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Hospitals Stand to Lose Billions Under ‘Medicare for All’

Greenbeard

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Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’
The yawning gap between payments to hospitals by Medicare and by private health insurers for the same medical services may prove the biggest obstacle for advocates of “Medicare for all,” a government-run system.

If Medicare for all abolished private insurance and reduced rates to Medicare levels — at least 40 percent lower, by one estimate — there would most likely be significant changes throughout the health care industry, which makes up 18 percent of the nation’s economy and is one of the nation’s largest employers.

Some hospitals, especially struggling rural centers, would close virtually overnight, according to policy experts. Others, they say, would try to offset the steep cuts by laying off hundreds of thousands of workers and abandoning lower-paying services like mental health.
Dr. Adam Gaffney, the president of Physicians for a National Health Program, warned advocates of a single-payer system like Medicare for all not to seize this opportunity to extract huge savings from hospitals. “The line here can’t be and shouldn’t be soak the hospitals,” he said. “You don’t need insurance companies for Medicare for all,” Dr. Gaffney added. “You need hospitals.”

The Stuart Altman quote is the crux of it:

Whether hospitals would be able to adapt to sharply lower payments is unclear.

“It would force health care systems to go on a very serious diet,” said Stuart Altman, a health policy professor at Brandeis University. “I have no idea what would happen. Nor does anyone else.”

This would be uncharted territory.
 
Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’



The Stuart Altman quote is the crux of it:



This would be uncharted territory.

Exactly. Medicare for all relies heavily on screwing providers. I have pre-existing conditions and have talked to many others in single payer countries. They wait excessively for appointments, wait excessively while at the appointment, see nurses instead of doctors, when having issues are told to go to the emergency room because there are no appointments for months, have to travel to metropolitan areas for providers because there aren't any in rural areas, and can't receive the latest expensive medicines. The only reason why they like their health care systems is because they are basically free so they have financial peace of mind. The cold hard fact is that millions in the US are better off with our current system of employer based health insurance than they would be if we went to medicare for all. What we need to concentrate on is the people who don't have employer based insurance, which is less than 20% of Americans.


None of this even takes into account the economic devastation from basically eliminating an entire industry.
 
This would be uncharted territory.

We can't simply keep accepting ballooning doctor, hospital, procedure, and drug costs.

This trajectory has to change or someday in our lifetimes, routine healthcare will only be available to the wealthy.
 
The prices of providers are overinflated to begin with. They have been feasting at a banquet for far too long, propped up by insurance companies who in turn charge high premiums. As we see in our western neighbors, cost of care is not that high. Most hospitals could benefit from price reform in management and administration.

When government controls payout, providers have to start cutting costs, and so they should.
 
Hate to see hospitals' obscene profits diminish.
 
Exactly. Medicare for all relies heavily on screwing providers.

If it purports to offer substantial savings beyond administrative simplification. Which the PNHP president quoted surprisingly (to me) seems to oppose. Single-payer that inherits the costs of the current system (again, except for some of the administrative overhead) wouldn't face the capacity constraints you're talking about. That's the likeliest scenario.
 
We can't simply keep accepting ballooning doctor, hospital, procedure, and drug costs.

That's not the alternative to saying we're going to suck double digit percentages out of every provider organization's budget.

The prices of providers are overinflated to begin with. They have been feasting at a banquet for far too long, propped up by insurance companies who in turn charge high premiums. As we see in our western neighbors, cost of care is not that high. Most hospitals could benefit from price reform in management and administration.

Cost of care isn't an absolute. Factors like local wage pressures play a substantial role in it.

When government controls payout, providers have to start cutting costs, and so they should.

That's certainly the theory, but again this is uncharted territory if we were to try this on the scale some have imagined. Cutting is very hard and we're past the point where we can hand wave past what that looks like in practice. Grappling with that is to treat this idea with the seriousness it deserves--which is actually a good sign for the maturity of the MFA concept, though I imagine it will make some defensive.
 
Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’



The Stuart Altman quote is the crux of it:



This would be uncharted territory.

Yes, when we become more cost-effective and can negotiate better prices, some people won't be rolling in profits like they did before at the expensive of everyone else who has trouble affording healthcare. Other developed nations pay 2 1/2 times less for healthcare and still have great healthcare. When a product can be provided or created at a lower cost, that is the definition of technological progress. If products never got cheaper, then we wouldn't get any richer. Technological progress requires that corporations get less money for the exact same product over time. They have to produce better and better products for the same price, and if that isn't happening, then progress has stagnated. So healthcare providers getting less in profits for the same services because healthcare is more cost-effective is a very good thing.

