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Free Care at Hospitals Doubles in Three Years

Posted on: Monday, 19 December 2005, 18:00 CST

By Gerald M. Carbone, The Providence Journal, R.I.

Dec. 19--PROVIDENCE -- The state's hospitals delivered $21.4 million worth of free care to poor people in 2004, almost double the amount of free care they delivered in 2001.

The state's 14 hospitals also wrote off $52.2 million in bad debt last year -- money billed to patients but not collectable -- and absorbed $29.4 million in Medicaid shortfalls, the difference between the cost of services and the amount Medicaid reimbursed for those services.

Despite spending more than $103 million on free care, bad debt and Medicaid shortfalls last year, no hospital has completely complied with state regulations specifying how much free care and bad debt hospitals must absorb. Failure to comply could lead to loss of license and fines of up to $1 million.

These were some of the findings of the state Department of Health's "Hospital Community Benefits Report" released on Friday.

Bruce Cryan, the Health Department analyst who wrote the report, said the findings support the adoption of new laws regarding "community benefits" that hospitals must provide.

Since regulations went into effect in 2000, the Health Department has never punished a hospital for failing to comply with them, even though no hospital has a 100-percent compliance record. In fact, Butler and Newport Hospitals have never complied with the standards, yet over the past four years those hospitals have ranked first and third, respectively, in the percentage of revenue written off as charity.

The lack of compliance, coupled with significant increases in costs that hospitals are absorbing, may mean it's time to change the regulations, not to punish hospitals, Cryan said.

"We could either get punitive or proactive," Cryan said. "The point is to provide the best possible product."

In August, the Health Department unveiled a proposal to change the licensing standard -- which is currently based on a hospital's five-year average of charity care -- to one that requires hospitals to provide charity care to all low-income, uninsured Rhode Islanders. The proposal defines low income as people or families earning 200 percent of the federal poverty level.

Cryan said that many of the 14 hospitals have already moved toward adopting the 200-percent criteria, thus expanding the number of people they treat for free. This accounts for much of the $10-million increase in charity treatment seen between 2001 and 2004; some of the increase is also a result of inflation.

A public hearing will be held next month on the proposed changes in regulations.

Cryan's report also surveyed the ethnic backgrounds of members of hospital administrative staffs, and of people who sit on hospital boards of directors.

His report concluded: "Hospital governance and management were not diverse in 2004, nor were they reflective of the general population. Senior administrators were almost exclusively non-Hispanic whites, with no black representation and only one Asian employed at this level. Hospital boards were more diverse racially. Both the black and Asian representations reflected state demographics [5 percent for blacks, 2 percent for Asians] but Hispanics [9 percent] and females [52 percent] were underrepresented."

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To see more of the The Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com.

Copyright (c) 2005, The Providence Journal, R.I.

Distributed by Knight Ridder/Tribune Business News.

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Source: Providence Journal

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