Hospital industry, White House announce $155B cost-cutting agreement

The hospital industry, the White House and the Senate Finance Committee have struck a deal under which hospitals will agree to $155 billion in Medicare and Medicaid cuts over the next decade to pay for health reform. The deal hinges on the cuts phasing in as uninsured patients gain coverage, presumably covering the gap as the federal money goes away.

If it goes through, the hospital agreement would follow another piece of reform-related dealmaking in which the pharmaceutical industry, the White House and the Senate Finance Committee will spend $80 billion over the next 10 years to expand the Medicare drug program.

In the past, hospitals were deeply opposed to President Obama's plan to cut federal payments to hospitals by over $220 billion over 10 years. Under these terms, however, hospitals have decided to bite the bullet.

Observers note that members of the House could still demand bigger cuts, but politicos are hoping that by reaching a deal with key Senate Democrats, they'll be able to get enough momentum to get the deal through Congress.

To learn more about this deal:
- read this Kaiser Health News piece

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