Healthcare economist Austin Frakt deconstructs what he says is hospital executives’ erroneous assertion that their institutions have to make up lower payments from Medicaid and Medicare by charging higher prices to privately insured patients.
He says that “study after study in recent years has cast doubt on the idea that hospitals increase prices to privately insured patients because the government lowers reimbursements from Medicare and Medicaid.”
“The evidence is clear: Today, hospital cost shifting is dead, and the spillover effect reigns. A consequence is that public policy that holds or pushes down Medicare and Medicaid prices (or their growth) could put downward pressure on the prices hospitals can charge to all its customers and, in turn, on the premiums we pay to insurers.”
What this might do to hospitals executives’ salaries is unknown.