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For Immediate Release
Office of the Press Secretary
August 22, 2006
President Bush Discusses Health Transparency in Minnesota
Minneapolis Marriott Southwest
Fact Sheet: Health Care Transparency: Empowering Consumers to Save on Quality Care
Executive Order: Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs
In Focus: Health Care
2:41 P.M. CDT
THE PRESIDENT: Thank you very much. Thank you. Please be seated. Thank you for coming. Thanks for the warm welcome. We've got some work to do. (Laughter.)
Thanks for being here today. And I want to thank our panelists for joining Secretary Leavitt and me to talk about health care. And before we do, I want to say a couple of words about some of the guests here. First, I'm real proud to be here with your Governor, Tim Pawlenty. Governor, thanks for being here. (Applause.) Senator Norman Coleman is with us. Senator, thanks for coming. (Applause.) Three members of the Congress: Jim Ramstad, whose district we're in. (Applause.) Mark Kennedy is with us. (Applause.) John Kline is with us, thanks for coming. (Applause.)
We've got members of the State House here. We've got local officials -- Mayor Jan Callison, the Mayor of -- Mayor, thanks for coming. (Applause.) This is the 50th anniversary of Minnetonka, right? Yes, good. Congratulations. Wait until you turn 60. (Laughter.) It's not as old as it sounds. (Laughter.)
We're going to have an interesting dialogue today. I'm going the sign an executive order after a while, but I want to explain why we're signing the executive order to you. We've got an interesting debate in health care in America. And I guess if I had to summarize how I view it, I would say there's a choice between having the government make decisions or consumers make decisions. I stand on the side of encouraging consumers. I think the most important relationship in health care is between the patient and their provider, the patient and the doc. (Applause.) Thank you. And health care policy ought to be aimed at bolstering the consumer, empowering individuals to be responsible for health care decisions -- is kind of the crux about what we're talking about.
Obviously, all of us are concerned about costs. You know, I hear it a lot. We talk about -- we'll hear from Jane Brown here, who helps those who need help here in your community. She says health care costs oftentimes make it hard for people to buy food. You talk to small business owners and one of the big concerns they have is the cost of health care that many, in order to stay in business, you know, have to say to their employee, you provide for yourself. And that's troubling. It's troubling. It doesn't matter what your political party is; it's an issue that needs to be addressed
And so the fundamental question is how do you address cost, given the philosophy that I've just described to you? And so here are some ideas I'd like to share with you.
One way to help small businesses address the cost of rising insurance is to allow them to pool risk across jurisdictional boundaries. In other words, if you're a restaurant in Minnesota, and you're a restaurant in Texas, you ought to be allowed to pool your employees into a employee risk pool so that the insurance is lower because of the spreading of risk. Those are called association health plans. One idea to -- that says basically the small business owner will be in charge of the health care for his or her company is to encourage association health plans.
Another idea is to make sure that -- let me take a step back. There is a very important role for the federal government in health care. And that is to provide for the elderly and the poor. One of the things that Mike and I have worked on, and I hope some of you have helped with, is to encourage seniors to take a look at the new Medicare drug benefit. I was very concerned that Medicare had gone stale and it needed to be reformed. Medicare is a vital program, and it's an important federal program. And it worked.
The problem is, medicine had changed and Medicare hadn't. Medicare would pay, you know, $100,000 for an operation, but not a dime for the prescription drugs that would prevent the operation from being needed in the first place. And it didn't make any sense. It didn't make any sense to the seniors, nor did it make any sense to the taxpayers. So we've changed Medicare. And if you're a poor senior in America, the government is going to really help you with prescription drugs. And if you're not a poor senior, you'll save a half on your drug -- prescription drugs. It's a good deal.
The federal government has also got a role in helping the poor through Medicaid. And one of the tasks that I've given to Michael Leavitt is to say to the governors, you should have the flexibility necessary to design a Medicaid program that meets the needs of your citizens.
Now, having said that, here's what we need to continue to do in the private sector. One of the problems to make sure health care is affordable and available is the legal system. And, look, it's out of kilter. We want everybody to have justice. But, unfortunately, particularly in medicine, there are too many frivolous and junk lawsuits that are running good doctors out of practice and running up the cost of medicine. Do you realize that in order to avoid lawsuits, many doctors practice what's called "defensive medicine." In other words, they prescribe medicines that may not be necessary or procedures that may not be necessary, just in case they get hauled into the court of law. As a matter of fact, it's estimated that the defensive practice of medicine costs your federal government, costs you, the taxpayer, $28 billion a year.
