Health and Human Services Secretary Kathleen Sebelius today addressed the New DLC Policy Forum on Health Reform and Education Reform. Sebelius’s remarks as prepared for delivery are below.
Let me thank Bruce Reed for that gracious introduction. I know that we celebrated Al From’s retirement last night, but I think it’s only fitting for me to say a few words about his career now.
Al has shown tremendous leadership – through good times and bad. He has earned a long, relaxing retirement and Al, I join so many in wishing you well.
Al worked with my father in Ohio, and when I was elected in Kansas and served in the legislature, I quickly learned that the DLC was a reliable source of good ideas and best practices, and understood how to navigate the policy issues as a Democrat in a very red state. So Al, I appreciate you leadership and willingness to inform and encourage those of us who served in public office.
And let me also welcome Bruce Reed as he takes on this new role. Bruce, I have no doubt that you will be an outstanding leader of the DLC in the years ahead.
Now, Al may be retiring, but the work he has done for so many years will continue to pay dividends, particularly in the area of health reform.
Thanks in no small part to his work, we are better positioned to make reform a reality than ever before.
Today, I’d like to discuss our work to pass real health reform.
But first, I want to remind us all of where we stand today.
Today, health care costs consume 18 percent of our GDP. If we continue on our same path, health care costs will consume 34 percent of our GDP by the year 2040 and the number of uninsured Americans will rise from 46 million to 72 million. The status quo is unsustainable and unacceptable.
The high cost of care is hurting all of us – whether you have insurance or not.
A new study from Families USA found that insured families pay a hidden health tax of more than $1,000 every year. The hidden tax is the amount businesses and families with insurance have to pay to help cover the cost of treating uninsured Americans.
Small businesses and their employees are dropping coverage. Fifteen years ago, 61 percent of small businesses offered insurance to their employees. Today, only 38 percent offer insurance.
Health insurance premiums for families who are covered through a job at a small business increased 85 percent since 2000 and more small businesses are thinking about dropping health insurance benefits.
And 46 million Americans are uninsured and millions more have insurance, but it doesn’t pay for the care they need.
These statistics are more than just numbers on a page. They tell the story of a system that is denying Americans the care, the quality and choices they deserve.
Every day in America, families are forced to choose a different doctor because their health plan was changed because their employer can no longer afford the old plan.
Every day in America, families see their health plan benefits erode because they can’t keep up with higher premiums, co-pays and deductibles.
Every day in America, people decide to skip a doctor’s visit and the medication and treatment that they know they need because they can’t afford the payment.
Every day in America, families are confronted with losing their health insurance all together because their employer can no longer afford to offer any health insurance benefits.
We pay more and have poorer health results than any other country. Doing nothing is no longer an option. The American people are calling for reform and we will deliver.
Today, committees in the House and Senate are working aggressively on reform legislation. There has been unprecedented cooperation and consultation. Insurers, hospitals, doctors, patients, business groups and labor have all been at the table. We know that reform, done properly will benefit all Americans. And we want to ensure all parties continue to work together, because everyone has something to gain.
Now I know that it in Washington, it is easy to be distracted by the daily back and forth. There will be no shortage of rumors and status reports and pundits willing to declare victory or defeat at a moment’s notice.
But the President and his team will not be distracted by the chatter. Instead, we will focus on delivering reform that reduces costs for families, businesses and government; protects people’s choice of doctors, hospitals and health plans; and assures affordable, quality health care for all Americans.
And we will be guided by one basic principle: fix what’s broken and build on what works.
We know that health care costs are out of control. Health care costs doubled from 1996 to 2006. If this rapid health cost growth persists, the Congressional Budget Office estimates that by 2025, 25 per cent of our economic output will be tied up in the health system. So reform must reduce the long-term growth of health care costs.
Today, the high cost of care is crippling businesses, who are struggling to provide care to their employees and stay competitive. It is driving budget deficits and weakening our economy. And as the President has said, you can’t fix the economy without fixing health care.
