When Jessica Staten\u2019s kidney stones wouldn\u2019t pass, she said, her doctor suggested a procedure to \u201cblow \u2019em up.\u201d She went to have it done last November at St. Joseph Medical Center in Bellingham, Washington, one of nine hospitals that the Catholic health system PeaceHealth operates in the Pacific Northwest and Alaska.<\/p>\n
\u201cI was probably there a total of 3\u00bd hours, and everything went well,\u201d said Staten, who works as an accountant and has health insurance. What came next shocked her: PeaceHealth sent a bill for $5,313.63 and, she said, told her she didn\u2019t qualify for help to lower the cost. Staten said she asked about financial assistance but was told she earned slightly too much.<\/p>\n
PeaceHealth aims to \u201ccarry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way,\u201d according to a 2022 tax filing<\/a>.<\/p>\n For Staten, suffering lingered long after receiving care from the health system with the only hospital in town.<\/p>\n To pay off her medical bill, Staten ultimately took on more debt, using her condo as collateral to secure a line of credit of more than $5,000, according to records reviewed by KFF Health News. She said the line of credit had an 11.2% interest rate. That was cheaper than a payment plan the hospital offered through a third party, which Staten said she was told would have charged about 12.5% interest.<\/p>\n \u201cIt\u2019s all about the money,\u201d said Staten, who has lived in Bellingham for more than 30 years. \u201cThat\u2019s the way they think now at the hospital.\u201d<\/p>\n PeaceHealth spokesperson Victoria Wilson said the hospital offers patients interest-free 12-month payment plans. For some patients, the monthly obligation is unaffordable. PeaceHealth also now offers longer-term plans with a 9% interest rate \u201cin alignment with current regulations,\u201d she said, declining to elaborate further.<\/p>\n \u201cEach patient who comes to us seeking care is experiencing a vulnerable moment in their life and needs healing,\u201d Wilson said in an emailed statement. \u201cWe hold each healing opportunity sacred, so financial healing is closely aligned with our Mission.\u201d<\/p>\n The \u201cEthical and Religious Directives<\/a> for Catholic Health Care Services,\u201d issued by the U.S. Conference of Catholic Bishops, outlines social responsibility principles for Catholic health facilities. One states that \u201ca just health care system will be concerned both with promoting equity of care \u2014 to assure that the right of each person to basic health care is respected \u2014 and with promoting the good health of all in the community.\u201d<\/p>\n As of 2023, there were just over 600 Catholic general hospitals nationally and roughly 100 more managed by Catholic chains that place some religious limits on care, a KFF Health News investigation revealed<\/a>.<\/p>\n Catholic nuns established many hospitals in the name of service. But modern-day practices at such facilities demonstrate how they adhere to the directives and church teaching in one way \u2014 prohibiting or limiting procedures that the church deems immoral, such as abortion and what it calls \u201cassisted suicide\u201d \u2014 while neglecting social responsibility standards, patients and clinicians said.<\/p>\n \u201cIt does show the lack of control or influence that the faith organization has over the actual company,\u201d said Shane Alderson, chair of the Baker County Board of Commissioners in Oregon. The local Catholic hospital owned by Trinity Health \u2014 Saint Alphonsus Medical Center-Baker City \u2014 last year shut down its obstetrics department. Its intensive care unit is also closed, Alderson said. \u201cYou get the feeling when you go to a Catholic hospital that the care and the vision is a lot more defined by the faith,\u201d he said, adding: \u201cIt\u2019s not really. It\u2019s corporate.\u201d<\/p>\n Sister Mary Haddad, president of the Catholic Health Association, said in a written statement that Catholic health systems \u201cremain true to our origins and the missions on which we were founded through our ongoing commitment to serving those most in need.\u201d In addition to patient care, she said, this includes investing in programs to address societal problems such as homelessness and food insecurity.<\/p>\n Health systems like CommonSpirit Health, Ascension, PeaceHealth, Trinity Health, and Providence St. Joseph pay their chief executives millions of dollars a year \u2014 payouts that kept pace during the covid-19 pandemic emergency, according to each company\u2019s tax filings.