Contact: White House, Office of the Press Secretary, 202-456-2580

CHATTANOOGA, Tenn., Feb. 21 /Standard Newswire/ -- The following text is of remarks by President Bush in a conversation on health care initiatives:

Chattanooga Convention Center

Chattanooga, Tennessee

12:33 P.M. EST

THE PRESIDENT:  Thank you all very much.  Please be seated.  Thank you.  (Applause.)  Thank you very much.  I'm honored to be here.  Jim, thank you.  We just toured a pretty fantastic hospital.  He talked about robotics that are being used to operate on.  He said that I was on the machine, and he's right, but there wasn't anybody at the other end of the machine, you'll be happy to hear.  (Laughter.)

I want to talk today about health care.  I see people wearing the uniform -- I want to thank you for wearing the uniform.  I am the Commander-in-Chief, and proudly so.  I'm also the educator-in-chief.  (Applause.)  The job of the educator-in-chief is to try to educate people about different ways to solve major problems facing our country.  And we've got a problem with health care.  It's not affordable and it's not accessible to too many of our people.  And the fundamental question is how to deal with it.  And so today we're going to have a conversation with experts.  We've got people who call themselves experts, like me and the Secretary and the Governor.  And we got people who are living experts because they're having to deal with the health care problems. 

And so I want to thank you for joining us.  I particularly want to say thanks to Michael Leavitt, who is the Secretary of Health and Human Services.  I asked him to join my Cabinet; he came from the state of Utah, where he was the governor.  I happen to believe governors know how to set agendas and know how to achieve results.  You've got you such a governor here in the state of Tennessee, as well.  And, Mr. Governor, we appreciate you joining us.  (Applause.)

I think you're going to find it interesting as we discuss the proper relationship between the federal government and states, as we design programs that help individuals be in charge of their health care decisions.  And so we're going to have a discussion with some of your fellow citizens here, and I want to thank you all for joining us.  It seemed like a pretty good idea when you accepted.  (Laughter.)  And then you got out here, look at all the people and cameras.  Anyway, I think you're going to find it interesting.  I know I'm looking forward to hearing what you all have to say.

I'm keeping pretty good company today, as you can see.  Not only have we got the Governor, we've got the Lieutenant Governor with us today.  Lieutenant Governor Ramsey is with us.  Thanks for coming.  (Applause.)  There he is, yes -- Ramsey. 

I am very proud of your -- the senators you've got up there -- that you sent up to Washington.  (Applause.)  The senior Senator, Lamar Alexander -- appreciate  you coming, Lamar.  Proud to be here.  (Applause.)  He's a good, thoughtful guy, who, by the way, paid me and Laura a high compliment the other day in the newspapers in Tennessee when he noticed that we had worked hard to increase the budget of the National Park System, thereby directly benefitting the people who care about the parks in eastern Tennessee.  And so thank you for not only helping us get that piece of legislation into the process, I'm looking forward to getting it passed during the appropriations process. 

The other United States Senator is a fellow you know pretty well, a man who made his mark in paving the roads and filling the potholes -- former mayor, Bob Corker.  Thanks for coming.  (Applause.) 

And finally, the United States Congressman.  All he talks about is "Chatt-town" every time I see him.  You remember Chattanooga, now, Mr. President, don't you?  You came here when you were not in public office.  We expect you to come back in public office.  And I'm glad, Zach, that I finally listened to you when it came to my travel schedule.  I'm really thrilled to be here in this beautiful part of our country, and I'm also proud to be in the presence of your Congressman, Zach Wamp.  Thanks for being here.  (Applause.)  

We got the Mayor with us today -- the Mayors.  We got the Mayor, Ron Littlefield, of Chattanooga.  Mr. Mayor, thank you for coming.  Proud to have you here.  (Applause.)  Mayor Claude Ramsey of Hamilton County.  I told the Mayor, I said, in Texas, we call them county judges.  (Laughter.)  So I said, I might just call you Judge.  And he said, well, Mr. President, you can call me whatever you want to call me.  (Laughter.)  Mayor, thanks for coming.  Appreciate you being here.  (Applause.)

