From today's Boston Globe:
In a detailed two-page letter to key senators released yesterday, the president wrote that he wants to "fully offset the cost of healthcare reform" by cutting an additional $200 billion to $300 billion from Medicare and Medicaid over the next decade, on top of the $309 billion reduction he has already proposed in the government's two main healthcare programs for the poor, elderly, and disabled. (I have provided the embedded link to the actual letter.)
I'm trying to give this a fair shake and not jump to conclusions, because the motivation is noble. The question is whether this is real cost-cutting, or appropriation cutting. If you just cut appropriations, you just dumb down health care. You get to cost-saving by reducing medical errors and harm to patients and by engaging in the kind of continuous process improvement that has been found in the most successful firms in other industries. See Steve Spear's comments on this. The items mentioned in the letter sound rather more like administrative efforts to avoid government payments than a recognition that the medical field remains a cottage industry at the actual level of care delivery. Creation of "accountable care organizations" could result in an agglomeration of inefficient hospitals and other providers, a step that could also cement in the benefits to those institutions that are already part of large systems with more market power. You do not want to create the medical equivalent of "Government Motors." Careful, here, folks.
Meanwhile, hospitals, do you see the hand-writing on the wall? Academic medical centers have the most to lose here: There is no natural constituency in Congress to provide high levels of support for graduate medical education to these high-cost hospitals. While there is a community hospital in every Congressional district, academic medical centers are much fewer in number and concentrated in just a few districts. Count the votes.