Yes, President Obama bungled it with his tonsillectomy example. He was trying to distill into a sound bite the evidence laid out in an 8 page report, The Cost Conundrum by Dr. Atul Gawande in the New Yorker. See http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all

Basically, Dr. Gawande and President Obama want to change the financial incentives to move away from a "fee for service" model, which is what Medicare uses now, toward the Mayo Clinic model. The Mayo Clinic offers incredibly high quality healthcare for very low prices because it gives doctors, staff, administrators, etc. financial incentives to put patient care first.

This is part of the description of how this works from the article:

"I [Dr. Gawande] talked to Denis Cortese, the C.E.O. of the Mayo Clinic, which is among the highest-quality, lowest-cost health-care systems in the country. A couple of years ago, I spent several days there as a visiting surgeon. Among the things that stand out from that visit was how much time the doctors spent with patients. There was no churn—no shuttling patients in and out of rooms while the doctor bounces from one to the other. I accompanied a colleague while he saw patients. Most of the patients, like those in my clinic, required about twenty minutes. But one patient had colon cancer and a number of other complex issues, including heart disease. The physician spent an hour with her, sorting things out. He phoned a cardiologist with a question.

“I’ll be there,” the cardiologist said.

Fifteen minutes later, he was. They mulled over everything together. The cardiologist adjusted a medication, and said that no further testing was needed. He cleared the patient for surgery, and the operating room gave her a slot the next day.

The whole interaction was astonishing to me. Just having the cardiologist pop down to see the patient with the surgeon would be unimaginable at my hospital. The time required wouldn’t pay. The time required just to organize the system wouldn’t pay.

The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients. I asked Cortese how the Mayo Clinic made this possible.

“It’s not easy,” he said. But decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focussed first on what was best for patients, and then on how to make this financially possible.

No one there actually intends to do fewer expensive scans and procedures than is done elsewhere in the country. The aim is to raise quality and to help doctors and other staff members work as a team. But, almost by happenstance, the result has been lower costs.

“When doctors put their heads together in a room, when they share expertise, you get more thinking and less testing,” Cortese told me."

Sorry, no offense, but I think you are misreading Obama's statement. You write "Unstated here is that under the Obama plan, your kid doesn't get his tonsils out."

I don't think that is correct. I think the clear implication is that if incentives reward doctors for procedures and not outcomes, your kid might get surgery -- invasive surgery with general anesthesia -- even if she doesn't need it. The whole focus of his remarks was on incentives.

Just after the part you quote, the transcript says:

"Now, that may be the right thing to do. But I'd rather have that doctor making those decisions just based on whether you really need your kid's tonsils out or whether it might make more sense just to change -- maybe they have allergies. Maybe they have something else that would make a difference.

"So part of what we want to do is to free doctors, patients, hospitals to make decisions based on what's best for patient care. And that's the whole idea behind Mayo."

Maybe it was inartfully worded, and maybe as a matter of horse-race politics he did himself no favors, and maybe on the merits you think fee-for-procedure is a superior system, but I don't think your characterization of the press conference remarks is accurate.

Just to be clear, my comment was directed to Professor Hurt, not Elizabeth Brown, whose comment wasn't yet visible when I made mine (and with whom I agree).

Sorry, no offense, but Obama thinks doctor's are like his thief friends in Chicago.

He thinks, because he surrounds himself by people who think this way, that doctors are motivated by the same greed all his Chicago buddies are.

He just can't imagine a doctor ordering a procedure because the patient would benefit from it.

Obama's "think the worst of people" theme continued in the same press conference when he maligned the Cambridge police officer. If a cop arrests a black man, he must be a racist. Why? Because all Chicago cops are racists (in Obama's mind).

Obama is running the country into the ground on the basis of a bunch of incorrect biases he picked up in Chicago, Illinois.

They're not serving him well at all.

