Though President Bush's first budget blueprint received criticism for lack of detail, one missing detail has made healthcare providers happy: Medicare payment cuts. For the first time in years, the President's fiscal budget seeks no savings by capping annual Madicare payment increases to hospitals, physicians, and other providers. 

"This is the first time in a generation that we haven't seen Medicare payment cuts in a president's budget," said Richard Pollack, executive vice president of the American Hospital Association. However, the budget did not propose repealing payment-growth caps already in place through 2003.

The President's proposed fiscal 2002 budget also sets aside $153 billion for unspecified Medicare modernization and a new prescription drug benefit from 2002 to 2010. But that drug benefit proposal ("immediate helping hand") has already come under fire from some Democrats. According to Senator John Breaux (D-LA), "the helping hand is an idea that has a good purpose, but it's a bad idea because it takes the pressure off for real reform."

President Bush has announced his endorsement of a Medicare reform framework developed two years ago by a bipartisan commission (co-chaired by Senators Breaux and Frist (R-TN)), but some House Democrats have criticized the plan as relying too heavily on private managed-care plans to deliver healthcare to Medicare beneficiaries. "There is no evidence that managed care has done anything to help Medicare."

So, while healthcare providers may have reason to breathe a little more easily next year, those hoping for substantial change to the Medicare system may be holding their breath for a long time.