Prospect of Medicare sequester affecting nurse hiring plans

Written on:January 30, 2013
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Medicare spending cuts not quite surgicalThe prospect of the “Medicare sequester” spending cuts set to take effect on March 1st is causing a number of healthcare employers and nurse staffing agencies to scale back their hiring and recruitment plans as they wait to see what will happen.

The “Medicare sequester” is part of a series of automatic federal spending cuts (including a 2% reduction in payments to Medicare providers) that will take effect on March 1st unless a bipartisan group of Congressional leaders, known as the “super committee,” agrees on legislation to reduce the budget deficit before then.  The sequestration mechanism and automatic spending cuts were created in August 2011 as part of the Budget Control Act and designed to provide a strong incentive for lawmakers to reach deals to cut spending and reduce the federal budget deficit.

In September 2012, research firm Tripp Umbacch reported that the Medicare sequester budget cuts could result in the loss of 496,000 healthcare jobs in 2013.  In January 2013, Congress reached a “fiscal cliff” deal that temporarily postponed the automatic spending cuts.  However, unless another deal is reached, automatic cuts to Medicare spending will take effect on March 1, 2013.  While there is still time for a deal to be reached, some Congressional leaders are not optimistic about the chances of that happening.  In a January 27th interview on “Meet the Press,”  House Budget Committee Chairman Paul Ryan said “I think the sequester is going to happen” and cited Democratic opposition to Republican-proposed alternative cuts as the reason.   However, anything could happen between now and the deadline and the widespread opposition to many of the automatic cuts makes it likely that a deal will be reached in time.  Yet many healthcare providers see cuts in Medicare and Medicaid spending as inevitable and are preparing for them.

However, an aging U.S. population and the looming introduction of tens of millions of previously uninsured Americans into the healthcare insurance marketplace as a result of the Affordable Care Act are expected to create a strong demand and many more jobs for nurses, physicians and other healthcare workers.