Betty - And the Bill Lives Forever...

[Guest guest]

Jeanette White Is Long Dead

But Her Hospital Bill Lives On

By LUCETTE LAGNADO

Staff Reporter of THE WALL STREET JOURNAL

Quinton White lies in bed at his home in Bridgeport, Conn., suffering

from kidney ailments and the aftereffects of a heart attack and

dreaming of a trip to Paris, which he has seen only in the movies.

But for Mr. White, a retired dry-cleaning worker, seeing Europe is

probably as likely as a trip to the moon. In addition to his health

troubles, the 77-year-old is strapped with nearly $40,000 of debt.

He owes the money to Yale-New Haven Hospital, a distinguished not-for-

profit facility where his wife, Jeanette, was treated 20 years ago.

Mrs. White died in 1993, but her debt lives on, growing like her

cancer because of the 10% interest charged on her original $18,740

bill. Back in 1983, the hospital's lawyer got a lien on the Whites'

house, and in 1996 nearly cleaned out Mr. White's bank account.

Mr. White figures he will be stuck paying the hospital until his own

dying day, though he adds, with a mischievous glint in his eye, " They

will never get the whole amount. I am not gonna live that long. "

Mr. White isn't alone in his predicament. Many hospitals besides Yale-

New Haven have adopted aggressive collection practices aimed at their

uninsured and underinsured patients as they seek extra income to stay

afloat. Collection dollars are one of the ways hospitals are

compensating for the squeeze on HMO and government reimbursements and

countering their losses from caring for the uninsured.

Recently patient advocates from Connecticut to California have begun

to criticize the way hospitals pursue patients who owe them money. As

part of a national campaign by the Service Employees International

Union, the New England health-care local has been researching Yale-

New Haven's collection practices. Grace Rollins spent months looking

up court cases the hospital has brought and interviewing some of the

patients involved. Some of these people " are living hand to mouth, "

Ms. Rollins says. " These debts are literally crippling them. "

Indeed, medical bills are now the second biggest cause of personal

bankruptcies, according to a study by Warren, who heads

Harvard University's Consumer Bankruptcy Project. Along with the

astronomical cost of even routine hospital procedures, she blames

hospitals' aggressive collection tactics.

The patients who suffer the most aren't necessarily indigent. The

very poor can get Medicaid, the government health plan that pays

hospital tabs for those who qualify, while most middle-class families

have health coverage that picks up the bulk of their medical bills.

It is working-class families like the Whites, with some assets but no

insurance coverage, who are penalized the most by the system.

Yale-New Haven, the primary teaching hospital for Yale University's

medical school, defends its collection practices. The hospital, whose

board includes the university's president and the medical school's

dean, says prudent business practices mean that the hospital must at

least try to get back money for care rendered. " I can attest

vehemently to the ethics, the goodwill, and the intent of this

organization, " says Marna Borgstrom, Yale-New Haven's chief operating

officer.

Mr. White seems more resigned to his fate than resentful. Leaning

back on his mattress, his skinny limbs covered by a worn blanket, he

points to desk drawers stuffed with stacks of canceled checks. Many

are made out to Yale-New Haven Hospital, tangible proof, he says, of

how month after month he faithfully attempted to repay the

institution for its care.

Over the years, Mr. White has paid Yale $16,000 -- close to the

amount the hospital originally billed for his wife's stays. But

interest on the bill now exceeds $33,000. Indeed, between the

principal Mr. White has paid off, the principal that remains to be

paid, and the interest and fees owed to the hospital's attorneys and

others, the total bill for Mrs. White's treatment has ballooned to

around $55,000. The hospital confirms that Mr. White still owes

$39,000. " I accept it. That's the way it is, " Mr. White says with a

shrug. " How are you gonna fight them? "

But E. Brown, a professor at the UCLA School of Public Health

who studies the uninsured, argues that a hospital's tax-exempt status

should require it to steer clear of hard-nosed tactics, including

lawsuits, wage garnishing, liens and unrelenting claims for

payment. " If we are going to give them that status, " Professor Brown

says of hospitals, including Yale-New Haven, " they should be

responsible for fulfilling the intent. The intent is to create a

community benefit, a public good, and not simply act like a for-

profit hospital but with a taxpayer subsidy. "

