November 30, 2021 | Updates

What They Are Saying: Government-Controlled Health Insurance Proposals Could Harm Health Care Providers and Hospitals

WASHINGTON – As lawmakers in Washington continue policy discussions on health care, research reminds us of the potential consequences from government-controlled health care proposals, like the public option, Medicare at 60, and Medicare for All, on our health care providers and hospitals.

  • FTI Consulting draws the conclusion that under a public option, “hospitals that serve disproportionately diverse patient populations could lose a combined $45.8 million annually. Compounding the magnitude of this loss, approximately one quarter of these hospitals are the only hospital in their county.” (FTI Consulting, 7/14/21)
  • Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil conclude that “‘Medicare at 60’ could negatively affect hospitals and medical providers that are already financially strained by reducing the reimbursement rates they receive. These potentially unsustainable cuts could mean lower quality and less access to care for the current Medicare-eligible population.” (Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil, 6/23/21)
  • FTI Consulting finds that “Medicare for All would result in an estimated decrease of 5.4% in the total number of U.S. physicians, a reduction that would be felt most acutely in rural communities already experiencing access challenges. Further, research shows that shortages of health care workers in rural areas widen existing health disparities and contribute to hospital closures.”
    • Also, FTI’s analysis concludes that “Medicare for All could put the jobs of 1.2 million American health care workers at risk and our nation could lose over 44,000 doctors.” Additionally, “the number of registered nurse graduates will decline by more than 25% and the entire nurse workforce will shrink by 1.2 million registered nurses by 2050 relative to current projections.” (FTI Consulting, 1/10/20)

These potential consequences are even more significant given the current shortage of health care workers seen during the COVID-19 pandemic.

  • At this critical time when Americans need health care the most, there is already a shortage of health care workers and a wave of resignations. In August of 2021 alone, more than a half million health care workers quit. Politico reports, “that’s the most in a single month in more than 20 years.” ( Politico, 10/21/21)
  • The health care worker shortage has already impacted quality of care for many patients. Politico reports that “Governors and hospital directors warn that the staffing crisis is so acute that patients, whether suffering from Covid-19, a heart attack or the effects of a car accident, can no longer expect the level of care that might have been available six weeks ago.” ( Politico, 8/23/21)
  • Hospitals also are currently facing risks of closure due to the stress and consequences of the COVID-19 pandemic. Fierce Healthcare reports that “Close to half of U.S. rural hospitals are operating in the red with at least 450 facilities at risk of closing their doors.” ( Fierce Healthcare, 2/10/21).

A majority of Americans would rather build on what’s working in health care according to a recent nationwide tracking poll conducted by Locust Street Group. It is no surprise that ongoing budget reconciliation negotiations in Congress are focusing on building on our current system, not starting over with unaffordable government-controlled health insurance systems like the public option or Medicare at 60.



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