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Uncompensated Healthcare and Community Benefits


Uncompensated health care is any medical attention and treatment given to a patient by a health care/dental professional, hospital or medic without any payments by the government, non governmental organization or the patient (Mosby’s 2008, Dental Dictionary, 2nd edition).The care provided is considered voluntary work of the physician, hospital, or professional medic usually at the expense of the organization or company. Uncompensated health care is provided by many health care facilities in the United States (McGraw-Hill Concise Dictionary of Modern Medicine, 2002).

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According to the Medicare Advisory Payment Commission, uncompensated care is defined as medical care given by hospitals or any other medical care provider, for which there is no direct payment by the patients receiving the care or their insurers. Uncompensated care may be in the form of charity care or it may be a result of bad debts (Garth Kruger, 2004).

Billions of United States funds are spent on uncompensated health care each year for its citizens. Examples of one of the non profit community based institutions/hospitals include those found in Michigan. There are a number of instances where people benefit from uncompensated care, were they are required to pay discounted fees. The Michigan Health & Hospital Association (MHA) finds that uncompensated care is mostly provided on humanitarian grounds and has helped many people in Michigan reduce and even eliminate tobacco use, reduce weight and assist individuals with costs associated with physical fitness. There are so many ways in which communities gain from services offered by non profit community hospitals in Michigan. These benefits include: general improvement of health of the people and making health care accessible to more people by taking medication to homesteads. Hospitals also improve health of many children, creating conducive and healthy environments, detection of diseases in early stages and prevention of the same (Michigan Health & Hospital Association Press).

The improved health care and more particularly the uncompensated community health care has improved livelihoods and led to a high increase in the population thereby straining the available medical resources. The uncompensated medicare system in Michigan has experienced several challenges including shortage of medical, physical and human resources besides reduced government support.

This dwindling support is also notable because of the increased cost of living and increased cases of maladies of every kind. This challenge in the uncompensated health care provision creates the need for an apt management and administrative systems. Most of these Medicare institutions are under management boards and responsibility in terms of financial, human resource and medical facilities management is demanded of them (Healthcare Financial Management (HFM) magazine).

The immigration legislation passed since 1965 in the U.S. has led to a big increase in immigration. The immigrant population in the United States has nearly tripled since the implementation of the laws. The population growth, most of which comes from new births and immigration continue to threaten the few available environmental resources like wild life and biodiversity. This effectively means that species extinction, loss of farmland and open space, and general degradation of environmental quality will be experienced for along time which will in turn be replicated in the health sector due to shortage of medical facilities and resources.

The surge in population increase also means that the rate of pollution(noise,land/soil,air) has increased in equal measure leading to increase in reports of health related problems.(Wayne U,Michigan Statistical Abatract.1987).

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The United States Department of Education presented statistics which estimated that 2.6 million more children joined America’s public schools in 1996. This population surge of minors has brought about increased demand for infant medical care. However, the problem is that resources have not increased in the same proportions and if efforts are being made to increase the resources, then it is not at the same rate of the population growth. The most affected will be immigrants and Americans of Hispanic decent who form the bulk of the financially challenged population. Projections indicate that by 2050, non-Hispanic whites will compose about 15% of the population and by 2050 will compose about 46%. African Americans make up 12% of the population; in 2050 they are projected to comprise 15% of the total population. Asian Americans comprise about 5% of America’s population and are projected to rise to about 9% in 2050. (Pew Research Center, 2008) The U.S. has approximately 305 million people today, and statistical projections indicate it could reach to 400 million people by 2039 and 439 million people in 2050. The increase in population and factors like world economic recession, along with threats of terrorism all threaten domestic spending on the health care sector and more particularly the uncompensated health department and standards of living. (Pew Research Center, 2008).Michigan is the 8th most populous State in the U.S,with unemployment rate of 8.5% and this challenge explains the need to expand the uncompensated community health care in the State. Michigan’s annual economic growth rate is 1.1% and it is ranked 48th out of the 50 States in the U.S.This comparatively means that its economy does not perform very well, plunging the uncompensated health care services into more serious problems.(U.S Bureau of Economic Analysis.2005)

The State of Michigan’s contribution to the GDP of the United States is1.3% which is comparably lower than most of the States.

