Thank you, Dr. Lazarus, for that kind introduction. And thank you for your leadership. I think it's especially valuable to have a psychiatrist leading the AMA at this moment in our nation's history. The tragedy in Newtown broke our hearts. But it has also given us an important opportunity to address gun safety and mental health issues that often go undiscussed in this country.
In the coming weeks, Education Secretary Arne Duncan and I will be launching a national dialogue aimed at ending the silence around mental health that keeps so many people from getting the help they need. I know the AMA has already sent a letter to the President and Congress offering their expertise as our nation grapples with these issues. And Dr. Lazarus, I hope you and the AMA will continue to help lead this conversation.
This is one of the topics we'll hear about tonight when the President speaks about the state of our union. But this morning I'll focus my remarks on the health care system. And today, I can report that the state of American health care is getting stronger -- thanks in large part to America's doctors.
Consider some of the changes we've seen in the past few years. Around the country, physicians are adopting new models of care in greater numbers than ever before. Two hundred and fifty health organizations -- many of them physician-led -- have agreed to form Accountable Care Organizations, and are now serving more than four million Medicare beneficiaries. And last month, more than 500 hospitals and other health organizations agree to participate in an initiative that will test whether receiving a single bundled payment for an episode of care can improve coordination between health providers.
Similar care models are spreading rapidly in states and the private market. These transformational models are no longer isolated pilots. They are becoming the face of American medicine.
Aiding this transformation is the accelerating adoption of new tools for sharing health information. Since 2008, the number of office-based doctors using a basic electronic health record has doubled, spurred in part by billions of dollars in incentive payments and technical assistance from our department -- a development which has huge promise to reduce medical errors, facilitate better care, and lower costs.
Most important of all, these changes are already translating into significant improvements in Americans' health. Central line bloodstream infections are down more than 40 percent since 2008. Hospital readmissions in Medicare have fallen dramatically in the past year, resulting in an estimated 70,000 fewer patients returning to the hospital with dangerous and costly complications. And as part of a new Affordable Care Act initiative, clinicians at some hospitals have reduced their early elective deliveries to close to zero, meaning fewer at-risk newborns and fewer admissions to the NICU.
Meanwhile, we've now achieved three consecutive years of historically low growth in health care costs. And there is growing evidence that this slowdown is not just a result of the ongoing economic recovery, but a reflection of the fundamental transformation in care delivery happening across the country.
America's doctors should be enormously proud of these achievements. It's true that the Affordable Care Act and other legislation have helped speed up this transformation. But it's been doctors and their teams who have done the hard work of improving care, episode by episode, patient by patient, organization by organization across the country.
Because of these efforts, a daughter who might have passed away from a hospital acquired infection is in school today. A grandfather who could have been stuck in a hospital bed is eating breakfast at home. A newborn is playing in her crib instead of lying in a neonatal ICU. That's what you've helped accomplish.
Now, I understand that these changes have not been easy. Most of you do not exactly have a lot of free time. And even improvements that can save time in the long run like upgrading to digital health records can be labor-intensive at first.
I also recognize that we still have a lot to learn about these new models. The American health care system has evolved over decades in ways that perpetuate fragmented care for acute illness rather than coordinated care across settings. As we transition into a new era of integrated, patient-centered care, it's inevitable that there will be some growing pains.
But moving forward is the only option. The health needs of the American people are changing. Patients today are more likely to have chronic illnesses that require careful management. They're more likely to have multiple conditions that require coordination between physicians and other health professionals. They often want more control over decisions about their care. To be successful, our health care system must evolve to fulfill these needs.
And we must also put health care spending on a sustainable trajectory. If health care costs continue to rise unchecked, we will eventually reach the point where drastic cuts are needed that will harm both patients and doctors. Especially as fiscal issues move to the center of the national debate, it's essential to demonstrate that there are better ways to control health care costs than cuts to provider rates or shifting costs to beneficiaries or private payers.
The choice today is not whether our health care system will evolve, but when and how. It's whether to change now when we can take a thoughtful approach and learn from our mistakes. Or whether to wait until it's too late and a far blunter approach is needed.
I believe the first path is best. That's why I'm grateful to the AMA for leading the way on care improvement. And it's also why I'm challenging each of you today to ask what more you can do to help us accelerate the transformation of health care in this country.
If your organization is already participating in a new care model, let us know how we can support your efforts. And help educate us about what's working and what isn't so we can build those insights into our policies.
If you've been waiting to get involved in a new model, now is the time to take the leap. We know there's no one-size-fits-all approach to modernizing health care and we are committed to creating opportunities for health organizations of all shapes and sizes.
Everyone can do something, whether it's pushing forward on patient safety or investing in electronic health records that will help you better coordinate treatment.
What I'm asking, ultimately, is for you to be leaders. Whether you work for a big hospital, for a non-profit, or for yourself, I'm challenging you to take responsibility for thinking about how your health organization can deliver better care.
In return, my pledge to you this morning is that this Administration will continue to listen and respond to your concerns.
