The Obama administration made a big show out of announcing an agreement in which the nation’s hospitals agreed to sacrifice $155 billion (with a “b”) in future Medicare and Medicaid expenses.
This was supposed to be one of the lynchpins of Obama’s healthcare plan, clear evidence that this bloated fiasco could be paid for with cost cuts rather than tax increases.
Except for one thing: It’s all smoke and mirrors. Here’s how the Associated Press reported it:
Of the $155 billion in projected savings from hospitals, about $40 billion to $50 billion would come from reducing federal payments hospitals receive for providing care to uninsured and low-income patients, according to lobbyists. Those payments are now made through the Medicare and Medicaid programs. The Medicaid cuts would be apportioned by state, as 10 percent annual reductions beginning around 2015.
About $100 billion more would come from reductions in planned Medicare payments to hospitals. A small amount of savings would come from trimming the money hospitals get for preventing patients from being readmitted for additional care.
Hospitals would also get something out of the deal. They won an agreement that if the Finance Committee’s legislation includes a public health insurance plan, it would reimburse hospitals at above the rates Medicare and Medicaid pay, which hospitals have long complained are insufficient.
Got that? The nation’s hospitals have agreed to cut payments from the government in exchange for increased payments from the government.
Everybody sing along: “There’s no business like show business, if you tell me it’s so…”
Source: Associated Press via Wall Street Journal
