PRESIDENT BARACK Obama has welcomed as “a watershed event” in the struggle for universal health care a promise by the US private health industry to cut costs by $2 trillion over the next 10 years.
Groups representing doctors, hospitals, pharmaceutical companies and the private health insurance industry have promised to cut the growth rate of health spending by 1.5 per cent every year – a move they claim will equal a 20 per cent reduction in the projected rate of growth.
The US spends more per capita on healthcare than any other industrialised country, despite the fact that almost 46 million Americans have no health coverage and many more are underinsured.
All sides in the healthcare debate agree that reducing costs is essential if any reform is to be effective.
“We, as a nation, are now spending a far larger share of our national wealth on healthcare than we were a generation ago,” Mr Obama said yesterday.
“At the rate we’re going, we are expected to spend one-fifth of our economy on healthcare within a decade. And yet we’re getting less for our money.”
The healthcare groups say that major savings could come from improved efforts to prevent obesity, co-ordinate treatment, manage chronic illnesses and limit unnecessary procedures and by increased use of information technology for medical records.
The president, who has made healthcare reform a priority, noted that many of the groups involved in the new initiative were among the most vocal critics of earlier attempts to introduce universal access to healthcare.
He said the promised savings would help his administration and Congress to make healthcare affordable for all Americans and would complement other efficiencies the White House is promoting.
“This is a historic day, a watershed event in the long and elusive quest for healthcare reform,” he said.
“And as these groups take the steps they are outlining, and as we work with Congress on healthcare reform legislation, my administration will continue working to reduce healthcare costs to achieve similar savings.
“By curbing waste, fraud and abuse and preventing avoidable hospital re-admissions and taking a whole host of other cost-saving steps, we can save billions of dollars, while delivering better care to the American people.”
Yesterday’s move reflects the health industry’s view that it cannot derail Mr Obama’s reform plan in the way it wrecked Hillary Clinton’s healthcare plan when her husband was president.
The White House has ruled out introducing a single-payer, government-funded health system but private insurers are worried about Democratic proposals for a government-run health plan that could compete with the private plans currently used by most Americans.
For their part, pharmaceutical companies fear new drugs would face a cost-benefit evaluation before they are approved, while hospitals and doctors want to block any attempt by the government to determine how much they can charge patients.
Mr Obama acknowledged that much remains to be agreed as his administration moves ahead with consultations on healthcare reform over the coming weeks.
“I’m committed to building a transparent process where all views are welcome,” he said.
“But I’m also committed to ensuring that whatever plan we design upholds three basic principles: first, the rising cost of healthcare must be brought down; second, Americans must have the freedom to keep whatever doctor and healthcare plan they have, or to choose a new doctor or health care plan if they want it; and third, all Americans must have quality, affordable healthcare.”