Recession cuts into Grants Pass hospital's bottom line

Shaun Reger has had his fair share of hospital visits.

Without a job or health insurance, the 27-year-old found himself using the emergency room at Three Rivers Community Hospital for services related to spinal damage caused by osteoporosis and a neurological problem.

"I've been there so many times," said Reger, who estimates he's racked up around $15,000 in unpaid hospital bills in two years, before recently being accepted for the Oregon Health Plan, the state's version of Medicaid coverage. "The hospital took care of one of the bills for me. I don't know how much it was, but I know it was a lot of money."

Reger is living at the Gospel Rescue Mission while he works with nonprofit groups such as Options for Southern Oregon and United Community Action Network to get back on his feet.

"At this point, I'm going through therapy and not letting that stress me out," Reger said of his unpaid hospital debt.

At Three Rivers Community Hospital, uncompensated care, which includes charity care and bad debt, is an everyday part of life, said Marvin Haas, chief financial officer for Asante Health System, which owns the local hospital.

Bad debt is accumulated when patients aren't able to pay for services billed to them. Charity care is provided when patients qualify for Three Rivers' financial assistance program for discounted care.

Haas said uncompensated care added up to $26.4 million — $22.7 million in charity care and $3.7 million in bad debt — at Three Rivers during the 2010 fiscal year, which ended Sept. 30.

In 2009, the hospital had $21.3 million in uncompensated care and in 2008, $19.8 million.

"It's definitely trending upwards," Haas said, noting that the county's high unemployment rate has been a factor in the uptick of the hospital's uncompensated care. "The economics in Southern Oregon, Josephine County and at Three Rivers has been challenging through this recession, so more and more patients are having uncompensated care."

The financial assistance policy allows the hospital to offer discounts of 10 percent to 100 percent to low-income patients.

"If patients don't qualify or apply for it, or if they receive the financial assistance form and never return it, those costs could end up in bad debt," Haas explained.

During 2010, 53 percent of patients seen at Three Rivers had Medicare coverage, 20 percent were covered under a commercial insurance such as Blue Cross Blue Shield or Pacific-Source, 15 percent had Medicaid, 8 percent of patients didn't have health insurance, and 4 percent of patients were covered by other methods such as worker's compensation, Haas said.

"Interesting enough, that's not the biggest piece," Haas said of the uninsured, or self-pay, accounts. "The biggest piece we're seeing is after insurance — the high-deductible health plans." Haas said businesses that provide health insurance for their employees have had to raise copayments or deductibles to continue to provide health care coverage, passing a considerable burden to the employees. Any bills that go unpaid by patients fall into the bad debt category, Haas said.

Haas said the hospital is able to collect about 25 percent of unpaid bills that are sent off to local collection agencies.

Charges to patients with insurance end up subsidizing uncompensated care at Three Rivers, Haas said. He added that insurance companies are paying more for services than they would if there was less uncompensated care.

According to the Lund Report, a website that covers the health care industry, Oregon hospitals provided more than $1.1 billion in uncompensated care in 2009, which is 14 percent more than in 2008 and the highest amount ever for the state's 57 acute-care facilities.

While Rogue Valley Medical Center in Medford is a larger hospital with 378 licensed beds, uncompensated care amounted to 5.6 percent of its patient charges during fiscal year 2010.

With 125 licensed beds, uncompensated care at Three Rivers amounted to 8.5 percent of its charges during the same year.

"With both hospitals having the exact same policies, it comes down to economics in the community," Haas said. "We're here to care for the patients and uncompensated care is part of what we expect to have as we go into the future."

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