Federal Budget Pleases Doctors, Not Hospitals

The major trade groups for healthcare providers offered a decidedly mixed reaction to President Barack Obama's Fiscal 2012 budget proposal released Monday, with doctors praising the plan and hospitals panning it. 

The American Medical Association looked favorably upon the president's plan to shift about $50 billion in Medicare and Medicaid payments away from states, insurers and drug companies over the next 10 years, and use the money to improve physician reimbursements.

"Based on preliminary reports, the AMA is pleased that President Obama's proposed budget includes funding to address Medicare physician payments and medical liability -- two broken policies that are driving up cost and compromising patients' access to physician care in our nation," said AMA President Cecil B. Wilson, MD.

"Permanent reform of the Medicare physician payment system is essential to ensuring seniors and baby boomers now entering Medicare can receive the physician care they deserve. The president's budget includes a renewed commitment to permanently fix the broken Medicare physician payment system, which the AMA strongly supports. It also contains funding to delay the devastating cuts scheduled to occur Jan. 1, 2012 for another two years, which is important for providing stability in the Medicare system while a permanent solution is enacted."

Wilson said the AMA was also pleased to see funding included in the budget for "testing innovative medical liability measures (as) an important way to augment efforts to enact the proven reforms such as those included in the HEALTH Act (HR 5)."

"The AMA supports the proven medical liability reforms in HR 5, which have been shown effective in states such as California and Texas, as well as the testing of innovative measures such as those funded in the President's budget proposal," Wilson said.

American Hospital Association President Rich Umbdenstock said the trade group was "deeply disappointed" that the president's call for about $18 billion in Medicaid cuts over the next decade.

"At a time when hospitals have already been asked to absorb big cuts at the state level, and state budgets are already stretched, it is unwise to ask states to continue to do more with less," Umbdenstock said. "In addition, we are also disappointed to see elimination of funding for the children's graduate medical education program at a time when there is a need for an expanded physician workforce. While we fully support eliminating future reductions to physicians, the answer to the physician payment issue is not cutting one provider to reimburse another."