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Will hospital deal really materialize?

Steve Henn Jul 7, 2009

Will hospital deal really materialize?

Steve Henn Jul 7, 2009


Kai Ryssdal: The economic news of the day is neither Michael Jackson nor Eric Schmidt. It is, instead, the health-care debate. Sometime soon, tomorrow perhaps, the White House is going to announce a deal with three major hospital associations.

The hospitals are going to voluntarily cut $155 billion from their government health-care bills over the next 10 years. That is, they’re going to collect $155 billion less from the government than they ordinarily would. On the face of it that would appear to be a savings. Marketplace’s Steve Henn reports from Washington though there is some concern those savings might never materialize.

STEVE HENN: Right now the debate over health-care reform is basically just a numbers game.

JOHN HALAHAN: I think the bill will certainly cost a trillion or more.

John Halahan is at the Urban Institute.

HALAHAN: So it’s going to have to be paid for through some combination of savings from cutbacks to providers, and the rest is going to have to come out of new revenues.

So Halahan says the administration’s been leaning on drug companies and hospitals to cut the fees they charge to the federal government for Medicare, Medicaid and prescription drugs.

A couple weeks ago drug makers promised to slice $80 billion off the government’s health-care tab over 10 years. Tomorrow three large hospital associations are expected to announce they’ll cut fees by $155 billion in the next decade.

Rick Curtis runs the Institute for Health Policy Solutions.

RICK CURTIS: A $100 billion here and a $100 billion there, and pretty soon you are talking about real money.

But will these savings materialize? Chuck Grassley, the top Republican on the Senate Finance Committee’s not convinced.

CHUCK GRASSLEY: It doesn’t mean anything unless you get the Congressional budget office to give it a score.

Grassley says when it comes to tallying possible savings in any new law the CBO is the ultimate scorekeeper. And he’s not sure these voluntary industry promises will count.

GRASSLEY: Because if CBO can’t score it, it’s not worth the paper it’s printed on.

And that will make health-care reform much harder to pass in Congress.

In Washington, I’m Steve Henn in Marketplace.

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