George W. Bush photo

Remarks in a Discussion on Health Care Initiatives

February 16, 2006

The President. Thank you all. Thanks for the warm welcome. Thanks for coming. We're about to have a discussion about how this country can make sure our health care system is available and affordable. And I want to thank our panelists for joining us. It's an interesting way to describe and discuss policy. It's a lot better than me just getting up there and giving a speech—you don't have to nod. [Laughter]

Do you want to kick things off, Mark?

Mark B. McClellan. I'd be glad to. I'd like to welcome all of you to the Department of Health and Human Services. As you know, there are many people here who are working day and night to protect the public health, to help our health care system work better.

We have the privilege of working with the best health professionals in the world— doctors, nurses, others who have some great ideas about delivering better care and about finding ways to do it with fewer complications and at a much lower cost. But in many ways, our health care policies haven't kept up with what our health care system can do, and we're going to spend some time talking about that today.

So, Mr. President, we're very pleased to have you here today to lead this discussion of some new ideas for improving our health care.

The President. Yes, thank you, Mark. Thanks. Mike Leavitt—where are you, Michael? Surely, he's here? [Laughter]

Dr. McClellan. He's in Florida, Mr. President.

The President. Oh, he's in Florida. Okay. Surfing. [Laughter] Actually, I saw him this morning—now don't make excuses for him. He's doing a heck of a job—he really is— and I hope you enjoy working for him.

I am really pleased that Nancy Johnson is here. Madam Congresswoman, thank you for coming. If you want to meet somebody in Congress who knows something about health care, talk to Nancy; she is a tireless advocate for making sure the health care systems are efficient and compassionate. And I really want to thank you for coming. It's a joy to work with you on these big issues.

I thank all the folks here at HHS. Thank you for working hard on behalf of our fellow citizens. You've got a tough and important job, and you're doing it well. One of the reasons why is because, you know, we've clearly defined roles of government— with the role of Government in health care. And one of the roles is to make sure our seniors have a modern, reformed Medicare system. And I want to thank those of you who are working on making sure that the Medicare system is explained to and available for seniors all across the country.

We did the right thing when it came to saying that if we're going to have a program for seniors, let's make sure it works as good as possible. And part of that meant modernizing the system so it included a prescription drug benefit. It's not easy to sign up millions of people in a quick period of time to a new program, and there were some glitches. The good thing about this Department, and the good thing about Mike and Mark is that they have prioritized problems to be fixed and have gone around the country fixing them.

Millions of folks—about 25 million people have signed up for the new Medicare benefit. I don't know if you remember when we first had the discussions about the Medicare benefit, people said, "It will cost about $37 a month per beneficiary." One of the interesting reforms was not only making sure that medicine was modernized, but seniors actually were given choices to make in the program. And Mark's done a fine job of encouraging providers to be in the markets. And as a result of choice in the marketplace, the average per—anticipated cost is $27 a month.

In other words, giving people a decision to make is an important part of helping to keep control of cost. We have a third-party system—third-party payer system. When somebody else pays the bills, rarely do you ask price or ask the cost of something. I mean, it seems kind of convenient, doesn't it? You pay your premium; you pay your copay; you pay your deductible; and somebody pays the bills for you.

The problem with that is, is that there's no kind of market force. There's no consumer advocacy for reasonable price when somebody else pays the bills. And one of the reasons why we're having inflation in health care is because there is no sense of market. We're addressing the cost-drivers of health care, and this discussion today is a part of helping to make sure health care is affordable. And as it becomes affordable, it becomes more available, by the way.

A couple of ideas, other than the subject at hand, to make sure health care is affordable is—and we'll talk a little bit about information technology. I know there's a great initiative here at HHS to help bring the health care industry into the modern era by implementing information technology reforms. And for those of you working on the project, thanks, and we take it very seriously at the White House, and I know you take it seriously here.

