Color me skeptical

Despite Elizabeth's generous description of me, I tend to be a little bit leery of writing too much about health care policy. While I feel very comfortable discussing the nuts and bolts of health care delivery (for example, I will confidently aver that bribery with stickers is laughably ineffective when shots are on the line), the intricacies of health care reform are both more complicated and more obscure than I can authoritatively claim to understand. Still, as an issue that is of pressing national importance and dear to my heart, I try to essay an opinion now and then.

With that disclaimer in place, I'd like to comment on Jonathan Cohn's recent post at The Treatment (TNR's health care blog). Mr. Cohn, who knows far more about the topic than I do, is somewhat unsure what to make of the overtures from the pharmaceutical and hospital industries that they are willing to make a deal with the Obama administration as efforts to reform the health care system proceed. He writes:

On Wednesday, according to the Washington Post, three groups representing the U.S. hospital industry will announce their willingness to give up $155 billion in revenue over the next ten years--money that the government can then use to help finance universal coverage, or some approximation thereof.

The deal, which the hospital groups are making with Senate Finance Chairman Max Baucus and the White House, has apparenlty been in the works for a while. Laurie McGinley and Phil Galewitz of Kaiser Health News first reported its emergence last week. It follows closely on the heels of a similar deal Baucus and the White House struck with representatives of the pharmaceutical industry in late June. And, broadly speaking, it's consistent with the pledge leaders of the health care industry made at the White House in early May: That they would support health care reform, even if it meant taking money out of their own pockets.

These agreements might seem merely symbolic. They are not. They are significant developments, both politically and substantively.

But are they also good developments, the sort that liberals should cheer? That's a bit more complicated. To be quite honest, I'm not sure I know the answer.

I must admit to feeling somewhat gratified that Mr. Cohn is as unsure as I am. The details of the deals seem a bit murky to me, but from what I understand, the pharmaceutical industry will kick in money to shore up the Medicare prescription drug benefit, and the hospital industry will cut costs by $155 billion over the next decade. Cohn's piece discusses some of the upsides and downsides, but what I was most interested in was this:

Perhaps the most important question to answer is what these industry groups are getting in return. Changing payments to the health industry isn't simply about generating savings that can finance expansions of insurance coverage. It's also about changing the behaviors of these industries--and, in so doing, creating a health care system that offers better quality care for less money.

To accomplish that, reform should ideally include measures like strengthening the hand of the Medicare Payment Advisory Commission (MedPAC), developing more data on comparative effectiveness (CE), or building a strong public insurance plan. But hospitals don't like the idea of a stronger MedPAC, drug makers are pretty hostile to good CE, and insurers (among others) hate the idea of a public plan. When the industries cut these deals, are they prying promises from [Senate Finance Committee chair Max] Baucus [D- Mont.] --or the White House--not to push too hard on these levers?

Considering how closely tied Baucus appears to be to the industries in question, I must admit to being more than a little bit skeptical. (Confidential to GJ: you can put this in the "Dan willingly criticizes the Democrats" file.) Based on nothing more than a certain familiarity with human nature and suspicions about corporate behavior, I have a hard time believing that either the drug companies or the hospital industry are making concessions out of the kindness of their collective hearts. I don't know much about MedPAC, but I do know that CE could potentially steer patients away from new and expensive brand-name drugs and toward older, cheaper generic alternatives that are just as effective (if not more so). Minimizing attention to CE would be in the pharmaceutical industry's interests, but not necessarily ours.

Cohn seems cautiously optimistic about what all of this means, and I'm certainly glad to see the major industries playing along with health care reform to any degree. But I can't swallow the idea that these concessions don't come with some kind of sweetener. It remains to be seen just what that may be.