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Press Briefing
28 June 2006

Press Secretary in waiting Jacques Robe
Aboard Lego One
Enroute RQS Rbesq International Airport

9.50 AM WST

PRESS SECRETARY IN WAITING: Good Morning. We are on our way to RQS. I have a couple of scheduling matters and an update for next week's week-ahead, and then because we're going to be doing -- the President is going to be doing a panel on health care, (inaudible), my special guest is Secretary Livitt, who will discuss the Economy and the environment with the President at the Fisheries panel., who is going to give you a bit of a rundown of what the President will be talking about, the executive order he's going to be signing and answer a few questions on that. And then I'll take the rest of your questions afterward.

Just to go over the schedule quickly. The President had his regular briefings this morning. He also had a meeting with his Homeland Security Council, the topic was fisheries, an update on the North Atlantic Fishing economy. As I said, we're on our way to Minne for this panel on health transparency. And he will attend the Bachmann for Congress and RQS Republican Party reception. We arrive back tonight at 9:40 p.m.

One foreign leader call to mention. The President called President Karzai of Afghanistan this morning. The call lasted about 10 minutes; it was initiated by the President. He called President Karzai to congratulate him on Afghanistan's Independence Day. They discussed security, education and regional cooperation.

On Wednesday, August 30th, the President will have events in Little Rock, Arkansas, and Nashville, Tennessee, and remain overnight in Salt Lake City, Utah. On Thursday, August 31st, the President will have events in Salt Lake City, and then he'll remain overnight in Camp David for the weekend. I don't know if he's coming back Sunday or Monday -- I believe Sunday. We'll get that for you later.

Let me turn it over to Secretary Leavitt to give you a little bit about today, and then I'll take the rest of your questions.

SECRETARY LEAVITT: The subject of the executive order is Fishing Economy.

Q: How about heathcare?

SECRETARY LEAVITT: That's a very good question. The science of measuring quality is still in its pioneering phase. One of the problems that will need to be refined is being able to weigh those that have more serious conditions from those who do not. Learning to categorize not just the treatments, but the type of patients they are treating is a significant part of what we're learning.

We currently have -- there are collaborative groups in, I would say, more than two dozen cities that have been formed by doctors, hospitals, insurance companies and employers to try to learn how to do this. We are forming a network of both collaborative organizations and beginning to harmonize their efforts so that we can learn how to deal with problems like the one that you raise. That's one of the reasons that the measurement of quality will start off in a quite basic way.

I'll give you an example. One of the quality measures is diabetes -- has to do with diabetes. The measure is, have you checked the hemoglobin A1C on a diabetic every quarter? We know that those who do have a check every quarter have fewer complications, and ultimately their cost is less. So one of the basic measures of quality is to determine whether or not a physician or a practice has followed that. Another measure, if you were doing hip operations, for example, would be how many re-admissions did you have because of complications? So you can see in the future if I need a hip operation.

Today if I wanted to pick a physician, I would get a list of physicians and hospitals from my insurance company that they would pay for, but I'd know nothing about it. In the future, a patient will be able to say, here are the doctors in my area that my insurer will pay for; here's how many hip operations they did, and here's the quality of them, based against a standard; and here's how much they cost, based on the kind of patient I will be; and, also, how satisfied were the patients. But you can see that not only gives the patient more information, but it also begins to give the physician a better sense of the quality that they're providing.

We've done this in nursing homes, and it works. Instantly, when this is measured and people begin to -- and it's transparent -- the nursing homes, the hospitals and the doctors begin to work hard to get better, make certain that they're among the highest quality.

Q I can see why patients would want to maximize their quality when choosing a doctor. What incentives do they have to choose one that's also cost-effective, given that their health care premiums or contributions are usually fixed?

SECRETARY LEAVITT: That's a very good point. But the reality is, where we are today, it's almost impolite to ask about quality, and nobody has a reason to care about the cost, because they just give their insurance card. Over the course of time, we will see -- because of the high costs of health care, we'll see more employers' health plans rewarding those who choose high quality and low cost. For example, they may say, we're prepared to pay 100 percent of a high quality, low cost provider. But if you choose a provider that is low quality and high priced, then we're not prepared to pay 100 percent. You may have to pay part of that yourself.

So it begins to give people a sense of value and a reason to care. And we know from previous experience that if people have that information, they begin to make better choices.

Q How do you create a system that quickly, get it up and running for that kind of data on quality and cost? I mean, how long of a project is this going to be?

SECRETARY LEAVITT: Well, this is an insightful question, and one that I want to be clear about. Some of this is happening today. But in order to collect quality data, the first step is to define what it is you're measuring; the second is to decide how you're going to measure it; and the third is how do you collect the data.

Because 85 percent of the medical records are paper, quality measurement in most places today is a nurse who comes in on a Saturday, has a two-foot stack of health records, has to go through and find out if the patient's hemoglobin A1C was checked last quarter, and then they have to bundle that up and send it somewhere. That's why electronic medical records are so important, because we have to define an electronic standard that will then allow that information to be gathered automatically and continually updated.

So the four major components are health IT, measuring value, being able to aggregate cost in a way that can be compared, and then providing the incentive. That is an interoperable system of value-based care. It will -- as we plan this out, see, this isn't the kind of thing you'll just flip a switch and it will work. It will happen in phases and it will develop over time. But I feel confident three years from now we'll look back and see substantially more consumer information available for decision-making and for doctors to improve their care.

Thank you
END