 Ladies and gentlemen, the President of the United States. Members of the House of Delegates and guests, this is a distinction for me, for the American Medical Association, and for all of the nation's physicians we represent. As our way of saying thank you in advance to our guest of honor for taking time from perhaps the world's busiest schedule to be with us today, we are taking an action as an association that we believe will please him as well as help a worthwhile endeavor. We know that one of Mrs. Reagan's favorite organizations to which she has devoted a considerable amount of time and energy is the National Federation of Parents for Drug-Free Youth, a coalition of local parents groups. It's my pleasure today to announce that in honor of Mrs. Nancy Reagan the AMA is contributing $5,000 to the National Federation of Parents for Drug-Free Youth. Now it's with a great deal of pride that I introduce to this House of Delegates and to our guests the President of the United States. Thank you very much. You did that. Thank you. Well thank you very much, a very warm welcome. Thank you for inviting me today and I know Nancy would want me to thank you for your donation to the National Federation of Parents for Drug-Free Youth. I'm delighted to address this annual meeting of the AMA House of Delegates and I want to congratulate Dr. Yurka and Dr. Boyle on their new positions. I can't help but think that what a great place this would be and what a great moment to have a low back pain but I left him in Washington. One thing I've always liked about doctors is that you generate lots of anecdotes which is very good for very good for those of us who have to travel the mashed potato circuit. Like the one about the fellow who went to the hospital for a complete checkup, very depressed and said to the doctor I look in the mirror I'm a mess my jowls are sagging I have blotches all over my face my hair has fallen out I feel ugly what is it and the doctor said I don't know what it is but your eye sight is perfect. Well today I'd like to take a clear eyed look at our health care system and let me start by saying as strongly as I can the quality of American medicine is unsurpassed and on that we don't need a second opinion. What our space shuttle is to technology our health care is to medicine. In lifesaving discoveries in innovative treatment and the overall quality of services America's doctors have no peers. Your medical accomplishments are a gift to mankind that honors us all and I have a special appreciation for the skill of some Washington doctors and nurses who patched up an inner tube for me and had me back on the road very early and in a quick time. My respect for your profession is deep and personal. Let me add here that Judy Bucklew who recently joined my staff as a special assistant is the first registered nurse to serve in such a capacity. Her duties aren't medical although with what's going on in Congress Judy it might be a good idea if you carry smelling salts. A moment ago I mentioned the space shuttle which as you know is scheduled to land tomorrow weather permitting and now it's beginning to look as if weather isn't going to permit but medicine as well is becoming high-tech increasingly so in some instances high bio through computers lasers nuclear devices and various Star Wars technologies your diagnostic and healing powers have multiplied over the last decade. We're going to make sure that trend continues by promoting solid math and science skills in our schools. We'll also further that trend with an active federal role in quality research. I believe the orphan drug act that I signed in January eventually will add to your curing powers. As you know the sad fact is that many diseases still cripple or kill hundreds of thousands of Americans because no drugs have yet been developed. Statistically they are rare diseases yet that small comfort for those afflicted and their families. The cost of discovering and developing a new drug of course is often staggering. This legislation provides incentives for the private sector to develop drugs to treat these rare diseases and I'm proud to say the FDA under this administration has proposed new initiatives to help streamline the drug approval process. We want a process that genuinely promotes the public health not only by keeping unsafe and ineffective drugs off the market but by enabling beneficial new drugs to reach those who need them more rapidly. We recognize full well that if the burdens of excessive regulation are lifted the American medical community can do an even better job in protecting the health of the American people. While the quality of health care in this nation is unsurpassed unfortunately so are the costs. In fact many patients believe that a hospital should have the recovery room adjoining the cash ears office. I know cost is a matter that concerns you as well. The AMA deserves congratulations for its cost effectiveness programs and its health policy agenda. And as I did at the White House in April let me again thank those medical societies that have private sector programs to assure cost will not prevent anyone from receiving medical care. But the problem of health care costs the problem of health care cost is so pressing you can't carry that full burden alone. For the last 12 month period health care costs went up almost two and a half times the overall inflation rate. In 1982 the cost of health insurance rose nearly 16 percent. Health care costs are consuming a growing portion of the nation's wealth. And this is wealth that cannot be spent on education or housing or other social needs. Health care costs are not just the concern of the sick in our society. Everyone is affected. The taxpayer picks up the tab for 40 percent of all hospital bills mainly through Medicaid and Medicare. Because of rising costs the poor on Medicaid have