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Health Issues Brief
Florida Hospital posts $17 million in uncompensated care in January, while UCF study urges strong action on indigent health care.

April 2002

Florida Hospital posted $17 million in uncompensated care charges in January 2002 – the highest amount ever in the hospital’s 84-year history.

"We haven’t seen the February figures yet, but we believe we’re seeing the impact of a sagging economy hit harder locally by the September 11 tragedy," said Florida Hospital President Don Jernigan. "We offer care to all who come to our doors, and we budget for uncompensated care, but our uncompensated care has risen 18% in the last five years – not counting 2002."

Uncompensated care is defined by the American Hospital Association as hospital care for which there is no payment from either the patient or the insurer.

UCF Study

The Florida Hospital numbers come on the heels of a University of Central Florida study that urged local hospitals to find new ways to manage the $150 million-plus burden created by uncompensated medical care and the inappropriate use of local hospital emergency departments. The study confirmed that:

The study focused on year 2000 data for the Emergency Departments (EDs) at Florida Hospital Orlando and East Orlando, which serve the largest numbers of self-pay and Medicaid patients in the seven-campus Florida Hospital system.*

Issue 1: Uncompensated care

The UCF study showed that, in 2000:

Self-pay patients incur the highest uncompensated care charges and represent the lowest collections of all payer categories.

This chart shows that Florida Hospital Orlando and East Orlando collected just 11.3 cents on the dollar for 24.6% if their total ED patients:

Primary Insurance

# of

ED Patients

% of total

ED Patients

Average Charges

Amount Collected

Self-pay

25,890

24.62%

$1,431

$49

Medicare

12,076

11.48%

$10,368

$3,315

Medicaid

12,670

12.05%

$3,013

$907

Other Insurance

52,050

49.49%

$3,139

$1,154

Workers Compensation

2,491

2.37%

$785

$470

TOTAL

105,177

"The results suggest a growing consequence for these organizations if uncompensated care is not addressed in a substantive manner," said the research team.

 

Issue 2: Inappropriate Emergency Department utilization

Eighty percent of all ED visits were classified as non- or semi-urgent conditions. (The most common complaints were back pain, nose bleeds, sprains, fevers, headache, earache, throat symptoms, urinary and vaginal problems, lacerations and coughs.)

Uninsured patients were more likely to use the ED for conditions like these that could be treated in a primary care setting, and 79% of uninsured patients who used the ED for minor conditions did not pay, the study said.

Just 16% of ED patients are admitted. Yet, over half the patients – admitted or not – received services in addition to a physician examination:

Key Research Objectives & Findings

Objective

Key findings in uncompensated ED patients

1

Determine ED patients’ socioeconomic and financial characteristics.

  • People ages 19-29 use the EDs most often.
  • The majority of uncompensated care patients were uninsured (yet 80 percent were employed).

2

Determine ED utilization patterns.

Over a seven-day period:

  • 49% of patients came in during the day, 36% in the evening, and 15% at night.
  • 70% of the patients came in on a weekday.
  • At least 74% arrived by car.

3

Determine the amount of uncompensated care charges associated with ED use.

  • Higher charges are associated with:
  • People ages 50-64
  • Males
  • Married people

4

Determine the levels of uncompensated care associated with ED utilization patterns.

Higher levels of uncompensated care are associated with those who use the ED for primary care:

  • 42% of non-urgent patients and 37% of semi-urgent patients did not pay their bills – a total of 79%.
  • Daytime patients paid more often than evening and night patients paid.

5

Recommend a strategy to address the challenge posed by uncompensated care in the EDs.

See Study Recommendations below.

Recommendations

The UCF study suggested a number of potential scenarios/benefits for dealing with uncompensated care and inappropriate ED utilization.

A number of these scenarios are already underway, mostly through the Primary Care Access Network (PCAN). PCAN includes representatives from Florida Hospital, other hospitals, primary care clinics, and Orange County government; the group has been working on many of these issues as part of a $1.24 million Community Action Program (CAP) grant received in fall of 2001.

Others may or may not be acceptable solutions.

Potential Future Scenario

Potential Outcomes

Group Responsible
Establishment of a public HMO or other contracting entity. Shift of some costs from private to public sector. N/A

Development of a community plan to provide needed primary care services in the right locations, at the right times.

Reduce use of EDs for primary care.

PCAN

Collaboration and coordination among primary care clinics.

Longitudinal relationship between health care system and the patients.

PCAN & CAP grant

Transportation of indigent patients to and from primary care clinics.

Shorter wait times for indigent primary care services.

N/A

Maximize efficiency through the use of physician extenders (e.g., nurse practitioners and physician assistants).

Primary care services available at convenient times and places.

Clinics have some extenders.

Patient flow directed to most appropriate level of care.

Higher profit margins for hospitals (especially beneficial to not-for-profit hospitals that have no stakeholders but must upgrade and maintain equipment and facilities).

PCAN

Develop new start-up clinics in high-risk areas.

Maintenance of care close to home and reduction of ED costs.

PCAN

Initial public funding for indigent care through sales tax or Special Funding District.

Lower total costs isolated with indigent care due to more preventive care.

Florida Hospital does not support a tax for healthcare.

 

*The research faculty of the UCF Department of Health Professions (DHP) published the study, entitled "Uncompensated Care and Emergency Department Utilization: An Analysis of Florida Hospital Orlando and Florida Hospital East Orlando," in mid-2001. They used data extracted (under strict confidentiality guidelines) from Florida Hospital patient and financial records.

The principal investigators were Timothy Rotarious, PhD, and Aaron Liberman, PhD, department chair. DHP is part of the College of Health and Public Affairs at UCF.

Sources:

  1. The Impact of the Uninsured in Orange County Report – Florida Hospital & Orlando Regional Healthcare Uninsured Work Group
  2. The University of Central Florida’s Department of Health Professions Programs in Health Services Administration
  3. The Florida Hospital Association
  4. Groeller, G., Idea For Businesses: Chip in to Cut Hospital Bills. Orlando Sentinel, April 9, 2001
  5. Head, T., Cincinnati’s Health Care System Buckling Under Weight of Uninsured, Cincinnati Business Courier, April 23, 2001
  6. AHCA Financial Data, 1995-1999

This Health Issues release is located on the Internet at: http://www.floridahospital.org/

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