Medical Industry Promises to Cut Costs for Healthcare Reform

In an about-face to their stance during the Clinton Administration, leaders of the nation’s healthcare industry have promised to cut prices in response to the Obama Administration’s vow to resolve the healthcare crisis and make health care available to every American.  After vigorously fighting back any systemic reforms proposed during the Clinton Administration, industry leaders now promise to cut costs by 1.5% each year for ten years, a move government economists say would result in a $2 trillion reduction in overall healthcare costs for that period.  President Barack Obama describes the promise “a watershed event.”

health_insur2Even with a promise such as this on the table, the debate over how to accomplish the Obama Administration’s healthcare goals is still in progress.  The promise does, however, indicate the healthcare industry wants to actively and constructively participate in the debate this time.

Industry savings are expected to come from improving coordination of medical services, records, and personnel; improving efficiency of care; upgrading technology; and adapting regulatory reform measures.

Even while praising the industry’s promise to cut costs, the president also said the only way to make these promised cost cuts meaningful is to build them into the system on an on-going basis instead of viewing the cost controls as a singular, limited-time-only, event.

On Monday, May 11, President Obama met with a medical consortium at the White House, where he announced the promise made by the medical community leaders.  In attendance were doctors and representatives from the nation’s hospitals, drug manufacturers, and the medical insurance industry.