Under Single-Payer Health Care, Some Hospitals Would Lose Revenue

| Press Releases

A new analysis of New York’s proposed single-payer health care plan finds that as many as 77 percent of hospitals statewide could lose revenue under its funding structure.

With widespread support among Democrats, the proposed New York Health Act would implement a single-payer health care system for New York State residents. The plan would make taxes the sole source of revenue for hospital and physician services — setting community against community in a struggle for whatever funds are available.

In their report, “The Impact of Single-Payer on New York Hospitals,” Empire Center Director of Health Policy Bill Hammond and Manhattan Institute Senior Fellow Chris Pope find that many institutions receiving relatively high reimbursement rates from privately insured patients would see a significant drop in their revenues under a single-payer system reimbursing hospitals at much lower Medicare rates.

The key findings of the report include:

  • The adoption of current Medicare reimbursement rates would reduce New York hospital revenues by 17 percent statewide, cutting income for 77 percent of the state’s hospitals. Total revenues would be cut by more than a quarter at 19 percent of the state’s hospitals.
  • Even if Medicare reimbursement rates were increased to maintain aggregate statewide hospital spending, revenue would still be altered by more than 15 percent at about half of the state’s hospitals.
  • For many hospitals, the revenue cuts under either scenario would be deep enough to compromise their quality of care, trigger layoffs and put them at risk of closure. Hospitals serving affluent downstate communities would face the biggest cuts in access to care.

Click here to read the full report.