First, the announcement: At about 12:30 today, representatives from the insurance industry, the pharmaceutical industry, the American Hospital Association, the American Medical Association, Advamed, the California Hospital Association, the Greater New York Hospital Association, and SEIU will present Barack Obama with a letter promising to aid his health care reform effort by cutting health care spending by 1.5 percentage points over the next 10 years. That sounds minimal. But it actually amounts to $2 trillion in savings.
The politics of this should surely cheer supporters of reform. In essence, this is the entire medical industry stepping forward and declaring themselves partners in Obama's effort. It leaves Republicans isolated. It allows the administration to credibly claim that they are working with the stakeholders to cut costs. It puts the industry on record saying that reform will bring new efficiencies rather than increased spending. And it's simple evidence of the momentum building behind the administration's effort. These groups wouldn't be jockeying for a seat at the table if they didn't think everyone was eventually going to sit down.
But it's not just the administration that benefits from the optics. It's the medical industry. The fact that the White House is making a big deal of their support means it would be a big deal if they lost it. And so it's worth asking what, exactly, the health care industry has committed itself to.