Medical Device Daily Washington Editor
President Barack Obama's Monday address to the American Medical Association (Chicago) was highly anticipated, but did not deliver much in the way of news. However, Obama used the occasion to reinforce his message that "reform is not a luxury, it is a necessity." He also stated that he favors a public option and that he is "open" to the idea of mandatory enrollment, albeit with exceptions provided for individuals and businesses that cannot afford to enroll or provide coverage for employees.
Regarding a public option for healthcare insurance, Obama said that such a plan could be set up as part of a healthcare insurance exchange (HIE) that "allows you to one-stop shop for healthcare plans." Every plan will offer "an affordable basic package," as well as other higher-coverage plans, he said. "One of these options needs to be a public option," he said of the HIE, adding that the public option is necessary to "force waste out of the system and keep the insurance companies honest."
Obama attempted to reassure physicians that the burden for making a public option work would not fall unduly on the shoulders of doctors. He said doctors are worried that today's Medicare rates "will be applied broadly, which means cost savings are coming off your backs," but said that policymakers "will ensure that you are reimbursed in a thoughtful way that's tied to patient outcomes" rather than "the immediate state of the federal budget in a given year."
"The public option is not your enemy, it is your friend," Obama continued, adding that he did not see the legitimacy of concerns "that a public option is somehow a Trojan horse for a single payer system." He said he is of the view that single-payer systems work for some nations, but he said he does not favor such an approach for the U.S. "What a public option will help do is put affordable coverage in reach for millions of Americans," and one of the ways to make that happen is to provide "assistance for families that need it," he said.
Obama acknowledged that reform will cost dearly in the next couple of years, but promised things will even out in the long haul. "Even if we accept all the economic reasons for providing coverage for all Americans, there is no denying that expanding coverage will come at a cost, at least in the short run." Still, he promised it will not add to long-term deficits. Reform, he said, "must be and will be budget neutral in the next decade."
"Making healthcare affordable for all Americans will cost on the order of $1 trillion over the next decade," Obama acknowledged, but argued that failing to act "will cost us trillions of dollars more in lost economic growth." One of the cost solutions, he said, is that the federal government "should end overpayments to Medicare Advantage" plans, which he said government pays "much more than we pay for traditional insurance plans. We need to introduce competitive bidding" to AMA plans. "That alone will save $177 billion over the next decade."
Obama acknowledged the role of defensive medicine where costs are concerned, but offered physicians little hope of seeing any movement toward tort reform. "I understand some doctors may feel the need to order more tests in order not to feel legally vulnerable," he said, but nonetheless stated, "I'm not advocating caps on malpractice awards," which he said "can be unfair for people who have been wrongfully harmed." Without going into specifics, Obama said, "I want to work with AMA so we can scale back the defensive medicine" reassuring doctors that "this is going to be a priority for me."
Despite all the concerns, Obama made the case that "reform is not a luxury, it is a necessity," stating further that "if we do not fix our healthcare system, America may go the way of GM," a reference to General Motors (Detroit), which is in the midst of a Chapter 11 bankruptcy proceeding.
"I know people are cynical," Obama said, but asserted, "we can't let this moment pass us by."
The reaction from the Republican Party preceded the speech, a move made possible by the pre-speech publicity of the content of Obama's speech. Rep. Eric Cantor (R-Virginia), the House minority whip, said in a statement that Democrats are "touting a government-run healthcare option that creates an unlevel playing field leading to the destruction of the private market, reducing choice and putting Washington bureaucrats in charge of family healthcare decisions." Cantor also said, "it's time for the administration to end the happy talk and get down to the difficult decisions ahead."