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Report: Charity Care Up at Area Hospitals; More Patients Getting the Services They Need Regardless of Income

Posted on: Saturday, 3 December 2005, 06:00 CST

By Tammie Smith

More low-income uninsured people are getting free care at area hospitals, according to the Virginia Health Information's 2005 Industry Report, which looks at hospital performance for the previous year.

The dollar value of charity care provided at some area hospitals has increased substantially from just a few years ago, according to the report, which is based on data submitted by the hospitals.

The report also showed that overall, the most-profitable area hospitals maintained comfortable, double-digit profit margins.

"Richmond is really a money machine for HCA and Bon Secours," said Karen Cameron, executive director of the Central Virginia Health Planning Agency, referring to the region's largest hospital systems.

Locally, charity care as a percentage of hospital total income from patient care is also up, from 1.8 percent in 2002 to 2.8 percent last year.

As numbers of uninsured people increase, charity care is a way of providing low-income uninsured or underinsured people access to pricey hospital medical services, including inpatient care, lab work and such diagnostic services as MRIs and CAT scans.

Cameron said her agency has been "much more aggressive" in pushing the hospitals to provide charity care.

Area hospitals that want to expand services or offer new services requiring capital investment must undergo a certificate of public need process overseen by Cameron's agency. Often as a condition of approval, hospitals have to agree to give away a certain amount of care.

"There is still a lot of room to improve," Cameron said. "I really am proud of our region, when you see things like CJW [Medical Center] -- they have almost tripled what they have been providing" over the past four to five years.

Nationally, hospitals have faced criticism for charging uninsured people "list" prices that are much higher than what insured people pay, and for pursuing aggressive bill-collection policies, all while making hefty profits.

Nonprofit hospitals have been criticized for making similar profits while not providing enough charity care to offset their tax- exempt status.

"Many people mistakenly believe for-profits make money and not- for-profits don't," said Mark Foust, HCA Inc. spokesman. "Outside the academic setting, the area's largest hospitals all have comparable [profit] margins."

Cameron said safety-net providers, such as the free clinics, have pushed for easier access to free care for low-income uninsured people. As a result, almost all the health systems in the area write off or cancel hospital bills for patients whose income is below a certain level, usually 200 percent of the federal poverty level.

"In talking to the free clinics, they say it has made a huge difference in terms of getting their patients into services," Cameron said.

Dr. Dan Jannuzzi, medical director for Cross Over Ministry's network of free clinics, gave Cameron's agency credit for enforcing charity-care conditions.

"In trying to meet these commitments, the hospitals have come to the free clinics and said, 'Send us people so we can meet these obligations.' Both major systems we work with, HCA and Bon Secours, have been over the last three years dramatically welcoming," Jannuzzi said.

For the past year, Bon Secours Richmond has had a staff person designated specifically to make sure low-income, uninsured people are told about charity care and helped through the system, said Michael Spine, vice president of planning and marketing for Bon Secours Richmond.

Of the health system's four hospitals in the area, Richmond Community Hospital in Richmond's East End provides the highest percentage of charity care, at 3.3 percent, but the small hospital also loses the most money.

In terms of actual dollars, Bon Secours St. Mary's Hospital in the West End had the highest dollar value of charity care in that system, at nearly $12.9 million, and also makes a healthy profit.

To be counted as charity, care has to meet strict definitions, said Michael T. Lundberg, Virginia Health Information executive director.

Much of the data in the annual industry report comes from audited financial statements. In addition, the state requires hospitals to maintain charity-care logs that are used to calculate hospital payments to and from a state indigent-care trust fund.

CJW Medical Center reported nearly $37 million in charity care last year, up from $14 million two years before. CJW's charity care last year amounted to 2.1 percent of its overall patient income, a significant increase from just about half a percent in 2001.

"It shows that patients are getting the care they need and know they can get the care they need regardless of income," said Foust, HCA's spokesman. The numbers don't yet reflect that earlier this year, HCA changed its policy so all uninsured patients receive charity care or get discounts comparable to what managed-care members receive, Foust said.

VCU Health System has traditionally reported the highest charity- care percentage in the area and did so in this report as well, at 7.3 percent.

Overall, for-profit HCA hospitals had the highest profit margin. Bon Secours facilities, which are not-for-profit, were not far behind.

Hospital Info

PERFORMANCE www.vhi.org

CHARITY CARE www.cvhpa.org

2004 hospital profits

Profit

Hospital margin Profit* Charity care

Henrico Doctors Hospital 13.93% $50,459,244 $13,647,928

CJW Medical Center 13.86 69,700,961 36,952,098

Bon Secours St. Mary Hospital 13.26 39,243,160 12,876,829

Bon Secours Memorial Regional 10.59 19,613,193 5,910,897

Medical Center

VCU Health System 3.17 20,084,176 95,694,296

Southside Regional Medical Center 0.84 1,095,294 7,140,296

John Randolph Hospital -2.56 -1,901,646 7,679,081

Retreat Hospital -3.47 -1,949,883 5,857,750

Bon Secours Richmond -7.50 -2,029,285 2,828,611

Community Hospital

SOURCE: VHI 2005 Industry Report, www.vhi.org

*Not-for-profits technically do not make a profit that goes to shareholders but reinvest money into services and charitable missions.

Source: Richmond Times - Dispatch

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