 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Witness Testimony
Mr. Trevor Fetter
A Review of Hospital Billing and Collection Practices WRITTEN TESTIMONY OF TREVOR FETTER Thank you, Mr. Chairman. I appreciate this opportunity to address the Subcommittee. My name is Trevor Fetter. Last September, I was named Chief Executive Officer of Tenet Healthcare Corporation. Prior to that, I had served as President of Tenet since November 2002. I have spent nearly nine years as an executive in the health care field. Tenet is America's second largest investor-owned hospital company. Last year, we treated more than 9.5 million patients at our 99 hospitals in 14 states across the nation. We employ more than 100,000 people in our hospitals. Tenet's largest regions are in California, Texas and Florida. We also operate hospitals in Alabama, Georgia, Louisiana, Massachusetts, Mississippi, Missouri, Nebraska, North and South Carolina, Pennsylvania and Tennessee. This has been a challenging time for our company. Last year we reported a net loss of $1.4 billion. Tenet's challenges have galvanized our board of directors, our new management and our employees to make our company a model partner with federal and state payors and regulatory agencies. In the past 18 months, we have made enormous progress in the areas of compliance, quality and transparency, but all of us know that we have to regain the full trust of the government, our patients and our physicians if Tenet is to succeed in its mission. The specific subject you have asked me to address is the growing challenge of providing health care to uninsured and under-insured Americans, and it has two parts. The first requires all of us to recognize that individuals without insurance are not represented by large payors and therefore do not benefit from negotiated pricing. The second part is the limited ability that these patients have to pay for health care, regardless of the price. Tenet has taken action we believe is appropriate on both fronts, but our company - and our hospitals - cannot solve this problem alone. Every one of us at Tenet is very familiar with the growing uninsured crisis in our country. We deal with it every single day, and the burden is rapidly increasing. Tenet, like most hospital operators, has always provided charity care to truly indigent patients with no ability to pay. But in recent years, we have been forced to absorb the sharply rising cost of treating uninsured patients who are not indigent but for a variety of reasons can't or won't pay for the care we provide. I think it's important to note that the uninsured crisis is definitely not confined just to the unemployed and the indigent. In some of our markets, as many as a third of our uninsured patients have jobs, but no health care insurance. We estimate that the number of uninsured patients receiving care in Tenet hospitals has now risen to more than 500,000 per year. This has an enormous cost. So far this year, it has cost us about $100 million a month to provide care to patients where neither an insurance company nor the patient has paid us. About three-quarters of that total was from uninsured patients. In addition, Tenet provides $15 million per month in charity care to people who we believe can't afford to pay us anything. What's most alarming is how the uninsured totals have grown just recently. While our charity care increased 15 percent from 2002 to 2003, our write-offs from unpaid patient bills - the vast majority of them uninsured - rose by 49 percent. As hospitals continue to incur this significant and rapidly growing cost, their ability to invest in capital improvements, expanded services and new technology becomes limited. My greatest objective is to improve the quality of care provided by our hospitals. But my greatest concern is that the uninsured crisis may compromise our ability to do that. When I was named President of Tenet in November 2002, this company faced many difficult issues. Our new management team set out to address each one. Among the things we faced were some very vocal complaints that our hospital charges and collection practices were unfair to uninsured patients. I knew that Tenet alone could not fix the uninsured challenge. Only when the uninsured have insurance will we truly solve this problem. But I was determined to see what Tenet could do to ease the burden until more fundamental solutions are developed. In January 2003, we adopted our own approach to the uninsured crisis. We called it Tenet's Compact With Uninsured Patients. The Compact has radically changed many of the ways Tenet hospitals interact with uninsured patients, including a dramatic overhaul of some collection measures. The paramount goal of the Compact is to treat all Tenet patients fairly and with respect, regardless of their ability to pay. We start by giving our uninsured patients extensive financial counseling to help them access all state and federal programs, such as Medicaid, that may help pay for their health care. As part of this process, we also determine if the patient is indigent and therefore eligible for Tenet's charity care program. Under our Compact, we do not sue uninsured patients to collect unpaid bills if the patient is unemployed or lacks significant income. And we also do not impose liens on homes if they are a patient's only significant asset. These two changes in our collection practices have reduced by 90 percent our patient litigation and lien activity since 2002. One of the unique aspects of the Compact is our uninsured discount program. Every uninsured patient who does not qualify for charity care or government health coverage will be offered a substantial price discount similar to those negotiated by HMOs for their members. Although our uninsured patients have benefited from all other features of the Compact since January 2003, Tenet has not implemented the uninsured price discount until very recently. That's because we wanted to be sure our program complied with all federal and state laws. Earlier this year we concluded that Tenet's discount program is in compliance with all federal laws, but there are two states where we have had to take interim measures. By the end of July, the discount will be available in virtually all of our hospitals, except those in Texas and California. We are still awaiting resolution of regulatory issues in those two states. In the interim, we are significantly expanding our charity care policy there to include many more uninsured patients until our discount is available. As Congress continues its efforts to address this problem, I urge you to keep in mind that the most formidable challenge faced by uninsured patients - as well as their hospitals and other health care providers - is the lack of available and affordable health insurance. Tenet's Compact provides uninsured patients with meaningful price discounts and less onerous collection practices. But it is no substitute for health insurance. Even with the price discount offered by our Compact, uninsured patients still must pay their own bills. Not many Americans with health insurance would find it easy to pay their own medical bills, even if they were discounted to HMO-style rates. With our Compact, all of us at Tenet believe we're doing our part to help ease the burden of this crisis on the patients who need help the most. We welcome the opportunity to work collaboratively with Congress and others to find broader answers to this pressing challenge. I applaud the Subcommittee's leadership in evaluating the uninsured crisis and how our country can do a better job to address the health care of all Americans. I'd be happy to answer any questions the Subcommittee may have. # # # |
