Hospitals operate in a unique economic environment. We have created this series of instructional briefs to help our members explain to their patients and policymakers the different financial elements within the health care industry. Feel free to print or link to these resources as needed. Reach out to Shannan Flach with any questions.
Revenue - Hospitals must generate revenue in order to provide their community with crucial health care services. The complex system of hospital financing includes a variety of revenue sources. A large portion of hospital revenue comes from government programs. The payment rates for these programs are set by law and typically do not cover the full cost of care. This brief provides an overview of government and other sources of hospital revenue and explains the challenges of public payer underpayment.
Cost - The resources necessary to provide high-quality health care services come at a cost. Providing hospital care is a labor-intensive and slim-margin business. Hospitals rely on their highly skilled and dedicated workforce to provide advanced levels of health care services. Employee salaries, wages and benefits make up about half of Kansas hospitals' total costs. Supplies account for another 20 percent of costs.
EMTALA - The Emergency Medical Treatment and Labor Act requires hospitals with emergency departments to provide three responsibilities regardless of a patient’s insurance status or ability to pay: medical screening examination, stabilization of patient; and transfer or acceptance of patient. This brief explains the impact EMTALA has on hospital finances.
Hospital Bill - Hospitals deal with more than 1,300 insurance plans, each with many different plan options. This leads to multiple coverage, authorization and billing requirements for hospital bills. Government regulations have made a complex billing system even more complex. This brief explains hospital charges versus payments and how to read a hospital bill.
Health Insurance - Before understanding your hospital bill and final balance, a patient must understand some common health insurance terms and how their insurance plan pays the provider. Your out-of-pocket costs for your care are dependent on the specific components of your health insurance contract, not by the billed charge from your hospital or physician. This brief explains deductibles, co-pays and co-insurance.
Billing Issues – This brief covers the steps to take to avoid billing issues such as: providing your current insurance card at every visit; updating your personal information when you register for appointments (name, address, subscriber information, etc.); reviewing your insurance policy annually, as benefits often change and coordination of your benefits.
Please contact Shannan Flach, with additional hospital finance questions.