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CNN LIVE EVENT/SPECIAL

Health Care Summit

Aired February 25, 2010 - 14:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: You heard republican Congressman Paul Ryan of Wisconsin say the democrats plan was full of smoke and mirrors, a Ponzi scheme that would make Bernie Madoff proud. The president has been responding, let's listen in.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- and let's not close the doughnut hole, for example, or, you know, there may be other ways you want to spend that money.

But I just want to establish whether we've got some agreement that the Medicare Advantage program, which is what we are proposing to reform, is actually not a good deal to taxpayers or for seniors and certainly not a good deal for the 80 percent of seniors who aren't in Medicare Advantage. Because, by the way, they're paying an extra premium of about 90 bucks (ph) a year to subsidize the 20 percent who are in Medicare Advantage.

(UNKNOWN): Mr. President --

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: Mr. President, John McCain also would like to address that issue.

OBAMA: Well, I'm sorry. So if somebody else wants to address it -- you know --

(CROSSTALK)

SEN. JOHN MCCAIN (R), ARIZONA: I would just make one comment. Why in the world, then, would we carve out 800,000 people in Florida that would not be -- have their Medicare Advantage cut? Now, I proposed an amendment on the floor to say everybody would be treated the same. Mr. President, why should we carve out 800,000 people because they live in Florida to keep the Medicare Advantage program, and then want to do away with it?

OBAMA: I think you make a legitimate point.

MCCAIN: Well, maybe --

OBAMA: I think you do.

MCCAIN: Thank you very much.

(LAUGHTER)

OBAMA: Yes. (CROSSTALK)

OBAMA: I'm going to have your -- in fairness, I asked a question, so I'm going to let one of the Republicans respond and then I'll go to Xavier. OK, go ahead.

SEN. TOM COBURN (R), OKLAHOMA: You know, the assumption that's important for the American people to hear. We have Medicare Part D, except no senior in this country ever paid a tax dollar for it. And we're talking about filling a doughnut hole on a program that they're already benefiting from that we're going to leave $11 trillion in debt for our children. I'm not sure the seniors wants us to leave more debt for their children to fill a doughnut hole.

And when we talk about filling the doughnut hole by taking away from people who can't afford to buy a supplemental policy, that's where Medicare Part A helps poor people in Oklahoma is they get to buy Medicare Part C. We never call it Part C, but that's what it is. And they don't have to buy a supplemental policy. So consequently, they get lots of the benefits that other people who have better buying power in Medicare with a supplemental policy.

So it's a tradeoff of whether or not we say, "Where are we going to give the benefits?" What we really should be doing is saying, "We're broke. Medicare's broke. We're working, struggling together to try to get there. Let's not add new benefits anywhere and let's make sure the benefits that we have today get applied more equitably."

OBAMA: Well, I think that's a legitimate point. I would just point out that 80 percent of seniors are helping to pay in extra premiums for the 20 percent who are in this Medicare Advantage, and it's not means-tested. So it's not as if the people who in Medicare Advantage are somehow the poor people who can't afford supplementals. It's pretty random.

And what we also know is, and I just want to point this out, Tom, $180 billion of it is going to insurance companies. It's not going to seniors. It's going to insurance companies, including big insurance company profits, (inaudible) appreciable improvement in health care benefits. That's not a good way for us to spend money.

I agree with you about the fact that the prescription drug plan added to our deficits, because we didn't pay for it. And I just add the point that didn't happen under my watch. It happened under the previous Congress. There's some people -- you know, John was an example of somebody who was true to his convictions and didn't vote for it.

(CROSSTALK)

OBAMA: But -- but the fact of the matter is that, you know, that was costly, and we do have to deal with that. On the other hand, the problem I don't think is that we gave seniors a prescription drug benefit. I think the problem is that we didn't pay for it, and we should try to find a way to pay for it. Taking some of that money out of Medicare Advantage and putting it into that doughnut hold does pay for it.

All right. I really breached protocol here, but I thought that was important to just get clear. We are talking about Medicare Advantage in terms of where these cuts come from, not Medicare benefits through the traditional Medicare plan.

Xavier?

REP. XAVIER BECERRA (D-CA), VICE CHAIRMAN, HOUSE DEMOCRATIC CAUCUS: Mr. President, thank you very much for bringing us all together. I do want to address something that my friend, Paul Ryan, said, because I almost think that we can't have this discussion any further without addressing something Paul said.

Paul, you called into question the Congressional Budget Office. Now, we could all agree to disagree. We could all have our politics, but if there's no referee on the field, we can never agree how the game should be played.

REP. PAUL RYAN (R), WISCONSIN: Let me clarify just to be clear.

BECERRA: No, no, let me -- if I could just finish.

