Health Care Savings in Question

The presidents cost saving deals have been questionable since day one if not outright nonsense. We had the whopper about saving two trillion dollars, then the alleged savings from the pharmaceutical industry, and today savings from the hospitals:

WASHINGTON — The deals, trumpeted loudly by the White House, would each help pay for a sweeping overhaul of the health care system.

First, it was a broad consortium of health industry groups — doctors, hospitals, drug makers and insurers, all promising to slow the growth of medical spending by 1.5 percent. Then, it was the big drug makers, promising savings of $80 billion over 10 years, by lowering the cost of medicine for the elderly.

On Wednesday, it will be major hospital associations, pledging to save more than $150 billion over a decade. And a deal with doctors is said to be on tap next.

In each case, the Obama administration hailed the agreements as historic. But what has been little discussed is what the industry groups will be getting in return for their cooperation, whether or not the promised savings ever materialize.

The hospitals are counting on mandated coverage to pay the bills as millions of newly insured patients start to pay the bills, in addition a deal in in the works with doctors but they are pushing for a 250 billion boost in Medicare spending, which by itself would blow up much of Obama's nonsense about health care saving. :

But Rick Pollack, executive vice president of the American Hospital Association, credited Mr. Baucus and his staff with reaching the agreement.

“Hospitals have been long committed to expanding coverage for the millions of Americans that don’t have health insurance,” Mr. Pollack said. “We see this as a historic opportunity to achieve that objective.”

In the case of hospitals, Mr. Pollack said negotiators had worked hard to come to terms not just on the financial issues but also on broad and complex policy matters intended to improve the health care system.

He said hospitals had agreed to about $150 billion in savings after securing assurances that lower reimbursements would come after an insurance expansion that would guarantee that more patients pay their bills.

“We do believe in that regard in particular there are safeguards that are part of this proposal,” Mr. Pollack said.

In addition there is clearly massive political pressure to prevent a tax on employee benefits as well as pressure on Baucus to include the public plan:

Democrats are trying to keep the cost of the legislation to about $1 trillion over 10 years. In a sign of a deepening rift among Senate Democrats, the majority leader, Harry Reid of Nevada, on Tuesday urged Mr. Baucus to drop a plan that would pay for the bill partly by taxing some employer-provided health benefits.

Aides said Mr. Reid, speaking for other Senate Democratic leaders, was concerned that Mr. Baucus had not included any provision for a government-run insurance program to compete with private insurers, which is favored by Mr. Obama and many other Democrats. At a meeting later in the day, aides said, Mr. Baucus pushed back against Mr. Reid, saying his own proposal offered the only clear path to Senate approval.

Months into this battle its clear we have industry, centrist democrats, and some in the GOP working in collusion to pass health care legislation and the left pushing its own plans. Obama has played somewhere in the center-left, pushing government intervention but very happy to appear working with industry. By the way even they scrap the employee benefit tax it can only mean they are going to push Rangel's income tax increase. With the public skeptical of tax increases this will end up the most politcaly contentious issue of them all.