'Medicare for All' proposals would drain billions from hospital revenues, policy experts say

One of the largest roadblocks to "Medicare for All" proposals is the widening gap between government-funded hospital reimbursement and payment from private health insurers, according to The New York Times.

Under current Medicare for All proposals, private reimbursement would be scrapped and hospital payments would be lowered to Medicare levels, which can be up to 40 percent lower, according to an estimate cited by the Times from the Mercatus Center at Fairfax, Va.-based George Mason University. A recent article published in JAMA predicted hospitals could lose up to $151 billion in revenue each year under Medicare for All policies.

That's because private insurers sometimes pay more than twice what Medicare pays for the same procedure. For example, Medicare may pay a hospital $17,000 for a patient's knee replacement, whereas private insurance may pay about $37,000, according to the report. Similarly, a hospital could receive $4,200 from Medicare for a gallbladder removal, but get upward of $7,400 from a commercial insurer.

Policy experts say overhauling the system to lower Medicare rates would virtually close some hospitals overnight, especially those in rural areas that are already enduring financial hardship. Other hospitals would likely offset the cuts by laying off hundreds of thousands of employees and shuttering services that receive lower reimbursement, according to the Times.

Richard Anderson, CEO of Bethlehem, Pa.-based St. Luke's University Health Network, told the Times he thinks Medicare for All proposals are "naïve." He added: "I have no time for all the politicians who use the healthcare system as a crash-test dummy for their election goals."

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