Several prominent healthcare professional groups, including America's Health Insurance Plans, the American Hospital Association and the American Medical Association, are set to meet with president Barack Obama Monday 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, according to a White House release. "That is why these groups are voluntarily coming together to make an unprecedented commitment."
Also meeting with Obama are the PHrMA, AvMed, the Service Employees International Union (SEIU), The Greater NY Hospital Association and The California Hospital Association.
Though details concerning how the savings would be achieved remain sketchy, the groups are expected to subscribe to reducing the rate of growth in spending by 1.5 percent a year to achieve the $2 trillion in savings over a decade.
The initiative was announced Sunday by senior administration officials in a conference call with media. The efforts could save $2,500 annually for a family of four by the fifth year, the officials said.
Officials said that the plan submitted by the groups was 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 an op-ed Sunday in the New York Times, 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."