US healthcare reforms focus on cost control

Controlling costs is emerging as the Obama administration’s top priority in health as it seeks a reform package that greatly expands coverage of the 47m uninsured Americans.

The White House’s approach is to widen coverage within strict fiscal constraints, rather than increasing coverage at all costs, reflecting the political and economic pressures imposed by record budget deficits, according to healthcare analysts.

Some liberal critics are concerned that Mr Obama is preparing to water down his ambitions to expand coverage and could jettison a promise to include a public healthcare plan. But many supporters recognise the increasingly urgent need to show fiscal discipline.

In an interview with the Financial Times, Peter Orszag, the White House budget director, said: “We have been very clear that a deficit-increasing healthcare reform is neither practical nor desirable.”

A senior administration official told the FT that health reform would have to be deficit-neutral over 10 years and in the tenth year, and promise substantial savings over the longer term.

Health campaigners fear this could make it difficult to achieve near-universal coverage. Bill Galston, an analyst at Brookings, the public policy group, said: “The fact that the administration appears to be leaning towards making cost reductions a priority is consistent with the larger political reality. Remember, 85 per cent of American people have health insurance and there is genuine public concern about rising fiscal deficits.”