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Federation of American Hospitals Annual Meeting

March 2, 2010

Thank you, Chip.  And I want to thank all the members of the Federation for being such committed advocates for fixing our broken health insurance system.  You know our health care system better than anyone, so you have great credibility when you speak out for reform.  And I can tell you that your voices have been heard in the last twelve months.

I also want to acknowledge my friends in Congress who are here today and who have been working so hard over the last year to pass comprehensive reform.  It’s not easy.  If it was, it would have been done in the 30s or the 50s or the 90s.  So the fact that bills have passed the House and Senate and we are now poised to achieve reform is a great credit to them.

Before I get to our topic today, I want to say a few words about the important role hospitals play in our public health system.  We had two major public health crises in this hemisphere in the last year: the H1N1 flu and the earthquake in Haiti.

The Department of Health and Human Services has been at the center of the US government response to both crises.  So I’ve gotten to see firsthand how hospitals have stretched their resources to respond.

When the second wave of H1N1 was at its height this fall, many of you saw your emergency room caseloads rise by 50 percent or more.  But you rose to the occasion, planning for surge capacity, finding more beds, accommodating the extra patients, and make sure they got the care they need.  The flu season’s not over, but you’ve been an essential part of what’s been a successful response so far.

When tragedy struck in Haiti, you stepped up again.  Hospitals in Florida and around the country found room for hundreds of Haitian patients who desperately needed care.  These crises showed how resilient our hospitals can be in difficult times.

But they also reminded us of the importance of the hard work you do in between crises to prepare for the next public health emergency.  And I want you to know that our department is committed to working with you through initiatives like our Hospital Preparedness Program so that we can be even more ready when the next crisis hits whether it’s another pandemic from Mother Nature or a dirty bomb set off in a subway.

But what we’re here today to focus on is the day to day workings of our health care system.  And the reason I’m especially glad to be talking to this group is that you’ve consistently been leaders, not just in acknowledging that we have a problem, but in proactively developing and promoting serious solutions.

You didn’t just sign your name at the bottom of a list of supporters.  You’ve been engaged in this process every step of the way.  And I think part of the reason why is that you understand that the problems in our health care system are connected.  If you want to deal with rising costs, you also have to deal with gaps in coverage.

No one knows this better than hospitals.  Taxpayers paid more than $56 billion to provide care for more than 46 million uninsured Americans in 2008.  Without reform, experts estimate that the amount of uncompensated hospital care may more than double in 45 states over the next ten years.  By then, they estimate we’ll spend $141 billion a year on uncompensated care.  Hospitals bear the brunt of these charges.

This system is bad for hospitals and bad for patients.  You provide care that is more expensive and less effective and patients suffer from conditions that could have been avoided.  That doesn’t make sense.  What we need is a system where every American has access to affordable coverage so they go to their doctor and get their blood pressure checked instead of waiting until they have a heart attack and going to the emergency room.

You’ve been leaders in seeing the connection between costs and quality.  Today, health care costs are rising at an unsustainable rate.  Without reform, they’ll take up a third of our entire economy in 30 years.  These rising costs are putting pressure on families, squeezing small businesses, and expanding the federal deficit.

But rather than waiting for budget-driven cuts in the future, hospitals have volunteered strategies to reduce costs and reinvest resources in improving care – rewarding quality not quantity.  An improved health care system will better care at a lower cost and patients will reap the benefits.

All of these pieces of this problem fit together.  That’s why the President has said from the beginning of this process that we need comprehensive reform: we need a bill that slows rising costs, makes coverage more affordable, and raises the average quality of care.  These were the goals we brought into last Thursday’s bipartisan healthcare meeting.

As you know, we went into the Summit having made more progress towards reform in the last twelve months than we have in the previous forty years.  Comprehensive legislation passed the House and Senate.

And these bills had the same common sense reforms.  Making insurance more affordable for families and small businesses.  Helping tens of millions of Americans get coverage.  Creating a new health insurance marketplace that will make it easy for families to shop for and compare different plans.

Laying out rules of the road to prevent insurance company abuses and denial of care.  Putting our budget on a more stable path, by reducing the deficit by $100 billion over the next ten years.

This legislation would provide security and stability for tens of millions of American families.  When California’s largest insurer recently made the news by raising premiums for 800,000 people by up to 39 percent, I got inundated with letters. Some of them were from angry California families.  But many of them were from Americans in different states, saying “What happened in California is bad, but you should see what my insurer just did.”

I am reminded of two dads I talked to on the same trip.  One stopped me in an airport in Chicago, and introduced me to his 11 year-old son Patrick who was returning from a soccer tournament. Patrick had gone through two heart operations: one at one week and one at 3 years. He’d had no problems since then.  Yet, the family premiums before this last round of increases were $30,000 a year.

Then Rich Colby approached me at an event in Columbus, Ohio. He pays over $30,000 a year to cover himself and his wife and son. Both his wife and daughter had cancer; his wife survived, his daughter did not. He is desperate and doesn’t know how much longer he can afford insurance.

Both of these dads are self-employed and so far, can pay these staggering rates. But they are frightened about what happens next, to themselves and their families.

If we don’t act, more and more Americans are going to have these same worries.  The percentage of Americans who gets insurance from their employer goes down every year.  Over the next decade, one out of every two Americans under 65 will go without health insurance.

These trends mean a growing number of health decisions will come down to a negotiation with an insurance company, by either you or your patient.  And that’s unacceptable.  That’s why President Obama is determined to build on the progress we’ve made so far and pass health insurance reform this year.

