- Rose Shaffer is a homecare nurse and grandmother of seven
who lives on Chicago's south side. Though she spends all day caring for
the health of others, her job doesn't provide her with health insurance.
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- Advocate is one of the largest chains of hospitals in
Illinois, with 10 hospitals in the Cook County area and profits of $108
million in 2001.
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- But Shaffer Ð and millions like her around the country
Ð are actually subsidizing Advocate and other major hospitals, according
to a report recently released by the Service Employees International Union
(SEIU). That's because the approximately 41.2 million Americans who don't
have health insurance today not only have to pay astronomically high healthcare
bills out of their own pockets, but they actually pay around 50 to 70 percent
more than insurance companies do for health coverage.
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- When an insurance carrier foots a hospital bill, the
company "negotiates" a price with the hospital that is usually
about half the original billing price. Yet when an individual without insurance
is forced to pay for healthcare, they don't have this bargaining power.
So they end up paying the "full" rates, making up the slack for
the deals the insurance companies have gotten (as well as the uninsured
individuals who never pay their bills).
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- "If you look at it from the insurance company's
perspective, they are a big group who can make a deal with the hospital,"
said Marianne McMullen, communications director of the Service Employees
International Union (SEIU) Hospital Accountability Project, a relatively
new initiative aimed at linking workers' and patients' rights. "But
from the perspective of the uninsured, it's really gross. The hospitals
are making their biggest profit off them."
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- The full rates uninsured people end up paying are usually
vastly inflated from the actual cost of providing service. For the past
20 years healthcare bills have risen at twice the inflation rate. In 1993
the U.S. General Accounting Office reported that 99 percent of hospital
bills have overcharges, which can include "phantom charges" for
services that weren't actually given, markups, duplicate billings and charges
for unnecessarily long hospital stays or unneeded services.
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- Hospital administrators argue that many uninsured individuals
never pay their bills, so hospitals have to keep costs high to avoid losing
money. But that doesn't make it any easier for those who do pay. And most
hospitals don't just write off the unpaid bills. It is common practice
for hospitals to sue patients for tens of thousands of dollars, money they
often just don't have. After Shaffer had a major heart attack in October
2000, she couldn't pay the bills. She noted that even though she told her
doctors she didn't have insurance, she was never given available financial
aid forms to fill out for her treatment.
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- So Advocate South Suburban Hospital where she was treated
sued her for the amount of her bill Ð $17,760. Never mind that if Shaffer
had had health insurance, the company would only have been billed about
$8,500. Shaffer said she could have handled the $8,500. But coming up with
over $17,000 was impossible. So she put her house in foreclosure and declared
bankruptcy. Meanwhile the stress this has caused isn't helping her health
any.
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- "I'm grateful to the hospital for the care I received
Ð they saved my life," Shaffer said. "But now they are trying
to take it away from me again."
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- A study by the SEIU project found that at Advocate hospitals
in Cook County, Illinois, uninsured residents like Shaffer were charged
an average 139 percent more than the charge insurance companies ended up
paying for the same services. That equals out to $13,854 compared to $5,805
on average for inpatient services Ð funds an average uninsured person
can hardly spare. This amounted to a total gap of $58 million between charges
for the insured and uninsured at Advocate hospitals in 2001, the SEIU said.
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- McMullen said that while virtually all hospitals overcharge
the uninsured, Advocate is the current target of the overpricing campaign
because they have the area's highest average charges for uninsured people
and also because they are a non-profit, religiously affiliated chain which
is supposed to have the mission of helping the needy. Advocate is affiliated
with the Illinois Conference of the United Church of Christ and the Evangelical
Lutheran Church of America. In 2001, the SEIU report says, Advocate made
an $8,460 profit on the uninsured patients who paid their full bills.
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- "This just incredibly wrong," said Toure Muhammad,
communications director for the SEIU. "Advocate is a religiously sponsored
non-profit institution that is getting tax breaks that the community pays
for."
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- Advocate spokesman Ed Domansky said that Advocate's billing
practices are mandated by federal law, as are the billing structures of
all hospitals. He thinks the SEIU is singling out Advocate since they are
trying to unionize the hospitals, in what has turned into an extremely
contentious campaign.
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- "They're exploiting the uninsured with this study
and they're singling out Advocate because they want to unionize,"
he said. "It's pretty clear what this is about. It's just another
tactic they're using to mislead the public." He added that Advocate
has "one of the most generous charity care programs in the country."
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- The SEIU alleges that overcharging also allows non-profit
hospitals like Advocate to inflate the amount of charity care they provide
Ð Advocate claimed to provide $32.7 million in charity care in 2001,
but the SEIU pegged the true cost of the care at only $12.7 million.
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- Members of the SEIU project hope that by drawing attention
to Advocate's practices, hospitals around the country will be forced to
change their ways. Already, McMullen noted, two national for-profit hospital
chains Ð Columbia HCA and Tenet Ð have promised to stop charging
more to uninsured patients. In response, Domansky said, "Whatever
the SEIU has pressured Columbia HCA and Tenet into doing, they will find
that the federal government doesn't allow them to use that pricing structure."
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- Meanwhile between the tough job market and the rising
costs of coverage for employers, the number of uninsured in the country
is likely to keep rising. While the ranks of the uninsured include the
unemployed and homeless, the majority of uninsured people are employed,
working everything from service industry and blue collar jobs to professional
jobs with temporary agencies, small businesses or non-profit organizations.
Minorities are also more likely to lack health insurance, as are immigrants.
For example in Illinois 28.9 percent of Latinos and 22.8 percent of African-Americans
are uninsured, compared to 11 percent of whites.
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- In June the Hospital Accountability Project held a widely
attended Town Hall meeting in Chicago on the topic of overcharging, and
they have staged numerous protests outside Advocate hospitals as well as
advocating on the behalf of individual patients.
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- They hope a victory in ending or reducing the overcharging
of uninsured people will aid both low income people in general and health
care workers themselves Ð workers who ironically are themselves often
uninsured or underinsured. The Hospital Accountability Project also plans
to undertake other campaigns linking the rights of workers and patients,
noting that healthcare workers' rights are inextricably linked to patient
safety and vice versa.
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- Already the SEIU is on the verge of winning passage of
Illinois state legislation that requires hospitals to make public their
staffing levels, infection rates and other crucial data, which can both
help people choose what hospital to go to based on these indicators of
quality of care, and help unions fight against understaffing and other
workplace issues. Legislation that is similar, though not as comprehensive,
already exists in Wisconsin and California and is in the works in other
states.
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- "We're working on behalf of the patients, workers
and the community in which [the hospitals] operate," said McMullen.
"Unions usually just work on the behalf of employees, but here we're
working on behalf of the whole community. It's part of the new direction
unions have to go in."
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- http://www.alternet.org/story.html?StoryID=16466
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