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Medicare spending cuts will imperil N.J. health care employment, industry warns

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Though health care has been one of the few industry sectors showing significant job growth amid disappointing employment data, a report released today by three national health associations said New Jersey stands to lose nearly 22,000 health care jobs by 2021 from a proposed 2 percent cut in federal Medicare spending enacted to balance the nation's budget.

"These cuts would have a significant impact on the well-being of our hospitals, their patients, their communities and the entire Garden State economy," said Betsy Ryan, president and CEO of the New Jersey Hospital Association, in a statement. "The health care community recognizes the importance of reducing the nation's deficit, but hospitals have already been forced to absorb billions (of dollars) in Medicare cuts."

In its report for the American Hospital Association, the American Medical Association and the American Nurses Association, the consulting firm Tripp Umbach said the projected Medicare payment cut for health care services will translate to direct job losses in the industry, health care entities' reduced purchases of goods and services from other businesses, and fewer household purchases by laid-off workers.

According to the NJHA, hospitals in the state employ approximately 140,000 people, making the health care sector second only to government as the largest employer in the state. However, in 2013 — the first year of the Medicare spending cut, as mandated by the federal Budget Control Act of 2011 — the state is set to shed 14,126 jobs from payrolls, which Ryan said "will affect many economic sectors beyond health care."

Nationally, the U.S. Bureau of Labor Statistics has reported the health care sector created 169,800 jobs in the first half of 2012, accounting for one of every five jobs created this year. However, the nation would lose more than 766,000 jobs by 2021 from the proposed cuts in Medicare payments.

"As the impact of these cuts ripples through the economy, jobs will be lost across many sectors beyond health care … (which) has long been an economic mainstay, providing stability and growth even during times of recession," Ryan said in a statement. "These additional cuts would go far too deep into a critical component of our safety net and our economy."

Under the Affordable Care Act, Medicare payments to hospitals nationwide already have been cut $155 billion over 10 years, and New Jersey hospitals have seen cuts totaling $4.5 billion in that period, Ryan said.

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