somewhere. as newt gingrich has rallied pointed out, and i don't quote newt gingrich that often -- we do a better job tracking a fedex package in this country than we do tracking patient's records. [applause] >> you shouldn't have to tell every new dr. you see about your medical history but with prescriptions you're taking, you shouldn't have to repeat costly tests. that information should be stored securely in a private medical records so that your information can be tracked from one doctor to another even if you change jobs or move or if you have to see a number of different specialists. that is just common sense. [applause] that one not only mean less paper pushing and lower administrative costs, saving taxpayers billions of dollars, it will also mean all

of you will have an easier time doing your jobs. it will tell you, the doctors, what drugs the patient is taking so you can avoid prescribing a medication that could cause a harmful interaction, it will prevent the wrong dosages from going to a patient, it will reduce medical errors, it is estimated, that lead to 100,000 lives lost on necessarily in our hospitals every year. there shouldn't be any argument. we want to make sure we are helping providers computerize so we can get this system up and running. the second step we can all agree on is to invest more in preventive care so we can avoid illness in the first place. [applause] that starts with each of us taking more responsibility for our health and health of our

children. [applause] it means quitting smoking, it means 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. [applause] it also means cutting down on all the junk food that is fueling an academic of obesity. [applause] button..

>> you can get screened for problems like high cholesterol or high blood pressure, and if you score well, you can pay lower premiums. you get more money in your paycheck. it's a program that has helped safeway cut spending by 13% and workers save over 20% on their premiums. and we're open -- [applause] >> we're 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. 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 for public health. that's starting to change with an investment we're making in prevention and wellness programs that can help us avoid diseases that harm our help and harm the health of our economy. but as important as they are, investments in electronic records and preventive care, all the things that i just mentioned, they 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 spiraling costs is not simply because we've got an aging population. demographics due account for part of rising costs because older, sicker societies pay more on health care than younger and healthier ones. there is nothing intrinsically wrong in us taking better care of ourselves. but what accounts for the bulk of our costs is the nature of our health care delivery system itself. a system where we spend vast amounts of money on things that aren't necessarily making our people and healthier. a system that automatically equate more expensive care with better care. now recent article in the new yorker, for example, showed how mcallen, texas, is spending twice as much as el paso county. twice as much.

not because people in mcallen, texas, is sicker than they are in el paso, not because they are getting better care for getting better outcomes. it simple because they are using more treatments. treatments that in some cases they don't really need. treatments that in some cases can actually do people are by raising the risks of infection or medical error. and the problem is this pattern is repeating itself across america. one dartmouth study shows that you are less likely, you are no less likely to die from a heart attack and other ailments in a higher spending area than in a lower spending area. there are two main reasons for this. the first is a system of incentives were the more tests and services are provided, the more money we pay. and a lot of people in this room know what i'm talking about.

it's a model that rewards the quantity of care rather than the quality of care. that pushes you, the doctor, to see more and more patients, even if you can't spend much time with each. and gives you every incentive to order the extra mri or ekg, even if it's not necessary. it's a model that has taken the pursuit of medicine from a profession, a calling, to a business. that's not why you became doctors. that's not why you put in all those hours in the anatomy suite or the o.r., that's not what brings you back to a patient's bedside to check in or make you call a loved one of the patient to say it will be fine. you didn't end of his profession to be bean counters and paper pushers.

you enter this profession to be healers. and that's what our health care system should let you be. [applause] >> that's what this health care system should let you be. [applause] >> that starts with reforming the way we compensate our providers. doctors and hospitals. we need to bundled payments so you are paid for every single treatment you offer a payment with a prime condition like diabetes, but instead paid well for how you treat the overall disease. we need to create incentives or physicians to team up because we know that when that happens, it

results in a healthier patient. we need to give doctors bonuses for good health outcomes. we're not promoting just more treatments but better care. and we need to rethink the cost of a medical education and do more to report medical students who choose a career as a primary care physician -- [applause] ♪ (singing) instead of the more lucrative tasks. [applause] >> that's why we are making a substantial investment in the national health service corps that will make medical training more affordable for primary care doctors and nurse practitioners so they aren't drowning in debt when they enter the workforce. [applause] >> somebody back there is drowning in debt.

