The Trail: A Daily Diary of Campaign 2008


Health Care

Obama Offers More Health-Care Savings Through Limits on Payments

By Scott Wilson and Lori A. Montgomery
President Obama proposed today to rein in spending on federal health programs for the elderly and the poor by an additional $313 billion over the next decade, bringing his total proposed savings to nearly $950 billion -- enough to cover the full cost of sweeping health reform, a top adviser said.

In his weekly radio and Internet address, Obama proposed limiting the growth of Medicare fee-for-service payments, taking hospitals and other health providers at their word that they will reduce costs. Obama also proposed slashing subsidies to hospitals that treat uninsured patients, on the theory that very few uninsured patients will remain in the wake of reform.

Obama also suggested reducing payments to drug companies that serve Medicare recipients. Advisers declined to release details, saying the idea was still under discussion.

"These savings will come from common-sense changes," Obama said. "For example - if more Americans are insured, we can cut payments that help hospitals treat patients without health insurance. If the drug makers pay their fair share, we can cut government spending on prescription drugs. And if doctors have incentives to provide the best care instead of more care, we can help Americans avoid the unnecessary hospital stays, treatments, and tests that drive up costs."

By mandating cuts in federal payments to health providers, the measures would go a long way toward ensuring that untested innovations in health delivery actually produce savings for the federal government. But like other parts of Obama's plan to pay for health reform, they are likely to be met with skepticism on Capitol Hill, where lawmakers have so far proven unwilling to cut payments without clear evidence that providers can find efficiencies that don't hurt patients.

The president's offer of new cuts comes against a backdrop of public concern over the nation's fiscal health and long-term spending plans. His 10-year budget would shrink the $1.3 trillion annual deficit left by the Bush administration before allowing it to widen again in its final years, even before taking new spending on health care into account. Obama himself has acknowledged such deficits would be "unsustainable."

Obama and his senior advisers have identified rising health care costs as the biggest long-term drag on the budget, mainly due to the sharply escalating costs of the Medicare and Medicaid programs. He has said reining in health care costs is the key to reducing the deficit, and vowed that his own reform plans will require no additional borrowing.

Cost estimates for extending health insurance to all Americans exceed $1 trillion over the next decade. Obama's budget proposal set aside $635 billion for health care reform. Today's address adds $313 billion more to the pot, offering what White House budget director Peter Orszag called an "unprecedented" effort to "put down in such clarity how reform will be financed."

In addition to saving money in the short term, the newly proposed cuts would "spur productivity in a way that does not exist under current law," Orszag said, helping to prevent an increase in health costs that threatens to bankrupt the federal government. They would also save Medicare patients money - as much as $43 billion in reduced premiums for physician and outpatient services over the next 10 years.

"These savings underscore the fact that securing quality, affordable health care for the American people is tied directly to insisting upon fiscal responsibility," Obama said. "And these savings are rooted in the same principle that must guide our broader approach to reform: We will fix what's broken, while building upon what works."

"I know some question whether we can afford to act this year," Obama said. "But the unmistakable truth is that it would be irresponsible to not act."

The address capped a week when Obama emphasized the importance of health care reform inside and outside of Washington. He held a town hall forum Thursday in Green Bay, Wis., on the subject, and asked congressional leaders to send him legislation that would provide health insurance for the roughly 47 million Americans without it sometime this fall.

On Monday, he is scheduled to speak in Chicago to the American Medical Association, a trade organization wary of the president's reform plans.

Posted at 6:00 AM ET on Jun 13, 2009  | Category:  Health Care
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Several problems here. One, it is usually the elderly and poor who need better heath care not reduced health care by $313B.

Two,the current health care program being proposed will cost the taxpayers over $60,000 per person. You can buy a lot of health care for that, like other government programs its wasteful.

Three, will the President and Congress be under this plan or will they have something better like they do today? This reminds me of the old Soviet Union.

Posted by: gerrypooh | June 16, 2009 9:46 AM

when you have company heads taking the bonuses that they are you must have controls.I remember when companys tried to make the best product so they would have the most sales now companys try to make the least and charge the most to get the biggest bonuses.HONESTY,WORKMANSHIP, TEAMWORK, HELPING OTHERS,PRIDE,EFFORT,THINGS OUR FOREFATHERS FOUGHT FOR!!

Posted by: theoldmansays | June 16, 2009 12:31 AM

With all due respect, everyone knows that the Post is a big fan of Obama and gives this guy all the breaks that you can as a newspaper, but when are you going to learn?
This Obama is the biggest fraud to ever come down the political road. If it wasn't for his single-handed wrecking the country, it would be funny. But he is wrecking the economy and the country and it is not funny.

