Hospitals commit to cut $155B in costs

WASHINGTON, July 8 (UPI) -- The U.S. hospital industry committed to cut $155 billion in government costs over the next decade, Vice President Joe Biden announced Wednesday.

"These reductions (in Medicare and Medicaid payments) will be achieved through a combination of delivery system reforms ... and additional reductions in the hospital's annual inflationary updates," Biden said of the hospital's commitment to healthcare reform. "All of these savings are based on the policies the administration proposed in its budget to fund health care reform."

Surrounded by leaders of the country's hospital associations, Biden praised the agreement reached after weeks of negotiations. Healthcare reform proposals, facing opposition from Republicans and special interest groups, are being considered in Congress.

"The hospital industry knows, and the people with me here today know, and (President Barack Obama) knows, that the status quo is simply unacceptable," the vice president said. "Rising costs are crushing us."

Biden said hospital association officials worked with Senate Finance Committee Chairman Max Baucus of Montana to come up with a restructuring plan that would allow more people to be insured, leading to a lifting financial burden on hospitals and allowing them to lower costs.

"As our system becomes more efficient, thanks to innovation, technology and electronic records, ... we'll slow ... increases in Medicare and Medicaid payments to hospitals," Biden said. "As more people are insured, hospitals will bear less of the financial burden of caring for the uninsured and the underinsured, and we'll reduce payments to cover those costs, in tandem with that reduction."

Wednesday's announcement represented the "essential role" hospitals play in making healthcare reform a reality, Biden said.

"And a reality it will be," Biden said. "We must enact this reform this year. We must -- and we will -- enact reform by the end of August."