Congressional Testimony
Here's a look at documents involving congressional testimony and member statements
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Surgery Center of Oklahoma Co-Founder Smith Testifies Before Senate Special Committee on Aging
WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by G. Keith Smith, co-founder of the Surgery Center of Oklahoma and the Free Market Medical Association, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs":* * *
The Surgery Center of Oklahoma was founded in May of 1997. Our goal was to gain control of the medical and financial treatment of our patients. The problem was that even a minor surgical procedure performed at a large hospital meant bankruptcy for many patients, including ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by G. Keith Smith, co-founder of the Surgery Center of Oklahoma and the Free Market Medical Association, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs": * * * The Surgery Center of Oklahoma was founded in May of 1997. Our goal was to gain control of the medical and financial treatment of our patients. The problem was that even a minor surgical procedure performed at a large hospital meant bankruptcy for many patients, includinginsured patients. Consistent with their attempts to maximize revenue, hospitals denied physicians the tools and supplies they thought appropriate to treat their own patients-and yet hospitals continue to book ever increasing profits even today. I have changed this model. Our model is grounded on mutually beneficial exchange. While we save patients tens of thousands of dollars, currently the only ones that walk through our door are patients paying for their own care (about half the population) because if someone else is paying, they don't shop or care how expensive something is.
We were excluded from insurance at the start which meant that we had to be creative. We started quoting patients all-inclusive prices. It was simple math: what fee did the surgeon think was fair, what was the fair anesthesia charge and what was the time and materials based charge for the facility. It turns out that our prices were usually less than the patient's in network deductible and co-pay. Today our total charges are still only 1/6th to 1/10th of what large hospital systems near us charge and even more extreme price discrepancies are routine. In fact, we recently performed a tonsillectomy on a child for $3875 after the family had been quoted $72,000 by a Dallas area hospital. Our prices remain half of what Medicare pays hospitals and less than Medicaid payments to hospitals for the same procedure.
The Surgery Center of Oklahoma (www.surgerycenterok.com) quoted prices over the phone to patients until 2009 which is when I launched the first website displaying all-inclusive surgical prices. I had three goals in mind, all of which I would argue have been achieved. First, I wanted sticker-shocked patients to easily find us. Second, I wanted to start a price war, so patients far from Oklahoma could use our pricing as leverage in their local market. Third, I wanted to better understand why the same market discipline other industries must endure was seemingly not a thing in healthcare.
The first patients to arrive after posting our prices were Canadians. These patients are forced to wait in lines longer than the misery they can endure without care. Then it was the uninsured, beneficiaries of self-funded health plans and members of cost-sharing ministries. Approximately half our patients travel from out of state or out of the country to Oklahoma City for their surgical care. As news of the success of our model has grown, so has the number of facilities-and I'm happy to report-large hospitals-who now have copied us.
Price-matching in the industry has had a deflationary effect, even on the price-gouging facilities, as they stand to lose business and patients if they don't compete. Our model also increases the quality of care because physicians with unpredictable outcomes shy away from this tightly disciplined space. The good surgeons would rather perform a surgery at my facility due to better conditions and the higher pay they receive.
While building the surgery center and changing the market, my mission has now grown. I now also run Atlas Billing Company (www.atlasbillingcompany.com) which facilitates payment bundles for the Surgery Center of Oklahoma and is now curating and implementing surgical bundles for many other facilities now attempting to service price-sensitive buyers and patients. I am also a co-founder of the Free Market Medical Association (www.fmma.org), a mission-driven organization that works to bring buyers and sellers together in the United States, promotes market discipline in the industry and now has 37 state chapters.
To the industry big shots, or as I call them the cartel, the healthcare system in this country isn't broken-it is working precisely as designed, meant to enrich the corporate elite and intermediaries at the expense of patients and the American people at large. Fortunately, the alternative approach I've described is becoming more widespread. As insurance deductibles balloon and delays and denials become more commonplace, affordable, high quality care is available for victims of the system. I predict that "shoppable" medical services will become particularly critical for older Americans as an increasing number of physicians opt out of or severely curtail their exposure to Medicare.
Thank you.
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Original text here: https://www.aging.senate.gov/imo/media/doc/e181c4e3-f9c5-eb56-4409-3daeca3232b4/Testimony_Smith%2010.22.25.pdf
Stanford University Economics Doctoral Candidate Hartley Testifies Before Senate Health, Education, Labor & Pensions Committee
WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by Jonathan S. Hartley, an economics doctoral candidate at Stanford University, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward":* * *
Thank you, Chairman Cassidy, Ranking Member Sanders, and Members of the Committee.
My name is Jon Hartley. I'm an economist and currently an economics PhD candidate at Stanford University. I also work at several other think tanks focused on economic policy issues.
The purpose ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by Jonathan S. Hartley, an economics doctoral candidate at Stanford University, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward": * * * Thank you, Chairman Cassidy, Ranking Member Sanders, and Members of the Committee. My name is Jon Hartley. I'm an economist and currently an economics PhD candidate at Stanford University. I also work at several other think tanks focused on economic policy issues. The purposeof my testimony today is to highlight a major challenge in American labor law today: the coercive use of union membership, dues and fees for political purposes unrelated to workers' economic welfare.
Many in the American public may not be aware that, in recent years, many groups of university graduate students have formed unions. This includes Harvard, Cornell, MIT, and Stanford, where I currently work as a teaching assistant. Let it be said I firmly believe that workers have the right to organize, and this is an important pro-worker right to allow for workers to engage in collective bargaining for improved wages, benefits and working conditions.
However, many unions today have expanded beyond traditional workplace bargaining into broader political activism, which can alienate members who disagree with these causes. These student unions often are led by some of the most progressive students on their respective campuses. Many of these unions have affiliated with the United Electrical, Radio and Machine Workers of America (UE), one of the most progressive unions in America. It was the first national union to endorse the Boycott, Divestment, and Sanctions (BDS) campaign against Israel in 2015. It supports many additional progressive causes including, abortion, "Medicare for all", the "Green New Deal", and the "No Kings" protests which protest President Donald Trump.
I first entered Stanford as a graduate student in 2021, with no idea that a graduate student union would be formed in the years to come nor that it would become a condition of employment as a worker. In 2023, the Stanford Graduate Workers Union was certified and affiliated with the United Electrical workers.
In November of 2024, to avert a looming strike, leadership at Stanford University signed a collective bargaining agreement that included a forced dues clause, making joining the United Electrical Workers and/or paying it fees, a condition of employment at the university as teaching assistants or research assistants.
Earlier this year, the progressive student union obtained my email and phone number, and sent many harassing emails, threatening to terminate my employment at the university if I didn't join or pay money. Eventually they sent a termination request to the university in June of this year. In August of this year, I was told by university officials that if I did not pay the union by the end of the week, my employment at the university would be terminated.
California is not a right-to-work state and hence workers like me, who object to funding a progressive union, have limited options.
Technically, graduate students have the right under the Supreme Court's 1988 Beck decision to opt out of full union membership and dues payment and pay only "agency fees". However, those fees are nearly identical to regular dues and still end up in union coffers of a union that makes progressive politics a primary part of its mission. I would contend this is not sufficient to protect workers.
Another path exists for religious objectors under Title VII of the Civil Rights Act. The challenge here is that what constitutes genuine religious accommodation is often left up to the union (though the law clearly states that a university has discretion as well).
Because many of the issues the union supports contravene my Catholic faith, I refused to pay money to an organization that supports causes contrary to my moral and religious principles. By national charter of the United Electrical Workers, the majority (at least two-thirds) of union dues collected by the Stanford Graduate Workers Union affiliate of the United Electrical Workers go to the national body, whose agenda extends far beyond typical concerns like wages, benefits, and working conditions.
Jewish students at MIT and Cornell troubled by BDS and anti-Israel sentiments have faced resistance in getting religious accommodations from the United Electrical workers, because the union had classified this as a political objection rather than a religious one. It was only after bringing attorneys to their universities and threatening to bring charges from the Equal Employment Opportunity Commission that they have able to get their university (rather than the union) to grant the religious accommodations. Stanford so far is deferring to the union to decide religious accommodations. I requested such a Title VII religious exemption from union payments. Typically, people who are granted such an exemption, after filling out an exhaustive survey about their religious practices, are still required to contribute funds to one of a set of non-political charities provided by the union. My exemption was just granted over the past week and I have to choose amongst the American Cancer Society, American Heart Association, and Nature Conservancy to pay the equivalent amount of union dues each year, which is in the amount of roughly $690 to $810 per year.
The fact is these progressive issues supported by major labor unions have no bearing on the wages and benefits of graduate students. The United Electrical Workers spend this money on political causes and is aligned heavily with the Democratic Party. So are many of the other largest unions in the United States./1
What might be the consequences of forced contributions to progressive political causes as a political condition of employment? Will this discourage conservatives like me from applying to graduate schools going forward and becoming professors?
Labor law reform should consider political dimensions of unions. Why not bar them from political activity? If I felt that my contributions were not used for political purposes but instead focused on wages and benefits, I would feel better about making contributions. Why not treat them like 501(c)(3)'s which are barred from coordination with political parties and making direct financial contributions to them? Part of me says this would be a step in the right direction, though perhaps not enough. Unions promote political causes in ways that go beyond official support for political parties and candidates.
Another path might be national right-to-work laws that would stop unions from forcing workers to pay dues or fees to labor unions./2,3
Such laws would let individuals decide for themselves whether a union deserved their financial support and would make it harder for unions to promote across-the-board progressive politics, since they would risk losing financial support from people who disagree. 26 U.S. states currently have right-to-work laws and Janus v. AFSCME (2018) established right-to-work nationwide for public-sector employees.
Respecting moral conscience should be primary in our labor laws if they are to be truly pro-worker. Unions should be focused on bargaining for their members to obtain better wages, benefits, and working conditions,/4 rather than across-the-board progressive politics.
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Footnotes:
1 Over one quarter of United Autoworkers (UAW) membership today is now made up of graduate students.
2 Why should poor graduate students be forced into paying roughly $690 to $810 of their annual wages to a union? This is about 1.44% of gross pay (the minimum possible amount outlined the national UE constitution).
3 Non-religious students opposed to subsidizing the union on other moral grounds would not have such a path to obtaining an accommodation in the 1964 Civil Rights Act.
