Remarks as Prepared at the National Council on Aging & American Society on Aging Joint Conference

Good morning. Thanks for that enthusiastic introduction, Josefina. When you invited me to speak at this conference, I was excited to have the opportunity to speak with seniors, since so much of what we do at the Department of Health and Human Services affects them. But — I don’t see any old people here!

It really is great to be here, and to engage people committed to improving the health of seniors all across America. Because as my mother used to tell me when I was little, “If you don’t have your health, you don’t have anything.”

We all do what our mothers tell us, don’t we? Heeding my mother’s words, I recently visited my doctor for one of my regular check-ups. He told me that I’m in pretty good shape for a man of 60. Unfortunately, I’m only 40.

I do have some exciting — albeit too humorous to be true — news, though. While I was getting my breakfast this morning, I overheard some scientists from the National Institutes of Health and the Food and Drug Administration talking excitedly over coffee. The NIH scientist bragged that he had just discovered a drug that would confer immortality. But the FDA scientist shook his head and said that finding out if it actually works would take forever.

Seriously, though, President Bush and Secretary Leavitt have been doing a great deal over the past seven years to improve health and long-term care for seniors and everyone in America.

• We implemented Medicare Part D on a foundation of consumer empowerment and free market competition, and now 39.5 million seniors have some form of prescription drug coverage as well as preventive benefits and screenings.
• We created tax-free Health Savings Accounts, giving families more control over their health care spending independent of where they work or what job they hold.
• We also funded more than 1,200 new or expanded community health centers, bringing more health care options to 16 million people.
• For the first time, we funded embryonic stem cell scientific research without encouraging the further destruction of embryos. And now scientists have discovered how to reprogram adult skin cells to act like embryonic ones, opening up a world of medical opportunity without using taxpayer funds to offend human dignity. 
• We have partnered with the organization Aging With Dignity on the Five Wishes information program. Five Wishes is a living will program that helps people answer five question to make dignified end of life decisions while they’re still healthy. They recently expanded their campaign to reach get 100,000 organizations to support and distribute out the Five Wishes brochures and info.
• And we achieved the President’s campaign promise of enhancing community living for seniors and people with disabilities under the New Freedom Initiative by making serious investments in the transformation of long-term care. For example, we reformed Medicaid and established the Real Choice Systems Change CMS grants to help states implement changes in their systems of care and make their systems more consumer-directed and supportive of community living.
• We reauthorized and modernized the Older Americans Act to provide new and effective tools to help consumers:
• • Make informed decisions about their health and long term care options,
  • Reduce their risk of disease, disability and injury, and
  • Control their own care.

President Bush and Secretary Leavitt know of the importance of these issues because none of us are getting any younger, despite the best efforts from those NIH and FDA scientists. And increasingly, our economy cannot bear the burden of the resulting rising costs of health care due that are due in part to the growing number of aging baby boomers.

As many of you probably know, more than 6000 people in the United States celebrate their 65^th birthday each day — and that number will more than double in only 20 years. We’re getting close to the point when Americans over 65 outnumber those under 5 years of age.

Under Josefina’s guidance, HHS’s Administration on Aging has been working with community providers of long-term care to help seniors and their families navigate our complex health and long-term care systems. Her work to reform the aging network’s programs, services, and infrastructure embodies the Secretary’s principle of developing implementing national standards with neighborhood solutions.

If we’re going to ensure the long-term viability of how our health care system treats seniors, we’re going to have to make some serious changes:

• One, we’re going to need to reduce the costs of long-term care.
• And two, we’re going to need to improve the cost and quality — the value — of our care.

Long-Term Care Reform

I’d like to talk a little about both of these. I’ll start by talking about some of what we’re doing to improve long-term care.

For far too long, too many Americans find themselves with only one option when they need long-term care — to move into a nursing home. But moving into a nursing home means losing their roots in the community. They have to spend all their savings until they’re totally dependant on Medicaid.

Nursing homes aren’t right for many of these people, and they’re not right as a one-size-fits-all solution for the nation. When it comes to the right kind of long-term care, as Dorothy in the Wizard of Oz said, there’s no place like home.

Yet right now, of the $207 billion a year that Americans spend on long-term care, most goes to nursing home care.

And despite the gains we’re making in rebalancing long-term care, 30 states still spend 80 percent or more of their Medicaid long-term care budgets on nursing home care. Thirteen of these states actually spend almost all their funds on nursing home care.

