Health Industry Promises Obama $2T In Cuts

Obama Says Proposal To Slow Rate Of Cost Increases Is "Historic"

(CBS/ AP)  President Obama's plan to provide medical insurance for all Americans took a big step toward becoming reality after leaders of the health care industry offered $2 trillion in spending reductions over 10 years to help pay for the program.

On Monday, Mr. Obama praised health industry groups for coming forward with the offier.

Mr. Obama appeared at the White House with an array of industry figures, including union representatives, and called it the occasion "historic."

The industry figures pledged to the president that they would voluntarily slow their rate increases over the next 10 years.

Mr. Obama said the step the industry took Monday must be carried out as part of "a broader effort" to change the health care system, keep costs under control and provide health insurance for the some 46 million Americans who do not now have it.

He said, "I will not rest until the dream of health care reform is achieved in the United States of America."

With this move, Mr. Obama picks up key private-sector allies that fought former President Bill Clinton's effort to overhaul health care. Although the offer from the industry groups doesn't resolve thorny details of a new health care system, it does offer the prospect of freeing a large chunk of money to help pay for coverage. And it puts the private-sector groups in a good position to influence the bill Congress is writing.

Six major groups pledged to cut the growth rate for health care by 1.5 percentage points each year.

Still, even Mr. Obama acknowledged that the step announced Monday would be meaningful into the future only if it is not a singular event, but part of a larger and successful effort toward universal health care coverage for Americans. He said the country "can, will and must" accomplish this goal by the end of the year.

"There's so much more to do," he said.

"We can't continue down the same dangerous road we've been traveling for so many years," Mr. Obama said. "Reform is not a luxury that can be postponed, but a necessity that cannot wait."

He indirectly criticized some of the groups at his side for killing the effort last time.

"All too often, efforts at reform have fallen victim to special interest lobbying aimed at keeping things the way they are, to political point-scoring that sees health care not as a moral issue or an economic issue, but as a wedge issue, and to a failure on all sides to come together on behalf of the American people," the president said.

Mr. Obama has offered an outline for overhauling the health care system, and he wants Congress to work out the details and pass legislation this year. His plan would build on the current system in which employers, government and individuals share responsibility for paying the cost and care is delivered privately. The government would play a stronger role by subsidizing coverage for many more people and spelling out stronger consumer protections.

The industry groups are trying to get on the administration bandwagon for expanded coverage now in the hope they can steer Congress away from legislation that would restrict their profitability in future years.

Insurers, for example, want to avoid the creation of a government health plan that would directly compete with them to enroll middle-class workers and their families. Drug makers worry that in the future, new medications might have to pass a cost-benefit test before they can win approval. And hospitals and doctors are concerned the government could dictate what they get paid to care for any patient, not only the elderly and the poor.

Mr. Obama has courted industry and provider groups, inviting their representatives to the White House. There's a sense among some of the groups that now may be the best time to act before public opinion, fueled by anger over costs, turns against them.

It's unclear whether the proposed savings will prove decisive in pushing a health care overhaul through Congress. There's no detail on how the savings pledge would be enforced. And, critically, the promised savings in private health care costs would accrue to society as a whole, not just the federal government. That's a crucial distinction because specific federal savings are needed to help pay for the cost of expanding coverage.

Indeed, costs have emerged as the most serious obstacle to Mr. Obama's plan. The estimated federal costs range from $1.2 trillion to $1.5 trillion over 10 years, and so far Mr. Obama has only spelled out how to get about half of that. Administration officials would not say Sunday how much they think Mr. Obama's plan will ultimately cost, but they indicated they were confident it can be paid for.

A reduction of 1.5 percentage points a year in the rate of increase in costs may not sound like much, but administration officials said it amounts to slowing the current 7 percent annual increase in costs by about one-fifth. That's significant when health care spending keeps running far ahead of inflation year after year.

They estimated, for instance, that five years from now, such private cost curbs could save a family of four an average of $2,500 a year in health care costs.

Administration officials said they didn't expect all the saving strategies to be announced Monday, nor did they have access to specifics on how the groups reached their estimates and analysis.

But the initial reaction was positive.

"While serious questions remain about the details, AARP believes the agreement of providers to slow the skyrocketing cost of health care is critical for the health reform we are all working toward," said John Rother, policy director for the seniors' lobby. "Reducing the skyrocketing cost of health care is the only way to create a health care system that works for all Americans; after all, what good is access to a system that we can't afford?"

Ron Pollack, director of Families USA, a liberal group that supports coverage for all, said the health insurance industry came up with the target of a 1.5-percentage-point reduction. Karen Ignagni, president of the insurers trade group, America's Health Insurance Plans, took the idea to other major interest groups, said Pollack, who was familiar with the talks among the industry groups.

