FROM THE OFFICE OF PUBLIC AFFAIRS

October 19, 2004
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Secretary Snow's Remarks to Lancaster, PA Health Alliance

Thank you so much for having me here today; it's great to be in Lancaster. I'm delighted to be visiting this outstanding medical facility. It is a reminder of the fact that American health care, with its outstanding level of innovation and technology, is the envy of the world. While we have a long way to go in terms of controlling costs and increasing access, we must not lose the things that are working so well, the things that are saving and improving lives.

It's good to be here with Congressman Joe Pitts, who is doing a terrific job representing the people of this district in Congress. He's been a partner in passing tax relief and I appreciate his work and I know the President does too.

I'm looking forward to our discussion. It's important to talk about health care - it's one of the most pressing issues our country faces today. It's a complex issue, and some of the best answers and ideas come out of forums like this one.

Secretary Thompson and I recently hosted a discussion on healthcare issues at another leading medical center where we stressed the critical role that choice and the underlying doctor/patient relationship must play in our healthcare system.

We both learned a lot as well.  For public officials like Secretary Thompson and myself there is no substitute for getting out of Washington and hearing directly from healthcare providers and recipients.

I'd like to set the stage for our discussion of healthcare, which has such significant economic implications, with an overview of how our economy is doing.

I'm pleased to report that we're doing quite well. Here are a few of the key signs: GDP growth is the strongest in 20 years, 1.9 million new jobs have been created over the past 13 months, and homeownership is at an all-time high. Since August 2003, employment has increased in 47 states and unemployment rates have decreased in 45 states. We're on the right path.

Several of you here today are on the front lines of economic recovery and growth. You are small-business owners, the backbone of our economy. And the President's goal is to make sure that the work you do, on the front-lines of job creation and economic growth, isn't over-burdened by unfair levels of taxation and regulation. We know that, as small-business owners and operators, you simply ask for two things from your government: fairness and freedom.

You seek the freedom to start up a new business venture, to run it and grow it, or to close the door and go fishing if that's what you want to do. And you want to be treated fairly and you deserve nothing less.

In exchange for fairness and freedom, your unspoken promise to your country and our economy is jobs and the fuel our economic engine runs on. This is why we've got to keep tax rates low on business owners like you, and on every American who pays taxes.

Here in Pennsylvania, you have gained 57,600 jobs so far this year - 6,400 in August alone - and that's great news for Pennsylvania families. I'm optimistic that the economy in Pennsylvania will continue to improve, especially if we make the President's tax cuts permanent.

More than 4.6 million taxpayers in Pennsylvania will have lower income tax bills in 2004 under the President's tax relief, and my hope is that Pennsylvanians will be able to plan on lower taxes for years to come. More than 910,000 business taxpayers in Pennsylvania will be able to use their 2004 tax savings to invest in new equipment, hire additional workers and increase pay. My hope is that those business owners will be able to plan on low taxes for years to come as well.

Our economy has come a long way. When he took office, President Bush inherited an economy in steep decline. The stock market bubble had been pierced. We were then shocked by terrorist attacks and wounded by reprehensible behavior by corporate CEOs that hurt employees, investors and investor confidence. All of that took a toll on jobs, but now we are coming back strong.

We are fortunate that our economy is the most open, flexible, adaptive and resilient in the world. Our powerful core elements - small-business owners and entrepreneurs, an outstanding workforce, and the simple fact that we operate as a free market - have enabled us to recover from those very difficult economic times.

Sound monetary policy from the Federal Reserve Board helped our recovery as well. Lower interest rates encouraged investment, which is critical for economic recovery and growth.

Finally, President Bush's tax cuts gave our economy the oxygen it needed to right itself, and continue on a path of growth and job creation. The tax relief allowed individuals and small businesses to keep more of their own money and spend or invest it how they saw fit. This method of economic stimulus is tried-and-true; it worked this time and it worked extremely well.  And thanks to the President's leadership the American economy is now on the right path.

That said, we have many challenges ahead. We know we can do better and we will not rest while there are still Americans seeking work. Our economy is so resilient, yet we have to keep constant watch on what might be weighing it down.

Rising health-care costs are acting as an economic head-wind, and that's one of the reasons I'm so glad we're talking about it here today.

When it comes to politics and government, people often refer to health care as a "social issue." And there is no doubt that few things mean more to a family, on a very personal level. But it is also an economic issue of staggering proportions. I'm concerned with what the cost of health care means to a family's budget… and what it means to the federal government's budget.

