Nonprofit Hospitals Are Quiet Quitting Their Charitable Missions

COMMENTARY

Hospitals play an essential role in the American health care system: They care for people when they are at their most vulnerable. For nonprofit hospitals, this role is doubly important. Organized as charities, their mission is — or at least it should be — to care for those who can’t afford the cost of care. 

But many nonprofit hospitals today are quiet quitting their missions. At Consumers for Quality Care, we’ve seen heartbreaking stories of vulnerable patients left penniless by nonprofit hospitals, of patients being denied nonemergency care because they owe a nonprofit hospital money, of poor patients being sued by nonprofit hospitals for bills they never should have received, and if not sued, hounded day and night by debt collectors working for the hospitals. 

This is unacceptable, and it’s why we launched our #HospitalFail campaign. 

Legally, nonprofit hospitals are classified as charitable organizations and enjoy billions of dollars in tax breaks every year as a result. In return, nonprofit hospitals are supposed to operate for the public’s benefit, including by providing free or discounted care for the poor. This is where many nonprofit hospitals are failing; they’re not upholding their end of the deal. 

In fact, most hospitals run what the Lown Institute calls a “fair share deficit,” receiving more in tax breaks than what they spend on charity care. In every state, more than half of nonprofit hospitals are running fair share deficits. In 37 states and in the District of Columbia, the percentage of hospitals running a fair share deficit exceeds 70%. It’s now the norm for nonprofit hospitals to act more like profit-driven businesses than charitable organizations, and this is contributing to some of our nation’s biggest health care woes.

Hospitals, including nonprofit hospitals, are also driving up health care costs by overcharging their patients, especially patients with private insurance. Researchers at RAND Corporation have studied this extensively. They found that in eight states, patients with private insurance were being overcharged by 200% or more. In the state where patients were overcharged the least, Arkansas, they were still overcharged by an average of more than 62%.

On top of overcharging their patients, America’s hospitals aren’t being transparent about the prices they charge. Although federal rules require hospitals to publish their prices online in consumer-friendly formats, most hospitals haven’t complied. 

Patient Rights Advocate reviews hospitals’ price-transparency policies twice every year. Their latest report shows that just 21% of hospitals complied with federal price transparency rules. The rest were, to some degree, hiding pricing information from their patients, impeding their ability to understand what their care will cost, making it harder for them to shop around.

This has real consequences. It’s one reason that roughly 100 million Americans carry medical debt. Much of that debt consists of unaffordable hospital bills, bills that could have been lower if hospitals charged fairer prices, bills that could have been avoided if consumers had the information needed to shop around, bills that never would have been sent if nonprofit hospitals took their missions seriously and devoted adequate resources to charity.

The only thing worse than the medical-debt crisis is the fact that hospitals, including nonprofit hospitals, are using aggressive debt-collection tactics to force patients into paying.

In most states, consumer protections don’t protect health care consumers enough from hospitals and other health care providers. In state after state, we found instances of nonprofit hospitals suing working-class patients for unpaid bills, siccing debt collectors on them, and reporting their medical debts to credit agencies, which in turn tanks their credit scores and makes it harder for them to rent an apartment or buy a car.

This is not what we expect from charitable organizations. It’s not something policymakers at any level of government should allow to continue.

With a new president and a new Congress, there’s a lot in flux for American health care policy. Some issues attract more media attention than others, and the constant cycling of the public’s attention from one hot-button issue to the next erodes our ability to focus on long-term problems, problems that we can solve if we give them the attention that they deserve. 

The role of nonprofit hospitals in our health care system is one such issue.

We can solve this problem. We just need policymakers at the state and federal levels to commit to making meaningful changes, so that nonprofit hospitals keep to their missions and put patients’ well-being before their own bottom lines.

Former Del. Donna M. Christensen, D-V.I., 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. She can be found on LinkedIn.