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Health Care

Hospitals Push to Stop Budget Cuts to Health Care Providers

The administration wants to cut $2 billion, but the industry's lobbying group says the cuts will end up costing taxpayers in the long run.


A hospital lobbying group hopes to convince Congress to avoid making roughly $2 billion in cuts to health care providers, arguing that the health care system is generating savings and that slashing payments further would jeopardize future innovations in care.

The Obama administration proposed the cuts Tuesday in its 2015 budget request, and it includes reductions in post-acute care, payments for rural hospitals, and reimbursements for care provided to Medicare beneficiaries who don't pay their bills. The cuts come after years of spending reductions to hospitals, which faced some $25 billion in reduced revenues in the president's proposal last year.

The Federation of American Hospitals, which represents more than 1,000 health care providers, is pushing a new study to persuade lawmakers to forgo the cuts. The study, produced by health care consulting firm Dobson DaVanzo, estimates more than $900 billion in savings to the Medicare program over the next decade due to cost cutting already being generated through changes to the way hospitals and doctors provide care. The projection exceeds estimates by the Congressional Budget Office, which last month lowered its ten-year projections for Medicare and Medicaid spending by $221 billion.


FAH President and CEO Chip Kahn said in his announcement at the organization's  annual public policy conference that the savings are the direct result of structural changes to America's health care system that will drive down cost growth. Some of the changes he noted are the use of electronic health records, reduction in hospital readmission rates, and adoption of new care and payment models, innovations which can be traced back to public policy, including the American Recovery and Reinvestment Act and the Affordable Care Act.

"Our mission now should be to stay the course, with the structural reforms that are driving down health care costs," Kahn said.

Hospital leaders Tuesday sent a copy of the report, along with a call to avoid new hospital payment cuts, to the House and Senate Budget committees' leadership.

This article appears in the March 5, 2014 edition of NJ Daily.

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