>because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest That's simply not true. Medicare prices are explicitl

>because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest That's simply not true. Medicare prices are explicitly designed to cover costs, based off of collected data and input from the self-interested American Medical Association[1]. They almost carte blanche accept the AMA at their word, and I doubt the doctors at the AMA are shooting themselves in the foot (although they appear to be backstabbing under-represented GPs). What Medicare doesn't do is pay excessively, so poorly ran facilities may go red. One of the motivations behind incentivizing (and soon requiring) electronic health records is the ability it gives Medicare to objectively analyze this information, rather than taking the doctor's subjective assessment. What does inflate private insurance rates is unnecessary market saturation, where hospitals are expanding to capture patients from competitors and lowering per-hospital utilization in the process. Particularly an issue with non-profits, which have little other recourse to spend their profits on except higher salaries and facility expansion. The other main reason for higher insurance rates is bad debt, which is the percentage of care hospitals write-off because they don't expect to recoup the charges[2]. Since Medicare payments are supposedly break even, this is almost solely absorbed by private insurance. That's one of the reasons hospitals are for Obamacare, because there will be fewer uninsured and hence less write offs; yet, current reimbursement contracts account for that bad debt already, so they're going to get a lovely profit boost until the payors correct the imbalance. Anecdotely, revenue cycle departments (that collect payments) love Medicare, because it just pays. Private insurers dispute everything and threaten to pass the bill directly to patients, which the hospital knows will never get paid because the member expects their insurance to take care of it. [1] http://www.washingtonpost.com/business/economy/how-a-secretive-panel-uses-data-that-distorts-doctors-pay/2013/07/20/ee134e3a-eda8-11e2-9008-61e94a7ea20d_story.html http://www.washingtonpost.com/business/economy/how-a-secreti... [2] http://www.acainternational.org/products-health-care-collection-statistics-5434.aspx http://www.acainternational.org/products-health-care-collect...