By Judy Keen, USA TODAY
CHICAGO — Raudel Sanchez's American dream was so strong that he tied a few possessions around his waist in 1967 and swam across the Rio Grande into Texas.
"I wanted to make a better life in America," says Sanchez, 63. "My dream was bringing my family here and working together."
Sanchez, now a U.S. citizen, joined a brother in Chicago after crossing the border near Laredo, Texas. He worked as a butcher, making $1.85 an hour, and took a second job at a candy factory. He often worked 14 hours a day. He saved his earnings and eventually brought his wife, siblings and parents — who are now in their 90s — to Chicago.
Eventually, he opened several small businesses and built a comfortable life for himself and his family. But now, the recession has hit him hard. He has sold one of his three clothing stores and a restaurant, resulting in layoffs of several immigrant workers. He's considering selling a second store.
Sanchez's story reflects how immigrant-owned businesses — a key part of the U.S. economy — are being threatened by the recession. About 1.5 million immigrants own U.S. businesses, according to a study for the Small Business Administration by Rob Fairlie, an economics professor at the University of California-Santa Cruz. He found that immigrants are 30% more likely to start a business than non-immigrants. They account for 11.6% of all U.S. business income.
Many immigrants started with nothing and built businesses that support them and their extended families and communities.
They epitomize the American dream: Work hard and you can build a good life.
With customers spending less and banks less willing to loan money, some immigrant entrepreneurs are wondering whether that's still true.
A few years after arriving here, Sanchez bought a foreclosed house, then three more. He sold two of them in 1985 and used the money to open Sanchez Bros. Western Wear, a clothing store. He expanded to two more stores in the suburbs, bought a restaurant and started a record label for Mexican music.
He tried to run his businesses cautiously: He paid cash for merchandise and didn't use his line of credit at the bank. When people stopped buying $1,000 cowboy boots, he stocked $400 pairs.
Now they aren't selling, even on sale. "Every year we've seen a decline" in sales, he says.
Besides selling two of his businesses, Sanchez has stopped advertising. He laid off most employees, and now family members are behind the counters.
The record label is down to its last two acts. "I had a meeting with my family and told them we've got to work more and more hard," he says.
Sanchez believes his seven children and nine grandchildren will build successful lives here. He's sure the economy will rebound.
"Maybe next year," he says. Still, he's wondering about his future at a time when he should be planning retirement.
"I still believe in this dream I had many years ago," he says. "The only thing is, you have to work hard."
'We just couldn't hang on'
Niall Freyne's dream was snatched away by the recession.
Freyne, an Irish immigrant, closed Galway Tribes Irish Pub last month after lunch and weeknight business dwindled along with his customers' confidence in the economy.
"We just couldn't hang on," says Freyne, 43, who opened the restaurant in 2005 in suburban Frankfort, Ill."We've already lost so much: all of our life savings, all of the equity in our home."
Freyne wrote a letter to President Obama asking why small businesses like his can't get a federal bailout — he says he got no reply — and he held out hope until the last minute that some generous millionaire would rescue him. That didn't happen either, and now Freyne isn't sure how he'll support his wife, Dorothy, and son James, who is 6, or what will become of his 42 employees.
"I feel like I've let everybody down," he says. "I can't control the economy, and that's what killed me."
People who leave their countries to pursue success in the USA often are risk-takers who are optimistic and willing to work especially hard to build successful futures for their children and grandchildren, says Allert Brown-Gort, associate director of the Institute for Latino Studies at the University of Notre Dame.
In difficult economic times, "immigrants are much more likely to battle it out for longer," he says, in part because they realize that "success or failure is really on them, and this is going to have an effect for generations to come."
Because immigrant business owners — particularly those who operate stores or restaurants — often depend on their own communities, they can be "more vulnerable in these downturns," says Gregory DeFreitas, an economist at Hofstra University.
For the same reason, recovery will come more slowly to immigrant businesses, he says.
Entire family invested
Susan Patel inherited her American dream from her father, Tulsi, and uncle Mafat, immigrants from India who founded Patel Brothers, a national chain of 41 Indian grocery stores.
Last year, Susan Patel bought Patel Brothers Handicrafts & Utensils, a small Chicago shop that sells kitchen items and Hindu statues and temples, from her father. Since then, she has watched several of the Indian and Pakistani businesses that line Devon Avenue close and stopped paying herself a salary to avoid laying off her two employees.
"We've all had to adjust," says Patel, 33, but she's confident she can survive the recession. She feels obliged to keep her store open to help the neighborhood get through the recession. "If I close, customers may not come to this area at all," she says.
Patel's uncle came here from Bhandu, a rural Indian village, in the late 1960s. Her parents, Tulsi and Aruna, followed in 1971. Everyone shared a house, and Patel's parents worked in factories.
"They saved their money so they could have the American dream," she says. In 1974, they bought a small grocery. More relatives emigrated from India to join the growing throng in the Patel home, Patel says, and more stores and a line of Indian food followed. The family bought restaurants, travel agencies and real-estate companies, and the two brothers' children work in them.
Patel believes immigrant-owned businesses are more likely to make it through the recession because owners often invest their life savings — and their lives — in them. "Everyone works all the time," she says. "At the dinner table, all we talked about was business. It's all we knew."
Patel's goals are identical to those that led her parents to risk everything and come here: "just to make it, to be a success."
Confident in the economy
It will take more than a recession to threaten the dreams of many immigrant business owners who left their homelands because of political turmoil.
Christos Koskiniotis, 46, and his mother, Panayiota Koskiniotis, 67, own Four Seasons Cleaners. They came here in the 1970s from Greece after government coups forced his late father to close the cafes he owned.
The dry-cleaning business is stable for now, Christos Koskiniotis says. His mom is unfazed because she's "seen everything in her life," he says.
Their confidence in their plan for a better life in the USA is unwavering. "For the long term, this is the best place to be," he says. "You're going to hit rough spots no matter where you're at. … I don't think the American dream is ever going to die. To think that would be like giving up on hope."
Dana Kapacinskas, 48, moved here from Kounas, Lithuania, in 1979, during the country's occupation by the Soviet Union. The dream that propelled her family was simple: "Freedom. At that time in the Soviet Union, you couldn't move, you couldn't go anywhere. They would follow you," she says.
The family started a bakery/deli here that grew over time. Racine Bakery now has more than 25 employees and distributes its baked goods to area supermarkets. Business hasn't been affected much by the recession, Kapacinskas says, "maybe because it's comfort food. … People still have to eat."
Things are going well enough that the bakery donates food to area churches, schools and non-profit groups. Kapacinskas says she, her parents and brother were motivated to improve their lives and demonstrate to people in their new country that they were willing to work hard.
"I was very eager and I had good work ethic and I saw the opportunities," she says. "We left our friends and missed our family, but the freedom and the opportunities were unlimited."
That's what Freyne thought, too. He opened Galway Tribes after working at hotels and restaurants in Ireland and the USA. He bought the land and built the place, furnishing it with items imported from Ireland.
"We were making it. We were fine, and then about a year ago the economy started going down a bit and people stopped coming out during the week," Freyne says. Then a new assessment a few months ago pushed his property taxes beyond what he could afford. "We just couldn't survive on weekends alone," he says.
Freyne wants to believe that his American dream can somehow be revived when the economy improves.
"You can't know when that will happen," he says. "I put my blood, sweat and tears in this place. It's a sad story."
Monday, June 15, 2009
Text: Obama’s Speech on Health Care Reform
Following is a text of President Obama's prepared address on health care reform to the American Medical Association, as released by the White House.
From the moment I took office as President, the central challenge we have confronted as a nation has been the need to lift ourselves out of the worst recession since World War II. In recent months, we have taken a series of extraordinary steps, not just to repair the immediate damage to our economy, but to build a new foundation for lasting and sustained growth. We are creating new jobs. We are unfreezing our credit markets. And we are stemming the loss of homes and the decline of home values.
But even as we have made progress, we know that the road to prosperity remains long and difficult. We also know that one essential step on our journey is to control the spiraling cost of health care in America.
Today, we are spending over $2 trillion a year on health care – almost 50 percent more per person than the next most costly nation. And yet, for all this spending, more of our citizens are uninsured; the quality of our care is often lower; and we aren't any healthier. In fact, citizens in some countries that spend less than we do are actually living longer than we do.
Make no mistake: the cost of our health care is a threat to our economy. It is an escalating burden on our families and businesses. It is a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America.
It is unsustainable for Americans like Laura Klitzka, a young mother I met in Wisconsin last week, who has learned that the breast cancer she thought she'd beaten had spread to her bones; who is now being forced to spend time worrying about how to cover the $50,000 in medical debts she has already accumulated, when all she wants to do is spend time with her two children and focus on getting well. These are not worries a woman like Laura should have to face in a nation as wealthy as ours.
Stories like Laura's are being told by women and men all across this country – by families who have seen out-of-pocket costs soar, and premiums double over the last decade at a rate three times faster than wages. This is forcing Americans of all ages to go without the checkups or prescriptions they need. It's creating a situation where a single illness can wipe out a lifetime of savings.
Our costly health care system is unsustainable for doctors like Michael Kahn in New Hampshire, who, as he puts it, spends 20 percent of each day supervising a staff explaining insurance problems to patients, completing authorization forms, and writing appeal letters; a routine that he calls disruptive and distracting, giving him less time to do what he became a doctor to do and actually care for his patients.
Small business owners like Chris and Becky Link in Nashville are also struggling. They've always wanted to do right by the workers at their family-run marketing firm, but have recently had to do the unthinkable and lay off a number of employees – layoffs that could have been deferred, they say, if health care costs weren't so high. Across the country, over one third of small businesses have reduced benefits in recent years and one third have dropped their workers' coverage altogether since the early 90's.
Our largest companies are suffering as well. A big part of what led General Motors and Chrysler into trouble in recent decades were the huge costs they racked up providing health care for their workers; costs that made them less profitable, and less competitive with automakers around the world. If we do not fix our health care system, America may go the way of GM; paying more, getting less, and going broke.
