Hurting the Hospitals

In a move that will soon make the cost of care a measure of hospital performance, the federal government is set to establish "Medicare spending per beneficiary" - a measure that will reward hospitals that keep low costs and penalize those that spend the most.

In an interview Tuesday on Varney & Co. NYU Langone Medical Center Vice President Andrew Rubin said that although hospitals saw this coming, they aren't pleased with the measure.

"We knew this was going to happen. We have to cut Medicare costs and the public, as we saw with Representative Ryan's Medicare privatization plan, they don't like it. So what are you going to do? Squeeze the hospitals."

In addition to the treatment they provide while the patient is checked in, hospitals could also be held accountable for the cost of services provided 90 days after a Medicare patient is discharged.

While Rubin says it will be difficult to hold hospitals responsible for care after a patient is released, he believes they will be forced to adapt in other ways.

"They are going to force hospitals to invest more money into making sure we look after patients after they leave the hospital by hiring our physicians into hospital organizations, rather than having them practice in private practice as they have been doing for a century," said Rubin, "We are going to have to look at new ways to manage care of patient."

This may not be so bad for patients, says Rubin, but it will be hard on the hospitals, as well as the private sector.

"Right now the private sector already subsidizes the federal government by paying us more than Medicare pays us. Presumably, we are going to have to charge higher rates to the private sector in order to stay in business," said Rubin.

According to Rubin, there is no single answer that will lower the cost of medical treatment nationwide. Instead he says that the public must be better educated as to what the choices are.

"With Obamacare the White House did a terrible job selling health care reform to the general public. Rep. Ryan from Wisconsin came out with a plan to privatize Medicare. He and the Republican Party did a terrible job selling the privatization plan."

Rubin says that it is the job of politicians to explain the "consequences of the choices" American's have made towards the heath care system. "Then and only then can we have an honest conversation republican or democrat, hospitals and doctors, about what it is going to take to solve it."

Until we do that, Rubin says the growing issue of Medicare costs will not get better.