A talking point against Medicare for All is that it will cause rural hospitals to shut down due to lower reimbursement rates. Indeed, some weeks ago I noticed a prolific and outspoken commenter on Daily Kos opining that “MFA would close down every rural hospital in the country.”
In fact, rural hospitals have been shutting down all across the country under our current system. This chart shows 113 closures since 2010. So clearly the status quo is not a boon for rural hospitals.
Opinions vary about what effect Medicare for All might have on rural hospitals, but doomsday should not be our default assumption. Consider, for example, what the CBO has suggested:
[P]redictions of further demise under a single-payer system may be overblown, according to research from the Congressional Budget Office.
Universal health care would likely boost revenue at rural hospitals "because they take care of so many Medicaid and Medicare and uninsured patients today," CBO's Jessica Banthin told lawmakers at a congressional hearing in May.
"They treat a greater share of uninsured patients than some more urban and suburban hospitals do,” she said. “They could actually get more revenue under a single-payer if Medicare payment rates were provided for every patient."
In other words, under Medicare for All, no one would show up to the emergency room without insurance. Everyone is a paying customer.
I highly recommend this Kaiser Health News article, written in partnership with PolitiFact, which discusses the complexities of this issue.
Recently I heard a journalist on C-SPAN’s Washington Journal who was well-versed on the subject of rural hospital closures. He pointed out that fewer and fewer folks live in rural areas nowadays compared to generations ago, and thus the money to support the rural hospitals has dwindled, at the same time as advances in modern medical technologies have made it very expensive to keep hospitals well-equipped, and so people tend to want to travel to the cities for care. States refusing to expand Medicaid have worsened their situations.
However he notes that Utah is an interesting case:
Utah has about 21 rural hospitals. None of them have closed down during the period — none of them have closed down at all. They are also the most profitable, collectively, those 21 are the most profitable in the country and they only expanded Medicaid last year. The reason Utah is doing so well is about 20 years ago the hospitals got together and the urban hospitals agreed to share some of the profits with the rural hospitals. So basically what you have going on in Utah is socialism where the rich urban hospitals are helping the rural hospitals.
The important takeaway here, of course, is not his rather tongue-in-cheek reference to socialism, but that effective efforts to help rural communities aren’t unimaginable. We live in a democracy: if we care about rural communities and we elect politicians who do, then government policies can be devised to help rural hospitals. For example, as the Sanders team has pointed out, there’s nothing in his Medicare for All proposal which says that reimbursement rates must necessarily be one-size-fits-all.
Medicare already tailors payments based on regional costs, and a Sanders aide made clear to HuffPost a new system could add further modifications as necessary. “There’s no reason we can’t adjust rates geographically,” the aide said.
Donald Berwick agrees (and, looking at his bio, I think you’d be hard-pressed to find someone with more expertise in the field):
Supporters of Medicare for All also point out that reimbursement rates are negotiable when the law is written.
"That could be entered into the conversation," says Donald Berwick, former administrator of the Centers for Medicare & Medicaid Services during the Obama administration.
"Those who care about rural hospitals — like I do — would have the ability to argue that a Medicare for All system should make more effective adjustments of payments to meet the needs,” Berwick says.
As the Utah example shows, we can certainly do a better job of sharing wealth in America, and we can certainly devise policies to help our rural regions prosper.
There’s nothing written in stone that says we cannot do so.
Candidates such as Sen. Bernie Sanders, Sen. Elizabeth Warren and Mayor Pete Buttigieg have announced proposals specifically aimed at helping rural America. You can find Sanders’s plans for revitalizing rural America on his website and Buttigieg’s on his. Here’s an article that discusses Warren’s proposals.
And in the near term, we could invest in emergency measures to help prevent hospital closures, such as Sanders has suggested.