Secondly, I want to thank those of you who are working on community health centers. One way to help control costs is to help people who are poor and indigent get costs in places that are much more efficient at delivery of health than emergency rooms. And so we're committed to expansion of community health centers. Again, thanks on that, Nancy, for helping in Congress. They work. We're measuring results, and the results are good results.

Thirdly, lawsuits are running up the cost of medicine. The practice of—the defensive practice of medicine or the practice of defensive medicine—I'm a Texan—[laughter]—it costs about 28 billion a year when doctors overprescribe, to make sure that they kind of inoculate themselves against lawsuit. It runs up Federal budgets. It costs the economy about 600 to 100 billion— 60 to 100 billion a year.

And so we've got to do something about these junk lawsuits. I mean, they're running good people out of practice. I said a statistic the other day in the State of the Union that's got to startle you if you're involved with the health care delivery in America: 1,500 counties don't have an ob-gyn because lawsuits have driven a lot of good docs out of those counties. And that's not right.

And so we've got to get medical liability reform. The House has done a good job of passing it. It's stuck in the Senate. So for the sake of affordable and available health care and if—is to get a good, decent bill passed.

One other way to help control costs is to interject market forces, as I mentioned. And one way to do that is through what's called health savings accounts. Health savings accounts are an innovative product that came, really, to be as a result of the Medicare bill that I was honored to sign. And they're an innovative account that combines savings on a tax-free basis with a catastrophic health care plan. We'll have some consumers here of health savings accounts that will describe how they work and whether or not they're working worth a darn.

But the key thing in a health savings account is you actually put a patient in charge of his or her decisions and—which we think is a vital aspect of making sure the health care system is not only modern, but a health care system in which costs are not running out of control. And part of making sure consumers, if they have a decision to make, can make rational decisions is for there to be transparency in pricing. In other words, how can you make a rational decision unless you fully understand the pricing options or the quality options. When you go buy a car, you know, you're able to shop and compare. And yet in health care, that's just not happening in America today.

And so one of the—this discussion is centered around encouraging consumer-based health care systems and strengthening private medicine through transparency and pricing and quality. And I hope you find this as interesting a discussion as I will.

I'm going to start off with Dr. Gail Wilensky. Do you know anything about health care? No. [Laughter] She knows a lot about health care. You've been working the health care industry for, what—tell us what you do.

[At this point, Gail Wilensky, senior fellow, Project HOPE, made brief remarks.]

The President. Thank you for the lead-in. We spend a lot of money at the Federal level, and you would expect that if we're sitting up here talking about transparency then we ought to do something about it. I mean, the Federal Government is the largest purchaser of health care—am I right—46 percent of all health care dollars.

Dr. McClellan. That's right.

The President. Okay. What are you going to do about it? [Laughter]

Dr. McClellan. Well, Mr. President, we are doing a lot about this already, as you know. With—before the Medicare drug benefit, Medicare provided a drug discount card for millions of seniors to enable them to save billions of dollars. And with that card, we made available information on discounted drug prices for all the prescription drugs and all the pharmacies around the country. Seniors use that information to keep prices down. They shopped, and we saw during the course of this program, savings actually increase over time.

The President. Yes.

Dr. McClellan. We also saw lots of seniors switching to drugs that they found out about that could meet their medical needs at a much lower cost.

The President. One thing a person watching out there—what we're talking about, for example, when it comes to putting information out on drugs, a brand name drug and a generic drug do the same thing, but there's a huge price differential. And what Mark is saying is, is that we made, as a result of our Government policies, the providers to provide a shopping list, a comparison for people to get on the Internet and find out whether they can buy a drug cheaper or not.

Dr. McClellan. That's right. And many people are saving 70 or 80 percent or more on their drug cost by switching to generics. You can get this information on the Internet. You can also get it by calling 1-800-MEDICARE. And we're doing the same thing with the drug benefit. And that's one reason the drug benefit costs now are so much lower than people expected, as you mentioned earlier.

