Cost-Shifting In Healthcare

570 Words3 Pages
The cost of healthcare has increase exponentially through the years. Current government reimbursements are lower than the actual cost to provide healthcare services. Businesses are falling short of their revenue and are limited to the amount of money they received from Medicaid and Medicare. Limited revenue has lead to the common practice known as cost shifting, which accommodates for the losses of revenue and for uncompensated care. Cost shifting has been a matter of controversy. Large commercial employers and large commercial health insurance companies have criticize government policies that have lead hospitals, private practitioners, non-profit community health centers, and many others health providers to shift cost to private patients,…show more content…
Hospitals situated in areas that have a lower competitive market are more prominent to raise their cost to private insurance when face short revenue from Medicaid and Medicare (Shi, L.,& Singh, D. (2012). Contrariwise, in a more competitive market hospitals will focus on cutting cost rather than increasing prices. Undercurrent government policy the gap between actual cost and reimbursement is debated as a method of payment from a cautious consumer point of view. Meaning that it is paying practitioners and hospitals only for the costs strictly and directly attributable to serving government beneficiaries, (J A Meyer and W R Johnson (2013)). Therefore, the government will not negotiate any prices with businesses. This system is the primary cause of cost shifting, since the introduction of Medicaid and Medicare. The cost of healthcare increases every year, without government stimulus the revenue will keep declining. Since the introduction of the ACA coverage expansion, new questions were raising as to what would happened to the methods of reimbursements. Unfortunately, the ACA will be finance in part by reducing payments to hospitals and any other healthcare practitioners, according to Shi, L., & Singh, D. (2012). Therefore, cost-shifting practices will continue, leading private insurance to pay for the short revenue of hospitals and health
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