Minnesota health care leaders optimistic about Obama plan

The White House announced a plan today to take a $2 trillion scalpel to health care costs, and medical industry leaders in Minnesota are optimistic that the plan can succeed.

President Barack Obama announced today that a national coalition representing doctors, hospitals, drug manufacturers, insurers and laborers has agreed to help reduce the rise in healthcare costs by 1.5 percentage points per year for 10 years. That would bring the projected annual rate of increase down to a somewhat less painful 4.5 percent.

The plan has prompted a range of reaction. Skeptics wondered how the Obama administration would make sure these organizations would live up to their commitment. Critics said the proposal lacks concrete details or an enforcement mechanism. None of the groups that went to the White House can actually dictate prices to their members.

Charles Fazio, chief medical officer of the Medica health plan, says the announcement reflects growing pressure for reform and action.

"There's never been more pressure to do things differently. There's never in my career been more willingness to think about things differently," he said. "And I think there's general agreement at least among those having the discussion right now that just tweaking what we have isn't sufficient. We need to make some fundamental changes in how things go."

Fazio says Medica and many other Minnesota organizations have shown they know how to rein in costs.

"We have a nice track record of doing those things locally, and I think we're probably very well positioned to participate in all the things that will come out of this discussion."

While a Clinton administration health reform plan ran into a buzz saw of opposition a decade and a half ago, health industry leaders say now there's an increasing sense that this time, reform will actually happen.

"All the people involved in health care need to think about how they can work together in a way that is effective to getting to the end of making sure we have affordable health care, said Dr. George Isham, chief health officer of HealthPartners, a Minnesota-based HMO.

Isham says there are plenty of opportunities to reduce costs throughout the health care system.

"One is administrative costs. The second is costs related to ineffective processes. And third there are some clinical activities going on that could be used in a better way to make sure that people are getting the health care that they need."

Baby Boomers are likely to be greatly affected by any effort to cut the rate at which health care costs are rising.

"We know the population is getting older," said Lawrence Massa, head of the Minnesota Hospital Association. "The baby boomers are going to be turning 65 in greater numbers, and so overall health care spending is likely to rise. And the focus of the president and these leaders of these organizations have tried to hone in on is that that we've got to reduce the rate of increase."

Massa says the changes required may be painful. But necessary.

"It's going to mean a lot of change for a lot of people, in terms of both patient expectations and people in the delivery system," he said. "There's a lot that's unknown at this point. but you have to start out to want to make change and recognize that there's problem."