by Marty Makary
I hear from hundreds of patients each year who have been harmed or ripped off by the medical system. But the hardships faced by a woman named Jennifer and other Carlsbad patients were unlike anything I’d ever heard. Will and I had traveled all this way to talk to patients like Jennifer, a mother of four young children, two of whom had special needs.
Before we flew to Carlsbad, Jennifer had explained her situation to me over the phone. Her three-week-old baby girl became sick and had to be rushed to Carlsbad Medical Center, the town’s only hospital. Even though Jennifer and her husband had health insurance, her deductible was high and they couldn’t afford to pay the hospital’s inflated medical bill. The hospital didn’t work with her or negotiate. Instead, the hospital sued her, won a judgment, and garnished her husband’s wages—meaning they took money from his paycheck without his permission.
Not long after, her five-year-old daughter came down with the flu. Again, Jennifer had to go to Carlsbad Medical Center, where they gave her little girl IV fluids and a nebulizer breathing treatment. The child improved, but the IV became infected. The infection turned into sepsis, a life-threatening condition in which an infection spreads through the blood to multiple organs.
Jennifer explained to me that the pediatrician documented in her daughter’s medical record that the hospital had caused the infection. Regardless, the family got stuck with a huge bill. Jennifer and her husband couldn’t afford to pay the $2,400 portion not covered by insurance. Again, the hospital didn’t work with the couple to help settle the bill—as medical facilities often do in these types of cases. Instead, the hospital sued them again. And they garnished Jennifer’s husband’s paycheck a second time.
On the phone before our trip, I had asked Jennifer if she knew anyone else who has been sued and had their paycheck garnished by the hospital. “Lots,” she said.
Examining online court records, it was clear Jennifer wasn’t the only person being sued by Carlsbad Medical Center. Hundreds of cases, maybe even thousands, were showing up on the local judicial docket. I told Will about Jennifer’s story and the court records. Intrigued and alarmed, Will and I went to Carlsbad to check it out.
When our plane landed in Carlsbad, the pilot opened our door and personally grabbed our bags out of the cargo bin. We walked right off the runway to the parking lot, where Betty awaited with a giant smile.
“Well, you guys must be Marty and Will!” she said with a friendliness reminiscent of a recent visit to Minnesota. On the drive, the three of us began a fun conversation about Carlsbad. She pointed out the Walmart and City Hall and we observed a string of homes and storefronts that looked like classic Americana. The town reminded me of my hometown in rural Pennsylvania.
“What are you fine young gentlemen doing here? Are you visiting the caverns?” Betty asked, referring to the famous Carlsbad Caverns National Park.
“We’re actually here to learn about the billing practices of Carlsbad Medical Center,” I told her.
Betty went silent. Her peppy mood disappeared. I asked what she knew about the subject.
She told us her own story about dealing with the hospital’s inflated bills and legal threats, even as a city employee with good insurance. She told me it’s so bad that the city encourages its workers to drive more than an hour to the hospital in Roswell, the next town over, to avoid Carlsbad Medical Center.
She talked our ears off for the 20-minute ride before dropping us off at our hotel. I reached into my pocket to pay for our ride—four bucks for the two of us. I found a $20 bill and told her to keep the change. She thanked us profusely.
As we were checking into our hotel, the receptionist asked if we were there to visit the caverns.
“No, we’re here to learn about the billing practices of the hospital,” I said.
The receptionist froze. She motioned us over to a corner of the reception counter and in hushed tones unloaded her own family’s story, pausing every few minutes to make sure we wouldn’t name her as a source. We agreed to keep it off the record.
