Hospital Debt Collection

SPEAK OUT

December 24, 2008

Readers of "In Their Debt" (Dec. 21-23) may be dismayed - as we all are - by descriptions of individuals struggling to pay medical bills. But they ought to be far more focused on the fact that under Maryland's one-of-a-kind and widely praised rate-setting system, those who can pay for health services, but don't do so, unfairly burden everyone with higher rates and costs, including patients.

Hospitals are strongly encouraged and given incentives by the Health Services Cost Review Commission to collect unpaid bills precisely so that everyone pays a fair share to shoulder the cost of care for those who truly cannot afford to pay.

Under HSCRC rules, all unpaid patient bills are included in future rates that Maryland hospitals are given approval to charge to all patrons, including the insured and uninsured. If the debts of those who can pay are not recovered by hospitals, these unpaid bills are spread around to those who do pay their bills.

Collecting these debts helps patients by keeping costs down, and no hospital is tempted to refuse care because someone cannot pay.

In other states, uninsured or underinsured people may be charged 200 to 500 percent more than the actual cost of their care.

The Baltimore Sun's article offers some facts, but they are presented with very ill-considered perspective.

For example, the uncompensated care "surpluses" referred to in the series are not only reported by Johns Hopkins to the HSCRC but also removed from the calculation of bad debt included in rates we are allowed to charge in the future.

It's also important to remember that the vast majority of unpaid debt resulting in collection activity or legal action is accumulated by people who have resources to pay their co-payments or other bills, and have not paid despite repeated efforts to work with them on payment plans.

Individual patient stories are compelling but often give a false picture.

For example, over the past six years, only about one-third of 1 percent (0.333 percent) of 3,840,078 admissions and patient encounters at the three hospitals that make up the Johns Hopkins Health System resulted in a lawsuit.

Indeed, the Johns Hopkins Health System spends millions each year on staff and services to assist patients with their financial needs.

In fiscal 2007 alone, the Johns Hopkins Hospital spent $2.5 million of its own money to help patients obtain more than $80 million in Medicaid benefits for which they were eligible.

To conclude that hospitals get a windfall from such dollars demonstrates a lack of understanding of the HSCRC system and how the HSCRC effectively uses incentives to control costs.

Is there an occasional administrative mess-up? Unfortunately, yes.

Improvements are always possible, and it is worth discussing how we can improve the system.

But the 36-year track record of enormous benefits to patients under HSCRC, along with Hopkins' track record of compassionate care regardless of patients' ability to pay, speaks for itself

Ronald R. Peterson, Baltimore

The writer is president of the Johns Hopkins Hospital and Health System.

The Baltimore Sun has shown us again why we need newspapers in today's cyber world: The series "In Their Debt" (Dec. 21-23) is an excellent expos? about hospitals taking American citizens to court for debts they obviously have no ability to pay.

Last week, the paper reported how a pregnant woman from Sudan, with a husband with a job, came to America to obtain medical care because she felt, and probably rightly so, that the medical system in her native country would not be able to handle the delivery of the triplets she expected.

She had quintuplets two months later at Anne Arundel Medical Center and was served by a team of about 40 medical doctors and technicians.

A hospital executive said that the family would not be charged because the hospital felt that was "the right thing to do" ("Annapolis baby watch: Five and doing fine," Dec. 17).

What is right about Marylanders being taken to court regardless of ability to pay?

Thanks to The Baltimore Sun for presenting such hypocrisy.

Charles Herr, Baltimore

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