Between 2015 and 2016, the cost of providing care to Missourians at the bottom of the income ladder — individuals who are eligible under hospitals' charity care policies — increased by nearly $78 million to $719 million statewide. At the same time, the bad debt total decreased by nearly $41 million. Bad debt often results from an uninsured or underinsured individual's inability to afford out-of-pocket costs for care. A decrease in bad debt signals that more Missourians receiving health care services are insured.
In 2016, hospitals provided $37 million more in uncompensated care than in 2015, with the growth in cost primarily in charity care provided to Missouri’s most vulnerable. Overall, hospitals’ community-supporting financial contributions increased by $250 million during the same period.
The Missouri Hospital Association’s annual Community Investment Report includes core community benefit and economic impact data, and underscores how hospitals’ investments support healthier communities, a healthier state and continue to serve as the safety net for the uninsured. The report is available on the association’s consumer data site, FocusOnHospitals.com.
“In 2015, for the first time in a decade, hospitals experienced a decline in uncompensated care costs,” said Herb B. Kuhn, MHA President and CEO. “The 2016 data indicate that gains in health insurance coverage, a stronger economy and higher employment rate shifted, rather than reduced, the cost of uncompensated care.”
Between 2015 and 2016, the cost of providing care to Missourians at the bottom of the income ladder — individuals who are eligible under hospitals’ charity care policies — increased by nearly $78 million to $719 million statewide. At the same time, the bad debt total decreased by nearly $41 million. Bad debt often results from an uninsured or underinsured individual’s inability to afford out-of-pocket costs for care. A decrease in bad debt signals that more Missourians receiving health care services are insured.
The report found that in 2016, hospitals provided $719 million in charity care, and incurred nearly $538 million in bad debt, for an uncompensated care total of $1.26 billion, a $37 million increase from 2015.
Caring for the uninsured and underinsured isn’t the only way hospitals benefit the communities they serve. Hospitals also absorb the unpaid costs of treating beneficiaries of Medicare and Medicaid, help educate and train the health care workforce, offer free or reduced cost clinic services, and donate to local causes. Together, these investments are known as community benefit. When uncompensated care is added to these other community-supporting investments, hospitals provided nearly $3 billion in value to their communities.
“Most Missourians don’t realize that the cost to provide care to Medicare beneficiaries and Medicaid enrollees exceeds hospitals’ reimbursement for care under these programs,” Kuhn said. “In 2016 hospitals received $1.2 billion less than the cost of providing this care. Between 2015 and 2016, these costs grew by $165 million, with more than $128 million attributed to Medicaid.
“The growth in Medicaid costs could be linked to the growth in children participating through traditional Medicaid and the Children’s Health Insurance Program. There is evidence that because of the more generous eligibility within CHIP, families seeking coverage through the Affordable Care Act found coverage for kids in this program. Although this report predates the statewide expansion of Medicaid managed care, the expansion might affect Medicaid reimbursement. Future reports may reflect the influence of this policy shift.”
Hospitals have a significant impact on Missouri’s economy. They provide a powerful financial boost to the communities they serve, where they often are the largest employer. In addition, hospitals must invest in their infrastructure to ensure the highest quality care and patient satisfaction. These investments underpin the economy of cities, small and large, providing support for families and businesses throughout the state.
In 2016, Missouri’s hospitals employed more than 158,000 full-time equivalent staff, with an annual payroll and benefits of $10.6 billion. Between 2015 and 2016, hospitals added more than 5,000 full-time equivalent employees and expanded payroll by $670 million. Hospitals also invested approximately $1.8 billion in various capital improvement projects throughout the state. These community investments help strengthen the health care system. They also ripple throughout the economy, creating household income, opportunities to build businesses, and revenue for state and local government.
“Hospitals are essential to the communities they serve, and support a stronger, healthier Missouri,” Kuhn said.
The Missouri Hospital Association is a not-for-profit association in Jefferson City that represents 144 Missouri hospitals. In addition to representation and advocacy on behalf of its membership, the association offers continuing education programs on current health care topics and seeks to educate the public about health care issues.