Obama strikes a deal with the healthcare industry

The biggest players in healthcare say they'll help reform efforts by cutting spending growth by $2 trillion over 10 years -- can they be trusted?


Alex Koppelman
May 11, 2009 9:30PM (UTC)

Monday marked what was essentially the kickoff of President Obama's attempt to pass major healthcare reform. So, in any other environment, it might have been surprising -- even shocking -- to see who was guest-starring in the rollout: Some of the biggest players in healthcare, including the descendant of the lobbying group that sponsored ads that have gotten some of the credit for killing a similar effort by the Clinton administration.

Before Obama spoke to reporters, he met with a group of industry executives, including the heads of five large groups that represent a broad swath of companies, as well as union representatives. The organizations have come together to promise the president that they'll assist his reform efforts by reducing the growth rate in the nation's annual healthcare spending by 1.5 percentage points, which would save about $2 trillion over 10 years.

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"All too often, efforts at reform have fallen victim to special interest lobbying aimed at keeping things the way they are," Obama said. "And that's what makes today's meeting so remarkable, because it's a meeting that might not have been held just a few years ago. The groups who are here today represent different constituencies with different sets of interests.

"They've not always seen eye to eye with each other or with our government on what needs to be done to reform healthcare in this country. In fact, some of these groups were among the strongest critics of past plans for comprehensive reform."

Given recent history, there are some concerns from progressives that this committment is something less than fully sincere. And there are reasons to be skeptical. Ezra Klein writes:

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[I]t's worth asking what, exactly, the health care industry has committed itself to.

And the answer is: Not much. As one senior administration official said to me, "this is a commitment, not a plan." The industry coalition has gestured towards various areas of potential savings -- among them billing reform, health information technology, and linking payment to outcomes. But they've not presented a detailed proposal for attaining them. They have not set down enforcement mechanisms. Put simply, they are, at this juncture, helping the White House with its messaging. But that doesn't mean they will help the White House with its legislation.

Even if the industry keeps its word, there's one other possibility that the New York Times' Paul Krugman wonders about: "Is this gift a Trojan horse?" That is, are these groups trying to get on the inside of healthcare reform efforts only to sabotage them?

Well, anything's possible. But two other explanations seem more likely: First, as the Atlantic's Marc Ambinder explains, the administration's latest bargaining position has come as something of a pleasant surprise to the industry. The second factor in play is simple political reality. As shown most vividly by Republican pollster Frank Lutz's recent memo on how the GOP can effectively oppose reform proposals, the idea that the country has to change the healthcare system in some way has already won. Opposing the broad concept of "reform" is, at this point, political suicide.

These companies and organizations are smart enough to see that, so they're putting themselves on the winning side early. Will that mean they're trying to work from the inside to fashion the final legislation in a form that's closest to what they want? Of course. But in doing that, they're still conceding that something must be done, and that's a very significant concession, one completely at odds with the 1990s strategy, as outlined by Bill Kristol, of completely denying that reform was necessary and not ceding any ground whatsoever.

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Alex Koppelman

Alex Koppelman is a staff writer for Salon.

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