In March, President Obama released the Administration’s proposed Fiscal Year (FY) 2015 Budget. The Department of Health and Human Services (HHS) portion allocated $1 trillion in outlays and proposed $77.1 billion in discretionary budget authority, $0.8 billion less than the 2014 enacted level and $3 billion less than last year’s request.
Of significance to many physicians are the legislative proposals included in the HHS portion of the budget. While these are merely proposals, they do provide valuable insight into what we can expect in regards to health policy priorities throughout the remainder of President Obama’s term in office. According to HHS, these proposals are projected to save $407.2 billion over the next decade “by more closely aligning payments with costs of care, strengthening provider payment incentives to promote high-quality efficient care and making structural changes that will reduce federal subsidies to high-income beneficiaries and create incentives for beneficiaries to seek high-value services.”
Among those of greatest interest to neurosurgery are three key Medicare proposals:
- Repealing and replacing Medicare’s sustainable growth rate (SGR) payment system along the lines of the policies contained in H.R. 4015, which passed the House of Representatives on March 14, 2014;
- Reducing graduate medical education (GME) payments by 10 percent and granting HHS the authority to set standards for teaching hospitals receiving GME to encourage training of primary care residents and promote high-quality and high-value healthcare ($14.6 billion in savings over 10 years); and
- $12.9 B in savings from the Independent Payment Advisory Board (IPAB).
Because it met many of neurosurgery’s core principles, neurosurgery supported passage of the SGR bill, although we also pointed out ongoing concerns with several aspects of the legislation. However, the AANS and CNS strongly oppose any additional cuts to GME, and given the current physician manpower shortage, we are recommending that Congress provide increased funding for GME. Additionally, organized neurosurgery strongly opposes the IPAB, and believes that President Obama’s efforts to “double-down” and increase the amount of savings to be achieved by this unelected and unaccountable government board is bad for patients and physicians alike. Certainly we are mindful that Congress faces challenges to hold down the costs of the Medicare program, but we need comprehensive Medicare reform, not piecemeal programmatic cuts.
Speaking of comprehensive Medicare reform, on April 10, 2014, the House of Representatives passed Rep. Paul Ryan’s (R-Wis.) final budget — barely. Like last year’s budget, this proposal would balance the budget within 10 years by making $5 trillion in cuts, and without additional tax increases. Importantly, the legislation would modernize the Medicare program through the adoption of a premium support model. The plan also repeals the Affordable Care Act (ACA), thereby eliminating the IPAB and saving $2.1 trillion over 10 years in healthcare subsidies and coverage under the ACA.
Both budgets are considered to be “dead on arrival” and it’s not anticipated that they will make any meaningful headway. Instead, they serve as a blueprint of the policy battles that lie ahead.
