President Bush Explains His Vision for Health Care Reform

by Administrator
December 18, 2007

The following are excerpts from President Bush’s Speech yesterday in Fredericksburg, Virginia where he spoke at length about health care and the need for further reform. Significantly, President Bush talks about the lack of large-scale consumerism in health care today, and why it is needed to help self-correct the health care market place:

“Part of the problem in health care is that there is no consumerism — I shouldn’t say “no consumerism,” obviously there is some consumerism. But when a third party pays your bill, you tend not to worry about price. If somebody else pays your bill, you’re not really an active consumer. And therefore the question is — part of the issue with price is, how do you encourage consumerism? And here’s one way: Change the tax code. The tax code now says if you work for corporate America — big company — you get a tax benefit. But if you’re a small business owner or you’re out on your own, you have to buy health care with after-tax dollars.

And therefore, there’s a disincentive for people to be purchasing health care on the individual market and, therefore, the individual market hasn’t grown.”

Keen observers of the individual health insurance market will tell you that it is rapidly being completely populated by individuals with a Health Savings Account and a HSA qualified health plan. This is because part of the funds, the part that are used to meet the insurance plan’s deductible, are tax-free for individuals with an HSA. The second reason that HSAs are gobbling up the individual market is that of all the health plans on the market, HSA qualified health plans are the most affordable. These are some of the reasons in the same speech, President Bush declared that “products like health savings accounts [need to be] expanded.”

Besides consumerism and Health Savings Accounts, President Bush talks about the need — in order to get to consumer based health care — for price transparency. How are you supposed to buy something that you do not know how much it costs, and when you ask, the person you ask does not know? It is pretty difficult. So President Bush has done a couple of things to fix that, the first being an Executive Order he signed on price transparency.

The President explains:

“Step two is for there to be transparency in pricing and quality, and the federal government can help. We’re a huge health care consumer. And one of the things that Secretary Leavitt is doing is saying that if you’re interfacing with the federal government, then you got to post your price. I don’t know how many of you ever go to your doctor and say, what are you charging, you know, compared to your neighbor. I suspect you do that when it comes an automobile, but you don’t when it comes to purchasing health care. I never have, frankly. I don’t remember asking my buddies in Midland, who are my doctors, how much are you charging relative to the person down the street.

So the government can help with pricing transparency. So we’re now getting people to providers to not only post a price, but also we’re developing a qualitative index, so that people are able to compare price and quality. Now, this is a novel concept, I readily concede. But if you’re interested in more consumerism, then there has to be transparency in the health care industry.”

The President has been clear and consistent in his call for more openness in the health care market place, including if you want to make your health care portable, and have it move with you from job to job, which is essential in todays employment market. As the President said yesterday:

“one of the issues facing America, particularly if you’re a youngster, is can you take your health care plans with you. It turns out most young Americans have changed jobs, like, seven or eight times by the time they’re 35 years old. And the inability to carry a good health care plan with you — a plan that you own, a plan which the dollars inside your plan are earning tax-free — creates frustrations for people. This economy is changing. And therefore the health care industry needs to change with it and provide flexibility for our workers.”

And part of the freedom to move your health plan with you when you change jobs is to be able to change health plans when you need to, and to be able to buy health plans across state lines, just like any other good or service.

Here is what the President wants Congress to do:

“Small businesses ought to be allowed to pool risk across jurisdictional boundaries. Well, that means if you’re a restaurant owner here, you ought to be able to pool your employees with a restaurant owner in Texas, so that you can go into the market and buy insurance at the same discounts that larger companies get.”

President Bush has a comprehensive health care plan, which will give Americans access to lower cost health care, and perhaps now that things are going better in Iraq, and his approval rating is going back up, Congress will take action on health care before the next election.

Michigan Hospitals Launch Price Transparency Web Site

The Associated Press reports that the Michigan Health and Hospital Association has launched a website that allows patients to compare prices for common procedures at 146 non-profit hospitals. In fact, this database comes directly from the U.S. Health and Human Services web site, which was created after President Bush signed the above cited Executive Order.

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