[laughter] >> the second structural reform we need to make is improve the quality of medical information making its way to doctors and patients. we have the best medical schools, the most sophisticated labs, the most advanced training of any nation on the globe. yet we're not doing a very good job harnessing our collective knowledge and experience on behalf of better medicine. less than 1% of our health care spending goes to examining what treatments are most effective. 1%. and even when that information finds its way into journals it can take up to 17 years to find its way to an exam room or operating table. as a result, too many doctors and patients are making decisions without the benefit of the latest research. a recent study, for example, found that only half of all cardiac guidelines are based on scientific evidence.

have. under a tent that means doctors may be doing a bike bus operation when placing a stent is equally effective, or placing a stent went adjusting a patient in drug and medical management is equally as effective. all of which drives up costs without improving a patient's health. so one thing we need to do is figure out what works and encourage rapid implementation of what works into your practices. that's why we are making a major investment in research to identify the best treatment for a variety of ailments and conditions. [applause] >> that the beaker. i just want to clear something up your. identifying what works is not about dictating what kind of care should be provided. it's about -- [applause] >> it's about providing patients and doctors with the information they need to make the best medical decisions.

see, i had the assumption that if you have good information about what makes your patience well, that's what you are going to do. [applause] >> i have confidence in that. [applause] >> we're not going to need to force you to do it, we just need to make sure you have the best information available. still, even when we do know what works, we are often not making the most of it. and that's why we need to build on the examples of outstanding medicine in places like the cincinnati children's hospital where the quality of care for cystic fibrosis patients shot up after the hospital began incorporating suggestions from parents. in places like tallahassee memorial health care were deaths were dramatically reduced when rapid response team that monitored patients conditions and disciplinary ramps with everyone from physicians to pharmacists. and places like geisinger held

system in rural pennsylvania and intermountain help insulate city where high quality care is being provided and it costs well below the national average. these are all islands of excellence, and we need to make the standard in our health care system. so replicating best practices, incentivizing excellent, closing costs disparities, any legislation sent to my desk that does not -- that does not achieve these goals in my mind does not earn the title of reform. but my signature on a bill is not enough. i need your help, doctors. because to most americans you are the health care system. the fact is americans, and i include myself, michelle and our kids in this, we just do what you tell us to do. [laughter] >> that's what we do.

we listen to you. we trust you. that's why i will listen to you and work with you to pursue reform that works for you. [applause] >> together, if we take all these steps, i am convinced we can bring spending down, bring quality up. we can save hundreds of millions of dollars on health care costs are making our health care system work better for patients and for doctors alike. and when we align the interests of patients and doctors, then we're going to to be in a good place. now, i recognize that it will be

hard to make some of these changes if doctors feel like they are constantly looking over their shoulders for fear of lawsuits. i recognize that don't get too excited yet. [applause] >> all right. now, i understand some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. that's a real issue. now, just hold on to your horses. [laughter] >> i want to be honest with you, i am not advocating caps on malpractice. which i believe, i personally believe can be unfair to people who have been wrongfully harmed,

but i do think we need to explore a range of ideas about how to put patient safety first, how to let doctors focus on practicing medicine, how to encourage broader use of evidence -based guidance. i want to work with the ama so we can scaleback the excess of defensive medicine that reinforces our current system and shift to a system where we are providing better care, simply -- rather than simply more treatment. so this is going to be a priority for me. and i know, you know, based on your responses it's a priority for you and i look forward to working with you, and it's going to be difficult. but all this stuff is going to be difficult or all of it is going to be important. now, i know this has been a long speech, but we have more to do. the changes that i have already spoken about, all that is going

to need to go hand-in-hand with other reforms. because our health care system is so complex, and medicine is always evolving, we need a way to continually evaluate how we can eliminate waste, reduce costs and improve quality. that's why i'm open to expanding the role of a creed commission created by a republican congress called the medicare advisory commission, which happens to include a number of positions on the commission. in recent years this commission proposed roughly $200 billion in savings that never made it into law. these recommendations have now been incorporated into our broader reform agenda, but we need to fast-track their proposals, the commission's proposals in the future so that we don't miss another opportunity to save billions of dollars. as we gain more information about what works and what doesn't work in our health care system. and as we seek to contain the cost of health care, we also

have to ensure that every american can get coverage they can afford. [applause] >> we must do so in part because it is all about economic interests. each time an uninsured american steps foot into an emergency room with no way to reimburse the hospital for care, the cost is handed over to every american family as a bill of about $8000. it reflected in higher taxes, higher premiums and higher health care costs. is a hidden tax, a hidden bill that will be cut as we ensure all americans. and as we ensure every young and healthy american it will spread out risk for insurance companies, further reducing costs for everyone. but alongside these economic arguments, there's another, more powerful one. and it is simply this.

