    [Public Papers of the Presidents of the United States: George W. Bush (2006, Book I)]
    [February 15, 2006]
    [Pages 238-252]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Health Care in Dublin, Ohio
    February 15, 2006

        Thank you all. Thanks for coming. Please be seated. Jack, thanks for
    the introduction; thanks for letting us convert your lobby into a--
    [laughter]--place to come and visit.
        So I get on Air Force One this morning, I said, ``Take me to
    Dublin''--the guy heads east. [Laughter] I said, ``Nuh-uh, Dublin,
    Ohio.'' [Laughter] Proud to be here. Thanks for letting me come and
    visit with you. It's neat to be in ``the house that Dave built.'' He was
    a great American.
        George Voinovich and I were sharing
    Dave Thomas stories, particularly when he came and helped educate and
    lead the

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    Governors--that's when we were Governors--about adoption. And one of his
    great legacies is inspiring people to show the ultimate act of love,
    which is to adopt a child. The other great legacy is, leave behind a
    great company that is providing thousands with good jobs; another great
    legacy is to leave behind consumer choice. You can either get your
    three-quarter pound triple cheeseburger--[laughter]--or your salad.
    [Laughter]
        I appreciate the fact that Wendy's understands that choice for the
    consumers is important. I also appreciate the fact that Wendy's
    understands that giving employees the opportunity to make rational
    choices in health care is an important part of having a workforce that
    is vigorous, active, and enthused about their jobs. And so today I'm
    here to talk about innovation in the health place, how we can make sure
    the health care system in the United States of America remains the best
    in the world.
        And so, Jack, thanks for
    letting me come. Thanks for being an innovator. I love the
    entrepreneurial spirit of America. And the entrepreneurial spirit
    doesn't end if you happen to be a big company. As a matter of fact, it's
    important to remain entrepreneurial, no matter what your size is. And to
    have a company like Wendy's introduce HSAs, which I'm about to talk
    about, reminds me that the entrepreneurial spirit is alive and well
    here.
        I appreciate the team, the management team, and all the employees
    for giving me a chance to come and visit. I will keep my remarks
    relatively short so you can get back to work. [Laughter]
        Governor, thank you for coming. I appreciate Governor Bob Taft joining us. Yesterday I had the privilege of meeting with
    his wife, Hope. We were talking about how to rally the great armies of
    compassion around the United States to help provide love and help and
    concern for those amongst us who need love and help and concern.
        I want to thank my friend Senator George Voinovich. I've known him for a long time. He's steady; he is
    capable; he is a great public servant. Thank you for being here, George.
        I want to thank the Members of the United States Congress who
    managed to get a free flight on Air Force One--[laughter]--to come and
    join us. I'm better for the fact that you accompanied me; thank you. And
    that would be Pat Tiberi, the United
    States Congressman from this district. Congressman David Hobson is with us as well--as well as Congresswoman Deborah
    Pryce. Thank you all for coming today.
        The speaker of the house is with us; Mr. Speaker, thanks for joining us. The president of the Ohio
    Senate is with us. Glad you guys are here;
    thanks for coming. I also want to mention Senator Steve
    Stivers, United States Senator, Lieutenant
    Colonel in the Ohio National Guard. He served a 12-month tour of duty in
    the Middle East and Africa. Appreciate your service. God bless you and
    your family, and God bless all our troops in harm's way.
        I skipped the majority leader--I didn't mean to--Mr. Majority
    Leader, in fact, it's an oversight, you
    know? Thank you for being here, Larry Flowers. I want to thank the mayor
    of the city of Dublin for joining
    us. Appreciate you coming, Mayor. I'm honored you're here. Thanks for
    taking time out of your schedule.
        I just met with some folks that work here at Wendy's--I'll talk
    about them later. But I also met with the owner of a restaurant here,
    Frank Ciotola. I met with Shawn
    Kessinger; he's the vice president of
    finance for the Ohio Credit League Union. I met with a farmer, Debbie
    Carr. We talked about health care
    from the perspective of small-business owners, entrepreneurs. I listened
    to their concerns; I listened to their solutions. And as I begin to give
    this address on the health care system, I want you to know that many of
    their thoughts are incorporated in what the

