NORTHEASTERN VERMONT REGIONAL HOSPITAL
Cost Shift  
Text Box: A hospital incurs costs to provide services to their patients. All patients, regardless of their ability to pay, are billed the same price for the same service. Sometimes the payment received by the hospital is less than cost for the services provided. This includes payments from uninsured, Medicare, and Medicaid patients. When the payment doesn't cover the cost to provide those services, this unreimbursed cost is passed on to other payers; this is the “cost shift”. The ability to cost shift helps the hospital maintain its financial health.
Text Box: This graph shows the discounts to total hospital billings by Medicare, Medicaid, and Uncompensated Care. The top line shows the total of these discounts and is the amount of costs which is shifted to others who pay. This total is the cost shift.
Text Box: This graph shows amount of money collected for each dollar of expense and surplus. If a payer (Commercial, Medicare, or Medicaid) is above $1.00, then it pays more on average than the costs of its patients. If a payer is below $1.00, then it pays less on average than the costs of its patients.
Text Box: NVRH became a Critical Access Hospital in July, 2004. CAH hospitals receive additional Medicare payments, which reduced by over $2 million the amount NVRH was cost shifting. This was accomplished by not increasing our charges during fiscal year 2005. Patients covered by the Medicaid program represent 19% of our total patients. However, Medicaid payments account for only 11% of total payments. This disparity results in a cost shift of almost $3 million to commercial payers.