National trends in uncompensated care and profitability

The nation's short-term acute care hospitals (STACHs) have reported nearly $124 billon in uncompensated care costs since federal fiscal year 2003. Although Medicare requires acute care hospitals to report uncompensated care costs, more than 20 percent of Medicare cost reports submitted by STACHs over the past five years have not complied fully with that requirement. Although increased costs of uncompensated care have affected different types of hospitals in different ways, virtually all STACHs have been challenged by these costs.

Effects of changes in incomes and practice circumstances on physicians' decisions to treat charity and Medicaid patients

CONTEXT

The decline over the past decade in the percentage of physicians providing care to charity and Medicaid patients has been attributed to both financial pressure and the changing practice environment. Policymakers should be concerned about these trends, since private physicians are a major source of medical care for low-income persons. This study examines how changes in physicians' practice income, ownership, and size affect their decisions to stop or start treating charity care and Medicaid patients.

METHODS

This study uses panel data from four rounds of the Community Tracking Study Physician Survey. The dependent variables are the likelihood of physicians' (1) dropping charity care, (2) starting to provide charity care, (3) no longer accepting new Medicaid patients, and (4) starting to accept new Medicaid patients. The primary independent variables are changes in physicians' practice income, ownership, and practice type/size. Multivariate analysis controls for the effects of other physician practice characteristics, health policies, and health care market factors.

FINDINGS

A decline in physicians' income increased the likelihood that a physician would stop accepting new Medicaid patients but had no effect on his or her decision to provide charity care. Those physicians who switched from being owners to employees or from small to larger practices were more likely to drop charity care and to start accepting Medicaid patients, and physicians who made the opposite practice changes did the reverse.

CONCLUSIONS

Changes in their income and practice arrangements make physicians less willing to accept Medicaid and uninsured patients. Moreover, physicians moving into different practice arrangements treat charity and Medicaid patients as substitutes rather than as similar types of patients. To reverse these trends, policymakers should consider raising Medicaid reimbursement rates and subsidizing organizations that encourage private physicians to provide charity care.

Caring for the New Uninsured: Hospital Charity Care for Older People without Coverage

Despite near-universal coverage through Medicare, a number of elderly residents in the United States do not have health insurance coverage. To the author's knowledge, this study is the first to document trends in the use of hospital charity care by uninsured older people. Data from the New Jersey Charity Care Program, which subsidizes hospitals for services provided to low-income uninsured people, were used to analyze trends in charity care utilization by older people from 1999 to 2004. Charity care charges are standardized to uniform Medicaid reimbursement rates and inflation adjusted using the Medical Care Consumer Price Index. From 1999 to 2004, use of charity care by older people grew much faster than it did for younger patients. As a result, older people now account for a greater share of hospital charity care in New Jersey than children. Elderly users of charity care generated higher costs per patient than their younger counterparts. Cost differences were especially salient at the upper end of the distribution, where high-cost elderly patients used significantly more resources than high-cost patients in other age groups. These results highlight an emerging source of strain on the healthcare safety net and point to a growing population of uninsured residents who have costly and complex medical needs. Similar experiences are likely to be found in other states, especially those that have growing populations of elderly immigrants who are likely to lack health insurance.

Straight talk new approaches in healthcare. Rebuilding healthcare in Louisiana--a blueprint for the nation. Roundtable discussion

When Hurricane Katrina struck Louisiana last August, it ravaged the healthcare system, which has since been struggling to cope with day-to-day challenges while also preparing for the future. The The Louisiana Recovery Authority (LRA) has been working to develop a blueprint for an equitable, affordable, high-quality healthcare system that's also equipped to respond to future disasters. In this installment of Straight Talk, representatives from Franciscan Missionaries Of Our Lady Health System, Baton Rouge, and Ochsner Health System, New Orleans, discuss the present and future state of healthcare in Louisiana. Modern Healthcare and PricewaterhouseCoopers present Straight Talk. The session on rebuilding Louisiana was held on June 8, 2006 at Modern Healthcare's Chicago headquarters. Fawn Lopez, publisher of Modern Healthcare, was the moderator.

The community safety net and prescription drug access for low-income, uninsured people

While the new Medicare drug benefit has helped alleviate concerns about prescription drug access for elderly and disabled Americans, many low-income, uninsured people under age 65 continue to rely on community safety nets to get needed medications. As the number of uninsured Americans increases, safety net providers are stretching limited resources to meet growing prescription drug needs, according to findings from the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. Despite redoubled efforts--centered on obtaining discounted drugs and donated medications--to make affordable drugs available to needy patients, safety net providers and community advocates report that many low-income, uninsured people continue to face major barriers to obtaining prescription drugs.

Medicaid in 2006: a trip down the yellow brick road

This issue brief explores the continuing evolution of the Medicaid program on several fronts. It discusses the benefits and cost-sharing flexibility that is included in the Deficit Reduction Act of 2005 (DRA) and examines the implications of these provisions for states, beneficiaries, and providers. The paper also explores recent trends in section 1115 waiver development and considers the use of waivers as a vehicle for restructuring Medicaid financing systems and for testing completely new approaches to health care delivery. The role of section 1115 waivers in the context of the DRA and as a mechanism for continued state innovation is also discussed.

A growing hole in the safety net: physician charity care declines again

Continuing a decade-long trend, the proportion of U.S. physicians providing charity care dropped to 68 percent in 2004-05 from 76 percent in 1996-97, according to a national study from the Center for Studying Health System Change (HSC). The ongoing decline in physician charity care is alarming given the increase in the number of uninsured people, particularly during the first half of the decade. Declines in charity care were observed across most major specialties, practice types, practice income levels and geographic regions. Increasing financial pressures and changes in practice arrangements may account in part for the continuing decrease in physician charity care.

