Does Medicare pay hospitals too little?

Opponents of allowing a public plan to be part of health care reform often claim that this is a bad idea because the public plan, like Medicare, would under-pay hospitals? This post on Health Beat asks, Does Medicare Under-Pay Hospitals?

The losses many hospitals report may be real, but there is tremendous variation depending on management choices, location, and the ways in which costs are incurred.

Some hospitals are indeed losing large amounts on Medicare services, while others actually are making a profit. Most individual Medicare patients are profitable. Many others could make a profit if hospitals improved their operations.

Medicare is an excellent program, has high levels of approval from its enrollees, and has provided good care for many patients who would otherwise be excluded from the health care system. Hospitals need to be protected from true underpayment, but Medicare itself and the American public also need to be protected from poor management that leads to increased costs and poor health care.

The entire post is well worth reading.