Medicare Spending Cuts To Lead to Loss of 766K Health Jobs, Report Says

As many as 766,000 health care jobs will be lost by 2021 if lawmakers do not avert a 2% cut in Medicare spending outlined in the 2011 debt reduction agreement, according to a report by a coalition of three large medical groups, MedPage Today reports.

The report -- by the American Medical Association, the American Hospital Association and the American Nurses Association -- predicts that the automatic cuts, known as sequestration, would cost 496,000 jobs in the first year. Job losses in physician, dentist and other practitioner offices alone would exceed 40,000 in 2012, growing to nearly 62,000 by 2021, according to the report. Sequestration also would negatively affect other industries whose clients are in the health care sector, the report stated (Pittman, MedPage Today, 9/12).

Meanwhile, nursing homes also would be negatively affected by the sequester, according to a press release from the Alliance for Quality Nursing Home Care. Skilled nursing facilities in Florida would see their Medicare funding cut by $66 million, while facilities in Ohio and Pennsylvania would see their funding decline by $37.3 million and $36.9 million, respectively (Kulkarni, "Capsules," Kaiser Health News, 9/12).

Coalition Urges Action by Congress

In a letter, the coalition urged Congress to take action against the provider cuts under the sequestration, as well as the expiration of the sustainable growth rate formula, at which point physicians face a scheduled 27% cut to Medicare reimbursements. Both will take effect in 2013 and "devastate" health care providers and patients' access to care, the groups wrote.

"We believe the Congress should not abdicate its responsibility to deliberate and make policy decisions on what is important and needs to be funded," the groups wrote, adding, "The status quo is unsustainable, and will do considerable harm to the Medicare program as well as the broader healthcare delivery system" (Viebeck, "Healthwatch," The Hill, 9/12).

Groups Offer Alternatives

At a news conference Wednesday, AMA President Jeremy Lazarus said the cuts would coincide with an anticipated influx of baby boomers in Medicare. Physician reimbursement for treating beneficiaries has remained flat for more than a decade, while the cost of caring for them has increased by 27%, he added. "Common sense tells you that this is not a good time to take a hatchet to health care," he said.

AHA President Rich Umbdenstock offered several alternatives to the Medicare payment cuts, including liability insurance reform, increasing the Medicare eligibility age and reducing payments to pharmaceutical and medical device companies. Although AMA has not proposed an alternative to the cuts, the group supports alternative-payment models, Lazarus said (MedPage Today, 9/12).