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Cuts could hurt hospitals’ bottom line

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Steve Chiotakis: As part of our series “The Cure” this week, we’ve been looking at
some of the biggest stakeholders in the proposed health care overhaul. Today, we turn to hospitals. Part of the money to pay for health care reform is supposed to come from cuts in Medicare and Medicaid spending. Hospitals that treat large numbers of low-income patients say those cuts might hurt them the most. Joel Rose reports.

Joel Rose: It’s a fairly quiet morning in the emergency room at Temple University Hospital in North Philadelphia.

Nurse: Nobody knows anything about the patient coming to us.

Temple is what’s known as a safety net hospital. Roughly 80 percent of its patients are covered by Medicaid or Medicare. Because safety hospitals see so many low-income patients, they currently get extra funding from the government — money that could dry up if proposed Medicare and Medicaid cuts become reality under health care reform, says Temple Hospital CEO Sandy Gomberg.

Sandy Gomberg: What makes this debate the toughest that we’ve faced in a really long time is that there is no easy consensus that’s gonna make this work. There will be winners and there will be losers.

Gomberg says safety net hospitals like hers stand to lose more than most. The White House plans to trim $155 billion in Medicare and Medicaid payments to hospitals. That’s supposed to help cover the cost of insuring nearly all Americans.

In theory, hospitals would win, because more patients could pay their bills. But the most vulnerable hospitals could lose, says Andrew Wigglesworth, a hospital consultant with TRG Associates.

Andrew Wigglesworth: Operating margins are razor thin. If there were cuts without the corresponding increases in terms of access and coverage, it would create a disaster.

That’s what worries Temple’s Sandy Gomberg. Many of her patients are undocumented immigrants or the working poor. Gomberg says they may have trouble finding affordable insurance even if Congress does pass a health care bill, and her hospital will still need to treat them. So without some additional money, Gomberg says she’d have no choice but to cut services and staff.

Gomberg: The waiting line’s going to get longer. It’ll be longer for people to get to specialists. It’s going to be longer for people to wait to get in to see the doctor in the ER.

If that happens, Gomberg says her patients will be the real losers.

In Philadelphia, I’m Joel Rose for Marketplace.

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