Hospitals Agree To Fee Cuts

Health Care Reform

Industry To Accept Changes If Insurance Deal Reached

July 09, 2009|By Noam N. Levey | Noam N. Levey,Tribune Newspapers

WASHINGTON - -In the face of mounting Republican opposition to its health-care agenda, the Obama administration received a boost Wednesday, winning a preliminary agreement with leading hospital groups to cut federal payments to the industry over the next decade.

Under the plan, negotiated primarily by Senate Finance Committee Chairman Max Baucus, a Montana Democrat, hospitals would accept $155 billion in cuts if the administration and its congressional allies succeeded in extending health insurance to tens of millions of people who are now without coverage.

None of the hospital groups has signed a written agreement backing the cuts, nor is there any guarantee that the cuts will be included in versions of the health care legislation being developed by lawmakers other than Baucus.

"We have agreements on specific points, and the understanding is that if those points materialize, that's great," said Rich Umbdenstock, who heads the American Hospital Association. "If they don't, we're back in discussions."

In one potentially ominous sign Wednesday, House Energy and Commerce Committee Chairman Henry A. Waxman, a California Democrat, said House leaders would not be bound by an agreement with the pharmaceutical industry that was announced by the White House last month.

But the pledges from hospital leaders may help galvanize support for the health care overhaul.

Senior Democrats are struggling to draft legislation that would not drive up the national debt but still accomplish the goals of expanding health coverage, controlling costs and improving the quality of care.

Baucus and the White House have been working for months to enlist industry support, in part to help offset the cost of the expanded coverage, which many expect to top $1 trillion over the next 10 years.

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