Hospital Lobby Ramps Up ‘Medicare for All’ Opposition

Hospital lobbies are mounting a coordinated effort to dissuade legislators from supporting Medicare for all, a policy health systems argue would cut into profits and ultimately force facilities to shutter.

The idea of opening up Medicare to those under age 65 has become a popular, if still not well-defined, position for Democratic presidential hopefuls like recent entrant Sen. Kamala Harris, D-Calif., and Sen. Bernie Sanders, I-Vt., who has proposed the idea for years and pitched it when he ran for president in 2016.

Once seen as too progressive even for Democrats, more mainstream candidates are embracing some version of the idea. At the same time, newly emboldened Democrats in charge of the House include a liberal faction pushing the policy.

Opposition from the hospital groups picked up in the latter half of 2018 as the mid-term elections heated up and the push is expected to continue up to 2020. In June, many joined forces in a campaign called the Partnership for America’s Health Care Future, a coalition that includes the American Medical Association, PhRMA, America’s Health Insurance Plans and the Federation of American Hospitals.

The coalition’s plea is to “improve what’s working and fix what isn’t — not start over.”

Internal documents acquired by The Intercept show the group aims to remove Medicare for all from Democrats’ 2020 platforms through similar means many founding members used to make sure a so-called public option policy didn’t appear on Democratic agendas in 2016.

Once a public option was removed from the Affordable Care Act during its drafting in 2009, hospitals threw their weight behind the law. While not without its hang-ups, the ACA was ultimately good for hospitals: the flood of newly-insured patients caused charity care to plummet and profit margins to inflate.

AHA President Rick Pollack called Medicare for all one of a few “key issues of concern” this year in a Jan. 11 blog post. The ACA, Pollack writes, is a “better framework for ensuring coverage” than Medicare for all would be. 

Since hospitals make most of their money on the high rates they’re paid by commercial plans, those profits are commonly viewed as a sort of cross-subsidy that mitigates losses incurred from lower Medicare payments. In 2017, according to a recent AHA fact sheet, 66% of hospitals received Medicare payments less than the cost of care, adding up to an industry-wide shortfall of $53.9 billion.

“Strengthening the ACA marketplaces to make coverage more affordable and continuing to expand Medicaid would provide better coverage and stability than a one-size-fits-all government-run program subject to politicization and micromanagement by Congress … and government shutdowns that put funding in jeopardy,” Pollack writes.

Pollack argues that any attempts by providers to improve care or quality would take a backseat to government’s tendency to cut costs. Legislators, Pollack writes, would “simply ratchet down reimbursement” as a means of improving the system.

Throughout all of 2017, Medicare for all was hardly mentioned by the hospital lobby, according to the Senate lobbying database. And although some version of Medicare for all hasn’t been introduced in Congress for many years, it wasn’t until the second half of last year that hospitals decided they needed to throw their financial weight behind its opposition.

HCA, Tenet

Two coalition members from the hospital side, trade group FAH and the country’s largest hospital chain, HCA, began lobbying against Medicare for all soon after the group launched. Dallas-based hospital operator Tenet Healthcare is also lobbying on the policy.

Nashville-based HCA lobbied against the Expanded and Improved Medicare for All Act in the final two quarters of 2018 through two firms for a combined $340,000. The House bill was just one of several issues HCA reported in its lobbying disclosure.

Tenet, while not part of the cross-industry coalition, in the fourth quarter of 2018 added Medicare for all to its $360,000 list of legislative interests.

In the third quarter, FAH reported $650,000 spent lobbying on issues that included the House Medicare for all bill, followed by $720,000 on the same in the fourth quarter.

Doctors’ lobby AMA did not report lobbying against Medicare for all until the fourth quarter. That quarter, the group allocated nearly $4.75 million toward a plethora of issues — one being, simply, “Medicare for all.”

Neither AMA, HCA, FAH nor Tenet reported anything explicitly labeled or associated with the policy until the second half of 2018.

Representatives for HCA, Tenet and FAH did not respond to Healthcare Dive’s requests for comment.

Nurse support, debate over impact

Last year saw support for Medicare for all by way of nurses union National Nurses United, which reported spending $150,000 throughout 2018 in support of the plan from Sanders and the House bill, among other issues.

Union co-president Jean Ross told Healthcare Dive the current healthcare system has allowed hospital coffers to swell and quality outcomes to remain largely stagnant, in some cases even trailing those of other developed countries — though the U.S. still outspends everyone else on healthcare. Hospitals, she said, are interested in keeping the status quo.

“It’s been very lucrative for them,” Ross said. “Why wouldn’t they?”

Care, Ross argued, isn’t the system’s most costly component. Rather, it’s the cost of correctly administering dozens of health plans so hospitals can get charges recouped.

A working paper published by Koch-funded libertarian think tank Mercatus Center last year argued providers would face payment cuts as high as 40% under Sanders’ Medicare for all plan — providing fodder for the bill’s opponents and for industry lobbyists.

The conclusions made in the paper were called into question, perhaps most notably by Matt Bruenig, founder of left-wing think tank People’s Policy Project. Bruenig used similar data and reported that under Sanders’ plan, provider payments would instead drop by 10.6%.

Those losses, he argues, are minimal enough to be offset by the current system’s administrative inefficiencies, which he says would be eliminated under Medicare for all. “The real risk for these hospitals is not that they suffer a one-time shock cut in payment rates, which again the Medicare for All bill does not really seem to impose on them,” Bruenig told Healthcare Dive in an email.

Robert Berenson, a researcher with the Urban Institute, said a Medicare for all policy wouldn’t be likely to use current Medicare rates, which “don’t quite pay costs” of care. More viable ways of moving the market toward Medicare rates are available, such as a heavily-regulated public utility model like Medicare Advantage. The program is well-liked by patients and has been a boon for payers and hospitals alike.

Expect hospitals and health systems to ramp up efforts to stymie Medicare for all legislation in the House and Senate in 2019 — even if the majority of Americans reportedly view it favorably.