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The Deal with the Hospital Industry to Kill the Public Option [View All]

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peace frog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-07-10 09:26 AM
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The Deal with the Hospital Industry to Kill the Public Option
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Tom Daschles admission that the public option was tossed in a deal with the hospital industry may come as news to a lot of people, if it gets wide attention. Its significant that Daschle tried to clarify his statement to Igor Volsky at The Wonk Room, even though his book contains the same information:

In his book, Daschle reveals that after the Senate Finance Committee and the White House convinced hospitals to accept $155 billion in payment reductions over ten years on July 8, the hospitals and Democrats operated under two working assumptions. One was that the Senate would aim for health coverage of at least 94 percent of Americans, Daschle writes. The other was that it would contain no public health plan, which would have reimbursed hospitals at a lower rate than private insurers.

In addition, this acknowledgement lines up perfectly with the admittedly scant public record we have on the subject. Miles Mogulescu pursued this story at the Huffington Post for months, and Ed Schultz got an on-the-record confirmation from a reporter at the New York Times.

On Monday, Ed Shultz interviewed New York Times Washington reporter David Kirkpatrick on his MSNBC TV show, and Kirkpatrick confirmed the existence of the deal. Shultz quoted Chip Kahn, chief lobbyist for the for-profit hospital industry on Kahns confidence that the White House would honor the no public option deal, and Kirkpatrick responded:

Thats a lobbyist for the hospital industry and hes talking about the hospital industrys specific deal with the White House and the Senate Finance Committee and, yeah, I think the hospital industrys got a deal here. There really were only two deals, meaning quid pro quo handshake deals on both sides, one with the hospitals and the other with the drug industry. And I think what youre interested in is that in the background of these deals was the presumption, shared on behalf of the lobbyists on the one side and the White House on the other, that the public option was not going to be in the final product.

The timing of Kirkpatricks story about the health care negotiations covers exactly the same time frame as Daschle does the summer of 2009, specifically July. This article is from August 13 of that year:

Early last month, for example, hospital officials were poised to appear at the White House to announce a deal limiting their industrys share of the costs of the overhaul proposal when a wave of jitters swept through the group. Senator Max Baucus, the Finance Committee chairman and a party to the deal, had abruptly pulled out of the event. Was he backing away from his end of the deal?

Not to worry, Jim Messina, the deputy White House chief of staff, told the hospital lobbyists, according to White House officials and lobbyists briefed on the call. The White House was standing behind the deal, Mr. Messina told them, capping the industrys costs at a maximum of $155 billion over 10 years in exchange for its political support.

I dont know that theres a piece of paper laying out the terms, or an audio tape of the meeting, or anything other than a handshake deal. But this is a fairly badly kept secret in Washington, and now Daschle went ahead and put it in a mass market book.

The hospital industry was an unsung player in the health care debate, but it was almost certainly their pressure, and their unwillingness to accept a public option which could have bargained down their profits, that led to its demise. In the next round of health reform, and there has to be a next round, the influence of the hospital industry must be taken into account. /
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