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The Commonwealth Fund’s 12th Annual Symposium on Health Care Policy

Washington, DC - November 4, 2009

Good evening, everyone. Thank you, Karen, for that introduction. If you work in the health care world, you’ve probably heard this conversation before. Somebody asks a health policy question, and the answer is, “the Commonwealth Fund has a great report about that.”

I’ve worked with the Commonwealth Fund going back to my days as Kansas Insurance Commissioner. I’ve served on task forces and attended your meetings. It’s a great organization: highly-respected, with a deep commitment to improving the performance of health care systems. And a lot of that is a credit to Karen.

I also want to welcome the Ministers of Health and delegations from ten countries. I’ve been working with some of you since my first few weeks on the job. And these partnerships have never been more important than they are today. Disease doesn’t stop at borders. Neither can our response to disease.

Think of the H1N1 flu. From the moment we identified the flu, health ministers around the world were talking. We shared information about the virus strain. We traded updates on the prevalence of disease and the location of infections. We made plans to get vaccine to the developing world.

Because each of us was open and transparent, all of us had a better picture of what the flu was doing. We were able to respond faster. We were able to respond better.

We’re here tonight because we believe that cooperation and sharing information between health departments should happen all the time – not just during health emergencies. Despite the differences between our countries and our health care systems, we face many of the same challenges.

We’re all concerned about rising health care costs. In many of our countries, health care has grown into our biggest industry. Here in the United States, one out of every six dollars we spend is on health care.

Rising costs are tied to another trend that’s affecting us all: we’re getting older. Which means we’re getting sicker too. But it’s not just aging. Many of us are eating more, but exercising less. Too many people of us still smoke.

In the past, the most terrifying diseases were the ones that struck quickly like smallpox. Today, the biggest killers are chronic conditions that you can develop when you’re young and that stay with you your whole life. Here in the United States, chronic disease accounts for 70 percent of deaths and 75 percent of health care costs.

Each of our countries has addressed these challenges in its own way. The American health care system will never be the same as the British health care system, which will never be the same as New Zealand’s health care system. But that doesn’t mean we don’t have a lot to learn from each other.

Just as we’re quick to adopt new medicines and treatments that are developed abroad, we also shouldn’t hesitate to borrow best practices that save money, increase efficiency, and help people live longer, healthier, more productive lives.

With that in mind, I’d like to give you an update on this administration’s vision for how we can build a health care system that will give Americans more bang for their buck.

As some of you may have heard, we’re in the middle of a major effort to reform our health care system. It hasn’t been easy, but we’re making good progress. The House will vote on a bill sometime in the next week and the Senate is close to producing its own legislation. In just nine months, we’ve come further than we had in 70 years.

This is important because when we began this effort, we knew that America had some of the best doctors and nurses in the world. We knew we had some of the most advanced treatments. And we knew that some Americans got some of the best care in the world.

But we also knew that tens of millions of Americans couldn’t get the care they need because they didn’t have insurance. We knew that tens of millions more were underinsured, meaning they had insurance but still couldn’t afford their medicines and treatments. We knew that even though some Americans got incredible care, overall outcomes were mediocre. And we knew we paid way too much for health care – more than any other country in the world by far.

So like a lot of other countries, we faced a challenge: how do we keep what’s right with the American health care system while also fixing what’s wrong? How do we take the high level of care that some Americans get and make it available to all Americans – at a price we could all afford?

What President Obama proposed and what Congress is now debating is health insurance reform that has four components.

First, they say, we need to fix our insurance system. We need to get rid of discrimination based on preexisting conditions. We need to end the practice of dropping someone when they get sick just because they made a mistake on their paperwork. We need to put a cap on out-of-pocket costs, so that if you have insurance you can’t go broke from a hospital bill.

They also say we need to create a new health insurance marketplace: a health insurance exchange where consumers can easily review and compare plans. And that we need to provide subsidies for Americans who still wouldn’t be able to afford insurance. When you add these changes together, you get a health insurance system where every American has access to quality, affordable coverage – that can’t be taken away.

Reforming our insurance system is essential. And it’s the part of reform that has gotten the most attention in the media. But even if we fixed our insurance system, we’d still have other problems, including the fact that Americans aren’t getting enough bang for our health care bucks! We spend twice as much per person as some other rich countries, but are results are mixed.

That’s why there’s a second part of our vision for a new health care system that’s just as important as the first: reforming our payment and delivery systems so that we start spending money to keep Americans healthy and stop paying for tests and procedures that don’t work. Let me give you just a couple examples.

We all know about health care associated infections. This isn’t what brings a patient to the hospital; it’s what happens to them while they are in the hospital. One hundred thousand Americans die each year of health care-associated infections. That makes them one of the ten leading causes of death in this country. More people die from health-care-associated infections than from car accidents and homicides combined!

These deaths are tragic. They’re also totally preventable. For example, a system developed by Johns Hopkins and implemented in Michigan has gotten incredible results! It wasn’t a complicated technology and it didn’t require a huge capital investment. The new system was a checklist that health care providers followed with each procedure including simple steps like hand-washing. Within 18 months, they cut infections by 66%, prevented 1,500 deaths, and saved $200 million.

Now, we need to multiply those results by 50 states – quickly! That’s the kind of change we’re trying to make: first providing financial incentives for providers who take proactive steps to improve patient outcomes, and eventually using penalties to make sure they follow these best practices.

