President Obama just publicly announced the new private partnership for health care reform introduced last night.
The full transcript will be available at Daily Kos TV, but here's a snippet:
Their efforts will help us take the next and most important step -- comprehensive health care reform -- so that we can do what I pledged to do as a candidate and save a typical family an average of $2,500 on their health care costs in the coming years. Let me repeat that point. What they're doing is complementary to and is going to be completely compatible with a strong, aggressive effort to move health care reform through here in Washington with an ultimate result of saving health care costs for families, businesses and the government. That's how we can finally make health care affordable, while putting more money into the pockets of hardworking families each month. These savings can be achieved by standardizing quality care, incentivizing efficiency, investing in proven ways not only to treat illness but to prevent them.
This is a historic day, a watershed event in the long and elusive quest for health care reform. And as these groups take the steps they are outlining, and as we work with Congress on health care reform legislation, my administration will continue working to reduce health care costs to achieve similar savings. By curbing waste, fraud, and abuse and preventing avoidable hospital re-admissions and taking a whole host of other cost-saving steps, we can save billions of dollars, while delivering better care to the American people.
The basics of this partnership are to reduce the rate of increase in health care costs by 1.5 percentage points over the next 10 years, amounting to $2 trillion in savings. Note, as President Obama stressed in his remarks, this is not a health care reform plan. This is not a substitute for the legislative reform being shaped now in Congress. (For some thoughts on that side of the equation, don't miss David's post at Congress Matters).
The White House has also released a fact sheet [pdf] and the letter [pdf] these groups wrote to President Obama, announcing the partnership. The meat, thus far, is in the letter:
We are committed to taking action in public-private partnership to create a more stable and sustainable health care system that will achieve billions in savings through:
- Implementing proposals in all sectors of the health care system, focusing on administrative simplification, standardization, and transparency that supports effective markets;
- Reducing over-use and under-use of health care by aligning quality and efficiency incentives among providers across the continuum of care so that physicians, hospitals, and other health care providers are encouraged and enabled to work together towards the highest standards of quality and efficiency;
- Encouraging coordinated care, both in the public and private sectors, and adherence to evidence-based best practices and therapies that reduce hospitalization, manage chronic disease more efficiently and effectively, and implement proven clinical prevention strategies; and,
- Reducing the cost of doing business by addressing cost drivers in each sector and through common sense improvements in care delivery models, health information technology, workforce deployment and development, and regulatory reforms.
This absolutely is the "tremendously good omen" that Krugman says it is, in the sense that these private stakeholders recognize that reform is coming and that they have to be on the train. For those of us involved in the Clinton reform effort, who saw it killed by the insurance industry's "Harry and Louise," it's pretty remarkable. That said, we all, including Krugman, have our suspicions.
While the White House officials on yesterday's call repeatedly said that there was no quid pro quo in this initiative--that a public option was still among President Obama's goals, there's plenty of concern that these private stakeholders are going to attempt to use the leverage they are gaining by becoming partners with the White House to kill it. On the other hand, politically, what they've done effectively isolates the Republicans in the debate and, ultimately, signals that health care reform will happen this year.
But this is just the beginning, and as Ezra points out, some of these players actions on reforms that are on the table now contradict what they say they will do.
What we have, in other words, are promises of future cost containment that exist alongside concrete and continued opposition to the cost containment ideas that are actually on the table. And for good reason. A 1.5 percentage point decrease in health spending is a 1.5 percentage point decrease in medical industry profits. This commitment doesn't contain any examples of concessions that will reduce a participant's revenue streams. Conversely, every time legislators have proposed a reform that will actually cut industry profits -- and thus cut health spending -- the industry has howled in pain and anger. It's hard to sync that with promises to cut spending by $2 trillion over the next 10 years by implementing a set of unspecified reforms.
This isn't the magic bullet to a health care reform or to a system that adequately covers every American. It's an extremely significant step, mostly politically, but the real action is still going to be happening in the Senate, and those are the levers we're going to have to be paying the most attention to.