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GOP Doctors Caucus: The Effects of the Affordable Care Act on America's Hospitals

Floor Speech

Location: Washington, DC


Ms. BUERKLE. Thank you, Mr. Speaker.

Here in Washington, we are divided on many issues, but whether we are a Republican or a Democrat, Members of Congress recognize the essential role that our hospitals play in our communities.

Hospitals provide care for the sick, and the clinics provide essential care to many. They are engaged in important medical research, and teaching hospitals are educating doctors and nurses to provide care for future generations. In many districts across the country, including mine, New York's 25th Congressional District, our hospitals are our major employers.

They're perhaps the largest single employer a congressional district may have.

The health care sector constitutes nearly 18 percent of the United States' economy, and it is one of the more stable portions of our economy. American hospitals employ more than 5.4 million people; and as hospitals and hospital employees buy goods and services from other businesses, they create additional jobs. The economic impact is felt throughout the community. Hospitals are a vital part of our local and our national economy. In New York State, particularly in my home district, hospitals are the largest single employer.

I want to call your attention to this chart, Mr. Speaker, with data provided by the Hospital Association of New York, which shows the importance hospitals have on my district's local economy. Five hospitals in my district employ over 18,000 people. Together, payroll and purchases in my district alone amount to over $2.4 billion. They generate over $100 million in State and local income sales taxes. This is in my district alone with regard to the economic impact of our hospitals.

Looking at New York State as a whole--and I hope some of my New York colleagues will join me here tonight--the hospitals contribute nearly $108 billion to our State and our local economies. Mr. Speaker, it is no exaggeration to say hospitals are a mainstay of our New York State economy; so when our hospitals are hurting, the effects extend to the entire community. Our hospitals are under assault. Not only will it affect our local and State economies, but it will also affect access to health care, to some of the most basic services that our hospitals provide to our communities.

I now yield to the gentleman from Georgia, Dr. Gingrey.


Ms. BUERKLE. I thank the gentleman from Georgia for being here this evening.

Mr. Speaker, as my colleague mentioned, the President's Patient Protection and Affordable Care Act, which became law in March of 2010, included some welcome provisions, such as allowing people to stay on their parents' insurance until the age of 26 and prohibiting insurers from denying coverage based on preexisting conditions. These positive provisions, which proponents quickly point to when facing criticism, are far outweighed by the negative consequences that the Affordable Care Act has on our providers and the health care system.

These measures could have been accomplished in a much simpler manner. I say to you, Mr. Speaker, so many roads are paved with good intentions, but the unintended consequences are devastating to our hospitals.

As a health care professional, my opposition to the Affordable Care Act has never been solely based on philosophical grounds, but on strategic and tactical ones. Most Americans--myself included and my colleagues here in Congress--recognize that health care needs to be reformed and that health care costs continue to rise. We need to figure this out. We disagree as to what the health care reform should look like. If I thought that the Federal Government could be the necessary agent of change, that would be one thing; but I don't believe the government can change health care.

The Affordable Care Act affects our hospitals and our providers. This is not a Republican or a Democratic issue, but an American one--as access to health care affects every American.


Ms. BUERKLE. I thank the gentleman from Michigan.

Mr. Speaker, we've touched upon it, and I want to continue having this conversation about the effect that the Affordable Care Act is going to have on our hospitals in our Medicare population. Now, Mr. Speaker, you may have heard over and over again from our colleagues from the other side of the aisle, demagoguing our budget proposal that came out in April. They say we want to kill Medicare; we want to kill Social Security; we don't care about our seniors.

Tonight I stand here, Mr. Speaker, and I tell you, and I want to tell the American people, that the Affordable Care Act, in fact, cuts Medicare spending by $500 billion. Those are actual cuts that are now in the Affordable Care Act, or what is known as the health care law. One of the most negative effects is the result of reductions in hospital Medicare payments and the CMS code, offsetting reductions to hospital payment plans.

