Side Effects: Obamacare Accelerates Hospital Job Losses
Kathryn Nix /
Repeatedly, reports have shown that Obamacare will increase job loss. But what happens when those who are laid off are the workers meant to enable the health care law’s expanded access of care: namely, hospital employees?
According to one hospital, layoffs of workers have already begun as a result of the new law. Leaders of Memorial Hospital in South Bend, Indiana, said that although “the economy sparked this problem…the Obama Health Care Reform Act gave the hospital a one-two punch. While more people may soon get more health coverage, Obama’s plan cuts reimbursement dollars for hospitals at a time administrators say they could use them most.”
Obamacare includes $575 billion in cuts to Medicare to pay for a Medicaid expansion and a new entitlement program, which will provide generous subsidies for middle-class Americans to buy insurance. The cuts include slashes to hospitals’ reimbursement rates.
Of course, cutting reimbursement rates is bound to have an effect on hospital operations. Centers for Medicare and Medicaid Services Chief Actuary Richard Foster reports:
“[P]ayment update reductions will create a strong incentive for providers to maximize efficiency, [but] it is doubtful that many will be able to improve their own productivity to the degree achieved by the economy at large.”
“[P]roviders for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Part A providers would become unprofitable within the 10-year projection period as a result of the productivity adjustments.”
Health providers dropping Medicare patients is the worst case scenario, especially in light of the flood of baby boomers set to retire and join Medicare. For now, many hospitals are preparing for revenue cuts as best they can. For Memorial Hospital, this means reducing the work force. “We expect that reality to get worse moving forward,”the health facility said.
Obamacare is projected to insure 34 million more Americans by 2019. But by 2015, the nation will face a physician shortage of 63,000 doctors across all specialties, up from 39,600 before the law passed. The last thing the U.S. health care system needs is “reform” that encourages a reduction in its work force.