When it comes to the cost of our health care, then, the status quo is unsustainable. Reform is not a luxury, but a necessity. I know there has been much discussion about what reform would cost, and rightly so. This is a test of whether we – Democrats and Republicans alike – are serious about holding the line on new spending and restoring fiscal discipline.
But let there be no doubt – the cost of inaction is greater. If we fail to act, premiums will climb higher, benefits will erode further, and the rolls of uninsured will swell to include millions more Americans.
If we fail to act, one out of every five dollars we earn will be spent on health care within a decade. In thirty years, it will be about one out of every three – a trend that will mean lost jobs, lower take-home pay, shuttered businesses, and a lower standard of living for all Americans.
And if we fail to act, federal spending on Medicaid and Medicare will grow over the coming decades by an amount almost equal to the amount our government currently spends on our nation's defense. In fact, it will eventually grow larger than what our government spends on anything else today. It's a scenario that will swamp our federal and state budgets, and impose a vicious choice of either unprecedented tax hikes, overwhelming deficits, or drastic cuts in our federal and state budgets.
To say it as plainly as I can, health care reform is the single most important thing we can do for America's long-term fiscal health. That is a fact.
And yet, as clear as it is that our system badly needs reform, reform is not inevitable. There's a sense out there among some that, as bad as our current system may be, the devil we know is better than the devil we don't. There is a fear of change – a worry that we may lose what works about our health care system while trying to fix what doesn't.
I understand that fear. I understand that cynicism. They are scars left over from past efforts at reform. Presidents have called for health care reform for nearly a century. Teddy Roosevelt called for it. Harry Truman called for it. Richard Nixon called for it. Jimmy Carter called for it. Bill Clinton called for it. But while significant individual reforms have been made – such as Medicare, Medicaid, and the children's health insurance program – efforts at comprehensive reform that covers everyone and brings down costs have largely failed.
Part of the reason is because the different groups involved – physicians, insurance companies, businesses, workers, and others – simply couldn't agree on the need for reform or what shape it would take. And another part of the reason has been the fierce opposition fueled by some interest groups and lobbyists – opposition that has used fear tactics to paint any effort to achieve reform as an attempt to socialize medicine.
Despite this long history of failure, I am standing here today because I think we are in a different time. One sign that things are different is that just this past week, the Senate passed a bill that will protect children from the dangers of smoking – a reform the AMA has long championed – and one that went nowhere when it was proposed a decade ago. What makes this moment different is that this time – for the first time – key stakeholders are aligning not against, but in favor of reform. They are coming together out of a recognition that while reform will take everyone in our health care community doing their part, ultimately, everyone will benefit.
And I want to commend the AMA, in particular, for offering to do your part to curb costs and achieve reform. A few weeks ago, you joined together with hospitals, labor unions, insurers, medical device manufacturers and drug companies to do something that would've been unthinkable just a few years ago – you promised to work together to cut national health care spending by two trillion dollars over the next decade, relative to what it would otherwise have been. That will bring down costs, that will bring down premiums, and that's exactly the kind of cooperation we need.
The question now is, how do we finish the job? How do we permanently bring down costs and make quality, affordable health care available to every American?
That's what I've come to talk about today. We know the moment is right for health care reform. We know this is an historic opportunity we've never seen before and may not see again. But we also know that there are those who will try and scuttle this opportunity no matter what – who will use the same scare tactics and fear-mongering that's worked in the past. They'll give dire warnings about socialized medicine and government takeovers; long lines and rationed care; decisions made by bureaucrats and not doctors. We've heard it all before – and because these fear tactics have worked, things have kept getting worse.
So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage – they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what's broken and build on what works.
If we do that, we can build a health care system that allows you to be physicians instead of administrators and accountants; a system that gives Americans the best care at the lowest cost; a system that eases up the pressure on businesses and unleashes the promise of our economy, creating hundreds of thousands of jobs, making take-home wages thousands of dollars higher, and growing our economy by tens of billions more every year. That's how we will stop spending tax dollars to prop up an unsustainable system, and start investing those dollars in innovations and advances that will make our health care system and our economy stronger.
That's what we can do with this opportunity. That's what we must do with this moment.
Now, the good news is that in some instances, there is already widespread agreement on the steps necessary to make our health care system work better.
First, we need to upgrade our medical records by switching from a paper to an electronic system of record keeping. And we have already begun to do this with an investment we made as part of our Recovery Act.
It simply doesn't make sense that patients in the 21st century are still filling out forms with pens on papers that have to be stored away somewhere. As Newt Gingrich has rightly pointed out, we do a better job tracking a FedEx package in this country than we do tracking a patient's health records. You shouldn't have to tell every new doctor you see about your medical history, or what prescriptions you're taking. You should not have to repeat costly tests. All of that information should be stored securely in a private medical record so that your information can be tracked from one doctor to another – even if you change jobs, even if you move, and even if you have to see a number of different specialists.
That will not only mean less paper pushing and lower administrative costs, saving taxpayers billions of dollars. It will also make it easier for physicians to do their jobs. It will tell you, the doctors, what drugs a patient is taking so you can avoid prescribing a medication that could cause a harmful interaction. It will help prevent the wrong dosages from going to a patient. And it will reduce medical errors that lead to 100,000 lives lost unnecessarily in our hospitals every year.
The second step that we can all agree on is to invest more in preventive care so that we can avoid illness and disease in the first place. That starts with each of us taking more responsibility for our health and the health of our children. It means quitting smoking, going in for that mammogram or colon cancer screening. It means going for a run or hitting the gym, and raising our children to step away from the video games and spend more time playing outside.
It also means cutting down on all the junk food that is fueling an epidemic of obesity, putting far too many Americans, young and old, at greater risk of costly, chronic conditions. That's a lesson Michelle and I have tried to instill in our daughters with the White House vegetable garden that Michelle planted. And that's a lesson that we should work with local school districts to incorporate into their school lunch programs.
Building a health care system that promotes prevention rather than just managing diseases will require all of us to do our part. It will take doctors telling us what risk factors we should avoid and what preventive measures we should pursue. And it will take employers following the example of places like Safeway that is rewarding workers for taking better care of their health while reducing health care costs in the process. If you're one of the three quarters of Safeway workers enrolled in their "Healthy Measures" program, you can get screened for problems like high cholesterol or high blood pressure. And if you score well, you can pay lower premiums. It's a program that has helped Safeway cut health care spending by 13 percent and workers save over 20 percent on their premiums. And we are open to doing more to help employers adopt and expand programs like this one.
Our federal government also has to step up its efforts to advance the cause of healthy living. Five of the costliest illnesses and conditions – cancer, cardiovascular disease, diabetes, lung disease, and strokes – can be prevented. And yet only a fraction of every health care dollar goes to prevention or public health. That is starting to change with an investment we are making in prevention and wellness programs that can help us avoid diseases that harm our health and the health of our economy.
But as important as they are, investments in electronic records and preventive care are just preliminary steps. They will only make a dent in the epidemic of rising costs in this country.
Despite what some have suggested, the reason we have these costs is not simply because we have an aging population. Demographics do account for part of rising costs because older, sicker societies pay more on health care than younger, healthier ones. But what accounts for the bulk of our costs is the nature of our health care system itself – a system where we spend vast amounts of money on things that aren't making our people any healthier; a system that automatically equates more expensive care with better care.
A recent article in the New Yorker, for example, showed how McAllen, Texas is spending twice as much as El Paso County – not because people in McAllen are sicker and not because they are getting better care. They are simply using more treatments – treatments they don't really need; treatments that, in some cases, can actually do people harm by raising the risk of infection or medical error. And the problem is, this pattern is repeating itself across America. One Dartmouth study showed that you're no less likely to die from a heart attack and other ailments in a higher spending area than in a lower spending one.
There are two main reasons for this. The first is a system of incentives where the more tests and services are provided, the more money we pay. And a lot of people in this room know what I'm talking about. It is a model that rewards the quantity of care rather than the quality of care; that pushes you, the doctor, to see more and more patients even if you can't spend much time with each; and gives you every incentive to order that extra MRI or EKG, even if it's not truly necessary. It is a model that has taken the pursuit of medicine from a profession – a calling – to a business.
That is not why you became doctors. That is not why you put in all those hours in the Anatomy Suite or the O.R. That is not what brings you back to a patient's bedside to check in or makes you call a loved one to say it'll be fine. You did not enter this profession to be bean-counters and paper-pushers. You entered this profession to be healers – and that's what our health care system should let you be.
That starts with reforming the way we compensate our doctors and hospitals. We need to bundle payments so you aren't paid for every single treatment you offer a patient with a chronic condition like diabetes, but instead are paid for how you treat the overall disease. We need to create incentives for physicians to team up – because we know that when that happens, it results in a healthier patient. We need to give doctors bonuses for good health outcomes – so that we are not promoting just more treatment, but better care.
And we need to rethink the cost of a medical education, and do more to reward medical students who choose a career as a primary care physicians and who choose to work in underserved areas instead of a more lucrative path. That's why we are making a substantial investment in the National Health Service Corps that will make medical training more affordable for primary care doctors and nurse practitioners so they aren't drowning in debt when they enter the workforce.
The second structural reform we need to make is to improve the quality of medical information making its way to doctors and patients. We have the best medical schools, the most sophisticated labs, and the most advanced training of any nation on the globe. Yet we are not doing a very good job harnessing our collective knowledge and experience on behalf of better medicine. Less than one percent of our health care spending goes to examining what treatments are most effective. And even when that information finds its way into journals, it can take up to 17 years to find its way to an exam room or operating table.
As a result, too many doctors and patients are making decisions without the benefit of the latest research. A recent study, for example, found that only half of all cardiac guidelines are based on scientific evidence. Half. That means doctors may be doing a bypass operation when placing a stent is equally effective, or placing a stent when adjusting a patient's drugs and medical management is equally effective – driving up costs without improving a patient's health.