As for uncharted territory, every other 32 developed nations has successfully implemented universal healthcare systems that are far cheaper than the US and most are very good. This territory is at charted as it can get and all we have to do is copy.
 
As long as there are sick people there'll be hospitals. With medicare for all hospitals will have more patients, not just the insured.
 
Yes, when we become more cost-effective and can negotiate better prices, some people won't be rolling in profits like they did before at the expensive of everyone else who has trouble affording healthcare. Other developed nations pay 2 1/2 times less for healthcare and still have great healthcare. When a product can be provided or created at a lower cost, that is the definition of technological progress. If products never got cheaper, then we wouldn't get any richer. Technological progress requires that corporations get less money for the exact same product over time. They have to produce better and better products for the same price, and if that isn't happening, then progress has stagnated. So healthcare providers getting less in profits for the same services because healthcare is more cost-effective is a very good thing.

Yes, therein lies the challenge. Health care is a service industry, heavily dependent on labor (it's now the country's largest employment sector). That's why cutting it is politically fraught and that's why productivity gains are less than spectacular in that industry. If we could roll out an army of Watsons to do the heavy lifting, that would indeed change the game.

As for uncharted territory, every other 32 developed nations has successfully implemented universal healthcare systems that are far cheaper than the US and most are very good. This territory is at charted as it can get and all we have to do is copy.

None that I'm aware of it ever did so to intentionally lop off a few percent of their GDP and force downsizing in their largest industry. Most did it in the ruins of WWII and/or when health care constituted low single digits of their GDP. Doing it with the intention of arbitrarily cutting out dollars and jobs is different than putting it in place for structural reasons.
 
We can't simply keep accepting ballooning doctor, hospital, procedure, and drug costs.

This trajectory has to change or someday in our lifetimes, routine healthcare will only be available to the wealthy.

If the government started issuing gallon of milk coupons redeemable for $2.00 that does not mean that retail stores would drop their current "ballooned" milk prices and learn to accept (love?) the new "cost saving" single-payer offering.
 
Many hospitals are barely profitable.

Very true.

Hospitals tend to lose money on patient care. Those that get back into the black often do so by having side hustles (i.e., additional revenue sources).

A More Detailed Understanding Of Factors Associated With Hospital Profitability
Hospitals incurred small losses per adjusted discharge (a median loss of $82) from patient care services, with public hospitals and very small hospitals (those with fifty or fewer beds) having the lowest profitability. However, the median overall net income from all activities per adjusted discharge was a profit of $353, because many hospitals earned substantial profits from nonoperating activities—primarily from investments, charitable contributions (in the case of nonprofit hospitals), tuition (in the case of teaching hospitals), parking fees, and space rental. It appears that nonoperating activities allowed many hospitals that were unprofitable on the basis of operating activities to become profitable overall.
 
Yes, therein lies the challenge. Health care is a service industry, heavily dependent on labor (it's now the country's largest employment sector). That's why cutting it is politically fraught and that's why productivity gains are less than spectacular in that industry. If we could roll out an army of Watsons to do the heavy lifting, that would indeed change the game.

None that I'm aware of it ever did so to intentionally lop off a few percent of their GDP and force downsizing in their largest industry. Most did it in the ruins of WWII and/or when health care constituted low single digits of their GDP. Doing it with the intention of arbitrarily cutting out dollars and jobs is different than putting in place for structural reasons.

Other developed nations don't pay their doctors nearly as much, and still have more doctors than we do, but I don't think people are going to revolt because a few doctors got a pay cut. A lot of our healthcare costs go to corporate profits, administrative costs, executive salaries, R&D, red tape, actuaries, middlemen, technology, and facilities. Only a tiny fraction of healthcare costs goes to the direct cost of middle class healthcare labor (including nurses, CNAs, and family practice doctors, and excluding specialized doctors). Cutting healthcare costs will hurt some people, mostly wealthy people, and help tens of millions of middle class and lower class people better afford healthcare.

If we immediately reduce the cost of healthcare from 3.5 trillion today to 1.5 trillion like it is in other developed nations, that will cause an economic collapse because making things more efficiently shouldn't be done so suddenly. Thankfully for this concern, reforming healthcare to make it cost effective will likely take decades assuming it completely happens at all. Switching to Medicare for all will reduce the cost of healthcare, but our healthcare will still be very expensive and overpriced and we will need many other difficult smart reforms to really see healthcare at the same price as the rest of the world.

