Comment by conductr

I spent a lot of time in healthcare finance and across most medical service industries the Medicare rate is actually not a loss. It’s a common thing said as it’s not super profitable, but it’s usually not a huge loss. It’s pretty close to what the cost of care should be. It just doesn’t give the extra padding for extremely fancy clinics, hospitals, admin and executive compensation, and often PE investor margin expectations. It’s usually slightly positive on contribution margin and given the volume of Medicare in the mix there’s enough flow through to cover reasonable overhead and perhaps slim margins. But, whenever I see a claim that the true cost of service is 10x over the Medicare rate, it’s a huge red flag there’s some financial shenanigans at play. Saying that Medicare is a loss, leaves the impression that it leaves a huge hole to fill so other payers need to pick up the bag in a huge way. This kind of lazy analysis blindly perpetuates this misconception. If they wanted to add value here, they should have performed a “what should an ambulance ride cost?” type analysis. You have to really strip out costs that are unneeded, excessive, and account for profit margin similarly. There’s no way $13k makes any sense for the service described. We need sensible cost controls in this industry. The industry hands these people blank checks when they can hide behind out of network, etc. It’s still captive price gouging.