4 There is some debate in the academic literature to what degree unionizations create wage gains for workers. There are studies that compare establishments where a union vote barely passed (i.e. unionization gained) to those where it barely failed (i.e. no union), under the idea that near the cutoff the outcomes are as good as randomly assigned. Some of these studies find small or negligible causal effects of unionization on wages, employment, and output (see DiNardo, John and David Lee, (2004). "Economic impacts of new unionization on private sector employment 1984-2001", Volume 119, Issue 4, November 2004, Quarterly Journal of Economics, 1383-1441). Other recent studies focused on unionization education in higher education, particularly Canadian universities, find that wages at the bottom of the wage distribution increased by roughly 10 percent while wages at the top were unaffected, driven by the introduction of contractual salary floors (see Baker, Michael, Yosh Halberstam, Kory Kroft, Alexandre Mas, Derek Messacar (2025), "The Impact of Unions on the Wage Distribution: Evidence from Higher Education", American Economic Review: Insights, Forthcoming).
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Original text here: https://www.help.senate.gov/imo/media/doc/11987bcb-dd74-6e5e-b142-b64646a6a75e/FINAL%20Hartley%20Testimony.pdf
Workplace Policy Institute Senior Adviser Beck Testifies Before Senate Health, Education, Labor & Pensions Committee
WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by Thomas Beck, senior adviser at the Workplace Policy Institute, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward":* * *
Chairman Cassidy, Ranking Member Sanders, and Members of the Committee, thank you for the opportunity to offer a few observations about labor-management relations and labor law. The remarks I share today are not those of any organization with which I am or was affiliated; rather, they are my ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by Thomas Beck, senior adviser at the Workplace Policy Institute, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward": * * * Chairman Cassidy, Ranking Member Sanders, and Members of the Committee, thank you for the opportunity to offer a few observations about labor-management relations and labor law. The remarks I share today are not those of any organization with which I am or was affiliated; rather, they are myown, based on 30 years as a labor lawyer, labor regulator, and labor relations practitioner.
There was a time when I would not have expected labor policy to be such a current topic. Thirty-four years ago, when I walked into the first day of my labor law class at the University of Virginia, our professor, Stan Henderson, greeted his students by saying "welcome to the study of a dying area of law." But, to borrow from Mark Twain, the death of labor law was greatly exaggerated. The pandemic -- and the concerns about workplace safety, job security, and employee voice that came with it -- offered new opportunities to organized labor. And the political realignment that allowed President Trump to gain a second term by winning the popular vote and every one of seven swing states suggests maybe, just maybe, we can find some bipartisan consensus to benefit the American worker.
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PROTECT THE SECRET BALLOT
First, labor law should bolster the sanctity of the secret ballot. Most importantly, it protects employees against coercion or retaliation from any direction./1
If the secret ballot is appropriate for electing a United States senator, or for a Senate conference to elect its leaders, I don't know how it could be inappropriate for employees choosing their exclusive legal representative in the workplace.
Compared to the alternative of card check, the secret ballot facilitates a more informed choice about "union yes" or "union no." In the card check scenario, employees get the union's perspective, which is, no surprise, pro-union. But they aren't necessarily given any alternative perspective. For example, they don't hear much (or maybe anything) about union dues, or about the important reality that the union cannot guarantee outcomes in collective bargaining./2
In contrast, with a secret-ballot election, there's a greater likelihood of an actual campaign with competing viewpoints offered to employees./3
And, again, less chance of social pressure or outright coercion affecting a voter's personal decision about how to vote.
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1 See 85 Fed. Reg. at 18381 (April 1, 2020) (NLRB noting that "both the Board and the courts have long recognized that secret ballot elections are better than voluntary recognition at protecting employees' Section 7 freedom to choose, or not choose, a bargaining representative"); Richard Epstein, The Case Against the Employer Free Choice Act 30 (2009) (explaining that recognition by card check, rather than secret-ballot election, "exposes workers to multiple forms of intimidation and direct coercion").
2 See NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45 (1937) ("The theory of the Act is that free opportunity for negotiation . . . may bring about the adjustments and agreements which the Act itself does not attempt to compel."); see also Daniel V. Johns, Promises, Promises: Rethinking the NLRB's Distinction Between Employer and Union Promises During a Union Organizing Campaign, 10 U. Pa. J. Bus. L. 433 (2008) (generally observing that unions can make promises during campaigns but lack the ability unilaterally to change terms and conditions of employment).
3 85 Fed. Reg. at 18381 (April 1, 2020) (NLRB finding "the 'uninhibited, robust, and wide-open debate' characteristic of a Board-conducted election better fulfills the national labor policy that Congress has established," citing Chamber of Commerce v. Brown, 554 US 60 (2008)); NLRB v. Flomatic Corp., 347 F.2d 74, 78 (2nd Cir. 1965) ("it is beyond dispute that secret election is a more accurate reflection of the employees' true desires than a check of authorization cards collected at the behest of a union organizer").
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END THE TACTIC OF BLOCKING CHARGES
And if we really want workers to be able to express their preferences on unionization, we need to deal with tactics that nullify the votes cast by those workers. These are called "blocking charges" - unfair labor practice charges filed by unions seeking to delay or stop an election, particularly a decertification election, that they perceive will not result in their preferred outcome./4
Historically, fewer than half the unfair labor practice charges filed with the NLRB are found to have merit. Most years it's in the range of 35-40 percent./5
If we want to effectuate worker choice, we should not delay elections for charges that, statistically, are more likely than not to be meritless -- and, because they are blocking charges, are even more likely to be frivolous.
Indeed, the very concept of a blocking charge rests on a shaky assumption, which is that an employer can so effectively threaten or coerce an employee that it affects how the employee votes in a secret-ballot election. By definition, the secret ballot means no one but the employee herself knows how she will vote or how she did vote. As a consequence, it's difficult to see how threats can be effective or retaliation can occur.
The strong presumption should be that, once an election is scheduled, it will take place as scheduled and its result implemented. In the very rare circumstance where it's established that some misconduct or irregularity had a material impact on the outcome of a secret-ballot election, the election can be re-run.
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4 See, e.g., NLRB v. Hart Beverage Co., 445 F.2d 415, 420 (8th Cir. 1971) ("it appears clearly inferable to us that one of the purposes of the Union in filing the unfair practices charge was to abort Respondent's petition for an election, if indeed, that was not its only purpose"); Templeton v. Dixie Color Printing Co., 444 F.2d 1064, 1069 (5th Cir. 1971) (criticizing Board's blocking charge policy on grounds of delay and employee free choice); see also Jeffrey M. Hirsch, NLRB Elections: Ambush or Anticlimax?, 64 Emory L. J. 1647, 1663 (2015) (the availability of blocking charges "provides the party opposed to an election the incentive to file unfair labor practice charges and delay the vote. This tactic is available in all elections, but in practice it is primarily a tool of unions facing a decertification vote.").
5 NLRB General Counsel Memorandum 25-06 (May 16, 2025).
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RECONCILE SECTION 7 OF THE NLRA AND TITLE VII OF THE CRA
Finally, we should put an end to the unnecessary battle between Section 7 of the National Labor Relations Act and Title VII of the Civil Rights Act. If we care about American workers, we should want them to enjoy Title VII's protections against a racially or sexually hostile workplace. But in some cases, the protections set forth in Section 7 of the NLRA have been so stretched and mis-applied that they have eviscerated the protections of Title VII. For example, in one recent case, an Administrative Law Judge of the NLRB determined that Section 7 insulated from discipline a male employee who referred to a female employee as a "gutter bitch," "crack ho," and "queen of the slums."/6
In enacting Section 7 of the NLRA, the 74th Congress encouraged workers "to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection." Given the language it used, I doubt the Congress of 90 years ago intended to encourage hateful, racially or sexually offensive behavior.
Again, thank you for allowing me to appear today, and I look forward to answering any questions you may have.
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6 Amazon.com Services LLC v. Gerald Bryson, No. 29-CA-261755 (2024). See also Consolidated Communications, Inc. v. NLRB, 837 F.3d 1, 21-22 (D.C. Cir. 2016) (Judge Millett concurrence noting the NLRB's "cavalier and enabling approach ... toward the racially and sexually demeaning conduct of some employees during strikes").
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Original text here: https://www.help.senate.gov/imo/media/doc/11987bcb-dd74-6e5e-b142-b64646a6a75e/Beck%20Testimony.pdf
National Nurses United President Turner Testifies Before Senate Health, Education, Labor & Pensions Committee
WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by National Nurses United President Mary Turner from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward":* * *
Good morning and thank you, Chairman Cassidy, Ranking Member Sanders, and Members of the Committee, for giving me the opportunity to testify here today. My name is Mary Turner, and I am a registered nurse in the Intensive Care Unit at North Memorial Hospital in Robbinsdale, Minnesota. I have been a nurse for over ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by National Nurses United President Mary Turner from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward": * * * Good morning and thank you, Chairman Cassidy, Ranking Member Sanders, and Members of the Committee, for giving me the opportunity to testify here today. My name is Mary Turner, and I am a registered nurse in the Intensive Care Unit at North Memorial Hospital in Robbinsdale, Minnesota. I have been a nurse for over30 years, and I am the President of National Nurses United.
National Nurses United is the largest union and professional association of registered nurses (RNs) in the United States, representing nearly 225,000 nurses across the country. In my testimony today, I will illustrate how critical our right to bargain collectively and form a union is--for us nurses, for patients, for our communities and for all workers across the United States. Through our union, nurses speak truth to power about what we witness every day in hospitals, calling out the consequences of a for-profit health care system that prioritizes profits over patients, fuels the severe nurse staffing crisis, and undermines safe, quality care.
Nurses are our patients' advocates first and foremost. We witness every day how hospital executives prioritize profits at the expense of our patients' well-being. To maximize revenue, hospital employers intentionally understaff our units to cut labor costs, forcing nurses to take on dangerously high patient loads. We have decades of evidence that shows when nurses are required to care for too many patients at one time, patients are at higher risk of preventable medical errors, avoidable complications, falls and injuries,/1 pressure ulcers,/2 increased length of hospital stay, higher numbers of hospital readmissions, and death./3
Hospital employers' profit-driven decision to short-staff our units has become standard practice and created the severe nurse staffing crisis that we face today. We don't have a "nurse shortage," but a staffing crisis, one driven by hospital corporations' refusal to create good nursing jobs where RNs are respected, protected, and able to provide the safe, therapeutic care every patient deserves.
Nurses are also the first to ring the alarm bells when health care corporations deploy other profit-seeking tactics. We see large hospital chains buy up community hospitals, make empty promises to improve access and jobs, but instead deliver cuts, closures, and union-busting. Big hospital systems will reduce services, cut staffing levels, retaliate against nurses who organize, refuse to purchase essential medical supplies and equipment, close departments or units, and even shutter hospitals in rural or underserved communities.
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1 Kim J, Lee E, Jung Y, Kwon H, Lee S. Patient-level and organizational-level factors influencing in-hospital falls. J Adv Nurs. 2022 Nov;78(11):3641-3651. doi: 10.1111/jan.15254. Epub 2022 Apr 20. PMID: 35441709; PMCID: PMC9790490.