I do want to thank the good folks who work at Erlanger.  Thanks for putting up with me and the entourage.  We really had a wonderful tour.  And the truth of the matter is, you can put all the robotics you want in a hospital, or all the X rays; what really matters is the compassion and care given by people.  And so I want to thank the docs and the nurses and the staff of that wonderful facility for being on the leading edge of compassion. 

It was really interesting, a couple of docs showed us some stroke recovery procedures, and one of the examples was a 26-year-old woman who got a stroke, and she couldn't talk.  And then the next film they put up there was her talking, and how happy she was.  And it had to make you feel great, Doc, to know that you saved somebody's life.  And so I thank you.

And the mission, by the way, of government is to make sure that the quality of health care received by our patients around this country remains the best in the world.  Private medicine works.  And we need to make sure that we put good policies in place to make sure private medicine is the norm, quality care is given to as many Americans as possible.  And that's what we're here to discuss.

We got a problem.  And the problem is health care costs are rising too fast for a lot of our individuals and small business owners.  Here's one of them right here.  He's about to testify -- (laughter) -- about the rising cost of health care.  Individuals are being priced out of the market.  And so what is the proper policy to deal with it?  You sent us up to Washington to identify problems, but you also sent us up there to identify solutions.  And so I want to share some solutions with you today, some ideas that I hope the members of Congress take seriously. 

A first philosophical note is that the best decisions are made by providers and patients, not by government or insurance companies.  In other words, if you want a health care system that really works -- (applause) -- you want the decision-maker to be the individual, in consultation with somebody who knows what they're talking about, somebody trained to help that person make the proper decision -- that would be your doctor.

Secondly, that when it comes time to helping people who need help, it makes sense for us to make sure the federal government does its job and to work in concert with states.  Now, I believe the federal government has a solemn responsibility to take care of the sick -- I mean, the disabled, the elderly and the poor.  We have made that commitment and we've got to honor that commitment.

Recently we took on a big issue in the Congress, and that was to make sure that the Medicare system provided modern medicine for our seniors.  And we passed new legislation that said we're going to help with the pharmaceutical drugs, that for the poor, they'll get their pharmaceuticals; but for those who aren't poor, they'll have some choices to make about how best to suit their needs when it comes to medicine.  See, I believe in choice.  I told you, I want those patients making the decisions.

And guess what?  It's working.  Part D reform for Medicare is working.  I congratulate the Secretary on helping implement this piece of legislation.

My point to you is, is that we take our responsibility seriously.  We want to make sure there's adequate funding, and we will.  We want to make sure that funding ends up in the hands of people who need help.

Other ways to control costs are to make sure that we introduce information technology into health care.  If you want to be honest about it -- I think we probably ought to be -- a lot of health care is kind of lagging behind the rest of the country when it comes to IT.  I mean, they're still filling out forms by doctors signing things, which leads to, sometimes, confusion, since doctors can't write very well.  (Laughter.)  Paper gets lost.  Files move around and they get reshuffled the wrong way.  We need to help make sure that health care is as modern as other aspects of our society.  We want people to have a medical identification record that you can take with you, by the way, that is secure from people snooping.

I'll tell you an interesting example of that is our Veterans Affairs Department has done a good job of providing individualized health care records on the computers.  And so when Katrina hit in New Orleans all the files were destroyed for a lot of the health care providers, but each individual vet had his own health care chip.  And so when they went to Houston, for example, they were able to take that, plug it into a computer; the doctor there at the VA was able to see what the previous treatments were or what the person needed, and there was a seamless transition from care in New Orleans to care in a VA place somewhere else.

And so we've got -- we're working on that, and the federal government can help.  After all, we're a huge provider of health care.  We want there to be price transparency in health care.  I don't know about you, but I don't remember ever asking how much something was going to cost when it came to health care.  I do when it comes to a car -- or I used to.  (Laughter.)  I will soon.  (Laughter and applause.)  But there's not many consumers asking, what does it cost, Doc?  And what's the quality of the product?

