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Medicare Spending Reductions to Hospitals Equal One-Half of One Percent

December 12, 2011

It’s important to add a little perspective to what the hospital industry is calling “major reductions” to hospitals in H.R. 3630.  Here are the facts:

  • According to Medicare’s actuaries, the Medicare program is expected to spend $2.6 trillion on hospital services over the next decade.
  • H.R. 3630 would reduce Medicare hospital spending by $14 billion over the next 10 years.
  • This means that under H.R. 3630 Medicare spending on hospital services would be reduced by 0.5 percent over the next decade, hardly a “major reduction.”

Not so long ago, the major hospital trade associations endorsed and strongly supported legislation that became law.  It contained $155 billion in hospital Medicare cuts – more than 10 times the reductions in H.R. 3630.

To further put things in perspective, here is what hospital officials said in the face of the much larger reductions in hospital spending that were enacted in the Democrats’ health law:

  • “Clearly, the Catholic Health Association thinks the possibility that hospitals might pull out of Medicare because of the deal that was struck to be very, very unfounded…. Catholic hospitals would never give up on Medicare patients.” – Sister Carol Keehan, President of the Catholic Health Association of the United States
  • “A memorandum recently issued by the CMS Actuary analyzing the effects of [the health care law] concludes that some providers may end their participation in the Medicare program.  Hospitals always will stand by senior citizens.”  – Charles N. “Chip” Kahn, III, President of the Federation of American Hospitals