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Analysis

To Slow Costs, Slow Revenue, Says Healthcare Economist

By Tinker Ready  
   September 22, 2016

The government is not going to increase its rates. Therefore, the only way the hospitals could get more money is to continue to jack up private rates.


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There's a general feeling that the gap is about as wide as it can go. I think most hospitals realize that their ability to generate more revenue from the private sector is really limited.

HLM: They argue that the public programs like Medicare and Medicaid are not paying enough to cover costs.

ALTMAN: The question is, what are the costs? From the hospitals' point of view—and I can very much appreciate it—the costs are what the costs are.

The government isn't paying its share, and therefore it has to get [it's money] from the private (payers). The government is saying, 'this is all we can pay.'

It's already a much higher amount than every other country. You mean to tell me that you can't provide good quality care with less?

The government is saying, 'we can't and we won't pay.'

[Healthcare] is already the biggest item in every state budget. It's already a big item on the federal level. It's the main reason why we have a deficit.

You're just not going to get more money from the government. I don't say the hospitals are inherently wrong, if you accept the cost structure. The government people and the analysts are saying the cost structure is too high.

Tinker Ready is a contributing writer at HealthLeaders Media.

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