THE WHITE HOUSE Office of the Press Secretary ____________________________________________________________ Embargoed for Release Until Sunday, August 15, 1993 at 9:00 A.M. EDT THE NEED FOR HEALTH CARE REFORM Prepared by the President for use in The Tulsa World on Sunday, August 15, 1993 The economic plan passed last week by the Congress plants us firmly on the path to restoring the American dream. For the first time in many years, we're ready to make a meaningful down payment on the massive federal deficit and start a new direction. As we reduce that deficit by nearly $500 billion over five years, we'll strengthen the foundation for our economic future here at home and our position in an increasingly competitive world economy. We'll help American business -- particularly small business -- by providing incentives to invest in research, development, and the technologies of tomorrow. And we'll create 8 million jobs over the next four years. Our commitment to deficit reduction will continue to keep interest rates down, giving your family the chance to own a home, buy a car, pay off credit cards, or borrow for college. For the first time in a decade, we'll also make a serious effort to invest in our children, to reward work over welfare, and to strengthen our families. But the sum of all these accomplishments -- a new economic direction that offers concrete improvements in the lives of America's broad middle class -- is only a first step. As I said when I outlined my economic plan last February, we cannot truly strengthen our economy, or ensure the well- being of every American family, until we reform our health care system. In the coming months, health care is going to be topic number one in America -- at our dinner tables, in our offices, and in the halls of Congress. As we enter this great national debate, there are two things that every American should keep in mind. First, all of us should share the same goals: guaranteeing that no American will ever lose health coverage and controlling skyrocketing health care costs. While we pursue these goals, we must not allow our efforts to fall victim to partisan bickering. Health care reform is not a Democratic or Republican challenge; it is a challenge for America and we must all face it together. Second, Americans have demanded fundamental reform and we must deliver. To continue down the same path -- to embrace the status quo -- means less security for more people, and health care bills that continue to rise out of control. To settle for incremental change is to doom our children to face these same questions a generation from now. But by then it will be so much worse. Because the costs of doing nothing are severe indeed. Every month that we wait to enact fundamental health care reform, two million more families will lose their health care -- and go to sleep wondering what they will do if a loved one gets sick. Rising costs threaten to bankrupt small businesses and stop them from creating jobs. Big businesses face an increasingly tough fight against our international competitors. Workers give up wage increases just to maintain their health benefits. And our deficit threatens to grow and grow. Today, everything that's wrong with our health care system is threatening what's right with American health care -- high-quality care and the right to choose our doctor. And the simple fact is: we can do better. Last year, as I travelled across our nation, I met people who told me their stories --stories of how our health care system had let them down. I met a young couple in Columbus, Ohio who had three children -- the youngest with cerebral palsy. The family got health insurance through the woman's employer, a non-profit organization with just 20 employees. When the woman's youngest child was born, the company was faced with a choice: fire a young mother or watch their premiums go up an average of $200 a month per employee. I met a divorced woman with seven children who was successfully supporting her family on a $50,000 income. But when her youngest child developed a serious health problem with monumental costs, the only way she could get health coverage was through Medicaid. But that meant quitting her job and going on welfare. A productive American worker with a $50,000 income became a welfare recipient. A woman who wanted to work couldn't because she needed health benefits for her child. These stories are all too common. Working Americans face a growing threat from the uncertainties created by the health insurance system. All of us face increasing risks. If someone in your family gets sick, if you lose or change jobs, your health protection can disappear overnight. Even people who have fought hard for good benefits packages find that they are denied coverage after paying their premiums year after year. Just when they need their insurance most, the insurance company tells them to read the fine print -- and denies them coverage. Today's system is rigged against families and small businesses. Small businesses don't have the clout to get quality health coverage at an affordable price, and rising costs have forced many small and mid-size businesses to cut back or eliminate coverage. Nearly one of every three small employers say they expect that rising costs will soon force them to stop offering health care. Many small business owners find it impossible to afford coverage for their families or employees. These small business owners want to take responsibility for their families and employees, but they cannot. My Secretary of Health and Human Services, Donna Shalala, met a furniture store owner in Titusville, Florida who is so strapped by the rising cost of insuring his workers that he had to stop providing coverage for his own parents, who work in his business. Other Americans want to start small businesses but don't because they're worried about putting their family's health security at risk. Would-be entrepreneurs face an unattractive set of options: start the business and go without health coverage, pay outrageous