Hoppy’s Commentary for Wednesday

Well, we can’t say we weren’t warned.

Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services, said during the debate over Obamacare that the legislation would put a severe financial strain on hospitals and doctors who care for the elderly.

“Providers 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,” Foster said.

Those cuts are significant. 

Sally Pipes, in her book The Truth about Obamacare, says the law “will cut Medicare payments to hospitals that serve low-income patients by $22 billion. Payments for home care will be cut by $40 billion, and payments for inpatient and outpatient hospital services will be cut by $157 billion.”

Now in West Virginia we’re starting to see some of the impacts of the planned cuts in the Medicare payments to hospitals.

The Charleston Gazette this week reported that the Charleston Area Medical Center, one of the state’s largest Medicare providers, is trying to figure out how to handle the growing number of patients with reimbursement rates that don’t keep up with costs.

“Medicare pays below cost already,” CAMC CEO David Ramsey told the Gazette.  “The issue for us is that they’re going to continue to pay further below cost and that doesn’t make a lot of sense.”

And that, according to Ramsey, creates a chicken or the egg problem.

CAMC could use another 80 to 100 beds to care for the growing number of Medicare patients, but financing is a problem.

“We’re so busy we need more capacity, but we’re not able to borrow the money because reimbursement rates are so poor, mostly from Medicare,” Ramsey told the Gazette.

The coming crunch, at CAMC and across the country, is going to lead to more cost shifting and forms of rationing as seniors inevitably have to wait longer for care. 

Ramsey stayed away from the “R” word in the Gazette, but you can read between the lines: “(There are) 18 fewer hospitals in West Virginia today than in the 1980’s,” he said.  He added that the reductions could mean longer waits in emergency rooms as well.  “It’s hard to say what the full outcome will be but certainly nothing good will come from these reductions.”

Pipes has a more dire prediction.

“Obamacare also siphons money away from Medicare–$529 billion-worth over ten years.  Never mind that Medicare was already scheduled for bankruptcy around 2017; Obamacare robs Medicare to pay for itself while leaving most of Medicare’s benefit obligations in place, so, sooner or later, something is going to implode.”

Ramsey’s comments suggest that the implosion has begun.

President Obama said at the bill signing in March, 2010, “After a century of striving, after a year of debate, after a historic vote, health care reform is no longer an unmet promise. It is the law of the land.”

However, just because it’s the law, doesn’t mean it works.  We’re going to find out that the federal government is  incapable of efficiently managing one sixth of the nation’s economy.  The anticipated problems at CAMC are a sign of things to come. 






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