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Uncompensated hospital care costs reach $660 billion since 2000, AHA finds

The AHA data doesn't yet include figures from the COVID-19 pandemic that consumed much of 2020.

Mallory Hackett, Associate Editor

Hospitals have provided more than $660 billion worth of uncompensated care since 2000, according to the American Hospital Association.

The AHA publishes data on the level of uncompensated care each year using figures from its Annual Survey of Hospitals.

In 2019, the most recent year included in the data set, 5,141 of the nation's hospitals incurred $41.61 billion in uncompensated care costs. This is a slight increase from 2018's $41.3 billion.

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Uncompensated care costs reached a peak in 2013, coming in at $46.8 billion. In 2015, uncompensated care costs were the lowest they'd been since 2007 when hospitals racked up just $36.1 billion in costs.

WHY THIS MATTERS

The AHA data doesn't yet include figures from the COVID-19 pandemic that consumed much of 2020. Whether the year's historically high unemployment rates, resulting in higher numbers of uninsured patients and uncompensated care, will be reflected in future figures is yet to be determined.

The AHA uses a hospital's total bad debt and financial assistance costs to calculate the total amount of uncompensated care. It excludes other unfunded costs of care, such as underpayment from Medicaid and Medicare.

Financial assistance and bad debt differ in that financial assistance consists of services for which hospitals neither received, nor expected to receive, payment because they had determined the patient's inability to pay, and bad debt occurs when hospitals anticipated but didn't receive payment.

Uncompensated care often occurs when people don't have insurance and can't afford the costs of care.

Studies have demonstrated that states that expanded Medicaid under the Affordable Care Act saw significant decreases in uncompensated care costs. In comparison, hospitals in states without Medicaid expansion experienced little change in uncompensated care.

THE LARGER TREND

Hospitals have been in dire financial situations for months, and Kaufman Hall's December Flash Report showed more of the same as margins continue to fall while expenses grow.

The fallout has led many revenue cycle managers to turn toward technology and automation tools to recover financially from COVID-19. Eighty-one percent of CFOs and senior leaders surveyed by Black Book said there was an absolute and immediate need for digital transformations for the long-term survival of their organizations.

Twitter: @HackettMallory
Email the writer: mhackett@himss.org