Her daughter—I’ll call her Tina—worked as a housekeeper at Carlsbad Medical Center. One day, Tina developed an allergic reaction and went to the facility, where she received a steroid injection, a nebulizer treatment, and an IV. Tina was in the hospital for only a few hours but was billed thousands of dollars. From her description of her bill, it sounded as if she was charged about double what we would charge for the same service at Johns Hopkins. Tina was a single mom and worked a minimum wage job. She had health insurance, but the bill was below her deductible and much more than she could afford. She got sued—by the same hospital that employed her! The hospital won a judgment and garnished her wages—so her pay went from about $7.50 to $5.00 an hour to pay off the debt. The hotel receptionist said she had to watch her daughter’s kids so that she could take on a second retail job and, later, a third job as a waitress. Tina eventually stopped working at the hospital. When she switched jobs, her garnishment was transferred to her waitressing job.
Tina’s relationship with the hospital, which was both her employer and her debt collector, reminded me of the stories from my hometown in the northeastern coal country. In the 1800s, coal was king, yet the prosperous coal companies charged miners for their shovels. A miner could work months to pay off the cost of his shovel. If it broke, the miner would be charged for another at full retail price. All along, the miner ate food from the only company store near the mine. Company stores were known for high prices, since there was no competition in the remote mining areas. After a few months of hard labor, a miner might have no net income and instead owe money to the company for working there.
According to a Kaiser Family Foundation study, it’s common for Americans to go through hardships like Tina’s. The study found that 70% of them are cutting back on food, clothing, or other basic needs to pay medical bills.1 The study also found 58% have taken an extra job or worked more hours to pay a medical bill, and 41% have borrowed money from friends or family to pay a bill. It’s so bad that in a West Health Institute–University of Chicago nationwide study, more respondents feared the cost of treating a serious illness than feared becoming ill.2
Will and I had been in Carlsbad, New Mexico, for only two hours and already two people we randomly met had shared nightmare stories of the hospital going after them. We went to our rooms, threw our bags down, cleaned up a bit, and then embarked on a trip with Betty to the courthouse.
The Courthouse
Most courthouses aren’t hospitable, and the one in Carlsbad was no exception. After getting scolded by a security guard for not removing our belts, we went to the clerk’s office and faced an intimidating row of bank-teller-type windows with a woman behind one of them. She gave us a “What do you want?” look as she began to speak. The thick glass muted her voice. I tried to talk in sound bites though tiny air holes in the glass, explaining that we wanted to review any available court records of the hospital suing patients. Her confusion about what we wanted quickly turned to frustration. She finally hit a button that projected her voice through a loudspeaker.
“You’re here to do what again? Are you lawyers in a case?” she said with a stern look.
We introduced ourselves and explained that we were looking into Carlsbad Medical Center’s practice of suing its patients. Suddenly something clicked. She buzzed us through a nearby door. The hostile atmosphere dissolved. She warmly shook our hands.
“Gentlemen, nice to meet you. So you’re here to help people sued by Carlsbad hospital?”
We told her yes and politely explained how we wanted to find out how often the hospital sued its patients and garnished their wages. As I spoke, I noticed a handful of courthouse staffers sitting at their desks, eavesdropping.
The woman who let us in nodded. Another clerk mumbled “Oh, yes, thank you.” One by one, the five women who worked in the clerk’s office came to meet us.
“Carlsbad Medical Center is like 95% of the lawsuits here at the courthouse,” said the clerk who han
dled civil cases.
“They go after everyone: old people, disabled people, people who can’t pay, the insured, the uninsured, and they garnish their wages,” added another administrator, a pleasant middle-aged woman who walked over to join the conversation. “They even garnished an old man’s 401(k) retirement dividends.”
“They went after my relative and garnished her wages,” another court employee said.
A secretary for one of the judges came over. One of her family members was charged for simply going to the hospital, even though they never made it past the waiting room, leaving before getting any services.
The lady who buzzed us in the security door piled on another story. “We just had an old man here with one leg, in a wheelchair from a car accident. The insurance company paid the hospital about $300,000, but the hospital billed the man for another $300,000, and then went after him.”
Almost every employee had a financial horror story about Carlsbad Medical Center. Moreover, they all had stories of other community members that had been sued and had their wages garnished.
