Cure nursing homes' ills

Congress: Erasing deep cuts in Medicare payments to health-care providers a must before leaving.

October 10, 2000

IT'S ONE of the golden rules: You break it, you fix it.

So Republican congressional leaders had better address the perilous state of health-care providers as they try to find agreement on the budget this week. It was their earlier attempt to squeeze "excess profits" from Medicare payments to the providers that created this mess.

Three years ago, when shrinking the budget deficit was in vogue, Republicans imposed payment reductions on Medicare providers. This was supposed to save $112 billion over five years. Instead, the actual cuts proved more than double that size, throwing many companies into financial distress.

Fifteen percent of the nation's nursing homes are in bankruptcy. More than 3,000 home health-care agencies stopped participating in Medicare because of the skimpy federal reimbursements. More than 200 HMOs stopped providing Medicare coverage or have pulled out of areas -- leaving a million seniors to find other coverage.

Last year, Congress eased the squeeze on these providers by $16 billion, spread over five years. But that did very little. For home-health care companies, this simply delayed a 15 percent cut in payments for another year.

A far larger adjustment is in order. Nursing homes, for example, need nearly $10 billion over five years to wash the red ink from their ledgers. Since 1990, nursing home admissions have tripled; sicker patients are being treated, requiring more complex -- and costly -- care; and the demand for nurses and doctors is rising.

Given the growing federal surplus, lowering payments to hospitals, nursing homes, HMOs and home-health agencies is short-sighted and self-defeating. Patient care has suffered.

Sure, congressmen want to wrap up quickly in Washington so they can go home and campaign full-time for reelection. But they should not pack their bags until they have fortified America's health-care providers.

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