Medicare Cuts Threaten 766K Healthcare Jobs, Groups Say
She says that multiplier effect could also work in reverse for thousands of hospitals and the communities they serve across the nation if the cuts go through.
"When you cut Medicare funding Medicare hospitals will have less reimbursements coming in. They will have to lower their expenses and some of that will be through staff reductions. That is the direct effect," Steinberg says. "And part of that direct effect is that hospitals will reduce spending on other supplies and services."
"The indirect effect would be when the hospitals reduce their spending on other supplies and services and other businesses are affected," she says. "If a hospital reduces spending on laundry or food service or medical devices or drugs those companies will in turn have to reduce their expenditures, which could result in staff layoffs."
Finally, Steinberg says, there is the "induced effect" of the loss of revenue for people who've lost their jobs either at a hospital, or supplier. "They are then going to reduce their purchases in their community, which will cause additional business, restaurants, clothing stores, car dealerships, to have less revenue coming in, which will lead to more job losses," she says.
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