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Schering-Plough CEO Calls on Winner of Presidential Election to Adopt 4-Point Plan for Health Care Reform Wire Editor | 9/9/04
Effective Agenda Demands Sweeping Health Policy Reform, 'Innovation Friendly' Environment and 'Political Courage,' says Fred Hassan
DURHAM, N.C., Sept. 9 /PRNewswire-FirstCall/ -- In a major address at Duke University, Schering-Plough CEO and Chairman Fred Hassan today presented a four-point plan for sweeping health policy reform for the United States that he said should be adopted by whichever candidate wins the November presidential election.
Speaking before an audience of several hundred business and medical school students and faculty, Hassan said that the United States was facing a revolution in health care "that will be on a scale similar to that of the industrial revolution in the 18th and 19th centuries" - driven by a combination of aging baby boomers and new health care innovations coming from the pharmaceutical industry. Hassan was speaking at the invitation of Duke's Fuqua School of Business, as part of its Distinguished Speakers Series.
Hassan called conclusions that enormous innovations in genomics and other technologies would not pay off "premature." He said, "Over the course of the next decade or two, I am convinced that we will see extraordinary breakthroughs. However, these breakthroughs will come only through enormous investments, and thus potentially enormous new health care costs."
To manage this revolution and to deliver on public expectations of improved health care and quality of life in coming decades, Hassan laid out "four pillars for health care reform" for the next president that he said were "essential."
The first pillar was to change individuals' investment behavior to assure that "we as a society can afford the health innovations that will make our lives better and longer." Specifically, Hassan called for incentives to encourage mid- and higher-income baby boomers to invest up to 5 percent of their annual earnings in health savings accounts. By doing so, Hassan said, it would be possible to increase health spending in the United States from a current level of approximately 13 percent of Gross Domestic Product (GDP) to up to 18 percent of GDP 10 years from now -- a level Hassan said is not only realistic but "even a necessary level," given societal expectations for improved health and the potential to deliver on those expectations.
Hassan said it was essential that this additional funding come through individual savings, both because it would be dangerous to place health care decision-making in the hands of government bureaucracies, and because it was essential that individuals take greater responsibility for health decisions. He said this was especially the case with respect to changing behaviors such as smoking, poor exercise and poor diet, which cause enormous, avoidable health care costs. "Health care saving is a way to get individuals to own the consequences of their own behavior," he added.
Hassan also said that health saving by those who can afford it would free up other resources "to fund quality care for the poorest and least advantaged in our society." Appropriate incentives would include tax benefits and other measures.
The second pillar of health care reform proposed by Hassan was transformational change of the health care system. The increases in GDP devoted to health care that he advocates, he said, must be accompanied by dramatic increases in efficiency and effectiveness of health care delivery. Citing examples such as $2 billion in annual spending on medication-related errors for hospital patients and the deaths of 18,000 Americans annually due to preventable heart attacks, Hassan called for a radical increase in the use of IT and other tools to ensure better coordination and transparency of information in patient care.
Hassan also said it was "essential" that Medicare be rebuilt from top to bottom, in order to achieve integrated care focused on health outcomes at a reasonable cost. "We need to turn Medicare on its head," said Hassan, "focusing first on the patient, rather than on the providers." Hassan added, "This is a matter that requires political courage. We should demand this courage of either candidate who wins the White House this year."
The third pillar of health care reform, said Hassan, was to change the personal behavior of individual citizens and their doctors "to give a priority to preventative care and health literacy." Citing an alarming increase in obesity-related and other chronic diseases, Hassan said that a key to needed behavioral change lay in the schools. Calling many school meal programs "a dietary disgrace," Hassan said that it should be a mission of the next president "to give the same priority to school-based programs to change health behaviors as we give to other education initiatives."
The fourth pillar of reform advocated by Hassan was to change the societal environment to foster and support health innovation. He noted that health care advances have come through billions of dollars of pharmaceutical industry investment and the 'high risk, high reward' free market system that has encouraged investors. Hassan said it was time for national politicians to "do the hard and responsible work of educating constituents on the realities" that better health has to be paid for.
Said Hassan, "To hear some of our politicians talk, you would believe that government creates health innovations and pharmaceutical companies simply profit from them." Yet the reality, he emphasized, "is that it is the private sector that is playing the key role in discovering and developing new therapies."
Hassan said that the exodus of pharmaceutical research from Europe to the United States in recent years was a warning of the dangers of price controls and other government intervention in the high-innovation pharmaceutical industry, an industry that he said was now "one of two pillars of U.S. strength in high technology, along with Silicon Valley."
The next president of the United States, said Hassan, should be leading the way "on how best to support one of the leading industries of our country, one that does good things for millions of people -- not arguing over policies to undermine or even to destroy it."
Schering-Plough is a global science-based health care company with leading prescription, consumer and animal health products. Through internal research and collaborations with partners, Schering-Plough discovers, develops, manufactures and markets advanced drug therapies to meet important medical needs. Schering-Plough's vision is to earn the trust of the physicians, patients and customers served by its more than 30,000 people around the world. The company is based in Kenilworth, N.J., and its Web site is http://www.schering-plough.com/.
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