Proposed Medicare Cuts May Leave 287,000 Hospital Jobs at Risk

Yesterday the American Hospital Association (AHA) announced that 83,000 hospital-based jobs are at risk should Congress enact H.R. 3630, already passed in the House, which would lead to “nearly $20 billion in Medicare cuts to funding for hospital care.” This is just the start of additional Medicare cuts and job loss over the next 10 years to an industry that added 89,000 jobs in 2011; 9,800 jobs just in December, according to the Bureau of Labor Statistics.

A study released by the AHA and economic research firm Tripp Umbach earlier this month paints a dreary picture. By 2021, there could be as many as 278,000 hospital-based jobs lost thanks to the approximately $64.1 billion in Medicare cuts:

Image Source - Tripp Umbach Job Loss Calculator Report

Budget Control Act (BCA) of 2011 — Calls for $41 billion of new cuts starting in 2013.

Already been passed and signed into law, the BCA includes a provision which requires “a 2 percent cut to Medicare payments to all providers in each of the next 9 years.”

H.R. 3630 — Calls for $19.9 billion if signed into law.

There are three provisions in this bill which would cut hospital care payments:

1) From 2013 to 2015, Medicare reimbursement will be reduced to “hospitals for providing assistance to low-income Medicare beneficiaries.” — Cut = $5.8 billion

2) Payment cuts for “evaluation and management services provided in hospital outpatient departments to the rates paid in physician offices.” — Cut = $12.3 billion

3) Subject hospital outpatient departments to “per beneficiary caps on the use of outpatient therapy services.” — Cut = $1.8 billion

"Cuts in funding for hospital care will threaten jobs at a time when our nation needs to be creating jobs, not eliminating them," said AHA President and CEO Rich Umbdenstock. "H.R. 3630 would lead to further job losses in hospitals, an ill-advised move in these tough economic times."

Read the full report here.

Other reports related to this article:

Hospital Jobs by State and Congressional District

Medicare Cuts Could Slash 278K Hospital Jobs, Warns AHA