And so I think we have to decide, do we believe in the Congressional Budget Office or not? Because Paul, you and I have sat on the Budget Committee for years together and you have on any number of occasions in those years cited the Congressional Budget Office to make your point, referred to the Congressional Budget Office's projections to make your point. And today, you essentially said you can't trust the Congressional Budget Office.

RYAN: No, that is not what I'm saying.

BECERRA: Well, that was my interpretation. I apologize if I misinterpreted.

(CROSSTALK)

RYAN: I am not questioning the quality of their scoring. I am questioning the reality of their scoring.

BECERRA: If I could just finish my -- OK. I -- I take your point on your clarification.

RYAN: Let me just say it, 10 years of tax increases, 10 years of Medicare cuts to pay for six years of spending.

BECERRA: If I -- if I could just try to make my point.

So then I'm assuming then that you do believe that the CBO is a legitimate agency to render decisions on spending for the Congress.

RYAN: You know I believe that.

BECERRA: OK, so then let's work with that, because quite honestly, if we can't work with CBO numbers, we're lost. We're lost because we really will get into a food fight. And so I apologize, Paul, if I misinterpreted what I had heard. I appreciate that we left the referee on the field.

(CROSSTALK)

BECERRA: So if the referee is on the field, then we have to at least accept what the referee has said, and the referee said that the bills that are before us reduce the deficit, the federal government's deficit, by over $100 billion in the first 10 years. The Congressional Budget Office, the referee, not political parties, the referee, said that these bills reduce the deficit in the succeeding years, after the first 10 years, by over $1 trillion.

Now, you're right. All the discussion makes it clear it wasn't easy. There are going to be some savings that we extract out of Medicare. What we do in these bills is try to make the point that as we reduce the deficit, we're not going to put the onus, the burden of those cuts on seniors who receive Medicare. We're asking the providers to stop, as some of my colleagues in the Senate said, over- utilizing or over-spending in services so that we don't see someone having four different X-rays for chest pains.

And so what we're trying to do is figure out the ways to reduce the costs without impacting benefits. In fact, that's how in these two bills that the Senate and House passed, we were actually able to close the doughnut hole for prescription drug coverage in Medicare and still extract, according to the CBO, over $100 billion in savings.

So Mr. President, I would just say the thing that I would love for us to get into the details of in terms of those deficit reductions that are made is the fact that we do it while putting the brakes on Medicare overpayments that went to insurance companies which were getting reimbursed at greater levels than were doctors and hospitals that relied on traditional Medicare fee-for-service to provide services to our seniors.

We have any number of provisions that deal with the issue of fraud, which it says at least totals $60 billion. And working with some of our Republican colleagues, we are doing exactly that, going after the waste that's in the system, certainly the fraud. And that's how we extract the number of the savings.

And finally, perhaps one of the unsung secrets of what we learn from listening to doctors and hospitals and all the different providers is that we can actually do a far better job of coordinating care for people. And if you -- if you make sure that someone who walks in the door of any one of the great physicians who are in this room when they were practicing, and made sure that we followed them through not just that first visit to the primary care or family doctor, but then into the specialist, and then into the hospital.

And then afterwards to the, perhaps the nursing home or the home health center, that what you do is that you coordinate the care instead of have each provider do just its share and forget about the patient. If you coordinate the care, you can actually reduce costs dramatically. And that's how we were able to reduce the cost for Medicare. That's how we were able to extract, according to the referee on the field --

BLITZER: All right, that is Xavier Becerra, the Democratic congressman from California, who is responding to Congressman Paul Ryan.

They're both on the Budget Committee. You saw that they had a little exchange on the reliability of the Congressional Budget Office, which is widely seen by both Republicans and Democrats as an honest assessor or broker in these estimates, in these guides.

Our own physician, Dr. Sanjay Gupta, has been watching all of this, our chief medical correspondent.

Sanjay, we're going back and forth on costs and -- and premiums, expenditures. It is obviously very important, very complicated stuff, but give us a little perspective.

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Yes, it is interesting.

Just over the last several minutes, there has been a bunch of very important topics brought up, but one of the topics that has been sort of overlaid on top all of this is this idea of uncompensated care.

Wolf, you heard that term a few times. The uninsured, they don't simply cost nothing to care for, because, as we know, as has been stated quite a bit this morning and this afternoon, is that people who are uninsured still access the health care system.

So, I have some numbers, Wolf. We have been looking into this, reporting on this, as you know, for some time. The last reported numbers back from 2008, uninsured roughly cost around roughly $60 billion. That is how much health care costs were associated with the uninsured, $57 billion, to be more precise, about 75 percent, or three-quarters, of it paid by the federal government.

Here's a couple of important things to keep in mind, though, Wolf. If people -- if you insure a lot of people who are currently uninsured, their utilization of the health care system will likely go up, so the costs may actually go up.

Why? Because they now have insurance and they're more likely to see their doctors, see their specialists, see all the various aspects of the health care system, just like is being discussed right now.

