was designed to lower spending in some areas to help balance the budget. Hence the name Balanced Budget Act. The main area from which the BBA cuts back spending is Medicare. Changes in the Medicare program were an essential part of the budget agreement that led to the Balanced Budget Act of 1997. Without the $191.5 billion in net spending reductions over the next five years, a balanced budget would not have been achieved. (M.M. www.urban.org.)The problem with drastically lowering the amount that Medicare pays health care providers is obvious. Just like every other industry in America, the health care business needs make money to survive. You dont open up a new factory and make a new toy for $45 and then turn around and sell it to your customer for $20. You would go out of business in no time. This is essentially what Medicare is doing to the health care business. In the past four years, more than 40 hospitals have closed, and 64% are losing money, Feinstein said. Three hundred physician groups have gone bankrupt since 1996. (J.J LA Times) These statistics are from California only, but are very representative of the entire country.As with any major legislation, the Balanced Budget Act included some policies that are flawed or have had unintended consequences that are posing immediate problems to some providers and beneficiaries, said Clinton in a letter to Sen. William V. Roth Jr., chairman of the Finance Committee. (C. B. PP A08)It is quite obvious that even the government recognizes that there is definitely a problem with the way in which the BBA has been implemented. We believe that congressional intent was for this policy to be implemented in a way that is budget-neutral for hospitals, the White House said in a memo yesterday, meaning the cuts should have been compensated in some other area of hospital payments. (C.B PP A08)According to Modern Healthcares By the numbers issue, profits dropped from $21.9 billion in 1997 to $19.4 billi...
