Providers must ac­cept that cuts are com­ing in gov­ern­ment health­care pro­grams

Modern Healthcare - - Front Page - Howard Ber­man and Bruce Mcpher­son

It’s time to move be­yond de­nial on gov­ern­ment cuts

We are fully in agree­ment with David Burda’s com­men­tary in Mod­ern Health­care, “Gun to the head” (Aug. 8, p. 21). Provider groups need to stop bring­ing out what Burda de­scribed as “the usual cry­ing tow­els” and “alarmist rhetoric” about the debt-ceil­ing law; ac­cept the fact that Medi­care and Med­i­caid will un­dergo sig­nif­i­cant changes to help put our nation’s fis­cal house in or­der; and work with their con­stituen­cies to frame a set of changes that will be in the best in­ter­ests of the com­mu­ni­ties they serve.

The re­cent TV ads placed by the Coali­tion to Pro­tect Amer­ica’s Health Care be­fore the debt-ceil­ing com­pro­mise was passed, “What Were You Think­ing,” are a case in point re­gard­ing alarmist rhetoric. In the ads, three sup­posed Medi­care ben­e­fi­cia­ries be­moan any fed­eral bud­get deficit-re­duc­tion plan that would in­clude “cuts of over $100 bil­lion for hos­pi­tal care.”

In con­junc­tion with the ads, at least one na­tional hos­pi­tal as­so­ci­a­tion was plead­ing with all of its mem­bers to “reach out again to urge your leg­is­la­tors to pro­tect hos­pi­tal care” and to re­mind them that “enough is enough.” It pointed out that $155 bil­lion in hos­pi­tal pay­ment re­duc­tions had al­ready been in­cluded in the health­care re­form law, and claimed that “Al­ter­na­tives ex­ist.” Well, what are they?

Who is this coali­tion? Its board con­sists of the CEOs of vir­tu­ally ev­ery na­tional hos­pi­tal trade as­so­ci­a­tion rep­re­sent­ing for-profit, not­for-profit and pub­lic hos­pi­tals, along with a smat­ter­ing of other CEOs whose or­ga­ni­za­tions also have hos­pi­tal con­stituen­cies or whose or­ga­ni­za­tions are them­selves hos­pi­tals or sys­tems.

What does a to­tal re­duc­tion of the mag­ni­tude of $255 bil­lion ($155 bil­lion plus $100 bil­lion) re­ally amount to over 10 years? Even un­der a very con­ser­va­tive as­sump­tion of 5% an­nual growth in com­bined Medi­care and fed­eral Med­i­caid spend­ing for hos­pi­tal care, that $255 bil­lion “cut” trans­lates to an av­er­age an­nual re­duc­tion in the rate of in­crease in fed­eral hos­pi­tal spend­ing of less than 0.5% a year.

Un­der the debt-ceil­ing law, as Burda in­di­cates, health­care providers will be lucky if the trig­ger is pulled and they ex­pe­ri­ence cuts in their Medi­care pay­ment rates of 2% a year. We be­lieve that they won’t be so lucky, or at least not for long. The Stan­dard & Poor’s down­grade of the U.S. gov­ern­ment’s credit

Hos­pi­tals were able to cope some­how be­fore the

ad­vent of Medi­care and Med­i­caid in the ’60s.

rat­ing will put enor­mous pres­sure on the new con­gres­sional “su­per­com­mit­tee” to look for much greater sav­ings over 10 years than the $1.5 tril­lion min­i­mum.

S&P has stressed that over­haul­ing en­ti­tle­ment pro­grams is “key to long-term fis­cal sus­tain­abil­ity” and that the debt-ceil­ing deal “en­vi­sions only mi­nor pol­icy changes in Medi­care.”

So it’s time to not only talk facts but also face facts. The U.S. econ­omy has changed sig­nif­i­cantly, and for the worse, and we need to ex­er­cise real lead­er­ship in help­ing our coun­try, our con­stituen­cies and our com­mu­ni­ties cope in this new world. Let’s rec­og­nize that the Medi­care and Med­i­caid pro­grams are huge con­trib­u­tors to fed­eral spend­ing and that our nation’s fis­cal health re­quires that these fed­eral pro­grams, as well as many oth­ers, must change with the times.

The only ques­tions are how and how quickly. The an­swers may or may not be in the best in­ter­ests of the ma­jor na­tional hos­pi­tal and physi­cian as­so­ci­a­tions, whose dues rev­enue is de­pen­dent on a con­tin­ued need to lobby Congress and fed­eral bu­reau­crats on be­half of mem­bers over ad­min­is­tered rates lev­els and re­lated poli­cies.

What­ever di­rec­tions are taken, let all of us in health­care show our coun­try what we can do, in­di­vid­u­ally and in col­lab­o­ra­tion with oth­ers, to live within those pa­ram­e­ters and help our coun­try live within its means. That is real value. So is pro­tect­ing the pub­lic and pri­vate not-for-profit hos­pi­tals and other health­care providers that serve as the true “safety net.” If the “haves” don’t help the “havenots,” the “haves” will ul­ti­mately bear the bur­den one way or an­other that the “have-nots” are car­ry­ing for them.

If char­i­ta­ble hos­pi­tals across the coun­try were able to cope be­fore the ad­vent of the Medi­care and Med­i­caid pro­grams in the ’60s, we have ev­ery faith that they will be able to cope with what­ever lies ahead if they demon­strate real value to their com­mu­ni­ties. Howard Ber­man is chair­man of the Al­liance for Ad­vanc­ing Non­profit Health Care and a re­tired pres­i­dent and CEO of Life­time Health­care Cos., Rochester, N.Y. Bruce McPher­son is pres­i­dent and CEO of the al­liance.

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