September 25, 2020 | Updates

Reminder: The Public Option Could Threaten Access To Care For Communities Already Facing Challenges

WASHINGTON – As some candidates and lawmakers push for creating new government-controlled health insurance systems like the public option, a story titled “Some Urban Hospitals Face Closure Or Cutbacks As The Pandemic Adds To Fiscal Woes,” serves as a stark reminder of the threat the public option could pose to already at-risk hospitals.  NPR reports

While rural hospitals have been closing at a quickening pace over the past two decades, a number of inner-city hospitals now face a similar fate.  And experts fear that the economic damage inflicted by the COVID-19 pandemic on safety net hospitals and the ailing finances of the cities and states that subsidize them are helping push some urban hospitals over the edge … [T]he closing of a few could portend problems at others.  Even some of those that remain open may cut back crucial specialties like labor and delivery services or trauma care, forcing patients to travel farther for help when minutes can matter.

Meanwhile, a recent report released by FTI Consulting and the Partnership for America’s Health Care Future finds the public option “would only exacerbate stresses on the health system.  Instead of improving access to care and supporting health system capacity, the public option could instead leave many Americans worse off.”

Today, our nation’s hospitals are already strained and projected to lose $49.6 billion in revenue nationwide due to coverage changes.  The public option could increase this loss by 60% to $79.2 billion, reducing access to quality care for tens of millions of Americans.  This could lead to over half of all American hospitals operating with negative margins, increasing the risk of hospital closures and threatening access to quality care — especially for America’s rural and vulnerable communities.  Consequently, hospitals serving rural and vulnerable patients could see their revenue loss increase by more than 40% from $14 billion today to $20 billion under a government-controlled health insurance system. 

While America’s health care leaders are working together to help Americans get healthy and stay healthy during this critical time, the public option’s financial impact could have significant consequences for patients and our nation’s preparedness efforts for the next crisis.  The report notes “diminished margins would limit the resources available to expand intensive care units (ICUs), procure supplies and enhance staffing.  Such measures are essential to containing the spread of disease in health care settings and ensuring access to high-quality critical care.”

Research Confirms The Public Option Could Reduce Patients’ Access To Quality Care: 

  • Already operating under razor-thin margins, the public option could increase revenue losses for hospitals in rural and underserved communities by more than 40% – threatening access to affordable, high-quality care. (FTI Consulting, 8/13/20)
  • Nationwide, America’s hospitals and health care providers could face a 60% increase in revenue loss, which could hurt the nation’s ability to respond to the next public health crisis. (FTI Consulting, 8/13/20) 
  • “For 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.” (KNG Consulting, 3/12/19)


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