Is Obama's 'Major' Health Care Announcement Just a Bunch of Bull?

Posted by David Sirota, Open Left at 9:33 AM on May 11, 2009.

So the big news today is President Obama's press conference with the health insurance industry touting the industry's "voluntary" commitment to slashing $2 trillion off Americans' health care bills over the next decade. The New York Times reports that this voluntary announcement is motivated by the health insurance industry's "hope to stave off new government price constraints that might be imposed by Congress or a National Health Board of the kind favored by many Democrats."

My three questions are really simple:

1) If the health industry is saying it can lower costs by $2 trillion over 10 years and remain highly profitable, isn't the industry admitting that it was planning to absolutely bilk consumers, and has been bilking consumers in the past? Put another way, isn't the industry admitting that it's entire business model is based on outright profiteering?

2) Why should the American public believe the health industry is going to voluntarily do anything to cut into its profits? Health executives have a fiduciary responsibility to private shareholders to maximize profits. Voluntarily lowering those profits would violate that fiduciary responsibility. Are we really expected to believe these health executives will, out of the goodness of their hearts, violate their fiduciary responsibilities? What has actually changed to suggest that they will violate their fiduciary responsibilities and help health care consumers?

3) Isn't President Obama legitimizing voices that will use that added credibility later on to try to derail serious health care reform? Today's press conference has the President of the United States effectively saying that the health insurance industry should have a major seat at the health-reform table - and that it should be trusted. But any serious health care reform will need to take on the health insurance industry in a way that will make that industry unhappy. When that eventually happens, won't the previous efforts to legitimize the health insurance industry's voice add credibility to its opposition to reform? I think so, and agree with Ezra Klein who says, "The fact that the White House is making a big deal of [the health industry's] support means" the White House is suggesting that it "would be a big deal if they lost it."

Look, I have no problem with the industry making voluntary commitments about lowering costs - and if it follows through, then that's great. But I also have no illusion about industries making voluntary commitments to reduce their profits - those commitments usually aren't worth the paper they're written on. And so I worry that promoting such commitments as "major" can be politically dangerous and, frankly, counterproductive.

Obama's political calculus throughout his life has been to avoid making enemies. He seems to believe that he can make lots of different interests happy - and on many issues, that's certainly possible. But on some issues, like health care, it's a binary fight: Either you appease the health industry and preserve the status quo they are making big bucks off of, or you take on the health industry and make real change. Touting the industry's "voluntary" commitment to not rip off consumers seems more in the appeasing camp than in the "real change" camp.