Skip to content
Link copied to clipboard

Health-industry officials submit savings ideas to Obama

Their proposals did not hit his $2 trillion goal. Still, officials declared success.

WASHINGTON - Health-industry officials sought yesterday to make good on a $2 trillion savings proposal announced with great fanfare at the White House, but they came up short by several hundred billion dollars.

Nevertheless, the officials claimed success in producing solid proposals in time for a deadline set by President Obama after a White House photo op May 11 at which they promised to curb their costs to help his health-care agenda.

Obama asked for a progress report by early June, and the five industry groups and one labor union delivered it yesterday. They sent the White House a letter along with proposals that they said could total $1 trillion to $1.7 trillion in savings over a decade.

"This is a very serious collaborative effort," said Nancy Nielsen, president of the American Medical Association.

The groups identified three big areas for savings:

$150 billion to $180 billion from more-efficient use of health-care services.

$350 billion to $850 billion from better managing chronic diseases.

$500 billion to $700 billion through administrative and business improvements such as standardizing claim forms.

The groups - insurers, doctors, hospitals, drugmakers, medical-device makers, and a leading health-care union - maintained that the savings could be even bigger because they were conservative in their estimates and because some of their ideas had not been studied enough to be quantified.

White House health spokeswoman Linda Douglass said the White House was reviewing the proposals.

Leaders of the groups shrugged off the failure to hit Obama's $2 trillion target. Some said the savings announced were just the start; others contended they had said only that they would participate in a larger effort to slow projected increases in health costs by 1.5 percentage points a year for 10 years, on average.

The groups did not try to measure how much savings would accrue to the federal government, rather than to the health-care system as a whole.

Obama needs government money to pay for extending health coverage to 50 million uninsured Americans, something that could cost $1.5 trillion over a decade.

Industry proposals include:

America's Health Insurance Plans said it would overhaul administrative processes to standardize and automate claims submissions, payments, and other functions.

The American Hospital Association said it would undertake various measures to reduce infections.

The American Medical Association said it would seek to reduce hospital readmissions by improving how patients transition out of hospital stays.