Defending the uninsured


Pat Rooney’s new crusade 

Most people associate the debtor’s prison, a jail where people who couldn’t pay their debts were incarcerated, with costume dramas like Les Miserables and Great Expectations. But some hospital corporations have given the idea a new lease on life. The practice of “body attachment” — arresting patients for failure to pay their medical bills — is a tough tactic that drew the attention of J. Patrick Rooney, the former chairman and CEO of the Golden Rule Insurance Company. “I gasped,” says Rooney in describing his reaction to a story about body attachment that he encountered in a 2003 issue of the Wall Street Journal.

Rooney is one of the nation’s leading authorities on questions regarding health insurance and health care delivery systems. He is credited with inventing the medical savings account concept. In 1976, he led a successful fight against discrimination in insurance agent testing. Today, Rooney heads the Medical Savings Insurance Company and is founder of the Fairness Foundation.

Rooney has a longstanding philanthropic commitment to fighting discrimination. And the fact that people were being hammered because they couldn’t pay their medical bills offended his sense of decency. But things got worse when he looked more closely into the issue. What Rooney found was that hospitals generally charge the uninsured three times what they charge insured people for the same services.

“My interest in this subject is a values issue,” he explains. “It just offends me that the people that didn’t have enough money to buy insurance be charged three times what the people who have insurance are charged. From a moral standpoint it seems to me it’s wrong.”

Rooney points to the profits local hospitals are making by way of explaining his indignation. Clarian Hospital, for example, had profits of $132,709,138 in 2004 with cash and investments of $1.45 billion. Dan Evans, Clarian’s president and CEO, received $1,071,000 in total compensation that year. St. Vincent reported profits in 2005 of $86,498,143 with $500 million in cash and investments. The four hospitals in the Community system made a combined profit of $50 million in 2005.

Rooney has made helping people get out from under debt due to lack of health insurance a major focus of his Fairness Foundation. “We’ve done a lot of crusading on this and we’ve been very successful,” he says. “My opinion is that when [hospitals] are confronted with a well-informed patient that says it’s an unreasonable bill [the hospitals’] alternative is to sue them and I believe they don’t want to be in court on this issue when they’re charging three times as much.”

Rooney has found that hospitals have made a common practice of charging 3.5 times what Medicare will pay for services. While Rooney acknowledges that hospitals may need to charge more than Medicare will pay, he contends that authoritative research shows that Medicare plus 25 percent is the reasonable amount for hospitals to charge.

But hospitals are notorious for their lack of transparency when it comes to revealing what their costs actually are. “Dan Evans, the head of Clarian, testified before the Senate Finance Committee two or three weeks ago,” Rooney says. “He said [transparency] could be done but it’s so complicated it’s not worthwhile and we don’t want to do it.” But, Rooney adds, a health care system in Milwaukee, Wheaton Franciscan, has recently signed a contract in which it agrees to disclose what it will charge for 29 common hospital procedures.

The prevalent lack of transparency in hospitals, combined with the fact that people who are sick or injured are often unable to be their own best advocates, places patients in a particularly vulnerable position. Rooney also sees the higher prices being charged to the uninsured as a potential civil rights issue. “I am concerned about the minority people. I don’t want to see them screwed. Nationally, 35 percent of Hispanics are uninsured; 22 percent of African-Americans are uninsured; and 11 percent of non-Hispanic Caucasians are uninsured. So when you’re doubling, tripling, multiplying the price by five times, you’re doing it mainly to minority people,” Rooney says. “I consider that racial discrimination.”

In Maryland, what hospitals charge is now regulated by law. Rooney points out that Maryland’s Johns Hopkins Hospital is considered one of the nation’s best and manages to operate with a cost-to-charge ratio of 81 cents to the dollar. “They make a lot of money and they’re not gouging people,” he says. He would like to see the governor take the lead on the regulatory issue in Indiana.

In the meantime, Rooney also applauds investigations into the tax-exempt status of hospitals that have been launched by the state attorney generals in several neighboring states — Illinois, Wisconsin, Ohio and Minnesota. Referring to Wheaton Franciscan’s decision to reveal its pricing in Milwaukee, he says, “I’m sure the fact that the A.G. in Wisconsin has sharpened up her knife has everything to do with their deciding to give the price ahead of time.”

Rooney believes that people need tools to defend themselves. “They need to know how to deal with the hospital and the evidence is if they deal with the hospital correctly almost all the time the hospital will forgive the bill … The hospital is only entitled to collect a reasonable fee. There is case law exactly on this subject. When they enter the hospital, if they sign an unconditional commitment it’s generally not binding because they’re under duress.”

Rooney has made helping the uninsured a focus of the Fairness Foundation. The foundation has allied itself with lawyers willing to represent people in disputes over hospital bills and has set up a toll free number that people call for help: 800-742-3441. Rooney emphasizes that talking people through the process of dealing with hospitals requires patience, stamina and verbal skills. The Fairness Foundation, he says, is equipped to not only give people useful information but to talk them through what they need to do.

“A sick person is not in a position to adequately defend themselves,” Rooney says. “But that doesn’t mean they can’t be defended.”

Hoosiers and Healthcare

Hoosiers and people around the United States are paying more for health care than ever before. And these increases in health care premiums have left nearly one million Indiana residents without insurance, and several million more are underinsured or on the verge of losing coverage.

The face of the uninsured has changed. It includes mostly working families and larger numbers of the middle class. Being uninsured has a great impact on individuals, families, communities and the economic vitality of the state as people without health insurance often have poorer health status, which affects their ability to work.

Additionally, lack of health insurance is one of the leading causes of personal bankruptcy; uninsured patients often  delay care ultimately receiving costly emergency room treatment; and  safety net hospitals and clinics created to provide care for the indigent are struggling – as evidenced in the recent telethon held to raise funds for Wishard Hospital in Indianapolis.

According to a 2006 study by Indiana Family Social Services:

• 797,000 Indiana residents were without health insurance in 2005

• 604,000 additional persons were without insurance for part of the last two years

• 24 percent of Hispanics in Indiana are uninsured

• 19 percent of African-Americans in Indiana are uninsured

• 12 percent of Caucasians in Indiana are uninsured

• 22 percent of the uninsured in Indiana are children 18 and under

• 69 percent of the uninsured have at least one full-time worker at home

• 98 percent of businesses in Indiana are small businesses

• 55 percent of small businesses in Indiana do not offer health insurance

• 36 percent of the uninsured in Indiana have incomes above poverty level

Perhaps it is just a coincidence, but as millions of Hoosiers go with out health insurance or pay for insurance that fails to provide substantial savings or benefits, the healthcare industry and medical professionals continue to spend millions of dollars supporting political candidates who see no real urgency for health care reform.

In the past three elections, the campaign donations from those with a vested interest in the profits of health care have consistently been in the top five donors to political campaigns in Indiana, representing nearly one-third of all contributions. Republicans tend to have received more of these donations, however, it should be noted that Republicans were also in the majority for two of these three cycles.

—Laura McPhee