2 Kim J, Lee JY, Lee E. Risk factors for newly acquired pressure ulcer and the impact of nurse staffing on pressure ulcer incidence. J Nurs Manag. 2022 Jul;30(5):O1-O9. doi: 10.1111/jonm.12928. Epub 2020 Feb 25. PMID: 31811735; PMCID: PMC9545092.
3 Increased LOS, Mortality and Readmission: Dierkes, A. M., Aiken, L. H., Sloane, D. M., Cimiotti, J. P., Riman, K. A., & McHugh, M. D. (2022). Hospital nurse staffing and sepsis protocol compliance and outcomes among patients with sepsis in the USA: a multistate cross-sectional analysis. BMJ Open, 12(3), e056802. https://doi.org/10.1136/bmjopen-2021-056802.
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In Minnesota, we've heard those empty promises before. When Essentia Health acquired the non-profit hospital in Fosston--a rural community of about 30,000--it pledged to maintain core services. But in 2022, Essentia shut down the hospital's labor and delivery department, citing workforce shortages and population decline. In truth, it was more profitable to send expectant mothers 65 miles away to Detroit Lakes. The loss devastated the community, forcing mothers to travel for up to two hours while in labor. Union nurses joined residents to demand accountability, and the Fosston City Council ultimately voted to end its contract with Essentia after months of failed negotiations. Essentia refuses to comply, insisting it will continue operating the hospital. The Fosston case demonstrates not only how corporate hospital chains put profits over people, especially in rural areas, but also how union nurses organize alongside their communities to fight back.
Hospital employers understand the power militant union nurses wield when we fight for our patients, and the employers try to disrupt our organizing efforts in every way possible. Across the country, nurses are standing up to union-busting campaigns from hospital giants like HCA and Ascension. They know that when nurses have a collective voice, we expose the truth about the unsafe, profit-driven practices, which they fear.
In so-called "right-to-work" states, nurses are organizing fearlessly despite laws designed to silence us. At HCA Florida Fort Walton-Destin Hospital, nurses voted decisively to join National Nurses Organizing Committee/National Nurses United (NNOC/NNU), proving that even under anti-worker laws, nurses will not back down. In New Orleans, nurses at University Medical Center voted to form a union with us in 2023, yet two years later they continue to fight to secure a first contract while enduring persistent management retaliation. LCMC Health has repeatedly disciplined and targeted pro-union nurses for speaking out about unsafe staffing and patient care concerns. These nurses have held return-to-work marches, staged multi-day strikes, and organized community support, all to push back against management violations of labor law and ensure their voices are heard. Their courage demonstrates that even in hostile legal environments, nurses will stand up for their patients, their profession, and their fellow workers.
For all these reasons, nurses across the country have been taking collective action through their unions, both at the bargaining table and in the halls of Congress, to improve our workplaces and ensure we can provide the high-quality care our patients deserve.
But we know that our ability to advocate for patients and communities is stronger with labor laws that protect our right to organize. Right now, those laws are broken and not just in states with "right-to-work" laws. Employers routinely violate workers' rights with little to no consequence. The National Labor Relations Act (NLRA), once intended to protect working people, has become toothless. According to the Economic Policy Institute, employers illegally fire or retaliate against tens of thousands of workers each year who try to form unions, costing workers billions in lost wages. Nurses have seen this firsthand, when hospital executives threaten, intimidate, or even terminate nurses for speaking out about unsafe staffing or dangerous patient conditions. These illegal acts don't just silence nurses; they endanger the patients and communities who rely on us. All workers deserve a stronger NLRA that truly defends the right to organize and bargain collectively without fear.
Chairman Cassidy, we agree with your call to map a pro-worker way forward, and we believe this can start with two immediate actions.
First, Congress must end the government shutdown by passing legislation to fund the government, make whole our federal workers impacted by the shutdown, and ensure millions of Americans get the health care they need. Nurses are deeply concerned about the current government shutdown and the Republican-passed H.R. 1, which will slash nearly $1 trillion from Medicaid and Medicare and strip coverage from more than 16 million people. Many of these cuts will begin as early as the end of this year, alongside the expiration of the Affordable Care Act's enhanced premium tax credits. If allowed to move forward, these cuts will force patients to ration medications, delay or forgo care, and rely on already-overwhelmed emergency rooms for care, or in the worst cases, patients will die unnecessarily. In fact, experts predict more than 50,000 people will die each year because of these cuts./4
Even before the passage of H.R. 1, nurses were witness to how our profit-driven health care system is a death sentence for our patients who cannot afford to pay.
The loss of Medicaid funding will also devastate hospital budgets, leading to layoffs, unsafe staffing, service reductions, and even closures, particularly in rural areas. Hospitals nationwide, including in Minnesota, are already announcing closures and service reductions. Reopening the government and reversing these cuts is not just about protecting federal workers; it is about protecting patients, communities, and the stability of our health care system. Nurses across the country are urging Congress to negotiate a funding bill that fully funds essential programs, restores the livelihoods of federal workers, and ensures our patients receive the care they deserve.
Second, once the government is open, Congress must finally commit to passing the Richard L. Trumka Protecting the Right to Organize (PRO) Act. Nurses and other workers cannot be expected to advocate for patients, speak out against unsafe practices, or collectively bargain for better workplaces if our labor laws offer little real protection. The PRO Act would restore workers' rights, strengthen collective bargaining, and provide real consequences for employers who violate the law, giving nurses and all workers the legal tools to organize safely and effectively. Strong labor protections are not only a matter of justice for workers; they are essential for a health care system that prioritizes patient safety over corporate profits.
On behalf of the nearly 225,000 registered nurses represented by National Nurses United, we look forward to working with your committee to improve working conditions for nurses, strengthen our right to collectively bargain, and ensure our patients receive the health care they deserve.
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4 Werner, R., et.al. (2025). Projected Mortality Impacts of the Budget Reconciliation Bill, Letter: Response to Request for Technical Assistance. The Leonard Davis Institute of Health Economics. The University of Pennsylvania. https://ldi.upenn.edu/our-work/research-updates/research-memo-projected-mortality-impacts-of-the-budget-reconciliation-bill/
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Original text here: https://www.help.senate.gov/imo/media/doc/11987bcb-dd74-6e5e-b142-b64646a6a75e/Turner%20Testimony.pdf
Institute for the American Worker President Vernuccio Testifies Before Senate Health, Education, Labor & Pensions Committee
WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by F. Vincent Vernuccio, president of the Institute for the American Worker, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward":* * *
Good Morning. My name is F. Vincent Vernuccio and I am President of Institute for the American Worker (I4AW). I4AW is a 501(c)(3) nonprofit organization dedicated to championing worker freedom, fair competition, and modern labor policy for a modern workforce. Our ultimate goal is to ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Health, Education, Labor and Pensions Committee released the following testimony by F. Vincent Vernuccio, president of the Institute for the American Worker, from an Oct. 22, 2025, hearing entitled "Labor Law Reform Part 2: New Solutions for Finding a Pro-Worker Way Forward": * * * Good Morning. My name is F. Vincent Vernuccio and I am President of Institute for the American Worker (I4AW). I4AW is a 501(c)(3) nonprofit organization dedicated to championing worker freedom, fair competition, and modern labor policy for a modern workforce. Our ultimate goal is toempower workers to thrive in the 21st century economy. We educate policymakers and the public on the benefits of freedom, innovation, and collaboration between workers and job creators. More information can be found on www.i4aw.org, a one-stop shop for the best resources on the labor policy debates facing our country.
America's workers are the backbone of our economy and the foundation of our shared prosperity. Yet, our federal labor laws were written for the Industrial Revolution, with one-size-fits-all contracts and that promote adversarial relationships between workers and employers.
Yet one-size-fits-all doesn't work, because today, our workforce is dynamic, diverse, and independent. Millions of Americans build careers in finance, health care, retail, professional services, and self-employment. They are entrepreneurs, employees, small business owners, and independent contractors--each pursuing opportunity in their own way. The purpose of my testimony is simple: to discuss the benefits of policies that empower every American worker. Empowerment does not come from rigid government mandates or one-size-fits-all solutions. It comes from freedom, flexibility, and trust--especially trusting workers to decide how, where, and with whom they work. The solutions I'll outline build on the issues raised during the committee's recent labor policy hearing, offering practical, worker-centered reforms to address those challenges. This includes updating outdated labor laws, protecting the rights of independent contractors, defending secret ballot elections, ensuring fair and equal collective bargaining standards, and rejecting policies that strip workers of their freedom and agency.
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Worker Freedom: Updating Outdated Labor Laws
When Congress passed the National Labor Relations Act (NLRA) in 1935, one in three nonfarm workers in America were employed in manufacturing.1 Yet today, fewer than eight percent work in manufacturing.2 That said, jobs in manufacturing still increased over 10 percent in right-to-works states during the last decade but fell by 0.2 percent in states without those worker protections.3 The economy has transformed dramatically--but our labor laws have not.
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1 Bureau of Labor Statistics. (1991). Employment, hours, and earnings, United States, 1909-1990 (Bulletin No. 2370). https://fraser.stlouisfed.org/title/employment-earnings-united-states-189/employment-hours-earnings-united-states-1909-90-5435
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In today's knowledge-driven economy, the skills required for success evolve quickly, and even traditional blue-collar industries now demand advanced technical expertise. At the same time, greater competition among businesses for both talent and customers has elevated workers' expectations for flexibility, mobility, and opportunity.
Unfortunately, over decades, layers of regulation and shifting legal interpretations have made labor laws increasingly complex--even for the experts who navigate them daily. By focusing on leveling the playing field, empowering workers through transparency, information, and trust, policymakers can restore balance. Workers should have clear, accessible information and the ability to make informed decisions about their workplace representation, career paths, and what is best for them and their families.
With thoughtful reform and this committee's leadership, we can create a system that protects workers' rights, ensures accountability for employers and unions, and reflects the diversity and dynamism of the modern workforce.
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Choice: The Foundation of Worker Empowerment
Choice lies at the heart of any effort to empower the American worker. It recognizes that true freedom of association includes the right to associate--or not to associate--and to make that choice freely. Under current law, many workers are compelled to accept union representation and pay fees to organizations they never voted for, or that a majority of their colleagues never supported. Even in states with right-to-work laws, workers can still be bound by collective bargaining agreements that limit their flexibility or advancement.