Now, when I first went to Washington, I said, well, this is an issue that ought to be solved at the state level, until I realized the budgetary impact that these lawsuits are having on you, the taxpayer. And so I went to Congress and worked with the House and we got a good medical liability reform law out of the House. Unfortunately, it's stuck in the Senate. The trial lawyers are tough in Washington, by the way; they really don't want to see medical liability reform. But if you're interested in making sure the system works, if you want people to have access to affordable health care and have doctors that are around to practice to begin with, you need to have strong medical liability reform in order to make the health care system work.
Thirdly, have you ever watched how these files work in medicine? We're going to talk to Dr. Dean here in a minute. Her penmanship is probably pretty good -- (laughter) -- but most doctors don't write too well, and yet they write a lot in files. What I'm telling you is, medicine is really behind the times when it comes to information technology. And one of the things we'll talk about here is how to use information technology to wring the costs out of medicine, and yet be able to deliver good quality care to our citizens.
It's estimated that between 25 -- that we can reduce costs by 25 to 30 percent with the advent of what we call medical -- electric medical records, so each person has got their own electronic medical record that you've got to add on -- in other words, we'll be passing information from provider to provider via the Internet, via new technology as opposed to handwritten files that are carried from one office to the other.
We're going to spend some time talking about that. It's a -- it is a practical way to help control medical costs so people have got health care that's available and affordable.
Fourthly, we've got to make sure that we have plans that encourage consumer saving, in other words, insurance plans, products for people to be able to use in order to get health care that encourages savings. One idea is health savings accounts. These are plans where you buy a high deductible, catastrophic plan. You contribute money tax-free. But you're the consumer, you're the decision-maker when it comes to health care. You decide. You decide what doctor you see. Think about the system today as a third-party payer, how many of you have got insurance and you never really cared about the cost because somebody else is paying the bill, right? You don't really care about the quality, because some person in an office somewhere is paying the bill on your behalf. It's called a third-party payer system. It's the prevalent system today.
One of the things we're trying to encourage is the design of new opportunities for citizens to be able to get quality health care where they're in charge of the decision-making, that encourages people to make rational savings. If we have more consumer involvement in health care, then it makes sense, if that's the goal, then it makes sense to make sure that consumers have got rational data from which to make choices. And that's not the case today in medicine, really, when you think about it.
I don't know how many of you all have ever said, gosh, I wonder how much this procedure is going to cost me, or before I go to see this person, I want to know how much it costs, or maybe I need to know what this hospital charges. I doubt many of you have done that. I think the new trend in medicine is going to be to encourage transparency in pricing, as well as transparency in quality. And that's the subject of today's discussion. How do we encourage consumerism. What do you do? Well, one thing you do is you make sure people understand their options, how much something costs. And if they decide to make a purchase, what do they expect, what are the expectations from the consumer?
The federal government has got a lot to do with this, because we spend a lot of money in health care. When you really think about Medicaid and Medicare, veterans' benefits, Department of Defense. And one of the initiatives Mike is now going to undertake is, say, in order to do business with the federal government, you've got to show us your prices, and you've got to help us develop a qualitative standard so the people that we're trying to help know what they're getting.
And so here are some practical ways to address the rising cost of medicine. These are ways that basically say, we want you, the consumer, in charge, that there is such thing as a market, and that markets function. You remember Lasik surgery, eye surgery? It's a place where -- it was a procedure that cost a lot of money when it first came on, and yet there was quite a bit of competition -- people said, look, I'm good at this, why don't you come to my shop, or you notice docs were advertising. All of a sudden the cost of laser surgery has dropped precipitously. It's now an affordable procedure. Markets work when consumers have got options to make in the marketplace.
And that's what this executive order is going to do. I'm going to have Mike describe the executive order to you here in a minute. But it's an order that basically commits the federal government to work with state and local and docs and hospitals to lead the way and be a part of this new movement about transparency in pricing and quality.
Have I done it all right?