we are not a nation that accepts nearly 46 million uninsured men, women and children. we are not a nation -- that lets hard-working families go without coverage or turns its back on those in need. [applause] 's stack are a nation who cares for its citizens. we look out for one another. that's what makes us the united states of america. we need to get this done. [applause] >> so we need to do a few things to provide affordable health insurance to every single american. the first thing we need to do is protect what's working and are healthier system, so just in case you didn't catch it the first time let me repeat. if you like your health care system and your doctor, the only

thing reform will mean to you is your health care will cost less. if anyone says otherwise, they are either trying to mislead you or don't have their facts straight. now, if you don't like your health care coverage or if you don't have any insurance at all, you will have a chance, under what would have proposed, to take part in what we are calling a health insurance exchange. and this exchange will allow you to one stop shop for a health care plan, compare benefits and prices and choose a plan that's best for you and your family. the same way, by the way, that federal employees can do. from a postal worker to a member of congress. [applause] >> you will have your choice of a number of plans that offer a few different packages, but every plan would offer an

affordable, basic package. again, this is for people who aren't happy with their current plan. if you like what you're getting, keep it. nobody is forcing you to shift. but if you're not, this gives you some new options. and i believe one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care markets so that forced -- so that we can force waste out of the system and keep the insurance companies honest. [applause] >> now i know that there is some concern about a public option. even within this organization there is healthy debate about it. in particular, i understand that you are concerned that today's medicare rates, which many of you are to feel are too low, will be applied broadly in a way

that means our cost savings are coming off your backs. and these are legitimate concerns. but they are ones of i believe can be overcome. as i stated earlier, the reforms we propose to reimbursement are to report best practices, focus on patient care, not on the current piecework reimbursements. what we seek is more stability and a health care system that is on a sounder financial foot. and the fact is that these reforms need to take place regardless of whether there's a public option or not. with reform, we will ensure that you are being reimbursed in a thoughtful way that's tied to patient outcomes instead of relying on yearly negotiations about the sustainable growth rate formula that's based on

politics, and the immediate state of the federal budget in any given year. [applause] >> and i just want to point out, the alternative to such reform is a world where health care costs grow at an unsustainable rate. and if you don't think that's going to threaten your reimbursements and the stability of our health care system, you haven't been paying attention. so the public option is not your enemy. is your friend, i believe. let me also say that -- let me also address an illegitimate concern that's been put forward by those who are claiming that a public option is somehow a trojan horse for a single-payer system. i will be honest. there are countries where a

single-payer system works pretty well. but i believe, and i've taken some flak from members of my own party for this belief, that it's important for our reform efforts to build on our traditions here in the united states. so when you hear the naysayers claim that i'm trying to bring about government run health care, notice, they are not telling the truth. what i am trying to do -- [applause] >> what i am trying to do and what a public option will help you is put affordable health care within reach for millions of americans. and to help ensure that that everyone can afford the cost of a healthier option in our exchange, we need to provide assistance to families who need it. that way there will be no reason at all for anyone to remain uninsured. [applause]

>> indeed, it's because i'm confident in our ability to give people the ability to get insurance and affordable rate that i'm open to a system where every american bears responsibility for owning health insurance. so long as we provide -- so long as we provide a hardship waiver for those who still can't afford it as we move toward this system. the same is true for employers. while i believe every business has a responsibility to provide health insurance for its workers, small businesses that can't afford it should receive an exception. and small-business workers and their families will not be able to see coverage in the exchange if their employer is not able to provide it. now here's some good news. insurance companies have expressed support for the idea of covering the uninsured. and they certainly are in favor

of a mandate. i welcome their willingness to gauge constructively in the reform debate. i'm glad they are at the table. but what i refuse to do is simply create a system where insurance companies suddenly have a whole bunch of more customers on uncle sam's dime, but still fail to meet their responsibilities. [applause] >> we're not going to do that. let me give you an example of what i'm talking about. we need to end the practice of denying coverage on the basis of pre-existing conditions. [applause] >> the days of cherry picking him to cover and who to deny, those days are over.

[applause] >> i know you see it in your practices, and how an incredibly painful and frustrating it is. you want to get somebody can you find out the insurance companies are wiggling out of paying. this is personal for me also. i told the story before. i will never forget watching my own mother as she fought cancer in her final days spending time worrying about whether her injured would claim her illness was a pre-existing coverage to get out of providing coverage. changing the current approach to pre-existing conditions is the least we can do for my mother and for every other mother, father, son and daughter who has suffered under this practice, who have been paying premiums and don't get care. we need to put health care within the reach for millions of americans. [applause]

>> even if we accept all of the economic and moral reasons for providing affordable coverage to all americans, there is no denying that expanding coverage will come at a cost. at least in the short run. but it is a cost that will not, i repeat, will not add to our deficits. i've set down a rule or my staff, for my team, and i've said this to congress. health care reform must be and will be deficit neutral in the next decade. now there are already voices saying the numbers don't add up. they are wrong. here's why. making health care affordable for all americans will cost

somewhere on the order of $1 trillion over the next 10 years. that's real money. even in washington. [laughter] >> but remember, that's less than we are projecting to have spent on the war in iraq, and also remember failing to reform our health care system in a way that genuinely reduces cost growth will cost us trillions of dollars more in lost economic growth and lower wages. that said, let me explain how we will cover the price tag. first, as part of the budget that was passed a few months ago, we put aside $635 billion over 10 years in what we are calling a health reserve fund. over half of that amount, more