Heartfelt with Dr Melissa Walton-ShirleyView all posts »
Hospital interest rates: Taking the family farmApr 24, 2012 20:22 EDT
My patient of over 20 years knows the banking business inside and out and is considered a "go-to" man by firms across the country. His expertise is widely sought as a motivational speaker, and his commonsense approach to loan structuring and the mortgage business garners a large local following. In times past, I was flattered that he drove 100 miles one way for our office visits. He would be a perfect patient except he is a workaholic. My grand plan for his exercise and dietary program is forced to play a distant second to his professional success. Predictably, his time in our office mirrors the extreme efficiency required by a successful executive, starting with a few well-structured and concise health-related questions. He concludes his visit with a "thank-you" and often punctuates it with the proclamation, "Hey, you know, you saved my life and I'll always be grateful."
Today's visit was different, as I could tell he was deeply troubled. Our discussion quickly turned away from his health queries to the topic of an extreme injustice he recently witnessed. Embarrassingly, it was not the result of callous banking practices or armed robbery. It was at the hands of medical administrative professionals, more accurately described as "highway robbery" instead.
My patient's story began with the death of a poorly educated gentleman from a rural area 14 years ago. He suffered from multiple medical problems, including heart disease, and at the end of his battle incurred a hospital bill of around $17 000. When his land sold recently, his children stood to take home around $88 000 US. My patient, as an excellent banker and decent human being, was proud for this meager family, who, it seemed, would finally profit from their father's initial investment. "Do you know how much that family recovered from that deal?" he asked. "I have no idea," I replied. "ZERO," he said, holding up his thumb and his index finger into a circle. "They never saw one penny of it." "Why?" I asked. "The hospital charged a 14% interest rate for over a decade," he said, shaking his head in disbelief. "They received nothing. That is criminal," he lamented as he stepped from the exam table and reached for his tie. "Someone should do something about that. Someone should go to the newspaper in that town, but they won't do anything about it. The hospital in that city funds most of the newspaper's advertising revenue. It's a shame, because that kind of practice should be exposed," he said. "So much for objective journalism," I thought when he walked toward the checkout desk.
This isn't the first time a hospital has been accused of nefarious debt-collecting practices. In January of 2009 the Wall Street Journal's health blog by Jacob Goldstein reported that Minnesota's Attorney General sued Allina's Twin Cities hospitals and clinics for charging excessive interest on unpaid bills. They denied any wrongdoing but quickly lowered their interest rate to 8%. "Allina has dug a deeper financial hole for patients facing tough economic times by charging usurious interest rates of up to 18% on medical bills," Attorney General Lori Swanson said in a statement. The legal debate centered on whether or not the hospital's rate would qualify under the state's "open-ended credit plan," under which interest rates of up to 18% are allowed. They countered that because they cared for the uninsured, they should be able to charge higher interest rates to make up for it.
My question is this: If hospitals receive government funding to pay for the under- or noninsured, should they be allowed to charge such exorbitant rates under their state's "open-ended" credit plan? My secretary contacted a hospital today in a neighboring town that charges a 0% interest rate and if the debt is not collected at six months, "we work with the patient," they told her. In my book, that's a far more humane approach. Just today, a patient told me he dealt with the legal counsel for his local hospital by going the bank to borrow $3500 dollars, because he was able to obtain a loan for a far lower interest rate. Obviously, folks without good credit are forced to continue the debtor's-prison approach formerly practiced by the Twin Cities hospitals and currently followed by many institutions today.
Patients with few resources figured out the hospital debt legacy scam long before providers. Around 15 years ago, a 50-year-old gentleman refused a cardiac cath and rarely allowed me to admit him despite frequent exacerbations of angina and heart failure. I thought he was a bit strange and certainly a difficult man, leaving against medical advice frequently. Before he died, he refused to consider formal embalming because of the debt his family would incur, so from dust he came, to dust he returned, with no help from the local funeral parlors. Another gentleman died in our ER from an acute MI. He would not allow EMS to be contacted although he and his family knew he was experiencing a heart attack. When he fibrillated and lost consciousness, they called 911. He arrived pulseless after more than 40 minutes in the field, a goodly portion of which was without CPR. We could never establish a pulse and quite frankly were afraid we might. He'd been down too long. The family knew there was a good chance they would be left with only a vegetative patient instead of the person they knew and loved. They also had extreme guilt about pursuing a prolonged hospital and rehab admission that was obviously against his wishes. More aggressive measures would definitely have run counter to his phobia about incurring medical debt,
These two cases taught me that the fear of debt for some actually takes precedence over the love of life. Unfortunately, the fear of medical debt is not just some irrational psychiatric diagnosis. It is becoming a common concern.
How can a hospital that advertises itself as a "not for profit" position itself to profit from an unsophisticated, uneducated sick human being with a meager income? And if the practice is legal, is it necessarily moral? I liken it to someone who picks their nose in public. It's legal, but it's distasteful . . . repulsive really, not unlike what happened to this man's legacy. It is a trespass on the same level as the Old Testament example of the family who had one beloved lamb they kept as a family pet. It was slaughtered for the king's dinner party, when in fact the King had thousands of sheep from which to choose. Similarly, it was neither moral nor ethical to inflate the posthumous debt left for this family who suffered the premature death of their loved one and the loss of their primary wage earner. Religious zealots as well as unbelievers will likely agree that judgment in this world should be harsh for such practices. I believe that in the hereafter, the punishment should and will be far worse indeed.