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Minority Business Roundtable

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June 21, 2011
Washington, DC

Remarks as prepared for delivery

Thank you Roger for that kind introduction.

It’s great to be here this afternoon. The Minority Business Roundtable is such a vital voice for the more than 3 million minority-owned firms across this country -- with new firms continuing to grow at rates many times faster than the national average.

We have to build on that momentum for our economy to continue to recover.

Yet for many small businesses, the costs of health care for your employees is way too high, and you can’t recruit or keep the best talent.

Among your workforce, people who are racial and ethnic minorities have been less likely than white Americans to get the health care they need. And there’s a huge price in productivity costs. Folks are living sicker and dying younger. That’s bad for workers and their families, bad for business owners and bad for our country.

The good news is that the health care law is the most powerful legislation in decades for reducing costs of insurance and improving the health of Americans: better health; improved care; lower costs.

It will provide about 34 million currently uninsured Americans access to coverage. It will make care more available in underserved communities by investing in our primary care workforce and community health centers. And small business owners, who now pay over 18% more for the same coverage, will have a new market with lower rates.

And that will help with workforce health and your bottom line. But, to be sure, this is a tough time for business owners. As local economies continue to struggle, your customers have been forced to cut back, save more, and spend less. Many people are still struggling to find a job or gain access to credit.

And that makes it hard for you to grow your business – hard to invest in that next important project or to hire the people you need to make it happen.

The good news is the economy is coming back. We’ve created two million jobs over the last 15 months. The financial system is stabilized. We are headed in the right direction.

But it’s going to take time. And in order to make the most of our progress, we also need make sure small businesses -- and small disadvantaged businesses in particular -- have access to a level playing field.

That starts at home. I am proud to say that the Department of Health and Human Services continues to expand and diversify our vendor base.

We awarded $4 billion in contracts to small businesses last year, an increase of 25 percent over the previous year, exceeding our small business goal, as well as our small disadvantaged business goal and our women-owned small business goal.

These are significant steps in the right direction.

We also have a terrific mentor-protégé program at HHS which provides another opportunity for small businesses to get through the door and have a stake in the Department’s broader mission.

It is initiatives like this that have earned us an ‘A’ grade on the latest version of the Small Business Procurement Scorecard.

What that grade says is that we believe supplier diversity matters – it provides access to opportunity and helps rebuild our economic infrastructure. Partnering with diverse suppliers and small businesses creates jobs and builds wealth in the communities where we deliver services – and that’s every community in America.

Companies to will have a stable market and can hire more employees; can expand their customer base and grow.

So I want to thank Bill Weldon and Johnson & Johnson for being a pioneer -- and congratulate you on joining the "billion dollar roundtable" comprised of the very few companies that spend at least $1 billion every year with diverse suppliers.

The fact that Johnson & Johnson is the first healthcare company to join this leadership group is important – and there’s a lot of opportunity for the healthcare industry as a whole, to increase its spending with minority- and women-owned businesses. It is a growing sector of our economy and provides lots of potential for new jobs and new products and services.

But we also recognize that there will be more difficult choices ahead unless we also address some of the broader issues that affect our long-term prosperity. And health costs are skyrocketing, now over 17% of our GDP, and we pay too much to treat sickness and don’t focus enough on how to keep Americans healthy and well.

The Affordable Care Act, signed by President Obama in March of 2010, begins to change the health platform for our country. There are 3 basic goals: lower costs and increased competition in the insurance market, improving health of our population, and providing better care.

For insurance costs, too many small businesses don’t have the leverage that large companies have to drive down rates. and pay up to 18 percent more for the exact same health insurance.

It’s not fair. And in an economy where small businesses create two thirds of jobs, it’s a huge drain on economic growth.

This is changing under the Affordable Care Act.

The first of the new improvements are new tax credits, available since last year, to help small businesses provide health insurance for their employees.

Here’s how it works: if you have fewer than 25 full-time employees and average wages of less than $50,000, then you’re eligible for a tax credit of up to 35 percent of your health insurance costs.

For example, Jamal Lee owns a video production company in Laurel, Maryland. Ever since he started his business 5 years ago, he hasn’t been able to offer health insurance to his employees. It was simply too expensive at a time when he needed every dollar just to keep his company afloat.

This year, he’s getting the small business tax credit which means he will be able to provide his employees with insurance and invest more in his business.

Jamal said, “Because I’ll be able offer benefits, I’ll be much more competitive when I look to hire. Knowing we’re covered if something happens has an enormous impact on morale and on my employees’ physical and emotional well-being,” he said.

We’re hearing stories like this across the country.

In Kansas City, where the largest insurer has been advertising the tax credit, they’ve reported a 58 percent jump in the number of small businesses buying insurance since the law was passed.

But we also knew we needed to address the underlying causes behind small businesses’ higher premiums.

That’s why we’re working with states to set up new health insurance marketplaces called Exchanges that will be available to small business owners starting in 2014.

Each state will be able to set up its own Exchange. But they will all have certain key features in common:

They will act as a one-stop shop where consumers can easily compare plans and pick the right one for them.

They’ll ensure a basic level of coverage.

And by bringing greater transparency to the process they’ll increase competition.

Insurers will have to compete on price and quality, and can no longer exclude anyone because of a pre-existing health condition.

Even if you are pleased with your insurance, the underlying growth in health care spending is a problem for all of us, from medium and large businesses, to families, to state and local governments to the federal government.

Today, we spend far more than other countries on health care without being healthier. And health costs put us at a serious disadvantage in a global economy.

Yet we know that it’s possible to improve health while reducing costs. We know this because businesses across the country are doing it with well-designed employee wellness programs. And the private sector has been a real leader in promoting health and wellness.

Thanks to the Affordable Care Act, the government is now an active partner in working to improve health. Not only are there new efforts in prevention and wellness, but hospitals across the country are adopting innovative new models of care to reduce harm and lower preventable re-admissions..

I saw this firsthand a few weeks ago when I traveled to California and visited San Francisco General Hospital. They’re a city hospital, the only level one trauma center in San Francisco, and they serve 100,000 patients a year.

A few years ago, they decided to tackle the problem of bedsores, which are incredibly painful and sometimes deadly, but also preventable. So they took a series of steps from training nurses in how to prevent bedsores to introducing special rounds where they looked for early warning signs.

And in just two years, they cut their rate of bed sores by nearly 55 percent. That means far fewer days in the hospital, fewer patients who need to return for more treatment – better health and lower costs.

If San Francisco General can do this, there’s no reason every hospital in America can’t do it too.

That’s why we’ve joined with employers, health plans, doctors, nurses, local health agencies and more than 1,500 hospitals across the country to form the Partnership for Patients, an alliance that’s set 2 concrete goals: lower hospital harm by 40% and reduce preventable re-admissions by 20% across the country, in the next three years.

If we achieve those goals, we’ll save up to 60,000 lives, prevent 1.6M Americans from returning to the hospital, in the next three years and reduce Medicare costs by up to $50 billion over the next ten, with billions more in savings across our health care system.

As we implement these reforms, we recognize that we can only get there if we work together.

The Partnership for Patients is a start, a public-private partnership for better care and lower costs. We would urge all of you to be involved.

It is my hope that all of you will be part of this conversation. As health care purchasers and consumers, you should join us in demanding better care.

Thank you again for inviting me to join you here today. I appreciate your continued support and partnership.

Sometimes, the challenges we face can seem insurmountable, but working together, anything is within reach.

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. And where every American can get the right care at the right time, each and every time.

Thank you.