And so if there's transparency in pricing it will help control costs.  It's amazing what happens when consumers are making decisions.  And one way to help consumers to make decisions is to encourage systems that put consumers in charge of health care decisions, like health savings accounts.  Like if you're running a small business you need to look at a health savings account.  People can save money with health savings accounts.  These are innovative products, innovative ways of providing insurance for yourself and you're family, where you actually save money, tax-free, if you don't spend money on yourself.

We believe there needs to be association health plans.  I'm very worried about small businesses not being able to afford insurance, but not nearly as worried as the CEOs of small businesses.  It's got to pain somebody running a small business to know they can't provide their employee with the coverage they need.  And yet, small businesses aren't able to have the same advantages that big corporations get when it comes time to spreading risk across a lot of people they're insuring.

And so I believe small businesses ought to be able to pool risk across jurisdictional boundary.  That's fancy words for I think a restaurant in Chattanooga ought to be able to put their employees in the same risk pool as a restaurant from Houston, Texas, so you can spread risk.  Those are called association health plans.

Here's another innovative way to help people be able to have affordable insurance.  I strongly believe we've got to do something about lawsuits.  I don't want to get too -- (applause.)  We've got a system in some states where you can't find an OB/GYN in a county because the lawsuits are running these good people out of the county.  And by the way, it's running up the cost of medicine.  A doc, whether they'll admit it to you or not, can't help but think in the back of their mind, I might get sued, I'm going to practice a little extra medicine.  That's called the defensive practice of medicine.  But it means that you're paying more for health costs than are absolutely necessary.  If I was a doctor and worried about a lawsuit, I'd be doing the same thing.  I'd be protecting myself for fear of a lawsuit that could conceivably damage my capacity to stay in business. 

And I happen to believe lawsuit reform is a national issue.  When I first got up to Washington, Governor, I thought the states ought to take care of it.  And then I found out that we're spending about $28 billion of your money as a result of the defensive practice of medicine.  See, we spend a lot of money on Medicare, Medicaid, Veterans Affairs.  And so when somebody is practicing extra medicine to avoid the consequences of a lawsuit, it's costing our taxpayers money. 

I decided it was a national issue that requires a national response -- and we hadn't done a very good job of getting that liability bill passed out of the Senate, but these two senators are with us.  And I'm going to keep pushing so long as I'm the President to get good national liability reform so to make medicine more accessible and more affordable for more of our citizens.  (Applause.)

You probably think I'm going to do all the talking.  (Laughter.)  My wife, by the way, who sends her love, would tend to agree with you.  (Laughter.)  By the way, I am a lucky man that Laura said yes when I asked her to marry me, and I really -- (applause) -- I know this isn't very objective, but I firmly believe the country is lucky to have her as the First Lady, I really do.  (Applause.)

There are some ideas I just laid out for people to think about on how to deal with the rising cost of medicine.  I've got an idea as to how to make sure people can get private insurance.  We ought to be striving to help people buy insurance so that hospitals, like Erlanger, don't have to pick up the tab. 

So the fundamental question is, how do we help?  Well, the tax code needs to be changed.  If you work for a large corporation in Chattanooga, Tennessee, you get your health care free, basically.  In other words, you don't have to pay any tax on the benefits.  If you work for a small company, and that small company can't afford your health care and you go out and buy health care on your own, you pay with after-tax dollars.  In other words, it costs you more than the person who works for a large company to buy insurance.  And that's unfair.

We're worried about helping make sure people can afford health care.  But the tax code is so structured that if you're an individual or somebody working for a company that can't afford health care, you're disadvantaged relative to a company that is -- a larger company.

So here's an idea that Congress needs to consider:  If you're married, got a family, and buying health care, you get a $15,000 deduction from your income taxes, right off the top.  (Applause.)  It doesn't matter whether you're working for the largest company in Chattanooga or one of the smallest, you get that deduction.  If you're single, you get to deduct $7,500 from your -- not only your income tax, but your payroll taxes.  And the reason you do that -- and you're going to hear some examples of how this will help our fellow citizens -- one, it helps somebody afford insurance; two, it will help in the development of a market for individuals in the insurance world. 

