The Price We Pay

by Marty Makary

  A cold-sounding judge was pressing him. “Do you or do you not owe the hospital this money?” the judge asked repeatedly. Each time, Mr. Ortiz stammered to explain his situation. Each time, the judge would hammer back the same question.

  Eventually Mr. Ortiz stopped trying to explain and said, “No, I do not owe this money.” The judge set up a hearing for next month, and Mr. Ortiz walked out of the courtroom visibly shaken.

  We were able to catch Mr. Ortiz outside the courtroom and he agreed to tell us his whole story. He’s a 50-year-old man from Guatemala who works for himself as a landscaper. His wife has been disabled and in a wheelchair for 20 years, so she is not able to contribute to the support of their household.

  Four months earlier, he had some dizziness and decided to go to the Mary Washington Hospital emergency department. The doctors did a series of minor tests and found nothing wrong. But they were still concerned, so they decided to hospitalize Mr. Ortiz for four days, doing countless tests and blood work panels. Eventually, after everything came out clean, they discharged him and referred him to an ear specialist. Mr. Ortiz saw the specialist the next day and was told it was a common ear infection and that it would go away within a week or two. A few weeks later, Mr. Ortiz received a bill in the mail from Mary Washington for $14,000.

  For months Mr. Ortiz has tried to talk to Mary Washington about the bill but said he received no help, which led to his having to defend himself in court that morning. We saw many other stories much like Mr. Ortiz’s: a single uninsured mother being sued, an army veteran harassed by collection agencies, an elderly widow being dunned for her deceased husband’s medical bills.

  We had pulled up to the courthouse as stoic academic researchers with surveys and notebooks in hand, ready to gather data. But we left that courthouse feeling emotionally distraught, like people who had just witnessed a social injustice.

  In total, our research revealed that over the last five years, Mary Washington Hospital had filed more than 24,200 lawsuits against patients, the equivalent of one lawsuit for every resident of the city (Fredericksburg has a population of 25,000 by census and is surrounded by large farming areas). The hospital’s website boasts that they rank #2 in quality. I’m not sure about the quality, but they appear to rank #1 in suing patients in the state.

  Ironically, their website also boasted, “Our not-for-profit status drives us to be the kind of organization that provides care to those in need regardless of their ability to pay.” Wait a minute. They will take care of you regardless of your ability to pay, but if you don’t, they sue the socks off you? Even though the hospital bears their family name, I’m not sure George Washington or his mother, Mary, would be proud. After I called their hospital CEO to verify the high number of lawsuits his hospital filed, the statement on their website suddenly disappeared and instead it now reads “Because of our not-for-profit status, we file reports with the IRS to demonstrate our income and spending.”

  Keep in mind that most hospitals that sue patients are not shaking people down for fair market prices. I searched Mary Washington’s pricing data through the American Hospital Directory database. They mark up their bills many times higher than what Medicare would pay for the same services.

  Within a couple of weeks, my research team had crunched the numbers for all the hospital lawsuits in Virginia. The good news was the majority of hospitals didn’t sue any patients in 2017, a finding that restored our faith in the leaders of American hospitals. However, the 37% of hospitals that did sue filed over 20,000 lawsuits against patients that one year alone.

  Carlsbad Medical Center was no lone wolf. Each of the cases my team pulled represented an American worker or family—like the teacher and cop and Rent-a-Center employee I had met back in New Mexico. These patients would have no way of knowing whether their local hospital was the type that sued its patients for not paying inflated bills. Hospitals warn patients with dozens of signs about X-ray radiation all over the radiology area. I wish these hospitals would warn patients about being sued with the same level of concern: WARNING: HOSPITAL LIKELY TO SUE.

