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Medical News & Perspectives
May 19, 1999

AAMC Analyzes 1997 Balanced Budget Act

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JAMA. 1999;281(19):1781-1782. doi:10.1001/jama.281.19.1781-JMN0519-2-1

Washington—In its zeal to reduce Medicare spending by passing the Balanced Budget Act (BBA) of 1997 last year, Congress has threatened the long-term financial stability of US teaching hospitals, says the Association of American Medical Colleges (AAMC). The act is intended to cut Medicare spending by phased-in reductions in payments to all hospitals until 2002.

But, according to a recently completed AAMC analysis, when the act is fully implemented the results will have a "pronounced negative effect on the education and service missions of teaching hospitals," said Jordan Cohen, MD, the AAMC's president. The magnitude of the cuts the act will produce is some $88 billion over the original estimates, he said, and "this exceeds what Congress had intended."

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