[Weekly Compilation of Presidential Documents Volume 42, Number 18 (Monday, May 8, 2006)]
[Pages 831-838]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the American Hospital Association

May 1, 2006

    Thank you very much. It was on this stage two 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 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

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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. 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

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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.
    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

[[Page 834]]

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 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

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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 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

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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.
    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

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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 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 you for 
your

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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.