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KANSAS CITY, Mo., Jan. 25 /Standard Newswire/ -- The following text is of remarks by President Bush in a roundtable discussion on health care initiatives:

Saint Luke's East -- Lee's Summit

Lee's Summit, Missouri

12:08 P.M. CST

THE PRESIDENT:  Rich, thank you very much for inviting us here to St. Luke's.  We had a fascinating tour of your facility.  It is safe to say that St. Luke's hospital -- the St. Luke's Health System understands the power of technology to help compassionate doctors and nurses better do their job.  And technology is a -- we saw unbelievably interesting medical programs, programs that enable doctors to better analyze disease and deal with disease before it becomes acute, which is important.

The reason why I emphasize the information technology aspects of this hospital is that part of the role of the government is to encourage people to make decisions to help hold the cost of health care down.  And when a hospital modernizes, and you go from files to electronics, it helps hold the cost of health care down. 

One of the interesting things about medicine is that medicine tends to have lagged behind the rest of our economy when it comes to information technology, and yet under Rich's leadership this facility and its sister facilities are doing some real interesting reforms, we'll talk about a little bit. 

I want to thank George Pagels, who is the CEO of this facility.  George, thank you.  He's a doctor, and gave us the tour.  Met a lot of really fine nurses and docs, by the way.  I appreciate Senator Bond joining us.  Thanks for coming.  And of course our Secretary of Health and Human Services, who will say something here in a minute.

I want to talk a little bit about a comprehensive strategy to make health care available and affordable.  There is no question in my mind that a proper role for the federal government is to help the poor and the elderly and the diseased get health care.  We'll do that.  And to the extent that these important programs need to be reformed and strengthened, we will do that, as well.  Witness what we did with Medicare.  Medicare was old and stagnant; it needed to be reformed.  We reformed it through a generous prescription drug benefit that has actually worked -- it's helped our seniors. 

And so we will do our duty at the federal level, and when we find deficiencies in federal programs we will work to correct them, for the good of the citizens and the taxpayers. 

The second aspect of our responsibility is to work to make health care available and affordable for all our citizens, and the best way to do that is through private health insurance. Therein lies part of the debate we have in Washington.  We believe the private sector is the best delivery of health care.  We know there's a role for the federal government, but it's not to dictate, it's not to be the decision-maker.  And so Mike and I and others in my administration have been strategizing on how best to make health care available and affordable.

Here are some ways:  One, helping spread information technology.  We're the biggest user of health care in the United States, and, therefore, we can help people understand the benefits of using information technology.  Secondly, price transparency.  One reason we came to this hospital is that under Rich's leadership, this hospital system has been willing to place its prices and its quality ratings out for consumers to see. 

Health care is an interesting industry, isn't it, where a lot of times you have no idea about the price of the service you're paying for.  You just assume it's okay.  Somebody says, here's your price, and you say, okay, I'll pay it.  We believe that with price transparency and quality assessments, consumers will have better decision-making process.  And we want consumers making the decision on health care.

Think about a system where there's a third-party payer -- you've got your insurance, somebody pays your bills for you and you're not involved.  You just kind of assume that the third- party payer is making a rational decision on your behalf.  And our view is, is that in order to have -- to worry about health care costs, the more a consumer is involved, the more likely we'll be able to deal with the increasing cost of health care.

Another reform is medical liability reform.  I'm walking around the hospital here; a professional comes up to me and says, we practice too much medicine for fear of lawsuits, which raises the cost of your bill.  See, if the medical provider is worried about getting sued, they will make decisions on how to stay out of the court of law more than -- as important as decisions on how to keep you healthy.  Medical liability is a real problem in a lot of states. 

And we are trying to get the United States Congress to hear that same call.  And I'll keep working on medical liability reform.  Why?  To help  make health care more affordable.  But also, when you've got a lawsuit, it causes good docs to quit the practice of medicine.  There are a lot of counties in the country that do not have OB/GYN because these lawsuits have run them out of practice.  And it's not right, and it's not fair.

And so we need to -- need to have the political will in Washington to take on a very powerful lobby, which is the trial lawyers, and prevent these frivolous lawsuits from running up the cost of your medicine, and running good docs out of practice.