  Surprisingly, nonprofit hospitals were more likely to sue patients than Virginia’s few for-profit hospitals.2 My team and I also gathered more information on the patients being sued. People in rural areas were just as vulnerable as those in urban and suburban parts of the state. Our study showed where the patients who had their wages garnished were employed. At the top of the list was Walmart, with about 450 employees from Virginia who had their wages garnished in 2017. Other employers ranking high were Lowe’s home centers, the U.S. Postal Service, Perdue Farms, and two area supermarket chains, Kroger and Food Lion.

  I contacted some of these patients from Virginia and heard stories identical to those of the full-time workers we’d encountered in New Mexico. Here were hardworking Americans with health insurance who made too little money to afford inflated hospital bills but made too much to qualify for Medicaid. These were not one-percenters. These people were within the income range of the average American worker, who makes about $18 an hour, according to the Bureau of Labor Statistics.3 I asked my team to reach out to Walmart and other employers to let them know what we were finding. Employers needed to know how often their workers’ paychecks were being docked.

  One day I happened to share some of our findings with a lawyer I met at a birthday party for a mutual friend. I told her how blown away I was by how some hospitals had stooped to this level, and how proud I was of the hospitals that didn’t. She didn’t share my outrage. “What’s wrong with garnishing wages if someone doesn’t pay their debt?” she argued.

  I get it. Hospitals have a right to get paid for the work that they do. And patients have an obligation to pay for services received. But let’s also put things into context with some key facts. Hospitals are marking up their bills by 2 to 23 times what Medicare would pay for the same services.4 Further, our research showed that hospitals playing the pernicious markup game were also the most likely to sue. Of the many sued patients with whom I spoke, not one had a cosmetic procedure like a breast augmentation and refused to pay. These were basic medical services for sick and injured folks.

  Also, many of the hospitals filing lawsuits were nonprofits. They enjoy huge tax benefits because they claim to the IRS that they provide charitable care to the community. Yet in some cases, they were pulling the trigger on lawsuits without providing discounts or payment plans. Even when these medical facilities did offer payment plans, they were often for the full bill, which is typically marked up three- to fivefold. If a bill is inflated, do we really believe that paying the inflated amount over five years at zero interest is fair? Plus, these bills that lead to lawsuits are peanuts for the hospitals. For many hospitals, it represented less than 1% of their overall revenue. Suing patients did not appear to be associated with a hospital’s need for cash. Advocate Aurora Health sued many patients the same year that their CEOs’ salaries doubled by $11 million.

  I decided to pay a visit to Mary Washington Hospital. I wondered whether the doctors working there knew the hospital’s legal team was giving their patients this follow-up “treatment.” After all, the Carlsbad doctors hadn’t known. And why would doctors know about it? The clinical side of a hospital is typically walled off from the operation’s billing side.

  At Mary Washington, I headed for the cafeteria. I wanted to grab lunch and chat up doctors. It’s hard to work up an appetite in a hospital cafeteria. Hospitals are supposed to promote healthful foods, but the flavorless, processed, overcooked, carb-laden food they serve is a constant on hospital menus. And of course, they always have Jell-O. I’ve eaten in hospital cafeterias in the north, south, east, and west, and Jell-O is always available. After studying the epidemic of hospitals suing patients, it was time for some emotional eating. I skipped the antibiotic-injected chicken and grabbed a limp slice of pizza and a piece of cake.

  After forcing down this uninspired lunch, I started hunting for doctors to interview. I can spot doctors a mile a
way. Of course the obvious sign is the white coat. If it’s waist length, that’s a medical student. Midthigh or knee, you’ve got a resident or doctor. From there, my eyes go to the pockets. If they’re stuffed, it’s probably a resident carrying around paperwork, prescribing pads, and pens. If there’s a banana or one of those little bottles of 5-hour Energy in the pocket, that’s a resident. If the pockets are empty, it might be a surgeon. If there’s a stethoscope, that person is probably in internal medicine or a cardiologist. A dermatologist carries a penlight.

  I sidled up to a couple of doctors and introduced myself as a surgeon at Johns Hopkins. I said that I was doing a study on hospital billing practices and it had come to my attention that their hospital sued a lot of its patients and garnished their wages. At that point, one of them did a double-take and I could see his mental wheels turning.

