This article concerns a real dispute with a real hospital in San Jose, California (O'Connor Hospital). I do not have medical insurance and the hospital insists on charging me approximately 3 times the rate they charge people with insurance. If you don't know how this works I suggest you read my previous article Proposal for Fair Treatment for People Without Health Insurance at: www.jmargolin.com/todo/medins.htm .

Over a period of at least seven months I attempted to resolve the dispute with this hospital. I failed. I don't think the failure was mine. They have a great deal of experience dealing with sick people and they know that sick people want to put the whole experience behind them and get on with their lives. (If they die, the hospital can file a claim against their estate and get paid that way.) This hospital's strategy seemed to be to cause me as much frustration and anguish as possible until I reached the point where I would have no choice but to give in. That probably works with most people.

The reason I am going public by posting this article is that when the hospital sues me either they will sue me in small claims court where I will not be given enough time to present my case, or, if they sue me in regular court it will be years before the case comes up. I am hoping that by posting this article now, others may benefit from my experience.

O'Connor Hospital is a supposedly non-profit hospital operated by the Daughters of Charity. Don't let the Charity bit fool you. They are the least charitable organization I have ever had the misfortune to get tangled up with.

I am not an attorney. I am an engineer. In putting together the following legal information I have simply used the same persistence and thoroughness that I use in my engineering work. If it works for you, great. Let me know. If it doesn't work, let me know that, too.

The laws I have cited are California laws relating to contracts. Contract laws vary from state to state, and the laws I have cited may not have equivalents in other states.

1.0      A Night to Remember
 

2.0     O'Connor Hospital (O'Connor) is charging me far in excess of the amounts allowed by the agreements I signed.
 

3.0     O'Connor insists on charging me for three visits even though it was the decisions made by O'Connor and its doctors, resulting in inappropriate medical care, that resulted in three visits instead of just one.
 

4.0     Despite the excessive charges and inappropriate medical care I received from O'Connor and its doctors I attempted to resolve the charges with O'Connor during the period from December 2003 through June 2004. O'Connor consistently acted in bad faith and made any reasonable resolution impossible.
 

5.0     O'Connor's conduct in this matter was not the result of an oversight or a mistake on their part. It was a deliberate attempt to exploit me because I do not have medical insurance.
 

6.0      O'Connor belongs to an association that sponsors (and perhaps, subsidizes) a Political Action Committee and by doing so may have jeopardized its tax exempt status.
 

Conclusion
 

Appendix
 

Exhibits

1.0     Last November (2003) I made three visits to the O'Connor Emergency Room during a 12 hour period between Sunday evening and Monday morning.

I went there because I was experiencing severe burning chest pain whenever I ate food or drank water.

1.1      At my first visit I was seen by a doctor who diagnosed my condition as gastritis.

According to this doctor gastric pain is not considered serious.

At his direction I was given a G.I. Cocktail and sent home. Before taking the G.I. Cocktail I asked what was in it and was told only that it contained Maalox and an anesthetic for my stomach.

1.2      A few hours after coming home the severe burning chest pain came back and was even worse, so I returned to the O'Connor ER, where I was seen by a second doctor who had several tests done, gave me another G.I Cocktail, an IV of a Proton Pump Inhibitor, and sent me home. A Proton Pump Inhibitor (PPI) suppresses the stomach's production of acid, like Aciphex and Prilosec.

1.3      Again, a few hours after coming home the burning pain was even worse, at the same level of pain that I had when I had kidney stones, so I went back for a third time, where I was seen by a third doctor.

I don't remember very much except the pain and that I was dead tired.

At some point someone gave me a pill. I asked what it was and she said it was Atavan (I did not recognize the name) and that it would relax me.

Either as a result of the drug or because of sleep deprivation and pain I started seeing images with my eyes closed, like a dream on fast-forward.

1.4      As I found out later, Atavan is a sedative (diazepam).

I also found out that the G.I. Cocktails I had been given contained:

30 cc Maalox
10 cc Xylocaine (Lidocaine)
10 cc Donnatal

 Atropine Sulfate
 Hyoscyamine Sulfate
 Phenobarbital
 Scopolamine Hydrobromide

That explains why, when I got home, I was dead on my feet and immediately fell asleep.

I should not have been sent home in that condition, especially since I was driving myself.

They had been giving me sedatives all night and had withheld that knowledge from me even when I explicitly asked what I was being given.

