Friday, December 19, 2014

When a company is run by droids

This column was originally to be focused on Uber, which allowed its shortage algorithm to increase the prices of taxis out of the Sydney central business district by four times during the recent hostage episode--and who, at first, responded to complaints by saying, "Well, we need to increase prices to encourage more drivers to enter that sector of the city."

This tin ear to public opinion got them in a heap of trouble, even though they later changed their tune and offered people free taxi service during the crisis.

But even that pales compared to Heartland Regional Medical Center in St. Joseph, Missouri.  Listen to this report from NPR and Pro Publica.  Excerpts:

Heartland, which is in the process of changing its name to Mosaic Life Care, seizes more money from patients than any other hospital in Missouri. From 2009 through 2013, the hospital's debt collection arm garnished the wages of about 6,000 people, according to a ProPublica analysis of state court data.

After the hospital wins a judgment against a former patient in court, it's entitled to take a hefty portion of the patient's paychecks going forward: 25 percent of after-tax pay. For patients who are the head of household, if they tell the hospital or court that information, the hospital can seize only 10 percent of each paycheck.

But Heartland, through the debt collection company Northwest Financial Services, often sues both adults in a household — garnishing one at the 10 percent rate and the other at the full 25 percent of their pay. The hospital also charges patients 9 percent interest, the maximum allowed under state law.

Bad enough?  Wait:
In 2006, the hospital sued the Heries and got a court judgment against them for the full bill plus legal fees — more than $18,000 in total. Ever since, the hospital has been taking 10 percent out of Keith Herie's paychecks.

To make some more money, Kathleen Herie got a low-wage retail job at Sam's Club. But then Heartland hospital began seizing 25 percent of her paychecks after taxes — meaning both she and her husband were now getting their pay docked at the maximum level allowed under state and federal law. On top of that, the hospital placed a lien against their home — which also prevents them from refinancing. According to a Heartland operations memo, this is done in all cases in which the company has won a judgment exceeding $1,000.

Enough? Look:

In 2010, Heartland sued Keith and Kathleen Herie again. Keith was experiencing chest pains, had tests done and ended up with new bills totaling upwards of $10,000. But this time, based on his income on his tax returns, the couple could have qualified to get their entire bill forgiven under the hospital's financial aid policy.

But they say nobody told them that. They didn't formally apply for aid. So the hospital charged them the full bill and garnished their wages again. Altogether, over the years, the couple has paid $19,779 through garnishments, according to court records. They still owe $25,739.

Want more?

The Heries' case highlights a key point: When a hospital garnishes patients' wages, it learns how much they make. But even if the patient is very low-income, Heartland doesn't consider that. Once you get sued, you no longer qualify for assistance. "The time to do that would have been back when you got the bill or when the bill initially went to collections," Wagner says. Hospital spokesperson Tracey Clark says charity care is reserved for patients who "seek it and legitimately work with us." Meanwhile, the hospital is seizing the wages of many patients who could qualify for free or reduced-cost care.

Last point:

Heartland is a non-profit hospital. It made $605 million in gross revenues last year, and $45 million of that was profit, an 8% margin in a business where 2-3% margins are the norm.


Norma Sandrock said...

From Facebook:

No words. I wonder whose pockets are lined by that 8% profit margin ripped from the people who can least afford it.

Beverly Heywood Rogers said...

From Facebook:

Maybe they are changing their name because "Heartland" is so easily changed to "Heartless" which seems to describe them to a T.

Rob said...

First point...they should be renamed "Heartless"

Second point...the 2-3% margin is the "norm", even in the face of mismanaged, high expense generating, overpaid administrators.

Final is no longer justified to allow these businesses to hide under the guise of "non-profit" would be much better (but not perfect) to have their Boards and bureaucrats answer to the SEC, IRS and the media, and to stockholders in regard to their reckless spending and bloated salaries and "heartless" behavior.

Nick Dawson ‏@nickdawson said...

From Twitter:

When I ran rev cycle for a large system, we never went after individuals personally. Seemed unethical.

Jeanne Apelseth ‏@SDSunchaser said...

From Twitter:

Makes me furious. Where does this greed and lack of compassion COME from? Heartless, indeed.

Anonymous said...

While their collection practices seem extreme, if they did not pursue debtors their other patients would have to make up at least part of the difference. They certainly do have a PR problem, though.

Mary Freer ‏@FreerMary said...

From Twitter:

It's a shocker! A health service that creates the conditions for ill health.

Bob said...

Name and shame.

How can you put these people in the category of "health care?" They are in the illness exploitation business.

From Vermont said...

Of all the items you have covered recently this is possibly the most disturbing.

I have been on the admin and business side of healthcare, mostly eldercare, for 24 years. Went into this work eventually becoming an elder care and planning/support provider and doing a lot of direct care myself. Not a path to riches, but meaningful work and I bet I had lots of clients like the Heries. Wish I had the resources to send them some $ for their HC bills. Where is the Board of Directors of this hospital? Wonder what they are directing CEO to do with his surplus?

Anonymous said...

Thank you for this. Certainly questions I will be highlighting to at least one local conglomerate. I had a "problem" doctor there, more of a personality issue that caused other problems. He is skilled but still makes mistakes because of attitude/ego. I've been gaslighted, lawyered, blacklisted, had the cops called on me (cops told them 'leave her alone', she's doing 'nothing wrong'). I've never threatened with a lawsuit but said this isn't the first time this has happened and you need to fix the problem. Not on our dimes though. They didn't. So now I pass it on. It is past time to get any company that is making more than $10 million a year to have non profit status removed. I could think of a number of other laws that could be put in too. Taming the beasts they have become would be good.