President Barack Obama on Monday hailed as a “watershed event” a commitment from the health care industry to cut $2 trillion in spending increases over the next decade.
Industry groups, eager to shape Obama’s push for health care reform, offered the concession as Congress and the White House prepare to tackle how to insure some 46 million Americans without coverage and bring down the costs for others.
“What they’re doing is complementary to and is going to be completely compatible with a strong, aggressive effort to move health care reform through here in Washington,” Obama said.
The president’s statement followed a closed-door meeting at the White House with industry officials, unions, hospital representatives and others.
“We are at a pivotal moment in the health care reform effort,” said Stephen Ubl, president and chief executive officer of the Advanced Medical Technology Association, who attended the session with Obama. “The meeting that occurred today and the cross-industry consensus it represents are an important step toward making comprehensive health reform a reality.”
The industry move could mean savings of up to $2,500 a year for a family of four, according to the White House. The last time Washington seriously tackled wholesale health care reform, under President Bill Clinton in the 1990s, industry voices such as insurers and pharmaceutical companies complained they were left out of the discussion.
Volunteering cost reductions at the start of the process is expected to give the industry a role in crafting a remedy, and could inoculate private corporations from having to disclose too much about their profits during congressional hearings on reform.
Health care reform advocates said the savings concession was a good first step, but a better marker of the industry’s willingness to compromise will come during the lawmaking process.
“The test of the good intentions expressed today will be whether these same groups agree to real cost control measures in health care reform,” said Richard Kirsch, national campaign manager for the union-backed Health Care for America Now.
At the libertarian Cato Institute, senior fellow Michael Tanner warned that efforts to compromise government and business interests on health care may come at the expense of consumers.
“Health care reform should be about empowering patients, not about how much increased government control the health care industry is willing to accept,” Tanner said.
White House officials downplayed the potential for industry influencing the process, however, saying health care costs drive up deficits and an effort by the industry to work with the administration is welcome.
“Health care is affecting not only the federal government, but also state governments, and it’s reducing workers’ take-home pay to a degree that’s unnecessarily large,” said Budget Director Peter Orszag. “If we get more efficiencies out of the system, we can all win.”
Obama made reforming the nation’s health care system a key priority of his campaign. The administration wants to get the process under way while the president’s popularity and political capital are still strong.
