Discord on Health Care Dulls Luster Of New Pacts

Vice President Biden, with the American Hospital Association's Rich Umbdenstock, discusses a deal with hospitals on health-care reform.
Vice President Biden, with the American Hospital Association's Rich Umbdenstock, discusses a deal with hospitals on health-care reform. (By Ron Edmonds -- Associated Press)
By Ceci Connolly and Michael D. Shear
Washington Post Staff Writers
Thursday, July 9, 2009

The Obama administration, hoping to boost its health-care reform effort with financial concessions from the hospital and pharmaceutical industries, is instead confronting deep dissension on several fronts within Democratic ranks and possible defections among key constituencies.

Rep. Henry A. Waxman (D-Calif.), lead House architect of the landmark health legislation, warned yesterday that he is not obligated to abide by deals struck recently by the White House, Senate Finance Committee, industry executives and interest groups such as AARP.

"The White House is not bound. They tell us they're not bound by that agreement," Waxman, the chairman of the House Energy and Commerce Committee, said at a National Journal breakfast. "We're certainly not bound by that agreement. The White House was involved, and we were not."

Waxman's comments came amid several other warning signs for the administration, including a slipping timetable in the Senate, internal division in the hospital industry and mounting tensions between AARP and the pharmaceutical industry that threaten a temporary detente between the two negotiated last month by the White House.

And a day earlier, President Obama took the unusual step of issuing a statement from Moscow correcting comments by White House Chief of Staff Rahm Emanuel that creation of a government-sponsored insurance program is "negotiable."

No single development appeared likely to kill Obama's signature domestic agenda item, but the relentless barrage of challenges that seemed to hit hourly served to demonstrate why no president since Lyndon B. Johnson has been able to enact large-scale health legislation.

From the outset, Obama has declined to dictate the details of a health-care bill to Congress, but he and his most trusted advisers have worked aggressively to shape its parameters and build political support. At the core of their strategy has been a series of side agreements aimed at extracting revenue, neutralizing potential adversaries and signaling to lawmakers that when the difficult votes come, they will have the political cover of industry support.

"All the constituencies that have been the most vocal critics of any form of health reform in the past are now invested in its success," Emanuel said in an interview.

Yesterday, Biden trumpeted an agreement by the nation's hospitals to contribute $155 billion to the cost of health reform, but it was quickly undermined by skepticism in the industry.

Two public hospital systems left out of the talks suggested the reductions "could severely damage" hospitals that serve the poor. American Hospital Association representatives from Virginia, Wisconsin, Montana, Washington and Oregon also were raising objections internally to the deal's across-the-board Medicare cuts.

"Everyone can say we need to reform the system," said one state hospital official, who requested anonymity to discuss the internal rift. "But when you start to look at the details of how you do that, that's when you get the rats scurrying off the ship. That's what's happening now."

Senate Majority Leader Harry M. Reid (D-Nev.), after warning that some Democrats cannot tolerate taxes on employer-sponsored health benefits to finance comprehensive reform, met with four Republican senators in pursuit of a bipartisan approach.

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