Uninsured residents of Michigan usually turn to nonprofit community hospitals during emergencies and minor ailments for quality medical care according to Spencer Johnson, president of the Michigan Health and Hospital Association. These nonprofit community hospitals have bridged a very big gap in provision of health care over and above provision of basic health care. Michigan nonprofit community hospitals provide health care to the financially challenged and administer many health, education and communication programs that address the plight of needs to local communities across the state. All these services are free of charge as they are essential in community service and healthcare provision. It also forms a vital and critical part of the hospitals’ objectives (The Michigan Health and Hospital Association, 2008). A recent survey carried out revealed that out of 146 nonprofit community hospitals, 132 of them responded to the community benefit survey.

These non profit hospitals spend large amounts of money in the provision of health care. Unreimbursed medical care to Michigan residents includes: over US $209 million for charity care; over US $605 million accumulated in bad debts; over US $1.2 billion consisting of unreimbursed fees of health care services which include people covered by Medicare, Medicaid, or by other healthcare programs which are sponsored by the government. Nonprofit community hospitals provided more than 224,000 registered visits to the community for free treatment and medical care. The medical care given represented a contribution of about US $35 million to hospitals and medical facilities in the communities. Community health screening offered free of charge by a nonprofit community hospitals amounted to roughly 5,900 participants. This catered for roughly 220,000 patients at one of the major hospitals and the estimated cost was roughly US. $3 million.

The Michigan nonprofit community has been very instrumental in changing lives of people by their investment in the communities.

The number of people who have gained from uncompensated prescriptions and medical provisions offered at reduced prices by nonprofit community hospitals amounted to over 140,000 residents of Michigan According to the American Hospital Association the cost of uncompensated hospital care in the U.S. totaled $31.2 billion in 2006, up from $28.8 billion in 2005 and US $21.6 billion in 2000, according to the latest data from the AHA’s Annual Survey of Hospitals. Underpayment by Medicare and Medicaid reached nearly US $30 billion in 2006, up from US $25.3 billion in 2005 and US $4 billion in 2000. Medicare reimbursed 91 cents and Medicaid reimbursed 86 cents for every dollar hospitals spent caring for these patients (American Hospital Association, October 2007).

The uncompensated health care in Michigan has proved to be one of the most successful health care projects to communities and the disadvantaged in the society. There are three major ideas which have been extensively tackled in the guidance availed to the hospital communities from the departments of health. This includes accessibility to medical facilities, quality health care service provision and improved medical and statistical/logistical record keeping. Medicare does not require providers to be aggressive in their collection of finances from patients and in case a patient is willing to pay, they should be made aware of the honoured contribution to the community. The gesture of courtesy by the willing patients if appreciated will motivate more people to take part in payments of medical bills at the hospitals however little the contribution may be. Besides, policies ensuring that medical services parity is reduced between the affluent citizens and the poor should be implemented to ensure that all the citizens are protected and that they are neither mistreated nor surcharged. Health care trends report indicates that there is increased debt on nonprofit community hospitals creating the need for accountability in the use of finances and other resources. (Health Financial Management, HFM Magazine)

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Some of the problems facing the uncompensated medical services include malpractice by medical practitioners and charging the patients medical fees unnecessarily, mishandling of health related reports, lack of proper medical inventory and financial record keeping, shortage of health facilities, reduced government funding for the uncompensated medical support. Apart from these challenges there are also recurrent medical incidences of patients which can be avoided to reduce cases of lawsuits against the medical and paralegal staff. Several reforms in the medical sector including changing the medicare system response to challenges of practice and malpractice have been prospected. However, these reforms have not achieved much towards improving the situation. The reforms have been criticized as not being comprehensive on the liabilities experienced by the health sector. (Indiana Health Law Review.2006)

The average costs of uncompensated medical care in Michigan increases gradually with increase in economic hardships. Indeed almost all medical institutions recorded an aggravated rise in the cost of running hospitals hence the threat for unsecured uncompensated health care plan.

This threat has led to the legislation of mandatory policy requirements for funding. The United States federal government has therefore developed particular policy requirements to qualify for its charity funding.

