Friday, May 15, 2009

"Health Care Leaders Say Obama Overstated Their Promise to Control Costs"

That was the headline in yesterday's New York Times regarding Monday's promise by health care stakeholders to reduce spending by $2 trillion.

A couple of snipets from the Times article:
Hospitals and insurance companies said Thursday that President Obama had substantially overstated their promise earlier this week to reduce the growth of health spending.

“There’s been a lot of misunderstanding that has caused a lot of consternation among our members,” said Richard J. Umbdenstock, the president of the American Hospital Association. “I’ve spent the better part of the last three days trying to deal with it.”

One of the lobbyists, Karen M. Ignagni, president of America’s Health Insurance Plans, said the savings would “ramp up” gradually as the growth of health spending slowed.
Right after the $2 trillion announcement I posted:
Don’t also assume that the American Medical Association (AMA) really represents doctors—I don’t think anyone or anything really represents doctors. If the AMA makes a commitment that actually means sacrifice among the docs you will see just what I mean—especially if the national association folks do a deal with the insurers "on behalf" of all the docs back home requiring real sacrifice. To some degree, you can say the same for the thousands of hospitals out there.

If these stakeholders don't deliver $2 trillion in something Orszag can take to the bank will the Democratic response be a "public health plan?" Watch the fireworks.

Someone dug themselves one heck of a hole yesterday.

Is it the stakeholders that now have to do in a few weeks what no one has done in decades of pondering this dilemma—make a tangible, measurable, and enforceable offer that cuts real money? If you think coming up with $2 trillion was a big deal actually figuring out the mechanism to carry it off will be a dramatically bigger challenge.

Was it the Obama administration that just raised expectations exponentially trusting these guys can actually deliver something measurable? Or, is the Obama administration just setting them up?
Or was the Obama administration just setting them up?

When those stakeholders walked into the White House on Monday they never intended to make more than a vague promise. When they walked out it was to headlines that they would make "scoreable" proposals by June 1st.

They also had some very angry constituents across the country wondering just what kind of deal they were doing.

They never had $2 trillion and now they have one big problem!

As one insider told me this week, "They got smoked!"

Update: Stakeholders released a statement in response to the NY Times article:
Washington, DC — “We are committed to working together to bend the health care cost curve. Health care reform will not be sustainable unless the nation brings down the rate of growth of health care spending. We are committed to doing our part to make reform sustainable and to make the system more affordable and effective for patients and purchasers.

"Our organizations are currently engaged in an intensive process to develop proposals to reduce the rate of increase in future health care costs. And to be successful, we must take action in public-private partnership. We look forward to offering cost-savings
recommendations in the weeks ahead.

"The participating organizations reaffirm their commitment as outlined in the May 11 letter pledging to do our part to bring down health care costs."
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