|
Written
Statement
of
Kevin E. Lofton, FACHE
President and Chief Executive Officer
Catholic Health Initiatives
Before the
Subcommittee on Oversight and Investigations
Committee on Energy and Commerce
U.S. House of Representatives
June 24, 2004
Chairman Greenwood and members of the Subcommittee, thank you.
My name is Kevin Lofton.I
am the President and Chief Executive Officer of Catholic Health Initiatives.Thank you for inviting us to join you today to discuss how we may all
work together to achieve quality health care services AND fair, efficient and
compassionate health care financing for all Americans, particularly persons who
are poor,uninsured and
underinsured.
Catholic
Health Initiatives hospitals take care of patients in need, regardless of
ability to pay.Providing charity
and discounted care to persons who are poor, uninsured and underinsured is core
to our mission.In that regard, we
appreciate the opportunity to respond to the Subcommittee's invitation to
testify on the subject of hospital billing and collection practices.I am proud of our policies and practices, and am pleased to
provide you with an update on our improved billing and collections procedures.Further, we appreciate the assistance of these valuable hearings and the
increased guidance from the Department of Health and Human Services (HHS).
Improved
billing and collection practices - while important - will not substitute for
the long-overdue structural reforms in health care delivery and financing.Catholic Health Initiatives is a strong advocate for universal health
care coverage, and urges the Congress to consider meaningful expansion of health
care coverage to all Americans.
That view is not only
the view of Catholic Health Initiatives; it is my view as well.
I have committed my entire professional career to working with public, inner
city and faith-based health care organizations, all of which have been dedicated
to serving the needs of poor, uninsured and underinsured persons.I joined
Catholic Health Initiatives in 1998 as a Group President and was later promoted
to Chief Operating Officer and Executive Vice President. In August 2003, I was
appointed President and Chief Executive Officer.
Prior to joining Catholic Health Initiatives, I was Chief Executive
Officer of the University of Alabama Hospital in Birmingham, a 908-bed
university teaching hospital. I have also served as the Chief Executive Officer
of Howard University Hospital in Washington, D.C., and Chief Operating Officer
at the University Medical Center, the urban campus of the University of Florida
Health Science Center in Jacksonville, Florida.
I received a master of health administration degree from Georgia State
University in Atlanta and a bachelor of science degree in management from Boston
University.A copy of my curriculum
vitae is attached to this testimony.
Catholic Health Initiatives is a national non-profit corporation based in
Denver, Colorado.The CHI health
system, which is comprised of affiliated non-profit corporations located in 19
states, includes 68 hospitals, 44 long-term care, assisted and independent
living and residential facilities and five community-based health organizations
serving 68 rural and urban communities.CHI
hospitals, facilities and community health organizations are non-profit health
corporations in the states in which they operate and have fiduciary boards of
directors, although Catholic Health Initiatives has some approval rights over
these other non-profit entities.Collectively,
these health providers employ more than 67,000 dedicated men and women.All of us are bound together by a common mission and vision.
Catholic Health Initiatives was formed to advance and strengthen the
Catholic health ministry into the 21st century and is unique among health care
systems in the United States.During the last decade, religious sponsors of
Catholic health care ministries recognized that the changing health care
environment meant greater resources would be needed to develop programs,
structures and services in the next century.In early 1995, a group of visionary leaders in Catholic health care began
to explore ways to preserve and strengthen the health ministry for the future.They envisioned a national Catholic health care organization, sponsored
by multiple congregations of women religious and governed by a religious-lay
partnership whose mission was to transform health care delivery and create new
ministries to promote healthy communities.The result was the formation of Catholic Health Initiatives through the
consolidation of Catholic Health Corporation, Omaha, Nebraska; Franciscan Health
System, Aston, Pennsylvania; the Sisters of Charity Health Care Systems,
Cincinnati, Ohio; the Sisters of Charity of Nazareth Health System, Bardstown,
Kentucky; and the Sisters of St. Francis of the Immaculate Health of Mary,
Hankinson, North Dakota.
