Rep. Pramila Jayapal (D-Wash.), a leader of Democrats’ Medicare for All caucus, said hospitals are "very much going to be a partner at that table.” | Chip Somodevilla/Getty Images health care 'Medicare for All' backers find biggest foe in their own backyard Hospitals threaten to derail big and small Democratic plans for coverage expansion.

Democrats who've made "Medicare for All" a top health care priority are running up against their toughest opponent yet: their own neighborhood hospitals.

The multibillion-dollar industry has emerged as the most formidable foe of single-payer health care. It’s helped assemble a coalition of health care lobbies that has launched social media campaigns attacking Medicare for All and its most high-profile proponent, Sen. Bernie Sanders (I-Vt.), while fighting narrower Democratic proposals to expand federal health coverage over concerns any change would slash hospital revenue.


That’s created a dilemma for Medicare for All champions who cast themselves as crusaders against a broken health care system full of greedy insurers and drug companies, yet remain wary of taking on hospitals that rank as top employers in many congressional districts and are seen by the public as life-saving institutions.

“We’re not cutting out hospitals, we are keeping the existing hospital system,” said Rep. Pramila Jayapal (D-Wash.), a leader of Democrats’ Medicare for All caucus and fierce critic of corporate influence, adding “they’re very much going to be a partner at that table.”

The bill would all but end private insurance and regulate hospitals in a vastly different way, dramatically changing operators’ business model and costing community hospitals as much as $151 billion a year, according to one estimate published in JAMA.

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The industry's stand against Medicare for All comes amid lobbying on separate and intensifying bipartisan efforts to address "surprise" medical bills, with hospitals fighting other parts of the health care industry to ensure they’re not the ones who have to swallow the bulk of the patient’s tab.

Hospitals now drive a significant share of the nation's health care spending, though the public doesn't see it because insurers wind up paying much of the bill. And hospitals make up for the relatively lower payments they get for Medicare and Medicaid patients by shifting some of the expense to patients with private insurance, which pays more than double Medicare rates, according to a new study that’s put the hospital industry on the defensive.

The calculus would change dramatically under Medicare for All, which would free millions more patients to seek no-cost medical care while slashing hospitals’ pay rates and putting up to 1.5 million jobs at stake.

"Every congressman has got a major hospital in their district, and that hospital is a major employer,” said Kevin Schulman, a professor of medicine at Stanford, who co-authored the JAMA article. “And so how hard we can push on hospitals given that is an open question.”

It’s a concern that’s left Medicare for All advocates walking a fine line, arguing for a dramatic reshaping of the health system while trying to avoid a brawl with their hometown health systems.

“It’s hard to argue that the institutions that provide the care shouldn’t be given a more sympathetic ear than the people who essentially serve as middlemen,” said Sen. Brian Schatz (D-Hawaii).

While progressives waver, the hospital industry has spent the last year fueling the corporate resistance to Medicare for All.

For-profit hospital trade group Federation of American Hospitals led the formation of The Partnership for America’s Health Care Future — a coalition spanning the provider, insurer and drug lobbies formed solely to oppose major efforts to expand government coverage. Its 30 members include hospitals’ other lobbying juggernaut, the American Hospital Association, and a slew of big operators including Ascension — the nation’s largest Catholic health system — and Texas hospital management giant Tenet Healthcare.

The Partnership has spent more than $68,000 attacking Medicare for All on Facebook and Twitter this year, and plans to spend at least six figures targeting voters and Washington policymakers, according to a person familiar with its strategy. Its frequent email blasts deride Medicare for All as a costly government takeover that would destabilize the health system and cut access to care.

In recent weeks, The Partnership launched a series of broadsides at Sanders, a 2020 presidential contender, reflecting a conscious decision to directly challenge the top-tier Democratic candidate over his health care rhetoric, the person familiar with the strategy said.

Sanders’ campaign manager, Faiz Shakir, responded by calling the group “a partnership to protect America’s health industry profits” and a front for profiteering corporations.

But even Sanders has shied away from directly implicating hospitals, branding The Partnership as “insurance companies and the pharmaceutical industry’s lobbying group.” In an interview, he referred to hospitals only as one of their “allies” in the fight against Medicare for All.

More troubling for the Democratic Party as a whole is the hospital industry's staunch opposition to Democrats’ entire range of ideas expanding government-run coverage, including far less ambitious proposals such as a public option — a government-run plan within the Obamacare markets that would give consumers more choice and increase competition.

“A public option for us is a complete nonstarter,” said Jeff Cohen, a top lobbyist for the FAH. “We are totally opposed and would fight it.” A public option was originally envisioned as a part of the Affordable Care Act but didn’t make it through the Senate.

The development has rattled a party that found hospitals a crucial ally in its efforts to pass Obamacare a decade ago, and that remain key to ongoing efforts to improve the 2010 health law.

“We can achieve the same objectives by building on what’s in place,” said AHA President and CEO Rick Pollack, listing Medicaid expansion in 14 mostly Republican holdout states and expanding federal subsidies designed to help enrollees afford coverage.

Democrats plotting major coverage expansions have tried to assuage hospitals’ concerns. Multiple House Democrats said they’ve encouraged the industry to work with the party on coverage expansion, with the expectation that savings created by downsizing private insurance could be redirected to boost hospitals’ pay.

One new proposal from Sens. Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.) and others that envisions letting privately insured individuals enroll in Medicare would set payment rates between what Medicare and private insurers now pay.

Still, many hospital groups aren’t biting if it means putting any revenue at risk.

“Medicare and Medicaid payment rates are wholly inadequate,” said Kenneth Raske, president of the Greater New York Hospital Association, which has fought single-payer bills on the state and federal levels. “It would take a huge investment to make them adequate enough to create a sustainable health care system, and that is an absolute fact.”

Not every hospital is a strident opponent of expanding coverage. America’s Essential Hospitals, which represents safety net institutions that provide higher levels of charity care, has steered clear of the debate, saying there are still too few details. And some say more government-funded coverage could actually help safety net hospitals.

“If you’re trying to solve the problem that we want to get everybody covered and we want to level the playing field between the hospitals that take care of the poor people and hospitals that take care of the rich people, Medicare for All is something we better take a look at,” said Eric Dickson, president and CEO of UMass Memorial Health Care.

Yet the biggest industry lobbies view Medicare for All as enough of a threat to put their public credibility and political leverage on the line to stop it. And unlike drug companies and insurers, they believe they have the public credibility and political influence to keep the Democratic Party in line.

“Right now, some person that is uninsured — including illegals — comes to our ER, we take care of them. Nobody else does,” said Raske of the New York hospital lobby. “They’re sick, they don’t have insurance and we take care of them. How in the name of God are you going to criticize that?”