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American Hospital Association

Washington, DC
April 26, 2010

Thank you, Maynard, for that very nice introduction. Maynard is an old friend of mine. When I was Governor, we got to work closely together on health issues. And it wasn't just to improve the health of patients at Stormont-Vail. It was to improve the health of all Kansans.

We had a natural partnership because we wanted the same thing.

That why I'm so glad to be here with you this morning. Because this administration and America's hospitals have the same goal: to build a healthier America.

We share a common vision of a future when all Americans can live a healthy lifestyle, have access to the health care they need, and enjoy the highest quality care possible.

And any time you're trying to achieve the same goal, you have an opportunity to work together.

We saw how effective that partnership could be this past flu season.

As the second wave of H1N1 hit its peak this fall, many of you saw your emergency room caseloads rise by 50 percent or more. There was a real question about whether our health care system would be able to handle this surge of demand.

But our department made sure you had the resources and flexibility you needed.

And America's hospitals rose to the occasion, finding more beds, accommodating the extra patients, and making sure they got the care they need.

Working together with partners across the country, we were able to keep most Americans safe during a flu season when some had forecast far worse.

That's the power of our partnership. We've seen it in efforts to raise the quality of healthcare across America.

For example, we've worked together to bring life-saving checklists to intensive care units in one out of five hospitals around the country.

When Michigan's hospitals adopted these checklists, central line infections fell by 66 percent in just 18 months, saved 1,500 lives and $200 million.

Multiply those results by 50 and you can see the potential of what we're trying to do. We still have a long way to go, but this is incredibly important work.

About a year ago, we began our most ambitious partnership ever.

That's when President Obama joined with hospitals, doctors, nurses, and Americans across the country to say it was finally time to reform our health care system.

This was our biggest challenge yet. After decades of delay, there were some people who said it was impossible. They said the days of transformative legislation were behind us like soda fountains and five cent matinees.

But we had great leaders in Congress, like Speaker Pelosi who you're going to hear from in just a few minutes. And we had great allies like the American Hospital Association.

It's one thing to say you support change, to add your logo to the bottom of an open letter, to put out a press release. It's another thing to participate in change – to help drive it.

That's what you did.

You didn't just talk about the problem. You helped come up with a solution.

By pledging to do your part to bring down skyrocketing health care costs, you helped make this historic legislation possible.

And today, my message to you is this: we worked together to pass this law. Now, let's work together to get it right.

To do that, we're going to need to build on some of the important health achievements of last year.

This sometimes gets forgotten because 2010 is going to go down in history as the year of the Affordable Care Act.

But the transformation of our health care system really began in 2009.

As you all know, one of the first bills President Obama signed was the CHIP Reauthorization Act, which helped us enroll 2.6 million previously uninsured kids in CHIP and Medicaid by the end of last year.

That's 2.6 million kids whose parents don't have to think twice about taking them to the hospital when they get sick. They'll just go.

Then, just a couple weeks later, the President signed the Recovery Act. This was a jobs bill first and foremost. But as you know, it was also one of the biggest health innovation bills in American history.

In particular, it began to address three of the biggest and most persistent obstacles preventing Americans from living healthier lives.

To keep more Americans out of hospitals, we invested $650 million in some of the most promising local strategies for promoting wellness and reducing chronic disease across the country. To make sure they could get a doctor, we strengthened our primary care workforce, expanding our network of community health centers and providing new funds to train primary care physicians and nurses. And as you heard yesterday from Dr. Blumenthal, we made a historic investment in electronic health records, which many of you have shown can save money, slash paperwork and help doctors deliver better care.

Last year, we also launched a new interdepartmental effort to identify, prosecute, and ultimately prevent health care fraud, which is already paying dividends.

These investments aren't separate from reform. They're its foundation.

If you get diabetes before you turn 20, there's only so much even a high performing health care system can do. Having great health insurance doesn't make much of a difference if you can't get a doctor's appointment.