It is time for reform that gets costs under control.
And we know that higher quality, lower cost care is available, to some Americans in some parts of the country. The President likes to talk about the New Yorker article comparing McAllen, Texas to El Paso, Texas, but this is NOT an isolated case. We are rationing quality in many parts of the country, and need to use the payment system and transparency to drive quality care in every location.
We need to expedite the adoption and use of critical health information technology. Our country is the home of incredible innovations that have changed the way we do business. But too many doctors and hospitals still rely on pen and paper. It isn’t efficient, it drives costs up and it allows for too many medical errors. It’s time for doctor’s offices and hospitals to enter the 21st century.
And it is time for reform that makes investments in prevention and wellness. We know that it is cheaper to prevent a disease than treat a disease and we know that prevention initiatives can help Americans lead longer, happier, healthier lives. We can control costs and save lives if we work to keep more Americans out of the hospital in the first place.
We can do all of this without saddling our children with new debt.
The President is committed to reforms that will fix the status quo without adding to the deficit. He has made tough decisions and put proposals on the table that will help strengthen our health system and finance critical reforms.
The President’s 2010 budget identified $635 billion in savings and revenue to dedicate to health reform over the next ten years. The savings are common sense practices, taking what we know works in the Medicare and Medicaid programs, and rewarding health systems for driving quality care. They will help reduce overpayments to health plans and drug companies while encouraging strategies to lower hospital readmissions.
A few days ago, the President announced new reforms that will generate an additional $313 billion for health reform and help move us closer to a health system that puts quality before quantity.
These proposals will not reduce Medicare benefits. Seniors will still receive the benefits they enjoy today. But they will they will ensure that the Medicare program is financially stronger for the 45 million seniors and individuals with disabilities it currently serves and for future generations.
The President’s new proposals will reduce the costs of prescription drugs and strengthen the Medicare prescription drug program. We will ask the prescription drug companies to pay their fair share so that everyone’s costs will decrease.
We will provide stronger incentives for hospitals and physicians to work together and truly coordinate the care they provide.
And the President’s proposals will help put a stop to wasteful spending and to rampant fraud and abuse. At a time when 46 million Americans are uninsured, when more and more individuals are counting on Medicare and Medicaid, and all of us are being asked to pay more for their health care, we should have zero tolerance for waste and those who try to cheat the system.
Combined with the President’s budget, this complete package of proposals will help support the health reform we so desperately need and extend the solvency of Medicare’s Hospital Insurance Trust Fund by seven years.
And to be clear, over two-thirds of the revenue proposed to fund expanded access to all Americans is already in the medical system, too often paying for strategies which don’t work, or overpaying for medicines and equipment.
We know that there are a number of options for funding health reform. Members of Congress, stakeholders, and I suspect, many people in this room have good ideas about how we can finance this critical work.
In the days ahead, we will work with Congress and address other proposals for funding health reform. We are open to good ideas.
But we are not open to deficit spending. Health reform will be paid for and it will be deficit neutral over ten years.
Health reform will also protect patient choice. Our reforms will not force the millions of Americans who like the health care they have now to make any changes. But it will give millions of Americans the choices they don’t have today.
In today’s market, many Americans cannot choose an affordable insurance plan. Only 33 percent of rural workers are given a choice in health plans through their work, compared with 43 percent of urban workers. In states like my home state of Kansas, one insurance company has a monopoly in much of the state.
We believe reform must create an insurance exchange – a marketplace – that will give Americans the opportunity to compare benefits and prices and choose the plan that works from them. This new marketplace uses market strategies: competition, rather than regulation, to cut health care costs.
And when the American people are shopping for insurance in this new marketplace, they deserve the chance to choose a public health insurance option. A public option is an essential component if we want to create the kind of competition that will bring premiums down and make care affordable. It will keep insurance companies honest and help cut waste out of the system.
Perhaps most importantly, it has been done before.
