AHA: Medicare cuts to cost 278K hospital jobs

Hospitals should prepare themselves for nearly 278,000 job losses over the next decade because of a potential $61.4 billion in Medicare cuts, according to a new report from the American Hospital Association (AHA) and by economic research firm Tripp Umbach.

Should Congress enact $20 billion in Medicare cuts included in legislation (H.R. 3630) already passed in the House, it will cost 83,000 jobs, according to the report.

"Cuts in funding for hospital care will threaten jobs at a time when our nation needs to be creating jobs, not eliminating them," AHA President and CEO Rich Umbdenstock said, AHA News Now reported yesterday. "H.R. 3630 would lead to further job losses in hospitals, an ill-advised move in these tough economic times."

The 83,000 job loss figure is coupled with an additional estimated 194,000 job losses through sequestration, slated to begin in 2013. Under the Budget Control Act of 2011, signed into law, Medicare will cut $41.5 billion in payments--that is, a 2 percent cut to payments to all providers--in each of the next nine years, the report noted.

H.R. 3630 would reduce payments for bad debts incurred by Medicare patients from 70 percent in most settings to 55 percent between 2013 and 2015, at an estimated $5.8 billion impact, according to the report. It also would cut payment rates for evaluation and management (E&M) services in hospital outpatient departments to physician office rates, estimated at $12.3 billion. In addition, the bill would place beneficiary caps on the use of outpatient therapy services, affecting an estimated $1.8 billion.

"As lawmakers look at ways to reduce the deficit and fund other priorities, cuts to Medicare and Medicaid are often discussed, but rarely with consideration for the broader impact that these cuts could have on the larger economy and the jobs situation in particular," the report stated.

The Bureau of Labor Statistics this month reported overall healthcare employment is up with December gains of 22,600 healthcare jobs, with 9,800 of them at hospitals.

For more information:
- read the AHA News Now brief
- check out the jobs map
- here's the report (.pdf)