Strong Public Plan Means Heavy Cuts to Hospitals

Greg D'Angelo / October 26, 2009

Behind closed doors, the House and Senate leaders are trying to cobble together very different and complex provisions of their respective bills.

A key issue is the impact of the public plan, a government run health plan intended to compete against private health plans. In the House version of the bill (H.R. 3200), payment to doctors and hospitals will be pegged to Medicare rates. Specifically, the bill calls for payment for medical services to be set at Medicare payment levels with a 5 percent increase for only certain physicians.

In the aftermath of the debate on physician payment updates, much of the media focus has been on the impact on doctors. But what is often overlooked is that while doctors could lose income, there are many areas of the country where the expansion of Medicare payment for hospitals would cause many hospitals to go broke. (more…)