Obama Holds Town-Hall Meeting on Health Care; Grocery Employees Share Views on Health-Care Plan; House Committee Nears Deal on Health Care; Lawmakers May Have Come to Initial Compromise on Health Care
KYRA PHILLIPS, CNN ANCHOR: Let's get you back to the president's town hall meeting in Raleigh, North Carolina.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Medicare has cost taxpayers, even though seniors have high satisfaction rates with Medicare. Now, having said all that, it's all relative. Medicare still needs to be a lot better and more efficient. And there are examples of how we can make the entire health care system more efficient. We know where these examples are. The Mayo Clinic, the Cleveland Clinic, Guessenger (ph), Kaiser Permanente. There are health systems around the country that actually have costs that are as much as 20 or 30 percent lower than the national average and have higher quality. And so the question is, why is that? What is it that they're doing differently than other systems? And there's some patterns that start coming in to place. For example, number one is that they have a patient-focused practice where instead of worrying about how they're getting -- how they're billing, so how many tests they're ordering or how many procedures they're ordering, all they're focused on is the patient. And they -- part of what helps is their doctors are all on salaries, so they don't even know what the economics of any decisions that they're making are. Then it turns out you also have a group practice, so that when you come in, the family physician, your primary care physician, has already coordinated with all the specialists. So instead of having to go to four different doctors and four different tests, you go take one trip and you see all of them all at once and they all help diagnose you and coordinate your care throughout the process. They've got health information technologies so that when you take a test, it actually gets forwarded to the next doctor and the next doctor and to the nurse and the pharmacist so that there aren't any errors. So there are a whole range of, you know, practical things that they're doing that are improving quality and lowering costs at the same time. Now, there's no reason that we can't duplicate that in both private and public settings across the board. But in order to do that, we're going to have to change how we reimburse, for example. So, we've got to say to doctors and hospitals, we're not going to reimburse you for the number of tests you provided. We're going to reimburse you instead for the quality of the outcome. Here's another example. Right now, we just reimburse hospitals no matter how many times they re-admit you. Now, if you took your car to the shop and they fixed it, or you thought they fixed it, and then two, three weeks later you go back in and they're having to do the same thing, you wouldn't feel good about paying twice for the exact same thing that you thought had been fixed. But under Medicare there is no penalty to hospitals for having very high readmission rates compared to their peers. So those are the kinds of things that can be changed. Now, your broader question may just be, I don't have confidence in government. But as I pointed out, I just want to go back to my original point, Medicare costs have gone up more slowly than private- sector health care costs. That is documented.</s>UNIDENTIFIED FEMALE: I'm sorry. If you do say that we know Medicare has this problem, that they're paying for re-admittance, why don't we reform that now? That's a government program. Why are we allowing that?</s>OBAMA: That's exactly what I want to reform. No, no, I mean, maybe I'm just -- I don't understand your question. I mean, that's exactly the changes that we want to make. That's exactly -- those are the exactly the changes that we want to make. That's what we're proposing. And what happens when we propose that is, then people start trying to scare you by saying -- I mean, I've got seniors right now who are writing to me -- let me address the seniors in the audience. I've been getting letters, people saying, I hear that you're going to take my Medicare away. I've received letters that say, I don't want a government-run program. I don't want socialized medicine. And, by the way, don't touch my Medicare. No, I do. Because -- because, you know, what's happened is in this debate, on the one hand, people are worried about change. They're nervous that even though they may not be satisfied with what they have, what we create might be worse, and every proposal that you make, it's very easy to use scare tactics to make people think that you're going to lose your Medicare, we're going to ration your care, et cetera, this is going to cost way too much. And so part of my job is just to try to get the facts in front of people. I want to make these reforms that you just talked about as part of the overall change in health care. And, by the way, here's an important point. You've been hearing these figures that say, it's going to cost a trillion dollars for this new health care program. So then, of course, people think, well, we can't afford that. A trillion dollars, that's a lot of money. First of all, just to keep it in perspective, it's a lot less