Healthcare Business News

Daschle sees budget cuts for HHS agencies

By Jessica Zigmond
Posted: November 8, 2012 - 3:00 pm ET

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Medicare and Medicaid will certainly have a place in federal lawmakers' pending deficit-reduction talks, and HHS agencies should prepare to see their funding levels cut as a result of those negotiations, former Senate Majority Leader Tom Daschle (D-S.D.) told healthcare providers Thursday in Washington.

Daschle—who had been a contender for HHS secretary early in President Barack Obama's first term—and former Senate Majority Leader Bill Frist (R-Tenn.) offered their perspectives on the outcome of this week's elections in a discussion with Dr. Donald Berwick, former interim administrator at the CMS. The Institute for Healthcare Improvement, which Berwick helped establish, hosted the event.

Daschle agreed with Frist that the idea of a premium-support model to reform the Medicare program is now off the table, but he said there's no question that cost containment for Medicare and Medicaid will be a part of any deficit-reduction agreement between Congress and the White House.

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“I think, for example, the cost of living readjustment for Medicare is a candidate that is likely to be considered very carefully,” Daschle said. “There are other eligibility questions, perhaps even a means test for Medicare.”

Meanwhile, the South Dakota Democrat said he expects heavy downward budgetary pressure on “virtually everything in HHS,” including agencies such as the Centers for Disease Control and Prevention.

“I don't think there's any question that discretionary accounts are all going to be adversely affected—that's a given,” Daschle said. “I can't predict precisely what it will mean. But if I had to guess, I'd say it's going to be a 10% haircut at least, and I would say almost categorically that's going to affect almost every program.”

Frist, a cardiothoracic surgeon whose family founded the organization that became the HCA, said he thinks that while the elections did not produce a big change in Washington, they will create much change in healthcare as the uncertainty surrounding the Patient Protection and Affordable Care Act has been lifted.

“The elections created radical change in the sense a lot of innovation has been locked up in the past because of uncertainty: will the Affordable Care Act be repealed? Will parts of it be pulled back?” Frist told Modern Healthcare. “The elections basically—very clearly in my mind—ratified the direction of healthcare reform over the next four years, built along the Affordable Care Act, which focused mainly on access, which will be followed by more incremental reform, I believe, in how we address the cost issues,” he continued. “That certainty unleashes innovation that has been locked up.”

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