June 15 (Bloomberg) -- President Barack Obama will try to convince the nation’s largest group of doctors today that his plan to overhaul the U.S. health-care system will lead to more efficient care and enhance the country’s fiscal health.

In a speech to the American Medical Association, Obama will endorse the creation of a government-sponsored insurance plan operating alongside private coverage while maintaining existing relationships between doctors and patients, according to an administration official who released background on the address on the condition of anonymity.

The AMA, which is holding its annual meeting in Chicago this week, has criticized Obama’s proposal to create a government-run insurance program. Nancy Nielsen, the group’s president, said in a statement June 11 that the group “opposes any public plan that forces physicians to participate.” Nielsen said the organization is “willing to consider” variations of the public plan being debated in Congress.

According to a report in the New York Times today, Obama sees limiting medical malpractice lawsuits as a way to drive down health-care costs and wants the issue addressed in the overhaul legislation. Obama will mention the issue in his speech today, though won’t offer specifics, according to a senior White House official who spoke on condition of anonymity.

‘Fiscal Responsibility’

Obama is stepping up his campaign for a health-care overhaul as he seeks to meet his self-imposed deadline of getting legislation through Congress and to his desk by October. Last week he held a campaign-style town-hall meeting in Green Bay, Wisconsin, and he used his weekly radio address to outline some of the savings and cost cuts that will cover part of the estimated $1 trillion cost of his proposals.

“These savings underscore the fact that securing quality, affordable health care for the American people is tied directly to insisting upon fiscal responsibility,” Obama said in his address on June 13.

In speaking to the AMA, Obama is making his pitch directly to a constituency whose support he will need to get his proposal passed. One of the points he plans to make is that revamping the system won’t upend existing coverage if patients are happy with it, according to the official. He also plans to reiterate his stance that the high cost of medical care in the U.S. doesn’t always result in the best care, the official said.

Electronic Records

Obama has pointed to greater use of electronic records and regular assessments of procedures and treatments as ways to make delivery of health care more efficient and less costly.

The Obama administration has said the next two months are a critical window of opportunity to get the overhaul accomplished. Spending on health care already represents about 18 percent of the U.S. economy and will almost double over the next three decades unless the growth of costs is slowed, according to figures released by the White House Office of Management and Budget. Legislation on a health-care overhaul may be unveiled by congressional Democrats as early as this week.

Republicans are signaling strong opposition to creation of a government-operated insurance plan.

“For virtually every Republican, a government plan is a non-starter,” Senate Republican leader Mitch McConnell of Kentucky said yesterday on CBS’s “Face the Nation” program. “I don’t think many Americans want to start having to, you know, wait in line and start getting government permission for procedures. We need to be very careful about taking the wrong steps.”

Counting Votes

Senators drafting health-care overhaul legislation are also weighing a compromise that would use nonprofit cooperatives, instead of a government-run program opposed by Republicans, to provide coverage for the uninsured.

The concept would allow the cooperatives to negotiate directly with health-care providers for low-cost rates. The plans they offer would be sold, like private plans, through new Internet-based “exchanges” where consumers could buy insurance at lower-cost, group rates.

The cooperative plan was proposed last week by Senator Kent Conrad, a North Dakota Democrat. He said yesterday that the government-run insurance program would probably fail to get through Congress, even though Democrats hold majorities in both chambers.

“At the end of the day, nothing advances unless you get 60 votes in the United States Senate,” Conrad said on CNN’s “State of the Union” program. “And that I don’t believe is possible with the pure public option. I don’t think the votes are there.”

McConnell also said the cost cutting Obama has outlined to pay for his plan likely will meet resistance from doctors and operators of hospitals. “They’re having a hard time dealing with the cuts that have been imposed already,” he said.

Federal Deficit

Paying for a health-care overhaul has become a key point of contention among lawmakers as they draft legislation. Obama has pledged that his plan won’t add to the federal deficit that is projected to swell to a record $1.8 trillion this year.

Obama included a $635 billion “down payment” on health care in his fiscal 2010 budget. The money would come from a combination of tax increases for wealthier Americans and savings in the federal Medicare and Medicaid insurance programs.

On June 13 Obama outlined another $313 billion in Medicare and Medicaid savings over the next 10 years through forcing greater efficiency in Medicare, demanding better prices from drugmakers and cutting the number of uninsured Americans.

“We are making good on this promise of fully financing health care reform over the next decade,” White House budget Director Peter Orszag said in a June 12 conference call.

To contact the reporter on this story: Nicholas Johnston in Chicago at njohnston3@bloomberg.net

Last Updated: June 15, 2009 10:02 EDT