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Reform Health Care Now

Speaking to the AmericanMedical Association on June 15, President Obama outlined why health care reformthat brings down costs can't wait another year or for another administration.

• Reforming our health care system is the single most important thing we can do for America's long-term fiscal health. Our country spends too much and gets too little in return. Huge costs are crushing businesses and families and leading us toward exploding deficits, weaker benefits, and millions more Americans losing their health care coverage.
• We are spending too much money on treatments that don't make Americans any healthier--our system equates more expensive care with better care. To provide Americans better, more affordable care, our health care system needs to replicate best practices, create incentives for excellence, and close cost disparities.
• As a nation, we cannot accept that nearly 46 million men, women, and children go without insurance. To ensure quality, affordable coverage for every American, we must take certain steps, including the creation of a health insurance exchange where private plans compete with a public option, which will drive down costs and expand choice.
• President Obama has been very clear about what a public option means: more choices for consumers and more competition to keep insurance companies honest and lower costs. It does not mean: arbitrary pay cuts for doctors or some sort of Trojan horse for single-payer care.
• The President has been clear: health care reform will save us money in the long-run, it will come at a cost in the short term -- but that additional cost must not add to our deficits.

Paying for Health Care Reform

In his budget, President Obama put aside a $635 billion over ten years as a down payment on health carereform. More than half of that amount comes from raising revenue, by doing things like modestly 

limiting the tax deductions taken by the wealthiest Americans to the same level it was at the end of the Reagan Administration.

Some are concerned this will dramatically reduce charitable giving, but statistics show that's not true. The best thing for our charitable organizations is the stronger economy we will build with health care reform.

However, we cannot only raise revenue. We also have to make spending cuts. President Obama welcomes a debate over how to make these cuts, but he is committed to making them in a way that protects our senior citizens. The President has suggested a series of specific cuts that keep that commitment:

• We should end over payments to Medicare Advantage that are a windfall for insurance companies at the expense of the American people. That will save $177 billion over the next decade.
• We need to use Medicare reimbursements to reduce preventable hospital readmissions. By changing how Medicare reimburses hospitals, we can discourage them from acting in a way that boosts profits, but drives up costs for everyone else. That will save us $25 billion over the next decade.
• We can save billions of dollars by introducing generic biologic drugs into the marketplace. And save approximately $30 billion more by getting a better deal for our poorer seniors, while asking our seniors who can afford it to pay a little more for their drugs.
• We can also save hundreds of billions of dollars by adjusting Medicare payments to reflect new advances and productivity gains in our economy and by reducing payments to hospitals for treating uninsured people as we cover more and more Americans.
• We can save approximately $75 billion by getting better prices for drugs under Medicare, and another billion by rooting out waste, abuse, and fraud throughout our health care system.
• In total, the President has identified about $950 billion savings - not counting some of the longer-term savings that will occur as a result of reform - taking us almost all the way to covering the full cost of health care reform.

President Obama'scommitment to reforming health care starts with a promise and principle.

• The promise: No matter how we reform the system, if you like your doctor, you will be able to keep your doctor. If you like your health care plan, you will be able to keep your health care plan.
• The principle: To preserve what's best about our system, we have to fix what's broken and build on what works.

In some cases, there'sbroad agreement on the steps we should take - most people agree that we shoulduse electronic medical records to reduce errors, save lives, save money, whilestill ensuring privacy, and we should invest in prevention and wellnessprograms.

The bigger cost savings willcome from changing the incentives of a system that equates expensive care withbetter care.

• The President is committed to looking at the health care systems and communities around America that provide better care for less money, identify their best practices, and replicate their success throughout the country.
• We need to change incentives for doctors and hospitals so that they are rewarded based on the quality of care they provide, not on how many tests or procedures they prescribe, even if those tests or procedures aren't necessary or result from medical mistakes.

We also must provideAmericans who can't afford health insurance with more affordable options. Thisis the right thing to do. But we must also do this because when people withoutinsurance have to be treated in the ER, everyone else ends up paying for it.

• President Obama believes we should have a Health Insurance Exchange so Americans can compare health plans - none of which would deny coverage based on pre-existing conditions - and pick the one that's right for them. And if someone can't afford one of the plans the government should provide assistance so s/he can.
• President Obama believes one of the options in the Exchange should be a public insurance option. If private plans have to compete with a public option, it will keep them honest and help keep prices down.

Providing coverage formore Americans will not be cheap. To that end, President Obama has promisedthat reform will not add to our deficit over the next ten years and has alreadyidentified hundreds of billions of dollars in savings from steps like rootingout waste in Medicare and Medicaid. He will continue to outline hundreds ofbillions more in savings in the days to come