Right now there's a limited market for the individual.  It makes it hard to find a product that either suits your needs or you can afford.  The more policies written to meet the individual -- in other words, the larger the risk pool -- the more likely it is that costs will come down for the individualized policy.  That's just the way it works.  Yet the tax code discourages the individual from being in the market. 

Now, one of the concerns I have about such a plan is that some people can't afford insurance -- some people won't be able to get insurance.  This plan will help a lot of people afford it, like the uninsured, the working uninsured -- now, remember, the government is going to take care of the poor -- that's called Medicaid and SCHIP, plus what the innovative policy Phil is  doing here in Tennessee -- the government is going to take care of the elderly; we take care of the disabled.  And here's a way to help people who are working uninsured afford insurance.  We'll give you some examples here in a minute. 

But I am also worried that there is -- that the process will kind of leave out people who may have preexisting conditions.  In other words, it's okay for the individual who's healthy to go get insurance, but how about the person that's not healthy?  And therefore, Secretary Leavitt is designing a plan that says, we will give you flexibility with federal money that we give to the state to help you design risk pools, like they're doing here in Tennessee, that will help you take care of the uninsurable, like you're doing here in Tennessee.  In other words, it's a collaboration with the federal government and the state government to come up with innovative ways to deal with the issues as a result of adverse selectivity because of individual policies being the norm. 

And so I'm going to have Leavitt start us off in talking about it.  And by the way, in return for flexibility we expect the states to design basic health care coverage -- coverage that doesn't have all kinds of mandates on it; coverage that means somebody is more likely to be able to afford health care.  And again, that's what the Governor has done here in Tennessee.

You've got yourself -- you're on the leading edge of some really interesting ideas in your state.  You really are.  And I want Mike to kick off the discussions, and then we're going to bring the Governor in.  And then -- we're getting ready to talk among ourselves here.  Anyway, Michael.

SECRETARY LEAVITT:  Thank you, Mr. President.  As you pointed out, our aspiration is to assure that every person in America has access to an affordable insurance policy.  You made the point that if people are blind, if they are disabled -- rather if they are disabled, or if they are elderly, or if they're in low income, we want to help them.  We're a compassionate nation.

And that's what Governor Bredesen and I do with Medicare and Medicaid and SCHIP.  But for everybody else, we've got to make certain that there is a basic policy available that they can afford.  States all over the country are now beginning to organize in a way as to make certain that every person in Tennessee has access to at least a basic affordable plan.

I was anxious for the President to see what's happening here in Tennessee.  Governor Bredesen has organized what he calls Cover Tennessee, and it's just that -- it is a very basic health insurance policy that's affordable, that employers, that employees and individuals can contribute in order to be able to afford at least basic insurance.  We know if people have basic insurance that they're healthier, they don't have to go to an emergency room for the most basic health care.  They can go to a doctor's office instead of an emergency room.  It's not only less expensive, it's far more efficient because they get preventative care.

So, Governor, I'd love to have you tell the citizens and the people here about Cover Tennessee, what your thinking was about it and how it's going to be helpful to Tennessee, and how others can learn from it.

GOVERNOR BREDESEN:  Thank you very much, Mr. Secretary.  And first of all, let me do my job as Governor and welcome you and Mr. President to the state of Tennessee, and thank you for coming.  And, Mr. Secretary, thank you for joining him, as well.

Cover Tennessee is based on some principles, and I think the most fundamental principle is that there are problems out there in the world, and health care is one of them, where maybe government can't do it alone, where maybe business can't do it alone, where certainly individuals can't do it alone, but if we come together and find a way for each of us to do some of the lifting, we can solve some problems that no one can individually.  And that's what this is all about.

Second of all, in designing something, we wanted to make sure that it was affordable.  It does no good to design something which is $400 or $500 a month and doesn't really help anybody, doesn't help any small business.  And the approach that we took was to say, rather than defining a set of benefits and then saying, okay, how much does that all cost, we would say, we're going to put this much money into the thing, all told together -- happens to be $150 a month in this case -- and we're going to buy through a competitive bidding process as much health care as we possibly can for that amount of money.  It was a very successful bidding process.  Blue Cross happened to win it in Tennessee; other major insurers came to the table.

