From the November 2011 issue of HealthCare Business News magazine
So what happens if they miss the required date for submission of recommendations for cuts of $1.2 trillion, or even worse: they come to an agreement and Congress doesn’t pass a bill for the president to sign?
The answer isn’t pretty. Should the Supercommittee or Congress fail to meet the deadlines set by the Budget Control Act of 2011, or if the president vetoes the bill, then a failsafe mechanism is automatically triggered, resulting in $1.2 trillion in discretionary cuts. A portion of that amount, about $123 billion would apply to Medicare providers but not to Medicaid or Medicare beneficiaries. This would certainly have a chilling effect on the delivery of health care services.
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Rep. Jeb Hensarling, (R-Texas) the co-chairman of the Supercommittee, views it differently. In an interview with Newsmax.TV on October 26, he said: “Entitlement programs do not have to be cut by a penny to meet that demand. Instead, ways have to be found to prevent Medicare, Medicaid and Social Security from growing.
“You cannot have programs that are growing at 5 and 6 and 7 percent a year when great economic growth might be 3 percent,” he said. “The committee’s main task is to figure a way to bend the growth curve.”
In addition to the Medicare provider cuts, there is speculation that, in order to make this work, the federal mandate for increased Medicaid services would remain, while more of the burden of paying for the services would be shifted to the states. Many states are already running huge budget deficits and may not be able to shoulder the burden.
Will the Budget Control Act of 2011 affect the health care market in the U.S.? I believe when you look at the structure of the deadlines and the triggers, there is no way that health care can avoid being negatively impacted. As Margo Channing (Bette Davis) said in the film All About Eve, “Fasten your seat belts. It's going to be a bumpy night!”
Diana Upton is president of the International Association of Equipment Remarketers and Servicers (IAMERS), a trade association comprised of members who sell and/or service pre-owned diagnostic imaging equipment.
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