around the bar
October 18, 2011

Cuts in Federal Spending Cause Concern with the Implementation of Healthcare Reform

By Rabiah Alicia Burks
Oct. 18, 2011

WASHINGTON­– Experts from around the country weighed in on the impact of federal budget cuts on the implementation of the recent healthcare reform at the _’s Washington Healthcare Summit in Pentagon City Tuesday. The two­­-day event was sponsored by the ABA Health Law Section.

“When the president took office in 2009, he looked out at the challenges our country faces and healthcare stood out,” said Liz Fowler, special assistant to the president for healthcare and economic policy at the National Economic Council.

Fowler told attendees that before the Affordable Care Act, healthcare costs affected American companies’ ability to compete globally, and threatened the nation’s economy in the long term.

“For all we spend on healthcare we don’t get our money’s worth,” Fowler said. “Caring for the uninsured and those who cannot afford to pay their bills cost the nation $43 billion in 2008 and increased the premiums for those who have insurance by more than a thousand dollars per family every year.”

Those most affected by the change are lower-income workers, who are expected to benefit from the new regulations.

“The bulk of people who are going to get coverage under the act are low-income workers, who today are making minimum wage or close to it or holding low-wage jobs without insurance,” said Sarah Rosenbaum, a law professor at George Washington University.

While many healthcare associations and organizations supported reform, health experts are becoming increasingly concerned about the impact that federal budget cuts will have on Medicare and Medicaid funding.

“We’re very focused on preserving the funding for Medicare and Medicaid and it would certainly complicate the efforts to extend coverage that was envisioned by Medicare and healthcare reform,” said Lawrence Hughes, assistant general counsel of advocacy and public policy at the American Hospital Association.

Medicare is a significant payer for most hospitals in the United States and reductions in costs will put constraints on what hospitals are able to do, Hughes said.

“The need to reduce costs at the same time that one is attempting to comply with new kinds of regulations and expand services to provide greater quality of care are conflicting ideas that make it very hard to do both,” Hughes said.

Medicaid is either the largest or the second largest item in states’ budgets.  Medicaid covers 60 million people at an annual cost of $400 billion per year, making it the largest healthcare provider in the nation.

“The first concern [for Medicaid directors] has nothing to do with the health reform at all, it’s the budgetary crisis that we are currently facing,” said Matt Salo, executive director of the National Association of Medicaid Directors.

“They are trying to find ways to reduce enough spending to meet their budgetary targets while maintaining their current standards of quality and access,” Salo said. “The decisions they are going to be making and the cutbacks that are being implemented will have an impact on the implementation of healthcare reform when it does come.”

The new regulations are expected to present new changes for lawyers who specialize in healthcare.

“Healthcare lawyers will need to know and understand what those changes are for their own organization to understand what their new healthcare environment will be like,” Hughes said.

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