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Charity care a small portion of nonprofit Kentucky hospital costs

By   /   February 23, 2016  /   News  /   No Comments

Part 2 of 8 in the series Measuring Uncompensated Care

Kentucky’s nonprofit hospitals provide health care regardless of a patient’s ability to pay, but charity care costs are only a small portion of their total expenses.

Based on a review of 2012-13 financials from 37 nonprofit members of the Kentucky Hospital Association, charity care costs amounted to an average of 3.3 percent of hospital expenses.

Charity care was typically the smallest part of the 37 nonprofits’ overall uncompensated care costs. Uncompensated care falls into three main categories: charity care for patients without insurance, unreimbursed Medicaid, and bad debt from patients who don’t pay their bills.

Unreimbursed Medicaid — the gap between Medicaid expenses and the reimbursements the government pays care providers — averaged 3.5 percent of the Kentucky nonprofit hospitals’ total expenses in 2013. Bad debt was, on average, 7.3 percent of total expenses.

Combined, the 37 nonprofit hospitals and hospital networks had revenues $295 million greater than the sum of their costs despite 14 of the hospitals and networks operating in the red, with expenses exceeding revenues.

St. Elizabeth Medical Center in Edgewood, Ky., south of Cincinnati, had revenue in excess of expenses — what would have been reported as profits, if the hospital were a for-profit business — of $125 million, by far the most of any nonprofit institution in the state. It accounted for 42.3 percent of all revenue in excess of expenses collected by Kentucky nonprofit hospitals.

St. Elizabeth’s charity care costs equaled 4.7 percent of total costs, while unreimbursed Medicaid was 2.5 percent of total costs and bad debt was 6.9 percent of total costs.

Baptist Health reported $96 million of revenue in excess of expenses, with charity care costs equal to 3.7 percent of total expenses, unreimbursed Medicaid equal to 1.8 percent of total expenses, and bad debt equal to 1.2 percent of total expenses.

To push more of the cost of health care for the poor to federal taxpayers, KHA supports expansion of government programs such as the 2010 health care overhaul and that law’s optional Medicaid expansion.

Photo credit: Twitter

Kentucky Gov. Matt Bevin

Democrat Gov. Steve Beshear expanded Medicaid under Obamacare in 2013. Republican Gov. Matt Bevin campaigned against the expansion, but since taking office Bevin has instead decided to pursue minor changes to the expansion.

Obamacare expansion opponents, including U.S. Sen. Rand Paul, a Republican, warned that putting more Kentuckians on Medicaid could be disastrous for rural hospitals.

“My fear is that these hospitals may be bankrupt by overwhelming them with Medicaid patients,” Paul said during a 2013 ABC News interview. “The same with doctors. Some may leave the community. Some may discontinue seeing Medicaid patients if they’re overwhelmed.”

Though Medicaid losses were already more of a burden for Kentucky’s nonprofit hospitals than charity care was, Beshear insisted Obamacare expansion’s new federal welfare spending would create jobs and improve Kentuckians’ health.

RELATED: Kentucky’s Medicaid expansion promises clash with reality

“While charity care has declined due to people gaining Medicaid coverage, uncompensated care is far more than just charity care,” KHA wrote in an April 2015 report. The report noted that Medicaid expansion reduced charity care costs, but increased unreimbursed Medicaid costs, as has happened in other states.

KHA did not respond to questions from Watchdog about charity care costs before and after Medicaid expansion took effect in January 2014.

Kentucky’s Medicaid expansion added roughly 400,000 people — primarily working-age adults with no children and no disabilities — to the program in its first two years.

“Patients are hurt most by Obamacare’s expansion of Medicaid as it pushes small and rural hospitals out of the market, which leaves people with fewer choices and less access to providers,” Julia Crigler, state director for Americans for Prosperity Kentucky, told

“While the payment scheme of Obamacare can be gamed by large hospital chains, those providing access to rural communities are struggling and that is compounded by the crippling regulations that come with compliance,” Crigler added.

Uncompensated care data for nonprofit KHA member hospitals and networks are listed in the following table.

