Healthcare News & Insights

Hospitals rack up billions in uncompensated care costs

Although uncompensated care costs in hospitals have remained relatively stable over the years, they still represent a significant portion of healthcare costs, according to the American Hospital Association (AHA).

Using data from its most recent annual survey of U.S. hospitals, the AHA found that, in 2011, hospitals provided $41.1 billion worth of uncompensated care to patients.

Uncompensated care is defined as “an overall measure of hospital care provided for which no payment was received from the patient or insurer,” according to the AHA.

Charity care, where hospitals don’t expect any reimbursement, is included in this measurement, as are the instances where patients are either unwilling or unable to pay hospital bills.

The costs of uncompensated care represent 5.9% of total healthcare expenses, which is in line with the percentage in recent years. But it’s still a slight increase from 2010, when uncompensated care costs came in at $39.3 billion, or 5.8% of total healthcare expenses.

With the anticipated provisions of the Affordable Care Act expected to be put in place next year, some of this burden is expected to be relieved, since more patients are expected to have some form of health insurance to cover their medical bills.

However, until then, hospitals have had to come up with some creative solutions to mitigate the effects that providing uncompensated care has on their budgets.

Charging fees

Some hospitals have started to try and boost revenue by charging fees to patients with non-emergent conditions who seek care in the emergency department.

According to an article appearing in American Medical News, these fees tend to range from $100 to $180 for those seeking care who don’t have any form of insurance. Patients must pay the charge up front. Otherwise, they’ll have to seek care elsewhere.

In hospitals that have initiated this practice, there has been a marked decrease in patients who seek treatment for non-life-threatening conditions in the emergency room. This can lessen the strain on hospitals’ budgets that comes with providing uncompensated care.

Whether or not a similar measure would have an impact on uncompensated care costs at your hospital depends on many factors, including the percentage of patients it sees for non-emergent conditions.

Although it’s been somewhat effective for hospitals, the practice of charging pretreatment fees in the emergency room setting has been the target of scrutiny. Critics claim it could have harmful effects on people who may not have access to alternate forms of care.

If your hospital is considering such a fee, it’s important to weigh all the benefits and drawbacks, including those relating to patient care, before beginning the implementation process.

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