AMA: Sequester of Medicare spending could lead to job losses

September 27, 2012

A new 2% sequester on Medicare spending could exacerbate problems caused by Medicare physician payment cut.

A 2% sequester of Medicare spending as mandated by the Budget Control Act of 2011 could lead to a loss of more than 750,000 healthcare and related jobs, according to a new report from the American Medical Association (AMA) and the American Nurses Association.

The report was compiled by Tripp Umbach, a firm that specializes in conducting economic impact studies. The model used by Tripp Umbach reflects how cuts in Medicare payments for healthcare services will lead to direct job losses in the healthcare sector. The model estimates that in the first year of the mandated sequester, more than 496,000 jobs will be lost. A ripple effect will follow and spread to other economic sectors beyond healthcare in every state, the report states. It predicts 78,000 jobs lost in California alone by 2021.

“This new report shows that the sequester of Medicare spending will lead to the loss of hundreds of thousands of jobs,” says AMA President Jeremy A. Lazarus, MD. “Coupled with the looming 27% Medicare physician payment cut, this 2% sequester will hurt patient access to care and will inject more uncertainty into our Medicare system.”

Click here to see the full Tripp Umbach report.