President Obama on Monday dangled the prospect of larger earnings for doctors who treat patients in government programs in a reformed health care system, but drew boos from members of the country’s largest physician group when he told them he wouldn’t limit malpractice lawsuits that drive up their insurance rates.
Mr. Obama’s comments to the American Medical Association came shortly before the Congressional Budget Office estimated that the Senate’s reform bill, which isn’t complete, would cost $1 trillion over 10 years and would add a net of 16 million people to the rolls of the insured, leaving 36 million still uninsured.
The estimate by Congress nonpartisan budget watchdog indicates that Mr. Obama’s call to enroll uninsured citizens in a public plan could be far costlier. It also adds fuel to a fight about how to pay for reform.
In Chicago, Mr. Obama told the AMA, which opposes a public insurance plan, that it would actually benefit doctors, who are fearful it would add to the headaches of the Medicare system.
“With reform, we will ensure that you are being reimbursed in a thoughtful way tied to patient outcomes instead of relying on yearly negotiations [over reimbursement rates],” he said. “The alternative is a world where health care costs grow at an unsustainable rate, threatening your reimbursements and the stability of our health care system.”
Physicians are reimbursed only a percentage of the cost of treating Medicare and Medicaid patients. The price is renegotiated each year and forces physicians - as well as hospitals and other providers - to redistribute those costs to other patients. One of physicians’ chief concerns over the proposed public plan is that it would reimburse at rates similar to those programs.
“Clearly he is reaching out in terms of dealing with the physician-reimbursement issue,” said Julius Hobson, a senior policy adviser at Bryan Cave LLP and a former AMA lobbyist. “These are fairly important to physicians.”
Mr. Obama said public-plan reimbursements would be based on patient care instead of individual tests or medical procedures. For instance, a doctor would be reimbursed a set rate for treating an individual with diabetes instead of for the individual procedures required. Incentives would be included for healthy outcomes.
Hospitals also have a vested interest in reimbursement rates. The American Hospital Association (AHA) criticized separate plans from the administration to reduce Medicare payments.
“Additional cuts of this magnitude could severely jeopardize hospitals’ ability to care for their patients and communities,” said Rich Umbdenstock, president and chief executive officer of the AHA.
One of Republicans’ main critiques of the public plan has centered around the reimbursement rate, arguing that the government would keep the rates artificially low, driving other insurers out of business.
“When the government is running something, it subsidizes it to the point private industry can’t compete,” said Rep. Tom Price, Georgia Republican and AMA member, pointing to Fannie Mae and Freddie Mac as examples of government-run programs.
Physicians are also concerned that the public plan would eliminate control over patient care, said Mr. Price, a nonpracticing orthopedic surgeon, on a conference call with reporters from Chicago.
Mr. Price said the administration’s plan to set up a board to determine the effectiveness of medical treatments would turn into a “rationing board” to determine treatment, taking decision-making authority out of doctors’ hands.
Senate Minority Leader Mitch McConnell, Kentucky Republican, and Minority Whip Jon Kyl, Arizona Republican, introduced a bill Monday that would ban the use of “comparative effectiveness research.”
Mr. Obama said existing insurance programs would be kept in place.
“No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period,” he said.
But the CBO estimated that some 15 million workers would be dropped from employer plans under the Senate’s reform proposal.
Mr. Obama told the AMA that if a bill doesn’t pass by the August recess, it isn’t going to happen at all. But the group of nearly 250,000 physicians has a history of opposing change in its industry.
During the 1993 work to reform health care, the AMA teamed with insurers to help squash the work. The group also opposed the creation of Medicare in 1965.
Mr. Obama said he supports physician-friendly proposals such as computerized medical records and preventive care. But he said he opposes putting a cap on malpractice awards, a move physicians favor because they say the large sums are driving up their insurance rates.