Report: Medicare-related jobs could take hit by sequestration

Washington - If so-called sequestration measures go into effect at the beginning of next year, New England could lose 25,605 jobs in 2013 and 39,551 jobs by 2021 as a result of cuts to the Medicare program alone, according to a study released Wednesday.

Massachusetts would be hit hardest, with 11,284 Medicare-related job losses, followed by 6,033 lost jobs in Connecticut, 2,337 in New Hampshire, 2,821 in Maine, and 1,192 in Vermont.

The estimates are contained in a study by the Pittsburgh-based consulting firm Tripp Umbach, and were presented at a press conference sponsored by three organizations with a large stake in the provision of Medicare-related services: the American Medical Association, the American Hospital Association, and the American Nurses Association.

Sequestration, a process mandated by the 2011 legislative deal to raise the federal debt ceiling, requires $1.2 trillion in automatic, across-the-board spending cuts at the beginning of January 2013. Half of these are reductions in defense spending, with the rest from domestic programs.

According to Tripp Umbach, a required 2 percent sequestration for most aspects of the Medicare program would result in a nationwide cut of $16.4 billion in the program by 2021.

Hospitals - which, according to AHA CEO Rich Umbdenstock, rank second only to restaurants on the list of top private sector employers - would be particularly hard hit by the cuts, losing 144,006 jobs nationwide by 2021.

Meanwhile, AMA President Dr. Jeremy Lazarus expressed concern about the impact the cuts would have on aging baby boomers.

"Common sense tells you this is not a good time to take a hatchet to health care," he said.

The projected Medicare-related job cuts include direct job losses - employees paid directly by Medicare-funded organizations - as well as indirect losses in other industries as Medicare-funded programs decrease spending.

While the job losses primarily affect health care sectors such as hospitals, nursing homes, and physicians' offices, the Medicare cuts also are predicted to cause losses in areas such as food services.

Umbdenstock said his organization is talking with members of Congress about finding ways to save that would not require job cuts. Possible changes, he said, include medical liability reform, structural changes within the Medicare program, and cuts to other sectors, such as pharmaceuticals.

But while there have been widespread calls on Capitol Hill for an alternative plan to head off sequestration, so far - with just four months to go - there has been no perceptible progress in reaching an accord.

The federal Centers for Medicare and Medicaid Services did not immediately respond to a request for comment on the Tripp Umbach report.


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