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    vision is for good health care. Thanks for taking time to be here today.
        Let me start by giving you kind of a state of the economy: It's
    strong. I recognize there's parts of Ohio that aren't necessarily as
    strong as other parts of the country. But from an overall perspective,
    when you look at the Nation's economy, it's strong, and it's getting
    stronger. And the reason I say that is because we're now in our fifth
    year of uninterrupted economic growth.
        Last year, this economy, in spite of high energy prices and in spite
    of natural disasters, grew at 3.5 percent. We've--after-tax income of
    our people--and that matters a lot, you know, whether or not people have
    got money in their pocket after paying their taxes--is up 8 percent
    since 2001. Productivity is high. It's important to have high
    productivity growth in an economy because that's how economies improve
    their standard of living for their people. The more productive you are
    as a citizen or the more productive you are as the--as a company, the
    more likely it is you will generate higher revenues and higher quality
    of life.
        And so productivity is increasing, which is a measurement of not
    only this country's competitiveness, but is a measure of whether or not
    life is improving for our citizens. Small businesses are thriving.
    That's really good news. Most new jobs in America are created by small
    businesses. And when the small-business sector is thriving, it means
    people are working. We've added 4.7 million new jobs over the last 2\1/
    2\ years. The national unemployment rate is 4.7 percent. That's low.
        Things are improving here in Ohio. The unemployment rate is still
    5.9 percent, but nevertheless, the trends are in good shape. You've gone
    from 6.4 percent to 5.9 percent. Obviously, there's still work to do.
    George and members of the delegation are concerned about trade that is
    fair and free. He wants the manufacturers here in Ohio to be treated
    fairly in places like China. I assured him I understand it's part of my
    job. I'm going to India at the end of this month, and I'm going to make
    it clear to the Indians, ``We will look forward to trading with you, but
    just treat us the way we treat you; that's all we ask.'' The reason I
    say that is because we can compete with anybody, anytime, anywhere, so
    long as the rules are fair.
        The fundamental question is, how do we remain a leader in the world
    economy? You know, there's uncertainty in this economy of ours. People
    are changing work a lot--that kind of creates a sense of uncertainty.
    People see China and India out there looming as competitors, and the
    reaction with some is, ``Let's don't compete; let's just kind of shut
    her down; let's get protectionist,'' or, ``Why don't we isolate?'' I
    have a different point of view. My attitude is, we shouldn't fear the
    future; we ought to shape the future. My attitude is, the United States
    of America must continue to be the leader in the world economy, for the
    good of our people.
        And so here are some ways as to how to make sure this economy
    remains strong today and remains strong for years to come. And first, in
    order for us to be a leader in the world, we've got to remain a leader
    when it comes to technological developments. So I'm proposing to the
    Congress an American Competitiveness Initiative, which will double the
    basic research in basic sciences over the next 10 years.
        And secondly, I recognize most research is done in the private
    sector, and yet the incentive for companies to invest in research, which
    yields technologies, which increases standard of living and makes sure
    our economy is on the leading edge, is through the research and
    development tax credit. It expires on an annual basis. It is very
    difficult for private sector to plan when a Tax Code is uncertain. And
    so Congress, in order to make sure that we invest in the future, should
    make the research and development tax credit a permanent part of our Tax
    Code.

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        Finally, in order to remain competitive, we've got to have kids who
    understand math and science. And so I laid out an initiative--
    [applause]--I spent some time talking about it last week. I'm going to
    continue talking about it. I'm looking forward to working with--this is
    an issue, by the way, where we can put aside needless politics, which
    tends to dominate Washington, DC, and focus on the good for the future
    of this country. I'm confident we can get something done on this very
    important education as well as research and technology issue.
        In order to make sure we're competitive, we've got to be wise about
    your money. The tax relief we passed is working. In order to make sure
    America is the most competitive Nation in the world, we've got to keep
    your taxes low and be wise about how we spend your money, which means
    we've got to learn to set priorities in Washington, DC. We can't try to
    be all things to all people when it comes to spending your money. We're
    on the way to cutting this deficit in half by 2009, and I intend to keep
    us on track to cut the deficit in half by 2009.
        But to be wise--to be competitive in the future, we've got to get
    off being hooked on Middle Eastern oil. In order for us to grow--
    [applause]--I said something in the State of the Union that probably
    surprised some of you. I said, we have a serious problem; we're addicted
    to oil. But I meant what I said. I fully understand that an economy that
    requires oil from parts of the world that--where some countries may not
    like us, puts our economic security at risk and puts our national
    security at risk. And I'm serious about working with members of both
    parties to advance technological research that will enable us to drive
    cars by using switchgrass as a base stock of ethanol--or wood chips, as
    well as the corn and soybeans we use today. I mean, I can't wait for the
    day, and I know future Presidents can't wait for the day, when some-
    body walks in with the farm report, and says, ``Mr. President, the crops
    are up, and we're less dependent on Middle Eastern oil.'' And it's
    coming; it's coming.
        To keep this country competitive, we need a health care system that
    provides Americans with high-quality care at good prices. And that's
    what I want to talk about today. The health care costs are rising
    sharply in America. If they continue rising the way are--they are, that
    will make us less competitive. Many Americans are worried that they're
    not going to get the treatments they need. Small businesses, in
    particular, are struggling to pay for health care for their employees.
    If two-thirds of the new jobs in America are created by small businesses
    and your small-business owner is struggling to keep their employee base
    because of health care, then we've got to do something about it. Workers
    have lost good coverage because they're changing jobs. I've told you,
    there's uncertainty in the marketplace because people are changing work.
    And if you fear about losing health care when you change work, it
    creates even more uncertainty.

        More than 45 million Americans have no health insurance at all, and
    this is unacceptable for our country. We've got the best health care
    system in the world, make no mistake about it. The question is, how do
    we keep it that way? And I've got some ideas for you.

        First of all, we've got to choose between two competing philosophies
    when it comes to health care. Behind all the rhetoric in Washington and
    all the proposals, there's really a philosophical debate. On the one
    hand, there's some folks who--good-hearted folks, good, decent folks who
    believe that Government ought to be making the decisions for the health
    care industry. And there are some of us who believe that the health care
    industry ought to be centered on the consumer.

