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Hospitals group: Obama cuts would hurt patients

TRENTON, N.J. -- Cuts in federal funding to hospitals proposed by President Barack Obama would endanger the already struggling industry, the head of the American Hospital Association said Monday.

Rich Umbdenstock, president and chief executive of the trade group, said it is "deeply disappointed and concerned" that the administration is proposing cuts to hospitals at a time when more patients are relying on their local hospital for care.

Obama has suggested trimming federal payments to hospitals by about $200 billion over the next 10 years, saying greater efficiencies and broader insurance coverage will justify the change. Hospitals, especially those with many poor patients, say the proposed cuts are unfair and will harm the sick and elderly.

In a statement released after Obama gave a speech on health care reform at the American Medical Association's annual meeting Monday, Umbdenstock said hospitals already face up to $41 billion in recently proposed cuts to the payment system for Medicare.

The health program for senior citizens covers a large proportion of patients at many hospitals. Umbdenstock said that Medicare and other federal health programs already pay hospitals, on average, more than $32 billion a year below the cost of the care they provide.

He said cutting programs that reimburse hospitals that treat many poor and uninsured patients -- the Medicare and Medicaid Disproportionate Share Hospital programs -- "could severely jeopardize hospitals' ability to care for their patients and communities."

"These programs also help to mitigate the financial shortfalls hospitals experience from government program underpayments and treating undocumented immigrants," Umbdenstock said.

Those programs support both services for uninsured children and adults, and "essential community services" including trauma and burn units, disaster readiness, neonatal care and emergency psychiatric treatment, he said.

Umbdenstock urged Congress not to reduce the disproportionate share hospital payments "before coverage expansions are universal and fully implemented as part of reform, and Medicare and Medicaid shortfalls are addressed."

He also criticized an administrative proposal for a "productivity" adjustment for hospitals, saying it "does not make sense" for the industry.

"Our focus needs to be on ensuring that patients receive the right care at the right time in the right setting," Umbdenstock said, adding that hospitals remain committed to helping reduce national health care costs.

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