Providers Awaken to Day One of Sequestration

"When we add sequestration, we will see additional unexpected reductions of 2% in Medicare reimbursement. But to add to that, we will need to look at the impact of reductions in research funding and graduate medical education and others types of reimbursements or grants some organizations receive that will also trickle down due to cuts in their budgets. Remember, the providers are at the very end of the economic food chain."

Craig Samitt, president and CEO of Madison, WI-based Dean Clinic, acknowledges that the cuts will force providers to do more with less but said that "the bright side is that sequestration will further instigate organizations to transforms from volume to value."

"Dean's focus is on better care at a lower cost. That strategy has taught us that in the world of bundled payments there are an array of strategies that can be implemented to reduce cost and make up for reductions in fee-for-service reimbursements," Samitt said.

"For us, sequestration creates even greater urgency to try and transform from a sickness care company to a wellness care company."

"I am sure there are differing views that the sky is falling with sequestration," he says. "It certainly puts pressure on us to deliver care at lower costs. But it should open our eyes to an alternative care model that focuses on wellness and prevention and care coordination. It will further catalyze the importance of moving in a new direction."