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Biden Rolls Out Deal With Hospitals to Cut $155B in Costs

By Michael D. Shear
Washington Post Staff Writer
Wednesday, July 8, 2009 12:18 PM

Vice President Biden today formally unveiled the latest attempt by the White House to rally the health-care industry behind its reform effort, announcing an agreement with hospitals to cut $155 billion in government costs over the next 10 years.

Flanked by the leaders of the nation's hospital associations, Biden lauded the deal -- hammered out after weeks of negotiations -- as another indication that President Obama's pledge to enact health-care reform this year is on track.

"Folks, reform is coming," Biden said. "It's on track. It's coming."

Biden said the deal, details of which were reported by The Washington Post earlier this week, was reached after the administration, the Senate Finance Committee and hospitals agreed that insuring more people under a restructured plan would lift a financial burden on hospitals, allowing them to lower costs.

"Our hospitals are cracking under the weight of providing quality health care for Americans who lack insurance," Biden said. "The status quo is simply unacceptable."

But the hospital agreement, like an earlier one that Obama's administration reached with the pharmaceutical industry, is contingent upon the passage of a broad-based plan that would place new burdens on all of the players in the health-care field.

Richard Umbdenstock, chief executive of the American Hospital Association, made that caveat clear today with a blunt warning to the reporters assembled in the Eisenhower Executive Office Building. He said his association is committed to "coverage for all, paid for by all. And hospitals are ready to do our part. But so must all the other stakeholders."

That includes, he said, insurers, employers, doctors, the government and individuals.

The warning was a reminder that while Obama has so far achieved surprising consensus among industry players who in the 1990s had opposed then-President Bill Clinton's health-reform efforts, their participation and enthusiasm will remain tempered until a final, comprehensive approach is developed.

Sources said that during negotiations with the Senate committee and its chairman, Max Baucus (D-Mont.), the hospital associations made clear their opposition to a new public insurance plan that would pay at Medicare and Medicaid rates, which they have long complained are too low.

But Obama this week reiterated his support for a public insurance plan that would compete with the private insurance companies, driving down costs.

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