Annandale, Virginia. - President Barack Obama hugged a cancer patient Wednesday at an emotional forum before a supportive audience and vowed to bring greater efficiency and accessibility to the nation's health care system.

    Debby Smith, 53, of Appalachia, Va., a volunteer for Obama's political operation, fought tears as she told the president of her kidney cancer and her inability to obtain health insurance or hold a job. Obama embraced her and called her "exhibit A" in what he said was an unsustainable system that is too expensive and complex for millions of Americans.

Also see below:     
Transcript: Barack Obama's Health Care Town Hall Remarks    •

    "We are going to try to find ways to help you immediately," he told Smith as hundreds looked on at a community college forum -- and countless others watched on television. But the nation's long-term needs require a greater emphasis on preventive care and "cost-effective care," he said.

    Smith obtained her ticket through the White House. Aides said she was a volunteer for Organizing for America, Obama's political operation within the Democratic National Committee. Among the other questioners were a member of the Service Employees International Union and a person with Health Care for America Now, which recently organized a Capitol Hill rally for overhauling health care.

    Also questioning the president -- via the Internet -- was Republican Rep. Michael Burgess of Texas, an obstetrician.

    Obama aides said half the tickets were distributed through the community college, with the balance handled through the White House.

    The president said the best way to drive down health care costs is to persuade doctors and hospitals to emphasize quality of care over the quantity of procedures.

    Health experts have long criticized formulas that tie Medicare payments to tests and other services that may not always be the best way to treat a patient. Obama said the formulas must change as part of his bid to overhaul U.S. health care delivery.

    "The biggest thing we can do to hold down costs is to change the incentives of a health care system that automatically equates expensive care with better care," the president said. He said the formula system drives up costs "but doesn't make you better."

    Obama did not make specific recommendations for changing the incentive formulas. Nor did he offer new proposals or details for other tough issues, such as whether to limit medical malpractice awards or to tax employer-subsidized health care benefits.

    He repeatedly said the current health care system is not acceptable and must be overhauled this year. He urged the audience, which included people following on Facebook and YouTube, to reject critics who say his plans are too costly or a step toward socialized medicine.

    Obama gave a nearly 20-minute introduction and answered seven questions.

    Obama said a government-run "single-payer" health care system works well in some countries. But it is not appropriate in the United States, he said, because so many people get insurance through their employers working with private companies.

    But he again called for a government-run "public option" to compete with private insurers, a plan that many Republicans oppose.

    Obama said the public option would provide "competition and choice" and "keep insurers honest."

    Obama also said his health care plan would benefit small businesses and people who are self-employed, by giving them more leverage in dealing with insurance companies. He would do it through a health care exchange for employers who have too few workers to get a good health insurance package, and for people who are self-employed.

    Obama said they would be able to look at the plans available and join with others in the same situation. They would become part of a "big pool" with the leverage to drive down costs, he said.

    When a man from Texas said limits on awards from medical malpractice lawsuits would bring down health care costs, the president replied, "I don't like the idea of an artificial cap" on such awards for injuries suffered. He also said there is little evidence that various states' efforts to limit such awards have uniformly brought down costs.

    Obama said, however, that he is working with the American Medical Association to explore ways to reduce liability for doctors and hospitals "when they've done nothing wrong." He offered no specifics.

    Congress will return to debating health care when it returns Monday from a one-week recess. Obama's agenda calls for reducing delivery costs even as insurance coverage is extended to virtually all Americans.

    Obama says the government will not borrow money to carry out the plans, but many Republicans are dubious if not outright hostile to his proposals.

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Barack Obama: Health Care Town Hall Remarks

Wednesday 01 July 2009

    Transcript provided by the White House, July 1, 2009, Annandale, Virginia.

    It's great to be here in Annandale, and I'm looking forward to answering questions from the folks here with us today as well as the Americans who've submitted questions online.

    But before I begin, I just want to say a few words about where we are as a nation and where we need to go.

    We are living through extraordinary times. This generation of Americans - our generation - has been called to confront challenges of a magnitude unmatched in recent history - challenges that few generations of Americans have ever been asked to confront. In addition to the immediate threats we face - two wars and a deep recession - our economy has also been weakened by the failure to solve problems that have plagued us for decades: the crushing cost of health care, the state of our schools, and our dependence on foreign oil.

    Now, I know there are some who say that in tackling all these problems, my administration is taking on too much at once - that we're moving too fast, too soon.

    Well I say that America has waited long enough. It's not too soon to fix our schools when we're already behind other nations in graduation rates and achievement. It's not too soon to wean ourselves off dirty sources of energy when we've been talking about our oil dependence since Richard Nixon was president. It's not too soon to reform our health care system when we've been talking about fixing it since Teddy Roosevelt was president.

    We are at a defining moment for this nation. If we act now, we can rebuild an economy that is strong, and competitive, and prosperous once more. We can lead this century as we lead the last. But if we don't act - if we let this moment pass - we could see this economy sputter along for years, if not decades. We could see our children inherit a world that is poorer and more dangerous than the one we found. I know that people say the cost of fixing our problems is great, but I can assure you - we have reached a point where the cost of doing nothing is far greater.

    Nowhere is that more true than when it comes to the cost of health care in America. In the last nine years, premiums have risen three times faster than wages. If we do nothing, they will rise even higher. In recent years, over one third of small businesses have reduced benefits and many have dropped coverage altogether since the early 90s. If we do not act, more will lose coverage and more will lose their jobs. Unless we act, within a decade, one out of every five dollars we earn will be spent on health care. And for those who rightly worry about deficits, the amount our government spends on Medicare and Medicaid will eventually grow larger than what our government spends today on everything else combined.

