Hospitals appear
likely to “take the biggest hit” under efforts to trim Medicare
spending by $35.89 billion over the next five years outlined
yesterday in President Bush’s 2007 proposed budget, the Wall
Street Journal reports. The proposal would reduce Medicare
spending by decreasing payments to medical providers by $30
billion—resulting in a more than $8 billion reduction in hospital
payments over the next five years—while also reducing budgets for
the NIH and the CDC and eliminating or scaling back
funding for several “innovative” medical programs. According to
federal officials, the plan would slow the annual growth in Medicare
spending from 8.1% to 7.7%, a change that HHS Secretary
Michael Leavitt says is “necessary…to maintain [the program’s]
sustainability.” President Bush also called for the elimination of
an inflation adjustment on monthly premiums for Medicare
beneficiaries with annual incomes higher than $80,000 and suggested
“reduce[ing] federal spending on Medicare when it exceeds 45% of the
total program costs for two years in a row.” The proposal also aims
to boost enrollment in health savings accounts by 2010 from an
estimated 14 million under existing laws to 21 million through tax
breaks that make the accounts more desirable. Furthermore, a number
of HHS programs and agencies would experience budget reductions
under the proposal. For example, CDC funding would be cut by $179
million in 2007, the NIH would receive “flat funding” of $28.6
billion next year, and the National Cancer Institute and
National Institute of Diabetes & Digestive & Kidney Diseases
would see $40 million and $11 million in reductions, respectively.
Other programs “on the government chopping block” include a $10
million program to screen newborns in poor families for hearing loss
and a federal program that installs defibrillators in rural
communities. Finally, the budget proposal calls for the abandonment
of the National Children’s Study, which is the “largest study of
U.S. children ever performed” and aims to determine the preventable
causes of asthma, autism, and premature birth, as well as
investigate other influences on childhood health. The president of
the American Hospital Association says the proposed budget
represents “a step backwards in protecting access to care for all
Americans.” The Journal notes that the proposed budget
“faces an uphill battle in Congress, where local hospitals hold
great sway with lawmakers” (Lueck, Journal, 2/7;
Neergaard, AP/Washington Post, 2/7).
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