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        I think as we kind of make our minds up about what philosophy works,
    it's important to look at the world health care systems. Other nations
    have adopted for Government control of health care for centralized
    decisionmaking when it comes to health care, which has created long
    waiting lines and quality of care not as good as the American system and
    a significant lag in technological development.
        We've done a different path up to now in our Nation's history. We
    believe in private medicine that encourages innovation and change.
    That's been the cornerstone of American public health up until now. And
    we have a choice to make. I've made my choice; I'm going to lead the
    Congress to make sure that our health care system preserves America's
    system of private medicine, that we strengthen the relationship between
    doctors and patients, and that we make the benefits of private medicine
    more affordable and accessible for our citizens. That's our strategy.
        Obviously, Government has a role to play. We have made a commitment
    to the poor and the elderly in the United States, and it's a commitment
    we're going to keep. When I got to Washington, I took a look at the
    Medicare system. It's a very important part of our Nation's health care
    system, and that is Medicare, except it was old and tired and hadn't
    been changed. It was a centrally-controlled system. I'll give you an
    example of what I meant by old and tired. This is a system that paid
    $28,000 for ulcer surgery--when you've got an ulcer, you check in the
    hospital--Medicare would write you a $28,000 check. It wouldn't pay the
    $500 necessary to prevent the ulcer from happening in the first place.
    In other words, medicine had began to--begun to change, and Medicare
    didn't change with it. One reason why is because it's centrally
    controlled; all decisions had to be made by people out of Washington,
    DC.
         And so I worked with Members of the United States Congress to
    modernize the system. I said, ``If we've got a commitment to our
    elderly, let's make the commitment a good one.'' We're not going to make
    the commitment and have it be a mediocre commitment; it ought to be a
    good, sound commitment. And we did. And we added the prescription drug
    benefit to Medicare that modernizes the system.
        And at the same time, we gave seniors more options from which to
    choose. See, part of making sure a health care system works, seems like
    to me, the consumers ought to have more choice. In a centralized system,
    the Government makes the choice. In a private system that focuses on
    kind of the markets, people ought to have a choice. People ought to be
    able to be given different options from which to choose.
        And so we did modernize the system. It's tough sledding up there in
    Washington to get things changed. [Laughter] People like the status quo
    at times. Twenty-four million Americans have now signed up to the new
    Medicare plan since January 1st. That's a lot of folks, 24 million.
    Hundreds of thousands are enrolling each week. Now, needless to say,
    when you have a change that size, there's going to be some things that
    need to be adjusted in the system. And you probably read about, kind of,
    the dual-eligible problem. I don't know if you've had that problem here
    in Ohio, Governor. We're dealing with it. Our job
    is to solve problems when they arise. When you have that big a shift,
    you can imagine there's going to be glitches. But by far, the vast
    majority of people are signing up to a program that's making a big
    difference in their lives.
        Competition--in other words, when you have choices, it creates a
    sense of competition in the marketplace--is lowering costs for American
    seniors. The average premium that seniors now pay for the prescription
    drug benefit is a third less than what was expected. In other words,
    when we started rolling out the plan, it was expected that the
    prescription drug benefit would cost the seniors $37 a month. The actual
    cost

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    is $25 a month. It's an interesting lesson about what can happen when
    you give people different options from which to choose.
        The other thing that's important for you all to know is that the
    typical senior will end up spending about half of what he or she used to
    spend on prescription drugs. I mean, if you want the system to function
    well, it seemed like to me and others here that we ought to modernize
    the system to make it good for our seniors. It's working.
        If you happen to have a mother or father or a neighbor who's a
    senior, I strongly urge you to get your loved one or your friend to call
    1-800-MEDICARE or to go on the web at medicare.gov and help that person
    realize the great new options available to him or her.
        Medicaid, as well, is a program that we take very seriously. It's a
    program aimed at helping the poor. It's administered in conjunction with
    States. It is health care for low-income families with children, poor
    seniors, and disabled Americans. It's a very important program. It
    needed to be restructured, however, in order to make the program
    actually work in a cost-effective way. And so we decided to work with
    the States to give Governors and folks at the local level more
    flexibility in how to structure the program to meet the needs at the
    local level.
        See, in the past, if you had a good idea, if old Taft had a good idea, he had to come to Washington and beg
    permission for a waiver: ``I, the Governor, was elected to do something
    good for the people. I'm worried about those who are qualified for
    Medicaid. Please give me permission to do what I think is right.'' The
    new bill I signed is one which will make the States--give States a lot
    more flexibility when it comes time to signing up people--to designing
    eligibility standards to providing what the programs ought to look like.
    In other words, it's flexibility, all aiming to make sure the Medicaid
    system works well.
        We take the program seriously, but we fully understand what happens
    when the bureaucracy becomes so encrusted that it's impossible to design
    programs that will actually meet States budgetary needs as well as the
    needs of the people. And we're remedying that fact.
        The--I mentioned to you we have the goal of making sure that our
    budgets are responsible. One of--the budget I just signed or the bill I
    just signed and the budget I proposed is finally beginning to do
    something about the growth in Medicare and Medicaid. I want to describe
    to you a little bit about what we're doing.
        Let me give you this story, kind of an analogy--there is a
    difference between slowing your car down to the speed limit or putting
    your car into reverse. I want you to think about that as I explain to
    you that, in working with the Congress, we have slowed Medicare growth
    down from 8.1 percent a year to 7.7 percent a year. In other words, we
    found ways to reform the system so that we can slow the growth rate down
    to make it--Medicare more affordable for future generations. We're not
    putting the car in reverse; we're just finding the speed limit.
        Same thing with Medicaid. It grows--slow it down from 6.9 percent a
    year to 6.6 percent a year, which means just by slowing the growth rate
    down on those two important programs and, at the same time, making them
    more efficient and delivering better services, we're saving the
    taxpayers $104 billion over 5 years. I want to thank the Congress for
    working on this. You hear rhetoric, of course, that we're ``starving the
    poor.'' The car is going the speed limit; it's not going backwards.
        Now, the long-term solution for Medicare requires--and Social
    Security--requires an understanding that we've got a lot of baby boomers
    getting ready to retire. The true strain on our budget is really going
    to be the unfunded deficits caused by a baby boom generation retiring,
    with fewer workers to pay for guys like me. See? I mean, a lot of us are
    retiring. As a matter of fact, my retirement date is--I turn 62

