Posted by: Jeff | February 17, 2010

The Cost of Doing Nothing

The New York Times, on what will happen if Congress gives up on health care reform:

For the nation’s hospitals, at least, the cost of doing nothing in Washington translates into tens of billions of dollars each year in medical bills that go unpaid by patients with little or no insurance.

Nationwide, the cost of unpaid care for hospitals, which includes charity care as well as money that could not be collected from patients, was around $36 billion in 2008. It is expected to spiral higher. The number of people without insurance in this country could increase to as high as 58 million by 2014, from about 49 million now, according to an estimate by the Urban Institute.

With the ranks of the uninsured growing, hospitals will most likely treat even more patients who cannot afford care. For one thing, hospitals are legally obliged to medically stabilize anyone who shows up in the emergency room. But they also choose to provide charity care for many people who clearly cannot afford to pay their bills.

Money lost in the treatment of those that cannot pay is usually recouped by increasing the cost of care for those that can.  It’s similar to the macro effect of theft – when someone steals items from a store, the store typically makes up the lost profit by increasing the cost of the item, passing on the differential to rule-abiding customers.

In other words, a system in which some people cannot pay is a system in which the rest pay more than we should.

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