After insuring continued profits for insurers, drugmakers, hospitals, and employers, Obama targets the elderly, the poor, and the disabled for health cuts.

In each case (of healthcare cost savings), the Obama administration hailed the agreements as historic. But what has been little discussed is what the industry groups will be getting in return for their cooperation, whether or not the promised savings ever materialize.

As part of their deal with the White House, pharmaceutical companies say they won an agreement from Mr. Baucus to oppose efforts by House Democrats to sharply reduce what the government pays for drugs for some Medicare recipients previously covered by Medicaid.

The deal with doctors could come at a steep price: a $250 billion fix to a 12-year-old provision in federal law intended to limit the growth of Medicare reimbursements.

Wal-Mart, the nation’s largest private-sector employer, agreed recently to support requiring all big companies to insure their workers. In exchange, Wal-Mart said it wanted … lawmakers (to) abandon the idea of requiring employers to pay part of the cost for workers covered by Medicaid, the government insurance plan for the poor.

Rick Pollack, executive vice president of the American Hospital Association, … said hospitals had agreed to about $150 billion in savings after securing assurances that lower reimbursements would come after an insurance expansion that would guarantee that more patients pay their bills.

Meanwhile, after insuring continued profits for insurers, drugmakers, hospitals, and employers, Obama targets Medicare and Medicaid, the  government-run health programs for elders, the disabled, and the poor for cuts.  (See June 13, 2009 NY Times, “Obama Offers More Health-Care Savings Through Limits on Payments“)

Cutting healthcare costs to business and government has replaced concern for the uninsured as the driver of healthcare restructuring,  and it is becoming increasingly clear that the essense of Obama’s healthcare plan is to reduce business’ healthcare costs by downgrading healthcare for the majority of the population, particularly for the old, the poor, and the disabled.

See “Factbox: -Health lobbyists fight to keep lucrative programs” in Comments, below.

New York Times, July 8, 2009

Health Deals Could Harbor Hidden Costs

WASHINGTON — The deals, trumpeted loudly by the White House, would each help pay for a sweeping overhaul of the health care system.

First, it was a broad consortium of health industry groups — doctors, hospitals, drug makers and insurers, all promising to slow the growth of medical spending by 1.5 percent. Then, it was the big drug makers, promising savings of $80 billion over 10 years, by lowering the cost of medicine for the elderly.

On Wednesday, it will be major hospital associations, pledging to save more than $150 billion over a decade. And a deal with doctors is said to be on tap next.

In each case, the Obama administration hailed the agreements as historic. But what has been little discussed is what the industry groups will be getting in return for their cooperation, whether or not the promised savings ever materialize.

The short-term political benefits are clear. Senior White House officials say the deals are building momentum that will help propel the health care legislation past potential opponents in the private sector and on Capitol Hill.

Rather than running advertisements against the White House, the most influential players in the industry are inside the room negotiating with administration officials and leading lawmakers, like Senator Max Baucus, chairman of the Finance Committee.

“The very groups we have been talking to have been the most vocal opponents of health care reform; they are now becoming the vocal proponents for health care reform,” said Rahm Emanuel, the White House chief of staff.

But some lawmakers said the deals, while seemingly helpful, could raise false expectations by obscuring how much the industry is demanding for its concessions.

“I’m delighted to hear that people are stepping up to help reduce costs,” said Senator Christopher J. Dodd, Democrat of Connecticut, who is leading the Senate health committee, “but I want to know what the ask is, and the ask sometimes can exceed the value of your cost savings.”

Senator Olympia J. Snowe, Republican of Maine, who could provide a critical swing vote, said she had not signed on to any of the White House deals. “It’s one thing for the president to reach that agreement, but it’s another thing for Congress to reach that agreement,” Ms. Snowe said. “We have yet to evaluate what are the specifics and particulars. So it’s uncertain. It could be helpful. I just don’t know.”

As part of their deal with the White House, pharmaceutical companies say they won an agreement from Mr. Baucus to oppose efforts by House Democrats to sharply reduce what the government pays for drugs for some Medicare recipients previously covered by Medicaid.

The deal with doctors could come at a steep price: a $250 billion fix to a 12-year-old provision in federal law intended to limit the growth of Medicare reimbursements. The American Medical Association and other doctors’ groups have sought to change or repeal the provision, and they are likely to try to extract that as their price for boarding the Obama train, people tracking the negotiations said.

Wal-Mart, the nation’s largest private-sector employer, agreed recently to support requiring all big companies to insure their workers. In exchange, Wal-Mart said it wanted a guarantee that the bill would not “create barriers to hiring entry-level employees” — in effect, code words to insist that lawmakers abandon the idea of requiring employers to pay part of the cost for workers covered by Medicaid, the government insurance plan for the poor.

“It’s kind of a give-and-take, quid pro quo kind of environment,” said Tom Daschle, President Obama’s first choice for health secretary, who remains in touch with the White House on health care issues. “I think that the stakeholders wouldn’t do this if they didn’t think there was something in it for them.”

But, Mr. Daschle said, there is something in it for Congress and the White House, too: By getting on board early, groups like the drug makers and hospitals will be “owners of this process, and as owners they have to continue to defend it and support it.”

