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Now We're Talking Real Money

When you're trying to crunch the numbers for America's future, the prospect of ever-skyrocketing health care costs makes everything look really grim.

And that's why the White House's announcement today -- that a broad coalition of health-industry groups is vowing to rein in the growth in health care costs, after years of uncontrolled increases -- is such a big deal. Simply trimming the annual health care spending growth rate by 1.5 percent would be enough to save the nation $2 trillion over 10 years. It would also dramatically slow the increasing cost of Medicare, and would make President Obama's hopes for universal health coverage considerably more affordable.

"This is a historic day, a watershed event in the long and elusive quest for health care reform," Obama said today.

Indeed, in an answer to those of us who weren't too impressed with the $17 billion in possible savings trumpeted by the White House last week, now we're talking real money.

There's more we need to know before getting too excited, however. One is where these "savings" will really come from -- and that we won't know for a while. But the other is what exactly united this extraordinary range of normally competing groups, some of them highly averse to government intrusion. That we should know more quickly.

Were they brought together by altruism? OK, stop laughing. No, the question of course is: What's in it for them? Did they decide that getting on Obama's train was better than being thrown under it? That certainly seems to be a part of it. But these guys are pretty clever. What do they think they're getting in return for one potentially empty promise?


Paul Krugman writes in his New York Times opinion column: "The fact that the medical-industrial complex is trying to shape health care reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential health care to all its citizens.

"And serious cost control would change everything, not just for health care, but for America’s fiscal future."

Ezra Klein blogs for the American Prospect: "The politics of this should surely cheer supporters of reform. In essence, this is the entire medical industry stepping forward and declaring themselves partners in Obama's effort. It leaves Republicans isolated. It allows the administration to credibly claim that they are working with the stakeholders to cut costs. It puts the industry on record saying that reform will bring new efficiencies rather than increased spending. And it's simple evidence of the momentum building behind the administration's effort. These groups wouldn't be jockeying for a seat at the table if they didn't think everyone was eventually going to sit down."

By Dan Froomkin  |  May 11, 2009; 2:21 PM ET
 
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Comments

Wait a minute, it's coming into focus now. Just a second, I can almost see it . . .

Yes, it's Harry and Louise all over again. And all over again, Obama leads the nation on a Democratic Policy Vanishing Act.

Whenever a so-called progressive President invites those who stand to make a ton of money maintaining the status quo, you have to wonder what's going on here. Oh wait, I forgot, this is the same so-called progressive President who guaranteed investments, guaranteed profits, and slashed jobs, first in banking, then for the speculators on Wall Street, next for automobile manufacturers. Why would I expect big Pharma, big Medical Insurance, and big Group Practices to be treated any different?

Get well soon, Ted Kennedy.

Posted by: seattle_wa | May 11, 2009 3:19 PM | Report abuse

Silly me. It isn't Harry and Louise at all. It's Rick "swift boat" Scott.

My bad.

Posted by: seattle_wa | May 11, 2009 3:24 PM | Report abuse

It's laughable how gullible some people can be...

These men of industry are offering up the phantom $2 trillion in savings because the optics of participation will most benefit them! They want a seat at the table to assure that, first and foremost, their interests are secured.

Surprising as it may seem, I think this is a GOOD thing...it will likely mean that we'll have a revised status quo with cheaper prices...good for all of us who currently are very happy with our private insurance and don't wish to have single-payer...and good for the uninsured as they may now be able to afford insurance for themselves.

I am counting on these industries to keep us away from any hint of universal health care provided by the gov't, over and above the current Medicare and Medicaid already offered and costing us a fortune in unfunded mandates.

And, really, isn't this what Republicans wanted in the first place????? So I see it as a win for them and a loss for all the liberals who want single-payer...

Of course, leave it to Mr. Froomkin to spin this his party's way...

Posted by: boosterprez | May 11, 2009 3:52 PM | Report abuse

The insurance companies want a seat at the table to PROTECT THEIR INTERESTS.
Period.
Their offer to cut costs is a scam.

Posted by: kmblue | May 11, 2009 4:10 PM | Report abuse

The fact that these interest groups are offering concessions so early in the process is evidence of the weakness of their position. They will do anything to head off the public option which would eventually put them out of business. Obama and the Democrats should press their advantage and insist on a public option to keep the private insurance industry honest. The goal of this process is to provide Americans with health insurance. If the private insurance providers can't compete, too bad. We have a public option for national security. It's called the U.S. military. We don't worry that this puts a crimp in the mercenary business.

