Six Health Groups Detail $2 Trillion Cost-Saving Effort
Six industry groups on Monday outlined their promise to cut $2
trillion from the growth of health-care spending over 10 years,
with large savings envisioned through administrative cost-cutting
and changes in the care of chronic diseases.
The groups caused a splash with a May 11 announcement of a
pledge to President Obama to reduce $2 trillion from projected
future medical costs over a 10-year horizon. The groups include the
American Medical Association, the American Hospital Association,
America's Health Insurance Plans, the Service Employees
International Union, Pharmaceutical Research and Manufacturers of
America and the Advanced Medical Technology Association.
Since then, the groups say they have held seven "all-day"
meetings to flesh out how they would save the huge sum of money. In
a statement Monday, they said they had made "solid progress" on
their goal and would now pursue the changes they identified.
The proposed cost-savings, detailed in a letter to Barack Obama
on Monday, come from a wide variety of sources. The America's
Health Insurance Plans trade group, or AHIP, which represents
managed-care companies, pointed to efforts toward "fully automating
and standardizing" health insurance claims and payments.
"The effect throughout the health care industry will be similar
to the effect of ATMs being introduced throughout the banking
system," AHIP said in a statement. Members of the AHIP trade group
include Aetna Inc. (AET), Humana Inc. (HUM), Cigna Corp. (CI) and
UnitedHealth Group Inc. (UNH).
The group also said it is developing a model for personal health
records with the Blue Cross and Blue Shield Association. The
records, according to AHIP, will help medical providers and
patients keep better track of chronic diseases even when they
The American Hospital Association said it would seek to prevent
infections, which can lengthen the duration of hospital stays. The
American Medical Association, which represents doctors, identified
ways to cut down on readmissions of patients into hospitals and
prevent the overuse of some imaging procedures.
The details represent a major step for the groups, which had to
tamp down speculation that they were unsure or unready about the
initial $2 trillion commitment. Congressional Republicans have
noted that there is no way to effectively enforce the commitment
and that the savings would not directly pay for the cost of
covering those without health insurance.
But the White House and Democrats have said that the proposed
savings, even if not directly tied to health overhaul legislation
taking shape in Congress, would ease efforts to cover those not
holding health insurance.
-By Patrick Yoest, Dow Jones Newswires; 202-862-3554;