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    on 2008, which is--[laughter]--pretty convenient time to retire.
    [Laughter] There's a lot of us, a whole lot of us. And there are fewer
    people paying in the system per person retiring.
        And what's interesting--and you've got to know this--is that my
    generation has been promised greater benefits than a previous
    generation. So you can imagine when you start to think about the strain,
    a lot of us have been promised greater benefits with fewer people paying
    for us. And it's not going to work; it's simply not going to work.
        I was very serious in the State of the Union--I explained this to
    George and the Congressmen--that I understand a solution to Social
    Security and Medicare in terms of dealing with a bulge of retirees is
    going to require a bipartisan solution. And I mean it to Members of
    Congress--I expect there to be a bipartisan effort to come up with a
    solution. Nothing will pass the House or the Senate unless there's
    agreement. And now is the time to put aside the politics that have
    stopped rational people from coming up with a rational answer to a very
    serious problem, to set it aside, sit down at the table, and solve this
    problem once and for all--so we can travel the country looking at young
    workers and saying, ``You're not going to pay payroll taxes into a bust
    system anymore. You're going to pay payroll taxes into the system which
    will be around not only for baby boomers like me but for a young
    generation of Americans coming up.'' Now is the time for us to get
    something done.
        I want to talk about another program that's working. One of the
    things that we've got to do is spend time in Washington actually
    measuring results of programs. You know, every title on a bill sounds
    just fantastic, you know. [Laughter] The problem is, is that every bill
    doesn't deliver the results it's supposed to. I will tell you about a
    program that does. It fits into a vision of a health care system where
    the Government does have responsibility, and that's community health
    centers.
        One of the real strains on local hospitals and local health
    providers is the fact that the poor and the indigent use emergency rooms
    for primary care--it's an incredibly inefficient use of assets. It's an
    important use of assets if somebody can't find care and they need help--
    I'm not denigrating the people going to the emergency rooms, but I am
    saying there's a better way to be wise about how we spend your money and
    to solve a very important problem, and that is, have the emergency rooms
    be there for emergencies, and have primary care facilities like
    community health centers being there for primary care for the indigent
    and the poor.
        Since I took office, we've opened or expanded about 800 health
    centers. There are now 3,700 of these centers around the United States
    serving 13 million Americans. It is a cost-effective way to provide
    primary care for those who need help. And I'm going to call upon
    Congress and work with Congress to put 400 more of those health centers
    in.
        So what I'm telling you is, is that the Federal Government obviously
    has a role, to make sure the Medicare system is cost-effective and works
    well, make sure Medicaid is--works well and gives flexibility to States,
    and to expand community health centers.
        I now want to talk to you about how the rest of us need to have a
    health care system, if you don't fall into those categories. What should
    the role of the Government be? And I believe the role of the Government
    ought to be to empower consumers to make choices. And so let me talk to
    you about five ideas I have to make sure that health care is more
    available and more affordable.
        And the first one is to expand health savings accounts. We--I call
    them HSAs. When you hear me say HSA, that's kind of government-speak for
    health savings account. They--HSAs are helping to begin

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    a movement away from what's called a third-party payer system to one
    where the consumer is very much involved in making wise purchases of
    health care. That's a very important philosophical point.
        The traditional insurance today will cover your health care costs--
    most of your health care costs--in exchange for a high premium payment
    up front. The costs are generally shared by you and your employer. You
    may also pay a small deductible and copayment at the time of treatment.
    What's interesting about this system is that those payments cover only a
    fraction of the actual costs of health care, the rest of which are
    picked up by a third party, basically your insurance company.
        It means most Americans have no idea what their actual cost of
    treatment is. You show up; you got a traditional plan; you got your
    downpayment; pay a little copay, but you have no idea what the cost is.
    Somebody else pays it for you. And so there's no reason at all to kind
    of worry about price. If somebody else is paying the bill, you just kind
    of--hey, it seems like a pretty good deal.
        There's no pressure for an industry to lower price. And so what
    you're seeing is price going up. If you don't care what you're paying
    and the provider doesn't have any incentive to lower, the natural
    inclination is for the cost to go up. And the insurance companies, sure
    enough, pass on the costs--the increase in cost to you and your
    employer. That's what's happening.
        The fundamental problem with traditional coverage is that there's no
    incentive to control how their health care dollars are spent. You don't
    have any incentive, whatsoever. And that's one of the cost drivers in
    our system. If we want to solve health care problems, if we want to make
    health care affordable and available, we've got to analyze and address
    the cost-drivers of health care. And there's one right there. If
    patients controlled how their health care dollars are spent, the result
    is better treatment at lower cost.
        I'll give you an interesting example of a procedure called LASIK--
    laser eye surgeries. It's a good example of how the market can work when
    there's not a third-party payer involved. You might remember when LASIK
    first appeared, was approved about a decade ago for its use. It went
    through the process of getting a Government approval, and when approved,
    it was an opportunity for people to have their eyesight--feeling a
    little nervous about LASIK surgery when it first came out, and it was
    awfully expensive. Consumers began to, however, inquire as to why
    something costs the way it costs, how safe it was. Doctors felt more
    comfortable starting to offer more and more of the surgery. More
    providers came in the market; there was transparency of pricing. You
    might--I can remember billboards springing up with people advertising
    LASIK surgery. Today, the price of LASIK surgery has dropped
    dramatically. More people are getting the surgery; they're giving up
    their glasses and contact lenses.
        The market is working. I think if you go back and look at the
    history of the pricing of LASIK surgery, the availability of LASIK
    surgery, you'll find that when consumers start showing up saying, ``I
    want to know more information; I'm interested in this idea. How about--
    how does your cost compare to old Joe's over here''--the market began to
    adjust. LASIK surgery is now more widespread, at much more reasonable
    cost for consumers.
        And so, how to affect those kinds of cost changes in the health care
    industry, that's what we're really here to discuss. And one way to do so
    is to--to make health care more responsive is through health savings
    accounts. Many people in our country don't know what a health savings
    account is. I will start to try to explain it here.
        First, it is a part of our drive to make health care more consumer-
    driven. There's two components to a health savings account; one is low-
    cost catastrophic insurance coverage and a tax-free health savings

