Bernie Sanders campaigned on a slogan: Medicare for all.
Joe Biden dismissed it, but if he is elected President, and if the Senate falls to the Democrats, we're going to see renewed pressure on the Democrats to nationalize the health insurance industry, and thereby nationalize the healthcare delivery system.
There will not be much resistance from America's hospitals. That is because some of them will soon be facing bankruptcy. They are all desperate for a bailout. How desperate? This desperate.
BAIL US OUT!
The coronavirus crisis is hammering the finances of America's hospitals as nothing has since World War II.
The American Hospital Association has released a report on just how bad the crisis is. Here is the estimate of losses from March 1 to June 30: losses of $202.6 billion or an average of $50.7 billion per month. While we can dismiss anything past a decimal point, this is a disaster.
In 2017, hospitals charged the public $1.1 trillion. So, we have to take these numbers with a grain of salt. But there is no doubt that red ink is spilling throughout the hospital industry. It's a nonprofit industry, but this year, there will not even be the pretense of profits.
What is going on? Mainly this: hospitals have become dependent on the federal government. Now they are getting squeezed by the government. Big surprise!
Experts have raised concerns about low payment rates from government payers, which in part led the Congressional Budget Office to project that between 40% and 50% of hospitals could have negative margins by 2025 prior to the pandemic. Congress created a provider relief fund to support health care providers during the pandemic, but this fund is intended to stabilize providers in order to keep Hospitals and Health Systems Face Unprecedented Financial Pressures Due to COVID-19 their doors open, rather than fully restore compensation to pre-COVID-19 levels. Further, these funds are being distributed to all health care providers with only a portion of these funds going directly to hospitals.Other providers – such as physicians and other clinicians, laboratory and testing facilities, and durable medical equipment providers – are drawing down from health care provider relief funds as well. Hospitals and health systems will need more funds to treat patients, save lives, and get America back on its feet.
Anybody who becomes dependent on federal government subsidies is going to hit a brick wall when the federal government starts reneging on the deal. This is what is happening to the hospital system. The day of reckoning has arrived.
Hospital and health system revenues have declined sharply as a result of the COVID-19 pandemic. To increase personal and public safety across the country while conserving PPE, hospitals moved to cancel nonemergency procedures. At the same time, many Americans have forgone care, including primary care and other specialty care visits. On March 18, the Centers for Medicare & Medicaid Services (CMS) recommended that most elective surgeries and non-essential medical, surgical and dental procedures be cancelled or delayed during the COVID-19 outbreak. Since then, several governors mandated cancellation of non-essential services in their state.
Medicare and Medicaid are saving money by not paying. Hospitals are the losers. This is what government-funded medical care does every time.
Then there is this:
The Kaiser Family Foundation estimates that the cost of treating a patient with COVID-19 could be more than $20,000, and over $88,000 for patients that require ventilator support.A study by FAIR Health estimated the average cost of treating patients with commercial coverage to be $38,221.
Is the government going to pay the hospitals this much? I doubt it. So does the American Hospital Association.
Then there is the loss of health insurance coverage.
At the same time, experts anticipate that millions of Americans could become uninsured given the spike in unemployment. The number of people without insurance could increase to over 40 million. These coverage losses put families at financial risk and increase uncompensated care at hospitals. Hospitals have already seen some of the effects manifest; bad debt and charity care increased 13% over the previous year in March, according to a recent study from Kaufman Hall.
If the Democrats take over the government next year, we can be sure there will be a massive push by the Left for something like Bernie Sanders' Medicare-for-all. Congress will surely pass a law that will be worse than ObamaCare. My guess is that the hospital industry is going to promote this law. It needs the money.
The above estimates do not include the additional costs of acquiring drugs, medical supplies and equipment that hospitals must incur to meet the demand for services. COVID-19 increased the demand for medical equipment and supplies, such as hospital beds and ventilators, and disrupted many supply chains. As a result, prices for these necessary supplies have increased exponentially since the beginning of the pandemic.
Then there are increased labor costs. "Moreover, these estimates do not account for increased labor costs. Many hospitals are experiencing increased overtime costs as hospitals experience a surge in patients or front-line workers become sick. Some hospitals have implemented bonus pay for front-line employees."
This report is a sales pitch for more government funding.
More support is needed. Hospitals continue to experience losses from cancelled and delayed procedures, while incurring increased costs for treating patients suffering from COVID-19 and purchasing the equipment and supplies necessary to ensure the health and safety of patients, providers, and their families. Additional support will be critical as the country moves into a new phase of recovery and rebuilding. During this time, we’ll need to address health disparities and ensure the health and safety of vulnerable communities. We’ll face new behavioral health challenges in light of all that our nation has experienced. And we’ll need increased resources to address clinical resiliency to support the health care workers who answered the call when the country needed them.As the country faces the inimitable challenges of COVID-19 head-on, Americans cannot afford the cost of closed hospitals and restricted access to life saving treatment – action is needed urgently to support our nation’s hospitals and health systems and the heroes that work there.
Hospitals are not going to get this money in 2020. They had better kiss that dream goodbye. The House of Representatives is not going to pony up the money until the Democrats can pass a new law on health insurance. That's what they're going to attempt to do next year. Meanwhile, the federal deficit is skyrocketing. The Republican Senate is not going to come up with the money this year. Congress is going to make the hospitals grin and bear it.
CONCLUSION
The Democrats will be tempted in victory to create some kind of healthcare insurance program funded by the government. The Democratic voters will cheer. This will mean imposing price controls and new regulations on hospitals. Nobody is going to complain except the hospitals. If enacted, this result will be reduced efficiency, more bureaucratization, and poorer care in hospitals.
If the Republicans keep the Senate, it will resist full-scale national health insurance. That is our only hope.
I hope the spread of the walk-in clinics will help keep us healthy. But those people who don't have health insurance are going to be in worse trouble from now on. The efficiency of the hospital system is bad already. It is going to get worse. The free riders in the emergency care rooms will suffer. The lines will be longer. The care will be worse.
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