At the end of my third visit I was given a list of gastroenterologists as well as a short list of psychiatrists, presumably because anyone who keeps going back to an Emergency Room which has already refused to help him obviously needs to have his head examined.

A few months later I had a Nuclear Gastric Emptying Study performed (somewhere else).

According to the report, after 90 minutes "There is no evidence of gastric emptying into the small bowel. The gastric emptying half-time can therefore can {sic} not be calculated."  From the diagnosis: "The findings are consistent with severe gastroparesis."

According to the article "Gastroparesis and Diabetes" from the National Digestive Diseases Information Clearinghouse (NDDIC) at http://digestive.niddk.nih.gov/ddiseases/pubs/gastroparesis the causes of gastroparesis include diabetes, postviral syndromes, anorexia nervosa, surgery on the stomach or vagus nerve, and medications, particularly anticholinergics and narcotics (drugs that slow contractions in the intestine).

In my first two (of three) visits to the O'Connor ER in November the G.I. Cocktail I was given contained Donnatal, which is an anticholinergic.

I believe it is reasonable to conclude that regardless of the cause of gastroparesis an anticholinergic like Donnatal would only make it worse.

1.5      In November 2003 I requested that O'Connor send me a copy of my medical records. They did not comply until April 2004.

1.6    I am being billed for three separate ER visits. Each visit is being billed at a rate approximately three times the rate charged to insurance companies and Medicare.

2.0     O'Connor Hospital (O'Connor) is charging me far in excess of the amounts allowed by the agreements I signed.

I made three visits to O'Connor's Emergency Room over an approximately twelve hour period from Sunday evening November xx, 2003, to Monday morning November xx, 2003.

When I went to O'Connor's Emergency Room seeking treatment I was required to sign their standard agreement at the beginning of each visit in order to receive treatment. O'Connor assigned a different account number to each agreement. They are: xxxxxx, xxxxxx, and xxxxxx. It is clear from O'Connor's actions in attempting to enforce these agreements that it considers these agreements to be contracts which are therefore governed by standard contract law. {Exhibit 1: Agreement}

2.1     The agreement entitled Emergency Information and Consent to Treatment Part II, Section 1 Financial Agreement contains the statement:

The undersigned agrees, whether he/she signs as agent or as a patient that in consideration of the services to be rendered to the patient, he/she hereby individually obligates himself/herself to pay the account of the hospital in accordance with the regular rates and terms of the hospital.

§1644.  The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.

In its ordinary and popular sense the phrase regular rates and terms can be understood as regular rates and regular terms.

The agreement goes into great detail about what it considers regular terms. There is nothing about regular rates, although in Section 1 Health Care Service Plan Obligation it states, in reference to patients whose health care service plan does not appear on their list plans:

The undersigned agrees that he/she is individually obligated to pay the full cost of all services rendered to him/her if he/she belongs to a plan which does not appear on the above-mentioned list.

In the ordinary and popular use of the phrase regular rates, they are rates that are regular.

A Rate is easily understood as the cost of something, but what is a Regular Rate? What is the Regular cost of something?

According to the Random House Dictionary of the English Language College Edition (1968),

Regular (adj)  1. usual; normal; customary.   2. evenly or uniformly arranged.  3. characterized by fixed principle, uniform procedures, etc.  4. recurring at fixed or uniform intervals or uniform intervals.

I believe that the definition that best fits O'Connor's use of the term is 1. usual; normal; customary, and in particular, usual.

What does O'Connor usually charge its patients?

According to the pie chart in O'Connor's Annual Report for 2003, in the section Consolidated Statement of Earnings, June 30, 2003 on page 22, 29% of their gross revenue came from HMO/PPO/Commercial, 42% came from Medicare, and 20% came from Medi-Cal for a total of 91%, which agrees with the figure of 9% from Other, presumably people like me who are uninsured. I believe that 91% qualifies as usual. (As will be discussed shortly, O'Connor has 97% Collection Rate from the Uninsured.) {Exhibit 2: O'Connor Annual Report for 2003}

However, the price I am being charged is approximately 3 times the usual amount. That is not what is called for in my agreement with O'Connor.

