Biden: Hospitals Agreed to Lower Costs by $155B

Vice President Joe Biden on Wednesday annnounced that hospitals have agreed to contribute $155 billion in Medicare and Medicaid savings over the next 10 years through reductions in their annual and inflationary payment increases, as well as delivery system reforms.

"We have tried for decades to fix a broken system... and we have never been this close," Biden said from the White House, with Health and Human Services Secretary Kathleen Sebelius and representatives of the hospital industry by his side. "We have these hospitals working with us, and we have the pharmaceutical (industry) working with us... we have the American public with us."

Hospitals stand to gain from the president's reform agenda, Biden said, given that one of the primary goals is to provide universal coverage.

"Our hospitals are cracking under the weight of providing quality health care for Americans who lack insurance," he said.

The deal was worked out under the guidance of Sen. Max Baucus (D-Mont.), who is leading health care reform efforts in the Senate Finance Committee. Senate Majority Leader Harry Reid (D-Nev.) just yesterday rebuffed Baucus' efforts to create a bipartisan health care reform package.

Biden was late in making his announcement about the hospital agreement because he was meeting with Reid and Baucus, the vice president said. Baucus was slated to be with Biden for the announcement but instead had to return to Capitol Hill for a floor vote.

The Obama administration has already won a commitment from the pharmaceutical industry to cut the cost of prescription drugs for seniors through Medicare.

Watch Biden's announcement below: