News today is all over the debt ceiling deal which is brewing in Congress. I'm less interested in the horse-race element of who won, who lost than I am in the policy implications of the deal as it is currently taking shape. And there's one thing there that I really don't like, and anybody in healthcare should be pretty apprehensive about.
Here's the broad outline:
- The debt ceiling gets raised and economic Armageddon is averted. Good enough.
- A panel of mutually agreed spending cuts of about $900 Billion is enacted.
- A commission is formed to negotiate another $1.5 trillion in deficit reduction over the next year or so.
- A trigger is placed: if the commission fails to agree on the $1.5T in deficit reduction, certain deep cuts automatically go into effect.
The land mine here is the trigger. It's supposed to be a package of unacceptably painful spending cuts, so heinous that neither party would be willing to let them go into effect. It includes deep defense cuts which probably will be blocked, deal or no deal. But it also includes deep cuts into medicare and medicaid. To avoid any accusation that either party is willing to reduce benefits, though, there is no reduction in eligibility or benefits. All the reductions are in provider compensation.
I find this pretty scary. Details are not out there, so I don't know whether these cuts would be from hospitals, physicians or some combination. But I recall the ten-year cost of the SGR fix is supposed to be about $300 billion and sources indicate that is about the amount that is supposed to come out of medicare if the trigger goes into effect. I kind of doubt that the whole amount would come onto the shoulders of physicians, but it's a concerning possibility.
I'll be very interested to see the detail of the deal when they become available -- probably after passage. It seems to me that this is a terrible deal for health care providers -- the nation's economy was held hostage to the debt ceiling and deficit hawks. Now that has been defused, but the health care sector has replaced the overall economy as the hostage, and one I fear policymakers will be more willing to sacrifice in the name of expediency.