<\/p>\n CommonSpirit Health\u2019s then-CEO Lloyd Dean earned roughly $28 million in 2022; he was among nearly three dozen executives who pulled down more than $1 million that fiscal year, according to the health system\u2019s tax filings<\/a>.<\/p>\n Elsewhere, Rod Hochman, CEO of Providence St. Joseph Health, earned $12.1 million. Ascension CEO Joseph Impicciche was paid $9.1 million, according to corporate tax filings.<\/p>\n Spokespeople for Providence and Ascension said CEO compensation levels are market-competitive; CommonSpirit spokesperson Felicity Simmons said that Dean, who retired in July 2022, like other retiring executives \u201creceived standard deferred compensation benefits consistent with their many years of service.\u201d (CommonSpirit\u2019s 2021 tax filing showed Dean earned $35.5 million that year.)<\/p>\n To maintain their tax-exempt status, all nonprofit hospitals are required to spend on community benefits, but federal law doesn\u2019t specify how much or which services qualify.<\/p>\n Several large nonprofit Catholic health systems spend far less on community benefits such as free or discounted care to eligible patients and community health improvement services than the estimated value of the millions they secure in tax breaks, according to research by the nonpartisan Lown Institute.<\/p>\n Based on 2021 data, the think tank found that five of the 10 health systems with the greatest \u201cfair share deficits\u201d are Catholic: Providence, CommonSpirit Health, Trinity Health, Ascension, and Bon Secours Mercy Health\u2019s deficits were between $488 million and $1 billion.<\/p>\n Research by Community Catalyst, a consumer advocacy group, found that Catholic hospitals treat fewer Medicaid patients<\/a> than other nonprofit hospitals, something at odds with their mission of prioritizing health care needs of the poor and underprivileged. And like other hospitals nationwide, many large Catholic health systems allow aggressive tactics against patients for unpaid medical bills such as using third-party collections, filing lawsuits, placing liens, garnishing wages, reporting bad debt to credit bureaus, or restricting care to people who owe, a KFF Health News investigation found.<\/a><\/p>\n Catholic bishops are \u201cquite zealous for making sure that the reproductive and end-of-life care components of the ERDs are followed,\u201d said Patricia Gabow, a physician who led a Denver safety net health system for two decades and has written about the evolution of Catholic health care in the U.S. She said \u201cthey should be as zealous\u201d on enforcing the directives outlining Catholic health care\u2019s social responsibilities.<\/p>\n Among those directives is this: \u201cCatholic health care should distinguish itself by service to and advocacy for those people whose social condition puts them at the margins of our society and makes them particularly vulnerable to discrimination\u201d including \u201cthe poor; the uninsured and the underinsured\u201d; and \u201cchildren and the unborn.\u201d The U.S. Conference of Catholic Bishops declined to comment for this article, referring questions to the Catholic Health Association.<\/p>\n PeaceHealth\u2019s first hospital was founded in the 1890s by nuns from New Jersey who ventured to the West to care for loggers, millworkers, fishers, and their families in the country\u2019s remote frontier. Seven nuns and a cook staffed St. Joseph Hospital in Whatcom County, Washington, where Bellingham is located. St. Joseph is the Catholic patron saint of families, workers, and the dying<\/a>.<\/p>\n Now no nuns serve on St. Joseph Medical Center\u2019s or PeaceHealth\u2019s leadership teams; two are on the health system\u2019s 11-person board of directors. PeaceHealth CEO Liz Dunne earned $3.6 million in the fiscal year that ended June 30, 2023, tax filings show, and the Lown Institute estimates the health system spent $108.7 million less on community investments than the value of its tax exemptions. PeaceHealth declined to comment on executive compensation or the Lown Institute\u2019s findings.<\/p>\n In 2023, the health system was forced to refund up to $13.4 million<\/a> to more than 15,000 low-income patients after the Washington attorney general\u2019s office found it billed patients who should have received financial help.<\/p>\n Catholic health systems \u201cset a standard for themselves which is higher\u201d than other U.S. hospitals, Gabow said. \u201cDo they reach what they set for themselves? And there\u2019s a fair amount of data to say probably not.\u201d<\/p>\n Shutting Down Maternity Care<\/strong><\/p>\n For more than a century, a Catholic hospital now named Saint Alphonsus Medical Center has provided care in Baker City, Oregon, a 10,000-person town less than 100 miles from the Idaho border.