Health-care industry promises Obama $2 trillion in savings

Nothing like the fear of a government-backed health plan and a determined president to focus the minds of the private health sector on curbing costs.

Today, trade groups representing some of the biggest financial interests in health — including doctors, drugmakers and insurers — are expected to unveil a pledge to President Obama to reduce growth in national health-care spending by 1.5 percentage points annually for a decade. The total savings would reportedly amount to $2 trillion.

The New Republic’s Jonathan Cohn blogs, “make no mistake: This is a big deal, if only for the clear political signal it sends.” These are the folks who historically fought health-care reform at every turn. This time industry isn’t promising cost control as an alternative to reform but as a key part of reform itself.

The carefully choreographed lead-up to the announcement produced anonymously sourced curtain raisers in a bunch of major outlets.

Several reports said the White House projects health-cost savings of $2,500 a year for a family of four savings after five years. Within a decade, the savings to the country would “virtually eliminate” the national budget deficit, the Washington Post reported.

Those are big claims, so hold on to your skepticism. Details on how the savings would be achieved are sketchy, too. Government officials also conceded to the New York Times that they “can’t enforce the commitment,” except by publicizing the performance of the group down the road.

Still, it’s pretty clear, as the Associated Press wrote, that industry groups are cutting a deal now to help Obama achieve health reform “in the hopes they can stave off legislation that would restrict their profitability in future years.”

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