In the snows of February, take time to remember Obama's Deals of August
Or, The Two Percent Solution and The One Half of One Percent Solution....
Greg Palast wrote last August about Obama's sweet deals with Big Health Industry Players and how they actually netted out for the public and the nation's deficit reduction:
...Obama's big deal with Big Pharma saves $80 billion out of a total $3.6 trillion. That's 2%.
Now it's Let's Make a Deal with hospital lobbyists.
First, the President was caught with his principles down, cutting a scuzzy back-room deal with pharmaceutical lobbyist Billy Tauzin to limit drug price savings to just 2% over 10 years (see attached, "Obama on Drugs: 98% Cheney?"), the New York Times today reports that another deal was sealed by lobbyist Chip Kahn of the American Hospital Association.
Here are the numbers they don't want you to see: Hospitals will be allowed to hike their prices and revenues by six trillion dollars ($5,853 billion) over the next ten years, only $155 billion less than they had projected before the Obama "reform."
In all, the Obama back-room deal will "reduce" our $26 trillion total hospital bill over the next decade by one-half of one percent.
The Big Pharma kingpins did not actually agree to cut their prices. Their promise with Obama is something a little oilier: they apparently promised that, over ten years, they will reduce the amount at which they would otherwise raise drug prices. Got that? In other words, the Obama deal locks in a doubling of drug costs, projected to rise over the period of "savings" from a quarter trillion dollars a year to half a trillion dollars a year. Minus that 2%.
We'll still get the shaft from Big Pharma, but Obama will have circumcised the increase.
And what did Obama give up in return for $80 billion? Chief drug lobbyist Billy Tauzin crowed that Obama agreed to dump his campaign pledge to bargain down prices for Medicare purchases. Furthermore, Obama's promise that we could buy cheap drugs from Canada simply went pffft!
What did that cost us? The New England Journal of Medicine notes that 13 European nations successfully regulate the price of drugs, reducing the average cost of name-brand prescription medicines by 35% to 55%. Obama gave that up for his 2%.
The Veterans Administration is able to push down the price it pays for patent medicine by 40% through bargaining power. George Bush stopped Medicare from bargaining for similar discounts, an insane ban that Obama said he'd overturn. But, once within Tauzin's hypnotic gaze, Obama agreed to lock in Bush's crazy and costly no-bargaining ban for the next decade.
This week in HuffPo, Mike Mogulescu writes about Obama's deal with Big For-Profit Hospitals. I'd noticed commenters today mentioning it as new news, and it seems like something new because the major emphasis has been on the Tauzin deal with Big PhRMA.
But Obama's deal with the for-profit hospital lobby to insure there would be no public option has, as best I can tell, only been reported in two articles in The New York Times. On August 13, The Times reported that while President Obama had presented himself as "aloof from the legislative fray," particularly in connection with the public option, "Behind the scenes, however, Mr. Obama and advisors have been...negotiating deals with a degree of cold-eyed political realism potentially at odds with the president's rhetoric." One of the deals reported in The Times article was the Pharma deal. The other was a deal with the for-profit hospital lobby to limit its cost reductions to $155 billion over 10 years in exchange for a White House promise that there would be no meaningful public option.
"Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying-Medicare rates...or controlled by the secretary of health and human services. 'We have an agreement with the White House that I'm very confident will be seen all the way through conference', one of the industry lobbyists, Chip Kahn, director of the Federation of American Hospitals, told a Capitol Hill newsletter...Industry lobbyists say they are not worried [about a public option.] 'We trust the White House,' Mr. Kahn said."
Mr. Kahn's lobbying group, with whom the White House made the deal, represents America's investor-owned, hospitals whose profits could be diminished by a public option with the negotiating clout to negotiate lower prices. To say that the deal included ensuring that any public option would not be "controlled by the secretary of health and human services" is code for saying it would not be national in scope and would lack negotiating clout--In other words, the Obama administration made a deal that a national public option on day one comparable to Medicare was off the table.
On September 9, a few weeks after The Times reported Obama's deal to gut the public option, President Obama gave his big health care speech to a Joint Session of Congress. In the speech, Obama said one of the programs he was considering was a "not-for-profit public option available in the insurance exchange." Supporters of the public option took this as a sign that Obama was on their side.
But Washington insiders noticed that Obama parsed his words very carefully. The New York Times noted that:
"Mr. Obama's call for a public plan, however, omitted any discussion of what rates it might pay or who might control it...'He worded it really carefully, because he said 'not for profit' and he didn't say it had to be controlled by the government,' Mr. Kahn [the hospital lobbyist] added. 'The way he described it, we could support that!"
In other words, Obama signaled the private health care industry that his deal that there would be no meaningful public option still stood.
There is no evidence that President Obama has ever twisted the arm of a single Senator to support a public option and plenty of evidence that he has assiduously avoided doing so, sending a message to Senators that he doesn't want a public option. When the Senate passed its version of the health reform bill, the reason the White House gave for there being no public option was that it couldn't garner 60 votes. But Joe Lieberman, who could have been the 60th vote, insists that the Obama administration never pressured him to support either a public option or a Medicare buy-in. And Sen. Russ Feingold blamed the demise of the public option in the Senate on the White House's failure to push for it.
He wants to cut costs? He wants to provide access to insurance? What a guy, what a negotiator! Sells out for 2% and 1.5%.
And the health and welfare of our nation's people.