But what you get in return -- and this goes back to this idea of making us a healthier nation, possibly bending that cost curve down -- they're going to receive more preventive care. They're going to be diagnosed at earlier stages of disease, including heart disease, cancer, all sorts of things. And they're going to receive more therapeutic procedures at the time those things are needed. So, ultimately, you're going to create a healthier population by insuring. But, if you break this down into medical and financial arguments, the medical arguments are pretty clear. Financially, it's -- the costs are probably going to go up a little bit as a result of what we are talking about, Wolf.

BLITZER: And what you are talking about, Sanjay, is that, if you are uninsured right now and you get sick, very often, you wind up in the emergency room, which is a very expensive place to get medical care.

GUPTA: No question about it. And if you wind up in the emergency room, you may get care for what it is that ails you right now, but what you are not getting, women are not getting mammograms to try and prevent breast cancer. There's hardly any preventive screening.

You're probably not going to get counseling on things like preventing heart disease, so you are just getting sort of fireman medicine. Fires are simply being put out, as opposed to trying to prevent those fires in the first place.

And, again, Wolf, they can start to put financial numbers on this, about $60 billion a year. And we all pay for that. Everybody pays for that, to some extent, either in increased premiums on our own health care insurance or taxes, as has been discussed, Wolf.

BLITZER: And you are saying that most of the money comes from the federal government, as opposed to local or state?

GUPTA: That is correct, about 75 percent, at least back in 2008. Those numbers fluctuate a little bit. But I imagine they are around the same now, Wolf.

BLITZER: Sanjay, stand by.

We are going to continue to watch what is going on inside Blair House.

Our coverage will continue right after this.

(COMMERCIAL BREAK)

BLITZER: They are scheduled to continue for one more hour.

Let's listen in. Senator Chuck Grassley of Iowa is making his case.

SEN. CHARLES GRASSLEY (R), IOWA: -- having any more guts than we do to close a rural hospital.

So I think that you got to take into consideration -- you got to take into consideration the consequences of the acts or the unproven promises of cuts that aren't going to materialize. That's just the way I see it. And working in those 31 meetings, hundreds of hours of meetings with Senator Baucus, I learned a lot about health care. Now, we didn't get a bill out of that bipartisan effort, but I'm sure glad I spent all of that time there, because I learned a heck of a lot about our health care system that I wouldn't have otherwise known.

OBAMA: Thank you, Chuck.

The -- I'm going to go to Kent next. I just want to make one point.

The -- if the notion is, is that we can't make some hard decisions about how entitlements work, because it's just not realistic, nobody is going to have the guts to do it, then we're in big trouble. Because that means that the federal budget and state budgets and then business budgets and family budgets are all going to be gobbled up by this thing.

So I hope that in fact we've got the courage to make some of these changes.

Now, you know, when I say that Medicare Advantage is not a useful way for us to spend tax dollars to provide health care to seniors, at least the way it's currently structured, as I said, that's not a Democratic idea. I mean, there are a whole bunch of Republican commentators and some of the folks who have sat around this table before who suggested that that's probably right.

You can make an argument that whatever savings we get out of Medicare Advantage should not go to filling the donut hole, for example, that's a legitimate argument. You can make an argument that it should go just to deficit reduction. Those are all legitimate arguments.

But my point is that the savings that are obtained here are from a program in which insurance companies are making a lot of money, but seniors who are in these kinds of programs are not better off. And the 80 percent of the people who are in these programs are paying an extra 90 bucks a year to subsidize the folks who are in them, and that just doesn't seem like a good deal for them or for the taxpayer (ph).

Kent Conrad?

GRASSLEY: Will you give me 30 seconds, please?

OBAMA: Sure.

GRASSLEY: Yes. I think that we've already had laid out here in four or five different ways how a heck of a lot of money can be saved, and I think that those things that we can agree on we ought to proceed on.

But I think that it's legitimate to take into consideration that if you're going to have program cuts that CBO says out there in the second decade could be 15 to 20 percent a year, that you got to have a system left to serve the people that we're promising health insurance to.

OBAMA: But what I'm saying, Chuck --

GRASSLEY: And that's the point I'm making.

OBAMA: I think it's a legitimate point. What I'm saying is that on Medicare Advantage that does not have to do with the concerns that you've got about hospitals or doctors getting properly reimbursed. This is a program that's going to insurance companies.

But I want to -- I want to make sure that Kent gets in here, because Kent knows something about the budget as the chairman of the Budget Committee.

Kent?

SEN. KENT CONRAD (D), NORTH DAKOTA: Well, thank you, Mr. President. Thank you for allowing us to come and visit about what really is the 800-pound gorilla facing the federal budget, and that is the health care accounts of the United States, Medicare, Medicaid and the rest.

What we all know that is true is the biggest unfunded liability of the United States is Medicare. What we all know is true is the trustees have told us Medicare is going to go broke in eight years.

