Local Columnists

Dave Helling: Federal budget cuts probably sealed the fate of Kansas hospital

Mercy Hospital in Independence, Kan., joined dozens of rural hospitals around the country that have not been able to withstand recent financial and demographic challenges.
Mercy Hospital in Independence, Kan., joined dozens of rural hospitals around the country that have not been able to withstand recent financial and demographic challenges. The New York Times

As soon as Mercy Hospital in Independence, Kan., announced its decision to close, the finger-pointing began.

No Medicaid expansion, Democrats said. Obamacare, Republicans replied.

As our story in Sunday’s Star showed, though, the actual reasons for the hospital’s closure are complicated. The hospital’s demise may have been the result of patients’ fondness for big-city health treatment, or competition, or some other reason.

But it’s likely that at least one federal decision played an important role in the closure. In 2011, in the middle of yet another can’t-reach-an-agreement crisis, Congress passed something called the Budget Control Act. You may know it as the sequester.

The sequester was supposed to be a threat. It was designed to coerce members of a “supercommittee” to reach agreement on a blueprint for reducing the nation’s horrendous budget deficit. If the committee couldn’t find a compromise, the sequester’s sharp, automatic spending cuts would lock into place.

Naturally, the supercommittee failed. That led to the automatic cuts, which included a cut in Medicare payments to health care providers, including hospitals such as the one in Independence.

So the sequester probably played at least some role in the closing of the facility, and dozens like it across the country. By one estimate, the sequester would have cost the hospital $1.3 million over 10 years.

Was the sequester a good idea?

Taken on its own terms — that is, reducing the federal budget deficit — it’s been a stunning success. The fiscal year 2015 deficit was $435 billion. Adjusted for inflation, it’s a smaller deficit than in three of Ronald Reagan’s eight years in office.

It’s also dramatically lower than the deficits Barack Obama rang up early in his presidency, including $1.4 trillion in 2010 and 2011, adjusted for inflation.

Republicans say spending discipline led to this year’s narrower deficit, while Democrats will say tax hikes on the rich and a recovering economy made the difference. It seems undeniable, though, that the sequester — which no one really wanted — played an important role in reducing the nation’s red ink.

Yet that success came at a price. Ask the sick people in Independence, who are losing their hospital.

Congress is about to launch into another bitter argument over spending, taxes, debt ceilings and deficits. A government shutdown seems likely. Another attempt to cut government spending is almost a certainty.

There should be no confusion over what that would mean. Reducing government spending can yield smaller deficits, but inefficient small-town hospitals may have to close. Other government services, from farm subsidies to public safety, will have to be reduced or eliminated.

It’s pretty simple, after all.

  Comments