Advocate Health Care benefits the few

By David Whitset

It is no secret that Chicago has one of the worst track records of any major city with regards to racial redlining, which is the illegal practice of discrimination against a racial group by insurance providers or real-estate lenders. What is not so readily apparent is that the same discriminatory system often practiced by Chicago’s banks and insurance companies is also being practiced by its largest nonprofit health-care provider, Advocate Health Care, making what was once only a civil rights concern within the city a human rights one, too.

As a nonprofit health-care provider and a public charity, Advocate Health Care enjoys tax-exempt status and in return is expected to provide health care and community services throughout the communities it serves, regardless of race or ability to pay. The economic setup of Advocate Hospitals is simple: It uses government subsidies and the $124 million it receives in annual revenues from its four for-profit hospitals, all of which are located in predominantly white, high-income neighborhoods, to help subsidize its four hospitals operated in predominantly black, low-income neighborhoods.

However, a study filed by the Service Employees International Union’s (SEIU) Hospital Accounting Project found that from 1995 to 2003 Advocate had made only marginal reinvestments in its mission hospitals. In fact, Advocate had spent nothing on capital improvements in one of its nonprofit hospitals, Advocate Bethany, but had given nearly $72 million to one of its profit centers of roughly equal size, Advocate Good Shepherd, whose average patient salary is $110,470. At the same time that Advocate was withholding basic medical resources from Bethany, it attempted to build a new, $200 million hospital in Tinley Park, an affluent, white community. When asked at the permit hearing why it didn’t expand its services at its nearby mission hospitals instead of building a new facility, Advocate made this preference for affluent white clients explicit: “There is a lot of invisible geographic barriers in the metropolitan area.” Unsurprisingly, the state hospital planning board unanimously voted to reject Advocate’s proposal.

Not only does Advocate provide inferior services to its low-income patients, it overcharges them, too. In the eight years from 1995 to 2003, Advocate has spent less than one percent of its revenue on charity care, a possible violation of the Hill-Burton Act, which requires tax-exempt nonprofit hospitals to provide high levels of free charity care. Advocate’s unwillingness to offer free care means that its patients must rely on insurance or their own pockets to pay their medical bills. But because insurance companies can negotiate with hospitals to lower the cost of their clients’ medical bills, noninsured patients are left to pay the full price of the health care they receive—148 percent more than their privately insured counterparts.

Because Advocate charges those least able to pay the most, many of its patients are forced into bankruptcy and some are simply incapable of paying the bill at all. But the inability of its patients to pay has not stopped Advocate from collecting its bills. As a result, it has been investigated by the State of Illinois for extortionist bill collection tactics, which include garnishing wages, issuing warrants through the Sheriff’s office, and putting liens on the houses of those who are unable to pay the astronomical bills they are presented with. Most charity hospitals simply write off the bulk of their debt from indigent patients, and in a typical year file no lawsuits against patients who are unable to pay. Advocate, on the other hand, typically files more than 1,200 lawsuits, further exacerbating the poverty of its patients.

Advocate has aggressively sought to impede any labor union activity that might alter the way in which health care is currently being distributed throughout the city. In one instance, Advocate threatened that “there will be a sacrificial lamb” if its employees sought out the union. In addition, Advocate has implemented a policy of holding one-on-one meetings with employees to discourage union activity, and even included a two page section in its employee handbook as to why Advocate opposes unions. This activity is a clear violation of the Wagner Act, which guarantees the right of employees to organize and to bargain collectively with their employers, and is thus quite illegal. Because Advocate depends on its employees to carry out its lucrative services, labor unions are an essential force in improving the Advocate Health Care System.

Nonprofit health care providers like Advocate do not receive tax exemptions to let their hospitals suffer from the same socioeconomic and racial inequalities of the neighborhoods they are enlisted to help. The goods nonprofit hospitals like Advocate offer are not Sony’s latest flat-panel televisions or Samsung’s newest wireless phones; they are the technologies that save and preserve people’s lives, and thus should not be reserved for the highest bidders. As Dr. King noted, “of all the forms of inequality, injustice in health care is the most shocking and inhuman.”