A fair and forward-looking solution would restore workers' ability to choose. Employees should have the right to elect and join a union if they wish, or to negotiate directly with their employer if they prefer. Representation should be earned, not imposed. Last Congress, Representative Eric Burlison (R-MO) introduced the Worker's Choice Act (H.R. 6745)4 to expand freedom and flexibility for employees in right-to-work states, giving them the ability to decline union representation and negotiate directly with their employers--just as more than 93% of private sector workers already do.5 Senator Tim Scott (R-SC) recently included Worker's Choice in his Employee Rights Act (ERA, S. 2984), further affirming that true worker empowerment comes from voluntary representation and the freedom to choose one's own path.6
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2 Bureau of Labor Statistics. "Employment by Major Industry Sector." Accessed April 24, 2025. https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm).
3 https://nilrr.org/wp-content/uploads/2025/05/2025-Spring-Right-to-Work-Benefits.FINAL_Published.pdf
4 Worker's Choice Act, H.R. 6745, 118th Cong. (2023).
5 Bureau of Labor Statistics, 2024 Union Membership Rate, https://www.bls.gov/news.release/pdf/union2.pdf.
6 Employee Rights Act, S. 2984, 119th Cong. (2025).
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Further, the decision to unionize a workforce should reflect the will of the majority or quorum of all affected employees, not merely those who cast ballots. Under current NLRA interpretation,7 unions are certified based on a majority of votes cast--even if most workers in the unit do not participate. Nor are unionized employees afforded an opportunity to have a regular or easy say on whether a union should continue representing them. In 2023, of the nearly eight million workers represented by unions under the NLRA, 95 percent of them did not vote for the union at their workplace.8 A recent survey conducted by Big Village found that 68 percent of Americans believe "employees in right-to-work states who opt out of union representation should be free to negotiate contracts, wages, and working conditions directly with their employer."9 Additionally, a recent study by I4AW and the Mackinac Center for Public Policy details how 40 percent of private-sector unions were certified without majority support of the full bargaining unit, and one-fifth were certified without a quorum.10 The NLRA's plain language, however, requires support from "the majority of the employees in a unit." 11 Even the NLRB operates under a quorum rule--at least three of its five Board members must be lawfully seated to exercise its full authority, and a majority of that quorum is needed to issue decisions. Holding union elections to a similar standard--requiring support from a majority of all employees, or at least a quorum--would help ensure that workers are not compelled to join or finance a union that lacks broad, active support among the workforce.
In the House, Representative Bob Onder's (R-MO) Worker Enfranchisement Act (H.R. 2572) would require the participation of at least two-thirds of eligible workers in a unionization election.12 If that threshold is met, the union would be certified as the exclusive representative; if not, certification would not occur.
Americans agree with this approach: a recent U.S. Chamber of Commerce survey found that 60 percent of Americans believe the law should change and unions should win the majority of all workers before representing a workplace.13 These findings make clear that reform is needed to ensure that union representation truly reflects the will of the workers.
Protecting worker empowerment also depends on protecting worker privacy. Employees should have control over their personal contact information, with the right to choose how, and through which channels, they wish to be contacted by union representatives. Such protection is also afforded under the Employee Rights Act.
The bottom line is that having the ability to choose is pro-worker, empowering individuals to decide what representation works best for them. It strengthens democracy in the workplace and affirms that the legitimacy of representation must rest on voluntary consent. By restoring these principles, Congress can ensure every American worker has a genuine voice in deciding how--and by whom--they are represented.
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7 Nat'l Labor Relations Board ("NLRB"), About NLRB: Conduct Elections, https://www.nlrb.gov/about-nlrb/what-we-do/conduct-elections ("Elections to certify or decertify a union as the bargaining representative of a unit of employees are decided by a majority of votes cast").
8 F. Vincent Vernuccio & Akash Chougule, Unions Need Democracy (2024), https://i4aw.org/wp-content/uploads/2024/08/I4AW-Report_Unions-Need-Democracy_Final-1.pdf.
9 Big Village, The Employee Rights Act Public Support (2025), https://employeerightsact.com/wp-content/uploads/2025/07/CUF-ERA-Public-Support-2025.pdf
10 Stephen Delie, Misred: How Legal Authorities Allowed Tyranny of the Minority to Subdue Worker Enfranchisement (2025), https://www.mackinac.org/archives/2025/s2025-06.pdf.
11 29 U.S.C. Sec. 159(a).
12 Worker Enfranchisement Act, H.R. 2572, 119th Cong. (2025).
13 Chamber of Commerce, What American Voters Really Think About Unions (2025), https://www.uschamber.com/employment-law/what-american-voters-really-think-about-unions.
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Worker Information: Ensuring Transparency and Accountability in Union Representation
Worker freedom relies on information, transparency, and accountability. When workers choose union representation, they should be confident that their leadership operates with integrity, their dues are spent responsibly, and their rights and beliefs are respected.
The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) established important safeguards to promote democratic governance within unions and protect workers' rights as members. Yet, after more than six decades, many of these disclosure and reporting requirements are outdated. Modernizing the LMRDA would strengthen financial transparency, improve member access to information, and ensure that workers can easily see how their dues are used--particularly for activities unrelated to collective bargaining or contract administration.
Reforms should reaffirm and strengthen workers' Beck rights, ensuring that no employee is compelled to fund political, ideological, or other non-representational activities without explicit consent.
Additionally, Representative Burgess Owens (R-UT) Start Applying Labor Transparency (SALT) Act (H.R. 2952)14 would provide workers with needed transparency in the workplace. The SALT Act requires so-called union "salts" to file the same disclosure forms that management hired consultants file with the Department of Labor. Workers deserve to know if they are talking to someone who is paid to persuade them on unionization, whether it is management or union.
By enhancing transparency and protecting workers' rights to choose how their money and voice are used, including through legislation like the Employee Rights Act, Congress can ensure that unions remain accountable to the workers they represent.
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Worker Protection: Safeguarding Employees from Harassment and Intimidation
As I testified before the House of Representatives earlier this year, protecting workers also means ensuring that every workplace remains safe, respectful, and free from harassment or discrimination.15 Employers should have the ability to protect their employees from discriminatory, harassing, or demeaning language. This behavior has no place in the workplace--and it certainly should not be protected. Unfortunately, in its 2023 decision in Lion Elastomers, the NLRB disagreed, holding that racist, sexist, and vulgar rhetoric is permissible in the workplace so long as it occurs in the context of "union activity."16 In June 2024, I4AW released a report exploring this deeply concerning interpretation. The report details the conflicting obligations placed on employers under federal law with respect to preventing workplace discrimination and harassment.
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14 https://www.congress.gov/bill/119th-congress/house-bill/2952
15 F. Vincent Vernuccio, Testimony before the House Comm. on Educ. and Workforce, Restoring Balance: Ensuring Fairness and Transparency at the NLRB (2025), https://edworkforce.house.gov/uploadedfiles/vernuccio_testimony.pdf
16 Lion Elastomers LLC II, 372 NLRB No. 83 (2023).
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The NLRB's ruling is not only inconsistent with federal civil rights laws--it is a troubling example of how the law can fail to protect American workers. In Lion Elastomers, the NLRB held that employers may be restricted from disciplining workers who use discriminatory language during union-related activity, citing protections under Section 7 of NLRA. Yet the plain language of Section 7 only protects employees' right to engage in collective bargaining or other concerted activities--it does not grant immunity for unlawful or abusive conduct.
The Board's interpretation suggests that employers may be prohibited from protecting employees from vulgar, harassing, or discriminatory speech from coworkers, so long as that speech is union related. This leaves employees vulnerable to such disturbing behavior in the workplace. Under the NLRB's 2023 standard, employees disciplined for offensive conduct could even be reinstated and even receive back pay--undermining workplace integrity and encouraging further misconduct. While the NLRB's position was vacated by the Fifth Circuit for procedural reasons, it leaves open the door for a future NLRB to revisit this stance.17 This position also conflicts with guidance from the federal agency charged with enforcing anti-discrimination laws. In 2024--one year after Lion Elastomers--the Equal Employment Opportunity Commission (EEOC) reaffirmed that harassment because of race, color, religion, sex (including pregnancy, childbirth, or related medical conditions; sexual orientation; and gender identity), national origin, disability, genetic information and age (40 or over) can trigger liability under federal law.18 The Employee Rights Act also addresses this issue by affording employers the ability to enforce basic standards of respect and civility and protect their employees--not only to comply with civil rights laws but also to maintain a safe and inclusive work environment.
All workers deserve a safe and respectful workplace--and 80 percent of Americans agree.19 Congress should act to protect the American worker and clarify that discriminatory, harassing, or demeaning language is not protected activity under the NLRA--or under any federal law.
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Worker Flexibility: Protecting Independent Work and Expanding Economic Opportunity
In today's 21st Century economy, workers deserve the freedom to decide how, where, and with--or for--whom they work.
Independent contracting has become a vital part of that freedom. Tens of millions of Americans rely on contract work to earn a living, supplement their income, or balance professional and family responsibilities. In 2023, 38 percent of the workforce--64 million Americans--performed some form of independent contracting work.20 Contract work empowers workers to set their own hours, choose their clients or platform, and determine how and when they work. It offers flexibility for parents, caregivers, students, retirees, and entrepreneurs alike. For many, this independence provides not only income, but the freedom to succeed on their own terms.
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17 Lion Elastomers, LLC II v. NLRB, 108 F.4th 252 (5th Cir. 2024).
18 Equal Emp. Opportunity Comm'n, Enforcement Guidance on Harassment in the Workplace (2024), https://www.eeoc.gov/laws/guidance/enforcement-guidance-harassment-workplace
19 Supra note 10.
20 Upwork, Gig Economy Statistics and Market Takeaways for 2025 (2024), https://www.upwork.com/resources/gig-economy-statistics#:~:text=2.,of%20the%20global%20labor%20force.
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Unfortunately, this model of empowerment faces growing challenges from policymakers who view independence as something to be restricted rather than respected. Actions by federal agencies during recent administrations created confusion and instability for millions of workers, contrary to the wishes of 76 percent of Americans who believe independent workers should be "free to work how and when they want under clear legal guidelines."21 In its 2023 Atlanta Opera decision, the Biden administration's NLRB narrowed the definition of independent contracting, adopting a complex and burdensome test that threatened worker's entrepreneurial opportunities.22 Likewise, the Biden administration's Department of Labor issued a rule that attempted to reclassify many independent contractors as employees, limiting their flexibility and earning potential. While the Trump administration has stated that it will not enforce the rule and is in the process of reconsidering it,23 the ever-swinging pendulum of policy changes between presidential administrations only leads to economic uncertainty and instability for America's workers.
These efforts to reclassify independent contractors rest on a misguided assumption: that Washington knows better than workers what work arrangements suit them best. As I testified before the House of Representatives earlier this year, I4AW and our partners have heard from many workers who know firsthand the value of independent contracting. The Independent Women's Forum (IWF), a leader on this issue, recently shared a compelling example of independent workers succeeding--and the risks they face from policies that threaten their flexibility.
