PROVIDENCE – The state’s 13 private hospitals provided $49.7 million in charity care in 2007, at a net cost to them of $36.5 million, up 38 percent from a net cost of $26.4 million the previous year, according to the latest data from the R.I. Department of Health’s Center for Health Data & Analysis.
Bad debt also grew, although less dramatically, rising 8 percent to $37.3 million in 2007 from $33.1 million the year before, the report shows. When combined, bad debt and charity care cost local hospitals 2.84 percent of their patient revenue for the year, up from 2.4 percent in 2006. (READ MORE)
“Our state’s hospitals deliver medically necessary services without regard to a patient’s ability to pay,” Dr. David R. Gifford, the state health director, said yesterday in unveiling the annual report. “Although uncompensated care is a relatively small portion of patient revenue, we need to continue to examine how hospitals provide necessary care for the indigent while maintaining their own financial solvency.”
In 2007, the state had an estimated 113,000 uninsured residents, the report notes. Lacking public acute-care hospitals, Rhode Island requires its private hospitals – all nonprofits – to provide medically necessary care to all patients regardless of their ability to pay.
Hospitals classify care that they provide without pay in two categories: Charity care is charges for services that are delivered but never recognized as revenue, because they’re given out for free from the outset, while bad debt are charges billed for services rendered, but never collected and written off.
Hospitals’ charity-care guidelines have varied, but since April 2007, all the state’s hospitals follow the same policy: Provide free care to uninsured patients with incomes below 200 percent of the federal poverty level (with an optional test that looks at the patient’s assets), and a sliding fee scale for patients between 200 and 300 percent of the poverty line.
Charity care is only given to the uninsured, while bad debt can also involve co-payments and deductibles for insured patients, or bills an uninsured patient is expected to be able to pay.
Asked for comment on the report, Edward J. Quinlan, president of the Hospital Association of Rhode Island (HARI), said the report “confirms the significance of increasing uncompensated care in Rhode Island, exacerbated by growing unemployment and uninsured rates.”
“With hospitals experiencing declining operating margins, rising uncompensated care puts additional pressure on fragile organizations,” he added. “This is one of many outside influences negatively affecting our hospitals, which play a vital role in the state’s health care delivery system and economy.”
Not all hospitals are equally affected: those in urban and lower-income areas tend to provide more charity care than their suburban counterparts, and the hospitals’ service and patient mix also are factors.
Increasingly, however, bad debt also skews the figures. For example, the charity-care burden at South County Hospital was only 0.83 percent, but the South Kingstown hospital’s bad debt was 3.92 percent, giving it the highest combined uncompensated-care burden in the state, 4.75 percent.
Rhode Island Hospital, meanwhile, had a 1.66 percent bad-debt burden, but a 2.7 percent charity care burden, the highest of any hospital, for a combined 4.36 percent.
Linda Shelton, a spokeswoman for Rhode Island Hospital’s corporate parent, Lifespan, noted in a written statement that Lifespan partner hospitals provide nearly 58 percent of the state’s uncompensated care even though they account for only 41 percent of patient discharges.
“This report validates for the public what the doctors and employees at hospitals in the Lifespan system have known: Our hospitals shoulder the largest portion of uncompensated care in Rhode Island,” she said.
Shelton also noted that Lifespan’s hospitals have a “liberal charity care policy” that results in a ratio of charity care to bad debt – 70 percent to 30 percent – that is much higher than at other institutions. And she cautioned that, with the economy worsening, “we expect that uncompensated care, in the form of both charity care and bad debt, will continue to increase.”
For additional news from the R.I. Department of Health and its Center for Health Data & Analysis – including the 20-page report, “2007 Hospital Net Uncompensated Care” – visit www.health.ri.gov.