In the article Investigative Report - Overcharging the Uninsured - Part 1 by Randy Suttles and Merrill Mathews, Jr, P.H.D. of The Heartland Institute. O'Connor Hospital is specifically mentioned in Table 2.  According to their example, for services with an operating expense of $1631.42, O'Connor collects $1,940.00 from Managed Care but the Uninsured are charged $5,951.00 (a charge/operating expense ration of approximately 1.2 for Managed Care and 3.6 for the Uninsured. The charge ratio of Uninsured to Managed Care is approximately 3.1. O'Connor has 97% Collection Rate from the Uninsured. {Exhibit 3: Article by Suttles and Mathews}

While O'Connor may argue that the ratio of 3.1 is the usual charge for the Uninsured, it is not the usual charge for 91% of their income. This is especially true even if O'Connor means that regular rates are the full cost of all services as was discussed previously.

I wish to note California Civil Code:

§1654.  In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.

Other hospitals explicitly mention their chargemaster. Here is part of the admitting agreement from Regional Medical Center of San Jose. The agreement is from August 2003. {Exhibit 4}

7. Financial Agreement
In consideration of the services to be rendered to the patient, the undersigned (as parent, guardian, spouse, guarantor, agent or as the patient) individually promises to pay the patients account at the rates stated in the Hospital's price list (known as the "Charge Master") effective on the date the charge is processed for the service provided, which rates are hereby expressly incorporated by reference as the price term of this Agreement to pay the patients account.

Then again, there is another hospital in San Jose that also uses the phrase regular rates and terms. Here is part of the admitting agreement from Santa Clara Valley Medical Center.{Exhibit 5}

4. Financial Agreement: The undersigned agrees to pay for services rendered, in accordance with the regular rates and terms established for such services at the hospital, or as specified under the terms of contractual or lien agreements or obligations.

§1611.  When a contract does not determine the amount of the consideration, nor the method by which it is to be ascertained, or when it leaves the amount thereof to the discretion of an interested party, the consideration must be so much money as the object of the contract is reasonably worth.

I expect that the accountants at Medicare have done a competent job of determining O'Connor's costs.

3.1     On Sunday evening, November xx, 2003, I was in severe pain as noted in the preceding section A Night to Remember.

At the O'Connor Emergency Room I was seen by Dr. X. After informing Dr. X of my medical history he said that gastric pain is not considered serious.

At his direction I was given a G.I. Cocktail and sent home. Before taking the G.I. Cocktail I asked what was in it and was told only that it contained Maalox and an anesthetic for my stomach.

According to a telephone message from Ms. W, Patient Relations Coordinator for O’Connor Hospital, on November 26, 2003, my medical records show that on my first visit I was given a G.I. Cocktail containing {Exhibit 6}:

30 cc Maalox
10 cc Xylocaine (Lidocaine)
10 cc Donnatal

 Atropine Sulfate
 Hyoscyamine Sulfate
 Phenobarbital
 Scopolamine Hydrobromide

As noted in the preceding section A Night to Remember, a Nuclear Gastric Emptying Study revealed that I have "severe gastroparesis." {Exhibit 8}

According to the article "Gastroparesis and Diabetes" from the National Digestive Diseases Information Clearinghouse (NDDIC) the causes of gastroparesis include diabetes, postviral syndromes, anorexia nervosa, surgery on the stomach or vagus nerve, and medications, particularly anticholinergics and narcotics (drugs that slow contractions in the intestine).  {Exhibit 9: NDDIC article}

I believe it is reasonable to conclude that regardless of the cause of gastroparesis, an anticholinergic like Donnatal would only make it worse. It certainly did make my condition worse after the xylocaine contained in the G.I. Cocktail wore off a few hours later. Therefore, the administration of an anticholinergic such as Donnatal was inappropriate.

3.2      A few hours after coming home the severe burning chest pain came back and was even worse, so I returned to the O'Connor ER, where I was seen by Dr. Y, who had several tests performed, gave me another G.I Cocktail (I don't remember having it), the intravenous administration of a Proton Pump Inhibitor (PPI), and sent me home. According to the account statement I received, the G.I. Cocktail contained Maalox, Belladonna/Phenobarbital, and Lidocaine. Why is there a discrepancy between the medical record and the account statement?

3.3     Again, a few hours after coming home the burning pain was even worse, at the same level of pain that I had when I had kidney stones, so I went back for a third time, where I was seen by Dr. Z. At some point someone gave me a pill. I asked what it was and she said it was Atavan (I did not recognize the name) and that it would relax me. As I found out later, Atavan is a sedative (diazepam).

3.4     I went to O’Connor because I was in pain, and instead of helping me their physicians kept giving me sedatives (without my knowledge or consent), inappropriate drugs that made my condition worse, and sending me home.

