Published January 13, 2015
By Tevi TroyVisiting Senior Fellow, The Hudson Institute/Former Deputy Secretary of Health and Human Services
President Obama has brought health care stakeholders to the White House again, this time to announce $2 trillion in putative cost savings to our health care system. These savings seem to solve a political problem for the White House, which has been on the hunt for ways to pay for its health care reform, which will likely cost twice as much as the $634 billion the White House put into the budget for that purpose. However, it's not at all clear that these savings will develop. "Future savings," are often promised in health care, but rarely develop. Still, this move may allow Congress and the White House to claim that they are reforming health care without busting the budget any further than they already have.
What's more telling, tough, is the stakeholders who came forward with the savings. It's clear that these stakeholders -- including the American Hospital Association, American Medical Association, Pharma, AdvaMed, America's Health Insurance Plans, the Greater New York hospital association and the California Hospital association -- are extremely nervous about where they will end up relative to their colleagues should the president secure the kind of major health reform he is seeking. These stakeholders have clearly decided that fighting reform is a fruitless struggle, and that they had better get on the ship before it sails. Their collective boarding will put additional pressure on each of the stakeholders going forward. If any group does not come forward with their promised savings, they may find their current allies only too happy to push them overboard.