Obamacare

Health Lobbyists Hope For a Yet Another Deal On Medicare Cuts

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Who could possibly have predicted that big players in the health care industry are opposed to Medicare cuts? Via Kaiser Health News:

Medicare might fare better than other health care programs if the congressional super committee fails to agree on a deficit-reduction package and automatic cuts kick in, but even 2 percent is a big problem when it comes on top of other recent hits, warn Rick Pollack, executive vice president of the American Hospital Association, and Karen Ignagni, president of America's Health Insurance Plans.

"Enough is enough," Pollack said. "We feel we've stepped up to the plate and made a substantial contribution in the name of shared sacrifice," which he said was $155 billion over 10 years as part of the health law. Under automatic cuts, he calculated, hospitals would lose another $43 billion over 10 years in Medicare payments alone, which he says translates into about 200,000 jobs.

That's why some health care industry lobbyists are pushing hard for a negotiated deal.

The last line is especially amusing because many of the biggest health care players already cut payment deals. When Pollack says the AHA "stepped up to the plate," what he means is that the hospital association, after some negotiation, agreed to accept cutbacks as part of ObamaCare.

So did other big players. And those deals aren't working out so well either. The drug industry famously cut an ObamaCare deal with the White House too. And yet now the Obama administration is aggressively pushing for a big reduction in drug prices that would violate the terms of that agreement. Reports during the health care debate also suggested that physicians cut a deal as well, agreeing to support ObamaCare in exchange for a doc fix—a permanent override of a Medicare payment mechanism that now calls for dramatic cuts to physician payments every year. They got ObamaCare. But so far, there's no permanent doc fix, and despite some outward enthusiasm about the possibility of a permanent fix, congressional staffers I've spoken to think it's unlikely we'll get one this year.

When will these industries learn to stop cutting deals with the government? I suspect most would prefer not to, but believe the deals are better than the alternative—arbitrary cuts that they don't help shape. Perhaps they're right. But this is what happens when the government becomes a major player and partner in a massive industry like health care, setting subsidies, prices, and payments from on high, and using those payments as savings mechanisms whenever times are tight. Thanks to Medicare and Medicaid, however, it doesn't seem like this is the sort of situation that will change any time soon.