TRANSCRIPT: ABC News' Dr. Timothy Johnson Interviews President Barack Obama

July 15, 2009— -- JOHNSON: I'd like to begin with a topic you talk a lot about, waste in the present system. Everybody agrees there is waste that is a bi-partisan agreement. The debate as you know starts when you talk about who is going to identify and remove the waste. In other words, there are experts who will label something as waste and other doctors or patients might say is important or even essential. So who exactly or what process exactly is going to do that very difficult job?

OBAMA: Well, I think it's a great question, and I think the important thing is to underscore that there is consensus that we spend too much on care that does not improve people's health. And if we start with that, then that means we've got to make some changes.

What I've proposed is that we have a panel of medical experts that are making determinations about what protocols are appropriate for what diseases. There's going to be some disagreement, but if there's broad agreement that, in this situation the blue pill works better than the red pill, and it turns out the blue pills are half as expensive as the red pill, then we want to make sure that doctors and patients have that information available to them.

Now, we don't think that we have to impose draconian measures to force patients to use a generic instead of a brand-name drug, for example, or to force a hospital to administer one test instead of five tests. But if, generally speaking, there's consensus that this will work in most circumstances, that's the default position, then I think most patients and doctors don't want to spend money unnecessarily.

JOHNSON: The House bill that came out yesterday proposed a so-called health benefits advisory committee, 25 people appointed mostly by you and by the surgeon general, who is going to figure out what benefits will get paid for and what won't.

Most people hate the insurance companies, but they know that devil; they're worried about this new devil, and how those decisions are going to be made behind closed doors.

OBAMA: Well, Doctor, I think you just made an important point. The decisions, right now, are being made by insurance companies. And I think a whole lot of people out there are having bad experiences because they know that recommendations are coming from people who have a profit motive.

Now, if I've got a panel of doctors and experts whose only motivation is making sure that we get the best bang for the buck from our health care, I think that's a situation that most Americans would feel pretty good about.

And what we can't do is pretend that somehow with all the waste that's in the system -- and everybody acknowledges that -- that we can just keep on doing business as usual and somehow bend the curve on health care costs in a way that not only provides affordable coverage to families but also makes sure that we don't have the federal budget blowing up.

Dr. Timothy Johnson Interviews the President

JOHNSON: Let's assume you get all that figure out... (LAUGHTER) ... a big job obviously, and now you're able to increase coverage and so now you got a lot of people with new coverage seeking out primary care. And they can't find doctors. We sent out a little note to the doctors, telling them about this interview and asking them what they most feared. And I just want to read you what a couple of them said. It's very poignant, actually, what they said. One of them said, "I fear that the plan will increase insurance coverage without increasing the ability of primary care physicians to take care of everyone who needs care. Massachusetts provides the obvious example of what happens, long waits, increased costs.

JOHNSON: One guy wrote, a sports analogy, "I fear that he won't shoot the puck and really fix it." So what if we get all these people with insurance and there is no primary care available? It's a nightmare situation. They'll got to the emergency room.

OBAMA: It's a big risk. We've already got a lot of problems…

JOHNSON: and its going to get worse…

OBAMA: Yes, but keep in mind, that the status quo is we don't have enough primary care physicians. We've got no incentive to create more primary care physicians. And those people who don't have access to primary care physicians are going to the emergency room where we're giving them the most expensive care and all of us are subsidizing that to the tune of about 900… (CROSSTALK) (JOHNSON: That's a bad scenario.)

So with the new insurance -- keep in mind that we're going to be phasing this in. And what we want to do is to provide a powerful set of incentives for more and more young people who are interested in health care, interested in medicine, to go into primary care.

Part of that may be adjusting the reimbursements, so that primary care physicians are getting a greater reimbursement and we're closing the gap between specialists and primary care physicians. Part of it may be how we finance medical education and saying to the young people who are going into medical school, "If you are committed to primary care, we are going to pay your way."

And so, putting in a sizable chunk of money into making life better for primary care physicians, particularly those who are willing to serve in under-served areas, I think we can solve some of those problems.

We're not going to solve all of them immediately overnight, and that's why I think we have to anticipate this program's not going to start up probably until 2013. That gives us four or five years to start developing programs to solve this problem.

