Obama's Reform Plan Cuts Too Deep, Says AHA

Les Masterson, for HealthLeaders Media , June 15, 2009

The American Medical Association and America's Health Insurance Plans have already spoken out about portions of President Barack Obama's healthcare reform plan, and a third major stakeholder came forward to criticize a part of the plan today.

Though the eyes of healthcare were on the AMA as the president spoke to the group in hopes of winning its support for his healthcare reform package, the American Hospital Association made it clear that it will not support healthcare reform that would cut hospital payments.

AHA President and CEO Rich Umbdenstock said Monday that hospitals support "systemic reform that lowers costs and improves care for patients," but opposes "more than $220 billion" in hospital payment cuts.

"Hospitals are already facing as much as $41 billion in cuts due to the Medicare payment system changes recently proposed by the Administration," Umbdenstock said. "Additional cuts of this magnitude could severely jeopardize  hospitals' ability to care for their patients and communities."

Umbdenstock said hospitals support healthcare coverage expansion to all Americans, but that must happen in concert with "adequate financing for hospitals that serve large numbers of poor and uninsured patients."

AHA opposes a proposal to cut the Medicare and Medicaid Disproportionate Share Hospital programs, which the organization said "overlooks the critical role these important programs play in supporting a broad range of services for uninsured children and adults as well as essential community services such as trauma and burn units, disaster readiness, neonatal care, and emergency psychiatric services."

Programs like DSH help hospitals mitigate Medicare and Medicaid underpayments. Even with the DSH payments, federal programs still pay hospitals more than $32 billion below the cost of caring for patients on average, said Umbdenstock.

AHA is lobbying Congress to not cut DSH programs before:

  • Healthcare coverage is expanded to all Americans
  • Medicare and Medicaid underpayments are addressed

Umbdenstock said the AHA remains committed to reducing health costs, but can't support a program that would hurt hospitals at the same time.

"Reform must improve care for patients without crippling hospitals' ability to care for patients and communities. We stand ready to help the Administration and the Congress make thoughtful reform a reality," Umbdenstock said.

Les Masterson is an editor for HealthLeaders Media.

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