SECRETARY LEAVITT: You've done a good job, Mr. President. (Laughter.)
THE PRESIDENT: That's what he's supposed to say. (Applause.)
* * * * *
THE PRESIDENT: There's a lot of savings, by the way, when you're not writing things down on paper. Just ask some of the more modern businesses here in Minnesota, where you're unemployment rate is, like, really low because of the productivity of your companies. One reason why is they use information technology.
* * * * *
THE PRESIDENT: Yes. Why don't you talk to them about electronic medical records? I didn't do a very good job of describing it.
SECRETARY LEAVITT: When --
THE PRESIDENT: I'll give it a stab, and then you come back in.
SECRETARY LEAVITT: All right. Got you. (Laughter.)
THE PRESIDENT: So one of these days, you're going to have all your medical records on a little key that you can then plug into a computer, and all of a sudden, information is at the provider's fingertips, which makes the system a lot more efficient, which means less costly, but also saves on medical errors. But the problem we face is that the -- we've got to develop a standard language. Medicine is a fairly complicated -- got a complicated dictionary, let's put it that way. So what's the procedure on that, Mike?
* * * * *
SECRETARY LEAVITT: My mother went to the doctor the other day. She told me that she filled out her name, address, insurance company name, birth date, telephone number -- seven different times. Now, that's not necessary --
THE PRESIDENT: My mother wouldn't have so patient as your mother. (Laughter.) Hope she's not watching. (Laughter.) Good job, Michael.
Michael Howe is an interesting character here. He is an entrepreneur who's come up with a unique idea on how to help people have affordable and available health care.
Michael, did you start your deal -- like, are you the classic entrepreneur, start in the garage?
MR. HOWE: No, actually, I have to give credit, there were other groups. There were physicians and entrepreneurs that devised the mechanism, devised the innovation that MinuteClinic really represents.
THE PRESIDENT: Okay, well, tell people what MinuteClinic is. If you haven't heard about it, it's worth listening.
* * * * *
THE PRESIDENT: What's process management? Tell people what that is.
MR. HOWE: Well, the interesting thing is, you can go through, and when you do something -- strep test, a strep throat test -- if you do thousands of strep throat tests, you can --
THE PRESIDENT: You've got a problem, if there's thousands of strep tests. (Laughter.)
MR. HOWE: You do. You have a problem. But you also have an opportunity.
THE PRESIDENT: Yes, right. Okay. (Laughter.) That's the spirit. (Laughter.) Sorry. Go ahead.
MR. HOWE: No, no, it's all right. You have an opportunity to measure the effectiveness of one provider, versus a next. You have an opportunity to measure treatment protocols.
* * * * *
THE PRESIDENT: So do you have one in a shopping mall?
MR. HOWE: Absolutely. We have one in the Eden Prairie Mall right over here in Minnesota.
THE PRESIDENT: Really? Isn't that interesting.
MR. HOWE: And the idea --
THE PRESIDENT: A person walking down there looking, and says, here's the -- if you need help, here are the costs.
MR. HOWE: That's right.
THE PRESIDENT: Posted right there for them to see on --
MR. HOWE: Absolutely. And to compare it to where they go. It's also right-sized. And what I mean by that, it's a small facility, it's focused on a very specific scope of practice, common family ailments that some estimates are as high as 40 percent of the medical visits in today's society are covered by these conditions.
So this is an opportunity to provide a higher-quality care, transparent pricing, but also much more affordable. Our prices are 40 to 50 percent of what it would cost anywhere else.
THE PRESIDENT: And are people going?
MR. HOWE: Well, in the last six years, we've completed 500,000 patient visits, we've had no malpractice claims, consumers tell us that their patient satisfaction runs between 97 and 98 percent, 99.6 percent of our patients tell us they'd use the service again, refer it to family and friend. Clearly, the providers we selected do a tremendous job making the emotional connection that delivers the end result that we're really looking for.
* * * * *
THE PRESIDENT: Well, in order to have electronic medical records, there has to be a standardization in medicine to begin with.
You know, it's interesting, isn't it, it's an interesting idea he had, and it's meeting a consumer need. That stands in stark contrast to the government making the decisions for you, is to make different options available to patients, and you're providing health care at a 40 percent or 50 percent --
MR. HOWE: It's half the cost.
