My Plan for a Healthy America

Barack Obama has promised to make health insurance affordable and accessible to all including the 45 million Americans who currently have no health cover. Here in a piece that pulls no punches in dealing with waste, greed, indifference and sickening profiteering, the new president-elect of the USA explains how.

We often hear the statistic that there are 45 million uninsured Americans. But the biggest reason why they don't have insurance is the same reason why those who do have it are struggling to pay their medical bills - it's just too expensive.

Health care premiums have risen nearly 90% in the past six years. That's four times faster than wages have gone up. 11 million insured Americans spent more than a quarter of their salary on health care last year. And over half of all personal bankruptcies are now caused by medical bills.

Businesses aren't faring much better. Over half of all small businesses can no longer afford to insure their workers.

This cost crisis is trapping us in a vicious cycle. As premiums rise, more employers drop coverage, and more Americans become uninsured. Every time those uninsured walk into an emergency room and receive care that's more expensive because they have nowhere else to turn, there is a hidden tax for the rest of us as premiums go up by an extra $922 per family. And as premiums keep rising, more families and businesses drop their coverage and become uninsured.

It would be one thing if all this money we spend on premiums and co-payments and deductibles went directly towards making us healthier and improving the quality of our care.

But it doesn't.

One out of every four dollars we spend on health care is swallowed up by administrative costs - on needless paperwork and antiquated record-keeping that belongs in the last century.

This failure to update the way our doctors and hospitals store and share information also leads to costly errors. Each year, 100,000 Americans die due to medical errors and we lose $100 billion because of prescription drug errors alone.

We also spend far more on treating illnesses and conditions that could've been prevented or managed for far less.

Since President Bush took office, the single fastest growing component of health care spending has been administrative costs and profits for insurance companies. Coming in a close second is the amount we spend on prescription drugs. In 2006, five of the biggest drug and insurance companies were among the fifty most profitable businesses in the nation.

One insurance company CEO received a $125 million salary that same year, and has been given stock options worth over $1 billion. As an added perk, he and his wife get free private health care for as long as they live.

Now, making this kind of money costs money, which is why the drug and insurance industries have also spent more than $1 billion on lobbying and campaign contributions over the last ten years to block the kind of reform we need. They've been pretty good at it too, preventing the sale of cheaper prescription drugs and defeating attempts to make it harder for insurance companies to deny coverage on the basis of a preexisting condition.

Look, it's perfectly understandable for a business to try and make a profit, and every American has the right to make their case to the people who represent us in Washington.

But I also believe that every American has the right to affordable health care.

We can do this. The climate is far different than it was the last time we tried this in the early nineties.

Since then, rising costs have caused many more businesses to back reform, and in states from Massachusetts to California, Democratic and Republican governors and legislatures have been way ahead of Washington in passing increasingly bolder initiatives to cover the uninsured and cut costs.

I will sign a universal health care plan into law by the end of my first term in office - a plan that not only guarantees coverage for every American, but also brings down the cost of health care and reduces every family's premiums by as much as $2500. This second part is important because, in the end, coverage without cost containment will only shift our burdens, not relieve them.

My plan begins by covering every American.

If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.

If you are one of the 45 million Americans who don't have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness. Everyone will be able buy into a new health insurance plan that's similar to the one that every federal employee - from a postal worker in Iowa to a Congressman in Washington - currently has for themselves. It will cover all essential medical services, including preventive, maternity, disease management, and mental health care. And it will also include high standards for quality and efficiency.

If you cannot afford this insurance, you will receive a subsidy to pay for it.

If you have children, they will be covered. If you change jobs, your insurance will go with you. If you need to see a doctor, you will not have to wait in long lines for one. If you want more choices, you will also have the option of purchasing a number of affordable private plans that have similar benefits and standards for quality and efficiency.

