Hospitals Struggle With Unpaid Bills From Insured Patients

For-profit hospitals are having an increasingly difficult time determining which patients are able to pay their medical bills as private health insurers shift more costs to members, experts say, Reuters reports.

A 2006 Kaiser Family Foundation Health Research and Educational Trust survey found that workers' average contribution for monthly health care premiums was $248 for family coverage, up from $178 in 2002. According to hospital officials and health care experts, insured patients account for a rising share of hospitals' uncollected debt. Most hospital chains' bad debt -- "a key gauge of uncollected medical bills" -- has reached 10% of quarterly revenue, Reuters reports.

Maribeth Shannon, director of market and policy at the California HealthCare Foundation, said, "The increase in patients' responsibility is putting hospitals in this unusual position of having to negotiate with patients who have insurance."

Debra Draper, associate director of the Center for Studying Health System Change, said, "I think a lot of providers have been caught off guard by this," adding, "There is an increasing burden on them to have effective (collection) systems in place."

The American Hospital Association recommends that families of four with incomes at 100% of the federal poverty level receive charity care, but this guideline is voluntary, and experts say hospitals "are all over the map on policies, especially in the grayer area of incomes above poverty," according to Reuters.

Some analysts believe hospitals should try to collect a portion of the unpaid bills before writing off care for some patients who have incomes greater than the poverty level.

Stanford Financial analyst Gary Lieberman said, "If you book it as revenue and put it through a process, you may only get 10 cents on the dollar, but that is better than nothing."

However, other analysts say medical costs are so high that it is possible people with incomes several times the poverty level would not be able to afford their medical bills (Dixon, Reuters, 8/6).