U.S. hospitals' costs for patients who didn't or couldn't pay increased by $2 billion, or 8%, to $26.9 billion in 2004, according to new data released by the American Hospital Association.
That's a record amount of uncompensated care, though the increase is a slightly slower rise than the 11.7% jump from 2002 to 2003.
Patients' uncompensated costs accounted for 5.6% of hospitals' total expenses in 2004--up from 5.5% in 2003--but still tied for the third-lowest percentage reported since 1983.
"I'd say it's been relatively stable over the last 20 years," said Don May, the Chicago-based association's vice president for policy, regarding hospitals' uncompensated care relative to its expenses. Since 1984, the percentage has hovered between 5.4% and 6.4%. The 2004 rise in bad debt and charity care wasn't surprising, he said. "We expected uncompensated care to increase," he said. "Until we find a solution for the 40 million uninsured in this country, this is a number that's going to continue to go up each year."
Total uncompensated care declined once since 1980, according to the figures released Nov. 22 by the AHA. That was in 2001, when it dipped to $21.5 billion, or 5.6% of overall expenses, from $21.6 billion in 2000, or 6% of total expenses.
The AHA defines uncompensated care as the total of bad debt, or uncollected bills, and charity care, or free and discounted care of low-income patients. The association compiles the figure using data from its annual survey of U.S. hospitals, including roughly 4,200 community hospitals. The total represents costs, not charges. The figure does not include discounts for Medicare, Medicaid or private insurers.
Hospital charity-care policies for low-income and uninsured patients have been sharply criticized by advocacy groups, unions and lawmakers, sparking dozens of lawsuits alleging not-for-profit hospitals gouge uninsured patients or aggressively pursue low-income patients for payment (Oct. 17, p. 8). May declined to comment on the lawsuits, but said the association's uncompensated-care figure reflects hospitals' commitment to communities.