THE PRESIDENT: Yes, it's great. Thanks for doing what you're doing. And you're in other states?
MR. HOWE: Yes, we have 86 clinics across 11 states at this point. We anticipate some very significant growth over the next few years.
THE PRESIDENT: Yes, you ought to.
MR. HOWE: We're going to drive them very hard.
THE PRESIDENT: Nothing better than being with an entrepreneur, isn't it? (Laughter.) Thanks, Michael.
Marilyn, thanks for joining us.
MS. CARLSON NELSON: Delighted to be here.
THE PRESIDENT: We're thrilled you're here. Chairman of the Board, CEO of one of Minnesota's great companies, Carlson Companies. Thanks for joining us. What's on your mind?
MS. CARLSON NELSON: Well, first of all, I want to say thank you. I think we've been waiting at Carlson and in this community for about 20 years to hear what we've just heard, and that is inoperability, standards, quality standards, incentives.
At Carlson, we've worked with the Business Health Care Action Group for -- I think we started almost 20 years ago now -- to look at how to incentivize providers to have more transparency. We've worked on involving and engaging our employee base in preventative -- various kinds of preventative activities. But recently we've put in several innovations -- one, I have to say, a MinuteClinic in our headquarters.
THE PRESIDENT: You saved 50 percent, I hope? (Laughter.)
MS. CARLSON NELSON: Actually, we did the research. It looked as if a cost to us and our employees was about $40 to $50 through MinuteClinic for this certain set of services; it was, like, $100 in the doctor's office, and dramatically more than that in the emergency room, where a lot of people end up going for that kind of care.
* * * * *
THE PRESIDENT: This is an issue that we're focusing on the core problem, and that is, we're dealing with an industry that really is not modern, that needs help in the legal profession, and that needs more consumerism. You know, you mentioned preventative health. There's nothing that will cause somebody to take good care of their body than a -- than having an insurance program that encourages savings. You make rational decisions and you exercise, and you don't smoke, and watch your drinking, it's amazing how your health improves. If you walk two miles every day, it really makes a big difference.
And if you have policies that say there's an incentive for you, you benefit from making that kind of rational decision, you monetarily benefit, like the health savings accounts, it helps with prevention. If people really watched what they ate, it's amazing how health care costs would also go down in America, as well.
SECRETARY LEAVITT: Mr. President, there is -- this is a good thing for our health, and it's a good thing for the system. It's also an economic imperative that we do it.
THE PRESIDENT: Yes.
SECRETARY LEAVITT: What Carlson suggested I'm hearing from employers all over the country. Health care is now 16 percent of our gross domestic product. And it's headed for 20 percent. And there's really not a place on the economic leader board for a country that continues to spend more and more and more in one sector.
I was looking at the -- and it's hitting consumers. I was looking in my home state at the teachers. They've got the largest increase --
THE PRESIDENT: What is your home state?
SECRETARY LEAVITT: That's Utah, by the way. (Laughter.) And yet the teachers, many of them end up having less take-home pay because of the cost of health care.
* * * * *
THE PRESIDENT: Jim Chase, what do you do, Jim?
MR. CHASE: Well, Mr. President, I work with an organization here in Minnesota that's been working on many of the things that you and Secretary Leavitt have talked about, and we're quite excited to have you here today.
* * * * *
THE PRESIDENT: And so, like, what is your group -- what's the name of your group?
MR. CHASE: We're called Minnesota --
THE PRESIDENT: I know, but -- (laughter.)
MR. CHASE: Minnesota Community Measurement. We've been a nonprofit that's been together for about three years.
THE PRESIDENT: Really? And so the local folks came together and said, let's give old Jim some work and figure out how to do -- (laughter) -- have a health care system that works well?
MR. CHASE: My work came later. (Laughter.) But I think what's exciting is that we're actually seeing some changes now. Being able to measure this, we're seeing the results change. And it's very encouraging, I think, for the providers out there who are -- that's what they were in this for, was to find ways to treat their patients better.
* * * * *
THE PRESIDENT: So, like, how many community measurement groups are there in the country, do you suspect? It sounds like it's pretty unique.
MR. CHASE: Yes. There are several that have started. In fact, we are -- we're pleased to be working with Secretary Leavitt in the Ambulatory Quality Alliance that has formed nationally, that are bringing together, to start with, six sites around the country that are in various stages of pulling together this kind of information.