Our current long-term care system is fragmented and confusing. When older people or their family members seek information or services, they often face a complex maze of publicly supported and private options administered by a wide variety of agencies and providers operating under different, sometimes conflicting, rules and regulations. The services people do receive are sometimes not responsive to their needs and preferences. Too often seniors and their caregivers are not an integral part of the system.

President Bush and Secretary Leavitt are committed to making long-term care more responsive and person-centric. Our starting principle is to get government out of the way of the markets — so that consumers can get what they want. So we have developed a strategy to advance meaningful and important changes in health and long-term care, while reducing fiscal pressures on taxpayers.

This strategy puts consumers in the driver’s seat by focusing on three interrelated goals:

• Making it easier for individuals, their families, and others to learn about and access existing services and supports through Aging and Disability Resource Centers.
• Empowering older individuals to make behavioral changes that can reduce their risk of disease, disability and injury.
• And giving people greater control of their own care.

To improve patient outcomes and taxpayer costs, we reformed the aging network’s payment systems from past practices directed toward specific programs — or silos — to the current practice of paying for what individual people need for themselves. This includes the ability for providers to assist people at highest risk with affordable consumer-oriented options.

Secretary Leavitt also challenged the Administration on Aging to develop new standards and find ways to collaborate with other HHS agencies and other levels of government. Josefina has fostered effective partnerships with other HHS components — with the Centers for Medicare and Medicaid, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, and others — to take the best health science in research and practice available and apply it to the network of aging community providers.

While these human services providers are not generally thought of as health care providers, they are indeed in the business of providing health care. The outcomes they produce — health and behavioral changes — impact those at highest risk and in greatest need. By effectively managing chronic conditions, we reduce the risks of disease, disability, and injury.

Secretary Leavitt has also challenged us to promote markets before mandates.  So the Administration on Aging has created more flexible service options and choices for people to remain at home that are consistent with their needs and preferences.

These options will empower consumers with information, personalized assistance, and streamlined access, making them better able to make informed decisions to meet their unique needs and preferences. Our goal is to help older people and those with disabilities make these decisions instead of government, and to help them remain living in their own homes and communities.

In turn, consumers will be empowered by information, personalized assistance, and streamlined access to become better able to make informed decisions to meet their unique needs and preferences — and remain in their own homes and communities.

AoA is also working to make it easier for individuals to take advantage of low-cost, evidence-based prevention programs that can improve their health and quality of life, regardless of how old they are. Our evidence-based prevention programs involve simple tools and techniques that can help people better manage their chronic conditions, take better care of their physical and mental health, and reduce their risk of falling.

And to help people who still remain at high risk for ending up in nursing homes, AoA is helping them stay at home longer through its Nursing Home Diversion program by providing States incentives to give individuals more flexible options, including consumer-directed options, that allow them to remain at home.

But of course, the problem of long-term care reform isn’t one that the government should — or even could — solve by itself. We need your support, engagement, and innovation to develop the appropriate goods and services that respond to the ever-growing aging consumer market.

Everyone here has a role to play. Maybe you’re good at reaching people in their communities. Maybe you’re thinking of investing in an innovative new service. Maybe you have the business savvy to develop new products. Maybe you have the technical know-how to implement changes in people’s physical environments.

Think about what you can bring to the table, and then share your best practices at conferences like this one. By working together, we can create communities across the country in which we could all be so lucky to retire.

Value-Driven Health Care

Now, I’d like to turn to the second area of what we need to do to improve how our health care system treats seniors — value-driven health care. It’s a problem that affects everyone, young and old. It’s about how health care isn’t set up in such a way that we get the best value for our dollars.

Back when I was born, health care accounted for a little over 5 percent of our economy. And now, within the next 10 years, we will see health care eclipse 20 percent of the entire economy. No economy can begin to focus that much of its resources in one sector and remain viable and economically competitive.

Health care costs are climbing everywhere because we don’t really have a health care system. We have systems for cell phones, air travel, and bank cards that communicate effectively across systems, but we don’t have an actual system for health care. We have a large and growing health sector, but not a system. Consequently, consumers can’t compare the quality and cost of the care they receive. We don’t know what we’re getting or what we’re paying for it, so naturally we consume too much and costs go up.

