Six of 10 hospitals will still be losing money on Medicare by the year 2004, despite an $8.4 billion attempt last year to provide relief to the program, the American Hospital Association (AHA) said. The hospital group based its prediction on a new analysis by The Lewin Group.
The Lewin study, performed at the request of the AHA, showed that the Balanced Budget Relief Act gave hospitals only 1% more in Medicare payments over the next 5 years than they regularly receive. The AHA released the report during a rally held on Capitol Hill.
The study showed that the total Medicare margins or profits for hospitals will drop between 1.6% and 6.6% by the year 2004. The report also shows that hospitals can no longer make up for low Medicare payments by cost shifting to private-pay patients because private payers are cutting costs as well.
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