Lehi » With the state's housing market in peril, bankrupt builders were not paying what they owed Codee and Jim Marshall's heating and air conditioning business. When the business failed earlier this year, the Marshalls lost their South Jordan home, two rental properties and their health insurance.
So the family had no coverage in August - when their 3-year-old daughter's skull was crushed by a startled colt on the family's Lehi farm. Ali was flown by Life Flight to Primary Children's Medical Center in Salt Lake City, where she spent a month undergoing surgeries and recovering.
The Marshalls joined the growing number of Utahns who can't afford to pay their medical bills. They applied for charity care to forgive their debt, which Codee Marshall estimates is between $200,000 and $300,000.
As the ranks of the uninsured and underinsured swell, the state's four major health systems report they have seen their charity care grow in the past five years by 148 percent. Intermountain Healthcare alone, which includes Primary Children's, saw the charity care it grants nearly double between 2003 and 2007, from $53.7 million to $101.2 million.
More often, hospitals are left with unpaid bills. Patients owed Intermountain $153.7 million last year, a 106 percent increase from 2003.
Hospital officials say those who are insured can't afford to pay ever higher deductibles passed on by their employers. Some of the uninsured refuse to pay. Others don't have the money.
"In the end, the responsibility or burden falls to the hospital," said Steve Bateman, chief executive officer of St. Mark's Hospital.
Hospital administrators expect to provide even more uncompensated care -- charity care plus unpaid bills -- this year, especially in emergencies for those who couldn't afford preventive care.
"Absolutely we're worried because the economy, potentially for a long period of time, is moving in the wrong direction," said Gordon Crabtree, chief financial officer for University of Utah's hospitals and clinics. "We only have so many beds. Some of those beds have to be filled with patients who have insurance."
Making matters worse, the investments hospitals also rely on as a source of revenue have been pounded this year by a volatile stock market. "This year hasn't been that good," said John Pingree, Intermountain Healthcare's vice president of community benefits.
While the hospitals remain committed to providing charity care, they also are making changes to ensure they get paid when possible -- deploying financial counselors to work with patients and requiring down payments for planned procedures. "It really goes to the notion of patients helping heal themselves," Bateman said. "We feel a measure of accountability is an important part of the overall fabric of health care delivery."
Patients who can't pay - and don't qualify for charity care or other programs -- are sometimes being turned away.
The Marshalls first applied for coverage from Medicaid and the Children's Health Insurance Program for Ali. But on paper, the Marshalls and their four children still had too many assets, and were rejected.
Primary Children's was generous: It gave the family a $25,970 uninsured discount and wrote off $146,800, covering all of Ali's hospital bills, according to hospital spokeswoman Bonnie Midget.
"It was for sure just a blessing," Codee Marshall said.
Paying off the doctors, however, will be another matter. While doctors on staff at Primary Children's are expected to honor the hospital's charity care policy, other doctors Ali has seen throughout the Intermountain Healthcare system are not.
Care in an emergency
Under federal law, hospitals must treat emergency room patients in a crisis, regardless of ability to pay.
They don't, however, have to treat an underlying illness. And once a patient is stabilized, financial advisors in many hospitals descend to see if the patient has insurance or if his care could be covered by any number of programs, from worker's compensation to the crime victim's reparation fund. The hospital also determines if the patient qualifies for federal programs such as Medicaid and CHIP.
Charity is the last option, and each hospital has its own system for deciding who qualifies. Nonprofit hospitals, which typically receive donations and other support to serve the poor and uninsured, tend to have more liberal policies. Intermountain Healthcare, for instance, offers at least partial charity care to patients making up to 500 percent of the federal poverty level.
"I think this it's pretty generous compared to a lot of policies out there," Pingree said. At the same time however, "we also feel strongly that … people who can pay, should pay."
St. Mark's and other hospitals track local demographic trends and try to predict - based on the historical utilization of health care by certain groups - what its charity care and bad debt will be.
