers do not 
usually employ surgeons or oncologists, my job was to refer her to 
those specialists, where her worst nightmare--not death, but financial 
ruin for her family--came true.
    Two other patients illustrate the same point. Both had aortic 
stenosis, a common degenerative heart valve disease in which the valve 
becomes stiff and finally, will not open despite the heart's increasing 
efforts to pump against it. When this happens, the patient experiences 
chest pain, sudden loss of consciousness, and usually death follows 
immediately. Medicine alone is useless for this condition, and can even 
be harmful. The only treatment for aortic stenosis is valve replacement 
surgery, which in most cases restores people to a level of functioning 
that they have not felt in months or years. The recovery time for this 
surgery takes months, and in most cases patients require close followup 
and lifelong blood thinner medicine with frequent blood tests.
    One of my patients with aortic stenosis was a man in his late 50s. 
He worked for a local transportation company which did not provide paid 
sick leave or health insurance. When he first came to my office, he 
could barely walk, and used a cane. The diagnosis was easy to make on 
the first visit. Within a few weeks, medications were effective at 
removing over 40 pounds of fluid, thereby giving him significant relief 
from his fatigue, swelling and shortness of breath. He was able to get 
rid of the cane, and said he had not felt so good in years. He wanted 
to believe he was ``fixed'' but I insisted at every visit that he 
absolutely required surgery or he would die. He did let me refer him to 
the cardiothoracic surgeon and he learned what the surgery would 
entail. Once or twice he considered scheduling the valve replacement, 
only to postpone it as he could not figure out how he would be able to 
afford either the direct monetary cost or the time off from work. He 
died suddenly at work one day, waiting for the right time, about 2 
years after receiving his diagnosis.
    I remember another patient who also tried to wait with aortic 
stenosis. She actually made it to the emergency department when she 
passed out while driving on the day when her valve finally, inevitably 
no longer worked. She underwent emergency valve replacement surgery and 
lived to become bankrupted and disabled by depression.
    The financial fears that lead so many patients, including this one, 
to withhold medical care from themselves, are neither irrational nor 
trivial. Her husband committed suicide by burning their home with 
himself in it after it was lost to foreclosure.
    Since this is the subcommittee on primary care and aging, I would 
also like to talk a little about older patients, by returning to the 
title of my presentation. ``Found down'' is common medical shorthand 
used to describe a patient, usually elderly, who has been brought to 
the hospital after having lost consciousness at an unknown time, for an 
unknown reason, while alone.
    This scenario is not rare. When it happens, the first thing we try 
to figure out is the duration of the ``down time,'' as this is 
inversely related to the patient's chances of having reasonably 
functioning kidneys, liver, heart and brain tissue. This in turn 
generally determines whether survival can be expected. The last case I 
had was only a couple of weeks ago. The patient never woke up before 
dying days later in the intensive care unit after withdrawal of the 
ventilator that it turned out she had not wanted in the first place.
    Every day in our country, seniors are found down. The risk factor 
for ending life in this way is being old, sick and alone. Aging and 
illness are not necessarily preventable, but in our society, being 
alone at this time of life is widespread. Who among us could not easily 
end our days in just this way? Most need to pay for simple personal 
care out-of-pocket and they simply cannot afford it. Seniors all have 
medical insurance, but Medicare does not cover low-cost home care which 
would keep them safely and securely in their homes. This could save 
their loved ones the anguish of never being able to know what happened, 
or how much pain and suffering was involved.
    Today I understand there is discussion about shifting even more 
cost onto seniors themselves. This makes no sense. You can see from my 
perspective that for anyone lacking resources, the natural consequence 
of any cost shifting or out-of-pocket costs is that they simply 
withhold needed care from themselves, often with devastating 
consequences.
    Our primary care system itself may soon be found down. In case this 
happens, here is my prediction for explaining the scenario: we will 
have to admit that we were not able to maintain our primary care work 
force due in part to this heartbreaking experience of being forced to 
watch our patients suffer and even die needlessly, even as we knew and 
advised what they needed, but they could not afford access to the most 
inexpensive and basic care.
    Home care services, dental care, eye care and behavioral health 
services are among the other types of highly cost-effective support 
services that can make the difference for many working people between 
disability and being able to function as contributing members of 
society.
    Let me end with one more patient. This was a young man in his 40s, 
whose name was not familiar to me when I admitted him to our intensive 
care unit with a massive heart attack. His cardiogram and blood work 
showed that the heart attack had started a couple of days earlier, and 
he admitted he had tried to tough it out at home until he was not only 
in pain but also found himself unable to breathe. The disease had 
likely destroyed a large area of his heart muscle, which meant he was 
doomed to being a cardiac cripple.
    I was listed as his primary care doctor and he seemed to remember 
me. He said a couple of years earlier I had seen him once in the office 
and advised him to take a low-dose aspirin and beta blocker (blood 
pressure pill) each day. Both are inexpensive, generic medicines that 
have been shown to protect patients at risk from stroke and heart 
attack. He explained that he was a truck driver with no benefits or 
health insurance, and he could neither afford his medicines nor take 
time off from work to follow up with his care. Yet to not being able to 
afford routine care and a couple of generic medicines that might have 
prevented this heart attack, he would most likely never again work in 
his occupation.
    In conclusion, although I have altered identifying details to 
protect my patients' privacy, the medical facts of these stories are 
all true. There are many, many more just like them. Any rural primary 
care doctor could tell you hundreds of their own. Urban doctors might 
have a slightly different version, but the moral of the story is this: 
our health care system and our society can do much better for the 
people of this country.
    I wish the members of this committee all the best in your efforts 
to create better health and social policies for us all, and thank you 
very much for the opportunity to provide my perspective today.

    Senator Sanders. Thank you very much, Dr. Kemble. Our 
second witness on this panel is Dr. Tim Hulsey, a practicing 
physician of cosmetic and plastic surgery in Bowling Green, KY. 
In addition to his work in private practice, he is a member of 
the medical staff of Hospital Corporation of America, Greenview 
Hospital, and the Medical Center at Bowling Green.
    Dr. Hulsey works with the Commission for Children with 
Special Needs and Children of the Americas. Dr. Hulsey, thanks 
for being here.

  STATEMENT OF TIM HULSEY, M.D., PRACTITIONER OF COSMETIC AND 
               PLASTIC SURGERY, BOWLING GREEN, KY

    Dr. Hulsey. My pleasure. In 1982, after 12 years of post-
graduate training at Vanderbilt University, I opened a practice 
in Bowling Green, KY, a town of about 50,000 with about 300 
physicians in a Commonwealth with about 2.2 physicians per 
1,000 people.
    I have been operating on patients for 37 years and have 
been in solo practice for almost 30 years, treating some 
cosmetic surgery patients, but more patients with cancer, 
burns, trauma, and patients in need of reconstructive surgery.
    My policy has been to see Medicare and Medicaid patients, 
as well as to see those without resources to pay for their care 
at no charge, when that was appropriate. Since 1984, we have 
run a cleft, lip, and palate clinic through the Commission for 
Children with Special Health Care Needs, and this serves a 
large portion of our Commonwealth.
    These clinics are available in most States and are 
available to anyone, regardless of their ability to pay. There 
is no excuse for a child in the Commonwealth of Kentucky, or 
any other State that has these clinics available, to go without 
care because of lack of monetary resources.
    I made a choice, as many physicians do, to use part of my 
expertise and time to treat those without health insurance 
coverage. And I am only one of 900,000 physicians in this 
country who have done the same thing to make sure that services 
are there for those who can't afford them.
    There are 100,000 churches in this country and innumerable 
civic organizations who have mandates, by faith or by choice, 
to provide care to those who are in need. These include people 
with need of medical care problems.
    Those people are aggressive and active in their seeking out 
patients who need their help. St. Jude's Children's Research 
Hospital is only one of the cancer treatment resources 
available to all comers.
    Emergency rooms in our country are mandated by Federal law 
to evaluate and stabilize any patient that arrives at their 
door, with regard to the ability to pay as insignificant.
    This certainly is a less-than-efficient manner to provide 
healthcare. Between doctors, nurses, hospitals, churches, civic 
organizations, free clinics, and individual citizens willing to 
dedicate a portion of their time and expertise, there is really 
no reason in this country for lack of ability to pay to be a 
death sentence.
    Mr. Chairman, I've had the opportunity to see the type of 
poverty that frequently is a death sentence. I've spent a 
significant amount of time delivering medical care in Central 
America.
    There, you can find the kind of poverty that, for millions 
of people, means living in a cardboard house on the side of an 
unstable, steep ravine with no water, other than local polluted 
streams, no electricity, no sanitation, where meals are cooked 
over an open, unvented fire, and where lighting an open cup of 
gasoline is the only means to have light at night, where 
children run around, barely clad and unwashed, where clothes 
can only be washed in nearby streams, which are usually sewage-
contaminated.
    I have seen adults and children living in multiacre, deep 
ravines full of trash, picking through the trash to recycle 
things for a pittance and picking out things to eat. The 
children run among the feral horses, pigs, dogs, cats, of 
course, rats, and a few feral human beings. They're exposed to 
drug addicts and the occasional human body part.
    They are surrounded by all manner of infectious diseases 
and with access only to clinics where there are no medications, 
supplies, or vaccines. There are incidences of significant 
infectious diseases among this population, including malaria, 
typhoid, Dengue fever, and fatal diarrheal diseases.
    The incidence of congenital defects is about tenfold what 
it is in the United States, defects of all categories. And of 
course, my experience has been mostly with cleft, lip, and 
palate, and burn scars. This is because of the local 
environment, lack of prenatal care, poor maternal nutrition, as 
well as a factor of genetics.
    Infant mortality rate there is 28 to 38, depending on the 
source, whether you trust the UN or the CIA more. And this is 
four to six times what it is in the United States.
    Added to this is the position these poor people now stand 
in, between armies, and police, and the drug cartels, and there 
is also a significant poverty of justice, in that 96 percent of 
crimes in that area go unpunished.
    This is certainly the kind of poverty that can be a death 
sentence. In the United States of America, if people living in 
poverty cannot avoid health problems by adopting a healthy 
lifestyle, they can choose, actively, to seek care through the 
myriad resources I have mentioned, and certainly, some that I 
have forgotten to mention.
    That care is best delivered locally by private individuals 
and practitioners who can act as the patient's advocate without 
extraneous pressures. In other words, there is little reason, 
other than failure to seek care, that poverty should be a death 
sentence in this country. Thank you, Mr. Chairman.
    [The prepared statement of Dr. Hulsey follows:]
                 Prepared Statement of Tim Hulsey, M.D.
    My name is Tim Hulsey. I opened my practice in Plastic Surgery in 
Bowling Green, KY, in 1982, after 12 years of post-graduate training at 
Vanderbilt University. Bowling Green has a population of about 50,000, 
with about 300 physicians. The Commonwealth of Kentucky has about 2.2 
physicians per 1,000 people, slightly less than the national average of 
2.6.
    I have been operating on patients for 37 years and have been in 
solo practice for almost 30 years, treating some cosmetic surgery 
patients, but more patients with cancer, burns, trauma, and patients in 
need of reconstructive surgery--both adults and children. My policy has 
been to see Medicaid and Medicare patients, because many of them need 
specialized care that would otherwise only be available hundreds of 
miles away or across State lines. I also see patients who are uninsured 
and without resources. These patients are referred by other physicians, 
the free clinic, by a friend or family member, or a charitable 
organization.
    Since 1984, an othodontist, an oral surgeon, a pediatrician, and I 
have run a Cleft Lip and Palate/Plastic Surgery Clinic through the 
Kentucky Commission for Children with Special Health Care Needs in 
Bowling Green. This clinic has been available to anyone regardless of 
their ability to pay for the services. Such services are available in 
other States, as well. There is no excuse for a child in the 
Commonwealth of Kentucky, or any other State where these clinics exist, 
to go without care because of lack of monetary resources.
    I made a choice to use part of my time and expertise to do things 
for those with no means to bear the expense for it, and I am one of 
over 900,000 doctors in this country.
    Since 1995, Commonwealth Health Corporation, which runs one of our 
local hospitals, opened the Commonwealth Health Free Clinic to provide 
Medical and Dental care to the working uninsured. There are about 1,200 
free clinics throughout this country. These supplement the community 
health departments available across all 50 States.
    My friend, Dr. Andy Moore, a plastic surgeon in Lexington, KY, runs 
a program called ``Surgery on Sundays'' that provides surgical services 
to those without health insurance coverage. This is only one of 
thousands of individual efforts by physicians across the country to 
make sure that medical services are available for those who cannot pay.
    There are about 100,000 churches in this country. Most religions 
mandate a service to those in need, including those in need of medical 
care. You have no difficulty seeing this in action around our Nation 
daily.
    One source sites civic organizations in the United States as ``too 
many to list.'' These entities have mandates to provide service to the 
people in their communities, many related specifically to medical care. 
Shriner's Hospitals, numbering about 20 in the United States alone, are 
well-known for providing some of the most expert treatment in the world 
at no charge. The Lions Club commitment to eye problems is another 
well-known example. These organizations actively and aggressively seek 
out patients for their programs.
    Hospitals such as St. Jude Children's Research Hospital provide 
expert cancer treatment to any child regardless of ability to pay for 
it.
    As I said, I am only one physician. Let's be extremely 
conservative, as I want to be, and say that only half of U.S. 
physicians are inclined to practice as I do, volunteering services for 
those unable to cover the cost. That amounts to 450,000 doctors 
providing non-remunerated care. If you add in all the other entities 
that I mentioned above, plus others that I have certainly left out, 
that amounts to a vast resource for anyone in need of medical care in 
this country, regardless of their financial situation.
    Mr. Chairman, I have had an opportunity to see the type of poverty 
that is frequently a death sentence. I have spent a significant amount 
of time delivering medical care in Central America. There you can find 
the kind of poverty that means living in a cardboard house on the side 
of an unstable ravine, with no electricity, running water, or 
sanitation where meals are cooked over an open fire, and where lighting 
an open cup of gasoline is your only means of producing light at night; 
where the children run around barely clad and frequently unwashed. I 
have seen children and adults living in multi-acre trash dumps, making 
a pittance for digging out trash to recycle, living amongst feral 
horses, pigs, dogs, cats, and, of course, rats; exposed to glue 
sniffers and the occasional human body part; with access only to 
medical clinics where there are no medications or supplies. This, Mr. 
Chairman is the type of poverty that can be and frequently is a death 
sentence.
    In the USA, poor or not, if people cannot avoid medical problems by 
adopting a healthy lifestyle to prevent disease, they can choose to 
actively seek care and treatment when they have a health problem, and 
that medical care is best delivered at the local level, in an 
individualized format by private practitioners who can act as the 
patient's advocate without extraneous pressures. In other words, there 
is little reason, other than failure to seek out treatment, for poverty 
to be a death sentence in this country.

