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Hospitals are cutting jobs across the nation

Under mounting financial pressures, hospitals across the country are slashing jobs and clinical services. The reasons range from financial to political, and among them are escalating costs and uncertainty about the Affordable Care Act. Casey Ross, who reported on this issue for health news website STAT, joins Hari Sreenivasan to look at the causes of hospital staff reductions.

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    The news website "STAT" focuses on health, medicine, and science. And in an article just published this afternoon, "STAT" reports how hospitals nationwide are cutting jobs. The reasons are financial and political, from escalating costs to uncertainty about changes to the Affordable Care Act.

    Joining me now from Cleveland to discuss all this is the author of the story, Casey Ross.

    Where are we likely to feel the impact of these hospitals cuts? I know you looked at places all over the country.


    Yes, you're going to see cutbacks in clinical services at hospitals. You know, some hospitals are choosing to reduce psychiatric services, for example. A lot of hospitals are cutting back on obstetric services, closing down labor and delivery units. In Boston, Brigham and Women's Hospital, a large Harvard affiliated teaching hospital, just offered a voluntary buyout to 1,600 employees. MD Anderson in Texas is laying off a thousand. Catholic Health Initiatives, one of the largest providers in the nation, just laid off about a thousand employees, in Kentucky, in Texas and elsewhere.

    And so, I think you're going to see cuts in all of those communities, in hospitals that are large and small, rural or urban. And I think the people in those communities are going to see that through a reduction in some of the medical services that are available.


    So, why now? And how do we know that this isn't just sort of a business correction where perhaps some of the hospitals that you are looking at or found aren't just correcting for errors that they might have made or just bad accounting?

  • ROSS:

    Well, these are structural financial problems in the health-care business. The biggest problem is that you have a large number of Americans every day who are aging into Medicare. The baby boomer population is aging into Medicare at a rate of 10,000 people a day. And that causes problems for hospitals because Medicare pays less than commercial insurance does for medical services.

    So, you have a problem where hospitals can't make money on their largest population of patients, which causes margins to get thinner and as those margins get thinner, they have less leeway to deal with some of the ever-rising costs.


    So, are any of the hospitals opting out or creating a two tier system where a Medicare patient might be, while they are less valuable dollar-wise, they would maybe get less preferential treatment?

  • ROSS:

    I think that is happening at hospitals across the country in different ways. Seldom are they out in the open about the ways in which they do that. But certainly, they find ways to prioritize commercially insured patients over Medicare and Medicaid patients often by choosing to locate in strategic locations where they can serve more commercially insured patients.


    So, how does the fight on Capitol Hill play into this, on what could happen to the Affordable Care Act and the number of uninsured people that might increase or decrease and the ripple effect that it has on hospitals?

  • ROSS:

    Well, it creates a lot of uncertainty because all of the hospitals certainly are concerned about the potential loss of 24 million insured patients over the next decade. That's the estimate of the Congressional Budget Office of the number of people that will become uninsured if the current law that's being considered in Washington is enacted.

    So, those hospitals are concerned about losing paying customers, essentially. Those people are still going to need care regardless. And the hospitals are worried that those folks are not going to be able to afford their care because they're not going to have insurance. Their uncompensated care costs rise and that puts more pressure on an already thin bottom line.


    All right. Casey Ross of "STAT" — thanks so much.

  • ROSS:

    My pleasure.

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