Taking on bad debt and charitable care cases is a hallmark of the U.S. healthcare system. But in the last year, the volume of charity care cases increased as special protections for Medicaid during the pandemic expired and insurer coverage denials increased, according to Kaufman Hall’s “National Hospital Flash Report.”
“The uptick in bad debt and levels of uncompensated care provided by hospitals will be an indicator to monitor over the next several months,” said Erik Swanson, senior vice president and data and analytics group leader with Kaufman Hall.
The report, based on data from 2,300 hospitals, shows overall bad debt and charity as a percent of gross revenue increased 7% year over year for 2024. The amount of bad debt and charity per calendar day jumped 14% year over year and 20% compared with 2021.
Here is the regional breakdown of bad debt year over year:
West
Bad debt and charity per calendar day: 19%
Bad debt and charity as a percentage of gross revenue: 10%
Midwest
Bad debt and charity per calendar day: 28%
Bad debt and charity as a percentage of gross revenue: 21%
South
Bad debt and charity per calendar day: 5%
Bad debt and charity as a percentage of gross revenue: -4%
Northeast / Mid-Atlantic
Bad debt and charity per calendar day: 21%
Bad debt and charity as a percentage of gross revenue: 12%
Great Plains
Bad debt and charity per calendar day: 13%
Bad debt and charity as a percentage of gross revenue: 4%
The size of the hospital also affects bad debt and charity care. The breakdown by size is as follows:
0-25 beds
Bad debt and charity per calendar day:12%
Bad debt and charity as a percentage of gross revenue: 5%
26-99 beds
Bad debt and charity per calendar day:13%
Bad debt and charity as a percentage of gross revenue: 7%
100-199 beds
Bad debt and charity per calendar day: 19%
Bad debt and charity as a percentage of gross revenue: 10%
200-299 beds
Bad debt and charity per calendar day: 13%
Bad debt and charity as a percentage of gross revenue: 4%
300-499 beds
Bad debt and charity per calendar day: 15%
Bad debt and charity as a percentage of gross revenue: 7%
500+ beds
Bad debt and charity per calendar day: 18%
Bad debt and charity as a percentage of gross revenue: 6%
Hospital C-suites are concerned the number of uninsured patients will rise this year if Medicaid benefits change and health insurance exchange policies price out some who are covered by those plans today. They are preparing for potential shifts by adding revenue streams, becoming more efficient and boosting philanthropic efforts.