    Senator Sanders. Thank you very much, Dr. Hulsey. Our final 
witness on this panel--and we have another panel to follow--is 
the founder of and physician at the Beersheba Springs Medical 
Clinic, a comprehensive ambulatory clinic in Beersheba Springs, 
TN.
    Trained as a pediatrician, Dr. Adams retired from full-time 
faculty at the University of Louisville School of Medicine, 
where he was chief of pediatric infectious diseases and medical 
director of communicable diseases at the Louisville Metro 
Health Department in Louisville, KY.
    He currently serves as president of Physicians for National 
Health Program. Dr. Adams, thanks very much for being with us.

    STATEMENT OF GARRETT ADAMS, M.D., MPH, PRACTITIONER AND 
 FOUNDER, BEERSHEBA SPRINGS MEDICAL CENTER, BEERSHEBA SPRINGS, 
                               TN

    Dr. Adams. Thank you, Senator Sanders, Senator Paul, and 
members of the committee. Senator Sanders, thank you for 
understanding the great health threats that more and more 
Americans suffer because of poverty. You do a wonderful service 
by giving them a voice.
    I dedicate this testimony to those for whom poverty is, has 
been, or will be a death sentence, and also to those for whom 
illness is a poverty sentence.
    These are people I have known, all of whom failed or are 
failing to get life-saving healthcare because they can't afford 
it. Most are or were impoverished.
    Others were not, but they died waiting for approval by a 
health insurance company of a life-saving procedure that never 
came or came too late, such as David Velten, a 32-year-old 
school bus driver from Louisville, KY, married, two sons. He 
had liver failure. A transplant was denied by the insurance 
company, but due to public pressure, the company eventually 
relented, but it was too late. He died several months after the 
transplant.
    And Cheryl Brawner, 50, a legal secretary from Louisville 
with acute leukemia--she achieved remission and was awaiting 
approval from the insurance company for a bone marrow 
transplant when her leukemia relapsed and she died.
    Clay Morgan, an automobile mechanic in Henry County, KY, 
owned his own business. He got malignant melanoma, was treated, 
improved, and thought to be cured, but now was bankrupted. 
Cancer returned. Depressed and unwilling to bring more medical 
debt on his family, Clay went into the backyard and took his 
own life.
    Velinda Anderson, whom you see in this photograph, I met on 
Oak Street in Louisville in March. She had surgery to remove 
blockage in her leg arteries. She was employed, but couldn't 
afford Plavix, an expensive medicine to keep arteries open. 
Here, she begs for help for medicine.
    Grundy County in Tennessee is the poorest county and ranks 
the lowest in overall health. Median household income is 
$25,000. Two-thirds of schoolchildren qualify for free lunch. 
Nineteen percent of the population is illiterate. The ratio of 
population to primary care provider is 7,000 to 1, 11 times the 
national ratio.
    On the Cumberland Plateau in Grundy County of Appalachia is 
the community of Beersheba Springs. My family has vacationed 
there for six generations. Confronted with seeing my mountain 
friends suffer without medical care and being forced to pay 
unfair bills to profiteering hospitals, I established a medical 
clinic, a free medical clinic.
    The following patients are from Grundy County. Charlotte 
Dykes had an obstruction to the main intestinal artery with 
stent placement in Chattanooga. We diagnosed a severe blockage 
of the main artery in her right arm and a 70 percent carotid 
artery blockage.
    The surgeon will not operate unless she pays up front 
because she still has not paid her bill from the previous 
surgery. A walking time bomb, she'll be 65 in December when 
she'll be eligible for Medicare, if she lives that long. In 
giving permission to tell her story, Charlotte said to me, you 
speak out for me.
    Charlene, 54, hasn't seen a doctor in over 20 years. We 
diagnosed an acute heart attack in May. She was airlifted to 
Nashville, treated, and discharged, but didn't fill her 
discharge prescriptions, including Plavix, and didn't go to 
cardiac rehab because she couldn't afford either. She's doing 
poorly now and has a recent dementia, due to small strokes.
    Doris, 58, and her husband operated a small local 
restaurant before her illness forced them to close the 
restaurant. Estimated annual income, $13,000, no insurance, no 
medical care. She heard we offered free mammograms. We 
diagnosed breast cancer.
    Paula, 32, cervical cancer surgery 2 years ago, but no 
follow-up because of no insurance and no money.
    Billy Campbell, a 54-year-old tree farmer and carpenter, 
makes $12,000, has stage-three colon cancer, no health 
insurance. He needs a PET scan, but the hospital won't do it 
because he can't pay the $1,500 fee, disability denied three 
times. This past Friday night, there was a barbecue benefit on 
the mountain to raise money for Billy's PET scan.
    Bob has double hernias. A surgeon agreed to fix them for 
$500, but Bob can't afford the hospital cost of $8,000. His 
hernias will not be fixed.
    I saw a 64-year-old woman with a crooked arm and a limp. 
She fell in March, suffering a serious arm and leg fracture. A 
surgeon agreed to repair her arm in spite of no insurance, but 
the hospital would not allow use of the operating room because 
she couldn't pay. Her arm will not be fixed.
    And finally, a woman with blood sugar greater than 500 
milligrams percent, life-threatening hyperglycemia, five times 
normal. She knew she had diabetes and she owned a glucometer, 
but she could not afford the strips to test her blood sugar.
    Thank you for this opportunity to speak for those without a 
voice, who have died or will die as a result of our country's 
unwillingness to acknowledge that healthcare is a human right 
and to provide affordable high quality healthcare to every 
resident.
    And this is just a microcosm, a drop in the ocean, of all 
the people, and much worse in minorities. We need social 
justice in America, not charity. Thank you.
    [The prepared statement of Dr. Adams follows:]
             Prepared Statement of Garrett Adams, M.D., MPH
    Senator Sanders, Senator Paul, members of the committee, I am very 
grateful to Senator Sanders for his sensitivity to the grave health 
threats that a large portion of the American population currently 
suffers because of poverty. He does a wonderful service to these people 
by giving them a voice to our leaders, so that you can better 
understand the perilous health care situation so many Americans find 
themselves in because of their poverty. I dedicate this testimony to 
all those Americans for whom poverty is, has been, or will be a death 
sentence. And also to those Americans for whom illness is a poverty 
sentence.
    According to the Institute of Medicine, 45,000 Americans die every 
year because of lack of health insurance, a stark figure. Surgeon 
General Julius Richmond, however, reminds us that, ``Statistics are 
people with the tears wiped dry.'' Today I will tell you about some of 
those people whom I know or have known, all of whom failed or are 
failing to get necessary life-saving health care because of financial 
constraints--most impoverished; others not yet impoverished, but who 
died waiting for approval by a health insurance company of an expensive 
life-saving procedure that never came or came too late. The first cases 
I describe are Kentuckians.
                                kentucky
    David Velten--Louisville. 32 years old. School bus driver. Wife, 
two young sons. Chronic liver failure. I met David in June 2006. He was 
initially denied a liver transplant by his insurance company, but due 
to public pressure, the company relented and allowed it. But it was too 
late. He died in 2007 several months after the transplant.
    Cheryl Brawner--Louisville. 50 years old, Legal secretary, avid 
bicyclist, friend. Acute leukemia. Advised at Fred Hutchinson Hospital 
in Seattle to have a bone marrow transplant. Was in remission awaiting 
approval from the insurance company for the transplant. She waited and 
waited and waited. Cheryl relapsed and died of her leukemia, while 
waiting for approval.
    Clay Morgan--Henry County. Automobile mechanic, owned his own 
business. Malignant melanoma. Received treatment, improved, thought to 
be cured, but now was bankrupted. His cancer returned. Depressed and 
unwilling to bring more medical debt on his family, Clay went into the 
back yard and took his own life.
    Velinda Anderson, ``Help Needed for Medicine'' (see attached 
picture) Oak Street, Louisville, March 2011. She was employed. Velinda 
had had endarterectomy (removal of artery blockage) in her legs, but 
could not afford the expensive medicine, Plavix, prescribed to keep her 
arteries open. She had left her usual neighborhood to beg, so that she 
would not be seen begging by friends. She had not told her daughter 
that she was doing it.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                           grundy county, tn
    Grundy County is the poorest county in Tennessee, 95th out of 95. 
The median household income is $25,619. Sixty-six per cent of school 
children qualify for free lunch. Nineteen per cent of the population is 
illiterate. Correspondingly, it has the lowest county rank in overall 
health. The ratio of population to primary care provider is 7,122 to 1, 
compared to the national ratio of 631 to 1.
    Beersheba Springs is on the Cumberland Plateau in Grundy County--
Appalachia. We have a vacation home there. In the early winter of 2008, 
Josephine, an 87-year-old friend, stopped by. She was holding her red, 
swollen face and was bent over in pain. She had an acute sinusitis that 
required quick, aggressive treatment. I urged her to get to a doctor 
immediately. She bounced around several places, but eventually got 
treated. However, her bill was over $2,000, money she didn't have, and 
she did not have Medicare. I decided to establish a free medical clinic 
for my mountain friends in Beersheba Springs. The Beersheba Springs 
Medical Clinic, an all-volunteer, not-for-profit clinic opened in 
November 2010 (www.beershebaclinic.org).
    Charlotte Dykes--64 years old. Works odd jobs when able; husband is 
a carpenter. Peripheral vascular disease. Past history of obstructed 
mesenteric artery (main artery to intestines) with stent placement in 
Chattanooga. This spring we diagnosed severe blockage of her right 
subclavian artery and a 70 percent carotid artery blockage. Surgeon 
refuses to operate unless she pays up front, because she still has not 
paid her bill from her previous surgery. Charlotte is a walking time 
bomb. She will be 65 in December, when she will be eligible for 
Medicare, if she lives that long. In giving permission for me to tell 
her story, Charlotte said to me, ``You speak out for me.''
    Charlene--54 years old. We saw her in May. She had not seen a 
doctor in over 20 years. We diagnosed an acute myocardial infarction 
(heart attack). She was air-lifted to Nashville, treated and 
discharged, but did not fill her discharge prescriptions (including 
Plavix--see Velinda Anderson) and did not go to cardiac rehab as 
directed, because she could not afford either. She is doing very poorly 
and has a recent dementia, probably due to small strokes.
    Doris--58 years old. She and her husband operated a small local 
restaurant before her illness forced them to close the restaurant. 
Estimated annual income: $12,948. Came to our clinic because of a lump 
in her breast. She had heard we offered mammograms. We diagnosed breast 
cancer. Because she had breast cancer, she was able to get TennCare to 
pay for her mastectomy and treatment, but the coverage is only for the 
cancer treatment.
    Billy Campbell--54 years old. Work: Tree farming and carpentry. 
Estimated income in 2009: $12,000; 2010: $17,000. No health insurance. 
Colon cancer, Stage 3. Oncologist recommends PET scan. Hospital refuses 
to allow it because he cannot pay the $1,500 fee. TennCare denied. 
Disability denied three times. Barbecue benefit to raise money for 
Billy's PET scan was last Friday night, Sept. 10, 2011.
    Paula--32 years old. Cervical cancer surgery 2 years ago. No 
followup, because of no insurance and no money. We arranged for 
specialist care at no charge.
    Bob--Double hernias. Surgeon agreed to fix for $500, but hospital 
charge will be $8,000. He can't afford it. His hernias will not be 
fixed.
    Woman with broken arm--64 years old. No insurance. I saw this woman 
about 3 weeks ago. She had a crooked left forearm and limped. She had 
fallen in March, breaking her left arm and her left leg. She went to a 
hospital emergency room where she was seen by an orthopedic surgeon, 
who recommended surgery to properly fix her arm. The surgeon agreed to 
do it in spite of the lack of insurance, but the hospital refused to 
allow use of the operating room since she couldn't pay.
     Woman with blood sugar > 500 mg percent. The normal value is 
around 100 mg percent. Her's was a life-threatening level of 
hyperglycemia. We sent her to a hospital emergency room. She knew she 
had diabetes. She owned a glucometer, but could not afford the strips 
to test her blood sugar!
     Thank you for this opportunity to speak for those without a voice, 
who have died or will die as a result of our country's unwillingness to 
acknowledge that health care is a human right and to provide 
affordable, high quality health care to every resident.

    Confidentiality Note. All patients with first and last names have 
given me permission to tell their story. Charlene, Doris, Paula, and 
Bob are fictitious names. All Grundy County patients, except for Billy 
Campbell, were seen in the Beersheba Springs Medical Clinic.