<\/p>\n The hospital was founded in 1897 by nuns from Philadelphia. They treated 115 patients in the first year, \u201cmany of whom were loggers, ranchers, and gold miners,\u201d according to a document detailing its history<\/a>. Patients \u201creceived complete health coverage\u201d for $1 a month<\/a>.<\/p>\n Like many of its peers across the nation, the small rural hospital would become part of larger Catholic health systems. In 2010 it settled in as part of Trinity Health, the nation\u2019s fourth-largest hospital system by number of beds, according to federal data. Trinity Health operates 101 hospitals, plus other care sites, in 27 states. CEO Michael Slubowski\u2019s most recently reported salary was $5.3 million in the company\u2019s 2023 fiscal year, when Trinity had an operating margin of -2%, according to financial statements and tax filings. Operating margins are a measure of a hospital\u2019s financial health.<\/p>\n Trinity Health spokesperson Melissa Lander said Slubowski\u2019s compensation is based on factors including experience and performance, and pay \u201cmust be market competitive to attract and sustain talented people.\u201d<\/p>\n Baker City was given a jolt in 2023. Blaming staffing shortages and a decline in births, hospital executives announced that Saint Alphonsus would close its obstetrics unit, the only one in the county. The move caused an uproar locally and pushback by Oregon\u2019s two Democratic senators.<\/p>\n \u201cWhat they were doing is essentially getting rid of the unit that made no money and cost a lot,\u201d said Cathie Roach, a nurse who worked in Saint Alphonsus Medical Center\u2019s obstetrics unit for roughly a decade before retiring last year.<\/p>\n Roach said the staffing shortages were \u201cpretty much of their making.\u201d Hospital management rotated nurses among departments in ways that made some feel \u201creally uncomfortable,\u201d and the hospital didn\u2019t consider alternative ways of staffing the OB unit, she said.<\/p>\n For months, she said, nurses were getting hints that executives might close the birth center and began looking for jobs elsewhere. \u201cOut here if you want to be an OB nurse and this is the only hospital, and they start talking about closing,\u201d she said, \u201cthen, time to get out.\u201d<\/p>\n Hospital leaders said its obstetric deliveries had \u201cdeclined at a record rate<\/a>.\u201d However, birth data from the Oregon Health Authority tells a different story.<\/p>\n Births at the Baker City hospital declined to 103 in 2015, a nearly 30% drop from 2013, before rebounding. Annual births were in the 120s or 130s until the covid-19 pandemic took hold, when they fell 25% from 2019 to 2020. Still, from 2020 to 2022, between 100 and 112 babies were delivered each year.<\/p>\n Saint Alphonsus Health System and Trinity Health declined to comment.<\/p>\n Now the closest hospital where a person can give birth is over 40 miles away. In the winter in eastern Oregon, roads to get there are often closed.<\/p>\n In 2023, 54% of Baker County resident births were paid for by Medicaid, the health coverage program for people with low incomes, according to Oregon Health Authority statistics. That\u2019s a higher share than Medicaid-covered births statewide.<\/p>\n \u201cThey really lost their charity,\u201d Roach said, \u201cwhen the old nuns disappeared.\u201d<\/p>\n The Reach of Market Power<\/strong><\/p>\n The actions of Catholic health systems can have an outsize impact because of their reach, fueled by mergers in recent years: Four of the 10 largest U.S. hospital chains by number of beds are Catholic, according to federal data from the Agency for Healthcare Research and Quality.<\/p>\n Haddad noted that that power has worked for the good of vulnerable populations.<\/p>\n The association and most of the Catholic health systems criticized the Lown Institute report on community benefit spending as flawed for excluding several categories reported to the IRS, including uncompensated care costs and spending on health professional education. Haddad called the research an effort \u201cto disparage the work of Catholic health care by publishing misleading and biased reports that cherry-pick data.\u201d<\/p>\n The Lown Institute considers five categories of community investments, including financial assistance for patients, community health services, and health services such as free clinics and addiction treatment.<\/p>\n Ascension spokesperson Sean Fitzpatrick called the report an \u201cexercise in misinformation\u201d; Trinity Health\u2019s Lander said it \u201cgives inaccurate and, unfortunately, misleading conclusions.