Senior administration officials held a conference call with reporters and bloggers today to announce an initiative by key private stakeholders in health care reform, the specific details of which will be released tomorrow after a morning meeting with President Obama.
The call today was to provide the background information for tomorrow's announcement, the substance of which is a commitment from six trade associations to work within their associations to achieve a significant decrease in the growth of health care spending in conjunction with health care reform efforts. The groups are the America Hospital Association, American Medical Association, Pharmaceutical Research and Manufacturers of America, America's Health Insurance Plans, SEIU, and the New York and California Hospital Associations.
Each is committing to reduce the growth in spending for their segment of the industry--in private health care spending--by 1.5 percent, per year, a goal that could--if achieved--save $2 trillion in federal spending, according to one of the officials on the call. By 2010, it could reduce health care expenditures as a part of GDP by 3 percent. An average family of four could realize as much as $2,500 in savings in 2014.
The initiative apparently came about as a result of the March 5th White House Forum on Health Reform. The initiative was heralded by the administration representatives on the call as a "game changer" in the health care reform discussion, because it signals the commitment of these organizations--particularly AHIP--that have been hostile to previous reform efforts. This signals, the administration says, that these organizations are on board and that health care reform will happen this year.
Greeted with skepticism from some of the reporters on the call about a potential quid pro quo regarding a public health option in reform, the administration officials emphasized that President Obama is still committed to creating a public health option in reform and that there have been no negotiations between the White House and members of this group. They also stressed that this effort has to come in conjunction with a larger reform effort. Some of the savings can be achieved within the processes of these organizations, and some can only be achieved by legislative changes.
The presence of the SEIU in the mix makes me somewhat less skeptical that a public option is going to be the sacrifice for bringing all these players together, but according to one report from an outside source at the AP, they are looking for a deal:
A source outside the administration told The Associated Press that the savings would come from slowing projected cost increases by a small percentage each year for 10 years. The result over time would be an estimated $2 trillion in savings on health care costs. The source requested anonymity in order to speak before the public announcement.
In a rare move before the administration has unveiled all the details of its proposal, the industry groups are trying to strike a deal now with Obama officials to help get coverage for all Americans in the hopes they can stave off legislation that would restrict their profitability in future years. Obama has courted industry and provider groups; he invited representatives to a health care summit discussion at the White House. There is a sense among some of the groups that this may be the best opportunity to strike a deal before public opinion turns against them, fueled by anger over costs.
For AHIP, a public option is the primary element of a reform plan that could "restrict their profitability." Expect more details on this plan tomorrow, after the group has presented it to President Obama.
Update: The White House has released the following statement, and excerpt from President Obama's remarks for tomorrow:
"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait.
"It is a recognition that the fictional television couple, Harry and Louise, who became the iconic faces of those who opposed health care reform in the '90s, desperately need health care reform in 2009. And so does America.
"That is why these groups are voluntarily coming together to make an unprecedented commitment. Over the next ten years - from 2010 to 2019 - they are pledging to cut the growth rate of national health care spending by 1.5 percentage points each year - an amount that's equal to over $2 trillion."
There's ongoing discussion and a few more links in calchala's diary.