    Senator Sanders. Thank you very much. Thank you very much, 
Dr. Adams. Senator Sheldon Whitehouse of Rhode Island has 
joined us. Senator, would you like to make a brief statement 
for the record?

                    Statement of Senator Whitehouse

    Senator Whitehouse. I'm fine. I'll hold until the questions 
and we can go on through the hearing, but I appreciate it. This 
is an important hearing, and I thank you and the Ranking Member 
for holding it. Thank you.
    Senator Sanders. OK. Let me begin by asking what I think is 
the $64 question, coming from the testimony of the panelists, 
and Senator Paul, and myself. We have heard that yes, longevity 
in America today is better than it was in the past. We have 
learned that, in the United States of America, healthcare is 
better than it is in some of the poorest, most desperate 
countries in the world.
    But frankly, I think that gives cold comfort to millions 
and millions of people. It almost speaks to the rather poor 
shape that we're in, when we're comparing ourselves to third-
world countries, who are much, much poorer than we are.
    We have heard from Senator Paul and Dr. Hulsey that, 
essentially, as I understand it, people can access healthcare 
if they want it. On the other hand, we have heard from Dr. 
Kemble and Dr. Adams that, that is not the case. I have quoted 
a report from Reuters, which discusses a Harvard University 
study that says 45,000 people in this country die each year 
because they lack health insurance and cannot get good care.
    So the question that we're asking now, is it, in fact, true 
that people can get all the medical care they need, the 
prescription drugs that they need, the hospitalization that 
they need, anytime they really want it? Or in fact, are we 
having a situation in this country, where millions and millions 
of people--and let's remember, we have 50 million people who 
are uninsured--are not able to get to the doctor, or the 
hospital, or afford it, and in fact, are dying or suffering 
unnecessarily?
    That seems to be the question and we have a strong 
difference of opinion about that, so let me throw it out to all 
three panelists. Dr. Kemble, what's your thought?
    Dr. Kemble. Sure. Well, I think that the nature of our 
system is that most physicians who have a heart do volunteer 
and do give some of their time in these voluntary efforts. I 
think all three of us here have done that. In my experience, 
actually, before we started the health center, there was a free 
clinic in our community. And I was a participating physician in 
that effort.
    I also was very curious about what were the real costs and 
benefits of that model. And I wrote a paper about that in 
Public Health Reports. It was published 10 years ago. And 
really, to cut to the bottom line, we did find that the actual 
cost--these free clinics are not free. Someone pays the 
administrative costs of running them, for sure, and it's not 
only that--it's not possible for good-hearted doctors to just 
show up and do their service without a lot of other organizing 
efforts taking place in the community.
    I was curious about what the actual cost of that was. In 
our community at that time, it was during the managed care era, 
so I was comparing the cost of caring for people in the free 
clinic to what we would normally expect to be paid on a per-
member, per-month basis from the managed care companies.
    And the cost of the free, so-called free, care actually 
exceeded routine care through an HMO.
    Senator Sanders. OK. Dr. Hulsey.
    Dr. Hulsey. Well, I'm honored to be on a panel with such 
distinguished folks here who have a big heart and give a lot to 
patients for no remuneration. I would be willing to bet you 
that the lady that was in this photograph over here with that 
sign would have no trouble getting people to stop right there 
on the street to offer her help for that problem, had she taken 
that sign to her local health department, had she taken that 
sign to her local civic organizations, to her local medical 
society.
    I have a feeling that she could also have gotten some 
response to that situation. There are multiple, generic, cheap 
drug programs available through many of our retailers. I do 
think that the resources are available out there.
    There is really no reason for a patient not to find a 
doctor who will take care of their problem with no 
remuneration, and I think that many of those doctors have the 
wherewithal to go to their hospitals and find that those 
entities will also give time for those patients.
    I have had that personal experience and, certainly, 
hospitals are worried about making a living, just like I am. 
But very frequently, I have gotten patients operated on at no 
cost to them by going to the hospitals and pleading the case 
for them.
    Now, I'm not saying it's fun to be poor in any country. But 
in the countries that I've been to outside of the United 
States, there certainly was no Xbox and the only game being 
played was, what am I going to have for dinner tonight?
    Senator Sanders. Thank you.
    Dr. Adams.
    Dr. Adams. Velinda Anderson, who is pictured there, Dr. 
Hulsey, had exhausted her avenues of regress. I did talk to her 
about that and she was a smart person. She was employed. She 
had done everything she could think of and had actually made 
these opportunities.
    Generally, it seems that physicians are more open to 
helping. Physicians are naturally sympathetic, but now, with 
the for-profit hospitals and with the closing of public 
hospitals, the hospitals in our area, that we can refer to, are 
part of chains, large, large, highly profitable chains that 
sell their stock on the New York Stock Exchange, and they're 
out for profit, and I haven't had success in twisting their 
arms to get them to do the surgeries to open their ORs or their 
PET scan units.
    Another point that Dr. Kemble made, I think, is a very 
important one. And that is dignity. And I have seen the 
patients in the emergency room and the Children's Hospital in 
Louisville. And they come in and the clerk says, ``have you got 
your card?''
    Have you got your card? It's a demeaning way to address a 
person. We need something that provides everyone equal dignity, 
an egalitarian system in this country, which provides equal 
healthcare for everyone, just as we see in other developed 
countries.
    I think we tend to want to compare ourselves to other 
developed countries. I think a comparison with--but in fact, in 
some respects, we have slipped down into the third-world area, 
in terms of infant mortality, immunizations, and life 
expectancy.
    Senator Sanders. OK. Thank you.
    Senator Paul.
    Senator Paul. In our town, we have two hospitals. We have a 
for-profit hospital, HCA, and before we throw all the for-
profit hospitals under the bus, HCA has actually been very good 
at allowing us to do free surgery. I've done free surgery there 
on children from Guatemala. So has Dr. Hulsey on numerous 
occasions, over many years.
    We have a doctor who lived in Guatemala, Dr. Schwank, who's 
a neurosurgeon, who's done many surgeries, also in the 
hospital. So I think, really, we can't make any blanket 
statement that for-profit hospitals are unwilling to help 
people.
    We also have a not-for-profit hospital in town that 
provides a free clinic, as well as free drugs. Actually, one of 
the main things that they do is, when people come in, they're 
able to help them with getting free drugs.
    Every drug company that I've ever dealt with has an 
indigent program. I have not come across one that didn't have a 
program, that you could fill out a card, and send in, and get 
assistance on your medications.
    Everybody over 65 already has assistance. We have Medicaid 
and has assistance also. When we talk about people--and a lot 
of the stories were very tragic that you presented--for every 
story that you presented, every physician in the country can 
present equally as many so that are real tragedies of people 
who all had insurance, and still died, and had horrible 
tragedies.
    We have a good friend, of Dr. Hulsey and I, who died from 
colon cancer. She was an OB-GYN and she had every resource. She 
had every resource possible, health insurance, physician, PET 
scans, everything.
    And she still died, and it's a horrible tragedy, but the 
tragedies are sometimes the disease and not necessarily the 
poverty. My question is for Dr. Hulsey when I ask it. Have you 
ever seen anybody, any patient, who died in Kentucky, in your 
30 years in practice, for lack of healthcare?
    Dr. Hulsey. No, sir. I have not.
    Senator Paul. One of the other follow-up questions would be 
that, when you see sort of patients who are not getting their 
Plavix and they say it's because of health cost, have you also 
seen that in patients who have government insurance, who have 
Medicaid, who then are noncompliant, even though it is paid 
for?
    Dr. Hulsey. Yes, sir. Compliance is a problem in all 
financial groups of patients.
    Senator Sanders. Thank you.
    Senator Whitehouse. Thank you, Chairman. I think, when 
we've heard the experiences of Dr. Kemble and Dr. Abrams, it 
may be true that charity helps some people without insurance 
and it may also be true that illness claims with insurance.
    But that doesn't take away from the fundamental problem, 
that a great number of people who don't have access to health 
insurance have health consequences in their lives from not 
having health insurance. In some cases, as Dr. Kemble and Dr. 
Adams have described, those consequences are fatal.
    What's tragic about this is that it's not for lack of 
funding into the healthcare system that this takes place. The 
healthcare system burns 18 percent of the gross domestic 
product of this country. The closest competitor that we have is 
around 12 percent, which means we're 50 percent more 
inefficient than the next-most inefficient industrialized 
Nation in the world at delivering healthcare.
    When we look at outcomes around our population, they're no 
better than some countries that we think of, really, as 
substantially less modern and industrialized than our own, 
virtually third-world countries.
    So we have this enormous expenditure and we have moderate, 
at best, results, and that plays out down where the rubber hits 
the road, where you all live, in the lives of the patients that 
you described, who simply don't survive an illness because they 
couldn't access the care.
    I hope that that's an issue that we can work on. There 
should be no Democratic or Republican value in a massively 
inefficient healthcare system.
    My guess is that about 10 cents of every insurance dollar 
gets spent on trying to deny and delay payment. You probably 
have seen that, Dr. Kemble, in your clinic. We have a Cranston 
community health center in Cranston, RI. And when I was last 
there, they said that half of their personnel were dedicated 
not to providing healthcare, but to trying to get paid for the 
healthcare that the other half of the staff provided. I see you 
nodding your head.
    They also have a $200,000-a-year contract to try to keep up 
with the tricks and traps that are used to delay and deny 
payment. Then, when they do that, the doctors have to hit back, 
as your community health center probably did, as the Cranston 
community health center did, as doctors across this country do, 
hire experts to do their billing, and to organize all of that.
    They can't be as efficient at fighting back at the 
insurance industry, as the insurance industry is denying and 
delaying payment. So it's got to be more than 10 cents worth, 
although I haven't seen good figures on their side.
    That would imply that 20 cents of every healthcare dollar 
is spent fighting over getting paid and not over actually 
providing healthcare.
    Then we have the quality issues of hospital-acquired 
infections, which cost billions of dollars and should be 
``never'' events, but they're not.
    There are just a lot of ways in which there's no value in 
that fight between insurers and providers. There's no 
healthcare value. There's no healthcare value in a hospital-
acquired infection that was avoidable. These are things where I 
think we ought to be able to work together and try to design a 
more efficient healthcare system so that the resources that 
we've already put into the system can get to the people who you 
see day to day.
    I just thank you for your courage and determination, 
whether through charity work, or through community health 
centers, or through your volunteer work in trying to reach out 
to those people who our healthcare system, for all its vast 
expense, overlooks and abandons. Thank you very much.
    Dr. Adams. Yes, may I comment on your remark, Senator 
Whitehouse, about the cost of billing? There's a recent article 
in Health Affairs to that effect, which compares the cost for 
physicians in Canada to bill compared to the United States.
    And it's four times in the United States, the cost for 
billing and amounts to some $80 billion. And 20 hours per 
patient, per week, the average American physician spends doing 
the billing.
    That 10 percent adds onto the 20 percent of the health 
insurance companies' overhead, so we're wasting 30 cents out of 
every dollar on the market-based system in this country.
    Senator Sanders. OK. Let me thank all of the panelists for 
excellent testimony. And now, we hear from the second panel. 
Thank you very much. I think we have three excellent panelists 
and I thank all of you for being with us.
    We're going to begin with Dr. Paula Braveman, a professor 
of family and community medicine at the University of 
California at San Francisco and director of the University 
Center on Social Disparities in Health.
    Dr. Braveman is a member of the Federal Institute of 
Medicine. She has studied socioeconomic, and racial, and ethnic 
disparities in maternal and infant health and healthcare for 
two decades.
    Dr. Braveman, a pediatrician and family specialist, has 
previously worked with the World Health Organization staff to 
develop and direct a WHO global initiative on equity in health 
and healthcare. Dr. Braveman, thanks for being with us.

