Target Waste, Not Jobs
A report issued in September generated headlines by forecasting hundreds of thousands of lost jobs if a 2% sequester (read: reduction) of Medicare spending set to begin in 2013 goes forward. The report, commissioned by the American Hospital Association, American Medical Association and American Nurses Association, is an alarmist reaction to fiscal reality.
The sequestration scenario, to be in effect 2013-2021 unless a legislative deal is brokered, was established last year after lawmakers failed to agree on a long-term plan to control the federal budget deficit. The Medicare portion of the annual spending reductions reportedly starts at $10.7 billion in 2013 and grows to $16.4 billion in 2021.
According to the report, an estimated 211,756 direct healthcare jobs will be lost due to the Medicare spending curb in 2013, with that figure rising to a total of 330,127 by 2021. The report also projects job losses among sectors supported by the purchases of healthcare organizations and their employees, bringing the totals of unemployed to more than 496,000 in 2013 and almost 767,000 by 2021.
The report appears to assume healthcare organizations will react to the Medicare reductions by slashing employee rolls. Meanwhile, Institute of Medicine workshop participants estimated $765 billion in healthcare spending was wasted in 2009 alone due to unnecessary services, excessive administration costs, inefficiently delivered services and more. Its 2011 report, "The Healthcare Imperative: Lowering Costs and Improving Outcomes," outlines how $463 billion could be saved over a decade. That figure dwarfs the cumulative $120 billion in Medicare reductions causing the industry groups such distress.
It seems cynical for these stakeholders to hype potential job losses rather than work together to offset the cuts at least in part through greater efficiency. The federal government is on track to spend upwards of $1 trillion more than it's taking in for the fourth year in a row. Reports like these helped get us here.
Do you witness waste in your workplace? Are there large or small changes you think would help keep caregivers at the bedside in the event of possible funding cuts?