Cost Shifting In Health Care

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An Analysis of the Health Care System as it Relates to Uncompensated Care and Cost Sifting.
Introduction
The health care system has always been a mystery when it comes to payment. If an individual needs emergency care, he or she is provided with the required medical care no questions ask. After the fact, once this person becomes aware of his surroundings, regains conscience, is stabilized, presents no harm, and is ready to get back to his normal life in society is when the question of how will this person pay the health care provider’s bill is ask. If this individual has health care insurance, he or she does not have to worry. The health care provider would bill the insurance and this individual would be responsible for the unpaid balance.
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A study on cost shifting by hospitals reported that hospitals in less competitive markets raise prices to private insurers when faced with shortfalls between Medicare payments and their projected costs (Shi, 2015, p. 238). Hospitals are market driven organizations that need to make revenue to stay in business and cannot afford to lose money from providing care to the uninsured or from the reduced Medicare and Medicaid compensations. Competitive hospitals have the potential to earn a profit even from Medicare prices thus having to reduce premiums to private insurers due to the market competition. Put it together and it is hospitals’ underlying costs, driven by competition-not cost shifting- that lead to difference in prices charged to insurers and Medicare short falls or profits (Frakt, 2015). Cost shifting is the method used by hospitals to justify the excessive charges and a constant increase in the premiums of private insurers when in fact is due to the market competitions, insurance companies profit gains, technology, employers paying less for coverage resulting in employees having to carry higher deductibles and so on. As a society, we are very accepting in helping each other even if that meant carrying out higher premiums in order for other people to have access to care. We are totally against paying high premiums for organizations to capitalize on their revenues. Hospitals increase their revenues to account for any loses accrued and insurance companies being for-profit organizations are always looking to amplify their capital gains. If it were true that Medicare 's proven cost effectiveness is subsidized by private health insurers through cost-shifting, it certainly does not seem to be affecting the huge

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