Catholic nonprofit hospitals – including Denver-based Catholic Health Initiatives – are increasing income while charging high prices to patients with no health insurance, according to a report by a Latino advocacy group.
The study, based on annual tax returns filed by CHI and six other large Catholic hospital systems, found net income doubled between 2003 and 2004.
At the same time, uninsured patients are being charged up to seven times as much as those covered by federal Medicare, according to the report.
The advocacy group that prepared the report, Calfornia- based Consejo de Latinos Unidos, is urging the Roman Catholic Church to intervene on behalf of the poor and uninsured.
“Rather than defending their congregation, the Catholic Church continues to let their nonprofit Catholic hospitals price-gouge,” said K.B. Forbes, the group’s executive director.
A spokesperson for the group representing Catholic health care providers said the uncertain nature of the U.S. health care system forces them to have plenty of reserves.
Forbes garnered national attention in 2003 by forcing Tenet Healthcare Corp., the nation’s second-largest hospital system, to discount uninsured patients’ bills and stop aggressive collection practices.
The nation’s seven largest Catholic hospital systems, which have amassed $20 billion in cash and investments, should follow Tenet, Forbes said.
The 611 Catholic hospitals, while part of the church’s ministry, are independently run, according to the Catholic Health Association of the United States, which represents 6,000 Catholic health care providers.
The church receives no payments from the hospitals, which treat one in six Americans each year, the association said.
“We operate our hospitals with the efficiency of a leading corporation and the compassion of the Catholic Church,” Sister Carol Keehan, the association president, said in a statement.
The nation’s “turbulent health care system” has forced Catholic hospitals to “maintain large financial reserves” to ensure operations, Keehan said.
The hospital industry is facing an ongoing congressional probe, launched in 2004, to determine whether a long-standing industry practice of charging “self- pay,” or uninsured, patients full retail price is discriminatory.
Health insurers and government programs, such as Medicaid and Medicare, pay only a fraction of published charges because they negotiate discounts.
Lacking such bargaining clout, consumers paying out of pocket are charged, on average, two to four times as much, said Gerard Anderson, director of the Johns Hopkins University Center for Hospital Finance and Management.
For example, Centura St. Anthony North in Denver charged Jorge Martinez $15,411 for a one- day hospital stay to repair a broken ankle in 2003, according to his bill. Medicare would have paid about $3,000 for the same procedure, according to federal fee schedules.
The hospital charged Jesus Marinelarena $3,905 for a three- hour hospital stay to treat stomach pain in 2004, according to his bill.
Catholic Health Initiatives, Centura’s parent, is one of 10 hospital systems the House Committee on Energy and Commerce has asked to provide more details on pricing, billing and collections.
In testimony before the committee in April, CHI chief executive Kevin Lofton said hospital billing was “well past complex.”
“An indirect and unintended consequence of these forces is that they have created hardship for uninsured patients,” Lofton said. “The system is clearly broken.”
CHI reported $5.9 billion in revenue during the first nine months of its 2005 fiscal year – a 5.6 percent increase over the same period last year.
In 2004, the hospital system increased revenues by 10.5 percent, earning $7.4 billion. Its net income was $617 million.
Investment income jumped to $203.4 million in 2005 from an $80 million loss in 2003.
Lofton made $1 million in 2003, according to the hospital system’s tax return.
Similarly, San Francisco- based Catholic Healthcare West, with nontaxable assets of $3 billion, made $249 million in tax-free profit in 2004.
In 2003, Catholic Healthcare West paid its president $1.45 million in compensation, according to its tax filing.
Amassing savings is a strategy of a financially responsible organization, said CHI chief financial officer Colleen Blye.
“We do need to be financial stewards, and we need to sustain ourselves for the long term,” she said.
Blye said CHI reinvests 70 percent to 85 percent of its earnings in new hospitals, clinics, medical equipment and staff salaries.
Catholic Health Initiatives implemented a discount program for uninsured patients in 2002, Blye said.
The program, for the system’s 69 hospitals in 19 states, covers patients with incomes up to 400 percent of the federal poverty level, or $28,000 for an individual and $78,000 for a family of four, Blye said.
She said CHI does not track how many patients have been given discounts or how much CHI has spent on the program.
Critics say hospitals rarely advertise such programs.
“What I see is a don’t-ask- don’t-tell sort of policy,” said Johns Hopkins’ Anderson.
Staff writer Marsha Austin can be reached at 303-820-1242 or maustin@denverpost.com.
