The hospital industry last week enlisted congressional help in an effort to reverse an expected White House proposal to trim at least $10 billion more from Medicare hospital spending.
Democrats and a handful of Republicans from New Jersey and New York, along with ranking Democrats on three key congressional panels, wrote President Clinton asking him to reconsider the proposal, which is expected in early February as part of his budget plan for fiscal 2000.
The letters cautioned against further spending cuts so soon after Congress and the White House enacted a 1997 law that will trim $44 billion from projected hospital payments over five years.
The New Jersey delegation's letter, in particular, cited the American Hospital Association's oft-used argument against Medicare cuts. Mirroring a separate AHA campaign on Capitol Hill, the New Jersey delegation said that despite the healthy 15.3% Medicare inpatient profit margins earned by hospitals nationwide in 1996, New Jersey hospitals averaged only an 0.8% margin.
The letters also said the White House should move cautiously because the National Bipartisan Commission on the Future of Medicare is still developing its recommendations for long-term reform of the program.
Democrats also are calling the White House to complain that they were caught off-guard by the potential for Medicare cuts and that the White House may be giving Republicans an issue on which to attack them.
Richard Pollack, the AHA's executive vice president for federal relations, said the organization is asking "as many Democrats as we possibly can" to take that message to Clinton. He said the AHA also has asked state associations to make the same requests of their senators and representatives.
Playing into the AHA's hands was a published report showing that Medicare cash spending in fiscal 1998, which ended Sept. 30, increased just 1.5%, to $192.8 billion, compared with 1997 spending. That increase was the lowest in the program's history.
Healthcare experts said the report, based on Treasury Department statistics, may not fully reflect total Medicare spending, because it does not account for services delivered but not paid for in fiscal 1998.
Although such a report could relieve the pressure to reduce Medicare spending, Gail Wilensky, chairwoman of the Medicare Payment Advisory Commission, added that a one-year slowdown does not necessarily indicate a long-term slowing of spending growth.
The year after the hospital prospective payment system was imposed in 1984, "things ground to a halt; but after a year, it was off to the races," she said.
Wilensky and MedPAC are backing a 0.7% increase in hospital Medicare inpatient payment rates in fiscal 2000 (See story, p. 8).
The public, meanwhile, may lean more toward reducing provider payments than other methods of saving Medicare money.
The Kaiser Family Foundation and Harvard University School of Public Health last week released a survey showing that 59% of voters favor reducing hospital and physician payments over increasing payroll taxes, raising the eligibility age or requiring increased beneficiary cost-sharing.
"Certainly people would like to see providers paid less before they sacrifice themselves," said Drew Altman, the Kaiser foundation's president.
Support for provider cuts declines to less than half, however, when voters are presented with the potential for quality or access to decline with reduced payments, according to data compiled by the surveyors.