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New NV Economic Study: Bush Medicare Cuts Undermine State and Local Economic, Jobs Base

State Projected to Lose $6.2 Million in Economic Activity, $3.1 Million in Lost Wage

WASHINGTON, June 12 /PRNewswire-USNewswire/ -- As Congress returned to Washington this week following its Memorial Day district work period, the Nevada Health Care Association (NHCA) released a new analysis finding the Bush Administration's proposed $770 million Medicare Part A national nursing home funding cuts will not only cost Nevada seniors $2.9 million in essential health benefits, but cause the state to lose $6.2 million in total economic activity and $3.1 million in lost wages.

According to the new study, prepared by the American Health Care Association (AHCA), the following schedule illustrates the full economic impact of the Administration's pending $2.9 million Medicare cut on Nevada, scheduled to go into effect this October 1, 2008:

Direct Indirect Induced Total

Business Activity

Impact ($) 2,874,502 670,703 2,695,398 6,240,603

Income Impacts ($) 1,831,757 225,902 1,069,231 3,126,890

Direct Effect represents the impact for the expenditures and/or production values specified as direct final demand changes.

Indirect Effect represents the impact caused by the iteration of industries purchasing from industries resulting from direct final demand changes.

Induced Effect represents the impacts on all local industries caused by the expenditures of new household income generated by the direct and indirect effects of final demand changes.

Total Impact is the sum of the direct, indirect and induced effects.

Labor Income is the sum of employee compensation and proprietary income.

Economic Impact Analysis: Impact Analysis for Planning (IMPLAN) software, Minnesota IMPLAN Group, Inc., 2006 data.

Copyright, American Health Care Association, 2008

"The Bush Administration's proposed Medicare cuts not only threaten Nevada seniors' access to quality care throughout our state, but will also negatively impact our state and local economy," stated Charles Perry, Executive Director of NHCA. "The Medicare cuts represent a 'lose-lose' proposition because Nevada seniors' care needs will be shortchanged and our state economy will be damaged at a time we already face significant challenges related to state Medicaid financing."

The Nevada long term care leader said the Medicare regulations being changed by the Bush Administration are currently helping facilities throughout the state successfully serve higher acuity patients -- at a lower cost than other settings. "Considering the fact existing Medicare policy is beneficial to both patients and the taxpayers who finance the program, it is especially curious this regulatory policy change is being pursued by the President's health care team," Perry stated. Current policy, he added, saved Medicare $709 million in 2006 alone nationally, according to an independent analysis by Avalere Health, LLC.

Perry praised U.S. Representative Shelley Berkley (D-NV) for leading a sign-on letter to Health and Human Services (HHS) Secretary Mike Leavitt urging him to stop the Centers for Medicare and Medicaid Services (CMS) from implementing the planned regulatory changes to the nation's Medicare program. "We thank Representative Berkley for leading the effort in Congress to stop these unwise, unwarranted cuts," Perry stated. "Their efforts in Washington to protect Nevada's most vulnerable constituents reflect the independent thinking Nevada needs, deserves and appreciates."

In the letter to Secretary Leavitt, the legislators state how the Bush Administration's Medicare funding reductions have caused them to be "deeply concerned that high-quality skilled nursing care for America's seniors will be threatened -- and reductions in spending of this magnitude would severely alter not only the quality of nursing home care, but also access to nursing home care for our nation's seniors."

Susan Feeney, Vice President of Public Affairs for AHCA, said rural communities in states like Nevada have higher than average numbers of elderly citizens, and noted that beyond serving the growing complex care needs of elderly seniors, rural facilities are a major local employer, and a significant part of the local economy. "Front line caregivers throughout Nevada, and across America, make a key difference in patient care -- and the Bush Administration's plan now set to go forward presents a clear and present danger to caregiver jobs, to vulnerable seniors' care needs, and to the health and well being of Nevada's economic and jobs base."

Darrin Cook, Regional Director of Operations at Fundamental Clinical Consulting, LLC, said, "The Bush Administration's single-minded effort to implement regulatory-driven Medicare cuts will undercut care in Nevada's rural communities -- which have special challenges -- and add to facilities' already onerous challenge of contending with rising wage rates and ever-higher energy prices. The Bush Medicare cuts will not only place the jobs of key front line caregivers in jeopardy -- the very direct care staff that make a difference in patient outcomes -- but further undermine facility quality improvement initiatives that are making a positive difference."

SOURCE American Health Care Association
Copyright©2008 PR Newswire.
All rights reserved

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