premiums, or don't start the business at all. We must change the health care system to encourage people to start small businesses -- and create jobs for America. Rising health costs also mean lower wages, higher prices for goods and services, and higher taxes. The average worker today would be earning $1,000 more a year if the cost of health insurance had not risen faster than wages over the previous 15 years. Put another way, as the accompanying chart shows, by the year 2000 the average worker will have to work another three weeks each year just to pay for health care. Skyrocketing health costs create a major burden for American business. Every hour, American businesses spend $26 million on health care. Health care costs add $1100 to the price of every car made in America -- double the cost added to Japanese imports. If our products are to be competitive in the world market, we must control health costs. Since 1980, our nation's health care costs have nearly doubled. Without reform, health care spending could consume as much as one of every four dollars in the Federal budget by the year 2000. But it's not only the federal budget that's going to suffer without reform. By the end of the decade, state and local governments are expected to spend 18% of their budgets on health care --amounting to triple the dollars they spent in 1990. Through all of this, America still has the world's finest health professionals delivering the highest-quality care. But what we like best about our health care is threatened by a system out of control. Insurance company red tape has created a nightmare for doctors and nurses -- with mountains of forms and endless levels of review that waste money and do nothing to improve the quality of care. The average doctor's office spends 80 hours a month pushing paper. And nurses often have to fill out as many as 19 forms to account for one person's hospital stay. The result: according to some estimates, twenty-five cents out of every dollar on a hospital bill goes to administrative costs and does not buy any patient care. The number of administrators is increasing four times as fast as the number of doctors. Time better spent caring for patients is spent negotiating payments and poring over paperwork. In some cases, our health care dollars are simply being thrown away. According to one study, Americans spend about $1 billion a year on unneccessary Caesarean sections alone. Another recent study shows that fraud and abuse eat up ten cents of every health care dollar. But we spend only a few pennies of each dollar on preventive care, the kind of care that saves us money in the long run. It's time for Americans to get good value for every health care dollar we spend. Our out-of-control system is also threatening something that we all value in our health care system: choice. Of those companies with fewer than 500 employees, barely one in three are able to offer any choice of health plan. In order to cut costs, many employers are forcing their employees into managed-care plans -- often splitting employees from their longtime doctors. Individuals and small businesses, meanwhile, find themselves with fewer choices among affordable health insurance policies that provide good benefits and offer real protection. Tomorrow, in a speech before the National Governors' Association, I will outline the rationale for my proposal for fundamental health care reform, and next month, I will spell out my plan. After living for eight months in Washington, I can safely say that not everyone will agree with all of the details of that proposal. But as we debate, let us consider the worst and most likely alternative: the status quo. If we do nothing, what health benefits will you get? Those who have coverage now will get a little bit less than last year. They'll face rising co-payments and deductibles. Premiums will increase but benefits will not improve. Will you be able to get affordable insurance? That depends on whether or not you have the clout to get good prices. Because if you're self-employed or a small business, insurance companies will keep charging you whatever they want--depending on how healthy you are or where you work. Most people will continue to get covered through where they work. Businesses that do offer coverage -- which is the vast majority -- will continue to give those who don't a free ride. The Tylenol that the hospital charges you $20 for today -- to make up for the people who end up in the emergency room without coverage -- may well cost you $25 or $30. And up to a quarter of those on welfare will remain stuck there solely to keep Medicaid benefits. Insurers and government will also pressure doctors and hospitals by second-guessing every decision. They'll have to jump through even more complicated administrative hoops, as today's thousands of forms continue to multiply. Small businesses will continue to pay at rates that are sky-high - - just to cover their administrative overhead and pay for their competitors who don't insure their employees. Rooting out incompetence will be left up to a medical malpractice system that rewards many frivolous claims and ignores thousands of legitimate ones. What will all this cost if we do nothing? As much as $100 billion next year, even more in the future. The bulk of these new costs will fall on businesses and government budgets. Government's share of the system's costs will eat up more than 60 cents of every new dollar of federal revenue over the next five years. And businesses' costs will continue to soar. If we allow the special interests in Washington and those who profit from the status quo to dominate this debate, that's what we'll get. Less security for more families. Costs that continue to skyrocket. And deficits rising without an end in sight. But if we can join together -- Democrats and Republicans -- and embrace fundamental reform, we can take control of our future. Each of us must consider the cost of doing nothing - - and then resolve to act with the courage to change. -30-30-30-