Revenue Cycle

Medicare cuts could slash 278K hospital jobs, warns AHA

Patient Access Weekly Advisor, January 25, 2012

Medicare funding cuts under consideration by Congress could cost the nation's hospitals $61.4 billion over the next decade, forcing them to trim their payrolls of nearly 278,000 jobs, the American Hospital Association said last week.

The reimbursement reductions detailed in H.R. 3630 would take funding from hospitals and use it to cover the deficit created by the extensions of the Social Security tax holiday and unemployment benefits, and by the so-called "doc fix" that aims to address cuts to physician reimbursements .

An analysis done for AHA by the researcher firm Tripp Umbach determined that if the provisions of H.R. 3630 were implemented, hospitals could see a reduction in funding of nearly $20 billion, along with about 83,000 job losses.

In addition, the study found that the mandatory sequestration that is scheduled to go into effect in 2013 could cost hospitals another 194,000 jobs and more than $40 billion in funding.

"Cuts in funding for hospital care will threaten jobs at a time when our nation needs to be creating jobs, not eliminating them," AHA President/CEO Rich Umbdenstock said Jan. 18 in a media release. "H.R. 3630 would lead to further job loss in hospitals, an ill-advised move in these tough economic times."

The Bureau of Labor Statistics reported this month that hospitals created 89,100 jobs in 2011, more than double the 37,300 jobs hospitals created in 2010.

In addition, AHA officials fear that hospitals may be caught in the political crossfire between the Obama administration and the Republican-controlled House. The AHA supported the Affordable Care Act and agreed to about $155 billion in funding cuts over the next decade in exchange for expanding healthcare coverage.

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