Media Release

For: Immediate Release
Date: Friday, March 7, 2008

HEALTH releases 2006 Hospital Net Uncompensated Care report

Today, the Department of Health (HEALTH) is releasing a report examining the amount of uncompensated care provided by RI hospitals in 2006. This Report provides Rhode Islanders with a more comprehensive picture of the actual burden of hospital uncompensated care than prior reports. This report calculates the net amount of uncompensated care by considering the subsidies received by hospitals to compensate for charity care and bad debt.  For example, both Medicaid and Medicare provide subsidies to hospitals for providing charity care and bad debt.

Overall, the net uncompensated care statewide increased $1.4 million from $24.6 million in 2005 to $26.0 million in 2006.  However, the burden of providing that care as a percentage of patient revenue remained unchanged from 1.06% in 2005 to 1.05% in 2006. For eleven hospitals, the net expense of uncompensated care in 2006 represented 0.6% to 3.2% of net patient revenue.  Two hospitals (Memorial and Roger Williams Medical Center) received subsidies that exceeded the expenses of the uncompensated care they provided.  Five hospitals experienced an increase in their net uncompensated care burden (Kent, Newport, South County, Westerly, and Women and Infants’) while six hospitals’ burden decreased or remained essentially unchanged (Bradley, Butler, Landmark, Miriam, Rhode Island, and St. Joseph’s).

“Hospitals are an important part of the health care safety net, and provide a large amount of uncompensated care as a benefit to the community,” said Ana Novais, Executive Director, Division of Community Health & Equity.  “This Report provides Rhode Islanders with a more comprehensive picture of the actual expenses of uncompensated care to hospitals after acknowledging the subsidies they receive to compensate for these un-reimbursed services,” she added.

For the first time, this report describes the setting in which hospitals provide charity care and incur bad debt.  Charity care is defined as care provided without the expectation of reimbursement, and bad debt is defined as the amount for services that were billed but never collected.  While the assumption is often that most charity care is provided in the Emergency Department, hospitals reported that nearly 50% of all charity care was provided in the hospital inpatient setting, 30% was provided in other outpatient settings, and only 20% in the Emergency Department.   In contrast, approximately 45% of all bad debt was incurred in the Emergency Department.  Over 60% of all bad debt was incurred by uninsured (self-pay) patients, and only 20% of all bad debt was incurred by individuals who had commercial health insurance.

A copy of the complete report is available on HEALTH’s web site at www.health.ri.gov.