Residents are closely supervised by another physician. So it's not just paying for the resident, it's paying for the supervisor as well. And early on, the supervisor is going to be combing through the details of each patient to make sure mistakes aren't made.

That plus the throughput of residents is going to be much lower than a trained physician.

As such, Medicare pays a "training institution" premium for all billing. It's a small bomb (5%?) but pays for the resident.

Why can't the resident sign a contract with the hospital promising to work there a certain number of years after finishing residency? That's what other industries with a training period do.

Most hospitals operate at a loss.

The ones that don't nickel and dime their patients, or even engage in outright billing fraud.

Do you really want to move more hospitals to the latter form of doing business? Because they would be a huge net loss for everyone except the hospital CEOs.

Do they truly operate at a loss, or do they operate at a loss in the same way Hollywood films never make money?

That's absolutely fascinating if so.

It's the latter. Whenever they would make money, they hike pay for senior administrators, of which there are a huge number (and maybe doctors and nurses too).

Given the medical costs in the US, this really begs the question: why?

To receive federal and state funding as well as accept residents hospitals have to run an ER and accept patients regardless of payment ability. Some facilities will do their best to help a patient that will be unable to pay. Others will simply stabilize the patient until they're not going to die immediately and then kick them out. Since medical care is very expensive a single non-covered ED patient could EASILY cost the hospital 250k+ per visit. For example maybe a homeless person is found and brought in unconscious. They're then discovered to have untreated diabetes, rot in their feet, and psychiatric issues. They'll be in the hospital for at least a week, surgery to clean up any rotten tissue, and then maybe a stay in the psych ER or other facility. Every day wracking up huge charges which the hospital will never be compensated for..except by spreading the loss around to others.

This looks like a crude version of socialised healthcare to me. Other socialised healthcare systems around the world should in theory face the same problem, wouldn't they? But AFAIK they do not nearly have the same cost issues as the US, at least I'm not aware of this here in Germany.

One theory I've heard that sounds plausible is that

a) insurers do not pay anywhere near what hospitals bill to uncovered patients

b) hospitals do not even expect patients to pay the whole bill, but more like 20% of it, so it is always good to contest the bill

So the problem is that hospitals are cash-strapped for systemic reasons, but can't get it from insurers or the state because those have contracts in place. So hospitals try to squeeze uninsured patients as much as they can with inflated bills, with predictably horrifying consequences. Insurers don't mind because that makes the case for buying insurance even stronger.

So one solution might be to pay for poor/homeless care via state/federal budgets. This could cover poor people up to an income level that can afford insurance.

Most/many of the homeless that come in are eligible for Medicaid or other government benefits (veteran healthcare for instance). However figuring that out can be very difficult. Many of them are incapable or unwilling to give up their names or stay long enough for social workers to get their paperwork in order. Or they're afraid of being located (for example they have warrants out for their arrest). Then you have regular uninsured people who are simply incapable of paying that come in and give fake information.

Fun fact, if you're unable to pay the full amount most hospitals will do almost ANYTHING to stop from having to send your bill to collection. Even if you say 'I'll pay $50/month forever' thats way better than they'll get from the debt agency that buys your debt.

Thanks for the explanation. Hospitals shouldn't be left alone with this, I can't imagine forwarding the costs to Medicaid would be a worse solution than the accountability problems that arise when having patients with no names, like fraud.

No hospital is going to pay for long tern psychiatric treatment unless it consists of pills during a short ER visit until social services can take over.

Many tech startups also operate at a loss. Plenty provide valuable services. Few have millions of dollars billables per workers, as doctors do. I wish the government would pay my junior engineers’ salaries.

Generally, any random doctor at a hospital provides valuable services.

I honestly can't name more than a handful of large or small startups that do anything remotely valuable. And the ones that do provide actual value don't operate at a loss...

Startups are experiments. Sometimes, you learn something really valuable in the process. Often, you don't.

Not doubting you (because I know that the mergers are happening a lot often these days, but could be partly because it's the natural conclusion of capitalism). Could you share any reference to the claim that most hospitals operate at a loss?

these are tough search terms to use with all the blogspam these days, but here is an article from a few years ago. huge losses in 2016 at least.

https://hbr.org/2017/10/how-u-s-hospitals-and-health-systems...