Catholic
Health Initiatives is committed to creating new models of health care, based on
collaborative relationships and partnerships with community groups, agencies and
other health care organizations.Since
1997, the Catholic Health Initiatives Mission
and Ministry Fund has awarded 123 grants, totaling more than
$11 million, to
improve the health of communities served by its facilities.Through this national healthy communities commitment,
hospitals and health services throughout the organization are developing unique
programs to address the root causes of serious social and health issues, such as
domestic violence and the inability to access basic health care services, so we
can create solutions for the long term.
In
our testimony, we hope to provide a better understanding of how the Catholic
Health Initiatives mission and vision motivates our deep commitment to charity
and discounted health care services to persons who are poor, uninsured and
underinsured; our resolve to proactively improve collections and billing for
patients; and our strong advocacy commitment to national health care reform.
Catholic
Health Initiatives: A Commitment to Charity and Discounted Health Care For the
Poor, the Uninsured and the Underinsured.
First
and foremost, Catholic Health Initiatives cares for and cares about poor,
uninsured and underinsured persons.Catholic
Health Initiatives has designed charity care standards to meet the needs
of the uninsured and the underinsured.This
has been the mission and tradition of Catholic Health Initiatives hospitals for
more than 100 years.As part of
this commitment to persons who are poor, alienated and underserved, Catholic
Health Initiatives uses financial resources to emphasize human dignity, social
justice and the promotion of healthy communities.Several examples of CHI's commitment to the poor and underserved
include: free clinics at many CHI hospitals; $24 million in direct community
investments, which are no- or low-cost loans to institutions or projects that
promote access to jobs, affordable housing, child care, education, environmental
protection andhealth care for
low-income and minority communities; and $11 million in Mission and Ministry
grants.
When
determining eligibility for charity and discounted health services, Catholic
Health Initiatives facilities have considered income, family size, available
assets and extenuating circumstances.CHI
facilities use the Department of Housing and Urban Development (HUD) income
guidelines because they are more inclusive than other poverty guidelines
and more accurately reflect the economic differences of the 68 urban and rural
communities in 19 states served by CHI hospitals and health care facilities.In 26 of those communities, a CHI hospital is the only hospital serving
that community.
In an effort
to be inclusive, CHI hospitals provide charity and discounted health care
services on a sliding scale.For
example, at St. Anthony Hospital in Denver, the community in which I live, a
family of four with an income of up to $74,000 would qualify for assistance.
With the
recent guidance from the Department of Health and Human Services, Catholic
Health Initiatives hospitals are revising their charity care policies.For example, the policies will now cover more people and will further
simplify the application process.If
a patient is unable or unwilling to provide financial information, but that
person has other evidence of indigence, such as a person who is homeless, he or
she will be covered by the charity care policy.
Catholic
Health Initiatives and its hospitals are responding to the needs of the poor and
underserved and the broader community in very direct ways.In fiscal year 2003, CHI's total measurable benefit for the poor and
the broader community was $644 million, which includes grants, free clinics,
mobile medical and dental vans and educational programs.That was 10.6 percent of our total revenues.
As part of
that, CHI hospitals provided $108 million in direct subsidization of charity
care.This is the estimated cost of
providing the care, not what was charged.Over
the last three years, Catholic Health Initiatives-sponsored hospitals provided
$1.9 billion in measurable benefits to improve the overall health of our
communities.
Let me give
you a few examples:
Good Samaritan
Hospital in Kearney, Nebraska, has lowered the rate of mortality from heart
disease by 34 percent in its rural Nebraska and Kansas communities through a
program to make advanced cardiac care available and accessible to the people in
these farming communities.Good
Samaritan staff members have driven more than a half million miles to outreach
sites since the program began.
St. Elizabeth
Health Services in Baker City, Oregon, is a critical access hospital in an
isolated, rural community in eastern Oregon.St. Elizabeth's provides prescription medications to persons who do not
have the means to purchase them. These medications help the recipients recover
more quickly from their illnesses, better manage chronic conditions and avoid
costly hospitalizations and interventions.
St. Joseph
Medical Center in Towson, Maryland, provides free or low-cost health care
services to underserved residents of the greater Baltimore community through a
mobile medical van staffed with bi-lingual health care providers.The van regularly stops at a soup kitchen, and the staff serves clients
who face homelessness, mental illness and drug addiction.