STATEMENT OF PAULA BRAVEMAN, M.D., MPH, PROFESSOR OF FAMILY AND 
  COMMUNITY MEDICINE, UNIVERSITY OF CALIFORNIA SAN FRANCISCO, 
  DIRECTOR, UCSF CENTER ON SOCIAL DISPARITIES IN HEALTH, SAN 
                         FRANCISCO, CA

    Dr. Braveman. Thank you very much. Good morning. It's a 
pleasure to be here. I'm going to discuss the current State of 
the science that can shed light on the question, is poverty a 
death sentence.
    A link between poverty and health has been observed for 
centuries, but a body of knowledge has accumulated in the past 
15 to 20 years, that I believe makes it very different to 
consider this issue now than previously.
    First, the connection between poverty and lifespan, and 
between poverty and virtually every health indicator has been 
established repeatedly. For example, recent studies using 
national data from the CDC have shown that the poor can expect 
to live around 7 years less than people with incomes at least 
four times the poverty, who I will call higher income.
    Next slide, please. Poor children are seven times as likely 
to have ill health as children in higher income families. Poor 
adults--next slide, please. Poor adults are four times as 
likely to have ill health and the pattern holds for scores of 
indicators.
    Next slide, please. Because health data in the United 
States have typically been reported by race or ethnic group and 
not by income, some people assume that differences in health by 
income primarily reflect racial or ethnic differences.
    But income differences in health are at least as striking 
when we look separately within each racial or ethnic group. In 
other words, differences in health according to income are not 
due to racial or ethnic differences. Most racial or ethnic 
differences in health disappear or are greatly reduced after 
considering income.
    But is poverty actually the cause? Some economists have 
ascribed the poverty health link to loss of income due to 
sickness, and that happens, but by now, a large body of 
research shows that poverty, because of multiple disadvantages 
associated with it, indeed causes ill health and shortened 
life.
    Poverty makes people sick. It's true that sickness makes 
some people poor, but the main direction is from poverty to 
sickness.
    Next slide, please. So how does poverty make people sick? 
It's not just through medical care. Behaviors are involved, but 
it is definitely not just through behaviors. I want to give you 
a few examples.
    Your income affects the quality of the housing you can buy 
or rent, which affects whether your kids are exposed to 
crowding, lead, asbestos, dust, mites, or mold, all of which 
have harmful health effects.
    A healthy diet costs more. Regular exercise is easier if 
you can afford to belong to a gym or live where it's safe to 
exercise outdoors. Low income is stressful. The strain of 
trying to cope with daily challenges without adequate 
resources, and I'll return to the topic of stress in a moment.
    We have learned that the health damaging effects of poverty 
reach across generations. Parents' income can shape the next 
generation's income by determining who can afford to live in 
neighborhoods with good schools or pay for private schools.
    School quality affects children's ultimate educational 
attainment, which then determines the jobs they can get, which 
in turn, drives their income. Low income and education are 
linked in many ways that I haven't mentioned.
    Poverty in one generation leads to poverty and ill health 
in the next, and this is very well-documented. Next slide, 
please. Many poor neighborhoods lack stores selling healthy 
food. Children in poor neighborhoods are more likely to be 
exposed to unhealthy norms and role models for behaviors like 
smoking and drinking.
    Poor neighborhoods are more polluted, they're more violent, 
they're more stressful. Next slide, please. Recent advances in 
neuroscience show multiple ways in which chronic stress can 
affect health and they show that it plays a major role in 
chronic disease.
    For example, stress can cause one part of the brain to send 
a signal to another part of the brain, which then signals the 
adrenal glands to produce a hormone called cortisol. 
Chronically high cortisol levels can lead to inflammation, 
suppression of the immune system, and premature aging.
    Other systems and even chromosomes can be affected. Acute, 
time-limited stress is not necessarily harmful, but repeated, 
chronic stress can damage multiple bodily organs and systems, 
resulting in chronic disease, premature aging, and premature 
death.
    Next slide, please. So who has the most stress? Some stress 
is inescapable, regardless of income. But higher income means 
more resources to cope with challenges.
    For example, as income rises among pregnant women, the 
prevalence of major stressors such as divorce or separation, 
involuntarily job loss, domestic violence, and food insecurity 
goes down.
    One of the most important scientific discoveries recently 
is that chronic poverty in childhood appears to contribute 
toward heart disease and other chronic disease among adults, 
partly through stress.
    If we care about chronic disease and premature mortality 
among adults, we need to do something about chronic poverty in 
childhood. Finally, the last one, please.
    In summary, a critical mass of very compelling scientific 
evidence shows that poverty, particularly chronic poverty in 
childhood, is a major cause of disease and premature death 
overall in the United States and of racial disparities in 
health in the United States.
    Scientific advances help explain how that happens, how 
poverty damages health through, for example, exposure to 
unhealthy physical and social environments, denial of 
educational opportunities, chronic stress, and multiple 
obstacles to health.
    I'd like to close by acknowledging that much is still 
unknown, but we know enough now about what works to act, to act 
now. Lack of knowledge isn't the obstacle. The obstacle is 
political will. Thank you.
    [The prepared statement of Dr. Braveman follows:]
            Prepared Statement of Paula Braveman, M.D., MPH
    My testimony has two main components:

    I. The text (below) that accompanies the attached Powerpoint 
presentation; and
    II. Broadening the focus, a paper published in the American Journal 
of Preventive Medicine 2011.*

    * The Broadening the focus paper referred to may be found at http:/
/files.meetup.com/1697878/To%20read%20Braveman%20-
%20broadening%20focus%20-%20soc%20determ%20-%20
AJM.pdf.

    Is poverty a death sentence? What does science tell us? (numbers 
---------------------------------------------------------------------------
below refer to the slides in the accompanying Powerpoint file).

    1. I'm going to discuss what current scientific knowledge tells us 
about poverty & health. A large body of knowledge has accumulated in 
the past 15 to 20 years that makes it very different to consider this 
issue today than previously.
    2. I'm going to show you a series of slides using national data 
illustrating how poverty and health are related. In each slide, as you 
look from left to right, income increases. On the far left are the 
poor--those under the Federal Poverty Line (FPL). On the far right are 
those with incomes at least 4 times the FPL, who make up around 40 
percent of the U.S. population. This slide shows how the number of 
additional years of life one can expect to live at age 25 increases as 
income increases. The poor live around 7 years less than the group with 
incomes at least 4 times the FPL.


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    3. This slide shows how ill health among children varies by income. 
Ill health among children goes down stepwise as income increases. We 
looked at scores of indicators and all age groups and found this 
pattern with most health conditions among whites and blacks. In 
biological science, this pattern--suggesting a ``dose-response'' 
relationship--adds to a wealth of other evidence indicating that 
income--or factors tightly associated with it--actually causes the ill 
health and shortened life.


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    4. Poor adults are more than 4 times as likely to have ill health 
as affluent adults.


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    5. Here is the same health measure, but looking separately at 
different racial/ethnic groups. The stepwise pattern, with dramatically 
worse health among the poor, is at least as striking WITHIN each 
racial/ethnic group as when you look overall. This illustrates that the 
differences in health by income cannot be explained by race or ethnic 
group. At a given income level, the racial/ethnic differences are 
modest. And other research has shown that most racial/ethnic 
differences in health disappear or are greatly reduced after 
considering income.


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    6. What could explain these patterns? Here are some examples of how 
poverty affects health, for which there is plentiful evidence. Income 
can influence who gets timely medical care, but that is probably not 
the largest piece of the puzzle. Your income determines the kind of 
housing you can buy or rent, which can determine whether your kids are 
exposed to lead, asbestos, dust, mites and mold, all of which have 
serious harmful health effects. A healthy diet costs more than an 
unhealthy diet. Regular physical activity is a lot easier if you can 
afford to belong to a gym or live in a neighborhood where it's safe to 
exercise. Many poor neighborhoods are food deserts, without any stores 
selling fresh, healthy food. And low income is stressful--the challenge 
of trying to cope with daily challenges without adequate resources. 
[I'll return to this point.]


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    Parents' income can shape the next generation's education & income, 
by determining who can afford to buy or rent in neighborhoods with good 
schools, or pay for private schools. School quality affects children's 
ultimate educational attainment. And education determines the kind of 
job people can get, which in turn drives income. [And you see the 
vicious cycle.]


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    7. I mentioned that our income shapes our options for where to 
live. Studies show how neighborhood conditions can shape health--this 
slide lists some of those ways, including stress.
    8. I've mentioned stress. How does stress get into our bodies? 
Recent advances in science show multiple ways in which chronic stress 
can affect health. This illustrates just one--by causing one part of 
the brain to send a signal to another part of the brain which then 
signals our adrenal glands to pump out a hormone called cortisol. Acute 
stress is not necessarily harmful. But chronic stress is linked with 
damage to multiple organs and systems in the body, resulting in chronic 
disease, premature aging, and premature death. Chronic stress in 
childhood appears to be an important factor in who develops heart 
disease & other chronic disease in adulthood.


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    9. Who has the most stress? Some stress is inescapable regardless 
of income. But higher income means more resources to cope with 
challenges. This slide shows you what percent of pregnant women in 
California experienced divorce or separation, according to income. We 
found a similar pattern looking at 10 other major stressors. Other 
studies have found the same patterns.


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    10. In summary:

    a. Compelling scientific evidence shows that poverty--particularly 
chronic poverty in childhood--is a major cause of disease and premature 
death, and of racial disparities in health.
    b. Recent advances in science help explain how poverty damages 
health, through, e.g.:

    i. Exposure to hazardous environments;
    ii. Parent's income limiting their children's educational 
attainment which then limits the latter's job options and hence income 
in adulthood; and
    iii. Chronic stress.

    And finally, I would like to add, that although there is much we 
still do not know, we know enough about what works to act now. All we 
need is the political will. I'm hoping you will create that.

    Senator Sanders. Thank you very much, Dr. Braveman.
    Our second witness is Michael Cannon. He is the director of 
health policy studies at the Cato Institute in Washington, DC. 
Previously, he served as a domestic policy analyst for the U.S. 
Senate Republican Policy Committee under Chairman Larry Craig, 
where he advised the Senate leadership on health education, 
labor, welfare, and the 2d Amendment. Mr. Cannon, thanks very 
much for being with us.

   STATEMENT OF MICHAEL F. CANNON, DIRECTOR OF HEALTH POLICY 
          STUDIES, THE CATO INSTITUTE, WASHINGTON, DC

    Mr. Cannon. Thank you for having me, Mr. Chairman, and 
Senator Paul. This is an incredibly important issue and I share 
the Chairman's commitment to reducing poverty in the United 
States and around the world, in large part, because of the link 
between poverty and health.
    But to identify the problem is not to solve it and there 
are serious disagreements about how to combat poverty. So I'd 
like to begin with a little perspective, which is that poverty 
is actually the natural human condition. It has been the 
dominant human condition throughout most of human history.
    So really, the question for us is not what causes poverty, 
but what causes prosperity? And on that question, the jury is 
in, a market economy with the greatest anti-poverty program 
ever designed, or maybe I should say discovered by humans.
    The market economy continuously makes goods and services 
that the wealthiest individuals could not afford 10, 50, or 
even 20 years ago, including life-saving goods and services, 
available to people who, previously, could not afford them, 
including the poor.
    In my written testimony, I show how markets have done so 
with items like refrigerators, air conditioning, mobile phones, 
and other goods. The same is also true of education and other 
crucial services.
    The benefits of the market process can be seen in U.S. 
health statistics. Figure two in my written testimony shows the 
actual and projected survival rates of men after age 60 from 
the top and bottom halves of the earnings distributions from 
two birth cohorts.
    Those are men born in 1912 and then born in 1941. One 
interesting feature of these data is that the gap in survival 
rates between the top and bottom halves of the earnings 
distributions is larger for men born in 1941 than for men born 
in 1912.
    But differently, the gap in survival rates between higher 
and lower income males is growing, but that's not even the most 
interesting characteristic of these data. Much more interesting 
is that men born in 1941, who are in the lower half of the 
earnings distribution, are projected to live longer than men in 
the top half of the earnings distribution, for men--among those 
born in 1912.
    In other words, the lower income males born in 1941 are 
living longer than the higher income males born 29 years 
earlier, and we should all be able to celebrate this progress. 
Higher income workers are living longer. Lower income workers 
are living longer. And today's lower income workers are living 
longer than yesterday's upper income workers.
    As a threshold matter, then, governments should not pursue 
policies and should eliminate existing policies that inhibit 
economic exchange and wealth creation. Unfortunately, 
governments the world over adopt policies that reduce economic 
activity, and thereby perpetuate poverty, often for the benefit 
of a privileged few.
    These such policies include government-imposed barriers to 
trade, which leave all nations poorer, and trap particularly 
third-world residents in lives of privation far worse than that 
known to the U.S. poor.
    These policies also include high marginal tax rates. In the 
United States, excessive marginal tax rates destroy anywhere 
from 25 cents to $1.65 of economic activity for every dollar of 
tax revenue the Federal Government collects. Excessive tax 
rates mean fewer jobs, less opportunity, and fewer goods and 
services for Americans to consume.
    Our first task, then, and our first duty to the poor is not 
to do anything to interrupt the market process that has pulled 
billions of people out of poverty and continues to do so every 
day--to pull people out of poverty every day.
    Put differently, our first duty to the poor is not to add 
to their numbers. Yes, poverty is a death sentence, but only in 
the sense that life itself is a death sentence. To abuse the 
metaphor further, if what you want is a stay of execution so 
that more people can enjoy a long and healthy life, your most 
effective tool is a free-
market economy.
    Your task, as stewards of the public fiscal, is not to 
create a new government anti-poverty program for every 
perceived need, but to ascertain whether existing programs are 
wise investments of taxpayer dollars at all.
    Now, ideally, that research would capture all of these 
programs' costs, which go far beyond outlays and include the 
economic activity destroyed by the taxes that finance them and 
economic activity destroyed by the incentive such programs 
create not to climb the economic ladder.
    I talk a little bit more about these effects in my written 
testimony, but a good place to start this process would be to 
build upon the Oregon Health Insurance Experiment by allowing 
other States to conduct similar experiments.
    This is the first scientifically rigorous study ever 
conducted of the effects of the Medicaid program, and health 
insurance broadly, on such outcomes as health and financial 
security.
    I submit that rather than expanding Medicaid eligibility to 
all Americans under 138 percent of the Federal poverty level, 
as the recently enacted Patient Protection and Affordable Care 
Act requires, States could use a lottery to extend Medicaid 
coverage to a pre-determined number of residents with incomes 
below that threshold, and then measure the results.
    Armed with that information, policymakers could determine 
whether they would save more lives by expanding Medicare, 
Medicaid, or by funding smaller programs targeted at vulnerable 
populations with highly effective treatments, for example, 
programs offering hypertension screening and treatment to low-
income adults.
    Such experiments would cost the Treasury far less than the 
Medicaid expansion mandated by the new healthcare law and could 
yield further savings while helping to save lives.
    I thank you very much for the opportunity to share my 
thoughts and I look forward to your questions.
    [The prepared statement of Mr. Cannon follows:]
              Prepared Statement of Michael F. Cannon \1\
    Thank you, Chairman Sanders and Ranking Member Paul for the 
opportunity to speak with you today about the relationship between 
poverty and health, and how government should address these goals.
    Any sincere effort to grapple with the problems of poverty must 
begin with the understanding that poverty has been the natural state of 
affairs throughout human history. Only in the past few hundred years 
have humans struck upon the antidote to poverty. Rather than begin our 
inquiry with the question, ``What are the causes of poverty and how can 
we eradicate them? '', we must instead begin by asking, ``What are the 
causes of prosperity and how may we promote them? ''
    This was the very aim of Adam Smith's volume An Inquiry into the 
Nature and Causes of the Wealth of Nations--known to most as The Wealth 
of Nations--published in 1776. Smith demonstrated that trading with 
others leads to enormous gains in innovation and productivity, and 
thereby greater wealth. Figure 1 illustrates how rapidly the United 
States' market economy has made new and often life-saving products 
available to people who previously could not afford them.
    U.S. households officially classified as ``poor'' today have access 
to amenities that not even the wealthiest people in the world could 
access just 100, 50, or even 20 years ago. Nearly all of the U.S. poor 
(99.6 percent) have refrigerators, 78 percent have air conditioning, 65 
percent have one or more DVD players, 62 percent have clothes washers, 
55 percent have cellular phones, 53 percent have clothes dryers, and 
17.9 percent have big-screen televisions.\2\ To highlight these numbers 
is not to deny that poverty is a problem. It is to highlight that a 
market economy is the remedy.