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    account. Those are the two components of what I'm talking about.
    Catastrophic coverage protects you and the family in the event of
    devastating medical illness--if you're really sick, a catastrophic plan
    kicks in.
        The health savings account portion of this product allows you and
    your employer to contribute tax-free to pay for routine medical costs.
    In other words, your company or yourself or a combination of the two
    makes a tax-free contribution into a health savings plan, a savings plan
    that you own. It's yours to call your own. And the savings within that
    plan are tax-free. In other words, you're not just going to put it under
    your pillow; you put it into a bank until you use it. The interest will
    be tax-free. Your money is growing.
        It means that if you don't spend money in your savings account on
    health care, you can roll it over to the next year, tax-free. You have
    money growing for health care to pay incidental expenses; it's growing
    at a reasonable interest rate; it's yours you call your own. And if you
    don't spend it in a year, you can put it into the next year and the next
    year and the next year.
        For many routine medical needs, HSAs mean you can shop around until
    you get the best treatment for the best price. In other words, it's your
    money; you're responsible for routine medical expenses; the insurance
    pays for the catastrophic care. You're responsible for paying for the
    portion of your health care costs up to your deductible. And so you--you
    talk to your doctor; you say, ``Well, can't we find this drug at a
    little cheaper cost?'' Or you go to a specialist, ``Maybe we can do this
    a little better--old Joe does it for X; I'm going--why don't you try it
    for Y?'' It allows you to choose treatment or tests that meet your needs
    in a way that you're comfortable with when it comes to paying the bills.
        In other words, decisions about routine medical treatments are made
    by you and the doc, not by third-party people that you never know. And
    all of a sudden, when you inject this type of thinking in the system,
    price starts to matter. You're aware of price. You begin to say, ``Well,
    maybe there's a better way to do this and more cost-effective way.''
        The combined cost of catastrophic insurance coverage and HSA
    contributions are usually less expensive than traditional coverage.
    That's important to know. In other words, HSAs are making health care
    more affordable. By the way, these HSAs became expanded--George tried to
    do it in the mid-1990s, 1996 I think--yes--medical savings accounts, he
    called them. He couldn't get them going. People who had the business
    didn't want any competition, which sometimes happens in the marketplace.
    [Laughter] But he thought of the idea; it made sense. This really--these
    HSAs have kicked off big time because of the Medicare bill I signed. And
    they haven't been around a long time. They're just kind of a fresh
    product that the marketplace is becoming used to.
        Forty percent of those who own HSAs have family incomes below
    $50,000 a year. In other words, if people are having trouble affording
    traditional insurance, all of a sudden, the HSA becomes a more
    affordable product. HSAs make a difference--are making health care more
    accessible to those without insurance. In the first year HSAs were
    available, more than a third of those who bought HSAs had been
    uninsured. In other words, as health care becomes more affordable, it
    makes it easier, obviously, for somebody who is uninsured to be able to
    pick up health insurance.
        You know, a lot of young folks are uninsured. You might remember the
    days when you kind of felt like you were never going to get sick.
    [Laughter] So why should you buy insurance? Why do you need coverage? A
    lot of young folks are saying, ``Wait a minute; this is a pretty good
    deal. If I'm going to stay healthy and can save a portion of that money,
    tax-free, and I'm not going to spend money on health care for a while,

