Will jobs plan be jobs loss?

AHA says Obama plan would hurt health sector employment

The American Hospital Association (AHA) is warning that President Obama's jobs plan could cause layoffs in the health sector, noting that it may require deep cuts to provider reimbursement, Politico reports.

President Obama wants the bipartisan, bicameral debt panel to offset the cost of his new $450 billion jobs plan, on top of the $1.5 trillion in savings the committee already is tasked with finding, Politico reports. Obama suggested panel members cut entitlement programs, such as Medicare and Medicaid, to address the cost of the jobs plan, among other strategies. If committee members do not make $1.5 trillion in cuts, Medicare payments automatically would be reduced by 2%.

Analysts said that health care stakeholders likely would prefer the automatic cuts because they include only a 2% cut in reimbursement to Medicare providers, as opposed to potentially deeper cuts made by the debt panel. Health care lobbyists said health care companies actively will support the automatic cuts, with some potentially going as far as encouraging a stalemate among panel members.

However, AHA on Friday said that a 2% reduction in Medicare reimbursement for hospitals could cause up to 194,000 job losses through 2021. AHA based its predictions on a report by Tripp Umbach, which specializes in economic impact studies. AHA said the automatic cuts would cause a $41 billion loss in the industry.

AHA President and CEO Rich Umbdenstock said, "As Congress looks for ways to cut the deficit, we urge lawmakers to first, do no harm." He added, "Reject cuts to hospital services that could create devastating job losses to communities." According to Umbdenstock, "Now is not the time for Congress to make cuts to a sector that is driving economic growth and creating jobs," noting that the cuts "would have ripple effects throughout our nation’s economy."

AHA spokesperson Marie Watteau said the group recommends that the debt panel consider a gradual increase in the Medicare eligibility age from 65 to 67. Previous research indicates that the proposal could cut Medicare spending by $125 billion over 10 years (Raju, Politico, 9/9; AP/Washington Post, 9/8; Baker, "Healthwatch," The Hill, 9/12; DoBias, Politico, 9/11; Evans, Modern Healthcare, 9/9 [subscription required]; Reichard, CQ HealthBeat, 9/9 [subscription required]).

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