Uncompensated care increased for community hospitals in 2016
Numbers from the American Hospital Association (AHA), uncompensated care increased in community hospitals in 2016, the first year since 2013 the amount went up from the previous year.
The report said 4,840 community hospitals provided a total of $38.3 billion in uncompensated care in 2016, up from $35.7 billion at 4,862 community hospitals in 2015.
These numbers come as community hospital profits increased 3.8% in 2016 to $76.1 billion. Community hospital profits increased 43% between 2011 and 2016.
The Affordable Care Act (ACA) brought down the costs of uncompensated care as it increased health insurance rates through Medicaid expansion and offering individual insurance through exchanges, as well as the individual mandate, which required nearly all Americans have health insurance.
A recent Commonwealth Fund report estimated the uninsured rate for adults between 19 and 64 declined in all states and the District of Columbia following passage of the ACA. The rate dropped by at least five percentage points in 47 states.
Now, with the end of the individual mandate penalty as part of the 2017 tax legislation and Congress so far failing to extend the Children’s Health Insurance Program, uncompensated care will likely increase. This uptick in uncompensated care and the potential for more uninsured Americans could come at the same time that the federal government cuts payments to the 340B drug prescription program.
The AHA, other advocacy groups and three hospitals sued the CMS in an attempt to stop the payment cuts, but a judge dismissed the lawsuit shortly before the new year. Following the ruling, the AHA and other plaintiffs said they will continue to pursue the lawsuit.
Hospitals in general face financial pressure with softening patient admissions and a growing push to move more services to outpatient settings. Moody's Investors Service recently changed its 2018 outlook for nonprofit hospitals to negative from stable, citing those factors and growing expenses like labor costs.