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> Wouldn't a good compromise be treating medicare reimbursement rates as price maximums? Since CMS effectively sets the prices by being a monopsony of sorts, co

> Wouldn't a good compromise be treating medicare reimbursement rates as price maximums? Since CMS effectively sets the prices by being a monopsony of sorts, codify it into law. If we did that, most providers would literally shut down overnight. A couple of decades ago, there was a whole string of hospital closures because those hospitals saw mostly Medicare patients, and Medicare reimbursements aren't enough to sustain a practice (they're subsidized by private insurance reimbursement rates). To fix this, Congress forced Medicare to pay an additional stipend to providers who see too many Medicare patients. The reimbursement rates are the same, but they get an extra subsidy, because otherwise they'd go under. So no, you couldn't do this unless you drastically raised the reimbursement rates first.

andrewjl 9y ago
What if CMS works with providers to understand why exactly do their rates not work. Is it a matter of unit economics? That alone cannot explain the cost increases in healthcare costs. There was a story in New Yorker about a small startup that made a safer syringe, but it did not achieve widespread use to due to obstacles in the hospital procurement process. Makes me wonder if there are other analogous issues that also contribute to the cost increases.
- chimeracoder 9y ago
  > What if CMS works with providers to understand why exactly do their rates not work. Is it a matter of unit economics? That alone cannot explain the cost increases in healthcare costs. Medicare rates are too low because... they're too low. Assume that a vaccine is sold by manufacturers for $100/unit wholesale. Medicare decides that they will pay providers $93 for every Medicare patient who receives the vaccine from that provider. There's no way to make those numbers work - if you're losing money per unit, you're going to lose money overall.

andrewjl 9y ago

What if CMS works with providers to understand why exactly do their rates not work. Is it a matter of unit economics? That alone cannot explain the cost increases in healthcare costs. There was a story in New Yorker about a small startup that made a safer syringe, but it did not achieve widespread use to due to obstacles in the hospital procurement process. Makes me wonder if there are other analogous issues that also contribute to the cost increases.

chimeracoder 9y ago
> What if CMS works with providers to understand why exactly do their rates not work. Is it a matter of unit economics? That alone cannot explain the cost increases in healthcare costs. Medicare rates are too low because... they're too low. Assume that a vaccine is sold by manufacturers for $100/unit wholesale. Medicare decides that they will pay providers $93 for every Medicare patient who receives the vaccine from that provider. There's no way to make those numbers work - if you're losing money per unit, you're going to lose money overall.