The Balanced Budget Act (BBA) created a new policy and was an overhaul to Medicare and Medicaid. Included was a decrease in Medicare and Medicaid spending by $125.2 billion over 1998-2003. The payment system was also modified. BBA increased Medicare Part B premiums and required prospective payment for certain services. It reduced incentives and allowances paid to educational faculties. Much of BBA targeted hospitals. BBA also allowed Medicare insurance to be open to private insurers which shared the fiscal responsiblity between the private sector and Medicare entity.

I feel that BBA's reduction to Medicare reimbursement ultimately applied necessary cuts to save necessary money. Hospitals, physicians, home medical providers, etc. were doing very well on the previous reimbursement and this forced them watch all line items and make necessary cuts themselves. Quality also became a necessary area for improvement. I work with the Long Term Care aspect of health care and Quality Initiatives which monitored the care of different health care areas became much more prevalent. These requirements were necessary to improve living conditions in the facilties but have led to this industry being the second most regulated industry behind nuclear. Other reductions in beneficiaries policies like the Benefits Protection Improvement Act increased provider payments and health plans payments. Medicare began paying hospitals, physicians, etc. based on their quality standards and payment was rejected if a patient was hospitalized due to infections caused by procedures. The BBA had a poor impact on health care system primarily on the private sector entities. I do feel that this is tough to judge whether or not the positives to the tax payers and end users out weight the cuts to the providers of the care. I am against regulations and government control, especially in the private sector, but I also feel that the BBA did help improve care and conditions for the residents in the long-term care. It also made healthcare sectors think more wise fiscally and held them accountable for the care they provide.