Mr. White, who married Jeanette in 1946, says the two struggled from

the beginning to make a life for themselves and their four sons. They

bought a house on Seaview Avenue in the 1960s. Mrs. White worked part

time as a cleaning woman and Mr. White worked as a spotter, or stain

remover, for a dry-cleaning shop in Westport, Conn., a suburb on New

York's Long Island Sound. The occasional movie star would wander in,

he recalls, including Westport's most famous resident, Newman,

whom he laughingly describes as " that short, blue-eyed guy. "

Then, in 1982, Mrs. White was diagnosed with throat cancer and

admitted to Yale-New Haven, first in March and again in May. In

return for her care, she signed a note agreeing to pay the

hospital " regular charges " and late fees. A couple of months later,

her husband signed a similar note agreeing to guarantee payment.

Doctors thought they had removed all of his wife's cancer, Mr. White

says. Still, a pall descended on the Whites' house. The couple's son,

, who lives with his father and helps take care of him,

recalls that his parents' friends all seemed to vanish after his mom

had her voice box removed. " She couldn't talk, and everyone stopped

coming, " he says.

The hospital says it held frequent discussions with the Whites over

how its bill would be paid. Early on, Mrs. White applied for Medicaid

but was turned down. She offered to pay $25 a month, but the hospital

considered that unacceptable. In August 1982, Yale-New Haven's

lawyer, ph Tobin, was brought in, and several months later he got

a court order for a lien on the Whites' house, guaranteeing that the

hospital's debt would be repaid in the event of any sale.

Numerous motions were filed with the court in late 1982 and early

1983, culminating the following May in a summary judgment and an

order for payment that included the original debt, Mr. Tobin's $2,811

in legal fees, $192 in court costs and $153 in late charges, for a

total of nearly $22,000. The judge then signed off on a payment

schedule of $5 a week.

In 1993, Mrs. White succumbed to her cancer, but her husband

continued to send the hospital checks. In January 1996, hospital

lawyers sought a higher monthly payment, and a judge agreed, tripling

the amount Mr. White had to pay to $15 a week.

That same year, the attorneys upped the ante again, moving to seize

Mr. White's savings to pay down his debt. He responded that he had

been making regular installment payments and that the funds the

hospital sought amounted to his entire savings. He also pointed out

that some of the money came from Social Security payments deposited

directly to his bank account but protected by law from seizure by

creditors. As a result, the court agreed to allow Mr. White to keep

$5,416.87 and let attorneys for Yale-New Haven seize $9,627.49.

Even after Mr. White retired from his job at the dry cleaner's, he

continued to make payments on his wife's bill. But last year, he

became seriously ill himself, suffering from heart and kidney

conditions. Though his niece and his son were supposed to pay his

bills while he was hospitalized at St. 's Medical Hospital in

Bridgeport, Conn., his son concedes that he missed some hospital

installments. (Yale-New Haven says that Mr. White has missed 17

payments over the past 20 years, the bulk of them in 2002.)

The hospital's attorneys quickly went back to court, seeking to seize

whatever was left in Mr. White's bank account. A June 25, 2002,

letter from the hospital's attorneys to the state marshal offers

crisp instructions on what to do: " Go immediately to the main branch

of the below named bank and make demand on the defendant's checking

and/or savings account. " The letter adds that, " in addition to the

judgment debt, bank fees, and your service fees, you are hereby

instructed to collect legal interest at a rate of 10% from the date

of judgment on the unpaid principal. Collect interest in the amount

of $32,119.37 from May 17, 1982, to June 25, 2002. " When the $491 in

Mr. White's account turned out to be Social Security money, however,

the hospital halted its effort.

At Yale-New Haven, Ms. Borgstrom defends the hospital's approach. " In

this business you deal with a lot of sad stories, " she says. " The

reality is they came to the hospital, they were given service and to

the best I know it was the very best service. " A senior hospital

official adds that hospital policy is to try to work out payment

arrangements with patients before resorting to collection actions.

