It’s been all over the news yesterday and today – a group of leading health care organizations have pledged to be able to cut some $2 trillion – yes, with a “T” – in healthcare spending over the next 10 years. The details are to be announced after an meeting at the White House this morning.
There are details missing, the offer probably has no real penalties if the target is not reached
Earlier, the group had offered to remove the hated pre-existing clause as part of an expansion of coverage to be mandated for all Americans. Although Obama had said in the campaign that he was not pushing mandated coverage, the mandate is also seen as one means of spreading the risk and lowering the average cost. For insurance companies, pharmaceutical firms and providers, universal coverage represents more customers. Even with the downward pressure on costs, companies will have to innovate to maintain and grow profit margins. But it can be done – GE has announced a $6 billion “Healthymagination”, for example, that is a bet that innovation will cut prices, expand the market and still grow profits.
The trade groups making the pledge represent a broad spectrum of health-care interests, including the American Medical Association, the Pharmaceutical Research and Manufacturers of America, the American Hospital Association,
We’ll see what is released after the White House meeting today and will report back then to you.