So, one thing we need to do is figure out what works, and encourage rapid implementation of what works into your practices. That's why we are making a major investment in research to identify the best treatments for a variety of ailments and conditions.
Let me be clear: identifying what works is not about dictating what kind of care should be provided. It's about providing patients and doctors with the information they need to make the best medical decisions.
Still, even when we do know what works, we are often not making the most of it. That's why we need to build on the examples of outstanding medicine at places like the Cincinnati Children's Hospital, where the quality of care for cystic fibrosis patients shot up after the hospital began incorporating suggestions from parents. And places like Tallahassee Memorial Health Care, where deaths were dramatically reduced with rapid response teams that monitored patients' conditions and "multidisciplinary rounds" with everyone from physicians to pharmacists. And places like the Geisinger Health system in rural Pennsylvania and the Intermountain Health in Salt Lake City, where high-quality care is being provided at a cost well below average. These are islands of excellence that we need to make the standard in our health care system.
Replicating best practices. Incentivizing excellence. Closing cost disparities. Any legislation sent to my desk that does not achieve these goals does not earn the title of reform. But my signature on a bill is not enough. I need your help, doctors. To most Americans, you are the health care system. Americans – me included – just do what you recommend. That is why I will listen to you and work with you to pursue reform that works for you. And together, if we take all these steps, we can bring spending down, bring quality up, and save hundreds of billions of dollars on health care costs while making our health care system work better for patients and doctors alike.
Now, I recognize that it will be hard to make some of these changes if doctors feel like they are constantly looking over their shoulder for fear of lawsuits. Some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That's a real issue. And while I'm not advocating caps on malpractice awards which I believe can be unfair to people who've been wrongfully harmed, I do think we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines. That's how we can scale back the excessive defensive medicine reinforcing our current system of more treatment rather than better care.
These changes need to go hand-in-hand with other reforms. Because our health care system is so complex and medicine is always evolving, we need a way to continually evaluate how we can eliminate waste, reduce costs, and improve quality. That is why I am open to expanding the role of a commission created by a Republican Congress called the Medicare Payment Advisory Commission – which happens to include a number of physicians. In recent years, this commission proposed roughly $200 billion in savings that never made it into law. These recommendations have now been incorporated into our broader reform agenda, but we need to fast-track their proposals in the future so that we don't miss another opportunity to save billions of dollars, as we gain more information about what works and what doesn't in our health care system.
As we seek to contain the cost of health care, we must also ensure that every American can get coverage they can afford. We must do so in part because it is in all of our economic interests. Each time an uninsured American steps foot into an emergency room with no way to reimburse the hospital for care, the cost is handed over to every American family as a bill of about $1,000 that is reflected in higher taxes, higher premiums, and higher health care costs; a hidden tax that will be cut as we insure all Americans. And as we insure every young and healthy American, it will spread out risk for insurance companies, further reducing costs for everyone.
But alongside these economic arguments, there is another, more powerful one. It is simply this: We are not a nation that accepts nearly 46 million uninsured men, women, and children. We are not a nation that lets hardworking families go without the coverage they deserve; or turns its back on those in need. We are a nation that cares for its citizens. We are a people who look out for one another. That is what makes this the United States of America.
So, we need to do a few things to provide affordable health insurance to every single American. The first thing we need to do is protect what's working in our health care system. Let me repeat – if you like your health care, the only thing reform will mean is your health care will cost less. If anyone says otherwise, they are either trying to mislead you or don't have their facts straight.
If you don't like your health coverage or don't have any insurance, you will have a chance to take part in what we're calling a Health Insurance Exchange. This Exchange will allow you to one-stop shop for a health care plan, compare benefits and prices, and choose a plan that's best for you and your family – just as federal employees can do, from a postal worker to a Member of Congress. You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package. And one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest.
Now, I know there's some concern about a public option. In particular, I understand that you are concerned that today's Medicare rates will be applied broadly in a way that means our cost savings are coming off your backs. These are legitimate concerns, but ones, I believe, that can be overcome. As I stated earlier, the reforms we propose are to reward best practices, focus on patient care, not the current piece-work reimbursement. What we seek is more stability and a health care system on a sound financial footing. And these reforms need to take place regardless of what happens with a public option. With reform, we will ensure that you are being reimbursed in a thoughtful way tied to patient outcomes instead of relying on yearly negotiations about the Sustainable Growth Rate formula that's based on politics and the state of the federal budget in any given year. The alternative is a world where health care costs grow at an unsustainable rate, threatening your reimbursements and the stability of our health care system.
What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. I'll be honest. There are countries where a single-payer system may be working. But I believe – and I've even taken some flak from members of my own party for this belief – that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this – they are not telling the truth.
What I am trying to do – and what a public option will help do – is put affordable health care within reach for millions of Americans. And to help ensure that everyone can afford the cost of a health care option in our Exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.
Indeed, it is because I am confident in our ability to give people the ability to get insurance that I am open to a system where every American bears responsibility for owning health insurance, so long as we provide a hardship waiver for those who still can't afford it. The same is true for employers. While I believe every business has a responsibility to provide health insurance for its workers, small businesses that cannot afford it should receive an exemption. And small business workers and their families will be able to seek coverage in the Exchange if their employer is not able to provide it.
Insurance companies have expressed support for the idea of covering the uninsured – and I welcome their willingness to engage constructively in the reform debate. But what I refuse to do is simply create a system where insurance companies have more customers on Uncle Sam's dime, but still fail to meet their responsibilities. That is why we need to end the practice of denying coverage on the basis of preexisting conditions. The days of cherry-picking who to cover and who to deny – those days are over.
This is personal for me. I will never forget watching my own mother, as she fought cancer in her final days, worrying about whether her insurer would claim her illness was a preexisting condition so it could get out of providing coverage. Changing the current approach to preexisting conditions is the least we can do – for my mother and every other mother, father, son, and daughter, who has suffered under this practice. And it will put health care within reach for millions of Americans.
Now, even if we accept all of the economic and moral reasons for providing affordable coverage to all Americans, there is no denying that it will come at a cost – at least in the short run. But it is a cost that will not – I repeat, not – add to our deficits. Health care reform must be and will be deficit neutral in the next decade.
There are already voices saying the numbers don't add up. They are wrong. Here's why. Making health care affordable for all Americans will cost somewhere on the order of one trillion dollars over the next ten years. That sounds like a lot of money – and it is. But remember: it is less than we are projected to spend on the war in Iraq. And also remember: failing to reform our health care system in a way that genuinely reduces cost growth will cost us trillions of dollars more in lost economic growth and lower wages.
That said, let me explain how we will cover the price tag. First, as part of the budget that was passed a few months ago, we've put aside $635 billion over ten years in what we are calling a Health Reserve Fund. Over half of that amount – more than $300 billion – will come from raising revenue by doing things like modestly limiting the tax deductions the wealthiest Americans can take to the same level it was at the end of the Reagan years. Some are concerned this will dramatically reduce charitable giving, but statistics show that's not true, and the best thing for our charities is the stronger economy that we will build with health care reform.
But we cannot just raise revenues. We also have to make spending cuts in part by examining inefficiencies in the Medicare program. There will be a robust debate about where these cuts should be made, and I welcome that debate. But here's where I think these cuts should be made. First, we should end overpayments to Medicare Advantage. Today, we are paying Medicare Advantage plans much more than we pay for traditional Medicare services. That's a good deal for insurance companies, but not the American people. That's why we need to introduce competitive bidding into the Medicare Advantage program, a program under which private insurance companies offer Medicare coverage. That will save $177 billion over the next decade.
Second, we need to use Medicare reimbursements to reduce preventable hospital readmissions. Right now, almost 20 percent of Medicare patients discharged from hospitals are readmitted within a month, often because they are not getting the comprehensive care they need. This puts people at risk and drives up costs. By changing how Medicare reimburses hospitals, we can discourage them from acting in a way that boosts profits, but drives up costs for everyone else. That will save us $25 billion over the next decade.
Third, we need to introduce generic biologic drugs into the marketplace. These are drugs used to treat illnesses like anemia. But right now, there is no pathway at the FDA for approving generic versions of these drugs. Creating such a pathway will save us billions of dollars. And we can save another roughly $30 billion by getting a better deal for our poorer seniors while asking our well-off seniors to pay a little more for their drugs.
So, that's the bulk of what's in the Health Reserve Fund. I have also proposed saving another $313 billion in Medicare and Medicaid spending in several other ways. One way is by adjusting Medicare payments to reflect new advances and productivity gains in our economy. Right now, Medicare payments are rising each year by more than they should. These adjustments will create incentives for providers to deliver care more effectively, and save us roughly $109 billion in the process.
Another way we can achieve savings is by reducing payments to hospitals for treating uninsured people. I know hospitals rely on these payments now because of the large number of uninsured patients they treat. But as the number of uninsured people goes down with our reforms, the amount we pay hospitals to treat uninsured people should go down, as well. Reducing these payments gradually as more and more people have coverage will save us over $106 billion, and we'll make sure the difference goes to the hospitals that most need it.
We can also save about $75 billion through more efficient purchasing of prescription drugs. And we can save about one billion more by rooting out waste, abuse, and fraud throughout our health care system so that no one is charging more for a service than it's worth or charging a dime for a service they did not provide.
But let me be clear: I am committed to making these cuts in a way that protects our senior citizens. In fact, these proposals will actually extend the life of the Medicare Trust Fund by 7 years and reduce premiums for Medicare beneficiaries by roughly $43 billion over 10 years. And I'm working with AARP to uphold that commitment.
Altogether, these savings mean that we have put about $950 billion on the table – not counting some of the longer-term savings that will come about from reform – taking us almost all the way to covering the full cost of health care reform. In the weeks and months ahead, I look forward to working with Congress to make up the difference so that health care reform is fully paid for – in a real, accountable way. And let me add that this does not count some of the longer-term savings that will come about from health care reform. By insisting that reform be deficit neutral over the next decade and by making the reforms that will help slow the growth rate of health care costs over coming decades, we can look forward to faster economic growth, higher living standards, and falling, not rising, budget deficits.
