Access to Affordable Health Care

 

In 2006, more than 1.7 million Georgians were medically uninsured, including approximately 294,000 children. Nationally, the majority of the newly uninsured between 2003 and 2004 – more than 750,000 people – were working adults. From 2000 to 2005, employer-provided health insurance for children under 18-years-old decreased by 8.9 percent.

Medical bills are the leading cause of personal bankruptcies. Of the 100 counties in the nation with the highest rates of bankruptcy, 45 are in Georgia.

Why the uninsured pay more

Hospitals charge the uninsured as much as ten times more than HMO’s, insurance companies and government programs such as Medicare. Because nobody negotiates a discount for the uninsured, these patients get stuck with artificially-inflated prices and enormous bills.  Products consumed in a hospital, such as children’s aspirin, are routinely marked-up several hundred percent over retail.

Uninsured patients are also less likely to receive basic preventative care such as routine checkups, making them more likely to become sick and require expensive emergency room care.

How Georgia’s nonprofit hospitals are dropping the ball

Georgia’s 100+ nonprofit hospitals are subsidized by state and local governments to offer health services to medically uninsured and indigent patients.  Nonprofit hospitals draw funds from the state Indigent Care Trust Fund (ICTF) and access substantial tax exemptions. In short, nonprofit hospitals access state taxpayer dollars but do not contribute to vital local infrastructure, such as road and sewer maintenance or police and firefighter services, even though they may utilize all of these services.

Regulations and requirements associated with the ICTF and tax-exempt status compel nonprofit hospitals to provide free and reduced charge health services to eligible patients. Instead, current hospital pricing practices targeting the medically uninsured discourage eligible patients from accessing reduced-cost health services. In fact, hospitals are the top clients of collection agencies.

As indicated by IRS filings from 2002, 34 nonprofit hospitals in the state held approximately $2.6 billion in untaxed cash and securities, and total hospital profit for 2002 was more than $500 million, proving that hospital pricing also functions to increase profitability for some nonprofit health facilities.

Georgia Watch has issued the following reports on nonprofit hospitals in Georiga:

A Crisis of Affordable Care: The Grady Memorial Health System

A Crisis of Affordable Care: Phoebe Putney Health System

A Crisis of Affordable Care: Northside Hospital

A Crisis of Affordable Care: Memorial University Medical Center

Accountability, transparency and oversight

State lawmakers should extend tax-exempt status to free health clinics. These clinics serve underprivileged communities and help curb rising health care costs by providing treatment for common conditions, such as asthma, high blood pressure and diabetes, before they lead to expensive hospital emergency room visits.

State lawmakers should create and enact definitions for the terms “indigent care,” “charity care,” and “bad debt” that are based on cost as opposed to marked-up charges and inflated hospital pricing schedules. Any state regulatory body, including county taxing authorities and the state Department of Community Health, could utilize these definitions in determining and assessing the financial performances of Georgia’s nonprofit health care facilities.

The state Department of Revenue should complete mandated annual investigations and certifications of certain nonprofit entities in Georgia, based on the amount of funds the entity holds in reserve and expenditures directly related to executive compensation.

County taxing authorities should perform regular assessments of the property holdings of nonprofit health care facilities to determine the current value of the facilities’ tax-exempt status.

Nonprofit health care facilities should employ a standardized system of publicly advertising the free and reduced charge services available, terms of eligibility and the person or office to which pricing complaints or questions should be directed.