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Health care industry pledging cost cuts

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STEVE CHIOTAKIS: Remember this ad from the early 1990’s?

HARRY AND LOUISE TV AD:Things are changing and not all for the better. The government may force us to pick from a few health care plans designed by government bureaucrats. Having choices we don’t like is no choice at all. They choose. WE lose.

You can bet President Obama remembers Harry and Louise, the television couple that helped doom health care reform nearly two decades ago. Today the president hopes there’ll be cooperation between a whole host of health care providers: insurers, drug makers, hospitals and doctors. They’re getting together to announce a spending reduction plan that could amount to a lot of money. Marketplace’s Jeremy Hobson joining us right now. Good morning, Jeremy.

JEREMY HOBSON: Morning, Steve.

CHIOTAKIS: So here we go again?

HOBSON: Well, you can bet they’ve got those Harry and Louise ads in mind. They are going to be trying to avoid the mistakes of the Clinton administration. And they know, the Obama administration knows that there will be two main obstacles to any comprehensive health care reform. Number one is going to be opposition from the industry. And number two is going to be costs to taxpayers. So having industry leaders on hand today to talk about cost savings over the long term is an attempt to get off to a running start in what is sure to be a very difficult marathon with the end goal, Steve, being a government health insurance plan that would compete with private insurers.

CHIOTAKIS: So what else are they going to be talking about today Jeremy?

HOBSON: Well there are going to be several trade groups on hand, as we’ve said — the American Medical Association, the American Hospital Association, others. And they are going to be giving President Obama a letter pledging to cut administrative costs in the industry, which they say will cut the growth of health care spending by a percent and a half per year. Over 10 years, they say, Steve, that could add up to $2 trillion.

CHIOTAKIS: Two trillion dollars, Jeremy, just by cutting the growth rate?

HOBSON: Yeah, remember, I mean health care costs are scary when the government looks at how much they’re spending on things like Medicare. But what really scares Washington is how much more expensive it’s going to get in the coming years as the baby boomers age and as Americans take advantage of more expensive treatments and drugs, the health care spending growth rate, Steve, 7 percent a year, which of course is way more than the almost nonexistent rate of inflation right now.

CHIOTAKIS: Marketplace’s Jeremy Hobson joining us from New York.

HOBSON: You’re welcome, Steve.

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