Hospitals that take a majority Medicare patients go out of business. Medicare patients are subsidized by the rest of a hospital’s patient population.
https://www.medicaid.gov/medicaid/finance/dsh/index.html
It’s just another case where the government splits spending across multiple programs.
> Hospitals with above average Medicare patients generally get paid more than the general population.
And the added payment isn’t that much.
Generally Medicaid pays below cost. Medicare is reasonable and leaves providers with a small profit (single digit percentage).
From 2015 to 2017 Medicare lowered it’s uncompensated care payments. However, that program covers uncompensated care underpayment. Medicare explicitly does not pay for everything at hospitals: https://www.medicare.gov/coverage/inpatient-hospital-care