THE PRESIDENT: Thank you so much. Good to see you. (Applause.) Thank you so much. Please, everybody be seated. Thank you very much. You're very kind. (Applause.)
Let me begin by thanking Nancy for the wonderful introduction. I want to thank Dr. Joseph Heyman, the chair of the Board of Trustees, as well as Dr. Jeremy Lazarus, speaker of House of Delegates. Thanks to all of you for bringing me home, even if it's just for a day. (Applause.)
From the moment I took office as President, the central challenge we've confronted as a nation has been the need to lift ourselves out of the worst recession since World War II. In recent months, we've 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're here to create new jobs, to unfreeze our credit markets. We're stemming the loss of homes and the decline of home values.
All this is important. But even as we've made progress, we know that the road to prosperity remains long and it remains difficult. And we also know that one essential step on our journey is to control the spiraling cost of health care in America. And in order to do that, we're going to need the help of the AMA. (Applause.)
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, as I think many of you are aware, for all of 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 substantially 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's an escalating burden on our families and businesses. It's a ticking time bomb for the federal budget. And it is unsustainable for the United States of America.
It's unsustainable for Americans like Laura Klitzka, a young mother that I met in Wisconsin just last week, who's learned that the breast cancer she thought she'd beaten had spread to her bones, but who's now being forced to spend time worrying about how to cover the $50,000 in medical debts she's already accumulated, worried about future debts that she's going to accumulate, when all she wants to do is spend time with her two children and focus on getting well. These are not the worries that a woman like Laura should have to face in a nation as wealthy as ours. (Applause.)
Stories like Laura's are being told by women and men all across this country -- by families who've 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 the prescriptions they need -- that you know 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, 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. (Applause.)
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 they've 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 '90s.
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. (Applause.) So reform is not a luxury; it is a necessity. When I hear people say, well, why are you taking this on right now, you've got all these other problems, I keep on reminding people I'd love to be able to defer these issues, but we can't. I know there's 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 -- (applause) -- if we fail to act -- and you know this because you see it in your own individual practices -- if we fail to act, premiums will climb higher, benefits will erode further, the rolls of the uninsured will swell to include millions more Americans -- all of which will affect your practice.
If we fail to act, one out of every five dollars we earn will be spent on health care within a decade. And in 30 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. It will, in fact, 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, or overwhelming deficits, or drastic cuts in our federal and state budgets.
So to say it as plainly as I can, health care is the single most important thing we can do for America's long-term fiscal health. That is a fact. That's a fact. (Applause.)
It's a fact, and the truth is most people know that it's 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, and perhaps some members who are gathered here today of the AMA, that as bad as our current system may be -- and it's pretty bad -- the devil we know is better than the devil we don't. There's 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'm here to tell you I understand that fear. And I understand the cynicism. They're scars left over from past efforts at reform. After all, 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 -- doctors, insurance companies, businesses, workers, and others -- simply couldn't agree on the need for reform or what shape it would take. And if we're honest, 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, yes, socialize medicine.
And despite this long history of failure, I'm standing here because I think we're 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 -- (applause) -- this organization long championed; it went nowhere when it was proposed a decade ago -- I'm going to sign this into law. (Applause.)
Now, 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're coming out -- they're coming together out of a recognition that while reform will take everyone in our health care community to do their part -- everybody is going to have to pitch in -- ultimately, everybody will benefit.
And I want to commend the AMA, in particular, for offering to do your part to curb costs and achieve reform. Just a week ago, you joined together with hospitals, labor unions, insurers, medical device manufacturers and drug companies to do something that would have been unthinkable just a few years ago -- you promised to work together to cut national health care spending by $2 trillion over the next decade, relative to what it would have otherwise been. And that will bring down costs; that will bring down premiums. That's exactly the kind of cooperation we need, and we appreciate that very much. Thank you. (Applause.)
Now, the question is how do we finish the job? How do we permanently bring down costs and make quality, affordable health care available to every single 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 a 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; who will give warnings about socialized medicine and government takeovers, long lines and rationed care, decisions made by bureaucrats and not doctors. We have heard this all before. And because these fear tactics have worked, things have kept getting worse.