Hospital group lobbies against proposed $2B provider cuts

A top hospital lobbying group opposes a provision in President Barack Obama's budget proposal that cuts about $2 billion for healthcare providers, according to the National Journal.

The budget, released Tuesday, reduces funds for rural hospital payments, post-acute care and reimbursements for uncompensated care. The Federation of American Hospitals (FAH) said these cuts are unnecessary, citing a recent FAH study that found structural changes in the healthcare industry--such as hospital readmission reduction programs, evolving care models and increased use of electronic health records--will save Medicare about $900 billion over the next decade, according to the article.

The proposed cuts are "unsustainable and counterproductive" and would "jeopardize both access to care now, and the investments hospitals must make, going forward, to accelerate the structural changes driving the new era of low cost growth," FAH President Charles Kahn wrote in letters to House Finance Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairman Patty Murray (D-Wash.), Reuters reported.

Medicare and Medicaid currently account for $862 billion in federal spending, according to Reuters, but will likely represent a combined $1.4 trillion by 2024. Although experts expect the proposal won't pass in Congress, the plan indicates that the White House is open to making structural changes to Medicare and Medicaid, according to the article.

The FAH also pointed out that healthcare spending growth is near an all-time low, noting that the Congressional Budget Office (CBO) recently reduced its Medicare and Medicaid spending projections for the next 10 years by $221 billion, according to Reuters.

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

Obama's budget, which would take effect Oct. 1, contains $800 billion in overall healthcare spending reductions, according to Reuters. It does not increase or reduce funding for the Food and Drug Administration or the National Institutes of Health.

To learn more:
- here's the National Journal article
- read the Reuters article

 

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.