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March 11, 2012 12:36 PM “Nonprofit” Hospitals and the Push for Fair Care

By Kathleen Geier

I’m loath to write about local issues on what is, after all, a blog with a national focus. But I do want to mention an initiative here in my home state of Illinois that I believe is important, and may have national implications. Progressive organizations and the Quinn administration are pushing for a bill that will ensure free and discounted health care, known as “charity care,” at hospitals that enjoy nonprofit status.

Currently, nonprofit hospitals are exempt from paying property and other taxes, so long as they provide a substantial amount of charity care; many such hospitals, however, have long ceased providing such care. Groups like The Fair Care Coalition are calling for legislation that “ensures access to healthcare, equity for all hospitals, and accountability to taxpayers.” They are seeking a standard that would require nonprofit hospitals to “pay 5% of their revenue in charity care and 1% of their revenue in the provision of health care services not located directly on the hospital’s site,” or otherwise risk losing their nonprofit status. Governor Quinn supports these efforts and has directed the state’s Department of Revenue’s to review of hospitals seeking charity-care exemptions.

As you may guess, there are all too many horror stories here in Illinois involving sick patients being denied care, or socked with astronomical bills, at taxpayer-subsidized hospitals. Here is just one of countless examples:

In 2010, Gudeliva Medina fell at work hit her head and lost consciousness. When she awoke she was at her local community hospital where she stayed for seven days. She told the hospital staff that she was uninsured but no one talked with her about charity care. She was told that she would receive her bill by mail. Soon she had received bills from the hospital for more than $70000.00.
Gudeliva, a mother of four, could not afford to pay her bill particularly since her husband had recently lost his job. Eventually her account went into collection. In 2012 0udeliva attended a meeting at her local church where she learned about charity care. She requested a copy of her bill from the hospital so she could apply for charity care. The hospital staff did not give her a charity care application. Instead the hospital staff told her that her husband could go to jail if she didn’t pay the bill. Her bill currently remains in collection.

I have my own personal tale of woe where this issue is concerned. I don’t have health insurance; I have not been able to find a full-time job and so right now I’m working part-time, without benefits. I applied for health insurance on the open market but was denied due to a pre-existing condition (though as it turned out I wouldn’t have been able to afford it, anyway). Last year, I needed to get a prescription refilled (not the meds itself, just a script), and not knowing where else to turn, I went to the nearest emergency room, which is at the University of Chicago hospital.

Biiiiig mistake. I waited six hours to see a doctor, and then the next week, I received a bill in the mail to the tune of nearly $450. I was stunned. All I did was to spend about three minutes with a doctor who wrote out a (one-month) refill for a pre-existing prescription. There wasn’t a general physical and no tests were done. Moreover, I mentioned to Every. Single. Person. I dealt with at the hospital that I didn’t have insurance and that I was unemployed (which I was, at the time). I assumed they would automatically charge me a discounted rate. My bad, clearly!

The University of Chicago Hospital, btw, is the place where Michelle Obama used to work — in their “community relations” division — before she became First Lady. At the time she left, she was pulling in a salary of over $300,000 a year.

But I digress. Anyway, upon receiving the bill, I briefly considered making a paper airplane out of it. Then I called the hospital, and after spending about an hour on the phone, I managed to get them to send me an application for charity care. The upshot is that my bill was slashed to about a third of what they’d originally charged me. But having to shell out over $150 just to have a doctor sign a script is still pretty outrageous, if you ask me.

And the fact is, if I hadn’t called the hospital and spent all that time on the phone, I never, ever would have gotten that discount. I should have been asked at the hospital if I wanted to apply for the discounted rate, especially since — have I mentioned this? — I only told Every. Single. Person. there that I was unemployed and uninsured. But I assume it’s probably hospital policy to be tight-lipped about the charity care option and to try to force patients to pay the full rate unless they specifically ask for a discount.

At least I knew enough to try to fight back. Many poor and uneducated people, immigrants especially, would not have had the wherewithal to do so, and so are especially vulnerable to exploitation. That hospitals are pulling this crap at all is infuriating enough; that they are doing it on the public dime, crying poverty while paying their administrators Wall Street-type salaries, is an outrageous betrayal of the public trust. I wish the Fair Care Coalition all the best with their efforts, and I hope other states follow suit.

Kathleen Geier is a writer and public policy researcher who lives in Chicago. She blogs at Inequality Matters. Find her on Twitter: @Kathy_Gee

Comments

  • schtick on March 11, 2012 2:20 PM:

    A friend of mine works in the accounting department of a local hospital and told me that 25% of the hospital bill is to cover people that can't or won't pay. So if you have a $12,000 bill, $3,000 covers the money they aren't able to collect.
    So people would rather pay or have their insurance pay the 25% rather than have universal healthcare. With more people having less insurance, I imagine that figure will be going up, too.

