THE UNINSURED:WSJ Examines Hospital Collection Practices

Wall Street Journal
March 13, 2003

The Wall Street Journal today profiles Quinton White, an uninsured retiree who has $40,000 of debt from medical bills related to cancer treatment that his deceased wife received at Yale-New Haven Hospital, and examines the "aggressive" practices that hospitals use to collect payments from uninsured and underinsured patients. White, a retired dry cleaner from Bridgeport, Conn., whose wife received treatment at Yale-New Haven in 1983, continues to pay for the treatment because of the 10% interest charged on the original $18,740 bill; the bill today totals about $55,000. When White, who has kidney problems and has suffered a heart attack, could not pay the hospital bills, attorneys for Yale-New Haven placed a lien on his house and "nearly cleaned out" his bank account, the Journal reports. Many hospitals have adopted similar collection practices, which represent "one of the ways hospitals are compensating for the squeeze" on reimbursements from the government and private health insurers and "countering their losses from caring for the uninsured," according to the Journal. Medical bills are the second most common cause of personal bankruptcies, and lower-income families that do not qualify for Medicaid or other public health insurance programs are "penalized the most by the system," according to Elizabeth Warren, head of the Harvard University Consumer Bankruptcy Project, the Journal reports.

Bottom Line' vs. 'Charitable Mission'

     Officials at Yale-New Haven, which had $52 million in bad debt and uncompensated care in 2002, defended the hospital's collection practices and said that the hospital "must at least try to get back money for care rendered," the Journal reports. "The reality is they came to the hospital, they were given service and to the best I know it was the very best service," Yale-New Haven Chief Operating Officer Marna Borgstom said. A senior Yale-New Haven official added that the hospital often makes payment arrangements with patients "before resorting to collection actions" and "doesn't charge interest when it bills patients directly," the Journal reports. However, some public health advocates maintain that hospitals with tax-exempt status, such as Yale-New Haven, have an obligation to provide charity care. Nancy Kane, a professor of health finances at Harvard University, said, "There is always tension, of course, between charitable mission and bottom line, ... but to pursue these people the way they are pursuing them is highly uncharitable" (Lagnado, Wall Street Journal, 3/13).

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