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California Hospitals Face 'Hard Decisions' Under Medicare Payment Changes


A hospital group in the San Francisco Bay-Area recently announced its intention to cut its staff by four percent due to financial pressures.

And more structural changes may be to come for other California hospitals under the Affordable Care Act, according to one hospital trade group.

The California Hospital Association says Medicare payment changes under the Affordable Care Act will mean billions fewer dollars will flow into medical facilities over the next decade.

Jan Emerson-Shea of the Association says that could result in consolidations that produce larger hospital groups, cuts to staffing, or the elimination of certain health care services.

“Hospitals across the state right now are having very thoughtful, in-depth discussions with their boards of trustees to try to determine how they are going to best respond to a changing health care environment,” says Emerson-Shea.

But Dylan Roby of the UCLA Center for Health Policy Research says these are not arbitrary cuts.

He says a lot of the Medicare changes are part of a push to pay hospitals based on performance and quality of care.

“It’s an effort for Medicare to move from a very volume-based, non-outcome, non-quality related payment mechanism, into something that resembles more of a value-based payment mechanism,” says Roby.  

One of the Medicare payment changes involves penalizing hospitals if certain patients are readmitted within 30 days.

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