A Profile Of Uncompensated Hospital Care, 1983-1995

Abstract

This DataWatch examines national trends in the provision of uncompensated hospital care. It shows that rapid growth from 1983-1986 was followed by modest growth through 1990, a time during which managed care was becoming established in some regions. There was then another spurt in uncompensated care from 1991-1993, a period that corresponds to sizable increases in disproportionate-share payments. Uncompensated care growth again slowed through 1995. The increase in uncompensated care levels after 1988 appears not to have kept pace with growth in hospital expenses or the number of uninsured. However, the trend data do not suggest a large-scale reduction of effort. B ECAUSE THE UNITED STATES lacks universal entitlement, the health care system relies on charitable care by medical providers to serve the 40.6 million uninsured.1 Hospitals, in particular, serve as providers of last resort, a role enforced through legal sanctions against turning away patients with life-threatening or urgent conditions. The $17.5 billion in hospitals' uncompensated care costs in 1995, which represented 6 percent of hospital expenses, is testament to hospitals' vital role in protecting access to care. Hospitals have been able to fund uncompensated care through a delicate balance of internal and external cross-subsidies. To a large extent, this balance depends on hospitals' ability to receive reimbursement from paying patients that exceeds the cost of treating those patients, a practice referred to as cost shifting. In a few states, these cross-subsidies are made explicit through uncompensated care trust funds as part of all-payer hospital rate-setting programs or through the establishment of indigent care subsidies that offset some of the costs of charity care.3 Explicit recognition of the burden ]oycc

Trends In Hospital Consolidation: The Formation Of Local Systems

“…33 High Medicaid and high charity care share frequently go hand in hand. 34 Thus, although private hospitals in systems locally serve large shares of low-income patients, the effect on charity care is as yet unknown. This stands in contrast to studies of hospital conversion and charity care.…”

Health Technology and U.S. Medicare Policy in the Late 20th Century

“…Changes in Medicaid as primary or supplemental insurance also increased the rate of uncompensated care by providers. However, HMO penetration within the same type of hospital market structure resulted in a lowering of the provision of uncompensated care when controlling for hospital size, and with the effect stronger in competitive markets (Mann et al, 1997).…”

“…The study noted that the lack of a universal entitlement system in the United States means that the health care system has relied on charitable care by medical providers to serve 40.6 million uninsured people. The study notes that uncompensated care delivered by all nonfederal community hospitals in the United States grew from $6.1 billion in 1983 to $17.5 billion in 1995 (Mann, Melnick, Bamezai, & Zwaniger, 1997). Uncompensated care per insured person however, declined due to growing numbers of uninsured persons, even though uncompensated care as a portion of hospital expense remained stable from 1989 to 1993.…”

Latino Population Growth and Hospital Uncompensated Care in California

“…2,29 We calculated uncompensated care charges by adding the following individual measures: (1) charity care charges, for patients without the ability to pay who qualified under the hospitals' charity guidelines; (2) bad debt charges, for patients without the ability to pay who did not qualify under the hospitals' charity guidelines; and (3) county indigent contractual adjustments, the difference between hospitals' full charges and the actual payments received. California's Welfare and Institutions Code requires counties to provide or pay for basic health care services for their indigent residents, 39 which typically include uninsured populations earning up to approximately 200% of the federal poverty level.…”