Maryland’s Health Services Cost Review Commission, which sets the rates hospitals can charge for their services, has an opportunity to preserve thousands of Maryland jobs as it decides how to implement a 2 percent cut in Medicare payments as part of the federal budget sequester, and then determines hospital rate increases for the next fiscal year. Hospitals in Maryland employ nearly 100,000 people and are responsible for an additional 206,000 jobs through the “ripple effect” of employee and hospital spending. However, according to a report from the Maryland Hospital Association, every 1 percent drop in hospital revenues translates into 1,450 jobs lost across the state, as hospitals struggle to cope with dwindling resources and a fieldwide operating margin of just 0.8 percent. That number includes hospital jobs as well as jobs that
exist because of the more than $26 billion in economic activity across the state generated by hospital spending for goods and services in Maryland’s communities.
“Hospitals have already received, for the past four years, rate updates that have been far below the rate of inflation,” said MHA President & CEO Carmela Coyle. “We’re simply at the point where hospitals have no place else to cut but jobs and services.”
Maryland’s hospital rate-setting system is unique in the country; where in other states hospitals can pass on the costs of the 2 percent cut, in Maryland those decisions are made by the Commission. The hospital field is strongly urging the Commission to protect hospitals from the additional
financial burden of the cut by placing its total impact into hospital rates, which would result in a temporary increase in hospital rates of just 0.83 percent. And its subsequent decision on hospital rate increases for the upcoming fiscal year must take into account the financial fragility of the
hospital field.
“Hospitals are all about people taking care of people,” said Carmela Coyle, President & CEO of the Maryland Hospital Association. “At a time when we’re working with state leaders to implement health care reform and provide care more efficiently, it’s important to remember that hospitals are
also, in their unique way, helping take care of local economies. The jobs we provide are good jobs, and the money we pump into the state’s economy is the result of the state’s investment in us.”
About the Maryland Hospital Association
The Maryland Hospital Association is the advocate for Maryland’s hospitals, health systems, and their patients before legislative and regulatory bodies. Its membership is comprised of community and teaching hospitals, health systems, specialty hospitals, veterans’ hospitals, and long-term care facilities. For more information, visit www.mhaonline.org.
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