I know people are cynical we can do this. I know there will be disagreements about how to proceed in the days ahead. But I also know that we cannot let this moment pass us by.
The other day, my friend, Congressman Earl Blumenauer, handed me a magazine with a special issue titled, "The Crisis in American Medicine." One article notes "soaring charges." Another warns about the "volume of utilization of services." And another asks if we can find a "better way [than fee-for-service] for paying for medical care." It speaks to many of the challenges we face today. The thing is, this special issue was published by Harper's Magazine in October of 1960.
Members of the American Medical Association – my fellow Americans – I am here today because I do not want our children and their children to still be speaking of a crisis in American medicine fifty years from now. I do not want them to still be suffering from spiraling costs we did not stem, or sicknesses we did not cure. I do not want them to be burdened with massive deficits we did not curb or a worsening economy we did not rebuild.
I want them to benefit from a health care system that works for all of us; where families can open a doctor's bill without dreading what's inside; where parents are taking their kids to get regular checkups and testing themselves for preventable ailments; where parents are feeding their kids healthier food and kids are exercising more; where patients are spending more time with doctors and doctors can pull up on a computer all the medical information and latest research they'd ever want to meet that patient's needs; where orthopedists and nephrologists and oncologists are all working together to treat a single human being; where what's best about America's health care system has become the hallmark of America's health care system.
That is the health care system we can build. That is the future within our reach. And if we are willing to come together and bring about that future, then we will not only make Americans healthier and not only unleash America's economic potential, but we will reaffirm the ideals that led you into this noble profession, and build a health care system that lets all Americans heal. Thank you.
From the moment I took office as President, the central challenge we have confronted as a nation has been the need to lift ourselves out of the worst recession since World War II. In recent months, we have taken a series of extraordinary steps, not just to repair the immediate damage to our economy, but to build a new foundation for lasting and sustained growth. We are creating new jobs. We are unfreezing our credit markets. And we are stemming the loss of homes and the decline of home values.
But even as we have made progress, we know that the road to prosperity remains long and difficult. We also know that one essential step on our journey is to control the spiraling cost of health care in America.
Today, we are spending over $2 trillion a year on health care – almost 50 percent more per person than the next most costly nation. And yet, for all this spending, more of our citizens are uninsured; the quality of our care is often lower; and we aren't any healthier. In fact, citizens in some countries that spend less than we do are actually living longer than we do.
Make no mistake: the cost of our health care is a threat to our economy. It is an escalating burden on our families and businesses. It is a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America.
It is unsustainable for Americans like Laura Klitzka, a young mother I met in Wisconsin last week, who has learned that the breast cancer she thought she'd beaten had spread to her bones; who is now being forced to spend time worrying about how to cover the $50,000 in medical debts she has already accumulated, when all she wants to do is spend time with her two children and focus on getting well. These are not worries a woman like Laura should have to face in a nation as wealthy as ours.
Stories like Laura's are being told by women and men all across this country – by families who have seen out-of-pocket costs soar, and premiums double over the last decade at a rate three times faster than wages. This is forcing Americans of all ages to go without the checkups or prescriptions they need. It's creating a situation where a single illness can wipe out a lifetime of savings.
Our costly health care system is unsustainable for doctors like Michael Kahn in New Hampshire, who, as he puts it, spends 20 percent of each day supervising a staff explaining insurance problems to patients, completing authorization forms, and writing appeal letters; a routine that he calls disruptive and distracting, giving him less time to do what he became a doctor to do and actually care for his patients.
Small business owners like Chris and Becky Link in Nashville are also struggling. They've always wanted to do right by the workers at their family-run marketing firm, but have recently had to do the unthinkable and lay off a number of employees – layoffs that could have been deferred, they say, if health care costs weren't so high. Across the country, over one third of small businesses have reduced benefits in recent years and one third have dropped their workers' coverage altogether since the early 90's.
Our largest companies are suffering as well. A big part of what led General Motors and Chrysler into trouble in recent decades were the huge costs they racked up providing health care for their workers; costs that made them less profitable, and less competitive with automakers around the world. If we do not fix our health care system, America may go the way of GM; paying more, getting less, and going broke.
When it comes to the cost of our health care, then, the status quo is unsustainable. Reform is not a luxury, but a necessity. I know there has been much discussion about what reform would cost, and rightly so. This is a test of whether we – Democrats and Republicans alike – are serious about holding the line on new spending and restoring fiscal discipline.
But let there be no doubt – the cost of inaction is greater. If we fail to act, premiums will climb higher, benefits will erode further, and the rolls of uninsured will swell to include millions more Americans.
If we fail to act, one out of every five dollars we earn will be spent on health care within a decade. In thirty years, it will be about one out of every three – a trend that will mean lost jobs, lower take-home pay, shuttered businesses, and a lower standard of living for all Americans.
And if we fail to act, federal spending on Medicaid and Medicare will grow over the coming decades by an amount almost equal to the amount our government currently spends on our nation's defense. In fact, it will eventually grow larger than what our government spends on anything else today. It's a scenario that will swamp our federal and state budgets, and impose a vicious choice of either unprecedented tax hikes, overwhelming deficits, or drastic cuts in our federal and state budgets.
To say it as plainly as I can, health care reform is the single most important thing we can do for America's long-term fiscal health. That is a fact.
And yet, as clear as it is that our system badly needs reform, reform is not inevitable. There's a sense out there among some that, as bad as our current system may be, the devil we know is better than the devil we don't. There is a fear of change – a worry that we may lose what works about our health care system while trying to fix what doesn't.
I understand that fear. I understand that cynicism. They are scars left over from past efforts at reform. Presidents have called for health care reform for nearly a century. Teddy Roosevelt called for it. Harry Truman called for it. Richard Nixon called for it. Jimmy Carter called for it. Bill Clinton called for it. But while significant individual reforms have been made – such as Medicare, Medicaid, and the children's health insurance program – efforts at comprehensive reform that covers everyone and brings down costs have largely failed.
Part of the reason is because the different groups involved – physicians, insurance companies, businesses, workers, and others – simply couldn't agree on the need for reform or what shape it would take. And another part of the reason has been the fierce opposition fueled by some interest groups and lobbyists – opposition that has used fear tactics to paint any effort to achieve reform as an attempt to socialize medicine.
Despite this long history of failure, I am standing here today because I think we are in a different time. One sign that things are different is that just this past week, the Senate passed a bill that will protect children from the dangers of smoking – a reform the AMA has long championed – and one that went nowhere when it was proposed a decade ago. What makes this moment different is that this time – for the first time – key stakeholders are aligning not against, but in favor of reform. They are coming together out of a recognition that while reform will take everyone in our health care community doing their part, ultimately, everyone will benefit.
And I want to commend the AMA, in particular, for offering to do your part to curb costs and achieve reform. A few weeks ago, you joined together with hospitals, labor unions, insurers, medical device manufacturers and drug companies to do something that would've been unthinkable just a few years ago – you promised to work together to cut national health care spending by two trillion dollars over the next decade, relative to what it would otherwise have been. That will bring down costs, that will bring down premiums, and that's exactly the kind of cooperation we need.
The question now is, how do we finish the job? How do we permanently bring down costs and make quality, affordable health care available to every American?
That's what I've come to talk about today. We know the moment is right for health care reform. We know this is an historic opportunity we've never seen before and may not see again. But we also know that there are those who will try and scuttle this opportunity no matter what – who will use the same scare tactics and fear-mongering that's worked in the past. They'll give dire warnings about socialized medicine and government takeovers; long lines and rationed care; decisions made by bureaucrats and not doctors. We've heard it all before – and because these fear tactics have worked, things have kept getting worse.
So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage – they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what's broken and build on what works.
If we do that, we can build a health care system that allows you to be physicians instead of administrators and accountants; a system that gives Americans the best care at the lowest cost; a system that eases up the pressure on businesses and unleashes the promise of our economy, creating hundreds of thousands of jobs, making take-home wages thousands of dollars higher, and growing our economy by tens of billions more every year. That's how we will stop spending tax dollars to prop up an unsustainable system, and start investing those dollars in innovations and advances that will make our health care system and our economy stronger.
That's what we can do with this opportunity. That's what we must do with this moment.
Now, the good news is that in some instances, there is already widespread agreement on the steps necessary to make our health care system work better.
First, we need to upgrade our medical records by switching from a paper to an electronic system of record keeping. And we have already begun to do this with an investment we made as part of our Recovery Act.
It simply doesn't make sense that patients in the 21st century are still filling out forms with pens on papers that have to be stored away somewhere. As Newt Gingrich has rightly pointed out, we do a better job tracking a FedEx package in this country than we do tracking a patient's health records. You shouldn't have to tell every new doctor you see about your medical history, or what prescriptions you're taking. You should not have to repeat costly tests. All of that information should be stored securely in a private medical record so that your information can be tracked from one doctor to another – even if you change jobs, even if you move, and even if you have to see a number of different specialists.
That will not only mean less paper pushing and lower administrative costs, saving taxpayers billions of dollars. It will also make it easier for physicians to do their jobs. It will tell you, the doctors, what drugs a patient is taking so you can avoid prescribing a medication that could cause a harmful interaction. It will help prevent the wrong dosages from going to a patient. And it will reduce medical errors that lead to 100,000 lives lost unnecessarily in our hospitals every year.
The second step that we can all agree on is to invest more in preventive care so that we can avoid illness and disease in the first place. That starts with each of us taking more responsibility for our health and the health of our children. It means quitting smoking, going in for that mammogram or colon cancer screening. It means going for a run or hitting the gym, and raising our children to step away from the video games and spend more time playing outside.
