Health-cost concessions cheered

The chorus of cost concessions by U.S. medical care providers, drugmakers, device manufacturers and insurers who hadn't made a peep about system reform before Sunday received warm welcomes Monday ranging from President Barack Obama to those in charge of Utah's health-care reformation project.

After the companies voluntarily offered $2 trillion in cost reductions over 10 years, Obama pronounced it "a historic day, a watershed event." The savings, he said, "will help us take the next and most important step — comprehensive health-care reform."

Regardless of claims that the industry offered the reductions just to stave off being forced to do something about spending, it was good news to reformers who had regarded those inside the system as noticeably absent from the reform debate so far.

The industry group noted in a letter sent to the president that if the commitment holds over time, the percentage of the economy health care represents would be held to 18 percent, or $700 billion in 2019 alone.

By medical spending standards, cutting $2 trillion (over 10 years) amounts to a small trim in a system that accounts for $2.4 trillion in yearly spending — more than the national deficit.

The long-term impact and what will ultimately be saved is debatable, "but it's clearly a step in the right direction," said Judi Hilman, executive director of the Utah Health Policy Project, a research and advocacy group.

"I'm surprised frankly by the low percentage of the commitment," Hilman said, noting that the amount is more than offset by health-care costs that continue to rise at more than twice the rate of inflation and by insurance premium costs that are set to double again in less than five years.

At the same time, cutbacks continue in the number and type of care insurance will cover.

"Then again, it's exciting that such a broad-based group of stakeholders are apparently interested in at least trying to get the ship pointed in the right direction."

Utah is much better off than most other states, Hilman and others said Monday. Medical costs run about a third less than charges for similar procedures elsewhere, and treatment generally improves the health of consumers.

The commitment by the industry was short on details and didn't address the main driver of health-care spending — waste.

Any step toward containment helps, said Dr. Brent James, an administrator with Intermountain Healthcare and an internationally recognized authority on medical care spending. They're anything but contained now, and they won't even be slowed unless both the industry and reformers do something about the waste in the system, he said.