The stories about Methodist Le Bonheur Healthcare’s aggressive debt collection practices bear the photos of the low-income workers who have been sued by the nonprofit hospital, workers such as Carrie Barrett.
A photographer captured Barrett, 63, at her church, her home and on her way to work at Kroger, where she makes around $9 an hour. She owes the hospital about $33,000, more than twice what she earned last year, according to her tax return.
Mostly out of sight are those with the power to influence the hospital system’s policies — its board of directors, which includes Alan Graf, FedEx’s executive vice president and chief financial officer. According to a recent proxy statement, Graf’s base salary in 2018 was $1.1 million, almost 35 times Barrett’s debt. (His total compensation that year topped $6.5 million, or more than 195 times her debt.)
As the hospital’s governing authority, the board has the power to influence policy, such as the hospital’s practice of suing patients — including its own employees — for unpaid hospital bills. It can also weigh in on the hospital’s financial assistance policy, which is exceptionally stingy because it does not apply to patients with insurance, according to an MLK50-ProPublica analysis of nonprofit hospital policies across the state.
Methodist Le Bonheur, which is affiliated with the United Methodist Church, filed more than 8,300 lawsuits between 2014 and 2018, according to an analysis of Shelby County General Sessions Court records. That’s more than all but one creditor during that five-year period.
Days after an investigation by MLK50 and ProPublica detailed its relentless pursuit of debts held by poor people, the hospital announced it would review its collection activities and on July 3, suspended new court collection activities. The hospital has since held town hall meetings with employees at each of its six facilities.
No comment then or now
It is unclear if Methodist’s board members knew how the tax-exempt hospital wielded the court as a hammer against low-wage patients before the investigation was published, but it seems certain that they know now.
All of the three Methodist bishops who are ex-officio members of the board refused comment prior to publication, but since, two have spoken out.
Board members reached before publication — including Johnny Moore of SunTrust Bank and Carolyn Hardy of Chism Investments — refused to comment. Board members contacted after publication also refused to comment. (Contact information for all board members was not immediately available.)
The lone former board member who agreed to talk before the investigation was published was Beverly Robertson, who served on Methodist’s board from 2003 to 2012. She said she was surprised to learn about the hospital’s collection practices. During her lengthy tenure, she said, board members were never informed about the lawsuits against patients.
“I wish I’d known some of this,” said Robertson, president and CEO of the Greater Memphis Chamber and previously executive director of the National Civil Rights Museum.
Methodist Le Bonheur Healthcare refused repeated requests to provide the most recent list of its board of directors. The list below was culled from the Methodist Healthcare Foundation’s 2018 annual review, which is available online.
The foundation’s annual review lists Sandy Smith and Denise Wood as board members. Because their employers/identities could not immediately be confirmed, their photos are not included above. The review also lists Floyd Tyler as a board member, but he has since resigned, he told MLK50 in an email.
The board members are (in alphabetical order):
- Mike Bruns, founder of Comtrak Logistics;
- Larry Bryan (board vice chairman), founder of Diversified Trust;
- Former Congressman Harold Ford Jr.;
- Harry Goldsmith, Bass Berry and Sims;
- Alan Graf, FedEx;
- Carolyn Hardy, Chism Investments;
- Edith Kelly-Green, franchise owner and the first black woman vice president at FedEx;
- Mark Medford, board chairman and CEO of Vining Sparks;
- Johnny Moore, president of SunTrust Bank;
- Billy Orgel, Tower Enterprises;
- John Pettey III, Raymond James, and great-grandson of hospital founder, John Sherard, who has been described as a wealthy planter;
- M. David Rudd, president of University of Memphis.
Low wages exacerbate court practices
Since 2014, Methodist has sued dozens of its workers for unpaid medical bills, including a hospital housekeeper sued in 2017 for more than $23,000. That year, she told the court, she made $16,000. She’s in a court-ordered payment plan, but in the case of more than 70 other employees, Methodist has garnished the wages it pays them to recoup its medical charges.
Part of what makes paying medical bills so hard for some Methodist employees is that their wages are low, lagging behind several other large employers in the Memphis market. In December, St. Jude Children’s Research Hospital announced it was raising its minimum pay for full- and part-time workers to $15 an hour. St. Jude’s decision followed a similar commitment by the Shelby County government, Shelby County Schools and Blue Cross Blue Shield of Tennessee.
At Methodist, which operates five hospitals in Shelby County, the lowest-paid employees make $10 an hour, and about 18% of workers make less than $15 an hour, the hospital reported in response to MLK50’s 2018 Living Wage Survey.
As recently as 2017, the Greater Memphis Chamber advertised on its website that the city offered a workforce at “wage rates that are lower than most other parts of the country.”
The United Methodist Church’s Social Principles, which state the denomination’s position on everything from climate change to the death penalty, speak directly to what employees should earn: “Every person has the right to a job at a living wage,” it states.
The Living Wage Model statement on the church’s website says, “Exploitation or underpayment of workers is incompatible with Christ’s commandment to love our neighbor.”
Methodist declined repeated requests to interview its top executives.
Instead it sent a statement that said, “Outstanding patient debts are only sent to collections and then to court as a very last resort, and only after continued efforts to work with the patients have been exhausted.”
“We strongly believe in providing exceptional care to all members of the community — regardless of ability to pay.”
Methodist, which made Forbes’ 2019 list of Best Employers by State, did not answer specific questions about pay for employees. On its website, it says, “It is the policy of Methodist Le Bonheur Healthcare to pay its employees competitive, market-based wages.”
Nonprofit hospitals are generally exempt from local, state and federal taxes. In return, the federal government expects them to provide a significant community benefit, including charity care and financial assistance.
Methodist does provide some charity care — and pegs its community benefits at more than $226 million annually — but experts faulted it for also wielding the court as a hammer.
Several nonprofit hospitals don’t sue patients at all, such as Bon Secours Hospitals in Virginia, which stopped pursuing debt suits in 2007, and the University of Pittsburgh Medical Center, which includes more than 20 facilities.
Some of Methodist Hospital’s cousins — health systems affiliated with the United Methodist Church — also don’t sue patients. That’s the case with Methodist Health System, which operates four hospitals in the Dallas area. The collection policy of the seven-hospital Houston Methodist system states: “At no time will Houston Methodist impose extraordinary collection actions such as wage garnishments,” liens on homes, or credit bureau notification.
“We are a faith-based institution and we don’t believe taking extraordinary measures to seek bill payments is consistent with our mission and values,” a Houston Methodist spokesperson said by email.
The Methodist Debt Machine Series
The story that started it all: Methodist Le Bonheur Makes Millions, Owns a Collection Agency and Relentlessly Sues the Poor and everything that came after, here.
This story is brought to you by MLK50: Justice Through Journalism, a nonprofit reporting project on economic justice in Memphis. Support independent journalism by making a tax-deductible donation today. MLK50 is also supported by the Surdna Foundation, the Southern Documentary Project and Community Change.