I have a chart here, Mr. Speaker. And as I go through my notes, I want it to be clear that you can see 2010 and what happens to Medicare reimbursements, down until 2018. Our hospitals can't sustain these cuts. The five hospitals in my district have come to me, and they said, This Affordable Care Act--and many of these hospitals were big proponents of the Affordable Care Act because they know in our country we need to reform our health care system, we need to make some changes, so they were in support of the law.

But what they didn't realize was this law is going to cut their Medicare reimbursements, which so many of them depend on. It's the mainstay--by 28.6 percent. I've had hospitals in my district say to me, We cannot sustain these cuts. We will go bankrupt. Because you see, Mr. Speaker, it's not only this Medicare, the reduction in these rates, but it also is a series of other cuts which we will get into as the evening proceeds.

I yield to the gentleman from Georgia.


Ms. BUERKLE. I thank the gentleman from Georgia.

I have spent most of my professional career in the health care industry. I have represented a hospital for a number of years, so I know up close and personal how these issues have affected and will affect our hospitals and our providers. And despite the best intentions of this health care law--whether we disagree with it or we agree with it--despite the best intentions of this health care law, what we are seeing are the unintended consequences.

The fact that our hospitals, our health care providers, will not be able to proceed, will not be able to perform the services that our communities need and expect and have come to expect. That certainly wasn't the intent of the health care law, but ladies and gentlemen and Mr. Speaker, that's exactly what is happening.

I would like to yield and recognize the gentlewoman from North Carolina.


Ms. BUERKLE. And I thank the gentlelady from North Carolina for being here this evening.

I would just like to continue on because of my concern, and I know my colleagues have such concerns, about the health and the well-being of their hospitals. As I mentioned earlier, they are the largest employer in my district. We refer to it as ``eds and meds.'' We have a large university there and some colleges, but we also have five hospitals in my district. So our reliance for our local economy and for our State economy is just so very important.

I want to talk a little more about what this health care law is going to do to Medicare and do to our hospitals. There is $112 billion in reduced market basket updates to hospitals. There is a $36 billion reduction to Medicare and Medicaid disproportionate share hospital payments.

Now, Mr. Speaker, disproportionate share may sound a little confusing. I'm going to explain what that is. In a district such as mine, we have hospitals that have missions. And I'm sure across the country, many hospitals have missions. They want to make sure that the indigent population, folks who can't afford insurance, who are self-pays or maybe are on Medicaid, that they have access to quality services. So the government says to these hospitals, we understand that Medicaid reimbursements or self-pay patients will not cover your services. So what we're going to do is, we're going to try to make you whole with this disproportionate share. Mr. Speaker, the health care law eliminates the disproportionate share for hospitals, and so hospitals that have a high indigent population or a high number of self-pay patients or those who are on Medicaid, they are not going to get that disproportionate share.

The hospital in my district came down here. It is a large teaching institution. They made a special trip down here to tell me that provision of the health care law will bankrupt them. They probably receive somewhere around $80 million a year to make them whole because of their mission. And isn't that what we want? We want to make sure--and wasn't that the original intent of the health care law?--to make sure that there was accessible care for all Americans. But here again we reached the unintended consequences, and the effect that this law is going to have on our hospitals.

There is a $7.1 billion reduction for readmissions. We will talk about that in a little bit.

Hospitals, and many of the ones in my district, and I know throughout this country, they are heavily dependent on Medicare and Medicaid dollars. And with that narrow margin, Medicare and Medicaid don't even cover their costs. And so there's such a small margin for them to operate that there's really little capacity for improvements. Realistically, hospitals--especially teaching hospitals and hospitals that are treating the underserved--cannot bridge that gap, and they won't be able to bridge that gap because of this new health care law.

Hospitals must be able to invest in their infrastructure. Having such a narrow margin and/or no margin operating in the red, they're not going to be able to do that. They're not going to be able to invest in infrastructure, systems improvements, new techniques to reduce hospital-acquired infections, new models of delivering health care and electronic health records.