At my third visit, Dr. Z noted in her report that:

He is very worried. He is worried almost to the point of being paranoid that he has some lesion down there. What he really wants is for someone to look down and take a look and see if there is anything that can be done or he can be reassured at least."

Presently he has no pain. He states the pain comes back and is worse when lying down. He did not have a comfortable night, even after being here.

I did get a list of gastroenterologists and a short list of psychiatrists, presumably because anyone who keeps going back to an Emergency Room which has already failed to help him obviously needs to have his head examined.

3.5     It was the inappropriate medical care provided to me by O'Connor and its doctors during the first visit that made the second visit necessary. It was the inappropriate medical care provided to me by O'Connor and its doctors during the second visit that made the third visit necessary. The inappropriate medical care provided to me by O'Connor and its doctors during the first and second visits make it difficult to determine whether the medical care I received during the third visit was appropriate.

3.6     During my first two visits, the ER was practically empty. During my third visit, the ER had more patients but there was no shortage of beds. They did not need to keeping sending me home because they needed the bed for someone else.

3.7     It was as a result of the inappropriate medical care I received from O'Connor and its doctors it was necessary for me to seek emergency medical treatment again four days later, on Thursday night, November xx, 2003, at xxxxx hospital where I received appropriate, kind, and compassionate care. I paid them promptly. {Exhibit 10: Receipt} I was discharged on Friday morning and had an Upper G.I. Endoscopy performed at xxxxx  that morning.

3.8     Further, in November 2003 I requested that O'Connor send me a copy of my medical records. They did not comply until April 2004. Even so, they sent the original doctors' reports which were unreadable. The doctors' reports were not transcribed until May 2004. I believe O'Connor's failure to send me my medical records in a timely manner hindered my efforts to obtain proper medical treatment.

3.9      Under California Civil Code Section §1714.8

§1714.8.
(a) No health care provider shall be liable for professional negligence or malpractice for any occurrence or result solely on the basis that the occurrence or result was caused by the natural course of a disease or condition, or was the natural or expected result of reasonable treatment rendered for the disease or condition. This section shall not be construed so as to limit liability for the failure to inform of the risks of treatment or failure to accept treatment, or for negligent diagnosis or treatment or the negligent failure to diagnose or treat.

Failure to Inform is clearly considered a serious breach of responsibility of the part of a health care provider.

O'Connor and its doctors withheld from me the information that the G.I. Cocktail I was being given during my first and second visits contained a sedative, even though I had specifically asked what was in the G.I. Cocktail. This constitutes "Failure to Inform."

It was this Failure to Inform that led to the second and third visits for which O'Connor is demanding payment.

O'Connor should not be allowed to multiply the costs for what should have been at most one visit since the reasons for the extra two visits were caused by the actions of O'Connor and its doctors.

According to the following California Civil Codes:

§1565.  The consent of the parties to a contract must be:
   1. Free;
   2. Mutual; and,
   3. Communicated by each to the other.
 

§1567.  An apparent consent is not real or free when obtained through:
   1. Duress;
   2. Menace;
   3. Fraud;
   4. Undue influence; or,
   5. Mistake.
 

§1575.  Undue influence consists:
1. In the use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him;
2. In taking an unfair advantage of another's weakness of mind; or,
3. In taking a grossly oppressive and unfair advantage of another's necessities or distress.

The charges for the second and third visits constitute an attempt to take advantage my weakness of mind caused by the actions of O'Connor's doctors in giving me sedatives without my knowledge and by their inappropriate treatment.

4.1      In January, 2004 I offered them (and the doctors) $2,000 to settle the accounts. O'Connor promised to consider the offer and "get back to me." I found out they had rejected my offer when I started receiving demand letters from their Collection Department. {Exhibit 11: January Offer}

4.2     In March, in a telephone conversation with Ms. W, I offered O'Connor and their doctors $1,900. A week later, O'Connor's response was to inform me that they had "accepted" my offer but not including the doctors' charges. That was not the offer I made.

4.3     I then offered them $1,600 for the hospital bill alone, not including the doctors. In light of information that I later received, this amount was approximately 25% higher than what insurance companies or Medicare would have paid them.

They rejected my offer.

4.4      Long after Ms. W insisted that the balance due on account xxxxxxs $1,485.40 I continued to receive demand notices from their Collections Department for $2,605.40. This may simply reflect poor business practices or it may have been an attempt to commit fraud.