It also means cutting down on all the junk food that is fueling an epidemic of obesity, putting far too many Americans, young and old, at greater risk of costly, chronic conditions. That's a lesson Michelle and I have tried to instill in our daughters with the White House vegetable garden that Michelle planted. And that's a lesson that we should work with local school districts to incorporate into their school lunch programs.
Building a health care system that promotes prevention rather than just managing diseases will require all of us to do our part. It will take doctors telling us what risk factors we should avoid and what preventive measures we should pursue. And it will take employers following the example of places like Safeway that is rewarding workers for taking better care of their health while reducing health care costs in the process. If you're one of the three quarters of Safeway workers enrolled in their "Healthy Measures" program, you can get screened for problems like high cholesterol or high blood pressure. And if you score well, you can pay lower premiums. It's a program that has helped Safeway cut health care spending by 13 percent and workers save over 20 percent on their premiums. And we are open to doing more to help employers adopt and expand programs like this one.
Our federal government also has to step up its efforts to advance the cause of healthy living. Five of the costliest illnesses and conditions – cancer, cardiovascular disease, diabetes, lung disease, and strokes – can be prevented. And yet only a fraction of every health care dollar goes to prevention or public health. That is starting to change with an investment we are making in prevention and wellness programs that can help us avoid diseases that harm our health and the health of our economy.
But as important as they are, investments in electronic records and preventive care are just preliminary steps. They will only make a dent in the epidemic of rising costs in this country.
Despite what some have suggested, the reason we have these costs is not simply because we have an aging population. Demographics do account for part of rising costs because older, sicker societies pay more on health care than younger, healthier ones. But what accounts for the bulk of our costs is the nature of our health care system itself – a system where we spend vast amounts of money on things that aren't making our people any healthier; a system that automatically equates more expensive care with better care.
A recent article in the New Yorker, for example, showed how McAllen, Texas is spending twice as much as El Paso County – not because people in McAllen are sicker and not because they are getting better care. They are simply using more treatments – treatments they don't really need; treatments that, in some cases, can actually do people harm by raising the risk of infection or medical error. And the problem is, this pattern is repeating itself across America. One Dartmouth study showed that you're no less likely to die from a heart attack and other ailments in a higher spending area than in a lower spending one.
There are two main reasons for this. The first is a system of incentives where the more tests and services are provided, the more money we pay. And a lot of people in this room know what I'm talking about. It is a model that rewards the quantity of care rather than the quality of care; that pushes you, the doctor, to see more and more patients even if you can't spend much time with each; and gives you every incentive to order that extra MRI or EKG, even if it's not truly necessary. It is a model that has taken the pursuit of medicine from a profession – a calling – to a business.
That is not why you became doctors. That is not why you put in all those hours in the Anatomy Suite or the O.R. That is not what brings you back to a patient's bedside to check in or makes you call a loved one to say it'll be fine. You did not enter this profession to be bean-counters and paper-pushers. You entered this profession to be healers – and that's what our health care system should let you be.
That starts with reforming the way we compensate our doctors and hospitals. We need to bundle payments so you aren't paid for every single treatment you offer a patient with a chronic condition like diabetes, but instead are paid for how you treat the overall disease. We need to create incentives for physicians to team up – because we know that when that happens, it results in a healthier patient. We need to give doctors bonuses for good health outcomes – so that we are not promoting just more treatment, but better care.
And we need to rethink the cost of a medical education, and do more to reward medical students who choose a career as a primary care physicians and who choose to work in underserved areas instead of a more lucrative path. That's why we are making a substantial investment in the National Health Service Corps that will make medical training more affordable for primary care doctors and nurse practitioners so they aren't drowning in debt when they enter the workforce.
The second structural reform we need to make is to improve the quality of medical information making its way to doctors and patients. We have the best medical schools, the most sophisticated labs, and the most advanced training of any nation on the globe. Yet we are not doing a very good job harnessing our collective knowledge and experience on behalf of better medicine. Less than one percent of our health care spending goes to examining what treatments are most effective. And even when that information finds its way into journals, it can take up to 17 years to find its way to an exam room or operating table.
As a result, too many doctors and patients are making decisions without the benefit of the latest research. A recent study, for example, found that only half of all cardiac guidelines are based on scientific evidence. Half. That means doctors may be doing a bypass operation when placing a stent is equally effective, or placing a stent when adjusting a patient's drugs and medical management is equally effective – driving up costs without improving a patient's health.
So, one thing we need to do is figure out what works, and encourage rapid implementation of what works into your practices. That's why we are making a major investment in research to identify the best treatments for a variety of ailments and conditions.
Let me be clear: identifying what works is not about dictating what kind of care should be provided. It's about providing patients and doctors with the information they need to make the best medical decisions.
Still, even when we do know what works, we are often not making the most of it. That's why we need to build on the examples of outstanding medicine at places like the Cincinnati Children's Hospital, where the quality of care for cystic fibrosis patients shot up after the hospital began incorporating suggestions from parents. And places like Tallahassee Memorial Health Care, where deaths were dramatically reduced with rapid response teams that monitored patients' conditions and "multidisciplinary rounds" with everyone from physicians to pharmacists. And places like the Geisinger Health system in rural Pennsylvania and the Intermountain Health in Salt Lake City, where high-quality care is being provided at a cost well below average. These are islands of excellence that we need to make the standard in our health care system.
Replicating best practices. Incentivizing excellence. Closing cost disparities. Any legislation sent to my desk that does not achieve these goals does not earn the title of reform. But my signature on a bill is not enough. I need your help, doctors. To most Americans, you are the health care system. Americans – me included – just do what you recommend. That is why I will listen to you and work with you to pursue reform that works for you. And together, if we take all these steps, we can bring spending down, bring quality up, and save hundreds of billions of dollars on health care costs while making our health care system work better for patients and doctors alike.
Now, I recognize that it will be hard to make some of these changes if doctors feel like they are constantly looking over their shoulder for fear of lawsuits. Some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That's a real issue. And while I'm not advocating caps on malpractice awards which I believe can be unfair to people who've been wrongfully harmed, I do think we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines. That's how we can scale back the excessive defensive medicine reinforcing our current system of more treatment rather than better care.
These changes need to go hand-in-hand with other reforms. Because our health care system is so complex and medicine is always evolving, we need a way to continually evaluate how we can eliminate waste, reduce costs, and improve quality. That is why I am open to expanding the role of a commission created by a Republican Congress called the Medicare Payment Advisory Commission – which happens to include a number of physicians. In recent years, this commission proposed roughly $200 billion in savings that never made it into law. These recommendations have now been incorporated into our broader reform agenda, but we need to fast-track their proposals in the future so that we don't miss another opportunity to save billions of dollars, as we gain more information about what works and what doesn't in our health care system.
As we seek to contain the cost of health care, we must also ensure that every American can get coverage they can afford. We must do so in part because it is in all of our economic interests. Each time an uninsured American steps foot into an emergency room with no way to reimburse the hospital for care, the cost is handed over to every American family as a bill of about $1,000 that is reflected in higher taxes, higher premiums, and higher health care costs; a hidden tax that will be cut as we insure all Americans. And as we insure every young and healthy American, it will spread out risk for insurance companies, further reducing costs for everyone.
But alongside these economic arguments, there is another, more powerful one. It is simply this: We are not a nation that accepts nearly 46 million uninsured men, women, and children. We are not a nation that lets hardworking families go without the coverage they deserve; or turns its back on those in need. We are a nation that cares for its citizens. We are a people who look out for one another. That is what makes this the United States of America.
So, we need to do a few things to provide affordable health insurance to every single American. The first thing we need to do is protect what's working in our health care system. Let me repeat – if you like your health care, the only thing reform will mean is your health care will cost less. If anyone says otherwise, they are either trying to mislead you or don't have their facts straight.
If you don't like your health coverage or don't have any insurance, you will have a chance to take part in what we're calling a Health Insurance Exchange. This Exchange will allow you to one-stop shop for a health care plan, compare benefits and prices, and choose a plan that's best for you and your family – just as federal employees can do, from a postal worker to a Member of Congress. You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package. And one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest.
Now, I know there's some concern about a public option. In particular, I understand that you are concerned that today's Medicare rates will be applied broadly in a way that means our cost savings are coming off your backs. These are legitimate concerns, but ones, I believe, that can be overcome. As I stated earlier, the reforms we propose are to reward best practices, focus on patient care, not the current piece-work reimbursement. What we seek is more stability and a health care system on a sound financial footing. And these reforms need to take place regardless of what happens with a public option. With reform, we will ensure that you are being reimbursed in a thoughtful way tied to patient outcomes instead of relying on yearly negotiations about the Sustainable Growth Rate formula that's based on politics and the state of the federal budget in any given year. The alternative is a world where health care costs grow at an unsustainable rate, threatening your reimbursements and the stability of our health care system.
What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. I'll be honest. There are countries where a single-payer system may be working. But I believe – and I've even taken some flak from members of my own party for this belief – that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this – they are not telling the truth.
What I am trying to do – and what a public option will help do – is put affordable health care within reach for millions of Americans. And to help ensure that everyone can afford the cost of a health care option in our Exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.
Indeed, it is because I am confident in our ability to give people the ability to get insurance that I am open to a system where every American bears responsibility for owning health insurance, so long as we provide a hardship waiver for those who still can't afford it. The same is true for employers. While I believe every business has a responsibility to provide health insurance for its workers, small businesses that cannot afford it should receive an exemption. And small business workers and their families will be able to seek coverage in the Exchange if their employer is not able to provide it.
Insurance companies have expressed support for the idea of covering the uninsured – and I welcome their willingness to engage constructively in the reform debate. But what I refuse to do is simply create a system where insurance companies have more customers on Uncle Sam's dime, but still fail to meet their responsibilities. That is why we need to end the practice of denying coverage on the basis of preexisting conditions. The days of cherry-picking who to cover and who to deny – those days are over.
