Weekly Pulse: Healthcare Industry Wavers on Savings

Lindsay E. Beyerstein

It took just three days for the titans of the healthcare industry to reveal the emptiness of their pledge to the Obama administration to save $2 trillion in healthcare costs over the next 10 years.

That was quick: It took just three days for the titans of the
healthcare industry to reveal the emptiness of their pledge to the
Obama administration to save $2 trillion in healthcare costs over the
next 10 years.

Last week, The New York Times proclaimed that Obama scored a "political coup" just by getting the industry groups and SEIU to the table.  Maybe so, but writers featured in last week‘s Pulse
remained skeptical that the industry would make good on its
unenforceable cost-cutting promises. Skepticism was the healthy

Three days after the promise, industry groups started accusing Obama
of overstating their commitment. Health Czar Nancy Ann DeParle
confirmed that the president garbled the stats slightly when he said
that the groups had pledged to cut the rate of growth in healthcare
costs by 1.5 percentage points per year. However, the outcry
over the slip-up is revealing. The groups are now scrambling to reassure
their members that they never promised to reduce costs by any specific
amount in any given year.
Of course they didn’t. In order to keep that promise, they’d have to
act right away-which they clearly have no intention of doing.

So, it comes as little surprise when Steve Benen of the Washington Monthly reports that Blue Cross/Blue Shield
is crafting a PR campaign to trash the whole idea of a public plan, a
key element of Obama’s healthcare reform agenda. One of the industry
groups that signed off on the aforementioned $2 trillion pledge was
America’s Health Insurance Plans (AHIP). Several members of AHIP’s board of directors work for Blue Cross or Blue Shield.

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In The American Prospect, Paul Waldman notes that the same coalition of Republicans and big business
that opposed President Clinton’s healthcare reforms 15 years ago are
gearing up for a rematch. These folks, who might as well be called
Americans for the status quo are trying to own the word "reform" under
the tutelage of GOP message master Frank Luntz, according to Waldman.

Some people oppose healthcare reform because they fear a tax
increase. That’s not a foregone conclusion, but healthcare is so
expensive that reform could be a bargain even if we had to raise taxes
to pay for it. In AlterNet, Dean Baker asks why his fellow economists are so complacent
about the status quo where healthcare is twice as expensive and not
quite as beneficial as it is in other developed countries. Baker argues
that the extra costs are tantamount to a huge tax on the entire economy:

The excess health care spending comes
to more than $1.2 trillion a year or the equivalent of more than
$16,000 for a family of four. Paying too much for health care has the
same economic impact as a health care tax. In effect, we have a health
care waste tax that is about 10 percent larger than the projected
federal revenue from the personal and corporate income tax combined. In
short, this is real money.

This is a tax that Americans pay without realizing it. Money that
could be going towards pay raises is going to support ever-increasing
insurance premiums, for those who are lucky enough to have health
coverage through their jobs. It’s a tax that employers have to take
into account when they decide whether to build a plant in the United
States, or across the border in Canada where the government takes care
of health insurance.

And last but not least, while you can’t get blood from a stone, you
can get plasma from an overextended American consumer. Credit Solutions
of America, a credit counselling service advised clients to sell their blood plasma to make ends meet, Moe Tkacik reports in Talking Points Memo. That’s especially ironic when you consider that medical bills cause over half
of personal bankruptcies, according to a 2005 survey by Elizabeth
Warren, a Harvard professor who went on to become Obama’s chief
financial industry bailout overseer.

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