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Tim Size: Medicare cuts tax rural communities

Tim Size: Medicare cuts tax rural communities



There is no question that Washington must get its house in order. We owe that to our children and our grandchildren. But the recent “debt ceiling deal” breaks the oldest rule in medicine — “First, do no harm.”

We all are at risk from those politicians more concerned about looking tough than solving our country’s problems. Medicare and Medicaid are on the chopping block, but it is not just the elderly and poor who may be harmed.

Washington has created a new “super committee” to find more cuts. Some call it a super Congress to remind us this is a small group given powers usually kept by Congress. Most economists say Washington needs a coherent policy for both additional cuts and additional revenue. But politics seems to have taken new revenue off the table. Most people believe the super committee will deadlock.

If Congress fails to act, cuts will be implemented across the board. Most federal programs will be cut. Across-the-board cuts harm efficient programs along with the inefficient. Across-the-board cuts harm necessary along with the less necessary. The country deserves better than bulldozers driven by blindfolded drivers.

Most rural hospitals are financially just holding their heads above water. Under-payment by government programs has left them vulnerable. A sluggish economy and an increasingly competitive health care marketplace are taking their toll. Medicare and Medicaid are rural hospitals’ largest payers. Additional cuts are likely to tip many rural hospitals into the red and eventual closure.

A national study from the University of North Carolina in 2006 showed that in communities with just one hospital, its closure reduces average per-capita income by 4 percent. Local unemployment rates were also shown to go up by nearly two percentage points. Both effects are due to the loss of hospital jobs and local purchasing as well as the downstream economic impact of those losses.

Bottom line: Closing a rural hospital has the economic impact of a 4 percent tax increase.

When a community loses its hospital, it is also at high risk to lose physicians. But it is just not patients who lose. According to the Federal Office of Rural Health, each primary care physician lost means the loss of 23 other local jobs.

Does any of this save the federal government money? Not likely. If a rural hospital is forced to close, Medicare and Medicaid will continue to pay for part of the health care. They just don’t pay in the rural community. Patients are forced to travel to urban hospitals. Local jobs soon follow. Urban hospitals will spread their costs over more patients. But the federal deficit is largely unaffected.

So what is to be done? Rural hospitals expect the federal government to hold us accountable, like any payer. We understand that to better do it, we will have to work harder and smarter.

We can reduce rural hospitals’ share of the debt by following the Triple Aim long promoted by the nonpartisan Institute of Health Improvement. “Improve the health of the population; enhance the patient experience of care (including quality, access and reliability); and reduce, or at least control, the per capita cost of care.”

Congress needs to stop the bomb throwing. Congress needs to start the hard work of finding common ground for our country’s problems. We need government that works with rural hospitals to serve America’s older, poorer and less healthy communities.

Tim Size is executive director of the Rural Wisconsin Health Cooperative.


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