Bush Medicare budget plan would hit hospitals
President Bush has faced some criticism over his recently proposed budget which targets Medicare spending cuts that have the potential to hit hospitals and physicians with cuts.

According to the Wall Street Journal, the President’s Medicare proposal would decrease spending over five years by $65.6 billion. According to some in the industry, this could reduce hospital Medicare income by as much as $30 billion. Over the period certain providers, such as ambulatory services and hospitals, would see a 0.65 percent payment decrease. Some doctors would be hit even harder, with a possible 10 percent cut in payments in 2008. Hospitals and some lawmakers are gearing up for a fight over the plan, the Journal reports.

A large portion of the cuts must be approved by Congress, though the rest will be implemented through regulatory changes the Bush administration has in mind, according to an Associated Press report.

In response to the budget, Rich Umbdenstock, president of the American Hospital Association said in a released statement that “Medicare and Medicaid payments to hospitals remain well below the cost of providing care to patients. While the administration's budget proposes to limit hospital reimbursement, the costs of caring for patients continue to increase. Hospitals absorb many costs that they are simply unable to control such as prices for drugs, medical devices and supplies.”

The planned cuts for physicians are equally unpopular based on some reaction from other groups. Cecil B. Wilson, MD, board chair of the American Medical Association said in a statement that "over the next eight years, Medicare payments to physicians will be slashed nearly 40 percent, while practice costs increase about 20 percent. Without adequate funding, physicians cannot make needed investments in health information technology and quality improvement, and seniors’ access to health care is placed at risk.”

A summary of the president’s key focus areas in healthcare released just prior to his recent State of the Union address, emphasizes increasing transparency in healthcare, expanding access to health savings accounts (HSAs), and allowing individuals to purchase health insurance across state lines.

Specifically relating to health IT, the president has re-emphasized his desire for electronic health records to be made available for all citizens with the next eight years or so. The administration has empowered a number of agencies to also work on a national health information exchange.

In Bush’s 2008 budget, the Office of the National Coordinator with HHS would have a budget of $118 million, which is the same as the 2007 total. Part of that amount, around $22 million, would be used to implement new standards recommendations for health IT adoption from the American Health Information Community. The overall health IT budget allotment is $165 million, according to reports.