Posted by: awmarch1 | May 11, 2009 4:17 PM | Report abuse

Hey, could somebody at the White House please tell my Medigap provider? They just hiked the insurance (it covers the gap between Medicare and ???) premium AGAIN.

Posted by: NYCartist | May 11, 2009 4:34 PM | Report abuse

Certainly, kmblue, the insurance co's (as Krugman suggests) may simply be reading the winds and trying to at least influence in their favor what they see to be inevitable--a lessened form of, if you can't beat 'em, join 'em.

You claim a false victory, booster. The goal is to affordably provide essential health services to all Americans. If this involves mostly private carriers, no problem.

Posted by: whizbang9a | May 11, 2009 4:49 PM | Report abuse

PRIVATE FOR PROFIT HEALTHCARE IS AN OXYMORON!

As congress debates fixing Americas current private for profit healthcare disaster, global embarrassment, and national disgrace. The question is not weather we will have a public option. But rather what kind of public option we will have.

America is the only country in the developed world that has a GREED DRIVEN! PROFIT DRIVEN! IMMORAL! UNETHICAL! PRIVATE FOR PROFIT! healthcare delivery system.

As a result, hundreds of thousands of you are needlessly killed by your healthcare delivery system in America every year. And millions of you are crippled and injured. America is the only country in the developed World that does not have a NOT FOR PROFIT, PATIENT PROTECTING, government managed healthcare delivery option for all it's people.

America currently has the most costly health care system in the developed world. And the lowest quality of healthcare in the developed world. And the most dangerous, deadly, and FEARED! healthcare delivery system in the developed world.

America is the only healthcare delivery system in the developed World that does not cover all it's people automatically. And America has the most difficult healthcare system to access in the developed World.

Contact your representative and tell then that a single payer, government managed healthcare option is a must for everyone that wants it. Tell them that you demand that the public option be the finest in the World.

Tell them it should be available to everyone that wants it as a HUMAN RIGHT! Tell them it should be the easiest to access in the entire world. Tell them it should have the highest quality, with the greatest patient protections in the entire world. Tell them coverage should be automatic for everyone that wants it unless they choose to opt out. Tell them it should be the most affordable in the World. And tell them that NO ONE in the public option is to be reported to a credit agency, or driven into bankruptcy for unpaid medical bills just because they got sick, for FREEK'EN SAKES!

Tell them, none of the requirements above are negotiable. Tell them, that we are prepared to remove them from office. Tell them, we will rain down the political FIRES OF HELL! on any of them that would betray the American people. Or continue to compromise the life, health, safety, and National security of the American people for the GREED DRIVEN, PROFIT DRIVEN! private for profit Healthcare Industry.

TELL THEM NOW! AND PASS THE WORD ON.

God Bless You

Jacksmith — WORKING CLASS

Posted by: JackSmith1 | May 11, 2009 5:36 PM | Report abuse

Voluntary?

... um, no.

Look, if we want to fix our health care system, we need to stop whining about the change and deal with the cold hard fact that we should just adopt a system that works.

Like Canada's health care system that costs half as much but results in them living 8-10 years longer than we do. Heck, we could even borrow their forms and software, since they have a US English dictionary add-on and it works with all our existing US states and health care plans and practitioners and zip codes and area codes.

But, we'd have to actually reduce patent lifespans for drugs and actually BARGAIN with pharma companies for the cheapest prices.

Posted by: WillSeattle | May 11, 2009 5:39 PM | Report abuse

Change is not coming to America. After having worked as a political Activist for the past 4 months working on "the new energy economy and green jobs now" I am convinced the American people are content to just lay down and take what ever happens to them. A real stunner here: after sending pleas to virtually every frat and sorority on the UT Austin campus as well has hundreds of individual University student emails, asking for them to help us help them by assisting with our campaign for job growth in green energy technologies and to support getting the economy moving again, we received not one response. Not one. Nada.

Hmmm, we are a bunch of every day citizens taking our spare time (of which we have very little), spending our own personal funds to organize and fight for jobs and economic growth that will benefit new college grads, and they are not the slightest bit interested in lending a hand. Hmmm. very puzzling. Very disappointing.

We are 350 strong here in this city, yet typically only 5-10 people show up when we petition, march, protest, visit legislators, sponsor town halls etc. I am fairly disgusted with the fact that people will blog themselves to death, but won't get off their duff to get out and organize and strike a little excitement into the hearts of our local leaders. It is these cretins in leadership positions that are pretty much standing idly by while our economic boat sinks. Oh sure they dip in a thimble to help bail once in a while, but it is only for show, so they don't get ejected from the boat. Nothing will get done until the people get off their cans, out of their houses and march for the things they want, jobs, green energy, affordable education, affordable health care. Get up, Get out, do it now.

