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Sanford, Avera Prepare For Sequester Cuts

March 1, 2013, 4:55 PM by Perry Groten

Sanford, Avera Prepare For Sequester Cuts

South Dakota hospitals stand to lose millions of dollars as a result of the across-the-board cutbacks that begin Friday with the federal sequester.

The sequester means hospitals will receive two percent less in Medicare reimbursements.  But both Sanford and Avera Health say those cutbacks won't affect patient care.

The sequester budget axe comes down hard, like a surgical strike, on hospitals in Sioux Falls.

"In dollars and cents, it means about $10 million, so it is a pretty significant hit," Sanford Vice-President of Health Policy Cindy Morrison said.

But it's a hit hospitals say they can absorb without their patients feeling the blow.

"The most important thing is that the core of what we do is take care of patients, so we will do everything we can to make sure nothing affects patients," Morrison said.

"We'll continue to have our doors open and lights on and continue to provide top-notch service," Avera Vice-President of Medical Affairs Dr. Mike Elliot said.

But hospitals are concerned patients will now be less willing to see their doctor.

"If they realize that as part of the cuts from a sequestration it puts a financial hardship on themselves, are they a little more reluctant to pay the co-pay?" Elliot said.

Both Sanford and Avera say dealing with the Medicare cutbacks won't be a shock to their systems since cutting budgets has been standard procedure already for years at the nation's hospitals.

"When we have a tight bottom line, every little bit matters, but it's manageable," Elliot said.

Hospitals say they can offset the loss in sequester-related Medicare payments by improving efficiencies that won't come at their patients' expense.

While the Medicare cuts take effect Friday, hospitals say they won't begin to see the effect for about another month.

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