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Forcing hospitals to better serve patients

Like it or not, hospitals are businesses, regardless of their non-profit status. So no one should be surprised at the unprecedented pressure hospitals and their lobbyists brought upon the N.C. legislature during the just-completed session. More than 40,000 letters were sent to lawmakers and the governor, according to a Charlotte Observer report Sunday. About $1 million was spent on spreading the message, which was reinforced by hundreds of hospital officials and employees descending on the General Assembly – all in the name of blocking bills that cut into their profits.

If only those non-profits were similarly concerned about the bottom lines of their patients.

N.C. lawmakers were. New legislation passed last week promises to take at least some of the mystery out of medical pricing. The legislation, which is expected to be signed by Gov. Pat McCrory, would force hospitals to simplify their bills and post prices for their most common admissions, surgeries and imaging procedures. Prospective patients also will be made aware of the reimbursements they might expect from Medicare, Medicaid and large private insurers.

The transparency might prompt hospitals to justify their costs with better outcomes and efficiencies – as happens with most other services and products. Better yet, it might begin to nudge patients into being more active participants in their health care costs, instead of assuming (or merely hoping) that insurance will take care of that messy process.

The legislation, which was co-sponsored by Mecklenburg Sen. Bob Rucho, also will require hospitals to dial back some harsh collection practices. Hospitals no longer will be allowed to put liens on houses co-owned by living spouses, and hospitals won’t be able to refer unpaid bills to collection agencies until a request for charity care has been accepted or denied. That could put a crimp in some hospitals’ aggressive tactics; a 2012 Observer investigation showed that Carolinas HealthCare System and Wilkes Regional Medical Center – which receive millions in tax exemptions each year – had sued tens of thousands of patients in four- and five-figure lawsuits.

All of which is not behavior the public should expect from charitable non-profits. And yet, hospitals are quick to remind folks of that non-profit status, as they did when fighting a bill this year that would cap sales tax refunds given to large hospitals. “We used to have: Thou shall not tax non-profits,” cried hospital association lobbyist Hugh Tilson, who forgot to mention that some of those non-profits have millions and billions of dollars in reserves.

But lobbying efforts were at least somewhat successful. Hospitals were able to get that annual sales tax cap raised from $100,000 to $2.85 million to finally $45 million, high enough that no hospitals will be affected this year. The hospital lobby also managed to temporarily defer a bill that would’ve made it easier for physicians to open same-day surgery centers, cutting into a lucrative market for hospitals.

Certainly, N.C. hospitals do much for their communities, especially in the Charlotte region, where CHS and Novant build unprofitable but critical facilities while launching worthy public health programs. It’s true, too, that hospitals must navigate an increasingly complex and uncertain health care environment.

But their patients must also navigate that complexity and uncertainty. It shouldn’t take legislation for hospitals to make things simpler for the people they’re supposed to serve.

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