MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
ROBERT SIEGEL, host:
And I'm Robert Siegel.
President Obama announced today that the health care industry would make substantial cuts over the next 10 years. At the White House, the president said the industry pledged to trim $2 trillion in costs by holding down increases over the next decade.
President BARACK OBAMA: The costs were out of control, and the reform is not a luxury that can be postponed, but a necessity that cannot wait.
SIEGEL: The reductions by health care providers, hospitals, insurance companies, doctors, drug makers are voluntary. But analysts say that they are a precursor to the president's bigger plans for an overhaul of the nation's health care system. Joining me now to talk about today's announcement and those plans is Nancy Anne DeParle, who is counselor to the president and director of the White House Office of Health Reform. Welcome.
Ms. NANCY ANNE DEPARLE (Director, White House Office of Health Reform): Thank you.
SIEGEL: And that commitment, $2 trillion over 10 years, how substantial is that?
Ms. DEPARLE: It's huge. It's huge. And what's even bigger is these groups, which have not always supported health care reform in the past, coming forward to say they support the president's goal of reducing health care costs and covering all Americans, and they want to be at the table helping him to get that done.
SIEGEL: A little bit of arithmetic here. We now spend, I gather, about 2.3 trillion a year on health care costs. By 2019, how much do you think we'll be spending if these players actually do control their costs?
Ms. DEPARLE: Well, if they control their costs, we'll be spending - we'll save $2 trillion over the next 10 years.
SIEGEL: That would be the cumulative savings. Rather than spending $23 trillion over that time, we'd spend 21 trillion or something like that.
Ms. DEPARLE: That's right. And it would be a smaller percentage of our gross domestic product.
SIEGEL: How would we know that? That is, if in fact an insurance company says, we're only increasing our costs this year by three and a half percent. We would've increased them by five percent, but we're doing less because of our commitment to the White House, how would we know that that's the case?
Ms. DEPARLE: Well, over time, you should see premium rates of increase starting to decline. Remember pharmaceutical companies where they are, medical device companies, hospitals? So all of them, I think, are committed to taking steps that American families will notice.
SIEGEL: The White House speaks of achieving these savings, surely improving efficiency, technology and regulatory reform. Those all sound like fairly painless ways of saving money on health care. Could efficiency mean, say, fewer employees or lower pay for specialists or shorter hospital stays?
Ms. DEPARLE: Well, it might mean shorter hospital stays. It might mean that the people who need hospitalization are getting it. So those things would net out. It also could mean better use of health information technology. Some things will definitely be painful, and I think the health care sector knows that. Other things are measures that will have really tangible benefits for American families like simplifying the forms that everyone uses to explain the benefits that they got from their health insurer.
SIEGEL: Just want you to explain something. Since I've been hearing about the need for hospital cost containment for most of my adult life, what can the federal government do to put real pressure on a hospital to contain costs, apart from accepting the gracious commitment to cut costs or contain increases?
Ms. DEPARLE: Well, remember there are two sides to this equation. One is the way that the private sector receives their hospital care and the other is the way that the public sector receives and pays for hospital care. So in the public sector, the president put some reforms in his budget proposals that he sent up to Congress. And those include things like better care coordination and bundling payments to hospitals, for example, to make sure that when someone's admitted to the hospital as a Medicare patient, they get the care they need when they need it. And they don't get discharged from the hospital prematurely and then have to bounce right back in, which is very expensive to the system and also not good for the patient.
He included a proposal in his budget that raises, I think, 25 billion over 10 years in savings to the Medicare program. If the private sector payers, who were at the table today, were to adopt a similar proposal, you'd see savings throughout the private sector as well.
SIEGEL: Do you have support for this on Capitol Hill and for the major plan that's coming? Are all the ducks in a row in Congress?
Ms. DEPARLE: Well, there's a lot of support on Capitol Hill for health care reform. It's the president's number one priority. And the Congress is deeply engaged in working out the details of it right now.
SIEGEL: When do you think we'll be reading about a bill that people can understand about how it's going to change their health care?
Ms. DEPARLE: I think we'll be reading about bills both in the House and the Senate in July.
SIEGEL: And voting on it?
Ms. DEPARLE: And voting on it - maybe as soon as the end of July.
SIEGEL: Really? You think that we could have a health care reform plan passed before the end of the summer?
Ms. DEPARLE: Passed before the end of the summer in at least in one of the houses, maybe both. And, remember, I work for a president who said that health care reform cannot wait, must not wait and will not wait another year.
SIEGEL: Well, Nancy Anne DeParle, thank you very much for talking with us.
Ms. DEPARLE: Thank you.
SIEGEL: Nancy Anne DeParle, who is counselor to President Obama and director of the White House Office of Health Reform.