[chimeracoder]

> US federal + state + local governments spend an obscene amount of money on healthcare. Including extra funding to keep many rural healthcare facilities open etc.

"Extra funding to keep rural healthcare facilities open" is exactly what I'm referring to.

Medicare rates are below what would be needed to sustain practices if they operated solely off of Medicare reimbursement rates. Medicare reimburses about 7% less than the costs of supplies, which means they're already losing money even before they have to pay things like staff wages, building maintenance, etc. The way they stay in business is by charging privately-insured patients much more, in order to cover the difference.

Some providers don't see a lot of privately-insured patients, and for those, Medicare provides two different payment programs (separate from normal reimbursements) in order to keep them in business. Otherwise, they would end up closing shop[0], because there's no way that they could sustain themselves off of Medicare reimbursement rates alone. For various reasons, this is more common in rural areas than it is in urban areas, though the program you're referring to does apply to some non-rural hospitals too.

So yes, when you say "Medicare pays extra funding to keep rural healthcare facilities open", you're actually referring to the exact reason that private insurers would love a transparent pricing system. It's not like Medicare pays this money to any rural facilities - they are forced to pay extra money to facilities that don't see enough privately-insured patients to cover the losses that they're making on Medicare patients. Private insurers (and providers) would love to have a transparent pricing system, because that would mean they wouldn't have to bend over backwards just to break even on their Medicare patients.

This isn't hypothetical; Medicare paying extra to these hospitals is a relatively new practice, and it was passed by Congress after a large number of hospitals were forced to close because they went bankrupt treating mostly or exclusively Medicare patients.

[0] Or just stop seeing Medicare patients, which is what many have done.

[smhenderson]

As mentioned above, citation needed. You're bandying around a lot of statements without any links or stats to back it up. Having watched the health care debate pretty closely in recent years I can honestly say I haven't seen this theory on Medicare being the primary problem. Where are you getting your facts from?

edit: corrected typo

[chimeracoder]

> As mentioned above, citation needed. You're bandying around a lot of statements without any links or stats to back it up.

Citation for what? I'm explaining the context of the subsidies that the parent commenter mentioned (themselves without citation). Of the 49 comments on this thread at the moment, there's only one other that includes any links at all, neither of which I'd really qualify as citations of factual information.

This is part of a broader pattern I see on Hacker News when the topic of health care comes up, where comments that present anecdotal information or reasoning that fits into the narrative of the article are accepted without evidence, but those which provide mitigating contextual information are held to standards which are comically high for an Internet comment.

Even in this case, we're talking about the correction I provided to information that OP mentioned without citation. The information about the critical access program is easily verifiable on Google (or even Wikipedia), so I'd hope that OP would feel comfortable verifying it (and providing a citation) before commenting with the misinformation.

[creaghpatr]

The government literally has an entire class of hospital that receives extra taxpayers subsidies because they have a high proportion of Medicare patients.

They are called Disproportionate Share Hospitals. If every hospital has a disproportionate share of Medicare patients (say 100%) then DSH payments go away and hospitals go under.

More info: https://www.cms.gov/Outreach-and-Education/Medicare-Learning...

Both private payers and taxpayer dollars are required to keep Medicare/Medicaid afloat, as those programs have 40M and 70M people respectively covered. Soon there won't be enough leftover people to fund these programs.

[Retric]

Having a high percentage of Medicare Patients is not enough to qualify on it's own.

"Applies to hospitals that serve a signi cantly disproportionate number of low-income patients; and ™ Is based on the disproportionate patient percentage (DPP)."

Medicare pays enough to cover care and operating overhead. It's not enough to cover significant writeoffs for non Medicare patients.

[chimeracoder]

> Medicare pays enough to cover care and operating overhead. It's not enough to cover significant writeoffs for non Medicare patients.

Medicare does not even pay enough to cover costs of care, let alone operating overhead: http://classic.ncmedicaljournal.com/wp-content/uploads/NCMJ/...

> For the first 18 years of Medicare's existence, the program paid hospitals for the "cost" of the care provided. However, since 1983, the payments have been slowly declining in relationship to the actual cost of providing care, and now hospitals are receiving less in payments than the actual cost of the care. How do hospitals recover this shortfall? Simple: they pass it on to other payers.

[Retric]

There is a fair amount of Hollywood according going on with what overhead is included in those costs. Medical groups for example often have profitable out patient facilities in the same area as s failing hospital.

Many hospitals do operate just fine with high numbers of Medicare patients and few private medical facilities reject Medicare patients. Remember, when a 3rd party agrees to cover costs the incentive to lower costs gets messed up.

However, many hospitals also have issues which is why there are supplemental payments.

[Retric]

The problem with rural healthcare is rural people can't afford it. https://www.hrsa.gov/rural-health/index.html

Midicare is often providing a disproportionate amount of funding relative to the amount of care being provided. In other words Medicare may be 70% of the fund but < 70% of the costs. But, that's frequently not enough to keep the doors open so the government added some back doors to hand out funding without strings attached.

[chimeracoder]

> Midicare is often providing a disproportionate amount of funding relative to the amount of care being provided. In other words Medicare may be 70% of the fund but < 70% of the costs.

Except that's not the case. Medicare's standard reimbursements are significantly less than COGS, and that doesn't even account for overhead.

This is pretty obvious to demonstrate, because other payers are generally required by law to set their reimbursement rates above what Medicare offers for their services. So there's mathematically no way that Medicare could be providing a disproportionate share of fee-for-service reimbursements.

And I'm not sure what point you're trying to make with the link you provided. FORHP is distinct from the critical access stipends that Medicare provides, which is what's relevant here (even though critical access hospitals may also receive funding through FORHP programs).

> But, that's frequently not enough to keep the doors open so the government added some back doors to hand out funding without strings attached.

There are plenty of strings attached. One of those strings is that the hospital's payer mix must exceed a certain threshold of Medicare patients. Again, that's not accidental - the whole point is that hospitals who don't exceed this threshold of Medicare patients will use their privately-insured patients to subsidize the costs of care for Medicare patients.

[Retric]

> So there's mathematically no way that Medicare could be providing a disproportionate share of fee-for-service reimbursements.

Many people receive services then pay 0$.

And really that's the core problem. A hospital can send a clam to collections but collections agency's pay penny's on the dollar. And if someone dies in debt there is nobody to collect anything from by law unless someone is dumb enough to voluntarily takes on that debt.

See here: https://en.wikipedia.org/wiki/Health_insurance_coverage_in_t...

[chimeracoder]

> Many people receive services then pay 0$.

That's actually not really true - at least not the "many" part of it. For most hospitals (including critical access hospitals), the default rate on medical bills is nonzero, but nowhere near the amount of money they lose on Medicare patients. The difference is a few orders of magnitude.