The biggest challenge facing hospitals right now isn't the lost revenue in recent months (which is, by all means, a significant challenge on its own).
The biggest challenge is a shift in the insurance landscape, that is already underway. A thread (1/9):
The biggest challenge is a shift in the insurance landscape, that is already underway. A thread (1/9):
About 27 million Americans may have lost their private health insurance in recent months, per one @KFF analysis.
Most of those people will do one of two things: enroll on Medicaid, or become uninsured (2/9)
Most of those people will do one of two things: enroll on Medicaid, or become uninsured (2/9)
Medicaid typically pays lower prices than private insurance. Hospitals have built entire business models around the high prices that private insurance pays, sometimes 10 times as high as Medicaid. (3/9)
One hospital in Montana told me they've already seen a 1 percent increase in Medicaid patients — and that translates into $600,000 in lost revenue (this is a hospital that is used to getting really good high rates from private insurers, 6x Medicare). (4/9)
Moody's estimates that hospitals' share of revenue coming from Medicaid increased 17 percent in the last recession — and that was with significantly less job loss than what we're seeing now. (5/9)
In recessions, Medicare — the program that covers the elderly — often acts as a stabilizing force. Retired Americans are somewhat insulated from an economic downturn.
Not this time: the elderly are often being told to social distance longer, more nervous to seek care (6/9)
Not this time: the elderly are often being told to social distance longer, more nervous to seek care (6/9)
All of this is to say that the American health care system is in for a world of tumult. It's not necessarily the tumult we expected a few months ago, of overwhelmed facilities stretched to capacity. (7/9)
It is the tumult of an industry used to constant growth — prices that always go up, revenue that always increases — confronting a world where that isn't true.
As @DavidBlumenthal told me: “Health care has always been viewed as recession-proof, but it’s not pandemic-proof." (8/9)
As @DavidBlumenthal told me: “Health care has always been viewed as recession-proof, but it’s not pandemic-proof." (8/9)
You can read more about this shift in my new story today. (And if you have a good story to share in this space, let me know! DMs are always open, or sarah.kliff@nytimes.com)
(9/9)
nytimes.com/2020/05/15/us/…
(9/9)
nytimes.com/2020/05/15/us/…
Bonus tweet: We've asked hospitals to run themselves as businesses.
We don't do that with our fire departments, or our electric grids.
A lot of what is playing out right now in health care is a direct consequence of that policy decision. (10/9)
We don't do that with our fire departments, or our electric grids.
A lot of what is playing out right now in health care is a direct consequence of that policy decision. (10/9)
