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

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

Their proposal–in a letter sent to the president signed by six health care-related trade groups–was obtained by National Underwriter.

Specifically, the industries said they would offer concrete proposals designed to reduce the projected rate of growth in health care costs by 20 percent.

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

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he was “pleased.”

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

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

Sen. Chuck Grassley, ranking member of the Committee on Finance, said: “There’s no doubt saving $2 trillion in health care costs would be a move in the right direction. When the White House and the industry put concrete proposals on paper and get a score from the Congressional Budget Office, then we’ll know if the suggestions really achieve that kind of savings, and it’ll be big news. For health care budgeting purposes, CBO’s word is the only one that counts.”

The letter from the groups said that under current policies, the annual growth in national health expenditures is projected by government actuaries to average 6.2 percent through the next decade. At that rate, the percent of gross domestic product spent on health care would increase from 17.6 percent this year to 20.3 percent in 2018, “higher than any other country in the world.”

The contents of the letter were scheduled to be announced will be 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 letter said.

“It is critical, however, that health reform also enhance quality, improve the overall health of the population, and reduce cost growth,” the letter said.

“We believe that the proper approach to achieve and sustain reduced cost growth is one that will:

o Improve the nation’s health.

o Continuously improve quality.

o Encourage the advancement of medical treatments, approaches and science.

o Streamline administration.

o Encourage efficient care delivery based on evidence and best practice.

The letter was signed by officials of America’s Health Insurance Plans; the Pharmaceutical Research and Manufacturers of America; the American Hospital Administration; the American Medical Association; the Service Employees International Union; and the Advanced Medical Technology Association.

The letter was an obvious attempt by the industries to forestall creation of a so-called “public option” or government-backed plan as a means of competing with health care providers and incentivize them to cut health care costs.

This option, currently under discussion by the Obama administration and various committees in Congress, would involve Medicare and Medicaid offering coverage to those in the U.S. not covered by individual and group health care plans, including those provided through employers and unions.

Ira Loss, a health care analyst at Washington Analysis, said his group’s view is that through the letter the private health care industry “is saying that it wants an opportunity to have significant input on the health care reform initiative now underway.”

He explained that it is consistent with prior comments by the providers, “but does signal they hope to work with policymakers in good faith.”

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

o Implementing proposals in all sectors of the health care system, focusing on administrative simplification, standardization and transparency that supports effective markets.

o Reducing overuse and underuse of health care by aligning quality and efficiency incentives among providers across the continuum of care so that physicians, hospitals and other health care providers are encouraged to work together towards the highest standard of quality and efficiency.

o Encouraging coordinated care, both in the public and private seconds, and adherence to evidence-based best practices and therapies that reduce hospitalization, manage chronic disease more efficiently and effectively, and implement proven clinical prevent strategies.

o Reducing the cost of doing business by addressing cost drivers in each sector and through common sense improvements in care delivery models, health information technology, workforce deployment and development, and regulatory reforms.