Dan Anderson

We were discussing the effects of the Deficit Reduction Act (DRA) while standing in the cab line. This fellow visitor to Chicago for the annual American College of Cardiology meeting shared how difficult it had become to operate in a hospital imaging facility with cuts to staffing, cuts to equipment purchase, and, most of all, cuts to patients. He said simply, "Tell your readers to write their Congressmen."

The DRA, a little more than a year in, started as a trickle of bad news. We've passed flood stage. Wade through the newswires and you sense quickly just how deep the water is these days.

General Electric Co just announced that its quarterly earnings were hit hard by health care losses. The division's profit was down 17% on revenue of $3.9 billion. "We continue to see a very tough equipment market," Chief Financial Officer Keith Sherin said.

Andrew Wilson, the president and CEO of St Alexius Medical Center, Bismarck, ND, was quoted telling attendees at a state medical conference that Medicare spending cuts were being felt acutely in his rural setting. "We have to compete around the country for staff, for physicians, and it costs just as much or more to move goods or services up to Bismarck to provide that," Wilson was quoted. "So less reimbursement puts greater pressure on our medical center to continue to provide the high-quality care we've been able to provide."

A recent edition of the New York Sun carries a story on women waiting, on average, more than a month for a mammogram. The article was based on a study by Rep Anthony Weiner (D-NY), and the congressman lays the blame squarely at the door of Medicare spending cuts. Lower reimbursements have caused clinics to shrink hours and services … or to simply fold.

"We have to dramatically re-examine the way things are done," Weiner is quoted.

All of this plays out as Congress considers what to do next with Medicare spending—and there is little time left before the stop-gap funding put in place late last year runs out. Additional cuts of around 10.5% to the Sustained Growth Rate (SGR) are all but guaranteed in the finance package that has to be passed by June 30. Imaging is expected to be especially walloped.

A few proposals have been floating around that could bail some of the rising water, including the "Save Medicare Act of 2008" introduced by Sen Debbie Stabenow (D-Mich). She proposed replacing the proposed cut with a 0.5% update for the second half of the year and follow in 2009 with a 1.8% update. Sounds great, but it's a little light on specifics of how to pay for all that, and despite our best efforts to break through her office's voicemail, we couldn't get a call returned. I'll take her reluctance to explain as a sign that this was good electioneering, but hopeless policy.

This last month of negotiating the SGR figure for the second half of this year and the full 2009 should be interesting. More manufacturers are sure to report disappointing earnings, and it is clear that the reimbursement cuts are having an impact at health facilities large and small. How long will the industry have to tread water before a real solution is presented?

As my conversation partner in Chicago indicated: it's already been long enough.

Dan Anderson
Editorial Director