J.C. Watts: “I would like take the time to express to you my significant concern over the current debate which is occurring in…”

“I would like take the time to express to you my significant concern over the current debate which is occurring in Washington regarding increasing the minimum wage. The impact of a $1.00 per hour increase in the minimum wage on rural hospitals would be devastating. The impact on direct payroll alone could amount to hundreds of thousands of dollars. What is impossible to estimate is the impact that it will have on other hospital costs, for example, food costs, medical supplies, pharmaceuticals, and utilities. Where is it anticipated these funds will come from? At many rural hospitals, over 80% of the patients they treat are beneficiaries of either the Medicare or Medicaid program. Certainly, unless reimbursement levels are increased under these programs, there is no source for providing the funds that a minimum wage increase would require. The remaining 20% of patients that rural hospitals serve are largely charity patients, for whom there is no reimbursement, or private sector patients whose reimbursement is fixed under managed care agreements. The minimum wage issue is a glaring example of the concerns which are frequently expressed about unfunded mandates--Congress cannot continue to impose higher levels of cost on rural hospitals without increasing reimbursements under the Medicare and Medicaid programs by a like amount.”