We're trying to make more information available on hospital quality, on nursing home quality, on many other aspects of health care. But we can't do this alone; we've got a public/private health care system, so we need to work with health professionals, with consumer groups, with business purchasers, and with the health plans in this country to get useful information out. We started to do that through collaborative efforts, like the Hospital Quality Alliance and the Ambulatory Care Quality Alliance. These are groups that include all of the different key stakeholders in our health care system working together to make useful information available on quality and cost.

Some of that's happened already, but I think with the leadership from the President and with the full backing of the Federal Government, we can move this effort along much more quickly and much more extensively to get information out about satisfaction with care, to get information out about outcomes of care and complications, and to get information out about cost. And, Mr. President, we're very pleased to be starting right now a new program that will be piloted in six large communities around the country, where all these different groups—the health professionals, business groups, Government organizations, including Medicare and the Agency for Health Care Research and Quality, and health plans—are going to be working together to make useful information available to consumers and health professionals in these communities about the quality and costs of their health care. And hopefully, we'll be able to move this project along very, very quickly.

The President. Good.

Dr. McClellan. We're working.

The President. Nice going. Yes, I know you are. You're working hard. Mark also has been responsive to some of the issues of the Medicare rollout. And they've been moving hard and traveling around the State. And thanks for responding to what's going to end up being a really, really important program for our seniors—let me say, a revitalized, important program for our seniors. It's going to make a big difference. Thanks for working so hard.

Robin Downey. What do you do, Robin?

Roberta "Robin" Downey. I'm head of product development for Aetna.

The President. Yes.

Ms. Downey. And I was instrumental in launching our HSA program. We've been doing consumer-directed plans since 2002. And so we're the first national plan to offer an HSA in the health plan arena.

The President. Good move. I bet you're really selling a lot of them.

Ms. Downey. Yes, we are. The adoption is higher in the HSA than it is in the HRA now. It's increasing, and I'm probably one of Aetna's first members in the HSA.

The President. You and I both. We own an HSA.

Ms. Downey. Yes, yes, both in it.

The President. Let me ask you something. Aetna, obviously, is a big health insurance company. Do you—obviously you've got an opinion on transparency, otherwise you wouldn't be sitting here—but give us from your perspective, from the insurance company's perspective, tell us what transparency means to you and how best we can work together to implement the transparency.

[Ms. Downey, vice president and head of product development, Aetna, made brief remarks.]

The President. Good. And I presume there was resistance at first?

Ms. Downey. Not resistance; they wanted to know why. I think physicians are wondering why the consumers need that kind of information. So they're getting used to that. And then they were actually pretty helpful when we were talking about how we were going to display it. They were saying, make it easy for the patients to understand, so they're helping us take the medical terminology, put it into layman's terms. They wanted to make sure it wasn't going to create more work for them; were people going to be calling their offices constantly. And that's what we want to do; we want to put it on the web site so they don't have to constantly call. So we want to provide easy access.

And so they were also concerned with, if you put cost information there, and you don't have quality, then people will price shop on cost alone, and they're very afraid of that—and they should be, because people should understand the——

The President. So how do you handle that?

Ms. Downey. We're marrying that now. We're going to expand that pilot. It was so successful, we're going to expand it into more locations in the fall of 2006, and we're going to be marrying that information with the quality information so the consumer can go out and see what the unit cost is, what the efficiency is, what the clinical quality is. And so they can look at the overall value. We're pretty pumped about it.

The President. Well, I appreciate you doing it. It must be exciting to be on the leading edge of an interesting innovation and to a—into health care.

Ms. Downey. Very much.

The President. It's hard to believe that ours is a market society in which people are able to shop based upon price and quality in almost every aspect of our life, with the exception of health care. And it's no wonder that we're dealing with what appears to be ever-increasing costs.