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    all of a sudden, a nest egg really begins to build.'' By the way, it's a
    nest egg they call their own; it's not something the Government--if
    there's excess money in your account, the Government can't take it away,
    or insurance can't take it away; it's yours. You own the thing. It's a
    vital part of kind of--a responsible society is when there's a sense of
    ownership in important parts of our economy.
        Over the last 10 months, the number of HSAs has tripled. In other
    words, people are becoming aware. One of the reasons I'm here talking
    about HSAs at Wendy's is because you've decided to implement this
    product. I want people to be aware of it. The number of people who
    bought HSAs has gone from a million to 3 million. And I'm going to talk
    today about ways to make sure that HSAs are--even expand even further.
        You know, I can remember the debate in Washington--I'm sure you can
    as well--I remember one person who said, ``Health savings accounts are
    not a solution for the uninsured; they're regressive; they favor the
    wealthy.'' It's just not the facts. They've helped the uninsured, and a
    lot of folks with incomes under $50,000 are buying these plans. It's
    kind of basically saying, ``If you're not making a lot of money, you
    can't make decisions for yourself.'' That's kind of a Washington
    attitude, isn't it: ``We'll decide for you; you can't figure it out
    yourself.'' I think a lot of folks here at Wendy's would argue that that
    point of view is just simply backwards and not true.
        People have said that expanding HSAs would fail to reduce health
    care costs. It's just not the case. I've just talked to Joe Cava--he
    knows what it's done to your costs. Wendy's decided to take on this
    product. They--you were facing double-digit increases in the cost of
    providing health care. That's a strain if you're a CEO. In order to have
    a workforce, you've got to have a workforce that's comfortable with the
    health care plan, and all of a sudden, it's beginning to take big bites
    out of the balance sheet. It's hard to expand your business, it's hard
    to grow when more and more of your costs are being consumed by health
    care. And it provides a real tension for small-business owners or large
    business managers--how do you take care of your people? No corporation,
    no entity can run unless the people are taken care of and, at the same
    time, expand your business.
        The company wanted to reduce projected health care increases. You
    didn't want to pass--keep passing on the high costs of--increasing costs
    to your employees. So they adopted HSAs. Nine--about 9,000 of Wendy's
    full-time employees and their families have got HSAs. In other words,
    Wendy's said, ``Why don't we give people a chance to make health care
    decisions themselves?'' They don't have some of the attitude in
    Washington. If you believe like Washington believes, you would never try
    an HSA because, ``People can't decide for themselves,'' see. That's not
    what the folks here at Wendy's thought.
        At the end of the first year with HSAs, more than 90 percent of
    Wendy's employees had positive balances in their savings accounts. In
    other words, there's a sharing ratio. The company paid--helped pay the
    premium for the catastrophic care. They shared the money that goes in to
    help pay for incidental or routine expenses. And--but 90 percent of the
    folks didn't use all the money for the routine expenses. It's kind of
    interesting that maybe it helps preventative medicine, I guess--when
    you're watching your own money, and you realize that if you take care of
    your body and you exercise and you don't do stupid things, you end up
    saving money. [Laughter] And when you save money, it's your money, not
    the company's money.
        Medical claims through this company have decreased by 17 percent
    since they've implemented HSAs. It's an interesting statistic, I think.
    After more than 5 years of health care costs going at double-digit
    rates, Wendy's overall health care costs rose only by 1 percent last
    year. HSAs have had a

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    positive effect. This has a positive effect on the individual employee;
    it's had a positive effect on the income statement of the company. They
    work.
        They're doing--and, Jeff, you made
    a good--get the boy a raise. [Laughter] It's a--here's what he said--you
    know, never mind. He said, ``We entered into this plan to use our money
    more wisely and to allow our employees to use their money wisely.'' Kind
    of an interesting corporate concept, to allow our employees to use their
    own--more money wisely. ``It's making health care more transparent,''
    Jeff says, ``and making improved health more sustainable for our
    employees and for all the consumers of health care.'' I think he gets
    it. He gets the philosophy of having a consumer-driven system.
        The savings have allowed Wendy's to raise the company's contribution
    to its employees' HSA accounts. By saving money on health insurance, it
    enables them to put more money into your account, which has got to be a
    heck of a good benefit, working for this company. It's your money now;
    it grows tax-free. It goes in tax-free; it grows tax-free; and you take
    it out tax-free.
        The--I met with Marla Hipsher. Thanks for
    coming, Marla. She works here. She is a senior paralegal for 4 years.
    She was part of the briefing party that was there when I arrived. She is
    a single mom with a 24-year-old daughter and two teenage sons. As an
    aside, she has the toughest job in America, being a single mother. She
    obviously cares about her health care for herself and, more importantly,
    for her children. Marla's sons are on her HSA plan with her, which is a
    family plan. She enjoys the choice. She's comfortable with the control
    she has over her HSA. Marla's premiums with her HSA are 18 percent lower
    than the traditional plan she used to have at Wendy's. She's saving
    money. It makes it easier to do the hardest job in America, which is
    being a single mother. She likes her HSA so much, she's helping her 24-
    year-old daughter look into setting one up herself. I--listen to your
    mother; it makes a lot of sense. [Laughter]
        I want folks who don't understand HSAs to listen to what
    Marla has to say: ``It has made me more
    informed, because you discuss it with your doctor now.'' She's talking
    about health care. ``You want to know up front what it's going to cost
    and what you need to know. You become a better informed consumer.'' HSAs
    are working; they're working. And I'm looking forward to working with
    Congress to expand them to more Americans.
        I'm going to talk about three ways to make them more attractive, so
    more people can have the benefits of an HSA, like Marla or the small-business owners we had. The greatest
    obstacle--one of the greatest obstacles to expansion of HSAs is the Tax
    Code. One problem is that under current law, employers and employees pay
    no income or payroll tax on any health insurance provided through the
    workplace. The health care plan here at Wendy's, you don't pay for it.
    It's a benefit that's not taxable. Those who buy their insurance on
    their own don't get the same tax break. That means that the self-
    employed, the unemployed, and workers at companies that do not provide
    insurance are at a disadvantage. The playing field isn't level. And so I
    believe that one thing Congress needs to do is to give Americans who
    purchase their own HSA policies the same tax breaks as those who get
    their health insurance from their employers.
        Another problem is that under current law, the amount you can put
    into your HSA tax-free is limited to the amount of your deductible. But
    sometimes your out-of-pocket expenses are greater than your deductible.
    That's because at--on some catastrophic plans, there is an additional
    copay, and therefore, when you--you're paying after-tax dollars under
    the current law if you exceed the amount of money you spend beyond your
    deductible. We can change that. We can raise the cap on the amount of
    money you put into your HSA

