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Leonard Bass of Snohomish waits for his appointment at Pioneer Square Clinic, beneath a portrait by clinic nurse Mary Larson. Which area hospitals are the most charitable? (pdf)

Leonard Bass of Snohomish waits for his appointment at Pioneer Square Clinic, beneath a portrait by clinic nurse Mary Larson. Which area hospitals are the most charitable? (pdf)


The Charity of Hospitals

John Ryan

As the recession has cost more people their jobs and their health insurance, local hospitals have seen more patients show up with no way to pay. Hospitals in Washington are required to provide free care to anyone living below the poverty line, if they ask for it. But some hospitals give more freely than others. In part two of KUOW's series on nonprofit hospitals, John Ryan looks at how charitable these charity hospitals really are.


It's about 8 o'clock on a warm July morning at the Pioneer Square health clinic. The early rush of homeless patients has already come and gone. Every morning, after the shelters close around 6:30, 10 or 20 homeless people line up outside the clinic, waiting for health care. This clinic is run by Harborview Medical Center, just up First Hill from here. Harborview provides far more health care to the poor and uninsured than any other hospital in the state. Harborview is a government operation. It's owned by King County and run by the University of Washington.

Ed Dwyer–O'Connor says serving the underserved is central to Harborview's mission. He's a psychiatric nurse. He manages Harborview's downtown medical programs.

Dwyer–O'Connor: "We'll treat people regardless of their ability to pay, regardless of whether or not they're HIV, mentally ill, substance dependent. These are the folks I think are as deserving of care as anyone else, and they're the ones who are left out."

Leonard Bass was homeless five years ago. That's when he started coming to the clinic. He lives in the town of Snohomish now but he still comes down to Pioneer Square to get treatment for his diabetes.

Bass: "My medications are very expensive. If I wasn't on charity care, I couldn't get it."

Like many patients at the clinic, Bass is unemployed and uninsured. He says the free care he gets there is really good, but it can be hard to schedule appointments.

Bass: "I would love to have other options, but this is the only option I have at the present time."

Bass may not be aware of them, but he does have other options, at least on paper. Whether they're for–profit, nonprofit, or government, all Washington hospitals have to provide care for those who can't afford it. All the state's hospitals have also pledged to provide deeper discounts to low–income patients than the state requires.

Demand for charity health care has been rising steadily in Washington for a decade. Last year, one out of 10 private employers in the state simply stopped providing health insurance. And health officials expect the flood of uninsured patients to keep rising.

Most hospitals in the Puget Sound region are private, nonprofit organizations. That means they get tax breaks to pursue their charitable purposes for the good of the community.

Only three of the nonprofit hospitals in central Puget Sound give away more than 2 percent of their care to the poor: Providence Regional in Everett, Saint Clare in Lakewood, and Saint Francis in Federal Way. The Washington Department of Health tracks those figures.

Swedish chief financial officer Jeff Veilleux says his hospital would love to provide more charity care.

Veilleux: "On the other hand, there is a limit to the resources that even a large organization such as Swedish has. If the government or others want to pay us more for other services, so that we can use moneys profited in those services for charity care, we're happy to do that. But there is a limit. We don't have an unending amount of cash in our checkbook."

The latest IRS filings show seven Swedish employees earning more than a million dollars a year.

Hospital officials and state regulators say it can be misleading to compare one hospital's percentage of charity care to another's. One hospital may simply serve a region with relatively few poor people. Swedish reported giving away 1.5 percent of its income in care to the poor in 2007. That was twice the level Virginia Mason Medical Center reported, just a few blocks away from the main Swedish campus.

Ken Berger is with the watchdog group Charity Navigator. He says he'd like to see hospitals required to do much more to benefit their communities.

Berger: "The average nonprofit hospital in many parts of the country, the amount of charity care they is abysmal, it's like 2.5 percent, and you're considered the best in your class. What that tells us is that there's something profoundly wrong with the current definition of what it's acceptable to do to be defined as a nonprofit hospital."

Johnese Spisso is in charge of the University of Washington Medicine health system; that includes Harborview Medical Center. She says Harborview is set up to receive patients from other hospitals that can't provide specialized services, like trauma care and cancer care. But she says, sometimes, other hospitals simply transfer uninsured patients to Harborview instead of providing the charity care themselves.

Spisso: "We're going to be providing the lion's share in the state, and we embrace that mission. But we can't do it alone, as the number of uninsured rises, we really need participation from all the hospitals in our state."

Spisso says other hospitals' failure to hold up a fair share of the health–care safety net threatens Harborview's viability.

Spisso: "We run very small operating margins, 1 to 2 percent at best, if all we're caring for is uninsured and underinsured, we financially cannot stay afloat."

While critics say hospitals aren't doing enough to justify their tax breaks, hospital officials say they do more than enough. Cassie Sauer is with the Washington State Hospital Association. She says hospitals provide all kinds of community benefits beyond charity care. Things like medical research and programs to raise health awareness. And she says nonprofit hospitals in Washington are more than twice as generous with their charity care as their for–profit competitors. But Sauer says charity is no subsitute for wider reforms to the health–care system.

Sauer: "Charity care is not good care. Of course, it's good care, you're getting really good care in the hospital. It's not preventive care, it's not primary care, it's not pharmaceutical care, it's not follow–up care, it's not rehab care. It's only acute care hospital care. It drives me crazy when people say this is what we're going to do to provide health care to people is to guarantee they can get hospital charity care. You're cutting out so many parts of the health care system that they need."

Federal law used to require charity care. But after Medicare and Medicaid were created in the 1960s, hospitals convinced Congress that few people would need the charity anymore. Now, the IRS only makes nonprofit hospitals show that they provide some broadly defined community benefits.

As the U.S. Congress debates how to revamp the nation's health care system, they're revisiting that decision. Along with proposals to make health insurance available to more Americans, the Senate is looking at requiring hospitals to provide a minimum of charity care, like they did decades ago.

I'm John Ryan, KUOW News.

© Copyright 2009, KUOW