Study: Medicaid, Medicare don't Pay Hospitals Enough

To make up for an alleged $345 million shortfall, private hospitals shifted higher costs on to privately insured patients to offset what Medicare and Medicaid wouldn’t pay.

That thesis is from a report by the New Hampshire Center for Public Policy Studies.

"Basically, the undercost of the public players and charity care forces these hospitals to shift these costs onto the private sector," the center’s executive director, Steve Norton, said in an AP interview.

Which means, according to the report, that private payers spend roughly 45 percent more for health care.

In 2005, nearly two-thirds of the shifted costs, or $220 million, were due to inadequate reimbursment by Medicaid and Medicare, up from about half the shifted costs in 2001, the report found.

The rest — about $124 million — was attributed to bad debt and charity care for those with no insurance, an increase from $86 million four years ago, the report said.

The full report can be downloaded here: http://www.nhpolicy.org/hospital–costshift–2007.pdf.