The Iowa Hospital Association (IHA) has released a statewide survey that shows hospitals provided community benefits in 2011 valued at more than $1.4 billion. IHA spokesman, Scott McIntyre, says those benefits included a huge increase in charity care in the last four years as the economy worsened.
“From roughly 300-million-dollars to 600-million dollars. And that’s likely attributable to folks losing their insurance, or being underinsured as businesses simply cut back on that areas, because it does get rather expensive, particularly for a business in a tough economic situation,” McIntyre says.
The benefits also include an increase in the amount of bad debt written off by hospitals from $285-million in 2007 to $351-million in 2011. “Bad debt is classified as expenses that you expect to be paid for but aren’t,” McIntyre explains.
“And sometimes it’s kind of a blurry line between that and charity care because, particularly for folks who are underinsured, that could involve copayments or that kind of thing where they appear to have the means to cover the costs, but for some reason aren’t. Sometimes bad debt ends up that way simply because people don’t want to go through the qualification process.”
Iowa hospitals also reported a $43-million increase in money lost for Medicaid or Medicare services. “Medicare and Medicaid account for about 60% of the revenue that Iowa hospitals receive, so it’s a huge part of our financial picture. The problem for them both is they don’t pay the full cost of care in a lot of situations, and hospitals as a whole…do lose a lot of money to them,” McIntyre explains. He says the gap in federal payments is an issue that continues to be a concern.
“It’s just a reality that those payments do need to be made more fair, that they do need to recognize value in the hospitals when it comes time for the federal government or state government to determine how much are we gonna spend on Medicaid or Medicare and are we gonna cut those payments. You have to realize what a huge impact that has on hospitals and the communities they serve,” McIntyre says.
McIntyre says Iowa hospitals provided 45 million more dollars in reduced cost programs and services to the state in the four year period. It’s an area he says could be in trouble if things remain the way they are. “It’s important to remember that as hospitals look at their financial health, that these programs and these services are on the line if choices have to be made. The choice might be for these programs and services not to be around any more, and if there is no one else to pick them up, they’re gone,” McIntyre says.
“That’s why we look closing at things like Medicare and Medicaid payments, because we don’t want to abandon these services when we know that no one else is going to pick them up.” The Iowa Hospital Association says there are 118 community hospitals in Iowa, with more than 70,000 employees and an over $6.2-billion impact on the state’s economy.