IWF spoke with Sheryl Myers, an owner-operator truck driver. She and her husband transport cargo for the likes of the Department of Defense and Smithsonian museums. Myers told IWF that independent contracting "has been a real blessing to lay out our business strategy the way we chose, and it's worked well for us." But when California approved the disastrous AB5 law to limit independent contracting, the Myers chose to avoid California like many other independent contractor drivers.24 Additionally, Kim Kavin, a freelancer of 22 years who addressed this very committee earlier this year, testified that there is an "enormous difference between the misclassification of employees and policymaking that hurts entrepreneurial Americans who wish to be their own bosses." Proposals to reclassify independent contractors threaten to force many freelancers, like her, out of business and would undermine her autonomy and financial stability.25 Thankfully, several Members of Congress and Senators have introduced legislation to strengthen independent work and enable access to benefits. If enacted, this legislation would help ensure that independent workers are free from shifting political winds in Washington while gaining access to benefits that support flexibility, security, and long-term prosperity for the 27 million Americans who choose independent work.26
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21 Supra note 10.
22 NLRB, Board Modifies Independent Contractor Standard under National Labor Relations Act (2023), https://www.nlrb.gov/news-outreach/news-story/board-modifies-independent-contractor-standard-under-national-labor.
23 Frisard's Transp., LLC v. U.S. Dept. of Labor, No. 24-30223 (5th Cir. 2025) ("[DOL]" intends to reconsider the 2024 Rule at issue in this litigation, including whether to issue a notice of proposed rulemaking rescinding the regulation.")
24 Independent Women's Forum, Department of Defense Truck Driver Says Law Undermining Independent Contractors Also Undermine National Security (2025), https://www.iwfeatures.com/profile/department-of-defense-truck-driver-says-laws-undermining-independent-contractors-also-undermine-national-security/.
25 Kim Kavin, Testimony before the Senate Comm. on Health, Educ., Labor, and Pensions, Freedom to Work: Unlocking Benefits for Independent Workers (2025), https://www.help.senate.gov/imo/media/doc/93f09de0-d4e4-898e-3a03-801afdd098fd/Kavin%20Testimony.pdf.
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First, Senator Scott's Modern Worker Empowerment Act (S. 2228)27 would amend the Fair Labor Standards Act (FLSA) to codify in statute the common law rules for determining who qualifies as an independent contractor. In the House, Representative Kevin Kiley (R-CA) introduced a similar but broader version of the Modern Worker Empowerment Act (H.R. 1319), which would not only amend the FLSA to define independent contractor but also harmonize that definition with a matching amendment to the NLRA.28 Senator Scott included the House version in his recently introduced Employee Rights Act. Together, these bills would provide clarity and consistency across federal labor laws, protecting the freedom and flexibility that defines independent work and ensuring that independent contractors can continue to operate on their own terms.
In addition, Chairman Bill Cassidy (R-LA) introduced the Unlocking Benefits for Independent Workers Act (S. 2210),29 and Representative Kiley introduced a similar Modern Worker Security Act (H.R. 1320).30 These measures would create a statutory safe harbor allowing businesses to voluntarily offer benefits to independent contractors without jeopardizing their classification. Complimentary proposals, including Senator Rand Paul's (R-KY) and Chairman Tim Walberg's (R-MI) Association Health Plans Act (S. 1847, H.R. 2528)31 and Chairman Cassidy's Independent Retirement Fairness Act (S. 2217).32, would further expand certainty and access to health care and retirement benefits for independent contractors.
Together, these bills would modernize America's labor laws to reflect the realities of today's workforce by preserving the independence that millions of workers value, while providing greater access to workplace benefits that work best for them and their families.
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Worker Rights: Modernizing Labor Policy Through the Employee Rights Act
In addition to the legislation I mentioned above, Senator Scott's Employee Rights Act also embodies the principles of worker empowerment and freedom. It updates labor law to match the realities of the modern economy. The ERA guarantees secret ballot elections, ensuring that workers can decide on union representation free from coercion or intimidation--from employers or unions alike. It protects the integrity of the vote by rejecting the "card check" process that eliminates worker privacy and opens the door to harassment. As I shared in testimony before the House of Representatives in 2023, there are countless examples of how card check invites intimidation and coercion.33
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26 https://www.help.senate.gov/rep/newsroom/press/chair-cassidy-scott-paul-release-legislative-package-empowering-independent-workers-to-access-portable-benefits.
27 Modern Worker Empowerment, S. 2228, 119th Cong. (2025).
28 Modern Worker Empowerment, H.R. 1319, 119th Cong. (2025).
29 Unlocking Benefits for Independent Workers Act, S. 2210, 119th Cong. (2025).
30 Modern Worker Security Act, H.R. 1320, 119th Cong. (2025).
31 Association Health Plans Act, S. 1847, H.R. 2528, 119th Cong. (2025).
32 Independent Retirement Fairness Act, S. 2217, 119th Cong. (2025).
33 F. Vincent Vernuccio, Protecting the Secret Ballot: The Dangers of Union Card Check (2019), https://www.mackinac.org/26958
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The Big Village survey found that 67 percent of Americans, and 72 percent of Americans in a union household, believe employees should "have the right to a supervised secret ballot election when deciding whether or not to join a union."34 The ERA also safeguards worker privacy, allowing employees to control what personal information is shared with union organizers. That same Big Village survey found that 76 percent of Americans, and 80 percent of Americans in a union household, believe employees should be "allowed to opt out of having their personal information shared with a union during an organizing campaign."35 The ERA also includes opt-in protections, so workers' dues cannot be used for political activity without consent. A remarkable 75 percent of Americans--and 81 percent of those in union households--support this reform.36
Finally, the ERA provides legal clarity for independent contractors and joint employment relationships, preserving entrepreneurial opportunities and small business flexibility. Notably, it codifies standards that protect the right to self-employment, while reducing uncertainty and litigation.
Together, these reforms create a balanced framework that empowers workers, holds institutions accountable, and supports innovation and growth in the American workplace.
Worker Empowerment: Restoring Freedom, Fairness, and Opportunity for Every American Worker
American workers deserve a labor system that reflects who they are today--not who they were a century ago. The economy has evolved, and so have the needs, aspirations, and expectations of the modern workforce. From factory floors to digital platforms, today's workers demand flexibility, fairness, and the freedom to choose the path that best fits their lives and families.
Updating our labor laws is about ensuring those rights keep pace with the realities of a 21st century economy. Modern reforms should safeguard workers' ability to decide how, where, and with whom they work; to freely choose or refrain from representation; and to access fair and transparent information about their workplace and unions. They should protect workers from harassment, coercion, and rigid mandates--whether from employers, union organizers, or government overreach.
At the end of the day, empowerment means trust--trusting workers to make their own choices, to represent their own interests, and to pursue the opportunity that best fits their needs and those of their families. By restoring that trust and modernizing America's labor framework, Congress can renew the promise of worker freedom, fairness, and opportunity for generations to come.
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34 Supra note 10.
35 Supra note 10.
36 Id.
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Original text here: https://www.help.senate.gov/imo/media/doc/11987bcb-dd74-6e5e-b142-b64646a6a75e/Vernuccio%20Testimony.pdf
Cost Plus Drugs Co-Founder Cuban Testifies Before Senate Special Committee on Aging
WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Mark Cuban, co-founder of Cost Plus Drugs, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs":* * *
My Shark Tank companies hate selling on Amazon -- but most don't have a choice. About 162 million Americans shop there, and if you want to reach them, you have to play by Amazon's rules.
Amazon knows this and takes full advantage -- adding new fees, raising old ones, forcing sellers to buy ads, and even launching copycat products ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Mark Cuban, co-founder of Cost Plus Drugs, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs": * * * My Shark Tank companies hate selling on Amazon -- but most don't have a choice. About 162 million Americans shop there, and if you want to reach them, you have to play by Amazon's rules. Amazon knows this and takes full advantage -- adding new fees, raising old ones, forcing sellers to buy ads, and even launching copycat productsthat compete directly with them. They get away with it because they control the marketplace -- and because 167 million people pay $139 a year for Prime, which makes Amazon incredibly "sticky." So what does that have to do with healthcare?
Insurance companies work the same way. More than 300 million Americans have some kind of coverage -- commercial, Medicare, or Medicaid. Every one of those plans hires a Pharmacy Benefit Manager, or PBM, to run their drug benefits.
Three giant PBMs -- all owned by the biggest insurance companies -- control pharmacy benefits for about 270 million Americans. That's 70% more people than Amazon reaches.
Like Amazon, PBMs control the "store shelves." Their shelves are called formularies -- the lists of drugs your insurance will cover. If a drug isn't on the formulary, it's basically invisible to patients.
Here's the kicker: unlike Amazon or Walmart, which want lower prices, PBMs actually prefer higher ones.
They say they negotiate lower costs -- but they don't. They auction off access to their formularies to the highest bidder. Drug companies pay whatever rebates and fees PBMs demand so their drugs can be covered and prescribed. If they don't pay, they don't get access to patients.
Those rebates and fees are based on a percentage of a drug's list price -- called WAC, or Wholesale Acquisition Cost. So the higher the list price, the more money PBMs make.
Because PBMs are so powerful, that inflated list price becomes the reference point for the entire drug supply chain.
Take a hypothetical drug -- Brand A. The PBM tells the manufacturer to set the list price at $600, with a 50% rebate and another 10% in fees, leaving the manufacturer with $240 net.
Now, what does the patient pay?
* If they're uninsured: $600.
* If they're insured -- through an employer, the ACA, Medicare Advantage, or Part D -- they still pay the full $600 until they meet their deductible.
And yes, the PBM still gets its rebate on that sale. PBMs and the insurance companies that own them love high deductibles because they keep collecting rebates while patients pay full price. Insurance carriers love it even more when patients can't afford their deductibles -- because then they never have to pay out from premiums.
So patients end up paying the highest prices of anyone -- all because PBMs insist on using inflated list prices instead of transparent net prices.
Meanwhile, wholesalers buy the drug from the manufacturer for $600. The three major wholesalers all use the same list price, so there's zero price competition. And because their fees are also based on WAC, they profit more when prices rise.
Pharmacies buy from wholesalers at around a 5% discount -- about $570 in this case. But when they fill a brand prescription for an insured patient, they're often reimbursed less than what they paid. They literally lose money on most brand-name drugs. And if they don't fill enough of those money-losing prescriptions, PBMs and wholesalers hit them with even more penalties. No wonder independent pharmacies are being crushed.
Make it make sense. It doesn't.
Because the whole system is built around list prices, everyone -- PBMs, wholesalers, and insurers -- has an incentive to keep WAC going up. And it almost always does. Patients are the ones who pay the price.
