Critic Disappointed At Health Care Proposal

President Obama is pushing to overhaul the nation's health care system, but doctors, hospital officials and others are raising sharp concerns over his call for a government-run insurance plan to compete with private plans. Peter Orszag, director of the White House's Office of Management and Budget, defends the plan, telling NPR's Michele Norris that it will put the U.S. "on a path to eliminating the number of uninsured people in the United States." Orszag says evidence suggests that many insurance markets lack adequate competition, and the goal of the public plan is to expand choice, introduce more competition and drive down premium costs. "Our goal here is not to force doctors and hospitals to do things that they don't want to do, but rather to create a plan that we think that they'll want to participate in, and that beneficiaries will find helpful also in terms of having more choices available," he says. One challenge the administration faces, however, is that in areas such as Howard County, Md., which offers relatively low-cost health coverage to its residents, many don't enroll. Orszag says no one would be required to participate in a public plan, but "there are proposals that the president is open to — to have some sort of personal responsibility where you have to carry insurance just like you do when you drive a car. But you could purchase that insurance through a health exchange where the public plan would be one of many options." Concerns From Hospitals One aspect of the proposal that has come under fire is a proposed $200 billion cut in federal payments to hospitals. Hospital officials say that will result in cuts in services to the people who need it most. But Orszag says that, for example, under the reimbursement system known as disproportionate share payments, government funding is provided to hospitals in large part to help meet the cost of caring for the uninsured. "Our argument is that as the number of uninsured goes down ... the hospitals would in a sense be double-paid if the number of uninsured people declines significantly and they were still receiving payments to meet the cost of the uninsured," he says. "So we scale those back, and we would also target those payments more efficiently toward the hospitals that are disproportionately serving the remaining uninsured." Rich Umbdenstock, president and CEO of the American Hospital Association, tells NPR's Robert Siegel that the hospitals have accepted "in principle" that reimbursements from Washington will decline as the number of insured patients rise at those institutions. But, he says, too many questions remain. "How soon will that coverage kick in? At what payment levels? Across what proportion of the uninsured population?" he asks. "Even by the best estimates, right now, people are saying that it looks like some of the plans that are out there can cover maybe a third, maybe, at the high end, two-thirds of the population. That still leaves a lot of people uncovered. It still leaves a lot of people on the Medicaid program, and it still leaves a lot of people who are undocumented immigrants and so on. That need's not going to go away overnight." Orszag says opposition to the health care overhaul is inevitable. "We're not going to transform a $2 trillion sector of the economy without some jostling occurring and without some objections being raised or some concerns being raised," he says. "That's natural." And Umbdenstock says all the stakeholders in the health care system have to examine what they can do now to cut costs. "You have to look at cuts in the context of a complete plan for reform. And our elements in reform include the important element of affordability," Umbdenstock says. "But also we have to think about coverage. We have to think about quality."