Health Care Reform: Keep Your Friends Close and Your Enemies Closer

This week, the White House teamed up with health care industry giants for a two-day PR blitz on health reform. A coalition of industry leaders sent a letter to president Obama over the weekend, pledging to help contain health care costs. The signatories include PhRMA (drug makers), Advamed (device manufacturers), the AMA (doctors), the AHA (hospitals), AHIP (health insurance), and SEIU’s Health Care project. The corporate signatories are the very same interest groups that have fought U.S. health care reform for generations. AHIP, America’s Health Insurance Plans, helped torpedo the Clinton plan in the 1990s with the infamous “Harry and Louise” TV spots.


Progressive health care writers are divided as to whether Obama’s rapprochement is a good sign. One school of thought is that the interest groups have finally seen the writing on the wall. Arguably, the industry realizes that some kind of health care reform is inevitable and they hope to get the best possible deal by cooperating. Another perspective, not necessarily incompatible with the first, is that this kind of “cooperation” will ultimately co-opt Obama’s reform program.

Mike Madden summarizes the main thrust of the industry charm offensive in Salon:

Some of the organizations that have fought hardest against changing the system in the past are — for now, at least — saying they’ll work for it this time around. To demonstrate how serious they are, they joined Obama Monday to say they’ll work voluntarily to cut the growth rate of health care costs by 1.5 percent each year for the next decade. Unchecked, costs would increase by more than 6 percent a year, so the administration says the country — private employers and the government combined — would save $2 trillion from the effort. An average family of four could save $2,500 a year within five years.

The letter itself offers few details as to how the industries will actually go about saving money. More to the point, there’s nothing forcing these groups to follow through on anything they’ve pledged to do.

Still, if you parse the platitudes, the industry is diverging slightly from Republican anti-reform rhetoric. The GOP has been crusading against comparative effectiveness research (CER) ever since the stimulus bill set aside a billion dollars to fund it. CER is just research to discover which treatments give the best outcomes for the money, but the GOP would have us believe that it’s a stalking horse for rationing. Whereas, the industry coalition’s letter talks about cutting costs by “aligning quality and efficiency incentives” and “adherence to evidence-based best practices”–basically, big words for “studying the evidence” and “trimming the fat”–the core of the CER agenda.

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