TIME's Exclusive Interview with President Obama

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Brooks Kraft / Corbis for TIME

President Barack Obama

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But what if it would make me just a little bit healthier, but it would really cost a lot of money and I want it?
Well, what you're describing is — what you're describing is the status quo now. There are all kinds of things that people want that would make them a little bit better and they don't have. Every single person who goes to the emergency room goes through that. Every single person who is denied reimbursement for something by an insurance company is going through that. Every single person who's got an $8,000 deductible, who foregoes a mammogram or a pap smear or a regular checkup or dental care is going through that.

So what you described is the status quo. And my point is, is that if we could save some money on things that are unnecessary, then less frequently would people be in a position where they had to forego things that are necessary.

Well, you know, a few months ago, when you brought up your own grandmother's situation [her choice to have an expensive hip-replacement operation, despite the fact that she was terminially ill], I mean, it was, I think, painful and personal because every family, if they haven't hit some wrenching decision like this, is going to. As you think back on that, I mean, was that the right decision? Is this the — for your family, for her? Is this the kind of thing that a reformed system, as you see it, would change the dynamic of that decision?
You know, first of all, unlike my mother, who had a difficult time with her cancer in part because her insurance was a little bit unreliable and she had just taken a new job, my grandmother had been signed up under Kaiser Permanente for years. And it's actually one of the models of high-quality, cost-efficient care that's out there right now, partly because they maintain such a stable base of patients and they construct a whole team approach that has proven to be very effective.

So my grandmother was generally very happy with her care, and if we could actually get our health care system across the board to hit the efficiency levels of a Kaiser Permanente or a Cleveland Clinic or a Mayo or a Geisinger, we actually would have solved our problems.

Now, even in those systems, there's still going to be hard choices, right? But the fact of the matter is, ultimately, my grandmother was able to get that hip replacement even though she had terminal cancer and even though the operation was full of risks. And so from a purely economic point of view, there would be some who argued that wasn't a good use of health care dollars. I guess my point is that —

Do you believe that was?
I guess my point is, is that you don't even get to those really tough decisions, you don't even have to get to those really tough decisions before you've already saved a huge amount of money and made people healthier and made sure that Medicare was solvent and bent the cost curve. I mean, there's 20, 25% of the cost — of the system that is wasteful right now, even before you get to tough decisions about end-of-life care.

Now, you ask me do I think it's worth it? Of course, it was my grandmother. So anything that would relieve her pain or her suffering or extend her life in a way that she wished is something I wanted to do, and I would have paid for it out of pocket if I had to. But not every family is going to make those same decisions.

Right. But that decision, however, will, you're saying, be still there for the family to make, will be —
It's still going to be a decision that the family has to make. I guess — this is my point, I think that there's this perception that you either have rationing that is very stringent and sort of makes you wait for months before you can get your cancer treated or you can never get your knee replaced, right, all the horror stories you hear from the British model or the Canadian system that people who are opposed to reform always trot out. Or, alternatively, you just have this bloated system in which we don't even try to make it rational, we just sort of live with what we have. And what I'm trying to suggest is, is that there's this huge space in between where we could make the system much more efficient, much more cost-effective, make people much healthier, and still not have to resort to some of the rationing that people are fearful of. But that — it does require changes in how we approach things.

Let's just take one example, and that is testing. It turns out that we pay 10 times what Japan pays, for example, for CAT scans and MRIs. Well, why is that? And it turns out, by the way, that we are having those tests five, six, eight times as often as folks in other countries who have just as good outcomes.

Now, some of that may have to do with reimbursement models. There may be differences that have to do with the approach that hospitals here take in recovering costs for expensive equipment. There are a whole range of reasons why that might be true, but the point is, is that it's not like people out there are — would automatically be prevented from getting CAT scans if we just tried to think when is a CAT scan or an MRI working and appropriate in improving care and when it's not.

And what we've said is that if doctors and patients had that information, and you start changing some of these delivery systems, you will see significant changes in the cost of health care and you will see improved outcomes and improved convenience, because if people are going through a battery of tests when one test would be sufficient, every time they're going to the doctor, that's gas, babysitting, sitting around for two hours, a day off work. We're not even factoring in those costs.

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