I suspect the issue is variable versus fixed costs on medicaid and hospitals.

Reader comment on: Haslam's Medicaid Expansion

Submitted by Lyle (United States), Jan 1, 2015 11:14

Consider that in all businesses there are both fixed and variable costs. At a minimum you have the costs of structure and equipment which occur no matter if there are zero patients or the hospital is full. I suspect that medicaid pays the variable costs for the patients (staff food supplies etc). So since I have never seen a breakout between fixed and variable costs in hospitals its not clear what lose money means.

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