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Press Start: Lead an Empowered Life as a Clinical Laboratorian

How Will the Sequester Affect You?

Published March 7, 2013 11:35 AM by Glen McDaniel

With all this talk about sequestration everyone is bound to be concerned with how these spending cuts will affect them.

Sequestration is such an odd word to be used Congress and picked up by the media as if it were a part of the regular lexicon.  It is a term with various meanings depending on one's background. As a clinical chemist, I know what it conjures up in my mind. So I asked a few friends from various professions what sequestration means to them in a literal sense.

In law, "to sequester" has two related meanings. We have all heard of jury sequestration where the judge isolates a jury from the general public in a crucial case to prevent accidental or deliberate outside influence from tainting the jury.

In another legal context it means the act of valuable property being taken into custody by an agent of the court and locked away for safekeeping, usually to prevent the property from being disposed of or abused before a dispute over its ownership can be resolved.

As laboratorians we often ask a supplier to sequester a lot of reagents to ensure we are guaranteed a single lot shipped to us over a period of time. This avoids multiple calibrations, documentation and a lot of headaches, obviously.

In Chemistry sequestration often involves the formation of chelate complexes, and is used to prevent the chemical effect of an ion without removing it from the solution. We are all familiar with how EDTA acts as an anticoagulant by chelating (or sequestering) calcium ions, therefore preventing clotting.

So what does all this sequestration stuff have to do with politics and drastic government spending cuts?

Congress in its own unique and infinite wisdom will often pass laws or enact legislation without ensuring a way of paying for each one. Deficit, anyone? It is commonplace for government to have many financial obligations and not enough budgeted funds to pay for them.

During one of the increasingly common debt limit stand offs, in 2011 Congress passed the Budget Control Act (BCA) mandating automatic cuts if Congress could not agree on cuts to rein in long term federal spending. According to the BCA, failure to come up with a plan would trigger automatic cuts.

There has been no plan, hence this recent fiasco.  The difference between certain government obligations and the funds available (the unfunded obligations if you will) have been set aside or sequestered by the Treasury and not made available to the various government agencies to spend. This is the sequester that went into effect on March 1; $856 billion in across the board automatic spending cuts to certain government programs.

Back to the question of how this will affect healthcare in general and the medical lab science profession in particular. Only some government agencies will be affected. Medicaid, the Children's Health Insurance Program (CHIP), Veteran's Affairs and some related programs are exempt. But some healthcare spending will be definitely be reduced.

The CDC, FDA, and NIH for example will be affected. Some programs will be cut and government workers might face some sort of furlough or unpaid leave in order to reduce costs.  Medicare provider rates will be cut 2% for sure.  The Physician Fee and Clinical Laboratory Fee Schedule (CLFS) will be cut 2% which sounds small until you realize that with the huge Medicare budget that translates to over $11 billion. In fact by some estimates healthcare will experience 20% of the entire spending cuts; a whopping $ 15.5 billion

So laboratories will be directly and indirectly affected. The economy and society are totally interrelated, so the downstream effects are unpredictable and may be bigger than anticipated. We all have friends, family, customers, providers, consumers, and patients who might be directly or indirectly affected.

So in the same way that the word "sequestration" means different things to different people, the effect of this latest governmental crisis means different things to different people. But it is safe to say that in some way or the other we will all be affected.

2 comments

One way of looking at it is like a sequester is an escrow, I guess. Money is put aside and you cant spend it. But if you fulfil certain requirements you can have access to the escrow.

But in the government case maybe you cant get it back if you dont use it in a certain time frame and all that. It is like use it now or lose it, and while it is in sequester you cant legally have access  to it. Very interesting concept.

Only spending what you have is a great idea, but the way the government operates and plays political games over and over real people get hurt.

Marie T March 25, 2013 3:39 PM
Tempe AZ

Very interesting. I know about sequester like in lot numbers and in trial juries. But I had no idea why spending cuts should be called this same word. Interesting explanation. Thanks to you I can now even see the similarity between the different ways the word is used.

The things you learn from Advance.

I agree we will all be affected in one way or another. Even if our own lab looks the same next week or next month, we all have parents and spouses and children who might find some benefits reduced or gone completely because of the sequester. It is sad that politicians play politics with people's lives. This is just not a good situation.

Roman V., MT2 March 8, 2013 11:21 AM
Galveston TX

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