To help pay for this, we will ask all but the smallest businesses who don't make a meaningful contribution today to the health coverage of their employees to do so by supporting this new plan. And we will allow the temporary Bush tax cut for the wealthiest Americans to expire.

But we also have to demand greater efficiencies from our health care system. Today, we pay almost twice as much for health care per person than other industrialized nations, and too much of it has nothing to do with patient care.

That's why the second part of my health care plan includes five, long-overdue steps we will take to bring down costs and bring our health care system into the 21st century - steps that will save each American family up to $2500 on their premiums.

First, we will reduce costs for business and their workers by picking up the tab for some of the most expensive illnesses and conditions.

Right now, two out of every ten patients account for more than eighty percent of all health care costs. These are patients with serious illnesses like cancer or heart disease who require the most expensive surgeries and treatments. Insurance companies end up spending a lion's share of their expenses on these patients, and not surprisingly, they pass those expenses on to the rest of us in the form of higher premiums.

Second, we will finally begin focusing our health care system on preventing costly, debilitating conditions in the first place.

We all know the saying that an ounce of prevention is worth a pound of cure. But today we spend less than four cents of every health care dollar on prevention and public health even though eighty percent of the risk factors involved in the leading causes of death are behavior-related and thus preventable.

The problem is, there's currently no financial incentive for health care providers to offer services that will encourage patients to eat right or exercise or go for annual check-ups and screenings that can help detect diseases early. The real profit today is made in treating diseases, not preventing them. That's wrong, which is why in our new national health care plan and other participating plans, we will require coverage of evidence-based, preventive care services, and make sure they are paid for.

Third, we will reduce the cost of our health care by improving the quality of our health care.

It's estimated that poor quality care currently costs us up to $100 billion a year. One study found that in Pennsylvania, Medicare spent $1 billion a year just on treating infections that patients contracted while at the hospital - infections that could have easily been prevented by hospitals. This study led hospitals across the state to take action, and today some have completely eliminated infections that used to take hundreds of lives and cost hundreds of thousands of dollars every year.

Fourth, we will reduce waste and inefficiency by moving from a 20th century health care industry based on pen and paper to a 21st century industry based on the latest information technology.

This reform is long overdue. By moving to electronic medical records, we can give doctors and nurses easy access to all the necessary information about their patients, so if they type-in a certain prescription, a patient's allergies will pop right up on the screen. This will reduce deadly medical errors, and it will also shorten the length of hospital stays, ensure that nurses can spend less time on paperwork and more time with patients, and save billions and billions of dollars in the process.

Finally, we will break the stranglehold that a few big drug and insurance companies have on the health care market.

We all value the medical cures and innovations that the pharmaceutical industry has developed over the years, but it's become clear that some of these companies are dramatically overcharging Americans for what they offer. They'll sell the same exact drugs here in America for double the price of what they charge in Europe and Canada. They'll push expensive products on doctors by showering them with gifts, spend more to market and advertise their drugs than to research and develop them, and when a generic drug maker comes along and wants to sell the same product for cheaper, the brand-name manufacturers will actually payoff the generic ones so they can preserve their monopolies and keep charging the rest of us high prices.

We don't have to stand for that anymore. Under my plan, we will make generic drugs more available to consumers and we will tell the drug companies that their days of forcing affordable prescription drugs out of the market are over.

And it's not just the drug industry that's manipulating the market.

In the last ten years, there have been over four hundred health insurance mergers. Right here in Iowa, just three companies control more than three-quarters of the health insurance market. These changes were supposed to increase efficiency in the industry. But what's really increased is the amount of money we're paying them.

This is wrong. We're going to make drug and insurance companies compete for their customers just like every other business in America. We'll investigate and prosecute the monopolization of the insurance industry. And where we do find places where insurance companies aren't competitive, we will make them pay a reasonable share of their profits on the patients they should be caring for in the first place. Because that's what's right.

• This is an edited version of Barack Obama's speech at the University of Iowa on May 29, 2007
• More on the president elect's policy