Opinion: Hospital Cuts Demand Sharp Instruments

Michael Regier, for HealthLeaders Media, July 29, 2011

As budget talks and related recriminations continue in Washington, payments to America's hospitals once again appear to be on the chopping block.  

It's one thing to stand inside the Washington Beltway and list ways to cut healthcare spending. It's quite another to stand inside a hospital and see the needs for care in your community--from the ER and the NICU to the nursing stations and the supply rooms.  

That's why hospital leaders nationwide are wondering how they can stomach another round of cuts on top of the $155 billion already sacrificed to support health reform. And that's before fully implementing the many requirements called for in the new law, under which hospitals could lose as much as 10 percent of today's Medicare payments in the next three years. Little wonder, then, that hospital executives are losing sleep wondering whether any debt deal will mean further payment cuts.

It's no surprise that federal officials are looking to save money in the Medicare program. According to the most recent Medicare trustees report, expenses for Medicare in 2010 were $523 billion and exceeded program income by $37 billion.

That report also projects that the balance in the Hospital Insurance Trust Fund (which pays for hospital, home health, skilled nursing and hospice care) will be exhausted in 2024—five years earlier than the prior year's report projected. And research has suggested that a significant portion—perhaps as much as a third—of the care provided in the Medicare program might be avoidable.

Clearly changes must occur if we are to sustain Medicare for the long-term, and hospitals across the nation are already making dramatic changes.

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