deduction premium or this individual premium that people are talking about setting up for people.

The Washington State experience has been that the most difficult problem to solve is to figure out an individual premium for 5.2 million people in the State of Washington, because they are all going to have a different one, depending on who they work for and what kind of company and how big it is and how much money they make. And these are the friends of this plan who are putting it together. There are five different committees operating, trying to get a handle on a system that you can efficiently, year by year, decide individual premiums on the basis of where you work and how much you work, and so forth, simply because they want to avoid using the income tax structure and a payroll deduction for accumulating the premium.

It is, in my opinion, an absolute Rube Goldberg nightmare. We are not going to be able to foist that on the American people because of the complications of setting premiums and deciding the way in which people are going to pay.

I think, Mr. Chairman, that is one of the most difficult problems we have to solve. How do you deal with the fact that people have different abilities to pay for their health insurance and how do you do it in a fair way in a democracy? I think that the individual premium issue is simply a nightmare that we are going to have to avoid as a Congress.

Mr. CARDIN [presiding]. This will not be the last word on this issue. Thank you for your testimony.

The next series of witnesses are in a panel. First, representing the Federation of State Medical Boards of the United States, Dr. James Winn, the executive vice president. We have Dr. Dennis O'Leary, president of the Joint Commission on Accreditation of Healthcare Organizations; Margaret O'Kane, National Committee for Quality Assurance, president; Dr. David Nash, member, board of directors, the American Medical Peer Review Association; and Dr. Paul Kerschner, chair of the Consumer Coalition.

Welcome. As I indicated at the beginning of the hearing, your entire statements will be made part of the committee record. You may proceed as you so desire, starting with Dr. Winn.

STATEMENT OF JAMES R. WINN, M.D., EXECUTIVE VICE PRESIDENT, FEDERATION OF STATE MEDICAL BOARDS OF THE UNITED STATES, INC.

Dr. WINN. Thank you and good morning. I am Dr. James Winn, the executive vice president for the Federation of State Medical Boards of the United States. The Federation is a national organization composed of State boards empowered to license and discipline physicians within the United States. The mission of the State medical boards is to protect the public from unqualified practitioners and the Federation assists their State boards with this mission by acting as a clearinghouse for the latest information on licensure and discipline and to assist the credentialing process in the maintenance of a comprehensive database on board actions involving physician disciplinary matters.

We are very concerned about the somewhat ambiguous confusing and cryptic references in the Health Security Act with regard to

State licensure. Particularly, we are concerned about section 1161, which reads that "No State may, through licensure or otherwise, restrict the practice of any class of health professionals beyond what is justified by the skills and training of such professionals." We are concerned that, if allowed to stay in the act, this section has the potential to create an upheaval of the health provider regulatory system. The section appears to imply that State laws unreasonably and improperly restrict the practice of certain classes of providers who are otherwise skilled in providing medical services to the public. It would also appear to override current laws that are in fact already assessing the skill and training of individuals who apply for licensure.

The true criteria for judging competency to perform a certain function in the delivery of health care should be qualifications and training. In fact the three elements-education, training and examination-form the basis for physician licensure in this country. If there is to be some other method for evaluating competency under this act, we would ask that it be brought to light at this time so it may be carefully examined.

Who would determine limitations of skill and training? I would submit that the objective measures already in place in the State licensure process are both adequate and appropriate.

We are also concerned that all although the act gives the States responsibility for establishing the regional health alliances, for certifying health plans and for processing consumer complaints about plans, it remains unclear what role the licensure and discipline practitioners will play in this new system. We believe that this is an important function and that it is properly placed at the State level with State regulatory boards.

With regard to quality assurance, the act would create a large and ambitious bureaucracy. However, there appear to be few, if any, direct references to the actual methods of monitoring and enforcing provider quality standards. State licensure with its attendant disciplinary authority continues to be the best tool to enforce such standards. The quality management program should build on existing structures at the State level rather than create new national and regional ones.

Time does not permit me this morning to review with you the many areas where State medical boards are already filling the quality assurance role with regard to physicians, but I submit to you that much has been done by boards in the realm of quality as

surance.

Medical boards are already experts in investigation and prosecution of consumer complaints about the quality of care delivered by a physician. Health care reform measures should instruct States to adequately fund medical board activities.

Health care reform should also mandate reporting of physician misconduct to State boards by peer review organizations, government agencies and any other entity involved in peer review. New instruments are constantly being developed for use by State boards to assess the competency of questionable and problem physicians. We would urge that the Congress encourage the development of such instruments, and we would also urge that the government encourage and support programs which remediate the incompetent

physician and again allow the contribution of his or her skills and training to the health care system.

I would ask you to consider the following:

Congress should recognize the important role of State medical boards as the proper agencies to license and discipline physicians and to assure the delivery of quality medical care.

Congress should take appropriate steps to assure that States adequately fund State medical boards so that they may carry out their role with increased effectiveness; and

Congress should maintain the role of the States in licensing health care professionals through the medical boards and not include any provisions in legislation to override States' licensure laws or to call into question their validity.

Mr. Chairman, thank you for the opportunity to appear before you today with these concerns. At the appropriate time, I would be happy to answer any questions that you may have.

Mr. CARDIN. Thank you.

