By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    grief
    Coping With Depression from Loss After a Preventable Accident
    November 14, 2024
    medical research
    The Key to Medical Progress in Clinical Trials
    March 13, 2025
    HIPPA compliance
    How Medical Office Staff Can Make Your Practice HIPAA Compliant
    October 29, 2021
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Image
    Emergency Room – Don’t Use It For Primary Care!
    March 19, 2013
    Encouraging Medicare News From Senate Republicans
    March 17, 2012
    chronic disease
    Lifestyles Cause Most Serious Disease and Deaths
    May 25, 2013
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Why Medicare Cuts Will Quietly Kill Seniors
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Why Medicare Cuts Will Quietly Kill Seniors
Health Reform

Why Medicare Cuts Will Quietly Kill Seniors

Michael Millenson
Michael Millenson
Share
6 Min Read
SHARE

The recent news that thousands of seniors with cancer are being denied treatment with expensive chemotherapy drugs as a result of sequestration-mandated budget cuts raises the question of whether other patients are being equally harmed, but less visibly.

The recent news that thousands of seniors with cancer are being denied treatment with expensive chemotherapy drugs as a result of sequestration-mandated budget cuts raises the question of whether other patients are being equally harmed, but less visibly.

A careful study of the impact of past federal budget cutting suggests a troubling answer. That study, in a National Bureau of Economic Research Working Paper published in 2011 and revised last year, established an eerily direct link between slashing hospital reimbursement and whether Medicare patients with a heart attack live or die.

Using data from California hospitals, researchers Vivian Y. Wu of the University of California and Yu-Chu Shen of the Naval Postgraduate School examined mortality rates for heart attack patients following the Medicare payment cuts resulting from the Balanced Budget Act (BBA) of 1997. The impact of the BBA was not as sudden or clear as the current situation, where Medicare’s two percent across-the-board cut on April 1 instantly transformed some expensive chemotherapy drugs into money losers, but it was significant and long-lasting.

More Read

Panacea Dreamin’
Pancreatic Cancer Symptoms
Krugman, Ezra: Wrong About Texas Health Care
Sequestration and Healthcare: What Organizations are Affected? (Part 1)
Texas Lawmakers Revisit Medicaid/Medicare Secession Scenario with Bill’s Intro

The researchers examined hospitals claims data for a three-year period before the BBA, a three-year period when the BBA first took effect and, finally, a six-year period after budget cuts had either permanently changed care or failed to do so. They also tried to adjust for the severity of illness of the heart attack patients – the condition is formally known as acute myocardial infarction (AMI) – and other factors.

In the end, the researchers were able to trace a clear path from Congressional budget decisions to the patient’s bedside. Payment reductions triggered by the BBA , Wu and Shen concluded, led to “worse Medicare AMI patient outcomes, and more importantly, that the adverse effect only became measurable several years after the policy took place.”

They even quantified the effect: every thousand dollars of Medicare revenue loss from the BBA translated to a six to eight percent increase in mortality rates from heart attack.Those findings, said the researchers,  “are very consistent with prior literature that finds short-term adverse effects of Medicare payment reductions.” They’re also consistent with broader research showing that Medicare coverage, does, indeed, save lives.

Wu and Shen’s National Bureau of Economic Research Working Paper was published in 2011 and revised slightly last year. It provides disturbing parallels to the present crisis, beginning with the fact that the BBA, like sequestration, represented a deliberately drastic effort by Congress to reduce the federal deficit.

Suddenly slashing payments an organization has been counting on and assuming that they’ll simply adapt is very different than announcing a change in reimbursement rules that takes place gradually. When the BBA went into effect, some analysts predicted that hospitals would make up deep cuts by becoming more efficient. Instead, Wu and Shen found, the heart attack death rate spiked because hospitals cut back on staff to slash operating costs. Left unexamined by the researchers, but profoundly important in a policy context, is what happened as a result to Medicare patients being treated for all medical problems, not just heart attack.

Just as in the 1990s, there’s no question today that billions of dollars are wasted on inappropriate or unsafe care. But brandishing the meat cleaver of across-the-board budget cuts represents a dangerous approach when many providers already feel as if they are already under severe financial pressure. Even before the chemotherapy denial hit the news, hospitals, nursing homes and others were already warning that sudden, across-the-board Medicare cuts would force them into just the kind of reactions the Wu and Shen paper found could be deadly.

Unlike with the BBA, the sequestration is playing out is occurring at the same time that a far more fundamental change in health care reimbursement policy is already underway, with a “bundled payment” approach increasingly adopted by government and private payers that links provider payment directly to high-quality outcomes. Yet in a kind of Gresham’s Law, the “bad” solution of indiscriminate cuts threatens to overshadow and drive out the “good” solution of more careful and coordinated care.

The White House estimates the current sequester cuts will result in $11 billion less in Medicare payments. There’s little question that those crude cuts, if they continue, will quietly, and unnecessarily, cost the lives of some seniors. The only question is how long it will take us less than a decade to find out who those victims really were.

TAGGED:cancerhealthcare costspharma
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025
physiotherapist at work
How One Fall Can Lead to a Long Road of Medical Complications
Health care
August 20, 2025
Common Healthcare Accreditation Programs
7 Most Common Healthcare Accreditation Programs: Which Should You Use?
Health News
August 20, 2025

You Might also Like

HIPAA Privacy and Security Compliance: Should You Care?

April 18, 2014
Health Reform

Medical Malpractice Reform Losing Physician Support

November 7, 2011
Patient studying at patient forum
NewsPublic HealthSocial Media

Patients Helping Patients: Improving Health Literacy and Cancer Care

May 20, 2014
medicare data release
BusinessFinanceHealth ReformHospital AdministrationPolicy & LawPublic Health

Medicare’s Data Release Places More Power in Hands of Informed Medical Consumers

May 9, 2013
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?