Medical Device Daily Washington Editor

President Obama's Wednesday evening speech to a joint session of Congress contained the soaring rhetoric the American public has come to expect from the nation's 44th president as well as a few nods to bipartisanship. However, Obama's message on the public option can best be described as mixed.

Further complicating the issue for the White House is a series of statements by Sen. Max Baucus (D-Montana) indicating that the chairman of the Senate Finance Committee sees no realistic prospect of getting a successful Senate vote on a bill that includes a public option.

Noting that his last appearance before Congress coincided with the deepening economic downturn, Obama acknowledged that a "full and vibrant recovery is still many months away," but promised to continue working until jobs become readily available again.

Addressing the multiple big-picture changes he and Congressional Democrats have undertaken in the first half of the year, Obama took a more strident tone. "We did not come here just to clean up crises. We came here to build a future," he said. Regarding healthcare reform, he proclaimed, "I am not the first president to take up this cause, but I am determined to be the last."

As for what he seemed to characterize as a health insurance oligopoly, Obama stated, "in 34 states, 75% of the insurance market is controlled by five or fewer companies." At one point, he seemed to hint that he is not wedded to the idea of a public option, telling progressives that the idea behind reform "is to end abuses" by insurance companies and suggesting "we ... remain open to other options that get us to that goal."

In contrast, he also said that a public option is "an additional step we can take to keep insurance companies honest," arguing, "no one would be forced to choose it." He also mentioned that the Congressional Budget Office indicated that under the terms laid out in the House healthcare reform bill, H.R. 3200, only 5% of Americans would enroll in the public option.

Still, Obama also struck a determined note on this point with the statement: "I will not back down from the basic principal that if Americans cannot find affordable coverage, we will provide you with a choice."

For his part, Baucus has stated that a public option "cannot pass the Senate." Several media outlets quote Baucus as stating further, "I could be wrong, but it's my belief that the public option cannot pass" a Senate vote.

Baucus is definitely in the minority among congressional Democrats on the public option, at least to the extent that the three House committee bills and the bill by the Senate Health, Education, Labor and Pensions Committee all call for a public option. However, the long August recess subjected members of Congress to a lot of headwind on the issue, and some Democrats, including Sen. Ben Nelson (D-Nebraska) have indicated that they would likely abandon a bill with the public option.

The ranking GOP member of the Finance Committee, Chuck Grassley (R-Iowa), has also indicated nervousness about several aspects of reform. Conventional wisdom holds that Democrats need at least some GOP support in the Senate unless they are willing to use budget reconciliation to pass reforms. The problem with this path is that parliamentary rules would probably limit what the Senate could include in such a bill, which would in turn put the Senate and the House on a collision course that might kill the effort altogether.

Obama also threw a fig leaf to conservatives regarding tort reform by promising to roll out demonstration projects that were proposed during the years of the Bush administration, but skeptics argue that most demonstration projects end up as nothing more than temporary programs that exert no influence on policy. Obama also promised that reforms would not provide coverage to illegal immigrants, a remark that spurred the now-infamous retort of "you lie" by Rep. Joe Wilson (South Carolina).

Wilson's behavior has been widely excoriated, but to the extent that Obama's discussion seems to parallel H.R. 3200, concerns over this issue seem well founded because while the House bill says that coverage will not be provided to illegal immigrants, it does not require that providers obtain proof of citizenship.

Perhaps the least credible of Obama's remarks was "I will not sign a plan that adds one dime to our deficit now or in the future." He said the bill would include a requirement for spending cuts "if the savings don't materialize."

The problem widely seen with this assertion is that every projection of healthcare reforms that would shave costs indicates that several years will be needed before those savings materialize, leaving the White House in the position of having to cut spending at a time when other initiatives are already driving up current and future deficits. Obama declined to go into details about where cuts would be made, but hostility to the conflicts in Iraq and Afghanistan was in full evidence during the president's speech.

In a Sept. 9 statement, Steve Ubl, President/CEO of the Advanced Medical Technology Association (Washington), commended Obama for his "efforts to further the national debate on the need for healthcare reform" and urged the White House to "support key systemic changes that will achieve critical efficiencies and improve patient care, including coordination of care, preventive health measures, value-based purchasing, and comparative effectiveness research – done the right way."

Ubl said the association's members also support "policies that encourage innovation and appropriate use of technology and diagnostics" and oppose "any new innovation tax that will increase the cost of every medical device needed by patients – from bed pans to pacemakers, from bandages to scales – and stifle innovation and investment in research and development."

Mark McCarty, 703-268-5690;