do the Emir of Kuwait and the working poor of the United States have in
common? Not much, except when it comes to paying for health care in the
United States. They all pay the highest price: up to 500% more than the
hospital receives from insured patients.
That's because hospitals negotiate discounts with big institutions like insurance companies, HMOs or the government that require payment of only a fraction of the listed charges. Those institutions have substantial bargaining power and can guarantee hospitals a certain number of patients. Uninsured people, on the other hand, have no bargaining power and are left to fend for themselves once they get their bills.
Jennifer Kankiewicz was rushed to New York's Beth Israel Hospital in July 2002 for an emergency appendectomy and was hospitalized for two days. "I waited through a day's worth of not being able to get out of bed because I didn't have health insurance," recalls Kankiewicz. "The next day, a friend drove me to the hospital in an emergency and we went to the closest hospital we knew of."
Kankiewicz had an emergency appendectomy. "They provided great service," she says. The hospital "reassured me that I could apply for Medicaid assistance. So I thought, maybe Medicaid would help me with the $24,000 that it cost me."
Though Kankiewicz is poor, she was not poor enough. She was denied Medicaid assistance because she makes $19,000 a year. In order to qualify for Medicaid, Kankiewicz either needed to be pregnant, disabled or earn less than $350 a month. Though she was able to convince her surgeon to slightly reduce the charges, she still faces over $19,000 in hospital bills, more than her annual salary. She says she is being billed by six separate billing groups and, unlike the big insurance companies; Kankiewicz has no negotiating power with the hospital or its collection agencies.
"It's like sending a guppy out to the sharks," says Elisabeth Benjamin, the supervising attorney of the Health Law Unit at the Legal Aid Society in New York. "It's just not fair."
Several states operate a funding pool for hospitals to offset the money they spend on charity care as well as bad debt. In New York, these funds total almost $1 billion a year.
Benjamin is the author of a new Legal Aid report called "State Secret: How Government Fails To Ensure That Uninsured And Underinsured Patients Have Access To State Charity Funds." The report alleges that none of the 22 hospitals surveyed in New York City have a process that would let poor or uninsured patients apply for the hundreds of millions of dollars in state government funds intended to help pay for hospital care for the needy, despite the fact that they are all receiving between $4-$60 million annually in charity care funds from the state. As a result, patients who are uninsured and have limited financial resources are forced to pay inflated prices for their care.
"An average consumer that might want to call a hospital and find out what the charity care policy is, forget it," says Benjamin. "What we found was at all 22 [hospitals], no one had a way to actually get the state money applied to your case."
In Kankiewicz's case, according to Benjamin, Beth Israel receives $28 million a year for charity or bad debt cases. But rather than establishing a process to inform patients about applying for this money, Beth Israel made Kankiewicz go through the process of applying for Medicaid.
"I could have told Jennifer in 30 seconds, she wasn't going to be eligible for Medicaid," says Benjamin. "For her to have gone to a fair hearing [on Medicaid eligibility] on her own was a waste of time."
Kankiewicz says that when she initially spoke to the collections department at Beth Israel, they asked her why she chose the most expensive hospital if she was uninsured. "Honestly, I didn't understand that I was a consumer, that I had to shop," Kankiewicz says. "I wasn't making a decision at the time. I rushed to the hospital that I knew where it was."
Like Kankiewicz, many uninsured patients end up with huge medical bills and no way of paying them. Hospitals then hound them for payment using collection agencies and lawyers, who employ such methods as filing lawsuits, slapping liens on homes, seizing bank accounts and garnishing wages to extract payments. Some hospitals now rank among America's most aggressive debt collectors.
"[Patients] don't know they have been sued because the collection attorneys and the collection agent hired by the hospitals are voracious," says Benjamin. "They claim to serve people, but in fact they have never served anybody with court papers. The next thing my clients know, their bank accounts have been taken."
But for some people, it can get worse than that.
A Return to Debtors Prisons
Hospitals in several states have actually had patients arrested and jailed if they are unable to pay their debts. This legal tactic is chillingly known as body attachment.
"Body attachment is basically a warrant for arrest," says Claudia Lennhoff, executive director of Champaign County Health Care Consumers in Illinois. She says that if a patient misses a court date, that they may not even know they have, the attorneys for the hospitals or collection agencies can ask the judge to issue a warrant for the patient's arrest.
"They can go out immediately and find that person or it can just kind of be out there and then if the person gets pulled over, for example, for having a taillight out or speeding or something, it pops up, and then shows a warrant for arrest and the person gets brought in, and then they get incarcerated," says Lennhoff.
Take the case of Jim Bean, a musician in Urbana, Illinois. More than a decade ago, he received treatment at the Carle Foundation Hospital, the primary teaching hospital of the University of Illinois at Champaign-Urbana, for a gunshot wound after a failed suicide attempt. He attended 13 court dates to answer to his $7,718 hospital bill. But then Bean missed a hearing, which he says he did not know was scheduled. The hospital asked the court for an arrest warrant.
"They put out this body attachment that I found out about the next day. I went and turned myself in," recalls Bean. "I went to find out what was going on, and they told me to go across the street to the county sheriff's office where I turned myself in. I was jailed, and I was put into general population at the satellite facility here until my brother could come up with 10% of $3,500 to bail me out of jail."
Bean says the next time he went to court, the attorneys for Carle Hospital asked that Bean's bail money be applied toward his debt to the hospital. The judge approved the request. "It was just a really quick way for them to collect $350," he says. "I had no say in that."
In an interview with Democracy Now!, Robert Tonkinson, chief financial officer for Carle Foundation Hospital, said the hospital would not end its practice of having patients arrested.
"We are exercising more review, and more care and more direction over that practice," says Tonkinson. But he says, "The reason we're not willing to say that we'll never, never use that practice again is because we do feel a very strong obligation to be a good steward of the resources we have." He adds that sometimes having people arrested is "the only option left in order to get the information we need to see if these people qualify for our charity programs or in assistance in other ways is to pursue that process."
Bean has been dealing with his debt to Carle Hospital for more than 12 years. He says he has made payments totaling $1,340. "When I started making those payments, my bill was $7,718.23," he says. "My bill today is $10,620.46. None of the money that I have paid has been applied to the debt whatsoever, it's all in interest charges."
Legal Aid's Benjamin says that Bean's case is part of a national trend. "In New York State, for example, the collection agents charge 9% interest," she says. "So, even though the federal interest rate is 1%, and most people can get mortgages for 6%, the hospital industry is charging 9%, at least, on average."
Lennhoff of the Champaign County Health Care Consumers says that practices like arresting people who can't afford to pay the exorbitant costs of health could have far reaching implications. "It creates a bad dynamic in our community, where people become very afraid of getting healthcare because they fear that they will be jailed if they cannot pay the bill," she says. "They are treated as a criminals and that's outrageous."
Democracy Now! is a daily national radio/TV newshour. Amy Goodman, Jeremy Scahill, Sharif Abdel Kouddous and Mike Burke compiled this report (www.democracynow.org)