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Teaching Hospital Update - April 8-12, 2013


Email Alert

April 12, 2013

By Allison Cohen*
Edited by Amy Kaufman

Cuts to Providers in the President's Budget Add to Existing Budget Concerns

Bloomberg BNA (4/11) reports that President Barack Obama's fiscal year 2014 budget proposes to reduce federal healthcare spending by $401 billion over 10 years, with $371 billion coming from reductions to Medicare. Providers are already facing reductions included in the Affordable Care Act and in legislation to avoid the fiscal cliff, so President Obama's call for substantial Medicare cuts exacerbate their struggles to provide access to quality care. Included in the President's budget are proposals that would call for Congress to find $15.4 billion to avert the 25% sustainable growth rate cut from taking effect; phase down over three years the amount of reimbursement hospitals can receive to cover the cost of patient bad debt; and reduce indirect graduate medical education payments by 10% starting in 2014.

The Looming Physician Shortage in the United States

Modern Medicine (4/10) reports that industry experts expect that "population growth, longer lifespans, and the aging" of the United States will result in a shortage of about 90,000 physicians by some estimates. "Additional shortfalls" are also projected as a result of healthcare reform. A study published in the Annals of Family Medicine (November/December 2012) found that by 2025 an additional 8,000 primary care physicians will be needed to treat patients covered due to the Patient Protection and Affordable Care Act. According to the U.S. Department of Health & Human Services' estimates, the national physician supply will increase by only 7% over the next 10 years; however, in certain specialties, the overall supply will decrease due to retirement. Although medical school classes are expanding to meet the public need, graduate medical education must also be expanded proportionately to avert significant shortages.

Tavenner's Smooth Senate Confirmation Hearing

Modern Healthcare (4/9) reports that the Centers for Medicare & Medicaid Services' (CMS') Acting Administrator Marilyn Tavenner experienced good will from senators during her confirmation hearing before the U.S. Senate Finance Committee. She received little push-back from Republicans opposed to healthcare reform who have faith in her non-partisan qualifications. During the course of the hearing, Tavenner rejected the concept of setting a target end date for Medicare fee-for-service payments, but said CMS could "expedite some payment reform initiatives in outpatient settings." She also said that CMS will not release premiums for exchange plans until August or September.

Sequestration's Impact on Scientific Research Grants

The Sacramento Bee (4/9) reports that the sequester cuts that went into effect on March 1 will impact scientific research by universities, resulting in delayed admissions decisions and cuts to positions and financial aid. University research receives substantial support from federal agencies, largely in the form of grants. Of the $65 billion universities spent on research in 2011, more than $40 billion was attributable to federal money. About 85% of the National Institutes of Health's (NIH's) budget is used to support research grants, but since the NIH budget is subject to a 5% cut under sequestration, grants will have to be scaled back. The National Science Foundation also estimates it will have to award 1,000 fewer research grants.

The Closure of LSU's Public Hospital Receives Final Legislative Approval

Times Union (4/10) reports that LSU's public hospital in Baton Rouge will close Monday after having received final approval from lawmakers. The joint House and Senate Budget Committee supported the most recent version of the privatization agreement, which will transition the healthcare services for the poor and uninsured to a private hospital. Lawmakers still have concerns that there will be gaps in care for pregnant women, prisoners, and mental health services. Baton Rouge legislators also said that Governor Bobby Jindal's (R-LA) administration had pushed this through without enough feedback or assurances that the level of care provided to patients will not be adversely affected. This is part of Jindal's effort "to privatize nearly all of the 10-hospital LSU system" that is responsible for providing care to the uninsured and training many of the medical students in the state.

*We would like to thank Allison Cohen, Esquire (Association of American Medical Colleges, Washington, DC), for providing this week's update. We would also like to thank Amy E. Kaufman, Esquire (Patton Boggs LLP, Washington, DC), for coordinating the weekly update.

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