So what do we do about it? The good news is — we are starting to create a system that underscores the importance and significance of this effort. Not only are we seeking greater value, but we’re committed to reducing medical errors, improving quality, and enhancing the ability of physicians to spend more time with patients than with medical records.

To build the necessary foundation for a system based on value, we’re working to get more doctors to use interoperable electronic health records. The importance of electronic health records underscores why they’re so necessary if we’re going to seek value: 

• It doesn’t matter which hospital or clinic you’re receiving treatment, because you and your doctor will always have access to your record.
• Your electronic health record can let doctors and pharmacists who may not know you about your allergies and medication history.
• Your doctor won’t have to read through pages and pages of handwritten notes to find the little details that can make a big difference in treatment.
• If your doctor prescribes a drug that interacts with something else you’re taking, it will let him know.

Electronic health records make things a lot easier and more convenient for both doctors and patients. They also make health care safer. There’s less chance of error using electronic health records, and patients have more control over their treatment.

There’s an added bonus: electronic health records allow researchers to track treatment outcomes. This is important for two reasons:

• The first is so that they can gauge the quality of care.
• The second is so they can learn from clinical practice what works best.

That’s the potential. The problem is that too few physicians use electronic health records. To correct that, the Centers for Medicare and Medicaid Services is launching a large new demonstration project to encourage the use of electronic health records.

Of course, this project isn’t the only way we’re connecting people to better health care.

• We’re also testing e-prescribing for Medicare beneficiaries; and
• We’re working with the Federal Communications Commission on developing high-speed fiber-optic networks to link rural hospitals electronically. This will bring better care to many underserved communities — saving people time, money, and trouble.

Now let me tell you about another major new initiative to help create a health care system.

For several years now, communities have been getting together to try to manage health care costs. They’ve been trying to define standards of quality that will enable consumers to compare treatment here with treatment there. The problem is that they been using different standards. As a doctor once told me, “The great thing about standards in medicine is that there’s so many to choose from.”

At HHS, we have been working with stakeholders in all corners trying to come up with national standards. We’ve made great progress. At the same time, there needs to be local control. The reason for that is trust. Everyone in the system needs to know that they’re being treated fairly.

In every major community there will need to be a nonprofit organization that is devoted to evaluating quality, that is governed locally, and that brings everyone to the table — physicians, hospitals, insurance companies, employers, consumers, everybody. It’s just like the aging services network infrastructure where there are locally-governed area agencies on aging that bring everyone to the table.

So we developed the concept of Chartered Value Exchanges.

• Nonprofit
• Locally governed
• Everyone there at the table
• National standards
• Network of networks

In the past year and half, we’ve recognized over 90 local or regional nonprofits as “Community Leaders.”

Now we are recognizing the first few of these Community Leaders as Chartered Value Exchanges. These CVEs will measure and publish information on the quality and cost of care, so that consumers can make better decisions about providers and treatment options. They will become the foundation of a system that will reward those who provide, pay for, and consume high-quality, competitively priced health care — similar to the foundation created by the Older Americans Act over forty years ago for home and community-based care.

In the not-too-distant future, consumers will be turning more and more to the CVE for information on health care in their area.

• They’ll be able to find out which hospital in their area has the highest success rate for the procedure they need — thanks to Medicare’s new Hospital Compare website that Secretary Leavitt unveiled today.
• They’ll be able to compare doctors, not just on what they charge, but also in the quality of the care they give.
• They’ll be able to approach health care they way they would any other major purchase — by consulting an impartial source of information on quality and cost.

Right now consumers know more about the quality of their television than about the quality of their health care. But we’re entering the second great phase of the value-driven reform. We’re bringing value exchanges into being. We’re getting electronic health records into the hands of doctors.

Conclusion

Clearly, there’s a lot we plan to accomplish over the next year. But the President’s approaches to Medicare reform, health savings accounts, community health centers, protecting the dignity of human life, and enhancing community living through long-term care reforms worked. So we will continue to orient our systems toward value. We will continue to use the best market principles of free enterprise and flexibility to improve quality and integrity of our programs, encourage competition and efficiency, and give consumers better choices and options.

As the federal government, we need to keep our focus on providing scientific leadership, encouraging cooperation and collaboration among the right people at the right time, and resisting attempts to micromanage. If we can do that, I believe we will find success in working with you to help seniors, and all Americans.

Thank you.