Healthcare News & Insights

Supercommittee fails: What does it mean for health care?

The so-called Supercommittee intended to reach a bipartisan deal for the federal budget has officially failed — and health care pros are scrambling to figure out what it means for their organizations. The consensus view: It ain’t good.

The committee was set up to find a compromise on how to cut $1.2 trillion in federal spending over the next decade. Failure to do so — which the committee officially announced on Nov. 21 — means the back up plan of “sequestration” takes effect. That means automatic cuts of that $1.2 trillion is cut from domestic and defense programs starting with 2013 spending.

Most directly affecting the health industry are planned cuts to Medicare — capped at 2%. Understandably, providers are worried about the effect that’ll have on their bottom lines.

The American Medical Association released a statement by President Peter W. Carmel, M.D., noting that cuts triggered by sequestration, along with the planned Jan. 1 physician payment cut of 27%, mean physicians may be forced to limit the number of Medicare patients they serve.

Similarly, the American Hospital Association’s statement warned that the cuts to Medicare will affect not just the elderly and disabled who rely on Medicare but their families who have to pick up the slack, as well as hospitals’ ability to provide essential services. The statement is available here (downloadable PDF).

“Sequestration means that arbitrary reductions in resources for patient care under Medicare will now be set to take effect under the law for the remainder of the decade,” Richard Umbdenstock, president and CEO of the American Hospital Association (PDF), said in a statement. “This will have an impact not just on the elderly and disabled beneficiaries of the program, but on their families,” he continued. “It will also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire healthcare system. It is likely that Congress will reconsider whether this approach should take effect in January 2013 as required under current law.”

What impact are you expecting to see from the failure of the Supercommittee to reach a deal? Share your thoughts and concerns in the comments.



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