Hospitals on notice, Obama is cutting Medicare

LOS ANGELES, CA (Catholic Online): According to CMS, payments for over 1,400 hospitals for Medicare services will be docked as a result of poor quality care. Meanwhile, some hospitals could see an increase. The adjustments are 1.25 percent and are based on each facility's performance across 12 criteria including patient satisfaction, outcomes, and mortality rates.

Under Obamacare, hospitals that perform poorly will see a reduction in their payments as a penalty for poor performance. Hospitals that do well could see an increase.
So far, the government is ahead. 1,231 hospitals are seeing an increase while 1,451 are being subjected to the penalty.

The program is designed to be largely budget-neutral, so it does not increase costs, at least not for now. It also provides a powerful incentive, particularly to for-profit medical centers, to improve patient outcomes and satisfaction.

The program itself is paid for with an across-the-board cut of 1.25 percent in all hospital's DRG payments. In 2013, the cut was 1 percent, and it will increase by increments until 2017 when it tops out at 2 percent.

The end result is facilities that do well should see their cuts washed out by increases in Medicare reimbursements. However, those that do poorly could see an overall cut of nearly 3 percent. Although such numbers may seem paltry, the annual cost to facilities across the nation can be in the millions.

If there is any criticism, it is that the criteria on which hospitals are evaluated may be somewhat subjective. Patients will enjoy the empowerment of being able to rate their experience and seeing that reflected in a facility's bottom line.

At the same time, this level of government involvement serves as an added disincentive for doctors to accept Medicare and Medicaid patients. In fact, this is the real consequence of the entire policy. Most doctors accept these patents because they represent guaranteed income via the government, even though they can make more money working in private practice or for a major health firm. Yet as the government exerts more and more control over their operations, doctors will be increasingly discouraged from treating Medicare and Medicaid patients.

The again, perhaps doctors and hospitals should acclimate to this brave new world of healthcare. It's becoming increasingly apparent that Obamacare is part of a larger scheme that will end with socialized, single-payer healthcare in the United States. Then, doctors will see what a true disincentive looks like and the rest of us, previously accustomed to speed and quality, won't like it either.