The medical news website, Kaiser Health News ran an article about a rural hospital in Oklahoma suing its patients over unpaid bills. This is now an old, familiar story in health care. Hospitals, including nonprofit organizations, sometimes sue patients for delinquent medical debts. Obamacare was supposed to do away with medical debt but many people still have cost-sharing they cannot afford.
Suing poor patients doesn’t exactly make nonprofit hospitals look particularly benevolent and some have stopped the practice, including major hospital systems in Virginia and North Carolina. The debt collection cases are still going strong in McAlester, Oklahoma, however:
It took little more than an hour for Deborah Hackler to dispense with the tall stack of debt collection lawsuits that McAlester Regional Medical Center recently brought to small-claims court in this Oklahoma farm community.
Hackler, a lawyer who sues patients on behalf of the hospital, buzzed through 51 cases, all but a handful uncontested, as is often the case. She bantered with the judge as she secured nearly $40,000 in judgments, plus 10% in fees for herself, according to court records.
McAlester Regional Medical Center has filed nearly 5,000 debt collection lawsuits in the past 30 years. McAlester, Oklahoma is a rural town of 18,000 people on US-69 about 125 miles southeast of Oklahoma City. The city has far more large employers than most rural towns. In addition to the Oklahoma state penitentiary, it has aerospace defense contractors. The following is from the City of McAlester website:
Home to the McAlester Army Ammunition Plant, Choctaw Defense, and Spirit AeroSystems, McAlester is a premier defense and aerospace community. Raytheon, General Dynamics, Textron, and Boeing utilize the McAlester workforce for its unique production specializations.
The City of McAlester’s economic base is better off than the vast majority of small rural towns and McAlester Regional is probably in better shape than most rural hospitals. Rural hospitals have a tough time staying afloat, yet communities need them. Rural hospitals are bleeding cash, while their poorer patients often don’t have the money to pay their bills or even their share of the bills. It’s a recipe for disaster.
The hospital, operated by a public trust under the city’s authority, faces its own struggles. Paint is peeling off the front portico, and weeds poke up through the parking lots. The hospital has operated in the red for years, according to independent audit reports available on the state auditor’s website.
The story of McAlester Regional Medical Center is a cautionary tale where there are no winners and a lot of losers.
Some of McAlester’s 18,000 residents have been taken to court multiple times. A deputy at the county jail and her adult son were each sued recently, court records show. New mothers said they compare stories of their legal run-ins with the medical center.
“There’s a lot that’s not right,” Sherry McKee, a dorm monitor at a tribal boarding school outside McAlester, said on the courthouse steps after the hearing. The hospital has sued her three times, most recently over a $3,375 bill for what she said out to be vertigo.
Some anecdotes involve people going to the emergency room for what turned out not to be emergencies, like gastritis or conditions better treated by a primary care provider. One woman even told an interviewer that she now avoids the hospital when her children need care. I wonder if that means she was using the ER for primary care? She should only consider taking her children to a hospital if they are in need of immediate medical attention.
Most people being sued for medical debts in McAlester (and elsewhere) don’t bother to show up and fight the charges. The judge noted that in cases where those being sued don’t show up to contest the case, he has no choice but to follow the letter of the law, even if he doesn’t like it.
This is a story that plays out in small towns all across America. Rural hospitals that operate in the red and try to stay afloat any way they can. This often means hospital emergency rooms that ambush patients at their weakest moments. Too many small town residents don’t have a primary care provider and seemingly use the hospital emergency room as their regular source of care. One uninsured man who went to the ER for gastritis and was later sued for $9,000, while a woman with vertigo owes $3,375. As I’ve said before, there is no easy fix for rural hospitals, and that includes some hospitals in rural areas that are less fortunate than McAlester’s.
Thanks for an excellent article!
It is worth noting that the states which expanded Medicaid after 2013 saw medical debt fall by 50%. ‘
It is also worth noting that countries that fund their hospitals with national taxes see very little medical debt, except for pharmaceuticals.
