Prognosis Profits

April 22, 2015

Perdue wants hospitals to publicize charity care policies, make bills understandable

The governor includes $100,000 in her budget proposal to study the issue in hopes of shaping future legislation.

This story was originally published in the Observer on 5/13/12.

Making hospital prices and bills more transparent is among the goals set out last week in N.C. Gov. Bev Perdue’s proposed budget for next year.

She also wants to make it easier for low-income and uninsured patients to find out about hospital charity care policies.

In her budget proposal, Perdue asked the legislature to allocate $100,000 to the N.C. Institute of Medicine for a study that would lead to recommendations that would help patients better understand hospital prices and bills.

If approved, the study would be completed by early 2013, “in hopes of shaping proposed legislation,” according to Perdue spokesman Mark Johnson.

He said Perdue will also introduce a proposal next week that would require hospitals to make the details of charity care programs more readily available to patients.

It would require hospitals to “print on their bills and publicly post the hospital’s financial assistance policy, including eligibility requirements and how to apply for financial assistance. The requirement will include contact information for appropriate hospital staff available to help the patient understand how they can apply for free and reduced-cost care.”

The governor’s proposals come two weeks after publication of a series by the Observer and the News & Observer (of Raleigh) that detailed the lack of transparency surrounding hospital costs and financial-assistance plans.

The investigation also found that Charlotte-area hospitals generate some of the nation’s largest profit margins and pay their top executives millions of dollars a year.

The newspapers found that charity care – free or reduced-cost treatment for the poor or uninsured – varies widely among N.C. hospitals, with some spending more than 13 percent of their budgets to provide free care and others spending less than 1 percent. Mecklenburg’s hospitals – all nonprofits – perform better than average, with all spending more than 4 percent on free care for the needy.

The newspapers also found that many uninsured patients are never offered financial assistance. More than a third of hospitals in the state provide no details about their charity-care policies on their websites.

Some lawmakers – including N.C. House Speaker Thom Tillis and Senate President Pro Tem Phil Berger, both Republicans – say patients need an easier way to find key information about hospital pricing and charity care. Tillis said lawmakers will likely work with the hospital industry to make more data available.

Johnson, Perdue’s spokesman, said the newspaper series reinforced the governor’s concerns about the lack of transparency in health-care pricing. Before she ran for the state House in 1986, Perdue was a gerontologist at Craven Memorial Hospital.

“As the governor has traveled the state and talked with North Carolinians, she has heard many concerns and complaints about health-care billing and how difficult it is to understand – complaints similar to those you have heard and included in your stories.”

Pam Silberman, president of the Institute of Medicine, said she only learned of the governor’s proposal Thursday when the budget was announced. “All I know is what I’ve read,” she said.

Silberman said that the concept of transparency in health care is “not unique to hospitals” and that her group has studied health-reform ideas directed at “making consumers more informed about a whole host of things.”

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