AHA Warns that Obama Will Hurt the Health Care Industry

President Obama has been working tirelessly at a health care plan that opponents believe is due for failure and has been dubbed as “socialized medicine”, much like the system that is already failing in Europe. As part of his restructuring plan, the President has proposed to systematically cut $200 billion of federal funding to hospitals. The head of the American Hospital Association, Rich Umbdenstock, said that these proposed cuts would hurt the health care industry exponentially, well beyond the point that it is already hurting. He said the group is “deeply disappointed and concerned” that the Obama administration is wants to cut funding to hospitals at a time when more patients are relying on health care from their hospital.

Yesterday, President Obama gave a speech on health care reform at the annual meeting of the American Medical Association (in which the words “government run health care” were repeated several times). Obama has suggested cutting federal funding to hospitals by about $200 billion over the next decade, justifying the change by saying that it will create greater efficiencies and broader insurance coverage. Hospitals say this is extremely unfair and will harm the sick and elderly. In a statement released after Obama’s speech Monday, Umbdenstock reminded the public that hospitals already have to worry about $41 billion in proposed cuts to the Medicare payment system.

Medicare, the health program for senior citizens and retirees, covers a large number of patients at many hospitals, just due to the fact that older folks need more health care for more debilitating diseases and conditions. Umbdenstock said that federal health programs like Medicare already pay hospitals at least $32 billion a year less than the price of provided health care. This is due to the fact that when Medicare is billed, the federal health program decides how much they believe the care received is worth paying for and a payment is issued for that amount rather than the amount billed.

He said that cutting Medicare and Medicaid, the federal programs that are set up to reimburse hospitals that treat many poor and uninsured patients “could severely jeopardize hospitals’ ability to care for their patients and communities. “These programs also help to mitigate the financial shortfalls hospitals experience from government program underpayments and treating undocumented immigrants.” He also noted that Medicare and Medicaid provide quality health care for uninsured children and adults, and properly provide what he called “essential community services” including trauma and burn units, disaster readiness, neonatal care and emergency psychiatric treatment.

Umbdenstock asked Congress not to reduce the payments from such programs “before coverage expansions are universal and fully implemented as part of reform, and Medicare and Medicaid shortfalls are addressed.” He also criticized a possible proposal for a productivity adjustment for hospitals, saying it does not make sense.”Our focus needs to be on ensuring that patients receive the right care at the right time in the right setting,” he said, also reminding the public and the government that hospitals agree that national health care costs must be reduced that that they remain dedicated to that endeavor.