On February 4, President Bush proposed his budget for Federal fiscal year 2009, which begins on Oct. 1, 2008. The President's budget contains the largest Medicare cuts to hospitals, nursing homes, and home health care providers in memory. He also proposed major reductions in Medicaid spending, over and above the cuts he would achieve through regulations proposed in 2007.

GNYHA/1199 SEIU advertisement protesting the President's proposed health care cuts.

Medicare Cuts: The President calls for $182.7 billion in Medicare cuts over five years—including payment freezes for hospitals, nursing homes, and home health providers, as well as the phased elimination of payments for Medicare bad debts. Particularly hard hit by the President's budget are teaching hospitals and Medicare disproportionate share (DSH) hospitals, which would see major cuts in the special payments designed to help teaching and DSH hospitals cover the extra costs they incur when caring for Medicare patients. In addition, hospitals would suffer from proposed Medicare capital cuts and reimbursement rate cuts for rehabilitation and dialysis services. In a briefing document provided by the U.S. Department of Health and Human Services, the Administration signaled that it would also seek $1.6 billion in Medicare savings over five years through the implementation of a new pay-for-performance or "value based purchasing" initiative, though no details were provided.

Medicaid Cuts: The president proposes $18.2 billion in cuts over the next five years beyond what he has already proposed, including 2007 regulations that would eliminate Federal funding for Medicaid graduate medical education costs in teaching hospitals and regulations that would restrict states' ability to draw down Federal matching funds to help public providers serve the poor and uninsured.

Response from GNYHA and the Health Care Community: GNYHA reacted strongly to the President's budget proposal and the devastating impact it would have on providers in New York, who stand to lose $1 billion in 2009 and $10 billion over five years, according to estimates by GNYHA and the Healthcare Association of New York State (HANYS). 
     
GNYHA President Kenneth E. Raske was quoted in The New York Times ("Bush Seeks Surplus via Medicare Cuts," Jan. 31, 2008), observing that the President's proposals showed "great insensitivity to teaching hospitals" and that they would "undermine our ability to train young doctors at a time when the nation is facing a shortage of doctors." He was also quoted in The New York Sun ("Bush Budget May Hit N.Y. Hospitals," Feb. 7, 2008), referring to the President's proposed cuts as "astronomical" and warning, "There is no way that New York hospitals can absorb those kinds of cuts without cutting into the flesh and bone of the operations." He added, "I can't remember seeing cuts of this magnitude that are so aimed at teaching hospitals and hospitals that serve the poor."
     
On February 13, the Healthcare Education Project—a joint effort of GNYHA and 1199 SEIU United Healthcare Workers East—placed an advertisement in The New York Times, The Washington Post, and other newspapers urging Congress and the public to join them in their battle against the president's cuts. 

Congressional Response: Congressional reaction was equally scathing. House Ways and Means Chairman Charles Rangel (D-NY), in a statement, said, "The drastic reductions President Bush proposed would threaten coverage for millions, force the closure of hospitals, and discourage other health care providers from serving seniors or elderly patients. With more than 46 million uninsured Americans, Congress and the Administration must work to expand, not limit, American families' access to reliable, affordable health care and this budget would only exacerbate this growing problem." 
     
Senator Charles Schumer also decried the cuts in a press release in which he highlighted the impact on hospitals across the State.

Bipartisan Opposition: In cooperation with the American Hospital Association, GNYHA and HANYS are working to secure signatures on two bipartisan letters—one spearheaded by Congressmen Richard Neal (D-MA) and Phil English (R-PA) to the leaders of the House Budget Committee, and one by Senators Blanche Lincoln (D-AR) and Pat Roberts (R-KS) to the leaders of the Senate Budget Committee—urging the committees to reject the president's Medicare and Medicaid cuts in the budget resolution, on which they will begin work in the coming weeks.    

GNYHA and HANYS also jointly briefed members and staff of the New York Congressional Delegation in Washington on February 15.