Severe, Long-Term Medicare and Medicaid Cuts Planned Will Impact Jobs Picture

The New York Times says cutbacks in healthcare planned in future years are so severe that the resulting layoffs and hiring freezes will  worsen the nation’s unemployment.   We need to take this very seriously. Half the Obama’s health plan is funded by scaling back $575 billion in planned increases in Medicare spending over the next decade, money intended to care for baby-boomers as they age into Medicare. Democrats and Republicans alike are calling for hundreds of billions in additional Medicare cuts.  All of these Medicare cuts are aimed at the doctors, hospitals, nursing homes, rehab facilities serving Medicare patients.  The cuts will result in many of these providers either dropping out of Medicare or giving dangerous care because of short-staffing.  Read more at http://wp.me/p3xLR-pJ . Proposed cuts to Medicaid providers, and cuts in Medicaid enrollment and services are even worse.

Capping and even cutting Medicaid and Medicare spending while allowing costs to rise to accommodate insurance, drug, and hospital profits means that government and its corporate partners are tossing away the notion of equal care for seniors, children, people with disabilities, and low-income workers.

New York Times, Thursday, August 18, 2011

Cuts in Health Care May Undermine Role in Labor Market

By REED ABELSON and KATIE THOMAS

Even during months of stubborn unemployment, the health care industry has provided a solid underpinning, reliably adding jobs in an otherwise dismal environment.

For example, hospitals, nursing homes and the like added about 430,000 jobs during the recession, as the country shed 7.5 million jobs. With the latest government reports showing a meager overall gain of 117,000 jobs in July, health care remained a significant contributor with an additional 31,000 jobs for the month, a tad higher than an average monthly addition of 25,000 health jobs in the last year. Hospitals, which had a slight decline in June, added 14,000 jobs in July.

While few experts can predict how the stock market’s gyrations and government cutbacks this month will affect the health industry, several health industry analysts warn that the sector is showing signs of economic sluggishness that has long kept other business sectors beleaguered.

The situation has led many in the health industry to caution that it cannot be relied upon to keep hiring workers. “It’s not realistic to believe that we’re going to continue to generate job growth when you’re speaking about Medicare and Medicaid reductions in the hundreds of billions of dollars over the next few years,” said Daniel Sisto, president of the Healthcare Association of New York, which represents the state’s hospitals and health systems.

Companies that rely on government spending have been bracing for deeper reductions, and President Obama recently alluded to another round of belt-tightening from one of the industry’s bedrock payers — Medicare.

Signs of a gloomier outlook have been surfacing in various spots, from a slowing in new construction plans to falling share prices of nursing home companies to announced layoffs among hospital support staff.“Nobody is sure what will happen,” said Alan M. Garber, a physician and health policy expert at Stanford. The cuts in government programs like Medicare and Medicaid, and pressure to reduce costs, are thwarting health care employers in trying to meet the rising demand for their services.

“The health care industry is facing greater uncertainty than in any time in memory,” Dr. Garber said.

Yet even though economists and other experts still predict increasing demand for health care as the population ages, with an accompanying demand for job growth, health care officials and executives cite a daunting cascade of recent events as reasons to reassess any expansions.

They point to Congress’ intent to reduce spending, economically depressed states struggling to deal with a rash of cuts in Medicaid programs and the continued uncertainty of financial costs that will be imposed by the federal health care law, including contradictory lower court decisions about the constitutionality of various provisions.

A survey by the Conference Board, a business research group, found that help-wanted ads for health care providers and technicians fell by 61,200 listings in July.

In Florida, for example, health care led the state in job gains during the recession — it was the only industry that did not lose jobs during that time. But since September of last year, the leisure and hospitality industry has been adding more jobs, according to a state economist.

The Palo Alto Medical Foundation, a large physician group in Northern California that employs 5,500 people, including 1,000 doctors, says it has no plans to add many more people in the near future. “Really our focus these days is to do more with the assets we have,” said Cecilia Montalvo, the vice president for strategic development for the medical group.

Hospitals also appear to be slowing the pace of building, as projects begun before the recession started are now being completed. The volume of tax-exempt debt for hospitals in the first half of the year has fallen by nearly half from a year ago, said David Johnson, a managing director at BMO Capital Markets. “We’re overinvested in hospitals and hospital beds,” he said.

The University of Michigan Health System, for example, is adding some 560 jobs as a result of new children’s and women’s hospitals it plans to open soon and an expansion of its emergency department. But Doug Strong, who heads the system’s hospitals, said his overall goal is to shrink his work force in future years as he tries to make the system more efficient.

While he expects the demand for health care services to rise, he believes he needs to deliver that care with fewer people at less cost. “I think that is what the nation is asking of all of us,” he said.

The impact of state cuts in Medicaid are already being felt in doctor’s offices, hospitals, nursing homes and home health agencies around the country. Hospitals experienced reductions in Medicaid reimbursement in 37 states for next year’s budgets, according to Lisa Goldstein, an analyst at Moody’s, who predicts further cuts.