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    The benefits of this market process can be seen in U.S. health 
statistics. Figure 2 shows the actual and projected survival rates of 
men after age 60 in both the top and bottom halves of the earnings 
distribution from two birth cohorts: men born in 1912 and men born in 
1941.\3\ One interesting feature of Figure 2 is that the ``gap'' in 
survival rates between the top and bottom halves of the earnings 
distribution is larger for men born in 1941 than for men born in 1912. 
Put differently, the gap in survival rates between higher- and lower-
income males is growing. But that is not even the most interesting 
aspect of Figure 2.
    Much more interesting is that men born in 1941 who were in the 
lower half of the earnings distribution (the dashed line) are living 
longer than did men in the top half of the earnings distribution among 
those born in 1912 (the solid line). In other words, the lower-income 
males born in 1941 are living longer than the higher-income males born 
29 years earlier. We should all be able to celebrate this progress: 
both upper- and lower-income workers are living longer; and today's 
lower-income workers are living longer than yesterday's upper-income 
workers.
    As a threshold matter, then, governments should not pursue policies 
(and should eliminate existing policies) that inhibit economic exchange 
and wealth creation.\4\ Unfortunately, governments the world over 
maintain policies that reduce economic activity and thereby perpetuate 
poverty, often for the benefit of a privileged few. Such policies 
include government-imposed barriers to trade, which leave all nations 
poorer and trap Third World residents in lives of privation far worse 
than that known to the U.S. poor. These policies also include high 
marginal tax rates. In the United States, excessive marginal tax rates 
destroy anywhere from 25 cents to $1.65 of economic activity for every 
dollar of tax revenue the U.S. government collects.\5\ Excessive tax 
rates mean fewer jobs, less opportunity, and fewer goods and services 
for Americans to consume.


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                           poverty and health
    If we seek to improve lives by improving population health, it is 
not sufficient to identify a social factor that is associated with 
health outcomes and throw taxpayer dollars at it. We must first 
identify the causal relationships between various factors and health 
outcomes. Second, we must identify policies that yield improvements in 
those factors and whose benefits exceed the costs.
    Figure 3, created by economist David Meltzer, demonstrates the 
difficulties inherent in the first task. The economic literature shows 
a correlation between poverty and health, but this relationship is 
complex. The existence of a correlation between A and B does not tell 
us whether A causes B, whether B causes A, or whether some third factor 
causes both. Poverty may cause some people to suffer poor health, while 
poor health may drive some people into poverty. And indeed many other 
factors are also correlated with health, including education, social 
status, health behaviors (e.g., smoking, exercise), genetics, access to 
medical care, and more. The arrows in Figure 3 show the causal 
connections between the many factors associated with health. Factors 
such as income, insurance status, education, and health behaviors not 
only influence health status but are influenced by health status. These 
factors may also exert an influence on each other.


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    With so many complex interactions between the factors associated 
with health, establishing the relative influence of any one factor 
requires controlling for all the others. In complex phenomena like 
human health, that means conducting a randomized trial. Such trials are 
expensive and often impractical. Yet without them, policymakers who 
attempt to maximize health by focusing on factors with which it is most 
correlated may neglect other factors that have a greater causal 
influence on health.
    Even if policymakers can overcome this hurdle, it is not sufficient 
to create new government programs that would deliver improvements in a 
known determinant of health. Policymakers must also ensure that the 
benefits of such programs exceed their costs, and that they deliver the 
greatest improvement in health per dollar spent. Most important, in 
judging the efficacy of anti-poverty programs, policymakers must look 
at all of the program's effects, both seen and unseen.\6\ 
Unfortunately, such accounting is usually lacking.
    On the benefits side, this means not looking solely at the 
consumption that the program enabled. We must also subtract the private 
charity and self-help for which the program substituted. Crowd-out is a 
persistent phenomenon with government anti-poverty programs. Economist 
Jonathan Gruber has estimated that, in effect, 6 out of every 10 new 
enrollees in Medicaid and the State Children's Health Insurance Program 
would have had health coverage anyway.\7\ If the aim of these programs 
is to expand health insurance coverage, only 4 of those 10 new 
enrollees count toward that goal. Elsewhere, Gruber has estimated that 
``church spending fell by 30 percent in response to the New Deal, and 
that government relief spending can explain virtually all of the 
decline in charitable church activity observed between 1933 and 1939.'' 
\8\
    Likewise, the costs of government programs go far beyond the tax 
dollars required to fund them. The costs also include the economic 
activity destroyed by those taxes, other behavioral changes the 
programs produce, and any additional economic distortions.
    Programs that offer subsidies to those with low incomes or assets 
also withhold those subsidies when incomes or assets exceed certain 
thresholds, for example. The potential loss of subsidies can discourage 
individuals from climbing the economic ladder. Gruber has estimated 
that the Medicaid program encourages low-income households to reduce 
their asset holdings by $1,600 to become eligible for the program.\9\ 
The ``Patient Protection and Affordable Care Act'' of 2010 (PPACA) 
offers large subsidies to help low-income households purchase health 
insurance. But because those subsidies shrink or disappear when 
household income exceeds certain thresholds, the law creates effective 
marginal tax rates in excess of 100 percent on low-income 
households.\10\ Those implicit marginal rates are far higher than the 
marginal tax rates faced by the wealthiest Americans.
    The behavioral changes that such programs encourage can have the 
perverse effect of expanding poverty if they induce Americans not to 
climb the economic ladder. The fact that the 1996 welfare reforms led 
to a vast reduction in the number of Americans receiving cash 
assistance yet was not accompanied by an increase in poverty (which 
actually fell) suggests that government anti-poverty programs can have 
very high off-budget costs.
    Unfortunately, the political system as an institution does not take 
the care to identify which social factors promote health, much less 
target those factors for improvement in a cost-effective way.
    The highest-profile example of this is PPACA. President Obama 
claimed this law will ``save lives.'' Yet the most reliable research to 
date suggests that the Federal Government's last great expansion of 
health insurance coverage--Medicare--did not save a single life in at 
least its first 10 years of operation.\11\ Congress rushed PPACA into 
law without bothering to wait for the results of the one study--the 
randomized, controlled Oregon Health Insurance Experiment \12\--that 
might inform policymakers about PPACA's benefits and enable them to 
ascertain whether they could deliver even greater gains in health and 
financial security for the same or less money.
                               conclusion
    As stewards of the public fisc, your first task is not to create or 
expand government anti-poverty programs in response to every perceived 
need, but to ascertain whether existing programs are wise investments 
of taxpayer dollars at all. Ideally, that research would capture all of 
these programs' costs, which go far beyond outlays to include the 
economic activity destroyed by the taxes that finance them and by the 
incentives such programs create not to climb the economic ladder.
    A good place to start would be to build upon the Oregon Health 
Insurance Experiment by allowing other States to conduct similar 
experiments. Rather than expand Medicaid eligibility to all Americans 
under 138 percent of the Federal poverty level as PPACA requires, 
States could use a lottery to extend Medicaid coverage to a 
predetermined number of residents with incomes below that threshold, 
and measure the results.
    Armed with those results, policymakers could determine whether they 
would save more lives by expanding Medicaid or by funding smaller 
programs targeting vulnerable populations with highly effective 
treatments (e.g., programs offering hypertension screening and 
treatment for low-income adults). Such experiments would cost the 
Federal treasury less than the Medicaid expansion mandated by PPACA, 
would reduce future deficits, and could yield further savings while 
helping to save lives.
                               References
    1. The Cato Institute is a nonpartisan, nonprofit, tax-exempt 
educational foundation organized under Section 501(c) 3 of the Internal 
Revenue Code. The mission of the Cato Institute is to increase the 
understanding of public policies based on the principles of individual 
liberty, limited government, free markets, and peace. In order to 
maintain its independence, the Cato Institute accepts no government 
funding. Cato receives approximately 82 percent of its funding from 
individuals, 10 percent from foundations, 1 percent from corporations, 
and the remainder the sale of publications. Cato's fiscal-year 2009 
revenues were over $20 million. Cato has approximately 105 full-time 
employees, 75 adjunct scholars, and 23 fellows, plus interns.
    2. Robert Rector and Rachel Sheffield, ``Air Conditioning, Cable 
TV, and an Xbox: What is Poverty in the United States Today? '' 
Heritage Foundation Backgrounder no. 2575, July 19, 2011, http://
www.heritage.org/Research/Reports/2011/07/What-is-Poverty.
    3. Hilary Waldron, ``Trends in Mortality Differentials and Life 
Expectancy for Male Social Security-Covered Workers, by Socioeconomic 
Status,'' Social Security Bulletin, Vol. 67, No. 3, 2007, http://
www.ssa.gov/policy/docs/ssb/v67n3/v67n3
p1.html.
    4. See generally, Johan Norberg, In Defense of Global Capitalism 
(Washington: Cato Institute, 2003), http://africanliberty.org/pdf/
GLOBAL%20CAPITALISM.pdf.
    5. Christopher J. Conover, ``Congress Should Account for the Excess 
Burden of Taxation,'' Cato Institute Policy Analysis no. 669, October 
13, 2010, http://www.cato.org/pubs/pas/PA669.pdf.
    6. ``There is only one difference between a bad economist and a 
good one: the bad economist confines himself to the visible effect; the 
good economist takes into account both the effect that can be seen and 
those effects that must be foreseen.'' Frederic Bastiat, That Which Is 
Seen, and That Which Is Not Seen, 1850.
    7. Jonathan Gruber and Kosali Simon, ``Crowd-out 10 years later: 
Have recent public insurance expansions crowded out private health 
insurance?'' Journal of Health Economics 27 ( 2008): 201-17; http://
econ-www.mit.edu/files/6422.
    8. Jonathan Gruber and Daniel M. Hungerman, ``Faith-Based Charity 
and Crowd-Out During the Great Depression,'' Journal of Public 
Economics 91(2007): 1043-69; http://www.religionomics.com/old/erel/S5-
ASREC/REC05/Gruber%20-%20Hun
german%20-%20Faith-based%20Charity.pdf.
    9. Jonathan Gruber and Aaron Yelowitz, ``Public Health Insurance 
and Private Savings,'' Journal of Political Economy 107, no. 6, part 1 
(December 1999): 1259.
    10. Michael F. Cannon, ``Obama's Prescription for Low-Wage Workers: 
High Implicit Taxes, Higher Premiums,'' Cato Institute Policy Analysis 
no. 656, January 13, 2010, http://www.cato.org/pubs/pas/pa656.pdf.
    11. David Jackson, ``Obama: `On the precipice' of health care 
change, though `differences' remain,'' USA TODAY, Dec. 15, 2009, http:/
/content.usatoday.com/communities/theoval/post/2009/12/obama-on-the-
precipice-of-health-care-reform-though-differences-remain/1. Amy 
Finkelstein and Robin McKnight, ``What Did Medicare Do? The Initial 
Impact of Medicare on Mortality and Out of Pocket Medical Spending,'' 
Journal of Public Economics 92, July 2008, 1644-68.
    12. Michael F. Cannon, ``Oregon's Verdict on Medicaid,'' National 
Review (Online), July 7, 2011, http://www.nationalreview.com/articles/
271252/oregon-s-verdict-medicaid-michael-f-cannon.

    Senator Sanders. Thank you. Thank you very much, Mr. 
Cannon. Our final witness is Phyllis Zolotorow, a Maryland 
resident and certified medical coding specialist, who has spent 
the last 26 years caring for her son, whose complex medical 
conditions have necessitated many surgeries and specialized 
treatments.
    Her husband suffered a serious heart attack 6 years ago and 
Phyllis herself has chronic health conditions. She will share 
with us today a glimpse into her life, navigating her medical 
bills while caring for her disabled husband and son, as she 
struggles to keep her family financially afloat.
    Ms. Zolotorow, thank you very much for being with us.

