Julian Kesner, Colorado Hospital Association
(720) 330-6019

Study: Medicare Cuts Could Lead to More Than 10,000 Jobs Lost in Colorado

Date Sep. 12, 2012
 WASHINGTON (Sept. 12, 2012) — A new report found up to 10,305 jobs could be lost in Colorado by 2021 as a result of the two-percent sequester of Medicare spending mandated by the Budget Control Act of 2011. More than 6,600 of these job losses are expected to occur in 2013 alone, the analysis found, with the vast majority of job losses occurring in the health care sector. Nationally, more than 766,000 jobs would be lost, according to the report released today by the American Hospital Association, the American Medical Association and the American Nurses Association at a press conference in Washington. 

“These findings confirm the devastating impact sequestration will have on the Colorado economy unless federal lawmakers take action,” said Steven Summer, Colorado Hospital Association (CHA) president and CEO. “The failure last year to find a bipartisan path forward on deficit reduction now stands to unfairly penalize one of the few employment sectors to provide economic stability over the past few years, and in turn threatens to reduce access to health care for all Coloradans. We call on the Colorado congressional delegation to take legislative steps to avert what would amount to a significant socioeconomic setback for our state.” 

CHA estimates that sequestration will reduce Medicare payments to Colorado hospitals by $337 million over the next decade (this does not include projected Medicare payment cuts related to the Patient Protection and Affordable Care Act of 2010, nor those related to Medicare coding adjustments). The report by Tripp Umbach, a firm specializing in economic impact studies, measures the anticipated effect of these cuts in Medicare payments on health care providers and other industries. The Tripp Umbach model reflects how reductions in Medicare payments for health care services will lead to direct job losses in the health care sector, reduced purchases by health care entities of goods and services from other businesses—which in turn will result in worker layoffs—and reduced household purchases by workers who lose their jobs. As the impact of these cuts ripples through both the Colorado and U.S. economy, jobs will be lost across many sectors beyond health care. 

The health care sector has long been an economic mainstay in Colorado and nationwide, providing stability and growth even during times of recession. Bureau of Labor Statistics data show that health care created 169,800 U.S. jobs in the first half of 2012—one of every five new jobs created this year. A 2011 study by Colorado State University found that Colorado hospitals contribute nearly $19 billion to the Colorado economy annually (including calculations for compensation, facilities, spin-off jobs and other parameters), representing 4.2 percent of the state’s entire economic output. Colorado hospitals directly employ approximately 72,000 workers, and also create another 61,000 jobs through spending by hospitals and their employees. 

Tripp Umbach designed a customized model based on the national economic impact models developed by MIG IMPLAN, as well as previous impact studies. The Tripp Umbach report and other resources are available online at the American Hospital Association website

About the Colorado Hospital Association
The Colorado Hospital Association (CHA) represents 100 member hospitals and health systems throughout Colorado. CHA partners with its members to work towards health reform and performance improvement, and provides advocacy and representation at the state and federal level. Colorado hospitals and health systems are committed to providing coverage and access to safe, high-quality and affordable health care. In addition, Colorado hospitals have a tremendous impact on the state’s economic stability and growth, contributing to nearly every community across the state with 72,000 employees statewide.