Washington Informer

Within moments of Obama's appearance with the industry leaders, lawmakers praised the effort but suggested it didn't go to the heart of the healthcare debate.

Several lawmakers made clear that the industry proposal would do nothing to stave off the outcome that health insurers and others are trying to avoid - a new government insurance plan that would be available to middle-income Americans. Health insurers say such a plan would drive them out of business.

Sen. Ron Wyden (D-Ore.) cautiously welcomed the industry's offer while saying, "I am not about to take the fox's word that the hen house is safe." Wyden said the industry's promises need to be given the weight of law.

The industry groups said they would slow the growth of healthcare costs by 1.5 percent a year by coordinating care, reducing administrative costs and focusing on quality, efficiency and standardization. Healthcare costs would still grow faster than the economy as a whole, but not as fast as they otherwise would. The specifics, industry officials said, would come later.

The top Republican on the Senate Finance Committee, Chuck Grassley of Iowa, called the announcement a "move in the right direction," but said it would be more significant if the Congressional Budget Office, Washington's arbiter of what costs or saves money for the government, determined it saved money.

"When the White House and the industry put concrete proposals on paper and get a score from the Congressional Budget Office, then we'll know if the suggestions really achieve that kind of savings, and it'll be big news," Grassley said. "For healthcare budgeting purposes, CBO's word is the only one that counts."

Karen Ignagni, president of America's Health Insurance Plans, said the voluntary cost-containment effort would help lawmakers who are aiming to craft health overhaul legislation by August.

"They need help from the stakeholder community on cost containment and what you're hearing from all of us is we intend to help and that I think is the story today," Ignagni said.

The groups who signed onto Monday's effort were the American Medical Association, America's Health Insurance Plans, the Pharmaceutical Research and Manufacturers of America, the Service Employees International Union, the American Hospital Association and the Advanced Medical Technology Association.

Officials said they could bring costs down even while continuing to stay profitable - noting that if healthcare legislation passes they'd be able to tap into a huge pool of currently uninsured people.

Associated Press writers Henry C. Jackson and Ricardo Alonso-Zaldivar contributed to this report.