Health Groups Vow Cost Control Measures That Could Erase Budget Deficit Within 10 Years

Volunteering to "do our part" to tackle runaway health costs, leading groups in the health-care industry have offered to squeeze $2 trillion in savings from projected increases over the next decade, White House officials said yesterday.

The pledge comes amid a debate over how, or whether, to overhaul the nation's health-care system, and Obama administration officials predicted that it will significantly increase momentum for passing such changes this year... groups aim to achieve the proposed savings by using new efficiencies to trim the rise in health-care costs by 1.5 percent a year, the officials said. That would carry huge implications for the national economy and the federal budget, both of which are significantly affected by health-care expenses.

Representatives from half a dozen health industry trade groups are scheduled to make a formal offer today in a White House meeting with President Obama.

"I don't think there can be a more significant step to help struggling families and the federal budget," a senior administration official said in a conference call with reporters. The official spoke on the condition of anonymity because the offer remains tentative.

The White House projects that the savings after five years under the proposal would mean about $2,500 a year in lower health-care bills for a family of four. Within 10 years, the savings would "virtually eliminate" the nation's budget deficit.

Their offer is the latest attempt by the health-care industry to secure a seat at the bargaining table, as Democrats consider legislation that would simultaneously hold costs in check and extend coverage to millions of uninsured Americans... White House officials said many of the cost reductions would be "crucially dependent" on legal changes being contemplated in Congress as part of a health-care reform package.

The groups will have to streamline administrative costs, better coordinate care and bundle payments to achieve the projected savings. If they can slow the spiraling increases in health-care costs, it would greatly improve the prospects for expanding coverage to the 46 million uninsured Americans.

Experts estimate that extending coverage to every American will cost $1 trillion to $1.5 trillion over the next decade, much of the money going to start-up expenses. Over the longer term, Obama and some analysts expect to accrue savings from technological improvements and more appropriate, less unnecessary care.

The United States spends about $2.2 trillion a year on medical care, representing about 16 percent of the nation's overall economy. And the federal government has a big interest in lowering the cost of health care, given the hefty expense of its Medicaid and Medicaid coverage.

Their offer is the latest attempt by the health-care industry to secure a seat at the bargaining table, as Democrats consider legislation that would simultaneously hold costs in check and extend coverage to millions of uninsured Americans... White House officials said many of the cost reductions would be "crucially dependent" on legal changes being contemplated in Congress as part of a health-care reform package.

The groups will have to streamline administrative costs, better coordinate care and bundle payments to achieve the projected savings. If they can slow the spiraling increases in health-care costs, it would greatly improve the prospects for expanding coverage to the 46 million uninsured Americans.

Their offer is the latest attempt by the health-care industry to secure a seat at the bargaining table, as Democrats consider legislation that would simultaneously hold costs in check and extend coverage to millions of uninsured Americans... White House officials said many of the cost reductions would be "crucially dependent" on legal changes being contemplated in Congress as part of a health-care reform package.

The groups will have to streamline administrative costs, better coordinate care and bundle payments to achieve the projected savings. If they can slow the spiraling increases in health-care costs, it would greatly improve the prospects for expanding coverage to the 46 million uninsured Americans.