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Health Summit 2010

Vice President Joe Biden makes remarks on cost at White House health summit

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Thursday, February 25, 2010; 4:37 PM

All right, Joe, let's talk about cost, because -- and now we're not talking about costs to families, but we're talking about deficit, how (inaudible) respective ideas cost. I think this is a good place to talk about Medicare as well, because it's been brought up several times.

Joe, go ahead.

BIDEN: Mr. President, I'll try to be brief. There's a lot to talk about. I'd like to focus it, though, on the deficit, the impact on the deficit which we're all talking about.

And I must tell you, maybe I've been around too long, but I'm always reluctant after being here 37 years to tell people what the American people think. I think it requires a little bit of humility to be able to know what the American people think. But -- and I don't. I can't -- I can't swear I do.

I know what I think. I think I know what they think, but I'm not sure what they think.

And the second point I'd make is, you know, this probably has an echoed -- and this is slightly off point -- but this debate about the philosophic difference has an echo of the debate that probably took place in the mid-'30s on Social Security. It was mandated, and it was mandated because everybody knew you couldn't get insurance unless everybody was in the pool. And they knew if only some people were in the pool, what would happen is, a lot of people, when they got old, we'd take care of them anyway, and you'd have to pay for them.

So it's kind of a -- it's not the same, I'm not the exact, but it's the same philosophic debate that took place back in, you know, i the '30s.

But, look, I think if I can lay out, Mr. President, what I think we all agree on, and then figure out whether there's a way to deal with the deficit end of this, bending the cost curve, to use a phrase you and many others have used, Mr. President.

First of all, everybody agrees we have the finest docs and the finest hospitals and the finest nurses in the world. And we don't have quite enough of them, but we have the finest.

Everybody also agrees, I got from this morning, but I think we have before, that Senator Coburn is right that we waste a heck of a lot of money, and that somewhere around a third of all of the dollars we spend on Medicare is -- goes for nothing useful.

The third thing it seems we -- I assume we can all agree on is that over the last decade costs have doubled for health care in America. Costs have doubled for government-provided health care, but everybody's health care. And that that meant that, you know, right now, everybody knows that that wrecks budgets. It wrecks state budgets, it wrecks family budgets, it wrecks federal budgets.

Every -- 35 cents of every dollar spent on health care is spent by the federal government or the state governments for Medicare or Medicaid, 35 cents on the dollar. That doesn't count veterans and other things, just those two.

And so -- and what's happened is -- on the dollar -- on every health care dollar. And so we're facing, all of us around this table, Democrat and Republicans are facing the fact that there is $919 billion now we're spending on Medicare and the federal portion of Medicaid, and that if things -- I don't see any firewall that's going to keep costs from doubling again, we're going to be talking about in the year, you know, 2019, we're going to be spending $1.7 billion -- excuse me, $1.7 trillion, if we don't do something to bend that curve.

So I -- and the -- and the fourth point I think we can agree on is that whether you agree how it is arrived at, CBO has gone out and scored the various plans as to whether or not they bend the cost curve, and everybody's acted in good faith. John's (ph) plan, they've gone out, and points out over 20 years, it will -- it will -- and I don't know if that's the Republican plan or John (ph), I don't think there is any one plan that is out there, but John's (ph) plan cuts those costs by $300 billion over 20 years, according to CBO. The Senate plan cuts it by over $1 trillion over 20 years, $100 billion over 10.

Again, we can argue on the margins, but the fact is it's not just CBO that said this, you had the Business Roundtable (inaudible) study that shows that the Senate plan slows growth by 15 to 20 percent, and that business costs per employee by the year 2019 would be $3,000 less per employee.

Again, it may be wrong, may be wrong the exact amount. It may be $3,800, it may be $2,200, but it cuts cost.

And so it seems to me that there is -- and I might add that in the process here, it wasn't part of the -- specifically part of the long-term debt debate, but, you know, as has been pointed out here, we're not cutting Medicare benefits in this. We're trying to eliminate the third of the problem that's a waste.

And as Senator Enzi, who I have an inordinate amount of respect for, points out, he said it'd be nice if we put some of these savings back into Medicare.

Well, the fact is we do. We close the prescription drug donut hole, we provide for preventative care for seniors, which they don't have now without a co-pay, and we also, it's -- everyone, I think most every major study agrees that it's going to extend the life of Medicare trust fund and it changes the -- these changes, the actuarial group pointed out, would save about $200 on a premium per Medicare recipient out there that people are paying.

So, look -- and the source of how we do this is getting rid of waste, making sure that we don't overpay insurance companies for Medicare Advantage. I want to remind everybody about Medicare Advantage, because some of us around here, probably all of us around this table were here when it got put in. What was the rationale for Medicare Advantage? The rationale for Medicare Advantage a decade ago was that private insurers could provide insurance, better insurance, cheaper than the government can do it. They can do it better.

And we said, the reason why we're going to pay them more than what they're going to give at the front end is to incentivize them to get in the business of doing it. And so, we paid them $1.15 for every dollar's worth, what we could have bought for a $1. We did it -- and it was a rational thing to try -- we did that because we wanted them to get engaged in the business we thought government didn't do as well as the private sector did.

Well, here we are, we're overpaying insurance companies about 15 cents on the buck that -- what we could buy for $1, and we call for eliminating that.

And so the other point I'd make, Mr. President, is that we're in a situation here where at the end of the day nobody in this room -- I don't think anybody in this room is going to say, "You know something, we are really going to be reforming the health care system without affecting the effect on the long-term deficit." Unless we bend that cost curve, we're in trouble.

And, Mr. President, we can argue, which we will, about whether or not the way you and I want to go after dealing with the long-term debt, whether commissions make sense, whether or not we're ever going to deal with entitlement, this is a big entitlement. It's a big entitlement, Medicare. It exists. We got to figure out how to keep it from bankrupting the country without denying seniors what they're entitled to in a nation like ours, decent health care that provides for their needs.

BIDEN: So I'd like to ask, Mr. President -- and I'm going to hush -- I'd like us to talk about, if we can, specifically, what we all agree on, what do we do about bending the cost curve?

What's the best way to do it?

And I yield the floor, as I used to say as a senator.


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