Ceci Connolly reports that Hospitals Reach Deal With Administration in the July 7 edition of The Washington Post. Unnamed sources report that the American Hospital Association, Federation of American Hospitals and the Catholic Health Association agreed to “contribute $155B over 10 years toward the cost of insuring the 47 million Americans without health coverage.” Approximately $100B will come through reduced Medicare and Medicaid payments, while $40B will come through “slowly reducing what hospitals get to care for the uninsured”, which presumably means lower payments to disproportionate share hospitals.

The White House has previously discussed plans to find $600B of “savings” from providers. In that context, the “contribution” by the hospitals of $155B appears to be a significant win, and the stock market seems to agree this afternoon. However, it is difficult to understand how the balance of providers make up the $445B difference.

Even so, hospitals have not fared as well as the pharmaceutical industry, whose “contribution” of $80B will not accrue to the government. In addition, it is likely that their “sacrifice” will be offset substantially or entirely by an increase in the number of new customers because of lower drug prices or the acquisition of health insurance. Along those lines, The New York Times published Sheryl Gay Stolberg and David Herszenhorn’s article Health Deals Could Harbor Hidden Costs on the front page of the July 8 edition.