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Blooberg, The New York based information services ,news and media giant reports the reactions of  major medical imaging companies like, GE healthcare, Siemens AG towards Obama's plan to cut medical imaging costs as a part of The Obama administration American Recovery and Reinvestment Act 2009.

GE and Siemens, though they acknowledged the efforts of Obama to cut healthcare costs, expressed their voice of disapproval against a plan proposed in the president’s budget that require approvals from a private “benefit manager” before Medicare paying for imaging.  The White House spokesperson said that this measure would save $260 million over a decade, money that would aid Obama’s plan to expand health coverage.  GE healthcare America's president commented that , the benefit managers will hamper access and also would result in additional administrative costs and GE probably will not support a system that gets between physicians and patients.

The reason behind such reaction of medical giants is that the new measure would hold back the equipment sales of these companies that accounts a major portion of their total revenue . The medical equipments accounted for more than half of GE’s $17.4 billion in health-care sales last year, which is about 5 percent of overall revenue. The reports from imaging unit at Siemens shows it generated 262 million euros ($328.7 million) in profit in the fiscal first quarter, a fifth of net income.  And reports says that Obama’s plan would mean fewer procedures and lost revenue for equipment makers led by GE, Siemens and Amsterdam-based Royal Philips Electronics NV.  The objective of the proposal is obviously to slow the growth in demand, And slowing the growth would translate into fewer sales for the equipment makers.

Obama’s budget has also drawn fire from insurance companies and drugmakers, who criticized the demand for more savings from both industries.  Drug giants like Eli Lilly & Co. and AstraZeneca Plc said that they would lose “several hundred million” dollars from Obama’s proposal to sanction deeper discounts for drugs they sell under Medicaid,the health plan for the poor. 

A report by The Government Accountability Office (GAO), points out that doctors are increasingly owners as well as users of scanning equipment, giving some an incentive for unneeded tests.  Report also says that the use of imaging varied substantially across geographic regions, suggesting that not all utilization was necessary or appropriate.  According to the Reston, Virginia-based American College of Radiology Reports, Doctors ordered almost 600 million X-rays, magnetic resonance imaging tests, computed tomography scans and other procedures in 2006, Medicare paid for a third of them.

Soon after the release of budget on Feb. 26, the Medical Imaging & Technology Alliance, the trade group representing both GE and Siemens, issued a statement warning that the plan would deny life-saving medical services. Obama expressed his view on this that the the inabilinability to reform health care in the past is just an example of how special interests have had their way and the public interest has fallen by the side. But this time, with support for reform from doctors and patients, unions and businesses weary of high labor costs, things will be different.  Incase the Congress approves, Obama’s plan would be the latest attempt to rein in Medicare imaging costs, which more than doubled to $14.1 billion from 2000 to 2006.