[chimeracoder]

> Many people receive services then pay 0$.

That's actually not really true - at least not the "many" part of it. For most hospitals (including critical access hospitals), the default rate on medical bills is nonzero, but nowhere near the amount of money they lose on Medicare patients. The difference is a few orders of magnitude.

[Retric]

The rate you're talking about is extremely deceptive. People may pay a 500$ bill over time, but not a 50,000$ one.

"hospitals uncompensated care costs -- medical care for which no payment is received -- jumped nearly five percent to $41.1 billion in 2011" And that's just for 0$, they also get paid >0$ but less than full costs which is a separate number.

https://www.forbes.com/sites/brucejapsen/2013/01/07/unpaid-h...

Numbers for the same time period:

https://www.beckershospitalreview.com/finance/12-statistics-...

• Total net revenue: $821.3 billion • Total expenses: $756.9 billion • Cumulative profit: $64.4 billion

Critically, it's only hospitals in prosperous areas that are doing well and those see a much lower percentage of unpaid bills. Medicare is basically break-even, but hospitals need a lot of profit to offset these write-offs.

PS: Having trouble finding public sources for total write-offs. But this is from 2005 (As a result, hospitals write off 40-50% of what they charge.) http://classic.ncmedicaljournal.com/wp-content/uploads/NCMJ/...

[chimeracoder]

> The rate you're talking about is extremely deceptive.

It's not; I'm not sure why you'd assume I'd be talking about the sheer number of bills that default (at any size) as opposed to the amount of bad debt (which is closer to the relevant figure).

> Medicare is basically break-even

Medicare is not even close to break-even. From the very first page of the link you provided:

> For the first 18 years of Medicare's existence, the program paid hospitals for the "cost" of the care provided. However, since 1983, the payments have been slowly declining in relationship to the actual cost of providing care, and now hospitals are receiving less in payments than the actual cost of the care. How do hospitals recover this shortfall? Simple: they pass it on to other payers.

The amount of money that hospitals need to make to overcome this shortfall, both the operating expenses and the amount needed to cover the overhead, is a few orders of magnitude greater than the amount of noncollectable debt from uninsured patients.

[Retric]

> a few orders of magnitude greater than the amount of noncollectable debt from uninsured patients.

$41.1 billion = 5% of total revenue. A few orders of magnitude would mean the shortfall is greater than all of their income combined.

[chimeracoder]

> $41.1 billion = 5% of total revenue. A few orders of magnitude would mean the shortfall is greater than all of their income combined.

You're not comparing apples to apples. $41 billion is the aggregate of the bills for which they cannot collect; that doesn't mean they don't receive any money from them, and it doesn't mean $41 billion is the amount they've actually lost.

I know you "don't trust" GAAP accounting, but understanding the basic terminology and concepts makes it a lot easier to follow what's going on here.

[Retric]

"U.S. hospitals provided $41.1 billion in uncompensated care in 2011, according to the latest data from the AHA's Annual Survey of Hospitals. That's $1.8 billion more than in 2010. The total includes "bad debt" (services for which hospitals anticipated but did not receive payment) and charity care (services for which hospitals neither received nor expected payment because they determined, with help from the patient, the patient's inability to pay). It does not include Medicaid and Medicare underpayment."

So, no this is not all 'underpayment' but I agree it's relative to charges not costs.