Skyrocketing Uncompensated Care Costs Drive Up County Hospital’s Debt

Skyrocketing costs for uncompensated medical care are driving up debt at the University Medical Center. The county hospital is already facing a $22 million deficit due to statewide budget cuts. That amount goes up to $28 million after hospital administrators factor in the exponential growth in uncompensated care. Now they’re asking taxpayers to help offset that shortfall by calling for a countywide 7.9 percent property tax hike.

“When you need us we’re going to be there for you and as a taxpayer, we need you to be there for us,” said Margaret Althoff-Olivas, a UMC spokeswoman.

Althoff-Olivas said uncompensated care costs went up from $176 million in 2007 to $316 million this year. She said the hospital has been taking in significantly more patients as its expanded. Some of those patients cannot afford medical treatment and the hospital has a hard time collecting payments from them.

Uncompensated care patients comprise two groups: charity care and bad debt. Charity care patients are considered indigent by the government and are not expected to pay hospital bills because they legitimately have little to no income. Bad debt patients do not pay their full hospital bills.

“(County commissioners) are justifiably concerned about the number (of uncompensated care costs) and want to know what we can do to better pursue those folks who can pay their bills,” said Althoff-Olivas.

She said the hospital is considering implementing strategies like raising prices for uninsured patients or those who pay on a sliding scale. One homeowner at a commissioner’s court workshop meeting Wednesday said those strategies should have been implemented before UMC officials asked taxpayers to help bridge their budget. “I understand that,” said Althoff-Olivas. “But you can only get so much blood out of a turnip and when the collection agencies are having a hard time pursuing these individuals and getting them to pay, I’m not sure what we as an organization can do. But we’re willing to look at it.”

The proposed tax hike amounts to $12.84 cents extra per year on an average-price $125,000 home.

Commissioners will get the final say on whether to approve the proposal sometime before October. ABC-7 will let you know when an exact date is set.

Even if the tax hike is approved, the hospital is not out of the woods. The tax increase would only generate about $4 million, which means $24 million in losses would remain. Althoff-Olivas said the hospital will tap into its reserve funds to make up the difference.

UMC’s reserve fund has about $100 million. Althoff-Olivas said UMC fears digging too deeply into its “rainy day” fund because doing that could negatively impact UMC’s bond rating. She added UMC is already planning on using more of those reserve funds to operate its newest building.