Over the past year, Mr. Baucus, Democrat of Montana, has strong-armed industry groups, warning them not to publicly criticize the process if they want to stay in negotiations.

Mr. Baucus, in turn, has said little about his talks with industry players. On Tuesday, he said only that he was “heartened” by how many groups were supporting the health care overhaul.

But Rick Pollack, executive vice president of the American Hospital Association, credited Mr. Baucus and his staff with reaching the agreement.

“Hospitals have been long committed to expanding coverage for the millions of Americans that don’t have health insurance,” Mr. Pollack said. “We see this as a historic opportunity to achieve that objective.”

In the case of hospitals, Mr. Pollack said negotiators had worked hard to come to terms not just on the financial issues but also on broad and complex policy matters intended to improve the health care system.

He said hospitals had agreed to about $150 billion in savings after securing assurances that lower reimbursements would come after an insurance expansion that would guarantee that more patients pay their bills.

“We do believe in that regard in particular there are safeguards that are part of this proposal,” Mr. Pollack said.

He said Mr. Baucus and White House officials had been responsive to the industry on many points, including plans to bundle payments for certain services and penalize hospitals when patients were readmitted for potentially preventable reasons.

Democrats are trying to keep the cost of the legislation to about $1 trillion over 10 years. In a sign of a deepening rift among Senate Democrats, the majority leader, Harry Reid of Nevada, on Tuesday urged Mr. Baucus to drop a plan that would pay for the bill partly by taxing some employer-provided health benefits.

Aides said Mr. Reid, speaking for other Senate Democratic leaders, was concerned that Mr. Baucus had not included any provision for a government-run insurance program to compete with private insurers, which is favored by Mr. Obama and many other Democrats. At a meeting later in the day, aides said, Mr. Baucus pushed back against Mr. Reid, saying his own proposal offered the only clear path to Senate approval.

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1 Response to “After insuring continued profits for insurers, drugmakers, hospitals, and employers, Obama targets the elderly, the poor, and the disabled for health cuts.”


  1. 1 mlyon01 July 10, 2009 at 10:27 am

    http://www.reuters.com/article/governmentFilingsNews/idUSN0839786420090708

    FACTBOX-Health lobbyists fight to keep lucrative programs
    Wed Jul 8, 2009 6:16pm EDT

    July 8 (Reuters) – Lobbyists for drugmakers, insurance companies, hospital chains and others are trying to protect lucrative businesses threatened by U.S. healthcare reforms.

    Following are some of the top concerns of the healthcare industry as Senate and House lawmakers prepare a legislative package:

    DRUGMAKERS

    * Oppose requiring lower prescription drug prices for poor, elderly citizens who qualify for both Medicare and Medicaid programs. In 2006, Congress moved drug coverage for dual-eligible citizens from Medicaid to the new Medicare Part D program on the assumption that it would be able to negotiate better prices. Democratic Rep. Henry Waxman criticized the switch as a “windfall” for drugmakers and said the government paid $3.7 billion more in 2006-2007 for the top 100 drugs used by dual-eligibles than it would have paid under Medicaid.

    * Want 12 years to 14 years of exclusivity for new biologic drugs before cheaper, generic versions are approved by the Food and Drug Administration. The Obama administration has endorsed seven years of protection. Biologics are man-made forms of human proteins that are more complicated to make than more traditional, chemical-based medicines. These often-expensive medicines are used to treat conditions ranging from anemia to cancer and are expected to help drive future profit growth for the drug industry.

    * Agreed to $80 billion in prescription drug discounts over the next 10 years, in part by reducing the cost of medicines for elderly Medicare patients who find themselves in the so-called “doughnut hole” and pay the full costs of drugs for a certain period of time.

    HEALTH INSURERS

    * Oppose creating a government-run public insurance plan to compete against private insurers. President Obama, along with many Democrats, backs a public option. Insurers say it could drive them out of business and lead employers to drop coverage for their workers.

    * Resist payment cuts for Medicare Advantage health plans for the elderly and disabled offered by some companies. Such plans can offer more benefits than traditional fee-for-service Medicare coverage but cost the government $12 billion more, according to the independent Medicare Payment Advisory Commission (MedPac).

    HOSPITALS

    * Opposed the Obama administration’s original proposal for $220 billion in payment cuts, but have agreed to $155 billion in cuts over 10 years, in part from reduced Medicare and Medicaid payments. Also oppose reduced payments for long-term care and rehabilitation hospitals, saying that could prevent better care coordination for patients.

    * Oppose a public health insurance plan that would pay providers at the same rates as Medicare and Medicaid.

    * Want a Medicaid drug rebate expanded to more hospitals as well as in-patient services.

    * Want funding assistance expanded for hospitals treating large numbers of undocumented immigrants.

    DEVICEMAKERS

    * Oppose paring the use of various medical technologies or related reimbursement rates, especially for imaging tests.

    RELATED NEWS:

    *TAKE A LOOK-Congress tackles health reform[ID:nN07323916]

    (Reporting by Susan Heavey, Julie Vorman, Lewis Krauskopf)


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