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Sequestration Nation: Medicare Reductions Are Hurting Elderly Cancer Patients

Kathleen Watson

SOURCE: AP/David Goldman

Kathleen Watson is photographed outside Shands Lake Shore Hospital, where she receives her cancer treatment and also picks up patients for her medical transport company, Monday, May 14, 2012, in Lake City, Florida.

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Author’s note: On Capitol Hill “sequestration” may mean a percentage point or two in lower gross domestic product growth, but beyond the Beltway, it is more than just an abstract economic concept; it means real pain for real people.

Each week in our “Sequestration Nation” series, we will highlight examples of the many ways in which the federal budget cuts may hurt you and your neighbors. This week we explore sequestration’s devastating impact on elderly cancer patients who depend on Medicare for treatment, as well as some of the other impacts it is having around the country.

In case you didn’t know, April is National Cancer Control Month. Ironically, though, as of April 1, the government began doing less to control cancer. As part of sequestration, the government began reducing funding for a specific portion of the Medicare program that is critical to cancer patients.

As The Washington Post recently reported, legislators intended to partially shield Medicare from sequestration by limiting reductions to the program to 2 percent, as opposed to the 7.8 percent cuts faced by most other programs. This 2 percent cut, however, will fall heavily on cancer patients enrolled in Medicare. For John Peterson, a cancer patient at Texas Oncology, this cut could be a serious burden. “I have a lot of exotic drugs that we have Medicare pick up the cost or we almost can’t afford to do it and it’s been a life saver,” said Peterson.

Because oncologists can’t change the cost of the drugs they purchase, the entire 2 percent reduction must come out of overhead costs for storing and administering the medicine. For drug treatments for cancer, which can run up to $15,000 for a full course, a 2 percent funding reduction can be a significant strain on the clinics offering these services. According to Ted Okon, director of the Community Oncology Alliance, “The costs don’t change and you can’t do without it. There isn’t really wiggle room.” Put more bluntly, Ralph Boccia, director of the Center for Cancer and Blood Disorders in Bethesda, Maryland, states that, “When I look at the numbers, they don’t add up. Business 101 says we can’t stay open if we don’t cover costs.”

Clinics that are able stay open will likely only be able to do so by drastically reducing the number of patients they currently see. In response to the funding cut, North Shore Hematology Oncology Associates in Long Island, New York, recently announced that one-third of their 16,000 Medicare patients would have to seek treatment elsewhere. Hospitals may be able to pick up some of the slack caused by private clinics dropping cancer patients; it is, however, far from clear whether they have the capacity to fully meet the increased need. This means that cancer patients may have simply nowhere to turn in their battle against the illness.

What’s even more galling is that patients who are fortunate enough to find a nearby hospital to treat them will need to pay more, according to the actuarial firm Milliman. The firm found that Medicare patients paid an average of $650 more per year when they received cancer treatment solely from hospitals. This increased cost is one that many patients may not be able to handle. Cancer patient Helen Jeton-Mantooth of Arkansas knows “people that because they can’t afford their medications just don’t take them … and they wind up dying.” The Milliman study also found that the federal government faces increased costs, paying an average of $6,500 more per year for cancer-patient care in a hospital versus a community clinic. Due to the government’s recent attempt to save money by cutting Medicare, some cancer patients will be left out in the cold—and the government may actually end up paying for it down the road.

For elderly cancer patients involved in traditional treatment programs, sequestration will be a heavy load to bear. For those involved in clinical trials, however, the situation is even more dire. Because clinical trials for cancer treatment involve the development of experimental drugs, both facilities and individual patients must receive approval from the government and pharmaceutical companies to take part. As a result, the options for those patients who lose coverage could be severely limited. Rather than simply going to a nearby hospital to receive traditional chemotherapy, participants in clinical trials might in some instances have to travel across the country to find another approved facility that will enable them to continue their participation.

Cancer patients often take part in clinical trials as a last resort. The way Devin Goodman, an administrator at Glacier Oncology in Kalispell, Montana, sees it, “If they are on a clinical trial they are on the end of their rope. They don’t have energy or resources. This is it for them. To put that burden [of higher costs] on them is really absurd.”

