Law should require hospitals to level with patients on cost of care

Law should require hospitals to level with patients on cost of care

- in Progressive Voices

Hospitals stand at the center of our state’s health care system. In many counties these institutions do great good. They are often the largest employers in their region, they treat complicated medical conditions, and they provide a variety of community benefits.

These sanative services, however, should never shield a hospital from criticism. Most hospitals in North Carolina are non-profit, and they are in most respects public institutions. Non-profit hospitals pay little or nothing in sales and property taxes; this despite the fact that many hospitals own some of the most valuable land in some of our most expensive cities. Hospitals can issue tax exempt bonds. Public payment systems also keep most hospitals in business. Without Medicare and Medicaid many hospitals would close.

A patchwork of laws and regulations and payment methods together make up an unwritten contract between hospitals and the public. We have seen the benefits hospitals enjoy from taxpayers. For their part hospitals should provide care to all people regardless of their ability to pay. Non-profits should not behave like private corporations that sock away giant reserves and pay executives exorbitant salaries. Hospitals also should refrain from pursuing patients to the point of breaking them financially. While health care providers are entitled to payment when possible, hospitals should not be in the business of soaking the poor or seizing their homes.

It is clear from recent news stories published across the state that not all hospitals are upholding their end of the bargain.

While taking the tax breaks and public money there are a number of hospitals that are providing paltry amounts of free care in return. There also are hospitals that are paying executives millions of dollars in total compensation for running large non-profits. And a few hospitals in North Carolina are still actively suing patients and attaching property liens if these families do not pay their bills in a timely fashion. This is unacceptable.

There are ways to move forward that will repair the social contract between hospitals and the public in a way that will not unduly burden either side in the deal. It would be unwise in the current unsettled health care environment to impose new financial requirements on hospitals. At some point we should consider a mandate that hospitals provide some minimum level of charity care. At this point, such a regulation is premature.

But the time is ripe for new laws demanding that hospitals post charity care policies in areas where patients seek care. Charity care policies also should appear on bills and other financial correspondence. Before a person is seen by a physician they should have some way to gauge what the encounter might cost.

Hospitals will insist that these measures be voluntary. They do not want any regulations written into state statute. New laws, however, are necessary. Not all hospitals can be trusted when left to their own devices. Carrots are nice but will only take us so far. For some laggards the state needs a stick.

Passing these laws needn’t be a bitter struggle. In many states hospitals have readily agreed to work with advocates in shaping new disclosure policies. A new regulation requiring the posting of charity care policies recently swept through the Colorado legislature with the endorsement of the hospital association in that state.

Such a move in North Carolina would not entirely repair the damage done by hospitals suing patients and attaching liens to their homes, but it would be a big step in what promises to be a long process.

Adam Linker is a Policy Analyst at the North Carolina Justice Center’s Health Access Coalition.