Jonathan Cohn: Why industry is joining Obama at White House to discuss healthcare reform





Guess who's coming to the White House.

On Monday morning, representatives for the nation's major health care industry groups--doctors, hospitals, drugmakers, device makers, and insurers--will pay a personal visit to President Obama. But instead of pitching a fit about health care reform, as they have so many times in history, they will offer their assistance. They will pledge their support for Obama's goals and they'll offer to do their part--by taking steps that would reduce the growth in national health care spending by about one-fifth over the next decade.

No less important, after delivering this message to Obama, they'll deliver it to the rest of the country. And they'll do it right there, from the White House, standing with the president himself.

Skeptical about the groups' motives? Dubious that, left to their own devices, they'd reduce their own revenue streams just to make medical care more affordable for the rest of us? You should be.

But make no mistake: This is a big deal, if only for the clear political signal it sends.

So far, the groups--which have been meeting for several months--have agreed only on basic principles and goals. But, substantively speaking, they are the right principles and goals, ones that align closely with the ideas of Obama and his allies on Capitol Hill.

In the letter the groups deliver to Obama on Monday, they will call for (among other things) creating electronic medical records, streamlining billing systems, linking payment to quality measurements, and encouraging the use of evidence-based guidelines. Taken together, the groups will say, these measures can reduce the annual rise in health care spending by 1.5 percentage points a year.

That may not sound like a lot of money. But it is. If indeed the industry could produce such savings, according to the White House, it'd be worth around $2,500 a year to the typical family--which, it just so happens, is what Obama promised during his presidential campaign. (Amazing coincidence, no?)

Students of history may hear in Monday's announcement echoes of the infamous "Voluntary Effort"--a promise by the hospitals, during the late 1970s, to curb the cost of care in their facilities. They made the promise, in part, to derail talk of reform in Washington. And they succeeded in that. It was the cost control that, shockingly, didn't work out so well. Spending came down for one year, then started skyrocketing again.

But note the key difference between now and then: This time, the industry groups aren't promising to control costs as an alternative to reform. They're promising to control costs as part of reform. In fact, some of the efficiency steps they are proposing wouldn't even be possible without the sorts of changes now under discussion in Washington, because they require changes in legislation.

This doens't mean the groups are acting out of altruism. The five big industry groups are the Advanced Medical Technology Association (AdvaMed), America's Health Insurance Plans (AHIP), the American Hospital Association (AHA), the American Medical Association (AMA) and Pharmaceutical Manufacturers of America (PhRMA). And they've made no secret of their opposition to proposals for creating a public insurance plan, into which anybody could enroll. Monday's gesture may simply be an effort to cut a deal that leaves out the public plan.

Also unclear is the depth of the groups' commitment to the principles. Maybe some of the groups will get cold feet once actual legislation is in front of them. Maybe some of them already oppose reform, but are using this as a way to buy good will.

Fine, fine. It really doesn't matter.
The mere sight of these groups standing shoulder-to-shoulder with Obama will give reform additional political momentum, driving an even bigger wedge between health industry groups and their erstwhile allies in the conservative movement--where dismay over the behavior of AHIP and other groups is becoming louder by the day.

The event will also give lawmakers in Congress political cover for proposing bolder changes to the payment and delivery systems--the kind that might make reform seem more affordable, at least in the eyes of the all-important Congressional Budget Office. It's hard to scream that using evidence-based guidelines would mean destroying the doctor-patient relationship when the American Medical Association makes a public show of endorsing the idea.

Last but certainly not least, this appearance buys time. Every day that these groups are saying positive things about reform in public is day they're not saying nasty things about reform in public.

So take these groups at their word, don't take these groups at their word. Either way, it's good news.


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