INDIGENT CARE IS HEALTH CARE ISSUE WITH $1.5 BIL. ANNUAL PRICE TAG: LACK OF PUBLIC CONSENSUS FOR METHOD OF PAYMENT MAKES TOPIC DIFFICULT FOR STATES

Executive Summary

The preeminent health care debate at the state level in 1985 is the issue of paying for uncompensated hospital care and particularly indigent care, Tennessee state legislator Paul Starnes told the PMA annual meeting. The key to the indigent care question itself is deciding whether it is a "societal issue" or exclusively a "hospital issue." "One of the most disturbing things to me" in dealing with the issue of indigent care, Starnes said, "is the absence of understanding." He maintained that "there are not enough people in Washington, there are not enough people in the 50 state capitals, there are not enough people in the courthouses and city halls that really understand uncompensated care and how it impacts the whole system." Starnes is the chairman of the Health & Human Resources Committee of the Natl. Conference of State Legislatures. He reiterated the importance of the indigent care issue on state health agendas in 1985 during a breakfast speech to the PMA annual meeting on April 16. The indigent care issue was identified as the number one priority in statehouses nationwide by a survey conducted by the Natl. Conference at the beginning of the year. Eighteen states listed the issue as one of the top three priorities in the health care area for 1985. Uncompensated Care Is $6.5 Bil. Issue Confronting Health Care System Starnes characterized the current system of paying for "uncompensated care" as an indirect tax on all medical users. He contrasted the indigent care approach to general taxes for other natural disaster protections. The Tennessee legislator used an analogy of support for fire departments to make his point about indecision over the nature of the indigent care issue. "If we paid for the fire departments the way that we pay for indigent care," Starnes said, "then no general taxation would be used to operate the fire department." The number of people who "had the misfortune of having a fire would be the number that would be divided into the total cost of operating the fire department and we would assess each of them that amount," Starnes said. "That's the way we do indigent care," Starnes maintained. "We pay taxes for the fire department and hope that we never have to need them," the legislator said. Why can't we say that about indigent care?" The Tennessee legislator described the $1.5 bil. annual price tag for indigent care as a subset of the larger $6.5 bil. annually spent on uncompensated care. Less than 2% of the debts that add up to the indigent care bill are from patients owing more than $20,000, Starnes said. More than 90% of the patients contributing to the indigent care total owe less than $1,000, he added. Bad debt for hospitals comprises $4.5 bil. of the annual uncompensated care bill, Starnes noted. He pointed out that a large number of the uninsured people who have outstanding bills making up the bad debt were insured at some point in the 12 months prior to incurring their unpaid medical expenses.