What is healthcare cost shifting?

• A. Shifting funds from capital to operating budgets
• B. Shifting patients to low-cost clinics
• C. Shifting costs to other payers due to poor reimbursement or high bad debt
• D. Shifting to cash-only payments

Answer: (C)

Cost shifting in healthcare is when providers recover costs that aren’t fully paid by one source by charging more to other payers. When reimbursements from programs like Medicare or Medicaid are lower than the actual cost of care, or when there’s a lot of unpaid care, hospitals and providers may raise charges for private insurers or for patients who pay out of pocket to balance the financial shortfall. That’s why shifting costs to other payers due to poor reimbursement or high bad debt best fits the concept. The other ideas describe internal budgeting moves, routing patients to lower‑cost settings, or changing how patients pay, none of which capture the practice of reallocating costs across payer sources.