Third of all, we wanted to make it portable.  We wanted something that if you are laid off, if you change the job that you are going to, that you have the ability to take this with you.  It's owned by you and not by the employer that you originally bought it from. 

And fourth of all, it's got a component of personal responsibility, that people are partners in remaining healthy.  We charge more, for example, you pay more if you smoke; you pay more if you're substantially overweight.  I think a number of those principles are very similar to the ones, Mr. President, that you laid out in your plan.

The way this thing works is real simple.  It works through small employers; it's private insurance -- we're not in the business of being the insurer.  And we took that $150 and basically split it three ways.  We said, we'll put in $50 as a state, we'll ask the employer to put in at least $50, and we'll ask the employee to step up, as well, and put some in.  By making that number on the average, $50, we said, look, for an employee, that's comparable to the cost of a cell phone, it's comparable to the cost of cable television.  It's something that will fit in the budgets and fit in the real world for a lot of people who are there.

With that, you buy some pretty basic benefits.  It is a basic health care plan that provides some entre to the system.  It's $25 doctor visits, it's $10 prescriptions with a primarily generic formula, it's $100 to go to the emergency room.  And on top of that, we made the things which are preventive in nature free, that you don't have to pay for those, to encourage people to get out and get access to the medical system early.

I don't claim, Mr. President, Mr. Secretary, anyone up here, that this is the be all and end all or solves all the problems of health care in America by any stretch of the imagination.  For me, it's this:  I've been talking about this I guess most of my adult life; I go to meetings and we all debate ideology and we debate who pays, and a host of things about health care.  And it struck me one day that all of us who are doing all this debating have health insurance.  And when we have to say, time out, for a moment, and go to the doctor, we can do so.  If we say, time out, and go to the hospital, we can do so.  And what we're trying to do here is just say, while we're having this debate, and while we're working things out, let’s get something into the hands of the people, like who are sitting up here on the stage, that gives you some basic health insurance and some basic entry into the system. 

It's a simple concept, does not solve all the problems in the world, but I hope will be a step forward and, if it works, can help to be a model and cause other people to think about how they might tackle this problem, as well.

Thank you.

THE PRESIDENT:  Governor, thanks.  It's really important for me and Mike to know that we've got governors on the front lines of health care decision-making, designing programs that meet the needs of your state.  Truth of the matter is, I'd rather, Governor, you be making these decisions than some of our brothers and sisters in Washington.  (Laughter.)

GOVERNOR BREDESEN:  I would agree with that, Mr. President.  (Applause.)

THE PRESIDENT:  A couple of points.  He said -- you know, this is an interesting statistic -- I think it's before age 30 most youngsters will have had, like, eight or nine jobs.  Isn't that interesting?  Baby boomers like us, we're not used to that kind of turnover in the job market, which means you better have health care policies that are able to follow the person.

One reason there's uncertainty in our economy is people are worried about whether or not they're going to be able to have health insurance if they do what is the norm, which is to change jobs.  And so I like the idea of the Governor designing a plan -- health savings account has got the same sense of portability -- you can take it with you.  It's your -- you own the deal.

And the other thing he talked about, preventative care; I want to remind you it doesn't cost any money to walk outside and walk for a couple of miles.  (Applause.)  Make sure when you ride your mountain bike you don't crash on caliche.  (Laughter.)

We've got Joe Cofer with us, mighty doctor.

DR. COFER:  Thank you, President Bush.

THE PRESIDENT:  What kind of doc are you?

DR. COFER:  Surgeon.

THE PRESIDENT:  Oh, yes?

DR. COFER:  Yes, sir.

THE PRESIDENT:  And what kind?

DR. COFER:  General surgeon.

THE PRESIDENT:  Feeling pretty good here, by the way, thank you.  (Laughter.)  You're working at Erlanger?

DR. COFER:  Yes, sir. 

THE PRESIDENT:  Good.  Do you like working there?

