A new report says the Detroit Medical System’s for-profit owner has broken its promise to care for the city’s poorest residents.
The DMC is owned by Dallas-based Tenet Health Care. Tenet pledged to continue the DMC’s historic commitment to “charity care” when it bought the hospital system in 2013.
But the Michigan Nurses Association report says federal government data show DMC charity care spending plunged 98% in three years, from nearly $23 million in 2013 to around $470,000 in 2016.
The report admits the Affordable Care Act and Medicaid expansion have driven large declines in charity care overall, because more people have health insurance.
However, it points to other Metro Detroit health systems—Beaumont and Henry Ford Health—that spend much more on charity care and have seen smaller declines over the same period, to suggest that Tenet-DMC’s drop must be driven by other factors.
“Tenet is the only major hospital system in the Detroit area to show a 98% reduction in charity care spending,” says Sara Wallenfang, president of the Michigan Nurses Association.
Marjorie Mitchell of the Michigan Universal Health Care Action Network says this has been a fear since for-profit companies took over the DMC, and supports anecdotal evidence that Detroit's uninsured are being pushed out of their hospitals.
“The people who cannot pay and who cost you money, [those] people are kind of left out of the system or pushed out of the system,” Mitchell said.
But Tenet-DMC blasted the report as misleading, saying it’s based on incomplete and cherry-picked data.
“This is an unfortunate attempt to characterize an issue that does not reflect the entire story,” DMC CEO Dr. Tony Tedeschi said through a spokesperson.
Tedeschi says hospitals incur two types of uncompensated care—bad debt and charity care. He says in 2017, the DMC spent $99.9 million in total uncompensated care, and has spent $698.3 million since 2013. Bad debt is a growing problem for hospitals nationwide, because many patients who have insurance are unable to pay increasingly high deductibles.
“The Detroit Medical Center has a well-established history of serving as the area's safety-net system,” Tedeschi said. “As you know, our hospital turns no patient away due to lack of insurance coverage because serving all in need is part of our mission. And, while the DMC, including Huron Valley-Sinai Hospital, is now part of a larger, investor-owned health system, we continue to stand up for all who are in need just as we did when we operated as a not-for-profit.”
Tedeschi also suggested the report is an attempt by the Michigan Nurses Association to “distract us from what is most important.” He alluded to contentious ongoing contract negotiations between DMC and the MNA, which represents nurses at Huron-Valley Sinai Hospital, and called the report “an insult to these hardworking men and women who work with the DMC.”
Wallenfang denied the report is related to the contract talks, saying the numbers speak for themselves.
Tenet is a publicly-owned company that provides detailed financial information to investors and the government. However, Wallenfang notes that in its 2016 annual report to the DMC Legacy Board—which oversees DMC’s safety-net obligations under its purchase agreement—specific information related to indigent and low income care is marked “confidential.”
“If indeed they want to dispute this, good. Show us the data,” says Mitchell. “Show us the data that you have a whole lot more people on charity care. Open up your books and let us see.”
Wallenfang says the MNA has submitted a copy of the report to the Michigan Attorney General’s office, and is in talks with the DMC Legacy Board about whether the hospital is meeting its legal obligations to provide charity care.