The Magical Mystery Tour of Health Care Savings

This weekend, I was on a panel where the other economics journalist and I spent a great deal of time belaboring the obvious: Obama's health care plans are very, very expensive, and they mean higher taxes for everyone, not just that elusive klatch of greedy fools who are not in the 95% of working families now allegedly slated for stable or lower taxes. Otherwise, how could Obama hope to pay for it?

I think we found out today: magic.

Obama got the SEIU and various corporate entities involved with health care provision in a room and got them to promise to slash 150 basis points from the annual rate of increase in health care spending... [snip]

You may recognize these proposals; they are recycled from the Obama budget. Estimated cost savings listed: $215 billion over ten years. That leaves just $1.785 trillion for the "stakeholders" to find. And with a model of stakeholder cooperation like Chrysler before us, that shouldn't be hard.

This is all very well as political theater; politicians convene never-never working groups all the time. But, being perhaps too cynical, I suspect that the announced plan to save $2 trillion is going to be used to sell Obama's healthcare plan as if we'd already found it.

Then when oh, darn, the SEIU doesn't agree to hold down wages or eliminate jobs, and pharma ratchets up the average price it charges the private sector to make sure it doesn't lose too much on its mandatory Medicaid discounts, etc, well, we'll all just have to dig into our pockets to pay for it, won't we?

[We've been warned.]

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