Effort To Draft Reform Legislation Hinges on Industry Cost Proposals
The outcome of current efforts to develop health care overhaul legislation will depend on how well health care industry groups follow through on their "homework assignment" from President Obama to submit specific plans by early June on how they intend to reduce health care spending growth by $2 trillion over the next decade, the AP/Contra Costa Times reports (Alonso-Zaldivar, AP/Contra Costa Times, 5/25).
In a letter that was sent to Obama on May 10, a coalition of health care industry groups wrote, "We will do our part to achieve your administration's goal of decreasing by 1.5 percentage points the annual health care spending growth rate. ... This represents more than a 20% reduction in the projected rate of growth."
The letter did not elaborate on what specific measures the groups would take to achieve such reductions. It was signed by the:
- American Medical Association;
- American Hospital Association;
- Pharmaceutical Research and Manufacturers of America;
- Advanced Medical Technology Association;
- America's Health Insurance Plans; and
- Service Employees International Union.
The Obama administration requested specifics on the coalition's cost-cutting plans by June 1 (California Healthline, 5/18).
Each group has been looking into its own ways it can reduce spending growth, the AP/Contra Costa Times reports.
Insurers currently are examining strategies to cut the administrative costs of filing claims.
AMA President-elect James Rohack said his organization will look at how to implement comparative effectiveness research and ways to prevent harmful and costly drug interactions, which he said "can save money ... by preventing unnecessary readmissions to hospitals," adding, "The most costly site where patients get care is the hospital." In addition, hospitals have begun looking into how to reduce readmissions.
What's at Stake
If the industry groups are able to convince lawmakers that their plans can significantly reduce spending growth, Obama "could be well on his way to closing a deal with Congress" on universal health coverage, the AP/Times reports. However, if the plans are rejected, the groups risk their reputations and Obama could be "seen as naive for entertaining such promises," according to the AP/Times.Some experts have said that the groups' pledge to cut health care spending is possible "in theory." According to the AP/Times, the challenge will be to persuade medical providers "to change years of ingrained habits that lead to much of the wasteful spending" in the health care system (AP/Contra Costa Times, 5/25). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.