At the Elliot Health System in Manchester, N.H., the seemingly abrupt decision by state lawmakers to sharply reduce hospital reimbursements led the hospital to recently lay off 182 people.

“For the last 10 years, we’ve been pretty stable and we’ve been able to grow,” said Elliot’s chief executive, Doug Dean. But faced with the loss of millions of dollars in Medicaid revenue that would wreak havoc on the coming hospital budget, Mr. Dean said he had no choice but to cut jobs. “It was simply because of the economics of Medicaid,” he said. Elliot is among a group of hospitals filing a lawsuit to stop the cuts.

Health care employers are also confronting cuts to the federal Medicare program. In July, nursing home operators learned their reimbursements would be cut by 11 percent in October, and hospitals expect further reductions in what they are paid under the new health care law as well as in future efforts to reduce the federal deficit.

Still, these continue to be boom times in many corners of the industry. Partners in Care, a New York nonprofit provider of home health care services, is hiring so many home health aides that it recently opened a second training center to handle the flood of new employees.

Its staff of aides has grown from close to 5,800 in 2006 to about 9,200 today. In June, the group, which is part of the Visiting Nurse Service of New York, hired 374 new people, the second-biggest month in its history.

Jay Conolly, vice president of human resources at Partners in Care, said his group is benefiting, not just from the growing elderly population, but also from the consolidation of nursing homes and hospitals in the New York area and a heightened interest in low-cost alternatives to inpatient care. The Bureau of Labor Statistics has predicted that jobs will grow faster in the home health care area than in any other section of the health care industry.

“There’s never been enough home health aides, and there never will be,” Mr. Conolly said.

And many expect that when the economy finally does rebound, hiring will, again, take off, especially when more people are expected to be insured under the federal health care law. Geraldine Bednash, chief executive of the American Association of Colleges of Nursing, expects there is pent-up demand for their services, especially for nurse practitioners and nurse midwives, who would work in primary care. “We are going to see this huge onslaught of need for nurses,” she said. “So we’re in a blip, that’s all.”

There are some who wonder whether the country should continue to rely on health care as a stalwart supplier of new jobs. If spending on health care continues at its current pace, it will choke out other vital sectors and end up hurting the rest of the economy, said Joshua Shapiro, chief United States economist at MFR Inc. “I think the path that we’re on now is clearly unsustainable,” he said.

Tom Torok contributed reporting.

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2 Responses to “Severe, Long-Term Medicare and Medicaid Cuts Planned Will Impact Jobs Picture”


  1. 1 Anonymous August 21, 2011 at 9:34 pm

    “And many expect that when the economy finally does rebound, hiring will, again, take off, especially when more people are expected to be insured under the federal health care law. Geraldine Bednash, chief executive of the American Association of Colleges of Nursing, expects there is pent-up demand for their services, especially for nurse practitioners and nurse midwives, who would work in primary care. “We are going to see this huge onslaught of need for nurses,” she said. “So we’re in a blip, that’s all.”

    Geraldine Bednash should not be so flippant and minimize that are thousands of unemployed newly graduated nurses and nurse practitioners in this country right now. The AACN is aware that hospitals will be downsizing and not creating new positions due to the cuts, Perhaps, she should encourage the nursing schools to stop enrolling so many nursing students and graduate students to prevent further unemployment of new graduate nurses and nurse practitioners. This is a huge problem.

    The AACN and nursing schools are contributing to the high unemployment rate by encouraging students to earn degrees for jobs that do not exist in the health care industry. Thousands of students have looming student loans that will go into default if they cannot find a job. The taxpayers will eventually foot the bill for this fiasco. There are few positions available for newly graduated nurses and nurse practitioners across the country. Hospitals prefer hiring nurses with experience, It is reckless and negligent of the nursing schools to keep giving nursing and graduate students millions in federal financial aid when they are aware of the poor job outlook for their graduates. Even nurse practitioners and experienced nurses are experiencing difficulty getting hired in this tough economy.

    There are thousands of applicants competing for one of the few graduate nurse and nurse practitioner jobs available in the country. Students were told they had excellent earning potential and job security since there was a nursing shortage in this country. The nursing shortage is a lie. Due to the economy, many nurses returned to work and postponed their retirement. However, nursing schools continue to enroll thousand of students when they know this is not true and their graduates cannot find jobs. The current job market is oversaturated with new graduates competing for the few positions that exist for them.

    It is obvious who has a hidden agenda regarding the future demand of nurses. Now, they are pushing the graduate nurse practitioner and midwives programs down student’s throats to keep enrollment up. This equals job security for faculty when undergraduate enrollments begin to decrease as potential students change their mind about their nursing major. News about their peers in nursing school who cannot not find employment travels fast.

    The AACN and nursing schools needs to do the right thing and tell students the truth about their career potential. Thousands of students sacrifice their time with loved ones, work during school, and invest a great deal of money to become a nurse. They have families to support. It is a disgrace the schools continue to increase enrollments and collect student’s tuition money each semester. They need to stop downplaying the brutal job market as well..


  1. 1 88Gears.Com Trackback on October 30, 2014 at 6:32 pm

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