- The Washington Times - Saturday, June 13, 2009

President Obama said Saturday that he’s closing in on the down payment for health care reform.

The administration has come up with $313 billion in Medicare and Medicaid savings, which, combined with $635 billion in a previously tagged payment, would come close to its estimated cost of a reform plan.

The administration would find the savings by reducing payments to health care providers for providing more efficient services.

“When it comes to the cost of health care, this much is clear: the status quo is unsustainable for families, businesses and government. America spends nearly 50 percent more per person on health care than any other country,” Mr. Obama said in his weekly address.

The plan takes into account that several broad goals of Mr. Obama’s plan will come into fruition: that more Americans will be insured, the hospitals will operate more efficiently and that drug makers will pay more.

“These savings will come from common sense changes,” Mr. Obama said. “For example — if more Americans are insured, we can cut payments that help hospitals treat patients without health insurance. If the drug makers pay their fair share, we can cut government spending on prescription drugs. And if doctors have incentives to provide the best care instead of more care, we can help Americans avoid the unnecessary hospital stays, treatments, and tests that drive up costs.”

Mr. Obama has said that health care reform must be budget neutral and that driving down costs is a central part of real reform in an industry that currently accounts for about 17 percent of the American economy.

But the cost of a health care reform plan, let alone the shape of the plan, hasn’t been determined. Mr. Obama has issued large goals and until recently, left many of the details up to Congress.

Mr. Obama said he wants the plan to include a public option, an idea included in the Senate Health, Education, Labor and Pensions Committee bill. But other details are missing.

The $313 billion and $635 billion would bring total health care savings to nearly $950 billion.

Rep. Charles B. Rangel, New York Democrat and chairman of the Ways and Means Committee, said Friday that the committee is expecting the plan to cost $1 trillion. But other estimates of the House or Senate versions have centered around $1.5 trillion or even $2 trillion.

Because the reform plan hasn’t been fully shaped, few people on the Hill have been able to pinpoint its cost, repeatedly saying the $1 trillion figure is close.

“$950 billion is in the ballpark of many of the proposals floating around,” said White House budget director Peter Orzag.

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