    The stories behind these numbers are real and they are heartbreaking. For over two years, I've heard them in town halls just like this one. I read them in letters every day. And so many of you have asked questions and talked about your struggles on our website, healthreform.gov.

    I still remember the story of the young mother I met in Wisconsin a few weeks back. She has bone cancer and two young children. She's thirty-five years old. She had a job, her husband has a job, and even though they've got insurance, their medical bills have still landed them in deeply in debt. And now, instead of worrying about how she'll get well, all this mother can think about is whether she's going to be leaving that debt to her husband and her children if she doesn't survive.

    This is not a problem we can wait to fix. This is not something we can keep putting off indefinitely. This is about who we are as a country. And that's why we're not going to pass health care reform ten years from now, or five years from now, or even one year from now. The United States of America will have health care reform in 2009. We will get it done.

    We have already made great progress in Washington. In the last few weeks, the pharmaceutical industry to agreed to $80 billion in spending reductions that will make prescription drugs more affordable for our seniors. Last month, doctors and hospitals, labor and business, insurers and drug companies all came together and agreed to decrease the annual rate of health care growth by 1.5 percentage points -- saving $2 trillion or more over the next decade. That will mean lower costs for all of us.

    And in the past two weeks, a committee in the Senate led by Senator Kennedy and Senator Dodd has been making tremendous progress on a plan that would hold down costs, improve patient care and ensure that you will not lose your coverage if you lose your job, change your job, or have a pre-existing medical condition.

    But now we need to finish the job. There is no doubt that we must preserve what is best about our health care system, and that means allowing Americans who like their doctors and their health care plans to keep them. But we also have to fix what's broken about health care in America - and that means permanently bringing down costs for everyone.

    To do this, we have to build on the investments in electronic medical records that we've already made in the Recovery Act - records that will reduce medical errors, save lives, save money, and still ensure privacy. We need to invest in prevention and wellness programs that help Americans live longer, healthier lives. And the biggest thing we can do to bring down costs is to change the incentives of a health care system that automatically equates expensive care with better care.

    We have to ask why places like the Geisinger Health system in rural Pennsylvania or Intermountain Health in Salt Lake City can offer high-quality care at costs well below average, but other places in America can't. We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere. And we should change the warped incentives that reward doctors and hospitals based on how many tests or procedures they prescribe, even if those tests or procedures aren't necessary or result in medical mistakes. Doctors across this country did not get into the medical profession to be bean counters or paper pushers. They became doctors to heal people. And that's what we must free them to do. This has to be about the best care, not just the most expensive care. It has to be about treatments that work, not just more treatments.

    It's also time to finally provide Americans who can't afford health insurance with more affordable options. This is a moral and economic imperative, because we know that when someone without health insurance is forced to get treatment at the ER, all of us end up paying for it - to the tune of about $1,000 per person.

    So what we're working on is the creation of something called a Health Insurance Exchange - a marketplace which would allow you to one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for you. None of these plans would be able to deny coverage on the basis of a pre-existing condition, and all should include an affordable, basic benefit package. And if you can't afford one of the plans, we should provide a little help to make sure you can. I also strongly believe that one of the options in the Exchange should be a public insurance option - an option funded by premiums, not the government. This public option is important because if the private insurance companies have to compete, it will keep them honest and help keep prices down.

    Now, I know one of the biggest questions on everyone's mind is how to finance reform. And that's why we've committed to paying for this without adding to our deficit over the next decade.

    About two-thirds of the cost will be covered by reallocating money already in our current health care system. Much of this money adds nothing to quality of care for patients - it fattens the bottom lines of insurers and other health care providers. As an example, we're on track to spend $177 billion over the next decade in unwarranted subsidies to insurance companies that add nothing to the quality of care. $177 billion. Those are your tax dollars, and you deserve better in return. That's why we'll redirect those resources toward lowering costs, expanding coverage, and improving quality for all Americans.

    In fact, between slashing wasteful spending, cost savings, and identifying new sources of revenue, we've already put almost $950 billion on the table to help pay for reform without adding to our deficit. And that doesn't even include the savings that these reforms could achieve - savings that will reduce our deficit over the long-term.

    So we are making progress on health care reform and we are identifying ways to pay for it. But the hardest part is yet to come - because that's the part when the naysayers and cynics use every excuse and scare tactic in the book to stop reform from happening. And it's already happening as we speak.

    If you hear this criticism, ask the same question that I always ask: "What's your alternative? What do you say to all those families whose medical bills have driven them into bankruptcy? What do we tell those businesses that are choosing between closing their doors and letting their workers go? What do we say to every taxpayer in America whose dollars are propping up a system that is driving us further and further into debt?"

    This isn't just about those Americans without health care. This is about every American - because if we do not act to bring down costs, every American's health care will be in jeopardy. All of us are in this together.

    When it comes to health care, or energy, or education, the naysayers seem to think that we can somehow just keep doing what we've been doing. But everywhere I go, I meet Americans who know that we can't. They know that change isn't easy. They know that there will be setbacks and false starts. But they also know this:

    We are at a rare moment when we have been given the opportunity to remake our world; a chance to seize our future. And as difficult as that sometimes is, what is inherent about the American spirit is the fact that we do not cling to the past in this country. We always move forward. And that movement doesn't begin in Washington - it begins with Americans from every corner of this country who stand up and face that future unafraid. And if we do that now - with health care, with energy, with education - then someday we will look back at this moment as the time when we did what's necessary to leave our children an America that is as bold, ascendant, and imaginative as the America we inherited from our parents. And with that, I'll turn it over to my friend and advisor Valerie Jarrett, who will take your questions.