THE U.R.'S OWN GAME:

Obama Endorses Health Industry's Goal to Rein In Costs: Despite Fanfare, Experts Say Plan Lacks Key Details (Ceci Connolly and David Hilzenrath, 5/12/09, Washington Post)

Though experts agree that the health system is inefficient, squeezing out savings has proven difficult. Yesterday's announcement, despite the fanfare, shed little light on precisely how the industry and government might achieve $2 trillion in savings over the next decade.

Despite the high-profile attention -- complete with a photo opportunity in the White House State Dining Room -- the industry offered just a handful of ways to achieve significant cost reductions, most of which were included in Obama's budget proposal.

"An unrivaled set of abstractions and posturing," said Alan Sager, a professor of health policy and management at Boston University. Among the specific money-saving items listed in a White House document are streamlining billing procedures, investing in preventive care and offering financial incentives to hospitals that reduce readmission rates.

"It would be difficult to wring 1.5 percentage points out of this list of proposals," said Robert D. Reischauer, former director of the Congressional Budget Office.

Many experts say it is possible to reduce the rate of growth in medical spending, but that it could take years to accomplish and it could involve painful trade-offs for patients and providers.

"We know that there's a lot of wasteful spending, but it's incredibly hard to identify it and then to figure out ways to eliminate it without putting some administrator in the doctor's office," said Dana Goldman, director of health economics at the Rand Corp.

J. James Rohack, president-elect of the American Medical Association, however, is optimistic that even more inefficiency could be rung out of the health system.

He described the 1.5 percent reduction as "a floor" to what could be achieved. "We can slow that growth even more."

Lowering the rate of growth of health-care spending by 1.5 percentage points would leave the federal budget deficit in the hundreds of billions of dollars, based on government data, and would leave health-care spending growing faster than the overall economy, said G. William Hoagland, vice president for public policy at the insurer Cigna, which is a member of one of the trade groups that signed the letter.

Consumer advocates and some analysts also were doubtful the industry would implement such steep cost reductions on its own.

"How is it we'll know these promises are actually implemented?" asked DeAnn Friedholm, campaign director of health-care reform at Consumers Union.

Speaking of the industry groups represented at the White House yesterday, Princeton University health economist Uwe E. Reinhardt predicted that when specific cost-control proposals come up in Congress, "They'll be right at the witness table arguing against it."

Let's give him the benefit of the doubt and assume the President is just being cynical in pretending to believe this nonsense. After all, his entire campaign was based on promising the Left stuff he had no intention of delivering. He must recognize the same ploy coming from industry.

Posted by Orrin Judd at May 12, 2009 11:11 AM