And here's the saddest part: self-insured employers, states, and anyone contracting with the big PBMs are signing off on this system. They approve plans that force patients to pay list price without realizing how badly their members are getting ripped off. We blame PBMs -- but the real problem is the people and governments who keep signing these contracts without a clue And big brand pharma is part of the problem too. They hate the big PBMs , but they let themselves get trapped in this mess with formularies and WAC based pricing.
If they moved to all net pricing , out of pocket prices to patients would drop immediately.
There is a reason the USA has the highest brand pricing in the world and it's because we are the only country that uses PBMs.
Coincidence. I think not.
What to do?
* Require that all cash pays are counted against deductibles
* Require that patient out of pocket costs are based exclusively on net pricing not WAC
* Separate formularies from PBMs
* Use administration leverage to require manufacturers to use net prices and margins rather than list prices and rebate/fees
* Get rid of GCRs and DIRs
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Original text here: https://www.aging.senate.gov/imo/media/doc/e181c4e3-f9c5-eb56-4409-3daeca3232b4/Testimony_Cuban%2010.22.251.pdf
Century Foundation Health Care Reform Director Lambrew Testifies Before Senate Special Committee on Aging
WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Jeanne M. Lambrew, director of health care reform and a senior fellow at the Century Foundation, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs":* * *
Chairman Scott, Ranking Member Gillibrand, and distinguished members of the Committee, thank you for the opportunity to testify on health care shopping and its impact on costs and outcomes.
My name is Jeanne Lambrew. I am director of health care reform and a senior fellow at ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Jeanne M. Lambrew, director of health care reform and a senior fellow at the Century Foundation, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs": * * * Chairman Scott, Ranking Member Gillibrand, and distinguished members of the Committee, thank you for the opportunity to testify on health care shopping and its impact on costs and outcomes. My name is Jeanne Lambrew. I am director of health care reform and a senior fellow atthe Century Foundation, an independent think tank that conducts research, develops solutions, and drives policy change to make people's lives better. I am also an adjunct professor of health policy at the T.H. Chan Harvard School of Public Health. Prior to these positions, I was commissioner of the Maine Department of Health and Human Services when the state expanded Medicaid and established a state-based Marketplace. I also served in the U.S. Department of Health and Human Services and White House. I have experience in federal and state policies related to private insurance, Medicaid, Medicare, and public health.
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Background
Shopping for affordable medications and high-quality services matters. So does shopping for health plans. When designed well, health plans pool purchasing power to give enrollees access to high-quality, low-cost services. They also pool risk through premiums to pay for health care if and when enrollees need it. Additionally, with few exceptions, private health plans limit annual out-of-pocket costs, ensure minimum levels of coverage, and fully pay for proven preventive services - thanks to reforms in the Affordable Care Act (ACA).
Health Insurance Marketplaces. In addition to private insurance reforms, the ACA created a shopping platform for people buying private plans on their own called health insurance marketplaces. Marketplaces offer health plans in tiers from bronze to platinum based on the percent of expected costs they cover. Shoppers can check to see if a plan includes their doctors or drugs. They can also compare plans based on their monthly premiums, deductibles, and other features. While the federal government runs HealthCare.gov for thirty-one states, twenty states offer their own marketplaces--more than half of which have recently opened up window shopping for 2026 plans. Marketplaces are funded by user fees from participating insurance companies.
Premium Tax Credits. This shopping experience is enhanced by premium tax credits for people with income above the poverty level who lack access to affordable employer-based coverage. The credits are set competitively, based on the second lowest silver-plan premium in an area called the benchmark. Currently, under changes made in 2021 that end in 2025, eligible enrollees' payment for the benchmark plan is limited to 8.5 percent of their income, with the tax credit paying for the rest. The current tax credit automatically phases out as income rises. People with income below 400 percent of the poverty level pay a lower percent of their income for premiums (Figure 1). Once set, the tax credit is like a voucher: with it, enrollees can choose more or less generous coverage.
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Recent Performance
Overall Enrollment and Health Coverage. Currently, 24 million people are covered through health insurance marketplaces, double the number enrolled in 2020 and triple the number enrolled in 2014. The marketplace growth contributed to record-low uninsured rates in 2022, 2023, and 2024. About half of these people are small business owners, workers, or self-employed. In sixteen states, a higher percentage of rural residents than urban residents are enrolled in marketplace coverage. Over half of marketplace enrollees live in states that have not implemented the ACA Medicaid expansion compared to only 28 percent of the U.S. population. Over 600,000 are Veterans. The diversity of marketplace enrollees also increased since 2020.
Enrollment and Health Coverage of Older Americans. Marketplace enrollees are older than the overall non-elderly population, with 23 percent of enrollees being aged 55 to 64 compared to 15 percent in the general population. The share of older enrollees is 30 percent or higher in eleven states (Figure 2). About 5.5 million marketplace enrollees are ages 50 to 64 (eligibility for the marketplace ends when Medicare begins). Nearly one in ten older Americans relies on coverage purchased on their own. An AARP analysis estimates that marketplace and other ACA reforms reduced the uninsured rate among people ages 50 to 64 by 50 percent.
Choice. Choices in the marketplace have increased. In 2025, 97 percent of enrollees in states using the federal marketplace, HealthCare.gov, had three or more insurance companies offering plans, up from 68 percent in 2020. Similarly, the number of health plan choices per county averages 99.5, up from 38.5 plans in 2020. Starting in 2023, HealthCare.gov required insurers to offer standard cost sharing plans in some but not all of their plans, enabling consumers to shop based on premiums and networks rather than deductibles and copays.
Costs. From 2020 to 2025, marketplace benchmark premiums increased by an average annual rate of 2 percent, slower than employer-sponsored insurance and inflation, both of which were around 5 percent. Studies have repeatedly found that competition among marketplace plans has led to lower premiums. Competition may also help explain why fully insured plans like those in the marketplace have lower provider payment rates than self-funded health plans. It is also noteworthy that, according to one analysis, median individual deductibles dropped by almost half, from $750 to $400, between 2021 and 2023.
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Changes
Overall Impact on Marketplace Enrollees. All this is about to change. The budget reconciliation law erected barriers to getting and staying covered in the marketplace, which will worsen the risk pool and increase the number of uninsured. Trump administration rule changes will lower premium tax credits and raise out-of-pocket limits, among other changes. And, even though dozens of expiring tax cuts were extended in the budget law, current levels of premium tax credits were not. Since 2021, the value of the tax credits has been enhanced and the extra cap on premium tax credits was lifted, allowing the tax credit to phase out with income rather than ending abruptly when income increases over 400 percent of the poverty level. Combining these effects, the Congressional Budget Office estimates 7 million people who would otherwise have been in the marketplace will become uninsured by 2034. Based on its projections for the same year, federal funding for premium tax credits will be 46 percent below baseline.
But the harm begins this coming year. Premiums are already locked in for 2026. People in Idaho have started signing up for coverage and people in all states will start doing so on November 1. Without Congressional action to extend current tax credits, shoppers will experience sticker shock when newly signing up for or renewing marketplace health coverage.
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Health Insurance Premium Increases
Average Premium Increase. The average marketplace enrollee will pay more than twice as much for premiums starting in January, with many paying much more. There is no historical precedent for such a large one-year increase in premiums for so many Americans (Figure 3).
Older Americans' Premiums Increase. Many enrollees will pay significantly more than the average increase of $1,016 due to family size, income, location--and age. Insurers can charge older people more than younger people. A sixty-year old couple with income of $50,000 (236% of the federal poverty level) would pay $2,240 more annually for the benchmark plan.
Moreover, older Americans will be much more affected by reinstating the cut-off of premium tax credits for people with income above 400 percent of the federal poverty level (which translates into $62,600 for a single person and $128,600 for a family of four this year) (Figure 4). Over half of all people who will lose tax credit eligibility altogether in January are ages 50 to 64. If that same sixty year old couple has income of $85,000 (402 percent of the federal poverty level), the average increase would be $22,635 more in 2026 for a benchmark plan. This couple would pay 27 percent rather than 8.5 percent of their household income for premiums.
Regional Variation in Older Americans' Premiums Increase. The increase in out-of-pocket premiums for older marketplace enrollees will vary by location. Early window shopping for 2026 plans (Figure 5) shows that a 60-year old couple earning $85,000 will pay annually for a benchmark plan:
* $28,064 more in Savannah, Georgia;
* $18,632 more in Salmon, Idaho; and
* $13,899 more in Beltsville, Maryland.
My home state of Maine, which is on many metrics the older state in the nation, will be particularly hard hit because of its residents' age, health system consolidation, and rurality.
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Potential Impact on Older Americans
Retirement Security. Older people have relatively high health needs. As such, they are more likely to pay the extremely high marketplace premium increases to stay insured. Absorbing such large premium increases would likely cut into household budgets for basic necessities. For example, if the 60-year old couple paid the average increase of $22,635 until they enrolled in Medicare at age 65, this could cost them over 60 percent of the median lifetime retirement savings of people ages 55 to 64 of $185,000.
Access and Health. Other older marketplace enrollees will simply be unable to afford the premium hikes and will become uninsured. Lacking coverage is associated with lower use of needed health care. Studies also have found being uninsured increases a person's risk of mortality. Simply stated, the older people losing health coverage because of the reduced tax credits are at greater risk of unmet needs, worse health, and preventable death.
Medicare Costs. Uninsurance among people ages 55 to 64 also affects Medicare. Research suggests that people who were uninsured prior to enrolling in Medicare have higher needs and significantly higher costs than those who were previously insured.
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In Their Own Words
Current marketplace enrollees have described what the change will mean for them. For example:
* Tracy W., a 57-year-old from Georgia: "That amount may not seem like much to the government or to the insurance companies, but for me it would most likely mean sacrificing essentials: groceries, gas, basic necessities that I rely on."
* Michael, a 54-year-old from Arizona: "If it does happen, we'll have to cut costs elsewhere and that's now digging into basic necessities, like, food, car, gas, rent. We're struggling already as it is."
* Charlene, a 60-year old from New York: "When you take away this extra help, even if it's $5 a month, that's still $5 a month, because your electric bill goes up $14 a month. People can't afford it."
* Kristen, a retired teacher from Maine: "If these health care tax credits are allowed to expire, many families will face impossible choices. People like me, caregivers, parents, those living with chronic illness, will be forced to decide between paying for their own care or covering a loved one's. Some will go into debt. Others will delay or skip essential treatment. Either way, the cost isn't just money -- it's worse health, more stress and a system that lets people down when they need it most." Potential Impact on All Americans
Market Stability and Choice. The significant impact of reduced tax credits on premiums and enrollment will affect the stability, affordability, and accessibility of the individual insurance market for people purchasing on their own without tax credits. As a result of not extending the tax credits, Marketplace enrollment next year is projected to drop by over 30 percent nationally and by more than 50 percent in Georgia, Louisiana, Mississippi, Oregon, South Carolina, Tennessee, Texas, and West Virginia. This, along with concerns about fewer consumer choices, is why the bipartisan National Association of Insurance Commissioners has urged extension of the premium tax credits.