And I want to talk about electronic health records because they were mandated in the health care law. The Affordable Care Act mandates that hospitals must move to electronic health records. Now, from a patient safety standpoint, that's a good thing, but getting hospitals up to speed and getting them ready for business has very high IT costs for our hospitals. So, again, you've got this health care law mandating electronic records, and you've got these drastic cuts to our hospitals in their Medicaid and Medicare reimbursements.

I yield to the gentleman from Georgia.


Ms. BUERKLE. I thank the gentleman from Georgia.

Mr. Speaker, I want to just emphasize again with regards to this health care law and the fact that this law--and, Mr. Speaker, this is a law, this isn't a budget proposal, this is a law--guts Medicare by $500 billion. It should be of concern, Mr. Speaker, to our seniors because this law, in fact in 2014, will begin to gut Medicare. I again would look at this chart and the Medicare reimbursements. There will be no hospitals that will be able to provide health care. If you look at what the trend is for Medicare reimbursements to our hospitals, they cannot continue to exist based on what is set forth in the Affordable Care Act.

I spoke with the CEO of one of our local hospitals, Crouse Hospital in Syracuse, and he spoke with one of my health care staff; and he indicated to us today that Crouse Hospital, one hospital in the district, is facing a projected loss of $18 million in reimbursement reductions. That number goes to access to care. We can have the most comprehensive health care law on the books, but if we don't have hospitals who are able to provide that care, and we don't have physicians who are able to provide that care, we will have access-to-health-care problems.

Mr. Speaker, earlier I talked about hospital readmission penalties. This is another concern hospitals have to deal with. And tonight we've talked a lot about what the Affordable Care Act will do to hospitals, the effect that it will have on our hospitals, the drastic cuts in Medicare and Medicaid reimbursements and the disproportionate share being eliminated.

But our hospitals are under assault from all sides, and that's part of the difficulty. Maybe they could somehow figure out how to deal with these cuts in the Affordable Care Act; but taken in its totality, our hospitals are having a very difficult time. In fact, as I mentioned earlier, many are concerned that they will be unable to sustain and unable to continue on with their services, given the whole assaults that are coming from all directions.

And this actually is part of the Affordable Care Act. It establishes a punitive policy for our hospitals when they readmit a patient. And I will explain that, Mr. Speaker. Under the health care law, the Affordable Care Act--we call it the Affordable Care Act, we call it ObamaCare, we call it many things--but under this new law that is taking effect gradually, under this to their expected readmission rates, if even more than one readmission occurs--and that readmission means that you discharge a patient, the hospital sends a patient home and then for some reason they have to come back. If that happens with one of three diagnoses within the Medicare scheme, the hospital will be penalized for all of the Medicare reimbursements, not just that one case where there was a readmission, but all of the Medicare reimbursement cases. You can imagine the magnitude and how that will affect Medicare reimbursements.

The other part of this provision in the health care law is that it really doesn't discern between what's avoidable and what's not avoidable readmission. So sometimes a hospital may discharge a patient and it was premature, or something wasn't done and the patient needs to come back. And certainly that should be considered, and we should figure out what went wrong because readmissions are expensive, and so Medicare doesn't want to pay for them. And I understand that. However, some readmissions are unavoidable, and a hospital shouldn't be penalized for an unavoidable readmission; and yet the Affordable Care Act does exactly that.

The Secretary of the Department of HHS, Health and Human Services, which has the authority now to expand what were three diagnoses, now has the authority to expand that list of conditions with regards to readmissions. Hospitals nationwide, Mr. Speaker, are projected to face more than $7 billion in Medicare reductions over 10 years because of this policy, $7 billion to our hospitals.

We began this discussion tonight, Mr. Speaker, talking about the importance to our local economies, the employment numbers, what hospitals pay into our community with their purchases and with their employees, the taxes that they give back to the community; and now we're talking about cutting them again because of this policy.

