You assume hospitals aren't lying about their financials. They are, they do, and they have been caught at it. The fact is, hospitals don't know what the actual cost of anything is. They bill whatever they can get away with, charging different prices to each of the dozens/hundreds of payers they bill, and have been doing so for so long that they don't know what actual cost is. Under our current mixed payer system, it doesn't even matter to them anymore, as long as they can maximize revenue by any means necessary.
The only solution is single payor, ie Improved Medicare for All. Isn't it funny how other nations that utilize single payer (or defacto single payer, wherein highly regulated non profit insurers administer the system but offer the same coverage for the same cost) manage to run their hospitals, provide better health outcomes and health equity, and save money....
Curious what you think about the body of research that says hospitals don't actually cost-shift. How do you respond to blanket claims by providers/systems that they need to keep commercial prices high to make up for the fact that they're underpaid by Medicare/Medicaid?
I think they don't know what they are talking about when it comes to cost. I think they look at aggregate costs and rely on cost-to-charge ratios which beg the question. Maybe they are underpaid, but they wouldn't know it.
Can you explain the bottom graph a little more? I’m not totally sure why the at risk hospitals have a higher net contribution margin for private payers?
You assume hospitals aren't lying about their financials. They are, they do, and they have been caught at it. The fact is, hospitals don't know what the actual cost of anything is. They bill whatever they can get away with, charging different prices to each of the dozens/hundreds of payers they bill, and have been doing so for so long that they don't know what actual cost is. Under our current mixed payer system, it doesn't even matter to them anymore, as long as they can maximize revenue by any means necessary.
The only solution is single payor, ie Improved Medicare for All. Isn't it funny how other nations that utilize single payer (or defacto single payer, wherein highly regulated non profit insurers administer the system but offer the same coverage for the same cost) manage to run their hospitals, provide better health outcomes and health equity, and save money....
Love this analysis. It is indeed all about the mix. Keep up the great work!
Curious what you think about the body of research that says hospitals don't actually cost-shift. How do you respond to blanket claims by providers/systems that they need to keep commercial prices high to make up for the fact that they're underpaid by Medicare/Medicaid?
I think they don't know what they are talking about when it comes to cost. I think they look at aggregate costs and rely on cost-to-charge ratios which beg the question. Maybe they are underpaid, but they wouldn't know it.
Can you explain the bottom graph a little more? I’m not totally sure why the at risk hospitals have a higher net contribution margin for private payers?
It's the Not at Risk hospitals that have higher margin from private insurance