Posted September 1, 2004

• About 16% of the population of Chicago and the greater metropolitan area, nearly 1.2 million people, have no health insurance.
• Many of the uninsured are “the working poor” – those who earn too much to qualify for Medicaid, yet not enough to afford health insurance offered through their employer or via the private health insurance market. In the Chicago metropolitan area, 42% of families with incomes below $25,000 have one or more members without insurance.
  
• The uninsured problem is not limited to low-income workers. In the Chicago metropolitan area 21% of families with incomes between $50,000 and $75,000 have one or more uninsured member, as do 14.6% of those with incomes above $75,000. In some cases, these higher income individuals choose not to buy coverage even though they can afford it.
  
• Chicago-area hospitals wrote off $1.8 billion in charges for uncompensated care in 2003 – a figure that has risen steadily for decades.
• Chicago-area hospitals typically collect 10% to 15% of charges for care to uninsured patients.

• Assistance in applying for Medicare, Medicaid, KidCare and other public insurance programs
• Writing off charges for services to patients without insurance who qualify, typically those at 100% or less of the federal poverty level
  
• Discounting of charges based on a sliding income scale for patients without insurance who qualify – typically for those uninsured patients with incomes between 100% to 200% of the federal poverty level
  
• Payment plans which allow payment over extended periods of time

Source: Metropolitan Chicago Healthcare Council, 2004

Chicago-area Hospital Contributions of Uncompensated Care Exceeded $1.8 Billion in 2003
Uncompensated care (including “charity care and bad debt”) provided by all Metro Chicago area hospitals (estimated figures)
1999	2000	2001	2002	2003
$1.38 billion	$1.50 billion	$1.63 billion	$1.67 billion	$1.82 billion
This represents about a 32% increase over 4 years.
Source: Estimates based on Metropolitan Chicago Healthcare Council Finance Survey, 2004

Hospitals Lose on Medicaid, Medicare and Uninsured Patients
On average, Chicago hospitals experienced the following cost losses in providing care for patients in 2003.
Payer	Medicare	Medicaid	Uninsured
Percent Loss	10%	29%	50%
Source: Metropolitan Chicago Healthcare Council, 2004

One-third of Chicago-area Hospitals Operate in the Red
2003	Number	Percent
Margin > 0	33	65%
Margin < 0	18	35%
Source: Metropolitan Chicago Healthcare Council Financial Survey, 2004 (51 of 96 Chicago-area hospitals)

Why Hospitals and Their Communities Need Operating Surpluses

Hospitals –- regardless of whether they are organized as not-for-profit or for-profit institutions –- must maintain healthy bottom-lines in order to have access to capital necessary to invest in programs and services that will benefit the patients and communities they serve. For example, there is increasing pressure on Chicago-area hospitals to invest in:

• Expanding emergency department capacity and providing 24/7 emergency and trauma care services
• Bioterrorism/disaster situation preparedness
  
• New surgery suites, clinics, hospital units and other patient care buildings
  
• Replacing and refurbishing existing and antiquated patient care buildings
  
• Information technology to maintain, enhance patient safety – e.g., automated medication dispensing systems, electronic medical records, E-ICU bar coding, PACS electronic imaging
  
• New technology, including MRIs, lasers, minimally invasive surgical instruments and other advanced equipment to detect/diagnose diseases earlier, and treat patients with less pain and shorter recovery times

Sources: Metropolitan Chicago Healthcare Council, Healthcare Financial Management Association, 2004

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