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April 28, 2008

Some Nonprofit Hospitals Demand Payments Before Treating Patients

In an effort to reduce debt and costs associated with treating uninsured or poor people, some nonprofit hospitals are asking patients to make payments before they receive treatment, reports The Wall Street Journal.

In 2006, unpaid bills cost hospitals of all kinds a total of $31.2-billion, an increase from $21.6-billion in 2000.

Hospitals defend demanding upfront payments, saying the practice improves their finances and the quality of care they provide.

However, some say the practice is questionable for nonprofit hospitals since they receive tax-exempt status in part because they treat poor people. A study conducted by Ohio State University found that net income per bed nearly tripled at nonprofit hospitals to $146,273 in 2005 from $50,669 in 2000.

Uwe Reinhardt, a health-care economist at Princeton University, said nonprofit hospitals “shouldn’t behave this way.”

A 2006 survey by the Internal Revenue Service found that 14 percent of 481 nonprofit hospitals required patients to make payments before receiving treatment.

Monday April 28, 2008 | Permalink

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