"If these cost savings are truly achievable, this may be the most significant development on the road to health care reform," said Pollack. "It would cut costs for families and businesses and enable subsidies to be offered so everyone has access to quality, affordable health care."

The groups include the American Medical Association, the American Hospital Association, the Service Employees International Union, the California Hospital Association and the Greater New York Hospital Association, which represents facilities in four states.

Mr. Obama's plan envisions that people would be able to keep the coverage they now have. Those working for big companies probably would not see major changes.

But the self-employed and those working for small businesses would be able to get coverage through a new kind of insurance purchasing pool. Called an "exchange," the pool would offer stable rates and predictable benefits. Plans in the exchange wouldn't be able to deny coverage to those who are sick and would have to follow other new consumer protection rules.

Lawmakers in Congress are generally following Mr. Obama's outline, but the Senate plan is likely to go further by requiring all Americans to carry health insurance, much as states now require motorists to carry auto coverage. Democrats hope to get legislation to the floor this summer.

[ubrew12]

What do Malta, Morocco, Dominica, and Chile all have in common? Their citizens get better healthcare than citizens of the richest country on earth. Their citizens also get univeral care, while 47 million Americans have no health insurance at all. America's private health insurers maintain massive bureaucracies whose sole purpose can be summed up in one word: NO. Their profit comes mainly from denial of healthcare, NOT efficient healthcare provision. And no amount of politically-expedient apology is going to change the dynamic that, when your cancer comes between a health insurance agent and his bonus, well, you can just die, sucker.

[ianlou]

Health Insurance Industry:

"Please don't diminish our ability to screww the American People!!!
We'll give you 1% of our ill gotten gains back"

[bigsk8fan]

it took a liberal to get the health industry to agree to make cuts. republicans just do what they can to make business as usual. this is just one more reason that american overwhelmingly voted for barack obama and the democrats. we need to banish republicans to a country where they like torture.

[choptanktoo]

Follow the money! Do you really want insurance companies, bureaucrats and litigators to continue making decisions on your healthcare? Shouldn't those decisions be left to the physician and patient?

[clancy49]

This simply means our deductibles and co pays will go up to make up the difference in their benevolent offer to cut costs and lower their costs. It also means more and more medical professionals will leave the field because they cannot afford to practice medicine under the excessive malpractice insurance costs and the costs of paying personnel insurances. The surgical care will become non existent. It will be slice them and send them home to recover. All surgery will be out patient, and more and more tests will not be made. The hospitals, labs, and doctors will use more hard arm enforcement to collect bills. The result will be pay up front or die, or suffer slowly and die under stress.
Until health care in America becomes all about health, the current health care in America remains all about profit and we just need to take care of ourselves, accept our fate either heal ourselves or die of whatever.

[cakemanjb]

If single payer is so bad , then why do we treat our Veterans that way ?

Just saying.....

[nofoolling]

When he was campaigning Obama spoke of affordable health care for all.

Now he speaks of affordable health insurance for all.

Funny how if you pay off enough folks in Washington, they're bound to side with the very parasites who would profit off the misery of others.

We need a system like France and England to stop the windfall profiting of the HMO's and Insurance companies.

[gravyboat45]

Those health care industries may be crooked but they are smart they know congress is now most likely controlled by the Democrats. So they came up with this idea to prevent them from being hit too hard.
Posted by lami987

Yep, and nothing will change.

[lami987]

Those health care industries may be crooked but they are smart they know congress is now most likely controlled by the Democrats. So they came up with this idea to prevent them from being hit too hard.

[gravyboat45]

"What price are we as Americans willing to pay for first rate healthcare? "

Posted by choptanktoo
*********************

We as Americans are already paying more than double what the next countries pay for their UHC, and ours is ranked 37th in the world with 50 million un-insured and tens of millions under-insured.

It certainly doesn't appear we could ever get "first rate" health care at any price, since the current for-profit insurance companies would only take a larger cut for bigger profits and CEO bonuses and parties, and continue to make the patient come last!
Posted by evilbusheviks

eb...What makes you think that the meetings that these companies have had with the President are going to change anything?

I've worked in healthcare since I was 17.

I'm 45 now, it's not going to change...

I wish it could, but it won't.