I'm not afraid of gradually removing unnecessary spending and jobs that could be done cheaper. That is what technological progress is all about and those cost savings will allow people to have more money to spend on other things and grow the economy there. This is why automation wiping out tens of millions of jobs in the past hasn't resulted in mass unemployment. Because the cost savings allowed people to spend their money on other things and these cost saving pushed up society's standard of living.
 
Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’



The Stuart Altman quote is the crux of it:



This would be uncharted territory.
People need to check out the VA Hospital system if they want a peek at what a single payer government ran hospital system looks like. I worked at the Dallas VA Hospital in ICU for ten years. At the ICU level the Nursing care was OK but the Medical care was largely done by Residents and was average to below average. Also the average American isn't going to want to wait for their care like vets have too. Vets don't like it either.
 
People are going to have to decide.
Money or health...Which is more important?
Every arguement about healthcare (not insurance) in the US is turned into an arguement of money.
 
Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’



The Stuart Altman quote is the crux of it:



This would be uncharted territory.

It's a balloned market. Time for a market adjustment.
 
People need to check out the VA Hospital system if they want a peek at what a single payer government ran hospital system looks like. I worked at the Dallas VA Hospital in ICU for ten years. At the ICU level the Nursing care was OK but the Medical care was largely done by Residents and was average to below average. Also the average American isn't going to want to wait for their care like vets have too. Vets don't like it either.

Pfft. I had surgery at my VA in Phoenix and those doctors were all well experienced. And I had no problem with any wait line until George Bush Jr started creating boatloads of vets with his wars and not keeping up with similar increases in spending on the VA at home.

Your anecdote is bull****.
 
The American Healthcare System is a devastating mess and will never be fixed unless it completely implodes and needs to be built back up from total collapse and there isn't 50% of voters that believe the healthcare system should punish and destroy you for having the audacity to be poor.
 
People need to check out the VA Hospital system if they want a peek at what a single payer government ran hospital system looks like.

And people need to stop comparing the VA system to MFA.
 
Pfft. I had surgery at my VA in Phoenix and those doctors were all well experienced. And I had no problem with any wait line until George Bush Jr started creating boatloads of vets with his wars and not keeping up with similar increases in spending on the VA at home.

Your anecdote is bull****.
I'm glad you had a good experience. That is not always the case. I was a nurse for 13 years before going to medical school. I worked 10 years of that time at the Dallas VA. I worked for 5 years in the VA Thoracic ICU and 5 years in the Cath Lab from 1978-88. [BEFORE Bush Jr. created butt loads of vets] The heart surgeries were all preformed by residents with supervision from Thoracic surgeons. The post operative care was almost all done by residents. I the CCU the residents did almost all the care with oversight by Cardiologist. I worked with these doctors/residents every day of the week. They were not all well experienced and some vets paid the price for that lack of experience. I can tell you vets experience SIGNIFICANT waiting times for surgery and even simple clinic visits. I could write pages of horror stories that I have seen. The nursing floors were grossly understaffed. Now if you know more about hospital than me fine.
 
Cost of care isn't an absolute. Factors like local wage pressures play a substantial role in it.

We know what plays the biggest role in cost inflation in health care, and it's not local wages.

The two biggest factors:
1) Profiteering.
2) Patients who can't pay their bills, which transfers the cost burden to services.

Both of which could be remedied with government health care and price controls.

That's certainly the theory, but again this is uncharted territory if we were to try this on the scale some have imagined. Cutting is very hard and we're past the point where we can hand wave past what that looks like in practice. Grappling with that is to treat this idea with the seriousness it deserves--which is actually a good sign for the maturity of the MFA concept, though I imagine it will make some defensive.

It's not that uncharted, considering that we have working data from the top 10 health care nations who are ahead of us in cost/benefit analysis of care in every area.
 
Looks like this time around we're getting to the level of seriousness where trade-offs and winners-and-losers will get explored. Which is good! But it underscore the risks that primary candidates run in hitching their wagons to a very speculative idea without fully exploring those trade-offs.

Hospitals Stand to Lose Billions Under ‘Medicare for All’



The Stuart Altman quote is the crux of it:



This would be uncharted territory.

Health care is a basic human right.

Period.
 
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