So the idea that we don't have to do anything about Medicare is utterly disconnected from reality. The idea that we don't have to find savings in Medicare is an admission that we are headed for a fiscal cliff that we're going to go right over.

And if we really want to endanger the benefits to people who are getting Medicare, the best way to do that is to do nothing. Because if we do nothing, we will guarantee that Medicare goes broke.

So, together, we can either do this together or we can have this imposed on us. I very much hope we do it together.

Senator Coburn, and I'm sorry -- did he leave? I'm sorry that he's not here, because he said something that was one of the most important comments made here today, and something that I think has gotten way too little attention. And that's the question of those who are chronically ill.

As we analyzed Medicare, we found a startling statistic: 5 percent of Medicare beneficiaries, 5 percent, use half of all of the money. I think Paul knows this well. Five percent use 50 percent of the money. Who are they? They're the chronically ill. People who have multiple serious conditions.

And I think Dr. Coburn was really referencing that when he talked about the need to better coordinate their care, because we are wasting massive amounts of money and getting worse health care outcomes than we could if we better coordinated their care.

What do we mean by that? A study was done with 20,000 patients. They put a care coordinator on each one of them. These are chronically ill patients. And what they found was by coordinating their care -- and the first thing they did, by the way, was go into their kitchen tables, sit down, get out all their prescription drugs.

On average, they found they were taking 16. They found that by looking at them, they could eliminate eight. The result was hundreds of thousands of dollars of saving per patient and better health care outcomes.

You know, I did this with my own -- my own father-in-law in his final illness. Went to his kitchen table. Didn't know it was the final illness. Got out all his prescription drugs. Sure enough, he was taking 16.

I get on the phone to the doctor. I go down the list -- and Dr. Coburn, you were out of the room. I referenced you, because you said something that really triggered a thought in my mind that I think is important -- went down the list of what my father-in-law was taking, 16 prescription drugs.

And I get in the line to the doctor, and he says, "Well, Kent" -- and I get down to about the third one -- "He shouldn't be taking that. He shouldn't have been taking that the last five years."

I get a little further down the list, two drugs, and he says, "Well, Kent, he shouldn't be taking those two drugs, they work against each other."

I said, "Doc, how does this happen?"

He said, "Kent, it's very simple. He's got a heart condition. He's got a serious lung condition. He's got orthopedic issues. He's got doctors for each one of those. He's getting prescription drugs mail order; he's getting them at the hospital pharmacy; he's getting them down at the beach. He's sick and confused. His wife's sick and confused. We've got chaos."

And my conclusion, after all of these hundreds of hours of hearings and meetings that Senator Grassley and Senator Baucus were part of and Senator Enzi was that indeed we do. We have a system that is characterized, especially for those people, by chaos. We can do better.

And we really don't have a choice, because we've got a debt now grossed at 100 percent of the GDP, headed for 400 percent, that nobody believes is sustainable.

So I -- I just pray that we find a way to come together and deal with these things seriously, because if we don't, we will rue the day.

BLITZER: All right, let's take a quick break, as we continue to watch what is going on.

Mary Matalin and Donna Brazile are standing by.

Donna, what is wrong with this idea that several Republicans have now floated, take the areas where there is agreement between the White House, the Democrats, and the Republicans, and put together a more modest piece of legislation, get that passed, and then continue the process down the road?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, Wolf, I believe one of the -- the goals today is to find the broad areas of agreement and to see if this could be packaged in such a way that will do, as the president said from day one, ensure affordability, accessibility, and, of course, accountability.

If -- if they can find broad agreements that meet those three principles, then we will have a bill worthy of consideration and passage, hopefully within the next two weeks.

BLITZER: It would be a dramatically scaled-back version of what the Democrats have in mind, Donna. Would the liberals go along with it?

BRAZILE: You know, liberals, like conservatives and moderates, I think, want to ensure that we can cover the cost of -- for those who are currently paying so -- so much of their income, in terms of health insurance, but liberals, also, from day one, wanted to have a public option that would -- that would ensure accountability and affordability.

But, look, the truth is, is that we have two bills on the table that lower the cost of premiums, as well as it pays for itself and it lowers the deficit over the long term. That -- that is also something that liberals would like to see as well in the final bill.

BLITZER: All right.

All right, Mary, hold on for a second. I'm going to come to you, but John Boehner, the Republican leader in the House, is speaking.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: And yet, here we are having a conversation about creating a new entitlement program that will bankrupt our country. And it will bankrupt our country.

It's not that we can't do health insurance reform to help bring down costs to help save the system. This bill, this 2,700-page bill will bankrupt our country.

And, secondly, Mr. President, I'd point out that I think this is -- this right here is a dangerous experiment. We may have problems in our health care system, but we do have the best health care system in the world by far.

