Sequester Cuts and the Disgruntled Healthcare Community

With the budget plan approved by the Senate on March 23rd, President Barack Obama released the proposed fiscal budget for the year 2014, announcing major cuts to the healthcare industry.

A joint study by the American Medical Association and the American Hospital Association estimated that the reduced funding for healthcare would result in a loss of 766,000 jobs by the end of year 2021. These job cuts would penetrate through the economy and around 496,000 jobs would be lost in healthcare and related industries by the end of this year.

The proposed budget means to reduce $400 billion dollars from Medicare over the next ten years. Research shows that these cuts are highly unpopular with around 82% of the population against the cuts in Medicare.

Through the sequestration, $140 billion of funding to scientific research will be cut by 7% including a $1.6 billion cut to the National Institute of Health, which is the largest Biomedical Research Institute in the world. The CDC (Center for Disease Control and Prevention) also faces a cut in funding by $289 million.

The American Association of Cancer Research gathered 15,000 protestors in Washington D.C., comprised of healthcare professionals, patients and researchers alike to protest against the sequestration cuts. Eric Hoffman, director of the Center for Genetic Medicine Research at Children’s National Medical Center in Washington voiced his dismay and said, “They are doing cuts on top of cuts on top of cuts”.

Gene Ransom, executive director of the Maryland State Medical Society said, “Doctors are very nervous about this, it’s not like the cost of business has gone down”.

Rich Umbdenstock, CEO of the American Hospital Association said, “In addition, the budget would jeopardize the ability of hospitals to train the next generation of physicians by cutting funding for graduate medical education, and hinder care for people in rural communities by reducing funding for critical access hospitals.

Furthermore, industry experts say that the budget cuts would wreak havoc and result in around 3000 lesser inpatient admissions, 804,000 lesser outpatient visits and 424,000 lesser HIV tests granted by the CDC.

Despite the ongoing protest against the budget cuts and its potentially damaging effects on care delivery, a segment within the healthcare community believes that 2% reductions do not make that much of a difference and are largely unconcerned. Rob Schile, partner in charge of health systems and reimbursement at CliftonLarsonAllen said, “While these cuts are significant in terms of total dollars and undoubtedly will have some overall impact on the economy, the remaining $85 billion targeted for 2013 represents just over 2 percent of the total $3.8 trillion in federal spending for 2013” He added, “In reality, the proposed cuts should not equate to the level of devastation currently portrayed in the media”.


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