Officials also stress that the hospital doesn't charge interest when

it bills patients directly.

But lawyers retained by the hospital to collect debts are permitted

to charge interest under Connecticut law. The law firm that has

pursued Mr. White these many years is Yale-New Haven's most highly

paid outside consultant, Tobin & Melien, which received more than $2

million from the hospital in 2000, according to Internal Revenue

Service filings. (The firm declined to comment on its role, referring

questions about collection practices to the hospital's public-

relations office. A hospital spokesman, Mark D', verified the

history of the hospital's debt-collection efforts and the sums

involved, as did Ms. Borgstrom.)

Yale-New Haven has operated in the black in recent years, says Ms.

Borgstrom, but margins are " very thin. " In 2002, the hospital had to

deal with $52 million in bad debt and uncompensated care.

" Are there areas where a mistake has been made? Undoubtedly, " Ms.

Borgstrom says. In Mr. White's case, the hospital might even be

willing to forego interest payments, she says. " I read his file; he

is not a wealthy man. "

But Ms. Borgstrom denies that Mr. White's case indicates a need to

rethink the hospital's debt-collection methods. " You would not be

surprised I am sure to know there are a lot of people who have

perhaps many more means than this individual who go to great lengths

to avoid obligations, " she says. She adds that the hospital is

mindful of its responsibilities to the poor and indigent of New

Haven. " We live as a mission-driven organization. "

Kane, a professor of health finances at Harvard University, is

skeptical. " There is always tension, of course, between charitable

mission and bottom line, " she says, " but to pursue these people the

way they are pursuing them is highly uncharitable. "

The hospital's practices are indeed legal, says Looney, the

state senate majority leader whose district includes New Haven, but

he suggests that legislation could change that. Noting that " no one

incurs a hospital bill by choice, " he argues that debt-collection

laws should be amended to make hospital charges " a special area of

debt. " After all, he says, " it is very different from people who

purchase a car and then default on that obligation. "

Another issue is Yale-New-Haven's receipt of $2.5 million in federal

funds for construction projects from the 1950s to the 1970s under the

Hill-Burton Act. In return for such funding, hospitals were supposed

to perform public service and provide either free or subsidized care

to patients who couldn't afford to pay. UCLA's Prof. Brown suggests

that Yale-New Haven had a responsibility under Hill-Burton to help

the Whites.

Ms. Borgstrom says no, because Yale-New Haven long ago met its

obligation to provide $12.8 million in free care. In addition, she

says, to be eligible under Hill-Burton rules, a family's income

wasn't supposed to exceed 185% of the poverty level, and the Whites

were $4,000 over the limit.

But Prof. Brown responds that while the hospital may have met the

letter of the law, it appears to have ignored its larger intent: " The

obligation is about more than specific dollars, " he says. " It is an

orientation to helping people in the community, and this was a man

who clearly needed help. "

In California, Tenet Healthcare Corp., a for-profit hospital system

based in Santa Barbara, was recently targeted by a group of Hispanic

patients who alleged they were the victims of overly aggressive

billing and collection efforts. In a sharp turnaround, Tenet unveiled

a " Compact With Uninsured Patients " in late January, announcing that

it would change the way it bills and collects money from the poor.

In the wake of the Tenet scandals, says Jan Emerson, the spokeswoman

for the California Healthcare Association, " We as an industry need to

take ownership and need to put some restrictions on ourselves. " The

association supports legislative measures that would

place " restrictions on hospital collection processes, " she says,

adding, " No one's goal is to drive the uninsured into bankruptcy or

to have their house taken. "

These days, Mr. White spends his days watching TV in the cramped

bedroom he used to share with his wife. His son, who works as a

mechanic nearby, says he does his best to care for his dad, but the

two are clearly having trouble coping. Mr. White, though 6 feet tall,

weighs barely 135 pounds.

What would he do with the money the hospital has taken over the

years, he is asked. Mr. White flashes a wistful smile. He says he has

never traveled farther than Canada, but if he had some of that money

back, he would muster the energy to travel to Paris.

His son confirms that he has often heard his dad speak of his longing

to visit France. " He will probably never get there, " he says sadly.