4.5      In May 2004, after medical tests provided firm evidence that the treatment I received in their Emergency Room by their Doctors had been inappropriate, I made a final offer of $0.00 in return for my not suing them. {Exhibit 12: May Offer}

They responded by turning the accounts over to XXXX Financial, at which time I terminated my offer.

O'Connor refused further discussions with me on the matter. I spoke to Ms. V (O'Connor's Risk Manager) on Tuesday, June 8, 2004. She claimed ignorance of the matter and promised to look into it and call me back. I received no further communications from her.

5.1     According to the California Health and Safety Code Section §127340-§127365, which established the requirement that non-profit hospitals prepare a Community Benefit Plan, the hospitals are required to report on the health care benefits they provide to "vulnerable populations", and that "vulnerable populations" includes the uninsured.

I obtained a copy of O'Connor's current Community Benefit Plan. {Exhibit 13}

Their report is very interesting. However, what makes it interesting is not so much what they put in the report but rather, what they left out.

From California Civil Code:

§127355.  The hospital shall include all of the following elements in its community benefits plan:
.
.
.
.
(c) Community benefits categorized into the following framework:
   (1) Medical care services.
   (2) Other benefits for vulnerable populations.
   (3) Other benefits for the broader community.
   (4) Health research, education, and training programs.
   (5) Nonquantifiable benefits.

From California Civil Code:

§127345.  As used in this article, the following terms have the following meanings:
.
.
.
   (h) "Vulnerable populations" means any population that is exposed to medical or financial risk by virtue of being uninsured, underinsured, or eligible for Medi-Cal, Medicare, California Childrens Services Program, or county indigent programs.

O'Connor's Community Benefit Plan does not address what benefits they provide to the uninsured.

This is understandable, since they charge the uninsured approximately three times what they charge private insurance companies and Medicare.

In the article Investigative Report - Overcharging the Uninsured - Part 1 by Randy Suttles and Merrill Mathews, Jr, P.H.D. of The Heartland Institute previously mentioned, O'Connor Hospital is specifically mentioned in Table 2.

The table is introduced by the statement, " On average, HMOs pay 12 percent above what Medicare pays, according to the MedPAC Commission. But the uninsured receive artificially inflated bills that can be 20 to 1,100 percent more than what Medicare or insured patients pay."

As noted in California Civil Code:

§127340.  The Legislature finds and declares all of the following:
(a) Private not-for-profit hospitals meet certain needs of their communities through the provision of essential health care and other services.  Public recognition of their unique status has led to favorable tax treatment by the government.  In exchange, nonprofit hospitals assume a social obligation to provide community benefits in the public interest.

And O'Connor Hospital certainly knows how to use its favorable tax treatment.

On April 8, 2004, Scott P. Johnson (Director of the Finance Department of the City of San Jose) recommended to the City Council that the California Statewide Communities Development Authority (the "CSCDA") participate in the issuance of uninsured fixed rate revenue bonds in an aggregate principal amount not to exceed $550,000,000 (the "Bonds") for the benefit of the Daughter of Charity Health System which owns O'Connor Hospital along with several other hospitals. The Daughter of Charity originally owned these hospitals but sold them to Catholic Healthcare West about six years ago. Last year they bought them back. It appears they did this with $450M in California bonds. Now they want to refinance the debt with $550M in more California bonds. {Exhibit 14: CSCDA Bonds}

In return for this benefit O'Connor is being asked to produce a Community Benefits Plan to address how they serve vulnerable populations, which includes the uninsured.

What they do for people without insurance is to charge them 3 times as much as they charge everybody else.

And that is why they have left it out of their Community Benefits Plan.
 

5.2     O'Connor Hospital is a member of the Hospital Council of Northern and Central California (HCNCC) {Exhibit 15} which states in its goals for 2004 {Exhibit 16}:

The Hospital Council will increase the value that members receive by:

• Continuing to serve as the local lead advocate on issues including disaster preparedness, EMS, health care workforce, Medi-Cal programs, and health care access.
• Representing hospitals before local boards of supervisors and other county and regional agencies.
• Providing local networking, collaboration, and educational opportunities for members in each region.
• Participating in grassroots advocacy at the local level in conjunction with CHA and AHA to influence public policy issues in Sacramento and Washington, D.C.
• Ensuring the organization's financial sustainability, strengthening the relationship with CHA and aligning employees to best meet member needs.

