In­dus­try claims that feds’ debt-re­duc­tion plans will lead to mas­sive lay­offs

Modern Healthcare - - FRONT PAGE - Jes­sica Zig­mond

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

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