From the moment I took office as President, the central challenge we have confronted as a nation has been the need to lift ourselves out of the worst recession since World War II. In recent months, we have taken a series of extraordinary steps, not just to repair the immediate damage to our economy, but to build a new foundation for lasting and sustained growth. We are creating new jobs. We are unfreezing our credit markets. And we are stemming the loss of homes and the decline of home values.
But even as we have made progress, we know that the road to prosperity remains long and difficult. We also know that one essential step on our journey is to control the spiraling cost of health care in America.
Today, we are spending over $2 trillion a year on health care - almost 50 percent more per person than the next most costly nation. And yet, for all this spending, more of our citizens are uninsured; the quality of our care is often lower; and we aren't any healthier. In fact, citizens in some countries that spend less than we do are actually living longer than we do.
Make no mistake: the cost of our health care is a threat to our economy. It is an escalating burden on our families and businesses. It is a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America.
It is unsustainable for Americans like Laura Klitzka, a young mother I met in Wisconsin last week, who has learned that the breast cancer she thought she'd beaten had spread to her bones; who is now being forced to spend time worrying about how to cover the $50,000 in medical debts she has already accumulated, when all she wants to do is spend time with her two children and focus on getting well. These are not worries a woman like Laura should have to face in a nation as wealthy as ours.
Stories like Laura's are being told by women and men all across this country - by families who have seen out-of-pocket costs soar, and premiums double over the last decade at a rate three times faster than wages. This is forcing Americans of all ages to go without the checkups or prescriptions they need. It's creating a situation where a single illness can wipe out a lifetime of savings.
Our costly health care system is unsustainable for doctors like Michael Kahn in New Hampshire, who, as he puts it, spends 20 percent of each day supervising a staff explaining insurance problems to patients, completing authorization forms, and writing appeal letters; a routine that he calls disruptive and distracting, giving him less time to do what he became a doctor to do and actually care for his patients.
Small business owners like Chris and Becky Link in Nashville are also struggling. They've always wanted to do right by the workers at their family-run marketing firm, but have recently had to do the unthinkable and lay off a number of employees - layoffs that could have been deferred, they say, if health care costs weren't so high. Across the country, over one third of small businesses have reduced benefits in recent years and one third have dropped their workers' coverage altogether since the early 90's.
Our largest companies are suffering as well. A big part of what led General Motors and Chrysler into trouble in recent decades were the huge costs they racked up providing health care for their workers; costs that made them less profitable, and less competitive with automakers around the world. If we do not fix our health care system, America may go the way of GM; paying more, getting less, and going broke.
When it comes to the cost of our health care, then, the status quo is unsustainable. Reform is not a luxury, but a necessity. I know there has been much discussion about what reform would cost, and rightly so. This is a test of whether we - Democrats and Republicans alike - are serious about holding the line on new spending and restoring fiscal discipline.
But let there be no doubt - the cost of inaction is greater. If we fail to act, premiums will climb higher, benefits will erode further, and the rolls of uninsured will swell to include millions more Americans.
If we fail to act, one out of every five dollars we earn will be spent on health care within a decade. In thirty years, it will be about one out of every three - a trend that will mean lost jobs, lower take-home pay, shuttered businesses, and a lower standard of living for all Americans.
And if we fail to act, federal spending on Medicaid and Medicare will grow over the coming decades by an amount almost equal to the amount our government currently spends on our nation's defense. In fact, it will eventually grow larger than what our government spends on anything else today. It's a scenario that will swamp our federal and state budgets, and impose a vicious choice of either unprecedented tax hikes, overwhelming deficits, or drastic cuts in our federal and state budgets.
To say it as plainly as I can, health care reform is the single most important thing we can do for America's long-term fiscal health. That is a fact.
And yet, as clear as it is that our system badly needs reform, reform is not inevitable. There's a sense out there among some that, as bad as our current system may be, the devil we know is better than the devil we don't. There is a fear of change - a worry that we may lose what works about our health care system while trying to fix what doesn't.
I understand that fear. I understand that cynicism. They are scars left over from past efforts at reform. Presidents have called for health care reform for nearly a century. Teddy Roosevelt called for it. Harry Truman called for it. Richard Nixon called for it. Jimmy Carter called for it. Bill Clinton called for it. But while significant individual reforms have been made - such as Medicare, Medicaid, and the children's health insurance program - efforts at comprehensive reform that covers everyone and brings down costs have largely failed.
Part of the reason is because the different groups involved - physicians, insurance companies, businesses, workers, and others - simply couldn't agree on the need for reform or what shape it would take. And another part of the reason has been the fierce opposition fueled by some interest groups and lobbyists - opposition that has used fear tactics to paint any effort to achieve reform as an attempt to socialize medicine.
Despite this long history of failure, I am standing here today because I think we are in a different time. One sign that things are different is that just this past week, the Senate passed a bill that will protect children from the dangers of smoking - a reform the AMA has long championed - and one that went nowhere when it was proposed a decade ago. What makes this moment different is that this time - for the first time - key stakeholders are aligning not against, but in favor of reform. They are coming together out of a recognition that while reform will take everyone in our health care community doing their part, ultimately, everyone will benefit.
