Hospital Pricing: A Response

<b>60 Minutes</b> Producer Responds To Hospital Association's Letter

Earlier this month, 60 Minutes correspondent Dan Rather reported on the prices hospitals charge uninsured patients. In response, Richard Davidson, president of the American Hospital Association, sent a letter.

Here's his letter to Dan Rather, and below, is 60 Minutes segment producer Michael Rosenbaum's response.

Dear Dan:
CBS News and 60 Minutes took on a complex and serious set of issues in your March 5 segment on hospital charges and the uninsured. You worked hard for a balanced story, but there are three points about which your viewers deserved a fuller story than you delivered.

First, the tone of the piece suggested that the real and disturbing cases you highlighted are typical of what happens to people without insurance at all hospitals. That simply is not the case. The nation's hospitals spent nearly $27 billion in 2004 on care for which they were never paid. Thousands of hospitals have policies and people that help the uninsured effectively and with enormous compassion. That was missing from your report.

Second, it would have been fairer if you had given your viewers a more complete portrait of who K.B. Forbes is. Labeling him a community activist, you did point out his relationship with conservative politicians. Wouldn't the documented fact that the health insurance industry has financed some of his "activism" be relevant for the public to know? That was missing from your report.

Finally, a few more words about the real "widespread" problem at the core of the report's topic would have been appropriate. That's the 46 million Americans with no health insurance and the fact that our nation is largely ignoring the problem, leaving hospitals to be their family doctors, to care for them and then find a way to pay for it, while government and the wealthy insurance industry look the other way. That was the most important point of all and it was missing from your report. Hospitals will continue to work to find financial assistance options for the uninsured. It must be acknowledged that hospitals currently do more than any other element of society to care for the uninsured. You did a disservice by not calling for a national solution to providing health coverage for all Americans.

Dick Davidson

This was the response by 60 Minutes producer Michael Rosenbaum.

Dear Richard:

Thanks for your letter regarding "Is the Price Right?" and for acknowledging that we "worked hard for a balanced story." We'd like to respond to your points as follows:

First, the specific amount hospitals spend each year on care for which they are not reimbursed – which you put at $27 billion – is at best controversial, and subject to many interpretations, particularly over the issue of how much of that figure reflects charges, as opposed to costs.

A recent PriceWaterhouseCoopers study, the most comprehensive we've found, says "76 percent of hospitals calculated their charity care in terms of charges, not costs, and an additional 9 percent- use a combination of charges and costs, suggesting that the majority of charity-care numbers are based on charges." As our story reported, only the uninsured are charged a hospital's full price, which can be two, three, four or more times what they accept as full payment from an insurance company or Medicare.

Second, K.B. Forbes' acknowledges that he once worked for Patrick Rooney, who headed an insurance company that sells so-called "health savings account" insurance policies. These are the same kind of insurance policies President Bush advocated in his recent State of the Union address. Forbes also told us that Rooney, whom he describes as a "good friend," gave him some start-up money for his organization, and that Rooney now gives him advice.

But Forbes says his work is on behalf of the uninsured, and is in no way connected with any agenda of any insurance company. All the evidence we've seen shows that is correct. And, even Forbes' harshest critics have not provided any evidence that his work for the uninsured involves promoting, proselytizing or lobbying for any form of insurance.

Third, we do not believe that it is appropriate for the media to advocate any "solution" or policy regarding health care for the uninsured. That's the subject of a national political debate in which your organization and many others are engaged.

We did report that your organization believes hospitals did not create this problem, and quoted AHA Vice President Carmela Coyle as saying that the solution is for everybody to have health insurance. We also reported that some hospitals have begun to offer discounts to the uninsured, and quoted Coyle as saying American hospitals "are doing the right thing" for the uninsured.

We appreciate your letter, and the work that hospitals do. But we must respectfully disagree with your criticisms of our story.

Michael Rosenbaum