Healthcare is a major focus of Washington budget talks, Sen. Mark Kirk (R-Ill.) told attendees at an American College of Surgeons event in Chicago today, and every group that relies on federal funding should expect a 10% to 20% drop in that funding.

When Dr. L.D. Britt, president of the ACS, warned that such cuts could send some healthcare providers into a "tailspin," Kirk replied that “the tailspin is the U.S. economy.”

"There is a new audience at play," Kirk said, referring to U.S. creditors. "The judgments they render, they are swift and severe."

Creditors similarly wreaked havoc on the Irish economy after deciding the Irish government's austerity plan was not austere enough, and the U.S. can't afford to have the same thing happen, he added. Kirk is a member of the Senate's Health, Education, Labor and Pensions Committee.

Kirk was invited to speak at the ACS program on Inspiring Quality in Surgical Care, which sought to highlight how quality-improvement programs boost patient outcomes while cutting costs. Britt asked Kirk whether his colleagues in Washington were aware of how quality improvements lead to cost reductions, and Kirk replied that the message isn't being heard clearly, as almost every decision in Washington is being viewed in the context of the federal government's collapsing credit.

That said, Kirk predicted that a solution to the country's debt-ceiling dilemma "will have a way of concluding itself one day before the deadline," meaning by Aug. 1.

In the meantime, Kirk said, answers to the nation's healthcare crisis include national malpractice reform modeled after legislative changes already made in California and Texas; the development of more direct relationships between patients and their physicians with less bureaucratic control; the creation of incentives—similar to 401(k) accounts—for individuals to put money aside for healthcare costs while still ensuring coverage for catastrophic events and efforts such as first lady Michelle Obama's "quite-appropriate focus on obesity."

Kirk said the goal was to not have people depend on a "bankrupt entity" to fund their healthcare.

When asked what the ACS needs to do to advance its agenda, Kirk suggested that the organization try to exert its influence on the American Medical Association, which he said has become an "an utterly politically correct organization that swings with the political wind."