       STATEMENT OF PHYLLIS ZOLOTOROW, ELLICOTT CITY, MD

    Ms. Zolotorow. Thank you for inviting me here today. My 
experience with our healthcare system is as a mother of a 26-
year-old son whose serious chronic illnesses started at age 2, 
my husband's cardiac disability of 6 years, and my own chronic 
diagnoses.
    My husband, Mike, had a serious injury at work, requiring 
two surgeries and 2 years of physical therapy, paid by workers' 
comp. After the first year, Mike's employer canceled his health 
insurance and workers' comp paid for treatment of his injury 
only.
    Mike felt sick in September 2005, but refused to go to the 
emergency room due to the cost, since he was no longer insured.
    Ten days later, he had a massive, near-fatal heart attack 
with permanent, severe damage to his heart, requiring three 
surgeries, and is permanently disabled. If a national health 
insurance plan had been available, Mike would have been 
diagnosed at the first sign of illness, had a cheaper surgery, 
and treatment for milder heart disease, and like most heart 
patients, would have been working several months later, adding 
to the tax base.
    The hospital applied for Medicaid and SSDI for Mike, and 
Medicaid covered his expenses associated with catastrophic 
illness and insured his eligibility for placement on the heart 
transplant list, a life-saving privilege denied any person 
without health insurance in the United States.
    To be eligible for full Medicaid coverage without a spend-
down deductible in the State of Maryland, the net income 
standard for a family of two adults with no dependent children 
is $392 a month. Mike had to accrue a deductible of $3,500 
every 6 months before Medicaid started paying his medical bills 
for that time period.
    Five months after his heart attack, Mike received 
confirmation of eligibility for SSDI. But as per Federal 
regulations, there is a 24-month wait for eligibility for 
Medicare. My spousal eligibility for Medicaid ended when Mike's 
Medicare coverage began in 2008.
    During the 2-year wait for Mike's Medicare approval, I had 
been forced to choose between applying for jobs without health 
insurance benefits and losing financial eligibility for 
Medicaid if hired, most likely resulting in Mike's death or not 
working and being forced into an unwanted life below the 
poverty level, thus qualifying him for partial Medicaid 
benefits and transplant eligibility.
    I chose my husband's life over earned income. I have 
Crohn's disease and diabetes. I was overcome with exhaustion in 
2008, unable to get out of bed without feeling faint many days 
of the week. With the constant stress of being the caretaker 
for my family and financial worries, I thought I was suffering 
from depression.
    Without health insurance or a job, I felt I could not 
afford an office visit and assumed I could just think my way 
out of depression. After a year of suffering, I finally went to 
the doctor. Being a type II, noninsulin-dependent diabetic, she 
took a finger-stick glucose level. My supposed depression was 
actually a glucose level of 500.
    I was now a type II, insulin-dependent diabetic and working 
my way up to a diabetic coma. Contrary to popular belief, most 
uninsured people don't go to the emergency room for minor 
illness. Who wants to spend 4 to 8 hours sitting in an 
emergency room?
    We go when we are sick enough to be frightened for our 
lives. And for those people who think the uninsured are well 
cared for in any emergency room for any illness, the emergency 
room will diagnose and stabilize you, but they do not treat 
chronic illness.
    Between Mike's old medical bills and my recent bills, all 
totaling over $26,000, we get calls from medical collection 
agencies starting at 8:30 a.m. to 8:30 p.m. 7 days a week.
    Since access to healthcare in the United States is 
dependent upon employment status, I am still uninsured. In 
2009, I went back to school. I passed a 6-hour national medical 
coding certification exam and I still can't get a job. I'm not 
lazy. I spend hours each day in front of the computer, filling 
out applications and sending resumes the 21st century way to 
search for jobs.
    Healthcare and employment are so tightly intertwined, they 
cannot be separated. Getting people employed, and consequently 
healthy, is what your constituents want from you now. We also 
want you to defend and protect the new health law that will 
soon loosen the ties that bind healthcare coverage to 
employment status. Thank you.
    [The prepared statement of Ms. Zolotorow follows:]
                Prepared Statement of Phyllis Zolotorow
                      is poverty a death sentence?
    I would like to thank Chairman Bernard Sanders, Ranking Member Dr. 
Rand Paul, and the members of the subcommittee for holding this hearing 
today.
    My husband Mike and I are the parents of a 26-year-old son whose 
numerous chronic life threatening illnesses started in 1987, at age 2 
when he was diagnosed with Common Variable Immunodeficiency, a mild 
form of the ``Boy in the Bubble Syndrome'' requiring expensive monthly 
intravenous infusions for his lifetime. When he was 3 my husband's 
employer-based health insurance company, changed the physician's 
diagnosis from Common Variable Immunodeficiency to AIDS, for the sole 
purpose of rationing Craig's health care by denying future claims. The 
Maryland State Commissioner of Insurance convinced them to change the 
diagnosis back to CVID by threatening their ability to do business in 
the State of Maryland.
    Craig had 7 surgeries in 3 years, Nephrogenic Diabetes Insipidus, 
Anemia, atypical Anorexia, fevers up to 105 degrees 5-15 times a month 
for years, acute kidney failure four times, Meningitis and many more 
diagnoses. During his childhood, he was followed by 12 specialists at 
The Johns Hopkins Children's Center. At age 10, Craig was diagnosed 
with Hodgkins Lymphoma. He was treated for cancer with my UFCW union 
health insurance coverage. While getting chemotherapy, it was 
discovered, during a crisis, that he had an Adrenocorticotrophic (ACTH) 
Deficiency. During treatment for a serious reaction to his previous 
round of chemotherapy, an insurance company clerk told Craig's Johns 
Hopkins Pediatric Oncologist to discharge him from the hospital because 
the ``for-profit" health insurance company did not pay for pediatric 
oncology inpatient stays without active chemotherapy infusions. We took 
Craig home but 3 hours later he was readmitted through the emergency 
room with a fever of 104 and complications that could have killed him. 
Because of his diagnoses and our 20 percent co-pay of a $250k medical 
bill in 1995, Craig became eligible for SSI with Medicaid co-
eligibility, as his secondary insurer. Two years later, at age 12, 
Craig reached his lifetime maximum on my health insurance, so Medicaid 
became his primary and only insurer. By 1999, I had to leave my job to 
take care of Craig and his ever-increasing diagnoses.
    My husband, Mike, was seriously injured at work in December 2003, 
requiring 2 surgeries and 2 years of rehabilitation therapy. A year to 
the day after his injury, Mike's employer cancelled his health 
insurance and Worker's Comp Insurance paid for medical treatment of his 
injury only. In September 2005, Mike felt very sick while taking a 
walk. I wanted to take him right to the Emergency Room, but because he 
no longer had health insurance he refused to go due to the cost. Ten 
days later he had a massive, near fatal heart attack with severe damage 
to his heart and had a Defibrillator surgically implanted. Six months 
later when his condition worsened he had emergency quintuple bypass 
surgery. If a Medicare-like insurance plan had been available, (health 
insurance not dependent on employment status), Mike would have been 
diagnosed at the first sign of illness, had a much cheaper surgery and 
treatment for milder heart disease and would most likely have been 
working several months later adding to the tax base, instead of being 
permanently disabled.
    The hospital applied for Medicaid and SSDI (Social Security 
Disability Income) for Mike and Medicaid covered his medical expenses 
associated with catastrophic illness. As soon as he received Medicaid 
approval Mike was eligible to be placed on the Heart Transplant list 
(without any insurance, public or private, a human being in the United 
States is denied the ``privilege'' of a life saving transplant.) To be 
eligible for FULL Medicaid coverage without a spend-down (deductible) 
in the State of Maryland, the net income standard for a family of 2 
adults (with no dependent children) is $392.00/mo. Mike's monthly SSDI, 
our only income, was too high to qualify for full Medicaid without a 
spend-down. He had to accrue a deductible of paid or unpaid medical 
expenses of $3,500.00 every 6 months after which Medicaid picked up 
medical bills for the rest of that 6-month period. By the time that 
deductible was met, he ended up with coverage only every other 3 months 
or so, with uncovered expenses we may never be able to pay off.
    Five months after his heart attack, Mike received confirmation of 
eligibility for SSDI. But unlike Craig's SSI with co-eligibility for 
Medicaid, with SSDI, as per Federal regulations, there is a 24-month 
wait for eligibility for Medicare. Why? Only the most seriously ill are 
considered for SSDI. We have no choice but to believe that the Federal 
Government wanted Mike to die so Medicare didn't have to pay his 
medical expenses. Mike survived and is now submitting bills to 
Medicare. My spousal eligibility for Medicaid ended when Mike's 
Medicare coverage began in February, 2008, so I became and continue to 
be uninsured. From the time of Mike's heart attack, I knew I would be 
the permanent head of household. I immediately started looking for 
employment. I checked the biggest online employment Web sites on the 
Internet including that of Maryland's largest employer, THE STATE OF 
MARYLAND, but all the jobs I qualified for were contractual, no 
benefits. I had been forced to choose between applying for jobs I was 
qualified for, without health insurance benefits, thereby losing 
financial eligibility for Mike's Medicaid if hired, most likely 
resulting in his death, or not working and being forced into an 
unwanted life below the poverty level, thus qualifying him for partial 
Medicaid benefits and eligibility for a place on the transplant list. I 
chose my husband's life over earned income.
    I have had Crohn's Disease for most of my life and I was diagnosed 
with Type II non-insulin dependent Diabetes in 2001. I was overcome 
with exhaustion in 2008, unable to get out of bed without feeling faint 
many days of the week. With the constant stress of being the caretaker 
for my very ill family and financial worries, I thought I was suffering 
from severe depression. Without health insurance or a job, I felt I 
could not afford an office visit and assumed I could just think my way 
out of my depression. After a year of suffering, I finally gave in and 
went to my doctor. Being diabetic, she took a finger stick Glucose 
level. My supposed depression was actually a Glucose level of 500. I 
was working my way up to a diabetic coma. I am now a Type II Insulin 
Dependent Diabetic. During that office visit in 2009, I found out I was 
eligible for Maryland's PAC (Primary Adult Care) program. It allows me 
to see a family doctor only, and pays for my medications.
    Contrary to popular belief, most uninsured people don't go to the 
emergency room for minor illness. Who wants to spend 4-8 hours sitting 
in an emergency room? We go when we are so sick or in such pain we are 
frightened into believing that our lives are in jeopardy. And for those 
people who think the uninsured are well cared for in any emergency room 
for any illness, the emergency room will diagnose and stabilize you, 
but they do not treat chronic illness. I have had two hospitalizations 
in the last 2 years with bills totaling over $12,000. With no insurance 
and without the ability to pay out-of-pocket and with Mike's 2005-8 
deductibles of $15,000+, we get calls from medical collection agencies 
starting at 8:30 a.m. to 8:30 p.m., 7 days a week.
    With pre-existing illnesses, even with the Affordable Care Act's 
regulation of no pre-existing conditions clause forcing insurance 
companies not to refuse to insure us and out-of-pocket spending limits 
of $11,000 per year for a family, private coverage is still financially 
unaffordable for us. Even after passage of the ACA we find that care is 
still rationed by for-profit insurance companies that threaten our 
health. Two weeks ago my husband tried to refill his Lipitor, covered 
by the Medicare Part D insurer, Anthem--Wellpoint, that they have 
covered for the last 6 years. Lipitor limits Coronary Artery Disease, 
the main cause of my husband's heart attack and lessens the possibility 
of strokes. I called the insurer to find out why coverage was denied. I 
was told Lipitor was no longer part of their covered formulary and I 
needed to have the doctor fill out a Formulary Exemption form.
    The doctor's office called for, received the fax and filled out the 
formulary exception form, but there was no return fax number on that 
form. Mike was now 10 days without his medication. I called the insurer 
to ask what was going on and was told the doctor was faxed the wrong 
form. In anger, I told them if my husband had any medical issues due to 
their mistake, we would be filing a malpractice suit and I was 
contacting the Washington Post as soon as I hung up. I was then told 
the doctor could call in a pre-authorization (new information I was 
never told about with Mike's past medication formulary exemption 
changes) and they would approve his Lipitor within 72 hours. The 
pharmacy called later that day to let us know his prescription was 
ready for pick-up. Over the last 24 years I have become an expert at 
fighting for coverage and overturning insurance denials for my family.
    In 2009, I went back to school and in August, 2010, I passed a 6-
hour national medical coding certification exam. I was employed by an 
MRI facility from December 2010 through April 2011, but was laid off 
when my employer lessened their patient case load by dropping patients 
insured by one insurance company due to reduced insurance 
reimbursements for MRI's in this region. I have been searching for a 
job since April and I still can't find employment. I'm not lazy, I have 
been a full-time but unpaid, medical case manager for Craig for the 
last 24 years and now for Mike, too. I spend hours each day in front of 
the computer filling out applications and sending resumes, the 21st 
century way to search for jobs with very little success. I have heard 
there are at least 1,000 resumes for every job listed!
    We have not always been uninsured. In my lifetime, I have had just 
about every kind of health insurance available in the United States. As 
a young single woman, I had an affordable individual private insurance 
policy, then, my husband's employer-based family insurance, for 7 years 
during some of my son's worst illnesses (I was a rooming in parent 
while Craig was a cancer inpatient and worked part-time evenings) I was 
a UFCW union member so my family had insurance through my union, we've 
had Medicaid and my husband is now on Medicare/Medicaid. I can't tell 
you how frustrating access to care is without one single affordable 
national health insurance option. Our easiest and fullest access to 
health care has been with government-funded but privately administered 
(Medicare and Medicaid) healthcare coverage.
    We are not a rare occurrence in the United States. Our friends, 
formerly upper middle class, are small business owners. With the 
economy of the last several years, their business has fallen 
considerably. They were forced to drop their individual family coverage 
due to the cost of $26,000/yr in premiums with 50 percent-60 percent 
co-insurance, co-pay and deductible out-of-pocket expenses for medical 
care and are now uninsured. Another friend, a nurse, who had to stop 
working because of medical disabilities, had an individual single 
insurance plan and was paying $700/month for about 50 percent co-
insurance, co-pay and deductible out-of-pocket coverage. She was 
finally sick enough to qualify for SSDI and is now on Medicare. Even 
with an AARP Medicare Supplemental insurance plan, its a great 
financial relief for her.
    Although my son Craig has the intelligence and capacity to earn an 
unlimited income, unless he can find a permanent job with benefits, not 
a contractual job offering no health insurance benefits, he will be 
limited to a salary of less than $30,000/yr so as not to jeopardize his 
much-needed Medicaid coverage. He will never achieve the American Dream 
of home ownership but then, of course, he will never lose his home to 
medical bankruptcy, either. Why not let people earn as high a salary as 
their capabilities allow, paying into the tax base and pay a premium, 
based on their income, into the Medicaid program helping to keep it 
funded while keeping their lifesaving coverage?
    Under the status quo, since access to health care in the United 
States is dependent upon employment status, jobs and health are so 
tightly intertwined they cannot be separated. It's cheaper for the 
United States to make sure all of its citizens have access to 
affordable, quality health care. A citizen able to access care is 
healthier. Healthy people work and add to the tax base and seek less or 
no social service assistance from the State or Federal Governments. A 
healthy working citizen adds to the economic growth of the United 
States. 


