Hospitals Charge Private Insurers Twice or More Than Medicare
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What else is new? And when I paid 75 to ship a box from Florida to New England and Amazon pays $15..
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Medicare rates barely cover cost of services provided so hospitals have long looked for other ways to make up that lost revenue.
Of course private insurance pays 3-4 X more than Medicare. If hospitals and physicians were paid straight medicare rates, most of the hospitals and practices in the US would go broke.
This is well known by physicians and hospital administrators, but apparently is not well know by the public, who thinks that "medicare for all" would be great.
As a physician, I would actually support a single payer plan of some form. However, the reimbursement would have to be so that hospitals and practices did not go bankrupt and there would be a re-evaluation of medicare rates that pay 6-8X in states that have the highest costs and lowest quality as ranked by the CMS.
Of course private insurance pays 3-4 X more than Medicare. If hospitals and physicians were paid straight medicare rates, most of the hospitals and practices in the US would go broke.
This is well known by physicians and hospital administrators, but apparently is not well know by the public, who thinks that "medicare for all" would be great.
As a physician, I would actually support a single payer plan of some form. However, the reimbursement would have to be so that hospitals and practices did not go bankrupt and there would be a re-evaluation of medicare rates that pay 6-8X in states that have the highest costs and lowest quality as ranked by the CMS.
First, on average Medicare does not pay 3-4 times less. Second, a lot of the current overhead that pèroviders are complaining about will be eliminated. Third, yes if done properly, the HC costs would decrease as a fraction of GDP. And that's the goal since the current situation is not sustainable.
First, on average Medicare does not pay 3-4 times less. Second, a lot of the current overhead that pèroviders are complaining about will be eliminated. Third, yes if done properly, the HC costs would decrease as a fraction of GDP. And that's the goal since the current situation is not sustainable.
Reimbursements are very variable, between institutions, regions and diagnoses. In the end hospitals actually collect 20-30% on all billings. Medicare typically pays less than the privates, but that doesn't always hold true with Obamacare plans and why many docs don't take them. When Medicare rates drop, the privates soon follow close behind. Medicare knows what it costs to deliver the medicine, and they typically squeeze on profits. Except maybe with hospital outpatient fees. There remains a large reservoir most likely next to be drained.
In my own experience, my local hospital billed $1B last year and collected $250M.
In my wife's unfortunate experiences the last 2+ years, her medical/surgical billings have been about $4M, and her Obamacare policy so far has paid out about $1.2M.
This is a big concern if we do go to a Medicare for all system. Medicare reimbursement rates are too low, so private insurance helps make up the difference to keep the hospitals solvent. Remember hospitals ER are mandated to provide care to stabilize a patient regardless of their ability to pay.
So without private insurance to make up the difference, what happens to to hospitals? Medicare won't want to increase reimbursement rates as the cost of Medicare for all will be prohibitive as it is. Conservative estimates are at least 10 percent of salary equivalent in tax increase.
Lots of things to be thought out and worked on before such a seismic change in the health care system.
And why IMO it makes much more sense and simplicity to incrementally lower the Medicare age to 50-55. This also takes huge risks off the private plans and would naturally lower their premiums.
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