Web Search powered by YAHOO! SEARCH
09.05.2008 9:00 pm

Sunday editorial: Re-writing the rules on charity care

  • Email this
  • Print this

cd_ls_forest_park_land_3_opt.jpgThe sticky issue of charity care — health care delivered by a hospital without the expectation of payment — got a lot of attention last week.

A circuit court judge in St. Louis, Illinois Attorney General Lisa Madigan and members of an influential U.S. Senate Committee all were working on different aspects of this important safety net for America’s nearly 46 million uninsured citizens. About 85 percent of U.S. hospitals are nonprofit corporations that don’t pay income, sales or property taxes, a benefit that far exceeds the cost of the charity care they provide.

But for decades, hospitals have charged their highest prices to poor, uninsured patients who are least able to pay. They’ve worked aggressively to collect those debts, going so far as to jail people in Illinois who failed to make payments.

More recently, major hospitals are reported to have steered uninsured patients away from their emergency departments and to have demanded thousands of dollars in advance payments from uninsured cancer patients.

Such practices are getting a closer look from state and federal regulators, lawmakers and local governments. At least 40 lawsuits have been filed against nonprofit hospitals, including one here against BJC Healthcare, the region’s largest hospital system.

Congress has held hearings and launched investigations, including one revealed last week involving hospitals in Illinois and Texas.

Meanwhile, state officials like Ms. Madigan have proposed clear standards on billing and charity care at nonprofit hospitals.

In St. Louis last week, a judge heard arguments about a proposed settlement of the BJC suit. That class-action suit, which dates to 2004, alleged that BJC overcharged uninsured patients and used aggressive methods to collect those debts.

A settlement was reached in March. But some of the plaintiffs have objected, and the deal has not been approved yet.

Those who object are saying that BJC should provide deeper discounts to poor, uninsured patients than the 25 percent reduction contained in the settlement. Charges for uninsured patients average nearly three times a hospital’s actual costs and more than twice what private insurance companies pay for the same service.

BJC, which took in $226 million more than it spent in 2005, the latest year for which numbers are available, provides more charity care than any other local hospital system. That’s not surprising, since it has the largest revenues by far.

But all of BJC’s charity care amounted to slightly more than 1 percent of its revenues. Since 1996, charity care provided by St. Louis hospitals has fallen from about 1.5 percent of revenues to about 1 percent, even as the number of uninsured people soared.

In Illinois, Ms. Madigan has been pushing a plan to require hospitals in her state provide charity care worth 8 percent of their revenues. That’s significantly higher than the 5 percent standard now in effect in Texas or the 3 percent minimum that members of the Senate Finance Committee have discussed.

Few U.S. hospitals could meet even the least restrictive of those standards. A survey by the U.S. Internal Revenue Service found that about half of the nation’s nonprofit hospitals provide charity care worth 3 percent of revenues or less. About a quarter provide care worth less than 1 percent of revenues.

Because of their nonprofit status, hospitals receive tax breaks worth billions of dollars. It’s not unreasonable to expect that they provide real community benefits in return.

Congress should require that poor, uninsured patients be charged no more than big insurance companies pay for the same service. It should protect those patients from overzealous collection methods. And it should set clear standards for how much charity care hospitals provide.

5 comments

Comments are closed.

I’ve said this a 1,000 times. The fed gov needs to provide health insurance with some caveats for those who need help. They can either completely take over the health care industry and thus eliminating any private entities involved. Or, make the hospitals private, tax paying entities and use those monies, controlled by the government, to pay for health insurance for the needy. This is a very simple solution. It is a myth that hospitals provide free medical care. They do not in most situations. They have to treat you and can’t turn you away, but they can go after you for payment of services. The fed/states goverments lose out on millions of tax dollars because most hospitals are run as non-profits.
The amount they use for community health ed purposes is minute and not enough goes to pay for the uninsured.
It will be interesting to see how the lobbyists control this again when Obama is president.

— A CENTRIST
11:09 am September 7th, 2008

Why does David Axelrod, Obama’s chief campaign strategist, keep saying McCain employs lobbyists when that is exactly what he is? He is one creeply looking guy if you ask me.
http://www.weeklystandard.com/weblogs/TWSFP/2008/05/david_axelrod_lobbyist.asp

I wish the P-D editorial page would start reporting some truth and the front page would start acting like journalists for once. Our future depends on it.

— A CENTRIST
11:50 am September 7th, 2008
— A CENTRIST
12:01 pm September 7th, 2008

Is it not outrageous that less than 1% of the hospital’s treatment goes to the uninsured, yet they want to charge that 1% 2, 3, 5 times as much as the insured?

What is even more sickening is the fund raisers these organizations put on.

The cause is good, the result only benefits the priveledged executive few of these organizations and boards.

Yes, we definitely need a single payer system. We the taxpayers set the payment schedule for all patients, insured or not. We are already paying for it and just need to implement now.

— g4
2:45 pm September 7th, 2008