    [Public Papers of the Presidents of the United States: George W. Bush (2006, Book I)]
    [May 1, 2006]
    [Pages 836-844]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to the American Hospital Association
    May 1, 2006

        Thank you very much. It was on this stage 2 nights ago that I had
    the pleasure of showing up with a George W. Bush look-alike. [Laughter]
    So I walked in, and Dick said, ``Is it
    really you?'' [Laughter]
        Thanks for your introduction, Dick.
    Thanks for the invitation to be here. I want to, first, thank all the
    good people of the American Hospital Association. I appreciate the
    important voice that you provided for our hospitals, but more
    importantly, I appreciate the compassionate care you give to our
    citizens.
        I have come to talk about a comprehensive health care strategy that
    will make health care more affordable and available for all our
    citizens. And I appreciate you giving me a chance to use this forum as
    an opportunity to discuss our vision for moving forward.
        I do want to thank George Lynn, who is
    the chairman of the American Hospital Association board of trustees. I
    want to thank all the trustees who are here. I appreciate the leadership
    of the American Hospital Association. I want to thank the

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    members of the American Hospital Association.
        I understand--there he is--my friend Charlie Norwood is here. Good to see you, Congressman. Thank
    you so much for being here. You're looking pretty good. [Laughter]
    Looking real good, as a matter of fact. [Laughter]
        This economy of ours is strong, and that's important for health
    care. It's important for the hospitals. And the economy is getting
    stronger. We put our trust in the American people by cutting taxes, and
    the tax relief we passed is saving--is helping people save and spend and
    invest. And when people save, spend, and invest, it causes our economy
    to grow. Thanks to tax relief and progrowth economic policies, we're now
    in our fifth year of uninterrupted economic growth.
        In the first quarter of this year, the economy grew at 4.8 percent.
    We've had 18 straight quarters of economic expansion. Last year our
    economy grew faster than any other major industrialized nation. Over the
    past 2\1/2\ years, we've created 5.1 million new jobs, and that's more
    than Japan and the 25 nations of the EU combined. Productivity is high;
    the unemployment rate is 4.7 percent; consumer confidence is at its
    highest point ever--in nearly 4 years. The new economic report out today
    contains good news on income growth.
        Things are looking good for this economy, but we cannot be
    complacent. One of my concerns is that the United States of America
    loses our nerve, fears competition, and we become an isolated and
    protectionist nation. And health care plays a vital role in making sure
    this nation remains competitive.
        One of the best ways to make sure that we're a competitive nation is
    to continue to invest in research and technology. If America wants to be
    the leader of the world, we've got to remain on the leading edge of
    change. As many of you know, when I came into office, I pledged to
    continue the doubling of the funding for the National Institutes of
    Health, and we kept that commitment. And it's one of the many reasons
    why our health care system leads the world. And we need to keep--we need
    to understand the importance of research at the Federal level, and
    that's why I have proposed that the United States Congress double
    Federal investment in basic scientific research.
        In other words, for this country to be competitive, we've got to
    invest in the future. See, I don't think we ought to fear the future; I
    don't think we ought to become protectionists and isolationists. I think
    we need to continue to lead, and one way to lead is to lead in research
    and development.
        To keep this economy competitive with other nations around the
    world, we've got to do something about our dependence on oil. Dependency
    on oil creates an economic problem for us, and it creates a national
    security problem for us. So I look forward to working with Congress to
    change--to help speed up research and development so we can change our
    habits, so we can drive cars fueled by ethanol, or so we can have
    batteries that enable cars to drive for the first 40 miles on
    electricity.
        To keep this country competitive, we've got to have a health care
    system that provides our people with good quality care at affordable
    prices. In other words, you're a part of an industry that must be
    reformed in order for the United States to continue to be an economic
    leader.
        America has the best health care system in the world, pure and
    simple. We got the best medicines; we got the best doctors; and we have
    the best hospitals. And we intend to keep it that way. Yet we are
    challenged by the fact that health care costs are rising sharply. In the
    past 5 years, private health insurance premiums have risen 73 percent.
    And as a result, some businesses have been forced to drop health care
    coverage for their employees. You know that as well as anybody. Others
    have been forced to raise copayments and premiums.

