UPDATE: Six Health Groups Detail $2 Trillion Cost-Saving Effort
Six industry groups 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 Barack 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
The groups say that since announcing the pledge 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
The proposed cost-savings, detailed in a letter to 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 regarding
the initial $2 trillion commitment. Congressional Republicans have
noted that there is no way to effectively enforce the commitment
and that the savings wouldn't directly pay for the cost of covering
those without health insurance.
Sen. Charles Grassley, R-Iowa, the top Republican on the Senate
Finance Committee, said in a statement Monday that the
Congressional Budget Office would determine whether health policy
proposals "rise or fall," rather than the six groups.
"I'm skeptical that these proposals will add up to anywhere near
$2 trillion," Grassley said.
The White House and Democrats, however, 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;