Hospital margins drop as charity care rises

Wisconsin hospital patient care margins were 3.1 percent in 2006, dropping 39 percent from 2005 and reaching the lowest percentage in eight years, according to the latest Wisconsin Hospital Fiscal Survey, collected by the Wisconsin Hospital Association Information Center.

The Wisconsin Hospital Association, of Fitchburg, also announced Wednesday that charity care by the state's not-for-profit hospitals rose by 27 percent to a total of $202 million and government program payment shortfalls topped $1.6 billion in 2006, the highest ever.

Unreimbursed care for charity patients and patients able to pay but who failed to pay for services totaled $614 million, a $65 million, or 12 percent, increase compared with 2005. Charity care represented 27 percent, or $43 million, of that increase and bad debt accounting for $22 million of that increase.

On average, Medicare paid hospitals 77 percent of the cost of providing care, while Medicaid paid 48 percent of cost. Medicare is the federal health care insurance program for people age 65 and older and for the disabled, while Medicaid is the federal-state program that helps pay for health care for the needy, aged, disabled, blind and for low-income families with children.

Unfunded patient expenses through government program payment shortfalls and uncompensated debts and charity care now amount to more than 20 percent of a hospital bill for patients with commercial insurance, said George Quinn, senior vice president of the Wisconsin Hospital Association.