Bush Tries to Eliminate Public and Teaching Hospitals: Action Needed

While people are focused on universal care, the Bush Administration is incrementally chipping away at our existing public health safety net. The most recent assault on our public health care infrastructure is escaping the notice of mainstream media and citizen journalists alike, probably because it is not easily explained. I am referring to a proposed arcane regulations change by the Center for Medicaid and Medicare Services (CMS) which, if enacted, will result in $4 to $5 billion dollars over 5 years in cuts to public hospitals and other hospitals that serve indigent patients. In addition, CMS is proposing other rules changes that will result in billions of dollars of reductions to teaching hospitals.

These hospitals serve as the backbone of our public health safety net, train the next generation of physicians and health care professionals, and are essential to any kind of response to disaster, terrorist attack or pandemic outbreak. Without them, our already frayed public health infrastructure may disintegrate.

On January 18, 2007, CMS issued a sweeping rule that, if it goes into effect, will drastically limit Medicaid payments to public health care providers, and to private providers who serve the indigent and uninsured.

In response, Congress enacted a one year moratorium on the rules change, which was buried in the supplemental appropriations bill (P.L. 110-28, Section 7002) that funds military operations in Afghanistan and Iraq. The moratorium allows Congress time to consider and develop rules that simplify Medicaid without harming our safety net by preventing CMS from enacting the new rule until May 25.

In a display of contempt, CMS published its proposed rule in the Federal Register on the same day that Bush signed the one-year moratorium provision into law. States must now expend resources, regardless of Congressional action, preparing to implement the regulations.

The rules changes are expected to effect public institutions in the following ways:

Currently, the Federal Government matches county contributions to designated hospitals approximately 3 to 1 with Medicaid dollars to help subsidize the cost of care for low-income patients who are not covered by Medicaid. The new rule limits Medicaid payments to cost, preventing Medicaid from being used to subsidize the care of non-Medicaid eligible indigent clients. This will result in millions of dollars in annual cuts to institutions that provide care to the uninsured. Local governments in impoverished communities will be unable to make up the losses. Many hospitals may be forced to privatize, close their doors, or severely curtail services.

The rule restricts ways in which counties can raise matching dollars to tax revenues only, disallowing partnering institutions from assisting governments to raise the match. Local governments in low-income communities often lack the tax base required to fully subsidize the care of their constituents without forming partnerships. Multi-county hospital systems are sometimes able to route funds from profitable hospitals to low-income communities for the purposes of serving the uninsured.

The rule prevents hospitals from using Medicaid payments to offset the cost of teaching, impeding our ability to produce a new generation of physicians and other health care professionals.

The rule invests CMS with broad new authority to audit local governments, significantly increasing the range of transactions and documents subject to review, thus increasing the administrative costs of fund management. The audit requirements will pose a barrier to participation for cash-and-staff-strapped local governments.

In many disenfranchised communities, local government is the only entity representing constituents. Removal of decision-making authority over health care financing, and particularly over programs financed through local tax revenues, from the community to the state will further disenfranchise the poor. States are more likely to award health care contracts to entities that are not primarily interested in serving indigent populations. It is important that health care decision-making authority remain vested in local governments, and is not, for the sake of "convenience" transferred to state or federal jusrisdiction.

On November first, the National Association of Public Hospitals and Health Systems offered testimony before Congress. Alan Aviles, President of the New York Health and Hospitals Corporation described the potentially drastic impacts the cuts would impose to public health, and to the ability of local government to respond to natural or manmade disasters. He should know. His hospitals treated the victims of 9/11. Mr. Aviles stated that many hospitals will be forced to choose between closures of emergency rooms, or primary care and outpatient services.

The impacts to communities are drastic and far-reaching:

In rural communities, where the same hospital serves all income levels, closure or cutbacks will leave all residents out in the cold regardless of ability to pay, and may leave multi-county regions without access to hospital care or trauma services.

Hospitals are essential to disaster preparedness, and to our ability to respond to infectious disease. In many communities, they are also a source of primary care. The elimination of infrastructure among the poor to address the spread of recently mutated diseases (influenza), medication-resistant forms of illness (tuberculosis and MRSA), and diseases which may not be widely immunized against because specific immunizations are risky or expensive (anthrax) or they are considered eradicated in the US (smallpox, typhoid, cholera and increasingly, even polio), will result in outbreaks among the wealthy as well.

All resources are needed in the event of a disaster that produces mass casualties such as 9/11 or the Minnesota bridge collapse. If entire multi-county regions are left without access to emergency services, no effective response will be possible. If the President of the United States happens to be injured in such a disaster, he will not be able to access treatment.

Fortunately, some members of Congress are working towards a solution. Representatives Eliot Engel (D-NY) and Sue Myrick (R-NC) have introduced the Preserve Our Public and Teaching Hospitals Act (H.R. 3533). Please call your US Representative and ask them to co-sponsor this bill! Please ask your Senator to introduce a similar bill into the Senate!

And please, email Move On to urge them to take up the cause. (Or any other relevant organization, for that matter. Don't hesitate to provide links or ideas in the comments below.)

Finally, contact your Board of County Commissioners, and ask them to pass a resolution supporting H.R. 3533. If there is demand, I can provide a resolution template for you in a future diary.

Thank you in advance for your help! Also available in orange at http://www.dailykos.com/story/2007/12/2/12530/7850.

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I have written an e-mail to move-on with a link here and an excerpt from your post.

I hope you keep on following medical news. I think it is one of the most important issues in the election. Thanks.


I read this piece earlier today...we are in desperate need of new priorities that put caring for people closer to the top of the list instead of the bottom.

It's only a matter of time before one pandemic comes along and dessimates small communities because of what's happened to health care.