A couple of other points I want to make before we talk to the -- talk about this new initiative I laid out to the country.  I think it's very important to help develop plans that make the consumer in charge of as much of the health care decision as possible.  These are called -- one idea is health savings accounts, which basically says that there is a product available for you to use where you're the decision maker, and you're able to contribute tax free, earn money in your account tax free, take money out tax free on medicine.  If you don't spend the money in your account one year, you can roll it over.  It becomes a savings account.  It's an incentive for you to make good decisions about your life, and it also provides catastrophic care in case something bad happens to you.  We'll talk about health savings accounts here in a minute, and their effect on enabling people who do not have insurance to have health care available and affordable for them.

Finally, small businesses need help.  I mean, it's hard to be able to buy insurance when you're a stand-alone company.  And insurance is basically a spreading of risk through pooling of risk, and we just need to allow small businesses to be able to buy insurance at the same discounts that big companies can by pooling risk. 

In other words, a restaurant in Missouri ought to be able to have their employees insured with a restaurant in Texas.  In other words, put them all in the same pool so they can get the benefits of spreading risk.  Now these are practical things to get done.  And they're hard to get done in Washington because people in Washington have a different view.  They want the government basically making decisions for health care.  The view of the people here is that you ought to be making those decisions.

One way to encourage you to make the right decisions when it comes to health care is to take the inequities out of the tax code.  If you work for a company, you pay -- you get your health care free, in essence.  It's part of the benefit package.  If you're a stand-alone person, you pay your health care on an after-tax basis.  In other words, there's discrimination in the tax code based upon who you work for.  It makes it harder for people to be able to -- individuals or small company employees to be able to buy health care.

And so what we've said, and Michael spent a little time describing this, we've said that all Americans who have health care ought to be allowed to have a $15,000 deduction on your income taxes if you're a married couple -- if you're married, and if you're not, $7,500.  In other words, the benefits you receive from your company become part of your taxable income, offset by a $15,000 deduction.  And so if the benefits you get from your company are $11,000, you'll have $4,000 deducted from your income.  And that's important.

It also will help people who are uninsured or on the verge of being uninsured.  In other words, it encourages the development of an individual market.  It makes it more likely an individual will be able to afford health care.  If you've got a family of four with $60,000 income, you get a substantial tax savings, which will then enable your health insurance to be more affordable.  And we'll talk about that.

The point I'm trying to make to you is the system is geared toward enabling the individual to have more control over his or her decision-making and make the tax code fair for the individual.

And finally, I've instructed Michael to work with states.  We believe that there's been some very innovative policy that takes place at the state level to cover the uninsured, to help the sick, to help those who are poor be able to get insurance.  And so we're going to have flexibility with federal money that goes to states, and all we request is the states develop a basic health insurance plan that becomes more affordable.  Oftentimes the plan that is only available for the individual is priced out of their control because of mandates and add-ons.  And Michael is going to say to governors, look, we're going to help you.  You got some interesting ideas, we think it makes sense to use federal money to help you with those ideas, but you need to develop a basic plan so that health care is affordable for more of our citizens.

And here's a comprehensive strategy.  A lot of times in Washington, they say, well, let's just design it there in the federal government, it will all work.  It won't, in my judgment.  It will become bureaucratic, it will become costly, it won't empower individuals, it will make it harder to get affordable health care. 

And so here's a strategy, a multiple-pronged strategy, a strategy that says there's a lot of things we need to do to help our American citizens be able to buy private health insurance.

Leavitt is in charge.  Michael is the Secretary of Health and Human Services.  He's spent a lot of time on the subject.  You might want to add a few comments, and then we can hear from some of our citizens here.

SECRETARY LEAVITT:  Thank you.  There is a wide aspiration held in this country for everybody to have the basic affordable policy available to them.  You pointed out there are two diverging points of view right now; one, some people would say, look, let's have the federal government insure everybody

and basically take over health care.  And then there are those who would say, let's have the states create partnerships with the federal government and the private sector and we'll use innovation and market forces to make things better.  You made very clear how you stand on that subject.

Today, Governor Blunt is excused from our gathering because he is out having -- yesterday, made his State of the State address with health care being the primary -- the primary point of that address.  He's out talking to the people of this state about it, as are governors all over the country.

Now, I've been through a lot of these efforts to help people acquire basic insurance, and you always run into one very serious road block, and that is a person who works in a restaurant, a person who is a service provider with a small business.  When they buy insurance, if they have to buy it after they've paid taxes, it's just too heavy a lift.  They can't get there, particularly if there isn't a basic plan. 