Our Lady of
the Way Hospital in Martin, Kentucky, handles more than 18,000 emergency
department and urgent care visits each year.Nearly 60 percent of the 42,000 people living in Floyd County have a
family income below 200 percent of the federal poverty level and nearly half of
the adults in the county have less than a high school education.The hospital's outreach program provides care for more than 25,000
people.To combat the county's
high teenage pregnancy rate, Our Lady of the Way Hospital initiated the RESPECT
Program for girls in grades six through eight.RESPECT is a nine-week program designed to build self-esteem, develop
career skills and encourage young teenage girls to postpone sexual activity.More than 400 girls have completed the program and there have been only
three teen pregnancies among program participants.
Finally,
Lakewood Health Center in Baudette, Minnesota, is a founding partner of
Communities Caring for Children, a program involving 13 counties in northwestern
Minnesota, that offers free care to pregnant women and children up to age five.The goals are to encourage healthy deliveries and to increase the number
of children who receive well-child exams and immunizations.
Catholic Health Initiatives: Proactively Improving
Billing and Collections
Chairman
Greenwood, I would like to commend you, the Subcommittee and staff for your
attention to this issue.It
prompted Catholic Health Initiatives to examine our own billing and collections
practices more closely, and to aggressively seek clarification and guidance from
the Department of Health and Human Services to ensure we are doing what is
right.As a result, Catholic Health
Initiatives is proactively reforming its own billing and collection policies.Let me be specific:
All Catholic
Health Initiatives hospitals have been asked to amend the contracts they hold
with third party collection agencies to include the following standards: neither
CHI hospitals nor their collection agencies will request bench or arrest
warrants; neither CHI hospitals nor their collection agencies will seek liens
that would require a sale or foreclosure of a primary residence; and no
collection agency may seek court action without hospital approval. Several
collection agencies refused to agree to these new standards and the hospitals
terminated their contracts.
As of June 30,
2004, we will require that collection agencies be trained on the Catholic Health
Initiatives Mission, Core Values and Standards of Conduct to make sure all
patients are treated with dignity and respect.Catholic Health Initiatives will continue to work with the
hospitals so that all patient financial services staff show respect for the
individual, regardless of the source of payment for care.
Improving
billing and collections - what
we charge and how we collect - are
important.Catholic Health
Initiatives is committed to fair, efficient and compassionate billing and
collection policies and practices.
To
be fair to the community, patients in a hospital have an obligation to pay if
they can or, if they cannot, to provide information so they can seek to be
qualified for government or charity programs.Hospitals have an obligation to seek payment so they can continue to
provide services to people in the community.
Some
of our patients qualify for charity care and discounts based on income levels,
but many others fall outside the charity care guidelines and cannot afford
adequate insurance.It is for those
uninsured and underinsured patients that we must do better as health care
providers, as policy makers and as a nation.
However,
the goal of providing fair and compassionate health care financial services
requires that healers, policy makers, administrators and regulators truly
understand the complexity of hospital pricing.
Catholic
Health Initiatives appreciates the guidance given by the federal government
regarding charges and discounting to better serve the community, including
people who are uninsured and underinsured.This guidance, provided by Secretary Tommy Thompson and HHS, allows
greater flexibility in discounting for individuals in the case of medical
indigency, and as a result, Catholic Health Initiatives hospitals are expanding
their definition of who qualifies for charity care.
We
have also been meeting with the Centers for Medicare and Medicaid Services to
discuss other improvements to the provision of services to the uninsured, such
as presumptive eligibility, so that people in any of several situations, such as
those living in subsidized housing or migrant farm workers living in transient
housing, are presumed to be eligible for charity care. I am convinced that these changes will bring some overdue rationality to
at least a small corner of the problems of the uninsured.
But
as CEO of Catholic Health Initiatives, I respectfully suggest that it is
impossible for any hospital to solve the complex issue of financing care for
persons who are uninsured and underinsured.We must address it as a country from the standpoint of day-to-day
regulatory and operating reality.