And -- and having a government takeover of health care -- and I believe that's what this is, is a dangerous experiment with the best health care system in the world that I don't think that we should do.

So why did I bring this bill today? I'll tell you why I brought it. We have $500 billion in new taxes here over the next 10 years. At a time when our economy is struggling, the last thing we need to do is to be raising taxes on the American people. Secondly, we've got $500 billion worth of Medicare cuts here. I agree with Kent Conrad, we need to deal with the problem of Medicare.

But if we're going to deal with the problem with Medicare and find savings in Medicare, why don't we use it to extend the life of the Medicare program as opposed to spending that $500 billion creating a new entitlement program.

But it's not just, Mr. President, the taxes or the Medicare cuts, you've got -- you've got the individual mandate in here, which I think is unwise, and I, too, believe is unconstitutional.

You've got an employer mandate in here that says that employers, you've got to provide health insurance to the American people, or you're going to pay this tax. It's going to drive up cost of employment at a time when we have over 10 percent, or near 10 percent unemployment in America.

And beyond that, a lot of employers are going to look at this and say, "Well, I'll pay the tax," and they're going to dump their employees into the so-called exchange, because in five years, every American is going to have to go to the exchange to get their health care.

And who's going to design every health care bill offered in the exchange? Under this bill, the federal government's going to design every single health care bill in America within five years, once this bill were to pass.

I could go on and on and on.

Let me just -- let me just make one other point. I'll save you -- I'll save you. For 30 years, we've had a federal law that says that we're not going to have taxpayer funding of abortions. We've had this debate in the House. It was a very serious debate.

But in the House, the House spoke. And the House upheld the language we have had in law for 30 years, that there will be no taxpayer funding of abortions.

This bill that we have before us, and there was no reference to that issue in your outline, Mr. President, begins -- for the first time in 30 years allows for the taxpayer-funding of abortions.

So, Mr. President, what we've been saying for a long time is let's scrap the bill. Let's start with a clean sheet of paper on those things that we can agree with. Let's take a step-by-step approach that'll bring down the cost of health insurance in America, because if we bring down the cost of health insurance, we can expand access.

Mr. President, I told you the day after -- maybe it was the day you were sworn in as president, I would never say anything outside of the room that I wouldn't say inside the room. I've been patient. I've listened to the debate that's gone on here.

But why can't we agree on those insurance reforms that we've talked about? Why can't we come to an agreement on purchasing across state lines? And why can't we do something about the biggest cost driver, which is medical malpractice and the defensive medicine that doctors practice?

Let's start with a clean sheet of paper and we can actually get somewhere, and we can get it into law here in the next several months.

OBAMA: John, you know, the challenge I have here -- and this has happened periodically -- is we're having -- every so often, we have a pretty good conversation trying to get on some specifics, and then we go back to, you know, the standard talking points that Democrats and Republicans have had for the last year. And that doesn't drive us to an agreement on issues.

There are so many things that you just said that people on this side would profoundly disagree with -- and I would have to say, you know, based on my analysis, just aren't true -- that I think that the conversation would start bogging down pretty quick.

Now, we -- we were trying to focus on the deficit issue. And the fact of the matter is, as we indicated before, that according to the Congressional Budget Office, this would reduce the deficit.

Paul has different ideas about it. Other folks may think that there are better ways of doing it. But, right now, what we're doing is focusing on the issue of federal entitlements and whether we can make some changes.

I will come back to you, I think, at the end of this session to answer a range of the questions that you just asked.

Right now, what I want to do is go to Jim Cooper, who I think everybody knows cares pretty deeply about the federal budget. He's been championing this for a very long time.

Jim, do you want to address some of the issues that have been raised in terms of both Medicare and Medicaid?

REP. JIM COOPER (D), TENNESSEE: Thank you, Mr. President. We're all here. We're dressed up. We're on good behavior.

OBAMA: (OFF-MIKE)

COOPER: But I think folks back home are wondering how we behave when the camera's off. The deficit, in my opinion, is probably the most important single issue we face. Paul Ryan said it well: Health inflation is driving us off a cliff.

And I'm kind of intrigued by the conversation, because so far we've heard a lot of folks trying to outdo each other in deficit reduction. I welcome that competition, especially if it's backed up votes, because it's easy to talk tough on this. It's harder to deliver.

I personally liked Senator McCain's suggestion. Let's get rid of all of the special deals. That's just a starting point.

Paul Ryan is right, again, and Tom Coburn is right when they point out that we're probably wasting a third of medical spending. Medicare alone is $37 trillion in the hole. And that means, for all the folks who want to talk tough and not vote tough, that's not good enough. It means that for all the folks who want to do this next year or next decade or leave it to their successor, that's not good enough.

