Cox, St. John's See Surge in Unpaid Medical Bills
Federal law says hospitals must treat people in need of emergency care, regardless of whether or not those patients can pay for that care. The high costs of health insurance, and rising unemployment rates mean that more and more people are without insurance, and many of them are seeking the emergency room as their first stop for health care, despite the fact that it’s usually the most costly. KSMU’s Jennifer Moore reports on how local hospitals are weathering an influx of patients who cannot pay their bills.
When a hospital treats a low-income patient at a discounted rate, or for free, it’s called “charity care.” CoxHealth and St. John’s Health System both have charity care programs, which they say support their missions as not-for-profit hospitals. But the number of patients needing charity care has skyrocketed in the past few years, and it continues to rise.Steve Edwards is the Executive Vice President and Chief Operating Officer for CoxHealth.He says five years ago, the total amount of charity care and so-called “bad debt,” which is essentially unpaid bills from patients who are uninsured or have very little insurance, was around $35 million per year. In 2009, that amount had risen to about $120 million per year. In other words, Cox’s hospitals are now seeing around $10 million in unpaid bills each month.“Maybe the best way to put it is, for every dollar we charge, we collect 38 cents. Another way to put it is, we could discount our charges by 62 percent and have the same bottom line, if everyone just paid their bill,” Edwards explains.He says more and more people are resorting to the emergency room for their needs, which is generally much more expensive than a primary care clinic. That’s partly because, in the ER, the patient’s history is unknown, so it’s more likely they’ll need several tests to determine what’s wrong with them.
Also, today, there are many people who have insurance but can’t meet their premiums, which are sometimes as high as four or five thousand dollars.So how does a hospital stay out of the red when it’s bleeding millions in unpaid bills each month? Again, CoxHealth’s Steve Edwards:
“We have an obligation to care for those people. And the only way to pick up the slack is to raise our rates for those who can pay. And those who can pay are principally small businesses, big businesses, people who have insurance. So insurance rates go up. It’s what we call 'cost-shifting,' and it happens all across the country," he said.
Edwards says he believes the actual health care in the United States is top-notch, but its financing mechanism is broken.
"It creates a lot of inequities. And I think, ultimately, those who have insurance are paying for those without health insurance. And they’re paying more than they should,” he says.And by that, he means that uninsured patients tend to not use the most cost-effective methods of treatment. “It’s been very tight,” says Dave Dillon, spokesperson for the Missouri Hospital Association, or MHA.
“The numbers that we’ve seen for charity care have gone up significantly,” he said. The association receives data from its 153 member hospitals, most of which are not-for-profit.
He says cost-shifting for hospitals is nothing new. What is new is the amount of cost shifting hospitals are having to do now. “To operate in any way in the black, there’s a certain amount of [cost shifting] that has to occur, just so that hospitals can keep their doors open. It probably is occurring more since we have a higher rate of unemployment, and a very, very low threshold for Medicaid eligibility in Missouri,” Dillon said.Over at St. John’s Health System, charity care and unpaid medical bills have also risen significantly in the past three years. Cora Scott is a spokesperson for St. John’s.
“For Fiscal Year 2009, St. John’s Health System wrote off bad debt accounts totaling 85.9 million [dollars] and provided charity care write-offs totaling 80 million,” she said.
At St. John’s emergency trauma center in Springfield, one in five patients who visits the ER does not carry health insurance.
“We believe it’s our community benefit that we need to provide the care, regardless of the peoples' ability to pay, so a large portion of that is provided as charity care by St. John’s. But certainly, some of that cost is shifted to our insured population,” she says.
Scott says she’s optimistic, however, about the fact that St. John’s, CoxHealth and other local health care providers have joined hands to launch the Greene County Health Commission. That’s a new partnership that’s exploring how to get Ozarks residents the primary health care they need, regardless of whether they have insurance or not.
Currently, the only clinic to offer free care to all patients walking through its doors is The Kitchen Clinic in Springfield, and its director says the clinic is bursting at the seams with patients needing care.
For KSMU News, I’m Jennifer Moore.