On what he called a “historic day,” President Barack Obama announced a collaborative effort by several health care industry stakeholders in reforming health care in America that will produce $2 trillion in savings over the next decade.

Barack Obama

In a short speech following a meeting with representatives for insurers, hospitals, pharmaceutical companies and others today (May 11), Obama announced the pledge to work together to trim health care costs.

“Getting health care costs under control is essential,” Obama told reporters after the meeting, surrounded by meeting attendees. “What’s brought us all together today is a recognition that we can’t continue down the same dangerous road we’ve been traveling for so many years, that costs are out of control, and that reform is not a luxury that can be postponed, but a necessity that cannot wait.”

The president said the groups have pledged to cut the rate of health care cost growth by 1.5% each year between 2010 and 2019 to generate the $2 trillion in savings. This pledge represents more than a 20% reduction in the projected rate of growth.

The move would not only assist families and businesses struggling to afford care, Obama said, but also curb growing spending that is “putting the federal budget on a disastrous path,” with increasing costs for government plans like Medicare and Medicaid as the baby boomer generation grows older.

Obama said that the average annual savings for a family of four would be about $2,500, a goal he sought during his candidacy for president.

Collaborative effort

Those attending the meeting and collaborating for the cost cutting measures were America’s Health Insurance Plans, the American Medical Association, the American Hospital Association, the Advanced Medical Technology Association, the Pharmaceutical Research and Manufacturers of America and the Service Employees International Union.

The announcement came on the day a letter by the groups was made public, outlining their commitment to the president and the American people to increase accessibility to affordable, high quality health care.

“We, as stakeholder representatives, are committed to doing our part to make reform a reality in order to make the system more affordable and effective for patients and purchasers,” a two-page letter from the six organizations concludes. “We stand ready to work with you to accomplish this goal.”

Among the steps pledged by the organizations are focusing on administrative simplification, standardization and transparency to support effective markets; reducing over-use and under-use of health care by aligning quality and efficiency incentives among all providers across the continuum of care; and coordinating care both treat and prevent illnesses more effectively.

Reform a hot topic in D.C.

This new commitment comes as health care reform in Washington, D.C., has heated up, from news of a growing consensus for a government-run health plan to legislators setting target dates to introduce new reform efforts.

Obama noted that the new pledge both “compliments and is compatible with” all the reform being undertaken in the nation’s capital. He touted his administrations work to expand the State Children’s Health Insurance Program, extend employer-sponsored COBRA benefits and work towards electronic health records as steps already taken on the road to reform.

“I will not rest until the dream of health care reform is finally achieved in the United States of America,” the president said.

As for what he will be looking for in any legislation that comes across his desk, Obama noted three key characteristics: affordability; the ability to keep one’s current doctor or switch if desired; and the ability for all Americans to have quality, affordable coverage.”