FOR IMMEDIATE RELEASE
June 24, 2004
Contact: Josh Freed
(202) 225-4431

WASHINGTON, DC – U.S. Representative Diana DeGette (D-CO) released the following prepared statement for the Energy and Commerce Subcommittee on Oversight and Investigation hearing into hospital billing and collection practices:

Thank you, Mr. Chairman, for holding this important hearing on the hospital billing of the uninsured. I would also like to extend a welcome to Kevin Lofton, President and CEO of Catholic Health Initiatives of Denver, Colorado.
Each year, thousands of Americans without health insurance receive hospital care because of urgent or even emergency medical situations. Through no fault of their own, however, these patients are unable to pay their bills. This puts both hospitals and patients in a quandary.

The hospitals have spent money and manpower providing critical medical care, but have no way to recover its costs. The patients have incurred catastrophic debts — the amount could be $1,000, $10,000 or even $100,000 – and have no ability to get the amount of money necessary to pay off these bills in a proper period of time.

This problem stems from the inevitable collision of uninsured patients needing health care and hospitals needing to be paid for providing care. With anywhere from 43 to 81 million Americans going without insurance for at least part of the year, this is a burden that our health care system cannot continue to bear. As a result, both patients and hospitals are facing severe financial pressures.

There is no question that some hospitals took collection efforts too far. Everyone here is aware of the reports of body attachments and other dire financial penalties. The stories, frankly, are horrifying and we must look into steps to protect patients from overzealous bill collectors. This hearing, however, must keep the problem of hospital billing in context: too many Americans are unable to pay for health care because they do not have health insurance.

This Subcommittee’s investigation reinforces the reality that the entire health care system is extremely ill. Some hospitals seem to view uninsured patients as revenue enhancers. Studies uncovered that hospitals charge insured patients only 46 percent of the “rack rate” for services. This pricing reveals that it is essential that patients have an advocate in the discounting process. In the current system, the uninsured are the only ones who have no advocates.

Like any other type of debt collection, hospital billing and collection practices can have a devastating effect on patients without the means to pay. These patients, many still recovering from illness or surgery, may see their credit rating ruined and financial lives destroyed. As Professor Jacoby will describe, this could even mean denial of housing or employment. This can spiral into a vicious trap. How can these patients pay their hospital bills without new income? And if the patients have left the hospital still recovering from their illness, how easy is it for them to negotiate with the billing department?

Our second panel, comprised of hospital CEOs, will provide more information on this price system and the collection practices. They will also describe the steps that they are taking to improve their billing systems. I am looking forward to hearing the details of these hospitals discount plans for the uninsured, because up to this point, it has been unclear how robust these needed discount programs are.

The investigation of this Subcommittee has been extremely comprehensive and valuable. Examination of this problem has brought to light some specific examples of egregious billing practices. But I hope that these stories do not overshadow the fact that both patients and hospitals are caught in the same vicious cycle.

Hospitals cannot be expected to absorb all the costs of serving the growing number of uninsured and under-insured. What this country needs is a system under which everyone has access to and can pay for essential health care services, both emergency and preventive. Every American should have basic health insurance that is affordable. As this hearing will show, the financial burdens that our uninsured patients and our hospitals struggle with every day make this an issue that can no longer be delayed. It is critical to our economy and the health of our citizens.

It would be easy for this body to simply blame hospitals for over-aggressive bill collection. But would miss the larger point: too many Americans are unable to pay for health care services because they do not have health insurance. I hope that this hearing serves as the impetus for us to address this larger issue that is at the root of this problem.
 

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