HCNCC, through its affiliation with the California Hospital Association (CHA), has already provided a number of useful services for its members.

From their 2003 Member Value Report Working Together For Success {Exhibit 17}, they boast:

Charity Care/Self-Pay Policies - CHA opposed AB232 (Chan, D-Oakland), which would have imposed onerous new reforms on all California hospitals regarding what uninsured self-pay patients could be charged; how they could be billed; and what the collection practices could be. AB 232 would have, among other things, required caps on charges and costly and duplicative administrative burdens on hospitals; and established extraordinarily high patient-income eligibility levels. Several meetings with the author and sponsor to address hospitals' objections and concerns prove to be fruitless. Ultimately, AB 232 was held in the Senate Appropriations Committee. Annual costs avoided: Unknown millions of dollars. CHA also successfully countered OSHPD's attempts to redefine hospital charity care.

The bold emphasis is mine.

Therefore, what O'Connor also omitted from their Community Benefits Plan that what they also did for the vulnerable populations who were vulnerable because they do not have insurance: O'Connor worked to prevent passage of a law that would have limited what they can charge them.

That's not all O'Connor omitted from their Community Benefits Plan.

In their 2003 Member Value Report CHA also boasts:

OSHPD Staffing - CHA supported a provision in the 2003 Budget Act to augment the Office of Statewide Health Planning and Development's (OSHPD) budget by $1.1million for the current fiscal year to establish 19 new staff positions in OSHPD's Facilities Development Division. The augmentation will come from the Hospital Building Fund. FY 2003-2004 savings: $40 million in preventing project delays.

OSHPD (Office of Statewide Health Planning and Development) is the agency that provides oversight for hospitals' Community Benefits Plan {Exhibit 18}.

Q2.  What is OSHPD’s role under the hospital community benefit program?

A.  OSHPD is the equivalent of the "public library" for private, non-profit hospitals' community benefit plans.  Various operating units throughout OSHPD are involved in handling the plans and related issues.  OSHPD's Accounting and Reporting systems Section receives the plans and is working with other units and stakeholders to develop more standardized reporting formats.  The Healthcare Information Resource Center handles public requests for copies of community benefit plans.  The Healthcare Quality and Analysis Division is responsible for conducting policy analysis on unresolved issues.  the Healthcare Workforce and Community Development Division is responsible for working with the Healthcare Information Division in synthesizing information made available through the community needs assessment process and distributing it to local entities in their community capacity building efforts.

Since 1971, OSHPD’s Healthcare Information Division (HID) has collected important financial and clinical data from licensed health facilities. Reporting facilities include approximately 600 hospitals, 1250 long-term care facilities, 1000 licensed clinics, and 1000 home health agencies. The reported data are used by the reporting facilities themselves, healthcare purchasers and insurers, medical care providers, employers and unions, consumers, researchers, and public agencies to help them make informed and cost-effective decisions regarding healthcare.

OSHPD does more than act as a library. It wields considerable power by controlling the interpretation and distribution of the data.

O'Connor should note in their Community Benefits Plan that they have a great deal of influence over the Office of Statewide Health Planning and Development, which is a state agency that exercises considerable oversight over them. If they can have OSHPD's budget increased, they can also have it cut. I expect OSHPD got the message.

O'Connor's actions, either directly, or indirectly through the above-mentioned actions of its agents, the Hospital Council of Northern and Central California and the California Hospital Association, speak clearly to its intent to exploit the vulnerable position of uninsured patients.

6.0      O'Connor belongs to an association that sponsors (and perhaps, subsidizes) a Political Action Committee and by doing so may have jeopardized its tax exempt status.
 

6.1     O'Connor is a member of both the Hospital Council of Northern and Central California {Exhibit 15} and the Californial Healthcare Association {Exhibit 20}, both of which are also corporate partners (www.calhealth.org/public/about/index.html).

These Partners proudly proclaim that they sponsor a Political Action Committee (CHPAC) {Exhibit 21}  From the CHPAC Web site (www.calhealth.org/public/chpac/index.html) :

What Is CHPAC?

In July 1979, the California Hospitals Political Action Committee(CHPAC) was formed to strengthen the CAHHS government relations program. On January 1, 1996, CHPAC changed its name to the California Healthcare Association Political Action Committee to align itself with its sponsor, the California Healthcare Association (CHA).