than we spent on the war in Iraq, but that's -- but it's still a lot of money. Two-thirds of the costs to cover everybody in America, two- thirds of it, could actually be paid for by money that's already in the health care system that taxpayers are paying that's being wasted. So, let me give you an example. $177 billion over 10 years is spent on subsidies to insurance companies under something called Medicare Advantage. There's no showing that seniors are healthier using Medicare Advantage than using regular Medicare, but taxpayers, you fork over an additional $177 billion to them over 10 years. You take that out, that right there helps pay for millions of people who could get coverage. So we've already identified $500 billion to $600 billion worth of savings that are already being spent by taxpayers that would help pay for the reforms that we're talking about. But you wouldn't know that from watching the news. And, by the way, that -- so $1 trillion is over 10 years. So that's $100 billion a year. $600 billion of it already paid for by money that you're already using -- that's already being used, but just not used wisely in the health care system. That's what we're talking about. And for that, we can have 40 million people who don't have health insurance get health insurance. And small businesses, if you're already paying health insurance, so you're already paying, you would get a tax credit. We're putting $43 billion on the table to help reduce your costs directly for your care. So, small -- 95 percent of small businesses would benefit from subsidies if they're already providing health insurance for their employees. And if they're not providing health insurance for their employees, the problem is small businesses typically have a much tougher time getting health insurance and they pay higher premiums because you've got a smaller pool. You're only 20 people. It's not like, you know, some big Fortune 500 company with 1,000 people, they can drive a harder bargain. You'll be able now to join and access health care through a health care exchange that we set up so that you're able to be part of a pool that can leverage lower prices. This is not something that's -- this is not something that is impossible to do. But we've got to overcome the understandable skepticism that somehow Washington can never get anything right. I mean, that's the biggest challenge we have right now, is just people sort of generally have skepticism about Washington. And, look, I under that. That's why I ran for president, because I was skeptical about what was happening in Washington. All right. It's a man's turn. This gentleman right up in front here. He's got a -- he looks quite popular. Everybody was pointing at him.</s>UNIDENTIFIED MALE: Thank you very much, Mr. President. My name is Bill Purcell (ph). I'm one of those primary care doctors you were talking about. A pediatrician. I also have a little job in the North Carolina senate. But I can see in my practice a patient and make a correct diagnosis and prescribe the right medicine. But if the patient can't afford the medicine, they don't get treatment. What can we do about the high cost of prescription drugs in America?</s>OBAMA: Since I gave a very long answer on the last, I'll try to keep this one short. We pay 77 percent more for prescription drugs in America than any other country does. Seventy-seven percent more than any other country. Now, if you talk to the pharmaceutical industry, they'll say, well, you know, a lot of the research and development is done in this country and that's how we're developing the great new drugs. That accounts for maybe 25 to 30 percent of the difference in the cost. The rest of it has to do with marketing. It has to do with the fact that basically the pharmaceutical industry can get away with it. And what happened when the prescription drug bill was passed several years ago, under Medicare, they specifically prohibited you negotiating -- they prohibited Medicare from negotiating with the drug companies for the cheapest available price on drugs. Specifically said you cannot negotiate. So what we've said is, in this reform process, we are going to turn that around. And to the pharmaceutical industry's credit, they have sat down and started negotiating. And they've already said -- they've already put $80 billion in deep discounts and rebates on the table that would help to close the so-called doughnut hole that a lot of seniors are suffering under Medicare. They've already committed to that. That would cut the costs of the doughnut hole in about half. So, that's a significant savings. I think we can obtain more savings. One other thing that's being debated right now in Capitol Hill, though, that people need to keep an eye on, one of the ways to lower prescription drug costs is to move to generics. And the problem right now is, is that the drug companies want -- after they've come up with a drug, they want to keep that patent for 12 years. And there's a debate about, can we lower that to seven years before it goes generic so that people can enjoy lower prices on those drugs. Those are some of the debates that will be taking place alongside the health care reform debate. But overall, there's no reason why we should not be able to at least pay in the ballpark of what other countries are paying for the exact same drug. And that will be a major focus in this health care reform legislation. All right. It's a woman's turn. Young lady right there who's on the rail.