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    Some have been paying increasing health care costs and, therefore, have
    been unable to give workers the pay raises they need to cope with rising
    health care costs.
        With rising costs, many Americans are concerned. They're concerned
    they're not going to be able to afford health care. As you well know,
    millions of our fellow citizens have no health insurance at all. And as
    you know, that places burdens on our Nation's hospitals. This is
    unacceptable, for this country to have health care costs rising as fast
    as they are. If we want to be the leader of the world, we must do
    something about it. And my administration is determined to do something
    about it.
        To make our health care system work for all Americans, we have to
    choose between two philosophies: one that trusts government to make the
    best decisions for the people's health care or one that trusts the
    people and their doctor to make the best decisions for their health
    care.
        We know from experience which of these systems works best. Other
    nations that have adopted for bigger government and more centralized
    control now have long waits for treatment for their people. The quality
    of care is lower; there's less technological innovation. In America, as
    you know, we follow a different path. We lead the world in health care
    because we believe in a system of private medicine that encourages
    innovation and change.
        And the best way to reform this health care system is to preserve
    the system of private medicine, is to strengthen the relationship
    between doctors and patients and make the benefits of private medicine
    more affordable and accessible for all our citizens.
        Government has a role to play; don't get me wrong. We're kind of--
    we're big in the health care field, as you may know. [Laughter] We have
    a major role to play in strengthening and reforming this health care
    system, but in a way that preserves the doctor-patient relationship.
        And that's what I want to talk to you about today. The first goal of
    our health care strategy is to meet the obligation the Federal
    Government has made to take care of the elderly and the poor. We have
    said, as a Federal Government, we will help the elderly and the poor,
    and I intend to keep that obligation. We're meeting that obligation,
    that responsibility through Medicare, Medicaid, and community health
    centers.
        More than four decades ago, the Federal Government established
    Medicare to provide health coverage for older Americans. The bill was
    signed by Lyndon Baines Johnson. He came from a State I know pretty
    well. [Laughter] When I came into office, I found a Medicare program
    that was outdated, a Medicare program that was not meeting the needs of
    America's seniors. The way I tried to explain it to the American people
    was this: We had a system that would pay $28,000 for an ulcer surgery
    but not the $500 it would cost for prescription drugs that would prevent
    the ulcer from being--with taking hold in the first place. And that
    didn't make any sense--$28,000 for the surgery but not a dime of
    prescription drugs to prevent the surgery from being needed. To me,
    that's an outdated system. It's one that's not very cost-effective, and
    it's one that does not provide quality care for our seniors.
        So I decided to do something about it. And I worked with the
    Congress, and we passed critical legislation that modernizes Medicare
    and provides seniors with more choices through the private sector and
    has given our seniors better access to the prescription drugs they need.
        The benefit allows seniors to choose from a number of private
    prescription drug plans to find the one that is right for them. It
    encourages plan providers to compete for the seniors' business, and that
    helps lower costs. The new Medicare prescription drug benefit is a good
    deal for America's seniors. The typical senior will end up spending
    about half of what he or she used to spend on prescription drugs each
    year.

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        In addition, we've provided extra help for low-income seniors. About
    a third of seniors are eligible for prescription drug coverage that
    includes low or no premiums, low deductibles, and no gaps in coverage.
    On average, Medicare will pay for more than 95 percent of the costs of
    prescription drugs for low-income seniors. I know you shared my concern
    when we heard the stories of low-income seniors having to choose between
    food and medicine. And because of this reform, those days are over with.
        The Medicare prescription drug benefit went into effect in January.
    More than 30 million people now have prescription drug coverage through
    the Medicare program, and hundreds of thousands more are signing up each
    week. We want every senior who needs coverage to sign up.
        The May 15th deadline for seniors to sign up at the lowest cost is
    approaching. Over the next 2 weeks, this administration will encourage
    our Nation's pharmacies--pharmacists and doctors and hospitals and
    others in the medical community to continue to get the word out to
    seniors about the benefits of this important program. There are some
    seniors who are risk-adverse; they don't want to change. It is really
    important for those of us who are involved in health care in this
    country to get the word out that, at the very minimum, seniors ought to
    look and see what's available. Americans need to take advantage of this
    opportunity to choose a plan.
        We're also--I also recognize that we got a problem with the long-
    term viability of Medicare. Today the trustees for our Medicare and
    Social Security systems will release their annual report. Each year the
    trustees remind us that these programs are not structured in a way that
    they will be financially sound for our children and our grandchildren.
        The problem is pretty basic. There's a lot of baby boomers like me
    getting ready to retire--[laughter]--in my case, 2\1/2\ years.
    [Laughter] And there's a lot of baby boomers who are living longer, and
    there are fewer workers per beneficiary paying money in the system to
    support future retirees like me. And so the systems are going broke, and
    now is the time to do something about it. We've got too much politics in
    Washington, DC. It's time to set aside politics and restructure Social
    Security and Medicare for generations to come.
        We're honoring our Nation's commitments to take care of the poor by
    strengthening Medicaid. Medicaid is a program administered in
    conjunction with the States that provides health care for low-income
    families with children, poor seniors, and disabled Americans. To help
    improve Medicaid, earlier this year, I signed legislation to restructure
    Medicaid and give States more flexibility in designing better programs
    to cover their citizens.
        Under the reforms I signed into law, it's now easier for States to
    offer alternative benefit plans, provide coverage to more people, and
    design their Medicaid program to meet their State's needs and budgets.
    In the coming months, my administration will be encouraging States to
    adopt commonsense reforms. Our health care system must be guided by the
    needs of patients, not by rules emanating out of Washington, DC.
        Another way we're meeting our commitment to Americans in need is
    through community health centers. These centers provide primary health
    care for the poor, so they don't have to go to the emergency room of a
    hospital to get routine care. This is a really good use of taxpayers'
    money. It makes a lot of sense to have community health centers so that
    we can cut down on unnecessary visits to the emergency rooms. Health
    centers help lower the cost of health care for everyone.
        Since I took office, we've funded about 800 new or expanded health
    centers, bringing our total to more than 3,700 health centers serving
    more than 13 million Americans a year. And over the next 2 years, we
    will fund the opening and expanding of 400 more health centers. And
    Congress

