Excellent analysis that states the obvious - I've highlighted the crucial paragraphs.
Sanders wants taxpayers to save hospitals after he bankrupts them.
Usually politicians pass a bailout to clean up a mess they’ve created in the past, but Bernie Sanders is now promising cash up front. Witness the democratic socialist’s opening offer to the hospitals he’d bankrupt with his Medicare-for-All bill.
Mr. Sanders last month suggested a $20 billion federal bailout fund for struggling hospitals. He announced this plan in Philadelphia, where the city’s Hahnemann Hospital is in bankruptcy proceedings. He spins the failure of the hospital as a tale of corporate greed perpetrated by a private-equity firm.
Yet one under-appreciated reality is that nearly two-thirds of Hahnemann’s patients are on government insurance, either Medicare or Medicaid, a fact noted in passing in a letter to Health and Human Services from members of the Pennsylvania delegation in Congress. This detail is significant because Medicare and Medicaid are notorious for paying hospitals less than what it costs to provide services.
The best estimates are that Medicare and Medicaid pay hospitals on average about 87% to 90% of the actual cost of care, often lower in high-cost areas like New York City. Hospitals then shift costs onto private insurers, which tend to pay more than 140% of costs, according to data from the American Hospital Association.
Usually politicians pass a bailout to clean up a mess they’ve created in the past, but Bernie Sanders is now promising cash up front. Witness the democratic socialist’s opening offer to the hospitals he’d bankrupt with his Medicare-for-All bill.
Mr. Sanders last month suggested a $20 billion federal bailout fund for struggling hospitals. He announced this plan in Philadelphia, where the city’s Hahnemann Hospital is in bankruptcy proceedings. He spins the failure of the hospital as a tale of corporate greed perpetrated by a private-equity firm.
Yet one under-appreciated reality is that nearly two-thirds of Hahnemann’s patients are on government insurance, either Medicare or Medicaid, a fact noted in passing in a letter to Health and Human Services from members of the Pennsylvania delegation in Congress. This detail is significant because Medicare and Medicaid are notorious for paying hospitals less than what it costs to provide services.
The best estimates are that Medicare and Medicaid pay hospitals on average about 87% to 90% of the actual cost of care, often lower in high-cost areas like New York City. Hospitals then shift costs onto private insurers, which tend to pay more than 140% of costs, according to data from the American Hospital Association.
The Centers for Medicare and Medicaid Services reported earlier this year that “more than two-thirds of hospitals are losing money on Medicare inpatient services,” according to the latest data. Hospitals start sinking when they can’t attract enough privately insured customers to make up the difference.
All of which bears directly on Medicare for All endorsed by Mr. Sanders, Sen. Elizabeth Warren and others. The point of Medicare for All is to eliminate private insurance and reimburse hospitals for all services at Medicare rates. Mr. Sanders talks about efficiencies from less paperwork or administrative burdens, but the real savings of Medicare for All would come from paying doctors and hospitals less than their cost of treating patients.
The Journal of the American Medical Association this year published estimates of what Medicare rates would mean: $151 billion a year in lost revenue for community hospitals. “Hospitals currently operating at costs substantially above Medicare payment rates,” the authors note, “may have limited ability to reduce their costs quickly.”
Enter Bernie’s suggested bailout, which tries to solve the practical and political problem of bankrupting hospitals. Former Congressman John Delaney in the June Democratic debate scored a direct hit on BernieCare when he noted: “If you go to every hospital in this country, and you ask them one question, which is, ‘How would it have been for you last year if every one of your bills were paid at the Medicare rate?’ Every single hospital administrator said they would close.”
Bernie’s hospital bailout plan is a tacit admission that Mr. Delaney is right. It’s also one more reminder that Medicare for All isn’t about universal coverage so much as a federal takeover of American medical care
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