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Monday, Aug. 03, 2009

Northern San Joaquin Valley hospitals footing more of the bill

Charity care, bad debts up during prolonged recession

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Across California, hospitals have seen a surge in the amount of care they provide for free, known in the health care industry as charity care.

Last year, hospitals across California wrote off nearly $1.2 billion in bad debts and provided $973.4 million in charity care, an 89 percent increase from four years earlier.

In Stanislaus County, where unemployment has risen to 16.6 percent, hospitals are particularly vulnerable to the effects of the recession.

Memorial Medical Center in Modesto reported more than $39 million in bad debts in 2008, up from $31.5 million in the previous year, according to data filed with the state. Charity care at Doctors Medical Center in Modesto climbed from $61 million in 2006 to $81.5 million last year, state statistics show.

What's even more startling is the shift of people from private insurance to government health coverage, said John Sigsbury, chief executive officer of Emanuel Medical Center in Turlock, which had $11.1 million in charity care last year.

People who lose employee health benefits resort to government programs such as Medi-Cal, and the reimbursements are not close to covering the costs when they come to the hospital. Because Medi-Cal patients have less access to physicians, some are quite ill by the time they seek hospital care and they require expensive treatment.

Emanuel attributed $24 million in losses to the Medi-Cal and Medicare shortfalls in the past year, a 41 percent increase over the previous year, Sigsbury said.

"That is part of the reason why hospitals in the state are in trouble, why at best we are breaking even," he said.

Doctors Medical Center, owned by a publicly traded company, declined to comment, citing Securities and Exchange Commission rules. Its parent company, Tenet Healthcare Corp., is scheduled to release quarterly earnings Tuesday.

The company, which has 51 hospitals in 12 states, has told investors its 2009 outlook is difficult to project because of several factors, including patient volumes, the mix of insured and un- insured patients served, and bad debt expenses.

Memorial Medical Center officials were unavailable for comment. The state does not have data on uncompensated care for the Kaiser Permanente hospitals in Modesto and Manteca.

Many in valley uninsured

Scott Seamons, a regional vice president of the Hospital Council of Northern and Central California, said the San Joaquin Valley normally has large numbers of uninsured patients. But even those with private insurance may have coverage that pays a small part of hospital bills.

Hospitals are legally required to open their emergency departments to patients regardless of their ability to pay. So even the members-only hospitals of Kaiser Permanente will receive patients who are unable to pay.

"As that frequency escalates at Kaiser hospitals, they will incur bad debt and charity expenses as well," Seamons said.

The growing number of patients who can't pay has had a "devastating effect" on hospitals, said Jan Emerson, spokeswoman for the California Hospitals Association.

"It's a significant burden on us, and it's getting bigger as the days go by," she said.

Nonprofit hospitals such as University of California at Davis Medical Center are required by the Internal Revenue Service to benefit the community in exchange for billions of dollars in tax breaks.

Hospitals typically comply by providing health screenings, smoking cessation programs and free medical care to those who cannot pay.

As Congress plunges into the health care debate, the role that nonprofit hospitals play in caring for the poor and medically underserved is part of the broad and contentious discussion in Washington to revamp the country's health care system.