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Obama makes 'downpayment' on US healthcare reform

Published on 05/03/09 at 08:26am

President Barack Obama has reiterated his aim of bringing universal healthcare to the US and has put a $76.8 billion 'downpayment' on future reforms.

President Obama unveiled his plans as part a keynote address to Congress, in which he set out his vision to revive the country's ailing economy and improve America's general sense of well-being.

A major factor in America's feeling of malaise is the crisis in its healthcare system.

The situation has reached a crisis point, with an estimated 45 million Americans with no healthcare insurance, and a million more people losing coverage and adding to the total every year.

The main reason for this is the rising cost of insurance premiums, which are said to be causing a person to go bankrupt in American every 30 seconds.

Obama wants every American to have access to affordable insurance within five years.

"The cost of healthcare had weighed down our economy and the conscience of our nation long enough," Obama said.

"So let there be no doubt. Healthcare reform cannot wait, it must not wait, and it will not wait another year."

In addition to the 'downpayment', a further $630bn will be raised over ten years to finance fundamental reform of the healthcare system.

The funds for this spending will be generated from two sources - 50% from new revenues from increased taxes for the rich, and the remaining 50% from efficiency savings.

Americans will also be asked to play their part in improving their own health by adopting healthier lifestyles and thus avoiding expensive treatments.

A further $20bn has been put aside to improve health information technology.

The reforms will have major implications for the pharmaceutical industry. The most ominous sign is in Obama's budget, which indicates healthcare savings will be partly recouped through lower drug costs.

This could involve direct federal government price negotiation with drug companies, and even the setting up of a health technology assessment body like the UK's NICE.

Billy Tauzin, chief executive of PhRMA, the industry body for the US pharma industry warned against policies that might undermine innovation.

He said: "We understand the President's budget proposal must make tough choices in order to pay for needed reform [but] we strongly urge against the adoption of policies that could undermine innovation and disrupt patient access to life-saving medicines."

But the industry body pledged to work with the government and stakeholders to achieved the "shared goal of ensuring that all Americans have access to healthcare coverage".

Cancer research

President Obama has also pledged to find "a cure for cancer in our time" and the budget includes $6bn as part of a plan to double cancer research. This builds on a further $10bn set aside to support new research over the next two years.

Meanwhile the President has also selected Kathleen Sebelius, the governor of Kansas, to be secretary of health and human services.

The move comes after the President's first choice Tom Daschle was forced to step down after he was found to have not paid taxes on perks provided by a lobbyist.

Nancy-Ann DeParle's has been named as the White House's head of health reform. De Parle was previously head of health services in Tennessee, and worked in Bill Clinton's healthcare team.

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