Comments 1 and 2 are on the money, and I urge you to rethink your posture of "getting off the bus" and tolerating a filibuster.
One flaw in your discussion is that denial of treatment already is here and now, which I can say first hand having watched as an oncologist at a major medical institution refused to order a timely PET scan for a smart 51 year old senior healthcare executive who was in repeatedly with obvious symptoms (nights sweats, evening cough, bone pain, anemia) and saying that she could feel the return of non-Hodgkins lynphoma first suffered a decade before. Instead, he ordered a cheaper CAT scan that failed to confirm what she knew. Only later did he finally order the PET scan in which she "lit up like a christmas tree," with the lights being the high metabolic activity that is part of cancer and that only a PET scan will find. So, a terrible first decision resulted in the insurer paying for two expensive tests. In human terms, the delay left her in agony that far exceeded even what you might imagine in a bad dream.
The agony and bad decisions finally went away because she is well insured (for now) and had the brains and good judgment to go MD Anderson in Houston. There, the lymphoma specialty clinic sees hundreds of lymphoma patients a year and does in fact work in wonderful collaborative teams that get things done right the first time, and do not do unnecessaary tests. Pay for results like this - heck yes ! This is what medical care should look like.
Meanwhile, along the way, her disability insurer dragged its feet until ceaselessly prodded by me and others, which most people cannot do at all, much less effectively.

Consider further the aftermath. She flies home tomorrow after a bone marrow transplant that leaves her - for the second time - as part of the 4% of Americans who are cancer survivors, with 1.4 million new cancer cases arising each year (of which only 15% are lung cancers - see national cancer society webiste - 2009 data). For too many of these people, there is no time to wait. So, this no time for you or any anyone else (especially smart professionals) to get tired and lazy because you do not have pressing health issues, today.
There is no good reason to take the pressure off Congress and the industry to come to grips with major flaws and tough issues that have to be addressed.
Could President Obama could have worded things better. Yes, you are right, he can and should do better. And frankly he needs to do a better job of sometimes speaking in reassuring sound bites instead of being wonky and thoughtful. But thank goodness we now have a president who can and does think critically about many, many things.
Hopefully you and others will stay on the general bus of demanding answers and progress, and desparetely needed reforms. If nothing else, think for example, about my uninsurable friend who is an employee at will as a professional and has been gone from work for 4 months, with another couple of months of difficult recovery ahead. Her employer so far has been but there are no guarantees in the corporate world for her or millions of other cancer survivors who may lose their jobs for reasons far beyond their control and despite being highly rated and highly valued employees. And, then think about the fact that there are many other dread diseases that also render people uninsurable.
While you are at it, perhaps think also about demanding that we make science and cures a national priority. Every two days, more people die of cancer than died on 9/11, but we have wholly failed to wage a trillion dollar war on their behalf. In fact, our government (NIH) spends spend only about $ 5 billion per year on cancer and our research program is poor at best. Want proof? Read Gina Kolata's NYT columns on cancer and policy. The President has raised the budget for cancer but far more is needed, especially after 8 years of science being pushed back and exported, We need to instead grow science here at home where it can save lives and generate lots of great jobs for white and blue collar people.
Thanks for listening - I hope you get back on the bus in at least some way(s).
Kirk Hartley

Can't we get to the real point? Obama commented "stupidly" -- to use his own rhetoric (itself quite stupid) in connection with the Gates matter -- on tonsillectomies.

This gentleman is the political Messiah?

Bah.

I am sorry but the Mayo Clinic is by no means cheap. I fact it is incredibly expensive. They charged my wife $1250 for an IUD insertion. The recommended rate for this is $250. They charge $3000 for an MRI. $18K to deliver a baby by vaginal birth. Saying they are cheap is incredibly ridiculous.

It's entirely laughable to think that a physician would perform a certain procedure, based on higher Medicare or Medicaid reimbursement, because the reimbursement from those agencies is so absolutely paltry, regardless of what you do. In my clinic, Medicare reimbursement doesn't even pay my overhead, and Medicaid is even worse. I continue to take Medicare because these patients have no other option, at great expense to myself, so I am incensed to hear Obama make these kinds of claims. I voted for the guy, too. He's not impressing me right now.

I am a physician with 12 years' practice experience, and can say that I've rarely seen a physician that chooses treatment based on reimbursement level. I've seen over-billing, and I've seen a huge amount of under-treatment, but rarely the situation that Obama refers to. And I have never seen it in a large medical center. In fact, regarding tonsillectomies, the criteria for this procedure are nowadays so rigorous that parents become frustrated they have to wait so long for it to get done. Obama chose a poor example, but even more so, his comment shows ignorance of how the vast majority of physicians practice medicine.

In general, I think politicians are disrespectful of physicians and ignorant of both science and medicine. If we let them dictate how medicine is practiced, we are in for a world of hurt.