Obama's Health Reform "Bargain" Puts Hospitals at Risk
by Senator Kay Bailey Hutchison
Published in Real Clear Politics July 20, 2009
An intense debate on how to reform our health care system is unfolding in the nation's Capitol. It is important that all American patients be aware of the devastating impact the proposed reforms could have on hospital systems throughout our state for both rural and big city hospitals.
Imagine a patient goes to the hospital for surgery to have a stent placed in his heart. Once there, he is told that the surgery will not occur unless he first donates a kidney. As shocking as this scenario is, it is not unlike the position many American hospitals will be placed in if the Obama Administration has its way.
Last week, the Administration announced that it struck a bargain to pay for health care reform, in part, by slashing federal reimbursements to hospitals. Without question, Americans want to see health care reform legislation enacted to improve access to health insurance and restrain runaway health care costs, but many of our hospitals are already on life support. Siphoning their funding would be disastrous for the millions of patients who rely on these facilities for care each year, and it could sink the hospitals to new and dangerous fiscal lows.
Our hospitals currently bear the financial burden of having to keep pace with increasingly expensive technological advancements; meanwhile, their federal reimbursements are shrinking at an alarming pace. Further, many hospitals are required to provide billions of dollars in uncompensated care to our 47 million uninsured residents. Despite this untenable financial dilemma facing our hospitals, the Obama Administration expects them to take further cuts in reimbursements on the hopes that the proposed government-run insurance provider would eventually lessen the number of Americans without insurance coverage.
In short, the Administration asked for an upfront investment by the hospitals and offered an IOU in return. But what the Administration is calling a "bargain" is actually a gamble with very high stakes - the health of entire communities. They are essentially gambling away health care access to achieve health care coverage.
Their so-called "bargain" ignores the unique challenges facing rural hospitals, which serve communities that are, per capita, older, sicker, and poorer. And due to the low number of patients, rural hospitals operate with little to no profit margin. Lowering these hospitals' badly needed federal reimbursements could result in reduced services, or even worse, the closure of entire facilities.
Another costly problem that has been entirely ignored by the Obama Administration is the uncompensated care hospitals provide to illegal immigrants each year. This is a huge challenge in my home state of Texas. Last year, 6,540 visits from undocumented immigrants cost Parkland Hospital System in Dallas $7 million, and Memorial Hermann in Houston incurred over $4 million in cost for their care. Border states are not alone in this dilemma. Hospitals in Connecticut, Delaware, Florida, Louisiana, Nevada, and other states have drawn 100 percent of the available federal aid to help defray the costs associated with providing care for illegal immigrants.
I have consistently championed federal efforts to offset these costs to hospitals and to prevent local and state taxpayers from having to shoulder the burden. However, the program has expired and the Administration and the Majority Leaders in Congress refuse to address this problem in health care reform. It will be impossible for some hospitals in Texas to remain operational if they are asked to carry an even heavier financial burden.
Patients should also be concerned that the cost of these proposed reimbursement cuts may actually be transferred to them. Hospitals may be forced to pass on these cuts to patients with private insurance, ultimately resulting in even higher premiums. A shrinking hospital budget must be filled in some way if the hospital is going to survive.
If our hospitals are placed in such peril that they can no longer afford to keep their doors open, who do you think will have to rescue them? Ultimately, this proposal leads us one step closer to a government takeover of the health care system. Over the last several months, we have seen the federal government seize control of Wall Street, the banking industry, the housing market, and the auto manufacturers. Can we really trust the health of Americans to a big government that is willing to take high stakes risks on the American health care system?
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