Hospitals Cutting Thousands Of Jobs

From the USA Today:

Hospitals, a reliable source of employment growth in the recession and its aftermath, are starting to cut thousands of jobs amid falling insurance payments and in-patient visits.   

The payroll cuts are surprising because the Affordable Care Act (ACA), whose implementation took a big step forward this month, is eventually expected to provide health coverage to as many as 30 million additional Americans. 

"While the rest of the U.S. economy is stabilizing or improving, health care is entering into a recession," says John Howser, assistant vice chancellor of Vanderbilt University Medical Center. 

There are myriad reasons for the cuts, which are affecting administrative staff as well as nurses and doctors: 

• Medicare, Medicaid and private insurance companies are all reducing reimbursement to hospitals. The federal budget cuts known as sequestration have cut Medicare reimbursement by 2%, the American Hospital Association says. 

• The health care law has further reduced the Medicare payments to hospitals that provide lower-quality service or have high readmission rates. 

• The National Institutes of Health reduced funding to hospitals by 5% as part of sequestration, forcing hospitals to trim research staff. 

• The number of inpatient hospital days fell 4% from 2007 to 2011, in part because of the economic downturn, the hospital association says. 

• As more Baby Boomers turn 65, their services will be reimbursed at Medicare rates that are lower than those of private payers, putting further pressure on hospital revenue. 

The new health care law was supposed to ease the burden on hospitals by expanding Medicaid coverage to more low-income Americans, who often use hospital services in emergencies then don't pay their bills. But 26 states, including Tennessee, rejected ACA's offer of federal funding to expand Medicaid. That decision led to about a third of the job cuts by Nashville-based Vanderbilt, Howser says.