Obama Tries To Sell Health Plan To Doctors

President Obama warned on Monday that the escalating cost of health care is a threat to the U.S. economy, telling the American Medical Association that the whopping cost of health care helped drag down General Motors and Chrysler, and urging support for his new public insurance system to whittle the medical price tag.

In a speech at the AMA's annual meeting in Chicago, the president noted that the U.S. is spending more than $2 trillion a year on health care — 50 percent more per person than the next highest-spending nation. Despite the huge expenditure, Americans' life spans are shorter than people in some countries that spend less.

"The cost of our health care is a threat to our economy," Obama said. "It is an escalating burden on our families and businesses. It is a ticking time bomb for the federal budget, and it is unsustainable for the United States of America."

Citing health horror stories from across the country, the president said Americans are forgoing checkups and prescriptions, small businesses are dropping or reducing coverage, and big companies are less profitable and less competitive because of the exorbitant cost of providing health care for workers.

"If we do not fix our health care system, America may go the way of GM — paying more, getting less and going broke," he said. Obama noted that without health care reform, "1 out of every 5 dollars we earn will be spent on health care within a decade. In 30 years, it will be about 1 out of every 3."

More than 46 million Americans are uninsured. Obama asked doctors to support his effort to provide affordable health insurance to every American, adding that his plan would enable those already insured to keep the coverage they have if they prefer. Under Obama's proposal, every American would be able to shop for a health care plan under a Health Insurance Exchange that would allow families and individuals to choose a basic health care package. The plan includes a public option that would allow Americans a broader range of choices that is designed to keep the plans competitive.

The president said the plan would make sure doctors are reimbursed in a way that is tied to patient outcomes, rather than the annual negotiations that drive Medicare rates. He also appealed to the nation's doctors to help explore ways to ensure patients' welfare without unnecessary medical tests or procedures that are often done as a hedge against lawsuits.

"I need your help, doctors," he told the group, "because to most Americans, you are the health care system."

The plan won't be cheap, and the money to pay for it will come from a number of sources, Obama said. He noted that the federal budget calls for putting aside $635 billion over 10 years in a health reserve fund. More than half of that will come from revenue generated by limiting tax deductions to the wealthiest Americans.

Obama also said savings would come from cutting inefficiencies in the Medicare program. Although he predicted debate regarding where the cuts should be made, he said $177 billion could be saved over the next decade by ending overpayment for Medicare services by introducing competitive bidding into the Medicare Advantage program, which allows private insurance companies to offer Medicare coverage.

In addition, the president said using Medicare reimbursements to reduce preventable hospital readmissions would save $25 billion over the next 10 years, and that introducing more generic versions of biologic drugs also could save billions.

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