Pethokoukis, Economics, Taxes and Spending

Here’s how the private sector deals with sequestration

David Blom is the CEO of OhioHealth, a Columbus, Ohio, based not-for-profit health care system that includes 18 hospitals. Because the 2% sequestration cuts to Medicare providers, OhioHealth will lose $12 million in revenue this year from Uncle Sam. In an interview with Kaiser Health News, Blom tells how he’s planning to deal with the cuts:

Inside the organization, we’ve not really made a big deal of this because we actually budgeted for it. Last year when we did our budget, one of the assumptions was for sequestration to occur. … We’re very cost-efficient as an organization. It was just one other element as we were preparing for this fiscal year.  … We do a five-year financial forecast every year, and we take very conservative assumptions on that forecast. So we’ve been thinking about Medicare cuts, Medicaid cuts, employers being a lot more cognizant of their own health care spending as we do our own planning. … Can we live with it? Yes. I think we’re able to live with it because we’ve anticipated it for some time.

That’s right, the private sector adapts and overcomes, the public sector tries to kvetch away fiscal reality. Blom goes on to outline all the ways OhioHealth has become more efficient in recent years. What he did not do is claim sequestration will be a disaster causing bodies to pile up in the hallways or some other nightmarish prediction.

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