Fitch: Bad debt falls among for-profit hospitals during Q1 '08

Marking a welcome change of direction, bad debt fell among for-profit hospitals during the first quarter of 2008, according to a recent report from financial ratings agency Fitch Ratings. Nonetheless, for-profits still have a higher percentage of unpaid bills than their non-profit peers and physicians. Bad debt levels as a percentage of revenue fell from 18.4 percent in Q4 '07 to 17.7 percent in Q1 '08. While falling debt is always a good sign, this stands in contrast to physician practices, whose bad debt level is typically in the 5 percent to 10 percent range. It's also higher than the debt faced nonprofits, who had bad debt levels of 5.5 percent in 2006, the most recent data available. Fitch says bad debt has fallen among for-profit hospitals partly because of the number of uninsured patients being treated at such facilities, as well as more efforts by the hospitals to collect co-payments up front and improve internal and external collections efforts.

To learn more about Fitch's report:
- read this AMNews article (reg. req.)

Related Articles:
Bad debt expense drops at for-profits for Q1 '08, Fitch says
In 2007, bad debt rising for hospitals
Bad debt savages HCA, LifePoint profits
Bad debt hits Health Management Assoc. earnings

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