Schumer Reveals: President's Budget Takes Meat Axe To Upstate Hospitals As New Round Of Medicare Cuts Cost Hospitals More Than $2.4 Billion Over The Next Five Years

Press Release

Today, U.S. Senator Charles E. Schumer revealed that President Bush's proposed budget for 2009 will slash funding to Upstate New York hospitals by more than $2.4 billion over the next five years. The Administration's budget includes huge cuts in Medicare payments to hospitals, skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, ambulances, and other providers. Schumer said the proposed cuts will also starve graduate medical education programs across the state, a vital source of funding to reverse the physician shortage currently affecting upstate communities.

Schumer today released a report detailing how local hospitals in every corner of New York State will be starved of funding under Bush's 2009 proposed budget.

"This budget gives the meat axe to hospitals in every community of New York State and I am going to fight it tooth and nail every step of the way," said Senator Schumer. "Our hospitals and graduate medical programs are the life blood of our community and an economic engine for the entire state. Instead of cutting the legs out from under our health care system, we should be giving it the resources it needs to flourish and modernize."

Schumer's report details staggering cuts to large and small hospitals across the state. Most of the Medicare savings in the budget would be achieved by reducing the annual update in federal payments to hospitals, nursing homes, hospices, ambulances, and home care agencies. The cuts proposed by the Administration and included in the Schumer analysis target hospital reimbursements for inpatient and outpatient care, hospital-based nursing homes, and home health agencies.

Schumer stressed that these cuts are particularly damaging to hospitals' bottom lines because hospitals create their budgets based on what they expect the Medicare payments to be. The Administration's proposal would dramatically and suddenly change the payments rates, which would significantly reduce the level of support each hospital receives from the federal government. Schumer said that there is no question that, should these cuts be enacted, New York residents could see a decline in services.

Schumer's office today released a county-by-county report detailing how Bush's budget cuts would hurt local hospitals across the state. The Healthcare Association of New York State (HANYS) compiled and estimated the specific data for cuts to each county and hospital.

- The Capital Region is home to 16 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $26 million in 2009 and more than $294 million over the next five years.

- Central New York is home to 12 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $31 million in 2009 and more than $357 million over the next five years.

- The Rochester-Finger Lakes Region is home to 15 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $53 million in 2009 and more than $485 million over the next five years.

- The Hudson Valley is home to 28 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $62 million in 2009 and more than $690 million over the next five years.

- The North Country is home to 12 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $9 million in 2009 and more than $106 million over the next five years.

- The Southern Tier is home to 13 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $14 million in 2009 and more than $175 million over the next five years.

- Western New York is home to 22 hospitals that stand to be affected by proposed cuts to Medicare with funding losses totaling over $73 million in 2009 and more than $695 million over the next five years.

In addition, Bush's proposed cuts would hurt the state's graduate medical programs at a time when the state is suffering a severe physician shortage. According to HANYS, the cuts to teaching hospitals are estimated at $82,173,000 for FY2009 and $709,755,000 over the next five years. Schumer said that as the baby boomers age into retirement, demand for medical services and health care will skyrocket. Essential funds to train future physicians are critical to the health care system.

Nationwide, the US population is growing rapidly with the largest growth occurring in Americans over the age of 65, who tend to consume the greatest health care resources. However, the available supply of physicians to provide those health care services will decrease if these cuts to graduate medical education are enacted. According to the American Association of Medical Colleges, one-third (250,000) of active physicians nationwide are over age 55 and likely to retire by 2020.

In Upstate New York, more than 52 percent of active patient care physicians are age 50 or older, according to a report by the SUNY Center for Health Workforce Studies. Statistics from the New York State Department of Labor indicate that the projected percentage of annual growth of physicians and surgeons from 2004-2014 statewide is 10 percent, whereas the expected population growth rate is 14 percent annually for Upstate.

Schumer also blasted the cuts in the President's budget to hospital-based nursing homes that care for New York's seniors. According to HANYS, the budget cuts to hospital based nursing homes are estimated at $2,241,000 for FY2009 and $29,364,000 over the next five years. Cuts to hospital based home health agencies are estimated at $1,624,000 for FY2009 and $25,675,000 over the next five years. Cuts to hospital based inpatient rehab facilities are estimated at $10,832,000 for FY2009 and $102,038,000 over the next five years.

Schumer today announced that he will be sending a letter to the heads of the Senate Budget Committee urging them to remove these cuts from the Congressional budget set to be released this spring.

The Administration's total nationwide $182 billion proposed cut to Medicare would translate to a cut of more than $2.4 billion for Upstate New York hospitals over five years. New York State's hospitals have been operating at a loss for the last nine years in a row, but are targeted for drastic reductions in payments. The estimated cuts, complied by Schumer's office and estimated by the Healthcare Association of New York State (HANYS), are based on official budget documents provided by the Administration on Monday.

New York hospitals continue to provide exemplary care, despite the rising numbers of uninsured Americans. HANYS estimates that the state's hospitals provide more than $1.6 billion annually in uncompensated services, to low-income uninsured and under-insured patients—based on the current state definition of bad debt and charity care.

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