A New Approach to Medical Billing

It’s refreshing to see this new emphasis on navigating patients through the system, but it should only be the first step. The next step? Reducing the redundancy and complexity in the first place.

In December 2014, National Public Radio and ProPublica featured an investigative journalism piece about Heartland Regional Medical Center in St. Joeseph, MO.  The non-profit hospital was aggressively filing lawsuits against patients for unpaid medical bills; even for patients who were eligible for debt forgiveness or other medical assistance programs.  The article garnered the attention of Sen. Chuck Grassley, who in numerous speeches on the floor of the US Senate called out the hospital for these practices, and applied sunlight to the practices.

As the old saying goes, sunlight is the best disinfectant.

Fast forward to today, and the hospital, which has renamed and re-branded itself Mosaic Life Care, has completely overhauled its polices for medical financial assistance. It reached out to the victims of its former lawsuits, forgave hundreds of thousands of dollars of medical debt, and actively connected patients with medical financial assistance programs they qualified for. It hasn’t worked for every patient, but it does mark a stunning turn around. Read the NPR article for an in-depth look at this change.

Speaking as a nonprofit management professional, whether or not this was the right choice for the hospital financially cannot really be determined from the outside. It requires in-depth knowledge of the financial structure of the hospital, its patient base and the surrounding community. One issue I do have is with some of Sen. Grassley’s statements, which seem to imply that because the hospital is non-profit, it shouldn’t seek to make a profit.

A lot of politicians and people outside the non-profit world make similar statements without thinking about what it really means. The definition of profit is simply “A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.” Bringing in more income than you spend is a profit. The idea that a non-profit shouldn’t make a profit is ludicrous when you keep the definition in mind: If it costs you more to operate than you are bringing in, you aren’t making a profit. And you aren’t going to be in business very long. You need to at least break even, or better yet bring in some profit. The distinction between a non-profit and a private or public business (aside from the tax benefits which are a whole other discussion) is that non-profits are required to put profits they make back into the purpose of the business; they cannot be paid out to shareholders.

Speaking as someone with higher levels of insight into the medical field than most, I can say this is a prime example of the complexity of the healthcare system. Complexity doesn’t just exist in getting care…it’s almost worse trying to pay for the care. Anyone who has ever had to make the decision to place a relative in a nursing home can testify to this. Trying to figure out what programs they will qualify for, get enrolled in them, and coordinate communication between all of the various programs and healthcare institutions is a Herculean task. Some facilities are starting to address this problem with patient care advocates whose only job is to navigate this tangled web on behalf of the patients, which is an excellent start. But more of them are needed, before a crisis situation builds up like Mosaic Life Care.

It’s refreshing to see this new emphasis on navigating patients through the system, but it should only be the first step. The next step? Reducing the redundancy and complexity in the first place.

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