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Everything is explained on the documents uploaded. Minimum 700 words maximum 1000.
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Alejandra Padron
ECP 4530
Katie Sherron
01/18/2018
Uncompensated Care
Over the years, the dynamics of uncompensated care have been changing, which has, in
turn, necessitated the formulation of better ways of managing it. Market aspects that have been
changing are affecting the type and level of coverage in the economy. For instance, as the
demand for health services increases with the growth in the general population, more people
from the low and middle social classes are still accessing health services even if it is at the lowest
costs. In these days, uncompensated care often comes from people that don’t have insurance and
cannot afford to pay the cost of care that will be offered to them in a hospital. These patients are
managed in different ways, including through the use of charity care for the needy ones, which
leads to a chance to provide support to the mission of healthcare institutions. Additionally,
uninsured patients could be managed by categorizing their uncollectible funds as bad debts.
While health institutions do their best to collect the dues held by their patients, collection efforts
are faced with challenges such as that some of the patients may be uninsured or that they might
not be able to pay for the services offered to them. From this point of view, uncompensated care
makes part of the payments that have to be met by the hospitals. In my opinion, to adequately
address the issues related to uncompensated care, it is crucial to apply strategies such as revenue
cycle automation to track debts and avoid bad debts, as well as encouraging more charity care.
Revenue cycle automation will help to prevent bad debts and thus, extra costs to
hospitals, which helps in tracking the uncompensated care costs (HFMA, 2008). At some point
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in time, most hospitals play a charitable purpose, which means that they prefer charity care to
bad debts because they show that they are giving back to the community. A good example of this
is when hospitals, whose supply is higher than the demand of patients, donate medicines,
especially in low-income areas. Revenue cycle automation helps in streamlining and speeding
the data collection processes during the process of giving patients services (Marcinko and Hetico
72). Such data might include information on patient’s history, income, and other economic
considerations. It is through the analysis of this data that an institution can easily clarify if
patients’ health fees should be followed up and collected or considered as bad debts. From this
point of view, hospitals will be able to cut off some of the bad debts that could have been
incurred. Additionally, the automation will help institutions to document patient’s information
more efficiently and at the same time ensure that all patients are treated without discrimination
and in a systematic way while being charged for the services offered. Capturing transactions in
an efficient way and processing and storing this information will help to reflect cases of
uncompensated care. All this while analyzing the situation of patients to determine if they are
eligible for charitable care, which will help to reduce the chances of bad debts within the
respective health institutions (Wilensky, 1984).
Additionally, encouraging more charity care will help in addressing some of the problems
associated with uncompensated care. From an accounting point of view, charity care is
considered to be a form of revenue that is taken off from an institution’s top line, while bad debts
are considered to be an expense. As a result, as explained above, most healthcare institutions
prefer to have charity care as compared to bad debts (Watson 48). Health institutions need to
partner with more charity groups to ensure that uncompensated care is accessible to all the
necessary cases within the society. It could also be important for these institutions to partner with
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the federal, state, and local governments to ensure that they can efficiently implement such
programs as Medicaid and Medicare that will help in catering for the costs of uncompensated
care that could otherwise have taken a toll on their revenues. Expanding the charity funds in
hospitals might also be promoted by involving members of the public through soliciting
donations. Improving the level of charity funds available for hospitals will ultimately ensure the
reduction in bad debts and other negative effects associated with uncompensated care.
Healthcare organizations in the contemporary world are making significant attempts to
prevent the problems that come with uncompensated care, especially regarding bad debts.
Uncompensated care leads to instances of bad debts for healthcare institutions, while ultimately
impacting the profit levels of the profit-making ones. To prevent the occurrence of
uncompensated care, automation of the revenue cycle is a good strategy. As explained before,
the main reason is that it will enable the availability and accessibility of information that will be
required to make effective decisions as to the eligibility of some of the patients for charitable
care with the aim of preventing cases of uncollected health funds. It is also important to ensure
that healthcare institutions expand charitable funds by seeking partnership with more
participants, including the government and members of the public, which will in turn help in
enabling more charitable funds thus, preventing bad debts.
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Works Cited
HFMA. (2008, June 5). Keys to Reporting Uncompensated Care | HFMA. Retrieved January 15,
2018, from http://www.hfma.org/Content.aspx?id=7207
Marcinko, D. E., & Hetico, H. R. (2014). Financial management strategies for hospitals and
healthcare organizations: Tools, techniques, checklists, and case studies. Boca Raton,
FL: CRC Press.
Watson, M. E. (2011). Systems approach workbook for health education and program planning.
Sudbury, MA: Jones & Bartlett Learning.
Wilensky, G. R. (1984, January 1). Solving Uncompensated Hospital Care: Targeting the
Indigent and the Uninsured | Health Affairs. Retrieved January 16, 2018, from
https://www.healthaffairs.org/doi/full/10.1377/hlthaff.3.4.50
