Hospitals could lose $30B under Medicare cuts

A new budget proposal by President Bush designed to cut Medicare spending by $65.6 billion over five years would have a particularly harsh effects on hospitals, reducing their Medicare income by $30 billion over that period, industry analysts said this week. President Bush is also proposing cutting Medicaid costs a total of $25.7 billion, including $13 billion in spending cuts and $12.7 billion intended to be generated by administrative-cost savings.

The five-year budget proposal would cut payments by 0.65 percent to a wide variety of providers, including hospitals, hospices and ambulance services. Given the particularly marked impact on their business, however, hospital groups are furious, and poised for a major fight. (The proposal doesn't mention it, but the budget would also lead to doctors seeing even bigger cuts of 10 percent in 2008, news which is likely to lead to its own firestorm.) Hospitals aren't fighting alone, however: lawmakers like Senate Finance Committee Chairman Max Baucus (D-MT) are already speaking out against the proposal.

To find out more about budget cuts:
- read this article from The Wall Street Journal (sub. req.)