'Homework assignment' could mean success, failure for health reform legislation

How well health care industry groups follow through on their "homework assignment" from President Obama to submit specific plans by early June on how they intend to reduce health care spending growth by $2 trillion over the next decade could determine whether current attempts to develop health care overhaul legislation are successful, the AP/Contra Costa Times reports (Alonso-Zaldivar, AP/Contra Costa Times, 5/25).

In a letter that was sent to Obama on May 10, a coalition of health care industry groups wrote, "We will do our part to achieve your administration's goal of decreasing by 1.5 percentage points the annual health care spending growth rate. ... This represents more than a 20% reduction in the projected rate of growth." The letter -- which was signed by the American Medical Association, the American Hospital Association, Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, America's Health Insurance Plans and the Service Employees International Union -- did not elaborate on what specific measures the groups would take to achieve such reductions. The Obama administration requested specifics on the coalition's cost-cutting plans by June 1 (Kaiser Daily Health Policy Report, 5/18).

Each group has been looking into its own ways it can reduce spending growth, the AP/Contra Costa Times reports. Insurers currently are examining strategies to cut the administrative costs of filing claims. AMA President-elect James Rohack said his organization will look at how to implement comparative effectiveness research and ways to prevent harmful and costly drug interactions, which he said "can save money ... by preventing unnecessary readmissions to hospitals," adding, "The most costly site where patients get care is the hospital." In addition, hospitals have begun looking into how to reduce readmissions.

If the industry groups are able to convince lawmakers that their plans can significantly reduce spending growth, Obama "could be well on his way to closing a deal with Congress" on universal health coverage, the AP/Contra Costa Times reports. However, if the plans are rejected, the groups risk their reputations and Obama could be "seen as naive for entertaining such promises," according to the AP/Contra Costa Times.

Some experts have said that the groups' pledge to cut health care spending is possible "in theory." According to the AP/Contra Costa Times, the challenge will be to persuade medical providers "to change years of ingrained habits that lead to much of the wasteful spending" in the health care system (AP/Contra Costa Times, 5/25).

AHIP's Ignagni Profiled

The AP/Washington Times on Tuesday profiled AHIP President and CEO Karen Ignagni, who was a "key architect" of the industry's pledge to reduce health care spending. According to the AP/Washington Times, "with the prospect of a congressional health care overhaul looming, ... Ignagni's role is more important than ever." The AP/Washington Times reports that there are several questions surrounding Ignagni's involvement in the debate over health care reform, including, "What will Ms. Ignagni do if Congress produces a bill she doesn't like? Will her group try to kill it, resurrecting 'Harry and Louise'-style attack ads that proved so devastating during the Clinton years?" Ignagni has declined to say how the group would respond in the event of such a bill, but said in a recent interview, "The people who are working on this issue, even in areas where we have differences, are very thoughtful, have the right objectives, and we have a long history of working with them," adding, "So we're going to give them the courtesy of thoughtfully responding to what they propose" (Werner, AP/Washington Times, 5/26).