In 30 states across the country, state employees can choose between a public health insurance option and private insurance companies. The side-by-side competition has not destroyed the private market, nor has it become a single payer system.
The competition fostered by the new health insurance exchange will also improve the quality of care we receive.
Our country is home to some of the finest, most advanced medical technology in the world. But today, healthcare associated infections – infections caught in a hospital or other settings — are one of the leading causes of death in our nation. Close to 100,000 Americans die each year as a result of what happens to them in the hospital; not what brought them to the hospital in the first place. These medical errors are responsible for more deaths than car accidents, breast cancer, or AIDS.
Tremendous disparities continue to persist. Minorities and low income Americans are more likely to be sick and less likely to get the care they need.
And key statistics measuring patient safety have declined each year for the past six years.
This is not acceptable for the world’s wealthiest nation. We cannot accept a health system that leaves some Americans with the greatest care the world has ever known and millions more without the basic care they need.
It is time to reform our health care payment system to focus on the quality of care, not the quantity. The American people deserve the care that works best, not the care that just costs the most.
Now we know that these reforms will not be cheap, but they will cost far less than doing nothing. If the president’s proposals are adopted, over two-thirds of the cost of providing coverage and preventive care for almost 50 million additional Americans will be paid for with savings from an aggressive focus on waste and abuse, encouraging the most cost-effective, high quality outcomes for patients, and eliminating ineffective and overly expensive treatment strategies.
But without reform, without change and action now, the federal deficit will rise and Americans that receive insurance from their employers, will see a larger portion of their salary go to health benefits, not take-home pay.
And we know that the benefits of reform are significant.
The President’s Council of Economic Advisers’ found that real reform that slows the growth rate of health care costs by 1.5 percent would help cut the federal deficit, boost our economy, save jobs and put more money in the American people’s pockets.
For a typical family of four, real income would be about $2,600 more in 2020 than it otherwise would have been, and $10,000 more in 2030, but only if we make health reform a reality.
The message is clear: health reform can give us a stronger economy, a better health care system and boost families’ bottom line. But if we keep doing more of the same, we will all pay a heavy price.
And don’t believe those who think reform is impossible. In America today, there are already examples of hospitals and providers who are using new technology, cutting costs and improving the quality of care. Just last week, I was in Omaha, Nebraska at one of the nation’s first paperless hospitals and saw first-hand how health information technology can help doctors and patients.
I’ve spoken to Community Health Center leaders from around the country about how they are caring for patients in need.
I traveled to Massachusetts to meet with experts and discuss how the Commonwealth’s reforms have helped insure more people and the importance of cutting health care costs.
And I have heard good and constructive ideas from Democrats and Republicans who know reform cannot wait. Today, the Bipartisan Policy Center issued a new report that reflects bipartisan recommendations for health care reform. The Democrats and Republicans who helped produce the report, including Senate Majority Leaders Howard Baker, Tom Daschle and Bob Dole, agreed that health care costs are rising at an unsustainable rate. Their report also recognizes the need for strong insurance reforms and the importance of employers doing their part. And they agreed that its time for reform that ensures affordable coverage for all Americans.
No one report has all the answers, but this report and my travels around the country have shown me that there are no shortage of encouraging examples and good ideas about how we can improve care and cut costs in places across this country.
Our challenge now is to take these best practices and spread them across the entire country.
I know that achieving this goal and enacting health reform this will not be easy. As President Obama often says, if it were easy, it would have been done by now. But today, there is incredible support for reform. Groups that were once sworn enemies continue to sit at the table and work towards a solution. Patients and doctors, business and labor, Democrats and Republicans all know that reform cannot wait.
Of course, in Washington, there will always be plenty of people rushing to tell us what we can’t do. But I know that we will prove the nay-sayers wrong. The day we pass meaningful reform of our health care system, is months, not years away and I look forward to celebrating with you when we pass reform and give the American people the choices and care they need and deserve.