Prosposed Budget Cuts Worry Hospitals

The Wall Street Journal/Dow Jones Newswires reports on reaction to the Obama administration's proposed cuts that may acutely affect hospitals. It notes: "President Obama last weekend called for $313 billion in savings over 10 years through adjustments in Medicare and Medicaid payments - a plan that a 'deeply disappointed' American Hospital Association said would mean $220 billion in payment cuts to hospitals, on top of billions in other proposed Medicare cuts."

The Journal reported that Tenet Healthcare Corp. CEO Trevor Fetter thinks "the Obama administration may be asking hospitals to bear too great a burden for helping pay for an expansion of medical coverage to uninsured Americans, although full details of the president's latest financing proposal have yet to emerge." The Journal reports, "Obama proposed, among other savings, reducing government subsidies to hospitals for treating the uninsured as more people are covered. That makes sense, yet could pose problems if funds are cut while hospitals continue to care for large amounts of uninsured patients, Fetter said."

"While hospitals stand to benefit significantly if policy makers extend medical coverage to the more than 45 million uninsured Americans, the timing of that expansion and any spending cuts needed to help pay for it is crucial since a mistake could 'have catastrophic results,' Fetter said," according to the Journal. He also expressed concern about the effects of rising unemployment and said that now hospitals are "getting paid literally nothing from a large portion of our patient population," and are paid less than the cost of treatment for their Medicaid patients (Brin, 6/17).

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