Medicaid is usually a big loss for hospitals. It’s just a cost of doing business and another reason why someone else has to pay more. It’s completely a subsidy essentially. This is why certain areas only have a county hospital, it’s likely the same area that is a food desert and has no retail banks, the simple truth is too high of a Medicaid mix will quickly sink a for profit hospital.
Medicare is as I described. Every specialty and procedure has its quirks though, some even make a killing on Medicare and not commercial but the hospital kind of represents a portfolio and the overarching economics in aggregate favor the commercial insurance. I’m guessing your wife’s specialty had decent Medicare rates but it’s not always true.
There’s even some private insurance which is effectively Medicare that has different reimburse ranges (Medicare advantage plans).
Executives like to lament the lose money on Medicare but I never really saw it that way. If you look at it isolated, sure it’s true. But if you look at it as a portfolio where your fixed costs are covered by another cohort, then it’s a huge volume to add and make money at the contribution profit line. You just have to be careful not to run fixed costs as a percentage of total revenues or something like that. The extra volume Medicare brings to a hospital or network of hospitals also has tremendous negotiating power for pharma, medical supplies and devices, etc.
Those are fair points. From our specialty clinic's POV, Medicare has been great as far insurers go[0]. I've not had to deal with them at a hospital's scale.
[0]File under "damning with faint praise".
> Executives like to lament the lose money on Medicare but I never really saw it that way.
We're in the totally opposite boat. We actually prefer Medicare patients vs private insurance not only because of the reimbursement, but the way in which they reimburse us (one lump sum vs visit-by-visit auth that requires manpower to manage).
Some of the requirements can be onerous, but on the whole, they're easier to plan for than the private stuff.
You’re not a hospital then. I see this with some specialties or types of providers. I’ve also seen it do complete 180. As in, Medicare is high reimbursement for a decade or two allowing a specialty to proliferate, then one day they rug pull the rates and the specialty is scrambling because they’ve not been running managed care part of their practice (the part that negotiates with commercial plans). It’s a huge headache all around and I do agree Medicare is easy once established.