Determinants of the Uncompensated Care Burden of Rural and Urban Hospitals in Florida*

Abstract

It has been projected that over the next decade as many as 700 hospitals will close due to financial pressures created at least in part by the problem of uncompensated care. Many analysts contend that smaller, rural hospitals will be disproportionately represented among those which close. This investigation uses data collected from over 14,000 inpatient records from 130 representative hospitals in Florida to examine the degree to which rural hospitals experience an uncompensated care problem which differs in source, or magnitude, from that experienced by urban institutions. The analyses show that 150 days following the provision of service, the mean per capita outstanding amount was $18 higher for patients seen in rural hospitals than those seen in urban hospitals. Further, the odds of a rural hospital patient having some outstanding balance 150 days after service had been rendered ranged from 1.2 to 1.3 times those for patients seen in urban hospitals. The location difference is not eliminated by controlling for sociodemographic differences of the patients or the circumstances surrounding the type and/or source of admission. The single most important predictor of having outstanding hospital charges is possession of health insurance. Patients with no coverage are 38.6 times more likely to have some nonzero outstanding balance than patients with some form of insurance coverage. After controlling for sociodemographic, economic, and circumstances surrounding admission, the odds increase from 38.6 to 73.6. The critical role played by insurance is further evidenced by noting that the odds of someone with third party insurance coverage having an unresolved amount greater than or equal to $250 is only .024 and only slightly higher (.048) for government coverage.