Uncompensated Care Costs Rise at PA Hospitals

More than a year ago, the Corbett administration decided to end the state's adultBasic program, which provided affordable health insurance to about 40,000 low-income Pennsylvanians who were unable to obtain coverage from an employer or through other programs.

We worried at the time that many of those newly uninsured would delay treatments until a health condition snowballed into a more serious and costly problem, sending more people to the emergency rooms of our community hospitals.

The Pennsylvania Health Care Cost Containment Council released a report this week showing that uncompensated care costs at hospitals did in fact rise in the 2010-11 fiscal year, when adultBasic ended. Uncompensated care totaled $990 million — an 11% increase over the prior year.

Dave Wenner at the Harrisburg Patriot-News has more:    

[Hospitals'] average operating margin was 5.58 percent, up from 4.37 percent the previous year. That means the average hospital had a profit of $5.58 for every $100 in revenue... 

“We see the number of hospitals that lost money dropping,” said Joe Martin, the executive director of the cost containment council. “We see the margins rising to a healthy level. That’s all good news. 

“The news that’s a little concerning is the spike in the uncompensated care. And there are still a lot of hospitals, particularly the small- to medium-sized hospitals, that are struggling financially. So there is really two sides to the story.”

But the Hospital & Healthsystem Association of Pennsylvania painted a much darker picture, saying the recent numbers “mask” a bleak long-term reality of hospitals struggling against state and federal budget cuts, while straining to provide a safety net for uninsured and under-insured patients. 

Local hospitals told the Patriot that the loss of jobs and health insurance in the tough economy, as well as high deductibles and other tactics to shift more health care costs onto patients, played a role in rising uncompensated care costs.

And so did adultBasic's end, as Sharon Ward of the Pennsylvania Budget and Policy Center noted in the story:

The loss of coverage, Ward said, forces people to wait until they are sick, when they need a maximum level of care and obtain it in the most expensive setting. Then their costs get shifted to people with insurance and government programs, said Ward, who is an advocate for government programs to provide insurance for people who can’t afford coverage. 

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