Health-care trade organizations have formed a plan to reduce projected increases in health costs by $2 trillion over 10 years and will meet Monday with President Barack Obama to present the plan.

Health industry groups have pledged to reduce the rate of cost increases for treating patients by 1.5% each year, eventually resulting in the $2 trillion in savings, according to the White House. Participants in the plan are a diverse array of groups including the American Medical Association, the American Hospital Association, America's Health Insurance Plans and the Service Employees International Union.

Getting control of escalating health-care costs is a centerpiece of Obama's proposal to overhaul the nation's health-care system and expand health coverage to those currently uninsured. The vast savings envisioned by the industry groups, if realized, would represent a major step toward achieving that goal.

In excepts of remarks Obama will give Monday, he said the groups' convergence marks "an unprecedented commitment."

"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait," the prepared remarks said.

Administration officials spoke favorably of the plan Sunday, with one official saying the cost control plan "would virtually eliminate the nation's long-term fiscal gap," which is caused largely by the growth of the politically popular Medicare program.

According to the officials, the average family of four would save $2,500 in the fifth year after the cost reductions begin. In the first year of the plan, the same family would see roughly $500 in projected savings over what they would have paid in health costs.

By 2019, the officials said that plan would cause health spending as a percentage of gross domestic product to decrease by 3%. The growth of U.S. health spending has outpaced gross domestic product by leaps and bounds in recent years, increasing by 6.7% in 2006 and 6.1% in 2007.

The cost of providing health insurance coverage to all Americans is estimated to be at least $1.2 trillion over 10 years - a hefty sum, but one that the cost-savings plan would help to counter-balance by restraining the growth of Medicare and Medicaid.

Officials didn't elaborate on all the specific changes that health care providers and insurers would make to lower costs, but said that better coordination of patients' care and the use of "bundled payments" - which ties together payments for all services related to a patient's illness - would be central to the plan.

Officials said that they hope that health-care overhaul legislation would initiate the changes through Medicare and Medicaid, which would compel private insurance carriers to adopt the changes.

"Many of the steps that they need to take would be dependent on getting health-care reform done," an administration official said. "In many cases, providers and others are financially penalized by providing more efficient care under current law."

Additionally, one official said that insurance companies are "looking at a lot of administrative simplification," such as adopting shared forms for filing claims and a shared explanation of benefits.

Officials said that the plan submitted by the groups was "very similar" in concept to what AHIP President Karen Ignagni presented at a health reform summit in March. Members of the AHIP trade group include Aetna Inc. (AET), Humana Inc. (HUM), Cigna Corp. (CI) and UnitedHealth Group (UNH).

The first person to approach one of the officials about the plan was SEIU health-care head Dennis Rivera, according to the official.

Obama is set to meet with health-care stakeholder groups at 11:30 a.m. EDT.

-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com