Public hospitals, as a primary destination for low-income residents seeking medical care, play a crucial role in our society. Through constant changes in the healthcare system of our nation, these institutions remain true to their mission of caring for disadvantaged populations who lack stable access to health care. Over the past decade, the government experienced increasing difficulty in operating public hospitals due to scant revenue generation and constant budgetary constraints. In 2010, while the average national hospital profit margin was approximately 7%, public hospitals have hovered around 2%, which often resulted in operating at a negative margin when factoring in Medicaid reimbursements.1 These financial shortages are intensifying and hospitals are forced to forgo renovations and routine maintenance to stay solvent. In 1999, one out of four hospitals was public, and by 2010, this number decreased to one out of five2, signifying the growing instability of such institutions.
The burden of providing uncompensated care, for which no payment is received from the patient or the insurer, carries an enormous financial liability for public hospitals. Costs of such services have skyrocketed from $3.1 billion to $45.9 billion in the past 30 years.3 As the Patient Protection and Affordable Care Act (PPACA) is implemented to overhaul the delivery of healthcare, uncertainties arise for public hospitals. It is likely that over 32 million people who are expected to gain coverage through PPACA by 2016 will seek care at their local public hospitals.4 Even if some of these patients decide to choose competing private providers, public hospitals must still be prepared for the other 23 million who are expected to remain uninsured by 2019.5 With such forecasts, it is certain that the services of public hospitals will continue to be heavily sought in the aftermath of the health reform.
Even disregarding the health reform, the recent increase in uninsurance and unemployment rates6,7 has led to vulnerable populations turning to public hospitals as their main source of care. But it is often mysterious, especially to physicians as well as the patients, which options exist if one cannot afford to pay for their treatments. Especially for illegal immigrants and those ineligible for Medicaid, the lack of public awareness for financial assistance programs can discourage such populations from seeking medical care. This in turn ultimately contributes to the rising healthcare expenditure if their conditions worsen and require higher complexity of care.
The purpose of this article is to enhance our understanding of the financial health of various public hospitals across the nation. We mainly focus on our own affiliated New York City’s Health and Hospitals Corporations (HHC). We also explore various charity care programs implemented to assist those who cannot pay for their care. Finally, we analyze the implications of the new health reform on future...