Geographic Variation in Uncompensated Care Between Rural and Urban Hospitals
Rural residents are less likely than urban residents to have healthcare coverage through their employer, more likely to be low-income, and oftentimes are unable to afford coverage on their own. For hospitals that serve rural residents, this often means higher rates of uncompensated care compared to urban hospitals. Recent policy changes could lead to an increase in the number of uninsured in the United States, which could affect the amount uncompensated care reported by hospitals. Ensuring the adequate and justifiable support for hospitals that serve vulnerable populations has also increased interest in how and whether uncompensated care is reported. This brief uses data from 2014-2016 Medicare Cost Report Worksheet S-10 to compare uncompensated care in rural and urban hospitals and to describe how it varies across regions of the country. This study finds substantial differences in reported uncompensated care as a percent of operating expense between rural and urban hospitals and among regions of the country. Between 2014 and 2016, median uncompensated care as a percentage of operating expense declined across critical access hospitals (CAHs), other rural hospitals, and urban hospitals, and also declined across census regions. However, it increased for hospitals with less than $20 million in net patient revenue and decreased for hospitals with more than $20 million in net patient revenue. In 2016, the hospitals with the highest median uncompensated care as a percentage of operating expense were CAHs, other rural hospitals, and urban hospitals in the South. Among hospital types, other rural hospitals had the highest median percentage of uncompensated care, and urban hospitals had the lowest median percentage. Nine of the 10 states with the highest median uncompensated care as a percentage of operating expense were located in the South.