Health reporter Nick Stonesifer joins the “Beyond the Headlines” podcast to discuss his investigation into charity care provided by nonprofit hospitals in the state, particularly Delaware’s largest health care provider. He wrote about this in his October 3rd article, “As ChristianaCare’s profits rise, free care to the poor remains stagnant.”
Charity care is something most Delawareans may not be aware of, particularly those who could use it the most. Nick explored how this process works, why hospitals are required to offer it and how the level of care provided has evolved in recent decades.
The podcast was hosted by Director of Community Engagement David Stradley.
This transcript has been edited for length and clarity.
When you were hired at Spotlight Delaware, you were assigned the land use beat. When we added health care as a coverage area earlier in this year, I think it’s accurate to say you were pleased to have that reassignment to go to a new beat. What is it about health care as an issue that interests you?
I think it touches a lot of people. It’s more than what hospital X, Y, Z is doing or what law is coming down the pipe. I like to refer to myself as a health reporter because there’s a lot more to health than just what hospitals are doing.
It can be very wide encompassing and, for someone who doesn’t like to be in one box, it helps to have a little more freedom to kind of explore where that takes you.
So you see health as an issue that kind of has larger boundaries to it.
At large? Yes. I covered opioid-related, addiction-related issues here in the state.
In a past life I looked at some environmental health issues. And now, I’m digging into the weeds of hospital budgets, which I don’t envy myself for because it took a lot of time.
We will talk about that time digging into these budgets. Let’s use our “Hey Mom” question to give listeners a sense of what your article is all about.
If you can just start with, “Hey mom, I did an investigation into charity care….” And then tell her what you think is interesting about this story.
This is where I always struggle.
“Hey mom, I did an investigation into charity care in Delaware. As hospitals continue to grow and expand, as their budgets grow larger, as their capital projects grow larger and larger, the amount of investment they’re putting into reducing costs and bills for patients has stayed relatively flat.”
Health care and its high costs are certainly in the public conversation. Right now we are in the middle of a federal government shutdown that was sparked in part by Democrats trying to negotiate for a continuation of Obamacare subsidies.
But we don’t hear a lot about charity care. How did charity care even get on your radar and what was the news hook that convinced you and your editors that it was worth dedicating your reporting time?
This was pitched to me by our Editor-in-Chief to look into this.
I hadn’t heard of it until he told me. We looked at how hospitals in the state were running very large surpluses, but their financial assistance and those numbers were staying pretty low. And we saw that they were often a fraction of a percent within their budget, and we wanted to examine that further.
These fights over the Affordable Care Act, I think that you’re actually going to see more people probably going to have to lean on this as those credits go away. Premiums for insurance are going to go through the roof, and people may not be able to afford insurance. They might go uninsured and they might have to begin leaning on hospital financial assistance.
We didn’t know that this debate federally about health care costs was going be going on right now. What was it that said, okay, right now we’re going to look into charity care?
I think, at large, hospital health care in the state is a huge debate. We have a regulatory board that’s under fire. We have hospital systems that are growing massively. And, the question about cost is ever looming.
And there is a lever within hospital systems to alleviate that cost for patients. And we wanted to look at it.
This was a long-term process for you. I think when I looked at my notes from our editorial meetings, this story first came up back in May. Could you just talk a little about process.
Why was this a story that took four months to report? And what was your journey during that time?
Well, you know, short attention span is part of it. I get distracted very easily. That’s a good thing and a bad thing, but I was taken on many side quests between now and then. But once I really started to laser in and start to focus on it within the past couple of months, it was easier to shape up.
Like with all good stories, stuff happens as you’re waiting to write it. You’ll have a story four months prior and you have no idea what it’s going to look like. And then in two weeks, there’s this huge thing that happens to help you form it. So these things take time and, you know, the journalism gods have a way of making it all work out.
This wasn’t one of those investigative reports that was you tracking down 10, 15, 20 different sources to triangulate what the story was. What was the most labor intensive part of this particular process?
Just putting together all the data, consolidating it into one place where I could look at it for myself and then transferring it to separate programs that I could visualize it for the readers and understanding exactly what we were going to hone in on, what these numbers actually meant. There’s so much to it. Hospital budgets are not easy to understand. Hospitals at large are very complicated beasts.
This was really one of my first heavy hospital investigations. This was also a learning curve for me to understand what a lot of this stuff means.
At one point, you were going to weave into this story the charity care expenses of Bayhealth and Beebe Healthcare, which are the other two largest health care systems in the state. Why did you ultimately decide to focus this story just on ChristianaCare?
There were other larger factors at play here. Obviously, ChristianaCare is the largest hospital in the state. They kind of set the example for the rest of the state. They have the strongest financials in the state. They’re a two and a half plus billion dollar hospital
Their efforts to expand in the region – that’s something that we found could ultimately stymie the amount of financial assistance they provide, as they kind of become the regional power player.
So we wanted to look at that, and kind of hone in on that as well as the fact that ChristianaCare is fighting really, really hard to get this House Bill 350 board, if they had it the way they wanted, completely dismantled and nullified because they believe it’s unconstitutional. We wanted to look at that.
I would imagine also, as you’re thinking about making the story clear for the reader, if you were to have this story that included the charts for Christiana and Bayhealth and Beebe and were trying to compare and contrast all those, at a certain point, the story just gets lost.
It helps to have a central character, a central focus, but the story portrays a larger trend going on.
You were very clear in your reporting that the IRS no longer requires nonprofit hospitals to provide free care to disadvantaged patients. This was actually a point of contention in one of our editorial meetings. One of your editors, Karl Baker, stated the IRS requires this and your reply was, “Well, not exactly.”
