Yes, I learned this from a talk at the University of Chicago Hospitals -- Medicare/Medicaid almost always paid less than a dollar for every dollar in costs tha

Yes, I learned this from a talk at the University of Chicago Hospitals -- Medicare/Medicaid almost always paid less than a dollar for every dollar in costs that they incurred (I think the quoted average number was closer to 50 cents on the dollar but I could be wrong). The only way they made up for these costs was from patients with certain types of private health insurance (not all types because some like Blue Cross had essentially negotiated rates very very close to cost). Without these patients, the hospital would not have been able to afford the Medicare and Medicaid patients.