Hospitals Agree to $155B in Future Savings

Will accept lower payments for Medicaid, Medicare
By Kevin Spak,  Newser Staff
Posted Jul 7, 2009 7:25 AM CDT
In this April 2, 2009 file photo, Senate Finance Committee Chairman Max Baucus, left, and the committee's ranking Republican Chuck Grassley talk on Capitol Hill.   (AP Photo/Susan Walsh, FILE)
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(Newser) – The nation’s hospitals have struck a deal with White House and Senate negotiators that will save the government $155 billion over 10 years, the Washington Post reports. The hospitals will accept lower-than-expected Medicare and Medicaid payments, and a gradual reduction in the amount paid to help care for the uninsured. The government, meanwhile, has promised that a public insurance plan would pay better-than-Medicare rates.

“Getting health care reform is absolutely critical,” says one hospital negotiator. “This is our attempt to act in good faith.” President Obama gave them good reason to do so last month, when he said he’d identified $200 billion in potential hospital reductions. “There was no way we could tolerate $200 billion,” one industry executive says. Because Obama is out of the country, Joe Biden is expected to announce the deal tomorrow. (Read more hospitals stories.)