Posted by: walterndebby | June 15, 2009 5:14 PM

The president made some very good points in his speech, many of which are in this article. It appears that the folks who screen information for him to use have done a quite good job. His comprehension of almost all issues seemed excellent but possibly a bit superficial. On tort reform, e.g., he could promise that if pt evaluation and/or treatment guidelines were deemed to have been followed well, that should wash a lawsuit out of the system pretty quickly. Inherent in this is establishment of risk tolerance for error which only artificial intelligence computer systems might develop. So, for example, if the risk of not ordering a MRI is below some low level of finding more than "incidental disease", then the doctor should not be subject to missing disease whose symptoms and findings do not meet established threshold criteria for a MRI.
In addition, if a patient with a severe, newly diagnosed problem really takes 2 hours to evaluate and begin management, getting paid for the exceptional time spent should happen. Our biggest challenge in tertiary care is often that complex patient problems are often so interwoven that sorting among the several problems is an extremely time consuming challenge. In addition, so many options for treatment now exist for some things that educating a patient on those options in a way that is patient-pertinent and at patient education level, a great deal of time is often spent. That does not show up in outcomes statistics but it does take a lot of time.
The ideas floating around from the President's office hold out hope. Let's see what the backroom politics does to negotiate specifics.

Posted by: lbartels | June 15, 2009 1:53 PM

The biggest expense, which has driven this country to the brink of bankruptcy, is the insatiable greed of the predator class who take almost all of the profit from those of us who do the real work.

Some immigrant worker who busts his *ss a gets to keep vitually nothing is not the real problem, but a convient distraction.

Posted by: rooster54 | June 14, 2009 3:57 PM

Just stopped watching this week with George S and George Will was on. Lets talk about what the Obama group kept saying but no one really picked up on. The government wants health insurance for ALL AMERICANS. So I can only hope this cuts out the Il-legal people. Perhaps if we cut them out of having health care our cost would go down. Why is it that no one wants to address the cost of health care for il-legals? That is a number I would like to see people address and what impact it would have if we cut out their care. Try and go to Mexico and get the same care if you become injured. You can't. They want their money upfront before they will work on you if you break a leg or get in an accident. Your credit card better be available or have your family send the money. This is true.

Posted by: adfproductions | June 14, 2009 2:21 PM

Great idea!

Also we should spread the word to everyone who has a private health insurance policy to expressly forbid the use of premium revenue for any purpose not directly related to providing medical care. The insurance companies are using the money we paid them to lobby, litigate, and advertise against our interests. This is about as unjust as it gets.

Posted by: rooster54 | June 14, 2009 1:34 PM

I suggest the Health Care discussions could be clarified if the result was required to comply with one of the following conditions:
(1) Congress gives us the same Plan they have
(2) Congress must use the same Plan they give us.

Posted by: kc9alx | June 14, 2009 1:17 PM

Not sure where the answers lie, but absolutely pleased that President Obama has at this stage of his presidency moved to address this issue.

Great that the conversation has begun. Wait to see where Congress and the other special 'interests' groups will take it. But its on the table and that in itself, is a great way to start.

Posted by: Victoria5 | June 13, 2009 10:13 PM

Why does health care cost so much? Let me give you a recent example.

Last month this old guy broke his wrist - fractured the radial and left 3+ bone fragments. The break called for surgery on the wrist, insertion of a plate and 5 steel screws to hold it together.

The surgery was done on an out-patient basis - I walked in under my own power on 5/1 at 7:30 AM and walked out under my own power at 2 PM.

The hospital billed Medicare and my supplemental insurance $32,749.94. That’s right - almost $32,750. It all got paid except for $212 which neither Medicare nor my supplemental insurance would cover.

Included in the overall bill was Sterile Supply ($1,665), Metabolic Panel ($1,070), Fluoroscope Exam ($1,162), Anesthesia ($4,003), Treatment fx radial 3+ frag ($9,922) Recovery Room ($4,752) and the anchor/screws for my wrist $6,338). Oh I forgot a Chest X-ray for $635.

Think Medicare was overcharged? Think there’s room to save a few bucks? You bet your a$$.

This same hospital is owned by HCA - which pleaded guilty in the past to 14 counts of fraud and paid fines of $1.6 billion. It was run at the time by “Honest” Rick Scott - who now has the nerve to show his face as a spokesperson opposing any changes in how healthcare in America is provided.

Meanwhile, the surgeon, bless her heart, billed the government $1,989. She was paid $994.56 - less than the cost of the last body work on my jeep.

This system needs reform and needs it badly.

Posted by: toritto | June 13, 2009 7:11 PM

IF you would like to help pressure Congress to pass single payer health care please join our voting bloc at:

Posted by: letsgobuffalo | June 13, 2009 6:37 AM

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