Even though uncompensated Medicare is threatened by the factors stated before, a lot of efforts have been made to provide the same quality health care to the people. Some recommendations towards the provision of health care continuously and to a large population include: improving the management of finances through accountability and transparency in the institutions, payments of the accrued debts, adequate and efficient use of the available resources, improving the living standards of people to reduce certain maladies, creation of jobs for people so that they can contribute little money towards the uncompensated Medicare in nonprofit community hospitals. The federal government should also increase its funding for the

causes of improving healthcare and medical institutions should invest in viable sustainable projects to support itself. (MHA Hospital Community Benefits Report, 2006).

It is also advisable for hospitals to establish long-standing health plans which take into account both the economic and population growth rates. The government should also sensitize the public about benefits of uncompensated health care which will in turn create a healthy nation and finally increase productivity (Healthcare Executive 2004).

A broader resolution plan is needed for the issues surrounding uncompensated Medicare. Some of these resolutions include developing a wider spectrum community program in the management of the health care system. The stake holders should also ensure that the resources and funds for uncompensated health care are utilized adequately and carefully and for the intended purposes and not channeled elsewhere. Hospitals should also reduce expenditure on the services and improve quality uncompensated health care as well as increasing revenue collection to support its activities. 

A comprehensive community initiative approach should be followed; Firstly, advocacy for improved living standards and dietary measures besides sensitization of the public in their role in ensuring that the program successfully benefits the entire community,secondly,philanthropy and charitable services throughout the State by any qualified personnel and the retired medic as well as medical interns should be encouraged to reduce the human resource shortage experienced in the sector and finally, health status improvement should be ensured by the government, public and health sector(Michigan Health & Hospital Magazine 1999).

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Another approach should be improving the management of finances through accountability and transparency in institutions, payments of debts, efficient use of available resources, and improving prevention measures in the communities. Also, enlighten people about the importance of a good diet and sanitation measures to improve living standards and environmental conditions (Michigan Health & Hospital Magazine May/June 1999). Small hospitals should merge and pull resources together. In addition, policies should put together liability reforms and patient safety awareness (Indiana Health Law Review 3(1): 3-26, 2006).

Health insurance firms should be flexible and include viable waivers for faithful clientele. Among other things, motivation for waivers would expand coverage of customer base. States should develop a particular interest in providing coverage to groups that have previously been excluded from publicly-sponsored health programs. Coverage expansion however, should create wider fiscal projections to protect the uncompensated health services for sustainable development. (Health Affairs Web Exclusive, 2006).

The education system should encompass comprehensive education and awareness on diseases and their causes in schools. As children grow and mature, there are a lot of things they learn formally and things they learn through experience as they interrelate with others in their surroundings. Infants first come into contact with members of the immediate family and then followed by extended family, after which comes the local community. Through these interactions they will develop unique experiences which will help them develop perceptions about the society and the functional interrelationships existing in the community. They will develop social and cultural values and a good understanding of their environment and the factors that influence their livelihoods. They may become responsible leaders later in life to improve social welfare projects like uncompensated medicare. When an individual develops a sense of belonging to any particular group, they will tend to understand and make efforts towards giving a hand to that group (Newman, “Building Identity: Socialization”, 2005).

The uncompensated community medical administrative staff should comprise the local community leaders to gain the political support both in resource mobilization and management. Particular attention should be paid to the creation and implementation of a comprehensive health cover program along other state programs being catered for by the municipalities and councils. The state administrative and management machinery should develop a health coverage credit taxation which will also cater for the all Michigan State citizens getting pension remuneration from the Pension Benefits Guaranty Corporation and the jobless citizens due to the global economic recession and market and trade restructuring and adjustment policies. (Indiana Health Law Review 3(1): 3-26, 2006).

Currently there is a global credit crunch that has affected most organizations negatively. Due to this problem, more families have also been affected financially and therefore the government should make an effort to make the costs of insurance coverage for more Americans affordable especially middle and low income earning families. Some of the efforts towards the Universal uncompensated health care include establishing a medical prescription drug benefit, community initiated and run uncompensated health programs, community based medical internship to reduce human resource shortage, annual tax benefits to medical tax payers, free public check ups on particular days, sensitizing the public on the medical prescriptions for minor ailments of which they could secure medication directly from the pharmacies. (Rene Woods, reporting on American families, 2005)

Other important remedies include legislating the classes of uncompensated medicare beneficiaries based on the annual income and expenditure rates to ensure that only those people who deserve this type of medical care get it. The government should ensure that all the employees of different firms are insured and are covered by their respective employers.(National Centre on Minority Health and Heart Dispensary, 2008).