CHA's legislative advocacy program has three components:

•  Professional lobbyists.
•  An extensive statewide grassroots advocacy network of concerned individuals.
•  CHPAC, which provides campaign financing to officeholders and candidates who are concerned about and committed to better health care for all Californians. The program relies on effective communication and coordination between CHA, the Regional Associations (HCNCC, HASC and HASDIC) and hospital representatives.

An independent board of directors comprised of 17 members establishes  CHPAC’s policies.  Jim Holmes, president/CEO, Redlands Community Hospital is the 2004 CHPAC chair; Ted Fox, chief executive officer, Saint Louise Regional Hospital, is the chair-elect; and J. Kendall Anderson, chief executive officer, John Muir/Mt. Diablo Health System, is the immediate past chair.

For 2004, the CHPAC board has established a statewide goal of $500,000.

Non-profit companies are prohibited by IRS rules, section 501(c)(3), from engaging in political activities. Most of the members of CHA are for-profit hospitals. But O'Connor is a non-profit 501(c)(3) company.

By setting up a separate Board of Directors, CHA has attempted to circumvent these rules for its non-profit members. However, it is clear that CHPAC is a creature of CHA. After all, CHA is not shy in claiming credit for CHPAC's successes. {Exhibit 17 and Exhibit 21}

CHA will, no doubt, vigorously assert that it has scrupulously followed the letter of the law in sponsoring its PAC.  However, since PACs are all about money, let's follow the money.

The Federal Election Commission requires that PACs file financial reports.  You can download CHPAC's filings at: http://herndon1.sdrdc.com/cgi-bin/fecimg/?C00237495 .

In their FEC Form 3X for 1/1/04 - 3/31/04 Line 21, their Total Operating Expenditures for the period were $746.76

Does that include the cost of office space?

In the letter notifying the Federal Election Commission of their change of address, Sonya Knecht (CHPAC Administrator) gave the new address as: 1215 K Street Suite 800, Sacramento, CA 95814.  CHA is located at the same address (www.calhealth.org/contact.html). Does CHPAC pay rent to CHA or does CHA provide this benefit to them for free? And, by the way, who pays Ms. Knecht's salary? And does CHPAC pay CHA for its web pages?  (They use CHA's domain name.)

Putting the expenditures together in a table is very easy. On Schedule B (FEC Form 3X) Disbursements, starting on page 52:

      Name                                         Purpose            Amount         Transaction Code

Bank of America                        Merchant's Fee         $25.95              B3137
Bank of America                        Merchant's Fee         $25.00              B3138
Bank of America                        Merchant's Fee         $575.06            B3144
 

Page 53:

      Name                                         Purpose               Amount         Transaction Code

Political Action Committee of the
American Hospital Committee              C0010646         $34,550.00          B:26B5
 

Starting on Page 54 there are only payments to the California Healthcare Association, but the amounts and purposes are not listed.

What kind of financial disclosure is this?
 
 

6.2     By belonging to an association that sponsors (and perhaps, subsidizes) a Political Action Committee O'Connor may have jeopardized its tax exempt status. Without this tax exempt status O'Connor is not entitled to the $450M in bonds it got through the California Statewide Communities Development Authority (the "CSCDA") that the Daughters of Charity used to buy the hospitals back from Catholic Healthcare West or the $550M in bonds that it wants to refinance the debt. And why did the Daughters of Charity need the bonds in the first place? What did they do with the money they got when they sold the hospitals to Catholic Healthcare West?

O'Connor is not the only non-profit hospital member of the Hospital Council of Northern and Central California and the Californial Healthcare Association.

6.3     Santa Clara Valley Medical Center is also a member. Santa Clara Valley Medical Center is operated by the County of Santa Clara. When you owe them money, they don't sue you. They turn it over to the County which slaps a lien on your house and charges you 10% annual interest until you pay them. You are like money in the bank to them. They don't even sue you. You have to sue them, in a Court operated by the County. My efforts to get Valley Medical's annual report have been unsuccessful. Perhaps it is buried in the County's annual report. Perhaps they don't do one. After all, they are the Government and can do whatever they damn well please.

I think it is improper for the County to belong to an association that sponsors (and perhaps, subsidizes) a Political Action Committee.

O'Connor Hospital in San Jose, California, insists on charging me approximately 3 times the rate they charge people with insurance.

The agreements I signed when I was admitted to their Emergency Room do not support their right to charge me these excessive amounts.

