Examining The Impact Of ‘Steep Cuts’ To Health Care Providers Under Medicare For All

WASHINGTON – As supporters of Medicare for all continue to face tough questions about the high costs and unaffordable tax hikes associated with one-size-fits-all government-run health care, a report today by Axios provides yet another reminder of the negative impacts that proposed “steep cuts” to provider payment rates could have on Americans under a new government insurance system.

“Medicare for All would result in payment cuts for most providers, and a recent analysis in JAMA by Harvard’s Zirui Song takes a look at just how steep those cuts would be.  Many specialties would still take a pay cut even under versions of ‘Medicare for All’ that aren’t as full-throated as what Sen. Bernie Sanders has proposed,” they report – which would include so-called “buy-in” or “public option” systems.

With many hospitals already facing serious financial stress, The New York Times reported recently that experts are growing increasingly concerned about the “violent upheaval” a Medicare for all system would cause, cautioning: “Some hospitals, especially struggling rural centers, would close virtually overnight, according to policy experts.  Others, they say, would try to offset the steep cuts by laying off hundreds of thousands of workers and abandoning lower-paying services like mental health.”

A report by POLITICO echoes this warning, noting that Medicare for all “would all but end private insurance and regulate hospitals in a vastly different way, dramatically changing operators’ business model and costing community hospitals as much as $151 billion a year, according to one estimate published in JAMA,” all while “slashing hospitals’ pay rates and putting up to 1.5 million jobs at stake … It’s a concern that’s left Medicare for All advocates walking a fine line, arguing for a dramatic reshaping of the health system while trying to avoid a brawl with their hometown health systems.”

Meanwhile, research also warns of the risks to hospitals and patients posed by so-called “moderate” fallback proposals, such as “public option” or “Medicare buy-in” schemes.  One study found that “[f]or hospitals, the introduction of a public plan that reimburses providers using Medicare rates would compound financial stresses they are already facing, potentially impacting access to care and provider quality.”  Another study found that new government insurance systems like “Medicare buy-in” or “public option” could force hospitals to limit the care they provide, produce significant “layoffs” and “potentially force the closure” of some hospitals.

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