At White House, Industry Leaders Pledge to Reduce Health Care Costs
Doug Mills/The New York Times
“This is a historic day, a watershed event,” said the president, after a meeting with a range of leading health-care providers.
By ROBERT PEAR and BRIAN KNOWLTON
Published: May 11, 2009
WASHINGTON — A range of leading health-care providers joined President Barack Obama on Monday in announcing their promise to sharply reduce the growth of national health spending, a move that could ease the path toward his goal of comprehensive coverage for Americans.
Mr. Obama welcomed the pledge, following a White House meeting with representatives of hospitals, doctors, insurance companies and drug makers, as an “unprecedented commitment.” He was joined for the announcement in the State Dining Room by several of his top health, economic and budget advisers.
By giving such prominence to a promise that lacks many specifics, or any sort of enforcement mechanism, the president appeared eager to give the pledge greater substance through his strong embrace, while building momentum for his broader ambition to make health care available to every American.
“This is a historic day, a watershed event,” the president said.
The pledge, if kept, would not reduce overall health spending but merely slow its growth. Still, White House officials said the plan could save $2,500 a year for a family of four in the fifth year, and a total of $2 trillion for the country over 10 years.
That could make it less expensive for Congress to enact comprehensive health insurance coverage, a daunting challenge facing the administration, but also one of its declared priorities.
The pledge from some of the very groups that helped block President Bill Clinton’s efforts at health-care overhaul in 1993-94 — crippling any chance of such change for years — appeared to bolster Mr. Obama’s hopes.
The providers, for their part, hope to stave off new government price constraints that might be imposed by Congress or a National Health Board of the kind favored by many Democrats. The seeming inevitability of some sort of major overhaul appears to be driving the hospitals, insurers and drug makers to seek a larger role than they had in the ’90s in shaping the legislation.
Underscoring the shift in thinking, Mr. Obama referred to a potent series of television advertisements in the 1990s, sponsored by the insurance lobby, that helped erode public support for Mr. Clinton’s plans.
“It is a recognition that the fictional television couple, Harry and Louise, who became the iconic faces of those who opposed health care reform in the ‘90s, desperately need health care reform in 2009. And so does America,” he said. “That is why these groups are voluntarily coming together to make an unprecedented commitment.”
The providers’ approach appears qualitatively different from their response to the Clinton initiative.
This time around, they have already offered significant concessions. In March, health insurance industry representatives said they were willing to end the practice of charging higher premiums to sick people if Congress adopted a comprehensive plan requiring all Americans to carry insurance. That pledge, and the latest commitment, thus depend largely on the passage of reform measures.
“The only way these steps will have an enduring impact,” he said, is if they are “taken as part of a broader effort to reform our entire health-care system.”
Soaring health-care costs have eaten into workers’ earnings and companies’ profits. Those costs, along with the more than 45 million uninsured Americans, have sharply raised pressure on health-care providers to respond.
In a letter addressed to Mr. Obama, six industry leaders said: “We will do our part to achieve your administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate, saving $2 trillion or more. This represents more than a 20 percent reduction in the projected rate of growth.”
Health care now accounts for 17 percent of overall United States economic output and, with no change in law, the share will grow to 21 percent in 2019, administration officials said.
The new commitments would hold the share down to 18 percent of the economy, and that difference is equivalent to savings of nearly $700 billion in 2019 alone, the officials said.
The letter was signed by executives of the Advanced Medical Technology Association, a lobby for medical device manufacturers; the American Hospital Association; the American Medical Association; America’s Health Insurance Plans, a trade group for insurers; the Pharmaceutical Research and Manufacturers of America; and the Service Employees International Union.
Signers of the letter said that large amounts could be saved by aggressive efforts to prevent obesity, coordinate care, manage chronic illnesses and curtail unnecessary tests and procedures; by standardizing insurance claim forms; and by increasing the use of information technology, like electronic medical records.
An administration official, speaking in a conference call on Sunday, said, “The savings are crucially dependent on getting health care reform done this year.” The administration insisted that the official not be named.
Some economies could be achieved by voluntary action in the private sector. But most of the savings in the Medicare program, which provides health coverage for the elderly, and Medicaid, which ensures care for low-income Americans, would require changes in federal law and regulations.
The battle to contain costs, Mr. Obama said, was not only essential to reducing federal deficits — Medicare and Medicaid spending claim huge chunks of the budget — but would have direct and personal benefits for every American.
Half of all personal bankruptcies, the president reminded his listeners, stemmed from health-care expenses. Yet, while the United States spends more on health care than any other country, nearly 46 million Americans have no health insurance.
At the same time, Mr. Obama said, health-care costs were becoming an “untenable burden” for American businesses, soaking up money that could otherwise be used for growth or innovation.
In the abstract, slowing the growth of health spending is uncontroversial. But specific proposals could touch off fierce battles among interest groups fighting to expand their share of health care money.
In a relatively rosy forecast, the White House said Sunday that the savings from a more efficient health care system would far exceed the costs of achieving universal health coverage, with federal subsidies for people who could not afford insurance on their own.
The Department of Health and Human Services estimates that health spending will grow an average of 6.2 percent a year in the coming decade, to $4.4 trillion in 2018 from $2.4 trillion last year. |