So what you suggested and what we'll be doing with states all over the country is we want to help them do two things.  One is we want to remove a just undefendable part of the tax code that really started in the 1940s, not by a law, but just by a set of circumstances that happened when they passed wage and price controls, they just started allowing people to get tax deductible health insurance.  Nobody ever designed this system, and it doesn't make sense that the states haven't been able to come up with plans that were affordable because people like Esmerelda and Dan haven't been able to pay for their health insurance in dollars that were pre-tax.  They had to pay their taxes first.

On the other hand, people like Jim, or people like Martha, have been in a business and they are able to do it.  And it's just indefensible that we would provide it to Jim and to Martha, but not to Esmerelda and Dan.  And you've taken that fight on, and I believe we'll undoubtedly solve that problem. 

The second dilemma you also put well, and that is creating a basic, affordable plan.  But there will be people who, even after the plan is basic and affordable, and even after they have the tax benefit that everyone else gets, will still need some help.  And so that's what the President has suggested.  We want to create a pool of money that we can partner with states to do that.

Here's the principle.  Right now in this country we're spending more than $35 billion perpetually paying the health care bills for a lot of people who are uninsured.  Wouldn't it make more sense if we could use some of that money to just help them get insurance?  Then if we treat them in the same way we do those who buy it from business, we really are within reach of being able to meet this national aspiration we all feel of having every person have access to an affordable basic insurance policy.

I think, Mr. President, you'll get a lot of interesting perspective --

THE PRESIDENT:  Leavitt, one thing before you get -- I see we've got some cameramen here.  Why don't you give them the cameraman story.

SECRETARY LEAVITT:  I had a terrific conversation yesterday.

THE PRESIDENT:  For all you cameramen out there.

SECRETARY LEAVITT:  Someone asked me -- actually, it was a news organization here in Missouri, anticipating our trip, asked me, what are you going to talk about?  And I said, essentially, we've got this problem that we're trying to solve of people who work in restaurants or in daycare centers, or are self-employed, and it's unfair that they should be treated in a way -- and I could see the cameraman --

THE PRESIDENT:  He's an independent contractor, he's on his own, basically.

SECRETARY LEAVITT:  But he was behind the camera doing this, which is unusual.  (Laughter.) 

THE PRESIDENT:  Because he wants to be treated just like the person who works for big corporate America, and he wants to be able to have that deduction.

SECRETARY LEAVITT:  So before we were even off the satellite, he's saying, and you should have said independent cameramen.  (Laughter.)  He said, do you know how much I pay for insurance?  He says, it's $1,350 a month, and I have to pay it after I pay my taxes, and it's just not fair. 

It isn't fair.  This is the right thing to be doing. 

THE PRESIDENT:  Thank you. 

Rich, thanks for having us.  Appreciate you inviting -- letting us tour your hospital here. 

MR. HASTINGS:  Well, we really are grateful that you came, and we've had a great experience with the White House.  Actually, Laura -- this tie that I have on actually was part of her "Red Dress" campaign.  And so we have been very blessed in your administration, and we thank you so very much.

And we are grateful to all of you to come to St. Luke's, because this particular facility is one of the very few digital hospitals in the country, and the President has had a chance to see some of that technology.  Even our ability to monitor hospitals as far away as Hays, Kansas, we actually monitor their ICU from Lee's Summit, Missouri.  And that's where health care is going.

And, Secretary Leavitt, if there is any way that we're going to be able to provide health care for the future, IT will be principal to our ability to do it.  The good news is, at least here in Kansas City, St. Luke's is already doing it.  But I want to tell you it's very expensive, and yet, just the savings alone -- we reported some EICU savings that we have with a mortality rate that is about 20 percent less than the national average for ICU treatment.  And at the same time, our cost is about 25 percent. 

The initial cost is high, but in the vision, sometimes it's hard to get everybody to buy into it.  But one of the things we talked about earlier is that this hospital, if you want to be a member of the medical staff, you have to learn how to use the computer.  It is very computer-centric in what we do.

And so we're so grateful that you came here.  And I thank Secretary Leavitt, as well, because I think we'll be able to help interact as you continue your program.  Because on the hospital side to save costs, to reduce the costs for the consumer, it's really going to be from the IT side.  And the IT side on quality -- one of the programs we have here that we've talked about is Priceline.  If you're a patient of any insurance plan, you can actually contact St. Luke's and we can go to your plan.  We just require four pieces of information and we can go to your plan and we can tell you how much your health care costs, your out-of-pocket cost is going to be.  And it takes us about 45 minutes.  But it is being computerized as we speak.  Now about half of it is not; it's still manual. 

