In all of the heated discussions about health care, one area that has avoided attention is an important local one: the cost of charity and uncompensated care at public hospitals.
If you look at the table, you can see that Sarasota Memorial Hospital in 2007 and 2008 was unable to collect $118 million from patients who didn’t pay. This fiscal year, if the nine-month results stay on track, that number is likely to reach about $48 million. That’s $166 million in three years.
Who pays for this free care?
You do. Taxpayers do. Patients who have insurance do.
Look again at the table at right, it shows how Sarasota Memorial Health System’s property tax has generated almost enough money to cover the cost of the hospital system’s unpaid patient bills over the past three years. This tax money keeps the hospital system going. Without it, SMH would not be operating profitably.
To the hospital system’s credit, it will have reduced its bad-debt expense by 20% over the past three years.
Instead of bad debt increasing, the hospital’s efforts to collect at least something from patients has reduced bad debt.
Still, this is a huge amount and one that is deserving of taxpayers’ attention. This is especially so in light of the Sarasota Public Hospital Board in the next few weeks opting to raise its property-tax rate from 0.94 mills to 1.08 mills — a 15% increase in recessionary times. Hospital officials say they need this increase to make up for lower property tax revenue and to be able to meet the costs of uncompensated care and move forward on building a new hospital tower.
But going forward, how much of this burden are taxpayers willing to bear? Sure, it’s great to have a public hospital that treats everyone. But this is not free. What is the threshhold for annual uncompensated care that taxpayers should or are williing to accept — $40 million, $56 million, $60 million?
What’s more, consider the record of the hospital board. Since 1995, its tax rate has risen from 0.25 mills to what is soon to be 1.08 mills — a 332% increase. Since 2000, the hospital board’s millage rate has risen five times.
The amount of uncompensated health care that Sarasota Memorial has administered to Sarasotans has necessitated these tax increases. But the tax increases beg the question: How can the amount of uncompensated care be reduced?
To no surprise, many public hospitals would favor the Democratic Party plan to require mandatory health insurance for all. That might help a little, but it wouldn’t eliminate what would become endless cases of insurers refusing to pay for patients who abuse their insurance.
Mandatory insurance probably isn’t going to occur in the coming Obamacare. Meantime, however, we would advocate a new public protocol at Sarasota Memorial: no admittance to the emergency room unless it truly is an emergency. All other patients must be directed to less costly walk-in clinics. And: Everyone must pay — even if it’s in installments.
To view a chart of the costs of free heath care, click here.
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