seen their coverage reduced as states make cutbacks. Because of the increased cost of health insurance employees have received lower cash wages. Consumers have paid higher prices for goods and services since the cost of employee health benefits must be included in the price of products. And the elderly who are covered by Medicare face the threat of catastrophic illness expense against which Medicare offers no protection. It's high time that we put health care costs under the knife and cut away the waste and inefficiency. The growth in medical cost is malignant and must be removed for the continued health of the American people. The danger is that high medical inflation may soon jeopardize the quality and access of our health care. America won't be able to sustain its unequal health care system if citizens can't afford it. Not all Americans have the fancy gold plated all option insurance plans that cover every sneeze and itch. Yes the big corporations can look after their people but let's not forget that little guy down at the donut shop. Don't get me wrong it's not bad to spend money on health care far from it. The nation's high level of health expenditure is his testimony to our people's compassion. We can't and we will not scrimp on the health of America's citizens but on the subject of compassion let me clear something up. In spite of all the stories you hear on television and I would turn flips down the halls of the White House if this next statement made the evening news. The truth is that this administration in 1984 will devote more money to health care than any administration in history. That probably surprises you but 49 million elderly poor and disabled persons one out of every five Americans will have health care needs met through Medicare and Medicaid in 1984. That's a million more than this year and three million more than in 1980. With this kind of solid record you can understand why I get a little irritated by those who say that we're cutting health care. The critics remind me of the hypochondriac who was complaining to the doctor. He said my left arm hurts me and also my left foot, my back and there's my hip and oh yes my neck and the doctor muttered something to himself and then sat him down and crossed his legs and tapped him with a little rubber hammer. He says how are you now? The patient said well now my knee hurts too. Many of our critics are simply political hypochondriacs. They're complaining about every little ache. I've also read those know nothing stories about this administration ignoring childhood diseases. Let me just tell you that in the last two years the reported cases of diphtheria, measles, mumps, polio, rubella and tetanus as I'm sure many of you know have reached all-time lows. The measles rate is down by nearly half over 81. The problem is that Washington is full of special interest groups passing around self-serving studies that are then reported as fact. They serve up headlines but too many of them don't serve up the truth. I understand why doctors are torn by our attempts to put the brakes on the budget. Like most citizens you want to slow the growth in federal spending yet at the same time professionally you worry about this breaking action and that it may affect our health care especially the health care of the poor. Well let me reassure you we're not trying to limit the quality and access of America's health care we're trying to save it. We want a health care system that is affordable and fair to all Americans. There are some who no matter what the problem is think money's the answer. If you told them that you had walking pneumonia they'd give you five bucks and tell you to take a cab. And if they're not proposing more money they're proposing more government controls over the practice of medicine. Back in 1847 a group of 250 physicians convened in Philadelphia to establish this American Medical Association. Well I'm going to tell you what I told them. We have the best health care in the world because it has remained private and working together we'll keep it that way. The government plays a role of course. I believe Medicare and Medicaid have filled genuine needs in our society but our federal health care system was designed backward. The incentives have not been to save but to spend. Medicare and Medicaid costs have gone up nearly 600 percent since 1970. For too long the federal government has had a blank check mentality. The hospital simply filled in the amount they wanted and Uncle Sam would be more precise the hard-pressed American taxpayer paid the bill. Today for example Medicare payments for treating a heart attack can average $1,500 at one hospital and $9,000 at another with no apparent difference in quality. Likewise Medicare payments for hip replacements can vary from $2,100 to $8,200 and payments for cataract removal can vary from $450 to $2,800. One of our reform measures to control hospital costs has already been passed. No longer will we pay virtually whatever the hospital asks with our prospective payment program we'll pay one fair rate and the hospital that delivers its services at a cost less than that rate can keep the difference. In the past the government actually subsidized and encouraged inefficiency by paying more to the inefficient hospital than to the efficient one. Medicare cost sharing has often seemed backward as well. Under current law unbelievable as it seems Medicare hospital coverage can actually expire in the event of catastrophic illness just when it's needed most. And even when the coverage has not expired those in a hospital who stays for 60 days must make every high out-of-pocket payment. In contrast those with shorter hospital stays pay nothing out of pocket after the first day. It's cheaper for the patient to be at the hospital than at home. We're trying to make coverage fairer by using moderate cost sharing