But it is the wave of the future.  You have to have that information if you're going to make the decision.  And any health plan that is developed will require that the consumer has a chance to decide where do I want to go based on quality and based on price.  You have that capability with IT.

THE PRESIDENT:  The other thing that's interesting what Rich is doing, availability of health care, they've got like a specialist sitting in Kansas City capable of analyzing somebody's graphs in a remote region, which, again, remember it's affordability and availability for health care.  And information technology is able to make medicine available throughout rural Missouri or rural Kansas, for example.  And it's very exciting.  And I appreciate what you're doing. 

SECRETARY LEAVITT:  I want to make certain you all understand here three things that are happening that need to happen all over the country -- the first is, you're a connected system.  If a patient wants to get their medical records, they can do it in a convenient way.  People need to have access to their own records in a way that will be convenient to them.  And this idea that a patient then can have an independent assessment of the quality of the care that their provider is giving them is revolutionary and very important. 

But then you combine that with the ability for people to know what it costs.  Once you have the cost and the quality, you're now making decisions based on value.  That's what we hope in the future.  The whole system will become a connected system that has competition based on value, where consumers -- where consumers are making decisions, as opposed to someone other than the consumer.

THE PRESIDENT:  Dr. Jim Kelly.  Why don't you tell people what you do, Doctor?

DR. KELLY:  Thank you, Mr. President.

THE PRESIDENT:  Let me guess.  (Laughter.)

DR. KELLY:  I'm an anesthesiologist at St. Luke's Hospital downtown on the Plaza campus.  And I'm happy to report that what you are trying to do at the federal level as far as tort reform, through an unfortunate set of circumstances in Missouri, it's not something we wanted to do, but we were faced with a crisis.  And the physicians -- many left.  Some had -- people who were going to stay wanted to make the practice of medicine and patient care first.  And in the early 2000's, we were faced with malpractice premiums for orthopedists, neurosurgeons, trauma doctors, OBs that had been in the $20,000 range and had gone up to the $100,000 range -- $150,000, $180,000 range.  And that was just not sustainable.

And so the physicians banded together and elected that they wanted to work on this.  And we became involved in the system under cook (phonetic) education efforts.  And we're involved in Jefferson City, and got tort reform passed, in both '03 and '04.  The governor at that time vetoed the -- vetoed both proposals and an override failed.

During that time, the physicians -- some were defeatist but many stayed energized -- got involved in a governor's election, and elected a -- or worked to elect a governor that understood our issues.  And I'm pleased to report that in 2005, we had tort reform not only passed by the legislature, but also signed by the governor, became law.  The day before it became law, phenomenal amounts of lawsuits were filed.  Those are still all out there.  And I'd like to tell you that our malpractice premiums have decreased.  They have not, but they have stabilized.  And when the actuaries get done taking care of the risk that's out there, I think our premiums will stabilize. 

And it's through the work of a Missouri physicians that we have been able to do this.  And it allows us to work, to take care of the patient first, not always be concerned about the defensive medicine.

THE PRESIDENT:  I don't think people know what you mean by defensive medicine.  Why don't you describe that?

DR. KELLY:  Well, you're always concerned.  One, we're here to take care of patients, and that's our primary objective.  But if you are told that you do a poor job or go -- everybody lives in fear of being sued, and they will go to extreme lengths to document that everything they're doing is the right thing.  If any of us were so unfortunate to fall down right now and bump our head, it would be hard to get out of this hospital, if you tell the emergency room physician that you hit your head, without a CT scan, maybe even an overnight stay in the ICU.  They want to make sure that they're okay and not just trust their clinical skills, that it's a little bump on the head.

THE PRESIDENT:  In other words, practicing maybe too much medicine --

DR. KELLY:  Too much medicine -- and extra tests.

THE PRESIDENT:  It actually costs the federal government something like $23 billion a year.

DR. KELLY:  This is something that we have seen -- as an anesthesiologist, we had a malpractice crisis in the mid-'80s.  And our rates -- at that time, the anesthesiologists were the most costly to gain liability insurance.  And we took a method where we hired systems engineers and actually founded the first patient safety foundation so we could look at where through the whole process do things go wrong and make differences.

