To enjoy the full Mail & Guardian online experience: please upgrade your browser
13 May 2009 06:00
US President Barack Obama on Monday unveiled what he billed as a “historic” tie-up with healthcare providers to slash rises in medical costs by up to $2-trillion over 10 years.
“Costs are out of control, reform is not a luxury to be postponed but a necessity that can’t wait,” Obama said after meeting representatives of healthcare insurers, hospital groups and physicians at the White House.
“When it comes to healthcare spending, we are on an unsustainable course,” said Obama, who is attempting to pass bold reforms of a mostly private healthcare system that leaves 46 million Americans without insurance.
The White House hopes the voluntary plan—drawn up by groups representing insurance firms, hospitals, doctors, pharmaceutical firms and a labour union—could eventually save US families as much as $2 500 a year.
Signatories to the deal have promised to reduce spending increases by 1,5 percentage points each year until 2019.
Officials say that amounts to around $2-trillion in cost cuts, reached in part through slashing administrative expenses.
The president argued that with the government trying to ignite economic recovery, healthcare reform was more vital than ever.
“Half of all personal bankruptcies stem from medical expenses,” Obama said, adding “what is a growing crisis for the American people is also becoming an untenable burden for America’s businesses.
“Rising healthcare costs are commanding more and more of the money that our companies could be using to innovate and to grow, making it harder for them to compete around the world.”
Obama’s initiative came as his Democratic allies in Congress embark on the task of moving healthcare legislation.
But many Republicans fault Obama’s plans, including the methods he unveiled on Monday.
“The patient has been left out of the administration’s back-room deal with special interests,” said Republican Senator John Cornyn, a member of the Senate Finance Committee that has jurisdiction over healthcare.
“The American people deserve real solutions to our healthcare crisis, not another special interest working group.”
Senate Finance Committee chairperson Max Baucus, a Democrat, said his panel would produce legislation to reform healthcare in June 2009 and called lowering costs one of the top goals.
“I’m confident that together with doctors, hospitals, patient groups and industry experts, we will determine the best ways to get healthcare costs down, improve patient care and build the healthcare system that Americans deserve this year,” said Baucus.
The administration targets, which will not be subject to formal government oversight or sanctions, are likely to be met with scepticism by consumer groups wary of self-regulation, which they say amounts to no regulation at all.
Signatories to the deal include America’s Health Insurance Plans, the American Medical Association, the American Hospital Association, the Service Employees International Union and the Pharmaceutical Research and Manufacturers of America.
Officials hope to ensure that Obama’s healthcare plan does not suffer the same fate as the massive healthcare reform bid of former Democratic president Bill Clinton, which foundered in Congress and damaged his political prestige.
Obama has asked Congress in his budget for $634-billion for a “down payment” to fund healthcare reform over the next 10 years.
Under the White House healthcare plan, which will likely be amended by lawmakers in final legislation, Americans who have health insurance and want to keep it can do so, though the administration says costs will lower.
A new range of “affordable” health insurance options is envisaged under the Obama plan, which will make insurance firms cover pre-existing conditions and include tax credits to help small businesses provide healthcare to workers.
The initiative would seek to lower the cost of prescription drugs, partly through relaxing rules on the import of medicines from other developed nations, and stop pharmaceutical giants blocking production of generic treatments.—Sapa-AFP
Create Account | Lost Your Password?