And I want to commend the AMA, in particular, for offering to do your part to curb costs and achieve reform. A few weeks ago, you joined together with hospitals, labor unions, insurers, medical device manufacturers and drug companies to do something that would've been unthinkable just a few years ago - you promised to work together to cut national health care spending by two trillion dollars over the next decade, relative to what it would otherwise have been. That will bring down costs, that will bring down premiums, and that's exactly the kind of cooperation we need.
The question now is, how do we finish the job? How do we permanently bring down costs and make quality, affordable health care available to every American?
That's what I've come to talk about today. We know the moment is right for health care reform. We know this is an historic opportunity we've never seen before and may not see again. But we also know that there are those who will try and scuttle this opportunity no matter what - who will use the same scare tactics and fear-mongering that's worked in the past. They'll give dire warnings about socialized medicine and government takeovers; long lines and rationed care; decisions made by bureaucrats and not doctors. We've heard it all before - and because these fear tactics have worked, things have kept getting worse.
So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage - they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what's broken and build on what works.
If we do that, we can build a health care system that allows you to be physicians instead of administrators and accountants; a system that gives Americans the best care at the lowest cost; a system that eases up the pressure on businesses and unleashes the promise of our economy, creating hundreds of thousands of jobs, making take-home wages thousands of dollars higher, and growing our economy by tens of billions more every year. That's how we will stop spending tax dollars to prop up an unsustainable system, and start investing those dollars in innovations and advances that will make our health care system and our economy stronger.
That's what we can do with this opportunity. That's what we must do with this moment.
Now, the good news is that in some instances, there is already widespread agreement on the steps necessary to make our health care system work better.
First, we need to upgrade our medical records by switching from a paper to an electronic system of record keeping. And we have already begun to do this with an investment we made as part of our Recovery Act.
It simply doesn't make sense that patients in the 21st century are still filling out forms with pens on papers that have to be stored away somewhere. As Newt Gingrich has rightly pointed out, we do a better job tracking a FedEx package in this country than we do tracking a patient's health records. You shouldn't have to tell every new doctor you see about your medical history, or what prescriptions you're taking. You should not have to repeat costly tests. All of that information should be stored securely in a private medical record so that your information can be tracked from one doctor to another - even if you change jobs, even if you move, and even if you have to see a number of different specialists.
That will not only mean less paper pushing and lower administrative costs, saving taxpayers billions of dollars. It will also make it easier for physicians to do their jobs. It will tell you, the doctors, what drugs a patient is taking so you can avoid prescribing a medication that could cause a harmful interaction. It will help prevent the wrong dosages from going to a patient. And it will reduce medical errors that lead to 100,000 lives lost unnecessarily in our hospitals every year.
The second step that we can all agree on is to invest more in preventive care so that we can avoid illness and disease in the first place. That starts with each of us taking more responsibility for our health and the health of our children. It means quitting smoking, going in for that mammogram or colon cancer screening. It means going for a run or hitting the gym, and raising our children to step away from the video games and spend more time playing outside.
It also means cutting down on all the junk food that is fueling an epidemic of obesity, putting far too many Americans, young and old, at greater risk of costly, chronic conditions. That's a lesson Michelle and I have tried to instill in our daughters with the White House vegetable garden that Michelle planted. And that's a lesson that we should work with local school districts to incorporate into their school lunch programs.
Building a health care system that promotes prevention rather than just managing diseases will require all of us to do our part. It will take doctors telling us what risk factors we should avoid and what preventive measures we should pursue. And it will take employers following the example of places like Safeway that is rewarding workers for taking better care of their health while reducing health care costs in the process. If you're one of the three quarters of Safeway workers enrolled in their "Healthy Measures" program, you can get screened for problems like high cholesterol or high blood pressure. And if you score well, you can pay lower premiums. It's a program that has helped Safeway cut health care spending by 13 percent and workers save over 20 percent on their premiums. And we are open to doing more to help employers adopt and expand programs like this one.
Our federal government also has to step up its efforts to advance the cause of healthy living. Five of the costliest illnesses and conditions - cancer, cardiovascular disease, diabetes, lung disease, and strokes - can be prevented. And yet only a fraction of every health care dollar goes to prevention or public health. That is starting to change with an investment we are making in prevention and wellness programs that can help us avoid diseases that harm our health and the health of our economy.
But as important as they are, investments in electronic records and preventive care are just preliminary steps. They will only make a dent in the epidemic of rising costs in this country.
Despite what some have suggested, the reason we have these costs is not simply because we have an aging population. Demographics do account for part of rising costs because older, sicker societies pay more on health care than younger, healthier ones. But what accounts for the bulk of our costs is the nature of our health care system itself - a system where we spend vast amounts of money on things that aren't making our people any healthier; a system that automatically equates more expensive care with better care.
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