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Wake Forest Baptist Medical Center launched a distress signal in a gathering storm when it said on Nov. 14 that it will cut 950 jobs.
That storm has at its center national health care reform, possible lower reimbursements for Medicare and Medicaid services, and an increasing number of older patients who need more care.
The hospital industry is in for a direct hit — that’s not in doubt.
But mass layoffs may be only one of many solutions for the health care industry’s problems.
The problem for hospitals is choosing the right one: mass layoffs, refined management techniques or some middle ground.
Hospitals feeling the pinch
That’s a delicate balance, said Mark Graban, a national expert and consultant on health care management who lives in San Antonio, Texas.
“It’s easy to add up the cost savings of reduced payroll,” he said. “But it’s hard to add up the side effect of those layoffs.”
He said layoffs are sweeping the industry. Graban referred to a report from the American Hospital Association that says hospitals will cut 93,000 jobs during 2013.
There are 600,000 physicians in America who care for the 48 million seniors on Medicare. Of the $716 billion that the Affordable Care Act cuts from the program over the next ten years, the largest chunk—$415 billion—comes from slashing Medicare’s reimbursement rates to hospitals, nursing homes, and doctors. This significant reduction in fees is driving many doctors to stop accepting new Medicare patients, making it harder for seniors to gain access to needed care.....
How Obamacare's $716 Billion in Cuts Will Drive Doctors Out of Medicare
The 2010 Patient Protection and Affordable Care Act slows the growth in Medicare spending in several ways, including smaller automatic increases in payment rates for treatment providers and lower subsidies for private insurers. These two changes account for the largest savings -- $571 billion over 10 years, by the Congressional Budget Office's estimate. Both of them operate on the theory that the recipients of Medicare dollars can and should deliver better value of the money.