When hospitals treat uninsured patients, who pays the bill? Here in Colorado, Denver Health Medical Center treats a large portion of the city’s uninsured and indigent population, and the cost is staggering. Last year, it cost the hospital $275 million to treat uninsured patients. That number rose to $300 million this year, and is projected to increase to $350 million next year. And the hospital’s CEO, Dr. Patricia Gabow, warns that the cost could be even higher if the economic downturn hits Colorado harder than expected.
Dr. Gabow has been working with Diana DeGette (D – Colo) and Nancy Pelosi to try to secure government assistance for treating the uninsured. Otherwise, the hospital will be forced to cut services in order to make ends meet. And for some of Denver’s worst hard-luck cases, that would be very bad news. Denver Health is where people go when they have no place else to go. It’s one of the only hospitals in the area with emergency beds for the mentally ill. Without Denver Health providing this service, the local jail becomes the option of last resort.
Diana DeGette has been working in congress to try to get the federal government to provide more help to hospitals like Denver Health that take on a larger-than-average share of the costs of treating the uninsured population in the US. Hopefully the new session that begins in January will address this issue, although finding money for projects like this in 2009 might be like getting blood from a stone. The problem of paying for the treatment of uninsured patients is not a new one. But as jobs disappear – along with benefits like health insurance – it’s likely that more and more people will be relying on hospitals like Denver Health.
The government does already provide some assistance, and in past years has paid as much as 30% of the costs associated with treating the uninsured at Denver Health. But the costs have increased so much recently that the government share (not adjusted for inflation in over a decade) has dropped to about 20% of the total cost. That leaves a very big chunk of money that the hospital is losing by treating much of Denver’s uninsured population.
The common wisdom is that when hospitals have an increase in costs incurred from treating the uninsured, they eventually raise the rates that they charge insured patients in order to make up the difference. But in a metro area like Denver, with multiple hospitals, ‘reasonable and customary’ charges are going to be determined by looking at charges from all of the area hospitals. So even though a hospital like Denver Health treats more uninsured patients than other hospitals, they can’t charge health insurance companies higher rates to treat insured patients. They still have to work within the guidelines established by reasonable and customary charges. (I suppose they could charge whatever they wanted, but they would only get paid the amount that the health insurance companies deem appropriate). For hospitals like Denver Health, government assistance is vital. I don’t see a free market solution to this problem that doesn’t involve cutting off services to those without a means of paying. And I hate to picture a United States where we turn the truly ill and injured away from our emergency rooms if they are unable to provide proof of health insurance.