\u201d Bon Secours Mercy Health spokesperson Maureen Richmond said that the report \u201cutilizes flawed high-level assumptions and incomplete data\u201d and that the health system\u2019s community benefit spending in 2021 exceeded the value of its tax exemptions by more than $274 million \u2014 while Lown calculated that its benefit fell short of tax exemptions by $488 million. Providence spokesperson Melissa Tizon said Lown\u2019s methodology \u201cfalls short.\u201d<\/p>\n The CHA and multiple health systems declined to answer questions about whether certain business practices raised by this story were consistent with the mission of Catholic health care.<\/p>\n Years ago, Catholic hospital mergers were motivated primarily by ministry<\/a>, said Lawrence Singer, a retired associate professor who was affiliated with Loyola University Chicago School of Law. But things have changed.<\/p>\n \u201cIt really isn\u2019t \u2018save the ministry\u2019 any longer,\u201d he said. \u201cIt\u2019s really business that\u2019s driving a lot of this now.\u201d<\/p>\n Consolidation raises market power, and several studies have found that it leads to higher prices for patients while the quality of care remains steady or declines.<\/p>\n The Federal Trade Commission has blocked certain deals it predicts could reduce competition. Historically the agency has targeted transactions in which hospitals operate in the same market, according to antitrust law experts. State regulators have broader authority than the federal government, but most states can\u2019t reject proposed mergers without going to court, according to researchers at the University of California Law-San Francisco.<\/p>\n Some of the largest Catholic health systems, including CommonSpirit Health, Providence St. Joseph Health, and Trinity Health, achieved their size due to a different strategy: combining companies with little to no geographic overlap. Such \u201ccross-market mergers\u201d are traditionally harder for the FTC to block, according to health care antitrust experts.<\/p>\n When hospitals in the same market try to merge, \u201cin some ways it\u2019s a lot easier to quantify what\u2019s going on\u201d and the potential harm to competition, said Kevin Hahm, an antitrust attorney at Hunton Andrews Kurth and a former FTC official who investigated health care transactions.<\/p>\n But deals involving hospitals in different regions are increasingly drawing scrutiny. Researchers at the University of California-Berkeley, UC Law-San Francisco, and the University of Auckland found that health systems that acquired hospitals more than 50 miles away increased prices by 12.9% after six years<\/a> compared with hospitals not involved in mergers or acquisitions.<\/p>\n \u201cThe new frontier,\u201d said Thomas Greaney, one of that merger study\u2019s authors, \u201cis whether we\u2019ll go after what we\u2019ve called system power.\u201d<\/p>\n \u2018We\u2019re a Captive Audience\u2019<\/strong><\/p>\n Bellingham is one of the nation\u2019s least competitive hospital markets: In 2021, it was the fifth most concentrated in the U.S. and had the highest health care prices of metro areas in Washington, according to the nonprofit Health Care Cost Institute.<\/p>\n The nuns who established PeaceHealth\u2019s first hospital would open or operate others throughout the 20th century. PeaceHealth also acquired hospitals through mergers, including Southwest Medical Center in Vancouver and United General Hospital in Sedro-Woolley.<\/p>\n \u201cPeaceHealth is the leader in all three of its markets, with decided market share leads in its Northwest and Oregon markets,\u201d credit ratings firm Fitch Ratings reported in March<\/a>. PeaceHealth declined to answer questions about whether a desire to charge higher prices drives market decisions.<\/p>\n Its hospitals stand out for what they\u2019re paid. Rand Corp. researchers told KFF Health News that commercial health plans in 2022 paid PeaceHealth\u2019s Washington hospitals 314% of what Medicare would have paid for the same services. Those are the highest-priced rates among health systems in the state, according to Rand\u2019s analysis. PeaceHealth declined to comment.<\/p>\n Staten\u2019s medical bill from PeaceHealth is gone: She used the home equity line of credit to pay it off. Now she\u2019s paying more on her mortgage every month.<\/p>\n She said she can\u2019t afford to have another experience like her kidney stone surgery, which she was told involved a laser to break the stones into smaller pieces.<\/p>\n \u201cIt\u2019s not like you\u2019ve got three hospitals to choose from,\u201d Staten said. \u201cWe\u2019re a captive audience.\u201d<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\nUSE OUR CONTENT<\/h3>\n