The reason I am posting this is because there is nothing to explain the broad brushed strokes of these company execs who claim that Obamacare will cost jobs. Perhaps they can cut a few executive salaries rather than grow on the backs of their minimum wage employees with low end or no healthcare currently provided. I would like to see some details from the consulting firms, but I am sure none will be forthcoming. This is why we needed a public healthcare system aka Canada and Australia. If this will be the dismal failure that they predict and will cost them money to create jobs, then who will benefit? I know a lot about the healthcare consultants and the kickbacks that are made to corporate bottom lines. They actually making more money by using these consultants. How do I know? I used to work for one. The second story is something that will affect all Americans. Queenbee
Now on to the story:
Puzder: Job Creation Is Price for New U.S. Health Law
Pudzer: I am not an expert on health-care policy, but I do know something about job creation. So when a House Oversight and Government Reform subcommittee asked me to testify about the effect on employers of the Patient Protection and Affordable Care Act, sometimes known as Obamacare, I thought I could offer some insights. As I told the committee in a July 28 hearing, it is critical that Congress does a good job of balancing the benefits of new legislation against the costs of that legislation. That process begins with recognizing that laws like Obamacare come at a price.
Our company,
CKE Restaurants Inc., employs about 21,000 people (our franchisees employ 49,000 more) in Carl’s Jr. and Hardee’s restaurants. For months, we have been working with Mercer Health & Benefits LLC, our health-care consultant, to identify Obamacare’s potential financial impact on CKE. Mercer estimated that when the law is fully implemented our health-care costs will increase about $18 million a year. That would put our total health-care costs at $29.8 million, a 150 percent increase from the roughly $12 million we spent last year.
The money to cover our increased expenses will have to come from somewhere. We are a profitable company and, after paying our obligations, we reinvest our earnings in the business. Reinvesting in the business is how we grow, create jobs and opportunity. This is true for most U.S. businesses.
Cutting Spending
To offset higher health-care expenses, we will have to cut spending on new restaurant
construction, one of our largest discretionary spending areas. But building new restaurants is how we create jobs. An $18 million increase in our costs would more than consume the $8.8 million we spent on new restaurant construction last year, leaving nothing for growth. We will also need to reduce our general
capital spending, which also creates jobs and allows us to improve our infrastructure and maintain our business. In summary, our ability to create new jobs could vanish.
To reduce the financial impact of Obamacare, many businesses, including ours, will have to consider increasing the number of
part-time employees (those who work less than 30 hours a week as defined under the health-care law) and reducing the number of full-time employees. So, some individuals seeking full-time work will need to find two jobs.
Automation will also become more appealing. For example, although we value the personal touch, electronic ordering kiosks will become more economically desirable. Nationwide, 63 percent of our employees are minorities and 62 percent are
female. Unfortunately, these cuts will affect them the most.
The complexity of this legislation makes it hard to anticipate costs in the future. Our investments pay off -- when they are successful -- over the long term. Because we don’t know what our health-care expenses will be in two or three years, we are unable to determine with any certainty how much our investments will have to return for us to be profitable. All of that counsels in favor of holding off on new investments and saving our funds. We want to grow. But we are unable to do so knowing that large and undetermined liabilities will absorb funds we otherwise would invest for expansion.
My testimony was followed by that of Grady Payne, chief executive officer of Connor Industries Inc., a supplier of cut lumber and assembled wood products for shipping and crating needs. Based in
Fort Worth,
Texas, it has plants and employees in eight states and employs 450 people. He laid out the options open to his company under the health-care law, each of which would cost $1 million or more. According to Payne, that amount is “more than the company makes.” He
concluded that his company’s goals have turned “from ‘hire-and-grow’ to ‘cut-and- survive.’”
Tipping Point: Nursing home industry faces financial crisis
Dec 16 2011 By Molly Newman
Rising health care costs and declining Medicaid reimbursements have been major drains on the balance sheets of American skilled nursing homes for some time.
Now, tack on an 11.1-percent cut to federal Medicare reimbursements, which went into effect on Oct. 1, and the nursing home industry is nearing a tipping point.
The financial crisis is forcing Wisconsin’s nursing homes to reevaluate their business models, and the problems could force some of them to go out of business.
The crisis is being driven by a series of societal factors:
The population of aging baby boomers who need care continues to surge, but cuts in Medicaid and Medicare reimbursements result in lower revenues for health care providers, including nursing homes.
The elderly are living longer, but requiring more care, and the costs for that care continue to skyrocket.
The collapse of the housing market has diminished the ability of many seniors to use their homes to finance their elderly care.
Many seniors are outliving their financial resources to pay for their elderly care.
A survey by the Alliance for Quality Nursing Home Care shows the recent Medicare reimbursement reduction will result in at least 20,000 potential job layoffs and prevent the creation of another 20,000 new jobs in skilled care nursing facilities nationwide.
“It is a financial crisis for the industry — there is no question about it,” said Scott McFadden, chief executive officer of The Lutheran Home and Harwood Place in Wauwatosa.
More than half of The Lutheran Home’s 120 permanent residents are on Medicaid, and the business has been losing significant revenue on caring for those patients for years, he said.
“We’re not alone in that — most of our peers are going through the same thing,” McFadden said.
Nursing homes in Wisconsin experienced the sixth-largest gap in the nation between the cost of care and reimbursements for Medicaid patients in 2010, according to Eljay LLC, an accounting and long-term care consulting firm. The average per-day difference was $26.54 — a cost that falls on the nursing home.
“When you get into $30 per day deficits, it’s getting to be unmanageable,” said Rob Schlicht, director of health care consulting at Wauwatosa-based Wipfli LLP.
In the past, nursing homes could depend on a slight increase in Medicare reimbursement each year, which went toward filling the Medicaid gap, Schlicht said. That’s no longer the case.
“The declining revenues are hurting nursing homes in Wisconsin,” Schlict said. “The cost of doing business outpaces the reimbursement that they get from the government.”
Each state has its own formula to determine reimbursements for skilled nursing services, said Bill Mulligan, managing director of corporate finance at Ziegler Capital Management in Milwaukee. He has worked in the industry for 25 years and currently provides fixed rate financing to skilled nursing facilities.
“Medicaid reimbursement has not kept up with inflation, so Medicare utilization has been increasingly important,” he said. “Kind of the saving grace for the nursing homes is Medicare utilization has gone up significantly.”
The recent cut was a drastic change, so it drew sharp criticism, Mulligan said.
Since skilled nursing facilities lose the most on Medicaid patients, some are trying to attract more private pay patients through assisted and independent living communities, said Romy McCarthy, director at Ziegler.
Other nursing homes have reduced bed numbers, merged, sold the business or closed their doors as a result of consistent Medicaid shortfalls, she said.
“A lot of organizations are revisiting, ‘Is it viable for me to be in this line of work?” McCarthy said. “If they can’t even break even, how will they survive going forward?”
Severe shortfalls
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