If you believe in healthcare reform, go out and march with others, petition your legislators, call them, visit them, write them. PICKET THEIR OFFICES. For your future's sake do something!

Posted by: david771 | May 11, 2009 6:15 PM | Report abuse

It's easy to promise to spend less money in the future. Actually doing it is a whole different story. Do you think Obama really has the backbone to stand up to millions of retirees who will be up in arms because Obama is "cutting" healthcare funding?

Posted by: wolfcastle | May 11, 2009 6:29 PM | Report abuse

I hate to rain on your parade, Froom Froom, but that 2 trillion was money we were never going to spend, simply because we arent going to have that kind of money to spend on health care anytime soon. In that sense, its not "savings" at all. Its a little bit like contractors in Iraq saying they will charge us 30% less for the same services starting in 2015.

Assuming this promise was sure to be fulfilled, it wouldnt mean universial health care was "more affordable" as much as "less unaffordable". make no mistake, its still unaffordale, assuming raising middle class taxes to 40% is impossible politically.

Posted by: dummypants | May 11, 2009 6:33 PM | Report abuse

Wow, first Krugman and now Froomkin. Are you guys really buying into this? Where's that healthy dose of skepticism that's earned you my respect?

First off, the interests are coming to the table this time not because of Obama, but because of the new political reality. They want to get a seat, so that they can control the message in a way that will maximize their profits. No one deserves any particular credit for that. And it sure seems they've managed to control the message right out of the gate. 2 Trillion in savings? Somehow, calling out future possible reductions in INCREASES the same thing as savings seems a little disingenous. I thought the goal was for health care to actually cost less than it does NOW.

More to the point, are there even any specific proposals here? Without the particulars, why is this even news? I imagine the special interests will continue working on controlling the message, kicking the can down the road, while not committing to any specific cost containment, until the next Republican manages to take office. Does it all go out the window then? Unless there's some meat here that I'm not seeing, this looks to me to be nothing more than your typical bait-and-switch scam.

WHERE'S THE BEEF???

Posted by: 4afreepress | May 11, 2009 6:59 PM | Report abuse

Healthcare is the leading cause of illness.

Fact: A high proportion of hospital admissions result from errors of previous medical care. I think the world-leading New England Journal of Medicine, and maybe also The Lancet, covered this a while back. (The editors may have been changed since then.)

Fact: The medical industry's "success" rate in treating illness is about 3 in 10 of cases.

Fact: The "spontaneous remission" rate in illness, that is the people who get better without medical intervention, is also about 3 in 10 of cases.

Fact: Doctors almost never announce their success rates. In fact of course they hardly ever even track them.

Fact: If you want better health, don't put medically-recommended substances in your mouth. Just eat less, get out and exercise, and eat more simply. "Simply" means, partly, that anything that comes from a factory is to be avoided wherever possible, and partly, basic foods like cereals and vegetables.

Fact: The same people who own the drug companies (by and large, the oil companies) also own the means for increasing illness. This means they stand to profit more from illness. What does this tell you about their likely policies?

I believe that sensible people should save up to escape from healthcare, not to afford it. That might mean a couple of acres somewhere unfashionable.

Good luck, look after yourselves, and take care.

Posted by: llm2 | May 11, 2009 7:03 PM | Report abuse

Another day, another scam.

Wall Street needs $Billions, no problem. Credit Card anti-gouging bill, well, wait a while.

Congress exits to enact laws to take money from you and give it to Corporations. How many Dems and Repugs have an interest in the Health Care industry? Frist and Dole were share holders (blind trust so they said). $6 Billion in profit can buy a lot of friends.

So they have offered to shave $2 Billion off of $60 Billion over 10 years. WOW!!!!

I'm sure that $2 Billion will be made up somewhere.

Posted by: mdsinc | May 11, 2009 7:55 PM | Report abuse

Another day, another scam.

------------

I agree.

Just nationalize it now, they are in no way capabale of running a system so vital to our nation's well-being.

And it will show in the numbers, reflected in those delaying care, and it will show in the continual overall decline in the nation's health and economy.

And the government will pay, either way.

They want to cut serviecs, not their profits, in part because they have NO CLUE what is necessary to running a successful health care program.

This is a dodge, the same problems will result.

It's the same stupid Wall Stret people, set to screw up another one.