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    Senator Sanders. Thank you very much, Ms. Zolotorow. Let me 
start off with a question for Dr. Braveman. And I hope Senator 
Paul will correct me if I'm misstating what I believe his 
position to be. But we have heard testimony today that, 
essentially, anybody in Kentucky, I gather, or maybe in 
America, can get access to a doctor, access to a hospital, 
access to prescription drugs when they need it, regardless of 
income. Is that your understanding of reality, Dr. Braveman?
    Dr. Braveman. There is a huge body of evidence that says 
that that's not true.
    Senator Sanders. Do you want to elaborate on that?
    Dr. Braveman. There, you can look at evidence that comes 
out of the National Center for Health Statistics, out of the 
Agency for Healthcare Research and Quality. I know there's the 
Federal agency's data that are examined on an annual basis. And 
there's evidence of lack of access to care among certain 
portions of the population.
    I do want to emphasize, though, just in case this point 
gets lost, that poverty is a death sentence, but it's not----
    Senator Sanders. Right.
    Dr. Braveman [continuing]. Just because of the lack of 
medical care.
    Senator Sanders. And you made that point extremely well.
    Let me ask Mr. Cannon and Ms. Zolotorow. Mr. Cannon, do you 
believe that it's true that anybody in America, regardless of 
income, can access doctors, hospitals, prescription drugs?
    Mr. Cannon. No. I'm sorry. Sorry, Mr. Chairman. No. I think 
that cost is a barrier to access to medical care for people who 
are uninsured. But I think the same thing is also true, or at 
least my answer is also no when it comes to people who are 
enrolled in government programs like Medicaid.
    There are people in the Medicaid program who cannot access 
a doctor. There have been deaths of people in the Medicaid 
program because they cannot access a doctor. I think it's 
crucial to recognize, when we're wrestling with these 
questions, that there is no such thing as perfection here. 
Perfection is not an option.
    A healthcare system is going to be maintained by humans, no 
matter how it's designed, and so we will always have--and 
former Senate majority leader Tom Daschle makes this point well 
in his book, Critical--we will always have people falling 
through the cracks, whether it's a completely free market 
system or whether it's a completely government-run system.
    I think what we have to focus on is, what system does the 
best job of preventing people from falling through the cracks, 
filling those cracks in so that we minimize the number of 
people who fall through the cracks.
    Senator Sanders. Ms. Zolotorow, based on your experience, 
do you think it's true that anybody in America can access a 
doctor, a hospital, or get the prescription drugs they need, 
regardless of income?
    Ms. Zolotorow. No. I can't see a specialist for my Crohn's 
disease. I can't see an endocrinologist. I am extremely lucky 
to live in the State of Maryland, because I am in the PAC 
program. It's a program----
    Senator Sanders. Please explain what the PAC program is. Is 
that a State of Maryland program?
    Ms. Zolotorow. Yes. It is.
    Senator Sanders. Yes.
    Ms. Zolotorow. If you cannot qualify for Medicaid, it is 
kind of a partial Medicaid. You can see your family doctor and 
you can have your prescriptions covered. But you cannot see a 
specialist to be treated for any other condition. Luckily, 
there is a free clinic at the Wilmer Eye clinic in Baltimore at 
Johns Hopkins.
    And I am tested once a year for a diabetic retinitis, which 
Dr. Paul must have expertise in. And without these programs, I 
would most likely be one of the 45,000 Americans who die each 
year. I wouldn't be here talking to you.
    Senator Sanders. Dr. Braveman, you make a very important 
point, and your point is not just that people are dying, or 
suffering, or losing limbs because they can't get to a doctor 
when they should. But you're talking about the whole life 
cycle, of what it means to be poor, the kinds of diet that one 
has, the kind of stress that one lives under, which contributes 
to illness.
    Can you just compare, for a moment--and I think that's an 
enormously important point that goes above and beyond access to 
medical care, which is also enormously important. Can you give 
us a snapshot? Somebody is upper middle class, earns a good 
income, has health insurance. Somebody is poor. And maybe 
especially the impact on the children--what happens? What does 
it mean that over 21 percent of our kids are living in poverty? 
What does that mean for the future?
    Dr. Braveman. Let me give you an illustration. So here's a 
person over here who earns a good living, have kids, kids in 
childcare. They work. And here's a person over here who also 
has kids, and works, and does not earn a good living, is poor, 
is really on the edge.
    And for both of them, something happens that makes their 
childcare arrangements fall through. The person over here has 
the resources to find an alternative. They keep their job. They 
are not experiencing the stress of wondering what's happening 
with their kids.
    The person over here is in a situation where there's 
tremendous stress involved in trying to figure out a way 
without the resources to come up with a suitable arrangement. 
They may take chances and leave their kids in situations that 
are not healthy, situations where the kids don't get the kind 
of nutrition, or stimulation, or even that aren't safe.
    But in addition, the person without the resources is much 
more likely to lose their job because of this problem with 
childcare. And situations like that, with a million variations 
play themselves out, literally, every day and account for a 
difference in the levels of stress. And as I had mentioned 
earlier, what we've learned about the way that the physiology 
of stress is how it gets under the skin.
    We know it's not just cortisol. There are cytokines 
involved. And we know something about telomere length. There's 
a lot that we don't know, but we now understand the physiology 
of stress and how it gets under the skin. So that's just one 
minor example.
    Senator Sanders. I've exceeded my time. I'm going to give 
Senator Paul an equal amount of time, but let me ask my last 
question. I began my discussion by pointing out that countries 
like Denmark, Finland, Norway, Iceland, Slovenia, and Sweden 
have substantially lower childhood poverty rates, substantially 
lower. And I might add that they have, also, refrigerators, and 
air conditioning. I was there. They even have electric lights, 
you know. They're able to do all those things.
    What does it mean for the future of the country--I'm going 
to let everybody take a shot at this--that 21 percent of our 
kids are living in poverty, that the number in the midst of 
this terrible recession might very well rise? What does it mean 
for the future of our country? Dr. Braveman, and then others, 
take a shot at that.
    Dr. Braveman. Now, I'll tell you, it's a time bomb. I mean, 
it's already true that in the United States, we rank at or near 
the bottom, consistently, year after year, and getting worse. 
Among industrialized countries, we rank at or near the bottom 
in life expectancy, as well as in infant mortality.
    I think the current science tells us that, most likely, to 
explain that lower ranking on life expectancy, we need to look 
at childhood poverty. The growing childhood poverty is going to 
translate into more and more chronic disease in adulthood and 
lives cut short.
    The business roundtable a few years ago took a very strong 
position, calling for the need for universal, government-
supported, high quality early childhood development programs, 
sort of high quality early Head Start-type programs, based on 
the implications for a productive workforce and future medical 
costs for employers.
    Senator Sanders. Good. Thank you very much.
    Mr. Cannon, you want to take a shot at that?
    Mr. Cannon. If I may back up to 1996, I think there's a 
lesson in that year for when we look at childhood poverty and 
poverty overall. In 1996, Congress eliminated the Federal 
Entitlement to Cash Assistance under the old AFDC program. They 
effectively removed lots of people from the cash assistance 
rolls.
    The predictions were, from critics, that this would lead to 
an increase in poverty, an increase in child poverty. People, a 
million children dying of starvation, I think, was one of the 
predictions.
    In fact, what happened was, poverty fell for every age and 
income group, and only this year has the overall poverty rate 
risen to the level it was back in 1996.
    Now, I don't mean to suggest that eliminating that 
entitlement and cutting back the Federal Government's--this 
anti-poverty program necessarily caused that reduction in 
poverty.
    But it was followed by a reduction in poverty. It did not 
cause the increase in poverty that some had predicted, and so I 
think the lesson from that is that sometimes, government 
efforts to combat poverty can actually induce people to become 
dependent on that assistance and can perpetuate poverty.
    And I fear, moving forward, now that the poverty rate has 
climbed in this recession back up to the levels--to pre-1996 
levels, I am concerned that, moving forward, and especially in 
2014, we are going to trap even more people in poverty and in 
low-wage jobs, because the recently enacted healthcare law does 
contain subsidies to help low-income individuals purchase the 
mandatory health insurance, that this law requires nearly every 
American to buy.
    But those subsidies disappear as income rises. In fact, it 
creates what economists call low-wage traps that will impose 
upon low-
income households effective marginal tax rates that exceed 100 
percent, far beyond the actual tax rates that even the 
wealthiest Americans pay.
    That can discourage low-income families from climbing the 
economic ladder, so I'm very concerned about the poverty rate 
in the future.
    Senator Sanders. OK. This is Ms. Zolotorow.
    Ms. Zolotorow. I feel that children who are sick, hungry--
they just cannot get educated as well as a child who is well-
fed and well, medically. And these children are someday going 
to be the adults that are going to take care of us when we are 
no longer able to take care of ourselves. And I sure would like 
to hope that they are all as well-educated, and healthy, and 
intelligent as they possibly can be.
    Senator Sanders. Thank you. I have exceeded my time. 
Senator Paul.
    Senator Paul. Yes. The disease of Kwashiorkor, or 
malnutrition, the swollen babies, the swollen bellies that we 
see in the third world, you don't see in the United States. You 
don't see famine in the United States.
    Life expectancy has doubled. Around 1900, people lived 
about 46 years. I remember, in medical school, them talking 
about menopause being a disease that was not evolved for--or a 
condition not evolved for because no one lived that long.
    It's a hundred years that we have nearly doubled our life 
expectancy. We should be proud, where we've come. Childhood 
mortality, infant mortality, infectious disease mortality have 
all been reduced 200-fold in our country.
    These are great successes of capitalism. We need to be 
proud of our economic system. We need to be proud of who we are 
as a country. The poor among us are infinitely better off than 
the middle class in most countries. The poor among us are able 
to get healthcare at a rate that greatly exceeds the vast 
majority of the world.
    We have had developed nations that have had malnutrition 
and famine. These developed nations were like the Soviet Union, 
that plummeted into the depths of famine and malnutrition 
because of their economic system, because of socialism. 
Socialism doesn't work.
    We have countries like Zimbabwe that have great natural 
resources and great wealth. And it is squandered because they 
don't have the rule of law. They don't have a constitution that 
protects private property. Their leaders run off with their 
money and the poor have nothing. They have no running water. 
They have extensive infectious disease, despite having wealth.
    So we need to be proud of many of the things we have in our 
country. And my question for Mr. Cannon is, I really enjoyed 
when you said, what are the causes of prosperity. It's more 
important than knowing anything else.
    The people on the lowest end of the life expectancy curve, 
one generation ago, now exceed the ones who are rich at that 
time. So in one generation, we've allowed the poorest among us 
to live longer than the rich did a previous generation. That's 
an amazing statistic and something we should be enormously 
proud of.
    My question for Mr. Cannon is, how important is it, the 
type of economic system you choose, as far as trying to 
alleviate poverty in this country?
    Mr. Cannon. Thank you, Senator. I think it's incredibly 
important. The examples you highlighted are on point. To the 
extent that economic activity in a nation is directed by 
political systems rather than by markets and market actors, 
there's a degree of irresponsibility because the political 
system, the actors in that system are not spending their own 
resources. They don't spend them as wisely.
    And they also are not able to capture all of the 
information that a market system can capture, through the price 
system and other mechanisms, to harness the new ideas that 
people bring to bear on this problem of, how do we make 
resources more abundant and bring them into the hands of people 
who cannot afford these resources right now.
    So I think that if economic history has taught us anything, 
it is that a market economy does a much better job of solving 
the problem of poverty than an economy driven by political 
systems.
    Senator Sanders. Senator Merkley--Senator Paul, are you 
finished with your questioning?
    Senator Paul. Yes, thank you.
    Senator Sanders. Senator Merkley has joined us and I would 
like to ask a few more questions, but Senator Merkley, please.

