Investigative Classics is a weekly feature on noteworthy past examples of the reporting craft.
The nation’s roughly 3,000 tax-exempt hospitals have struck a simple deal with the government: They get to keep billions in tax breaks in exchange for pledging to help their communities.
But while the tax savings can be precisely measured, the value of their service is much harder to calculate. This conundrum has become a recurring issue for Yale New Haven Hospital, a wealthy, prestigious facility in a poor, cash-strapped city.
Politico reported last week:
While Yale New Haven may be a model for other teaching hospitals in extending its health care mission beyond its walls, some local political leaders, health care providers and even national critics say its community programs, while generously funded, don’t begin to offset the tens of millions of dollars in state, local and federal taxes that it would have paid on its annual profits of $460 million and its New Haven campus. … The hospital and its partners believe it’s doing a lot; critics insist it’s still too little. But there’s no federal rule or law that says what’s enough.
Yale New Haven Hospital presents an especially compelling case study for this issue because it has worked mightily during the last 15 years to repair its image and increase its community outreach. A 2003 story in the Wall Street Journal documenting how the hospital hounded and sometimes bankrupted people who could not pay their bills had created a firestorm of outrage. Local clergy called on hospital leaders to “repent.” Local unions posted a billboard with the word “SHAME.” Students at Yale Law School clinic sued the hospital.
Fifteen years later, Lucette Lagnado’s piece still packs a punch. Here the opening:
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. …
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.