One thing is for sure: both family budgets and government budgets are bending under the weight of increasing costs for health care and health insurance.

The real issue here is how to slow the growth if health-care costs. A good place to start is ending baseless, frivolous malpractice lawsuits that are driving doctors and health-care providers out of the profession.

As of 2002, 58 percent of physicians reported that they had been the target of a lawsuit, and their malpractice insurance typically rose between 30 and 75 percent over three years, from 2000 to 2002.

Many doctors I know have thrown in the towel. Retired early. Taken their life-saving abilities out of the medical system, because the risks of staying in are just too high, and because they've had enough.

Does anyone really believe that 58 percent of doctors are negligent? Of course not. Some members of any profession are going to turn out to be bad apples… but when 58 percent of them are being sued… well, that explains why the term "ambulance chaser" is part of our national vocabulary.

For some families and individuals, the terrible result of high, rapidly increasing costs has been: going without health insurance coverage. Forty-five million people are uninsured, and that is of great concern to President Bush.

A closer look at that number reveals that more than half of those without coverage are working for small businesses. I'm sure this comes as a surprise to no one in this room today. And any public official who has ever talked to a small-business owner has likely heard the same urgent plea: "please do something about my health insurance." This is what I hear, time and time again, as I travel the country and meet business owners.

Small business is caught in a very, very tough spot when it comes to purchasing health care coverage. I'm not sure any other issue feels less fair to the operator of a small firm than the inability to pool purchasing power with other small businesses to get a better deal on healthcare purchases just like unions and bigger businesses do.

In much the same way that it is more affordable per item to buy groceries "in bulk," it is more affordable, per employee, to purchase insurance for hundreds or thousands of employees. Purchasing it for four or five employees is the economic equivalent of buying water one bottle at a time instead of installing a cooler holding multiple gallons in your home or office.

Add to that the insurance reality of "risk pools." The more people in the group, the larger the risk pool… and the more affordable the insurance is, per person.

The President appreciates how important this issue is to those of you who own small firms. He knows that employees of a small or medium-sized business are like extended family to you. Many of them are actual family members. So when health insurance rates are rising steeply and becoming harder and harder to afford, a good business owner has many sleepless nights.

Small business needs help here… and they have for some time. We hear you. That's why the President has made the creation of a variety of more affordable insurance options a priority.

The creation of Association Health Plans (AHPs) would go a long way in addressing these cost issues for small businesses and their employees. The President has fought for legislation that would allow for their creation since the day he took office. Congress needs to pass this important part of the President's agenda.  It has passed the House twice and now it is time for the Senate to act. 

AHPs would allow small firms like the ones represented in this room today to band together, across state lines, to form health-insurance purchasing groups. This would bring the benefit of economies of scale, dramatically broaden risk pools, and therefore lower the cost of health insurance for this group of people who struggle so much with the ever-rising cost of premiums. The Congressional Budget Office estimates that small businesses could save 13-25 percent on premiums with AHPs.

AHPs speak to that issue of fairness… it's only fair that the owners and employees of small firms have the same purchasing power as larger companies and unions.

This Administration will continue to fight for AHPs on Capitol Hill. In the mean time, we have enacted another reform that is helping small businesses and individuals today.

The creation of Health Savings Accounts (HSAs) is bringing a revolutionary option to Americans when it comes to purchasing health coverage. HSAs were created as part of the Presidents Medicare reform legislation. They are like super-charged IRAs that put patients back in charge of their health care. You own it, you control it, and you can leave it to your heirs.

One of the top benefits of HSAs is the fact that both employers and employees can save money by using them. And that's good news for the future of health coverage in this country. We need it to be more affordable so we can get more people covered. 

I was delighted to learn that companies who offer HSAs are reporting to the Treasury Department that among those who sign up for the program, 25-40% of the enrollees were previously uninsured.

HSAs are a great start, a terrific new option for the small business community… but more must be done to address the rising cost of health care in this country. Health insurance premiums are acting as a drag on the small employers that mean so much to our economy.

Health care is an economic priority, and small business is an economic priority. He understands that creating an environment in which America's innovators can flourish is the essential ingredient in any recipe for economic growth.

We have plenty of work to do - in Pennsylvania and across America. But if we continue on the path of freedom and making sure individuals and entrepreneurs have an environment in which they can work and grow and afford health care for themselves and their employees, our best economic days will remain ahead of us and I am optimistic about our future.

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