Uncompensated Care and Cost Shifting essay

Uncompensated Care and Cost Shifting

Uncompensated Care and Cost Shifting   Global economic crisis has brought about the increase in cases of unco’mpensated care and cost shifting in the health care industry. Essentially, the patients who are either unemployed or face financial constraints, most likely, do not have any form of health insurance.

This paper explains the relationship between uncompen’sated care and cost shifting. In addition, it gives a discussion on why providers now have limited ability to shift costs.

Uncompensated ca’re In the health care sector, uncompensated care entails a situation in which patients after receiving any form of treatment in the hospital, fail to pay their medical bills either through insurance or through cash. Their incapability lies with the fact that they do not have cash or health insurance that can meet their medical expenses (Robinson, 2011).

In some instances, uncompens’ated care can be termed as either a hospital’s charity care or bad debt. In charity care, hospital management allocates finances, which will meet the expenses of the patients who are unable to pay their bills.

However, a hospital suffers bad debt, if its charity care is not enough to pay up a patient’s bills. Uncompens’ated care also includes the financial lose experienced by hospitals because of lower payments received from the insured.

There are situations in which Medicare and Medicaid brings about uncompensated care due to their depreciating health payments to hospitals. Additionally, uncompensated care charges are calculated by adding a hospital’s bad debt to charity care charges (American Hospitals Association, 2010)……………………………..