Looming Budget Cuts Make Hospital Belt-Tightening Increasingly Difficult
The economy might be on the rebound, but the nation's hospitals should still brace for the possibility of $360 billion in cuts in Medicaid, Medicare, and other federally funded healthcare programs and services over the next decade.
Moody's Investors Service said in a credit outlook that the ongoing reductions in federal funding for healthcare in the fiscal 2013 budget and beyond could make it disproportionately more difficult and more expensive to borrow money for hospitals that rely on Medicare.
"If adopted, the cuts would reduce reimbursement to hospitals, forcing these institutions to continue finding additional expense savings or new sources of revenue to avoid the credit negative deterioration of their profit margins," Moody's said in a budget analysis.
"Most hospitals have been adjusting to negative credit trends since 2008, and many have improved their quality and efficiency substantially. But past operating savings reflect harvesting 'low-hanging fruit,' while future savings will be harder to achieve and will require more wrenching change."
Medicare rate increase reductions installed under the healthcare reforms will enter their third year when the fiscal 2013 budget takes effect in October. Over the next decade, Moody's says, about $268 billion in Medicare reductions could adversely impact funding for critical access hospitals, graduate medical education, and bad debt relief.
- CFO Exchange: Smartphones Poised to Disrupt Healthcare, Says Topol
- CNO on Hospital Redesign: 'You Can't Over-Communicate'
- How Digital Strategy Shapes Patient Engagement at Boston Children's Hospital
- Consumerism Drives Healthcare Branding, Rebranding Efforts
- PA Ranks See 'Phenomenal Growth,' Lack of Diversity
- Half of All Primary Care, Internal Medicine Jobs Unfilled in 2013
- 3 Traits Personality Assessments Can't Reveal
- Carondelet to Pay $35M to Settle Fraud Allegations
- Antibiotic Overuse a 'Huge Threat' to Patient Safety, Says CDC
- Cleveland Clinic Partners with North Shore-LIJ for Heart Care