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Cost Shifting

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The popular practice of cost shifting, whereby health care providers raise prices for the privately insured to offset the lower health care payments from both Medicare and Medicaid as well as the often nonpayment of health care premiums from the uninsured, continues to raise the cost of health care. Medicare and Medicaid payments are less than 50% of what private insurers pay. Health care providers shift charges for health care costs to the private insurance sector. Some estimates of the cost shift are being valued at $6 billion annually. Cost shifting increases the cost of all health care. The health care facility or the health care professional shifts the cost of health care to other patients with health insurance or to those patients who can afford to pay. Costs to the public for these programs continue to increase. Almost two‐thirds of all Medicaid spending for services goes to the elderly and those with disabilities. The elderly and those with disabilities made up less than one‐quarter of all Medicaid enrollees as of 2014 (Rudowitz, Orgera, & Hinton, 2019). Dual eligible beneficiaries alone account for almost 40% of all spending, mostly for long‐term care. The 5% of Medicaid beneficiaries with the highest costs drive more than half of all Medicaid spending (Rudowitz et al., 2019). The high costs are due to their needs, acute care, long‐term care, or often both. Higher costs for prescription drugs, long‐term services and supports, and behavioral health services, as well as state policy decisions to implement targeted provider rate increases, have been recently cited as factors putting upward pressure on Medicaid spending (Rudowitz et al., 2019).

Kelly Vana's Nursing Leadership and Management

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