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Life Health > Health Insurance > Your Practice

AHIP Signs Cost Cut Letter

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WASHINGTON – America’s Health Insurance Plans, medical provider groups and other groups today pledged in a letter to President Obama to shave $2 trillion or more off the cost of health care over the next 10 years.

The cuts should reduce the projected rate of growth in health care costs by 20%, the groups write in the letter.

In addition to AHIP, Washington, the groups signing the letter include the Pharmaceutical Research and Manufacturers of America, Washington; the American Hospital Association, Chicago; the American Medical Association, Chicago; the Service Employees International Union, Washington; and the Advanced Medical Technology Association, Washington.

Current projections suggest that national health expenditures will increase by an average of 6.2% per year through the next decade, increasing the total share of gross domestic product going to health care to more than 20% in 2018, from 17.6% this year.

The share of GDP going to health care is higher than in any other country in the world, the groups write in the joint letter to Obama.

“We are determined to work together to provide quality, affordable coverage and access for every American,” the groups write. “It is critical, however, that health reform also enhance quality, improve the overall health of the population, and reduce cost growth.”

The groups say the proper way to reduce health cost growth is to:

- Improve the nation’s health.

- Continuously improve quality.

- Encourage the advancement of medical treatments, approaches and science.

- Streamline administration.

- Encourage efficient care delivery based on evidence and best practice.

The groups that signed the letter say they committed to supporting a public-private partnership designed to achieve billions in savings through:

- Implementing proposals in all sectors of the health care system, focusing on administrative simplification; standardization; and transparency that supports effective markets.

- Reducing over-use and under-use of health care by aligning quality and efficiency provider incentives.

- Encouraging coordinated care, both in the public and private sectors, and adhering to evidence-based best practices and therapies.

- Reducing the cost of doing business by addressing cost drivers in each sector and through commonsense improvements in care delivery models, health information technology, workforce deployment and development, and regulatory reforms.

White House officials have estimated that a successful implementation of the groups’ proposals could cut $2,500 in spending per U.S. family over the next decade.

President Obama today met with representatives from the groups that signed the letter. Health insurance industry representatives who attended the meeting included AHIP President Karen Ignagni; George Halvorson, chairman of Kaiser Foundation Health Plan, Oakland, Calif.; and Jay Gellert, president of Health Net Inc., Woodland Hills, Calif.

“Ultimately, the debate about reducing costs — and the larger debate about health care reform itself — is not just about numbers; it’s not just about forms or systems; it’s about our own lives and the lives of our loved ones,” Obama said, according to a written version of his remarks. “As I’ve mentioned before during the course of the campaign, my mother passed away from ovarian cancer a little over a decade ago. And in the last weeks of her life, when she was coming to grips with her own mortality and showing extraordinary courage just to get through each day, she was spending too much time worrying about whether her health insurance would cover her bills. So I know what it’s like to see a loved one who is suffering, but also having to deal with a broken health care system.”

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, also has welcomed the industry letter.

Baucus has held a series of hearings on the U.S. health care system. The series will conclude Tuesday with testimony by various industry and government officials about how system reform can be financed.

The Senate Finance Committee is supposed to consider a health care reform bill in June.

Lowering health care costs is one of the most important goals of health care reform, Baucus says.

“I’m very pleased that the ideas proposed by these industry groups meet my goals of increasing focus on value, efficiency, and prevention in the health care system,” Baucus says.

Baucus says health care reform is his top priority.

“I’m confident that together with doctors, hospitals, patient groups, and industry experts, we will determine the best ways to get health care costs down, improve patient care, and build the health care system that Americans deserve this year,” Baucus says.


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