Will Trump enable or thwart private equity increasing health care costs?
For context, this is a question I answered on Quora
The trillions in cuts to Medicaid and Medicare made in the One Big Beautiful Bill Act, which Trump signed into law on the 4th of July, will expedite the insolvency of rural hospitals, which according to the American Hospital Association, depend on Medicaid for 20–30% of their revenue and Medicare reimbursements for 40–50% of their revenue. According to the Center for Healthcare Quality and Payment Reform this will force the closure of an additional 100–150 rural hospitals, of which 44% were already operating at a loss in 2023 and of which 360 were already at risk of immediate closure before this law was passed. This in turn will consolidate market share in regions with fewer hospitals than usual. Note there are only 2,086 rural hospitals remaining and despite the $50 billion Rural Health Transformation Fund given as a bandaid that expires in 2030 the much larger reductions of provider tax caps from 6% to 3.5% and restrictions of state directed payments, which will eliminate an estimated $155 billion or 21% of Medicaid funding for rural hospitals, and worker requirements, which will reduce Medicaid enrollment by up to 11.8 million over the next decade, as projected by CBO, will inevitably lead to more hospital closures in spite of the $50 billion bandaid. This will ultimately drive up prices in both time and money for non-beneficiaries in those areas who will have to drive further to get care at urban hospitals that charge higher fees. Reductions in Medicaid enrollment, a higher proportion of privately insured and uninsured patients provided uncompensated care, increased market consolidation within regions with hospital closures and an uptick in the number of financially distressed hospitals will create the prefect environment for more private equity acquisitions of hospitals and other healthcare institutions. This is something that, as I noted in a prior answer, creates objectively worse outcomes for patients regardless of whether they are beneficiaries, privately insured or uninsured.
SourcesCenter for Healthcare Quality and Payment Reform: The Crisis in Rural Healthcare
Common Wealth Fund: Federal Cuts to Medicaid Could End Medicaid Expansion