Will and I dug into the court records and found thousands of garnishment cases. The hospital had won nearly every one. We estimated that about one in five people in that small town had been sued by the local hospital and had their wages garnished. The hospital was holding Carlsbad’s citizens hostage to predatory billing practices.
I examined the copy of the medical bill from one lawsuit involving the medical center, but all the line items were blacked out. The charges and prices—so often inflated—had been redacted.
“Is that what the judge sees?” I asked the clerk. “Or can the judge see the line items that are blacked out here?”
“No, that’s exactly the bill the judge sees.”
“Well, how can the judge determine if the prices are appropriate?”
The clerk shrugged. “When the hospital alleges that a bill was not paid, it doesn’t have to explain. The judge has little choice but to allow the garnishment.”
The personal experiences of everyone we met in Carlsbad seemed consistent with what we saw in these court records—pay your bill in full, or you’ll be served with a lawsuit and your wages will be garnished.
It’s easy to look at the thousands of cases, long list of names on a docket, and forget these are people whose lives are being wrecked by predatory practices. Will and I looked up some of the locals involved in these Carlsbad Medical Center lawsuits and set out on house calls.
Hannah
Hannah was a high school teacher whose school was a short walk from our hotel. A geologist, she was two courses away from getting her PhD, and she had moved to Carlsbad to work for an oil company. After being laid off when oil prices dropped, she picked up the teaching gig at the University of New Mexico High School. She met us in her classroom as the alarm sounded and her students dispersed at the end of the day. After Will and I walked in, 31-year-old Hannah graciously pulled up small desk chairs and we sat around a table.
Hannah’s bright smile faded as she explained how she had been sued multiple times by Carlsbad Medical Center and had her paycheck garnished, savings depleted, credit score cut in half. Fighting the hospital had also consumed every naptime for two years as she raised two babies.
It started when she noticed a small rubbery spot on her right leg just below her knee. Almost like a clot. She pointed it out to me on her leg and described what it felt like. I had seen these small superficial lumps before and knew that in the absence of leg swelling, they don’t need any formal testing. I’ve treated these by recommending compression stockings, maybe an ibuprofen. Hannah knew that too, because she had previously had the problem and it went away. But this time she was pregnant and concerned the lump could dislodge and present a danger to the baby. I knew it wasn’t dangerous but understood why a concerned mother-to-be would want to get it checked out.
The doctor at Carlsbad Medical Center did an ultrasound, even though one is not medically required for superficial clots below the knee. The charge for the ultrasound alone was $1,200. (It’s $300 at Johns Hopkins.) The hospital did other tests with similarly inflated charges, then swiftly sued her for the full amount. Embarrassingly, she was served with the lawsuit at school by the sheriff’s deputy. She called Carlsbad Medical Center ten times to straighten out the bill but never got it resolved.
“I’ve always had good insurance and documented everything,” she explained. But each time Hannah got a bill, she became entrapped in a finger-pointing game between the hospital billing department, their collections agency, and her insurer. She could not get basic answers to her questions: Can I get an itemized bill? What does insurance pay? And what am I responsible for paying? The fog of the three-way war enabled the collectors and the hospital’s law firm to simply answer her questions with “We can’t answer your question, you just need to pay.”
Hannah showed us folders of detailed records she kept of her dozens of requests to see an itemized bill. The fog of war was lucrative for everyone except Hannah. She discovered that the Carlsbad Medical Center never actually sent the bill to her insurance company. Hannah presented a letter to the judge on her court date, explaining the situation in detail. Her medical bill was voided. The law firm representing the hospital was in Missouri and did not need to show up in court because it was considered small claims.
Another time, Hannah got sued for going to the hospital on a weekend and getting an antibiotic for a urinary tract infection. There was no other way for her to get the prescription. She got only a prescription, no treatment, so I estimated the ER visit could cost $400. But the hospital charged five times that and swiftly sued Hannah for the full amount.
“I’ve always paid all my bills on time, but I just couldn’t make sense of the bills,” she explained. “I called dozens of times trying to resolve the many bills sent to me. Each time they would transfer me to someone else, the calls would disconnect, or I was put on hold for over 30 minutes. No one could help me. Every time my babies would nap, I would be on the phone. It’s been horrible.”
