First it was the financial cliff; then it was the debt ceiling. Now, Americans are concerned about the sequester – although many may not even know what it is.
The sequester entails approximately $85 billion in federal spending cuts that were agreed to in 2011 in the Budget Control Act. If Congress didn’t reach a deal to cut spending by March 1, 2013, Republicans and Democrats agreed that the sequester cuts would go into effect. Now that the day has arrived, both parties are facing 10 percent, across-the-board cuts.
Although Medicare will not be affected, there are significant areas in the health care field that will. According to an article published by U.S. News, there are three areas that health care consumers should be concerned about. They include:
- Hospitals: Decreases in Medicare reimbursement for hospitals and skilled nursing facilities are set to total nearly $4.5 billion, or about $1.3 million for the average facility. Such cuts are expected to result in layoffs, especially of nurses, who represent the largest percentage of employees in hospitals.
- Physicians: Medicare payments to doctors could drop by as much as 3 percent to 4 percent, according to some estimates, totaling about $4.1 billion. The reduction in revenue could be the last straw for frustrated physicians who may stop accepting Medicare patients — who tend to be 65 or older — or decide to retire a little sooner than they had planned.
- Research: Federal agencies such as the U.S. National Institutes of Health (NIH), the National Science Foundation, the U.S. Food and Drug Administration (FDA) and the U.S. Centers for Disease Control and Prevention (CDC) are each facing funding cuts of about 5 percent, or about $2.5 billion in all. The reductions could slow FDA reviews of proposed new drugs and medical devices, for example, and curtail some services at the CDC — such as infection control and immunization. The real impact on research projects, which are typically long-term efforts, is harder to estimate.
As the story unfolds, the true impact to the health care industry will be easier to understand. For now, the wait-and-see is a game that Americans – and the health care industry – are tired of playing.