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Public Statements

Statements on Introduced Bills and Joint Resolutions

Location: Washington, DC



Mr. OBAMA. Mr. President, the American people are facing two, major health care crises--lack of health insurance and the soaring costs of medical care. Nearly 46 million Americans are uninsured, and the number one reason is because they can't afford it. Even those with health insurance are struggling to pay their medical bills. Family incomes can't keep up with rising health costs--health premiums alone have increased 73 percent over the past 5 years, while wages have only risen 15 percent. Unfortunately, we can't fix either of these crises without addressing the other. As health care costs rise, more employers will drop coverage for their employees. As the number of uninsured rise, the cost of their care is subsidized by those individuals that have insurance. It's a vicious cycle, and the longer we wait to act, the more difficult it will be to successfully intervene.

There are many drivers of health care costs, but perhaps the easiest one to tackle is the wasteful, administrative costs associated with health care. Health care is one of the least efficient industries in America. Processing a single transaction in health care can cost as much as $25, whereas banks and brokerages spend less than a penny per transaction. Indeed, administrative costs account for 31 percent of total health care spending, or roughly $465 billion each and every year.

Today, I am introducing a bill that would help to reduce health care administrative costs in the Nation's largest employer-sponsored health insurance program, the Federal Employees Health Benefit Program. FEHBP serves over 8 million Federal Government employees, retirees, and their families, who can choose from over 200 health plan options. The FEHBP Efficiency Act of 2006 would require all health plans participating in FEHBP to develop systems for hospitals and doctors to submit their bills electronically within 4 years.

Ken Thorpe, a health economist at Emory University, has reported that if all FEHBP participating health plans switched to electronic systems for submission of bills, the program could save up to 2 percent of the $31 billion in total premiums, or over $600 million every year. That is a tremendous amount of savings--money that could be used to expand FEHBP benefits, increase the number of eligible employees, or lower premiums for FEHBP beneficiaries. Using its tremendous purchasing power, the Federal Government could help spur the health care industry to move to a completely paperless system for processing transactions in all government health programs as well as the private sector.

I urge my colleagues to join me in this effort to increase efficiency and reduce costs. Every American should have access to affordable health care, and this bill is one step towards making that a reality.

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