Report: Uncompensated care costs level out

A new report by the American Hospital Association says that uncompensated care at community hospitals held steady in 2005 at 5.6 percent of expenses, rather than continuing to climb as it had in past year. The total cost of uncompensated care, including free or discounted services and bad debt, climbed 7.1 percent to $28.8 billion last year. This was boosted by growing Medicare and Medicaid shortfalls, which jumped 14.5 percent to $25.3 billion.

The hospitals had previously posted record total revenue of $28.9 billion in 2005, with an aggregate profit margin climbing to a seven-year high of 5.3 percent, according to Modern Healthcare. These profit margins have attracted the eye of legislators in the U.S. Senate. A group of senators are currently questioning [1] whether a group of 10 non-profits hospitals deserve their tax break given their current levels of charity care and high compensation for top execs.

For information on uncompensated care trends:
- read this Modern Healthcare item [2] (sub. req.)
- review this AHA fact sheet [3] (.pdf)

Related Article:
The IRS launches an investigation into possible wrongdoings by tax-exempt hospitals. Report [4]