The Enid News and Eagle, Enid, OK

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November 2, 2013

Oklahoma hospitals: Small fraction of revenue spent on charity care


Hospitals’ community benefit

Hospital executives are quick to point out charity care for patients such as Bohlander is just a part of a hospital’s larger contribution to the community.

“Percentages sometimes don’t tell the whole story,” said Barry Steichen, chief administrative officer of St. Francis Health System.

Steichen says raw numbers — like the 26,000 uninsured and non-paying patients visiting the hospital’s emergency room in the past year — are important, too.

St. Francis Hospital reported charity care slightly below the state average, about 2.3 percent in 2011 and 2.1 percent in 2012. St. Francis Hospital South reported spending 1.7 percent of patient revenues on charity care in both 2011 and 2012.

Steichen said the hospitals, including St. Francis, take a loss on Medicaid patients they treat because federal reimbursement rates do not cover the cost of services. That shortfall between what Medicaid pays and what the care costs to provide is a large part of the community benefit hospitals provide, Steichen and other executives said.

That gulf will only grow larger with cuts in Medicare reimbursement rates under the Affordable Care Act, which hospitals agreed to in exchange for an expanded Medicaid program.

Oklahoma and 24 other states rejected the expansion, leaving hospitals in those states with all of the expenses and fewer benefits from the law.

Another community benefit claimed by St. Francis and other large nonprofit hospitals is the physicians they employ. Those doctors don’t have to worry about billing patients if they can’t pay for treatment.

St. Francis employs doctors at its Children’s Hospital, where 65 percent of patients are on Medicaid, who specialize in pediatrics oncology and other areas not widely available previously, Steichen said.

The hospital includes such spending in its “community benefit” report for the health system as a whole. The health system has set a goal of providing 5 percent of its net patient revenues in the form of community benefits, he said.

“Even though Oklahoma doesn’t have that requirement, it is a standard that this organization at the board level that we will meet or exceed that threshold,” Steichen said.

St. Francis Health System reported community benefits of $54 million in 2012. The system includes three hospitals and Warren Clinic, a group of 325 physicians affiliated with the health system.

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