> It's not that simple. If the payers other than Medicare had more negotiating power relative to large provider organizations then they could also drive down prices. The providers have a lot of room to stay in business and trim fat by eliminating waste, reengineering processes, cutting staff compensation, and squeezing suppliers.
Medicare doesn't have "negotiating power". It's a monopsony; it doesn't negotiate, by definition.
No other payer could do what Medicare does, because no other payer is enshrined in law the way Medicare is, as a mandatory payor [sic] for most major medical systems.
A while back, a whole string of providers who were required to take Medicare went bankrupt because Medicare didn't pay enough, and (unlike other providers) they didn't see enough privately-insured patients to make up the difference. Congress "fixed" that by forcing Medicare to pay an additional stipend to providers whose Medicare patient share exceeds a certain threshold. But for the rest, they're still forced to overcharge private insurers (and uninsured patients) to make up the difference. Or, if they are legally able to, stop seeing Medicare patients altogether, which we're starting to see more of again.
Medicare doesn't have "negotiating power". It's a monopsony; it doesn't negotiate, by definition.
No other payer could do what Medicare does, because no other payer is enshrined in law the way Medicare is, as a mandatory payor [sic] for most major medical systems.
A while back, a whole string of providers who were required to take Medicare went bankrupt because Medicare didn't pay enough, and (unlike other providers) they didn't see enough privately-insured patients to make up the difference. Congress "fixed" that by forcing Medicare to pay an additional stipend to providers whose Medicare patient share exceeds a certain threshold. But for the rest, they're still forced to overcharge private insurers (and uninsured patients) to make up the difference. Or, if they are legally able to, stop seeing Medicare patients altogether, which we're starting to see more of again.