Many conservatives have been suggesting that sequestration’s $85 billion in cuts is small in the context of the overall federal budget — just over 2 percent. But sequestration looms large when it comes to health care, and both doctors and patients are sure to feel the pain.
We in the health-care world are especially sensitive to cuts right now because we are in the middle of struggling to adjust to Obamacare’s reimbursement cuts, tax increases, and new regulations. Most patients are faced with new payroll, capital-gains, and excise taxes, and many others are burdened with higher insurance premiums and may need to change their policies. At the same time, doctors and hospitals are already dealing with a 2.3 percent tax on the gross income of medical-device companies, which is sure to be passed along to the consumer.
Meanwhile, there is already a doctor shortage, which is occurring in part because many of us are already not paid enough to cover our expenses. In response, we either stop taking public insurance programs, including Medicare, or quit entirely. Many hospitals are on the verge of bankruptcy, and there are 10 percent fewer emergency rooms in America now than there were ten years ago.
Sequestration’s across-the-board 2 percent Medicare cut may not seem like a lot, until you consider that doctors and hospitals are already teetering on the brink. For doctors who are still accepting Medicare, even a 2 percent cut in reimbursement could be too much. Medicare patients, on average, are older and sicker and require more service than do other patients– we can ill afford to be paid any less for seeing them.
A September 2012 analysis by the firm Tripp Umbach reported that the 2 percent Medicare cut will result in the loss of 496,000 jobs in 2013. Even if that figure is exaggerated, this is not a time when we can afford to lose any jobs at all.
Ditto for sequestration’s $1.6 billion cut to the National Institutes of Health (NIH). The NIH’s yearly budget is over $30 billion, so it might seem that it could easily absorb the austerity. There clearly is more than a billion dollars in bureaucratic waste within the NIH’s behemoth operation. However, the NIH conducts a great deal of essential research, and it estimates that it would have to issue 2,300 fewer grants per year if these cuts go through. The scientific-research community can ill afford fewer grants at a time when Obamacare threatens to weaken the incentives to engage in research and development.
On top of the cuts to Medicare and the NIH, the Department of Health and Human Services plans to cut $15.5 billion from its budget, with two-thirds of this coming from Medicare. This too will have a negative impact on patients.
And the HHS cuts will have effects beyond Medicare: The Association of American Medical Colleges has estimated that, as a result of the cuts, almost 23,000 fewer health-care providers will receive funding for continuing education related to women’s health, diabetes, or obesity. The planned 7.6 percent cut in funding for the National Health Service Corps could mean as many as 389 fewer scholarships and loan-repayment awards this year. Having worked with the NHSC in rural New Mexico as a medical student, I can personally attest to the great work this organization does. It should be expanded, not pared.
The federal government has enormous problems with entitlement spending and bureaucratic bloat. But now that it has placed the enormous weight of Obamacare on top of our existing health-care system, this is not the time to cut into essential government-run health-care services and research funding that pre-date the so-called Affordable Care Act.
A much healthier prescription would be to apply the sequester cuts to Obamacare itself.
— Marc Siegel, M.D., is an associate professor of medicine and medical director of Doctor Radio at NYU Langone Medical Center. He is a Fox News medical correspondent and the author of The Inner Pulse.