For example, when physicians called for new medical malpractice models that could improve patient safety and bring down liability premiums, President Obama became the first chief executive in history to provide funding for this effort. And we have some very promising results from these models, some of which were developed and implemented by physicians.
Another example is ACOs. When we released the proposed ACO rules, we received a lot of feedback from the physician community. Much of it was positive. But you also were also loud and clear on a few areas where you thought the rules came up short.
You told us we needed to reduce the reporting burden. So we did, cutting the total number of quality measures by about half. You told us there should be an option for smaller organizations that needed help with startup costs. We agreed, creating the Advance Payment ACO model. You told us we needed to create pathways for providers who wanted to take on less risk, and we answered that call.
The results speak for themselves. Not only do we now have hundreds of ACOs around the country. But they reflect the full diversity of America's health care system, from major academic medical centers to rural health clinics to physician-led organizations.
Our department has also responded to your concerns about how to balance the need for measurement and accountability with the administrative burden on doctors. That's why we've said that doctors will now be able to report one set of results for PQRS, Meaningful Use, and the physician value-modifier, instead of three. And it's why we continue to proactively look for opportunities to slash red tape, including a set of reforms last week that it's estimated will save health care providers, especially in rural areas, nearly $700 million a year.
Finally, we remain committed to a SGR fix that will take America's doctors out of a permanent state of limbo. As you know, the recent fiscal cliff deal signed by the President extends the SGR through the end of the year. But as he and I have both said repeatedly, temporary extensions are not good enough. We need to bring an end to constant uncertainty for doctors and patients.
Ultimately, only Congress can pass a permanent SGR fix. But this Administration is committed to doing what we can to make that happen. That's why every year the President has been in office, his budget has included an SGR fix. And it's why we will continue to work with you and Congress during this critical year for budget conversations to get an SGR fix done.
We also continue to believe that Congress can and should take action to avoid the sequestration cuts that are scheduled to take effect on March 1st. It's important to note that Medicaid and CHIP will not be affected by the sequester cuts. But many other essential programs will, including a two percent cut in payments to Medicare providers. That's why the President has called on Congress to prevent these indiscriminate cuts that would harm families, doctors and our economy.
But it's important to realize that preventing these devastating cuts is only a first step. Unless we come up with a credible plan for reducing health care spending going forward, we will ultimately end up in the same place with some other equally blunt approach to cutting costs.
That's why more efforts to accelerate the transformation of care are needed. I know that AMA has put forward a plan to do just that. And it's also been encouraging to see efforts like the recommendations for reducing unnecessary care advanced by specialty societies in Choosing Wisely. But physicians need to play an even bigger leadership role than they do today.
And that also goes for the second part of the law, which is expanding access to affordable health coverage so more people can access care.
This is a goal that the AMA and America's doctors have supported for decades because you understand the consequences of going without health insurance better than anyone.
You see it in the patient who doesn't fill the prescription you wrote because they can't afford it. You see it in the woman who shows up in the emergency room with complications from a cancer that could have been caught early. You see it in the families saddled with medical bills that they will spend their entire lives paying off. You see it in the burden many of you take on to provide care to the uninsured.
The uninsured have never been invisible to America's doctors. That's why you helped fight for the law that will finally bring the America into the ranks of nations that make affordable coverage available to all their citizens.
Because of your efforts, beginning October 1st of this year, millions of uninsured Americans across the country will finally qualify for a health plan that fits their budget, either through a new state Marketplace or an expanded state Medicaid program.
About half of states have already said they'll expand Medicaid. Many others are still deliberating. You can help make sure those debates are informed by the facts about what expanded coverage means for people's health, for local economies, and for the bottom line of health care providers. No one has more credibility when speaking about what's best for patients, so make sure your voices are heard.
You can also help educate people about the new insurance options that are coming. As you know from personal experience, dealing with health insurance is not exactly people's favorite thing to do. For many Americans, health insurance is confusing, frustrating, and something they want to avoid thinking about until they have to.
So today, I'm asking all of you to be messengers to help educate your patients, family members, friends, and neighbors about the new coverage options that will be available beginning this October. A great place to start is the website healthcare.gov, which has clear information about the law, about who's eligible for coverage, and how they can get it starting October 1st.
As I mentioned earlier, I also hope you will continue to lend your voices to the important debate about how we can come together as a country to prevent tragedies like the one in Newtown. We know there's no single solution to the problem of gun violence. But we can all agree that physicians should be able to talk to their patients about guns and safety. And we can also all agree that we should be able to talk as a society about mental illness. As I said earlier, we will soon be launching a national dialogue about how communities can promote better emotional health and create an environment where young people and their families feel comfortable asking for help. And I'm counting on America's doctors to help lead these community conversations.
The care you provide for your patients will always be your first job. But today, there are many other important ways for doctors to make a difference in people's lives, starting with contributing to the transformation of our health care system.
We've made great progress in the last few years. Now, let's work together to build on that progress and create the health care system that patients, doctors, and this country deserve.