More Bad News for ObamaCare

This is from Chris Fleming’s summary at Health Affairs:

James Robinson of the University of California, Berkeley, sheds new light on the simple story line that hospitals “cost shift” to make up for low Medicare payments. Evaluating data from a value-based purchasing initiative and twenty-seven local hospital markets in eight states, he concludes that the story is more complicated. In markets where there is little competition among hospitals, hospitals do in fact try to offset lower Medicare payments with higher prices for private insurers. However, in competitive markets hospitals cut costs to better survive on lower rates. As a result, Medicare payment cutbacks and integration of providers into accountable care organizations may increase costs in areas where competition is scarce, cautions Robinson.

Unfortunately, the whole thrust of ObamaCare reforms is to replace competition with monopoly.

Comments (3)

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  1. Bruce says:

    When are you folks going to wake up and realize that the Obama administration does not believe in competition.

  2. Larry C. says:

    Ditto Bruce. They are busy creating monopoly.

  3. Devon Herrick says:

    The cost shift argument is problematic. Hospitals and doctors charge what they believe the market will bear. If it was so easy to raise prices for one segment of customers, providers would do it whether or not Medicare was under-paying them.