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You are a business office manager of a small rural hospital.  The chair of your board...


You are a business office manager of a small rural hospital.  The chair of your board of directors, who has been in that role for many years, is discussing how you might be able to improve the financial position of the hospital.  He asks why you cannot simply increase charges to Blue Cross to cover losses to Medicare, Medicaid, and charity care.  As he states, this mechanism of ‘cost shifting’ was used in the 70s and 80s and was effective.  He wants to know why it will not work now.  What will you tell him?  

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Answer #1

Cost shifting refers to charging the insured person in excess to combat the loss happened to a healthcare provider or an organization .It will not work now due to some of the following reasons are

  • Public are more aware of the charges made by Medicaid and Medicare because of its transparency
  • The medical bill are received by the patients which can lead to scrutiny if cost shifting is done
  • The efficiency of care delivered to the elderly population and the insurance coverage of providing a quality care.
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