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Sequestration Takes Effect; Health Care Industry Reacts


After pulling out a few last-minute deals and compromises over the last three years, Congress was not able to avoid automatic spending cuts that took place on Friday to the great dismay of the medical community.

After pulling out a few last-minute deals and compromises over the last three years, Congress was not able to avoid automatic spending cuts that took place on Friday.

The sequestration includes $1.2 trillion in spending cuts that will take place over a decade, including 2% from Medicare. According to a report released by the American Hospital Association, the American Medical Association (AMA) and the American Nurses Association in September, the 2% sequester of Medicare spending will cost 750,000 health care and related jobs over the next decade.

“The across-the-board cut will hit physicians particularly hard because of the fundamentally flawed Medicare physician payment system,” AMA President Jeremy A. Lazarus, MD, said in a statement. “Since 2001 Medicare payments for physician services have only increased by four percent, while the cost of caring for patients has gone up by more than 20 percent. A two percent cut widens the already enormous gap between what Medicare pays and the actual cost of caring for seniors.”

Jeffrey Cain, MD, president of the American Academy of Family Physicians, said that allowing the cuts to take place will hurt the country’s goal for high-quality, affordable care.

“As small businesses operating on a razor-thin margin, family physicians will face a stark choice between putting their practices at risk or reducing the number of elderly and disabled patients they can see,” Cain said in a statement.

According to the Association of American Medical Colleges, the sequestration will impact institutions’ ability to invest in training new health professionals. President and Chief Executive Officer Darrell G. Kirch, MD, expect that cuts to funding that supports training at teaching hospitals will only exacerbate the physician shortage.

“To continue to improve our nation’s health and economic well-being, America needs more investment in medical research and the health care workforce, not less,” he said in a statement. “Congress and the Obama administration must work together on a realistic solution that avoids the destructive consequences of continued cuts to programs that benefit all Americans.”

Despite the dismay from the medical community and the fact that Americans refer to sequestration as a “disaster,” according to a Gallup poll, the stock market actually finished slightly up. At 14,075 the Dow is incredibly close to its all-time high of 14,164, which it reached on Oct. 9, 2007.

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