But it's not always right. And that can lead to financial juggling, Bateman said, because hospital owner Hospital Corporation of America is locked into multiyear contracts with insurance companies and can't easily change its cost structure.
Charity care, however, is "both a cost of doing business, as well as a responsibility we have as a good corporate citizen in the community," he said.
Still, Judi Hilman, executive director of the Utah Health Policy Project, which is pushing for health care coverage for everyone, said she worries that Utahns don't know about the charity policies, or don't fight when they are turned down.
Planned surgery? Pay up front
When patients have a planned procedure, from chemotherapy to the birth of a baby, hospitals are growing more insistent about getting paid. Many require down payments before they'll schedule care -- even nonprofits, which are expected to provide free treatment to the poor.
Hospitals often pursue patients' deductibles and their co-insurance, or the percentage the patient owes.
"We try to collect up front, there's no question about it," said Bryanie Swilley, CEO of Iasis' Pioneer Valley and Jordan Valley hospitals in West Valley City and West Jordan. "It's kind of hard to unfix an appendix or put back a gallbladder. You have to pay for a plane ticket before you fly."
The for-profit Iasis created a "stork program" for patients to pre-pay before delivery. It also offers uninsured patients up to a 50 percent discount if they pay within six months. And it's considering extending its no-interest payment plans from about six months to 18 months.
But sometimes payment arrangements aren't enough. Swilley recalls a patient who was scheduled for a surgery but backed out after learning he needed to pay $1,800. The CEO expects such patients to later arrive in the emergency room, when the condition worsens -- and the hospital must provide care.
"It is a balance. [Refusing to provide care] is probably the most emotional and difficult thing you can do," he said, adding that sometimes patients who can't pay are referred to nonprofit hospitals.
"We'll let you be the one to tell the mom of the 2-year-old that has an ear infection that we're not going to treat the child without [her] paying for it," he said, offering an example. "But at the same time, medicine is a business."
The U. began requiring uninsured patients to pay a 50 percent deposit for scheduled procedures eight years ago when Sherrie Woodmancy started as director of patient access services.
"We were just an open door to all of the unfunded [patients]," she said. "It's taken me a long time to change that culture."
Doling out care
When patients at the U. can't pay the deposit, medical director Tom Miller steps in. If the attending doctor says a procedure is medically necessary, Miller must decide whether to proceed, and then seek payment later.
He said he gives preference to Utah citizens. He might make a patient with a hernia wait until money is raised but gives the OK for someone who would go blind without surgery to repair retinal detachment.
Because of the expense, the U. won't list unfunded patients for organ transplants. Miller also says "no" to heart assist devices, bone marrow transplants and foreign nationals who need kidney dialysis.
Depending on the economy, Miller said the U. may have to cut back, such as being more strict about the deposit and rejecting uninsured residents of other states, who come to the U. seeking a higher level of care. The problem is not only the growth in uninsured patients -- up 48 percent at the U. since 2002, to 88,000 last year -- but a jump in Medicaid patients as the economy falters.
In considering charity care for planned procedures, Intermountain Healthcare generally uses standards similar to what an insurance policy would cover -- not some cosmetic surgeries, for instance, but those that are considered medically necessary or life-saving.
Hilman said her organization is hearing more often from patients who have been denied care, which she sees as a "tragic" consequence of a broken health care system.
Utah lawmakers are pondering reform that would allow businesses to give workers money to buy their own insurance, instead of providing a company plan. But Hilman predicts employees won't be able to afford coverage.
"If that's the direction we want to go in, we're talking about bankrupting our hospitals and making them less available to see everyone in the community," she said.
Hospital officials also say they may eventually need to cut back on capital and technology upgrades. And they acknowledge they pass on the costs of uncompensated care to insured patients. About 17 percent of private health care premiums go to pay for hospitals' uncompensated care, according to Hilman.
"That's one thing that helps us, every health care provider, from going bankrupt," said Kim Wirthlin, the U.'s associate vice president for health sciences public affairs and marketing. "It means all of us will pay more in the market for health insurance."
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