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Is the Affordable Care Act Hurting the Hospital Industry?

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By Phil Cohen

Hospitals around the United States are appearing to slash services and jobs to make up for recent budget shortfalls. The unexpected budget shortcomings are due to a deal the hospital industry agreed to with the federal government.

In 2010, the hospital industry agreed to accept a $155 million decrease in Medicare payments over a decade, according to Bloomberg Businessweek. The Obama administration assured industry executives that the Affordable Care Act would recoup their losses. However, due to the continual disagreements over the U.S. budget in Congress, hospitals have not recovered their losses.

Sequestration cuts have reduced Medicare reimbursement payments to hospitals by 2 percent this year. In addition to Medicare cuts, hospitals expect to collect less money from Medicaid than they’d been promised when they agreed to the Affordable Care Act terms. Health care reform required all states to expand Medicaid programs to cover the uninsured who don’t earn enough money to buy the required health insurance plans. However, the Supreme Court ruled that states were allowed to opt out and nearly half have done so. This leaves millions of poverty stricken citizens without healthcare coverage that will still be able to receive treatment in emergency rooms without the ability to pay. This leaves hospitals struggling, especially those in rural and inner-city regions struggling to treat patients on Medicaid, Medicare or without insurance.

The Bureau of Labor Statistics reports that U.S. hospitals have lost jobs in two of the past six months. On top of hospital staffing cuts, poor and elderly patients may suffer due to larger cutbacks for inner-city and rural hospitals.

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Phil Cohen

About the author

Philip Cohen is the founder and President of PRN Funding, LLC. PRN Funding is an extraordinarily focused niche player in healthcare funding. With years of…... Read More

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