Reform deal could create $16B gain, not losses, for U.S. hospitals

Remember not long ago when the nation's hospital associations made their big, oh-so-noble announcement about the cuts they were willing to endure to support the cause of health reform? The White House struck a deal with the American Hospital Association under which hospitals would contribute $155 billion in cost savings over 10 years to the cause.

Now, it appears that in private, hospital officials may have anticipated all along that they'd be getting a better deal than the one they unveiled in public. In fact, according to a cost-benefit breakdown developed by the Tennessee Hospital Association, hospitals would actually be paid $171 billion during the coming ten years, thanks to the expansion in health insurance coverage. That's a net gain of $16 billion, not a loss.

What's more, the hospital industry's cost giveaways wouldn't take effect until the second half of the 10-year term; would protect hospitals from cuts they'd probably have faced anyway; and while they'd take away $50 billion in money that helps hospitals pay for the uninsured, would probably not be needed of huge numbers of patients ended up newly covered.

All in all, while it might be too strong to call the deal a con job, it's clear President Obama was willing to give quite a bit to get hospitals on board. Now, the question is whether even that deal--and a similar complex giveback arrangement with pharmas--will be enough to push a reform package he likes through Congress.

To learn more about the new revelations about the hospital deal:
- read this piece in The New York Times

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