Missouri’s hospitals invest in their communities in various ways. One of the most important is hospitals’ role in providing a safety net for individuals who need medical services but can’t afford their care. But, this is not the only contribution hospitals make to improve individual and community health. Hospitals invest in services and programs — often outside of the hospital — to improve lives community-wide and provide an important economic foundation through employment and capital investments.
Hospitals’ value to the communities they serve is much broader than the delivery of health care services. Their total community benefit includes charity care, absorbing bad debt and the unpaid costs of treating beneficiaries of Medicare and Medicaid, helping educate and train the health care workforce, offering free clinic services, and donating to local causes.
Hospitals are a key component of Missouri’s economy, providing a significant economic boost to the communities they serve. Spending on employees, supplies and capital projects support local and statewide economic activity.
Community Benefit Measures
Charity Care Cost — All hospitals have charitable care policies that provide free medical care to individuals who don’t have insurance and/or the ability to pay. This amount is the free care provided by the hospital.
Bad Debt Cost — A hospital may incur a significant amount of bad debt for several reasons. Patients with insurance have a co-pay, or out-of-pocket amount, for which they are responsible. However, some patients have difficulty paying their out-of-pocket costs. In addition, many patients who work are uninsured. When they encounter an unexpected illness or injury, they often plan to pay for the care themselves. Many times, the cost of care is much higher than they expected or their illness left them unable to work, resulting in an unpaid hospital bill. In addition, hospitals may have different accounting practices and classify some free care as bad debt.
Uncompensated Care Total — This is the combined total of bad debt and charity care provided by the hospital.
Unpaid Cost of Medicare Beneficiaries — Beneficiaries are the individuals covered under an insurance plan. Because government health insurance programs often don’t pay hospitals the actual costs for delivering care to their beneficiaries, hospitals must write off a portion of those bills. The amount listed in this category is the amount not covered under Medicare for the hospital’s 2008 fiscal year.
Unpaid Cost of Medicaid Beneficiaries — Beneficiaries are the individuals covered under an insurance plan. Because government health insurance programs often don’t pay hospitals the actual costs for delivering care to their beneficiaries, hospitals must write off a portion of those bills. The amount listed in this category is the amount not covered under Medicaid for the hospital’s 2008 fiscal year.
Donations — Hospitals donate cash and in-kind services to individuals and the community for various charitable events, organizations and services. This may include contributions to community organizations, scholarship programs and not-for-profit event sponsorships through the hospital or its foundation.
Health Professions Education — Hospitals provide clinical and classroom settings for many vocational, technical and professional educational programs that lead to certifications or degrees. This includes graduate medical education and programs for nurses and paramedics. They also provide scholarships for individuals pursuing health careers.
Medical Services Clinics — Many hospitals provide free or low-cost medical services in physician clinics in their communities. Some of the clinics are operated solely by the hospitals while others are partnerships between hospitals or agencies. The amount listed is the hospital’s cost to provide free or low-cost medical services to the medically uninsured. It may include subsidies, such as grants or costs for staff time, equipment, overhead costs, lab services and medication.
Total — This is the combined total of uncompensated care, unpaid costs of Medicare and Medicaid beneficiaries, donations, health professions education, and medical services clinics.
Tax Subsidy — Some hospitals receive a tax subsidy from local or state government to help subsidize charity or bad debt expenses.
Adjusted Total — This is the amount of the hospital total minus the tax subsidy.
Economic Impact Measures
Taxes Paid — All hospitals pay taxes. The amount listed is inclusive of all taxes paid by the hospital and includes income, property, sales and payroll taxes.
Capital Investment — the cost of capital or fixed assets, such as equipment, land or buildings.
Payroll and Benefits — the sum of salaries and costs of benefits, such as health coverage and retirement plans, for individuals employed by the hospital or health system.
Employees — the number of full- and part-time employees at the hospital or health system.
Total Expenses — the total amount of operating expenses incurred by the hospital or health system.
Net Revenue — the amount of money collected by hospitals or health systems after contractual adjustment deductions from governmental and private payors are made.
Net Income — the amount of net revenue minus total expenses.