</s>UNIDENTIFIED FEMALE: Good afternoon, Mr. President.</s>OBAMA: Good afternoon.</s>UNIDENTIFIED FEMALE: First I wanted to thank you for your Supreme Court nomination. I mean, appointment.</s>OBAMA: She's going to do well.</s>UNIDENTIFIED FEMALE: And all the hard work that you've been doing on the economy and with the health-care reform. I had the opportunity to, with my family, last year to meet you in Bristol, Virginia. My father gave you the cane to help you out during the health-care reform. But my current question is, I consider myself an average American. I work for a corporate 500 company for 25 years and been unemployed for the past two years. And I'm prepared to teach mathematics in the middle-school system in my hometown in Virginia, which I haven't gotten an opportunity to do that yet. But I volunteered in the school system and on your campaign. So, my question is, I believe that most average Americans are for the health reform, but they are afraid of change. So, what -- what would you say to the average American? What do you believe the impact or the cost impact is, to the average person that needs health care?</s>OBAMA: All right. If -- if you already have health care, if you've already got health insurance, then I can't guarantee that immediately you'll have -- you know, your premiums will go -- be cut in half. But what I can guarantee is, is that your costs will be lower than if we don't have reform. I believe that strongly. So, if we can just get to the point where your premiums are going up as fast as your wages or your profits or your income, that would be a pretty good deal. Most people would take that. And I think that we can start bending the curve on our costs. I can definitely guarantee, if you've already got health insurance, that you won't be barred from getting health insurance because of a pre-existing condition. You won't lose your health insurance if you change jobs or you lose your job. You'll have more security in the health insurance that you have than you do now. That will be written into the legislation. That will be part of the overall reform process. I can also say with some certainty that, if we pass this health- care reform proposal, that not only will millions of Americans who don't have health insurance be getting insurance, but it will be much easier for small business owners to provide health insurance for their employees and to get health insurance for themselves. Because a lot of small businesses, it's not just a matter of getting insurance for your employees, it's also just finding insurance yourself. If you're self-employed, good luck trying to find insurance right now. And by being able to buy it through a health-insurance exchange, you will then be part of a broader group that has leverage over the insurance companies and will be able to get a better deal for you. So, bottom line is, your costs certainly will not go up, and they very well could go down, depending on the kind of insurance that you have right now. And if you've got health insurance, we're not going to ask you to change it. Now, it is true, just, you know, full disclosure here, that remember I said two-thirds of this can be paid for through savings in the system already? If we're going to cover everybody, then we've still got to pay for that one-third. And that's not an inconsequential amount. That's, you know, somewhere around $30 billion a year, over the next 10 years. And there are a bunch of different ways of paying for it. I've suggested that we could pay for it just by reducing the itemized deductions for people who make over $250,000 a year, like myself. And that right there would -- that would pay for it. There are other suggestions that are out there, and we are still debating those in Washington. The one thing that I've said is, we're not going to have middle- class folks bear that burden. They can't afford it right now. So, for the -- for the average American, you stand to gain significantly if you don't have health insurance. If you do have health insurance, you will have more security. And if you're a small business, you will be in a better position to provide health insurance for yourself and your employees over the long term. All right, I've got time for one more question. And this gentleman right here has been waiting a long time.</s>UNIDENTIFIED MALE: How you doing, Mr. President?</s>OBAMA: I'm good.</s>UNIDENTIFIED MALE: Thank you for everything you're doing.</s>OBAMA: Thank you.</s>UNIDENTIFIED MALE: Really, from my heart.</s>OBAMA: Thank you.</s>UNIDENTIFIED MALE: This is more a political question than a technical question. I wonder, I hear a lot, especially the opposition, complaining that they don't have time to read the thousands of pages for your health plan. And I was wondering, on one hand we've been in this old system for a long time. What difference does a couple of months so we allow them to read it? And we just, you know, we just don't hear that anymore.