Obama proposal upsets hospitals

The Associated PressJune 14, 2009 

— President Barack Obama said Saturday that he wants to help pay for his health care overhaul by slowing Medicare and Medicaid spending, but hospitals, medical technicians and others are resisting.

The president suggests 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.

Congress ultimately will shape the new laws. Obama is urging lawmakers to be bold and to resist powerful lobbies trying to maintain their clout and profits.

"Americans are being priced out of the care they need," Obama said in his weekly radio and Internet address.

Obama said high health care costs hurt the entire economy and help shut out the nearly 50 million people who lack coverage. He focused on payments to Medicare and Medicaid, which cover millions of elderly and low-income people and involve thousands of doctors, hospitals, nursing homes and other institutions.

Obama has insisted that his plan will not add to the federal deficit, and he had already set aside in his budget what he calls a $635 billion "down payment" toward the 10-year cost of the overhaul, which is expected to top $1 trillion. But Republicans and some Democratic legislators have been pressing him to provide details on how he would cover the rest. He used Saturday's address to do so, The New York Times reported.

Obama said he had identified "an additional $313 billion in savings that will rein in unnecessary spending and increase efficiency and the quality of care," bringing the total to nearly $950 billion. He did not offer a specific breakdown, but advisers said that in addition to the more than $200 billion in lowered hospital reimbursements, the president expected $75 billion in savings over 10 years by getting better prices for prescription drugs, and $22 billion in other savings.

Obama called them "common-sense changes," although he acknowledged that many details must be resolved. Some powerful industry groups called the proposals unwise and unfair.

"Payment cuts are not reform," Rich Umbdenstock, president of the American Hospital Association, said even before Obama's plan was announced. His group is urging hospitals with large proportions of low-income patients "to push back on proposed cuts."

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