We
need to rationalize and simplify our payment systems.These systems are well-past complex and have evolved so that
list prices (charges) - which are used in the formula for Medicare
reimbursement, workers compensation plans and private insurance discounts -
may or may not have a relationship to the actual cost of providing services -
and also have nothing to do with what most hospitals are actually paid.An indirect and unintended consequence of these forces is that they have
created hardship for uninsured patients.The
system is clearly broken.
At
Catholic Health Initiatives, we believe that quality health care and fair,
efficient, compassionate billing and collection policies should not, and cannot,
be separated.
Information
about hospital charges may be useful in helping patients ask better questions.However, obtaining accurate charge information in advance is made
difficult by the many uncertainties involved in predicting the course of
treatment for any one individual.No
two patients, diseases or injuries are alike.
Average
charge information may be useful for a simple procedure-such as an x-ray-or
for diagnoses that are common and have a great deal of standardization-such as
the normal delivery of a baby.However,
the average charge would be misleading for patients when the diagnosis is
unclear-and so diagnostic tests are needed-or where there are greater ranges
of possible treatments.
Charges
will depend on the specific items and services ordered by the patient's
physician and on complicating diseases the patient may have such as diabetes or
hypertension.For example, in
Colorado where charges are publicly available, the average statewide charge for
hospitalization for simple pneumonia is about $6,000 for a patient without
complications and more than $31,000 for a patient with extreme complications.One might question if publishing the overall average charge of $12,000
for pneumonia provides any useful information to a patient.
In
the end, however, the bottom line for Catholic Health Initiatives is social
justice. All Americans should
have access to affordable care.The
number of uninsured persons continues to grow.St. Anthony Hospital in Denver has seen the number of self-pay patients
(who are typically uninsured) in the emergency department grow from 21 percent
to 33 percent in two years.
Catholic
Health Initiatives can provide charity care and discounted services and improve
patient financial services.Yet,
the biggest problem remains unsolved: too many uninsured people, too many
persons without access to health care in an appropriate setting.Again, the system is broken.
The
solution is universal health care coverage.
Catholic
Health Initiatives: Strong Advocacy Commitment to National Health Care
Reform.
While
incremental change that benefits patients is good.it is not the solution.
Catholic Health Initiatives
believes all Americans should have health care coverage.All Americans should have access to quality health care services: the
right care, at the right time, at the right place.
Uninsured
Americans are up to three times more likely to have poor health outcomes.Studies show nearly 40 percent of uninsured adults skipped a recommended
medical test and 20 percent say they have needed but have not gotten care
because they did not have insurance.The
Institute of Medicine recommends that the problems caused by uninsurance in the
United States require a national and coherent strategy aimed at covering the
entire population.
Further,
as a matter of social justice, it is important that all people have access to
routine, consistent primary care in accessible settings that will be less
costly.Many persons without
insurance come to the hospital through the emergency department.Often, an uninsured person does not have a primary care physician and as
a result will have had no routine or preventive care.The emergency department does not have the medical background or history
and physical from a primary care physician that an insured patient with access
to primary care will have.More
clinical and diagnostic tests are needed, and they must be done in this more
expensive setting.
In
addition, a patient without access to a primary care physician is more likely to
have chronic diseases that have been untreated-diseases like diabetes and
hypertension.The Institute of
Medicine has found that people without health insurance have diminished health,
poorer outcomes and are less likely to get preventive services or the care they
need for chronic conditions.Simply
put, patients least able and least likely to pay may be among the most expensive
to treat.
Catholic
Health Initiatives wants to work with Congress and other policy makers to
achieve comprehensive reform.And,
if coverage for all cannot be immediately achieved due to current budget and
political constraints, we should adopt a phased-in plan that begins with
coverage of the most vulnerable members of our society, including women and
children.
We encourage
Congress to start by enacting legislation that: removes the prohibition on legal
immigrant children and pregnant women receiving Medicaid/SCHIP coverage during
their first five years in this country; expands Medicaid/SCHIP programs to cover
additional uninsured children from low-income families; and provides Medicaid/SCHIP
coverage for family members of children covered by these programs.
Mr. Chairman,
we pledge our cooperation.Thank
you.
|