So if reform is going to succeed, we need to continue to build on the momentum we built in each of these areas last year. And we need your help.

When children show up in your emergency rooms, see if they're eligible for CHIP or Medicaid. If they are, sign them up. You can help us understand how to promote health information technology in a way that maximizes the benefits patients. You can work with us to identify unscrupulous providers and educate other hospitals about the most common health care fraud scams.

This work is going to continue for years to come, and hospitals have a key role to play.

But we knew that these changes would not be enough.

We still had to reform a broken health insurance in which 46 million Americans had no insurance and tens of millions more had inadequate coverage.

A system that forced millions of Americans to wait until they had serious health problems to get treatment, adding up to $56 billion a year in uncompensated care by 2008, a number that was expected to grow to $141 billion within the next decade.

That's why we banded together to accomplish something Americans have been trying to do since Harry Truman was President: pass comprehensive health insurance reform.

The Affordable Care Act will end the worst insurance company practices from Arizona to Maine. It will make insurance affordable for all Americans and bring down health care costs for families and business. It enshrines the principle that every American should be able to get the health care they need.

That's the big picture.

But a lot of Americans have a much simpler question: what's happening right now and how does it affect me?

So I'd like to give you a little update on where we are.

As you know, the law is structured in stages.

The first parts to kick in are some immediate relief for seniors and small businesses.

So starting on June 15th, seniors who've hit the Medicare prescription drug donut hole will start getting $250 rebate checks. And there will also be a new tax credit to help small businesses provide health insurance for their employees.

Then later this year, some new insurance protections kick in. By this summer, uninsured people blocked out of the system due to a pre-existing condition will have an affordable option for health insurance.

Later on, lifetime or restricted annual limits on benefits will be eliminated.

And, preventive services will be offered with no cost sharing, encouraging people to actually use them.

Most of the changes take effect in September, but one of our biggest goals right now is to work with our partners to get these benefits to the American people as soon as possible.

For example, the Affordable Care Act says that starting this fall, most young adults up to age 26 have the option of staying on their parents insurance.

We realized that this meant there were college students, for example, who were going to get dropped in May only to sign back up in September.

That's bad for the college students because if they have a preexisting condition, they might not be able to get insurance over the summer. But it's also bad for insurance companies because they'd be paying administrative costs to drop people and then new administrative costs to sign them up three months later.

So over the last couple of weeks, we reached out to insurance companies and asked them to consider allowing young adults to stay on their parents' coverage through September.

Already, almost all of the country's largest health insurers have agreed to do just that, including WellPoint, Humana, United, Aetna, Kaiser, Coventry, and Blue Cross Blue Shield plans across the country.

And I'm pleased to announce that in the last few days, I received letters from Cigna and a group of prominent non-profit insurers including Geisinger, Health Partners, and Group Health of Seattle saying that they would do the same.

Over the last few weeks, we've also been working closely with states to set up high-risk insurance pools for a particularly vulnerable group of Americans: people who are uninsured and have preexisting conditions.

Our goal is to have this program up and running within the next few months. And we've already had many conversations with states about what the best way to provide health security for these people is – whether it's through a state pool that they design or through a larger federal pool that operates across state lines.

Ultimately, states will choose which option is best for their residents, and we're going to give them all the support they need to make that choice.

This combination of partnership and being proactive is a model for how we hope to carry out this law.

But there's more work to be done.

Last week, we saw some outrageous reports about how the nation's largest insurance company WellPoint was specifically targeting women with breast cancer with the goal of canceling their coverage. So I've also asked insurers to implement another September provision early and agree not to rescind the coverage of any premium-paying customer except in cases of deliberate fraud.

We're calling on insurance companies to abide by a very simple principle: no American should have their health coverage taken away when they're sick and need it most.

Stories like this one are why we began the push for health insurance reform and these protections will act as a critical bridge until 2014.

That's when the most important elements of the Affordable Care Act kick in: the health insurance exchange and subsidies.

