Hospital charity care may be underreported, survey finds

Healthcare Financial Management, July, 2005

Hospitals are absorbing higher levels of charity care and bad debt and may be providing far more free care than the $25 billion they report annually, according to a report released by PricewaterhouseCoopers. Although no one knows the exact value of charity care, the survey showed that hospitals provide an average of 5 percent of net operating income in charity care, though some provide a substantially higher amount. Charity care amounts may be underestimated because of the "burdensome and expensive process that hospitals must go through to classify a patient as charity care," the report concludes, noting that 92 percent of the hospitals surveyed said at least part of their bad debt could be classified as charity care.

The PricewaterhouseCoopers report, Acts of Charity: Charity Care Strategies for Hospitals in a Changing Landscape, is available at healthcare.pwc.com/cgi-local/hcregister.cgi?link=pdf/charitycare.pdf. Browse HFMA's programs, articles, reports, and tools for managing charity care serving the uninsured at www.hfma.org/ resource/uninsured.htm.