It’s become very nebulous. I hope I did a good job of portraying that in the story. Once the system was designed as kind of a tit for tat: I’m a hospital. I’m not going to pay taxes. In return, I am going to provide free care to those who need it.
And that’s changed. I think you look at hospitals nowadays, and a lot of them are very dependent on insurance payments to come through. They’re running operations with super high expenses. They have very high salaried employees. And overall, the cost of providing as well as receiving health care has really skyrocketed.
The whole industry is not what it used to be back in the early 1900s or even prior.
While the IRS no longer requires this free care, it does still consider it as a “significant factor in determining a hospital’s tax-free exemption.” However, you also report that Delaware does actually stipulate that hospitals must provide charity care to patients living at or below 350% of the federal poverty line.
In Delaware, is there any kind of required minimal level of care, or is it just all care provided to individuals at that income level?
I want to say yes. I’ve reported it as such, and I feel confident that there is a regulation, but it is through this very weird back channel regulatory approval.
Once again, it’s nebulous. Essentially for hospitals to get approved for any sort of expansions or certificates of public review, I think is what it was, they have to provide charity care at 350% of the federal poverty line. But it could be either discounted or free.
ChristianaCare states that their level for charity care is actually 400% of the federal poverty line. Now, the federal poverty line is actually $15,650 for an individual. So four times that would be $62,600.
I certainly have friends and acquaintances who I’m pretty sure are making about that level. Does that mean that all those people could get free or discounted medical care at ChristianaCare?
You would have to ask once you’re at the hospital to see if you qualify. Or, if you get a bill and you feel like I can’t afford this, there should be financial assistance information for you to follow up on to see if you’re eligible to receive free or even discounted care.
What is the process for that for someone who wants to try to access charity care? Your recommendation would be, wait till you get a bill and then ask about it?
I would ask up front if it were me personally, you know, see if I qualify even to get a discount.
For this story, did you actually talk to anyone who had used charity care about what their experience was like?
No, we weren’t able to find anybody. But, if anybody’s listening to this who did go through the process, we’d love to talk. I’m sure David will sneak my email in here somewhere.
We’re always looking for people to share their story.
Your reporting was clear that hospitals spend much more on community benefits than just charity care, and that ChristianaCare’s total spend on community benefits has actually increased over the last decade.
One of those other community benefit spends is forgiving bad medical debt. You start your article actually talking about an appropriation that was passed in the last legislative session where the state of Delaware is going to spend $500,000 to engage in a process that will purchase and eliminate up to $50 million in medical debt for an estimated 17,000 Delawareans.
As I read that, that sounds like quite a deal. How the heck is a half a million dollars going to get turned into $50 million in debt relief?
So my understanding is the state earmarked $500,000 for this company to essentially buy these huge bundles of devalued debt that is very unlikely to be repaid and over time has become less and less valuable. And this company buys these huge bundles of it from the commercial market and essentially clears those bills for patients. According to the people I talked to, debt has a commercial market value and sometimes hospitals will put it out on the market. Sometimes collection agencies will buy that and their goal is to turn a profit and get their money’s worth. This company buys that debt and essentially clears it.
If you are one of these lucky individuals, you’re just going to get a letter in the mail that says your debt has been cleared?
According to state channels. That’s how things should go by the end of the year.
Again, if you get one of those letters out there, let us know. We’d love to talk to you about it.
Yes, send us a picture. We’d love to see it.
Your article contains several comments from ChristianaCare’s Chief Financial Officer, Rob McMurray, providing context on the decision making from ChristianaCare around charity care. You also made the decision to include a link to the complete statement that you received from McMurray, which also includes your questions. What was the aim of including those full comments for access for our readers?
I think it’s good practice. If I’m a reader and reading that, you could see where I’m coming from with my questions, and you can kind of see the response that we get.
I think it’s fair when a story like this to give the subject as much room as possible to respond, give them as much space. But, if you read that through you, you’ll see I wasn’t able to include everything. It’s already a very long story and I thought it was only fair to just include that statement.
It was put together well for me already. So I figured that it’s only fair to share with everyone else who might want more, or feel a sense of unclarity. Is that a word?
I thought another thing you did that again, in this aim of being kind of fair, was you were very clear that although your headline’s about charity care, that there is a lot that goes into community benefits. What was important to you about setting that picture of the full totality of what goes into community benefits for a nonprofit hospital?
It’s only fair to include that because that is essentially what the system has become. It’s become a system of community benefit as opposed to, as we were discussing earlier, kind of this tit for tat exchange. That’s not really up to me to decide if that’s good one way or the other.
Spotlight Delaware likes to talk about its reporting being empowering for readers.
If there is someone out there who is at or under the 400% federal poverty level, who is struggling to pay for the medical care, how do you hope this reporting will empower them?
I would hope this would actually empower people all over the state because like we were discussing earlier, it can vary from hospital to hospital. You can go down the street, and a hospital might have an entirely different charity care policy where you might be eligible for free care at 300%, or somewhere else, you know, ChristianaCare, where it’s 400. So people understanding that these things exist.
That was one of the things we found in our reporting, that there’s often this communication breakdown where people might not even know that this exists or that they’re eligible. There might be this stigma attached to it that – you’re getting a handout or that there’s something wrong with that.
But you know, we hope in our reporting that people will know this exists and take full advantage of it because hospitals aren’t paying taxes. They are exempt from a lot of different things as part of that, and as part of that, they have to return [benefits] to the patients.
Thank you for crunching the numbers and bringing the issue of charity care to light, particularly for those who may not be aware that it exists.
No problem. I’m glad to do it.
