Hospitals Doing Harm to Patients Paychecks


The Methodist Le Bonheur Healthcare system in Memphis, which includes Methodist University Hospital, has sued thousands of patients, including many of its own low-wage employees.
Andrea Morales for MLK50

New Orleans       With the passage of the Affordable Care Act, hospitals were on notice.  Costs were out of control and people were going to be looking.  Prices were going to be made public so some patients could compare.  Hospitals were going to be able to be ranked by health outcomes.  Accountability was coming!

This was especially true for nonprofits, thanks to a late amendment by Senator Charles Grassley, Republican from Iowa, their charitable contributions were going to be tracked to see if they aligned with their tax-exempt requirements.  The IRS was going to be doing the checking and the enforcement.  The penalty for not providing charitable care could be loss of the tax benefits, which would be a fatal diagnosis for most nonprofit hospitals. Reports indicate that the exemption is worth $9 billion.  They were given a number of years to get their act together, but the years since the passage of the Act meant that time has now come and gone.

What is the accounting now?  How is it working out?  We found that trying to parse the IRS 990s to determine the real level of charitable care was often whack-a-mole, where researchers with ACORN International and Labor Neighbor Research & Training Center were often trying to find the real charitable expenditures hidden in obfuscation.  Many nonprofit hospitals tried to claim the difference between their “sticker prices” for care and the Medicaid reimbursement rate as “charity.”

A recent report on Virginia hospitals in JAMA, the Journal of the American Medical Association, the doctors’ union and trade association, according to the Becker Hospital Review found that,

“…36 percent of hospitals in Virginia garnished patient wages to collect payment for medical bills in 2017. Most of the hospitals that garnished wages (71 percent) were nonprofit. Researchers note their findings “suggest hospitals with greater financial need (nonprofit, lower annual gross revenue) may be pursuing debt collection to the final stage of garnishment.” Those that garnished wages recorded average annual gross revenue of $806 million and garnished an average of $722,342 in wages, or $2,783 per patient.”

Virginia hospitals are not outliers.  The Wall Street Journal quickly reported that hospitals in Arizona followed the same playbook.  The hospital system connected to the University of Kentucky tried to use the Kentucky state revenue system to help collect their bills.  John Hopkins in Maryland was a big litigator.  All of this is after a raft of stories several years ago and reports by Pro Publica and others of nonprofits for whom debt collection was more central to their business plan than good patient care.

All of this is in the face of prohibitions in the Act that were supposed to curtail such practices, if not eliminate them entirely.  As the Journal reminded, the Act requires that,

“…hospitals must post and provide information on their financial-assistance policies and send notices that they are planning to sue. They also must limit the amount charged to the uninsured and wait four months before using stepped-up collection efforts such as filing a lawsuit.”

Ignoring the law, human decency, and the proscription that they “do no harm,” such practices define impunity.

If the IRS can’t do its enforcement job, then states, prosecutors, and the Justice Department need to step up, while the rest of us need to hit the streets before more patients are sentenced to poverty for the bad fortune of experiencing bad health.

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Texas Hospital Merger Cancellation is a Good Thing

The patient tower at CHI St Francis in Grand Island (NTV News)

New Orleans       Hospitals are having some problems these days.  The Republican attacks on the Affordable Care Act meant that fewer of the uninsured that desperately needed health care can find – or finance – their way into hospital beds.  At the same time ACA and the attention during the health care debates did lead to some increased scrutiny about bill-padding and other concerns.  Local 100 United Labor Unions and ACORN International also paid close attention to the requirements in the ACA introduced by Iowa’s Republican Senator Charles Grassley of all people that focused on the number of hospitals that enjoyed tax-exempt nonprofit status but were the opposite of charitable.  With the help of interns from Tulane University and the University of Ottawa, our research into the IRS 990s of the nonprofit hospitals in Texas, Arkansas, and Louisiana found that many institutions were miserly despite their status.

All of which brings us to Houston’s giant nonprofit Memorial Hermann and Dallas’s huge Baylor Scott & White nonprofit chain.  Neither of which were really responsive to our requests for meetings, despite the requirements under the Act that they accept community input.  Nor were they willing to meet about their under-par charitable giving.  Their announcement last fall that they were entering discussions to merge, seem to us a step towards making a bad thing worse.  We took their announcement that the merger was off as good news.  A merger might have made them unassailable, so now when they remain separate, they will simply continue to be unaccountable.

These are big boys among hospitals nationally, not just in Texas.  “Baylor Scott & White had $582 million in operating income on revenue of $9.5 billion, according to financial disclosures to bond investors. Memorial Hermann closed the fiscal year with operating income of $129 million and revenue of $5.3 billion,” as reported by the Wall Street Journal.  If the merger had been consummated, they would have been even larger.  To the hometown paper, The Houston Chronicle, Memorial Hermann was as close-mouthed as they were with us about their charity care, issuing a statement full of platitudes.  Sources elsewhere claim the discussions went south when Memorial Hermann balked at the level of cutbacks in operations.  Who knows?  Who cares?

For all the talk about consolidation in health care being a good thing and supposedly delivering economies of scale, none of us have seen that happening in reality as health care costs continue to increase across the board.  Another word for such combinations is monopoly, and that’s not good for any of us.

The Federal Trade Commission should be all over these attempts to corner markets in hospital care, but they seem asleep at the switch in healthcare, just as they have been in supervising tech for example.  This merger may have caved under its own weight, but others have been completed around the country, and no one seems to be jumping in front of this train.

We’re not the only ones that are worried, either.  Reporting on these mergers, here’s a quote from the Wall Street Journal:

Dignity Health and Catholic Health Initiatives closed a merger last month to create the 142-hospital CommonSpirit Health. Last year, Aurora Health Care and Advocate Health Care formed a regional giant spanning Illinois and Wisconsin and Bon Secours Health System Inc. in Marriottsville, Md., merged with Mercy Health in Cincinnati.  One downside of the consolidation is it has given some large systems the size to raise prices and stymie efforts to reduce health-care spending. The deals can also result in patients being steered to specialists inside the systems, even if an outside referral might provide greater benefit.

See what I’m saying.  Just because they are claiming tax-exemptions, don’t make the mistake of believing they aren’t all about the dollar.

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Please enjoy Existential Frontiers by White Owl Red.

Kim Lenz’s Bury Me Deep.

Thanks to KABF.

 

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