Earlier quoted context omitted.
What do they mean by "lose money"? Even if I turn up at a private hospital here in Norway, I pay nowhere near what you would pay in the US. Which tells me that either hospitals are run extremely inefficiently in the US (orders of magnitude worse than here) or there are layers of pretty substantial profit margins. I may be a bit peculiar, but I think a healthcare sector that is set up to mainly benefit execs and share…
Medicare reimbursements are below cost of care. If all insurance lowered to Medicare reimbursements, you will reduce supply.
That’s what most providers claim. In my experience (healthcare Corp finance), it’s typically closer to breaking even on Medicare. Especially if you cut out some fluff/unnecessary spending companies like to engage in. I’ve worked with Medicare and they actually try to do a bottoms up, zero based, pricing to determine what something should cost. So when a hospital is built by some award winning architect and has fountains and statues etc. Medicare doesn’t cover that (donors often do in the hospital example, but not other lines of services). I often have to explain to C suites that Medicare should be seen as a high volume that basically helps break even thus covers your fixed costs in entirety and making commercial patients all the more profitable.
That said, every branch of healthcare works different and could be upside down from this where they make a ton on Medicare but not commercial