Obama: There Should Be Ways To Incentivize Health Systems

Armen Hareyan's picture

President Barack Obama speaking in a press conference and addressing health care reform said that there should be ways to incentivize other health systems. He earlier spoke about the good job that the Geisinger and Mayo Clinics are doing. Obama said his goal is to provide affordable health insurance coverage to all Americans.

Addressing the eight question if Obama can guarantee coverage will never be denied, and if the president and Congress will abide by the same quality of care offered to them Obama said. That system “is a good example of what we’re trying to build for the American people” Obama says. A public option will help keep the insurance companies “honest” because it will incentivize the private sector to do better to compete. “Can I guarantee there will be no changes in the health care delivery system? No,” he said, the point is to make the system work better. He credits the Mayo Clinic and the Cleveland Clinic as places that work efficiently and for lower costs. Follow up: “I’ll be happy to abide by the same package but to be honest with you I have a doctor following me every minute,” he quips.


The Washington Post reflects on July 22nd Obama speech and writes. "Most economists say that the best other lever to control costs would be a tax on employer-provided health benefits, which are now provided tax-free. This would both generate revenue and provide incentives to hold down costs. Mr. Obama, who criticized the idea when Sen. John McCain (R-Ariz.) championed it during the presidential campaign, said he would be open to taxing benefits of plans whose costs continue to grow too fast -- a kind of future cap that could help restrain health-care inflation. In our view, this isn't enough, but it's a valuable step in the right direction."

The president also said that "if doctors and patients have the best information about what works and what doesn't, then they're going to want to pay for what works. If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well? But the system right now doesn't incentivize that. Those are the changes that are going to be needed -- that we're going to need to make inside the system. It will require, I think, patients to -- as well as doctors, as well as hospitals, to be more discriminating consumers. But I think that's a good thing, because ultimately we can't afford this. We just can't afford what we're doing right now."

"We want a public option to keep the insurance companies honest... having a public plan that also shows that if you take the profit motive out, reduce administrative costs, that's going to incentivize the private sector to do even better," also said the president.