You can’t turn on the news these days without hearing about Medicare. Since the selection of Wisconsin Congressman Paul Ryan (no relation) as Gov. Mitt Romney’s VEEP choice, the issue has been front and center. Not surprisingly, both sides claim to be the protector of Medicare and paint the other as trying to shred the program with deep cuts. Romney/Ryan, for example, point to billions in cuts to Medicare under Obamacare, while the Obama camp claims that the Ryan plan would make senior citizens pay more because it would in essence “privatize” the program by giving seniors vouchers to shop for their own health coverage.
It’s interesting to watch the claims and counterclaims fly. And while the candidates are targeting their comments to rouse an important voting bloc – senior citizens – I wanted to share the perspective of another critical stakeholder, the healthcare provider community. The reality is, there were significant cuts to Medicare under Obamacare, primarily to provider payments. Here are some facts behind the campaign fireworks:
- Medicare payments to hospitals were cut by $155 billion over 10 years under the Affordable Care Act. For New Jersey hospitals, the cut is about $4.5 billion. The nation’s hospitals voluntarily conceded those cuts because they believe in the importance of insuring more Americans.
- Specifically, the hospital cuts included significant reductions to Medicare and Medicaid disproportionate share hospital (DSH) payments intended to pay hospitals that treat a large number of uninsured, along with cuts to Medicare inflationary rate updates.
- Nursing homes, home health agencies, rehabilitation facilities (the places that treat you when you have your knees replaced, not the substance abuse centers) and diagnostic imaging services also sustained reimbursement cuts under the ACA.
The worry for hospitals and other healthcare providers is that they will be the target of additional cuts in the future, especially as our leaders confront the growing federal deficit. Already, Medicare payments to healthcare providers are slated for a 2 percent cut in 2013 under a process called “sequestration” that was set into motion last year.
Reporters covering the presidential campaign quickly dubbed the current debate a case of “Medi-Scare” tactics. I don’t doubt that the topic is plenty scary to many Americans – senior citizens, absolutely. And healthcare providers too.