[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.

[chimeracoder]

> Many hospitals do operate just fine with high numbers of Medicare patients

Excluding those which receive extra stipends for qualifying as DSHs or CAHs, no, most hospitals aren't operating "just fine" if they have a high number of Medicare patients. Unless you call overcharging private insurers and uninsured patients just to stay afloat "doing just fine".

> 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.

There's no "Hollywood accounting". This is straightforward, textbook GAAP accounting that we're talking about. Medicare reimburses less than COGS. That's a well-documented fact - so well-documented, in fact, that you yourself linked to it with that article.

If Medicare reimburses less than COGS, there's no way for hospitals to subsist on Medicare reimbursement rates alone. You can try to tease the numbers any way you want, but that's exactly why GAAP exists - it gives a common framework for comparing these cases, and here the numbers are as clear as you can get.

[Retric]

That was from 2005 and there has been a world of changes in how things are paid for recently.

"Most notably, the share of total spending on hospital inpatient services declined by one-third between 2006 and 2016, from 32 percent to 21 percent, while payments to Medicare Advantage (private health plans which cover all Part A and Part B benefits) doubled, from 15 percent to 30 percent, as private plan enrollment has grown steadily since 2006." https://www.kff.org/medicare/issue-brief/the-facts-on-medica...

Anyway, I still disagree with how many of these things are calculated. You need to look at the indirect cost part of COGs critically and in context of other related government spending.

Again, the problem with GAAP it assumes all spending is prudent which is far from the truth.

[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.

[Retric]

The rate you're talking about is extremely deceptive. People may pay a 500$ bill over time, but not a 50,000$ one.

"hospitals uncompensated care costs -- medical care for which no payment is received -- jumped nearly five percent to $41.1 billion in 2011" And that's just for 0$, they also get paid >0$ but less than full costs which is a separate number.

https://www.forbes.com/sites/brucejapsen/2013/01/07/unpaid-h...

Numbers for the same time period:

https://www.beckershospitalreview.com/finance/12-statistics-...

• Total net revenue: $821.3 billion • Total expenses: $756.9 billion • Cumulative profit: $64.4 billion

Critically, it's only hospitals in prosperous areas that are doing well and those see a much lower percentage of unpaid bills. Medicare is basically break-even, but hospitals need a lot of profit to offset these write-offs.

PS: Having trouble finding public sources for total write-offs. But this is from 2005 (As a result, hospitals write off 40-50% of what they charge.) http://classic.ncmedicaljournal.com/wp-content/uploads/NCMJ/...

[chimeracoder]

> The rate you're talking about is extremely deceptive.

It's not; I'm not sure why you'd assume I'd be talking about the sheer number of bills that default (at any size) as opposed to the amount of bad debt (which is closer to the relevant figure).

> Medicare is basically break-even

Medicare is not even close to break-even. From the very first page of the link you provided:

> 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.

The amount of money that hospitals need to make to overcome this shortfall, both the operating expenses and the amount needed to cover the overhead, is a few orders of magnitude greater than the amount of noncollectable debt from uninsured patients.