How Is Sequestration Affecting Health Care? 

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The Budget Control Act of 2011, which calls for $1.2 trillion in federal funding cuts in national defense and nondefense programs, went into effect on March 1. The across-the-board cuts affect 21 agencies and programs directly involved in the health-care sector, including:

Centers for Disease Control and Prevention (CDC)—The effective reductions to the CDC are between 8% and 10% (about $303 million) for the rest of this year and will mean 424,000 fewer HIV tests (it funded 3.16 million in 2010), 50,000 fewer immunizations for adults and children (from a baseline of about 300 million), eliminating tuberculosis programs in 11 states, closing the National Healthcare Safety Network (which monitors health-care–associated infections), and eliminating the Cities Readiness Initiative.1

Food and Drug Administration (FDA)—According to ASCO President Sandra M. Swain, MD, FACP, the sequestration cuts to the FDA will seriously hinder the nation’s ability to move the many safe, effective, and innovative medicines currently in the review pipeline to patients whose lives depend on them. “ASCO remains concerned that sequestration will force the FDA to put improvements in the drug development process and regulatory science initiatives on hold. These forward-looking efforts speed approval without compromising rigor, prepare FDA for timely review of cutting-edge therapies, and provide a more predictable process for companies, spurring investment in new areas of therapy, clinical trial designs, and treatment methodologies,” said Dr. Swain.

Medicare—Funding has been cut by 2% ($11.08 billion) through reductions in reimbursements to Medicare providers, health plans, and drug plans, which will now be reimbursed at 98 cents on the dollar for their services to Medicare beneficiaries.

National Institutes of Health (NIH)—Budget cuts to the NIH and NCI this year will result in delays to new clinical trials and to the development of new cancer therapies.

Social Services—The Substance Abuse and Mental Health Services Administration plans to cut the Mental Health Block Grant Program, eliminating services for 373,000 seriously mentally ill adults and children. The Indian Health Service (IHS), which usually covers about 48,000 inpatient admissions and 12.8 million outpatient visits per year to tribal hospitals and clinics, will provide about 3,000 fewer inpatient admissions and 804,000 fewer outpatient visits. The Health Resources and Services Administration estimates that 7,400 fewer patients will have access to HIV medications. ■


1. McDonough JE: Budget sequestration and the U.S. health sector. N Engl J Med 368:1269-1271, 2013.

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