  • zandru on March 11, 2012 2:20 PM:

    On Knowing Enough to fight back...

    By now, you may have also learned that you can go in to an "urgent care" facility (as opposed to ER) for much much less?

    No kidding - the Republican rhetoric of "just go to the ER for all your healthcare needs" has to be put down like a rabid dog. People need to be aware that, if it isn't a life-threatening emergency, they should go ANYWHERE ELSE.

    I don't mean to sound too unsympathetic; I have a relative who found herself in a similar predicament. But - yet again - NEVER go to the ER for health care.

  • martin on March 11, 2012 2:29 PM:

    The Republicans will of course say you should have shopped around first to find the best deal and play one hospital off against the other n our splendiforous free market. As if that were even an option. I can assure, no one you asked at that hospital would even be able to tell you how much it would cost you to get that script written with or without the charity discount.

    Our Health System SUCKS.

  • WaterGirl on March 11, 2012 2:50 PM:

    I live in Illinois, and I was not aware of this initiative, so I greatly appreciate your post about this! Glad to see that we are doing something good in Illinois!

  • Anonymous on March 11, 2012 3:02 PM:

    I sympathize, but where have you been for the past couple of years? Apparently the "just go to the ER" meme has really taken hold. Anyone paying attention to the issue, though, should have heard over and over that ER care is the most expensive and least efficient care you can get.
    If you just needed the prescription at the time, and not the med, you could/should have looked on-line or in the phone book and found a primary care doctor in your area and established care with them. It takes longer and is still expensive, but not $450 dollars expensive.

  • mudwall jackson on March 11, 2012 3:02 PM:

    if the woman in the story got hurt while on the job shouldn't she be covered by worker's comp? that would have taken care of her medical bills.

    btw, the system sucks. even if you're covered by insurance, a major event can put you in a serious financial hole. and on knowing is right, never go to an emergency room unless it truly truly is an emergency and you don't have an alternative.


  • Roger Keeling on March 11, 2012 3:02 PM:

    Once fully implemented, the Affordable Care Act will significantly mitigate -- but not eliminate -- these kinds of stories. (It certainly won't help undocumented immigrants and foreign visitors much at all). In the meantime, in many states lawmakers (Democrats, mostly) and non-profits are looking at augmenting the ACA in ways to make the entire system a bit more humane. There is the legislation you mention in Illinois. In California (long shot) efforts are afoot to put an initiative on the ballot to better regulate health insurance companies and their premiums.

    In the meantime, Kathleen, I agree with the poster above: hope you've learned never, EVER go to an ER unless a bus just ran over you. Easiest solution: find a regular doc in your neighborhood, call to see if the practice is accepting new patients, and then ask if they will accept reduced fees from an uninsured person to match what they'd get from an insured person. Here's why: let's say you were covered by major medical such as Blue Cross. You go to Dr. Localmed (who is a Blue Cross provider) for a routine visit. You pay your $20 co-pay. Blue Cross gets a bill for $230. They reject $150 of it as exceeding their negotiated rate and send him $80. So as an uninsured person who will pay on the spot, if you pay $100 they're actually ahead (no billing costs).

    This is not unlike some of what the Republicans are chattering about -- sorry, I don't mean to endorse their non-answers -- but it does work. Many docs will say no, but some are happy to oblige. Also, check out the national lists of "micro-practitioners," docs who set up shop in very small spaces with minimal equipment and close to no staff. Such practitioners are hard to find, but generally great once you are an established patient. I am keeping mine here in Oregon even though our firm just switched to Kaiser and I have to pay cash to see him now. They will almost ALWAYS accept this arrangement; some don't accept insurance at all, and keep their prices low to reflect that. It's almost always cheaper than any kind of general urgent care clinic.

  • jjm on March 11, 2012 3:04 PM:

    I've seen articles in the NYT regarding the virtual scams hospitals who receive state support for charity care pull on the state. Illinois might look into what the Cuomo administration is trying to do about it.

  • beckya57 on March 11, 2012 3:11 PM:

    Ah, the good old U of C (my alma mater, as it happens). Champion of the free market and all that. There's a certain consistency to their econ dept advocating policies that bankrupt 3rd world countries and their ER (which I went to a number of times while a student there) screwing the poor and uninsured. I have never given their alumni fund a dime, and never will.

  • zandru on March 11, 2012 3:31 PM:

    mudwall jackson is right - where was Workers Comp?!