JOHNSON: You described some of the maybes. I'd like to respectfully say that at least one of them isn't a maybe – you HAVE to increase salaries for primary care physicians or you're not going to get them relatively. 2% of medical students today say they are going into primary care. (CROSSTALK)

Dr. Timothy Johnson Interviews the President

OBAMA: It is a huge problem and one that we've got to solve and I want to make sure that in the final bill that I sign there are strong incentives to help primary care physicians.

JOHNSON: So speaking of compensation, it leads me to another issue that you've talked a lot about which is we've got to stop paying doctors and other providers for simply doing or we've got to pay them to think and have good outcomes. I'm a physician. I've lived in this culture for too many years. I know how hard it's going to be to change physicians thinking. How are you going to do that?

OBAMA: Well, you know, it's interesting. We know that there are examples in the Mayo Clinic...

JOHNSON: They get a lot of their funding from private sources.

OBAMA: They -- they do, but what they've also done is created a culture in which doctors are thinking entirely on the patient's health and they're not worrying about reimbursement because the business models have been created that assures doctors a steady flow of income, and all they want to do is to think about how can I work as a team to make this patient better. And there are some places that do that better, some places that do that worse.

What we want to do is to make sure that we are incentivizing through our reimbursement practices those places that do it better. So if a hospital is reducing readmission rates, then they get a bonus for that. Now, suddenly the hospital administrator starts getting his team together saying, "How do we make sure that patients are healthier?" If we've got doctors working as a team, and when a patient comes in, the primary care physician is coordinating with specialists ahead of time so that they're all meeting and diagnosing that patient at once, as opposed to having a succession of tests and people being siloed in different places, that's going to save us money. It's going to save the system money and it will improve the quality of care for patients.

So we -- one of the things that we've proposed is -- a Republican Congress instituted something called the MedPAC board, that for Medicare and Medicaid was going to propose a series of measures to get exactly the problem that you are talking about, improving quality, reducing costs.

The problem is nobody's ever done anything with these studies.

JOHNSON: And they don't have any power. And there's no power.

OBAMA: So what we want to do is to empower the MedPAC board, to force Congress to consistently vote on these reforms that have been recommended by experts in the field, medical experts in the field. And that way, if Medicare and Medicaid start incentivizing the right behaviors, then I think what you'll start seeing is that private insurance will do the same thing.

JOHNSON: So, I want to come back to where I started, because if you do all these things, if you get the primary care infrastructure in place, and you incentivize the physicians to behave in the right way, there are going to be a lot of procedures and tests that will not be done anymore. And behind those procedures and tests are real people, real jobs, who are going to lose their jobs. It's the only growing segment in our economy. How are you going to handle the loss of jobs in this vital area of our economy?

Dr. Timothy Johnson Interviews the President

OBAMA: Well, keep in mind, first of all, health care is still going to be a growth industry, just because we're all getting older and as a population we're aging. Which means that the United States is going to spend a larger proportion of its income on its health care than we did twenty-thirty years ago. And so health care is still going to be a growth industry.

So the question is, how are we deploying people? Are we hiring somebody to spend all their time working on billing and figuring out whether somebody has insurance and finding paper records that are hugely inefficient or are we taking that same person and saying, "You're going to be working with the diabetic patients, calling them every month or so to make sure that they're taking their medications and that they are following procedures so that they don't end up with a foot amputation."

Those are equally important jobs. The problem is right now the growth industry is in doing the bureaucratic paperwork, instead of the actual patient care. And if we can direct our attention to patient care, there's still going to be ample opportunity for people. It's just that they're going to be doing stuff that actually adds value, as opposed to creates more frustration for patients throughout America.

JOHNSON: A final quick question. I'm from Massachusetts and people there are asking how much have you been able to communicate with Senator Kennedy – how has he been a part of this?

OBAMA: Well, you know, I just spoke to him last week because I was with the Pope, and he had asked me to deliver a letter to the Pope. Senator Kennedy is following this very closely. He is in communications with Chris Dodd, who has taken over the process in the Health Committee in the Senate. Obviously, it's painful for Senator Kennedy, who's fought all his life for this moment, not to be there in the heat of battle. But he's there in spirit.

Obviously, right now we just want to make sure that he's taking care of himself and he's healing, but his spirit looms large over this entire process.

JOHNSON: Thank you.

OBAMA: Thank you. I appreciate it.