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> Some providers are more efficient then others so a statement that medicare reimburses below cost is not accurate. Maybe some procedures reimburse below cost b
by chimeracoder 9y ago
> Some providers are more efficient then others so a statement that medicare reimburses below cost is not accurate. Maybe some procedures reimburse below cost but not all do.
I never said all do - I said that in aggregate, Medicare reimbursements are 7% less than COGS. "Efficiency" doesn't really enter the
picture, because COGS isn't driven by efficiency (ie, overhead); it's driven by upstream costs.
> So logically it is better to employ more residents if you have sufficient patient load since it would reduce COGs.
Nope, none of the stuff you mentioned falls under COGS.
> One could argue that medicaid and medicare patients are sicker and there are more of them than most so they provide a larger revenue stream than private insurance covered patients (and they also require more procedures)
This is the classic "we'll lose money per customer, but make it up in volume" argument.
- sjg007 9y ago>Nope, none of the stuff you mentioned falls under COGS. Ok, then please define what you mean by COGs. >This is the classic "we'll lose money per customer, but make it up in volume" argument. You misunderstand the argument. Since I wasn't clear, these two articles highlight the main points: https://www.kff.org/report-section/a-primer-on-medicare-how-does-medicare-pay-providers-in-traditional-medicare/ https://www.kff.org/report-section/a-primer-on-medicare-how-... https://www.washingtonpost.com/business/economy/medicare-pricing-drives-high-health-care-costs/2013/12/31/24befa46-7248-11e3-8b3f-b1666705ca3b_story.html?utm_term=.dff15cfbd3a7 https://www.washingtonpost.com/business/economy/medicare-pri... Also with respect to these and the efficiency argument, please see: https://theincidentaleconomist.com/wordpress/hospitals-medicare-margins/ https://theincidentaleconomist.com/wordpress/hospitals-medic...