The 2 percent reduction in Medicare services that cancer patients face is precisely the kind of blunt and indiscriminate cut that the Obama administration and Congress warned were on the way. As a result, some cancer patients will not receive treatment, clinical trials vital to ultimately finding a cure for cancer will be hampered, and the government may have to pay even more money when everything is said and done. The irony of sequestration’s negative impact on cancer treatment during National Cancer Control Month is painful, and for some elderly cancer patients, it could also be deadly.

Sequestration is having similarly negative impacts on individuals and situations across America. Below are just a few of the many examples.

Gilroy, California
Some of the most painful sequestration cuts are being felt by low-income families receiving federal housing assistance. Those in areas where the cost of living is high are particularly vulnerable to the loss of housing subsidies. Take 81-year-old Verna Hayden, for example, who is a resident of the San Francisco Bay Area. “They should be in our shoes for just one week to see how we’re doing our best to make ends meet and how losing even a little bit will hurt someone like me,” said Hayden. The Santa Clara Housing Authority will lose $21 million due to sequestration, resulting in up to 1,000 households losing their subsidies in one of the most expensive rental markets in the country. Alicia Diaz fears what sequestration might mean for her and her two children. “I probably would be homeless,” said Diaz. “I don’t understand why they’re cutting something that helps working people like me.”

Stoughton, Massachusetts
For many high school seniors, Advanced Placement, or AP, exams are an integral step toward academic success in college. According to Stoughton Public Schools Superintendent Marguerite Rizzi, “Sitting for Advanced Placement exams is a way to ensure acceptance in more prestigious colleges and can even reduce the cost of a college education.” Unfortunately for low-income Stoughton students, sequestration has resulted in the immediate suspension of a program that subsidizes the $89 cost of each exam for students whose families qualify for the Free and Reduced Lunch Program. Sequestration will rob these students of a chance to seek better academic opportunities that could one day help to lift them and their families out of poverty.

How is sequestration affecting you and your community? Make your voice heard by contacting us at kboadi@americanprogress.org with your stories about the effects of federal budget cuts.

Cedar Rapids, Iowa
Joe O’Hern, Cedar Rapids’ executive administrator of development services, told The Gazette that following the 2008 record floods that devastated Cedar Rapids, “A promise was made to the people of Iowa to help them recover.” That promise amounted to significant federal funding to help Cedar Rapids build flood-protection infrastructure. Officials and residents in Cedar Rapids now believe, however, that sequestration could cause the federal government to renege on that promise. Due to budget cuts to the U.S. Army Corps of Engineers, significant portions of the $9.3 million in federal funding for the project are at risk. According to Ron Fournier, an Army Corps official, “If we don’t get any money for ongoing engineering and design work, there won’t be any work. Right now, there’s no funding.”

New York, New York
U.S. District Judge Lewis Kaplan recently expressed his exasperation that sequestration will delay the terrorism trial of Osama bin Laden’s son-in-law. “It is extremely troublesome to contemplate the possibility of a case of this nature being delayed because of sequestration,” said Kaplan. As is the case with judges around the country, Judge Kaplan is faced with the possibility of delaying criminal prosecutions due to furloughs for federal public defenders. The trial of bin Laden’s son-in-law, Sulaiman Abu Ghaith, which Judge Kaplan had hoped to begin in September, may now be delayed until 2014.

Columbus, Ohio
The award for the most novel approach to dealing with budget cuts to the offices of federal public defenders goes to Steve Nolder, the now-former director of the Federal Public Defender’s Office for the Southern District of Ohio. In response to forced cuts to his office’s budget, Nolder fired himself. According to The Columbus Dispatch, after considering all other options, Nolder came to the conclusion that there simply wasn’t enough fat to cut. “We can’t furlough our way out of this situation,” said Nolder. Ultimately, the decision came down to saving his job or the jobs of his attorneys. He chose to help his employees, but it is a shame that sequestration forced him to make the decision at all.

Kwame Boadi is a Policy Analyst at the Center for American Progress.

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This is part of a special series: Sequestration Nation

For more from this series, click here