The Plain Dealer recently reviewed the community benefit local health systems provide throughout northeast Ohio. In 2010, the Sisters of Charity Health System and its subsidiaries, which include five acute care Catholic hospitals, three grantmaking foundations, several outreach organizations and two elder care facilities, collectively provided $54.6 million in community benefit. This includes $21.8 million in charity care at cost; $23.1 million in unpaid costs of Medicaid; and $9.7 million community health services, health professional education, community building activities and outreach to the medically disadvantaged. [more]
Read more about community benefit in the area in the full text of the story below.
Cleveland Clinic, UH, others say patients need more financial help
Published: Friday, November 25, 2011
By Sarah Jane Tribble, The Plain Dealer
CLEVELAND, Ohio -- The need for free and discounted medical care is escalating across Northeast Ohio, according to the latest tax filings.
Hospitals from the giant Cleveland Clinic to smaller players like Parma Community General Hospital have seen drastic jumps in the amounts they spend to provide free care to those who have no insurance. They also have seen jumps in the unpaid portions of bills of those who do have health coverage – portions that the patients are supposed to pay but can't.
"It's really scary," said Bill Ryan, executive director for the Northeast Ohio's hospital advocacy group Center for Health Affairs.
Each year, the area's nonprofit health systems are required to file federal tax documents that outline how much money they are earning as well as what they give back to the community. No standard exists for the amount of charity care nonprofit hospitals should provide. But for more than a decade, politicians and community activists have questioned how much free care nonprofit health systems should provide in a trade off for their tax-exempt nonprofit status.
The question has been particularly controversial in Greater Cleveland, where the county's taxpayer subsidized public hospital, MetroHealth System, blames an increase in the amount of charity care it provides for much of its financial problems.
In response to an announcement that MetroHealth would cut 450 jobs earlier this year, U.S. Rep. Dennis Kucinich publicly announced in September that the Cleveland Clinic isn't providing its "fair share" of health care for the region's poor.
According to its federal filings, the amount the Cleveland Clinic spent providing charity care to the poor jumped 25 percent, to $149.8 million last year. The Clinics spending on bad debt -- mostly from the insured who couldn't afford their co-pays or high deductibles -- rose 49 percent to $86.2 million. Bad debt at cost is not part of the community benefits number but is also reported on the tax filing.
The Cleveland Clinic is the region's largest health system and reported $6.2 billion in total revenue last year, up from $5.7 billion in 2009. The Clinic's overall spending on community benefits topped $537.4 million in 2010.
Northeast Ohio's second-largest health system University Hospitals also saw increases in need. The system reported $1.9 billion in total revenue last year, up from $1.8 billion in 2009. It's community benefits spending totaled $258 million. It's spending on bad debt, or writing off of bills that won't be paid, rose 13 percent to $16.8 million.
The amount University Hospitals spent providing charity care, which is part of the community benefits filing, fell 12 percent to $35 million. But Heidi Gartland, the system's government relations leader, says the community benefits did not actually drop. She said the number appears to have fallen because the implementation of new computer systems has delayed record-keeping that would accurately reflect the numbers.
During 2011, Gartland said, the health system's charity care has risen at least 20 percent.
The combined increase in charity care and bad debt are "going to be our realties until the economy turns around," Gartland said.
Northeast Ohio's unemployment rate is 8.5 percent, below the statewide rate of 8.8 percent and national rate of 9.1 percent. But even when workers have jobs, their insurance isn't what it once was.
More employers are offering coverage that demands high co-pays to visit the doctor as well as high deductibles, often starting at $500 or more, that have to be paid out of pocket before insurance kicks in. In many cases, workers can't afford to pay the deductibles, area hospital leaders said.
"Health care is not the first thing they pay for," Gartland said. "They're going to make sure their mortgage is paid or their renters insurance or food is on the table. We do work out payment plans with folks."
At Southwest General Health Center, where many patients come from the auto manufacturing industry, some who have jobs and insurance still qualify for financial aid because the amount they owe after insurance is high, said Mary Ann Freas, chief financial officer of Southwest.
Parma General Community General Hospital reports that its charity care increased 52 percent to $5.4 million. Bad debt rose 77 percent to $3.6 million.
A few health system leaders said federal health reform, which takes effect in 2014, might help, as it mandates that more people have health coverage. In addition, many people who fall into the charity care could qualify for Medicaid under the new rules.
Melissa Rogers, chief financial officer for the Sisters of Charity Health System, echoed the concerns of those at the Clinic and University Hospitals regarding high unemployment rates and the impact that will have on their bottom line.
Sisters of Charity Health System, which includes St. Vincent Charity Medical Center and St. John Medical Center as well as elder care and other facilities, reported $887 million in total operating revenue for 2010. At the same time, it provided $54.6 million in community benefits -- which include $21.8 million of medical care for the needy.
Rogers said that it appears that bad debt and charity care will continue to increase across the market for all the health systems.
"I don't think we're going to see a decrease," she said.
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