                      Statement of Senator Merkley

    Senator Merkley. Thank you very much, Mr. Chair, and thank 
you all for your testimony. Mr. Cannon, you note in your 
testimony that Congress rushed the Affordable Care Act into law 
without waiting for the results of one study, the randomized, 
controlled Oregon Health Insurance Experiment.
    That was a situation in which, essentially, there wasn't 
enough money to cover everyone who was eligible for Medicaid in 
Oregon, the Oregon Health Plan. And so a lottery was held, and 
therefore, gave us one of the first real comparable control--
groups type studies.
    I wanted to give you a chance to expand a little bit on 
your observations on that. My understanding is that we only 
have 1 year's results at this point, and that involves a study 
of the use of healthcare, the financial strain on the families, 
and overall health. All is self-reported. In the second year, 
there's going to be hard data regarding cholesterol, blood 
sugar, blood pressure, obesity, and so forth, that will be 
better scientific information.
    But what is your sense of the type of insights this might 
provide to us?
    Mr. Cannon. I'll try to keep my answer brief. There is a 
lot to be said about it. The first part of the answer is that 
it's very difficult to know the actual impact that extending 
Medicaid coverage to a population has on that population's 
health or financial security, because just extending coverage 
to these people in the control, and then looking at similar 
individuals, and trying to make comparisons that way may miss 
important characteristics that are different between those two 
groups, that might also be accounting for the differences that 
you're seeing.
    So it's important to----
    Senator Merkley. Such as? Just help us understand it.
    Mr. Cannon. If you look at people enrolled in Medicaid and 
people not enrolled in Medicaid, you might say, ``oh, well, the 
people enrolled in Medicaid are sicker.'' Therefore, Medicaid 
must make people sick, or give them worse health outcomes, when 
really, the reason they enrolled in Medicaid is because they're 
sick.
    You might have health behaviors that's a confounding 
variable. There are all sorts of confounding variables, so the 
challenge is to isolate the one variable you're trying to test, 
which is Medicaid coverage, from all the others, and the way 
you do that is with what Oregon did, somewhat inadvertently, 
which is randomization, randomly assigning some people to 
receive Medicaid.
    So you're correct. There's only been 1 year of results so 
far. It's only self-reported health. There are measures of 
self-reported health. There was a mortality measure which was 
not able to discern any difference between the Medicaid group 
and the nonMedicaid group. The authors of the studies believe 
it was statistically underpowered. You just didn't have a large 
enough group or enough years to detect mortality differences 
yet, but we'll have to see.
    There are also financial security measures. Now, I would 
say, there are improvements in financial security. There are 
improvements in self-reported health. And you know, people 
defer about whether those are larger or modest.
    I would say that one of the self-reported health measures 
is a little harder than the others, which is that people 
enrolled in the Medicaid arm had, I think, 10 restricted 
activity days per month, due to the mental or physical 
problems, which is a pretty--you can say that's a subjective 
health measure. It's a pretty important one and there was some 
improvement on that score, a half-day improvement.
    So the importance of this study is that it, really, for the 
first time, measures the effect of Medicaid in a scientifically 
rigorous way. And it's important. That's important to do, not 
just to establish that there are benefits to expanding Medicaid 
coverage to new populations, but also so that policymakers can 
compare the benefits of expanding Medicaid to other 
interventions that might improve health or financial security, 
and because I think the only responsible way to approach this 
is to say, ``OK, for a given amount of money, what is it that 
we're trying to maximize?''
    If it's health, then we should be putting that money into 
whatever gets us the most health per dollar spent. There are a 
lot of economists who believe that programs like the one I 
mentioned in my testimony--a discreet program to go into low-
income neighborhoods, and screen, and treat people for 
hypertension--would save a lot more lives for the money than 
would expanding Medicaid, say, up to all low-income 
individuals.
    My recommendation is that before Congress expand any 
programs, that Congress do more such testing so that they can 
really find out what works. Otherwise, we might be wasting an 
awful lot of money on ineffective strategies to promote what 
we're trying to promote.
    Senator Merkley. Thank you. I appreciate your point. I do 
share the perspective that anytime we can actually collect data 
on what works and what doesn't makes sense, that we can then 
utilize our resources in a far more effective manner.
    I do think I want to really draw attention to this study 
because I think, as additional results come out, if it's 
carefully followed up on, it will provide a lot of valuable 
insights. The self-reporting was striking. The reduction in 
financial strain was substantial, folks reported a 40 percent 
decrease in the probability of having unpaid medical bills, 
increased access to preventative care. They reported feeling 
healthier, and putting themselves in good and excellent health, 
an increase in 25 percent.
    It's just kind of a taste of the information that we'll get 
as we continue to study that process and understand how that 
applies to providing cost-effective healthcare in America.
    Mr. Cannon. If I may respond just briefly, unfortunately, 
we're only going to get one more year's worth of data out of 
that Oregon experiment, which is why I recommend doing the same 
in other States, especially large States.
    Senator Merkley. OK.
    Or continuing to study the Oregon experiment a few more 
years into the future.
    Mr. Cannon. Well, there will only be 2 years of data 
collection, because I believe Oregon expanded Medicaid to 
everyone who had previously been excluded.
    Senator Merkley. Correct. Thanks.
    Senator Sanders. All right. Let me just close. I am sorry 
that Senator Paul had to leave. But I just wanted to ask one 
more brief question, and Senator Merkley could participate as 
well, of course. Senator Paul made a statement--and I think 
I've got it right here. I always hesitate to quote somebody 
who's not here. But he said something like, the poor can get 
healthcare better in the United States than in any other 
country. Dr. Braveman, is that true?
    Dr. Braveman. That is not true and there's a tremendous 
amount of data to support that. And you know, what that brings 
up for me is, you know, we said we rank--I mean, we are No. 1 
in child poverty among the industrialized countries.
    There's another thing we're No. 1 on, which is spending on 
medical care. And yet, we consistently rank at or near the 
bottom on measures of health, like infant mortality and life 
expectancy. And many experts believe that it's because of child 
poverty. That's the biggest thing.
    It's not about the medical care. It also is a statement 
about the inefficiency of the medical care that probably can't 
be made up from within the medical care system, because the 
inefficiency is based on the poverty.
    Senator Sanders. All right. Let me ask you another 
question. Senator Paul also made the point, which is obviously 
correct, as longevity has improved, we live a lot longer than 
people did 50 years ago, 100 years ago, and so forth, and so 
on.
    But I think the real comparison--and I would say this to 
Mr. Cannon also--is not necessarily how we compare to people 
living a while back, with all of the growth, and medical 
technology, and medicine and so forth, but how we compare to 
other countries in the year 2011.
    Dr. Braveman, how are we comparing, in terms of life 
expectancy, to other countries around the world? Are we No. 1?
    Dr. Braveman. We have been consistently at or near the 
bottom among the industrialized countries.
    Senator Sanders. OK.
    Dr. Braveman. I mean, that's where the most valid 
comparison is. I would also like to comment that I think it's a 
moral issue, whether you say, I'm going to compare the health 
of the poor now to the health of the poor 25, 50 years ago, and 
say, you're doing great, they're doing better, or whether the 
moral obligation is not to say, I'm going to compare the health 
of the poor with the health that is possible----
    Senator Sanders. Right.
    Dr. Braveman [continuing]. The health potential that is 
there. And at a minimum level, that is indicated by the health 
of socially advantaged people within this country. Even if we 
say, ``OK, we're not going to compare to other countries,'' 
because that would be a relatively low standard--to the health 
of the affluent within our country, on many measures, is worse 
than the health of lower income people in some other countries.
    But certainly, I think one can say that the health of the 
affluent in this country represents a standard that should be 
possible for everyone. There is no medical reason why everyone 
shouldn't attain that and----
    Senator Sanders. OK. Let me ask Mr. Cannon. Mr. Cannon, 
I've enjoyed your testimony and I certainly agree with you, 
that when we spend public dollars, we want to make sure that, 
that money is used as cost effectively as possible. And we 
certainly don't always do this.
    But I don't want to be provocative and put words in your 
mouth. I wish Senator Paul was here. But I heard--I'm not 
really quite that familiar with the--all of what's going on in 
Zimbabwe. I know it's bad news, but I trust you do not believe 
that those countries that have substantially lower childhood 
levels of poverty, such as Denmark, Finland, Norway, Iceland, 
etc, are socialist tyrannies. I trust you don't believe that.
    Mr. Cannon. I don't----
    Senator Sanders. Or do you believe that?
    Mr. Cannon. I don't know that I would call them tyrannies. 
But I think socialist is probably a closer description. But 
let's keep in mind what socialism is, it is the government 
assuming control of more of the resources that are available in 
society, and to the extent the government asserts that control 
takes that control away from individuals.
    Senator Sanders. Correct. But the result is----
    Mr. Cannon. And the result is--which results in----
    Excuse me.
    Mr. Cannon [continuing]. Less freedom----
    Senator Sanders. I'm going to give you----
    Mr. Cannon [continuing]. For those individuals.
    Senator Sanders. Do you think it causes less freedom? So do 
you think, when children in Denmark have a 3.6 percent rate of 
poverty, compared to 21 percent plus in the United States, our 
poor kids are freer than those enslaved children in Denmark?
    Mr. Cannon. Well, then those enslaved children are--OK. So 
you mean under the socialist system. Freedom, as I use the 
term, when in discussions like these--let me back up. There are 
multiple definitions of freedom.
    If, by freedom, you mean the freedom to purchase whatever 
you want, the freedom to go where--to have the resources to do 
whatever you want, if that's what you mean by freedom, then 
actually, automatically, whoever has more resources is more 
free.
    Senator Sanders. No. But my question was----
    Mr. Cannon. When I----
    Senator Sanders. I'll give you a chance to respond. Please 
let me ask the question.
    Mr. Cannon. Well, I think I am answering the question.
    Senator Sanders. My question is, you're not suggesting that 
the people of Denmark, and Finland, and Sweden are not free, by 
the conventional definition of the word?
    Mr. Cannon. Economically, I believe they are less free. The 
conventional definition of the word is, do you have the freedom 
to do what you want with your life without being subject to 
physical restraint by others? And that could be the State. That 
could be other individuals, other than the State.
    Senator Sanders. And you think that is the condition in 
Scandinavia?
    Mr. Cannon. Well, let me ask you this. If you had to pay--
--
    Senator Sanders. I'm asking you the questions.
    Mr. Cannon. Well, but I'm a good Irishman, I'm going to 
answer a question with a question. If the government charged 
you a 100 percent tax rate, would you be free, if the 
government then provided you all of the material needs that an 
individual would want?
    Senator Sanders. I am not aware their governments or this 
government is charging people----
    Mr. Cannon. Well--but to answer your question----
    Senator Sanders. I'll--excuse me.
    Mr. Cannon [continuing]. I'm asking you----
    Senator Sanders. You can ask the questions when you get 
elected and I'll be over there, but at this moment, I'm asking 
the questions, OK? I think that's a hypothetical that is not 
terribly sensible.
    Mr. Cannon. Well, then let----
    Senator Sanders. This is----
    Mr. Cannon. Well, no.
    Senator Sanders  This is----
    Mr. Cannon. I think it is.
    Senator Sanders. OK, OK.
    Mr. Cannon. I think it illustrates----
    Senator Sanders. Mr. Cannon, excuse me, please. Ms. 
Zolotorow, would you like to answer the question?
    Mr. Cannon. I would appreciate the opportunity to answer 
your question.
    Senator Sanders. All right. You've had a considerable 
amount of time. I'll get back to you. But Ms. Zolotorow, would 
you like to answer the question?
    Ms. Zolotorow. Well, I think, if you're talking about 
freedom, when it comes to healthcare, if you are uninsured, you 
are not--you don't feel free to just get access to care. It is 
a job in itself. And you are penalized when you are sick and 
you are uninsured.
    When you go to the emergency room, if you are admitted into 
the hospital, if you are insured, the hospital receives no 
compensation for the time you spent there, the emergency room, 
because they're an outpatient facility and the coding guideline 
is, if you are admitted from an outpatient facility, they 
forfeit their payment and the hospital gets paid, because the 
care you got there is considered the first initial hospital 
day.
    But if you are uninsured, I get the bill for that. So I not 
only get the hospital bill from when I was admitted through the 
emergency room to the hospital. I got the bill for the 
emergency room, that an insured patient will not get. I get the 
hospital bill. I get all the doctors' bills. And I feel that 
that's a detriment to my freedom.
    Senator Sanders. OK. Thank you. Senator Merkley, you want 
to say something?
    Senator Merkley. Thank you, Mr. Chair, and I think this is 
an important conversation. It takes me to my town halls. I have 
36 town halls, one in each county each year, and I am one short 
of completing that for my third year.
    I can't tell you how many times people come up to me and 
say, here's where I'm at: I'm in my late 50s, early 60s. I'm 
just trying to figure out how to bridge the gap until I can be 
under Medicare because my health problems and my inability to 
pay for them--basically dominate my life.
    And we know, from many studies, that people delay, if you 
will, addressing their problems because they can't afford to. 
And then Medicare picks up the problems when they're more 
advanced and more troubling.
    If we think of this in terms of quality of life, there's an 
awful lot of folks out there who feel like they could pursue 
what they'd like to pursue in life better if they didn't have 
the millstone of the costs of an extraordinarily expensive 
healthcare system around their neck.
    And so I think there is kind of a double-edged sword here. 
We're arguing two sides of that issue. And I think it's a good 
discussion. I do want to end on the note, though, that the 
common ground that I feel is the point that Mr. Cannon made. We 
should be smart in studying what works. Oregon has been a 
leader in this. They've had some very controversial discussions 
about ranking, what procedures work the best, are most cost-
effective, so that at any given level, you can afford to invest 
in insurance. You get the maximum public health effect from 
that.
    That's a hard conversation for folks to have. People like 
to polarize the debate, but the fact is, every insurance policy 
has limits on what you cover and being smart about cost-
effectiveness is an area that merits a lot of exploration. And 
I thank you all for your testimony on what is really such an 
important conversation to the quality of life in America.
    Senator Sanders. OK. Let me thank the panelists. And Mr. 
Cannon, maybe we will continue our discussion on the nature of 
human freedom at some other point. But thank you all very much 
for coming. Thank you.
    [Whereupon, at 11:52 a.m., the hearing was adjourned.]