Medical/Business Coalition Pledges to Cut Growth in Health Care Costs by up to $2 Trillion

By Joyce Frieden

Leaders of several health care and labor organizations met with President Obama at the White House on May 11 and proposed ideas to reduce the growth in health care costs by as much as $2 trillion over the next decade.

In a letter sent to the president, the six organizations—the American Medical Association, the American Hospital Association, the Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, America’s Health Insurance Plans, and the Service Employees International Union—vowed to work as a group to help achieve the cost reduction. Among their proposals:

President Barack Obama meets with healthcare reform stakeholders in the Roosevelt Room at the White House May 11, 2009.
(Official White House Photo by Pete Souza).

Cutting costs by focusing on administrative simplification, standardization, and transparency;
Reducing overuse and underuse of health care by aligning incentives so that physicians, hospitals, and other providers are encouraged to work together toward the highest standards of quality and efficiency;
Encouraging coordinated care and adhering to evidence-based best practices and therapies that reduce hospitalization and manage chronic disease more effectively;
Implementing proven prevention strategies; and,
Making common-sense improvements in care delivery, health information technology, workforce development, and regulatory reforms.

The American Medical Association told the president that although evidence-based guidelines will be helpful in reducing costs, the reductions could be enhanced if physicians had more liability protection. “For example, if everyone who walks into the emergency room gets an MRI for a headache, it’s a costly procedure,” AMA president-elect Dr. J. James Rohack said in an interview. “We know that in some areas of the country [that test has] been done because people sued when they didn’t get the test. If we create scientifically based guidelines that say not everyone needs to have the MRI for a headache, physicians have got to have liability protection so they don’t get sued if they follow that guideline.”

Dr. Rohack said he felt the president heard what the AMA was conveying. “Clearly the message of defensive medicine costing dollars in the health care system was received, as was the recognition that prior attempts at tort liability by just creating global caps hasn’t been successful. We are going to have to work at other creative ways of achieving the goal.”

The president called the White House meeting historic. “[This is] a watershed event in the long and elusive quest for health care reform,” he said after the gathering. “And as these groups take the steps they are outlining, and as we work with Congress on health care reform legislation, my administration will continue working to reduce health care costs to achieve similar savings.”

Reaction to the meeting varied.

“If the savings described today truly occur, this may be one of the most significant developments in promoting meaningful health care reform,” Ron Pollack, executive director of Families USA, a liberal consumer health organization, said in a statement. “These savings would cut projected health care costs for families and businesses, and they would enable adequate subsidies to be offered so that everyone has access to high-quality, affordable health care.”

Others were less impressed. “We are very cautious about the particulars of the voluntary effort that groups proposed to the White House,” said a statement from the National Coalition on Health Care, a progressive advocacy group. “Most of the measures that they cited would help to make the health care system more efficient over time, but, as the Congressional Budget Office has indicated, should not be counted on to produce substantial savings soon. We are heartened by the sector’s growing acceptance of responsibility to engage constructively in a search for solutions, but we believe that those solutions will need to be embodied in law.”

Further, Rep. Michael Burgess (R-Texas) noted that although he was glad the groups were trying to work together, they weren’t taking the correct approach.

“From what I can tell, the announcement by the health industry leaders misses the mark in several areas,” he said in a statement. “It promises no protections against a Washington takeover of health care; no guarantees that Washington bureaucrats won’t stand in the way of Americans getting the treatment they need when they need it; no promises that patients will be able to control their health care decisions; and no assurances that Americans will have their choice of doctors or hospitals. Until more details are revealed, I would encourage Americans to be circumspect about today’s announcement.”

When asked to comment on this story, Dr. Frank Pomposelli stated: “It’s hard to disagree with the contents of the letter sent to President Obama by the health care and labor organizations. I suspect every clinician would like to see the goals outlined implemented in some shape or form. It would undoubtedly improve the care we deliver to patients but it seems less clear to me that any of it would save money. If fact, the infrastructure required to implement some of these goals (for example, improvements in information technology: translated widespread application of the electronic medical record, and implementing proven prevention strategies which requires increased access to health care by the uninsured who are probably most at risk), would likely increase costs in the short run. Moreover, does anyone really think that a totally voluntary system will work?” asked Dr. Pomposelli, who is an associate professor of surgery at Harvard Medical School and clinical chief of the division of vascular surgery at the Beth Israel Deaconess Medical Center.

“Undoubtedly, an agency would need to be commissioned to monitor and enforce compliance creating more expense and bureaucracy. The same can be said for the concepts of “working together”, “coordinating care” and “aligning incentives”. All will require administrative oversight to have any chance of being effective. My own opinion is that much of the needless or excessive expense in delivering health care comes from two controversial areas: the practice of defensive medicine and the tremendous utilization of resources by patients at the end of life. I doubt we can ever hope to reduce health care costs in any meaningful way until both have been addressed. So too for our love affair with high tech medical devices and procedures, many of which are unproven yet widely applied.

“So while as a concerned American, I laud the efforts being discussed, as an admittedly somewhat cynical surgeon confronting the realities of delivering care in a broken system, I find them to be disappointing as cost saving measures. I hope I am wrong,” he concluded.

Contact the Editor at vascularspecialist@vascularsociety.org.

Dr. Pomposelli is on the editorial board of Vascular Specialist.

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