We've had some examples of how we've behaved recently. A wonderful bipartisan measure, the Conrad-Gregg bill, completely bipartisan for years, on a bipartisan fiscal responsibility commission was brought up for a vote in the Senate. We had the 60 votes, but only 53 people showed up for work. Seven people who'd been original co-sponsors of that measure suddenly got different ideas when the moment of truth came.

So, Mr. President, I'm thankful you have appointed a presidential fiscal responsibility commission, with Alan Simpson and Erskine Bowles, to try to force us as a Congress and force the nation to address these fundamental problems, because if you love Medicare, you need to act to save it fast. Every day matters.

A report will come out issued by the Treasury Department. It's come out every year. It'll come out in the next few days. It's the only report that uses real accounting to describe America's fiscal problems, and the news is not pretty. It will reaffirm what's been discussed here about Medicare and Medicaid and other vital American programs being deeply in the hole. And the opportunity of costs for delay is extraordinary.

So we can face these problems, Mr. President. We can solve them with political will, but the talking points won't do it. We've got to acknowledge the real questions.

And as every business person in America knows, if you can't measure it, you can't manage it. And too many people in the federal government are refusing to measure it, much less take the tough votes that are required, because the reason we have a Medicare Advantage program, Mr. President, as you know, is in 2003, when the other party was completely in charge of everything here, we passed a program that before now was almost completely unfunded and added $8 trillion in one bill to our children and grandchildren.

Now, those benefits if offered should be paid for. So this is a challenge for everybody in both parties, because nobody's hands are clean in this, but let's have a new day, a new beginning. I think we could do this. And this bill is a great place to start, because if you don't think this bill reduces the deficit enough, according to CBO, vote for more savings. If you want to reform Medicare some more, vote for it. Don't just talk a good game.

So I hope the American people are watching, because -- and they're going to be watching after the cameras are turned off, too. And I'm thankful you called this meeting, because this is a moment of truth for our country. And together, we can solve this problem. BLITZER: Jim Cooper, the Democrat of Tennessee. We'll take a quick break, resume coverage inside of Blair House as this health care summit continues. (COMMERCIAL BREAK)

BLITZER: Senator John McCain is speaking and telling the president don't go for that 51-vote majority, reconciliation. That's a bad idea.

SEN. JOHN MCCAIN, (R) ARIZONA: -- there were a group of us that got together, said, no, that's not the right way to go, because that could deal a fatal blow to the unique aspect in the United States Senate, which is a 60-vote majority. And we came to an agreement, and it was brought to a halt.

If a 51-vote reconciliation is enacted on one-sixth of our gross national product, never before has been -- there have been reconciliation, but not at the level like -- of an issue of this magnitude. I think it could harm the future of our country and our institution, which I love a great deal for a long, long time.

OBAMA: OK, let me just address two of the points that you made, and then I'm going to turn to Dick.

You know, this issue of reconciliation has been brought up. Again, I think the American people aren't always all that interested in procedures inside the Senate. I do think that they want a vote on how we're going to move this forward. And, you know, I think most Americans think that a majority vote makes sense, but I also think that this is an issue that could be bridged if we can arrive at some agreement on ways to move forward.

Medicare, or the issue of malpractice that you brought up. I've already said that I think this is a real issue. I disagree with John Boehner. John, when you say that it is the single biggest driver of medical inflation, that is just not the case. The Congressional Budget Office took a look at the proposal you've got for medical malpractice, and estimates that the government system would save about $50 billion over 10 years, which is $5 billion a year, which is real money, but understand that we've got a $2 trillion system.

Let's assume that you extrapolate that into the private marketplace. Let's say it's another $5 billion or another $10 billion. It's still a small portion of our overall health inflation problem. But having said that, it's still something that I care about, and I've said I care about it.

Now, not only have I asked Kathleen to initiate some pilot programs at the state level, but there are some examples of legislation that I actually would be interested in pursuing. Tom Coburn, you and Richard Burr have talked about incentivizing and allowing states to experiment much more vigorously with ways to reduce frivolous lawsuits, to pursue settlements, to reduce defensive medicine. That's something I'd like to see if we could potentially get going. So I might not agree to what John Boehner has proposed. And it's interesting that I think I've heard a lot today about how we shouldn't have Washington impose on the states ideas, except when it comes to the ideas that you guys like, in which case it's fine to override what states are doing. There seems to be a little bit of a contradiction on this. But I think there may be a way of doing it that allows states to tackle this issue in a very serious way.

And I'd be interested in working with you, John, and working with Tom to see if we can potentially make that happen, if we can arrive at a package that also deals with the other drivers of health care inflation that are so important.

Now, we're running out of time. I've got Dick Durbin. And then what we're going to just do is go into coverage, and that will, I know Henry and John and Charles have been interested in talking about it. And frankly, it's something that we haven't spoken a lot about lately, and that is a whole bunch of people who just don't have health care.

Go ahead, Dick.

