Interest groups propose big healthcare savings

In advance of a White House meeting with President Obama Monday, the heads of six major interest groups penned a letter vowing to work together to reduce healthcare spending by $2 trillion dollars over the next 10 years.

Obama will formally announce the initiative following the meeting but the White House previewed the proposals Sunday. “These groups are voluntarily coming together to make an unprecedented commitment,” Obama will say, according to excerpts of remarks he will deliver Monday.

“To achieve all of these goals, we have joined together in an unprecedented effort, as private sector stakeholders — physicians, hospitals, other health care workers, payors, suppliers, manufacturers, and organized labor — to offer concrete initiatives that will transform the health care system,” says the letter, which is available here.

The chief executives of the Advanced Medical Technology Association (AdvaMed), America’s Health Insurance Plans (AHIP), the American Hospital Association (AHA), the American Medical Association (AMA), the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Service Employees International Union’s healthcare division (SEIU Healthcare) signed the letter.

According to these groups, their initiative would reduce national healthcare spending by 1.5 percentage points each year over the next decade, which would translate into $2 trillion in less spending and decrease projected healthcare spending as a percentage of gross domestic from 20.3 percent to 17.6 percent in 2018.

Though the letter does not spell out detailed plans, the groups do suggest ways to reduce spending, such as administrative simplification, payment reforms that would encourage better collaboration between different medical providers, improved management of costly chronic diseases, incentives to better promote prevention and more integration of health information technology.

The White House also released a list of the participants at the morning meeting:

• Kaiser Foundation Health Plan Chairman and CEO George Halvorson;
• AHIP President and CEO Karen Ignagni;
• Health Net President and CEO Jay Gellert;
• Cedars-Sinai Health System President and CEO Thomas Priselac;
• AHA President and CEO Rich Umbdenstock;
• Greater New York Hospital Association President Ken Raske;
• AMA President-elect J. James Rohack;
• AMA Chairwoman-elect Rebecca Patchin;
• AMA Senior Vice President Rich Deem;
• Edwards Lifesciences Chairman and CEO Michael Mussallem;
• AdvaMed President and CEO Steve Ubl;
• AdvaMed Senior Executive Vice President David Nexon;
• Merck Chairman, President and CEO Richard Clark;
• PhRMA President and CEO Billy Tauzin;
• PhRMA Senior Vice President Rick Smith;
• SEIU President Andy Stern; and
• SEIU Healthcare Chairman Dennis Rivera.

In addition to the president, the Obama administration is represented by Office of Health Reform Director Nancy-Ann DeParle, Office of Management and Budget Director Peter Orszag, National Economic Council Director Larry Summers and Health and Human Services Secretary Kathleen Sebelius.

– Jeffrey Young