Uncompensated Care Costs Decreasing at MN Hospitals

Minnesota hospitals received more good news Oct. 31 when the Department of Health announced new data that showed that uncompensated care costs at hospitals have decreased by 16.7 percent in the state since the implementation of the Affordable Care Act (ACA) in 2013.

Last week, MN Community Measurement released data that showed Minnesota hospitals fared better than the national averages on five quality measures.

In 2015 alone, uncompensated care at hospitals fell for a second straight year, from $305 million to $268 million. This one-year drop of 12 percent brings uncompensated care down to 2008 levels, when hospitals also spent $268 million.

Uncompensated care has two components, charity care and bad debt. Charity care is care that hospitals provide without expecting payment, and bad debt is payment that hospitals expect, but do not receive, for care provided.

Lack of insurance coverage is a primary factor in spending for both components of uncompensated care, but bad debt is also accumulated by people with insurance coverage who struggle with cost sharing, for instance through higher-deductible policies.

An estimated 213,000 more Minnesotans had health insurance in 2015 compared to 2013. The state’s uninsured rate fell to 4.3 percent in 2015, down from 8.2 percent in 2013. In 2015, uncompensated care decreased for both insured and uninsured patients.

“While we still have significant challenges to ensure that all Minnesotans have access to high-quality health care at affordable rates, this drop in charity care and bad debt is a positive sign that reflects our progress in reducing the number of Minnesotans going without coverage,” said Health Commissioner Ed Ehlinger, MD.  

The majority of hospitals saw a decline in uncompensated care costs (97 hospitals), but 34 hospitals had an increase. Hennepin County Medical Center was the largest provider of uncompensated care followed by the two Mayo hospitals in Olmstead County. 

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