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    needs to fully support these health centers in the budget that I have
    submitted.
        And so we have got a strategy to take care and help our elderly and
    the poor and the disabled. The second part of our strategy is to make
    care and coverage more affordable and available for Americans. And here
    are five key policies to support this goal.
        Our first policy is to expand health savings accounts to help
    improve health care and to help lower costs. Under the current system,
    as you well know, most Americans have no idea what the actual cost of
    their treatment is. Third-party insurers pay their bills, so patients
    have no reason to demand better prices, and the health care industry is
    under little pressure to lower prices. When somebody else pays the
    bills, it seems like everything is just fine. The result is that health
    care costs are skyrocketing. The insurance companies pass these rising
    costs on to their workers--on to workers and their employees in the form
    of higher premiums.
        Now, health savings accounts transform what I believe is an outdated
    system by putting patients in control of how their health care dollars
    are spent. And when patients and consumers see how their health care
    dollars are spent, they demand more value for their money. The result is
    better treatment at lower costs.
        HSAs have two components: low-cost catastrophic insurance coverage
    and tax-free savings accounts. The catastrophic coverage protects you
    and your family in the event of a devastating medical illness. The
    health savings account allows your--or your employer to contribute to a
    tax-free account to pay for your routine medical needs. The money that
    goes into your account is tax-free, the interest earned on your account
    is tax-free, and the money withdrawn from your account is tax-free. It
    means that you own your money in your account, and that you can build
    your savings by rolling over contributions that you do not spend in any
    given year.
        HSAs can help us move toward a health care system that is no longer
    dominated by third-party payers, to a system in which consumers make
    their own decisions. And we see strong evidence that HSAs are making
    health care more affordable and accessible. From March 2005 to January
    2006, the number of HSAs tripled from 1 million to more than 3 million.
    This is a new product. People are getting--taking a look at it. They're
    beginning to see the merits of a tax-free savings system coupled with
    catastrophic care.
        Forty percent of the people who bought HSAs have family incomes
    below $50,000. HSAs are making health care more accessible for those
    without insurance. More than a third of those who bought HSAs on their
    own had previously been uninsured. HSAs are good for small-business
    owners. HSAs, in my judgment, will mean that Americans who do not have
    coverage will be able to get coverage and afford coverage, which is good
    for America's hospitals. You see, by making health care coverage more
    affordable, more Americans can afford insurance. And with more Americans
    insured, fewer people will show up at our Nation's hospitals needing
    uncompensated care.
        HSAs also create an incentive for patients to become more informed
    about their medical options and more involved in their treatment as they
    shop for the best value for their health dollar. This involvement
    strengthens the doctor-patient relationship.
        Equally importantly is that HSA owners can see the benefits of
    changing risky behavior. They can follow doctors' preventative
    recommendations. The healthier you are, the less money you're going to
    spend out of your savings account. And there will be a tangible return--
    more of your own money, tax-free. Some employers are even offering
    employees financial incentives to get regular checkups and lose weight
    and

