Income levels of bad-debt and free-care patients in Massachusetts hospitals

Abstract

This study disputes the common notion that many hospitalized patients whose expenses are written off to bad debt are able to pay their bills. By matching 1996 state tax returns to more than 350,000 bad-debt and free-care claims at seven Massachusetts hospitals, we found that most patients involved had incomes below the federal poverty level and thus were presumably eligible for either public programs or hospital-based free care. This suggests that hospitals and public officials need to investigate further why low-income, uninsured patients are not receiving benefits for which they are eligible. Our results also suggest that measurements of indigent care levels in hospitals for purposes of research or regulation should include some portion of bad debt.