early in an illness rather than imposing severe cost later when the patient has little choice over the length of the hospital stay. Under current law the average patient hospitalized in 1984 for 150 consecutive days would owe $13,475 from his or her pocket and then bear the total cost of all subsequent hospital care. Under our plan the patient would owe only $1,530 with absolutely no cost for subsequent hospital care. The co-payments proposed for Medicaid are nominal $1 to $2 a day and intended only to discourage the unnecessary use of services. We also propose limiting the current tax subsidy for high priced health plans. Most employer contributions for employee health benefits should be tax-free because this encourages employee health insurance. Our plan would simply cap this tax-free treatment in order to correct the bias toward high priced first dollar coverage. Health insurance should cover hepatitis and whooping cough not hiccups. The proposed cap is an effort to make the tax law neutral in the choice between added wages and added health benefits. The Bible tells us that in creating the universe God made order out of chaos. Well at times I think even the Almighty would have his hands full making order out of the regulatory tangles that afflict our health care system. But our reforms are a conscientious start. Some of these reforms such as prospective pricing, catastrophic coverage and capping tax-free health insurance, many of you either support or remain flexible. And I want to thank you for these positions. I realize that other of our reforms such as Medicare vouchers or competitive bidding, many of you don't support. Well I'd like to explain an additional proposal you don't support. The one year freeze on Medicare physician reimbursement. These payments have been increasing at highly inflationary rates. In 1982 they increased 21%. I'm expected to rise 19% more in 1983. We believe physicians too must share the burden of slowing the rise in health care costs. As the patient in the movie often says give it to me straight doc. Well we believe the straight answer is that a one year freeze is painful but necessary medicine. In spite of occasional differences of opinion our goals are the same as the AMAs. As written in your constitution more than a century ago the purpose of the AMA is to promote the science and art of medicine and the betterment of public health. Well we too are looking for ways to improve the health of the American people and we need your support and your ideas. I want to insert something here I want to applaud the efforts by the AMA to become more involved in the public debate regarding environmental health risks. Yesterday in a speech before the National Academy of Sciences EPA Administrator William Ruckelshaus urged the scientific community to take an active role to help clear up confusion over the health dangers of chemicals. Your resolution on dioxin contamination is a positive step to a more reasonable public discussion of these important issues and I commend you and thank you for it. I think sometimes we want health and we don't want public hazards dangers to our people wherever they may be but a very eminent scientist once said that he questioned whether there were any dangerous or harmless substances. He said there were only dangerous or harmless amounts and I think that sometimes we have with the fantastic and the dramatic or melodramatic treatment of some of these things we have frightened a great many people unnecessarily and the answer is not to take risks not at all but to make sure also that we haven't frightened people unless there is truly a reason for them to be frightened. Before I go let me briefly mention an issue important to you both as citizens and as doctors. Last week I sent another message or a message to another group of doctors who were gathered in an international conference in Holland. They were not meeting on heart disease or nerve disorders. They were meeting on the matter of preventing nuclear war and I told them that we have an unprecedented opportunity to reduce nuclear arsenals. Very serious negotiations are proceeding in Geneva between the United States and the Soviet Union on the means of achieving substantial equitable and verifiable reductions in our nuclear arsenals and on building the mutual conflict making a great effort to move these negotiations forward just two weeks ago I announced that our negotiator Ambassador Ed Rauney would be going to Geneva with new instructions to give us greater flexibility in the talks and to take account of concerns the Soviets have expressed to us. I told the doctors meeting in Holland those negotiations deserve the full support of all who seek genuine progress toward peace. That was my message to the international group of physicians to reaffirm that nuclear war cannot be won and must never be fought. I invited their support for the important arms reduction negotiations underway in Geneva and today I invite your support as well so that we can make real progress toward the genuine peace that we all seek for ourselves and for our children. Charles Kettering once said that the greatest thing any generation can do is to lay a few stepping stones for the next generation and that's what we're trying to do. We want to lay stepping stones to better health care and a more secure peace for America and with your help we can do it. Thank you and God bless you. Thank you Mr. President. I know that I speak for everyone in this House of Delegates and in this room. When I say that we appreciate your remarks you've given us a great deal to think about both in our organizational activities and in our individual practices. Ladies and gentlemen as a courtesy please stay in the room until the presidential party and the press corps has left the room. Thank you very much Mr. President we appreciate your visit.