The American Hospital Association (AHA) has issued a statement supporting healthcare reform, but noted that it was "deeply disappointed and concerned to see the Obama Administration propose cuts of more than $220 billion to hospitals, especially during these tough economic times."

The association said that hospitals are already facing as much as $41 billion in cuts due to the Medicare payment system changes recently proposed by the Administration. "Additional cuts of this magnitude could severely jeopardize hospitals' ability to care for their patients and communities," the association said. 

Although the AHA said that hospitals supported expanding healthcare coverage to all Americans, it noted that cutting the Medicare and Medicaid Disproportionate Share Hospital (DSH) programs, as the Administration is proposing, overlooks the "critical role" that the programs play in supporting services for the uninsured, as well as community services such as trauma and burn units, disaster readiness, neonatal care and emergency psychiatric services. 

"These programs also help to mitigate the financial shortfalls hospitals experience from government program underpayments and treating undocumented immigrants," the AHA wrote. "Even with DSH payments, federal health programs pay hospitals more than $32 billion below the cost of caring for patients on average...we urge lawmakers not to cut DSH programs before coverage expansions are universal and fully implemented as part of reform, and Medicare and Medicaid shortfalls are addressed."

Also, AHA said that the "productivity" adjustments proposed for hospitals, do "not make sense. Instead, our focus needs to be on ensuring that patients receive the right care at the right time in the right setting. In addition, the new proposals for long-term care and rehabilitation hospitals are problematic and could serve as a barrier to better coordination of care for patients."

"Reform must improve care for patients without crippling hospitals' ability to care for patients and communities," the association concluded.