* * * * *
THE PRESIDENT: Good work. Thanks. It must be exciting to be kind of on the leading edge of substantial change.
MR. CHASE: It keeps us busy. (Laughter.)
THE PRESIDENT: That's good. I know the feeling. (Laughter and applause.)
We are joined by Doctor Laura Dean, OB/GYN. I will start off by telling you a startling statistic: there are 1,600 counties in the United States without an OB/GYN. I mean, we're talking about availability and affordability, obviously, 1,600 counties have got a series problem.
Thanks for hanging in there.
DR. DEAN: You're welcome.
THE PRESIDENT: A lot of OB/GYNs are leaving the practice because they're getting sued out of existence, pure and simple. I can't put it any more plainly than that. If you want to have OB/GYNs in America, we need medical liability reform to protect these good people. (Applause.)
Step up, Doc. How long have you been practicing?
DR. DEAN: I've been practicing obstetrics and gynecology for 10 years in the community of Stillwater, and I've delivered more than 1,500 babies.
THE PRESIDENT: Really?
DR. DEAN: Yes, sir.
THE PRESIDENT: That's good. (Laughter.) What's on your mind?
DR. DEAN: Well, I, certainly, as a physician, my goal is to help my patients make good decisions about their health care. And I'm excited about what you're here to talk about today, because I've been providing them with all kinds of medical information to help make decisions, but the financial piece has been missing. And people need that piece in order to make good and whole decisions.
THE PRESIDENT: So, like, are you going to put on the window, you know, Dr. Laura Dean, a hundred bucks? (Laughter.) How does it -- are you an individual practitioner?
DR. DEAN: I'm in a group practice with family practice doctors, other OB/GYNs, internists, pediatricians.
* * * * *
THE PRESIDENT: See, it's interesting, isn't it, kind of a mind set change. It used to be you'd go in and just take whatever they gave you, because somebody else is paying the bill. And if we can get a system down where people are able to have a good program, a good product, good insurance, but where the consumer has more to say with what's purchased or not, all of a sudden the dynamic begins to change, and costs begin to go down.
You know, the good doc here volunteered to us all you don't need this procedure.
That cost -- that saves money over time. The whole system benefits if we have a thousand providers making that same decision on an hourly basis. And so what Laura is saying is if consumers have more information from which to make decisions, all of a sudden, costs begin to become less of a burden on the system, I think is what you're saying.
DR. DEAN: Absolutely.
THE PRESIDENT: Lawsuits bothering you? Obviously, look, I led the witness. (Laughter.) Not even a lawyer. (Laughter.)
DR. DEAN: Certainly it is something looming over the heads of physicians every day, the thought about lawsuits, really, maybe ordering tests to protect yourself and to make sure -- I have many colleagues, similar in age to me, which is not real old yet, in practice of medicine --
THE PRESIDENT: Twenty-seven. (Laughter.)
DR. DEAN: -- who have stopped delivering babies, have stopped performing surgery.
THE PRESIDENT: It's a problem, you've got a problem. It is a problem when society starts losing good souls that otherwise would be OB/GYNs. It's a real problem, and we better do something about it. It's one thing to have good law; we want good law. But these frivolous lawsuits are a real problem for the people of Minnesota and all across the United States. It's serious business. These trial lawyers need to back off and these politicians in the United States Senate, people like Coleman, need to step up, and he will. (Laughter.) And he has. (Applause.)
No, he's been strong, he's been strong on medical liability reform. I'm not trying to turn this thing into a political deal. I'm just telling you, for the sake of this country, for the sake of good medicine, we better get some good medical liability reform out of the United States Senate. (Applause.)
Thanks, Dr. Dean.
DR. DEAN: Thank you.
THE PRESIDENT: Thanks for practicing. One of the wonderful things about America is our health care providers are fantastic people. They really are decent, honorable people who've answered a higher calling. And we appreciate --
DR. DEAN: Thank you, thank you, sir. (Applause.)
THE PRESIDENT: Speaking about a higher calling, Jane Brown, Executive Director, Second Harvest Heartland. Has anybody ever heard of Second Harvest Heartland? Good. So you don't need to tell them what you do. Actually, you're feeding people that need help.