I realize that solutions go against the libertarian grain………..but in the case of rural hospitals, libertarianism is not working.
I have felt for years that emergency rooms should be treated like the fire department or police department….and funded with taxes, not this pathetic and sometimes tragic patient billing.
Making the ER like the fire dept is an interesting idea. It would need to include provisions to discourage people from using the ER like a free clinic, since that could inhibit the ER’s real mission. I could see the change being tied to nonprofit status or leave it the way it is if the hospital operates an outpatient clinic nearby (as a few public hospitals began to do to combat overuse of the ER). If I go to the ER with chest pains that turns out to be a heart attack the $2,000 price tag is a bargain. If I go to the ER with chest pains that are quickly identified as a panic attack of indigestion, that’s not worth more than a few hundred. I don’t know how you would differentiate that. But I also don’t know how ER’s became profit centers whereas they are big money losers back when I was a hospital accountant.
Bob wants more Government control over healthcare and he wants more Medicaid. Medicaid and Obamacare’s largest company is Centene from St. Louis which is now the 2nd largest insurance company in the world! Centene was the best stock on the S&P 500 in 2018. Obviously there is huge Money in Medicaid and Obamacare.
Bob’s problem is the Private Sector has the lowest price for Americans in 35 States with America’s oldest health insurance company. The cost for a 30-year-old couple + child in the 84101 zip code is $170/month with a small $5,000 deductible that pays 100%. Both the University of Utah and Utah State University are paying over $30,000 a year for employees with families with giant Monopoly Blue Cross!
These Utah schools are paying over $28,000 per employee per year more than the Free and Open Market. Allstate purchased TIME Insurance Company, America’s oldest insurance company out of Milwaukee, Wisconsin.
Medicaid won’t let dying children go to the MAYO Clinic or MD Anderson Cancer Hospital in Texas, which Chip Roy says is the best cancer hospital in the world. Of course with Allstate dying children may go to the best hospitals in the world.
Bob’s biggest problem, along with all 37 Blue Cross Monopolies, is that Allstate has the lowest prices for health insurance in 35 States for people under 65 and nobody will be able to compete with them for years because they have experience, expertise and Balls! Allstate is the “Only” insurance company in America with “Child Only” insurance other than those super expensive dangerous and deadly Obamacare companies that only have Hillary-style HMOs that pay nothing out of network. Put your beautiful wife or daughter on Obamacare you are rolling the dice and may have to bury your daughter because Obamacare won’t let her go to MD Anderson Cancer Hospital. Who would pay 3 TIMES more for Obamacare only to gamble with your sweet lovely wife’s precious life. Only a schmuck would pay twice as much to put his wife in DANGER with cancer.
Devon is an economist and he can tell you government price controls like Obamacare leads to prices 10 TIMES more than the MAGIC of free markets! It’s called the invisible hand Bob. You should try Capitalism and Free Markets instead of your deadly Socialism. Socialism is dying all around the world and Allstate is killing all 37 corrupt Blue Cross Monopolies here in the States. I would be selling that Anthem Blue Cross Stock and Centene stock, the biggest in Obamacare and Medicaid. Many 401ks are wrapped up in these dying companies. There is nothing Dr. Goodman can say to save Blue Cross and overpriced and dangerous Employer-Based Benefits which are 5 TIMES more expensive than overpriced Obamacare, it’s surreal! I say save premium, eliminate taxes, build wealth, become informed, and EMPOWERED. The BEST tax cut is NO taxes!
All we know for sure is ISU’s Brock Purdy and UI’s George Kittle are Iowa’s contributions to this year’s Super Bowl! I’m praying for Brock Purdy for MVP! ISU and the Niner Nation Know Brock Purdy gives all the credit to God. Amen.
I will be more specific with your Collierville, Oklahoma zip code of 74021. Bob hates that the Gold Standard is Allstate in the Free and Open Market is $5,540 per year for a 30-year-old couple + (2) children (10-year-old sons) with a $5,000 deductible then 100% coverage. That is $461/month and the MAYO Clinic, MD Anderson Cancer Hospital, and Cleveland Clinic are Member Hospitals. This family didn’t want these 2 sons and won’t have any additional children.