  “Mary Washington is actually one of the most aggressive in the country,” I told them.

  “No one intended the system to be this messed up,” one of the doctors told me. “The games have gone too far.”

  My research team and I continued our analysis of these medical lawsuits. A few weeks later I raised the topic from the stage in front of a few hundred people at a medical conference. The audience included doctors from all over the country. I had a hard time not getting emotional as I presented our research and shared the shocking stories of patients whose lives were ruined by our medical system. I urged those in attendance to call on their hospital leaders and board members to stop the predatory billing and suing of insured low-income patients.

  “These are our patients,” I explained. “These are not the patients of our hospital billing departments. These people came to us as doctors because they were sick or injured, and we should respond in the spirit of the Hippocratic Oath.” In the audience, every head nodded. I asked them the same question that Dr. Keith Smith from Oklahoma had posed to me: “How can we take an oath, treat a patient, and then allow their lives to be ruined financially?” One doctor approached me afterward, fired up. He wasn’t going to stand for this type of treatment of patients, he told me. He committed to go back to his hospital and talk to his leadership to ensure they are not part of the problem.

  Within a few months, Will, Angela, Heidi, Tina, and other medical students with whom they had been talking approached me and said they wanted to take action. They wanted to rally other students, doctors, nurses, and concerned citizens about these issues in an effort they referred to as the Restoring Medicine Project. Their website, RestoringMedicine.org, gives people ranging from doctors to community members the resources they can use to address predatory billing, suing, medical overscreenings, and other unfair health care practices in their communities.

  I reached out to Mary Washington Hospital’s CEO, Dr. Mike McDermott, and CFO, Sean Barden, and had a chance to speak with them. I asked them about the 24,200 lawsuits their hospital filed against patients. McDermott said the number of cases was “probably correct.” He said that going to court was a last resort. “We only get to the legal action side if we are unable to establish communication, if the patient or their families have been unresponsive to all of our efforts to establish communication with them,” McDermott said. “We have [financial aid] programs for patients and families who have higher incomes who find themselves in unusual and catastrophic situations where they are unable to make payments,” he said.

  But their earnest responses to my questions did not correlate with what I was seeing on the ground. For example, Lisa Lester, a woman I met at the courthouse, was sued by Mary Washington one month after her husband died in March 2018. Lisa applied for the hospital’s financial aid to help pay his $10,000 bill but told me she didn’t get any help. Lisa said she was getting harassed and threatened by hospital collections people when she was in the midst of her grieving. “They make it impossible to get financial aid,” she said.

  The hospital executives were cordial when I spoke with them, but their reasonable-sounding approach was disconnected from the ugliness I saw in the courthouse. They seemed entirely disconnected from people like Wanda Brooks, a 52-year-old African American woman who went to Mary Washington with a headache and got billed more than $8,000 for both a head CT and a head MRI. Wanda’s employer, an assisted living facility, had insisted she have the hospital check her even though the single mom knew she was simply exhausted from working 16-hour shifts. Both the CT and MRI were normal, and probably neither was necessary based on the symptoms she described to me. Certainly one normal scan would negate the need for the other in working up a headache.

  Standing with me outside the courthouse on her trial day, Wanda explained that she had no way of knowing that she didn’t need both scans. Faced with the bill, Wanda said she applied for Mary Washington’s financial aid but was denied because she was told she earns too much (she earns approximately $25,000/year). The hospital then sued her and started garnishing her wages four months after her headache. According to Wanda, the hospital garnished half of her two-week paycheck, chopping it from $1,200 to $600. Wanda’s eyes welled with tears as she told me how the lawsuit and garnishment caused sleepless nights and made it hard to pay for essentials like food and rent. It also crushed her credit score. This was right before Christmas and I couldn’t help imagining how tough the garnishment made it for her to buy gifts for her son.

