Hospital Debt Levels Lower, But Problem Will Persist

By Roy Moore, Nashville Business Journal

Bad debt levels at Nashville-based hospital providers have stabilized in the past year, but the industry shouldn’t expect levels to return to their historic levels unless broad changes are made to the payer environment.

That’s the view of Fitch Ratings, which sees the current levels of bad debt – the money hospitals write off as uncollectible because patients and insurers can’t or won’t pay – as “a new operating dynamic that hospitals will need to adjust to.”

Some observers have attributed bad debt’s recent growth to the higher unemployment levels that resulted from the recession three years ago. But with the national unemployment rate falling to a four-year low of 4.9 percent in August, Fitch said in its second-quarter review that broader economic issues have played a greater role.

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