Healthcare: White House and Hospitals Are Reported to Be Near Deal

WASHINGTON – The Obama administration and major hospital associations on Monday evening were nearing a deal for about $150 billion in cost savings to help pay for an overhaul of the nation’s health care system, with an announcement expected at the White House as early as Wednesday, officials said.

If an agreement is finalized, it would be the latest step in an on-going effort by the White House to win concessions from major health industry groups to help pay for legislation aimed at providing health insurance to all Americans. Democrats are hoping to keep the cost of the overhaul at about $1 trillion over 10 years.

Earlier this month, the White House announced a “historic agreement to lower drug costs” and the lobby for drug companies, the Pharmaceutical Research and Manufacturers of America, or PhRMA, said it had pledged $80 billion over 10 years to help Democrats in the efforts to improve the health care system.

In addition to controlling costs and helping Mr. Obama achieve his goal of providing coverage to more than 40 million uninsured Americans, the administration’s tentative agreements with drug companies and providers, including hospitals and doctors, are also intended to bring pressure on the private health insurance industry.

Private insurers may have the most to lose as lawmakers in the House and Senate debate the possibility of creating a new government-run insurance program to compete with private firms and help slow the steep growth in medical spending.

Lawmakers, industry groups and other officials involved in the negotiations over hospital costs would not immediately provide details. But President Obama had recently called for cutting more than $200 billion in expected reimbursements to hospitals, prompting some outcry from the industry.

And the White House budget director, Peter R. Orszag, had said that $110 billion in savings could be achieved by pressing hospitals to treat patients more effectively, using health information technology and better coordination of care that would reduce the need for expensive specialists.

“Discussions are on-going,” said Jennifer Armstrong Gay, a spokeswoman for the American Hospital Association, one of the groups involved in the talks. “We are continuing to meet with Congress and the White House.”

At various points, there have been misunderstandings between the White House and industry groups. In May, for instance, Mr. Obama said doctor and hospital groups had pledged to reduce healthcare costs by 1.5 percent but the groups later clarified that they had promised only to help squeeze spending so that the rate of growth is eventually 1.5 percent lower.

Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, who is leading efforts to draft a bipartisan healthcare bill, would not discuss any specifics about the potential deal with hospital organizations.

“We’re working with groups and lots of different groups and I’m quite hopeful,” he said. Mr. Baucus said he remained confident that Senate Democrats could bring a health care bill to the floor before the summer recess begins on Aug. 8.

“Senators want to get to yes,” Mr. Baucus said. “They want health care reform. They know how important it is.”

Senator Kent Conrad, Democrat of North Dakota, also did not want to discuss any details.

“I don’t think it would be appropriate for me to talk about it until there is an announcement,” Mr. Conrad said. “I have been very impressed by how groups are coming forward and helping share responsibility and we are getting it from doctors, we are getting it from hospitals, we are getting it from nursing home people, we are getting it from the pharmaceutical industry. By and large, people are stepping up.”

By DAVID M. HERSZENHORN

A version of this article appeared in print on July 7, 2009, on page A11 of the New York edition of the New York Times.

[nytimes.com]

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