Health Providers: Paying Us More Money Will Save You Money!

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It really is a sad day for political journalism when Steve Esack, Tim Darragh, and Colby Itkowitz pass along a tortured argument like this uncritically:

The plan also could save money because reimbursements from the insurance bought on the marketplace would be greater than Medicaid reimbursements, Bachrach said. That would save money in the long run because health providers would not have to build extra costs into their pricing to cover Medicaid, which is a money-loser for them, she said.

This is the mendacious “cost-shifting” argument that health care providers use to say that lower reimbursement rates from the public insurers cause them to raise prices elsewhere. There is scant evidence to support this claim, and it is little more than a political argument against more monopsony power for the public insurers.

There really aren’t counterintuitive economics in play here. If Medicare and Medicaid pay providers less, we really are just paying less for the same amount of care.

Also note that Medicaid reimbursement rates go up to Medicare levels under the Affordable Care Act, so providers are in fact getting more money under Medicaid expansion relative to the current baseline.

This entry was posted in Economy, Health.

2 Responses to Health Providers: Paying Us More Money Will Save You Money!

  1. Julieann Wozniak says:

    This is the other reason our pollies keep voting against the ACA. They’re being paid handsomely by the insurance industry to do exactly that.

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