The government should also ensure that it develops a rechargeable medicare-approved discount cards which will help more people start operating health savings accounts (HSAs).

The Centre for Medicare and Medical services (CMS), should increase their assistance to more hospitals where more people can access the uncompensated health care (Mark B.McClellan, 2005).

Even though human resource are the most important type of resource especially in economic progress, the State of Michigan should strive to control birth rates and immigration into the State to reduce the strain on the Health care systems including the uncompensated medical services. (American Rennaissance, 2008).The State should also improve accessibility to Information Technology and ensure that at least every folk in the State can be able to search for relevant medical data including diseases, control measures, prevention, care and cure. This endeavor will lead to reduced rate of disease infection, better care and preventive measures. Besides it will also give the citizens an opportunity to acknowledge the role played by the uncompensated healthcare system, challenges and prospects. (PricewaterhouseCoopers, 2006).

The government and the State of Michigan should ensure that health care discrepancies and social class partiality in health care service delivery should be reduced by merging the different non-performing community based health institutions and that the health cover to all its citizens is comprehensive rather than the myriad health cover types by both the government and interested investment agencies which are not protected and immune to economic collapse. The comprehensive health cover protected by the government will ensure that almost all the citizens of Michigan are insured by the state, employer or have access to the uncompensated medical care. (Samuel D Uretsky, 2006).

When looking at the healthcare systems of the developed, wealthy industrialized nations like Canada, Britain, France, Germany and Italy, it’s realized that it is only the United States which does not have a universal healthcare system in place to take care of all its citizens. The disorganized nature of the United States healthcare system has also increased the United States’ spending on health care, far much more than the other countries which have universal healthcare system. Despite this fact of the money spent, it still faces a lot of problems in its health care sector. In order to get a long lasting solution to these issues including the uncompensated health care, it would be better to overhaul the whole healthcare system and implement universal healthcare. (Jack Meyer and William Jonston, 1983).

The American Hospital Association reports that only 5% of ll the United States hospitals provide more than 37% of uncompensated medical health care. This percentage of hospitals is so small compared to the total population who cannot access the insured medical care.Hence the government’s challenge creating an affordable medical facility for its citizens. (BM Smith New England Journal of Medicine, 1997).

The Health Saving Accounts (HAS) should be tax free to allow more pay for it and also to ease the problems of inaccessibility to medical assistance. The Government in cooperation with the State of Michigan should advocate for the nationwide sale of HAS policies. (BM Smith, New England Journal of Medicine, 1997).

In addressing the woes experienced in the medical sector, President George W.Bush advocated for the following policies towards reforming it and ensuring that more people access the medical services, improvement of the provision of transparent Health care system and policies, developing the electronic health record keeping and accessibility, development of associated health plans within the health sector, rewarding leading paralegal philanthropists to encourage more people to take part in the exercise.(Wendy’s International inc, 2006).


In conclusion, the uncompensated community health care in the State of Michigan has achieved a lot in the provision of health care especially the uncompensated heath care to the residents of the State of Michigan who would otherwise have not had any access to health care provision. The uncompensated medical health care has also made it possible to improve livelihoods and nurture a healthy nation. Despite the several challenges faced by the uncompensated medical care in the State of Michigan, the provision of uncompensated medical care has proved that it is possible to implement a nationwide uncompensated medical health care with few challenges especially that most of the States’ economy perform better than that of the State of Michigan. Besides the entire nation will spend less in the health if it adopts a universal health care for all its citizens like other developed nations like Germany, France and Italy.


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Desai, Kamal, Carol V. Lukas, and Gary J. Young. “Public Hospitals: Privatization and Uncompensated Care.” Health Affairs (2000). Web.

Duggan, Mark. “Hospital Market Structure and the Behavior of Not-for-profit Hospitals.” RAND Journal of Economics 33, 2002. Web.

Health Affairs Web Exclusive, 2006.

Jack Meyer and William Jonston, Cost shifting in Health care, Economic Annalysis, 1983.

Mark B. McClellan. United States Department of Health and Human Services. 2005. Web.

McGraw-Hill Concise Dictionary of Modern Medicine. Uncompensated care. 2002.

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