‘Charity’ care, bad debt rise for Iowa hospitals

DES MOINES - The prolonged U.S. economic downturn has contributed to a rise in the level of uncompensated “charity care” and unpaid medical debts that Iowa hospitals have incurred in recent years, officials said Tuesday.

Overall, the 118-member Iowa Hospital Association provided more than $850 million worth of care last year for which the facilities were not fully compensated, association spokesman Scott McIntyre said. That level, based on a member survey, was up $54 million, or 6.8 percent, from 2009. The total stood at $252 million in 2000, he said.

“For hospitals, the level of bad debt and charity care is a great concern,” according to a statement from the group.

McIntyre said the rise in the number of people who are unable to pay due to mounting debt problems, or who need charity care or discounted services, has followed the upward trend line in health-care costs and the number of unemployed, uninsured and underinsured Iowans.

“People lose their jobs, and jobs in America are ironclad links to insurance, so they lose their insurance,” he said. “And they may or may not qualify for Medicaid, and it's kind of left to the hospital to deal with it.”

Where possible, McIntyre said, hospitals try to work with patients to set up installment payments or other methods so they can meet their financial obligations. He said the goal is to create “a win-win - we don't end up with bad debt and they don't end up in debt.”

Overall, the organization's 2010 statewide survey showed that Iowa hospitals provided “community benefits” that were valued at more than

$1.3 billion. McIntyre said community benefits are activities designed to improve health status and provide greater access to health care. Along with uncompensated care, the category includes such services and programs as health screenings, support groups, counseling, immunizations, nutritional services and transportation programs valued at nearly

$212 million.

Hospital association President Kirk Norris said the programs and services accounted for in the survey were implemented in direct response to the needs of individual communities as well as entire counties and regions. Many of the programs and services simply would not exist without hospital support and leadership, he said.

However, Norris said in a written statement that the ability of Iowa hospitals to respond to various community needs is continuously challenged by the ongoing economic downturn, as well as by losses inflicted upon hospitals by Medicare and Medicaid - which represent about 60 percent of all hospital revenue in Iowa. The federal programs created about $259 million in combined losses for the state's hospitals last year, he said.

The 118 Iowa hospitals that make up the association employ more than 70,000 people annually and have a $6.1 billion impact on the state's economy, according to data from the association.