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    so it remains tax-free, so that all out-of-pocket expenses can be
    covered. That's the important--[applause].
        And finally, HSAs--we want to make sure they meet the practical
    needs of today's workers. I told you, people are changing jobs. And one
    of the problems is a lot of folks fear that when they change jobs,
    they're going to lose their health care. And that means--people feel
    like they've got to get locked into a job because of health care, and
    that's not right. We need more flex--they need to be more thoughtful to
    our workers and recognize that this is a changing world in which we
    live. And so we ought to make sure people can take their own health
    savings account with them job to job.
        Today, the savings in your health account--health savings account
    are portable; portable means you can take it job to job. So you've got
    savings in your own account; you can take it with you. But the health
    insurance that comes with the account you can't take with you, because
    of outdated laws and practices that prevent insurers from offering
    portable policies. So I believe that health insurers should be allowed
    to sell portable HSA policies nationwide.
        You see, it's like car insurance. If you change jobs, you can take
    your car insurance with you. You can't take your insurance in your HSA
    with you. In order to make sure this economy works better, in order to
    make sure the health care system functions better for our workers, we've
    got to make sure portability in HSAs is consistent and real. It's going
    to make a difference in people's lives when Congress gets that done.
        The second policy--way to make--making sure health care is
    affordable and accessible is to increase transparency in our health care
    system. To be smart consumers, you need to be informed consumers. It's
    hard to make wise choices unless you have information available. In
    order to spend your HSA dollars wisely, you need to know in advance what
    your options are. You need to know the quality of doctors and hospitals
    in your area; you need to know the full extent of procedures that
    someone recommends to you.
        You know, like when you buy a new car, you have access to consumer
    research on safety, you have access to information on reliability, you
    can compare price. There's performance data. You can become an informed
    consumer before you purchase your automobile. And that same sense of
    transparency and information ought to be available in health care. A
    modern health care system recognizes that people ought to be encouraged
    to shop for quality and price. So the health care industry and the
    insurance industry needs to provide reliable information about prices
    and quality on most common medical procedures.
        Tomorrow I'm going to have a little visit with people in the
    insurance industry and the health care industry and the business
    industry to encourage transparency. I know Members of Congress are
    working on a bill. It would--better this be done with people saying,
    ``Oh, we understand it's important to be transparent.'' There's always a
    bill out there in case the voluntarism is not quite as strong as it
    should be. [Laughter]
        Third policy that's important is to apply modern information
    technology to our medical system. Doctors practice 21st century
    medicine; they still have 19th century filing systems. And this is an
    important issue. One reason it's an important issue, because when a doc
    writes their files by hand, you generally can't read the writing.
    [Laughter] That leads to inefficiency and error. In hospitals, there is
    more risk of preventable medical error when records are handwritten,
    instead of being cross-checked on a computer. Oftentimes doctors
    duplicate expensive tests because they do not have access to previous
    results. In other words, the medical system has not taken advantage of
    information technology like I'm sure Wendy's has, or other industries
    around the country.

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        And so I set a goal in 2004 that most Americans would have an
    electronic health record within 10 years. You'd have your own health
    record on a chip. And we're making pretty good progress toward that
    goal. Mike Leavitt is the Secretary of
    Health and Human Services. He's got a whole division inside HHS aiming
    towards getting information technology spread throughout health care.
        First thing is, they've got to have a language that kind of can talk
    between a hospital in Dublin and a hospital in Crawford, you know? We
    don't have a hospital in Crawford. [Laughter] How about a hospital close
    to Crawford? [Laughter] And that's important, because there's a lot of
    different--the language needs to be standardized. And Mike's making pretty good progress on that.
        And we're developing solutions for a nationwide health information
    network. One of the things I've insisted upon is that it's got to be
    secure and private. There's nothing more private than your own health
    records. So any system that works is one that is--it's your record; you
    decide the disclosure of your health records.
        And let me give you an example about how such a system can work and
    what I'm trying to explain to you about how to help control costs and
    reduce medical errors. After Katrina hit, there was hundreds of veterans
    that had to be relocated. What's interesting is, is that the Veterans
    Department has already started this information technology
    modernization. There are medical--electronic medical records for
    veterans. And so when these poor folks got scattered around the country,
    they--the doctors and providers had access to the electronic records of
    our veterans.
        So if a person had a diabetes issue, up pops on the screen the
    information, the latest test, the medicine being taken. It was an
    incredibly efficient way to make sure that the health care needs of our
    veterans were met during this time of catastrophe. It helped people fill
    out the prescription drugs of our seniors without fear of error. It
    helped a local doc say, ``Well, gosh, look, you've been taking this
    medicine in the past; I'm going to prescribe it for you in the future,
    in order to make sure that your health care needs continue.'' If you
    have your own medical record, your own electronic medical record, and
    you get sick in a remote part of our country, people instantly see your
    blood type, the issues that you've faced in the past, really important
    information about your--about who you are and what you're going to need
    to help you.
        And we're on our way to providing a nationwide information network.
    It's going to help save maybe 25 percent of the costs in medical care. I
    told you that one of the important things we've got to be worried about
    is how to deal with the cost-drivers, how to come up with ways to,
    practically, with a commonsense solution, deal with rising costs. One
    way is to modernize health care. Another way is to put consumers in
    charge of making decisions with transparency in pricing.
        I want to talk a little bit about small businesses. The--obviously,
    I've told you once and I really mean it, I understand how important
    small businesses are for the economy. I also love the thought of America
    being a great place for entrepreneurship. There's nothing better than
    talking to somebody and saying, ``I started my own business,'' or, ``I
    own my own company.'' It's just--I love--it's refreshing to me. And it's
    just really an important part of the American experience. And obviously,
    as I mentioned, health care is a really important issue for small
    business. If you sat down with a roundtable of small businesses, the
    first issue that comes to their mind is, ``I can't provide health care
    for my people. How do you expect me to stay in business when health care
    costs are driving us out?'' Well, HSAs help a lot, and I really urge
    American small businesses to take a look at HSAs. They're good for
    Wendy's; they'll be good for you as well.

