KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Hospitals’ ‘Bad Debts’ Grow As Even Insured Patients Have Trouble Paying Medical Bills

News outlets look at several hospital industry developments.

Philadelphia Inquirer: A "local hospital group says the fastest-growing part of what hospitals call 'bad debt' -- basically, uncollectible bills -- is money owed by patients who have insurance. As employers dump costs onto workers, so now are workers dumping costs onto hospitals. Because of rising deductibles and cost-sharing rules, patients are increasingly faced with bills that would have been unusual for someone with insurance a few years ago. Growing numbers of them can't pay, or won't. Total bad debt grew 12 percent, from $490 million in fiscal 2007 to nearly $550 million in fiscal 2008, at 36 area hospitals that responded to a 2009 survey by the Delaware Valley Healthcare Council of HAP, a hospital association that released the data this week. But bad debt from insured patients grew twice as fast: 28 percent, from $76 million to $97 million." In response, hospitals are increasingly talking with patients earlier about payment issues (Burling, 8/13).

The Boston Globe: Cambridge Health Alliance, which runs three "safety net" hospitals in Massachusetts, is seeking a buyer or affiliation with another Boston hospital. The company "earlier this summer held preliminary talks with several teaching hospitals and physicians groups. In the past several weeks, its discussions have involved the state's two largest hospital groups: Partners HealthCare System Inc. and Caritas Christi Health Care. … Doug Bailey, a Cambridge Health Alliance spokesman, confirmed that the 225-bed hospital group, which also runs clinics in Malden and Revere, has begun considering a 'strategic partnership'' as it prepares for sweeping changes in the way medical care is delivered and paid for under state and federal health care overhauls" (Weisman, 8/13).

Kansas Health Institute: Officials at Southwest Medical Center in Liberal, Kan., announced they are closing the hospital's 12-bed psychiatric unit. Nancy Kletecka, director of public relations at the hospital, said the decision "was driven by the unit losing money and difficulty in hiring a psychiatrist. … Kletecka said the unit was expected to lose $500,000 this year. The hospital, she said, is expected to lose $1.5 million. … She attributed the hospital's losses to the ever-increasing emphasis on outpatient rather than inpatient care and the downturn in the economy. Hospital officials plan to lay off 28 workers, including about 13 from the psychiatric unit, which will be closed Oct. 1" (Ranney, 8/12).

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