Obama Takes Up Public Health Care Option In AMA Speech

President Obama walked into the lion's den on Monday, delivering a lengthy speech on his approach to health care reform in front of the annual gathering of the American Medical Association. But he did not dodge the major issue of contention -- the role the government will play in remaking the insurance market.

"The public option is not your enemy, it is your friend," Obama declared at one point.

His prepared remarks were a bit more detailed:

If you don't like your health coverage or don't have any insurance, you will have a chance to take part in what we're calling a Health Insurance Exchange.... You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package. And one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest.

The crowd, comprised of members of the nation's largest physician community, received those remarks with slightly less enthusiasm than other points of the president's lengthy address, including Obama's insistence that insurance companies cover pre-existing conditions, his nod towards the need for medical malpractice reform, and his touting of legislation that would discourage smoking among the nation's youth.

But the discussion of the public plan didn't end there.

"Now, I know there's some concern about a public option," Obama declared. "In particular, 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. As I stated earlier, the reforms we propose are to reward best practices, focus on patient care, not the current piece-work reimbursement. What we seek is more stability and a health care system on a sound financial footing. And these reforms need to take place regardless of what happens with a public option..."

The comments about a public option were some of the most widely anticipated of Obama's address. One week earlier, the AMA had expressed its opposition to a public plan before gently backing off their initial critiques. The concerns among its 250,000 physician members are over salary cuts and administrative requirements that could come with greater government involvement in the insurance industry.

There is also a general fear that a public option could be a gateway toward a single-payer system, something that the president dismissed during Monday's speech.

"What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system," he said. I'll be honest. There are countries where a single-payer system may be working. But I believe -- and I've even taken some flak from members of my own party for this belief -- that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this -- they are not telling the truth."

There is some confusion over just what kind of public plan AMA could support, but for those intricately involved in the health care fight, it seems likely to that the plan would have to be vastly watered-down.

"If a public plan is designed so as to satisfy the AMA, it is very unlikely to be able to serve the general aims of long-term cost containment," said Paul Starr, a Professor of Sociology and Public Affairs at Princeton University. "The AMA won't just want guarantees of higher rates than Medicare in the short run; it will want protection against the potential that a large public plan could enroll the great majority of people and exercise the kind of countervailing power in the market that would greatly restrain physician fees in the future."

That said, there is a bit more optimism today than last week that the White House could eventually win over the group's support.

"My wife read what the AMA clarifying statement was and neither one of us had an objection," former Gov. Howard Dean, told the Huffington Post. "There wasn't much in there. It did not say we opposed the public option. It did say the public option should have certain aspects in it that don't hurt the practice of medicine. That is something I understand. The American Medical Association is straddling a very difficult line."

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