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May 11, 2009

Healthcare: Insurers Offer President Obama $2 TRILLION In Healthcare Savings!

This news is hotter than a Times Square Rolex!

Healthcare reform is a top priority of the Obama administration and the Obama administration wants to provide healthcare for the 46 million American citizens who do not have healthcare.  It seems that President Obama has been working on the healthcare problem even though we haven’t heard anything about it and we now know that there is a viable plan to finally get Americans a civilized healthcare system.

Some of America’s largest private healthcare providers plan to voluntarily tell President Obama that they will reduce the spending growth rate of healthcare by 1.5 percentage points per year.  Hospitals, drug makers and doctors, among others, wrote a letter to President Obama outlining their plan. The letter didn’t have many details but suggests savings could come from simplified billing, restructuring the way hospitals are paid and using more information technology, among other steps.  Several of these same industry groups — including insurers, whose lobbying group signed the letter — played central roles in defeating earlier efforts to reshape the American healthcare system — including the Clinton administration’s push in the mid-1990s.

If their plan works it could translate into significant savings for families — up to as much as $2,500 a year for a family of four by the fifth year of the program!  And the federal government could see savings as well — as much as $2 trillion during the next decade.

These momentous saving in health care could potentially reduce the growth of the federal budget deficit when similar savings are passed on to federal programs such as Medicare!

White House officials have said that representatives from six healthcare groups including America’s Health Insurance Plans, the American Medical Association, the Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, the Service Employees International Union, and the California Hospital Association signed the letter and came to them with the offer without any quid pro quo – without giving up something in exchange for something else.

Leaders of these groups have been working behind closed doors for weeks and could lose some money if healthcare spending were substantially slowed.

It seems to me that these healthcare groups realize that President Obama means business and they don’t want him to put their backs against the wall or for him to put them in a business choke-hold so they have decided to work among themselves and come up with a more balanced plan that has some give and take that will benefit Americans. It seems to me that because of the way President Obama has been efficiently taking care of business, healthcare companies have felt some pressure and have finally decided that they want to be part of the solution.

White House officials have indicated that some of the savings would come from simple things such as common claims forms that would reduce administrative costs or a universal explanation of benefits. The groups were expected to come to the White House with concrete proposals.

The steps the healthcare industry will need to take will depend on healthcare reform, for example, under current law providers are penalized if they are more efficient.  The Obama administration wants to remove the bureaucracy that stops efficiency and clear the path for a more stream line, modern, straightforward and less expensive healthcare system. 

White House officials estimate that right now healthcare expenses are growing at about a 7 percent annually. If the companies succeed with their plan, by the fifth year, there would be a zero growth rate. By the 10th year the savings would be equal to 3 percent of the gross domestic product (GDP) or $700 billion – a figure close to the economic stimulus package that was enacted in January!

These are funds that could be used to pay down our debts or invested in education or other economic priorities.

Our next assignment as American citizens is to support President Obama by putting pressure on Congress when his plan his ready so that we can get a healthcare bill passed.

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