Posted by: thegreatpotatospamof2003 | May 11, 2009 9:41 PM | Report abuse

I think the healthcare industry sees the aging baby boomer population and has to ask themselves how they can possibly survive over the next 10-25 years without drastically cutting or limiting the quality of care. This is just their seat at the table.

It's hard to be too skeptical about anything productive that the industry proposes and Krugman tries to insert that caveat, but perhaps did not emphasize it enough. The good news is that the industry feels the need to make this move. Whether good, bad or indifferent it shows that the momentum towards some kind of new healthcare paradigm is inevitable.

We'll have to see whether the so-called government "experts" in charge of these new policies and programs propose solutions that benefit the user or the provider or both. This user, for one, is not going to hold my breath. We'll have to cure the so far incurable sickness of American corporate greed first.

Posted by: pricetheo | May 11, 2009 11:08 PM | Report abuse

But just how will this help people who don't have health insurance get health insurance?

Posted by: solsticebelle | May 11, 2009 11:57 PM | Report abuse

$2 trillion is spare change to the health insurance (sic) firms over 10 years. During the next 10 years health insurance (sic) firms will rake in $7.8 trillion in profits and overhead. They can afford to give up a lot more than $2 trillion.

THE MATH

US healthcare spending is $2.2 trillion this year growing at 6% a year. 27% goes to insurance overhead and profits, let's round it at $600 billion this year.

At the current rate of growth, US healthcare spending will be over $3.72 trillion in 2018. Cumulative spending will be $29 trillion over 10 years.


The rough cost of malpractice is about $33-40 billion a year. Which is bigger? Health insurance (sic) profits are 10-15 times larger than malpractice costs.

As an aside, I never saw a Harry and Louise TV spot in my local market, and I'm a heavy consumer of news and information.

Posted by: boscobobb | May 12, 2009 2:01 AM | Report abuse

mdsinc,
You are so 20th century. Those numbers are TRILLIONS.

Posted by: boscobobb | May 12, 2009 2:08 AM | Report abuse

Pre-empting reform is a standard conservative tactic, practiced for example by the Tories in Britain during the 19th century and of course by Bush in the prescription-drug addition to Medicare. What they have gotten from it and now expect to get is some control of who gets the benefits.

Posted by: skeptonomist | May 12, 2009 10:01 AM | Report abuse

When your business model requires you to screw over as many customers as you can get away with, it's time for you to go out of business. Private health insurance KILLS.

Posted by: BigTunaTim | May 12, 2009 10:09 AM | Report abuse

Read the plan. It is so convoluted and so obvious that it takes us nowhere. Why is Obama blocking all discussion of plans in other countries. Forget UK and Canada if they are "too socialistic." Look at Germany, France, Switzerland, Japan, Taiwan, etc, etc. In most, private insurance is allowed to flourish, but must be NON-PROFIT when offering universal healthcare plans, which are carefully regulated for offerings and price. Competition arises from trying to present the best service (i.e. healthcare). And yet, Obama quashed any discussion of that by saying "we're not Europe and we're not Japan." No, but we are all human beings that deserve healthcare as good as they get in Europe and Japan! If the plan put forth from the Senate Committee is what we're getting, forget about it!

Sharon Toji

Posted by: SharonToji | May 12, 2009 11:09 AM | Report abuse

does anyone remember - The burden of private health care costs sunk the American auto industry, sunk GM, our greatest producer. Without those costs, foreign competitors left our manufacturers at the post. Why in the world do the 'publicans fight to continue this self-destructive system?

Continuous impoverishment comes our way, still paying for the Vietnam war.

Posted by: rmermin | May 12, 2009 12:06 PM | Report abuse

Dan, the fine print and actual accountability on this are key:

http://digbysblog.blogspot.com/2009/05/good-americans-by-digby-krugman-writes.html

Posted by: Bat99 | May 12, 2009 1:21 PM | Report abuse

So, where will the $2 trillion or so in "savings" come from. Here's but one example:

http://blogs.wsj.com/health/2009/05/13/medicare-not-enough-evidence-to-pay-for-virtual-colonoscopies/

Some private insurers cover this, but Medicare will not, at least at this time. Multiply this by literally hundreds, if not thousands, of different diagnostic and therapeutic interventions, and you kinda get the idea. There is no free lunch here either. Less spending means making hard choices like this. And, unequivocally, real people will die because this intervention will not detect their colorectal cancer early enough. Get used to it.

Posted by: crosbyjo | May 13, 2009 1:09 PM | Report abuse

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