AHA Responds to Commentators Calling for Capping Payments at Medicare Rates

Government administered pricing at the Medicare level for all purchasers of health care services – as suggested in a recent opinion piece that appeared in the Washington Post titled, “There’s a genuine solution to our health-care problem” – would disrupt the fragile financing system that ensures the provision of access to essential services for all Americans, and would prevent private-sector innovation that supports medical research, education and the creation of medical miracles.  It would also threaten access to basic care for those in vulnerable communities.

For Medicare, hospitals received payment of only 87 cents for every dollar spent caring for Medicare patients in 2016.  Despite this, hospitals have kept growth of prices for insurers under 2% for each of the last four years. This is despite rising input costs, such as prescription drugs. For instance, hospital spending per admission on prescription drugs rose 38.7% from 2013 to 2105.

There is a better solution.  Over the years, hospitals and health systems have strongly supported health coverage for all. Strengthening health care exchanges providing subsidized coverage for the uninsured, combined with expansion of the Medicaid program, remains the best way of extending coverage to more people. 

Finally, rapid changes in the health care field require hospitals and health systems to join together with physicians, and other partners to explore new ways to enhance quality, reduce costs, and provide more convenient access to care to meet patients’ needs.