SEN. RICHARD J. DURBIN (D-IL), SENATE MAJORITY WHIP: Mr. President, I've been biding my time throughout this entire meeting. I thank you for inviting us on the issue of medical malpractice. Before I was elected to Congress, I worked in a courtroom. For years, I defended doctors and hospitals, and for years I sued them on behalf of people who were victims of medical malpractice. So I've sat at both tables in a courtroom. At least many years ago, I think I kind of understood this area of the law better than some.

But I listen time and again as our friends on the other side when they're asked what are the most important things you can do when it comes to our health care system in America. The first thing they say is medical malpractice. It's the first thing they say. Today, it was the first thing that was said.

The point that's been made by the president is if we do believe the Congressional Budget Office, when Orrin Hatch asked them how much will we save if we implement the Republican plan on medical malpractice from the House, they said $54 billion over 10 years; $5.4 billion a year is a lot of money, except in the context of the $2.5 trillion bill that we pay each year for health care. It represents one-fifth of 1 percent of the amount of money we spend each year on health care.

The Congressional Budget Office said something else. They said and as you lose accountability for what the doctors and hospitals are doing, more people will die -- 4,800 a year, according to the Congressional Budget Office's reference to this study.

Now, the Institute of Medicine tells us 98,000 people a year die in America because of medical malpractice. I think there are things that we have put in this bill to change that. Most of you have heard of this Dr. Gawande. We've read him. I've talked to him on the phone. His "Checklist Manifesto" is a very basic approach to reducing medical errors, which is what we should be focused on. And I want to say, Mr. President, I think what you and the secretary have done is the right thing -- incentivizing states to find innovative ways to reduce medical errors and reduce those lawsuits that should not be filed.

But let me tell you what, limiting the recovery for pain and suffering for someone who is entitled -- entitled because they're innocent victims -- to be paid isn't eliminating junk lawsuits. I will tell you that as far as the president is concerned, in his neighborhood there is a great hospital, which I will not name, and at this hospital a woman went in for a simple removal of a mole from her face. And under general anesthesia, the oxygen caught fire, burning her face. She went through repeated surgeries, scars and deformity. Her life will never be the same. And you are saying that this innocent woman is only entitled to $250,000 in pain and suffering.

I don't think it's fair. Our jury system makes that decision, and the states, 30 of them have made a decision on what to do. If you were asked a basic question: Over the last 20 years, has the number of paid malpractice claims in America doubled or been cut in half? If you listen to most people here, you'd say it must have doubled. No. According to the Kaiser Foundation, they've been cut in half.

Oh, but how much -- how about the money that's being paid for these malpractice claims? Clearly, that's gone through the roof. No. Between 2003 and 2008, the total amount paid for malpractice claims in America was cut in half from $8 billion to $4 billion.

This is an important issue. I don't dispute it and I think we have treated it as an important issue. But to make it the overriding issue is to, I think, really trivialize some of the other things that should be part of this conversation.

I've been asked to speak about deficit reduction. I will not, other than to say one general thing. When I hear my friend John Boehner say that we have the best health care in the world, I don't dispute it for a moment. If I were sick, this is the country I want to be in, with these doctors, these hospitals, and these medical professionals.

Step back for a second and look at who we are in this room. As was said many years ago, the law in its majestic equality forbids both the wealthy and the poor from sleeping under bridges. When it comes to the wealthy in health care per capita, we're the wealthiest people in America. the Federal Employees Health Benefit Program administered by the federal government, setting minimum standards for the health insurance that we enjoy as individuals and want for our families, is all we're asking for in this bill for families across America.

If you think it's a socialist plot and it's wrong, for goodness sakes drop out of the Federal Employees Health Benefit Program. But if you think it's good enough for your family, shouldn't our health insurance be good enough for the rest of America? That's what it gets down to. Why have this double standard?

Tom Harkin is right. Why do we continue to discriminate against people when we know that each one of us is only one accident or one diagnosis away from being one of those unfortunate few who can't afford or can't find health insurance.

OBAMA: All right. What I'd like to do is this. It is now -- it is now quarter-to-four. I said we'd try to get out of here at 4:15. We have not spoken about coverage and we're going to need to wrap this up.

I know that some people may be on a tight schedule. I'm going to ask that people are willing to stay until 4:30, which gives us 45 minutes. And what I'd like to do is to round out this conversation by focusing on what I think is probably at the core, or one of the bigger philosophical disagreements between the parties in how we address health care moving forward.

I think we've identified one already, which is the issue of insurance and minimum standards. And that was a debate surrounding the exchange. That was a debate that we discussed when it came to being able to buy insurance across interstate lines.

I think the second issue, which Eric Cantor alluded to earlier, John Boehner just alluded to, is the issue of coverage. And that is, can America, the wealthiest nation on Earth, do what every other advanced nation does, which is make sure that every person here can get adequate health care coverage whether they're young or old; whether they are rich or poor?

