How Much Uncompensated Care Do Doctors Provide?

41 Pages Posted: 5 Nov 2007 Last revised: 15 Aug 2022

See all articles by Jonathan Gruber

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

David V. Rodriguez

Massachusetts Institute of Technology (MIT) - Department of Economics

Date Written: November 2007

Abstract

The magnitude of provider uncompensated care has become an important public policy issue. Yet existing measures of uncompensated care are flawed because they compare uninsured payments to list prices, not to the prices actually paid by the insured. We address this issue using a novel source of data from a vendor that processes financial data for almost 4000 physicians. We measure uncompensated care as the net amount that physicians lose by lower payments from the uninsured than from the insured. Our best estimate is that physicians provide negative uncompensated care to the uninsured, earning more on uninsured patients than on insured patients with comparable treatments. Even our most conservative estimates suggest that uncompensated care amounts to only 0.8% of revenues, or at most $3.2 billion nationally. These results highlight the important distinction between charges and payments, and point to the need for a re-definition of uncompensated care in the health sector going forward.

Suggested Citation

Gruber, Jonathan and Rodriguez, David V., How Much Uncompensated Care Do Doctors Provide? (November 2007). NBER Working Paper No. w13585, Available at SSRN: https://ssrn.com/abstract=1027204

Jonathan Gruber (Contact Author)

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National Bureau of Economic Research (NBER)

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David V. Rodriguez

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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