Fox News reports:

Even as Democrats claim the outrage seen at town hall meetings across the country does not reflect public opinion on health care reform, the Obama administration is changing tactics and signaling that it’s ready to compromise on a key element of its reform push.

The shift suggest that critics of Democrats’ health care reform plans are having an impact, and could change the course of debate in Washington once Congress returns from recess.

On Sunday, Health and Human Services Secretary Kathleen Sebelius said the so-called public option — a government-run health care plan that would be just one component of a broader health care overhaul — is “not the essential element.”

She suggested the White House could settle for a system of insurance cooperatives instead, something the Senate Finance Committee is considering.

“I think there will be a competitor to private insurers,” Sebelius said on CNN’s “State of the Union.” “That’s really the essential part, is you don’t turn over the whole new marketplace to private insurance companies and trust them to do the right thing. We need some choices, we need some competition.”

Sebelius’ remarks come after President Obama suggested at his town hall meeting in Colorado Saturday that a public option, once touted as critical for effective health care legislation, is up in the air.

“The public option, whether we have it or we don’t have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it,” Obama said, saying both sides of the debate have become “fixated” on the proposal.

The apparent willingness of the administration to bend on that aspect of the bill raises new concerns. House committees have already passed a bill that includes the public option, and some liberal Democrats say they’ll back away from the bill if a public option isn’t part of it.

But it sends a signal that, in the face of polls reflecting growing disappointment with health care reform and town halls where critics are noisily confronting lawmakers, the administration wants to offer concessions in the interest of advancing toward a final product.

“I think we’re going to see a change in what Obama-care as we originally thought of it is going to be and I think they’re helping to redirect that conversation,” said Sabrina Schaeffer, with the Independent Women’s Forum.

Sen. Kent Conrad, D-N.D., one of six negotiators trying to hammer out a bipartisan compromise measure on the Senate Finance Committee, told “FOX News Sunday” that the so-called public option simply does not have the votes to pass.

“The fact of the matter is there are not the votes in the United States Senate for the public option. There never have been,” he said. “So to continue to chase that rabbit I think is just a wasted effort.”

Conrad and other negotiators on the finance committee are instead pushing for nonprofit insurance cooperatives as an alternative to the public plan.

The finance committee is the last of five committees to consider heath care legislation.

White House Press Secretary Robert Gibbs made clear Sunday that Obama would still prefer a public option, but said the “bottom line” for the president is “choice and competition in the insurance market.”

Another component that could be on the chopping block is a provision for optional end-of-life counseling. Though the idea used to have bipartisan support, it became a political football after former Alaska Gov. Sarah Palin compared the process to a “death panel” and other conservatives made similar allegations.

Democrats call such claims absurd. Sebelius told ABC’s “This Week” on Sunday that the provision has been unfairly turned into a “scare tactic,” defending it as a way to “empower” patients and family members.

But while she said she hopes the provision stays, she conceded that it will probably “be off the table.”

Republican Sen. Charles Grassley, one of the six finance committee negotiators, said earlier in the week the provision is out of his panel’s version of the bill, citing the way the measure could be misinterpreted.

Speaking on “FOX News Sunday,” Sen. Kent Conrad, D-N.D., confirmed that the provision had been stripped.

In the face of growing discontent, Obama also recently adopted a new rhetorical tactic as he tailored his message more toward those who have insurance than those who don’t.

He hammered that message Sunday in an op-ed in The New York Times, arguing that those who have health insurance are being short-changed by their insurance providers.

He wrote that he’s confident health care reform can pass and said it must happen this year.

But yet another timetable could be in trouble, as Conrad on Sunday said Senate negotiators would not be held to a Sept. 15 deadline to finalize their work on a compromise measure.

Conrad said the hope is that they can finish their work by mid-September but suggested they could miss that marker.

“We are going to be ready when we’re ready,” Conrad told “FOX News Sunday.” “This is not something that should be held hostage to any specific deadline.”

(Source: Fox News)