Enough is Enough: Hospitals and Patients Can’t Afford Further Cuts

As Congress continues to debate strategies to rein in the national debt, the provider community reminds lawmakers of one key truth: Hospitals have already done their part. To the tune of $155 billion, in fact.

That’s the amount that the nation’s hospitals conceded as part of the federal healthcare reform law. Love it or hate it, the law attempts to take a bold step toward controlling rising healthcare costs while preserving healthcare quality. New Jersey hospitals will absorb about $4.5 billion in lost federal funds as part of that law.

Now, lawmakers are confronted with raising the federal debt ceiling limit by Aug. 2 or risk defaulting on our country’s financial obligations. The debate over increasing the debt ceiling will focus on spending cuts and possibly tax increases. Given that Medicare and Medicaid comprise more than 20 percent of all federal spending and about 55 percent on average of hospital revenues, this debate could have significant implications on New Jersey’s provider community.

President Obama appointed Vice President Joe Biden to lead a group of bipartisan legislators from the House and Senate to develop a deficit reduction package that could be passed as part of the vote on a debt limit extension. Congressional Republicans want spending cuts which will most likely dramatically trim Medicaid and Medicare as part of any legislative package. Democrats say they would consider tweaks to both programs as part of their plan but they also want to include revenue raisers, such as tax increases.

Both Medicare and Medicaid already reimburse N.J. hospitals at rates far less than costs, and yet, hospitals could once again be targeted by this effort. If our state’s hospitals are required to absorb further reductions, the healthcare safety net for low-income families, seniors and Americans with disabilities will be weakened.

In addition, more cuts could lead to service reductions, longer waits for care, greater pressures on hospital ERs and staff losses, and also could limit the training of new physicians at a time when the nation faces a shortage of primary care physicians. The financial health of New Jersey’s hospitals would be put in further jeopardy.

New Jersey’s hospitals cannot afford any more cuts to Medicare and Medicaid. Nor can the people who rely on them for healthcare.

Written by Betsy Ryan at 14:36

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