Friday, October 16, 2009

More on cost shift v. price discrimination

Uwe Reinhardt weighs in convincingly. In fairness, if the cost shift story is called into question on the private v. Medicare side (idea that private insurance must pay providers more and then charge their customers more to make up for cuts in Medicare payment), then it is rendered questionable on the uninsured v. private as well (I think). Medicare explicitly has some accounting for the uninsured in the form of Disproportionate Share (DSH) payments. Drops in such payments to hospitals based on how much uninsured uncompensated care they provide is part of the drop in planned Medicare costs....since the number of uninsured would fall under a new bill.

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