You know, the issue of hospital readmission is complex, and I hope I did a good enough job tonight of explaining it. And while health care providers agree there's always room for improvement across the continuum of care, readmissions occur for many reasons. And punitive action via reduced reimbursements is not only counterproductive, but it's also potentially harmful to our hospitals, to our patients, and to our communities.

Mr. Speaker, as we work hard to make sure our seniors get the Medicare benefits from the system that they have paid into--and, Mr. Speaker, I want to emphasize that over and over again during the course of this hour, our seniors have paid into Medicare, into the health care system all of their life. And now, as they reach the Medicare eligibility age, they deserve to get Medicare coverage that they expect, that they deserve, and that they've paid into.

But this health care law, this $500 billion cut to Medicare, is going to change that for our seniors. It's not the budget proposal in April that's going to--that was a budget proposal. And you've heard my friends and colleagues across the aisle demagogue our budget proposal in April, saying we want to cut benefits to seniors, Medicare, and Social Security.

The fact is, Mr. Speaker, this health care law, passed into law in 2009, will devastate Medicare. And our seniors, Mr. Speaker, should be very, very concerned about this Affordable Care Act. Not only will it affect our hospitals--as we've spent so much time talking about tonight--but it will also affect the care and the access to care for our seniors.

Hospitals, Mr. Speaker, already operate on such thin margins, and we talked about this earlier, that for many providers, especially specialized programs, treating patients struggling, say, with substance abuse or helping the developmentally disabled, they will be reduced or they will end those programs. Hospitals cannot operate on such a thin margin and then run the risk of all of these devastating Medicare and Medicaid reimbursements.

Mr. Speaker, I also want to speak tonight a little bit about graduate medical education. As I mentioned earlier, I was an attorney in Syracuse, New York, and I represented a hospital that was a large teaching hospital. And so I know how much they rely on what's called graduate medical education. We often refer to it as GME, sort of the acronym for it, the initials. I'm going to explain what GME is because it's so important to our hospitals. And even hospitals that don't have a medical school attached to them, we'll talk about some of the reimbursements they get because medical students and residents train within these facilities.

Graduate medical education is the training medical school graduates receive either as a fellow or an intern or a resident. Medicare is the largest contributor to the GME. Now, why do I even bring this up? I bring this up because we talked earlier about the many assaults on health care providers, the many assaults that hospitals are concerned about. This is not per se in the health care law, so I want to make that clear. But when it comes to cutting, when it comes to finding and helping this terrible national debt that we have that is now $15 trillion, often we look to Medicare. And one of the areas in Medicare, the low-hanging fruit--whether it's a hospital or a physician--that seems to be the easiest place to go to rather than really looking at our health care system, making it a free market, allowing the market to compete, getting the government out of health care and letting folks buy insurance across State lines. Rather than letting the free market in it, we have the government involved. So Medicare is the largest contributor to this GME.

GME payments, as I mentioned, have been targeted. They've become a target for recommended budget savings. In 2010, the President's Simpson-Bowles Deficit Commission recommended limiting hospitals' GME payments to 120 percent of the national average salary paid to residents in 2010, and reducing another reimbursement the hospitals get, the IME, the indirect medical education, by 60 percent, from 5.5 to 2.2 percent.

Mr. Speaker, these two changes--Medicare reimbursement to the GME, Medicare reimbursement to the IME--would reduce Medicare medical education payments by an estimated $60 billion through 2020, $60 billion.

Mr. Speaker, these aren't just numbers. These proposed cuts would endanger the ability of teaching hospitals to train physicians. We must face the fact that cuts to graduate education would result in fewer practicing physicians and ultimately reduced access to care, which is getting back to why there was an Affordable Care Act.

