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Obama Says Healthcare Overhaul Could Save Trillions

by Caren Bohan

WASHINGTON - President Barack Obama will aim on Monday to build support for a sweeping overhaul of the U.S. healthcare system by highlighting a drive for greater efficiency he predicts could save trillions of dollars.

A driver helps a man in a wheelchair out of a cab outside San Francisco General Hospital. President Barack Obama is Monday to outline plans to cut US healthcare costs by two trillion dollars over the next 10 years, part of a bid to slash spending while making treatment more affordable. (AFP/Getty Images/File/Justin Sullivan) Obama has invited several large trade groups, such as the American Medical Association, America's Health Insurance Plans and the American Hospital Association, to an event to discuss ways to wring cost savings from the health system.

At a 12:30 p.m. EDT event, the trade groups will present Obama a letter pledging to reduce the growth of health spending by 1.5 percentage points annually through more efficient practices, according to White House officials who briefed reporters on the event.

The cost savings would be achieved through steps such as streamlining paperwork and changing the way hospitals deliver and bill for services to patients.

Obama aides said that given the explosion in healthcare costs projected to take place in coming years as the U.S. population ages, the slower growth rate for health care would save $2 trillion over 10 years.

"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait," Obama will say, according to excerpts.

"That is why these groups are voluntarily coming together to make an unprecedented commitment," he will say.

"Over the next ten years -- from 2010 to 2019 -- they are pledging to cut the growth rate of national health care spending by 1.5 percentage points each year -- an amount that's equal to over $2 trillion."

MILLIONS OF UNINSURED

Revamping the healthcare system and expanding coverage for an estimated 46 million uninsured Americans is one of Obama's top domestic priorities. He is pushing his allies in the Democratic-led Congress to pass an overhaul of the $2.5 trillion healthcare industry by the end of the year.

There is broad agreement within the industry and among lawmakers that the health system needs to be improved but big differences of opinion exist on how to go about it.

A centerpiece of Obama's health proposal would be a new government health insurance plan that would compete with private insurers. The administration says the public plan would help cut costs by introducing competition and cover the uninsured.

Republicans and insurers oppose a government plan, arguing that it would undermine the private healthcare market.

By focusing on delivering more efficient care, Obama is weighing in on one of the least controversial aspects of his healthcare proposal rather than the much more heated topic of whether to establish a new public insurance plan.

A more efficient healthcare system would save the government money by reducing spending on the huge Medicare system, an existing program for older Americans.

The United States has one of the world's most expensive healthcare systems, despite the high numbers of uninsured Americans. Studies show the country lags other developed nations on indicators of healthcare quality, including life expectancy and infant mortality.

Obama's effort to cast the health care proposal as a money-saving initiative comes as critics label his hefty domestic agenda fiscally irresponsible. But Obama counters that high budget deficits are a legacy of President George W. Bush, a Republican.

Some of the streamlining ideas to be highlighted at the White House event on Monday would require legislation.

Lawmakers are already considering some of moves to improve patient care and bring down costs by basing payments to doctors and hospitals on the quality of care given, not just the number of procedures and treatments.

Health-policy experts say big savings could be achieved in healthcare by cutting down on unnecessary treatments.

(Additional reporting by Doug Palmer, reporting by Caren Bohan; Editing by Chris Wilson)

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