Several prominent healthcare professional groups, including America's Health Insurance Plans, the American Hospital Association and the American Medical Association, met with president Barack Obama in May to announce a plan to cut healthcare costs by $2 trillion over 10 years.
"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control," Obama said. "That is why these groups are voluntarily coming together to make an unprecedented commitment."
Also meeting with Obama were the PHrMA, AvMed, the Service Employees International Union (SEIU), The Greater NY Hospital Association and The California Hospital Association.
Details concerning how the savings would be achieved remain a subject of contention. Obama said after the meeting the groups would reduce the rate of healthcare spending growth by 1.5 percent a year for a savings of $2 trillion over 10 years. In turn, the savings would save families $2,500 a year, according to the administration.
Health and Human Services Secretary Kathleen Sebelius repeated those numbers in a conference call after the meeting.
Sebelius described the meeting as "unprecedented." She noted that many of the groups who were at the table were opponents of reform in the early 1990s.
"This is not just a photo-op, but really the beginning of a partnership that can transform the healthcare system," she said. "Today was really a breakthrough day."
However, the New York Times has since reported that the groups – including the AHA and AHIP – say they agreed to curb spending, but in a more gradual way than Obama asserted.
AHA President and CEO Richard Umbdenstock said the group actually committed to helping achieve the administration’s goal of a 1.5 percentage point reduction over the span of 10 years, and noted that the $2 trillion in savings is a general estimate and can be achieved in multiple ways and across all sectors, public and private.
Nevertheless, officials said the plan submitted by the groups is similar in concept to what AHIP President Karen Ignagni presented at a health reform summit in March. Members of the AHIP trade group include Aetna, Humana, Cigna and the UnitedHealth Group.
Industry observers view AHIP's cooperation on healthcare reform as designed to stave off a public health plan.
In a New York Times opinion piece, economist Paul Krugman urged Obama to "hang tough" in the bargaining ahead.
"In particular, AHIP will surely try to use the good will created by its stance on cost control to kill an important part of health reform: giving Americans the choice of buying into a public insurance plan as an alternative to private insurers," he wrote. "The administration should not give in on this point."
"But let me not be too negative," Krugman continued. "The fact that the medical-industrial complex is trying to shape healthcare reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential healthcare to all its citizens."