Hundreds of rural hospitals are at risk of closing, threatening critical care

[dutch777]

7. Very true and Medicaid pays pennies on the dollar of real cost of treatment. Medicare is more generous.

Having worked in a mid size community (non-profit) hospital administration before I retired, we could never cover true cost of care with Medicaid alone. Luckily we were in the suburbs of Seattle and had a lot of private insurance patients who worked at places like Microsoft, Boeing and other employers with great health insurance and supplemental HSA benefits. We offset what we lost from Medicaid by running very efficiently and the better compensation from private insurers. Even at that, while we were a $$ billion enterprise annually, we would routinely end the year with less than $ 1 million in free cash reserves. We set our cost goals so that we could survive on Medicare level payments as we felt that was going to become the standard payment structure of even the private insurers eventually. While rural hospitals can usually pay less for salaries, the rest of their operations are usually very inefficient as they do not have economies of scale that bigger hospitals have with more patient thru put and ability to buy in large quantities for supplies.