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National Business Coalition on Health

Washington, D.C.
November 15, 2010

Remarks as prepared for delivery

Thank you for that very kind introduction. I am delighted to be here.

I want to thank Andy and everyone with the National Business Coalition on Health for your partnership.

Our mission at the Department of Health and Human Services is to improve the well-being of every American and to increase their access to safe, high-quality health care. Over the last 2 years we have made significant progress. And we could not have done it without you.

Some of the most innovative initiatives in the Affordable Care Act are ideas that were first tested and developed by private employers and coalitions to help their employees live healthier and get the right care.

And as we’ve begun to implement the Affordable Care Act over the last 8 months, you have been a full partner, whether it’s strengthening patients’ rights, expanding access to care, or building the framework for a more consumer-friendly marketplace.

Many employers and business groups have participated in our regular calls with stakeholders. When we hosted a summit this fall on the new Health Insurance Exchanges, you were there with valuable insight from the frontlines.

And we have been glad to have your support and feedback as we’ve rolled out the Early Retiree Reinsurance Program. We have already signed up more than 3,500 businesses, unions, and state and local governments to help them maintain coverage for their early retirees. And we continue to accept applications.

The progress we’ve made together gives me great hope. Today, we’re at a moment of tremendous potential for improving health in America. But to make the most of it, we will need to work together.

We all agree that we can no longer afford the status quo. Every extra dollar that America’s businesses spend on health care is a dollar you can’t spend on attracting the best employees, or building a new factory, or investing in R&D to develop the next breakthrough product that will change Americans’ lives.

The healthcare costs shouldered by America’s businesses put you at an enormous disadvantage against foreign competitors who pay far less for health care. For every dollar-per-worker-hour U.S. manufacturing firms spend on health care, the average foreign firm spends 40 cents. For some foreign firms, it’s much less. That makes selling your products or services in a global market like running a race with a weight around your ankles.

I understand the challenges you face because when we in the federal government look at our books, we see the same thing you do: health care costs eating up more and more of our budget every year.

What makes these rising costs even harder to take is that we’re not getting our money’s worth. By almost any measure, our health outcomes are mediocre or worse, despite spending more money by far than any other country in the world.

Some Americans get extraordinary care. But quality varies widely, and far too many of our health care dollars go to pay for unnecessary treatments and overhead costs.

As the largest private sector purchaser of health care in America, employers are footing the bill for a lot of that poor-quality care. Too many of you are paying more every year for health care that doesn’t even do a good job keeping your employees healthy.

And I know I don’t have to tell you that is bad for business. Poor-quality care leads to as many as 45 million avoidable sick days, the equivalent of 180,000 full-time employees calling in sick every day for a full year.

We have to do better.

That starts with putting a new focus on prevention and wellness.

This is nothing new for you. Your Community Coalitions Health Institute has a longstanding relationship with the Centers for Disease Control and Prevention, building the capacity of the private sector to promote health in their community and workplace. And the community health partnerships you currently support in 7 communities around the country are tackling important issues like obesity and nutrition, physical activity and diabetes prevention.

The new health care law builds on many of these partnerships, launching a historic effort to support some of the most promising local strategies around the country for helping people live healthy, from bringing supermarkets to food desserts to creating more walkable communities.

At the same time we’re putting better nutritional information in consumers’ hands in chain restaurants and grocery stores so it’s easier to pick out the healthier option. And we’re using new tools to help youth say no to tobacco and to help tobacco users quit.

Meanwhile, every Medicare beneficiary will now get an annual wellness visit with their primary care doctor free of charge.

We’re also making recommended preventive care—from certain cancer screenings to smoking cessation counseling—available to many Americans at no additional cost, because no woman should have to skip a mammogram because she can’t afford the co-pay.

And we’re working with employers like you who understand that your employees are one of your most important assets. It is a smart investment to give them the tools to make healthy choices.

We’re also following our own advice. At HHS headquarters here in DC, employees who complete a health assessment and meet with one of the nurses in our health clinic for a cardiac risk profile, get a free gym membership.

I know many of you continue to experiment with wellness programs, searching for the right combination of carrots and sticks to keep costs down and keep your employees healthy.

And under the new law, starting in 2014, employers will be able to offer workers rewards worth up to 30% of their cost of health coverage for participating in a wellness program and meeting health benchmarks. The law also sets up a 10-state pilot program for similar wellness initiatives on the individual insurance market.

America’s businesses are already among our best innovators when it comes to prevention and wellness and we want to give you the support you need to build on these efforts.

But we can’t stop with prevention. We must go further to move our system from a volume purchaser to a value purchaser.

It’s a rule of economics that you get what you pay for. If our system is set up in a way that rewards quantity, it won’t necessarily produce quality.

If we are serious about confronting the problems at the heart of our health care system, then we need to change its incentives, so that doctors and hospitals are rewarded for delivering the kind of care we know works best.

For many years, employers have been leading the way by developing, and supporting innovations like value-based purchasing and patient-centered medical homes that promise to improve care coordination and reduce spending growth.

Now, many of these ideas have been adopted under the new law.

Under the National Pilot Project on Payment Bundling, we’re funding demonstration projects to show how we can align incentives for an entire group of providers, from the hospital, to the primary care doctor, to the visiting nurse that provides follow-up care.

And we’re encouraging the development of Accountable Care Organizations to better coordinate patient care and improve quality, help prevent disease and illness, and reduce unnecessary hospital admissions.

Doctors participating in Medicare will be encouraged to participate in a program that evaluates the quality of the care they provide.

And under the new law, our department is developing a value-based purchasing program for acute care hospitals that will reward them for good outcomes.

We will also develop a similar plan for the home health and nursing home sectors. And by 2014, ambulatory surgical centers, long-term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, cancer hospitals, and hospice providers all will be required to adopt quality measurement programs. In subsequent years, they will have to test value-based purchasing as well.

But that is not where it ends. As you know, the new law also establishes an Innovation Center at CMS charged with developing additional models to support patient-centered care.

It will officially open its doors soon and we intend to work hand-in-hand with private employers in order to identify the best ideas out there and share and disseminate them.

I hope you will all be part of this conversation. The more companies and coalitions that participate, the more effective it will be, and the more likely its innovations will be to thrive.

The Innovation Center matters because Medicare touches every hospital system in the country and almost every provider. That means it can be a force for maintaining the status quo. Or it can be a force for transforming our health care system to keep patients healthier and lower costs.

We want to make Medicare a force for health care improvement, and these new models will help us do that.

That’s also why I’m so glad that Medicare and Medicaid are now being run by Dr. Don Berwick, one of our country’s premier experts in improving the quality of health care.

Any time you can take one of the smartest people in an area and put them in the position of greatest influence, you have a chance to make a huge difference.

As we implement these reforms, we recognize that we can only get there if we work together. Even the most innovative private employers and business groups here today don’t have the reach to make it happen alone. And until now the public sector has been slow to act.

But that is changing.

Today, we can envision a future where employers no longer feel shackled by soaring costs and poor outcomes. Where businesses can invest in a healthy productive workforce. Where employees get the right care at the right time, each and every time. And where providers get the right incentives to provide the care we know works best.

It is possible. It is within reach, and I look forward to working with you to make it a reality.