You know, it's really interesting, LASIK surgery is a good example of a procedure that was really didn't—was not a part of a third-party payer, just came to be. People could choose it if they wanted to choose it, could pay for it if they didn't want to— would pay for it themselves if they chose to use it. And more doctors started offering LASIK surgery. There was more information about LASIK surgery, and the price came down dramatically over time, and the quality was increasing. And now LASIK surgery is eminently affordable for a lot of people, because the market actually functioned. And I think what Robin is saying is that they're trying to introduce those same kind of forces in Cincinnati.

Thanks for doing what you're doing. I met with your old boss today. Maybe he's watching out there. [Laughter]

Ms. Downey. He talks to me just the way you talk to Mark—"just do it." [Laughter]

The President. A little bossy. [Laughter]

Ms. Downey. Yes. But you get stuff done.

The President. Yes, that's right.

Dan Evans is the president and CEO of Clarion Health Partners in Indianapolis, Indiana. Thanks for coming. They're doing some interesting things. He's a hospital guy.

Daniel F. Evans, Jr. Yes. We're—I'm the CEO of an academic medical center, so we have both a university and a hospital. We have 4,000 peer review projects ongoing right now, including——

The President. Tell everybody what a peer review project is.

[Mr. Evans, president and chief executive officer, Clarian Health Partners, Inc., made brief remarks.]

The President. So how easy is it to establish a matrix, or a—information for consumers to be able to really accurately understand?

[Mr. Evans made further remarks.]

The President. The—we're really talking about making sure each American has an electronic medical record, over which he or she has got control of the privacy. An interesting—another example was what happened—the Veterans Administration, by the way, has implemented electronic medical records. In other words, they're using modern technology to bring this important agency into the 21st century. A lot of files at your hospital still—probably not your hospital but the typical hospital—are handwritten.

Mr. Evans. Well, you know, what happens is, they may be electronic in the hospital, but handwritten in the doctor's office——

The President. Yes, and the doctors can't write anyways, so—[laughter].

Mr. Evans. Well, the pen is a very dangerous thing.

The President. Yes, it is.

Mr. Evans. Yes, as you well know. [Laughter]

The President. And so the idea is to modernize doctors' offices and hospitals and providers through information technology. And so the Veterans Department has done this. In other words, each veteran has got an electronic medical record. And so when Katrina hit, a lot of veterans were scattered, and they were just displaced. And you can imagine the trauma to begin with, and the trauma is compounded if you're worried about your record being lost somewhere, your medical record.

And fortunately, because the veterans at the Department had already acted, these medical records went with the patient, and a lot of veterans got instant help. And so a doc could just, you know, kind of download their record, take a look at what was prescribed before, take a look at other procedures, and boom, the medicine and the help was brought up to speed quickly, which is great. And I want to thank you for doing that.

Information technology is going to help change medicine in a constructive way, and it does dovetail with price and equality.

Yes. Getting kind of adrift of what we're talking about here? I hope so. If not, we'll go over to Jerry; she'll help—[laughter]. Jerry, welcome. Where do you live? What do you do?

Jerry W. Henderson. Mr. President, I live in Baltimore, Maryland.

The President. Welcome.

Ms. Henderson. And I am a nurse, and I've been in health care for over 30 years. And for the last 9 years, I've had the responsibility of running an ambulatory surgery center in Baltimore.

The President. Good. Called?

Ms. Henderson. The SurgiCenter of Baltimore.

The President. Very good. And tell us, you know, the transparency issue—you— we had a little visit ahead of time, so it's not the first time I've seen her; she gave me a little hint about what she was going to talk about. Go ahead and share with people—small clinic, relatively small clinic, big hospital guy, small clinic person.

[Ms. Henderson, executive director, SurgiCenter of Baltimore, made brief remarks.]

The President. Right. And the reason why they can't yet is because you happen to be on the leading edge of what is an important reform.

Ms. Henderson. I think so.

