CONTACT:

Priscilla Koutsouradis, (SE PA) Communications Director (DVHC of HAP) Work: (215) 575-3743 Cell: (215) 906-2739

Washington, District of Columbia - Tuesday, March 6, 2007

Representatives of Albert Einstein Healthcare Network, Mercy Health System, The Chester County Hospital and Thomas Jefferson University Hospital today visited the nation’s capital to urge southeastern Pennsylvania’s members of Congress to fight the President’s proposed Medicare cuts, totaling $26 billion over five years. Preliminary estimates place the Medicare cuts to southeastern Pennsylvania at approximately $722 million, with $100 million of these during federal fiscal year 2008. The President also proposes cuts to Medicaid funding for graduate medical education, amounting to a reduction of $60 million in combined federal and state funds to southeastern Pennsylvania hospitals in fiscal year 2007.

“The cuts proposed in the President’s budget place an unacceptable burden on Pennsylvania’s most vulnerable citizens,” Bill Ryan, Director, Government Grants and Contracts, Albert Einstein Healthcare Network, told Representatives Robert A. Brady, Chaka Fattah, Jim W. Gerlach, and the staff of Patrick J. Murphy during a Capitol Hill advocacy day meeting sponsored by the American Hospital Association and The Hospital & Healthsystem Association of Pennsylvania (HAP). “These cuts are a direct threat to the integrity of Pennsylvania’s health care delivery system, and they threaten to reduce every patient’s access to essential hospital care.”

All six representatives from southeastern Pennsylvania – U.S. Representatives Robert A. Brady, Chaka Fattah, Jim W. Gerlach, Patrick J. Murphy, Joe Sestak and Allyson Y. Schwartz – have signed a letter to the chairman and ranking member of the House Budget Committee. “Federal payments are not keeping pace,” wrote the Representatives. “Medicare payments are falling further and further below the minimal costs of care for our seniors. MedPAC [Medicare Payment Advisory Commission] estimates Medicare hospital operating margins of negative 3.1 percent in 2005 and projects that those margins will fall to negative 5.4 percent in 2007, the lowest Medicare margins recorded. This trend is simply unsustainable.”

The federal Medicare budget proposal cuts critical funding for hospital inpatient and outpatient care, inpatient rehabilitation services, hospital-based skilled nursing units, and hospital-based home health agency services. The President’s plan also proposes to drastically reduce Medicare and Medicaid payments for medical education, which is essential for the continued viability of the health care system in the region, state and nation.

The proposed federal cuts are in addition to the $80 million in cuts to Medical Assistance (MA)/Medicaid payments for southeastern Pennsylvania hospitals proposed by the Governor. Currently, MA/Medicaid reimbursements to hospitals are substantially lower than the actual costs of care provided—approximately 82 percent of inpatient costs and 53 percent of outpatient costs.