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Budget Outlook Mixed For Medical Schools, Hospitals
Congressional budget wrangling before the spring recess has left lawmakers with unfinished business for subsequent actions that will have major impacts on medical schools and teaching hospitals. The Senate on April 11 voted 51-50 on a compromise plan for the 2004 budget, with Vice President Dick Cheney casting the tiebreaking vote. The House passed the measure 216-211. While the 2004 budget plan - a congressional resolution - so far neither deals with specifics nor carries the force of law (it does not require the president's signature), it does set limits on federal spending. The budget proposal allocates spending into various categories, known as "budget functions." While not binding, the functions reveal congressional priorities across broad areas such as defense, education, and health. The resolution projects high deficits - to a record $385 billion for next year - while gradually declining until a projected surplus returns by 2012. 'Budget train wreck'For the AAMC members, the stakes are high as Congress moves forward. "Congress is setting itself up for the same budget train wreck as last year," said David Moore, associate vice president for the AAMC's Office of Governmental Relations. "The leadership began the year talking about limiting discretionary spending, but when the members begin to see what those spending limits will mean for specific programs and how they will have to vote to freeze or cut spending for popular initiatives, the process slowed down dramatically," Moore said. "Last year the process completely fell apart, and Congress did not decide to finalize FY 2003 funding until four and half months into the fiscal year. That kind of uncertainty makes it difficult for our institutions to do proper planning," he added. One area of concern for AAMC members is discretionary health programs. Although the Senate unanimously approved an amendment by Sen. Arlen Specter (R-Pa.) to add $2.8 billion to this category to increase funding for the National Institutes of Health, the Centers for Disease Control and Prevention, and health professions training, the final conference agreement calls for only a $152 million (0.3 percent) increase for these programs in FY 2004. On the plus side, the resolution eliminates the House proposal that threatened to cut $265 billion from Medicaid, veterans' health, and other mandatory healthcare programs. The blueprint also budgets $400 billion for lawmakers to develop a Medicare prescription drug benefit later this year. While the final bill does not include specific spending cuts to Medicare and Medicaid, it would not prevent such cuts. The Bush administration believes some providers are overpaid by Medicare and has suggested in its own budget blueprint that "these overpayments could be used to modernize the Medicare program." House Ways and Means Committee Chair Bill Thomas (R-Calif.) has indicated that he will look seriously at recommendations made by the Medicare Payment Advisory Commission to reduce Medicare payments to certain providers, including hospitals. Clearly, the battle against additional provider cuts is not over. Thomas hopes to take Medicare legislation that would include a prescription drug bill and other adjustments to the House floor for a vote by Memorial Day. Teaching hospitals may face an uphill battle on these issues for the rest of the year in attempting to urge Congress to repeal last year's cuts to the Medicare Indirect Medical Education and Medicaid Disproportionate Share Hospital payments. By Martha Frase-Blunt, |
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