Rxxx of the Day

From July 18, 2005 edition of Business Journal of Portland

Oregon employers and workers that carry employer-sponsored health plans subsidized the Medicare and Medicaid systems to the tune of 14.4 percent, or $634 million, in 2004.

Using data from the Oregon Price Point Web site, consultant Geoffrey cost shift to private insurance plans from Medicare and Medicaid is roughly 14.4 percent, varying widely within the state.

Payment shortfalls from Medicare totaled $399 million, according to Brown's data, and Medicaid shortfall was $235 million from Medicaid.
"This means higher insurance premiums for public and private employers" and for their health plan enrollees, said Kevin McCartin, an insurance consultant and president of McCartin Analytical Services.

While Medicare and Medicaid rates are non-negotiable, hospitals have more leeway in charges to private insurance. "When you have three customers, and two routinely pay less than the cost of doing business, the third payer becomes critically important," said Kevin Earls, vice president of finance for the Oregon Association of Hospitals and Health Systems. "Without the money you make up from [private insurance] you can't make up the losses you incur treating Medicaid and Medicare patients."  

Brown's analysis did not include the additional cost shift from growing rates of uncompensated care for the uninsured, but a study released last month by consumer health care advocacy group Families U.S.A. revealed private health insurance premiums in Oregon shoulder a cost shift of 10.2 percent for the uninsured.