A recent study from Third Way examines hospitals’ claim that low Medicare reimbursement is driving higher commercial rates. The study examined two large hospitals, Duke Regional in North Carolina and Mercy Hospital Southeast in Missouri, considering hospitals that make money from Medicare payments, the high quality of care efficient hospitals provide, and the possibilities or equitable charity care even under financial constraints.
Findings include:
- More than half of hospitals make money on Medicare.
- Many hospitals charge high prices even when they efficiently manage their costs and revenue because of the pricing power they have in their local market.
- One-third make money on Medicaid.
- Nine percent of hospitals pad their bottom line by collecting more money for charity care than they pay out
The report is available in full here.