Minnesota Hospital Association


February 07, 2013

Uncompensated care increased in 2011, according to Minnesota hospitals’ latest Community Benefit Report

ST. PAUL – In 2011, Minnesota hospitals and health systems contributed more than $3.6 billion in programs and services to benefit their communities, an increase of 7 percent compared to 2010, according to the latest Community Benefit Report released by the Minnesota Hospital Association.

A significant driver of hospitals’ community contributions was a nearly 26 percent increase in the difference between the actual costs of providing care and the payments received from caring for Medicaid patients. The report details that state and federal government payments to Minnesota hospitals and health systems for Medicaid and Medicare patients were nearly $1.5 billion below the actual costs of providing the care. In all, such government underfunding accounts for more than 7 percent of Minnesota hospitals’ total operating expenses.

In addition, a substantial and growing proportion of hospitals’ community contributions are from providing care without getting paid. This uncompensated care includes “charity care” for patients from whom there is no expectation of payment, and “bad debt,” the result of patients who cannot or did not pay their share of the hospital bill. Uncompensated care as a whole totaled $509.5 million in 2011, an increase of about 2.6 percent from 2010.

“As nonprofits, hospitals and health systems provide access to care to patients — regardless of their ability to pay — 24 hours a day, seven days a week,” said Lawrence Massa, president and CEO of the Minnesota Hospital Association. “That’s why Minnesota hospitals support the expansion of Medicaid to provide insurance coverage to more Minnesotans and the creation of a Minnesota-based insurance exchange to insure more Minnesotans.”

About $1.3 billion of the total was spent on community and health services, education and health care workforce development, research to develop new and better treatments and find cures for disease, community building activities, and cash/in-kind donations to other local nonprofits. These include programs to help people eat better and be more active; smoking cessation programs; workshops to educate people about disease; health screenings; and immunization clinics, to name a few.

“In addition, hospitals are often the largest employer in their community, and hospital employees have a great stake in the community in which they live and work,” Massa said. “As a result, hospital employees partner with their local community nonprofit organizations to meet the needs of their communities through volunteerism and financial contributions. Over the past year, Minnesota hospitals continued to help improve the health and well-being of their communities and their neighbors.”

The 2012 Community Benefit Report reflects 2011 financial information — the most recent data available — self-reported by Minnesota hospitals and health care systems and supplemented with data reported to the Minnesota Department of Health. The annual report comprises an analysis of categories of community contribution activities on a statewide and regional basis.

“Minnesota’s hospitals are a tremendous asset for their communities, serving as nation-leading health care providers, community leaders and economic drivers,” added Massa. “It is important that Minnesotans continue to support their hospitals so together we can continue to advance our communities and improve Minnesotans’ health.”

To obtain a copy of this or previous community benefit reports, visit our community benefits page.