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Hospital Headlines Color Public Perception

 |  By John Commins  
   April 25, 2012

Because I am a healthcare nerd, one of my favorite pastimes each day is to examine the Around The Web Sectionof our HealthLeaders Media website.

Each morning, HealthLeaders editors awaken before you do and scour the mainstream media to provide links to the compelling healthcare-related stories of the day from across the country.

Because these stories are written mostly by newspapers for the general public, reading Around The Web provides healthcare insiders with insight into what issues are on the public radar. Oftentimes, we can spot trends in healthcare and the public's perception of the industry by reading seemingly unrelated stories from different parts of the nation. Sometimes the perception is good.

More often, unfortunately, it is not.      

Heavy-handed Debt Collectors
The most damaging media attention this week was leveled at Minneapolis-based Fairview Health Services, which has come under withering attack—including a front-page story in the New York Times—in the wake of a scathing report from the Minnesota Attorney General's office that raises troubling questions about aggressive and possibly illegal bill collection tactics instigated by a contractor.

In fairness to Fairview, the AG's report vented most of its spleen at Accretive Health, a Chicago-based debt collector that the health system had hired. 

"Accretive's debt-collection activity is rife with violations of Minnesota and federal laws," the AG's six-volume report stated. "Accretive has hidden its true identity from patients, aggressively and illegally attempted to collect debts from patients, improperly used patient health information to collect debts, and failed to follow basic laws regarding the registration and conduct of its collectors."

The problem for Fairview, which is otherwise a highly regarded nonprofit healthcare system, is that many in the public understandably will not make a distinction between a hospital and the debt collectors they hire. It is never good publicity for a hospital when activities within its walls are described by a state's top law enforcement officer using language more commonly associated check-cashing outfits and loan-sharking operations.

Accretive already was the subject of a lawsuit by the AG's office after an employee at the debt collection company lost a laptop computer containing unencrypted personal medical records for about 23,500 at Fairview and North Memorial Health Care. Again, the public probably won't make a distinction between Accretive and the hospitals that hired it to protect their medical records.

For now, Accretive isn't saying much. The company issued a brief media statement saying that it has "a great track record of helping hospitals enhance their quality of care."

Fairview issued a statement this week saying it "decided to end our revenue cycle work with Accretive Health.  This was a decision we made in the best interests of our patients and our organization."

The health system said it is committed to protecting the privacy rights of its patients and is evaluating the issues raised in the AG's report.

"We take the concerns raised by Minnesota Attorney General Lori Swanson very seriously. We have been in consultation with her on these issues for several months. We share many of her concerns and have already taken actions to address them. It is critical that our business practices align with our values and comply with applicable laws and industry standards," the statement read.

How Much Will It Cost? Depends on How Much You Can Pay.
The huge variance in hospitals charges for the same procedures is not a new story. However, it is a particularly damaging story these days because cash-strapped patients are angry and confused and looking for someone to explain why healthcare is so expensive. Also, the government is turning over every gurney to look for savings.

In this environment, reports that hospitals are charging anywhere from $1,500 to $180,000 to treat acute appendicitis will not be well received, nor should they.

"Given estimates that 60 percent of bankruptcies in the United States involve catastrophic medical expenses, these data should alarm those making decisions about our society's ability to obtain medical care without financial catastrophe," researchers wrote in a letter published online April 23 in the Archives of Internal Medicine. The report was picked up for general readership by HealthDay News and published in many mainstream media outlets, including U.S. News & World Report.

The issue of price variance is not going away. Healthcare costs are consistently outpacing inflation in the general economy. In virtually every area of commerce and services, except healthcare, consumers can get on the Internet and shop prices.

Yes, informed consumers could conclude that healthcare pricing is highly variable because healthcare is far more complex than buying a set of tires. However, it is more likely that most consumers will conclude that:

  • Hospitals charge as much as they can get away with charging;
  • Hospitals don't know what to charge, or how much their competitors charge, so they use a dartboard; or
  • Both. Neither of these options reflects well on hospitals.

Making Big Profits as Non-Profits
For the past few days, The Charlotte Observer and The News & Observer of Raleigh have done an in-depth and mostly unfavorable series of articles on nonprofit hospitals in North Carolina. The reports have concluded that the largely tax-exempt nonprofits do well to improve their bottom line, but provide very little in the way of charity care.

This is not the first time that the value of a nonprofit hospitals' tax exempt status has been challenged. Though the investigation is limited to the Tar Heel State, many of the findings could be applicable to nonprofit health systems and hospitals across the nation.

Once again, this should be a source of concern for hospitals at a time when consumers are angry about rising healthcare costs and politicians are looking for scapegoats.  

The Public Conclusion
Using these select few media reports, it would not be far-fetched for some in the general public to conclude that hospitals are money-driven leviathans that deny care to the neediest, and that hire strong-armed private contractors to cow delinquent patients into paying for bills of wildly varying amounts that are based on murky and perhaps non-existent pricing schemes.

Of course, that is not a fair conclusion. However, it's understandable in a nation weathering prolonged economic stagnation and high unemployment, and with about 51 million people lacking health insurance.

Unfortunately, in tough times such as these, the perception can drive the reality.   

Click to access the RSS feed to Around the Web.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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