An HFMA Healthcare Financial Pulse Resource
Although hospitals around the country are facing problems as a result of the recent recession, job cuts in the auto and ancillary industries have placed significant challenges on Michigan hospitals in particular.
How have such challenges affected Michigan hospitals, and how are they responding? In this excerpt from an article in the October 2009 issue of HFMA's Healthcare Cost Containment newsletter, three hospital leaders discuss the effect of the economic downturn on patient financial responsibility and uncompensated care.
Q: How have the recession and job cuts in Michigan affected your hospital and health systems?
Jack Weiner, president and CEO, St. Joseph Mercy Oakland, Pontiac, Mich.: We’ve seen significant changes in the quality of insurance, as companies have either increased deductibles and co-pays or reduced scopes of coverage. We’ve seen significant increase in the demands on our clinics and support programs in the community. As a result, over two years, our charity care went up from $1.2 million monthly to almost $3 million monthly.
Patrick McGuire, CPA, CFO, St. John Health, Warren, Mich.: About two years ago, we started to see the amount that patients are responsible for paying with their bills climb dramatically. The patients’ share of their bill has essentially doubled. Volume also softened, and the quality of insurance was starting to weaken. All of this has translated into more uncollectable bills. Uncompensated care has gone up 50 percent in the past two years.
Doug Welday, CPA, executive vice president and CFO, Oakwood Healthcare System: We are experiencing a significant increase in the number of individuals who have either lost their insurance or don’t have the same level of coverage, meaning patients have higher copays and deductibles. The cost of our uncompensated care has more than doubled in the last four years. In 2008, our total uncompensated care exceeded $100 million.