Biden announces White House deal with hospitals
WASHINGTON -- The nation's hospitals agreed Wednesday to forgo $155 billion in government health-care reimbursements over the next 10 years, savings the White House says will go toward paying for an overhaul of the nation's ailing health care system.
The savings, added to $80 billion promised by drug companies last month, are aimed at helping to keep the cost of a new health care plan under $1 trillion. The deal is also contingent on President Obama signing health care legislation.
Vice President Biden, who announced the deal, said it "produces real savings in federal health care spending" that will go toward Obama's "firm goal" of enacting health care legislation that does not add to the deficit.
Congress continued work on legislation to cut costs and provide health insurance to the 46 million without it, but the agreement from hospitals was met with skepticism:
•Dennis Smith, a health care expert at the conservative Heritage Foundation, said hospitals will end up making money from a health care overhaul that costs the government $1 trillion. "These savings are really a mirage," he said. If Obama's plan is enacted, "hospitals are likely to get more revenue than what they are pretending to give up."
• House Republican leader John Boehner, R-Ohio, said the deal with hospitals would lead to higher costs and lower-quality care for patients.
"Administration and congressional Democrats are literally bullying health care groups into cutting backroom deals to fund a government takeover of health care," he said. "That will increase costs and force millions of Americans out of the health care that they currently have."
• Public and children's hospitals praised the overall savings plan but expressed concern that reduced government payments could hurt hospitals that serve a high percentage of poor people. Some of the reductions "could severely damage safety-net providers if not carefully crafted," the National Association of Children's Hospitals and the National Association of Public Hospitals and Health Systems said in a joint statement.
The deal follows last week's announcement from Wal-Mart that it will support a requirement that large business provide health care for their employees, another boon for the Obama administration's efforts.
The White House and hospital groups that agreed to the deal Wednesday said the bulk of the savings — $103 billion — would come from stalling planned increases in Medicare payments to hospitals between the time health care system changes are enacted and 2014. Then, the government would assess whether enough people have coverage to compensate for the cuts and make adjustments accordingly.
"In those first years, the cuts are real," said Rich Umbdenstock of the American Hospital Association.
Another $50 billion would be saved by cutting payments to hospitals that treat a disproportionate number of uninsured patients. Those payments wouldn't be reduced for several years — until millions of people without insurance get coverage, presumably eliminating the need for the bulk of the payments.
The final $2 billion would come from hospitals' efforts to prevent the practice of readmitting patients for the same problem once they've been released.
Carol Keehan, president and CEO of the Catholic Health Association of the United States, who stood with Biden at the announcement, said hospitals "have a great responsibility to the American people" and an obligation to help control costs.
Umbdenstock disputed the notion that hospitals aren't making much of a sacrifice.
Most of the government payments that would be reduced under the plan would be reduced right away — before the uninsured get coverage and are able to pay their bills. "That will be a challenge for us," he said. But he said hospitals "are ready to do our part" to help change the costly and inefficient health care system.