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Hospital Charges to the Uninsured

By May 10, 2010Commentary

The Agency for Healthcare Research and Quality released a statistical brief on uninsured hospitalizations. (AHRQ Brief) The study covers the period from 1998 to 2007.  There were 2.3 uninsured hospital stays in 2007, a 30% increase over the 1.8 million in 1998.  None of the figures used by AHRQ, however, were adjusted for population growth.  In the same time period, overall hospitalizations increased by 13%, as did Medicare-covered ones, while Medicaid’s went up over 30% and privately paid ones were about flat.  This likely reflects the far better management of care present in commercial health plans than in either Medicare or Medicaid.

The amount the hospitals charged the uninsured for these stays increased by 88%, while the actual costs of providing the services only went up 37%.  So hospitals were substantially increasing their profit margin on the customer’s least able to pay.  It may be that the hospitals know they aren’t going to get paid for many of these admissions, so they increase the charges to inflate what their uncompensated care figures are.  Whatever the reason, its an offensive practice.  The uninsured who are hospitalized tend to be younger and have shorter lengths of stay.

The most common cause of admission was to give birth.  A lot of admissions were due to alcohol and drug abuse and mental health problems, far more than in the insured population.  This reflects the poor health habits of this group and their lower socio-economic status.  Although reform proponents like to suggest that lack of insurance leads to poor health, that has been largely debunked and the causation almost certainly runs the other way–lower socio-economic status is associated with bad health behaviors and consequently poor health.  In any event, perhaps regulators could focus a little attention on the charges from hospitals to the uninsured.

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