Compassionate care.

Byline: Tim Christie The Register-Guard

In the mid-1990s, PeaceHealth's charitable mission to provide health care to those in need, regardless of their ability to pay, was at odds with its increasingly hard-nosed reputation.

But in the past three years, the parent corporation of Sacred Heart Medical Center has become more compassionate when dealing with financially strapped patients and has made its charity policies more widely known, hospital officials and patient advocates say.

PeaceHealth has become "much more sensitive" to how it treats patients struggling to pay bills, Chief Financial Officer Skip Kriz said.

"In the past, our focus was more on the clinical side and less on the interpersonal, compassionate side," he said. "Our whole culture has moved much closer to the compassionate side of what we do."

Ellen Pinney, director of the Oregon Health Action Campaign, a statewide patient advocacy group, agrees that PeaceHealth is doing a better job than most Oregon hospitals of telling patients about its charity policies.

"Most hospitals don't advertise the availability of their financial assistance programs and understand that it's a tool for ensuring access in their communities," she said.

The changes at PeaceHealth come at a time when nonprofit hospitals are under fire nationally on a number of fronts.

Last February, Illinois tax officials revoked the tax-exempt status of Provena Covenant Medical Center, a Catholic hospital in Urbana, in part for its aggressive collection practices with needy patients. The hospital was ordered to pay $1.1 million in property taxes.

In Congress, Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, has launched an inquiry into the section of federal tax law that covers nonprofits, known as 501(c), and has begun by looking at nonprofit hospitals, which account for more than 40 percent of the taxes the federal government loses by granting such status, the Chronicle of Philanthropy reported.

In the courts, Mississippi lawyer Richard Scruggs has filed lawsuits against 27 hospitals in 15 states on behalf of people without health insurance. The suits allege that the hospitals charged patients without insurance or those with insufficient coverage far higher rates than insured patients, and then aggressively used collection agencies to force them to pay, according to news reports.

Kriz said those national stories have caught the attention of PeaceHealth officials.

"If someone looked at us in the same vein, what conclusion might they draw? Would they draw a conclusion that would cause us to modify the way we do business?' he said.

To understand how PeaceHealth does business today requires a look at how it did business in the past.

Based in Bellevue, Wash., PeaceHealth is a Catholic-sponsored nonprofit corporation that operates six hospitals in three Northwest states. Its stated mission is to "carry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way."

But in the mid-1990s, Sacred Heart, PeaceHealth's flagship hospital, was sometimes called "Sacred Wallet" for its aggressive pursuit of patients struggling to pay their bills, said Pinney, the patient advocate.

Court records show PeaceHealth didn't hesitate to sue patients who didn't pay their bills.

In 1995, PeaceHealth filed 33 civil lawsuits, most against individuals and married couples, seeking payment of hospital bills. In 1996, the corporation filed 25 lawsuits; in 1997, it filed 32.

In a 1999 case against a Cottage Grove couple, PeaceHealth won a default judgment - meaning the couple never showed up in court - for $9,561, with interest accruing at 18 percent per year, plus $2,531 in attorney fees.

In a 2002 case against a Creswell couple, PeaceHealth won a default judgment of $20,189, plus $5,047 in attorney fees.

After 1997, the number of lawsuits PeaceHealth filed declined precipitously: It filed 11 in 1998, 10 in 1999, seven in 2000, one in 2001, two in 2002 and three in 2003. So far this year, PeaceHealth has filed none.

Kriz said he's not sure why the number of lawsuits has declined. But he said PeaceHealth officials "have undertaken renewed fresh reflection" on the hospital's community obligations.

Concrete changes began about three years ago after PeaceHealth executives examined their billing and collection practices, and decided they needed to improve the way they talked to patients, explained their charity policies and provided financial counseling.

PeaceHealth created the position of director of patient financial services to oversee the new way of doing business. Kevin McAndrews was picked to fill the job.

McAndrews said his charge was to take "a hard look at this aspect of our business, with the intent of adding more dignity and respect to the process."

