You've heard the adage, "There's no such thing as a free lunch."
Utah hospitals are proving it.In 1988, Utah hospitals reported an estimated $165 million in uncompensated care - an increase from $135 million in 1987; $85 million in 1986.
Each year, more and more patients - facing decreased assistance from state and federal governments - aren't paying their bills.
The result: Patients who can pay - or their insurance carriers - are having to absorb the costs. To avoid closing, hospitals are shifting costs.
On average, hospitals charge $605 a day for Medicare and Medicaid patients. That doesn't cover the hospital's costs. Other patients are charged an additional $350 to make up the hospital's losses on the government-sponsored patients, said Robert D. Burton, vice president of finance for the Utah Hospital Association.
"When you pay $3 for a Band-Aid in a hospital, $1 of the $3 is for the Band-Aids that weren't paid for by other people."
Burton said the situation is worsening. Federal and state governments are whacking from both directions - adding more people to the Medicaid and Medicare rolls, and cutting back on reimbursements to hospitals.
The Utah Medical Assistance Program currently pays 25 cents on the dollar; Medicaid, the state and federal program, pays 60 cents on the buck.
"Since the federal and state governments under Medicare and Medicaid account for nearly 50 percent of all of the hospital bills, they are big culprits in this because they never pay their fair share," said Eugene C. Beck, association president. "In the last six years the gap has grown incredibly."
Thus, so have hospital charges.
Still, Beck emphasized, no Utah hospital turns down patients who need emergency care but can't pay for it.
An in-house association report reviewing the growth of uncompensated care reveals that some hospitals, however, are providing more charity care than others.
"But it's not because one hospital is turning down poor people and another one isn't," he said. "Where the hospital is located and what kind of patient mix it has determines the amount of its charity care."
For example, University Hospital, which has an abundance of catastrophic cases, reported nearly $7.5 million in charity care and bad debts in 1987. Holy Cross, because of its central city location, attracts more medical indigent patients and reported $3.3 million.
LDS Hospital and Primary Children's, because of their high-level-care units, service mix and locations, both reported $4.3 million.
On the other hand, suburban Cottonwood Hospital Medical Center in Murray reported $2.1 million.
Douglas J. Hammer, IHC vice president and general counsel, said because of Cottonwood's location and service mix, it may provide less charity care. The same could be said of other hospitals in the suburbs. Some, such as LDS, Alta View and Cottonwood, provide outpatient care for the medically indigent.
"Blue Cross has been concerned for years because they've had to pick up additional expenses that others didn't pay," Beck said. The insurance carriers have passed along the costs to their clients through higher premiums, so everybody shares the costs of a lunch that has to be paid for.
"What's happening is that hospital margins are shrinking, or hospitals are operating at losses, out of reserves or on their own source of private contributions," Beck said.