Obama, industry leaders join to cut healthcare costs

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Welcoming leaders of the hospital, drug and insurance industries to the White House on Monday, President Obama trumpeted their pledge to work together to contain the nation’s skyrocketing healthcare tab.

But as the president was celebrating the collaboration among industry groups responsible for derailing previous healthcare overhaul campaigns, it became apparent that the carefully tended effort was about to face its biggest test.

Lawmakers on Capitol Hill plan to introduce legislation in the next few months to reshape the nation’s troubled healthcare system. That is expected to kick off an intense struggle as industry groups fight to protect their profits amid efforts to squeeze the cost of delivering healthcare and to increase regulation on drug companies, insurers and others.


“Healthcare’s legendary interest groups have stayed at the table in ways that are unprecedented historically,” said Drew Altman, a healthcare policy expert who heads the nonprofit Henry J. Kaiser Family Foundation. “As this debate enters a new phase, the big question is whether they will still be there.” Legions of healthcare leaders have been at work for months to assure they will remain part of negotiations.

Consumer groups and insurers, doctors and pharmaceutical companies, labor unions and business groups have been meeting in congressional chambers and conference rooms in Washington to advance the campaign to revamp the healthcare system.

Since September, Sen. Edward M. Kennedy (D-Mass.), who is helping lead the effort, has convened twice-weekly meetings to bring together healthcare industry groups as he develops legislation.

An initiative spearheaded by Families USA, a leading consumer group, employed a professional mediator to help historically antagonistic groups build agreement and what some strategists call an “aura of inevitability” around the current healthcare push.

Senate Finance Committee Chairman Max Baucus (D-Mont.), who is also writing healthcare legislation, is hosting round-tables too. So numerous have these “stakeholder” meetings been this year that lobbyists have joked they have little time to do anything but meet.

The groups, some of which have battled one another for decades, have bought ads together to promote a healthcare overhaul and have produced manifestoes endorsing universal healthcare and other goals.


“This is just an enormous change,” said Ken Thorpe, a health economist at Emory University in Atlanta who worked on the Clinton administration’s failed health campaign in the 1990s.

Back then the mood was negative and skeptical, said Thorpe, who is now advising congressional Democrats on healthcare legislation. “Now, there is a tremendous sense of momentum. People don’t want to give up.”

According to Thorpe and other experts, the meetings have helped keep industry groups engaged, rather than fomenting opposition.

Insurers helped sink the Clinton administration’s health plan with the “Harry and Louise” ads, in which a fictitious couple fretted that the government would soon make healthcare decisions for them.

This year no major industry group has paid for any advertising attacking the health campaign being pushed by the Obama administration. Insurers, drug makers and other industries have their own reasons for staying at the table. Many industry leaders believe that if they leave, lawmakers may punish them.

“If you don’t get in this game, then . . . you’re on the menu,” quipped U.S. Chamber of Commerce President Tom Donohue at a recent healthcare forum at the White House.


The agreement touted Monday by Obama grew out of an effort begun last year by the Service Employees International Union, a leading labor group and powerful force in healthcare politics. Dennis Rivera, head of SEIU’s healthcare effort, met with insurance executives and hospital leaders.

The efforts to forge an agreement, undertaken in strict secrecy to prevent leaks, intensified in recent weeks, according to people familiar with the process.

Leaders of the American Hospital Assn., the American Medical Assn., America’s Health Insurance Plans, Pharmaceutical Research and Manufacturers of America and the Advanced Medical Technology Assn. got involved to draft a letter that would set out the groups’ commitment to reining in costs.

The White House disclosed the letter over the weekend, after a week in which Republican opponents of the administration’s healthcare agenda seemed to be gaining traction.

In the letter, the groups outlined steps, such as simplified billing and greater collaboration among healthcare providers, that they said could help save more than $2 trillion over the next decade.

Obama praised the letter Monday: “It’s a recognition that the fictional television couple Harry and Louise, who became the iconic faces of those who opposed healthcare reform in the ‘90s, desperately need healthcare reform in 2009.”


But it remains unclear whether the harmony will last.

Insurance industry leaders have already rebelled at the administration’s proposal to pare federal spending on the Medicare Advantage program, under which private insurers contract with the federal government to provide health coverage to seniors.

And on Monday, House Energy and Commerce Committee Chairman Henry A. Waxman (D-Beverly Hills), who is helping develop healthcare legislation, said he was skeptical about the industry proffer. “I still would like to see a more concrete proposal,” he said.

Richard Kirsch, who heads the consumer group Health Care for America Now, said he too was unconvinced that industry leaders would remain at the negotiating table.

“We’re glad that these groups say they are willing,” he said. “But when Congress and the president say you have to give this up, will they say, ‘I didn’t mean it there, and I didn’t mean it there’? “