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    get fit. By encouraging preventative medicine, HSAs save lives and save
    health care dollars.
        HSAs will benefit hospitals, doctors, and patients, and they can
    also benefit hospital workers. Today, only a handful of hospitals offer
    HSAs to their employees. I encourage the members of the American
    Hospital Association to consider the benefits of offering health savings
    accounts to your employees. HSAs will provide your workers with better
    care and lower your health care costs.
        For decades, America's hospitals and health care professionals have
    led the world in innovation and quality medical care. Now you have an
    opportunity to help America transform our health care system by choosing
    the innovation and quality of health savings accounts. As HSAs continue
    to grow in popularity, my administration is working to expand them to
    even more Americans.
        One way to make HSAs more attractive is to make them portable so
    they can meet the practical needs of today's workers. Many people are
    changing jobs, and one of their greatest fears is that they will lose
    their health care coverage. We believe that no American should have to
    remain locked in a job to get health insurance. Today, the savings in
    your health account are portable, and that means you can take your
    savings accounts from job to job. However, the health insurance within
    your HSA account is often not portable, and this is because of outdated
    laws and practices that prevent insurers from offering portable
    policies. I believe health insurers should be allowed to sell portable
    HSA policies nationwide.
        Another obstacle to expanding HSAs is the Federal Tax Code. Under
    current law, employers and employees pay no income or payroll tax on any
    health insurance provided through the workplace. If you buy your own
    insurance, you do not get the same tax break. That means that the self-
    employed or the unemployed or workers at companies that do not provide
    health insurance are at a great disadvantage. Congress needs to end this
    discrimination in the Tax Code and give Americans who buy HSA policies
    on their own the same tax breaks as those who get their health insurance
    from their employers.
        The current Tax Code also limits the amount you contribute to your
    HSA tax-free. The limit is usually tied to your deductible. Sometimes
    your total out-of-pocket expenses are greater than your deductible.
    Those with chronic illnesses often have expenses that go well beyond
    their deductibles. So we need to fix the Tax Code by allowing Americans
    to cover their out-of-pocket expenses with tax-free dollars and make
    HSAs even more practical for more American families.
        In addition to these efforts to fix the code, I've proposed a
    refundable tax credit to help low-income Americans purchase health
    coverage on the individual market. Under my proposal, low-income
    families can receive up to $3,000 in a refundable tax credit to purchase
    HSA-qualified insurance. By working together, we can reform our Tax Code
    and make it easier for American families to get health care.
        And this week, Congress takes an important step in these efforts.
    Congressman Eric Cantor of Virginia will
    introduce a bill that would end many of the biases in the Tax Code,
    provide a tax credit of up to $3,000 for low-income families, and make
    HSAs more attractive. It's a bill called the ``Tax-Free Health Savings
    Act.''
        I also want to thank Senators Burns and
    Allen, Ensign, and
    DeMint for introducing bills to improve HSA
    options for all Americans and Senators Santorum and Murkowski for introducing
    legislation supporting the low-income tax credit. Congress needs to pass
    these reforms and make sure the doctor-patient relationship remains
    central to our health care system.

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        The second policy for making health care more affordable and
    accessible is to increase transparency in our health care system. To be
    smart consumers, we need to be informed consumers, and this is
    especially true for patients with HSAs who have an incentive to spend
    their HSA dollars wisely. They need to know in advance what their
    medical options are, the quality and expertise of the docs and the
    hospitals in the area in which they live, and what their medical
    procedures will cost.
        My administration is working with the AHA and other health care
    associations to provide patients with reliable information about prices
    and quality on the most common medical procedures. And I want to thank
    the AHA board for adopting a resolution this week supporting
    transparency. I appreciate your leadership on this vital issue.
        We must work together to get patients the information they need so
    they can get the best quality care for the best price. If you're worried
    about increasing costs, it makes sense to have price options available
    for patients. That's what happens in a lot of our society; it should
    happen in health care as well. By increasing transparency, the idea is
    to empower consumers to find value for their dollars and to help
    patients find better care and to help transform this system of ours to
    make sure America remains the leader in health care.
        Secretary Leavitt has met with
    leaders in the health care industry in 13 cities to encourage them to
    work with the Department of Health and Human Services to increase
    transparency in the marketplace. We're asking doctors and hospitals and
    other providers to post their walk-in prices to all patients.
        I directed the Department of Health and Human Services to make data
    on Medicare's price and quality publicly available on the Internet. The
    first data will be available to all Americans by June 1st. We're also
    asking insurance companies to increase health care transparency by
    providing their negotiating prices and quality information to their
    enrollees. And the Federal Government will do the same. My
    administration will be requiring transparency from insurance plans
    participating in Federal programs. Beginning this year, the Federal
    Employees Benefit Program and the military's Tricare system are asking
    contractors to begin providing price and quality information.
        Today I'm asking for your help. Every hospital represented here
    should take action to make information on prices and quality available
    to all your patients. If everyone here cooperates in this endeavor, we
    can increase transparency without the need for legislation from the
    United States Congress. By working together, transparency--to increase
    transparency, we can help lower costs.
        Third policy is to provide modern information technology to our
    medical system. Too many doctors' offices and hospitals have the most
    advanced technology in the 21st century but still use last century's
    filing systems. Doctors are still writing out files by hand, and that's
    kind of dangerous because most doctors don't write too well. [Laughter]
    In hospitals, there's more risk of medical error and duplicate tests
    when records are handwritten on paper instead of cross-checked on a
    computer.
        So in 2004, I set a goal that most Americans would have an
    electronic health record within 10 years. And we're making good progress
    toward that goal. The first thing is, we needed to develop a common
    standard of language so that health care providers in Los Angeles and
    health care providers in New York knew what the--knew what we are
    talking about.
        Imagine how valuable this access to information will become. If you
    had someone who had an epileptic seizure outside their hometown and
    ended up in a hospital in a nearby town, these electronic records would
    help save lives. Information would be valid and clear. There wouldn't be
    any

