Obama Pushes Public Plan with AMA

John Commins, for HealthLeaders Media , June 16, 2009

President Barack Obama told the nation's largest physicians organization on Monday that the fear of litigation is driving expensive and inefficient "defensive medicine." But he says patient-safety initiatives and evidence-based medicine are a better cure than caps on malpractice.

Speaking to the 158th annual meeting of the American Medical Association, the president also repeated his call for a "public option" health plan to provide Americans with low-cost insurance alternatives that will "keep the insurance companies honest."

"The public option is not your enemy. It is your friend," Obama told the physicians on Monday in Chicago. The AMA has voiced strong opposition to the public plan. Little new ground was covered in the sweeping, 55-minute speech. The president estimated that the cost of the reforms would be about $1 trillion over 10 years, but he said he's already identified about $950 billion in savings and tax hikes that will pay for the reforms.

For the most part, however, the president restated his case for healthcare reform, and touched upon all the major themes and efficiency initiatives that he's brought up in the past several months–from electronic health records to Medicare/Medicaid reform–that he says will reduce costs.

The president's acknowledgement that defensive medicine is driving healthcare delivery inefficiencies got one of the biggest rounds of applause from physicians, who warmly received the president and gave him a standing ovation when he entered the room. The cheers were quickly followed by stony silence and a smattering of boos, however, when the president said he wouldn't support Republican-style tort reform.

"Some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That's a real issue," he says. "And while I'm not advocating caps on malpractice awards, which I believe can be unfair to people who've been wrongfully harmed, I do think we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines. That's how we can scale back the excessive defensive medicine reinforcing our current system of more treatment rather than better care."

While noting that the president "didn't say anything new so we really weren't surprised," AMA President Nancy H. Nielsen, MD, says she's "thrilled" that malpractice costs and their broader impact on the overall healthcare system are up for discussion.

"This is the first Democratic president that's talked to us about any kind of liability reform," Nielsen told reporters after the speech. "He is open to considering options that would lower the cost of defensive medicine. He acknowledged that it is an issue, and he put it in the context of the overall pricing and unsustainable rise in healthcare costs. So, he has not taken that off the table."

Obama acknowledged physicians' unease about the public plan. "I understand that you are concerned that today's Medicare rates will be applied broadly in a way that means our cost savings are coming off your backs. These are legitimate concerns, but ones, I believe, that can be overcome." The president says the public plan is needed to "give people a broader range of choices and inject competition into the healthcare market so that force waste out of the system and keep the insurance companies honest."

The AMA has been quite public in its opposition to the idea. AMA Trustee Samantha Rothman, MD, last week told the Senate Committee on Health, Education, Labor and Pensions that the "AMA strongly opposes a public health insurance plan operated by the federal government with a pay schedule that is based on Medicare."

The AMA last week also issued statements to the Senate Finance Committee that voiced opposition to any public health plans. Nielsen told the New York Times that "we absolutely oppose government control of healthcare decisions or mandatory physician participation in any insurance plan."

Nielsen played down the conflict with the president when asked by reporters on Monday. "What you heard today was a call for a thoughtful analysis of all the options," she says. "What is going to happen here over the next two or three days, is the AMA will figure out a way that can best help the president reach the goals we share, which is affordable health insurance for all Americans."

Also Monday, the Congressional Budget Office slapped a $1 trillion price tag over 10 years on the cost of reforms, with the bulk of the costs coming from the creation of health insurance exchanges and subsidized insurance for the poor.

John Commins is a senior editor with HealthLeaders Media.

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