Now, we believe that putting doctors and patients back in control of health decisions is not just a Democratic idea.  In fact, the House Bill, the Senate Bill, and the President’s own proposal are all very similar to the plan co-drafted at the Bipartisan Policy Center by two former Republican Senate Majority leaders, Bob Dole and Howard Baker.  They’re also similar to the reforms implemented in Massachusetts by a former Republican Governor Mitt Romney.  And there’s a good reason for that.  These plans don’t just include ideas Republicans have supported.  They include dozens of amendments that were actually written by Republicans.

So when the President held the bipartisan health care meeting last Thursday, he hoped we could have an open, honest, productive discussion to find out where we agreed, where we disagreed, and how we could move forward.  And I think that’s what you saw.  Both parties agreed on a lot of the substance, from the need to give families and small businesses more affordable insurance choices to the importance of cracking down on waste and fraud.

There is one major policy difference.  The Republican proposals leave 30 million Americans without health insurance.  The President feels that is unacceptable.  And there is also a disagreement about what to do next.  Several Republicans at the meeting suggested that we start over.

But the President and I believe that after 12 months of hard work, we can’t afford to do that.  We can’t afford to postpone reform again as we have so many times in the past.  Not when 15,000 Americans are losing their insurance every day and premiums are on pace to double again in the next ten years.

So as you heard from President Obama on Thursday, we’ll welcome input from any Republicans and happily work with them on a final bill.  But we’re also willing to move ahead without them.  We’ve worked hard to get as far as we have, and later this week the President will outline the next steps he thinks we need to take to finish the job.

That means the coming weeks will be critical for reform.  Your support will never mean as much as it does now.  We’ve come 95 percent of the way.  The hardest work is already done.  Now we need whatever energy you have left to help us finish the job and fix our health insurance system to make it work better for all Americans.

But we don’t have to wait for Congress to act, especially when it comes to improving the quality of care that Americans get.  There are steps that we can take right now that have the potential to lift quality and lower costs.

One of those steps is taking our health care system into the age of technology: from paper files into a 21st century information system.

Last year as part of the Recovery Act, we made a historic investment in health information technology.  We made this investment because we believe this technology can cut costs, eliminate paperwork, and most of all, help doctors and hospitals deliver high-quality, coordinated care.

We’ve seen these benefits across the country.  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 encouraging them to get screened.  Screenings went up 300 percent.

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.

And yet, we know that only 10 percent of hospitals today have even basic electronic health records.  Yesterday, you heard from our National Coordinator for Health IT Dr. David Blumenthal about some of the steps we’re taking to promote this technology.  But today, I want to personally ask you to work with us to implement this technology in a way that improves care for patients, strengthens coordination between providers, and brings down your costs.

We can also do a better job putting information about the health workforce into your hands.  Right now, if you’re trying to hire a new nurse or physical therapist, there’s no way to see their history of licensing or disciplinary actions.  That makes it hard for you to assemble a team to deliver the highest quality care.

But starting yesterday, that’s changed.  You can now access information about disciplinary charges for these professionals the same way you get data on doctors and dentists.  While we were preparing for this change, we also learned that there may still be some gaps in our data on these new groups of providers.  So earlier this month, I wrote a letter to Governors asking them to work with us to fill in this missing information.  Patients will get higher quality care when you have this data in your hands and we’re working to help you get it.

But the burden of improving the quality of care needs to involve the entire health care system.  Hospitals play a unique role in care delivery and there’s work to be done.  I’m sure many of you saw the study that came out last week, which found that two healthcare-associated infections alone – sepsis and pneumonia – kill up to 48,000 Americans annually.  That’s over twice the number of murders we have each year.

Most of these deaths are preventable.  That makes them a tragedy, but it also presents an opportunity.  If we can reduce these infections, we have the ability to save tens of thousands of American lives and lower health care costs without discovering any new cures.

As many of you know, that’s exactly what happened in Michigan.  They were able to use a new approach to cut infections by 66 percent, reduce costs by $200 million, and save more than 1,500 lives in just 18 months.  It wasn’t a fancy new technology.  It was a simple checklist with reminders like, “wash your hands.”

There’s no reason why the checklist isn’t implemented in every hospital room in the country.

Now, we believe we can accelerate the adoption of these reforms.  That’s why we required every state to come up with a strategy for reducing healthcare-associated infections and plans were submitted to us earlier this year.  And it’s why we invested $80 million last year to support these state efforts and other promising projects across the country.

But without hospital leadership, these changes won’t occur.  Americans need you to aggressively seek out and implement these reforms.  There’s no reason we shouldn’t be able to multiply Michigan’s success by 50 and save lives and dollars.

We’re moving ahead in these areas and also with reforms from bundling payments to reduce hospital readmissions, to supporting coordinated care models like medical homes.  Even with all these efforts, we know that transforming our health care system will not happen over night.  But we are committed to diligently looking for new opportunities to align incentives with our best information we have about how to provide the best care.

Added together, many of these improvements will work like a seesaw, bringing down costs while increasing quality.  The experience of the average patient in a hospital room or intensive care unit will improve significantly.

But as you have understood from the beginning of this process, we will not get to the root of our health care system’s problems unless we also address a health insurance system that leaves tens of millions of Americans without insurance, tens of millions underinsured, and millions more with a constant fear that they will lose their insurance and be left at the mercy of insurance companies.

We know the cost of delay: rising prices, growing deficits, more arguments with insurance companies over reimbursement, and a growing number of Americans showing up in your emergency rooms with conditions that could have been avoided if they had it they had access to preventive care.

That’s why we’re pushing ahead with reform that will put health care providers and families back in control of their health care.  And that’s why we need your support now more than ever.

So thank you for inviting me here today.  Thank you for your partnership on so many issues.  And I look forward to working with you over the next year to achieve reform and build a healthier America.