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APhA CEO Blog

The Big Give? Hospitals and Drug Companies Agree to Spending Cuts

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July 09, 2009

On July 8, the White House and the Senate Finance Committee announced a pact with hospitals for $155 Billion in Medicare and Medicaid Cuts (July 8). These hospital cuts include $103 billion in spending reductions, based on 10 years of productivity adjustments and reduced market basket payments and $50 billion in spending reductions to disproportionate share hospitals, or DSH -- commonly referred to as "dish" hospitals.

Around June 23, the White House and Finance announced an agreement with PhRMA to provide $80 billion to fill the "doughnut hole" in Medicare drug coverage. According to Politico on July 6, PhRMA is telling the House that Senator Baucus (D-MT) will favor the provisions of this $80 billion deal rather than the Congressman Waxman (D-CA) approach to garner savings through rebates in Medicare Part D. Waxman would use the increased rebate money to cover more seniors in Medicare Part D. Clearly, much debate is to follow.

We have been seeking insights on the details about how these groups propose to make these cuts, and more specifically, what impact pharmacists would feel as a result. It has been my experience that when large groups like hospitals or the pharmaceutical industry give something, they get something in return. We understand those can often be reasonable compromises. We just want to make sure that pharmacists aren't disadvantaged. Details are sure to be hammered out in the next few weeks and months.