Methodist Le Bonheur Healthcare will expand its financial assistance policy, stop collecting interest on medical debt and raise its minimum wage to $15 an hour over the next 17 months, hospital executives said Tuesday.
The hospital will also stop suing its own employees and garnishing their wages. The reforms were announced in a media briefing call Tuesday, exactly one month after Methodist CEO and president Michael Ugwueke announced the hospital would spend 30 days review of its collections and financial assistance policies.
The review was prompted by an MLK50-ProPublica investigation that revealed the Christian hospital’s relentless pursuit of debts held by low-income residents and even dozens of its own employees.
“We were humbled to learn that while there’s so much good happening across our health system each day, we can and must do more,” Ugwueke said on the call.
The hospital system, 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.
One story chronicled the struggle of Carrie Barrett, who makes $9.05 an hour at Kroger, to pay a 2007 hospital bill for just over $12,000. Interest and attorney fees grew the bill to more than $33,000. Ordered by the court to pay $100 a month, Barrett, 63, will be 90 by the time she pays off the debt. On Tuesday, hospital officials said they could not talk about individual cases; Barrett said that she had not been contacted by the hospital or its attorneys.
Another detailed how Methodist sues its own employees, some of whom make less than $13 an hour. Some of the hospital bills were for care delivered while the defendants worked at Methodist and some for care before they joined Methodist. The system’s health plan doesn’t allow workers to seek care at hospitals with more generous financial assistance policies.
The new financial assistance policy will apply to care provided Aug. 1 and after, Methodist officials said.
The changes mean that more uninsured people will be eligible for financial assistance. While patients with family income up to 125% of the federal poverty level are currently eligible for charity care, starting Thursday, uninsured patients with income up to 250% of the federal poverty guidelines will be eligible for financial assistance.
In addition, Methodist will no longer pursue legal action against patients with or without insurance whose household income is at or below 250% of the federal poverty guidelines.
The hospital will “ no longer accept court ordered interest on medical debt, and we will no longer collect court allowed attorney fees and court costs from any patient,” according to a press release.
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.
But starting in September, the hospital will raise its minimum wage from $10.08 to $13.50. By Jan. 1, 2021, minimum wage will become $15.00 an hour. Raising the minimum wage and adjusting other salaries to account for wage compression is estimated to cost the hospital $14 million a year, said Carol Ross-Spang, Methodist’s chief human resources officer.
The compensation changes bring the hospital in line with the principles of the United Methodist Church. The denomination’s Social Principles, which state the church’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.”
Since July 3, Methodist has dropped more than 100 cases it had filed in General Sessions Court.
Shelby County Mayor Lee Harris applauded Methodist’s decision to raise employee pay and hoped it would prompt other organizations, including the University of Memphis, to follow suit.
“This announcement reflects Methodist’s values and, what’s more, our community’s values. Lifting wages to a livable standard is not controversial and it is increasingly a bi-partisan issue,” he said in a statement.
“One day, I hope it’ll also be standard operating procedure at most organizations, particularly at our public and charitable institutions. No organization is perfect, but the goal is to try as best we can to move toward what justice requires.
“It’s not lost on me that the U of M custodians, who are full time public employees, still face a similar issue. With any luck, U of M will also face the issue head on, and won’t be too far behind.”
This story will be updated.
Wendi C. Thomas is the editor of MLK50: Justice Through Journalism. Deborah Douglas is the managing editor of MLK50. Email Thomas at wendicthomas@mlk50.com and email Douglas at deb@mlk50.com.
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