It’s not fun being the hostage

I think one of the most uncomfortable things for me about the recent debt ceiling standoff was the fact that the hostage in the showdown was the US economy. I am not an official economist, but it seemed like all the people I trust (on all ends of the political spectrum) were saying that a default would be terrible for the country. In essence, we were all at stake.

It’s no fun being the hostage in the negotiation. If it were up to me, I’d like to see the debt ceiling vote go away entirely. I don’t understand why it shouldn’t just be bundled into budget negotiations. If you vote for a budget with deficit spending, you should immediately raise the ceiling by that amount. If you don’t like that, budget differently.

The “trigger” mechanism in the deal tries to rectify that. Instead of the economy being held hostage, however, it sets up two new hostages: defense spending and Medicare providers. And if there’s one thing we’ve learned the last few months, it that it’s not fun being the hostage.

You’re already seeing some defense hawks grumbling about this. Hospitals and physician groups aren’t happy either:

Physicians, home health practitioners and other providers could see an additional 2 percent pay cut on top of double-digit Medicare reductions already slated for 2012 under the debt ceiling deal reached by the White House and congressional leaders late Sunday.

There’s also more general concern about a new congressional panel to be created by the deal that would have broad authority to cut federal spending on Medicare, Medicaid and even some parts of President Barack Obama’s health care law, according to health care lobbyists and budget officials.

Under terms of the hurried deal, the 12-member joint committee would be charged with crafting proposals that trim at least $1.2 trillion in federal spending over the next decade. Those savings could be found in a number of programs, including Medicare and especially Medicaid, which the White House has signaled it would be open to.

If the panel can’t come up with enough savings, automatic cuts would go into effect. Medicaid, Social Security and veterans’ benefits would be protected. But providers could see a 2 percent cut in Medicare reimbursement.

I said a little while back that I thought it was a bit tone deaf for the AMA to fight for the doc fix at a time when spending cuts were all the rage. I agree that fixing the SGR needs to be part of a long-term “grand bargain”, but unfortunately, the groups opposed to that mechanism were not the ones being targeted by the AMA, at least as far as I could see.

Even worse for providers, the negotiations of the Super Congress would need to be wrapping up at just about the same time that the SGR is once again slated to kick in – reducing Medicare reimbursement about 29% across the board. If the AMA thinks it’s going to be easier to convince politicians to find a couple hundred billion dollars to solve this issue then, they’re in for a bit of a rude awakening.

I’ve become a bit more dispirited the last few weeks. I’m not sure I believe that the Super Congress will succeed where the entire Congress seemed to fail. If that’s the case, providers are in for some massive cuts next Fall. Anyone who thinks that won’t affect patient care, especially for seniors, isn’t paying attention.

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