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Health Care Industry Facing Medicare Cuts

07/07/09

  11:38:37 am, by MedBen5   , 225 words,  
Categories: News, Prescription, Discounts

Health Care Industry Facing Medicare Cuts

White House

While Congress labors to hash out a workable overhaul of the health care system, President Obama is pushing cost savings through Medicare cuts to hospitals, pharmaceutical companies and medical specialists – just part of a proposed $313 billion health care savings during the next decade.

Three associations representing the nation’s hospitals have agreed to $155 billion in Medicare cuts over a 10-year period, according to The Washington Post. Nearly two-thirds of the savings would be realized through reduced Medicare and Medicaid payments to hospitals, while decreased compensation for care to the uninsured would account for another $40 billion. Should the final health care legislation include a government-sponsored health plan, hospitals would be compensated at a higher rate for non-Medicare/Medicaid patients.

The hospital agreement comes on the heels of an offer by pharmaceutical companies to provide discounts to senior citizens over the next decade. As reported in The Wall Street Journal, U.S. drug makers will reduce revenue by $80 billion, mainly by covering a greater share of brand name drug costs to Medicare D users.

The Wall Street Journal also reports that the Obama administration has proposed Medicare payment cuts to specialists while slightly increasing payments to primary care physicians. This represents an ongoing effort by the administration to reduce overall costs while making family care practices more appealing to medical students, as concerns of primary care availability grow.

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