  • Jose Padilla on March 11, 2012 3:38 PM:

    Urgent care is not that much less than the ER. A couple of years ago my son was very sick (turned out he had mono). It was a Sunday and the doctor we go to wasn't open, so I took him to an urgent care facility. Even with insurance, the co-pay was $200 because BC/BS treated it the same as an ER visit. The best thing for a person without insurance is to go to a public health clinic, if they live in a large city.

  • dalloway on March 11, 2012 3:39 PM:

    A good rule of thumb: the "free" market is never free. It's very, very expensive, especially for poor people. And that's how Repubicans want it to stay.

  • darms on March 11, 2012 3:44 PM:

    I had a necessary surgery a few years back and the total paid out was about $12,000, $6500 from me and the rest from my insurance company. The billing people told me what I would have charged had I not had insurance ~ $36,000. The uninsured subsidize the insurance industry these days.

  • Lucia on March 11, 2012 4:12 PM:

    darms and others are correct: because insurers pay doctors and hospitals negotiated "contracted rates" that may or may not be close to the actual cost of the service, the minute you said you were uninsured the eyes of any hospital administrator/finance type who heard you lit up with great big dollar signs. The uninsured are charged more than anyone else, even though those same hospital employees know full well how cruel that is. I can't blame them too much: they are pawns in one huge shell game, and no one makes money but the drug companies.

    My son is on several meds, and when he needs a script renewal I email (!) the doc, who has an assistant phone it into my local pharmacy. Afaik no one is billed for this.

  • 57andFemale on March 11, 2012 4:18 PM:

    kathleen, I live in Chicago and I knew nothing about this. Thank you so much for bringing this to our attention.

  • 57andFemale on March 11, 2012 4:24 PM:

    Kathleen, I just complimented you on this story, and I continue to do so. However, it was snide to make it sound like Michelle Obama was pulling down a salary in lieu of your health care. You do not know what she did, what she fought for, or continues to fight for. Just a snide, unnecessary comment.

  • Anonymous on March 11, 2012 4:34 PM:

    Some things like Health Care simply should never be corporatized or privatized:
    The military or any part of the military. Too late for this one.
    The police. Too late for this one.
    Public schools. Too late for this one.
    Fire departments. Too late for this one.
    Water. Too late for this one.
    Congress. Way Too late for this one.
    Strategic natural resources. Way Too late for this one.
    Highways, bridges, tunnels, etc. Too late for this one.
    Morality. Too late for this one.
    Copyrights & patents. Too late for this one.
    Land. Way way Too late for this one.

  • Francis Volpe on March 11, 2012 5:22 PM:

    This is an excellent post, but I would like to add that, in my observation, the non-profit community hospital is going the way of the passenger pigeon in most places. They're being bought up by interstate hospital chains that run them like Hot Topics, or more to the point, malls. In my home town, the community non-profit was bought by one of these chains. The purchase price was paid out to the hospital board, which created a health assistance agency with the money that helps low-income folks get care, though I don't know exactly how many people are served by this. Now the local hospital is like a mall -- almost every department is contracted to an outside company, even the emergency room. Every time you get wheeled through a pair of double doors you get wheeled into another cost center run by a completely different group of people. And even if you have insurance these various cost centers send you bills for weird amounts of money payable to organizations you never heard of -- you thought you went to Shiny New Corporate Hospital but you get five different bills from Associated Practitioners, Practitioners' Association, New Health Care Alliance, Peoples' Health Care Alliance, People's Associated Practitioners of Judea, and so on. Good luck trying to figure out whether these are valid bills or whether somebody in the hospital just happens to have a postage meter and the admissions list.

  • coralwisp on March 11, 2012 6:17 PM:

    Kathleen, I work at the U of C. And I think it is totally wrong for you to walk into a hospital ER for a non-emergency when you can just as easily go to Stoger Hospital and get free care !!! ER are for emergencies !!! Your actions are the reason why healthcare costs are so high. It is unlikely that people who walk-in to the ER as if it were a clinic are going to pay the bill for such care. So the hospital recoups these costs thru higher charges to insured patients. Then the ratcheting up of prices for hospital services between insurance companies and hospitals goes on from there. You could have easily gone to the free hospital. In fact, people in Chicago should consider themselves quite lucky that the free hospital is so near. Unlike nearby residents of Indiana, who have to go to Indianapolis for free care. Yes, charity care should be offered. But charity care should be reserved for cancer patients, or other long term illness, that people can't pay for....not your measly prescription refill !!! You should be ashamed of yourself.

