Medicare cuts to Tennessee will have a $13.3 billion economic impact

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NASHVILLE, Tenn. (WVLT) -- The Tennessee Hospital Association released a study projecting the extended impact of $5.6 billion in Medicare cuts to Tennessee hospitals already in place.

Coupled with other cuts being considered in Washington, these hospital reductions would have a $13.3 billion recessionary impact on Tennessee’s communities as the cuts are phased in over the next decade.

THA estimates the state could lose more than 90,000 jobs over the next decade, and that reduction would result in Tennessee unemployment returning to the level that it was at the peak of the recent recession in June 2009.

“Tennessee’s hospitals are entering a serious fiscal crisis, the likes of which we have never seen in our history,” said Craig A. Becker, THA president.

“Hospitals are very important to their communities in many ways that go beyond providing necessary services to patients. In most cases, they are one of the largest employers in their counties and a very large economic engine,” Becker said.

“For our state to absorb cuts of this size and scope, without using every possible means to offset the cuts, will create a ripple effect, the likes of which Tennessee communities have never seen before.”

The study was conducted using a model published by the Minnesota IMPLAN Group, Inc.. It breaks down the projected impact by county for all 78 counties in the state that have hospitals.

“Tennessee’s hospitals have two years of experience with the Affordable Care Act cut phase-in and our projections of the Medicare reductions to hospitals have been accurate,” Becker said. “As these and other cuts continue to be phased in, the ability of hospitals to offset the cuts will become imperative. The ripple effect will touch every Tennessean, particularly those in rural counties.”