"This is an extraordinary moment of opportunity for real reform in healthcare," said Senator Edward M. Kennedy of Massachusetts, who is helping lead the healthcare effort in Congress.
The proposal, however, was short on specifics. And it appeared to do little to shift positions in Congress as lawmakers attempt to write legislation to implement Obama's goal of extending healthcare to some 50 million uninsured Americans.
Several lawmakers made clear that the industry proposal would do nothing to stave off the outcome 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.
"This commitment to cost-cutting is a good-faith gesture by the healthcare industry, but it does not mitigate the need for a public plan option in the upcoming reform bill," said Senator Charles Schumer, a member of the Senate Finance Committee that's writing a health reform bill.
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.
And slowing the increases doesn't translate directly to paying the estimated $1.5 trillion cost of covering the uninsured. Money saved by the private sector doesn't flow directly to the federal treasury.
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.
Karen Ignagni, president of America's Health Insurance Plans, contended that the voluntary cost-containment effort would help lawmakers who are aiming to craft health overhaul legislation by August.
Many economists, however, say true spending reductions will require much more than nips and tucks.
