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hat do we think when we hear about someone who has no health insurance coverage? Our first thought is that they may not get the care they need. Then we wonder if they could lose their savings and/or incur massive debts if they or someone in their family has a catastrophic illness. This should concern us, but this is not the whole picture. In reality, providing medical care for the uninsured is an even greater problem for our healthcare delivery system. In fact, it is crippling our system; and if left unresolved, it will destroy our system. Nationally, there are approximately 44 million people without medical coverage. Another 38 million have inadequate coverage. That means approximately 28% of the United States population is without adequate healthcare coverage. 1With some exception, uninsured people pay very little of the cost of providing their healthcare at the hospital level. For years, we in the hospital industry have referred to the uninsured as "self-pay." For financial purposes, we classify our patient receivables as Medicare, Medicaid, other government, commercial, or self-pay. We informally refer to self-pay as "no-pay." That is because we collect a very small percentage of what we charge the uninsured. Many of them are classified as charity care, and a large portion of their care is written off. Some uninsured patients have the ability to pay, but decide not to, and their balances become bad debts. Some fall into a monthly payment category where they make very small monthly payments (without interest). How do hospitals deal with the cost of the uninsured? Like any business, we pass it on to the paying customers. It becomes a piece of overhead. Call it what you want, but it is a part of the total cost, and somebody has to pay for it.From a financial perspective, accounting for healthcare is much like accounting for any other type of service. We must have enough revenue to cover our costs. If we cannot make a profit, we cannot replace worn out plant and equipment or invest in the latest technologies. However, there is one difference unique to the healthcare field. That is the enormous amount of free care and under-paid care we deliver. We must charge each patient more to recover the unreimbursed cost of care provided to the uninsured and "government payers." As a result, hospitals write off 40-50% of what they charge.

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