Unpaid bills, better known as “bad debt,” declined at non-profit hospit
als in states that expanded during 2014, according to a study by Moody's Investors.
Hospitals in the 29 states and Washington, D.C. that expanded experienced an average reduction in bad debt 13%. The reduction was over 40% in some cases. Hospitals in expansion states also benefited from having to provide less charity , when voluntarily waive charges for medical services.
In contrast, hospitals in non-expansion states saw bad debt increase through much the year before dropping slightly in the fourth quarter.
Daniel Steingart, a Moody's Senior Analyst and author the report, noted that bad debt represented less than 5% the 2013 total revenues hospitals in the expansion states, and that many other factors would affect the hospitals' total revenues and profitability.
His report notes that, in addition to the decline in bad debt, hospitals’ financial performance benefited from improved economic conditions and industry-wide efforts to control costs and improve productivity.