Bad debt, charity care rise in state’s hospitals

By: - September 20, 2019 1:22 pm
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Unpaid bills at Wisconsin hospitals rose again in 2018, topping $1.2 billion, according to a report issued Friday, but there are conflicting views about why.

The annual report by the Wisconsin Hospital Association found that charity care and bad debt, combined  under the umbrella term “uncompensated care,” increased by 7.6% over 2017. The report is based on data submitted by 150 hospitals.

Uncompensated care is about 2.1% of total gross patient revenues, the report said. Charity care averaged 1% and ranged from 0% to 8.6%. Bad debt averaged 1.1% and ranged from 0% to 15%. 

The report doesn’t offer a detailed explanation for the shift. Brian Potter, senior vice president of finance at the association, told Wisconsin Examiner that one factor is the growth of health insurance plans with high deductibles requiring people to pay more out of pocket. Also, some hospitals have reviewed and updated their financial assistance policies over the past several years to better meet the needs of their patients, he said. 

Potter said it’s not clear how changes in the Affordable Care Act may be affecting the picture. Enrollment in the act’s health insurance exchange program is declining, but “we don’t know” whether that’s because more people have jobs and are getting insurance through employers, or for other reasons.

Bobby Peterson, executive director of ABC for Health, a Madison nonprofit that works with low- and moderate-income people to seek resources for health care and navigate the health-care system, agreed that higher-deductible and high-coinsurance plans — “junk insurance” in his words — are likely a factor in the rise of unpaid bills. 

He tied that trend in part to “the political sabotage of the Affordable Care Act by the Trump Administration,” which has weakened elements of the law and reduced the government’s promotion of its availability. 

Peterson also pointed to other factors, including the difficulties patients may have in determining their eligibility for assistance and coverage, and unexpected bills because patients don’t get sufficient explanation of what is and isn’t covered

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.