The fact that key Democrats and the hospital industry have reached an agreement over cutting Medicare and Medicaid payments to hospitals is interesting. The way the two sides reached that agreement is also interesting.
According to my friends at Kaiser Health News, who first broke this story, the discussions began when the White House proposed even larger cuts:
Hospitals, which have been hit hard by the recession, have been objecting to President Barack Obama's proposals to slash federal payments to hospitals by more than $220 billion over 10 years. Under the deal with the White House and Senate Democrats, hospitals have agreed to smaller cuts--and gotten assurances that those reductions would be timed to coincide with expanded insurance coverage.
In other words, when the hospitals got scared, they sat down and cut a deal. There's a lesson here, one that applies to how Democrats deal not just with health industry groups but with Republicans, as well.
--Jonathan Cohn