State of Play – Monday June 15

By Ceci Connolly

President Obama kicks off the week with another speech touting the need for big changes in the nation’s health system. He’ll be speaking to the American Medical Association today as “neither supplicant nor scold,” in the words of one alliteration-minded senior adviser.

The two Senate committees with jurisdiction over health reform also will step up their activity this week, while House Democrats continue to haggle in private over legislation that could cost $1 trillion over a decade.

The AMA, the nation’s largest physician lobby, has lost a bit of its clout in Washington but is still a force in the nation by virtue of its size and the personal popularity of most physicians.

In the midday address in Chicago, Obama is expected to reprise familiar themes. He will make the case that health reform is a core component of broader economic reform. He’ll hit on a new favorite subject—geographic variations in medical spending in this country suggest there’s plenty of fat to cut.

And according to one aide, Obama may offer a bit more explanation on what exactly is -- and is not -- a public option. The term, first introduced by a Berkeley professor, loosely refers to creation of a government-sponsored insurance program that would compete with current private companies.

Obama has been endorsing the concept since last year’s Democratic primaries, though he has yet to provide a detailed explanation of how he would craft one.

The AMA, with 250,000 members, says it might be willing to support a weak, voluntary public plan. But it is opposed to any requirement that doctors participate in such a program and naturally against giving that entity the power to set prices.

The AMA speech is part of a ramped-up effort by the White House to rally public support for legislation that could dramatically alter the nation’s $2.2 trillion health-care system.

Obama remained on the sidelines during the early maneuvering because “he felt it was important to not be too proscriptive,” senior adviser David Axelrod told the Daily Dose. “Now we’re into a different phase where decisions are being made very quickly so it’s time to weigh in to a greater degree.”

The president did just that over the weekend, rolling out $300 billion worth of cuts to the government’s Medicare and Medicaid programs over the next 10 years. The administration now proudly claims that it has spelled out about $950 billion in savings and tax increases that could be used to offset the cost of offering health insurance to up to 50 million Americans.

Not surprisingly, industry is less than thrilled that the White House has taken on the role of bad cop.

Many of the proposed Medicare reductions would hit hospitals the hardest.

“Hospitals support health reform and are working on it closely with the committee leadership on the Hill,” said Chip Kahn, president of the Federation of American Hospitals. “It’s unfortunate that at this point the administration chose to propose arbitrary reductions in Medicare and Medicaid, some of which could inhibit our ability to serve patients.”

The latest batch of White House cuts would extract $75 billion out of drug makers, reportedly $25 billion less than initially threatened, but nevertheless a big bite.

Ken Johnson, spokesman for the industry group Pharmaceutical Research and Manufacturers of America, or PhRMA, would not comment on the precise figures but said: “We have a big concern about how far can we go in helping to enact health-care reform without jeopardizing innovation.”

The Senate Health, Education, Labor and Pensions Committee, with Sen. Christopher Dodd (D-Conn.) filling in for the ailing Chairman Edward M. Kennedy (D-Mass.) has a markup scheduled for Tuesday, though it’s unclear the panel will have resolved outstanding issues around employer mandates and who should receive insurance subsidies.

More significantly, the Senate Finance Committee may begin unveiling portions of its bill as early as Wednesday. Part of that may be “conceptual,” which is Senate language for “the deal isn’t done yet.”