The health care question: global market solutions.(speech by Merck & Company, Inc. Chmn/Pres/CEO Raymond Gilmartin)(Transcript)

GLOBAL MARKET SOLUTIONS

Address by RAYMOND GILMARTIN, Chairman, President and CEO, Merck & Co., Inc.

Delivered to The Economic Club of Detroit, Detroit, Michigan, March 1, 1999

It's a pleasure to be here today at the Economic Club of Detroit. My predecessor at Merck, Dr. Roy Vagelos, joined this group in the election season of 1992 to talk about the topic of the day, health care reform. For better and for worse, neither what was feared nor what was hoped for has come to pass, and once again, reform is on the national agenda. So let's make the topic a Merck tradition.

Seven years ago, candidate Bill Clinton was challenging the nation to dramatically change our health care system. Two years later, President Clinton's sweeping reform proposal failed just as dramatically, taking with it Democratic control of the House and Senate. Time passed, but the issue endured. Today, companies large and small see health care as a key operating expense. Young people and baby boomers worry along with the elderly about health care costs and access to doctors of their choice. The deliberations of the National Bipartisan Commission on the Future of Medicare, which had initially planned to release its report today, have been widely covered in the news media - as are a constant stream of stories of patients denied access to care. At this year's World Economic Forum in Davos, Switzerland, global leaders discussed health care investment, cost containment, and the pressures of aging populations in both developed and developing nations.

Against this backdrop of anxiety, our nation's progress in medicine, health education, and health infrastructure over the past half-century seems all the more remarkable. But our very progress underscores the challenges ahead. We live in the nation with the greatest medical care in the world. Yet 43 million Americans are uninsured. The U.S. virtually guarantees access to costly crisis and catastrophic care. Yet without guaranteed primary and preventive care, we guarantee an inefficient system.

Perhaps our greatest challenge is the all-too-common opinion that health care problems are intractable. That cost containment means care containment. That more efficiency equals less access. Compounding this sense of unease, the voices of special interests sometimes seem louder than those speaking for the public interest. Various groups use statistics or slogans to discredit others or stir fears. So today, I will try to limit the use of statistics and focus on the principles that I believe can responsibly improve quality and access in health care in a cost-effective way.

Competition

How can we do this? The cornerstones of the free marketplace - competition and choice - provide the best way to remove inefficiencies, control costs, and improve quality in health care. Market-based reform is not about giving up on our social contract. It does not mean reducing access to care or resorting to rationing. It means allowing competition to create a more efficient and more accessible system.

Competition sparks innovation, creating powerful incentives for new, …