AHA responds to gaps in NY Times editorial on hospital prices

In a letter to the editor published today, AHA takes issue with a recent New York Times editorial for failing to “mention some key facts” about the complexities of hospital prices. “First and foremost, Medicare and Medicaid payments do not reflect hospital costs,” notes AHA President and CEO Rich Umbdenstock. “In fact, underpayment by Medicare and Medicaid to American hospitals was $51 billion in 2013. Medicare reimbursed 88 cents and Medicaid reimbursed 90 cents for every dollar hospitals spent caring for patients. Why? Because Medicare can, given that it is both price regulator and purchaser. According to the Medicare Payment Advisory Commission, the Medicare margin was negative 5.4% in 2013. Hospitals must make up for shortfalls through a combination of approaches, and cost shifting to the private sector is among them.” In addition, he notes that “hospitals care for millions of patients who cannot pay for their care. Since 2000, hospitals of all types have provided more than $459 billion in uncompensated care to their patients – all of this while the financial health of many hospitals is in jeopardy. The reality is that one in three hospitals operates in the red. The full story about the complexities of hospital billing cannot be told without taking into account these important facts.”