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Area hospitals have been reporting a dramatic rise in the number of patients who don’t pay for their care and in the total cost of uncompensated care.
Together, the trends help explain why your health insurance bills have been climbing. When the uninsured receive emergency care and don’t pay for it, part of the cost is passed on to your insurance premiums.
Our CEO Scott Lewis examined this issue last week and focused specifically on one amazing local story — an uninsured man who has cost Scripps $1.8 million since 2006. Scripps says it must care for him by law.
But this man isn’t alone in San Diego County. Thousands receive medical care each year and don’t pay for it themselves, through health insurance or through government programs. Annual financial reports by area hospitals provide a window into this indigent population and how much their care is costing everyone else.
First let’s take a look at the patients.
In the past decade, area hospitals reported handling about 65,000 patients who had their care provided at reduced or no charge. Their bills weren’t covered by health insurance or government subsidies, such as Medicare or Medicaid. The patients couldn’t pay, so hospitals just absorbed the cost.
What’s especially troubling is how the annual number has grown recently. Area hospitals reported about 2,000 patients in 2001 and about five times as many in each of the last three years.
The graphic below breaks down the annual number of indigent patients at area hospitals for all care. The figures spike around 2007, as some hospitals expanded their emergency care facilities and the nation’s economic collapse left many more without health insurance.
Caring for the indigent climbed at most hospitals over the decade, but especially at Scripps Mercy Hospital and Sharp Grossmont Hospital. Both passed the UC San Diego Medical Center, which had long handled the most patients in the county.
OK, now let’s examine the costs of providing this care.
This part’s a little trickier because hospitals don’t just report how much it costs to care for the uninsured. They report how much they charged for all care and how much was paid for, and then say the difference represents all uncompensated care.
Some of the difference represents the cost of caring for the poor and uninsured, but some of it doesn’t. This is the tricky part. The total can include losses from insured patients who just refuse to pay their bills as well as losses from care that isn’t fully reimbursed by government contracts.
In other words, uncompensated care includes a broader array of financial losses than just those attributable to the uninsured. That’s important to keep in mind when looking at the graphic below. The amount of uncompensated care spiked after the 2007 economic collapse.
These figures are also pretty staggering. Last year, area hospitals reported $628 million in uncompensated care — about five times as much as a decade earlier. Over the decade, hospitals said they provided nearly $4 billion in uncompensated care.
Health care analysts say many factors have contributed to the rising cost of uncompensated care. A larger population of uninsured patients is often called a major reason, but experts also point to the industry’s greater use of expensive procedures and inadequate funding for government programs.
As Lewis explained, all of the $4 billion in uncompensated care wasn’t necessarily passed along to your insurance premiums. It’s not that simple. Instead, those losses were one of many factors that have been pressuring hospitals to increase premiums to stay financially afloat.
When national lawmakers approved a law requiring people to buy health insurance two years ago, part of the goal was to reduce uncompensated care and decrease the pressure on hospitals’ budgets and therefore everyone’s premiums. Now, whether that will actually happen remains to be seen.
Keegan Kyle is a news reporter for Voice of San Diego. He writes about local government, creates infographics and handles the Fact Check Blog. What should he write about next?
Please contact him directly at keegan.kyle@voiceofsandiego.org or 619.550.5668. You can also find him on Twitter (@keegankyle) and Facebook.
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