VALDOSTA — South Georgia Medical Center will write off more than $54 million in bad debts.
The losses, according to hospital staff, are largely due to indigent care, charitable services and nonpayment.
The Hospital Authority of Valdosta and Lowndes County approved the $54 million in write offs at a meeting Wednesday morning. Chief Finance Officer Grant Byers said the losses were expected and is something that happens to hospitals across the country every year.
SGMC is not alone in this, he said.
Byers said the hospital bills about $101 million per month in receivables and expects about $8.2 million of that amount to go uncollected because of the high numbers of indigent patients, unable to pay their hospital bills.
It takes time to investigate whether the $8.2 million is really uncollectible. During that investigation, which can take months, the losses just keep adding up from month to month, Byers said.
At a certain point, the hospital stops trying to collect the debt and writes it off as a loss, such as the $54 million approved at this week's meeting.
"That money reflects about a year's worth of previous services," Byers said. "For every dollar we bill, we only make about 30 cents. That's pretty normal in health care."
Health care is completely different than something like retail, he said.
If a business wants to charge a person $10 for a drink or a T-shirt, the patron pays the $10 and leaves.
When that same person goes to the hospital, Byers said the hospital provides the service whether the person can pay or not.
"We bill you $10, but ultimately, when we settle up your account with your insurance or with you, we get about 30 cents on the dollar," Byers said. "We bill about $1.2 billion a year. We only get paid $335 million a year. That's not exact numbers, but something like that."
The reason the hospital charges the $1.2 billion a year is to get the $335 million, he said. The hospital knows it will only make, on average, 30 cents on the dollar.
The $54 million of bad debit is essentially absorbed into the hospital's operating cost.
The hospital takes into account that it will lose about $100 million every year to indigent care, charitable care and other bad debt, so hospitals everywhere consider that in the budgeting process.
"You'll have some pay zero and others pay the full $10," Byers said. "We have to make sure that 30 cents covers our expenses. People who can pay are basically, you know, are paying for (indigent) care. It's very complicated, but that's health care."
Thomas Lynn is a government and education reporter for The Valdosta Daily Times. He can be reached at (229)244-3400 ext. 1256