Do Hospitals Lose Money On Medicare Patients?

Do hospitals, as they are quick to point out, lose money on Medicare patients? According to information available at , some do and some don’t. Some hospitals are more effecient than others.

But, what is the overall truth?

A 2010 Report To Congress: Medicaree Payment Policy is an interesting read. To answer the question posed here, go to page 51 and view Tables 2A-5 & 6.

Hospitals who lose money on some patients must make it up on others. That is common sense business logic. Yet if the overall margin is -8% on Medicare business, paying hospitals on the commercial side at 120% of Medicare seems fair. Or should that be 125%? Or 135%. Or, as we find in the managed care contracting world, 200% and more, sometimes much more.

Somewhere in the  commercial payer market is a magical hospital reimbursement percentage that is forever elusive.