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A Word from the President: A National Moment of Truth

AAMC President and CEO, Darrell G. Kirch, M.D. AAMC Reporter: September 2011

With temperatures finally beginning to moderate, activity on Capitol Hill is heating up as Congress returns from its summer recess. Now that the debt ceiling fight is behind us, it seems we have reached a national moment of truth in which policymakers must make difficult choices about the nation's spending priorities. As such, it is important for our community to take stock of the climate of fiscal austerity and to understand what funding may be at risk. In the coming months, actions on three fronts are likely to have a major impact on programs vital to the mission of academic medicine: the work of the deficit reduction “super committee,” the FY 2012 appropriations process, and a need to enact a permanent fix to Medicare’s sustainable growth rate (SGR) for physician payments.

The work of the super committee will set the tone for the coming year. The debt ceiling agreement reached in the Budget Control Act (BCA) calls for two rounds of deficit reduction. The first round involves $840 billion in discretionary spending cuts over the next 10 years. The second calls for the super committee to issue recommendations to reduce the federal deficit by an additional $1.2 to $1.5 trillion over the next decade, with the House and Senate voting on the plan by Dec. 23rd. It is unclear whether this second round of deficit reduction will include additional cuts to discretionary spending. Everything is on the proverbial table, including Medicare payments to physicians and hospitals, graduate medical education (GME) funding, and other mandatory funding authorized through the Affordable Care Act.

Should the super committee’s plan fail to become law, a 2-percent, across-the-board spending cut will go into effect for 10 years. I am often asked which option—super committee reductions or automatic spending cuts—would be less detrimental to academic medicine’s mission. At this point, it is hard to say. But what is clear is that the potential number of programs at risk for cuts is higher through the super committee process. In addition, only the super committee can raise revenues to reduce the overall amount of cuts that will ensure the targets are met.

Given the nation’s fiscal realities, shared sacrifices will be required from everyone. Cutting the deficit is essential, but we must remind policymakers to be careful where they cut. Reducing federal support for physician training when our nation faces a critical shortage of doctors would have serious effects on our nation’s health. Given the long timeline for discovery, decreasing the National Institutes of Health (NIH) budget today could forestall or delay the discovery of cures and treatments, which would pay a lifetime of dividends in better health for all and potentially reduced health care costs for years to come. Rather than focusing on just cuts, the AAMC supports a balanced approach to deficit reduction through a combination of spending cuts and revenue increases. A series of recent public opinion polls suggests voters agree.

Federal funding for the NIH and Title VII health professions programs is also at risk in the FY2012 appropriations process and will be guided by budgetary spending limits for Health and Human Services programs. The Senate likely will work with the BCA spending limit, while the House of Representatives could opt to work under the lower spending limits in the budget it approved in April. Should this occur, the two chambers will have to reconcile the spending caps. Given this possibility and the busy legislative schedule, we are likely to see a series of continuing resolutions passed throughout the fall to continue funding for the NIH and the Title VII programs in the short term.

The third factor at play is the deadline to enact a permanent fix to the SGR, which comes with an estimated $300 billion price tag. If Congress is unable to resolve this issue by the end of December, a 29-percent cut in Medicare physician payments will take effect. (See page 6 in this issue of the Reporter for more on this complex subject.) Given the magnitude of the cost to address the SGR at a time when the super committee is working to reduce spending, a shorter-term solution is likely.

On Aug. 2nd, Rep. Gabrielle Giffords (D-Ariz.) made a surprise return to Congress to vote on the debt ceiling deal. While this was a personal triumph for her and a moving moment for the nation, her return also was one of the most powerful examples in recent memory of the special role our institutions play in the nation’s health care system. Were it not for the specialized services of the University of Arizona College of Medicine, the Arizona Health Sciences Center, and the excellent team of firstresponders, physicians, and nurses that treated her there and continue to care for her at the Memorial Hermann Texas Medical Center Hospital, her remarkable recovery might not have been possible. Federal funding is essential to helping AAMC-member institutions operate nearly two-thirds of the country’s Level 1 trauma centers and other specialized services, including the majority of burn centers and pediatric intensive care units.

I would like to thank the academic medicine community for its tremendous outpouring of support this summer as we joined forces to preserve current levels of Medicare support for GME. Your meetings with legislators and staff, calls, letters, and opinion editorials played a key role in temporarily averting cuts to GME. Be assured that the AAMC will continue our vigorous advocacy efforts to sustain the federal funding that is vital to our mission to improve the nation’s health. I encourage each of you to add your voice to the debate as well, by engaging and educating your elected officials about the essential and irreplaceable role that federal funding plays in supporting critical health care services, physician training, and biomedical discovery. The future of our nation’s health depends on us.

Darrell G. Kirch, M.D.
AAMC President and CEO