Hannah’s final experience with Carlsbad’s billing department came when she was pregnant. On a few occasions she experienced some nausea and abdominal pain and went to the hospital to get it checked out, as directed by her obstetrician. At 20 weeks’ gestation, she walked in to Carlsbad Medical Center, where a doctor did an ultrasound on the baby and checked her cervix, and the nurse put in an IV for a few hours of hydration.
The hospital hit her with a massive bill, one I carefully reviewed and would deem outlandish. Five weeks later, when the same thing happened, she drove more than an hour through the desert to a hospital in Roswell, the next town over, where they did the exact same things but charged one fifteenth the amount of the Carlsbad bill. She was able to pay the Roswell bill on the spot. At Carlsbad, she had had to set up a payment plan: $25 a month for years.
How could one hospital charge 15 times more than another hospital for the exact same services? I drove to the Roswell hospital to find out what was different about it and how the town was different from Carlsbad. It turns out not much is different. It’s just that Roswell doesn’t jack up their prices 15-fold, then take legal action to essentially shake down patients for their last penny. I checked to see if Roswell hospital has ever sued a patient and garnished their wages. The answer was no. Two towns, two hospitals—one ruining the lives of the people they serve, the other loyal to the mission of medicine.
Hannah described to me how her town’s hospital ruined her family’s life, taking her credit score from 700 to 400 and adding lawsuit guilty pleas to their legal record. That’s a public record that sticks with a person. Buying a home became almost impossible, and at one point her credit card stopped working because of her low credit score. She was not shaken down by the hospital for an unpaid liver transplant bill, a month in the ICU, or anything like that. On the contrary, she sought medical help for minor things—a blood clot on one occasion, a pregnancy scare on another, a urinary tract infection
on another—none of which required a hospital stay.
In that empty classroom that day, Hannah cried. “I would rather die driving to Roswell than go to the Carlsbad Medical Center,” she said.
Rent-a-Center
Our next meeting was at the town’s Rent-a-Center, one of those stores where you can rent anything from couches to televisions. On our drive there, we passed seven dollar stores, including Dollar General, Dollar Tree, and Family Dollar, all of which were large. It was a long way from Laguna Beach or Manhattan, where experts discuss health care over gourmet appetizers.
Rent-a-Center saleswomen Luz Tatum had suggested we meet her at work during the lull just after lunch. Entering the store, we spotted a woman with a moving dolly in the back of the store.
“Hi, my name is Marty, and this is Will. Are you Luz?”
“She should be back any minute from lunch. Is there something I can help you with?”
“That’s okay, we’ll wait for Luz.”
“Wait,” she said, “are you the guys here to talk to her about medical bills?”
After we said “yes,” this younger woman, who wore a lifting brace around her torso and asked to remain anonymous, shared four stories about how Carlsbad Medical Center sued her (a single mom) as well as other loved ones. The prices they charged sounded massively inflated to me. Will and I would occasionally glance at each other, apparently thinking the same thing—this was unbelievable. Almost every person we talked to in that town had experienced the hospital’s shock-and-awe billing practices.
Raised in rural Oklahoma, Will told me that being in Carlsbad reminded him of home. As we sat in the Rent-a-Center waiting for Luz, Will tried to reconcile what he was seeing with his ideals. “I thought hospitals were a refuge for the sick and injured—that’s why I went into medicine,” he said. “But the hospital here is deliberately ruining lives.”
When Luz showed up, she welcomed us to sit on one of the leather couches for rent in the showroom. Luz was a Hispanic American in her forties who felt very comfortable navigating the large showroom floor. After we sat down, she began to tell us her story. She has a medical condition known as chronic nausea that on occasion requires IV hydration and antinausea meds. In 2017, the first time Luz went to Carlsbad Medical Center for treatment, they charged her $3,000 for the few hours of care she received.