The Domino Effect of Medicare Hospital Reimbursements on Soaring Health Costs

Published November 16, 2023
For years, Medicare has paid hospitals and their affiliates more for services than it has to others. The reasons are complex, but this policy significantly incentivizes hospitals to absorb independent practices, creating “monopolies” that reduce competition and increase prices for everyone. Dr. Richard Kube, M.D., founder and CEO of the Prairie Spine and Pain Institute—an independent practice in Illinois—experiences first-hand how this policy and other top-down government regulations work against patients. Kube, an advocate for “site-neutral” payment, recently discussed this topic in Newsweek.
“Site-neutral payment would end the unfair policies promoting consolidation and encouraging higher prices,” Kube writes. “Such proposals have bipartisan support in Congress. Several congressional committees are currently debating a health reform package, including provisions to establish site neutrality under limited circumstances. This would be an essential first step, one that physicians nationwide hope will soon extend to other services. After all, reimbursing providers equally for the same service is only fair.”
In the podcast, Kube discusses:
– The reasons why Medicare pays more money to hospitals for the same service
– Examples of the differences in costs
– How this policy leads to increased consolidation in the healthcare industry and raises costs for everyone
– The track record of Congress and the administration, including under Trump and Biden, in promoting site-neutral payments
– The influence of the hospital lobby and the feasibility of implementing site-neutral payments
– Actions the public can take to support the advancement of more free-market policies