February, 2013


By Michael J. Katin, MD

It was in 1985 that the concept of sequestration was first presented as a way to control government spending, under the provisions of the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act. Thanks to this landmark legislation, the budget of the United States has been balanced every year since 1986, with the exception of 1986 through 1998 and 2001 through the present. Although briefly used in 1986, the word "sequestration" had not surfaced again until 2011, when there was no agreement between the Democrats and Republicans regarding specific spending cuts but when it was necessary to make some sort of agreement to avoid a government shutdown. This "sequestration" was to have taken place January 1, 2013, but was postponed until March 1, 2013, to avoid stress on the economy as the "Fiscal Cliff" was looming and to allow two more months for agreement to be reached on more rational ways to reduce government spending. In a cruel twist of fate, one of the two months is February, with only 28 days, 2-3 days fewer to work out a compromise than if it were any other time of the year.

The word, "sequestration," is being used by everyone but what does it really mean? It is defined by Merriam-Webster as "the act of sequestering," which doesn't quite settle the question. When a jury is sequestered, the members aren't allowed to go home and have multiple other restrictions, getting only a modest daily stipend , whereas the President and Congress seem to be everywhere except on Capitol Hill settling the problem, while making a substantial income even when they don't show up at work Medical persons are already aware of what a sequestrum is, and, somehow, the idea of a dead piece of bone causing pain and disruption may be somewhat appropriate when thinking about the budgetary process.

It seems that this agony is being produced by the idea that $85 billion needs to be cut from total outlays for 2013 projected as $3,803,400,000, of which $85 billion is less than two per cent. Half of this is supposed to come from defense funding and the other half from domestic spending. Granted, there are several programs exempt from reduction, leaving a burden on discretionary spending items.

How can revenue be increased to avoid these cuts in services from occurring? It may seem academic to some of you, but when we have airliners stacked up on taxiways, TSA agents failing to cavity check 90-year-olds, see people voiding where prohibited by law, and finding the IRS unable to screen the majority of tax returns (wait, maybe that's........never mind), then raising taxes may seem like a small burden. Confiscating the entire wealth of Warren Buffett and Bill Gates will much more than make up the difference this year, but eventually we'll work out way through Waltons and Kochs and run out of this reservoir . We just don't understand the serious consequences of cutting the government back by two per cent. The decreases in services will mean that no one will be feeling the burden of the sequester alone.

However, is it possible that the government is wasting taxpayer money that can be recaptured to make up this difference. I'm sure there's no waste in the Department of Education or the Department of Defense, but those of us in the medical field have been chronically chastised for the fact that a great deal of expenditures on health care are not directed productively.

A May 2, 2012 report by the Senate Committee on Finance points out that the General Accounting Office attributes losses in Medicare and Medicaid due to fraud and misspending to as little as $20 billion to as much as $100 billion per year. This is based on Medicare and Medicaid spending to go over $1 trillion dollars annually after 2011. That's just Medicare and Medicaid. The National Healthcare Anti-Fraud Association estimates that three to ten percent of healthcare spending is lost due to fraud, calculating to $67 billion to $230 billion per year, based on total healthcare spending being $2.7 trillion in 2011. Can you imagine if that $230 billion could be directed to the general fund instead? Ironically, that's the same amount estimated to cost if the Affordable Health Care Act were to be repealed. Funny how that works.

Just one more thing to observe: the people who are going berserk over figuring out how the federal government will make up a less than two per cent decrease in spending are the same ones who feel free to keep cutting our reimbursements. Take the SGR, for example. It's accumulated up to 26.5% already and so far no one has had the courage to get rid of it before it takes effect.
The American Taxpayer Relief Act of 2012, passed just in time to avoid the "fiscal cliff," simply postponed the SGR from implementation until 2014 Of course, nobody expects the SGR will ever become real, but the same was said about sequestration. What about something that actually has happened?

Are these the SAME PEOPLE who thought it seemed REASONABLE that practitioners of radiation therapy could tolerate cuts of 15-19 per cent, as originally proposed?!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

We're currently dealing with 7-9 per cent overall reimbursement decreases and would have been ecstatic about a cutback of only 2 per cent. We need to respect that we must be considered amazingly adaptable compared to the Federal Government. I guess nobody said it would be fair.

Will the sequestration happen? Probably. March 1 will be here before we know it but I'm sure we all feel we can adjust to it. Keep in mind that on March 10, 2013, a far more heinous, government-sponsored, intolerable, pointless event will occur that no one will be able to stop.