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Patients hurt by Medicare cutbacks

Managed Care Weekly Advisor, June 27, 2007

Medical imaging equipment manufacturers are trying to reverse Medicare cutbacks while enduring some of the worst sales numbers in recent memory.

Following complaints that some healthcare providers were performing superfluous tests to boost revenue, Congress made the cuts in Medicare. Now, companies like General Electric Co., which manufactures equipment, and Alliance Imaging Inc., say the six-month-old policy is hurting public health.

The cuts began in January and were intended to reduce how much compensation doctors receive for administering X-rays, medical resonance imaging, and other tests for patients enrolled in the government-run health program for seniors. The changes are expected to save $2.8 billion over five years, but have sent scanner sales plunging by more than 20 percent last quarter. The companies -GE, Siemens AG, and Toshiba Corp.- said fewer diagnostic machines mean fewer tests and greater chances of diseases in the elderly going undiagnosed.

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