[The prepared statement follows:]

STATEMENT OF THE

FEDERATION OF STATE MEDICAL BOARDS
OF THE UNITED STATES, INC.
TO THE

SUBCOMMITTEE ON HEALTH
COMMITTEE ON WAYS AND MEANS

UNITED STATES HOUSE OF REPRESENTATIVES

PRESENTED BY

JAMES R. WINN, M.D.
EXECUTIVE VICE PRESIDENT

FEBRUARY 1, 1994

Good morning, Mr. Chairman and Members of the Subcommittee. I am Dr. James R. Winn, Executive Vice President of the Federation of State Medical Boards. The Federation is a national organization, the members of which are the state medical broads empowered to license and discipline physicians in the United States. The mission of the state medical boards is to protect the public from unqualified practitioners of medical services, through enforcement of standards established by state laws. The Federation assists boards with this mission, acting as a clearinghouse for the latest information on licensure and discipline, and assists in the credentialling process through maintenance of a comprehensive database of board actions involving physician disciplinary matters, that is available for query by state boards and other credentialling agencies.

I appreciate this opportunity to address the implications of Section 1161 of the Health Security Act and the disruptive impact this simple statement could have on the existing system of professional regulation in this country. Section 1161 reads:

"Section 1161. Override of Restrictive State Practice Laws"

"No State may, through licensure or otherwise restrict the practice of any class of health professionals beyond what is justified by the skills and training of such professionals."

We oppose the inclusion of this language in the Health Security Act or any other health reform legislation considered by the Subcommittee. This statement, if allowed to stay in the Act, will likely cause a complete upheaval of the health provider regulatory scheme. The section's title implies that state laws unreasonably and improperly restrict the practice of classes of providers who are otherwise skilled in providing medical services to the public; it seeks to override current laws that in fact quite reasonably assess the skill and training of individuals who apply for a license to practice in that jurisdiction as a practitioner of any of the numerous health professions regulated in the system.

The true criteria for judging competence to perform a certain function in the delivery of health care should be "qualifications and training". An individual's qualifications to be licensed as a particular type of practitioner are based on education, examination and training. These are the three basic elements used by state medical boards to evaluate physicians for licensure.

It is unclear under Section 1161 if some other method for evaluating competence would be instituted. The Health Security Act does not actually describe any other process by which "skill" is to be assessed, nor does it describe what "training" is necessary to adequately assure the public is protected from providers who are unqualified to do what they claim they can do. If methods other then existing processes are to be instituted, they must be discussed and debated. These important decisions cannot be left to individuals or practitioner groups asserting adequate "skill and training", but must be made by properly constituted regulatory boards. I submit that the objective measures already in place in the state licensure process are appropriate and adequate.

The Federation is also very concerned with other sections of the Health Security Act which contain confusing and cryptic references to licensure and scope of practice laws. Section 1112, where "health professional services" are defined, appears to acknowledge the authority of states to establish criteria for the various types of practice, but cannot easily be reconciled with Section

1161. These two sections seem to say that states may make distinctions between groups, but cannot enforce the differences through licensure laws. Although the Act gives the states many responsibilities for establishing the regional health alliances, the certification of health plans, and for processing consumer complaints about plans, it is unclear what role the licensure and discipline of practitioners will play in the new system. This is a vital role and is properly placed at the state level, with state regulatory boards.

As currently drafted the Health Security Act's approach to licensing and scope of practice will surely lead to a variety of interpretations. The language in Section 1161 may encourage individuals to sue states and their licensing boards because it puts a cloud over the appropriateness of current state licensure laws. Therefore, the Federation asks this Subcommittee to not include Section 1161 or any similar provision in health care reform legislation.

With regard to quality assurance, the Health Security Act creates a very large and ambitious bureaucracy of interwoven Federal, state, and regional agencies to carry out this function. However, very few if any direct references to the actual methods of monitoring and enforcing provider quality standards are found in the bill. State licensure, with its attendant disciplinary authority, is the best tool to enforce quality standards. The Act's quality management program should build on the existing structure at the state level.

I'd like to take a few minutes to point out areas where state medical boards assume the quality assurance role with regard to physicians, a role that can be continued and enhanced under a new health care delivery system, but only if state licensure and disciplinary structures are maintained.

-State medical boards have established mechanisms to investigate, and prosecute consumer complaints about the quality of care delivered by a physician.

-State medical boards are using post licensure assessment tools to assess the competence of questionable and problem physicians. Boards are experts in determining whether a physician is in need of reeducation or retraining.

-State medical boards are involved with physician assistance programs, usually used in conjunction with disciplinary action, to change a physician's problem behavior so that he/she can again contribute to the health care system.

If states are to be left in charge of ensuring provider quality which the Federation believes it critical to health care reform, increasing investigatory and sanctioning authority for state medical boards would of course, only enhance these processes. Currently, state boards are funded through state processes; some boards are entitled to keep all fees generated by their licensure activities and have relatively independent control over these funds. Other boards must rely on the state appropriations process and are often hampered by the inability to use the very funds they generate because this money is rolled into the general budget of the state. State boards can do a better job in quality assurance if through Federal legislation states are instructed to adequately fund medical board activities. Increased funding will allow boards to devote time ad attention to these difficult quality cases.

In considering reforms to the U.S. health care delivery system the Federation of State Medical Boards urges the Congress to:

1.Maintain the role of the states in licensing health care professionals through the state medical boards and not include any provisions in legislation to override state licensure laws or to call into question their validity.

2.Recognize the role of state medical boards as the proper agencies to license and discipline physicians and to assure the delivery of quality medical care.