Hospitals see surge in nonpaying patients

By Carol M. Ostrom
Seattle Times staff reporter

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Uncompensated care jumped more than 50 percent in King County and doubled in surrounding counties in the past two years, said the report, called hospTrends, which is issued quarterly by the state Department of Health.

In the year that ended in March, uncompensated care accounted for 3.7 percent of total billed charges, which is up more than 34 percent from the year before, and is the highest rate since the year ending March 31, 1992, the report said.

"It's one of the biggest increases I've seen in my career; it's really huge," said Leo Greenawalt, president of the Washington State Hospital Association. "I've been hearing about it from every part of the state."

He said emergency departments are particularly hard-hit, because people without insurance go there as a last resort. "It's really putting pressure on the hospitals' ability to deliver emergency care."

The uninsured also are turning to community clinics for help.

"We've seen unprecedented numbers of uncovered people," said Dr. Richard Kovar, medical director of Country Doctor Health Centers, which operates two clinics in Seattle. Many are patients who typically have not turned to community clinics, "the population we traditionally would have thought of as easily employed and easily insured."

The dot-com bust changed that, and for many unemployed people, group-insurance extensions have expired and they've found individual insurance unaffordable, he said.

The clinics he represents saw about 3,500 new patients last year, Kovar said. Many of those new patients had lost their jobs and insurance, or kept their jobs but saw insurance vanish or become unaffordable as employers shifted costs to employees.

"What's changed is the demographics," he said. "The people we serve now are everybody, everybody's neighbor."

Kovar said caps on state-subsidized insurance for the working poor have contributed to the higher numbers of uninsured, as well as tightened eligibility for Medicaid, the state-and-federal insurance for low-income patients.
 
In the past two years, Kovar said, the clinics also have seen a sharp upturn in the number of patients coming in sick enough to require hospitalization, because they'd put off care for a chronic disease such as diabetes or high blood pressure.

"We regularly see — on a daily basis — people who had a doctor, who had a good relationship with a primary-care provider, but they lost that" when they lost their insurance, Kovar said. "We're seeing the utter failure of the employer-based system, which can chug along reasonably well in good times but is doomed to failure when economies fail."

The report found that hospitals in urban areas and less-remote rural areas had larger increases in uncompensated care than those in "frontier" and remote rural regions.

Uncompensated-care numbers in the report reflect "charity care," which represents charges not paid by patients who are unable to pay, and "bad-debt expense," which reflects charges not paid by patients who are unwilling to pay.

Tom Muller, a financial analyst for the Department of Health and co-author of the report, said the increases are likely the interaction of several factors, including:

• The tightening of Medicaid eligibility.

• High rates of unemployment in Washington.

• The West Coast's slow recovery from the economic downturn.

• Medical bills being among the first to be unpaid when personal finances are tight, "because there's nothing to repossess, shut off or foreclose."

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com