Because there have been so many fat targets recently, I’m just getting around to Elliot Wicks’ Health Affairs post, in which he extols the virtues of a provider tax as a means of financing universal health coverage. The crux of his analysis is as follows:
For almost all states, achieving near-universal coverage … means imposing some kind of new tax or a tax increase. No tax increase will be easy to get through the political process … But as this analysis shows, a provider tax has some economic advantages that make it worthy of consideration.
Although Wicks’ bio indicates that he is an economist specializing in health care issues, he exhibits a remarkable naïveté concerning the capacity of the provider community to absorb such a tax burden. The reality is that the kind of tax he advocates would decimate the not-for-profit hospital system.At present, two-thirds of American hospitals are either losing money or barely breaking even, and most of those operating in the red are small to medium-sized community hospitals. All that stands between many of these essential providers and bankruptcy is the tax exemption associated with not-for-profit status.So, the primary result of the provider tax favored by Wicks would be a significant decline in the number of hospitals available to treat patients.
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