“Nonprofit” Hospitals and the Push for Fair Care

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

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