Spending to Save?

The Obama administration has been lining up stakeholders to agree to contributing to health care reform by agreeing to financial concessions over the next 10 years.

But while the early adopters have promised to save money over the next ten years, they are privately counting on increasing their revenue as a result of health care reform.

On the pharmacy side, PhRMA has agreed to give $80 billion in discounts to senior citizens over 10 years. But these discounts will lead to higher revenues (otherwise known as higher overall costs. Oops) Further, some analysts believe that simply eliminating the prohibition of government negotiation would save as much as $156 billion.

Now, word is that the hospital industry’s promise of $155 billion dollars in savings is more than offset by $171 billion in new revenue from newly-insured patients. Net… more overall health care expenses.

This feels sort of like facing foreclosure on a car, and being offered a big discount on an even more expensive car!