AHA News reports that the Medicare Payment Advisory Commission (MedPAC) recently voted  to recommend that Congress cut hospital payments next year by more than $400 million.  

MedPAC's own data show Medicare payments to hospitals are inadequate, and that hospitals' overall Medicare margins stand at a negative 1.9%. Nevertheless, MedPAC recommended a fiscal year 2006 payment update of market basket minus 0.4 percentage points for hospital inpatient and outpatient services. The reduction would apply to all hospitals even though the Medicare Modernization Act authorized a full update for hospitals sharing data on 10 key quality indicators.

The AHA recomments that hospital leaders spend more time with legislators.  My recommendation is to do that and work hard to improve hospital efficiency. Improving patient flow would be a great place to start...