Hospitals Face Deep Cuts Under Deficit Reduction Proposals

N.J. Healthcare Leaders Travel to Capitol Hill to Raise Awareness

PRINCETON, N.J., July 13, 2011 /PRNewswire-USNewswire/ -- New Jersey's healthcare community faces deep funding cuts under deficit reduction strategies on the table in Washington, D.C. – on the heels of billions of dollars in hospital cuts under last year's Affordable Care Act.  

Leaders from several Garden State hospitals and the New Jersey Hospital Association traveled to Capitol Hill today to press their case to lawmakers. Their message: New Jersey hospitals have already lost $4.5 billion in federal funding under healthcare reform. Deeper cuts in the deficit reduction package could have a devastating impact on hospitals and their patients.

"Hospitals 'gave at the office' in the last round of major cost-cutting – to the tune of $155 billion nationwide and $4.5 billion in New Jersey," said NJHA President and CEO Betsy Ryan. "The healthcare community is working very hard under healthcare reform to make care better, safer and more affordable. But we can't continue to chip away at the very foundation of our healthcare system by continually cutting Medicare and Medicaid. The impact will be felt not only by Medicare and Medicaid beneficiaries, but by anyone who counts on access to quality healthcare in their community."

President Obama and congressional leaders have been working to hammer out a compromise to cut spending and raise the nation's debt limit. The two sides face an Aug. 2 deadline to raise the limit before the nation's outstanding financial obligations outweigh its income.

There are several different cost-cutting proposals currently on the table. The proposals vary, but all contain some combination of significant cuts to Medicare and Medicaid, including proposals for broad provider cuts, reductions to teaching hospitals that train future physicians and nurses and additional changes such as increasing the Medicare eligibility age.

A Garden State contingent of hospital leaders traveled to the nation's capital today, first for a briefing with the American Hospital Association and then fanning out on Capitol Hill to meet with congressional members and their key staffers to educate them about the impact of deeper cuts on the state's hospitals. The nation's hospitals agreed to absorb $155 billion in federal cuts to achieve passage of the healthcare reform law. Those cuts have already begun and are spread out over a decade. For New Jersey providers, the statewide impact reaches $4.5 billion in federal funding losses. The worry is that additional budget cuts would force hospitals to consider job cuts and service reductions – perhaps even additional hospital closures.

Hospitals in New Jersey already struggle under government reimbursement levels that rank among the lowest in the nation. On average, N.J. hospitals are paid just 70 percent of their costs for treating Medicaid patients and about 90 percent of their costs caring for Medicare beneficiaries. Poor reimbursement from those two key programs has contributed to the closure of 15 New Jersey hospitals in the last decade.

"Enough is enough," said Joe Coyle, president and CEO of Meridian Health's Southern Ocean Medical Center, who was among the executives in Washington, D.C. today. "Hospitals provide an essential social service – healthcare for all, regardless of their ability to pay – but they also are a critical source of jobs in our state. We can't afford to further undercut our hospitals and all the benefits they deliver."

Visit Betsy Ryan's "Healthcare Matters" blog at for more on deficit reduction and its potential impact on New Jersey hospitals and patients.

A complete list of N.J. hospital closures is available at

An overview of the various debt reduction proposals is available from the Kaiser Family Foundation at

SOURCE New Jersey Hospital Association