Here’s another example. We know that one in five Medicare patients who are discharged from a hospital end up right back in the hospital within a month. Some of these readmissions are unavoidable. But in most cases, the patient hasn’t seen a health care provider in those 30 days. There’s been no follow-up care.

This is expensive because now we have to pay for two medical stays instead of one. But we can’t forget that there’s a human cost too. How many seniors have you talked to lately who say: my only wish is that I could spend more time in hospital rooms talking to doctors? I don’t know any. No one wants to spend more time in the hospital.

What’s frustrating about this is that like hospital-associated infections, we already have a good strategy for preventing readmissions. We know that follow-up care, often with health assistants, works. And we know that one way to get that care is by providing bundled payments to hospital and providers that encourage them to talk to each other and coordinate care once a patient leaves the hospital.

We also know that changes like reducing obesity, reducing tobacco use, and improving diet can also reduce the incidence of chronic diseases. So aligning incentives to encourage doctors to keep patients well, as opposed to paying them only when their patients are sick, can produce a healthier population at lower costs.

This is the second component of our reform effort. Using payment systems to provide incentives to encourage quality outcomes. Using our best research to inform provider practices and move away from the current fee for service status quo, which often drives up costs and adds no health benefits.

We believe that making these changes to our payment and delivery systems will set us on a path towards a 21st Century health care system. But it’s going to be hard for these changes to have their full impact unless we also have the third part of reform, which empowers providers and patients to be more involved and informed about best practices, protocols, and outcomes.

Health information technology is already widespread in countries around the world – including many of the countries represented here today. But in the US, most doctors and hospital systems are still using pen and paper.

The problem is that it’s hard for doctors to coordinate care if they each have their own chart for a patient and those charts can’t talk to each other. It’s hard for hospitals to publish information about medical outcomes if they don’t have any automated way of tracking them.

That’s why President Obama and this administration are committed to accelerating the adoption of health information technology, including electronic health records for all Americans. The evidence is clear: technology helps providers practice medicine more effectively and deliver better patient care. At one health system, they used electronic health records to identify older women who hadn’t received an osteoporosis screening and mail them personal letters. Screenings went up 300%.

At another health system, only a third of their diabetes patients were receiving the recommended foot and eye exams. They started tracking these patients using electronic health records, and within five months, the share of patients getting the recommended exams doubled to around two out of three. At a major children’s hospital, they used electronic health records to cut medical errors in half.

But since only 20 percent of American doctors and 10 percent of hospitals have fully integrated technology systems, we have a long way to go to catch up with the rest of you! The obstacle isn’t doctors. I’ve talked to doctors across the country who are using EHRs. They tell me that they’ve become better doctors. They tell me that patient results are better. And every single one has told me that they’d never go back.

That’s why this administration is making the biggest investment in health information technology in our nation’s history. And that’s why we’re going to continue the conversation we started last October at the health information conference we held with our European friends. No country is going to perfect this technology on their own. And the stakes are too high not to collaborate. If we can get this technology right by sharing best practices and cutting-edge research and connecting providers around the world, I believe we can make a huge difference in the quality of care we deliver across the globe.

The final component of a transformed health system is moving from a sick care system that treats people once they show up in the hospital to a true health care system that proactively promotes health..

We all face different public health challenges. Here in the United States, we are struggling with an obesity crisis. Two out of three American adults are overweight or obese. Just as alarming, so is one in three children.

There are big health costs. We know that obesity increases the risk of heart disease, certain cancers, and stroke. We also know that it is the greatest predictor of diabetes. We used to call Type II diabetes adult-onset diabetes. Now we don’t because so many kids are getting it.

What we should be doing is attacking the underlying condition. Instead, what we currently do in the US is try and “manage” chronic disease. This wait-until-people-get-sick approach is bad for our budget and bad for our health. We need a keep-people-from-getting-sick approach.

So in addition to the payment reforms I mentioned, we are launching a multi- agency approach led by the world’s most famous vegetable gardener, Michele Obama, which will include community strategies, school-based initiatives, parent assistance, and try to identify the health and wellness strategies that really work. And under health insurance reform, we’ll eliminate co-payments for preventive care like mammograms and colonoscopies because nobody should skip a life-saving screening because they can’t pay.

If we can make all of these changes, we will move closer to the kind of high-quality, patient-centered, evidence-based care that we know is better for doctors, better for patients, and better for our national balance sheet. Health insurance reform is the biggest step we can take in this direction, and I believe we’re going to pass a bill this year. We’ve already come closer to reform in the last nine months than we did in the previous 70 years. And Americans are ready for change.

But whatever happens this winter, a bill alone will not be enough. Achieving a better health care system will take a steady commitment in the years to come to making sure we spend our health care dollars wisely and investing in the transformative power of health IT and prevention and wellness. We will be eager to share what we learn. And eager to hear from you about what works in other countries.

When we talk about health care, we always keep in mind that we are not just talking about saving money or increasing efficiency. We are also talking about providing a higher quality of life. When people are healthy, they miss fewer days of work and get more done. They spend more time at home and less time in doctors’ offices. They can take care of their grandkids. They can play softball. They can volunteer at the town library. They can walk to the grocery store. They can get a good night of sleep.

We have a long way to go. But we’re excited to be heading in the right direction.

Thank you.