Health System Capacity. The impact of older people losing health coverage will extend to all Americans' access to health services. In the words of the American Hospital Association, "This loss of coverage would put considerable stress on hospitals and health systems, which will experience more uncompensated care and bad debt. There will also be an impact on the entire community, even those with coverage, because of an influx of uninsured patients into emergency departments causing longer waits, stress on the whole health care system and the inability to get the care they need." Jobs and the Economy. There could also be an effect on jobs and the economy. A recent analysis estimates that 339,000 jobs could be lost, and state and local revenue could drop by $2.5 billion, due to failure to continue tax credits.
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What's On the Horizon for Older Americans: Medicaid Changes
This testimony has focused on the ACA marketplaces and premium tax credits because of its time sensitivity. However, in the coming years, changes to the Medicaid program in the budget reconciliation law will also have profound effects on older Americans' access to health care, including those over age 65 (e.g., new asset test for nursing home care; continued obstacles to enrolling in Medicare Savings Programs). A few of the policies affecting those ages 50 to 64 are described below.
Medicaid Work Requirements. According to KFF, older Medicaid enrollees may be most at risk of losing coverage due to work requirements starting in January 2027. The percent of non-disabled, non-parent adults with Medicaid coverage that are employed or in school is 72 percent of enrollees ages 19 to 27, 66 percent of enrollees ages 27 to 49, but less than half (48%) of enrollees ages 50 to 64.
Required Eligibility Checks Twice a Year. Also starting in January 2027, people covered through the ACA's Medicaid expansion will need to have their eligibility checked every six months which will result in over $60 billion in savings over the next decade due to coverage loss, according to the Congressional Budget Office. Approximately 6 million older people are covered through the Medicaid expansion.
New Cost Sharing for Medicaid Expansion Enrollees. Starting in October 2028, Medicaid expansion enrollees with income above 100 percent of the federal poverty level may have to pay up to $35 copays for certain health services. Generally, people ages 55 to 64 have health costs that are three times higher than those of adults ages 18 to 24. As such, older Medicaid expansion enrollees will likely disproportionately pay more or forego care due to this policy. This, along with reduced coverage in the marketplaces, will likely increase medical debt.
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Conclusion
American people want clear choices and affordable options when it comes to health care and coverage. The policies and proposals being considered by this Committee may offer them that.
However, one proposal--extending tax breaks for private insurance--is at the forefront of the debate and merits attention as well as bipartisan support. It is straight out of a traditional conservative's playbook. It expands private coverage, leverages the tax code, and sets the amount of federal assistance through private plan competition. It requires no new government workers or bureaucracy to implement. And it reduces uncompensated care for hospitals, doctors, clinics, and other providers. It also meets progressives' goals of supporting coverage that provides meaningful benefits, limited cost sharing, and income-related premium support. ACA plans provide peace of mind to people with pre-existing conditions and their families. While improvements to ACA plans can and should be made, marketplace tax credits as currently designed have proven they can work and they should be extended.
Thank you for the opportunity to present this testimony.
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Original text here: https://www.aging.senate.gov/imo/media/doc/e181c4e3-f9c5-eb56-4409-3daeca3232b4/Testimony_Lambrew%2010.22.25.pdf
California Public Employees' Retirement System Chief Health Director Moulds Testifies Before Senate Special Committee on Aging
WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Donald B. Moulds, chief health director for the California Public Employees' Retirement System, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs":* * *
Chairman Scott, Ranking Member Gillibrand, and Members of the Committee, thank you for inviting me to testify on behalf of the California Public Employees' Retirement System (CalPERS) and discuss how shoppable services can help control health care costs. I will be using our reference ... Show Full Article WASHINGTON, Oct. 30 -- The Senate Special Committee on Aging released the following testimony by Donald B. Moulds, chief health director for the California Public Employees' Retirement System, from an Oct. 22, 2025, hearing entitled "Modernizing Health Care: How Shoppable Services Improve Outcomes and Lower Costs": * * * Chairman Scott, Ranking Member Gillibrand, and Members of the Committee, thank you for inviting me to testify on behalf of the California Public Employees' Retirement System (CalPERS) and discuss how shoppable services can help control health care costs. I will be using our referencepricing program and other aligned purchasing innovations as case examples.
My name is Don Moulds and I serve as the Chief Health Director for CalPERS. With more than 1.5 million members, CalPERS is the largest commercial health benefits purchaser in California and the second largest commercial purchaser in the nation after the federal government. We contract with numerous large health insurance companies to provide our members with a variety of health plan offerings that include health maintenance, preferred provider, and exclusive provider organization (HMO, PPO, and EPO) plans, as well as Medicare Supplemental and Medicare Advantage (MA) plans. In 2024, we spent over $12.4 billion purchasing health benefits for active and retired members and their families on behalf of the State of California (including the California State University) and nearly 1,200 public agencies and schools.
In my testimony, I will outline successes and lessons learned from CalPERS' two reference pricing programs: our hip and knee replacement reference pricing program and our Ambulatory Surgery Center Reference Pricing program. I will also describe a new program we instituted last year to incentivize our members to use independent laboratories for shoppable lab services rather than higher cost hospital-based labs. Finally, I will touch on our experience with a price transparency tool.
As I share our experiences, I wish to underscore that there is no "one size fits all" solution for rising health care costs. The cost-driving challenges are multifaceted. So too must be the solutions. We've learned that initially encouraging ideas can have underwhelming results or unintended consequences and that purchasers must be ever vigilant in monitoring and evaluating interventions to ensure they produce the outcomes we are seeking. Having said that, CalPERS considers consumer-oriented incentives, such as reference pricing, to be an integral part of our value-based purchasing model. At the end of my testimony, I will discuss other mechanisms that CalPERS utilizes to provide superior health care services at the greatest value for our members.
About CalPERS:
For more than nine decades, CalPERS has provided retirement and health security for state, school, and public agency members serving more than 2 million members as the nation's largest defined-benefit public pension fund.
As part of our role in administering health benefits for members and their families, CalPERS is committed to ensuring access to equitable, high-quality, affordable health care.
To promote competition and keep premiums affordable, CalPERS regularly commissions competition studies. For example, based on results from the 2021 study, CalPERS implemented health plan service expansions and introduced lower-cost HMO plans. These efforts increase competition within the CalPERS insurance marketplace and put downward price pressure on the premiums, positively impacting CalPERS members and employers./1,2
To control rising health care costs, CalPERS works to align financial incentives with the health plans and Pharmacy Benefit Manager (PBM) we contract with, aiming to mitigate cost trend increases. In June 2024, CalPERS awarded new five-year contracts for its self-funded PPO plans to Blue Shield of California (BSC) and to Included Health, which serves as the population health management vendors. The contracts are designed to promote savings and improve quality by establishing financial incentives and clinical performance guarantees. BSC and Included Health have committed $464 million at-risk over the term of the contract if they do not meet the program's goals for controlling medical cost trends and improving quality. The contracts set the initial medical trend cost target at 5.5% in 2025, decreasing annually to 3% by 2029. If CalPERS' medical cost trend is lower than the target, BSC and Included Health stand to share in the savings.
In July, CalPERS announced a new five-year pharmacy benefits contract with CVS Caremark (CVS) designed to address rising costs of prescriptions while ensuring access to safe and effective medications for members. Under the agreement, CVS has committed $250 million at-risk over the term of the contract for controlling drug costs and improving health outcomes. Similar to our HMO and recent PPO contracts, the new PBM contract builds on CalPERS' broader efforts to align health care affordability with quality and equity. By aligning pharmacy benefits with our overall health care goals, CalPERS aims to create a model that can serve as a blueprint for purchasers across the nation.
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Reference Based Pricing
CalPERS mitigates medical trend increases through cost and quality conscious strategies, including leveraging curated hospital networks for better pricing, implementing value-based purchasing and integrated health models, fostering competition, and flex-funding. One contributor to increased health care costs is significant price variation for the same service. For example, lab services tend to vary greatly in price, despite no quality difference. Additionally, the prices for procedures provided in hospital outpatient departments are typically higher than those charged in freestanding centers due to the hospitals' higher costs and stronger bargaining position with insurers. In fact, Medicare reimburses hospital-based outpatient procedures at rates substantially higher than those it pays freestanding ambulatory facilities./3
As such, employers and insurers have started to utilize programs encouraging employees and enrollees to select the most cost-effective setting, including reference pricing models, which CalPERS has had success with. In a reference pricing model, the payor sets a maximum price for a specific health care service. Patients still have the option to receive that service at a facility of their choice, but they are responsible for charges above the reference price. This process helps contain costs while maintaining access to quality care by encouraging members to choose a pre-arranged high-quality, lower-cost provider for certain medical services. Patients who require hospital outpatient services due to specific clinical needs or limited local options are not subject to cost-sharing initiatives.
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1 See CalPERS, Pension & Health Benefits Committee Agenda Item 7a, available at https://www.calpers.ca.gov/docs/board-agendas/202103/pension/item-7a_a.pdf
2 See CalPERS, Competition Study & 2022 New Plans, Area Expansion, and Benefit Changes, available at https://www.calpers.ca.gov/docs/board-agendas/202103/pension/item-7a-attach-2_a.pdf
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CalPERS Experience #1: Hip and Knee Reference Pricing:
In January 2011, CalPERS and Anthem Blue Cross of California (Anthem), our prior third-party administrator for our PPO plans, implemented a reference pricing program for high-cost elective procedures with minimal quality difference among facilities. CalPERS initially aimed to control inpatient hospital orthopedic surgery costs for total hip and total knee replacements. The program involved 46 hospital inpatient facilities statewide that accepted a reference price of $30,000 and met quality and volume standards. Members who used the designated reference price facilities were responsible for their standard coinsurance payments. However, members who chose a non-designated facility were responsible for any charges above the $30,000 reference price. Medical exceptions were granted for non-routine procedures, and travel benefits were available for members living over 50 miles from a designated facility. A significant level of effort was devoted to both implementation and member education.
Results: The reference pricing program successfully increased the proportion of members who used designated facilities from about 50% to 64% within two years. Notably, non-reference pricing facilities lowered their charges to match the CalPERS $30,000 reference price. In turn, price variation for hip and knee replacements decreased dramatically. The average price at preferred facilities dropped from $35,000 to $25,500, while the non-reference pricing facilities reduced their prices from $43,000 to $27,000.
