Congress’s decision to push the “sequester” deadline to March 1, part of the bargain reached this week to keep the country from careening off the much-ballyhooed “fiscal cliff,” gives the healthcare industry a little breathing room before mandatory, across-the-board budget cuts could go into effect.
Among the potential effects of the sequester is a 7 percent reduction in the Food and Drug Administration’s $4.5 billion budget for 2013. This ultimately could result in a slowdown in the drug approvals process, which could affect pharma events from investigator meetings through product launches. The deal also temporarily puts off a 4.3 percent cut to the Centers for Disease Control and Prevention’s $11.2 billion 2013 budget, and a loss of more than 8 percent of the National Institutes of Health’s $30.7 billion budget, which could put a damper on these organizations’ participation in continuing medical education. All the cuts likely would lead to massive job losses throughout the healthcare industry, according to the American Medical Association.
Under the January 1 deal passed by the House of Representatives, physicians also put off for a year a 26.5 percent cut in compensation for Medicare patients. Instead, hospitals are being asked to make up for the Medicare funding shortfall with cuts to their Medicare and Medicaid reimbursements.
Not surprisingly, this does not sit well with groups representing hospital interests. In response to the new American Taxpayer Relief Act, American Hospital Association President and CEO Rich Umbdenstock said, “While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals’ ability to care for seniors and their communities … We will continue to work with Congress to find a permanent solution to the Medicare physician payment problem, while remaining vigilant against additional cuts that could be harmful to hospitals’ ability to fulfill their mission of caring.”