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Health-care companies can't fix the root causes of the country's systemic inequality, but doctors and hospitals can ensure their services don't inflict financial harm on patients. For instance, they can determine how to screen patients for financial assistance and how to respond when a bill goes unpaid. But patient advocates say the medical industry perpetuates such harsh billing practices as garnishing wages, charging high interest rates, placing liens on homes, and suing patients. Those tactics often land harder on communities of color.

Meanwhile, these aggressive billing practices bring in little revenue for hospitals--less than 1% of the total by some estimates, patient advocates say. "These are already people who've been struggling to pay," says Jenifer Bosco, a staff attorney at the National Consumer Law Center who co-wrote proposed legislation to strengthen protections for patients. "It's not the way the hospitals are balancing their budgets."

Hospital industry groups have opposed state legislation intended to shield patients from harsh collections practices. Yet complaints about medical collections filed with federal authorities have persisted through the pandemic, the protests that followed Floyd's murder, and beyond.

Most U.S. hospitals are nonprofits or public entities; only about a quarter are for-profit companies. Consumer advocates say that as tax-exempt organizations, health-care systems should ensure that patients eligible for financial help don't get passed to debt collectors instead. They want medical providers to make clear to patients what assistance is available and halt the practice of garnishing wages or putting liens on houses. And they're pressuring hospitals to more broadly reexamine the impact of billing and collections tactics on communities of color. Those practices, they argue, are especially punitive in the context of the $119 billion in taxpayer money doled out to stabilize hospital finances upended by the pandemic.

"We invest a lot in our nonprofit hospital systems, and in exchange we ought to be able to expect them to behave like charities," says Elisabeth Ryden Benjamin, vice president for health initiatives at the Community Service Society of New York, a consumer group that fields health-care questions and complaints on behalf of the state.

In response to a rising number of complaints about medical billing, Benjamin's group analyzed almost 31,000 debt-collection lawsuits filed by New York state's hospital systems over five years. The median debt was $1,900. The results surprised her: Most of the litigation seeking debt repayment came from a handful of big nonprofit health systems, while dozens of other hospitals never brought suits.

NYC Health + Hospitals, which calls itself the largest public health-care system in the U.S., was among those that brought suits, though it was far from the most litigious. Benjamin was alarmed to find hundreds of lawsuits filed by the city's main safety-net provider. In a meeting in 2019 she asked the system's chief executive officer, Mitch Katz, about them.

Katz was surprised, too. He didn't know about the lawsuits. "I thought that was unacceptable, and so we ended all of those suits," he says in an interview. "We've been known to sue insurance companies, but we don't want to sue our patients." NYC Health + Hospitals has always provided free and low-cost care, Katz says, but some patients didn't apply or didn't know they could apply. Some undocumented immigrants may fear volunteering the information needed to qualify. The health system has boosted its outreach and extended the hours its financial counselors work. Those changes are intended to make charity care more accessible. "If we have a bill, we proactively contact them and say, 'Did you know that you are eligible?'" Katz says.

Benjamin also got a meeting with leaders from NewYork-Presbyterian, another one of the city's largest health-care systems. They didn't renounce lawsuits as NYC Health + Hospitals did, but they did instruct their collections agency to stop charging a 9% interest rate, Benjamin says. A spokesperson for NewYork-Presbyterian says the hospital doesn't charge interest on patient judgments but didn't comment on the rest of Benjamin's account.

Other health-care systems, including Northwell Health, the state's largest, have been less receptive to change, Benjamin says. Northwell representatives say that the system resorts to lawsuits only if patients don't respond to outreach, including offers of financial assistance, and that it has paused lawsuits during Covid.

For Benjamin, the meetings were revealing. "In some cases, hospitals didn't know what they were actually doing," she says. "There's something going on where it's on autopilot for these systems." Indeed, a November report by Benjamin's group revealed that New York hospitals filed thousands of liens against patients even as they collected state funds intended to cover the care of people who can't pay.

It's hard to separate the disparities in medical debt from other inequities. Black and Hispanic households are more often uninsured than White and Asian households, and they have lower incomes and less wealth to absorb unexpected shocks like medical bills.

Still, racial gaps in medical debt aren't inevitable. Massachusetts, Minnesota, Washington, and other states have low levels of medical debt and narrow differences in debt levels measured by race, according to Urban Institute data. In other areas, including much of the South, where states haven't expanded Medicaid eligibility, debt is more common, and the gaps between White communities and communities of color are wider.

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