A study by University of California Berkeley health economists found that CalPERS' reference pricing program saved $5.5 million in its first two years, with the average price per procedure declining by 26% or about $9,000./4
Initially, the program sought to create savings through consumer decisions, but market changes and hospital pricing had the biggest impact. We learned anecdotally that non-reference pricing facilities were lowering prices to draw CalPERS members.
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3 See Robinson, James C., Timothy T. Brown and Christopher Whaley. "Reference-Based Benefit Design Changes Consumer Choices and Employers' Payments for Ambulatory Surgery. Health Affairs 2015 34:3, 415-422 https://www.healthaffairs.org/doi/10.1377/hlthaff.2014.1198 4 See Robinson, James C., and Timothy T. Brown. "Increases in consumer cost sharing redirect patient volumes and reduce hospital prices for orthopedic surgery." at Health Affairs 32.8 (2013): 1392-1397.https://doi.org/10.1377/hlthaff.2013.0188
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Berkeley economists concluded that 14% of the savings arose from more individuals selecting reference-based pricing facilities, while 86% were due to cost reduction. Our analysis showed that the program continued to generate approximately $4 million in annual savings through 2020, with participating facilities expanding from 46 to 72. Additionally, members who utilized reference pricing facilities had lower rates of complications and infections with similar follow-up admission rates. Patient experience was also shown to be better at the reference pricing facilities.
In terms of our overall health care spend, savings from reference pricing have been relatively modest, but the model has nonetheless offered valuable insights and lessons that may inform future strategies and potentially yield further savings.
* More member outreach could have been beneficial, such as phone calls or letters to members who had been referred to a procedure that could have been done at an ASC or a pop-up in the price transparency tool when members searched for a reference pricing procedure.
* Our reference price has applied only to the facility portion of the procedure and excluded professional fees and other related costs. Adopting a bundled payment approach alongside reference pricing could be beneficial.
* CalPERS has used a single statewide price that is easily communicated to members, despite significant price variation by region, with Northern California historically much more expensive than Southern California. Cost savings could be improved with regional pricing, but it might be more difficult to explain to our members.
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CalPERS Experience #2: Ambulatory Surgery Center Reference Pricing
In 2012, CalPERS and Anthem introduced a second reference pricing program for Colonoscopy, Cataract and Arthroscopy services. Under this program, procedures not performed at an Ambulatory Surgery Center (ASC) have a set reference price. Similar to the hip and knee replacement procedures, we identified large price variations for colonoscopy, cataract, and arthroscopy services. The variation mainly depended on the location of care, specifically whether procedures were provided by Hospital Outpatient Facilities vs. ASCs. We noticed a substantial increase in routine non-screening colonoscopies at ASCs, climbing from 70% to over 90%. In contrast, Anthem's broader business had around 75% of these procedures at ASCs.
Results: The University of California, Berkeley's evaluation of this program showed total savings of $5 million each year and realized average reductions of 21%. Specifically, cataract surgeries resulted in $1.3 million in savings (20% reduction), colonoscopies saved $7 million (28% reduction), and arthroscopies contributed $2.3 million (17% reduction) across a two-year timeframe./5,6
As a result, in 2018, CalPERS extended its ASC reference pricing program to 12 additional procedures, including endoscopic and laparoscopic procedures.
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CalPERS Experience #3: Member Incentive Lab Program:
In 2024, CalPERS implemented a member incentive program for labs due to high price variation with no quality difference. National research shows that lab services in hospitals (e.g., large health systems) cost roughly 3.7 times more than those at independent labs./7
Our data indicates the markup may be even higher, especially compared with California's two largest independent lab providers.
Our program offers no cost sharing for preferred independent labs in California, but non-preferred labs require standard coinsurance. In contrast to the other reference pricing programs, the lab incentive program provides financial incentives for our members to choose the lower-cost option without imposing additional costs for those who opt out.
While we are still evaluating this program, preliminary results indicate it increased preferred lab use by 4% and saved members $2.4 million in its first year. As a result, we are expanding outreach to improve awareness of the program and encourage more use of the preferred lab sites.
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CalPERS Experience #4: Price transparency tool
To aid price shopping, CalPERS provided a price transparency tool for PPO members in 2014 that allowed members to use an app to search for location, price, and quality of services. The tool was created to empower members to shop for services based on both price and quality, fostering greater member engagement. When paired with reference pricing, the goal was to create a more informed and engaged member.
Results: Ultimately, the price transparency tool fell short of delivering expected overall cost savings. Members saved on imaging costs, but spending in other 'shoppable' categories and reference pricing procedures showed no decrease.
We found that few of our members used the tool, especially for price shopping. Even though 24% of CalPERS households registered to use the tool, only 12% used it to search prices, and just 4% maintained usage (3 or more times, at least 90 days apart). Our experience is consistent with other research in this area./8
A small fraction of people sign up for these tools, and among those who sign up, few use the tool before seeking care. Furthermore, when they do use the tool to search prices, for most services, users do not choose a lower cost provider.
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5 See Robinson, James C., Timothy T. Brown and Christopher Whaley. "Reference-Based Benefit Design Changes Consumer Choices and Employers' Payments for Ambulatory Surgery." Health Affairs 2015 34:3, 415-422 https://www.healthaffairs.org/doi/10.1377/hlthaff.2014.1198
6 See Robinson, James C, Timothy T. Brown and Christopher Whaley. "Association of Reference Payment for Colonoscopy With Consumer Choices, Insurer Spending, and Procedural Complications." JAMA Internal Medicine 2015;175;(11):1783-1789. https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/243473
7 See Chang, Jessica, Katie Martin, Yuvraj Pathak and Marissa Myers. "Price Markups for Clinical Labs: Employer-based Insurance Pays Hospital Outpatient Departments 3X Than Physician Offices and Independent Labs for Identical Tests." Health Care Cost Institute, https://healthcostinstitute.org/images/pdfs/HCCI%20Lab%20Brief_103124.pdf
8 Desai S, Hatfield LA, Hicks AL, Chernew ME, Mehrotra A. Association Between Availability of a Price Transparency Tool and Outpatient Spending. JAMA. 2016;315(17):1874-1881.doi:10.1001/jama.2016.4288
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As such, CalPERS stopped offering the tool after 2.5 years due to the added cost of the tool. We found that there are a limited range of services that are truly 'shoppable' and that our benefits with low cost sharing diminished the relevance of price shopping for most services. While members express an interest in quality and pricing, their decisions frequently hinge on the referrals they receive from healthcare providers./9
Additionally, rural communities lacked sufficient options to facilitate a meaningful comparison.
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Limitations on Reference Based Pricing:
Reference based pricing has shown promise, but it is not a panacea. Research suggests that if implemented as broadly as possible, it saves about 5 percent of total cost of care./10
Considering that CalPERS spends approximately $2.3 billion each year (or $6.4 million per day) on the affected PPO population, the savings are quite modest.
Overall savings are limited by the small number of procedures where reference pricing makes sense. While reference pricing is well suited for non-emergent elective procedures with significant price differences, many healthcare services are not "shoppable." Our experience has shown that while price referencing programs can work, to truly manage rising health care costs, other issues need to be addressed, including:
* Competition: CalPERS has found that insufficient competition results in higher prices. Since 2010, competition among hospitals and providers in California has lessened, notably in rural regions./11,12
As of 2018, 52% of specialists and 42% of primary care physicians were in health system-owned practices./13
In markets with fewer hospitals, consolidation led to a 12% increase in premiums, a 9% rise in specialist fees, and a 5% rise in primary care costs from 2013 to 2016./14
To address abuses in this space, Congress could pass laws to stop anti-competitive practices in contracts between providers and health plans. Specifically, we support the passage of the Healthy Competition for Better Care Act (S. 1451), which encourages a more open market, fosters competition, drives innovation, improves quality, and reduces costs.
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9 Semigran, H., Gourevitch, R., Sinaiko, A., Cowling, D., & Mehrotra, A. (2018). Patients' views on price shopping and price transparency.. The American journal of managed care, 23(6), e186e192-ee192. Available at: https://pubmed.ncbi.nlm.nih.gov/28817296/
10 White, Chapin, and Megan Eguchi. Reference Pricing: A Small Piece of Health Care Price and Quality Puzzle. National Institute for Health Care Reform. Available at: https://nihcr.org/wp-content/uploads/2016/07/Research_Brief_No._18.pdf
11 See California Health Care Foundation (CHCF), The Sky's the Limit: Health Care Prices and Market Consolidation in California, available at https://www.chcf.org/wp-content/uploads/2019/09/SkysLimitPricesMarketConsolidation.pdf
12 See California Health Care Foundation (CHCF), Markets or Monopolies? Considerations for Addressing Health Care Consolidation in California, available at https://www.chcf.org/publication/markets-monopolies-health-care-consolidation-california/
13 Ibid.
14 See Health Affairs, Consolidation Trends In California's Health Care System: Impacts On ACA Premiums And Outpatient Visit Prices, available at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.0472
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* Transparency: We see transparency as vital in developing shoppable services but emphasize that it should be user-friendly for all stakeholders. CalPERS maintains a comprehensive claims data warehouse to track health care costs and outcomes, allowing us to identify cost drivers and innovate in areas like reference pricing. Other payers may lack this long-term data, making federal standards for hospital transparency crucial. We commend the Administration's efforts to ensure comprehensive and precise reporting of hospital price data.
* Innovation: Beyond reference pricing, CalPERS continuously explores innovative approaches to reduce costs and improve quality. For example, CalPERS, in alignment with other large public purchaser partners in California, adopted a subset of quality and outcome measures and tied significant financial accountability to high-performance on these measures for our health plans. These measures, known as the Quality Alignment Measure Set (QAMS), and the financial incentives tied to them, aim to improve care for clinically important conditions for which there are major opportunities for improvement and evidence-based measures in current use. The QAMS consists of five measures, all of which are nationally endorsed, evidence-based NCQA HEDIS measures: Childhood Immunizations, Controlling High Blood Pressure, Comprehensive Diabetes Care - Poor Control (HgbA1c >9 percent), Colorectal Cancer Screening, Maternity Care (reflecting a combined score for Timeliness of Prenatal Care and Postpartum Care).
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Conclusion
Thank you, again, for inviting me to participate in today's hearing. CalPERS' application of Reference Pricing models demonstrates modest but notable savings in shoppable services. However, truly curbing rising health care costs requires a thoughtful, multi-faceted approach. CalPERS is uniquely positioned to assist the Committee as it develops policy and I welcome your questions on how we manage health care costs.
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Original text here: https://www.aging.senate.gov/imo/media/doc/e181c4e3-f9c5-eb56-4409-3daeca3232b4/Testimony_Moulds%2010.22.25.pdf