If this Mother works for the State of Oklahoma in Collierville she will have $983.14 deducted from her paycheck monthly for the Blue Cross HMO. If this family switches to Allstate they save $522 every month plus they can now use the best hospitals in the world instead of crappy Blue Cross hospitals. What Okie from Muskogee with 2 rug rats wouldn’t want to save $522/month or $6,265 every year?
Now the Oklahoma taxpayers are also paying through the nose to the Blue Cross Monopoly to the tune of $1,758/month or a whopping $21,096 annually per employee. So if the Oklahoma State employee saves $6,265/year and the Taxpayers save $21,096/year for a total savings of $27,361/year! The total Overpriced Blue Cross premium to the State of Oklahoma is $2,741/month or $32,892/year is deducted from the Federal Treasury at a cost of, Devon says 40%, or the Federal Treasury also saves $13,156/annually!
So if the Oklahoma State employee Mother switches off that Blue Cross HMO she saves $6,265/year + Oklahoma saves $21,096/year + Federal Government saves $13,156/year for a total savings of $40,517/annual savings per employee on an initial premium of just $32,892/year.
It’s almost not fair that Obamacare ran all of Allstate’s competition out of business so now I have the lowest price for health insurance for people under the age of 65 from sea to shining sea! I don’t think we will ever have a competitor because we are not the oldest health insurance company in America without reason! Nope, we have decades of experience and expertise and we have balls the size of Chinese weather balloons, Admit it, the so-called Affordable Care Act made health insurance premiums explode, HSAs turn high premiums and taxes into assets for employees,
Let me raise two points that come to mind about Ron’s comments:
1. His low-low rates are only available to “cherry” customers, i.e. those with no serious medical history.
Comparing the premiums on an underwritten policy like STM with a guaranteed issue policy like a state health plan is not always fruitful.
I am not saying that guaranteed issue is always right; just that the comparison must be careful. Obamacare made an honest attempt — not always successful –to combine guaranteed issue with subsidies and cost-sharing reductions — so that the inevitable guaranteed-issue premiums were not too crushing.
2. Many of the persons who are getting sued in McAlaster would not be able to handle a $5,000 deductible. Their financial position is for about a $500 deductible, if that.
Ron is just incorrect to say that the Private Sector has the lowest insurance rates in 35 states.
There are several million persons on ObamaCare who pay zero premiums. The policy that they get for zero premiums may have high out-of-pocket charges if they get seriously ill.
But so do some of the STM plans. I remember reading an STM actual policy that had dollar limits on certain surgeries, like $10,000 for childbirth. Maybe this drawback has been improved, I just do not know.
Bob, we are America’s oldest health insurance company and we have many choices for consumers. The plan that is the most purchased is a plan that pays to $1 million. But we also have a plan with co-pays that pays to $5 million. Of course this is non-HSA-Qualifying. Also, we have a plan that is the cheapest that only pays to $250,000 that I don’t inform clients about because the savings isn’t worth the added risk in my mind. Lifetime maximums are not that much more to enhance. Let’s face it, when someone gets cancer the 1st million is the problem for insurers.
We have no product that limits payments to $10,000.
Bob, it’s employer-based benefits that will soon die. In Iowa teachers in 300 school districts pay $700/month to $1,479/month to add a child to the Blue Cross Monopoly. Most children are healthy and low-cost STM is only $63/month for $10,000 deductible and $93/month for a $5,000 deductible. The $2,500 deductible is $136/month then 100% coverage.
An Iowa State employee single parent Mother pays $407/month to add a child to the Blue Cross PPO Monopoly. If she pays $93/month she saves $314/month and taxpayers save a whopping $1,854/month or $22,248/year. There is no way Dr. Goodman can scam the people much longer about the EVILS of Employer-Based Benefits!
It will take years for a competitor to arise because we have decades of experience and unmatched expertise. Employer-Based Benefits will soon die like dinosaurs and dodo birds!