November 1, 2014

Hospitals bracing for sequester cuts

With the sequester stalemate playing out in Washington, the organization representing Wisconsin hospitals is raising the alarm, over the effects spending cuts will have on the deliver of health care here.

Wisconsin hospitals face the loss of millions of dollars in Medicare payments if – as appears likely – sequestration kicks in on schedule March 1. “It’s a two percent, across the board Medicare payment cut. It’s a substantial impact to Wisconsin hospitals, particularly because the Medicare program for many hospitals makes up a big part of the things that they do, and the care that they provide,” said Brian Potter, Senior Vice-President for Finance with the Wisconsin Hospitals Association.

The WHA has estimated that sequestration will cost hospitals here $1 billion dollars in Medicare payments over the next ten years. If that’s hard to wrap your head around, try this: “that equates to about a $2 million dollar per week hit,” said Potter. “It is a big number. In an average yearly basis hospitals and their corresponding businesses bring in about five billion dollars in Medicare revenue, so it does add up.”

Particularly hard-pressed, Potter said, will be hospitals in smaller, rural communities serving larger proportions of Medicare recipients. Potter says most hospitals in Wisconsin have very few places in which to make significant cuts. “Hospitals are open 24/7, so it becomes pretty difficult,” he said.