NU Online News Service, May 11, 2:10 p.m.EDT

The health care industry–including health insurers, it waslearned–pledged in a letter to President Obama today to work attrimming the cost of health care by $2 trillion or more over 10years.

Their proposal–in a letter sent to the president signed by sixhealth care-related trade groups–was obtained by NationalUnderwriter.

Specifically, the industries said they would offer concreteproposals designed to reduce the projected rate of growth in healthcare costs by 20 percent.

The groups later met with the president and affirmed that theywould work to create savings.

Sen. Max Baucus, D-Mont., chairman of the Senate FinanceCommittee, said he was "pleased."

Sen. Baucus has held a series of hearings, which will concludetomorrow with testimony by various industry and governmentofficials on how reform of the industry can be financed.

In his comments today, Sen. Baucus said that lowering healthcare costs is one of the most important goals of health carereform.

Sen. Chuck Grassley, ranking member of the Committee on Finance,said: "There's no doubt saving $2 trillion in health care costswould be a move in the right direction. When the White House andthe industry put concrete proposals on paper and get a score fromthe Congressional Budget Office, then we'll know if the suggestionsreally achieve that kind of savings, and it'll be big news. Forhealth care budgeting purposes, CBO's word is the only one thatcounts."

The letter from the groups said that under current policies, theannual growth in national health expenditures is projected bygovernment actuaries to average 6.2 percent through the nextdecade. At that rate, the percent of gross domestic product spenton health care would increase from 17.6 percent this year to 20.3percent in 2018, "higher than any other country in the world."

The contents of the letter were scheduled to be announced willbe disclosed later this afternoon at a press conference.

"We are determined to work together to provide quality,affordable coverage and access for every American," the lettersaid.

"It is critical, however, that health reform also enhancequality, improve the overall health of the population, and reducecost growth," the letter said.

"We believe that the proper approach to achieve and sustainreduced cost growth is one that will:

o Improve the nation's health.

o Continuously improve quality.

o Encourage the advancement of medical treatments, approachesand science.

o Streamline administration.

o Encourage efficient care delivery based on evidence and bestpractice.

The letter was signed by officials of America's Health InsurancePlans; the Pharmaceutical Research and Manufacturers of America;the American Hospital Administration; the American MedicalAssociation; the Service Employees International Union; and theAdvanced Medical Technology Association.

The letter was an obvious attempt by the industries to forestallcreation of a so-called "public option" or government-backed planas a means of competing with health care providers and incentivizethem to cut health care costs.

This option, currently under discussion by the Obamaadministration and various committees in Congress, would involveMedicare and Medicaid offering coverage to those in the U.S. notcovered by individual and group health care plans, including thoseprovided through employers and unions.

Ira Loss, a health care analyst at Washington Analysis, said hisgroup's view is that through the letter the private health careindustry "is saying that it wants an opportunity to havesignificant input on the health care reform initiative nowunderway."

He explained that it is consistent with prior comments by theproviders, "but does signal they hope to work with policymakers ingood faith."

To accomplish these cuts, the industry said it was committed toa public-private partnership designed to achieve billions insavings through:

o Implementing proposals in all sectors of the health caresystem, focusing on administrative simplification, standardizationand transparency that supports effective markets.

o Reducing overuse and underuse of health care by aligningquality and efficiency incentives among providers across thecontinuum of care so that physicians, hospitals and other healthcare providers are encouraged to work together towards the higheststandard of quality and efficiency.

o Encouraging coordinated care, both in the public and privateseconds, and adherence to evidence-based best practices andtherapies that reduce hospitalization, manage chronic disease moreefficiently and effectively, and implement proven clinical preventstrategies.

o Reducing the cost of doing business by addressing cost driversin each sector and through common sense improvements in caredelivery models, health information technology, workforcedeployment and development, and regulatory reforms.