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Impact of Federal Funding Letter – Options for Reducing the Deficit

Impact of Federal Funding Letter – Options for Reducing the Deficit

Student’s Address

Client’s Address

Dear Editor, Members, and Peers,

RE: Impose Caps on federal spending for Medicaid (Option 2)

The second option of imposing caps on federal spending for Medicaid is selected because it is a government initiative fully funded by the state to benefit members of the public in accessing healthcare in the long term, which they could not have afforded in the first place. Imposing caps on federal spending on Medicaid implies that the federal government will limit the amount of money paid to states for Medicaid. Medicaid has consumed a significant part of the federal budget, and plans are to enhance its coverage in various states. However, putting caps on the program is crucial in reducing the budget deficit. The caps will put the states in a compromised situation in which they will have to pay for the Medicaid programs for members of the public (Congress of the United States, 2016). As a result, the number of citizens likely to benefit from the program will reduce.

One organization that will be affected by any imposition of caps on the Medicaid program is the Mayo Clinic. It is a not-for-profit organization that offers clinical services to members of the public. A more significant portion of the costs incurred by the Mayo Clinic is covered by the Medicaid program (Miller-Wilson et al., 2022). Reducing program funding implies fewer people will get medical help from the organization; thus, the need to write this letter is triggered by concern about the impact the organization will likely suffer if caps on Medicaid are implemented. The organization should be worried about the possible impacts of introducing caps on Medicaid and its relevance to society. Failing to facilitate medical services as it has been doing can drastically affect its public image and operations.

Imposing caps on federal spending on Medicaid will majorly impact the Mayo Clinic, requiring urgent consideration to avoid potential disruptions in their operations. First, imposed caps on Medicaid will reduce the reimbursement Mayo Clinic receives. Since the organization relies significantly on reimbursements to meet its expenses, it will be strained in sustaining operations and offering quality care services. Second, the Mayo Clinic will experience financial strains following the imposition of caps on the Medicaid program. They will be required to operate on tighter budgets, so covering operational, infrastructure, and research costs will be challenging. Third, the organization will incur limitations in the services offered. The organization will have to evaluate its services to determine which are non-essential to do away with. Notably, this will affect patients who rely on such services. The outcome of such events can be compromised patient outcomes due to decreased availability of specialized treatments (Baker et al., 2021). Lastly, the organization is likely to face increased cases of uncompensated care. This is so because patients will seek and fail to pay for services.

Based on the identified impacts that the organization will likely suffer due to a curtailed Medicaid program, there should be a plan of action to avoid the effects. Mayo Clinic is vital in providing health care to vulnerable and less privileged communities. There is a need to ensure that its ability to fulfill this purpose is not limited but continues irrespective of the caps on Medicaid. Collaborative efforts made by the organization with states, community organizations, and local health departments to promote community well-being should be enhanced. Although the introduction of caps on Medicaid may curtail the success of these collaborative efforts, the results of their efforts should be safeguarded.

Mayo Clinic can make the following changes to decrease the proposed rule’s potential impact. First, there is a need to diversify sources of revenue, and it includes adopting different funding options. Mayo Clinic should partner with private entities to raise more funding to replace the one cut under the proposed rule. Further, the Mayo Clinic can source donations and grants from State governments. Second, healthcare organizations relying on funding from the Medicaid program should enhance their operational efficiency to optimize resource utilization and reduce costs. In the case of Mayo Clinic, operational efficiency can be achieved by streamlining administrational processes, implementing effective healthcare management, and adopting innovative technologies to relieve financial strain (Ko et al., 2019). Lastly, Mayo Clinic and other organizations in the industry should consider exploring advocacy efforts; this will entail lobbying the government and policy-making bodies to reconsider the decision to impose caps on federal spending on Medicaid. Advocacy efforts by the Mayo Clinic can help make the federal government aware of the potential impacts of imposing caps on Medicaid.


Baker, M. V., Butler‐Tobah, Y. S., Famuyide, A. O., & Theiler, R. N. (2021). Medicaid Cost and Reimbursement for Low‐Risk Prenatal Care in the United States. Journal of Midwifery & Women’s Health66(5), 589-596.

Congress of the United States. (2016). Options for Reducing the Deficit. Congressional Budget Office.

Ko, D. G., Mai, F., Shan, Z., & Zhang, D. (2019). Operational efficiency and patient‐centered health care: A view from online physician reviews. Journal of Operations Management65(4), 353-379.

Miller-Wilson, L. A., Rutten, L. J. F., Van Thomme, J., Ozbay, A. B., Laffin, J., & Limburg, P. (2022). Cross-sectional adherence with the multi-target stool DNA test for colorectal cancer screening in a Medicaid population. Preventive Medicine Reports30, 102032.


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Understanding public funding is an important aspect when managing operations for a healthcare organization. Your ability to analyze how state and federal healthcare policies and funding affect healthcare organizations and consumers is crucial to its success in the marketplace. As a manager, especially one involved with overseeing operations, you will need to understand and apply this information regularly.

Impact of Federal Funding Letter - Options for Reducing the Deficit

Impact of Federal Funding Letter – Options for Reducing the Deficit

Select a healthcare organization with which you work or are familiar.

Download the report “Options for Reducing the Deficit: 2017 to 2026” from the Congressional Budget Office website.

Read Ch. 5 of the report.

Select one of the health options listed.

Assume you are the chief operating officer responsible for managing all operations of your selected healthcare organization.

You recently received an email from the Congressional Budget Office detailing the impact of the proposed options for reducing the federal deficit. You are directed to the document from the following website: Options for Reducing the Deficit: 2017 to 2026.

After reviewing the Health Care Options in Chapter 5, you determine that one of the options will have a major impact on your organization.

You have decided to write a letter to the editor of your professional association to reach its membership. Your purpose in sharing your opinion is to influence others in the industry and provide useful information for those in similar situations facing challenges from regulatory changes that will impact their operations.

Write a 750- to 1,050-word letter to the editor of a professional organization for its website, written for distribution to its membership, which includes your peers.

Include the following in your letter:

  • A summary of your chosen specific option and why it is relevant for your organization
  • Why you are writing to this specific professional organization
  • The impact of your selected option on your facility and similar facility types
  • A summary of the proposed changes you intend to make to your organization or service that may help to decrease the negative impact that this proposed rule will likely have

Cite 3 reputable references to support your assignment (e.g., trade or industry publications, government or agency websites, scholarly works, or other sources of similar quality).

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