The Medicare Payment Advisory Commission (MedPAC) tracks Medicare reimbursements to hospitals and the news is not good. For 2015, the Medicare margin dropped to -7.1 percent. This reflects a steady drop from +5.5 percent in 2001. MedPAC projects the margin to be -10 percent this year. (here)
Hospital CEOs list a number of reasons for the decrease: expenses for electronic health records, a two percent cut in Medicare payments because of the Budget Control Act of 2011, a decrease in payments for hospitals with a higher Medicare population, and a move to alternative payment methods.
Hospitals with a higher mix of employer-paid patients are still doing well. Unfortunately, those facilities in communities with a higher senior population or with limited employers have been hit the hardest with the negative margins.
For 2015, total government underpayments to hospitals were $57.8 billion including $41.6 billion for Medicare and $16.2 for Medicaid. Still to take complete effect are the billions of dollars in cuts to Medicare to fund Obamacare. (here)
These terrible numbers should be a warning to those people who advocate for a single-payer, or “Medicare for All,” health care system in the U.S. It is now clear that central-planning and price controls in general, and specifically pertaining to health care, don’t work.
