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Obama Launching Health Care Cost-Cutting Initiative

Updated: 10:18 a.m.

President Barack Obama is announcing a new initiative with leading health care organizations on Monday that would cut federal spending on health care and save families thousands of dollars through new efficiencies, according to White House officials.

Officials from the American Medical Association, the Pharmaceutical Research and Manufacturers of America, the American Hospital Association, America’s Health Insurance Plans and the Service Employees International Union will meet with Obama at the White House and then appear at the president’s side as he announces the proposal.

The plan would reduce the rise in the nation’s health care costs by 1.5 percent a year, saving some $2 trillion over 10 years and resulting in a $2,500 cut in health care bills for an average family of four.

“In 2019 alone, it would reduce national health expenditures by 3 percent of GDP, or almost $700 billion — a huge amount of money that, again, could be invested in education, in assistance to the elderly, in other priorities,— said one senior administration official in a Sunday conference call with reporters.

The savings, the administration official said, would “virtually eliminate the nation’s long-term fiscal gap,— which is a measure of long-term deficits.

White House officials said the willingness of the groups to come forward with Monday’s proposal sends a strong signal that comprehensive health care reform may be achievable.

“They’re coming together to say health care reform is essential to our country’s future, it needs to happen now, we support the president’s efforts, and we want to work together with him and the Congress to reduce the excess spending growth rate in health care,— said another senior administration official. “We view this as a game-changer.—

The groups came together voluntarily, the official said, adding that they will be reporting back regularly to the White House and “understand that all this also has to occur within the context of health care reform.—

Antonia Ferrier, a spokeswoman for House Minority Leader John Boehner (R-Ohio), characterized the event announcing the proposal a “PR hit— and said the initiative would do little to get the government back in the black.

“This is a worthy goal, and Republicans support some of these initiatives that would constrain health care costs,— Ferrier said in a statement. “But the most crucial point to remember is that this [does] nothing — absolutely nothing — to deal with the fact the Administration still doesn’t know how to pay for its health care plan that is estimated to cost taxpayers up to $1.5 trillion.—

Meanwhile, Secretary of Health and Human Services Kathleen Sebelius today announced the establishment of the Department of Health and Human Services Office of Health Reform. The office will be led by Jeanne Lambrew, a health adviser to former President Bill Clinton who co-wrote a book on health care reform with former Senate Majority Leader Tom Daschle (D-S.D.).

“The HHS Office of Health Reform and the White House Office of Health Reform will work in tandem to advance legislation and take immediate actions to cut costs, assure quality and affordable health care for all Americans, and guarantee Americans can choose their doctor and their health plan,— Sebelius said in a statement.

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