Representatives from the nation’s biggest health industry lobbying groups, in a White House meeting with President Obama today, offered up a plan to voluntarily reduce health care costs by as much as $2 trillion over 10 years.

How to pay for vastly expanded health care coverage is a key issue as Congress works on a health reform package that is expected to be enacted by early fall. Cutting health care costs will be a key component. Administration economists say the health industry offer would provide a big chunk of cash to help pay for expanded coverage.

Some commentators say the industry move indicates a tactical shift. Instead of directly opposing major health care reform, as the insurance and other corporate lobbies did in the past, they are signing on to reform while zeroing in on blocking the public option that Obama has proposed.

That skeptical view is reflected in an Associated Press report on the White House meeting, which says, “The industry groups are trying to get on the administration bandwagon for expanded coverage now in the hope they can steer Congress away from legislation that would restrict their profitability in future years.”

“Insurers, for example, want to avoid the creation of a government health plan that would directly compete with them to enroll middle-class workers and their families. Drug makers worry that in the future, new medications might have to pass a cost-benefit test before they can win approval.”

Tim Foley, online organizer for the Committee of Interns and Residents/SEIU Healthcare, a labor union for intern and resident doctors, writes of the health industry offer, “This could be a move forward for reform, or it could be a pre-emptive strike to preserve their share of the pie.”

The Service Employees union was a participant in today’s White House meeting along with the industry groups.

The big five industry lobby groups— the Advanced Medical Technology Association (AdvaMed), America’s Health Insurance Plans (AHIP), the American Hospital Association (AHA), the American Medical Association (AMA) and Pharmaceutical Manufacturers of America (PhRMA) — have “made no secret of their opposition to proposals for creating a public insurance plan, into which anybody could enroll. Monday’s gesture may simply be an effort to cut a deal that leaves out the public plan,” New Republic blogger Jonathan Cohn writes.

“Is this gift a Trojan horse?” asks economist Paul Krugman in his New York Times column. Krugman thinks the industry getting on board with the president’s reform efforts is a positive step, but he warns, “There’s every reason to be cynical about these players’ motives. Remember that what the rest of us call health care costs, they call income.”

Foley points out, “Just cutting costs isn’t anywhere near as good as cutting costs in a way that improves quality, access or improves the care we’re getting some other way.”

He continues: “So much of our warped payment for medical care system, from the MRIs to the prescription drugs to the uncoordinated care to the administrative costs, is because someone’s pockets are lined with the waste in our system. Reform has always been defeated in the past out of motivation for the profit margins of doctors (for Truman and Kennedy) or the insurance industry (Clinton).”

Health Care for America Now blogger Jason Rosenbaum says, “The industry will never make a binding commitment to control costs, so we need to put something in place that can police this agreement. That something is a public health insurance option.”

The labor movement has insisted that any health reform package must include a public option to compete with private insurers.

For example, the Communications Workers of America’s Health Care Voices campaign says government has to play a strong role in health care and “ensure that people have a choice to get their coverage through a public insurance plan offering comprehensive benefits at an affordable price.”

Gerald Shea, a health care specialist for the AFL-CIO, told the House Ways and Means Committee last month, “Congress should create a public insurance alternative to the private insurers, their high profits, high co-pays, deductibles and spending on overhead. Creating a public health insurance plan to compete with private health insurance plans will lead to substantial savings throughout our health care system as a result of that competition.”

Union leaders say they are determined to be represented at congressional hearings on the issue and they plan to organize their membership to lobby lawmakers.

Tom Swan, accepting a Connecticut People’s Weekly World “newsmaker” award last week on behalf of Health Care for America Now in Connecticut, emphasized that a health care plan will be passed in the next five months and urged participation in the struggle in Washington to achieve a strong public choice component, being vigorously opposed by the insurance industry, Republicans and some Democrats.

Warning that Congress could be recaptured by the extreme right wing next year if a strong health care bill is not passed, Swan urged people to go to Washington on June 25 for a rally and lobby day.

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Susan Webb
Susan Webb

Susan Webb is a retired co-editor of People's World. She has written on a range of topics both international - the Iraq war, World Social Forums in Brazil and India, the Israel-Palestinian conflict and controversy over the U.S. role in Okinawa - and domestic - including the meaning of socialism for Americans, attacks on Planned Parenthood, the U.S. as top weapons merchant, and more.