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Hospitals Denounce Obama's Planned Cuts

June 16, 2009 (LPAC)—There was swift response to President Obama's presentation to the American Medical Association — not from the doctors, but from the hospitals. Within hours of Obama's speech, the American Hospital Association had posted a statement denouncing announced plans to cut as much as $200 billion in payments to hospitals. Hospitals are already facing cuts of $38 billion in previously announced cuts, the statement noted, plus potentially $41 billion in Medicare cuts for inpatient care. AHA President Rich Umbdenstock said that, "additional cuts of this magnitude could severely jeopardize hospitals' ability to care for their patients and communities."

Umdenstock also noted that these cuts would fall disproportionately on the poor and the uninsured (I guess he forgot that, under Obama's program, "uninsured" does not exist). Trauma and burns units, along with neonatal and psychiatric care (all of which would be affected by cuts) are about the only profitable sectors of today's hospitals, and the only way for them to make up for the current $32 billion shortfall in Federal co-payments. He also made the point that all the talk of "productivity" could only be carried so far, that "other industries can replace people with machines, but health care is about people taking care of people."

Along with the national organization's stand, the president of the Illinois Hospital Association has a letter in today's Chicago Tribune, denouncing the use of HMOs for managed care in Medicaid, as the Tribune has proposed. In the letter, Kenneth C. Robbins notes, among other things, that the base rate for Medicaid payments for in-hospital patients has been frozen since 1995.


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