Cost shifting

  • Uncategorized



Costshifting is a situation where a health care provider or a hospitalcharges insured persons more than the uninsured patients for the sameservice or procedure (Hammaker &amp Knadig, 2017). Individuals whohave health insurance covers part more for the financial lossesincurred by hospitals when they offer services to persons who do nothave insurance covers (Brux, 2016). In the recent years, the gapbetween the real cost of providing services to Medicaid or Medicarepatients and the reimbursement has increased.

Thisincrease is a result of the government not taking responsibility ofshouldering the cost of services offered to persons not enrolled ingovernment programs and cannot afford the services (Brux, 2016). Theshortfall in Medicaid and Medicare reimbursements to the hospitalsand the doctors have made the healthcare providers to change theunreimbursed costs of serving the state to the payers of the privatesector (Hammaker &amp Knadig, 2017). Examples of policies that usecost shifting include the pharmaceutical and hospital policies.

TheACA and Cost Shifting

Sinceit was enacted, the ACA has completely reformed the healthcarerevenue cycle landscape (Barr, 2016). The healthcare serviceproviders improved how they offer care and collect funds as well ashow they refocus their incomes to maximize profits. The ACA hasenabled more individuals to access healthcare coverage and in theprocess, increased the patients’ financial responsibility (Barr,2016). The increase in patient consumerism has empowered people tochoose service providers based on their needs and expectations. Withthe growth in the number of individuals enrolling in insurance plansunder the ACA, many service providers have realized an increase inhospital profits because of the reduction in the uncompensated carecosts (Barr, 2016).


Costshifting led to high charges on the same services offered to insuredpersons to cover the financial losses incurred by service providersfor providing services to individuals who do not have insurancecovers and cannot afford to pay for services. The ACA has broughtpositive changes to the lives of many Americans by decreasing thecosts and offering service providers more incentive to provide betterhealth care services.


Barr,D. A. (2016). Introductionto US health policy: the organization, financing, and delivery ofhealth care in America.Baltimore: Johns Hopkins University Press.

Brux,J. M. (2016). Economicissues and policy.Australia: Cengage Learning.

Hammaker,D. K., &amp Knadig, T. M. (2017). Healthcare management and the law.Burlington, MA: Jones &amp Barlett Learning.