Friday, October 31, 2003

Yesterday's Wall Street Journal had a story (sorry, full story requires subscription)
about a little-known tactic that hospitals are using to collect overdue debt.

Throwing the patient in jail...

Late one night in June 2000, a police cruiser pulled up to Marlin Bushman's house on a quiet, tree-lined street. While Mr. Bushman's wife and son stood by, an officer handcuffed the burly truck driver and took him away to jail. The charge: missing a court hearing about a $579 hospital bill.

The story describes several patients who were arrested for not showing up for court appearances to resolve overdue bills, ranging from the $579 above to over $9,000 . The hospital administrators quoted in the story all defend the practice stating that they had exhausted all options:

........ just last month in Evansville, Ind., the not-for-profit Deaconess Hospital sought the arrest of a 22-year-old debtor, Jamie Ruston, who had missed two court hearings on a $5,664 debt related to gynecological surgery. Ms. Ruston, who works at a McDonald's, was briefly in custody before her mother arrived at the jail with the $500 needed to secure her release. "I cried the whole time," Ms. Ruston says.

Alan Shovers, a lawyer for Deaconess, says the hospital, which is affiliated with the United Church of Christ, made "innumerable efforts to get in touch" with Ms. Ruston to work out a payment plan or to see if she qualified for charity care. "In the range of 16 times, she has ignored us, ignored the hospital, ignored the court house," Mr. Shovers says. He defends the hospital's use of bench warrants -- as the proceeding is known in Indiana -- saying the hospital seeks them only when debtors have been repeatedly unresponsive. "Most people, whether rich or poor or whatever, can to some degree respond to the system -- and you have some people who go through life without responding," he says. "The question is, are we taking some unfair advantage, and I don't think we are."

While I feel that this is a drastic solution, I can agree with its' limited use. If you have someone who repeatedly shirks their responsibility to make good on their debt, it may take this to get them "scared straight":

Mr. Bushman was booked and fingerprinted at the Champaign jail. He posed for a mug shot, turned over his shoelaces and was escorted to a cell. A judge imposed bail of $2,500 -- with $250 payable up front. Mr. Bushman waited in a cell while his wife tried to come up with the money. He says he fell asleep on the concrete bench, using a roll of toilet paper as a pillow. Ms. Bushman borrowed the money from her mother-in-law, and Mr. Bushman was freed a short time later. Within three months, he paid Carle the balance of his debt, and the case was dismissed. (emphasis mine)

This was over a debt that was two years old. Another example is a man who had an unsuccessful suicide attempt in 1991:
In Champaign-Urbana, James Bean, the man who was treated at Carle hospital for a self-inflicted gunshot wound, says he has been pursued aggressively by a collections agent since 1995, when the hospital sued him over his $7,718 bill. In June 2001, Mr. Bean, who says he held a series of odd jobs during that period and couldn't afford a lawyer, missed a court hearing. He says he wasn't aware of the hearing. Carle's lawyer obtained a warrant for his arrest, and a few months later, Mr. Bean says, he heard about the warrant and turned himself in. Bail was set at $3,500, and he spent six hours in jail before his brother came up with the 10% required to release him.......Ms. Robbins, the Carle spokeswoman, says the hospital acted appropriately after Mr. Bean had failed for years to pay his debt. The suicide attempt was in 1991, and Carle unsuccessfully tried to collect for more than four years before filing suit. She says the hospital also encouraged Mr. Bean to apply for the state's insurance program for the poor, but that he didn't follow through.

In all of the examples give in the story, the people arrested were bailed out by family members several hours after being arrested. If you can go to mom, dad, Uncle Jed or Cousin It and get bail money, why can't you go to them for help with your medical bills? I think it is because that being in debt or declaring bankruptcy does not carry the stigma that it once did. When you have car dealers and others constantly flooding the airwaves with "no credit, no problem" , the consequences of not paying your bills are a nuisance at worst. It only becomes an issue when they "hit you where it hurts". None of those pictured in the article appear to be starving, or poorly dressed.
The story also has the "medicine is different" quote:

Patient advocates argue there is a fundamental difference between medical debt and other types of consumer debt. "If it is a car or a vacuum cleaner, they will simply repossess it. What do you want them to do? Give the heart valve back?" says Jane Perkins, an attorney at the National Health Law Program in North Carolina.

I cannot disagree more. Debt is debt. The patient is given a bill for a service that is rendered. The part that differs from other routine debt is that if you have past due car payments, or your car has been repossesed, the car dealer or lending company is under no obligation to loan you more money, or sell you another car. If money is owed to a hospital, and you show up with an emergency (as patients interviewed in this article did) they have to treat you.

Here at the Acme Surgical Corp., we are not trying to return to historical roots (Georgia being founded as a debtor's colony). We do turn people over to collections, but we also have a large number paying of their bills at amounts as low as five dollars a month. The theme of "rich hospitals picking on poor, defenseless patients" is played out, as the quotes from administrators take on a defensive tone.
Your comments, as always, are most welcome.
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