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Health Care Leaders Say Obama Overstated Their Promise to Control Costs

Capital

That was the headline in Thursday’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!”

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PeterMD as HELLspikeHealth Insurance GuyMichael Millenson Recent comment authors
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Peter
Guest
Peter

“But when well people become the worried well, watch out for the budget.”
“And when people get sick, they want to live forever, no matter what it costs and no matter whom it costs”
MD, you must be talking about the need for rationing?

MD as HELL
Guest
MD as HELL

Healthy people don’t need healthcare, after basic immunizations. Families with certain histories need to screen for these. We are not talking about a lot of money per capita. But when well people become the worried well, watch out for the budget. Without tort reform, people will still get unnecessary test galore. And when people get sick, they want to live forever, no matter what it costs and no matter whom it costs, (since it not their direct cost. You can’t mortgage the farm for healthcare. There is not enough money in China to do it. It is immoral to try… Read more »

spike
Guest
spike

I had the same thought, Health Insurance Guy. What were they thinking their shareholders would think when they saw the leaders of these companies promising not to make too much money? That their stock didn’t plummet that day shows that nothing real was intended or perceived with this “commitment”.

Health Insurance Guy
Guest

I’m not sure how publicly traded companies can lower costs without some promises from govt. The insurers themselves will need tax incentives or health insurance mandates before they can help others lower premiums.

Michael Millenson
Guest
Michael Millenson

Just to note, “I told you so” in the satirical post I made to this blog on May 12, “Voluntary Cost Control? Never Mind.” See: https://thehealthcareblog.com/the_health_care_blog/2009/05/voluntary-cost-control-never-mind.html#more I implied that if their cost containment promises were taken seriously, the companies’ stocks would plunge and the membership of the trade group would results. Within a few days, fact followed fiction. Or, as I put it, “Spokesmen…said their members could continue to enjoy near-obscene profits without in any way weakening what was, after all, a strictly voluntary commitment that might well be affected over time by employees retiring, changing responsibilities or feeling a… Read more »

Rick
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Rick

I think this whole kerfuffle proved what Matthew has said here all along about Ms. Ignani, and I’m sure the leaders of the others in this stakeholder coalition — AHA, PhRMA, SEIU, et. al. — are deserving of the same scorn. They are profligate liars. Here, copy and pasted from my personal PDF of the letter this group released last Monday, before they met with the president: “To achieve all of these goals, we have joined together in an unprecedented effort, as private sector stakeholders—physicians, hospitals, other health care workers, payors, suppliers, manufacturers, and organized labor—to offer concrete initiatives that… Read more »

Healthcare Guru
Guest

Originally, I was upset as I think 2 trillion dollars were nothing when put in the context of total expenditure.
There should be a cost reduction of the order of 30-50% and that is possible with prudence and persistence.
Now, I am impressed how the administration called the bluff. And the sad thing is that IF PEOPLE CAN NOT EVEN deliver such a tiny amount of saving, Should they be trusted to DO ANY GOOD!
rgds
ravi
blogs.biproinc.com/healthcare
http://www.biproinc.com

Michael Kirsch, M.D.
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Michael Kirsch, M.D.

I’m not surprised by the separation, only by the speed that is occurred. See http://mdwhistleblower.blogspot.com/2009/05/obamas-health-care-reform-indecent.html
Obama will discover that health care reform, like Guantanamo, military commissions, etc, are easier to campaign on than they are to implement. The presdent’s overstatements of what the medical groups agreed to last Monday will cause other players in the medical arena to dig in and hold back.

John
Guest

I am really not surprised by this at all. I think that Obama has overstated on a whole lot more than just this as well.

Dr. Rick Lippin
Guest

Q=How do you know if a for profit disease care industry executive is lying?- A=If his /her lips are moving 🙁
Dr.Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com

Ed Fleegler
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Ed Fleegler

I will start with my last blog entry: For anyone who missed the opinion page in the Saturday WSJ–read Peggy Noonan’s column. Money fuels health care. The government’s responsibility is to define through legislation what universal health care is, how universal health care will be enacted in our country; and, how it will be paid for–as I indicated in my last blog entry. The rest as outlined by Peter Orszag is as Peggy Noonan defines: “New class gobbledygook, which is more prevalent than ever, is also more destructive than ever…” We are a great society–but have somehow lost our sense… Read more »

Margalit Gur-Arie
Guest

I thought we were all done with “lobbyists”…..
These “stakeholders” have exactly what “stakes” in healthcare reform? Maintaining the status quo? Increased share holders profit?
Why are we turning to the same “stakeholders” that created this mess (cost, coverage, HIT, etc.)to provide resolutions?

Vince Kuraitis
Guest

What a shock! The American Public, the media, industry constituents, the Obama administration, Congress, bloggers, and even my trusting mom — just didn’t take promises of saving $2 T at face value!