Providing Care to Those in Need
Hospitals in the metropolitan Chicago region alone provided more than $3.5 billion in charitable community benefits in 2009, including more than $1 billion in charity care and “bad debt.” Charity care is defined by state law as free or discounted care provided to patients who cannot pay, who may not be eligible for public assistance programs, such as Medicaid or Medicare and who meet the financial criteria in accordance with hospital policy.
Therefore, the hospital does not expect to receive payment from the patient or from a third party payer. According to the U.S. Census Bureau, there are almost 1.2 million people who do not have health insurance in the seven-county region of northeastern Illinois. Many residents who are uninsured are often impoverished and by the time they seek medical care, they are usually in very poor health, requiring comprehensive care for a multitude of ailments. Hospitals absorb most of the cost of providing care for uninsured or underinsured patients, further straining the regional health care safety net. In 2009, hospitals in the metropolitan Chicago region provided more than $415 million in charity care.
Furthermore, in 2009, metropolitan Chicago hospitals did not receive payments for hospital bills totaling more than $645 million for which payment was expected, also known as “bad debt.” Bad debt is defined as the provision of care for “doubtful accounts” resulting from the extension of credit by the hospital. A significant portion of bad debt accounts, which may be as high as 50 percent, could be classified as charity case but due to reporting complexities, they remain classified as bad debt.