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Washington Highlights

AAMC Expresses Concerns About Sequestration’s Impact

February 8, 2013—In a Jan. 31 letter  to congressional leaders, AAMC President and CEO Darrell G. Kirch, M.D., said the AAMC “is deeply concerned about the impact of the pending sequestration mandated by the Budget Control Act on programs that are vital to the health of the American people.”

The Senate Budget Committee has estimated that sequestration, which is set to take effect March 1, would reduce non-security discretionary spending in FY 2013 by 5.1 percent.  These cuts will come on top of an additional $900 billion in discretionary spending cuts mandated by the Budget Control Act (BCA) over the next decade.

For the National Institutes of Health (NIH), sequestration would represent a $1.5 billion reduction in the first year alone.  The letter notes, “The impact of this cut on NIH-funded research will be immediate and devastating….  Even more troubling is that this cut would come at the end of a decade that has seen the NIH budget fall by nearly 20 percent after inflation.  Breakthrough discoveries that might have saved lives or improved the quality of life of all Americans will not happen.  Regaining ground lost in innovative research by sequestration will not take a year or two, but most likely decades. And this does not take into account the chilling effect on the brightest and best students who may, at this moment, decide not to go into research.”

“Sequestration also will undermine ongoing efforts of HRSA's Title VII health professions programs to improve the supply, diversity, and distribution of the health care workforce,” the letter states. “The realized consequences of sequestration for HRSA programs could extend far beyond the estimates provided here, as grantees lose the ability to leverage HRSA funding to acquire state, institutional, and philanthropic support, and as mounting fiscal constraints over the next decade jeopardize the viability of the modest federal investment in the programs in future years.  These threats come as the nation grapples with critical physician and other health professional shortages.”

The letter also expresses concern that “sequestration threatens Medicare hospital and physician payments at a time when providers already face a broad range of reimbursement cuts in the coming year and Medicare already fails to cover the cost of care.”  OMB estimates the 2 percent sequester of Medicare will cut provider payments by $10.7 billion.  A 2012 Tripp Umbach analysis indicates that the cuts to provider payments will result in the loss of nearly 500,000 jobs.

“The AAMC also is concerned that despite the 2 percent limit on Medicare cuts…, sequestration will have a significant impact on Medicare's long-standing support for graduate medical education (GME) and will ultimately limit teaching hospitals and physicians ability to care for all patients and train the next generation of physicians,” the letter states.

Emphasizing that "if we are to address the health challenges of an aging and increasingly diverse population, and remain a vibrant force in the global economy, America needs more investment in medical research and the health professions workforce, not less," the letter concludes that AAMC “urges Congress and the Administration to work together on a solution that avoids sequestration—and the devastating impact of across-the-board cuts—on programs that benefit all Americans.”

The letter was sent to Senate Majority Leader Harry Reid (D-Nevada), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio), and House Minority Leader Nancy Pelosi (D-Calif.).

Contact:

Dave Moore
Senior Director, Government Relations
Telephone: 202-828-0559
Email: dbmoore@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org