Once they do, every American will have access to affordable coverage, and it's estimated that 32 million people who were previously uninsured will get covered.

That's an incredible achievement.

But we don't want to just add 32 million new people to a broken system. To achieve the 21st century health care system we both envision, we also need to change the incentives in our health care system so that doctors and hospitals can get rewarded for delivering high quality care.

Your job is to heal people so that they can get out of their hospital bed and go home to their family. But today, a hospital with empty beds is a hospital that's not making any money.

We pay for quantity, not quality. For volume, not value. And that makes it harder for you to deliver the kind of care we know works best.

So as part of the Affordable Care Act, we'll start to change these incentives. And just as we're working with insurance companies on the insurance provisions and with states on the state provisions, we want to work with health care providers like hospitals on the quality of care provisions.

For example, we have a lot of evidence that health care providers work best when they work together. It's common sense that you're most likely to get the best diabetes care when your primary care doctor is talking to your endocrinologist.

So as part of this law, we're going to let health care providers form Accountable Care Organizations. If they can find ways to delivery quality care at less than the average cost – whether it's by doing a better job managing chronic conditions or avoiding unnecessary treatments – they'll get a share of the savings.

As we develop the guidelines for this program, we want your input. And when it starts up in 2012, we want your participation.

We'll also have pilot programs for bundled payments, which will experiment with different ways to reward hospitals that provide high-quality follow-up care.

There will be new financial incentives for the health care providers that reduce these infections that start with hospitals but will be expanded to other sites of care.

And we'll develop even more innovative payment models at a new Center for Innovation at the Centers for Medicare and Medicaid Services.

Most of these models don't need to be invented. They're already being used in hospitals across the country. We just need to identify the best ones and then help them spread.

We're looking forward to working with you in all of these areas.

The Affordable Care Act will build on the work we're done together to publish more data on health care quality.

The difference now is, we're going to start using that data to reward hospitals for top performance. This will not happen overnight – we'll need your feedback and partnership to do this effectively. In the end, improving care happens where patients receive that care.

We're fortunate that the President has nominated one of our country's best-known experts on these kinds of reforms to lead the Centers for Medicare and Medicaid Services.

Many of you have worked closely with Dr. Berwick over the years, and you know that no one has a better understanding of both the challenges involved in these reforms and the urgency of overcoming those challenges.

I hope the Senate will act quickly to confirm one of America's most respected health leaders.

These changes can't wait. And as I hope I've made clear today: they won't necessarily start in Washington.

It could be a state like Oregon that's developed an innovative new way to sign more kids up for health insurance or a community health center in Orlando that is expanding its offerings to meet the growing needs in its neighborhood.

It could be a housing project in Chicago that has a new approach to reduce smoking or an anti-fraud Strike Force team in Miami that is showing how to prevent fraudulent home health care claims.

It could be a health care system in Texas that eliminates prescription errors using electronic health records or a hospital in Illinois that improves the health of its diabetes patients by developing an innovative disease management program.

The federal government has a role in the transformation of our health care system – an essential one. We will provide information and education if it's needed; set basic standards to help foster a competitive insurance market; serve as an umpire to make sure insurance companies treat Americans fairly; help to measure and reward quality of care; create incentives to drive changes in our payment and delivery systems; and provide targeted resources to help empower consumers.

But ultimately, this isn't about us. It's about giving Americans and their health care providers more choices and more control.

We will know we have succeeded when people travel to America from around the world not just to observe a new surgical technique or hear about a new blockbuster medicine, but also to learn about how to build a patient-centered health care system, to discover the most effective strategies for reducing health disparities, to develop a plan for building a healthier country.

We don't often talk about Americans' health as a goal because there is no simple statistic to count it like GDP. And you can't measure it with a CBO score.

But it's what allows us to do our jobs, spend time with our loved ones, and pursue our dreams. It's the reason why we can sleep soundly, play softball, and live to see our grandchildren become grow into adulthood.

We are not there yet. But with your help, a healthier future for America is within reach.