Healthcare organizations saddled with unrecoverable debt should take note of a new payment program at Franklin Memorial Hospital, a 70-bed hospital in Farmington, Maine, that instills dignity in resolving hospital debt for low-income patients.
Last month, the hospital launched its "Contract for Care" program that allows uninsured or under-insured patients whose incomes fall within the state and federal poverty level to work off their out-of-pocket debts. The program is also extended to friends and family members of patients who want to help pay the bills.
Aside from the debt recovery issue, Tucker stresses that the program "is a marketing dream because of the self-esteem issue" involving patients who are proud to be able to pay their bills in a dignified way.
"A lot of people are looking at us and scratching their heads," says Pete Tucker, Franklin's director of planning and marketing, who contends that this program could be duplicated at any hospital, regardless of size and market.
The hospital is moving ahead with plans to make the program available as a bill payment option for low-income patients who meet the criteria. So far, three patients involved in the pilot have settled their debts at a rate of $20 an hour (which they signed over to the hospital). A 59-year-old Maine native paid off her $4,000 debt from a gall bladder operation by performing 20 hours of clerical work each week for four months. And a 24-year-old carpenter, who had wrist surgery, paid off a $2,400 hospital tab through cash installments and working several Sundays in the ER running errands. He delivered lab samples, made beds and organized paperwork.
Unique Outreach
The program also is an innovative business solution for hospitals that serve financially-stressed communities. Between 18 and 20% of Franklin's patient base either have no insurance or are extremely under-insured.
Despite the $500,000 the hospital annually earmarks for charity healthcare services, Tucker says it's still not enough to cover all of the expenses involved in delivering care to the poor.
The Contract for Care program is expected to put a dent in the otherwise unrecoverable debt that is incurred by the hospital for this patient population. Although the hospital has not projected what that cost-savings will be, the program has generated considerable interest. So far, 549 patients are being considered for the program which is expected to be fully operational this spring.
Unique community-outreach programs like Contract for Care have helped the hospital reverse a five-year decline in market share which ended in 1996, according to Tucker. Last year, admissions jumped 7% and outpatient care 11%. One of the hospital's most creative initiatives called the HealthCard, allows patients to receive a 10% discount on their out-of-pocket hospital charges as well as discounts from 77 local merchants. (Franklin Memorial Hospital, Pete Tucker, 207/778-6031)
Community Applauds; Industry Wonders
Barely off the ground, Contract for Care has already taken some potshots from critics- mainly from lawyers, accountants and healthcare advocacy groups. Their list of concerns involve the program displacing hospital workers, participants' Medicaid or welfare benefits being jeopardized or patients taking advantage of the program when they can afford to pay their bills. To these naysayers, Franklin Memorial Hospital officials clarify that:
- patients will be given special short-term assignments, not jobs filled by regular employees; and
- applicants will be screened for eligibility (using state/federal poverty level guidelines).