You would think that hospitals with the most money would offer the most charity care—trickle down and all of that. If my health system is big and I have lots of money and profitable commercial patients, I can stuff more dollar bills into the charitable donation balance sheet bucket, right?

Except, in general, it’s a fairly solid no on that.

Let’s talk about some of my takeaways from the conversation that I had with Vikas Saini, MD, and Judith Garber from the Lown Institute. During the conversation, there’s also mention of a powerhouse of a New York Times article.

So, let’s circle up on but a few of the more interesting (according to me) reasons why some rich hospitals fail to offer the level of charity care that you might think they could or should:

#1: Chasing commercial contracts because they are very profitable means building in areas where there are frankly not a whole lot of poor people. You see hospital chains doing this all of the time and saying at the 2023 JPM (J.P. Morgan) conference that they intend to do more of it, opening up in a fancy suburb with no affordable housing.

When this happens, there is just less opportunity to offer charity care. The need for financial aid in that ZIP code is just less.

#2: The Ambulatory Surgical Center (ASC) movement, which is weird to say because, in other respects, I’m a big fan. There are a lot of services and surgeries moving out of the hospital into ambulatory surgical centers or just the outpatient setting, and this is going on for a bunch of reasons, including Medicare and employers being very on board with this to save facility fees.

But here’s a consequence: Surgeons and other docs are now not in the hospital. So, indigent patient shows up in the emergency room and needs an emergency surgery or some intervention. But wait … those physicians and their teams are no longer in the hospital. And now the hospital doesn’t have the “capability or the capacity” to serve that patient. I heard from a surgeon the other day, and when he’s on call at his hospital, he’s getting patients shipped to him on the regular from hospitals in other states.

Now, about this “oh, so sorry … we can’t possibly help you so we’re gonna stick you in an ambulance and take you to another state” plan of action. I called up emergency room expert Al Lewis. He told me that if this “ship ’em out” is being done routinely as a pattern by hospitals who have an ER, you could call it evidence of an EMTALA (Emergency Medical Treatment and Labor Act) violation on several levels. You can’t have an emergency room and then routinely not be able to handle emergencies, especially when the emergencies you can’t handle always seem to be of a certain kind and for a certain kind of patient.

Speaking of violations, one more that reduces the need and level of charity care is canoodling with ambulance companies to take the poor people to some other hospital and the rich people to your hospital, which was allegedly transpiring in New Jersey, based on a recent lawsuit.

#3: [play some foreboding music here] This last one is the big kahuna underlying reason why some very rich hospitals may not offer the level of charity care which you’d think they would. This was superbly summed up by Tricia Schildhouse on LinkedIn the other day. She knew a physician leader who would go around saying, “Non-profit and for-profit is a tax position, not a philosophy.”

Bottom line, this whole thing boils down to what has been normalized as OK behavior at some of these rich hospitals. You have people in decision-making roles taking full advantage of their so-called tax position to jack up their revenues—revenues which they have no interest in frittering away on charitable causes. Why would they do that when they can use the money to, I don’t know, stand up a venture fund or make Wall Street investments?

Don Berwick’s latest article in JAMA is entitled “The Existential Threat of Greed in US Health Care.” And, yeah … exactly.

Back to that New York Times article that we talk about in this healthcare podcast, here’s what it says about a hospital in Washington State. It says:

“The executives, led by [the hospital’s CFO] at the time, devised … a program called Rev-Up.

“Rev-Up provided [the hospital’s] employees with a detailed playbook for wringing money out of patients—even those who were supposed to receive free care because of their low incomes.”

All of this being said, there are hospitals out there who are, in fact, living up to their social contract and serving their communities well with very constrained resources. You also have hospitals just in general working within some really whack payment models that we have in this country, which easily could be a root cause precipitating this suboptimal-ness.

Dr. Saini and Judith Garber mention three direct solves for hospital charity shortfalls and also the larger context of the issue.

So, there’s, of course, better reporting and better auditing, which is pretty nonexistent in any kind of standardized way right now. I also really liked one of the solutions that Dr. Saini mentions on the show: Maybe instead of all the hospitals doing their own charity care thing, they all should pool their money regionally and then put a community board in charge of distributing it. That way, if there is a hospital in an area where the charity care is really needed, even if the rich hospital nearby doesn’t have a facility there, they can help fund this care that their larger community really needs—including, by the way, public health needs, which is currently a big underfunded problem.

As mentioned earlier, I am speaking with Vikas Saini, MD, and Judith Garber. Dr. Saini is president of the Lown Institute. Judith Garber is a senior policy analyst there. They’ve studied hospitals from a number of dimensions, not just charity care.

You can learn more at lowninstitute.org and lownhospitalsindex.org.

Vikas Saini, MD, is president of the Lown Institute. He is a clinical cardiologist trained by Dr. Bernard Lown at Harvard, where he has taught and done research. Dr. Saini leads the Institute’s signature project, the Lown Institute Hospitals Index, the first ranking to measure hospital social responsibility. The Index, first launched in July 2020, evaluates hospitals on equity, value, and outcomes and includes never-before-used metrics such as avoiding overuse, pay equity, and racial inclusivity.

In his role at the Lown Institute since 2012, Dr. Saini led the development of the Right Care series of papers published by The Lancet in 2017, convened six national conferences featuring world-renowned leaders in healthcare, and guided other Lown Institute projects such as the “Shkreli Awards.” Dr. Saini also serves as co-chair of the Right Care Alliance, a grassroots network of clinicians, patient activists, and community leaders organizing to put patients, not profits, at the heart of healthcare.

Prior to the Lown Institute, Dr. Saini was in private practice in cardiology for over 15 years on Cape Cod, where he also founded a primary care physician network participating in global payment contracts. He also co-founded Aspect Medical Systems, the pioneer in noninvasive consciousness monitoring in the operating room with the BIS device.

Dr. Saini is an expert on the optimal medical management of cardiologic conditions, medical overuse, hospital performance and evaluation, and health equity. He has spoken and presented research at professional meetings around the world and has been quoted in numerous print media, on radio, and on television.

Judith Garber is a senior policy analyst at the Lown Institute. She joined the Lown team in 2016, after receiving her Master of Public Policy degree from the Heller School of Social Policy. Her research interests include hospital community benefit policy, overuse and value-based care, and racial health disparities. She has authored several white papers, journal articles, op-eds, and other publications on these topics. Judith previously worked at the Aspen Institute Financial Security Program, the Midas Collaborative, and Pearson Education. She has a bachelor’s degree in American studies and political science from Rutgers University.

06:50 Why does America need socially responsible hospitals?

08:23 What standards are hospitals beholden to with their charitable spending?

08:47 “It’s the honor system, essentially.”—Dr. Saini

11:38 What is fair share spending?

13:43 Which hospitals are paying their fair share?

15:05 Why do hospitals that are financially more strapped tend to give back to their communities more?

17:25 Why is it hard for hospitals with the most privately insured patients to do the most for their community?

18:56 “These outcomes … are the outcomes of the [current system].”—Dr. Saini

21:23 “A key problem here is [that] systems have gotten so big.”—Dr. Saini

22:30 What’s the solution to fixing the problem with hospital charity care?

23:52 EP374 with Dave Chase.

29:21 What would be the level of acceptance with changing the system as it stands with hospitals?

You can learn more at lowninstitute.org and lownhospitalsindex.org.

@DrVikasSaini and @JudiTheGarber of @lowninstitute discuss #hospitalcharitycare on our #healthcarepodcast. #healthcare #podcast #hospitals

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