What's New

Zack Hutchins
Director of Communications

December 16, 2003

Council reviews bills to require stricter account of 'bad debt and charity care' funds

The Business Council is reviewing three bills that would change the way hospitals account for and spend taxpayers dollars they receive for so-called "bad debt and charity care" cases.

The Council has not taken a formal position on the bills (A.9217, A.9218, A.9219/Grannis), "but the ideas behind them are very attractive," said Elliott Shaw, director of government affairs and The Council's health-policy lobbyist. Changes in the how these dollars are spent and accounted for "are long overdue," he added.

These bills would: require hospitals to report actual costs of care in bad debt and charity cases; require the state Department of Health to give a better public accounting of these funds; and establish tighter regulation of hospital bill-collection procedures.

The state gives its hospitals a pool of dollars each year for bad debt and charity care - that is, the care of patients who will not pay or cannot afford to pay. These dollars come from taxpayers, mostly employers, who pay the state's hidden tax on health insurance.

The Council has long argued that the state should require a much more aggressive accounting of dollars that it takes from employers and invests in bad debt and charity care, Shaw said.

In particular, hospitals should be required to say who actually delivers care in these cases and what it actually costs. The state should use this information to consider whether more efficient uses of this money might achieve the same health-care goals, Shaw said.

"Now, we spend this money by subsidizing institutions - ones that deliver care in our costliest health-care setting," he said. "We believe the state should consider using this money to give vouchers to help people who cannot otherwise afford insurance to buy it."

Shaw also noted that hospitals typically charge the state their "sticker" prices in bad debt and charity care cases - even though virtually no one else ever pays this much for care.