"We don't want to heal you physically and make you sick financially," he said.

When patients are unable to pay their bills, PeaceHealth financial counselors work to find out if they qualify for government assistance programs, such as the Oregon Health Plan or the Children's Health Insurance Program, and if not, whether they qualify for PeaceHealth's Bridge Assistance Program.

Bridge Assistance provides medical services at reduced or no charge when a patient does not have the means to pay and doesn't qualify for other programs. The service is offered on a sliding scale: PeaceHealth will forgive 100 percent of a hospital bill for someone who earns less than 150 percent of the federal poverty level.

PeaceHealth and other hospitals draw a distinction between charity and bad debt. Charity cases are unable to pay; bad debt cases have the ability to pay but refuse to do so. Hospital officials can err in either direction, Kriz said.

"If we provide charity care to someone who really does have the ability to pay, that is putting burden on all the rest of the patients who use Sacred Heart; that's not fair," he said.

"On the other hand, if we deny or hassle or undertake stringent collection efforts on someone who doesn't have the ability to pay, then we're not being true to our mission. Balancing the two ends of that continuum is a real difficult job."

PeaceHealth makes every effort to work with people struggling to pay their bills, McAndrews said. "Sending someone to a collection agency and having their credit ruined is an option of last resort."

This spring, PeaceHealth officials stepped up their effort to reach the uninsured before they ever arrived at the hospital. About 300 people showed up at a series of health fairs to find out whether they qualified for government health insurance programs or for the Bridge Assistance program.

McAndrews said PeaceHealth sponsored the health fairs because of its mission to "seek out misery and eliminate it," but also because it's more cost effective to get people in the system before they get sick. "It's expensive to process applications in a 911-type environment," he said. "The earlier the intervention, the lower cost to us."

Pinney, the patient advocate, said she was impressed that PeaceHealth reached out to the community with its health fairs.

"It was totally in their self-interest, but it was totally a good thing to do," she said. "The fact they did that is head and shoulders ahead of what any other hospital in Oregon has done."

In the fiscal year that ended June 30, about 4,000 people were enrolled in the Bridge Assistance program, up from 3,500 the year before, McAndrews said. Among the recipients was Deborah Glenn of Veneta, a foster parent who didn't have health insurance when she was brought at Sacred Heart in April 2003 in an ambulance.

Glenn was getting ready for church on Palm Sunday when she felt her chest tighten and a pain in her arm. At Sacred Heart, a cardiologist determined she had suffered a stress-induced heart attack. Her arteries were "pristine," and her cholesterol and blood pressure were low, but she been enduring stressful personal problems, including a divorce, for about two years.

She spent three days in the hospital, was given medication and sent home. Ten days later, she woke up in the middle of the night with another heart attack, and spent two more days at Sacred Heart.

She wound up with $17,000 in medical bills, including nearly $14,500 owed to Sacred Heart. Her only income was the stipend she got from the state as a foster parent for a special-needs child.

She had begun paying the bill, at $50 a month, when she received a letter on June 6 from a PeaceHealth financial counselor saying the hospital would "like to partner with you in resolving the balance so that it is a win-win situation for you and for the hospital."

Glenn filled out some financial forms to determine her eligibility for charity care and mailed them in. Later that summer, the counselor called her back and uttered the words that left Glenn dazed and weeping: "We have forgiven all your debt."

Glenn still gets emotional thinking about that day.

"It was huge," she said. "It was like this wonderful thing happened after a whole lot of bad things."

CAPTION(S):

Deborah Glenn of Veneta owed Sacred Heart Medical Center nearly $14,500 for cardiology and emergency room bills after two heart attacks she suffered in 2003. Her debt was forgiven through Bridge Assistance, a PeaceHealth program for those unable to pay. INSIDE Charity: Millions budgeted for needy / A9 "We don't want to heal you physically and make you sick financially." - KEVIN MCANDREWS, PEACEHEALTH DIRECTOR OF PATIENT FINANCIAL SERVICES