When hospitals exclude elective care from financial assistance
Hospitals are expected to offer free or discounted care to patients who can’t afford to pay, also known as financial assistance. But hospitals have considerable leeway to set their own eligibility rules for financial assistance, which leads to wide variation. A study from the Lown Institute of 2,500 hospital financial assistance policies found that many hospitals in the same cities had very different thresholds for who is eligible for free care. (You can see all of our financial assistance data on our website.)
Hospitals can also add their own restrictions to financial assistance eligibility, based on patients’ insurance status, location, assets owned, and the type of care they received. In some cases, hospitals only allow patients who received emergency or urgent care to get a discount. In a recent perspective piece in the New England Journal of Medicine, Lown Institute senior policy analyst Judith Garber and Wake Forest University Professor of Social Sciences and Health Policy Mark Hall write about this emerging issue.
Elective care exclusions
Hospitals’ financial assistance policies generally apply to all “medically necessary” care, encompassing the full range of services that Medicare and other health insurers will cover. That means that cosmetic surgeries, experimental therapies, and weight loss therapies are often excluded.
But many hospitals are going further, restricting care that is “needed but not urgently needed,” the authors write. The biggest offender here is HCA Healthcare, the nation’s largest for-profit system, which only allows “emergent, non-elective” services to be eligible for financial assistance. Some nonprofit hospitals appear to be following HCA’s example.
The authors reviewed a smaller sample from the Lown Institute’s data set, focusing on large private nonprofit hospitals. They found that over 40% exclude elective care of some sort. Of these, a smaller subset (6%) appear to exclude elective services broadly, even those that are medically necessary. Another 9% were unclear about what types of “elective” care were excluded.
What is “elective” care?
Does it matter if hospitals do not offer a discount for low-income patients on elective care? It could be a large blow to patients’ health, depending on the service that’s needed. The authors point out that during COVID-19, many “elective” procedures were delayed, including kidney stone removal, cancer biopsy, hernia repair, hysterectomy, cardiac valve replacement, and early-stage surgery for various treatable cancers. Many of these conditions get worse if delayed for too long.
Delaying other types of elective care like major joint replacement, hernia repair, serious back pain, and carpal tunnel syndrome would not necessarily make these conditions an emergency, but would leave patients to “cope indefinitely with considerable pain or serious physical limitations,” the authors write. Alternatively, patients could decide to have these procedures anyway and face medical debt if they cannot afford to pay the out-of-pocket portion of the cost.
The authors point out that we don’t know how hospitals are implementing these policies in practice, and acknowledge that hospitals with smaller budget may be prioritizing financial assistance for emergency care. However, with most private nonprofit hospitals spending less on financial assistance and community investments than they get in tax breaks, we should be looking to expand access to financial assistance, not restrict it.
Making things clearer for hospitals and patients
With few regulations around how hospitals can restrict access to financial assistance, hospitals have been left to make judgments about what kind of care and what kind of patients are worthy of help. That’s not a position that hospitals necessarily want to be in.
To make things easier for hospitals and patients, Garber and Hall recommend that policymakers consider regulations to clarify the types of services eligible for financial assistance, to ensure that all medically necessary services are included. Additionally, hospital leaders should regularly evaluate their policies to make sure they are not being unnecessarily restrictive.