Health care providers and facilities: health facilities--2005. End of Year Issue Brief

The mission of every hospital in America is to serve the health care needs of individuals in their communities, 24 hours a day, seven days a week. Their task, and the task of their medical staff, is to continually care for and to cure their patients. American health facilities are said to provide the best, most sophisticated, and most beneficial health care in the world. However, a hospital's ability to care for each patient who walks through their doors is continuously challenged on numerous fronts--the shortage of key hospital personnel, the increased cost of caring for the uninsured, the continued problem of medical errors, and the growth of niche and specialty hospitals. As of 2002, there were 5,794 registered hospitals in the United States, according to the most recent data available from the American Hospital Association (AHA). The AHA also states that there are 4,927 community hospitals, which includes nongovernmental, non-profit hospitals, investor-owned (for-profit) hospitals, and hospitals owned by state and local governments. The AHA defines community hospitals as all non-federal, short-term general and other specialty hospitals. Specialty hospitals include obstetrics and gynecology, rehabilitation, orthopedic and other individually described specialty services. Statistics provided by the AHA indicate that the number of rural and urban community hospitals is approximately equal--2,178 rural hospitals compared to 2,749 urban hospitals.

Rising pressure: hospital emergency departments as barometers of the health care system

Pressures--ranging from persuading specialists to provide on-call coverage to dealing with growing numbers of patients with serious mental illness--are building in already-crowded hospital emergency departments (EDs) across the country, according to findings from the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. As the number of ED visits rises significantly faster than population growth, many hospitals are expanding emergency department capacity. At the same time, hospitals face an ongoing nursing shortage, contributing to tight inpatient capacity that in turn hinders admitting ED patients. In their role as hospitals' "front door" for attracting insured inpatient admissions, emergency departments also increasingly are expected to help hospitals compete for insured patients while still meeting obligations to provide emergency care to all-comers under federal law. Failure to address these growing pressures may compromise access to emergency care for patients and spur already rapidly rising health care costs.

Balancing margin and mission: hospitals alter billing and collection practices for uninsured patients

A barrage of publicity about aggressive hospital billing and collection practices and a spate of lawsuits alleging hospitals overcharged uninsured patients have put hospitals in a harsh national spotlight. In the wake of a campaign by hospital associations to encourage hospitals to create formal policies for billing uninsured patients, many hospitals have modified billing and collection practices for low-income, uninsured patients, according to the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. Almost all of the hospitals interviewed that had adopted more generous charity care policies indicated expenses previously classified as bad debt have shifted to charity care write-offs. To date, these changes have had little impact on hospital bottom lines, and the impact on access to care for uninsured people remains unclear.

Uncompensated Care Provided by Emergency Physicians in Florida Emergency Departments

Uncompensated emergency department (ED) visits can negatively affect patients, clinicians, and hospitals, particularly as overcrowding occurs. Florida provides a unique market to analyze uncompensated ED care due to the high percent of for-profit hospitals, which typically provide significantly less uncompensated care, coupled with the older population that is more likely to be insured through Medicare. A survey of 188 Florida hospital emergency physician groups was conducted to estimate the level of uncompensated care provided by each ED physician group in 1998. The response rate was 44 percent (eighty-three ED physician groups). All ED physician groups provided substantial uncompensated care regardless of hospital ownership type. Uncompensated care averaged 46.8 percent and ranged from 25.8 to 79.4 percent. A model was developed to predict the amount of uncompensated care using ED volume and payer mix. A rise in the percent of self-pay patients causes a disproportionate increase in uncompensated care, such that EDs with high levels of self-pay visits have markedly higher uncompensated care rates. The results suggest the need for a uniform reporting method of ED physician uncompensated care cost.

Survival strategies for Michigan's health care safety net providers

OBJECTIVE

To understand key adaptive strategies considered by health care safety net organizations serving uninsured and underinsured populations in Michigan.

DATA SOURCES/STUDY SETTING

Primary data collected through interviews at community-based free clinics, family planning clinics, local public health departments, and Federally Qualified Health Centers from 2002 to 2003.

RESEARCH DESIGN

In each of six service areas in Michigan, we conducted a multiple-site case study of the four organizations noted above. We conducted interviews with the administrator, the medical or clinical director, the financial or marketing director, and a member of the board of directors. We interviewed 74 respondents at 20 organizations.

PRINCIPAL FINDINGS

Organizations perceive that unmet need is expanding faster than organizational capacity; organizations are unable to keep up with demand. Other threats to survival include a sicker patient population and difficulty in retaining staff (particularly nurses). Most clinics are adopting explicit business strategies to survive. To maintain financial viability, clinics are: considering or implementing fees; recruiting insured patients; expanding fundraising activities; reducing services; or turning away patients. Collaborative strategies, such as partnerships with hospitals, have been difficult to implement. Clinics are struggling with how to define their mission given the environment and threats to survival.

CONCLUSIONS

Adaptive strategies remain a work in progress, but will not be sufficient to respond to increasing service demands. Increased federal funding, or, ideally, a national health insurance program, may be the only viable option for expanding organizational capacity.

Initial findings from HSC's 2005 site visits: stage set for growing health care cost and access problems

Many developments in local health care markets appear to be setting the stage for additional health care cost increases and access-to-care problems, according to initial findings from the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. Hospitals and physicians are competing more broadly and intensely for profitable specialty services, making costly investments to expand capacity and offer the latest medical technologies, especially in more affluent areas with well-insured populations. Employers and health plans have launched few initiatives to control rising costs beyond increasing patient cost sharing. As rapidly rising costs continue to push private health insurance out of reach for more people, state and local governments are struggling to meet the needs of low-income people and an increasing number of uninsured people.