[chimeracoder]

> Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive.

To clarify: Medicare reimburses rates that are below COGS, so hospitals have to increase the amount they charge private insurers in order to make up the loss.

[ejstronge]

The grandparent is describing a separate issue - note that not all hospitals will serve Medicare-receiving patients beyond their federal requirements.

Insurers negotiate reimbursement rates with hospitals, with both parties being able to leverage their size/social cachet to extract favorable terms. This contributes to the availability of certain hospital chains in the preferred networks vs. the non-preferred networks of particular insurers.

[chimeracoder]

It's actually the same issue - the way the contracts are structured, insurers agree to pay X% of what Medicare charges, where X is typically something like 200% or 300%.

[dangerlibrary]

If Medicare rates are actually below cogs, why do hospitals accept Medicare patients? I know some don't, but the vast majority do. Something about that explanation feels off.

[Thriptic]

Some private facilities don't, but in general it's cheaper and easier to provide preventive care than it is to try to collect from these patients after they admit to the ER with a complication (where you are mandated by law to treat them).

One of the reasons hospitals accept discounted rates for insured patients in general is ease of reimbursement vs trying to chase the patient for money.

[woolvalley]

If you serve a certain rate of medicare patients, you get additional funding. It's set up this way for 'political' reasons. Like most of us politics, it's a mess.

[chimeracoder]

> If you serve a certain rate of medicare patients, you get additional funding. It's set up this way for 'political' reasons. Like most of us politics, it's a mess.

That's not an incentive for hospitals to serve Medicare patients; it's compensation for the fact that the hospital sees so many Medicare patients (and therefore so few privately-insured patients, by portion) that it can't make up the difference solely from overcharging private insurers.