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Here are 2 relevant scenarios. A homeless alcoholic withdraws and gets seizures, spending a week in the ICU. He is not on Medicaid, but qualifies. After paying
by jonathan-adly 3y ago
Here are 2 relevant scenarios.
A homeless alcoholic withdraws and gets seizures, spending a week in the ICU. He is not on Medicaid, but qualifies. After paying for all his care and applying for Medicaid on his behalf. The hospital might get 50 cents back for every dollar they spent. (They spent on doctors; nurses, medications; EMR bill, case management, etc.).
This guy will essentially come back 5-6 times per year. With negative margins every time because that’s how Medicaid is designed.
2nd scenario is a 70 year old with a knee replacement surgery and great insurance Medicare + supplemental. He spend a day and half in the hospital and the money that his insurance paid, would be ~130-150% cost of care.
Average everything out; and you end up with 3-6% margins.
Obviously, salaries are big part of the cost. So, perhaps the margins will be better if the CEO is paid less. But, overall its a low-margin business because the biggest payers are Medicaid and Medicare and they more or less pay whatever they want via legislative means.
- bumby 3y agoAre you saying medicare/medicaide are net-negative? Is so, what prevents hospitals from refusing to accept them? I suspect they don't because it's not financially solvent to do so, given the number of patients who use those services. That on it's face seems to bring into question the claim that they are net-negative (whether that's due to legislation or other means).
- arcbyte 3y agoHospitals are required by EMTALA[1] to treat all emergencu patients to the point of stabilization. So it only makes sense to charge whatever insurance is available because there is no turning them away. Im not sure if there are regulations applicable to hospitals that prevent them from refusing to accept medicaid patients for elective procedures. Certaibly there are lots of surgery centers that do refuse medicaid. Also lots of doctors dont take medicaid/medicare. Its within their right to do so. [1]: https://en.m.wikipedia.org/wiki/Emergency_Medical_Treatment_and_Active_Labor_Act https://en.m.wikipedia.org/wiki/Emergency_Medical_Treatment_...
- bumby 3y agoYou're right with regard to emergency treatment; so in the case of the withdrawal patient that holds. But hospitals are not required to accept any insurance, including medicare/aide (they are termed "non-participating"). So I don't think the premise holds in the knee-replacement scenario. So, to be generous, maybe there's a case that if a hospital gets a bulk of its revenue from the ER, it's a better business case to accept Medicare. But I don't believe that's the case for most hospitals, so it still leads me to question the premise that medicare is a net negative (or else we'd see a lot more 'non-participating' hospitals).
- gniv 3y agoAt least on paper they are net-negative. If you look at a Schedule H of IRS Form 990 they report huge shortfalls from Medicare/Medicaid. This I think helps them claim "community benefit expense". Example Form 990 (search inside for Schedule H): https://my.clevelandclinic.org/-/scassets/files/org/about/financial-statements/form-990-ccf.ashx?la=en https://my.clevelandclinic.org/-/scassets/files/org/about/fi... See also page 8 of this pdf: https://www.aha.org/system/files/media/file/2023/10/Results-from-2020-Tax-Exempt-Hospitals-Schedule-H-Community-Benefit-Reports.pdf https://www.aha.org/system/files/media/file/2023/10/Results-...
- bumby 3y agoThanks for sharing that. Do you happen to know how they calculate the "community benefit expense" that creates the shortfall? My understanding is that medical billing is inflated so they can anchor a high value to help in their negotiations with medical insurance. I'm wondering if this is the medicare adjusted value (i.e., what medicare says the procedures are worth) or the artificially inflated value?
- someguydave 3y agoSo you are suggesting that costs are primarily set by how much the government is willing to pay, and are completely independent of medical production?