Hospitals denounce tax package: ‘Largest cuts to care our country has ever seen’

Hospitals and healthcare trade groups had warned Congress that approving the tax package would result in millions of Americans losing access to care and hospitals closing their doors.

Congress has approved a massive tax and spending package that would also result in changes to Medicaid programs that could leave millions without coverage. Hospitals say some facilities could cut services or shut down.

Despite those warnings, the House of Representatives signed off on the tax and spending legislation Thursday, sending it to President Trump. The Senate narrowly passed the tax bill Tuesday.

Hospital leaders swiftly condemned Congress for passing legislation that cuts more than $1 trillion in healthcare spending over the next decade.

Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement Thursday that the damage would be felt nationwide.

“It cannot be overstated – the health cuts passed by Congress today represent the largest cuts to care our country has ever seen,” Kahn said in a statement. “Americans will feel the reverberations of this legislation in communities across the nation – whether directly due to a loss of coverage, the increase of their costs, or as doctors and hospitals scramble to sustain services and keep their doors open.”

After the Senate passed the tax bill Tuesday, Kahn blasted the legislation in an interview with Chief Healthcare Executive®. He said the Medicaid cuts “are totally unprecedented.” Kahn and other hospital leaders say the reductions in Medicaid funds would lead to hospitals shutting down.

“There's no question there'll be some closures,” he said.

Matt Cook, president and CEO of the Children’s Hospital Association, tells Chief Heatlhcare Executive® that pediatric health systems are going to face greater financial difficulties. Over half of the patients in children’s hospitals are covered by Medicaid, and hospitals may have to cut services and staff in the wake of projected losses of Medicaid funds.

“It’s going to take a really long time to repair the system,” Cook says. (See part of our conversation with Matt Cook in this video. The story continues below.)

Nurses are worried about the impact on patient care and the prospect of caring for more people without coverage, says Jennifer Mensik Kennedy, president of the American Nurses Association.

She tells Chief Healthcare Executive® that hospital emergency departments are going to treat more uninsured patients, who have no other resource for care. She says all patients will see more crowded emergency departments.

“People will have longer waits in the emergency room,” Mensik Kennedy says. “They're not going to get to the services that they need. This is, across the board, detrimental.”

• Read more: With Medicaid cuts, hospital emergency rooms could get even busier

By the numbers

While lawmakers supporting the legislation tout the preservation of tax cuts for many Americans, hospitals and healthcare providers face daunting numbers.

Start with an estimated $1.1 trillion in reduced healthcare spending over the next decade, according to estimates from the nonpartisan Congressional Budget Office.

Nearly 12 million Americans are projected to lose Medicaid coverage over the next 10 years, the CBO estimates. More Americans could lose insurance, with an estimated 5 million Americans projected to lose coverage under the Affordable Care Act if subsidies supporting the law aren’t extended beyond this year. That would bring the potential number of Americans losing coverage to 17 million.

Kahn and other hospital leaders are urging Congress to extend the subsidies to the Affordable Care Act.

“We have been advocating all year to continue to extend those enhanced tax credits, and we are very concerned that the current majority in the House and Senate may let them lapse,” Kahn told Chief Healthcare Executive® this week.

The tax and spending legislation also would put new limits on how states can finance Medicaid programs through provider taxes. So even as hospitals are expected to see more patients without insurance, they will have fewer public funds to treat them.

Rick Pollack, president and CEO of the American Hospital Association, called the final passage of the legislation “an extremely disappointing and very difficult day for health care in America.”

“No matter how often repeated, the magnitude of these reductions — and the number of individuals who will lose health coverage –- cannot be simply dismissed as waste, fraud, and abuse,” Pollack says.

‘A band-aid’

Lawmakers added a $50 billion fund to support rural hospitals, citing concerns from senators about the prospect of rural hospitals closing. The money will be distributed over five years, but the specifics of how the government will pay out that money to rural hospitals is unclear.

Still, hospital leaders said rural hospitals remain among those most likely to close or cut services such as labor and delivery due to the other cuts in funding. Rural hospitals would likely get a few hundred thousand dollars from the new program, which wouldn’t offset other losses, healthcare leaders said. About half of America’s rural hospitals are already losing money, and almost one-third are at risk of closure, according to some analysts.

“That's like putting a band-aid on a gunshot wound,” Cook said. “That's not at all helpful.”

Nicole Stallings, president and CEO of the Hospital + Healthsystem Association of Pennsylvania, said the bill would destabilize hospitals and their surrounding communities in the Keystone State.

“More than half of the commonwealth’s acute care hospitals are operating at a loss because payments already do not reflect the actual cost of providing care,” Stallings said in a statement. “They cannot absorb a cut of this magnitude, and some will have no choice but to reduce services or close.”

Hospital and healthcare advocates tried to persuade lawmakers to see that beyond the impact to millions relying on Medicaid, virtually all Americans could lose out under reductions to those programs. If patients face longer waits in the emergency room, hospitals trim services, or simply shut down due to financial pressures, entire communities will be affected.

Patients with commercial insurance and employers may see higher costs, as hospitals look to make up for lost revenue, says Rob Andrews, CEO of the Health Transformation Alliance.

“It also has ripple effects for other payers, like employers and commercial insurers,” Andrews tells Chief Healthcare Executive®. He says hospitals "have to try to shift the cost on other payers.”

Eduardo Conrado, president of Ascension, said the tax package fails the vulnerable who are “too often left out of important decisions in Washington.”

“While we do not expect immediate operational changes, these cuts risk destabilizing the health care system, especially in rural and underserved areas,” Conrado said in a statement.

‘Moral failure’

Some Medicaid beneficiaries will also face new requirements for $35 co-pays for services. The legislation also imposes work requirements on healthy Medicaid recipients in order to get services.

Catholic hospitals have been among the most ardent opponents of significant cuts to Medicaid, and the prospect of work requirements. Hospital leaders have said most Medicaid beneficiaries are working or caring for individuals with significant disabilities.

Sister Mary Haddad, president and CEO of the Catholic Health Association of the United States, said in a statement that the bill “will have devastating consequences for our nation’s health care system and the providers who deliver critical care every day.”

Haddad also criticized Congress for putting the needs of affluent Americans over the most vulnerable.

“This is not just a disservice to people who experience poverty, the elderly, and the underserved—it is a moral failure that will harm everyone who depends on a functioning, equitable health care system,” Haddad said. “The impact will be felt in every emergency room, clinic, and household struggling to access care in an already strained system.”

Georges C. Benjamin, MD, executive director of the American Public Health Association, said in a statement that the legislation represents “a profound national tragedy.”

“The passage of the reconciliation act is not a victory for America — and those who voted for it are not patriots and should be ashamed,” Benjamin said in a statement. “This bill undermines our economic security by increasing our national debt to obscene levels. It also creates the largest loss of health insurance coverage in our nation's history.”

The Medicaid program is far from perfect, Cook says. But he said the changes in the program in the legislation go too far.

“This blunt instrument of these cuts is really not the way to approach Medicaid reform,” Cook says.

Members of Congress who backed the package may come to regret it when they see the impact on hospitals, patients, and their communities, and lawmakers may pay a price in next year’s elections, healthcare leaders say.

Mensik Kennedy pointed to lawmakers who were ousted for trying to dismantle the Affordable Care Act.

“This is going to come back again in their re-election campaign,” Mensik Kennedy said. “So history shows that Congress people do not get elected when they vote against health care.”