Study says Medicare cuts would decimate state health care system

A report released today by the Louisiana Hospital Association alleges cuts to Medicare and Medicaid would have an adverse impact on the state's health care industry and, in turn, the economy. The study, "Hospitals and the Louisiana Economy 2011," says the health care sector in Louisiana employs more than 269,184 people, about 16.2% of the state's total work force and about 15% of the state's total private payroll. Hospitals account for more than 99,350 of these employees, with a payroll of $4.4 billion per year. The overall economic activity supported by hospital expenditures leads to $690 million in state tax collections and $567 million in local tax collections. Cuts to Medicare and Medicaid, the study claims, would significantly threaten those numbers. For every 35 cents the state spends on the Medicaid program, the study says, Louisiana receives 65 cents from the federal government. Because of this federal match, the impact of the state's reducing its direct expenditures for Medicaid by $150 million would be a loss of an additional $430 million of federal dollars, reducing overall funding by $580 million. It would also result in the slashing of approximately 6,764 jobs statewide, a decrease in personal earnings of $258 million and a reduction in overall business transactions of $800 million. The LHA is a nonprofit organization representing hospitals and health care systems across the state. The group performed the study in conjunction with LSU economics professor Jim Richardson. The complete report can be found online here.

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