  • Anonymous on March 11, 2012 9:10 PM:

    It's not just hospitals that scam uninsured people. Two days after losing health insurance (due to job loss) I had some scary things going on in one of my eyes and I worried about a torn or detached retina. So I went the clinic where I'd been a patient for over 10 years where they "nicely" charged me only $50 to get in with the doctor (rather than the $200 they charge new uninsured patients), and I saw an assistant and an optometrist (not an ophthalmologist)and it turned out it was a temporary problem that needed no treatment (thank god for that). A month or so later they sent me a bill for $335 (and had not credited me the $50 I'd paid) which I thought was outrageous. No way that my former insurance company or any insurance company would pay that much - more like half? When I called to complain they said they would give me a 15% discount - that was their standard for non-insured. How generous, but I took it and paid the bill.

  • Donna on March 11, 2012 10:36 PM:

    "My son is on several meds, and when he needs a script renewal I email (!) the doc, who has an assistant phone it into my local pharmacy. Afaik no one is billed for this."

    When a patient calls with a problem in our practice, we nurses are instructed to check the date of the patient's last annual exam. If it is within a year, we can help the patient over the phone if possible (Go to the Quest web site and type in your zip code to find the nearest location. I will fax a requisition to them. Leave a urine sample and call us for results this afternoon. If you have a urinary tract infection we will call a prescription in to your pharmacy.)

    However, if it has been over a year, then "it's time for your annual exam anyway" and you must come in.

    In other words, the fee for the annual exam includes telephone service, which the doctor cannot charge for directly, during the next year.

  • JS on March 11, 2012 11:40 PM:

    First and foremost, good on "Landslide" Pat Quinn for working on useful issues.

    But while I understand that it's likely you wouldn't be able to afford it, I thought you couldn't be denied coverage for pre-existing conditions since at least the start of 2011.

    And as stated above, that was quite the little cheap shot at FLOTUS. That, and your hagiographic take on Kucinich paint quite a point of view. (Which of course is entirely your right to hold, just don't expect not to get called out on it.)

  • golack on March 12, 2012 12:47 AM:

    here's a link to stuff that was going on in CT a few years back:
    http://www.ct.gov/ag/cwp/view.asp?A=1778&Q=284082

    The major problem with health care in general is getting good information. Google "free health clinics" or "hospital" and you won't see Cook County come up (Stroger), at least on the first page or two. CommunityHeath does show up under clinics and is free (?), under hospitals, didn't see any free services. Found Stroger by looking it up directly, but links on google are broken--it's at:
    http://www.cookcountyhhs.org/patient-services/billing-financial-assistance/

    Not free, but assistance available.


  • mfw13 on March 12, 2012 3:13 AM:

    The bigger problem is that health-care SHOULD NOT BE A FOR-PROFIT industry. All hosiptals should be non-profits, not just a few. I'm not a religious person, but I'm pretty sure there's something in the Bible somewhere about not profiting from someone else's misfortune/illness/pain.

  • g on March 12, 2012 10:04 AM:

    if the woman in the story got hurt while on the job shouldn't she be covered by worker's comp? that would have taken care of her medical bills.

    You raise a good point. I don't know the details about this story, but there are many workplaces where the "employees" are actually hired as "private contractors" and the employer doesn't pay into the worker's comp system. It is becoming more and more common.

  • Shivas on March 13, 2012 2:09 AM:

    A couple of years ago I suddenly developed a heart condition that required a week of hospitalization, tests, X-Rays, cardiograms and since then repeats of the above, an echocardiogram, an imaging procedure using a radioactive isotope, a stress test, cardioversion, lab tests and visits to specialists. In addition I have been prescribed dozens of heart drugs, I am currently on 4.

    My cost for all this? Zero. You see, I live in Canada where our backwater socialized medicine is keeping me alive in spite of market forces. Because I could not work due to my heart ailment I was provided with Provincial disability payments, which is enough for rent and food, and my medical and prescriptions are paid for by the government.

    Many times I have thought how lucky I am to live in a civilized country where the system supports the less fortunate. If I lived in the US I would have in all likelihood died more than a year ago. I would not have been able to afford many of the above mentioned procedures and would also likely not been able to afford the medications I need. After I had incurred several thousands of dollars in debt, I would be broke, in debt. and living al fresco. If my heart condition didn't kill me, the elements would.

    I feel both lucky and sad. Sad for the thousands and possibly millions of people in the US that are literally left at the side of the road of prosperity. It is not only the aged and washed up, it is young children who through no fault of their own do not have the resources to make it through childhood on their own. How many potential Einsteins, and Mozarts, and Shakespeares are among them, their lives snuffed out before they get a chance to fulfill themselves.

    Some of the future greatness of America is being sacrificed so that a few greedy people can live opulent lives. It is wrong on so many levels.