The President. Yes, it is. Well, so do the patients, more importantly. And thank you for sharing that with us.

You have—happen to have a patient here.

Ms. Henderson. I do.

The President. You've known Gail before?

Ms. Henderson. Gail Zanelotti was a patient at our center, and I think she'll tell you that probably it was a more convenient and comfortable and patient——

The President. You're not putting words in her mouth are you? [Laughter]

Ms. Henderson. No, no. But I bet she would tell you that. [Laughter]

Gail Zanelotti. It was more convenient and comfortable. [Laughter]

The President. It was? Very good. [Laughter]

Ms. Henderson. See? [Laughter]

The President. You were diagnosed with what?

Ms. Zanelotti. With bilateral breast cancer in October. And I had several procedures performed at the Surgical Center of Baltimore. And they treated me as if I were the main event. That's how I felt—socially, emotionally, physically. The whole gamut was covered. And I chose the surgeon first for quality and then went on to find the pricing and everything else through them——

The President. Sure.

Ms. Zanelotti. ——which they were very transparent about. It was a very positive experience. And I'm still in communication with them because—through the reconstructive process.

The President. Yes.

Ms. Zanelotti. And I would do it the same way again.

The President. And so how does—I mean, so you're the consumer. You walk in, obviously, pretty well traumatized to a certain extent. You've got this horrible disease that's attacked you. And you come to them, and they—and you're asking what questions?

Ms. Zanelotti. I saw the surgeon that night, and I think we were there at 10:30 p.m. at night.

The President. Oh, great.

Ms. Zanelotti. I mean, it's amazing how dedicated some of these doctors are. And then they take you through the process of different diagnostic steps that you have to take. And really, you see how curable things can be if it's caught early. And I was very lucky to be able to be faced with step-by-step approach to get back to my journey of full health.

The President. Good job. Congratulations.

Ms. Zanelotti. Thank you.

The President. You've got that sparkle in your eye, you know. [Laughter]

Ms. Zanelotti. Thank you. Very lucky.

The President. And so—no, I appreciate it. It's an interesting—the transparency reform is going to take place in both large entities and smaller entities, because consumers shouldn't be restricted to shopping only in a large entity or a small entity. "Shopping" isn't the right word, but you know what I mean—in other words, out there looking for the procedure that fits their needs at the right cost and the right price.

It almost doesn't matter if we have transparency if consumers, however, are not in a position to make decisions. In other words, if somebody is making the decision for you, transparency only matters to the decider.

And so Bruce is with us today—Bruce Goodwin. He's an HSA owner. Bruce, describe HSAs—well, first of all, tell us what you do.

William "Bruce" Goodwin. My company manufactures computer plate technology for the graphic arts printing business.

The President. How many employees?

Mr. Goodwin. We have 20 employees. We're a small company.

The President. Yes. By the way, two-thirds of new jobs in America are created by small businesses. And if a small business can't afford health care, it's pretty likely they're not going to be aggressive in expanding. And I presume you have some health care issues.

Mr. Goodwin. Well, I'm here as an employer who is concerned about health care costs for sure, and a strong advocate of health savings accounts. I'm a firm believer that for employers, health savings accounts is probably the best weapon we've got in the battle of these rapidly escalating health care costs. And I'm very much hopeful, and I appreciate very much your leadership in trying to help strengthen the health savings accounts.

The President. Yes, we'll talk about it in a minute. So tell people what a health savings account is. This is kind of a foreign language to everybody but the 3 million people who own one. It's just a new product. And it's just beginning to happen.

[Mr. Goodwin, president, Glunz and Jensen, Inc., made brief remarks.]

The President. An insurance plan with a health savings account is a high-deductible catastrophic plan coupled with a tax-free health savings account to pay routine medical costs up to the deductible. That's the way they're structured now. Many employees—I was at Wendy's yesterday. Wendy's has now got 9,000 employees using health savings accounts. The company pays for part of the premium, as well as the contribution into the cash account to be paid by the customer for routine medical expenses.

