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.
> 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.
> 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$.
And really that's the core problem. A hospital can send a clam to collections but collections agency's pay penny's on the dollar. And if someone dies in debt there is nobody to collect anything from by law unless someone is dumb enough to voluntarily takes on that debt.
That's actually not really true - at least not the "many" part of it. For most hospitals (including critical access hospitals), the default rate on medical bills is nonzero, but nowhere near the amount of money they lose on Medicare patients. The difference is a few orders of magnitude.
The rate you're talking about is extremely deceptive. People may pay a 500$ 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.
• 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.
> 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.
> $41.1 billion = 5% of total revenue. A few orders of magnitude would mean the shortfall is greater than all of their income combined.
You're not comparing apples to apples. $41 billion is the aggregate of the bills for which they cannot collect; that doesn't mean they don't receive any money from them, and it doesn't mean $41 billion is the amount they've actually lost.
I know you "don't trust" GAAP accounting, but understanding the basic terminology and concepts makes it a lot easier to follow what's going on here.
"U.S. hospitals provided $41.1 billion in uncompensated care in 2011, according to the latest data from the AHA's Annual Survey of Hospitals. That's $1.8 billion more than in 2010. The total includes "bad debt" (services for which hospitals anticipated but did not receive payment) and charity care (services for which hospitals neither received nor expected payment because they determined, with help from the patient, the patient's inability to pay). It does not include Medicaid and Medicare underpayment."
So, no this is not all 'underpayment' but I agree it's relative to charges not costs.
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.