Aug. 20--In the four years of losses at Decatur General, the majority of uncompensated care has been to patients whose income was above the poverty level.
President and Chief Executive Officer Dean Griffin described these clients as patients who can probably afford to pay, but who do not for some reason.
Griffin said almost three weeks ago that the hospital now is more diligent in billing and collections.
Between July 1, 2004, and June 30, 2007, bad debt accounted for about $57.9 million of the hospital's approximately $83.9 million in uncompensated care, according to hospital audits The Daily acquired in Montgomery.
These numbers on uncompensated and charity care are what the hospital would have billed for services and not the actual cost to the hospital.
Trudy Grisham, vice president of marketing, said bad debt is from people whose income is at 150 percent above the poverty level and who do not qualify for charity care.
In Alabama, for example, the poverty level for one person is an income of $10,400 annually. To qualify for charity care at Decatur General, this person could have an annual income of $15,600 or less.
For example, the hospital's audit figures show charity care for fiscal 2005-06 was more than $8.3 million and bad debt was $18.7 million. In fiscal 2006-07, charity care was $10.6 million and bad debt was $21.1 million.
Other factors
Decatur General has blamed its four consecutive years of losses on uncompensated care. The audits for fiscal 2006 and 2007 show other contributing factors.
Despite having more than $31 million in uncompensated care during fiscal 2006-07, operating revenues increased by more than $10.6 million.
In that same period, operating expenses increased by more than $10.7 million.
The expense increase was due primarily to "increases in physician employment expenses and operating expenses relating to the ramp up of various specialty services such as interventional cardiology and radiation oncology ... ," the audit states.
Physician employment
According to the audit, the hospital employed a pulmonologist, three cardiologists, one oncologist and one internal medicine physician.
Decatur General hired the cardiologists after a "four- physician cardiology group" cut ties with the hospital in May 2006, according to the audit.
During fiscal 2005-06, operating revenues increased by more than $1.4 million, according to the audit.
Despite the revenue increase, the hospital lost $1.1 million in fiscal 2006, compared to a $1 million deficit the previous year. The audit did not give detailed reasons for these deficits.
The $8 million deficit Decatur General had at the end of fiscal 2007-08 was the largest in the hospital's history. Grisham said uncompensated care was $30.5 million. A breakdown between charity and bad debt was not immediately available.
James Hahn, who was president and chief executive officer during the four years of deficits, resigned July 11 and accepted a severance package from the board.
The board has declined to release details of the severance package.
The board promoted Griffin from chief operating officer to replace Hahn.
Decatur General officials tried unsuccessfully to get millions from the city of Decatur and Morgan County Commission to help offset the deficit.
Elected officials have declined to give the money, saying the hospital has to give taxpayers a detailed explanation of what caused the deficits. To see more of The Decatur Daily, or to subscribe to the newspaper, go to http://www.decaturdaily.com Copyright (c) 2008, The Decatur Daily, Ala. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
Copyright (C) 2008 The Decatur Daily, Ala.