Healthcare Business News
Richard Pollack

Hospitals wary as deficit talks loom

By Jessica Zigmond
Posted: July 6, 2011 - 3:00 pm ET

As congressional leaders prepare to meet with President Barack Obama on Thursday for deficit-reduction negotiations, the nation's hospitals remain anxious that a deal could include additional federal spending cuts in healthcare.

“In this debate, we view ourselves very much at risk and we're working very hard to make the case that we're already absorbing significant reductions at the federal and state level and through regulatory actions,” said Richard Pollack, executive vice president for advocacy and public policy at the American Hospital Association. Pollack also told Modern Healthcare there are alternatives to healthcare spending cuts, such as slowly raising the retirement age, taxing unhealthy behaviors, and implementing medical liability reform.

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In a news conference Tuesday, Obama did not specifically mention cuts to Medicare or Medicaid, but he did include entitlement programs as a possibility while lawmakers work to reach a compromise.

“We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code–spending on certain tax breaks and deductions for the wealthiest of Americans,” Obama said, according to a transcript of the Tuesday news conference. “This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.”

Meanwhile, House Majority Leader Eric Cantor on Wednesday said he thinks the “underlying disagreement” during the weeks-long debt negotiations led by Vice President Joe Biden was whether lawmakers believe now is the time to tax small businesses and families. Cantor—who emphasized there are not sufficient votes in the House to support tax increases—also outlined the deal he saw as part of those earlier discussions.

“As I've said before, we've had nonhealthcare-mandatory discussions; we've had healthcare-mandatory discussions; and we've had discretionary discussions,” Cantor said in a crowded news conference in the Capitol.

“What we're saying is in nonhealthcare-mandatory area, there's a potential for over $300 billion in savings. In the healthcare-mandatory area: well over $400 billion in savings; the rest would be the discretionary piece, plus interest savings, which gets us well in excess of $2 trillion,” he added. “That's the basis upon which I believe we can build a deal that can deliver on the promise that we're going to finally start to change things around here.”

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