Press Release

AHA Statement on Administration's New Proposals on Reform

Rich Umbdenstock
President and CEO
American Hospital Association

June 15, 2009

America's hospitals support systemic reform that lowers costs and improves care for patients; however, we are deeply disappointed and concerned to see the Administration propose cuts of more than $220 billion to hospitals, especially during these tough economic times when more patients are turning to their local hospital for care. Hospitals are already facing as much as $41 billion in cuts due to the Medicare payment system changes recently proposed by the Administration.  Additional cuts of this magnitude could severely jeopardize hospitals' ability to care for their patients and communities. 

Hospitals have long supported expanding health care coverage to all Americans but feel this must happen while maintaining adequate financing for hospitals that serve large numbers of poor and uninsured patients.   Cutting the Medicare and Medicaid Disproportionate Share Hospital (DSH) programs, as the Administration is proposing, overlooks the critical role these important programs play in supporting a broad range of services for uninsured children and adults as well as essential community services such as trauma and burn units, disaster readiness, neonatal care and emergency psychiatric services.  These programs also help to mitigate the financial shortfalls hospitals experience from government program underpayments and treating undocumented immigrants.  Even with today's DSH payments, federal health programs pay hospitals more than $32 billion below the cost of caring for patients on average. These programs go beyond covering care for the uninsured and serve as a lifeline to hospitals struggling to meet the growing needs of patients and communities.  Because of that, we urge lawmakers not to cut DSH programs before coverage expansions are universal and fully implemented as part of reform, and Medicare and Medicaid shortfalls are addressed.

The Administration also is calling for a "productivity" adjustment for hospitals.  Anyone who has been to a hospital knows how vital the nurses and other skilled caregivers are in their care.  Other industries can replace people with machines but health care is about people taking care of people.  That's why the measure proposed to adjust for productivity, which was not intended for health care, does not make sense.  Instead, our focus needs to be on ensuring that patients receive the right care at the right time in the right setting.  In addition, the new proposals for long-term care and rehabilitation hospitals are problematic and could serve as a barrier to better coordination of care for patients.

Hospitals have pledged to do our part to help reduce national health costs and we remain committed to doing so.  Reform must improve care for patients without crippling hospitals' ability to care for patients and communities.  We stand ready to help the Administration and the Congress make thoughtful reform a reality. 

About the AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks, other providers of care and 43,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at

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