And, you know, I think that the effort in the House and the Senate has been to control costs, to reform the insurance industry, to deal with some of the structural deficit issues surrounding entitlements, and to do that all in a context in which everybody is getting a fair shake.

And right now, frankly, the 30 million people who don't have health insurance at all -- there are a whole bunch of people who aren't added to that list who -- all they have is a catastrophic plan. And again, they never go to visit a doctor unless they're really sick.

The way we tried to do it was not a government-run health care plan, Paul. I mean, that was, you know, some good poll-tested language that has been used quite a bit. But the fact of the matter is that, as Dick just alluded to, the way we've structured it through the exchange would be to allow people to pool, allow everybody to join a big group, and for people who can't afford it, to give them subsidies, including small businesses.

And so the question is whether there is a way for us to arrive at an agreement that would reach those people.

John, I -- Boehner -- I looked at your bill. I think, as I said, there's overlap on some issues. But when it comes to the coverage issue, the Congressional Budget Office says yours would potentially increase coverage for 3 million people, and the efforts of the House and the Senate would cover 30 million. So that's a 27 million-person difference. We can have an honest disagreement as to whether we should try to give some help to those 27 million people don't have coverage. And so that's, I think, the last aspect of this. And this is probably going to be the most contentious, because, you know, there is no doubt that providing those tax credits to families and small businesses costs money. And we do raise revenues in order to pay for that.

And it may be that the other side just feels as if, you know what, it's just not worth us doing that.

But one of the things I hope we don't do is to pretend that somehow, for free, we're going to be able to get those 30 million people covered. We're not. You know, if we think it's important as a society to not leave people out, then we're going to have to figure out how to pay for it.

If we don't, then we should acknowledge that we're not going to do that. But what we shouldn't do is pretend that we're going to do it and that there's some magic wand to do it without paying for it.

So, with that, what I'm going to do is I will go to whoever you want first, Mitch.

MCCONNELL: Yes, Mr. President, Dr. John Barrasso is going to make our opening statement --

OBAMA: OK.

MCCONNELL: -- on (inaudible).

OBAMA: And then I will call Henry Waxman, and we'll just go back and forth.

SEN. JOHN BARRASSO (R), WYOMING: Thank you very much.

OBAMA: And because we are short on time, let's keep our remarks relatively brief.

BARRASSO: Thank you very much, Mr. President.

For people who don't know me, I practiced medicine in Casper, Wyoming for 25 years as an orthopedic surgeon, taking care of families in Wyoming. I've been chief of staff of the largest hospital in our state. My wife is a breast cancer survivor. Bobbi's been through three operations, a couple of bouts of chemotherapy. We've seen this from all the different sides of -- of care.

And this discussion needs to be about all Americans because everyone is affected, not just people that don't have insurance. And I've had dozens and dozens of visits to senior centers and town hall meetings and visited at -- at service clubs. And if you go to any community in America, and you ask the question, do you believe that this bill up here, that this bill will, if it becomes law -- do you believe you will pay more for your health care, you personally, every hand goes up.

And then you say, do you believe, if this bill becomes law, overall health care and the spending -- and spending in the country will go up, every hand goes up.

And then you ask the most personal question of all, do you believe, if this bill becomes law, the quality of your own personal care will get worse? Every hand goes up.

And most worried of all are the seniors, when you go to the senior centers, because they know there's going to be $500 billion taken away from those who depend upon Medicare for their health care. And it's not just Medicare Advantage. It's hospitals; it's the doctors; it's the nursing homes; it's home health, which is a lifeline for people that are home alone; hospice, for people in their final days of life.

That's all going to be cut. That's why the seniors are most concerned.

And even the White House's own actuary says, if this goes into play, one in five hospitals, one in five nursing homes will be operating at a loss in 10 years. That's what we're looking at.

Now, for 25 years practicing medicine, I never asked anybody if they were a Republican or a Democratic or an independent and asked if they had insurance or not. I took care of everybody.

And many, many doctors -- and I know Dr. Coburn, Dr. Boustany -- do that. We take care of everyone, regardless of ability to pay. Doctors work long hours. Nurses work long hours.

And, Mr. President, when you say, with catastrophic plans, they don't go for care until later, I say sometimes the people with catastrophic plans are the people that are best consumers of health care, in using -- the way they use their health care dollars.

Because a lot of people come in and say, you know, my knee hurts; maybe I should get an MRI. They say -- and then they say, "Will my insurance cover it?" That's the first question.

And if I say yes, then they say, "OK, let's do it." If I say no, then they say, "Well, what is it going to cost?"

BLITZER: We are going to break away from Republican Senator John Barrasso. He's making the case that the Republicans have against the Democratic legislation. We're take a quick break, we're resume our coverage inside Blair House.

The president says they're going live until 4:30 p.m. Eastern, another half hour plus to come.

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