Weather extremes can increase hospital bad debt

When it gets blazing hot outside in the summertime, or freezing cold during the winter, most people don't think about these events as potential sources of bad debt. But that's a concern hospital financial executives must consider, according to an analysis of a new report from the Agency for Healthcare Research and Quality.

The report, "Hospital Stays Resulting from Excessive Heat and Cold Exposure Due to Weather Conditions in U.S. Community  Hospitals, 2005," concludes that about 6,200 people were hospitalized in 2005 due to excessively hot conditions, most of whom come in through the emergency department. All told, conditions brought on by bad weather cost about $120 million to treat in 2005, the agency found.

Of the people visiting the ED seeking treatment for excessive heat exposure, 81.6 percent were subsequently admitted for treatment at an average cost per stay of $6,200. Hospitalizations for cold weather exposure, meanwhile, amounted to 6,500 in 2005. Of that group, 77 percent who came in through the ED were admitted to the hospital, at an average cost of $12,500.

Hospitals serving poor communities, where uninsured rates are often high, saw two to two and half times more patients for such conditions than hospitals in prosperous communities. (Unfortunately, this isn't surprising, given that the poor may lack the means to pay for heating and cooling at crucial times.) Given this phenomenon, such hospitals may face bad debt issues when these weather conditions exist. What's more, with a shaky economy in place, both uninsured rates and exposure due to lack of utilities could rise this year. This is definitely an issue to watch.

To learn more about this trend:
- read this InsideARM piece

Related Articles:
Bad debt expense drops at for-profits for Q1 '08, Fitch says
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