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Obama’s Spending Cuts and What They Mean to Nursing Homes

President Obama’s plan to reduce spending resulted in a proposal last week of a $320 billion cut to Medicare and Medicaid over about a decade. The cuts affect many areas of senior care, such as nursing homes, pharmaceutical providers, and in-home care. But one specific niche of spending cuts is aimed at nursing homes with high annual hospital admission rates: such homes would risk losing up to 3% of their Medicare payment, and future spending cuts could extend to Medicaid coverage, too.

About 40% of American nursing home residents are admitted to the hospital every year. Often these visits aren’t for medical emergencies, but simply because nursing homes are short-staffed. Patients are often discharged before being adequately treated, and have to return to the hospital soon after–about 14% of nursing home patients are subjected to this back-and-forth.  The 3% cut would be extremely costly to nursing homes if approved, forcing them to boost the quality of the care at their facilities. However, even this modification would not protect the homes, because Obama has also proposed about $32 billion in cuts to care for nursing home residents who’ve been discharged from the hospital.

Dr. Stuart Shapiro is the president and CEO of the Pennsylvania Health Care Association and Center for Assisted Living Management. He is greatly concerned about the extent of the proposed cuts. “The message is clear,” he writes in Pennsylvania’s Morning Call. “Any further federal or state cuts to Medicare or Medicaid threaten an already fragile long-term care system with unthinkable and tragic results. Further cuts would place quality of care at risk, and very soon limit access to people who need nursing home care.”

Nursing homes will have to weigh the financial implications of hospital readmission and post-hospital care, looking for a balance that allows them to remain financially stable while maintaining quality.



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Lucy is a recent graduate of Western Washington University, majoring in English with an emphasis in Creative Writing. Lucy tagged this post with: , , , Read 7 articles by
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