Unbiased Analysis of Today's Healthcare Issues

How much uncompensated care do doctors provide? Less than zero.

Written By: Jason Shafrin - Dec• 17•07

Doctors are often perceived as benevolent professionals. They are hard-working individuals who extend their largesse by giving away free medical care to those in need. Studies by Cunningham and May (2006) and the American Hospital Association find that doctors provide uncompensated care equal to 6.3% or 5.6% of their cots annually respectively.

A recent Journal of Health Economics article by Gruber and Rodriguez concludes that these figures may be overstated. In fact, the study finds that physicians provide negative amounts of uncompensated care to the uninsured.

How is this possible? While it is true that doctors do give away free care to the uninsured and that many of those without insurance do not pay their bills, the uninsured patient often pay a large portion of the list price whereas those who have insurance receive a negotiated lower price. Thus, the authors find that “the majority of physicians actually make money, on net on their uninsured patients…12-14% of physicians found their uninsured patients more than twice as profitable as their insured patients; that is the net payments from the uninsured were more than twice the expected payments from the insured patients.”

Even when the authors ignore the higher list prices the uninsured pay, they still find that only about 1% of total revenues are given away as free care to the uninsured. Much of this amount, however, is due to non-payment by the patients rather than free care given away by the physicians.

Medicine may be a business after all.

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5 Comments

  1. […] than zero From the Healthcare Economist: A recent Journal of Health Economics article by Gruber and Rodriguez concludes that these figures […]

  2. DrBonis says:

    You said: “Doctors are often perceived as benevolent professionals. They are hard-working individuals who extend their largesse by giving away free medical care to those in need.”

    Well, some days ago I treated a patient that get ill during a flight. No body paid me an euro (nor the airlines compnay nor the patient). Curiously they ask for a doctor when the patient get ill. Curiously I paid 2 euros 30 minutes before to drink a Coke during the flight.

    I worked “for free”. Why? Because as a medical doctor my ethics are in such a way. I could say: “ok, you feel sick, I am the only doctor in 3.000 miles… so how much dollars do you have in your pocket?”. That is the “bussinesman” and “economist” way of thinking.

    But YES, doctors (the real doctors) are benevolent. I did not ask for money. They offered me a “Coke or coffe” after treating the patient. I said: “no thanks, I have just bought one 30 minutos ago”.

    You can see the full story at:

    http://gofiococido.blogspot.com/2007/12/polivalencia-10000-metros-de-altura.html

  3. […] Further, since the Amish and Mennonite are uninsured, they actually pay more for medical care than would someone with private or public health insurance.  This phenomenon was documented in my “Uncompensated Care” post. […]

  4. […] health care (and hence need to be subsidized by the American taxpayer). Much to my surprise, the blog Healthcare Economist quotes from a paper from the Journal of Health Economics that finds that the uninsured in net might […]

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    How much uncompensated care do doctors provide? Less than zero. « Healthcare Economist