Health insurers, hospitals already backing away from commitment to cutting costs and reform

That didn’t take long.

On Monday, President Obama had a meeting at the White House with leaders of the the health care industrial complex. The president announced an unprecedented agreement by that crowd to slow the growth of spending by 1.5% a year for the next ten years:

And that’s why these groups are voluntarily coming together to make an unprecedented commitment. Over the next 10 years — from 2010 to 2019 — they are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year — an amount that’s equal to over $2 trillion. Two trillion dollars.

That was Monday. Four days ago.

Today, four days later, the leaders of the health industry are already backing away from that commitment:

Hospitals and insurance companies said Thursday that President Obama had substantially overstated their promise earlier this week to reduce the growth of health spending…

…The Washington office of the American Hospital Association sent a bulletin to its state and local affiliates to “clarify several points” about the White House meeting.

In the bulletin, Richard J. Pollack, the executive vice president of the hospital association, said: “The A.H.A. did not commit to support the ‘Obama health plan’ or budget. No such reform plan exists at this time.”

Moreover, Mr. Pollack wrote, “The groups did not support reducing the rate of health spending by 1.5 percentage points annually.”

The leader of the health industry’s lobbying effort also created some distance:

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.

Huh. They’re acting like the Obama administration just made up the numbers. Funny thing, since earlier this week, Ms. Ignani’s group issued this statement:

By reducing the rate of growth in health care spending by 1.5% each year, the nation can achieve a savings of $2 trillion over the next decade. This effort will have a direct effect on the budgets of individuals and families and will also go a long way in ensuring that every American have access to affordable, high-quality health care.(my emphasis)

So, those people stood with the President as he announced the agreement. Those industry people reported the same exact numbers. But, now, they say it’s not true. That’s it right there: These people can’t be trusted. (Of course, anyone who deals with a health insurance company knows that.)

I listened to the conference call on Sunday with “senior administration officials” to preview the agreement. What they said was unequivocal. The health industry had made a commitment to slow spending by 1.5% for ten years, resulting is savings of $2 trillion. I’m sure the health industry knew about that call. They didn’t dispute it then. And, the industry used the same exact numbers. So did they just want to stand with Obama for the photo op?

One “senior administration official” on that Sunday call said this agreement was a “game-changer.” Now, we know the health industry doesn’t really want to change the game.


On October 27, 2010, Joe was one of five bloggers who interviewed President Obama. Joe is a DC-based political consultant with over twenty-five years of experience at both the state and federal level. Joe has managed political operations and legislative efforts for both candidates and issues-based organizations. For seven years, he was the Director of State Legislation at Handgun Control, Inc. He served as that organization's first Political Director during the 2000 cycle. Joe is a graduate of the University of Maine School of Law. In addition, he has a Masters in Public Administration from Lehigh University and received his B.A. from the University of New Hampshire. Joe also has a fun dog, Petey, a worthy successor to Boomer, who got Joe through eight years of Bush and Cheney. Joe likes to think he is a world class athlete having finished the 2005 Chicago Marathon in the time of 4:10. He has completed six other marathons as well -- and is still determined to break the four hour mark.

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