• Economics
• Political

In April 2013 we reviewed the definition and historical development of the sustainable growth rate (SGR) formula that plagues the American healthcare system.1 We examined and contrasted a number of serious policy proposals designed to fix this broken system. Finally, we explored what at the time were late breaking estimates of the perceived diminution in cost of permanently fixing the SGR.

As described in that foundational article, while there may have been a rational basis in developing the SGR to curb costs, in fact the SGR is at present a discredited approach. By design it is meant to restrain the growth of Medicare spending on physician services that critically links to the US gross domestic product (GDP).2–4 Current estimates are that application of the SGR formula would result in a diminution of professional fees for physicians accepting Medicare of 24.4% on 1 April 2014.2–4 We seek to update readers of JNIS on some meaningful developments related to the SGR discussion.

On 26 December 2013, President Obama signed the Bipartisan Budget Act of 2013 into law.5 This ‘fix’ is really a postponement of application of the SGR correction of 3 months; the irony being that the cuts are delayed to 1 April 2014. What is not a joke is that there was a pathway for the SGR Reform Act of 2013. There appears to be growing light at the end of the tunnel.

The Bipartisan Budget Act of 2013 established federal budget targets for 2014 and 2015 and, …