Massive federal support in several forms seems to be the biggest factor in staving off an apocalypse, analysts and advocates say. These supports include paying a higher percentage of Medicaid budgets, subsidies for unemployed workers to pay their health insurance premiums and more money for federally qualified health centers.
One advantage to hospitals during the recession was the decline in the undocumented worker population, many of whom are uninsured. In a report issued in January, the Homeland Security Department estimates that this population fell by about 800,000 to an estimated 10.8 million in 2008. Even with that decline, this population has grown by 27% since 2000, according to the report.
Moreover, hospitals had been working on various strategies for limiting their exposure to uninsured patients with nonemergent conditions for years, ever since their numbers began to increase more rapidly around 2003, analysts say.
Last year was not the first time that the predictions on uncompensated care were far off what actually occurred, says Kemp Dolliver, a healthcare stock analyst and managing director of investment bank Avondale Partners.
“It has defied conventional wisdom,” Dolliver says. “We had this sharp uptick mid-decade, and you think, ‘Gee, the economy is pretty good, the employment growth has picked up, but these numbers are pretty bad.' That was the peak of the growth of the undocumented population, for instance.” About 60% of undocumented workers are estimated to be uninsured, Dolliver adds.
Nine out of 10 hospitals responding to a survey conducted in March and April told the American Hospital Association that they are seeing higher levels of bad debt and charity care, says Caroline Steinberg, vice president of trends analysis for the AHA. “We do also sort of hear a sigh of relief that they didn't go up as much as we thought,” she adds.
The National Association of Public Hospitals and Health Systems says its members reported an 18% increase in uncompensated care for the third quarter of 2009 compared with the year-ago quarter.
The association doesn't have the full 2009 figures yet, says Lynne Fagnani, senior vice president, but its members expect more uncompensated care in recessions: “That's their job.”