Tue, May 12, 2009 page7

• Obama to cut healthcare costs

  THE TWO TRILLION CUT In a bid to make treatment more affordable, six major healthcare lobbies have vowed to limit spending increases over the next decade

  • AFP
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  US President Barack Obama was to outline plans yesterday to cut US healthcare costs by US$2 trillion over the next 10 years, part of a bid to slash spending while making treatment more affordable.

  Obama was to detail what he would describe as an “unprecedented commitment” by six major healthcare lobby groups to limit spending increases over the next decade, senior administration officials said on Sunday.

  The White House hopes the voluntary plan — drawn up by groups representing insurance firms, hospitals, doctors, pharmaceutical makers and a labor union — could eventually save US families as much as US$2,500 a year.

  “We cannot continue down the same dangerous road we’ve been traveling for so many years, with costs that are out of control,” excerpts of his remarks released by the White House showed.

  “Reform is not a luxury that can be postponed, but a necessity that cannot wait,” they read.

  Signatories to the deal have promised to reduce spending increases by 1.5 percentage points each year until 2019.

  Officials say that amounts to about US$2 trillion, in part through slashing administrative costs.

  The US currently spends more than US$2 trillion a year on healthcare, about 46 million Americas remain without health insurance.

  Even with the planned savings, spending is still projected to increase by around 7 percent each year — well above inflation levels — an administration official said.

  But officials insisted the deal was a “game changer” that would “virtually eliminate the long-term fiscal gap” — the government’s long-term budget deficit.

  It could also provide the administration with much-needed cash to pay for a prospective government fund that would help insure millions of Americans who currently have no coverage.

  But the targets, which will not be subject to formal government oversight or sanctions, are likely to be met with some skepticism by consumer groups who in the past have been wary of self-regulation, which they say amounts to no regulation at all.

  Anticipating criticism, one official said the move would be “done within the context of comprehensive health reform” and healthcare firms would receive no under-the-table quid pro quo.

  Signatories to the deal include the Health Insurance Plans, the American Medical Association, the American Hospital Association, the Service Employees International Union and the Pharmaceutical Research and Manufacturers of America.

  Obama has vowed to present substantial healthcare reforms to Congress this year, despite the inevitable political dogfight that will follow and which will add to his existing difficulties — from the wars in Iraq and Afghanistan, to the sagging economy.

  Healthcare reform has long been one of Washington’s most contentious issues.

  In the 1990s, former president Bill Clinton campaigned hard on promises to establish a universal healthcare system, only to be badly burned when his proposals were slapped down by Congress.

  Many Congressional Democrats have backed a shift toward European-style system that would guarantee healthcare for everyone, but such a move is strongly opposed by most Republicans who argue it would lessen choice and worsen standards.
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