Rhode Island DSA to launch Campaign Against Medical Debt in Providence

RI DSA is calling on Mayor Smiley and the PVD City Council to reject any tax agreement with Lifespan that doesn’t relieve patients’ medical debt and create public accountability...

The Rhode Island Democratic Socialists of America (RI DSA) outlines the problem of medical debt in Rhode Island this way:

• On average, Rhode Islanders carry $1,300 in medical debt; a median of $513.

• Rhode Islanders of color are 68% more likely to have medical debt in collections.

• There is a growing national trend that the underinsured, rather than the uninsured, are becoming a greater share of those whose medical debt is in collections.

  • This trend will mean that more patients choose to delay or avoid care when they need it.

• Much of the debt results from Lifespan not conducting due diligence in determining patients’ eligibility for assistance programs.

To counter this rising crisis, RI DSA has an audacious plan. They are calling on Providence Mayor Brett Smiley and the Providence City Council to reject any tax agreement with Lifespan that doesn’t relieve patients’ medical debt and create public accountability for the hospital system.

Let’s back up.

Mayor Smiley is negotiating a “Payment In Lieu Of Taxes” (PILOT) agreement with Lifespan in Providence. Lifespan is a not-for-profit company, based in Providence, comprising three teaching hospitals Rhode Island Hospital (and its Hasbro Children's Hospital), The Miriam Hospital, and Bradley Hospital. PILOT agreements help municipalities like Providence make up tax revenue that is a result of state property tax exemptions. Last year, Mayor Smiley reached a PILOT Agreement with Brown University and other private higher education institutions in a deal that the RI DSA characterized as “a needless giveaway.”

“Although Lifespan enjoys a nonprofit tax status, it acts like a for-profit corporation,” says RI DSA. “It holds more than $3 billion in assets and pays its executives with salaries in the millions. Meanwhile, Rhode Islanders are left unprotected as insurance companies squeeze patients for revenue. Lifespan provides little relief [to those suffering from medical debt and] has sued patients who can’t pay.”

RI DSA wants the City of Providence to include medical debt relief as part of its PILOT Agreement with Lifespan.

“If Lifespan wants privileged tax treatment, it needs to prove it’s putting patients first. Rhode Island DSA calls for a PILOT agreement that requires the following:

• Forgive Medical Debt

  • Forgive all existing medical debt now, and, going forward, hold a debt jubilee every year in which Lifespan has a budget surplus. 

• No Profiting Off Patients’ Debt

  • Guarantee basic protections for patients: no fees or interest on medical debt, no selling debt to third-party collectors, no extraordinary collection practices (arrests, liens, lawsuits, or wage garnishment), and no reporting medical debt to credit agencies.

• Democratic Control of Hospitals

  • Reserve at least 51% of the seats on the hospitals’ boards of directors for worker and patient representatives, specifically: patients who have been admitted to the hospital/emergency room, and non-managerial hospital workers appointed by their labor unions.

“Mayor Smiley and the Providence City Council should also advocate for a statewide Medicare-for-All, single-payer insurance system in Rhode Island,” adds the RI DSA. “As long as the state’s healthcare system is run for profit, the exploitation of patients won’t go away. Rhode Islanders deserve a system that’s designed to meet their needs rather than make profits for corporations.”

Lifespan, says RI DSA, can afford to make this a reality. The company “has the means to make appropriate payments to Providence AND forgive medical debt.”

• As of 2022, Lifespan has $3 billion in assets.

• Lifespan cites its loss in 2022 as a reason for not making a PILOT payment. [Source: Providence Business Journal]

• But Lifespan hasn’t made a PILOT contribution since 2020 but had a historically large net gain in 2021. In the last five years, they’ve had a net gain overall.

• In 2022, Lifespan executive compensation was about $9 million, or 3.0% of expenses; in 2021, executive compensation was $8.1 million, or 3.0% of expenses.

• According to a 2022 study commissioned by the City of Providence, two Lifespan holdings in the City, Rhode Island Hospital and Miriam Hospital, have an assessed value of $817 million.

The RI DSA is planning a kick-off event for their Campaign Against Medical Debt in early March. More details to come.