Hospital/Network Revenue Less Expenses Net charity care as % of expenses Unreimbursed Medicaid as % of expenses Bad debt as % of expenses Year
Baptist Health $96,063,753 3.68% 1.79% 1.19% 2012
Caldwell Medical Center -$621,758 3.30% 5.80% 7.09% 2012
Casey County Hospital District $393,631 3.50% -0.55% 2.58% 2012
Clinton County Hospital -$1,448,338 1.88% 1.24% 14.12% 2012
Commonwealth Regional Specialty Hospital $173,101 3.71% 0.00% -0.74% 2012
Continuing Care Hospital $252,646 0.22% 0.39% 3.19% 2012
Crittenden County Hospital -$1,318,305 6.52% 5.11% 6.25% 2012
Cumberland County Hospital $202,155 2.65% 3.78% 9.66% 2012
Ephraim McDowell Regional Medical Center $12,314,880 3.61% 2.85% 9.14% 2012
Harrison Memorial Hospital -$649,331 -0.65% 2.56% 6.08% 2012
James B. Haggin Memorial Hospital -$2,455,988 2.77% 3.35% 8.37% 2012
Jane Todd Crawford Memorial Hospital -$5,607,692 5.17% 5.78% 2.34% 2012
Jennie Stuart Medical Center $866,802 3.52% 4.23% 12.27% 2013
Jewish Hospital & St. Mary’s Healthcare -$8,146,281 3.23% 0.00% 7.25% 2012
King’s Daughters Medical Center -$566,281 2.88% 5.06% 3.11% 2012
Livingston Hospital & Healthcare Services -$141,749 2.35% -0.08% 11.75% 2013
Manchester Memorial Hospital $353,660 6.85% 3.67% 6.64% 2013
Marshall County Hospital $1,409,642 1.94% 1.91% 5.38% 2013
Methodist Hospital $1,247,737 1.54% 2.64% 4.88% 2012
New Horizons Medical Center -$383,220 1.83% 13.48% 12.95% 2013
Ohio County Hospital $476,731 2.19% 2.74% 3.83% 2012
Our Lady of Bellefonte Hospital $4,594,845 1.49% 5.01% 8.62% 2012
Owensboro Health $2,993,782 4.84% 3.75% 7.42% 2012
Pikeville Medical Center $21,336,769 2.44% 7.12% 20.79% 2012
Pineville Community Hospital -$4,386,653 6.22% 7.94% 3.80% 2012
Russel County Hospital $323,298 5.03% 5.55% 10.90% 2012
St. Claire Regional Medical Center $2,879,119 3.15% 2.51% 10.42% 2012
St. Elizabeth Medical Center $124,859,502 4.65% 2.48% 6.87% 2013
St. Joseph Health System $7,635,491 4.16% 1.51% 9.03% 2012
The Medical Center at Bowling Green $24,694,344 2.30% 2.59% 6.49% 2012
The Medical Center at Franklin $3,224,587 3.61% 0.60% 17.75% 2012
TJ Samson Community Hospital -$3,033,215 1.91% 3.46% 4.49% 2012
Trigg County Hospital $731,641 3.51% 0.81% 10.05% 2012
Twin Lakes Regional Medical Center $6,636,423 0.88% 8.01% 4.76% 2012
University of Louisville Hospital -$9,707,173 7.00% 0.00% 2.56% 2012
Wayne County Hospital -$376,335 4.65% 3.05% 4.24% 2012
Part of 8 in the series Measuring Uncompensated Care


Jason is an Ohio-based reporter covering labor issues for, with a focus on right-to-work, public employee unions and Obamacare. Before joining Watchdog, Jason was communications director for Media Trackers Ohio. His work has been featured at, Hot Air, The Daily Signal, RedState, Townhall and elsewhere. His investigations into labor union spending and Obamacare's Medicaid expansion have been cited by national commentators including Jim Geraghty, Michelle Malkin, Erick Erickson, Dana Loesch and Mark Levin. Jason can be reached on Twitter at @jasonahart and by email at [email protected]