I talked about this road paved with good intentions. And now what we are seeing is that our hospitals, our health care providers, and the training of physicians are both going to be significantly and severely impacted to the point where access to health care becomes a problem. And so seniors--not just seniors, but all Americans--will have to begin to deal with the fact that primary care physicians, there won't be as many of them. There will be fewer doctors being trained, and for a number of reasons.

The GMEs and the IMEs going to hospitals, if there is any reimbursement reductions to those, but also the fact that as a physician goes through all those years of training and he goes through 4 years of college, 4 years of medical school, an internship, 3 years of a residency, and then if he's a fellow because he wants to specialize, all of those years, and then they go into practice. And you see what the Affordable Care Act, you see what all these assaults are doing on our Medicare and Medicaid reimbursements to physicians as well as our hospitals.

Hospitals that are primarily teaching hospitals face an additional challenge that could threaten the stability of their institutions. Hospitals that have residents in an approved graduate medical education--again, that GME program--receive an additional payment for a Medicare discharge to reflect the higher cost of care. Because they are a teaching hospital, their cost of care is higher.

The regulations regarding the calculation of this additional payment--and I talked about this earlier--is the indirect medical education. This is all very complicated, but what I want to say and what I want to make clear, Mr. Speaker, is that if these cuts go through, it has been estimated that it will cost GME and IME reimbursements from Medicare $60 billion.

This could mean a loss of 2,600 jobs and $653 million in State and local revenue. And, Mr. Speaker, a $10.9 billion loss to the U.S. economy.

At current graduation and training rates, the Association of American Medical Colleges projects that the Nation could face a shortage of as many as 150,000 doctors in the next 15 years--150,000 doctors.

We talked about this, and I think whether you're on one side of the aisle or the other, whether you agree with the health care law, we all agree that we want to have, in a country as rich and as generous as ours, we want to have access to health care for all Americans. But if we don't have physicians to provide that care--and this estimate is 150,000 doctors in the next 15 years--a shortage of that many, it will discourage this access to health care and will result in the longer waiting times for patients.

Mr. Speaker, in closing, I want to just emphasize a few points this evening. And it's always an honor to be here on the House floor. It's always an honor to talk to the Speaker. And tonight it's been an honor to be able to address health care.

As a health care professional, I spent years as a nurse and then, as I mentioned, as an attorney representing a hospital. I know that people within the health care profession are dedicated. They have a passion to provide the American people, to provide any people with quality health care, to make sure and ensure that they have quality health care.

Mr. Speaker, the United States of America has the best health care in the world, and so it is so imperative that we preserve this health care system.

My colleague from North Carolina mentioned earlier that we voted to repeal the health care law, the Affordable Care Act, because it's not in the best interest of good health care. And tonight you heard, Mr. Speaker, from several of my colleagues who are health care professionals who dedicated their whole lives to providing medical services to the people in their communities. They care about quality health care. They care about people, and they care that the United States of America has a good health care system.

But we don't believe that good health care, access to health care, reasonable costs within health care, are going to result from the Affordable Care Act. The Affordable Care Act, I want to emphasize this one more time, Mr. Speaker, cuts Medicare to our seniors by $500 billion. To our seniors, that will be a devastating blow to the services and the access to services that you will have.

But beyond that, it affects how our hospitals can provide care, how our hospitals will be paid, how our doctors and our young doctors will be trained for future generations. This Affordable Care Act may have been the most well-intentioned law, but it is devastating for health care and health care delivery services in the United States of America.

Mr. Speaker, hospitals serve us and our communities. The crafting of the Affordable Care Act was carried out with the good intentions of many, as I said. I don't want to indicate or imply that people didn't have good intentions with this Affordable Care Act, but they approached it from the wrong direction. They put the government in the middle of a physician and the patient, and that can never work.

But good intentions are not enough to excuse legislation which has a terrible and far-reaching, albeit unintended, consequence for all sectors of our society, especially our patients, our doctors, and our hospitals.

Mr. Speaker, I yield back the balance of my time.

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