This is personal for me. I will never forget watching my own mother, as she fought cancer in her final days, worrying about whether her insurer would claim her illness was a preexisting condition so it could get out of providing coverage. Changing the current approach to preexisting conditions is the least we can do – for my mother and every other mother, father, son, and daughter, who has suffered under this practice. And it will put health care within reach for millions of Americans.
Now, even if we accept all of the economic and moral reasons for providing affordable coverage to all Americans, there is no denying that it will come at a cost – at least in the short run. But it is a cost that will not – I repeat, not – add to our deficits. Health care reform must be and will be deficit neutral in the next decade.
There are already voices saying the numbers don't add up. They are wrong. Here's why. Making health care affordable for all Americans will cost somewhere on the order of one trillion dollars over the next ten years. That sounds like a lot of money – and it is. But remember: it is less than we are projected to spend on the war in Iraq. And also remember: failing to reform our health care system in a way that genuinely reduces cost growth will cost us trillions of dollars more in lost economic growth and lower wages.
That said, let me explain how we will cover the price tag. First, as part of the budget that was passed a few months ago, we've put aside $635 billion over ten years in what we are calling a Health Reserve Fund. Over half of that amount – more than $300 billion – will come from raising revenue by doing things like modestly limiting the tax deductions the wealthiest Americans can take to the same level it was at the end of the Reagan years. Some are concerned this will dramatically reduce charitable giving, but statistics show that's not true, and the best thing for our charities is the stronger economy that we will build with health care reform.
But we cannot just raise revenues. We also have to make spending cuts in part by examining inefficiencies in the Medicare program. There will be a robust debate about where these cuts should be made, and I welcome that debate. But here's where I think these cuts should be made. First, we should end overpayments to Medicare Advantage. Today, we are paying Medicare Advantage plans much more than we pay for traditional Medicare services. That's a good deal for insurance companies, but not the American people. That's why we need to introduce competitive bidding into the Medicare Advantage program, a program under which private insurance companies offer Medicare coverage. That will save $177 billion over the next decade.
Second, we need to use Medicare reimbursements to reduce preventable hospital readmissions. Right now, almost 20 percent of Medicare patients discharged from hospitals are readmitted within a month, often because they are not getting the comprehensive care they need. This puts people at risk and drives up costs. By changing how Medicare reimburses hospitals, we can discourage them from acting in a way that boosts profits, but drives up costs for everyone else. That will save us $25 billion over the next decade.
Third, we need to introduce generic biologic drugs into the marketplace. These are drugs used to treat illnesses like anemia. But right now, there is no pathway at the FDA for approving generic versions of these drugs. Creating such a pathway will save us billions of dollars. And we can save another roughly $30 billion by getting a better deal for our poorer seniors while asking our well-off seniors to pay a little more for their drugs.
So, that's the bulk of what's in the Health Reserve Fund. I have also proposed saving another $313 billion in Medicare and Medicaid spending in several other ways. One way is by adjusting Medicare payments to reflect new advances and productivity gains in our economy. Right now, Medicare payments are rising each year by more than they should. These adjustments will create incentives for providers to deliver care more effectively, and save us roughly $109 billion in the process.
Another way we can achieve savings is by reducing payments to hospitals for treating uninsured people. I know hospitals rely on these payments now because of the large number of uninsured patients they treat. But as the number of uninsured people goes down with our reforms, the amount we pay hospitals to treat uninsured people should go down, as well. Reducing these payments gradually as more and more people have coverage will save us over $106 billion, and we'll make sure the difference goes to the hospitals that most need it.
We can also save about $75 billion through more efficient purchasing of prescription drugs. And we can save about one billion more by rooting out waste, abuse, and fraud throughout our health care system so that no one is charging more for a service than it's worth or charging a dime for a service they did not provide.
But let me be clear: I am committed to making these cuts in a way that protects our senior citizens. In fact, these proposals will actually extend the life of the Medicare Trust Fund by 7 years and reduce premiums for Medicare beneficiaries by roughly $43 billion over 10 years. And I'm working with AARP to uphold that commitment.
Altogether, these savings mean that we have put about $950 billion on the table – not counting some of the longer-term savings that will come about from reform – taking us almost all the way to covering the full cost of health care reform. In the weeks and months ahead, I look forward to working with Congress to make up the difference so that health care reform is fully paid for – in a real, accountable way. And let me add that this does not count some of the longer-term savings that will come about from health care reform. By insisting that reform be deficit neutral over the next decade and by making the reforms that will help slow the growth rate of health care costs over coming decades, we can look forward to faster economic growth, higher living standards, and falling, not rising, budget deficits.
I know people are cynical we can do this. I know there will be disagreements about how to proceed in the days ahead. But I also know that we cannot let this moment pass us by.
The other day, my friend, Congressman Earl Blumenauer, handed me a magazine with a special issue titled, "The Crisis in American Medicine." One article notes "soaring charges." Another warns about the "volume of utilization of services." And another asks if we can find a "better way [than fee-for-service] for paying for medical care." It speaks to many of the challenges we face today. The thing is, this special issue was published by Harper's Magazine in October of 1960.
Members of the American Medical Association – my fellow Americans – I am here today because I do not want our children and their children to still be speaking of a crisis in American medicine fifty years from now. I do not want them to still be suffering from spiraling costs we did not stem, or sicknesses we did not cure. I do not want them to be burdened with massive deficits we did not curb or a worsening economy we did not rebuild.
I want them to benefit from a health care system that works for all of us; where families can open a doctor's bill without dreading what's inside; where parents are taking their kids to get regular checkups and testing themselves for preventable ailments; where parents are feeding their kids healthier food and kids are exercising more; where patients are spending more time with doctors and doctors can pull up on a computer all the medical information and latest research they'd ever want to meet that patient's needs; where orthopedists and nephrologists and oncologists are all working together to treat a single human being; where what's best about America's health care system has become the hallmark of America's health care system.
That is the health care system we can build. That is the future within our reach. And if we are willing to come together and bring about that future, then we will not only make Americans healthier and not only unleash America's economic potential, but we will reaffirm the ideals that led you into this noble profession, and build a health care system that lets all Americans heal. Thank you.
THE OTHER SIDE OF HEALTH CARE DEBATE?
Wrong Way on Health 'Reform' Washington POST By Robert J. Samuelson
It's hard to know whether President Obama's health-care "reform" is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it's imperative to control runaway health spending. He's right. The trouble is that what's being promoted as health-care "reform" almost certainly won't suppress spending and, quite probably, will do the opposite.
A new report from Obama's own Council of Economic Advisers shows why controlling health costs is so important. Since 1975, annual health spending per person, adjusted for inflation, has grown 2.1 percentage points faster than overall economic growth per person. If this trend continues, the CEA projects that:
-- Health spending, which was 5 percent of the economy (gross domestic product) in 1960 and is reckoned at almost 18 percent today, would grow to 34 percent of GDP by 2040 -- a third of the economy.
-- Medicare and Medicaid, the government insurance programs for the elderly and poor, would increase from 6 percent of GDP now to 15 percent in 2040 -- roughly equal to three-quarters of present federal spending.
-- Employer-paid insurance premiums for family coverage, which grew 85 percent in inflation-adjusted terms from 1996 to $11,941 in 2006, would increase to $25,200 by 2025 and $45,000 in 2040 (all figures in "constant 2008 dollars"). The huge costs would force employers to reduce take-home pay.
The message in these dismal figures is that uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. Worse, much medical spending is wasted, the CEA report says. It doesn't improve Americans' health; some care is unneeded or ineffective.
The Obama administration's response is to talk endlessly about restraining health spending -- "bending the curve" is the buzz -- as if talk will suffice. The president summoned the heads of major health-care groups representing doctors, hospitals, drug companies and medical device firms to the White House. All pledged to bend the curve. This is mostly public relations. Does anyone believe the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?
The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services -- and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation as a whole.
That's the crux of the health-care dilemma, and Obama hasn't confronted it. His emphasis on controlling costs is cosmetic. The main aim of health-care "reform" being fashioned in Congress is to provide insurance to most of the 46 million uncovered Americans. This is popular and seems the moral thing to do. After all, hardly anyone wants to be without insurance. But the extra coverage might actually worsen the spending problem.
How much healthier today's uninsured would be with that coverage is unclear. They already receive health care -- $116 billion worth in 2008, estimates Families USA, an advocacy group. Some is paid by the uninsured themselves (37 percent), some by government and charities (26 percent). The remaining "uncompensated care" is either absorbed by doctors and hospitals or shifted to higher private insurance premiums. Some uninsured would benefit from coverage, but others wouldn't. Either they're healthy (40 percent are between ages 18 and 34) or would get ineffective care.
The one certain consequence of expanding insurance coverage is that it would raise spending. When people have insurance, they use more health services. That's one reason Obama's campaign proposal was estimated to cost $1.2 trillion over a decade (the other reason is that the federal government would pick up some costs now paid by others). Indeed, the higher demand for health care might raise costs across the board, increasing both government spending and private premiums.
No doubt the health program that Congress fashions will counter this reality by including some provisions intended to cut costs ("bundled payments" to hospitals, "evidence-based guidelines," electronic recordkeeping). In the past, scattershot measures have barely affected health spending. What's needed is a fundamental remaking of the health-care sector -- a sweeping "restructuring" -- that would overhaul fee-for-service payment and reduce the fragmentation of care.
The place to start would be costly Medicare, the nation's largest insurance program serving 45 million elderly and disabled. Of course, this would be unpopular, because it would disrupt delivery patterns and reimbursement practices. It's easier to pretend to be curbing health spending while expanding coverage and spending. Presidents have done that for decades, and it's why most health industries see "reform" as a good deal.
It's hard to know whether President Obama's health-care "reform" is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it's imperative to control runaway health spending. He's right. The trouble is that what's being promoted as health-care "reform" almost certainly won't suppress spending and, quite probably, will do the opposite.