And that time the risk of a death from an anesthetic was one in 10,000.  Right now I'm happy to tell you that it's one in about 300,000.  And a lot of that work is due to the American Society of Anesthesiologists taking a look at the patient first and seeing what we can do to make things better.

THE PRESIDENT:  Well, I appreciate you.  I happen to believe this is a federal issue.  When I first came to Washington, I said, we ought to allow these -- each state to determine their own medical liability reform.  I believe it's -- and I chose to make it a Washington issue because it's costing our taxpayers so much money.  When I say costing, we're a big consumer of health care through Medicare, Medicaid, veterans' benefits.  And when doctors' premiums go up, they charge more.  And with doctors in fear of being sued, they practice more medicine than is necessary. 

I don't know if $20 billion is the right number, but it is a lot.  I think it is something like that.  And that's extra money for the taxpayers, and I'd like to get it done in Washington, D.C., frankly.  And I believe medical liability is -- I know it's a huge issue in a lot of states.  And we'd like to help you.  Thanks for working on it.  Appreciate you being involved.

Jim Henderson.

MR. HENDERSON:  Thank you, Mr. President.

THE PRESIDENT:  President --

MR. HENDERSON:  Not like you, but thank you very much.  (Laughter.)

THE PRESIDENT:  -- of Dynamic Sales, Inc.  Where are you based and what do you do?

MR. HENDERSON:  St. Louis, Missouri.  We're a construction and industrial supply company.

THE PRESIDENT:  Great.  How are you doing?

MR. HENDERSON:  A second-generation owner.  It's been very good.  The economy has been very good to us, and the business has been booming.  We're on our 11th record year.

THE PRESIDENT:  Good.

MR. HENDERSON:  So we've very pleased.

THE PRESIDENT:  All because of good management.

MR. HENDERSON:  From the top down.  (Laughter.)

THE PRESIDENT:  That's right.  How many employees?

MR. HENDERSON:  We have seven employees, five full-time, two part-time.

THE PRESIDENT:  Right, and your issue with health care?

MR. HENDERSON:  Escalating costs.  I'm glad to see everybody in the country is getting excited about it, but we've been dealing with it for over 17 years.  Back in that day we had 100 percent coverage.  We didn't have to worry about deductibles.  We didn't have to worry about a PPO or what doctor or hospital we went to.  We could just go anywhere, get treated, and it was taken care of.

The carrier we were with at that time said they didn't want us to have that program anymore.  They wanted us to get off of that program, they didn't like it, but they couldn't take it from us, but they could raise rates to where we would buckle and ask them for something else.  And it didn't take them long to do that.

So then we moved into the PPO plan, and then we had to go to a zero deductible to a $100 deductible.  And we also had to go from paying 98 percent of our employees' premium and their dependents to doing a 70-30 split with the employee-only.  And they can add their dependents, but they have to pay for their dependents.  And that's not real attractive.

But then we went from that zero deductible to a $100 deductible, our rates continued to increase at an average of about 9 percent a year until 1998 -- I'm sorry until 2003, then we were faced with a 25 percent increase.  And we had no major losses.  We had the same type of census.  So it wasn't a big change in our census to worry about.  But we were faced with that kind of increase.  We asked what we were going to do and their suggestion was raise your deductible to a thousand dollar deductible, we can keep your premium at the same level, and then you just have a higher deductible.  And that way you're not spending more money for health care.

Well, maybe not as a company, but now we're asking the individual families, hey, now you've gone from zero to $100, now we're up to $1,000, and your doctor's visit is going to be more expensive, your drugs are going to be more expensive, and just right up the line.

That continued and continued.  And every year, we saw another increase -- 13 percent, 14 percent.  And it continued until this year, we were given another increase of 13 percent, again, for the same program, the same census, no major losses incurred.  This year, we're looking at a 13 percent increase.  The response was, well, raise your deductible to $2,000 and then you won't have to face that 13 percent.  So, the company's premium doesn't go up, but the individual is now paying $1,000.

We've done that, but we've also initiated health reimbursement accounts.  So the company has set that up, which of course is a cost to the company, but we've set that up to kind of pool that risk for the employees.  So they are still responsible for the first $1,000 like they've been for years, but now the company will reimburse anything over that $1,000 up to the $2,000 level.

Remarks by President Bush in Roundtable on Health Care Initiatives (See part 2 of 2)