Healthcare News & Insights

Where you’re getting ripped off now: Uncompensated care on the rise

If it feels like your balance sheet is a little out of whack, there’s good reason:

According to a recent report from the American Hospital Association, uncompensated care and Medicare/Medicaid underpayments are on the rise.

In 2008, uncompensated care costs increased by $2.4 billion to a total of $36.4 billion. The percentage of total expenses represented by uncompensated care stayed flat at 5.8%.

Medicare/Medicaid underpayments rose to $32 billion in 2008. That’s “only” half a billion more than in 2007. But consider that in 2000, the total amount of underpayments was a mere $3.8 billion.

Hospitals received 91 cents of payment for every dollar spent treating Medicare patients. For Medicare, they received only 89 cents on the dollar.

For this study, uncompensated care is defined as care provided where no payment is received from either the patient or an insurer. Underpayments are the difference between the costs to deliver care and the reimbursement the hospital receives.

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  1. Let’s be pragmatic about this situation: deal with uncompensated care costs by lowering the costs instead of increasing the government reimbursements. I’ve been in the Health Care industry for 2 years now after working in high tech manufacturing for the prior 25 years and I’m amazed at the opportunities for cost savings in Health Care. Other US industries have increased efficiencies to lower costs or they have gone out of business due to competition. The health care industry can learn from their experiences. It’s a shame that there isn’t more competition based on cost in health care and the current ‘health care reform’ efforts in Congress don’t appear to deal with that fact in a meaningful way. However one thing is clear – the US Government isn’t extending a blank check to the health care industry. So, let’s all work to find ways to lower costs. My suggestion for today: take a look at how manufacturers procure materials. Anyone interested in online auctions for commodity products? You’d be amazed at how much less can be paid for a commodity in an open market…

  2. If you’ve been in healthcare for two years, you must know by now that heathcare providers only received a contracted rate. The costs of healthcare are regulated by the insurance companies, not the healthcare industry. If you take a look at the EOB and look at the charges versus the allowed reimbursements it is impossible to explain how the healthcare industry survives!!! I have been in the healthcare industry for over 30 years. Healthcare is a necessity, not a commodity. You are right that healthcare should be treated as a business and competition should be encouraged. In reality, all services are paid at a fixed rate across the board–there is no way to compete in healthcare today.

  3. I am also working for 31 years… how can you save on overhead in an office with all the bureaucracy involved??? paper work, forms.. necessity for a staff for billing dictation when needed, utilities supplies, taxes licences insurances CME, salaries accounting, Phone, tonners , answering services .. stamps computer support … etc.. etc… an office can hardly spend less than 100$ an hour.. I have hundreds checks of less than 25 cents each from payers (may be should redeem them ) but I though I can use them as wall paper, rather than painting my office
    a board recertification today between trip refreshment course hotel exam fees and CME can excced 8000$ not including an office that is closed with a paid staff
    Good luck for us