Local Hospitals Fear Super Committee Cuts

The Massachusetts Hospital Association is out with a new analysis that shows that one year cuts in the program could reach hundreds of millions of dollars. Over 10 years, that number could reach into the billions.

Bebinger spoke with Bob Oakes this morning on the topic, and their conversation is here:

Bob: All the possible cuts we’re talking about this morning would be in Medicare, the federal health care program for the elderly. Why are hospitals so dependent on Medicare?

Martha: It pays doctors to care for many of their sickest patients, the elderly and disabled and several proposals would affect how much or the way doctors are paid. But the biggest worry right now Bob is possible cuts to graduate medical education. Medicare pays part of the cost of training doctors, that’s salaries and equipment and services. And if the super committee reduced medicare spending here, the Massachusetts Hospital Association say members would lose between $100 and $300 million a year or one to $3.2 billion over ten years.

Bob: There are about 5,000 doctors in training in Massachusetts at any given time. How many men and women would this affect?

Martha: We don’t have exact numbers, but one estimate says hospitals would have to eliminate several hundred student or resident slots.

One example is a program that trains 10 new family physicians at Lawrence General Hospital every year, the CEO at Lawrence General is Dianne Anderson:

"So if the residency program were cut or didn’t exist, our ability to add family practice doctors in this high need area would be really at risk," she said.

And John Erwin, director of the Conference of Boston Teaching Hospitals says cutting back on training programs for doctors anywhere right now doesn’t make sense:

"We have pretty well documented shortages of physicians here in Massachusetts," Erwin said, "and certainly across the nation and that will only get worse with these cuts in graduate medical education."

Bob: The Super Committee is also believed to be considering reducing federal money that helps hospitals cover bad debt and payments to rural hospitals. A lot of people say, look, Medicare can’t afford all these reimbursements for hospitals, it’s time to trim expenses. What do the hospitals say to that?

Martha: They know that Medicare, as a program, is in trouble, but they say that it is more needed than ever. With the wave of aging baby boomers, the state and country needs robust hospitals. Tim Gens, executive vp with the Massachusetts Hospital Association, says hospitals are doing their part to reduce costs and become more efficient.

"What’s being proposed in Washington goes way too far," Gens said. "We are making progress, no one is defending the status quo. There’s change at every level, particularly with hospitals, but there has to be a limit to how much hospitals can do without doing harm to those we serve and the communities in which we work. Any of these possible medicare cuts translate to lost jobs at hospitals, which are some of the state's largest employers, because labor is the main cost at hospitals."

Bob: If the super committee doesn’t reach an agreement, then the default plan includes a 2% Medicare cut that would mean $100 million less a year for Massachusetts Hospitals, one billion over 10 years – is that their best option?

Martha: It might be, but what hospitals are really worried about is that the super committee will agree to shave spending in one of the Medicare programs we talked about bad debt, medical training but not reach its goal so that the default plan will also kick in. It’s a stressful time in the world of hospitals which is a big part of our world in Boston.