Gundersen sues its own workers when they can’t pay medical bills

In 2018, Gundersen Health System had more than $1.1 billion in revenue, paid its CEO over $1 million, and spent $231,000 on political lobbying.

At the same time, Gundersen was also suing dozens of its own workers for medical debts, asking the courts for permission to garnish $75,000 in wages from 31 of its employees, many of whom were among the health system’s lowest paid workers.

The cases were among 326 Gundersen took to court in La Crosse County alone in 2018 to recoup $721,000 in medical debt, in many instances for amounts totaling less than $1,000. In one case, Gundersen sued for a medical debt of just $30. All the numbers come from public court records.

Now, SEIU Healthcare Wisconsin, the union that represents Certified Nursing Assistants, laundry, cafeteria, janitorial, and other employees at Gundersen facilities, is calling on the hospital system to stop suing its own workers and provide them with decent, affordable health insurance.

“Medical debt affects our whole community but, due to the stigma around it, it is rarely discussed,” said Amy Dummer, of SEIU. “This silence allows hospitals like Gundersen to continue to take community members to collections and garnish their own employees’ wages with no accountability. We are ending the silence now.”

The union, along with Citizen Action Wisconsin, has organized a rally at Poage Park, La Crosse, on Sunday, Aug. 2, at 3 p.m., to highlight the issue of medical debt and its impact on the community.

Dummer said SEIU is also calling on Gundersen, which is a tax-exempt nonprofit, to forgive existing debt and to stop suing both its own employees and community members in general for medical debt.

In 2018, which is the most recent year for which Gundersen’s financial records are publicly available, the nonprofit reported a surplus of $117 million for Gundersen Lutheran Medical Center, the organization’s hospital in La Crosse. The $75,000 Gundersen garnished from its employees amounts to 0.06% of that surplus. 

“The amount of money Gundersen collected in 2018 from medical debt and from garnishing its own employees’ wages is a miniscule percentage of its budget surplus that year,” Dummer said.

Of the 326 cases Gundersen took to court for medical debt in 2018 in La Crosse County, 177 had wages garnished, totaling just under $550,000, according to court records. 

Gundersen is far from alone among health care providers, which are often tax-exempt nonprofits, in regularly sending medical debt to collections and garnishing wages. The practice is common across the U.S. and medical debt bankrupts hundreds of thousands of Americans every year. 

No one should be sued over medical debt”

Ben Wilson, an organizer with Citizen Action Wisconsin, said that Citizen Action supported the introduction of Medicare for All as the best way to fix the nation’s health care system in the long term. In the meantime, he said it was time for providers like Gundersen to stop suing people for medical debt. Citizen Action of Wisconsin is helping to organize Sunday’s Stand Against Medical Debt rally with SEIU.

“We believe that no one should be sued over medical debt. Medical bankruptcy is a uniquely American problem and it is a stain on our country,” Wilson said. “On a personal level, as someone who has filed bankruptcy in part due to medical debt, I understand that we need to fight against health care providers who ruin people’s financial futures by suing over small dollar medical debt.”

Gundersen continued to sue La Crosse residents, including its own workers, throughout 2019 and well into 2020, often for debt amounts of below $10,000. While these may be relatively small sums for a billion dollar organization, they could be catastrophic for many of those being sued.

“Medical debt is not something people chose but more often the result of a catastrophic event or long-term illness,” Dummer said. “Fear of debt and potential negative effects on credit ratings can lead people to avoid medical treatment, putting them at higher risk for serious illness.”

The $75,000 garnished from the wages of Gundersen’s own employees in 2018 amounts to 7.1% of CEO Scott Rathgaber’s pay packet for that year. Rathgaber’s total compensation has increased from $655,000 when he was appointed in 2015 to $1.064 million in 2018 or 62.5%, according to public records.

Dummer noted that those most at risk from being sued for medical debt are often the most marginalized members of society.

“Medical debt affects low-income workers and because of our country’s structural oppression, it disproportionately affects Black, Hmong, Latinx, LGBTQIA+, Ho-Chunk and other Indigenous people in our community,” she said.

Gundersen officials did not respond to a request for comment on this story. We will update the story if they do provide a statement.

Nonprofit hospitals are required to report the amount of charitable care they provide, which in 2018 was about $2.9 million for Gundersen, or 0.3% of the hospital’s revenue for that year.

By Eric Timmons. Email questions to lacrosseindependent@gmail.com. Please support our journalism by becoming a subscriber for $5 a month here. Top image image shows the Gundersen Lutheran Medical Center in La Crosse.

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