</s>OBAMA: Well, let me just say this about sort of the politics of health-care reform. First of all, this bill, even in the best-case scenario, will not be signed -- we won't even vote on it probably until the end of September or the middle of October. We're just trying to get all these different bills out of committee. So, that means that any one of these senators, if they wanted to take this bill home with them during the August recess, they would have more than enough time to read it. So, second point. We've been debating this for 40 years now. So, some of the folks -- some of the folks who sincerely want to get it right, and we want to give them enough time to get it right. We just don't want to do it quickly; we want to do it right. But some folks have specifically said on the other side, "The more we can delay, the better chance we have of killing the bill." Because what happens in Washington is the longer it takes, the more the special interests can start getting in there and try to knock it down. But -- well, we did give them a deadline, and sort of we missed that deadline. But that's OK. We are going -- here's -- here's my promise. And, by the way, I've been keeping my promises since I got into office. We will not sign -- I will not sign -- a health-care bill that is not deficit neutral, that is not paid for. I will not sign a bill that does not have all the reforms that we need to lower health-care inflation over the long term. We will not sign a bill that isn't right for the American people. And I'm for the public option. So -- so, I just want everybody to know, Congress will have time to read the bill. They will have time to debate the bill. They will have all of August to review the various legislative proposals. When we come back in September, I will be available to answer any question that members of Congress have. If they want to come over to the White House and go over line by line what's going on, I will be happy to do that. We -- we are not -- we are not trying to hide the ball here. We're trying to get this done, but the American people can't wait any longer. They want action this year. I want action this year. And with your help, we're going to make it happen, North Carolina. Thank you very much, everybody. God bless you.</s>KYRA PHILLIPS, HOST: Well, summer school seminar in health care. Otherwise known as a presidential town hall at Broughton High School. Yes, you see right there, in Raleigh, North Carolina. It's one of many such events in President Obama's campaign to make health care a right and an obligation for all Americans. But, first, back in Washington, big signs, we're finding out now, of progress on both sides of the Capitol. On the House side, CNN has now learned that the logjam arising from resistance by so-called blue dog Democrats is easing. While over in the Senate, behind closed doors, the so-called Group of Six, three Democrats, three Republicans, don't have a done deal yet, but we're being told they're pretty pleased with what they've done so far.</s>SEN. MAX BAUCUS (D-MT), CHAIRMAN, FINANCE COMMITTEE: OK. We have some good news. Last night we received a preliminary report from the Congressional Budget Office. The CBO has reviewed a draft of the health-care reform bill we are currently negotiating. Keep in mind, the current draft does not include resolution of several key issues. Nevertheless, the report is encouraging. The current draft of the bill scores below $900 billion over 10 years. It covers 95 percent of all Americans by 2015, and is fully offset. In fact, according to the preliminary CBO report, the bill would actually reduce the federal deficit in the tenth year by several billion dollars.</s>PHILLIPS: OK. And Republicans and quite a few Democrats say that reform plans pitched by the White House and pending in Congress would do more harm than good. We're going to talk more about that, as our Ed Henry joins us live, as he's been following the president's town halls for the past couple days, getting both Republican and Democrat response. And presidents don't spend a lot of time in grocery stores, as we now know, but that's where President Obama is going next, believe it or not, to the produce department of a Kroger's supermarket in Bristol, Virginia, right on the Tennessee line. And I mean that literally. Part of the store is actually in Tennessee. Our Ed Henry is there.</s>ED HENRY, CNN CORRESPONDENT (voice-over): They're rolling out the red carpet in rural Virginia. But the president could get a chilly reception in the frozen-food aisle, where we found clerk Phil Younce, a McCain voter who fears health reform is being rushed, just like the stimulus.</s>PHIL YOUNCE, FROZEN-FOOD CLERK: Like the last package that he pushed through, I think it was too hurried. And a lot of mistakes. A lot of things that shouldn't be.</s>HENRY: But Kathy (ph) Montgomery, assistant produce manager, voted for the president, and is pumped up he's getting tough with Congress.</s>UNIDENTIFIED FEMALE: I like the fact that he's stepped up and he's being aggressive. I really do. I think -- I'm all for that.</s>HENRY: Thousands in this region showed up at a health expo offering free medical care this past weekend, exposing a problem all too familiar to doctors here.</s>DR. BENNETT COWAN JR., HOSPICE MEDIC: Clearly, we all recognize, any physician in the hospital would recognize that it's a system in crisis.