As the White House and Congress grapple with negotiations to prevent yet another showdown over raising the country’s debt limit, hospitals across the nation are worried the so-called “fiscal cliff” will encourage lawmakers to strike a deficit-reduction deal that could cripple safety-net programs and hospitals.
Medicare and Medicaid, two of the budget’s largest entitlement expenditures, are ripe territory for potential cuts in a “grand bargain” on deficit-reduction. But health care advocates like Republican Senate Majority Leader Bill Frist — who is a former physician and an unabashed Obamacare supporter — warn that excessive additional cuts to Medicare- and Medicaid-servicing hospitals could be devastating:
“I don’t think hospitals understand how deep these cuts are going to be in the grand bargain,” Frist said at the World Healthcare Innovation and Technology Congress.
The possibility for more hospital spending cuts on top of those coming under the Patient Protection and Affordable Care Act was not a surprise to some.
“If you just take a look at where the money goes in terms of federal expenditures, healthcare is right there,” said Dr. Robert Laskowski, CEO of Christiana Care Health System, Wilmington, Del. “So the bull’s-eye is an accurate description of the risk.”
In response, his health system is focusing on implementing and expanding quality improvement and cost-savings initiatives. Laskowski said he did not know whether such initiatives by many hospitals would succeed in dissuading deficit negotiators from targeting them.
Safety net hospitals are already worried about the strain they will be under in the states that don’t participate in Obamacare’s Medicaid expansion. The health reform law cut funding to Medicaid disproportionate share hospitals, expecting the expanded Medicaid pool to offset the cost, but those cuts will deeply hurt safety-net hospitals if GOP governors keep refusing to expand their states’ programs.
The potential of looming spending cuts can help encourage doctors and providers to find innovative ways to cut health spending and improve their systems of care. The health law does include some cuts to hospitals’ reimbursements in order to reallocate those funds to reward the hospitals that provide higher quality, less expensive care. But if Congressional leaders shirk difficult budgetary decisions on taxes, defense, and discretionary spending and choose to instead slash funding for safety-net services in a way that spurs contraction instead of innovation, they will be balancing the budget on the backs of America’s sick, poor, elderly, and the hospitals that give them life-saving treatment.