A new report from Obama's own Council of Economic Advisers shows why controlling health costs is so important. Since 1975, annual health spending per person, adjusted for inflation, has grown 2.1 percentage points faster than overall economic growth per person. If this trend continues, the CEA projects that:
-- Health spending, which was 5 percent of the economy (gross domestic product) in 1960 and is reckoned at almost 18 percent today, would grow to 34 percent of GDP by 2040 -- a third of the economy.
-- Medicare and Medicaid, the government insurance programs for the elderly and poor, would increase from 6 percent of GDP now to 15 percent in 2040 -- roughly equal to three-quarters of present federal spending.
-- Employer-paid insurance premiums for family coverage, which grew 85 percent in inflation-adjusted terms from 1996 to $11,941 in 2006, would increase to $25,200 by 2025 and $45,000 in 2040 (all figures in "constant 2008 dollars"). The huge costs would force employers to reduce take-home pay.
The message in these dismal figures is that uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. Worse, much medical spending is wasted, the CEA report says. It doesn't improve Americans' health; some care is unneeded or ineffective.
The Obama administration's response is to talk endlessly about restraining health spending -- "bending the curve" is the buzz -- as if talk will suffice. The president summoned the heads of major health-care groups representing doctors, hospitals, drug companies and medical device firms to the White House. All pledged to bend the curve. This is mostly public relations. Does anyone believe the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?
The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services -- and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation as a whole.
That's the crux of the health-care dilemma, and Obama hasn't confronted it. His emphasis on controlling costs is cosmetic. The main aim of health-care "reform" being fashioned in Congress is to provide insurance to most of the 46 million uncovered Americans. This is popular and seems the moral thing to do. After all, hardly anyone wants to be without insurance. But the extra coverage might actually worsen the spending problem.
How much healthier today's uninsured would be with that coverage is unclear. They already receive health care -- $116 billion worth in 2008, estimates Families USA, an advocacy group. Some is paid by the uninsured themselves (37 percent), some by government and charities (26 percent). The remaining "uncompensated care" is either absorbed by doctors and hospitals or shifted to higher private insurance premiums. Some uninsured would benefit from coverage, but others wouldn't. Either they're healthy (40 percent are between ages 18 and 34) or would get ineffective care.
The one certain consequence of expanding insurance coverage is that it would raise spending. When people have insurance, they use more health services. That's one reason Obama's campaign proposal was estimated to cost $1.2 trillion over a decade (the other reason is that the federal government would pick up some costs now paid by others). Indeed, the higher demand for health care might raise costs across the board, increasing both government spending and private premiums.
No doubt the health program that Congress fashions will counter this reality by including some provisions intended to cut costs ("bundled payments" to hospitals, "evidence-based guidelines," electronic recordkeeping). In the past, scattershot measures have barely affected health spending. What's needed is a fundamental remaking of the health-care sector -- a sweeping "restructuring" -- that would overhaul fee-for-service payment and reduce the fragmentation of care.
The place to start would be costly Medicare, the nation's largest insurance program serving 45 million elderly and disabled. Of course, this would be unpopular, because it would disrupt delivery patterns and reimbursement practices. It's easier to pretend to be curbing health spending while expanding coverage and spending. Presidents have done that for decades, and it's why most health industries see "reform" as a good deal.
Britain to Investigate Role in Iraq
JOHN F. BURNS
LONDON — After years of delay, the British government said Monday it would go ahead with an inquiry into the country’s role in the Iraq war, an issue that has been deeply divisive ever since the former prime minister, Tony Blair, committed more than 40,000 troops to the invasion in 2003.
Britain’s combat role ended in April, and the last British troops are scheduled to withdraw from their base at the southern city of Basra by July 30, their role taken over by American troops. Prime Minister Gordon Brown, under pressure for an inquiry from his own Labor party and from the opposition Conservatives, has long insisted that the British role in the war should be ended first.
Mr. Brown was scheduled to make a statement on the inquiry in the House of Commons on Monday afternoon, but the decision to go ahead was confirmed by Michael Ellam, his spokesman at 10 Downing Street. Key issues to be settled by the prime minister include whether the inquiry will be held in public or in private, and whether it will review the political decisions that led to war, as well as the conduct of military operations.
Few issues in Britain have been as contentious in the past generation as the decision to join the United States in the 2003 invasion. The commitment took on the character of a personal mission for Mr. Blair, who prevailed over a divided cabinet and Britain’s largest street protests in decades in forging the war coalition with former American president, George W. Bush.
It was an improbable partnership, given the wide philosophical differences between Mr. Blair’s Labor party and the conservative Republicanism of Mr. Bush. It ended, for Mr. Blair, two years ago this month, when he was hastened from office after 10 years by a left-of-center cabal led by Mr. Brown, his successor as prime minister, whose campaign to oust Mr. Blair rested in large part with the party’s unreconciled opposition to the war.
Mr. Blair has gone on to become a Middle East peace negotiator and a highly paid adviser to international banks, as well as a much-sought-after public speaker, particularly in the United States. He is said to have amassed a personal fortune of about $32 million. Mr. Brown, meanwhile, has seen Labor’s political fortunes plunge for reasons not related to the Iraq war, and narrowly survived a cabinet revolt earlier this month that threatened to unseat him.
He has had to tread warily in ordering a formal war inquiry. If the probe examines the political decision-making that preceded the invasion, Mr. Brown, who is said to have had serious reservations about the British commitment when the cabinet made its key decisions in March 2003, will be under pressure to explain why he subordinated his doubts and supported Mr. Blair. Earlier this year, the Brown government intervened to halt the publication of the minutes of cabinet meetings held just before the war started.
A key issue to be addressed by the inquiry will be the use — or abuse, as critics of the war have contended — of the pre-war intelligence provided by Britain’s security agencies, particularly MI6, the Secret Intelligence Service. The issue has already been examined twice by public inquiries, both of which broadly exonerated the government.
One inquiry was held into the death by apparent suicide in 2004 of Dr. David Kelly, one of Britain’s top weapons scientists, who told a BBC interviewer he believed the Blair government had overstated the intelligence on which it based its conclusions that Saddam Hussein had an arsenal of biological and chemical weapons that posed a ready-to-launch threat. A second inquiry into the Blair government’s use of intelligence in 2005 criticized intelligence officials for relying on flawed unreliable sources.
Another consideration weighing in favor of holding the inquiry behind closed doors, according to government officials, is the risk that public criticism of Britain’s military operations in Iraq will damaging the morale or combat effectiveness of the nearly 9,000 British troops fighting in Afghanistan, many of them from units that have seen combat in Iraq. The sensitivities of families who have lost relatives among the 179 British troops killed in Iraq — some of them in favor of an inquiry in public, others against — has been another factor.
LONDON — After years of delay, the British government said Monday it would go ahead with an inquiry into the country’s role in the Iraq war, an issue that has been deeply divisive ever since the former prime minister, Tony Blair, committed more than 40,000 troops to the invasion in 2003.
Britain’s combat role ended in April, and the last British troops are scheduled to withdraw from their base at the southern city of Basra by July 30, their role taken over by American troops. Prime Minister Gordon Brown, under pressure for an inquiry from his own Labor party and from the opposition Conservatives, has long insisted that the British role in the war should be ended first.
Mr. Brown was scheduled to make a statement on the inquiry in the House of Commons on Monday afternoon, but the decision to go ahead was confirmed by Michael Ellam, his spokesman at 10 Downing Street. Key issues to be settled by the prime minister include whether the inquiry will be held in public or in private, and whether it will review the political decisions that led to war, as well as the conduct of military operations.
Few issues in Britain have been as contentious in the past generation as the decision to join the United States in the 2003 invasion. The commitment took on the character of a personal mission for Mr. Blair, who prevailed over a divided cabinet and Britain’s largest street protests in decades in forging the war coalition with former American president, George W. Bush.
It was an improbable partnership, given the wide philosophical differences between Mr. Blair’s Labor party and the conservative Republicanism of Mr. Bush. It ended, for Mr. Blair, two years ago this month, when he was hastened from office after 10 years by a left-of-center cabal led by Mr. Brown, his successor as prime minister, whose campaign to oust Mr. Blair rested in large part with the party’s unreconciled opposition to the war.
Mr. Blair has gone on to become a Middle East peace negotiator and a highly paid adviser to international banks, as well as a much-sought-after public speaker, particularly in the United States. He is said to have amassed a personal fortune of about $32 million. Mr. Brown, meanwhile, has seen Labor’s political fortunes plunge for reasons not related to the Iraq war, and narrowly survived a cabinet revolt earlier this month that threatened to unseat him.
He has had to tread warily in ordering a formal war inquiry. If the probe examines the political decision-making that preceded the invasion, Mr. Brown, who is said to have had serious reservations about the British commitment when the cabinet made its key decisions in March 2003, will be under pressure to explain why he subordinated his doubts and supported Mr. Blair. Earlier this year, the Brown government intervened to halt the publication of the minutes of cabinet meetings held just before the war started.
A key issue to be addressed by the inquiry will be the use — or abuse, as critics of the war have contended — of the pre-war intelligence provided by Britain’s security agencies, particularly MI6, the Secret Intelligence Service. The issue has already been examined twice by public inquiries, both of which broadly exonerated the government.
One inquiry was held into the death by apparent suicide in 2004 of Dr. David Kelly, one of Britain’s top weapons scientists, who told a BBC interviewer he believed the Blair government had overstated the intelligence on which it based its conclusions that Saddam Hussein had an arsenal of biological and chemical weapons that posed a ready-to-launch threat. A second inquiry into the Blair government’s use of intelligence in 2005 criticized intelligence officials for relying on flawed unreliable sources.
Another consideration weighing in favor of holding the inquiry behind closed doors, according to government officials, is the risk that public criticism of Britain’s military operations in Iraq will damaging the morale or combat effectiveness of the nearly 9,000 British troops fighting in Afghanistan, many of them from units that have seen combat in Iraq. The sensitivities of families who have lost relatives among the 179 British troops killed in Iraq — some of them in favor of an inquiry in public, others against — has been another factor.