DR. COFER:  I love it. 

THE PRESIDENT:  I guess otherwise you wouldn't be working there.  (Laughter.) 

DR. COFER:  I'd still be working there.  (Laughter.) 

THE PRESIDENT:  That's a smart thing, old boss is sitting over there -- (laughter.)  Give us your concerns.  What's on your mind?

DR. COFER:  Well, I think that the plans you've set forth are very important.  I think we've got to develop health care for those that are uninsured, and I'd like to tell you about what we've done with Project Access. 

THE PRESIDENT:  I'd like to hear it.

DR. COFER:  Okay.  First, let me welcome you and Secretary Leavitt from the University of Tennessee College of Medicine, from Erlanger Hospital, and all the physicians who practice here in Hamilton County.  Thank you for coming to Chattanooga, the best kept secret in America, and thank you for coming here to talk about health care.

THE PRESIDENT:  Working the Chamber of Commerce angle, that's good.  (Laughter and applause.)  Don't forget the Governor now, the University of Tennessee has got the budget, right?

DR. COFER:  This is his -- we like to think this is his second home -- Nashville and then Chattanooga. 

The medical society in 2002 realized we had about 32,000 uninsured in Hamilton County, and we felt like we needed to try to do something to solve that problem.  So we formed a coalition at that time that involved the medical society and three major hospitals in town -- Erlanger, Memorial and Parkridge.  We raised some money.  I think the medical society put up $50,000, the three hospitals put up another $150,000, and we raised about $200,000.  And with that money we were able to hire a superb organizer and leader, Mrs. Rae Bond, who joined our organization.

And Rae was able to, among her many other talents, write grants.  And we were able to get an HCAP grant at that time.  We were helped very ably by Zach Wamp.  Zach, I thanked you then and I thank you again now.  With that seed money and with the HCAP grant, we were able to develop what we call Project Access.

So, what is this?  Who is eligible for this?  Well, basically if you're a Hamilton County resident, if your combined income -- family income or individual income -- is under 150 percent of the federal poverty level, and you're not eligible for any other form of insurance such as Medicaid or Medicare, you can come to the medical society and apply and get inducted into the program.  And what that does it basically give you a health care card, where you can go to Erlanger, Memorial, any of a number of over 500 doctors that have volunteered for this, and get health care.  And you get logged in with Project Access just like you have a Blue Cross card.

We first piloted some patients in '03, and we've been seeing patients regularly in '04, '05 and '06, more patients every year.  And to date, we've provided over $13.9 million in health care and treated over 1,600 patients.  So we think this is one way to help solve the problem.

There's about 50 Project Access programs like ours in the nation, and we -- as part of our grant requirement we have to help other places get started, and we've helped about five programs in five other states, and most importantly, helped Knoxville get up and running now with a Project Access program.  We're currently in the process of a funding development to try to support our infrastructure.

So, in closing, here in Chattanooga, we've successfully formed a health care network that provides both primary and specialty care for a segment of uninsured in our county.  And this is done through a coalition of doctors and hospitals who donate their care of their own free will.

Thank you.

THE PRESIDENT:  You know, the great strength of the country is not our military, nor the size of our wallets; it's the size of our hearts and the compassion for fellow citizens.  I appreciate, Doc, what you're doing.  We have an admonition to love our neighbor like we'd like to be loved ourself.  A government cannot make people love one another.  That happens when loving citizens decide, I'm going to help solve a problem.

And I thank you for recognizing that the federal government and the state government can't solve all the problems.  Instead of waiting around for them to do something they cannot possibly do, you have stood up and done it yourself.  And for that, I congratulate you and thank you, and the citizens.  (Applause.)

Our job is to keep the economy growing as best we can so people are able to help themselves and get out of poverty and be able to afford health care, and to do smart policies to be able to make sure that the uninsured numbers shrink.  That's the objective.  That's the goal.  That's why Phil is doing what he's doing; that's why I'm suggesting that Congress revisit the tax code to make it easier for citizens to be able to afford insurance.

(Continued, see part 2 of 2)