Dwight D. Eisenhower Executive Office Building
THE VICE PRESIDENT: Good morning, folks. How are you? I want to thank you all -- I apologize for being late. I was at a meeting with Senator Baucus and Senator Reid, and Senator Baucus was on his way over here with me for this announcement and he -- there was a vote called in the Senate. So, again, I apologize to our participants here.
I want to thank everyone for joining me here today. And as you know, we have with us today a constellation of people who have been able to put together a great, great proposal with Senator Baucus and the President: Richard Bracken, the president and CEO of the Hospital Corporation of America; Wayne Smith, President and CEO of Community Health Systems; Sister Carol Keenan who -- I told her that I was a good kid in school. (Laughter.) And she is the CEO of Catholic Health Association of the United States. And Richard Umbdenstock -- am I pronouncing it correctly, Richard? Rich, actually -- and president and CEO of the American Hospital Association.
I was going to introduce Max Baucus, but you got to go up to the Hill and see him -- he's voting now. And obviously, our Secretary -- Secretary Sebelius.
Look, I want to warmly welcome the hospital CEOs here with us today. You know, every day you see firsthand the impact the skyrocketing health care costs have had on American families. And today, they've come together to do something about those health care costs.
Folks, reform is coming. It is on track; it is coming. We have tried for decades -- for decades -- to fix a broken system, and we have never, in my entire tenure in public life, been this close. We have never been as close as we are today, and things remain on track.
We have these hospitals working with us, and we have the pharmaceutical industry working with us; we have doctors and nurses and health care providers with us; we have the American public behind us. And everyone sees that we need change. And in my view, we're going to get that change, and we're going to get it this year.
The poet Virgil said, the greatest wealth is health. Well, we're here today to make our health care system healthy again. A strong commitment from these hospitals represented here and others will be a big part of making that happen.
All around the country, the people who have health insurance still are struggling to pay their bills because they are underinsured or they're out-of-pocket expenses are rising so rapidly they have trouble keeping up. And those who don't have insurance because they've lost their jobs or have been denied coverage because someone in their family has a preexisting condition are throwing themselves at the mercy of the people who represent the major hospitals in this -- in the United States of America today. And as a result, our hospitals are cracking under the weight of providing quality health care for Americans who lack insurance.
The hospital industry knows, and the people with me here today know, and the President knows, that the status quo is simply unacceptable. Let me say that again -- the status quo is simply unacceptable. Rising costs are crushing us. They're crushing families, crushing businesses, crushing state budgets -- and they are crushing the health care industry itself.
Hospitals have acknowledged that significant health care savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures. And in the last several weeks, they've been working with Chairman Baucus and are coming forward with a proposal that produces real savings in federal health care spending -- savings that will be applied toward the President's firm goal -- firm goal of enacting health care reform that is deficit-neutral -- health care reform that is deficit-neutral.
As part of this agreement, hospitals are committing to contributing $155 billion -- $155 billion -- in Medicare and Medicaid savings over the 10 years to cover health care cost reform -- over the next 10 years. These reductions will be achieved through a combination of delivery system reforms, additional reductions in hospital -- and additional reductions in the hospital's annual inflationary updates. All of these savings are based on the policies the administration proposed in its budget to fund health care reform.
As our system becomes more efficient -- thanks to innovation, technology and electronic records -- we'll show increases -- we'll slow, I should say, increases in Medicare and Medicaid payments to hospitals. As more people are insured, hospitals will bear less of the financial burden of caring for the uninsured and the underinsured, and we'll reduce payments to cover those costs, in tandem with that reduction.
Today's announcement I believe represents the essential role hospitals play in making reform a reality. And a reality it will be. We must enact this reform this year. We must -- and we will -- enact reform by the end of August. And we can't wait. I know that; the leaders that are up here know that; the President knows that; my colleagues who I just spoke to know that; and the entire Congress knows it. And I look forward to hearing how their hospitals are going to be helping and bringing about this reform. That's why they're here today.
So I thank you again for being here. I thank the press for being here, and our colleagues. And I'd like now to introduce Sister Keenan -- or as we say, "Yester, it's your podium." (Laughter.)