MS. BROWN: That's correct, sir.
THE PRESIDENT: Actually, if people need -- I presume it's okay for me to say, you could use some contributions?
MS. BROWN: Oh, my, yes. That's a wonderful thing for you to say. (Laughter.)
THE PRESIDENT: Seriously. I know -- I know Marilyn will help you. (Laughter and applause.)
MS. BROWN: Thank you for that. (Applause.)
THE PRESIDENT: She has. (Applause.)
MS. CARLSON NELSON: Yes. (Laughter.)
THE PRESIDENT: She has been helping. As has corporate Minnesota.
MS. BROWN: Yes, corporate Minnesota has been very good to us. And the Carlson Companies are wonderful.
Second Harvest Heartland is a food bank, and we have 800 agencies that get their food from us, so every little bit helps, so thank you for that.
THE PRESIDENT: Yes. Well, we were talking -- actually, the reason that this subject came up is I was asking her whether or not she had enough product to help people who need help, and the answer is never enough.
MS. BROWN: Never enough, no, nowhere near enough yet.
THE PRESIDENT: Yes. But you've done some interesting things through health care.
MS. BROWN: We have. We have -- Marilyn and I were contrasting -- she has a huge company; there are 76 employees at Second Harvest Heartland, and 66 who receive their health insurance through our organization. And this last year, we offered an HEALTH SAVINGS ACCOUNTS for the first time as one of the options, and 15 percent -- or 10 of those employees -- opted to take it. And I'm one of those who opted to take it.
THE PRESIDENT: Everybody understand what that is? It's, again, a high-deductible, catastrophic plan, and that the person and/or company can put money in tax-free to cover up to the deductible.
MS. BROWN: That's great.
THE PRESIDENT: Which actually saves money.
MS. BROWN: It saves money. It does so many things, and that's why we've chosen it.
* * * * *
THE PRESIDENT: And you contribute into the savings account?
MS. BROWN: Yes. As the employer, yes, we do.
THE PRESIDENT: One hundred percent?
MS. BROWN: No. It's a shared responsibility, and that's very important, that there's a shared responsibility in that.
* * * * *
THE PRESIDENT: Right, right. This is a -- Jane has given her employees a very interesting option, and that is a consumer-driven plan where there is a incentive to save, to be a good shopper, and to make rational choices about how you live your life. And if you live a healthy lifestyle, you're going to spend less money out of the money she has contributed into their health account. But the money is yours. In other words, there's a catastrophic plan available. You may pay the first $3,000 -- the $3,000 is on the company, and anything above $3,000 goes to the insurance company.
So you can see, if you don't spend the $3,000, and you're able to roll it over, tax free, and then there's another $3,000 contributed next year, and you roll over money you save, pretty soon you've got a good health savings account, because the government doesn't tax any of it. It doesn't tax the money going in, it doesn't tax the earnings, and it doesn't tax the money coming out.
And if you change jobs -- by the way, which is an interesting statistic in our society today. Somebody told me the other day that people change jobs about eight times before they're 32 years old. That wasn't the case when we were growing up.
MS. BROWN: No, it wasn't. (Laughter.)
THE PRESIDENT: Anyway, doesn't it make sense to have a plan that you can carry with you? That's called portability. And so what Jane has provided her employees is something that encourages consumerism, but also helps meet their needs, and that's what medicine has got to do. It's got to meet the needs of the consumer, not the government. And that's what we're talking about, innovative ideas, innovative ways to help control costs in health care.
And I hope you've gained something from this conversation. At the very least, please leave with the notion that we're thinking differently, because you need to think differently. The system right now needs reform and needs to be fixed. And you're fortunate in the state of Minnesota that you've got leadership at the state and local and the corporate and individual level that is willing to think differently to help a new system evolve. And it's coming, and it's going to make a huge difference for people's lives.
And I want to thank all our panelists for joining us today. It's been a fascinating conversation. God bless you all. (Applause.)
Oh, wait a minute, now I'm going to sign an executive order. And I think you'll find this interesting. It doesn't take very long, and we usually have people stand behind me when I do it. (Laughter.)
You ready, Pawlenty?
(The executive order is signed.)
THE PRESIDENT: Done. (Applause.)
END 3:27 P.M. CDT
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