We have to reform how nonprofit Delaware hospitals operate
- Oops!Something went wrong.Please try again later.
Although it’s often said that we live in a post-truth society, some ideas are so self-evidently true that they remain uncontested. No one would argue, for example, that nonprofit organizations should engage in profiteering. No one would take seriously the idea that charities should treat those in need in uncharitable ways. Unfortunately, however, many nonprofit hospitals today are doing exactly that: pursuing their narrow financial interests at the expense of their charitable missions. This is a growing problem that touches every state in America, including states that candidates for the highest office in the land call home.
As charities, nonprofit hospitals are exempt from paying most taxes. In exchange for tax breaks, nonprofit hospitals are expected to provide tangible benefits to the public. And if they adhere to their missions, if they provide charity care to the needy, if they serve as accessible health care providers for low-income patients, then the value that they bring to public should far exceed the value of the tax breaks that they enjoy. This is the tacit bargain between these hospitals and the public at large.
Yet in most states, including here in Delaware, too many nonprofit hospitals aren’t keeping their side of the deal. In aggregate, the charity care provided by Delaware nonprofit hospitals amounts to less than the value of tax breaks that they receive. This is what the Lown Institute calls a “fair share deficit,” and in 2020, Delaware’s nonprofit hospitals recorded a fair share deficit of $95 million. Furthermore, Christiana Care Health Services is one of the 25 hospitals in the entire country with the largest fair share deficit.
In addition to failing to provide adequate charity care for those in need, many nonprofit hospitals are leaving patients in the dark as to the real cost of their care. Yes, federal rules require all hospitals to post their prices online in a searchable and accessible format. But in Delaware, hospitals often flout these rules. A recent survey of 2,000 American hospitals revealed that only half of Delaware hospitals reviewed complied with federal price transparency rules. This leaves patients without the information they need to make informed health care decisions, and it gives hospital opportunities to overcharge unwitting patients.
Which is exactly what they are doing. According to a report published by RAND Corporation, Delaware hospitals are charging patients with private insurance 285% more on average than they charge Medicare patients for the same services. Delaware nonprofit hospitals are putting profits over patients, disregarding patient safety along the way. According to Leapfrog Hospital Safety Grade, Delaware ranks 49th in the country for hospital safety.
Together, these unscrupulous hospital practices are contributing to a growing medical debt crisis. According to KFF Health, nearly 100 million Americans are carrying medical debt, many of them hailing from Delaware. Unfortunately, in Delaware, there are few consumer protections for patients carrying medical debt. The law favors health care providers, like big hospitals, over working-class patients struggling with medical bills that they can’t afford to pay.
How did Delaware do?: National 'Best Hospitals' rankings released
Under Delaware law, medical providers can sell off a patient’s medical debts. They can seize a patient’s bank account to collect a medical debt. They even send a patient’s debt to a collection agency without first offering a reasonable payment plan. So, consumers should be aware that without more robust protections in state law, getting sick could eventually cause serious finance struggles. Many hospitals in Delaware are not above using every using every available point of leverage to squeeze their patients for unpaid medical bills. Delaware hospitals will even sue their patients — or take other legal actions — to collect a medical debt. And yes, nonprofit hospitals are among those who use these coercive debt collection tactics.
At CQC, we believe that nonprofit hospitals should act as genuine nonprofits and fulfill their charitable missions. When they don’t, policymakers in Delaware should these hospitals accountable. No hospital should get a free ride on the taxpayer while simultaneously exploiting the patients who rely on them for care.
Former Rep. Donna M. Christensen, D-Virgin Islands, is a member of the Consumers for Quality Care board. She retired in 2015 from the U.S. House of Representatives, where she served nine terms. She was the first female physician to serve as a member in the history of the U.S. Congress.
This article originally appeared on NorthJersey.com: Delaware hospital finance needs reform attention