[choptanktoo]

Follow the money!!!. This is not being done because of the good-heartedness of the insurance companies , the government or healthcare providers. This is a question of access to healthcare. Healthcare is being changed from its current pseudo supply-and-demand format. Medicare and Medicaid are a price-fixed underfunded social healthcare mandate. Unlimited access to healthcare providers is currently promised to the insured,at a discount, compared to the uninsured that cant afford insurance. The disparity of the 'haves' vs the 'have-nots' has become more starkly apparent as the economy has weakened. Americans are dissatisfied by a healthcare system touted as the 'best in the world', when its performance is 'second rate' America appears to be quickly moving to a cost-benefit format. The questions are "What are the vested interests?" "Who is going to gain?" "What accommodations are the parties involved in this process willing to make and why?""Why would insurance companies be willing to give up trillions of dollars in profit? "Why are Medicare and Medicaid are becoming insolvent while insurers make billions?" "What price are we as Americans willing to pay for first rate healthcare? "Who will be paid for providing healthcare and how much?" and ultimately,"Should America embrace Universal Healthcare ie is healthcare a 'right'?"

[pepperwood2]

Health Industry Promises Obama $2T In Cuts - Obama Says Proposal To Slow Rate Of Cost Increases Is "Historic"

Yes I expect that everybody including us seniors will be getting cuts in treatment, reduced, limited or no care coverages in a lot of cases. Thanks to the increased contributions & donations by healthcare lobbyists. That slow rate of costs increases will only apply to what your healthcare or government medicare will have to pay. You have to make up the rest. While the billions in fraud within the system runs rampant. Thats a large part of the high costs that you hear not about nor Congress wants to address. BO is not being very transparent about it. I believe he thinks that the all this BOBS Rhetoric will be enough to make us feel better, if not, we'll get another dose in a couple of months.

[erasmus111]

I broke my ankle in March 2008.

Two Tylenol - 30's? $18.

They probably buy 1,000 of them for $18.
Posted by hungry1968-15 at 5:47 PM : May 11, 2009

We don't usually see what things cost, but after I had my first child, and 3 months after that, surgery, by mistake, I got a paper in the mail telling how much everything cost. I couldn't believe it! I would have thought that the surgery would have cost more, but it was having the baby that cost the most.

[erasmus111]

That depends on how big a cut you got.

Posted by AJMarine12 at 5:22 PM : May 11, 2009

Yeah, if it's more than a 1/4 inch, it probably will cost you $500. : )

I miss you!

[hungry1968-15]

Never mind that, isn't it like a $100 for freakin' bandaid? : )

Posted by erasmus111 at 4:45 PM : May 11, 2009


That depends on how big a cut you got.
Posted by AJMarine12 at 5:22 PM : May 11, 2009





I broke my ankle in March 2008.

Two Tylenol - 30's? $18.

They probably buy 1,000 of them for $18.

[AJMarine12]

Never mind that, isn't it like a $100 for freakin' bandaid? : )

Posted by erasmus111 at 4:45 PM : May 11, 2009


That depends on how big a cut you got.

[rhs648]

This is a small step of the health industry trying to preserve it's lucrative multi-trillion dollar industry. Nobody gives up a trillion dollars without expecting something in return, which in this case might be it's immoral business practices in order to fatten their profits. US citizen's health is much more important than mailing a letter. The health industry should be turned into a business similar to the USPS. And if someone wants to start the FedEx of healthcare, then do so. As it stands the health industry offers the public over priced boutiques and not wal mart services the majority of Americans can afford.

Making money from sick people just seems wrong.
Posted by ayatoldya

You said it well when you talked of boutique medicine versus Wal Mart services. You will not hear an objection from my side as long as there is the option to have what you describe as boutique medicine. Some of us prefer keeping the high end medical services and let others opt for the low end.

[erasmus111]

No more 10 thousand dollar a day ICUs or 75 thousand dollar prosthetic limbs.
Posted by rightaboutit at 3:55 PM : May 11, 2009

Never mind that, isn't it like a $100 for freakin' bandaid? : )

[johninpennsyl]

Its pretty funny to suggest that employers will be picking up the tab-when there ain't no freakin employers.

[rhs648]

is this a joke. These companies are looting the United States. Send them packing!!! Do health care right and remove the middle man!!! Nationalise Health care!! No more 10 thousand dollar a day ICUs or 75 thousand dollar prosthetic limbs.
Posted by rightaboutit

Who do you think will administer universal health insurance? The insurance companies will administer this program just as they administer Medicare and Medicaid. They stand to pick-up 50,000,000 new members and not the risk. Universal health insurance will be a big boom for the insurance companies and they know this. The middle man will not be eliminated and taxpayers will be paying for their own insurance and the insurance of many of the uninsured who can't afford premiums. Isn't it time that those who are pushing for universal health insurance provide us with details?