AMA: Cuts to physicians who treat Medicare patients hurt jobs, patient access and Medicare modernization

A guest column by the American Medical Association, exclusive to

Physicians contribute significantly to both the health of our patients and the economic health of our nation, and a new report shows that the 2 percent Medicare spending sequestration cut will put the jobs supported by the health care industry in jeopardy.

The AMA recently teamed up with the American Hospital Association (AHA) and the American Nurses Association (ANA) to release a new study showing that hundreds of thousands of jobs will be lost due to the Medicare sequestration cut dictated by the Budget Control Act.

Right now, we have an aging population of baby boomers who need the health care Medicare makes available, and we also have Americans who are grateful to have – or are looking to find – the good jobs the health care system provides. Common sense tells you that this is not a good time to take a hatchet to health care, which saves American lives and puts Americans to work.

The new report gives us a first look at the direct and indirect employment impact of the sequestration cuts to Medicare. It estimates that during the first year of this sequester, more than 496,000 jobs will be lost, and this number will grow to a job loss of 766,000 by 2021. Coupled with the looming 27 percent cut in payments to physicians who treat Medicare patients caused by the flawed Sustainable Growth Rate enacted by Congress, this sequestration cut will hurt patient access to care and will insert more uncertainty into Medicare. We need stability in the Medicare program as we work to promote high quality, high value, better coordinated patient care.

Payments to physicians who treat Medicare patients have been nearly frozen for a decade while the cost of caring for patients has increased by more than 20 percent, creating a huge gap between Medicare payments and the cost of providing care to seniors. Those who rely on Medicare for their health care already face roadblocks to physician access: according to a 2010 MedPAC survey, about one in four Medicare patients looking for a new primary care physician has had trouble finding one.

As we look to shape the health care system of the future that focuses more on keeping patients healthy and coordinating their care, physician practices must make investments in technology, hiring new staff and training for their current staff.  The impending sequester, paired with more than a decade of essentially flat Medicare payments, denies practices the resources they need to make these investments in the future of health care.

As part of the AMA’s new strategic plan, we currently have the opportunity to improve and restructure care delivery and payment policy. Physicians have already begun transitioning into alternative payment and delivery models, both in Medicare and the private payer market, and many ground-breaking innovations are already underway. It is critical that we continue our work to modernize physician practices and support the coordinated care that can improve patient health and prevent costly complications.

Congress must take action to remove the threat of an impending cut to physicians who care for Medicare patients. The AMA, along with state and specialty medical societies, sent a letter to Congress today urging the passage of legislation to nullify the sequestration cut. To prevent widespread patient access problems, significant job losses and slowed progress toward Medicare innovation, we must have stability in payments for those who treat Medicare patients.

Jeremy Lazarus is President, American Medical Association.

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