</s>HENRY: But like most employees, back at the Kroger's supermarket, produce manager Steve Shiplett gets generous health benefits. Despite being an Obama voter, he's nervous those benefits may be taxed to cover the uninsured and is demanding more specifics from the president.</s>STEVE SHIPLETT, PRODUCE MANAGER: He's going to have to spit out some numbers. And -- and let the public know exactly what it's going to cost them and what they're going to have to give up.</s>HENRY: Shiplett says if the president steps up and sells it, then he's willing to step up himself.</s>SHIPLETT: We've got to do something, and if it means me paying those taxes to get this reform through, then -- then I'd begrudgingly do it, yes.</s>HENRY: And back in the frozen food aisle, this Republican is ready to do his share, too.</s>YOUNCE: No matter what kind of plan you're going to come up with, somebody has to pay for it. So, eventually it comes down to us, the people that's working and paying taxes, we're going to half to pay for it, one way or the other. I just hope we can come up with a plan that's worth paying for.</s>PHILLIPS: I think there's a lot of people hoping that a plan that comes forward. And our Dana Bash is following all the fast-moving developments right now. She's got more on the House deal. Dana Bash joining us on the phone -- Dana.</s>DANA BASH, CNN CORRESPONDENT (via phone): Hi there, Kyra. That is definitely the news now, that we first brought you, and that is, coming -- we should say coming from our crack congressional producers, Deirdre Walsh (ph) and Evan Glenn (ph), and that is that the rebellious conservative Democrats who have been holding up the president's priority, they have struck a deal with House leaders and the White House that allows this process to move forward in a committee that has been stalled. However, they also, as part of this deal, have gotten, you know, confirmation that the full House will not vote on health care until the fall. The there will not be a House vote on health care until the fall. However, having said that, that is both something that Democratic leaders and conservative Democrats are touting as important movement, because it has been delayed. And we have just a few more details of part of what they -- the conservative Democrats got. And that is, for example, they have been able to reduce the total costs of the near trillion-dollar health care plan by about $100 billion. The other thing that they were very concerned about, these conservative Democrats, is the impact on small businesses. There has -- there's a mandate that employers must have health care for their -- for their employees. Well, what these conservatives were able to do is get a compromise that small businesses with payrolls under $500,000, they would be exempt. So, they think that they're going to be able to protect small businesses a bit. And there are some other details that we're still waiting for. But those are some of the initial headlines out of this deal. Now, what's going to happen now, Kyra, is the full energy and commerce committee is going to start to meet and begin to actually hash this out and put pen to paper. That's going to start at 4 p.m. today. And they are hoping that, at least in the committee, they'll be able to finish it by the end of the week. But in terms of the full House, the president's initial deadline of getting the House and the Senate to actually vote on his top priority, we now know that is not going to happen, because neither the House nor the Senate will vote now until the fall.</s>PHILLIPS: OK. So, bottom line, there will be no movement until the fall. And this is basically what Republicans wanted, Dana, right? I mean, I remember talking to RNC chair Steele and also yesterday Eric Cantor saying the same thing, that they wanted more time, they wanted to delay this, and that rushing to a vote would be detrimental. So, Republicans very much getting what they wanted with regard to a later vote.</s>BASH: Republicans, and not just Republicans. We're hearing that more and more from Democrats, it's these conservative Democrats who have struck this deal with their leadership. They were the ones who told us over and over again, "What's the rush? We want to do this. We agree." Many of them got elected to try to reform the health-care system. But they said, "We want to do it right." And that's why they are, as part of this deal, getting an agreement from their own leadership that this won't happen. At least there won't be a full vote until the fall. However, you know, they are still trying to chip away at some of the problems that they've had with their leadership's health-care plan: the impact on small businesses, the overall costs. They feel, at least in the short term, they've been able to do that, and that's why at least in this key committee that has been stalled that's really been holding everything up in the House, they're going to move forward today.</s>PHILLIPS: Got it. Dana Bash, appreciate you calling in.</s>BASH: Thank you.</s>PHILLIPS: The wife of Daniel Boyd tells CNN that her husband isn't a terrorist plotting holy war overseas. The federal government? Let's just say they're not on the same page.