Hospitals Cut a Deal on Reform

July 8th, 2009 | Sources: Washington Post

Industry sources have told the Washington Post that 3 influential hospital associations have agreed to contribute $155 billion over the next decade toward paying for the costs of insuring the 47 million Americans that don’t currently have coverage.

heregocovertheuninsuredThe deal reached between the American Hospital Association, the Federation of American Hospitals and the Catholic Health Association and both White House officials and Senate Finance Committee leaders follows a similar deal in which Big Pharma coughed up  $80 billion toward the same end.

“Getting health-care reform is absolutely critical,” said a hospital association negotiator. “This is our attempt to act in good faith.”

About 60% of the savings would result from cuts to previously expected Medicare and Medicaid payments. Most of the rest would be achieved by reducing hospital payments earmarked for care of the uninsured.

The reductions would kick-in after most uninsured folks acquire coverage, a significant risk-mitigator for hospitals.

A source privy to the negotiations indicated the parties reached a deal after government officials pitched “shared responsibility” and assured providers that that all parts of the system would be asked to sacrifice.

In achieving the final figure, the Big O played hardball, just as he did with Big Pharma 2 weeks earlier. In that case, Obama floated a request that drug makers fork over $100 billion towards the greater good. After losing its lunch, Big Pharma countered with $80 billion and the deal was done.

In this case, the Coronated One announced in his weekly radio/Internet chat that his team had found ways to save $200 billion in hospital costs over a 10 year period.

“There was no way we could tolerate $200 billion,” an industry executive told the Post.


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