As Mitt Romney and President Barack Obama duel over whose plan best protects Medicare, officials and employees at Pennsylvania's hospitals, nursing homes and home health-care agencies are wondering if either candidate's cure will harm not the patient, but the provider.
Already reeling from recent cutbacks in Medicare and facing more, health-care providers statewide will need to figure out how to maintain access to care and quality with $716 billion more in cuts over 10 years under Obama's health-care reform law.
If Romney is elected and repeals the law as promised, he'll have to wring similar savings out of Medicare or the government-funded health insurance program for senior citizens will be unable to cover all of seniors' health bills before his first term is over.
So when the candidates resume their bickering over Obama's alleged "raiding" of Medicare or Romney's plan to "end Medicare as we know it" during Tuesday's debate, it is clear that without higher taxes, cuts will be necessary to maintain benefit levels. And with no one suggesting that beneficiaries will take the hit directly, that means the pressure will be on those who provide the services.
"We're the ones between the rock and the hard place," said Ronald Barth, president and CEO of LeadingAge PA, a statewide trade association of nonprofit senior service agencies. "Seriously, it's the providers and their employees that are getting squeezed."
Cutting regulations would help a little, he said, but the real need is to keep reimbursements at a viable level. "The government refuses to recognize the cost of services," he said.
Health care representatives said the squeeze already has begun.
Among several examples: Hospitals now may lose Medicare money if too many patients are readmitted within 30 days of discharge -- for any reason. The Centers for Medicare and Medicaid Services cut home health payment rates by 3.79 percent in 2011 and 2012, and will cut home health by another 1.32 percent in 2013, said Jennifer E. Battista, communications director of the Pennsylvania Homecare Association. Another Medicare program for rural hospitals that serve a high number of seniors also was left unfunded. At Wayne Memorial Hospital in Honesdale, Wayne County, that will cost $1.7 million.
"This is a significant sum and it will force us to look very closely at the viability of other services at Wayne Memorial," Chief Financial Officer Michael Clifford.
Besides possibly shutting down costly services, officials said health-care providers are freezing salaries and benefits and looking to increase their mix of privately insured patients.
Cuts to Medicare naturally are a major issue in Pennsylvania, which has the fifth highest number of Medicare beneficiaries nationwide, according to the Kaiser Family Foundation. Total Medicare program payments in 2010 in Pennsylvania were $13.4 billion, according to the Centers for Medicare and Medicaid Services.
Even before they get to the changes imposed under the Affordable Care Act, a 2 percent across-the-board cut looms as the nation reaches the "fiscal cliff" on Jan. 1, 2013. Stepping off the cliff, or the "sequester," would mean a $30 million haircut for Pennsylvania nursing homes, said Stuart Shapiro, president and CEO of the Pennsylvania Healthcare Association, a trade group for long-term care providers.
"The Obamacare cuts are only part of the story of the cuts at the federal level," he said.
For hospitals, the automatic cuts agreed to by Congress and the White House after a failed budget deal would translate into an additional $149 million cutback in 2013 alone.
"Our largest concern right now is that Congress will continue to reduce payments to hospitals, which makes that challenge of doing more with less and providing quality, efficient care ... much harder to do," said Michael Strazzella, senior vice president for federal legislative services at the Hospital and Healthsystem Association of Pennsylvania.
Of the $716 billion in Affordable Care Act cuts to Medicare over the next 10 years, $260 billion of that would be made up of lower reimbursements to hospitals, with $7.5 billion in Pennsylvania alone, according to the Congressional Budget Office. Hospices, nursing homes and home care services would bear a $155 billion cut.
In part, hospitals accepted that deal with the provision that the health reform law would encourage states to expand their spending on Medicaid, the joint federal-state program for some of the poor and disabled. But the U.S. Supreme Court in June ruled that states had the option to expand or leave their Medicaid spending as it is. Like a number of other states, Pennsylvania is waiting for the presidential election results before making a decision, Gov. Tom Corbett said last week.
Without more money going into Medicare -- offsetting losses on Medicaid patients -- nursing homes will be limiting how many Medicaid patients they'll accept, Shapiro said. "We're hearing that some hospitals are having trouble finding nursing homes for some people coming out on Medicaid," he said.
The association says about two-thirds of their nursing home residents pay for their care through Medicaid.
In the end, privately insured patients carry more of the load for those on Medicare and Medicaid, Barth said. "In effect, those are hidden tax increases."
Prodded by the health reform law and other federal measures, providers have taken other measures to tighten their budgets. New technologies, such as electronic medical records, are designed to improve patient care and efficiency, for instance.
One group of providers are not specifically targeted: doctors. But with physicians increasingly employees of health systems, a Medicare cut to hospitals adds to the financial pressure on physicians.
"We're very much concerned with the threat," said Dr. Marilyn Heine, president of the Pennsylvania Medical Society. "It very important to keep access to care and access to health care jobs," she said, adding that each physician brings along six additional jobs.
The campaigns aren't making it any easier for people to understand the threat because both have been making highly charged claims that are exaggerated or contain only a kernel of truth. "The public has some real confusing stuff out there," Coordinated Health President and CEO Emil DiIorio said.
He said the solution lies in a new model in which insurers and providers cooperate on a plan of care that's best for the patient. "There's no room" in the system for insurance companies and providers to be at odds, he said. "That just keeps shifting cost."
It boils down to many moving parts, but at the same time, simple math.
As baby boomers age and seniors live longer, health care demands will grow. To pay for them, some combination of more revenue and cost containment will be inevitable.
Providers have stepped up, but there's a limit, Strazzella said.
"At some point," he said, "the cuts will become too much."
tim.darragh@mcall.com
610 778-2259 ___
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