Uncompensated care hits hospital bottom lines

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Sun Mar 13 19:01:51 PDT 2016



February 25, 2016


Uncompensated care hits hospital bottom lines 



8R7LMKM1ty9MQWxTk> Fierce Health Finance



By Ron Shinkman


Despite the addition of millions of newly insured Americans under the
Affordable Care Act (ACA), hospitals continue to struggle with the issue of
bad debt because of non-paying patients.


The primary reason why patients aren't paying their bills? More than a third
of all Americans are insured by plans with high deductibles and
out-of-pocket costs, according to Bloomberg News. That is up from just 25
percent in 2010, the year the ACA was signed into law.


"It feels like a sucker punch," John Henderson, chief executive officer of
the non-profit Childress Regional Medical Center in Texas, told Bloomberg.
"When someone has a really high deductible, effectively they're still
uninsured, and most people in Childress don't have $5,000 lying around to
pay their bills."


Rural hospitals have been hit especially hard because they don't have the
financial cushion of urban and teaching hospitals to absorb the losses from
bad debt, according to Bloomberg.


But for-profit hospital chains have also been hit hard, the article noted.
For example, Community Health Systems, which operates 195 hospitals in 29
states, increased its bad debt provision by $169 million for the fourth
quarter of 2015. The company told Bloomberg that of that sum, $68 million is
attributable to patients who have insurance but can't afford their
deductibles and out-of-pocket costs.


Some hospitals have tried to change collection tactics in order to better
ensure payments, such as using point-of-service collections prior to
rendering care. Nonetheless, uncompensated care totaled $42.8 billion in
2014, down from $46.4 billion in 2013. The total expense for that category
also dropped from 5.9 percent to 5.3 percent. 




Jeff Wells
Deputy Editor, CAL/AAEM News Service


Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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