Running: HIGH LEVELS OF BAD DEBTS IN HEALTH FACILITIES

High levels of bad debts in health facilities

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High levels of bad debts in health facilities

Introduction
A bad debt refers to an account owed by a debtor that has a high chance of being unpaid.
Nonpayment maybe due to financial factors like an organization going into liquidation, financial
stress and sometimes consumer default to pay the cost for a service or good. In nursing, bad
debts erupt in situations where the patients at the health facility are unable to pay for the
healthcare services offered to them (Weissman et al., 1999). As the population of a country
increases so do the number of patients seeking medical attention. High population growth has a
great link with poverty level and hence the inability of paying for services like those provided in
the health care causing large debts in the organization.
Health care institution is among the top organizations that encounter high volumes of bad
debts. According to American Nurses Association (2010), every person has the right to proper
and adequate health care services. Provision of health care without discrimination of the financial
or social level of a person is an ethical issue in nursing. Most healthcare facilities tend to put
more focus on the issue of service provision to their patients and at the same time put less effort
in the collection of debts or costs incurred in the treatment process. The impact is that it
undermines the efficiency of the organizations through increased cost of service provision and
fewer income streams. Another great contributor of high debt turnover for health care institutions
is the presences.
Nursing plays an important role in the development of a budget. Nurses develop a sense
of ownership of the budget and, therefore, learn how to manage unit finances (Kerfoot &
Cameron, 2003). Through access to the much departmental issue, nurses and especially nurse

High levels of bad debts in health facilities

managers have more information pertaining the requirements of the health facility. That way they
play an essential role in the process of developing budgets for the institutions.
Bad debts have a great deal on the budgeting of an institution. Healthcare institutions
have experienced large deficits that have led some of them out of the market while leaving others
relying on donations to offer medical services. With a high level of unrecoverable debt, health
institutions are unable to adequately budget for the necessary medication, medical equipment and
payment of medical practitioners (Kerfoot, & Vigh, 1991).
There are many methods that nurse leaders and financial staff can do to reduce the growth
and impact of bad debts on the organizations. One way of barring bad debts from increasing is
for hospitals to reduce any unnecessary visits to the emergency room (ER). When the number of
patients going to the ER is high, the cost of providing health services in these facilities increases.
The patients in most cases default in payment increasing the levels of bad debts. It is, therefore,
more cost effective in deciding the kinds of patients to go to the ER and those not to according to
the severity of the illness. Another way of reducing bad debts is through educating the newly
insured patients. Nurse Managers has the role and duty of ensuring that patients become
educated on the issue of emergency room visitation (Kerfoot & Vigh, 1991).
Finally to address the problem of bad debts in health organization can become achievable
through improving the billing practices (Cleverley & Cameron, 2003). It is evident that bad debt
accrues due to failure to ask for immediate payment for the services offered. The health
organizations should develop a system of debt collection that involves the collection of debts
immediately a patient receives the service.
References

High levels of bad debts in health facilities

American Nurses Association, ANA (2010). The Scope of Nursing Practice; Standards of
Professional Nursing Practice; Appendix D. Nursing: Scope and standards of practice.
(2nd ed., pp. 1-62; 93-143). Silver Spring, Md.: American Nurses Association.
Cleverley, W. O., & Cameron, A. E. (2003). Essentials of health care finance. Jones & Bartlett
Learning.
Kerfoot, K. M., & Vigh, B. J. (1991). Staff Nurse Financial Management Committees- The nurse
Managers guide to Effective Financial Performance. Nursing Economics, 9(4), 287.
Weissman, J. S., Dryfoos, P., & London, K. (1999). Income levels of bad-debt and free-care
patients in Massachusetts hospitals. Health Affairs, 18(4), 156-166.