Obama Pleads for Support of Health System Overhaul
CHICAGO (AP) -- President Barack Obama has made another strong pitch for overhauling the U.S. health care system, calling it ''a ticking bomb for the federal budget.''
Obama went before the American Medical Association in Chicago Monday to declare that the existing system leaves too many uninsured and forces ''excessive defensive medicine'' by doctors worried about malpractice suits.
Obama told his audience he is open to requiring all Americans to have health insurance. But he emphasized that the plan he envisions would permit continuing help for those who cannot afford it on their own. Obama said a ''health care exchange'' would be set up for the uninsured to choose a plan.
Without such change, Obama said the U.S. economy could end up in the same shape as the failed General Motors Corporation and Chrysler.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- President Barack Obama, continuing to barnstorm for his health care proposals, will urge doctors gathered in Chicago to support wider insurance coverage and targeted federal spending cuts.
Obama planned to tell the American Medical Association's annual meeting in his hometown on Monday that overhaul cannot wait and that bringing down costs is the most important thing he can do to ensure the country's long-term fiscal health, a senior administration official said.
The official spoke on the condition of anonymity to discuss the president's remarks before they were delivered.
The nation's doctors, like many other groups, are divided over the president's proposals to reshape the health care delivery system. The White House anticipates heavy spending to cover the almost 50 million Americans who lack health insurance and has taken steps in recent days to outline just where that money could be found.
For instance, Obama wants to cut federal payments to hospitals by about $200 billion and cut $313 billion from Medicare and Medicaid over 10 years. He also is proposing a $635 billion ''down payment'' in tax increases and spending cuts in the health care system.
To an audience of doctors Obama plans to say the United States spends too much on health care and gets too little in return. He says the health industry is crushing businesses and families and is leading to millions of Americans losing coverage, the administration official said.
Obama's turn before the 250,000-physician group in his latest effort to persuade skeptics that his goal to provide health care to all Americans is worth the $1 trillion price tag it is expected to run during its first decade.
The president plans to acknowledge the costs. But he also will tell the doctors it is not acceptable for the nation to leave so many without insurance, the official said.
Unified Republicans and some fiscally conservative Democrats on Capitol Hill have said they are nervous about how the administration plans to pay for Obama's ideas.
There have been indications Obama has been quietly making a case for reducing malpractice lawsuits to help control costs, long a goal of the AMA and Republicans. Obama has not endorsed capping jury awards
Former Senate Majority Leader Tom Daschle, D-S.D., said Monday that controlling the cost of malpractice insurance would have to be a part of the Obama administration's overhaul of the health care system.
Daschle, whose nomination for secretary of health and human resources was derailed because of questions about his personal finances, said much of the unnecessary annual health care cost can be attributed to doctors ordering extra tests and taking extra precautions to make sure ''they aren't sued.''
Obama has been speaking privately with lawmakers about his ideas and publicly with audiences, such as a town hall style meeting last week in Green Bay, Wis. Obama and his administration officials have blanketed the nation in support of his broad ideas, and Vice President Joe Biden on Sunday said it's up to Congress to pin down the details on how to pay for them.
''They're either going to have to agree with us, come up with an alternative or we're not going to have health care,'' Biden told NBC's ''Meet the Press.''
''And we're going to get health care.''
In Chicago, the president's remarks are likely to focus on how his ideas might affect the medical profession.
His proposed cuts in federal payments would hit hospitals more directly than doctors, but physicians will be affected by virtually every change that Congress eventually agrees to. Many medical professionals are not yet convinced Obama's overhaul is the best for their care or their pocketbooks.
Broadly, the AMA supports a health care ''reform'' -- a term that changes its definition based on who is speaking -- although the specifics remain unclear.
In a statement welcoming Obama, AMA president Dr. Nancy Nielsen said the medical profession wants to ''reduce unnecessary costs by focusing on quality improvements, such as developing best practices for care and improving medication reconciliation.''
She also said doctors need greater protection from malpractice lawsuits and antitrust restrictions.
Many congressional Republicans, insurance groups and others oppose Obama's bid for a government-run health insurance program that would compete with private companies. On Sunday, Senate Minority Leader Mitch McConnell, R-Ky., described a government plan as a ''nonstarter.''
''There are a whole lot of other things we can agree to do on a bipartisan basis that will dramatically improve our system,'' he said.
To that end, lawmakers were considering a possible compromise that involved a cooperative program that would enjoy taxpayer support without direct governmental control. The concessions could be the smoothest way to deliver the bipartisan health care legislation the administration seeks by its self-imposed August deadline, officials said.
''There is no one-size-fits-all idea,'' Health and Human Services Secretary Kathleen Sebelius told CNN's ''State of the Union'' on Sunday.
''The president has said, 'These are the kinds of goals I'm after: lowering costs, covering all Americans, higher-quality care.' And around those goals, there are lots of ways to get there.''
Momentum might be on Obama's side. Aaron Carroll, an Indiana University medical professor who has surveyed doctors' views on U.S. health care delivery, said 59 percent ''favor government legislation to establish national health insurance,'' an increase over a previous poll's finding.
He noted that many doctors are not AMA members, and therefore the association's views should not be overrated.
Obama went before the American Medical Association in Chicago Monday to declare that the existing system leaves too many uninsured and forces ''excessive defensive medicine'' by doctors worried about malpractice suits.
Obama told his audience he is open to requiring all Americans to have health insurance. But he emphasized that the plan he envisions would permit continuing help for those who cannot afford it on their own. Obama said a ''health care exchange'' would be set up for the uninsured to choose a plan.
Without such change, Obama said the U.S. economy could end up in the same shape as the failed General Motors Corporation and Chrysler.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- President Barack Obama, continuing to barnstorm for his health care proposals, will urge doctors gathered in Chicago to support wider insurance coverage and targeted federal spending cuts.
Obama planned to tell the American Medical Association's annual meeting in his hometown on Monday that overhaul cannot wait and that bringing down costs is the most important thing he can do to ensure the country's long-term fiscal health, a senior administration official said.
The official spoke on the condition of anonymity to discuss the president's remarks before they were delivered.
The nation's doctors, like many other groups, are divided over the president's proposals to reshape the health care delivery system. The White House anticipates heavy spending to cover the almost 50 million Americans who lack health insurance and has taken steps in recent days to outline just where that money could be found.
For instance, Obama wants to cut federal payments to hospitals by about $200 billion and cut $313 billion from Medicare and Medicaid over 10 years. He also is proposing a $635 billion ''down payment'' in tax increases and spending cuts in the health care system.
To an audience of doctors Obama plans to say the United States spends too much on health care and gets too little in return. He says the health industry is crushing businesses and families and is leading to millions of Americans losing coverage, the administration official said.
Obama's turn before the 250,000-physician group in his latest effort to persuade skeptics that his goal to provide health care to all Americans is worth the $1 trillion price tag it is expected to run during its first decade.
The president plans to acknowledge the costs. But he also will tell the doctors it is not acceptable for the nation to leave so many without insurance, the official said.
Unified Republicans and some fiscally conservative Democrats on Capitol Hill have said they are nervous about how the administration plans to pay for Obama's ideas.
There have been indications Obama has been quietly making a case for reducing malpractice lawsuits to help control costs, long a goal of the AMA and Republicans. Obama has not endorsed capping jury awards
Former Senate Majority Leader Tom Daschle, D-S.D., said Monday that controlling the cost of malpractice insurance would have to be a part of the Obama administration's overhaul of the health care system.
Daschle, whose nomination for secretary of health and human resources was derailed because of questions about his personal finances, said much of the unnecessary annual health care cost can be attributed to doctors ordering extra tests and taking extra precautions to make sure ''they aren't sued.''
Obama has been speaking privately with lawmakers about his ideas and publicly with audiences, such as a town hall style meeting last week in Green Bay, Wis. Obama and his administration officials have blanketed the nation in support of his broad ideas, and Vice President Joe Biden on Sunday said it's up to Congress to pin down the details on how to pay for them.
''They're either going to have to agree with us, come up with an alternative or we're not going to have health care,'' Biden told NBC's ''Meet the Press.''
''And we're going to get health care.''
In Chicago, the president's remarks are likely to focus on how his ideas might affect the medical profession.
His proposed cuts in federal payments would hit hospitals more directly than doctors, but physicians will be affected by virtually every change that Congress eventually agrees to. Many medical professionals are not yet convinced Obama's overhaul is the best for their care or their pocketbooks.
Broadly, the AMA supports a health care ''reform'' -- a term that changes its definition based on who is speaking -- although the specifics remain unclear.
In a statement welcoming Obama, AMA president Dr. Nancy Nielsen said the medical profession wants to ''reduce unnecessary costs by focusing on quality improvements, such as developing best practices for care and improving medication reconciliation.''
She also said doctors need greater protection from malpractice lawsuits and antitrust restrictions.
Many congressional Republicans, insurance groups and others oppose Obama's bid for a government-run health insurance program that would compete with private companies. On Sunday, Senate Minority Leader Mitch McConnell, R-Ky., described a government plan as a ''nonstarter.''
''There are a whole lot of other things we can agree to do on a bipartisan basis that will dramatically improve our system,'' he said.
To that end, lawmakers were considering a possible compromise that involved a cooperative program that would enjoy taxpayer support without direct governmental control. The concessions could be the smoothest way to deliver the bipartisan health care legislation the administration seeks by its self-imposed August deadline, officials said.
''There is no one-size-fits-all idea,'' Health and Human Services Secretary Kathleen Sebelius told CNN's ''State of the Union'' on Sunday.
''The president has said, 'These are the kinds of goals I'm after: lowering costs, covering all Americans, higher-quality care.' And around those goals, there are lots of ways to get there.''
Momentum might be on Obama's side. Aaron Carroll, an Indiana University medical professor who has surveyed doctors' views on U.S. health care delivery, said 59 percent ''favor government legislation to establish national health insurance,'' an increase over a previous poll's finding.
He noted that many doctors are not AMA members, and therefore the association's views should not be overrated.
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