A Watershed Washington Moment

Good news is in short supply these days, or these years. Actually, it it so rare it nearly shocks the system. So yesterday was a big day in this bad new world we find ourselves living in — the healthcare industry has not only come to the reform table, it is (at least) promising to dish up a generous helping of change.

Officials from a coalition of healthcare interests, upon meeting face to face with President Obama, have announced their intention to cut healthcare costs by 1.5 percent in 10 years, a slice that would save roughly $2 trillion, $2,500 for a family of four in the fifth year.

The letter that stated this goal was signed by the Advanced Medical Technology Association, which lobbies for medical device manufacturers; the American Hospital Association; the American Medical Association; the Service Employees International Union; the Pharmaceutical Research and Manufacturers of America; and the insurance trade group America’s Health Insurance Plans.

Obama administration officials concede they have not figured out just how the industry would keep this promise, but in their giddiness predicted that not only would this ensure healthcare would pass this year but that such savings would “virtually eliminate” the country’s budget deficit. Obama called it a “watershed moment.”

Sure, until we know the details, there is cause for cynical pause amid this celebration. Paul Krugman — who hasn’t been able to find anything positive to say about Obama’s economic policy or the prospects for his agenda translating into fundamental change — said in his New York Times column Monday that “there is every reason to be cynical about these players’ motives. Remember that what the rest of us call healthcare costs, they call income.”

But Krugman sounded some optimism about the prospects of such a concession, that the coalition’s letter “implicitly endorses much of what administration officials have been saying about health economics,” and that on the face of it “this is tremendously good news.” Krugman continued to warm to the excitement and ended his column by saying though he won’t count his healthcare chickens just yet, “this is some of the best policy news I’ve heard in a long time.”

I agree with Krugman that this watershed moment may not be airtight. But my cynicism would have prevented me from imagining a scenario like this in which even the beginning of substantive cooperation was possible.

The road to reform will be long and we know not just what it is the Democrats will actually pass and Obama will sign. The main question is whether or not there will be a government healthcare plan on the other side of this process. There are currently three proposals for a public plan — a program the government runs, a program modeled after Medicare but actually run by an outside entity, and a program that states run on their own. Republicans, and some centrist Democrats, oppose a public plan.

Democrats and the Obama administration still haven’t figured out just how to pay for any reform. And there is plenty of time for more fighting and infighting. But for now let’s cheer a spot of good news, evidence of at least the potential for real compromise. I haven’t seen anything like it in Washington in years.

SHOULD DEMOCRATS SHELVE ENERGY AND JUST PASS HEALTHCARE REFORM? Ask A.B. returns Monday, May 18. Please join my weekly video Q&A by sending your questions and comments to Thank you.

Tags Barack Obama Economics Enron Health Health care reform debate in the United States Health care reforms proposed during the Obama administration Healthcare reform in the United States Keynesians Paul Krugman Person Career Political Endorsement Politics Social Issues United States United States National Health Care Act

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