  Others I met at the courthouse said they had to pay higher mortgage payments after their FICA scores got hurt by medical bills. In looking at Wanda’s records, I saw that she had been billed for both the CT and MRI at a rate about four to five times higher than the Medicare allowable amount. I asked the hospital’s CEO, a radiologist, how much a head CT or MRI costs at Mary Washington. He wasn’t sure. I asked him to consider helping Wanda with her bill and he said he would gladly review it.

  But Wanda’s court day was looming. I offered to be an expert in her case. On her court date, the judge called her name. I approached the bench with her. Then something funny happened. The judge did a double take of her paperwork and said, “I’ve never seen this before, but your case has been canceled.” She was so nervous bracing for the worst, she didn’t process what he was saying. He then said, “Go on, you’re all set.” We embraced as she walked out of the courtroom, elated.

  On the way out, I approached more patients appearing in court that day and offered to be their pro bono expert. Every time the hospital saw my name listed on a case as the expert, the case was canceled before I could argue it. Judges began asking me who am I and what I was doing in their small town. I explained that I’m a physician and believed, based on my research, that patients were being overcharged by their local hospital. I explained that hospitals historically have been a safe haven for the sick but that aggressive billing was now eroding the public trust between the medical profession and the community, some whom now avoid care for fear of price gouging. I also explained that wage garnishment has a rocky legal basis. I told one judge, “If I mow your lawn for 30 minutes and send you a bill for $8,000, you would say that you are not required to pay because there is no valid contract.” Even consent forms where patients sign their financial life away in the emergency department are invalid because people are under duress and can’t be expected to understand the unilateral terms.

  My team and I continue to fight for patients on every level. In addition to educating patients, we urge state legislators and governors to do what four other states have done and ban wage garnishment for unpaid medical bills. My team has argued to members of congress that an IRS tax-free designation is not appropriate for hospitals that provide no charity care and instead sue low-income patients for inflated bills. I also took a few patients to the White House where they told their story directly to President Trump and Secretary Azar. The president was moved by their stories, and even more so when I presented new research that half of U.S. women with stage 4 breast cancer are now being harassed by medical debt collectors. He called it a disgrace and instructed his staff to work hard on solutions that would
provide relief for Americans gouged by overpriced and surprise bills. Shortly thereafter, his administration announced initiatives aimed at curbing egregious medical billing and increasing price transparency. What started as a spark in New Mexico was now a national movement for more honest health care.

  The Great Divide

  As I traveled across America for this book, what I saw was not a Republican/Democrat divide or a conservative/liberal divide. Instead, I felt a widespread sentiment among low and middle-income workers that the system was stacked against them, controlled by the powerful elite who make the rules.

  Honest, hardworking Americans feel helpless against a ruling class who use power and access to their favor, creating fine print and laws to give themselves the upper hand. The folks I met often pointed out how the process of appealing a hospital bill or an insurance company denial was too complex and utterly exhausting.

  I heard from farmers, small business owners, and even hospital workers who have been sued by hospitals. With intense frustration, they told me that it’s not a level playing field. For some, crying foul paid off and got them some measure of justice. But many others left defeated, feeling the system was “rigged against the little guy,” as one factory worker in Ohio put it. Some people were not formally educated on the issues, yet they eloquently argued for transparency and accountability. Sometimes they pointed out how health care is lumped in with other industries in which the rules are made by powerful elites. For example, one woman from Texas complained to me that incredibly profitable oil companies pay no taxes, yet she must struggle to pay hers. A man from Georgia asserted that we have two justice systems, one for the powerful wealthy establishment and another one for lower- and middle-income Americans. “When the rich rob people, their company pays a fine that doesn’t affect them,” a Midwestern farmer said. “If I rob someone, I go to jail,” said one mechanic in Carlsbad. “Everyone is fed up with a system where people use their power to take advantage of the little people.” Some respondents saw hope in President Trump’s anti-establishment style, which helped me better understand how he swept elections.