Healthcare facilities Health Policy Tracking Service issue brief Raduege, Tammy, author. Health Facility Administration Medicaid -- economics Medicare -- economics The success of hospitals should be a concern for everyone. Hospitals are vital not only to the health of our citizenry, but they also contribute greatly to the health of our national and local economies: Every dollar that hospitals spend supports more than two dollars in other economic activity. The American Hospital Association (AHA) has documented the contribution hospitals make to the economy. In 2018, the AHA released data showing that hospitals directly employ nearly 5.7 million people, but because of the ‘ripple effect,’ they support more than 16 million jobs. Hospitals spend over $852 billion on goods and services, and they create nearly $3 trillion in economic activity. In addition, hospitals never recover all of their costs, due to either uncompensated care or Medicare and Medicaid underpayments. Uncompensated care is care that a hospital gives for which it receives no pay, either because of bad debt or because it provided charity care. According to the Kaiser Family Foundation, while charity care represented just 1.4% or less of operating expenses at half of all hospitals in 2020, the figure varied widely among hospitals. For 9% of hospitals, charity care represented 7% of operating expenses. Medicare and Medicaid underpayments occur when the hospital receives payment that is less than the full value of the services they provided. In February 2022, the AHA released data on Medicare and Medicaid underpayments. The data show that, in 2020, Medicare underpaid hospitals by $75.6 billion and Medicaid underpaid by $24.8 billion. The combined amount of Medicare and Medicaid underpayment is up significantly from 2019: In 2019, the combined figure was $75.8 billion, and in 2020, it was more than $100 billion. [Toronto, Ontario] : Thomson Reuters, 19-December-2022 Thomson Reuters, issuing body. Technical Report Text 1 online resource (1 PDF file (59 pages)). nlm:nlmuid-9918645970506676-pdf 9918645970506676 http://resource.nlm.nih.gov/9918645970506676 English United States Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. http://creativecommons.org/licenses/by/4.0