Health Industry Voices Support for Obama Health Plan

As President Barack Obama begins his push for health care reform, he finds a climate in Washington that may be more willing to work on the issue than in the past. Video by AP
By Dan Eggen and Ceci Connolly
Washington Post Staff Writers
Thursday, March 5, 2009

Just four months ago, the pharmaceutical industry was prepared for the worst. Drugmakers feared that Barack Obama would press for price controls on prescription drugs and readied plans for a multimillion-dollar ad campaign against the idea.

Instead, Obama chose a more modest approach after becoming president, proposing to extract bigger discounts on medications bought through Medicaid. The plan could save the drug companies billions a year compared with price controls.

"This is a great start," said W.J. "Billy" Tauzin, a former House member from Louisiana who now runs the Pharmaceutical Research and Manufacturers of America (PhRMA), referring to Obama's health-care plan. "There are things we don't like about it. But there's time to discuss all that."

Obama's opening gambit to dramatically expand the health-care system has attracted surprising notes of support from insurers, hospitals and other players in the powerful medical lobby who are set to participate in an unusual White House summit on the issue this afternoon. The lure for the industry is the prospect of tens of millions of new customers: If Obama succeeds in fulfilling his pledge to cover many more Americans, those newly insured people will get checkups, purchase medicine, undergo physical therapy and get surgeries they cannot afford today.

To start the process, Obama has proposed a $634 billion health-care reserve fund that would be partially paid for with targeted cuts in payments to insurers, doctors, hospitals, drugmakers and other providers, and he has vowed to fight attempts to water down the package.

The unstated intention of Obama's approach is to dole out the pain in small, easier-to-swallow bites to minimize opposition, White House aides say. Under the president's plan, hospitals, doctors, drugmakers, insurance companies and wealthy seniors -- all of whom will be represented at today's summit -- would sacrifice. But if the system was calibrated properly, no one would lose too much.

Not everyone is happy, of course, and lobbyists and health-care experts warn that major obstacles lie ahead. The seniors lobby AARP, for example, opposes Obama's recommendation to raise Medicare prescription premiums on wealthy retirees. Major insurers also dislike his proposed overhaul of the Medicare Advantage program, which markets managed-care plans to seniors, while home-care providers object to cuts to their Medicare reimbursements.

Former Columbia/HCA executive Richard L. Scott has launched a nonprofit group called Conservatives for Patients' Rights, which promises a $20 million multimedia ad campaign warning that the country is hurtling toward socialized medicine. Scott, who was pushed out of Columbia/HCA in the 1990s and now runs a chain of Florida urgent-care clinics, said in an interview that he has put up $5 million of his own money to kick-start the effort, with hopes of building a grass-roots campaign.

"Imagine waking up one day, and all your medical decisions are made by a central national board," Scott says in the group's first radio ad, which warns of "a system like England or Canada, where national boards make your health-care decisions and waiting lists reign supreme."

But overall, the tone of the debate so far is strikingly different from that in the early 1990s, when well-funded lobbying groups united to crush President Bill Clinton's health-care proposal.

"I'm very encouraged by what's going on now," said Bill Gradison, a former head of the Health Insurance Association of America, which funded the "Harry and Louise" ad campaign that helped torpedo the Clinton plan. "My impression is that there's been a real openness to reach out to diverse interests, not leaving anyone out -- which is how a lot of people felt back in the 1990s. . . . They seem to have learned the lessons of what not to do this time."

Obama has made overhauling health care a centerpiece of his young presidency, with the stated goal of assembling a broad reform package by the end of the year that would push the nation closer to universal coverage. The number of Americans without health insurance is now estimated at 46 million.

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