Why healthcare providers joined forces with Obama

In 1993, they were a major factor in defeating President Clinton's proposals. But this time around, industry leaders sense change is inevitable, and they want a voice.

Charles Dharapak/AP
At the White House on Monday, President Obama announced a commitment from some health-industry trade groups to reduce the growth of healthcare spending. From left are: Cedars-Sinai Health System president Thomas Priselac; Merck CEO Richard Clark; Kaiser Permanente CEO George Halverson; Mr. Obama; American Medical Association president J. James Rohack; SEIU Healthcare chair Dennis Rivera; and Edwards Lifesciences CEO Michael Mussallem.

There has been a sea change in the long struggle over healthcare reform in Washington.

The last time a Democratic president took office promising major health reform, 16 years ago, the effort crashed amid fervent opposition by key groups in the healthcare industry.

Today, many of those same groups have voluntarily come to the table, ready to deal. On Monday, President Obama announced a commitment from a half-dozen health-industry trade groups to reduce the growth of healthcare spending significantly, with a potential savings of $2 trillion over 10 years.

Industry groups see that momentum is building toward reforming the system – and they want to be inside the tent affecting the outcome, not outside having decisions forced upon them.

“There is an aura of inevitability that legislation is going to pass, and as a result, the various stakeholders want to be part of the process,” says Ron Pollack, executive director of Families USA, an advocacy group for healthcare reform. “There’s a context of cooperation that we’ve never seen before.”

Healthcare now represents 17 percent of the nation’s economy, and that percentage is growing as inflation in health services has long outstripped overall inflation. Left unchecked, healthcare would account for 21 percent of the US gross domestic product by 2019, according to administration officials.

“What's brought us all together today is a recognition that we can't continue down the same dangerous road we've been traveling for so many years; that costs are out of control; and that reform is not a luxury that can be postponed, but a necessity that cannot wait,” Mr. Obama said after meeting with representatives of the groups.

Key to this new context is last fall’s election, which put Obama in office with a majority of the popular vote – an advantage President Clinton didn't have – and boosted the Democrats’ majorities in both houses of Congress. Obama’s popularity remains above 60 percent, giving him the political capital to make a major push.

In addition, the process started earlier under Obama than under Mr. Clinton. In 1993, Clinton did not give a speech on health reform until September and did not issue a proposal until November.

Also key is the attitude of the committee chairs in Congress. In 1993, Sen. Daniel Patrick Moynihan (D) of New York chaired the Senate Finance Committee, and he favored welfare reform over healthcare reform. Today, Finance chair Max Baucus (D) of Montana has made clear that health reform is his top priority. The other relevant committee chairs are cooperating.

Efforts toward reform have been in the works for months. One, dubbed the “workhorse group,” is led by Sen. Edward Kennedy (D) of Massachusetts, whose illness has added urgency to his mission. Another, the 18-member Health Reform Dialogue, represents input from various stakeholders, including industry groups, unions, and consumers.

The Health Reform Dialogue issued a framework for reform at the end of March. It found consensus in a number of areas, including extending coverage to all Americans, expanding Medicaid eligibility, and tax credits to promote affordability. But the group was unable to agree on mandates and whether there should be a government insurance plan that competes with private insurers.

At his meeting Monday morning, Obama met with leaders from industry groups that represent doctors, hospitals, insurers, and drugmakers. In a letter, six trade groups pledged to reduce the growth of healthcare spending by 1.5 percentage points a year. Reports indicate that the savings would be achieved by focusing on preventive care, cutting unnecessary tests and procedures, and increased efficiency of record keeping through technology.

The industry pledge is voluntary, and thus not enforceable. But public pressure will be brought to bear, administration officials said on Sunday.

Administration officials acknowledge that the tough work of crafting reform has just begun.

“It’s easier to get everybody joining together around a 30,000-foot view,” Health and Human Services Secretary Kathleen Sebelius said Monday in a conference call with reporters. “Once the details begin to be identified, that’s where tension often begins.”

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