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    confusion amongst those who are working hard to provide compassionate
    care.
        As we develop an information network--nationwide information
    network, we will make sure that we protect the privacy of a patient's
    medical record. But make no mistake about it, bringing information
    technology into our health care system is going to reduce costs and
    increase quality care for American people.
        And I hope you're aggressive on this front. I urge you to work with
    the AHA to come up with a plan to help develop a nationwide information
    system that is modern and helps you do your job better.
        Fourth policy is to make it easier for small businesses to obtain
    the same discounts that big companies get when obtaining health care
    insurance. Unlike big businesses, small companies cannot negotiate lower
    health insurance rates because they can't spread their risk over a
    larger pool of employees. So we proposed association health plans that
    will allow small firms to band together across State lines and buy
    insurance at the same discounts available to big companies. The House
    has passed a bill. The Senate hasn't acted, and now it's time for the
    United States Senate to do something good for the small-business
    employers of this country.
        Our fifth policy to confront high-cost health care and to make sure
    private medicine is central in the United States is to confront the glut
    of frivolous lawsuits that are driving good doctors out of practice and
    driving up the cost of health care. To avoid junk lawsuits,
    professionals in the health care field are forced to practice defensive
    medicine. They order tests and write prescriptions that are not
    necessary so they can protect themselves from trial lawyer lawsuits. One
    hospital CEO in New York said, ``Fear of liability does nothing but
    threaten patient safety by discouraging open discussion of medical
    errors and ways to prevent them.''
        The total cost of defensive medicine to our society is estimated at
    60 to a 100 billion dollars a year, and that includes $28 billion billed
    directly to the American taxpayers through increased costs of Medicare,
    Medicaid, Veterans Affairs, and other Federal health programs. The costs
    of frivolous litigation are more than financial; they hurt patients all
    across America.
        Most Americans are shocked when I cite the fact there are nearly
    1,500 counties in the United States without an ob-gyn. We want our
    doctors focused on providing compassionate care, not fighting junk
    lawsuits. We want our hospitals pursuing innovative and promising ways
    to heal, not battling lawyers who second-guess them in the courts. This
    is a national issue that requires a national response. The House of
    Representatives have passed a good bill; the Senate has done nothing on
    medical liability reform. For the sake of affordable and accessible
    health care, we need medical liability reform this year.
        I'm looking forward to working with the Congress to enact these
    reforms. This is a commonsense way of dealing with rising health care
    costs. And by dealing with rising health care costs, we will strengthen
    private medicine and fight off the calls of those in Washington, DC, who
    want the Federal Government making all the decisions for health care.
        The story of America's hospitals is a story of America's commitment
    to be a nation of care and compassion. America's strength and its
    goodness and prosperity is built on a trust in the extraordinary wisdom
    and power of the American people. And so I believe that by giving more
    Americans more control over their health care decisions, we will
    strengthen the doctor-patient relationship, and we will preserve the
    system of private medicine that has made our Nation's hospitals and
    health care the best in the world.
        People here in Washington need to trust the people. People here in
    Washington need to do commonsense things to address the rising costs of
    health care. And this person in Washington has come to thank

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    you for your compassion and what you do for the communities all around
    America. May God continue to bless your work, and may God bless our
    country. Thank you.

    Note: The President spoke at 1:17 p.m. at the Washington Hilton Hotel.
    In his remarks, he referred to Richard J. Davidson, president, American
    Hospital Association.