The Corner

Health Care Shenanigans

The “clarification” of the agreement between health industry leaders and the White House offered by the American Hospital Association yesterday is really staggering. According to the story Kathryn links below, AHA president Richard Umbdenstock told his members that Obama had misstated the agreement: that it wasn’t to reduce the growth of health care costs by 1.5%  per year for ten years, but rather to reduce that growth by 1.5% in total over ten years.

The White House earlier this week used the annual 1.5% figure to assert that the agreement would “save” $2 trillion over a decade, which would thereby magically allow the government to pay for the Democrats’ emerging health care plans. The savings would all have come from reductions in the rate of growth of costs, not actual savings, but it now seems that even that claim—with its layer upon layer of creative fiction—was not what the industry groups agreed to. What the groups have in mind is cutting a total of 1.5% off the rate of growth over 10 years, which would take a few drops of water out of the ocean of debt threatening to drown the federal budget. And of course even that much more modest goal is just a vague promise, with no plans or commitments behind it.

More ominously for the Obama plan, the White House’s ham-handed use of the industry groups has made the industry nervous and caused the groups to start backing away. The New York Times reports:

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 White House seemed at first to acknowledge that the agreement was not what they had claimed on Monday, but then apparently decided to play “he said/he said” instead. The Times again:

Nancy-Ann DeParle, director of the White House Office of Health Reform, said “the president misspoke” on Monday and again on Wednesday when he described the industry’s commitment in similar terms. After providing that account, Ms. DeParle called back about an hour later on Thursday and said: “I don’t think the president misspoke. His remarks correctly and accurately described the industry’s commitment.”

All of this suggests a remarkable degree of ad hoc carelessness in the White House’s handling of the providers groups. At this vague generalities stage in the development of the Clinton health care plan in 1993, many of the same major health care industry groups were also playing ball with the White House’s efforts, hoping to carve out room for themselves in whatever emerged. They thought something was certain to come out of the process and wanted to be sure they were not left in the cold. But as details of the plan began to be hammered down, the industry groups came to see that no good could come of it for them, and as they backed off the aura of inevitability around the process quickly faded too. This time around, the Democrats insist they are intent on avoiding that fate, but these early missteps tend to suggest otherwise.

The logic of the Democrats’ approach to health care this year requires that the immense cost of their plan and the dark side of government health insurance (especially the rationing of care) be kept from the public by means of fictional alternative cost-cutting measures. They hope to get the industry players to offer this cover by scaring those players into believing that ObamaCare is inevitable and they might as well play ball. But if instead they scare the industry away, both the cost and the character of government-financed health insurance become much more difficult to hide.

Yuval Levin is the director of social, cultural, and constitutional studies at the American Enterprise Institute and the editor of National Affairs.


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