They also unnecessarily multiplied what should have been one visit into three separate visits. When I asked what was in the meds I was given they withheld the information that it contained sedatives. As a result, the charges for the second and third visits constitute an attempt to take advantage my weakness of mind caused by the actions of O'Connor's doctors in giving me sedatives without my knowledge and by their inappropriate treatment.

O'Connor belongs to an association that sponsors (and perhaps, subsidizes) a Political Action Committee and by doing so may have jeopardized its tax exempt status.
 

If either O'Connor Hospital or Santa Clara Valley Medical Center wishes to respond to this article I will be happy to post a link to their response. On their own web sites. I am not paying for their bandwidth.
 

Jed Margolin
San Jose, CA
August 3, 2004

This article continues here.

Even though hospitals' financial information is supposed to be publicly available, getting it is not easy.

In California it is available through the OSHPD Web site as a huge Excel spreadsheet, containing cryptic labels.
 

The financial data is from HAFD_1202_PROFILE_HIRC_Revised 4-15-04.xls obtained from: www.oshpd.ca.gov/HQAD/Hospital/financial/hospAF.htm

and downloading:

WinZip.Zip
2002 899kb 4/04 extract

The file downloaded will be hafd1202pivot.zip

I have downloaded it and culled out the information for O'Connor Hospital, Santa Clara Valley Medical Center, and Regional Medical Center, all of San Jose.

If anyone finds anything especially interesting in them, let me know.

I am posting them in three formats:  HTML (.htm), Microsoft Excel (.xls), and Corel Quattro Pro (.wb3).
 
 

Note this information may not perform any useful function and can be safely removed. Probably.

The real purpose of the Appendix remains a mystery.

Exhibit 1:   Agreement with O'Connor for one of three visits to their ER over 12 hour period Sunday evening November xx, 2003 and Monday morning November xx, 2003. All three agreements are substantially identical.

Exhibit 2:   O'Connor Annual Report for 2003

Exhibit 3:      Investigative Report - Overcharging the Uninsured - Part 1 by Randy Suttles and Merrill Mathews, Jr, P.H.D. of The Heartland Institute. From www.heartland.org/Article.cfm?artId=12775 .

Exhibit 4:   Regional Medical Center of San Jose, Conditions of Admission and Authorization for Medical Treatment, page 1.

Exhibit 5:   Santa Clara Valley Medical Center, Conditions of Admission.

Exhibit 6:     Medical Records from First Visit, Account xxxxx. {not posted, it will be in the legal brief }

Exhibit 7:   Donnatal, The Pill Book, 10th Edition, Harold M. Silverman, Editor-in-Chief, CMD Publishing, pages 379-383.

Exhibit 8:     Medical Report on Nuclear Gastric Emptying Study performed at xxxxxxxx  {not posted, it will be in the legal brief}

Exhibit 9:      NDDIC article. "Gastroparesis and Diabetes" from the National Digestive Diseases Information Clearinghouse (NDDIC) at http://digestive.niddk.nih.gov/ddiseases/pubs/gastroparesis

Exhibit 10:      Receipt for November 20 visit to xxxx ER. {not posted, it will be in the legal brief }

Exhibit 11:      My January Offer {not posted, it will be in the legal brief }

Exhibit 12:      My May Offer {not posted, it will be in the legal brief }

Exhibit 13:  O'Connor Hospital Community Benefits Plan

Exhibit 14:  CSDCC Bonds, April 8, 2004 memo, Scott P. Johnson (Director of the Finance Department of the City of San Jose) to San Jose City Council

Exhibit 15:    HCNCC Member List for Santa Clara County

Exhibit 16:     HCNCC Goals for 2004  From:  www.hcncc.org/cgi-bin/enter.asp?ID=184&SecID=3

Exhibit 17:     HCNCC 2003 Member Value Report Working Together For Success From www.hcncc.org/doc/2003%20HCNCC-CHA%20Value%20Statement%20-%20FINAL.pdf

Exhibit 18:     OSHPD Web Site - Frequently Asked Questions
From:  http://www.oshpd.ca.gov/HID/hospital/hcpb/faqshcbp.htm#Q2

Exhibit 19:      OSHPD's web page - About the Healthcare Information Division
From:  http://www.oshpd.cahwnet.gov/hid/AboutHID/index.htm

Exhibit 20:     CHA Membership From: www.calhealth.org/Download/institution%20mems_04.pdf

Exhibit 21:  What is CHPAC?  From: CHPAC Web site at www.calhealth.org/public/chpac/index.html
 
 

Links updated December 28, 2004.