If you don't spend all your money in your cash account, you can save it tax-free and roll it over to the next year, and then you contribute again. Wendy's premiums rose this year, I think, at less than 2 percent—maybe even less than 1 percent, if I'm not mistaken. And they were increasing at double-digit rates—I hope I'm not exaggerating—they were going up quite dramatically, let me put it to you that way. And now their premiums were significantly lower. And the savings enabled them to put additional money into their employees' accounts, additional contributions.

It's an interesting concept, because all of a sudden, it puts an individual in charge of health care decisions. There's an incentive, by the way, for people to make rational choices about what they consume—like, if you don't smoke and drink, it's more likely you'll stay healthy and not spend money in your account. If you exercise— I'd strongly urge mountain biking—[laughter]—it helps you stay healthy. And by staying healthy, you actually save money. There's a remuneration for good choice.

And what Bruce is saying is that it's helped his business afford health care. It's helped a lot of small businesses. If you're a small-business owner, please look into health savings accounts for the good of your employees.

Interestingly enough, about a third of those who've purchased the new health savings accounts were uninsured. Many of the uninsured in America are young people, kind of the bulletproof syndrome—you're never going to get sick, so therefore, why buy insurance. Now, there's an incentive to buy insurance because it means you can save tax-free.

And so Bruce has used them, and it's— and he reports that he's able to better control his costs, which is really important for the small-business sector. And it's also important for the large-business sector to say to their employees, "Here is something that's really beneficial for you and your families because when you saved the money, it's your money." Savings in health care doesn't go to a third party entity; it goes to the consumer. It's a new concept that's just coming in to be.

In order for it to work, there has to be transparency. How can you expect somebody to make rational decisions in the marketplace if they don't see price and quality? It's going to be a very important— what we're talking here is a very important reform to really fit into a—making sure the private medicine aspect of our medical system remains the center of medicine.

There's a debate here in Washington about who best to make decisions. Some up here believe the Federal Government should be making decisions on behalf of people. I believe that consumers should be encouraged to make decisions on behalf of themselves. And health savings accounts and transparency go hand in hand.

There are some things we need Congress to do to make health savings accounts work even better than they are. One is to make sure that one's contributions into the health savings account is—can be—it will be equal to the deductible, plus any copays that may have to be made. In other words, we shouldn't cap the contribution, cash contribution at where it is; it needs to be raised.

Secondly, we need to make sure the Tax Code treats employees in large companies and employees in small companies equally when it comes to purchasing health savings accounts. And thirdly, and a key component of making sure health savings accounts works, that addresses one of the real concerns in our society, and that is people changing jobs but fearful of losing health care as they do change jobs, is to make sure health savings accounts are portable in all aspects, a health care plan that encompasses health savings accounts. Today, the rules enable one to take with them the cash balances in their health savings accounts but not the insurance in their health savings accounts. In order to make these plans truly portable, so as to bring peace of mind to people, we've got to make sure that health savings accounts are genuinely portable accounts.

I look forward to working with Congress to strengthen, not weaken, but strengthen these very important products that puts the doctor and the patient in the center of the health care decision. Today we've heard some interesting, innovative ideas that are taking place from the insurance industry to the providers to the Federal Government. And we will continue to implement transparency. And it's just the beginning. And I predict that when this—as this society becomes more transparent, as the consumers have more choice to make, you'll see better cost containment. And as we're able to contain costs, we achieve some great national objectives: One is to make sure health care is affordable, and two, make sure it's available.

I want to thank you all for coming to join us. It was an interesting discussion. Appreciate your time. God bless.

NOTE: The President spoke at 1:18 p.m. in the Great Hall at the U.S. Department of Health and Human Services.

George W. Bush, Remarks in a Discussion on Health Care Initiatives Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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