Image source: www.whitehouse.gov

Emphasizing both deficit reduction and investment, President Barack Obama has sent his 2012 budget to Congress, which includes a two-year extension of steady Medicare reimbursements and $32 billion in funding to the National Institutes of Health—paid for, in part, by $62 billion worth of Medicare savings.

The $3.7 trillion budget, delivered to Congress on Feb. 14, would tack on an additional one-year extension to Congress’s one-year “doc fix,” delaying 25 percent cuts to Medicare reimbursements for at least two years, according to a statement released by Jack J. Lew, JD, director of the Office of Management and Budget. The extension would be paid for by $62 billion worth of Medicare savings over the next 10 years, mainly through tighter restrictions on Medicare and Medicaid payments and expanded use of generic medications by federal health programs, according to California Healthline, a publication of the California HealthCare Foundation.

President Obama’s budget also proposes tax credits of $32 billion, effective subsidies, to support the research and development programs of the National Institutes of Health (NIH). Lew argued that these funds would help cement the investment and innovation components of the budget, propped up primarily by cuts to “lower priority programs” outside the health sector and by $46 billion worth of savings from the elimination of 12 tax breaks to oil, gas and coal companies.

The response to Obama’s proposal has been mixed from the various medical societies. “While we are pleased that the President's budget does not include any new major reductions in payments for hospitals services to Medicare beneficiaries, we are deeply disappointed that today's budget reduces Medicaid," Rich Umbdenstock, president and CEO of the American Hospital Association, said in a statement. “Moreover, at a time when hospitals have already been asked to absorb big cuts at the state level, and state budgets are already stretched, it is unwise to ask states to continue to do more with less. In addition, we are also disappointed to see elimination of funding for the children's graduate medical education program at a time when there is a need for an expanded physician workforce.”

The budgetary proposals, which would take effect Oct. 1,  now head to the Committees on Appropriations for the House and Senate for approval and revision.