Relieving the Burden of Government

Relieving the Burden of Government

One of the largest costs to metropolitan Chicago hospitals is the provision of government-sponsored indigent care, which includes the unreimbursed costs of Medicare, Medicaid and other federal, state and local indigent health care programs, eligibility for which is based on financial need. In the metropolitan Chicago region, hospitals spent more than $1.6 billion to subsidize government-sponsored indigent care provided to Medicare and Medicaid patients in 2009.

Currently, hospitals in the metropolitan Chicago region are reimbursed only 91 cents for every dollar spent on caring for Medicare patients. Medicaid reimbursement is even lower at 75 cents per dollar. More than 2.5 million Illinois residents are enrolled in Medicaid and that number is expected to grow to over 3.1 million in 2019 or sooner, as a result of expanded coverage from health care reform, according to the Kaiser Family Foundation (KFF). Reduced reimbursements for providing care to patients receiving Medicare or Medicaid benefits make it difficult for hospitals to provide other critical charitable community benefits. In addition to being uncompensated for care, metropolitan Chicago region hospitals covered the cost of $12.5 million in government-sponsored programs and services that were not included under state or federal indigent care in 2009.

That burden is expected to grow as a result of the region’s aging population and health care reform. In 2011, 78 million baby boomers will begin qualifying for Medicare coverage.iii In the next 10 years, an additional 16 million people will be receiving Medicaid coverage. This influx of patients will force hospitals to increase their capacity and workforce, while continuing to absorb underpayments from the government.

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