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        Here's another idea. One of the problems that small businesses have
    is that they enter into the market--they're trying to provide
    traditional insurance without any risk pool behind them. If you've got
    three people you're trying to insure, it's a heck of a lot more
    expensive then if you're trying to insure 3,000 people or 10,000 people.
    In other words, the more people that are in the risk pool, the lower the
    cost of traditional insurance is for a small business. And so I look
    forward to working with the Congress to expand what we call associated
    health plans. That's kind of Washington-speak for allowing small firms
    to band together to buy insurance at the same discounts that big
    companies get.
        I'll give you an example. You've got yourself a family restaurant
    here in Dublin, Ohio. They've got 10 employees, and you try to go in the
    marketplace, and it's prohibitively expensive. It seems to make sense to
    me that the family restaurant in Dublin ought to team up with family
    restaurants all across the country, so that the employees provide one
    big risk pool to help lower the cost for small businesses. It is a
    practical way of helping small businesses that choose not to go into
    HSAs to be able to buy traditional insurance in a cost-effective way.
        The bill passed the House of Representatives; it remains stuck in
    the United States Senate. I urge the Senate--I urge the Senate, for the
    sake of affordable health care for small businesses and their employees,
    to pass associated health plans.
        I'll talk about one other issue. I hope you're hanging in there with
    me here. [Laughter] And that issue is one that I remember well when I
    was traveling your State, and that is the number of good docs that are
    getting driven out of practice because of frivolous lawsuits. If you're
    worried about affordabilty of health care and availability of health
    care, then you have got to be concerned about junk lawsuits. You just
    have to be, because a lot of docs and providers, thinking they're going
    to get sued, practice what's called defensive medicine. They order
    tests; they write prescriptions that simply are not necessary so they
    can protect themselves from being sued in a court of law by a trial
    lawyer. That's just a fact of life.
        I find interesting a quote from an emergency physician here. Here's
    what this person said, ``In an effort to reduce our malpractice
    exposure''--that means, in an effort not to get sued--``we're being
    encouraged to overtreat, overtest, and overadmit patients.'' It has to
    be driving medical costs right out of the roof, and it is. It is.
        In order to address the rising cost of health care, we've got to
    have a rational liability system. If you're harmed, you ought to have
    your day in court. You ought to--there ought to be justice for you, if
    you're injured. But we can write laws that make sure that you get your
    due claims without encouraging a plethora of junk lawsuits that is
    costing you a lot of money.
        I'll tell you how it's costing you money. The cost of defensive
    medicine--in other words, practicing medicine that is otherwise not
    necessary--is estimated to cost our society $60 to $100 billion a year.
    It raises the cost of Medicare, Medicaid, Veterans Affairs, and other
    health programs by an estimated $28 billion a year.
        You're paying it. You're working hard. You're putting money into
    the--paying your taxes, and $28 billion of those taxes goes to pay for
    the cost of frivolous and junk lawsuits. As equal--more importantly, in
    my judgment, actually, is that good docs are leaving the practice of
    medicine.
        I said something in the State of the Union, and it's a startling
    statistic, if you really take time to think about it, and that is there
    are 1,500 counties in America without an ob-gyn. There are 15 counties
    in your State of Ohio without an ob-gyn. Now, that isn't right. I mean,
    these are good docs who are involved with the precious--the delivery of
    precious life. And they're getting sued--a lot. And they're leaving the
    practice, and it's putting a lot of women in

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    a bind. Women are having to travel miles. There's nothing worse than
    being--having uncertainty at this very important time of life.
        And we need to do something about it, you know. I thought when I got
    to Washington it was a State issue, Governor--not
    when I see the effect on the Federal budget of $28 billion a year, it's
    a national issue. It requires a national response. The House of
    Representatives passed a good piece of legislation. The trial lawyers
    have got it stuck in the United States Senate. For the sake of
    affordable health care and available health care, for the sake of good
    health care for our women across the United States of America, we need
    medical liability reform this year.
        So that's what I wanted to talk about--[laughter]--ways to make
    health care more affordable and more available. I hope you can get a
    sense of my philosophy that when you trust the American people to make
    wise decisions about their health care, positive things happen. Free
    markets and competition transform our world. They have the power to
    transform our health care system. It's important to recognize--Wendy's
    recognized that when you introduced health savings accounts.
        The agenda I just talked about, one I'm looking forward to working
    with both Democrats and Republicans in Congress, builds on the strengths
    of the private sector, recognizes what's good, and let's continue to
    build on that. It focuses on practical, market-based solutions. It
    offers the potential to deliver real improvements, genuine improvements
    in the lives of our fellow citizens.
        The heart of the reform is that you got to trust the people of the
    United States of America. And I do. And I do. I want to thank you for
    giving me a chance to come by and visit with you. God bless you. God
    bless our country.

    Note: The President spoke at 12:13 p.m. at Wendy's International, Inc.
    In his remarks, he referred to John T. ``Jack'' Schuessler, chairman and
    chief executive officer, and Jeffrey Cava, executive vice president of
    human resources and administration, Wendy's International, Inc.; Gov.
    Bob Taft of Ohio; Jon A. Husted, speaker, and Larry L. Flowers, majority
    leader, Ohio State House of Representatives; Bill M. Harris, president,
    and Steve Stivers, senator, Ohio State Senate; and Mayor Marilee
    Chinnici-Zuercher of Dublin, OH. The Office of the Press Secretary also
    released a Spanish language transcript of these remarks.