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Private Health Care Sector to Help Rein in Costs


With health care reform coming down the tracks, the private sector is left with two choices. Fight back against change or “join in” with the government’s efforts in an attempt to mitigate the damage. As of now, the private sector seems ready to play along.

President Obama will announce Monday that he has secured the commitment of several industry groups to do their part to rein in the growth in health care costs.

This pledge from the private sector could reduce the growth in health care spending by 1.5 percentage points a year, for a savings of $2 trillion over 10 years, a letter from the groups will promise, according to a senior administration official. Overall, it could amount to a 20% reduction in the growth of health care spending.

Six trade associations representing unions, hospitals, insurers and the drug industry have signed on to the commitment.

Without judging the specifics of this, cost containment is an essential step in any health care reform. Some observers seem to think, if the government just footed the bill, everything would be fine. But if costs are a burden now (or are rising at an unsustainable rate), then they’ll continue to be a burden no matter who signs the checks.

Real reform isn’t about choosing between government or private health care. Reform is about finding a way to make care for everyone economically feasible. All solutions need to be on the table – not just the ones which conform to a specific ideology.

The question is: how do we contain costs without lessoning quality of care? The industry seems to think there are ways to do this, mainly through increased efficiencies. There’s also talk of reforming how providers are paid – making such payments results based rather than per-service-rendered based. But how you judge “results” with any speed or equity is a mystery to me.

In any case, I’m glad to see the issue of cost being addressed early in this process. That is the central dilemma.