Industry claims that feds’ debt-reduction plans will lead to massive layoffs
Twould avoid sequestration altogether.
“It’s the American people who will pay the price for Republican intransigence,” Rep. Chris Van Hollen (D-Md.), ranking member on the House Budget Committee, said in a statement.
“The report makes clear that sequestration would cause great disruptions across many vital services, from cancer research at NIH, to food-safety efforts at the Department of Agriculture and public safety at the FBI, to lowered military readiness. It’s time to stop the political games and start working together to prevent the sequester, protect the economic recovery, and get our fiscal house in order,” he said. Van Hollen introduced an alternative proposal last week that calls for spending cuts and additional revenues, but the legislation did not make it to the House floor for a vote. If implemented, the sequester also would make several reductions to other healthcare programs. For instance, the National Institutes of Health would see payment cuts totaling $2.5 billion over 10 years. “The National Institutes of Health would have to halt or curtail scientific research, including needed research into cancer and childhood diseases,” according to the report. Meanwhile, about $464 million would be cut from the Centers for Disease Control and Prevention, $66 million from grants set aside for the health insurance exchanges, and about $27 million from community health centers.
Other healthcare programs would be exempt from the sequester, such as the PreExisting Condition Insurance Plan and Consumer Oriented and Operated Plan in the healthcare reform law, as well as Medicare health information technology incentive grants in the American Recovery and Reinvestment Act, grants to states for Medicaid, quality improvement organizations and the Children’s Health Insurance Fund.
“As Congress looks for ways to cut the deficit, we must not lose sight of the economic contributions of the healthcare sector, including hospitals,” Richard Umbdenstock, president and CEO of the American Hospital Association, said last week at a news conference in Washington. “Hospitals are the largest component of the healthcare sector and employ 5 million people. In fact, hospitals rank second only to restaurants as the top source of private-sector jobs across the U.S.”
The brief report from Tripp Umbach tallies job losses projected in healthcare, as well as jobs that would be lost in industries that sell goods and services to healthcare organizations he White House finally put a number on how much needs to be cut from the Medicare program as part of the debtceiling law, and groups representing hospitals, doctors and nurses put a number on how much it would cost them—in jobs.
Days before the Obama administration provided details on how it will obtain $1.2 trillion in 10-year federal spending cuts—including a maximum 2% annual cut to Medicare—the American Hospital Association, American Medical Association and American Nurses Association released a study from research firm Tripp Umbach that kicked lawmakers where it would hurt the most: employment.
The associations said the cuts would lead to more than 766,000 lost healthcare and related jobs during that period. In 2013 alone, the study found, the cuts will result in 496,431 fewer jobs, with hospitals accounting for the most.
Last year, President Barack Obama signed the Budget Control Act, which imposed more than $900 billion in discretionary spending caps over 10 years to help reduce the nation’s deficit. The law also established a Joint Select Committee on Deficit Reduction to identify another $1.2 trillion in cuts. If the committee failed to do this, the law set up a sequestration procedure that would trigger automatic spending cuts split evenly between defense and non-defense programs—including the maximum 2% annual cut to Medicare—from 2013 to 2021.
The supercommittee failed to find the savings before its November deadline, which means those cuts are scheduled to take effect in a little more than three months, unless lawmakers agree
“We must not lose sight of the economic contributions of the healthcare sector, including hospitals,” the AHA’s Richard Umbdenstock, left, said at a news conference in Washington with Dr. Jeremy Lazarus, of the AMA, and Cindy Balkstra, of the American Nurses Association.
on an alternative plan (Nov. 28, 2011, p. 6).
On Sept. 14, the White House provided detailed estimates on the sources for those reductions. The sequestration must reduce nondefense spending by $54.6 billion each year, of which about $11.1 billion would come next year from the portion of Medicare that is subject to the 2% limit. From that amount, about $5.8 billion would come from the Medicare Federal Hospital Insurance Trust Fund.
In a conference call with reporters, senior Obama administration officials said the administration does not “support the indiscriminate cuts in this report,” and added that the cuts should never be implemented. They were also quick to criticize congressional Republicans for failing to take a balanced approach to deficit reduction—one that would include spending cuts and tax increases—that