A Wealth of Charity Care

Charity care is on the rise at Missouri hospitals and that increase is not expected to abate due to lower Medicaid enrollment and job losses due to the economy, according to a report released last week.

Charity care, classified as those services that are provided without the expectation of payment, more than doubled to $159.5 million in 2008 from $61.7 million in 2004.

Charity care accounted for 1.68% of total operating revenue in 2008, according to the report from the Missouri Foundation for Health.

“Variation was dramatic across hospitals and some, but not all, of the variation could be explained by racial and income disparities in hospital service areas,” the report said.

Bad debt expenses increased to $256.5 million in 2008 from $137 million in 2004, accounting for 2.7 % of operating revenue. Since 2004, bad debt has outpaced reported charity care by an average of 22% a year.

“Interestingly, hospitals reporting the lowest charity care reported high and rising amounts of bad debt,” the report said. “Designating services as bad debt rather than charity care previously gave hospitals the opportunity to collect on past due accounts or sell them to a financial services company.”

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Healthcare industry Missouri
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