Healthcare Cost Reduction Initiative


This past week healthcare executives have vowed to take a semi-united front to align with President Obama’s goals to lower the cost of healthcare. Armed with the goal of saving $2 trillion over the next 10 years, industry leaders have volunteered to reduce the growth rate of national health care spending care costs by 1.5moneytab% every year.  

Fox News reported that six leaders of the health care industry penned a letter to Obama stating that: “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, saving $2 trillion or more. This represents more than a 20 percent reduction in the projected rate of growth.”

Though this declaration is advantageous to Americans, it is not without its benefits to health care leaders.  Namely, “they hope to stave off new government price constraints that might be imposed by Congress or a National Health Board of the kind favored by many Democrats” (


One reason that healthcare costs are so out of control is due to the lack of productivity.  In a report being sent to Congress on Monday, two research and advocacy groups, the Center for American Progress and the Democratic Leadership Council, say that productivity growth in health care has lagged behind that of other industries.  The government could save nearly $600 billion over the next decade if the health care industry increased its productivity growth by 1.5 to 2 percentage points a year, said the report, by David M. Cutler, a Harvard economist.

Taking a cue from industry leaders, members of the medical and insurance sector are also eagerly waving their hands to join the Lower Health Care Cost Team.  But before they receive the MVP award it is important to notice their timing.  Some Washington officials claim that the plan is for them to give in to some cost control concessions presented by the Obama Administration in an effort to thwart the implementation of a public heath care plan and to have at least some say over the direction of the overhaul.  But history might repeat itself: “the health care industry’s offer to slow the rise in health care costs mirrors a trend that goes back to 1993, when President Clinton launched his reform effort. The rate of health care inflation had been in the double digits before that and it begun rising after the Clinton administration’s effort failed, reaching its most recent peak of 9 percent in 2002.  In 2006, healthcare consumed 15% of gross domestic product” (

Some leaders believe that improving the use of EHR technology will result in increase productivity and decreased costs.

What do you think?


About The Author:

Kristen Mirsky is a Staff Writer with the Clear Medical Solutions Communication Team.  Her work is regularly shared on the Clear Medical Agency newsletter and the blog.  


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