Sen. Bernie Sanders (I-Vt.) and his allies talk a lot about how Medicare for All would take back money from insurers and drug companies, and use those savings to help make sure every American has generous health insurance. That is accurate.

But Sanders and his allies rarely mention that Medicare for All would also restrict the flow of money into the rest of the health care industry, including the parts that arent as easy to demonize in speeches.

At the top of that list are hospitals , which alone account for roughly one-third of the nations health care spending. No other sector, not even pharmaceuticals, rivals it. Under the Medicare for All proposals from Sanders as well as some other potential reforms getting attention these days, the federal government would limit payments to hospitals, quite possibly reducing their incomes significantly.

The case for squeezing hospitals is strong, given the available research on what they charge and why. Even some experts historically wary of government regulation are warming to the concept.

But actually crafting a policy that would cut hospital payments enough to free up big sums of money without adverse effects wouldnt be easy and getting such a policy through Congress could be even tougher. The hospital industry is already pushing back and, as this debate moves forward, its only going to push harder.

How Medicare For All Would Affect Hospitals

Both the Sanders bill and a House counterpart from Rep. Pramila Jayapal (D-Wash.) envision enrolling nearly everybody in a single, newly created government insurance plan that would control payments to all parts of the health care system, including for hospitals. Sanders would make this transition in four years, Jayapal in two.

With the Sanders bill, the federal government would simply pay hospitals the way that Medicare does now which, for the most part, means providing a fixed fee based on each patients diagnosis. In the Jayapal version, the government would basically give hospitals lump sums of money based on past expenses, and let them decide how best to allocate it.