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Produced by The Kindling Group
Production Backgrounder


More than 47 million Americans are currently uninsured and millions more are underinsured.1 Health care costs have reached an all-time high, and, until recently, over half of all personal bankruptcies in the U.S. were caused by medical costs.2 Yet, the vast majority of the hospitals in this country are non-profit, with stated missions to help those in need. Several large hospital systems have recently been accused of contributing to the bankrupting of the uninsured by charging them rates that are several times higher than those of the insured, and then hounding them with aggressive collection practices. Although many of these non-profit hospitals claim a lack of sufficient funding, they often function like for-profit businesses — even going as far as giving executives perks such as bonuses in cash and gift form.

Like most businesses, hospitals set annual target revenue goals based on a variety of considerations. Statistically, in a given geographical area, the numbers of births, appendectomies and colonoscopies tend to remain relatively constant from year-to-year. To determine prices for procedures and supplies, hospitals take those relatively constant numbers, calculate projected discounts to insurance companies, Medicare and Medicaid patients, and the indigent, and then set prices that enable the hospital to reach its revenue goals. These prices are called the “master charge rates” or “billable rates.”

Ironically, the only group of patients actually charged these elevated “master charge rates” are the uninsured, because they have no bargaining power. The uninsured tend to be the working poor, students, and other people who are not poor enough to qualify for Medicare, but don’t have the money to pay for health insurance. For many, an unpreventable overnight stay in the emergency room can lead to financial ruin — a lien on the patient’s home, wages garnished, ruined credit, and prolonged harassment from collection agencies and hospital administrators. Very frequently the stress of hospital bills contributes to health problems.

As a patient class, the uninsured tend to have care-seeking patterns and health outcomes that are different from those with health insurance. The uninsured often delay care and present in a later stage of illness, sometimes with urgent needs. Therefore, hospitals are on the frontlines of caring for the uninsured. To compensate hospitals, the federal government distributes over $20 billion in “disproportionate hospital funds” to support hospitals that treat a disproportionate number of low income and uninsured patients.

However, research has shown that hospitals often refuse to give uninsured patients discounted care, and then declare the unpaid bills “charity care,” which qualifies the hospital for federal funds designated for the uninsured. Many policy experts believe that universal health care would help change this pattern, thereby reducing pressure on hospitals and lowering health care costs. Until recently, all of this occurred below the radar of the IRS, under the banner of “non-profit status.” In 2004, Senate Finance Committee Chair Chuck Grassley began reviewing the meaning of “non-profit” status, and initiated an inquiry into ten non-profit hospitals across the nation, including Phoebe Putney, the hospital system at the center of this documentary, Do No Harm.


Do No Harm explores a critical issue for all Americans — the need for affordable health care — by telling the story of an emerging scandal in our nation’s non-profit hospitals.

The story begins at Phoebe Putney Hospital in Albany, Georgia, where two whistle blowers, Dr. John Bagnato, a surgeon at Phoebe Putney, and Charles Rehberg, the manager of his medical practice, exposed these startling, unethical practices in early 2004.

The discovery at Phoebe and at other hospitals led to class action lawsuits against 37 health care systems in 26 states stewarded by Dick Scruggs, perhaps best-known as the attorney involved in the highly publicized lawsuit against Big Tobacco. The issue also attracted the attention of lawmakers. In September 2007, Senate Finance Committee Chair Chuck Grassley released the results of an inquiry into ten non-profit hospitals, including Phoebe Putney.

The Kindling Group produced Do No Harm to raise awareness of these issues, educate the uninsured about their rights, and lend a voice to those who cannot speak for themselves. Through partnerships with The Access Project (TAP), Physicians for a National Health Program (PNHP) and American Patients United (APU), Do No Harm’s producers have set out to demonstrate to legislators, physicians and the general public that real health care reform is critical to the financial security of our country.

TAP is nationally recognized for groundbreaking work on medical debt and the financial burden of health care costs. PNHP is the only national physician organization in the U.S. dedicated exclusively to implementing a single-payer national health program. APU is the only group that expressly advocates on behalf of patients in the health reform movement. Working with these partners, The Kindling Group will host initial screenings with legislators in Washington, DC and five key states to help push the agenda for health care reform.

Do No Harm will also be screened for key caucuses, including the Congressional Black Caucus, Progressive Caucus, Hispanic Caucus, and the newly formed Single Payer Caucus. Do No Harm will also be screened in 24 cities across the U.S. in partnership with coalition allies, the American Medical Students Association, California Nurses Association and Health Care NOW, as well as at grand rounds meetings of physician groups at select medical schools and hospitals.


Far too many Americans — uninsured and under-insured — already know the terrible realities the filmmakers and our partners will be sharing all across the nation through screenings of Do No Harm, panel discussions and community events. Among those realities: many non-profit hospitals and other non-profit health care providers claim huge tax breaks in the billions of dollars from their non-profit status while devastating the financial standing of the patients upon whom their preferred tax status rests. Aggressive bill collection, extensive overbilling and other bottom-line protective business practices are damaging millions of patients and their families and leaving financial scars and life-changing tragedy behind in communities in all across America.

Join our film’s producers, directors and subjects and our national partners —three of the country’s most respected organizations working in the field of health care reform: The Access Project (TAP), Physicians for a National Health Program (PNHP) and American Patients United (APU) -- at an event in your community and become one of our local partners standing for health care justice.

1 KCMU and Urban Institute Analysis of March 2006 population Survey
2 Illness and Injury as Contributors to Bankruptcy, MarketWatch, 2005




Denise Godoy