WILL THE HOSPITALS SHUT DOWN?

NO, THEY WON'T.

Today, I was going to post my thoughts on The Soul of Republicanism, but I changed my mind when I saw Don McCanne's latest post:

US Hospitals Will Thrive Under Medicare For All

When you read it, you'll see that on April 4th of this years, a JAMA article, dated April 4th of this year, supposed that under Single Payer or Medicare For All,  hospitals would suffer grievously. Their income would be markedly reduced due to the lower reimbursement rates currently being paid by Medicare and Medicaid -- rates that hospitals are now able to recoup by charging private patients more -- a strategy which would be unavailable to them under Single Payer. Its conclusion is dire:

In the absence of exceptional public-mindedness among hospital leaders, supporters of Medicare for all should anticipate strong hospital political opposition, especially from leaders who have pursued strategies less focused on efficiency than on extracting ever-increasing payment rates from private payers.

Never particularly friendly to M4A, the New York Times, on April 21st, jumped on the bandwagon with an article whose headline was: Hospitals Stand to Lose Billions Under ‘Medicare for All'. Though the article did close with Dr. Adam Gaffney's assurance that decreased income would be offset by greater efficiencies, that assurance seemed, to this reader at least, not quite able to dispel the gloom of the Times' pessimistic headline.

On April 20th. The Huffington Post observed that hospitals ... alone account for roughly one-third of the nation’s health care spending. No other sector, not even pharmaceuticals, rivals it. Under the Medicare for All proposals from Sanders as well as some other potential reforms getting attention these days, the federal government would limit payments to hospitals, quite possibly reducing their incomes significantly.  Consequently, the hospitals have become part of an industry-wide lobbying effort to defeat any expansion of government-run health insurance, even relatively modest ones that wouldn’t do much to affect their revenue.

To clear the air, Matt Breunig, writing for the People's Policy Project,

Hospitals Will Do Fine Under Medicare For All

points out that in the U.S., 25% of hospital revenue is spent on administrative expenses, whereas hospitals in the Canadian Single Payer system spend only 12% of revenue on administration. What this means, Breunig continues,  is that the administrative efficiencies available under a Medicare for All system allow hospitals to offset 13 points of the 16-point revenue cut without digging into the actual cost of care. The remaining 3 points could come out of hospital profit margin (bringing the margin from 7 percent to 4 percent).

But there's more to it than that. Check out Woolhandler and Himmelstein's

Importance of Aligning House and-Senate Single Payer Bills The Right Way

which I present in my post, "Why Is American Healthcare So Expensive: Part Two." There  I discuss their analysis of the high cost of healthcare facilities like hospitals, dialysis centers, etc.  Woolhandler and Himmelstein write:

At present, hospitals’ success, and even survival, depends on generating profits (“surpluses” in non-profit facilities). Hospitals with a favorable bottom line can invest and add new buildings and programs, while unprofitable ones can’t modernize or expand, risking a downward spiral toward takeover or closure....It’s this profit imperative that drives hospitals’ financial gaming, e.g. upcoding, and concentration on the most lucrative services, such as elective cardiac and orthopedic services, rather than money losers like mental health. This payment mechanism ... also leaves the door open to investor-owned providers.

The answer to this, they write, is adopt the strategy used by some European countries, like Scotland, where the hospitals are paid not by procedure, but globally, with one payment intended to cover all  operating expenses. It's the way we in this country pay for firehouses, which, like hospitals, are resources for the public good. And if the firehouse needs to get a new fire engine, the firehouse applies to the municipality that governs it. No government is likely to last if it holds back on improvements the public sees is for its good. It would be the same with our hospitals. They would be expected not to show any profits at all. They could concentrate on their business -- which would not be making money, but healing.

In his discussion of all this, McCanne concludes:
Right now the two major hospital associations are partnering with other members of the medical-industrial complex to publicize [the notion] that hospitals will have to shut down if we enact and implement a single payer Medicare for All program. NOT TRUE! You should be prepared with your response when this comes up:


"Single Payer Medicare for All not only recovers a tremendous amount of administrative waste, but it also uses regional planning, global hospital budgets - like fire departments have - and separate budgeting of capital improvements to ensure that we will always have adequate capacity in our hospital system."

Amen.

The Soul of Republicanism is for our next post.

Dio

PS: If you'd like to leave a comment -- and I encourage you to do so -- simply click on the "number of comments" area, and share your thoughts in the "comment rectangle" that appears.

PPS: We know that there are plenty out there who have stories to tell -- stories of your trying to cope with our dysfunctional healthcare system. Trouble is, we don't know what these stories are! That's where you come in. If you have a story to tell, you can email me at indivisible12401@gmail.com. You can be as anonymous as you like. Thanks!