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Who Knew?

Hospitals used to enjoy unfettered access to your medical records, but no more—a situation that’s sending fund-raisers to the emergency room.

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You were sick, let’s say, and did time at Mount Sinai, NYU, Beth Israel, or New York-Presbyterian. Now you are better, you are grateful, and you want to show your appreciation. Maybe you’d like to help fund your doctor’s Parkinson’s research, to write a check for the new neuroscience center or nephrology unit. You want to give a grand? Grand, but first you have to complete this little form. Sign here, please.

For hospital-development officers, this past April was the cruelest month. That’s when a rider to 1996’s Health Insurance Portability and Accountability Act (HIPAA) kicked in. Now your medical information—diagnosis, doctor’s name, and department of service—can be used solely for treatment and billing purposes unless you sign a release. Hospital development executives no longer enjoy automatic access to your records.

Pre-HIPAA, it was all so simple, so logical, mourn those in the health-care-philanthropy biz: “If you were going to be building a new cardiac-care wing, your first instinct would be to pull the names and addresses of all the patients who’d been treated for heart problems at your institution,” says Susan Stuard, director of regulatory and professional affairs for the Greater New York Hospital Association, a trade organization representing not-for-profit hospitals and long-term-care facilities. “You can no longer do that. Where does it leave hospitals? They’ll do a generalized ‘grateful patient’ funding letter and be shooting in the dark.”

“We depend on knowing things so we can target our solicitations,” says Susan Kind, senior vice-president for development at Continuum Health Partners, a consortium that includes Roosevelt Hospital and Beth Israel Medical Center. “If you have cancer and you get a solicitation for orthopedics, you’re not inclined to donate.”

If Kind and her confreres must be careful about which patients get which cup-rattling communiqués (general requests for those who haven’t signed the form, targeted pleas for those who have), they’ve also got to tread carefully with doctors, heretofore a rich source for leads on folks with the capability and inclination to give.

“Often you’d have a patient ask the doctor, ‘How can I help you?’ and the doctor would talk about something that was important or say, ‘How about if I have the development officer call you,’ and then we would step in,” says Stefanie Steel, senior vice-president for development at Mount Sinai Medical Center. “Now we can’t have any conversation with a doctor about a specific patient until we get a signed release.

"It's putting doctors in a rather uncomfortable position."

“A startling, revelatory moment for us,” adds Steel, “was when a trustee who’s one of the biggest donors in Sinai’s history saw the form.” The document reads in part: Your authorization below permits Mount Sinai to contact you about educational and philanthropic efforts that may be of interest to you . . . My health-care treatment will not be affected in any way by my refusal or failure to sign this form. “He said, ‘Hell, I wouldn’t sign this.’ ”

More than one development officer compares all this to a prenup. “It’s putting doctors in a rather uncomfortable position where they have to talk to their patients about signing something,” says Kind. “Through cultivation of a donor who’s identified by a doctor, through targeted mailings, we could reasonably count on $1 million more per year, perhaps $5 million, even as high as 15. Now those sources are potentially unavailable.”

As a result, development officers are trying desperately to think outside the box. “We’re being careful to refer to someone as a prospect as opposed to a patient,” says one. “A doctor could tell me about a quote-unquote neighbor or friend who expressed interest in making a contribution. So in theory, since I’m not making use of that person’s health information, I could contact him.”

Doctors are equally uncomfortable about the legal ramifications. “I used to ask patients with whom I had a good relationship and who I had reason to believe were of means if the development office could call them,” says Sidney Stein, an attending internist at Beth Israel Medical Center. “And now I feel I have to be more guarded, because I’m not sure what the new rules are and I don’t want the hospital to have problems with the government.”

Before the new HIPAA provision went into effect, the Mount Sinai development office did a test mailing, sending out the authorization form with a cover letter to a select group of patients. “We’re getting 10 to 20 percent of the patients to sign the form and send it back,” says Steel. “It’s better than I would have expected. But you turn that around and say, ‘Our prospect pool has shrunk by 80 or 90 percent.’ ”

Not all institutions will suffer equally. Academic medical enters will probably feel the pain more acutely than community hospitals. And for some institutions it will be business as usual. “We have never solicited donations from our patients through direct mail,” says Leslie Rioux, Memorial Sloan-Kettering’s director of annual and special giving. “We raise money based on our brand recognition, if you can call it that.”

Sloan-Kettering’s success notwithstanding, a generalized direct-mail solicitation is problematic, say development officers. It’s relatively ineffective, and it’s expensive. “It could be 30,000 pieces, so we have to go to a direct-mail house, and we get only a one percent return,” says Steel. “A targeted mailing may only involve 1,000 people, and we can do it in-house.” The response rate can be as high as 50 percent, and the donations generally bigger, than those picked up through an unfocused direct-mail campaign.

Steel and other development officers get little sympathy from William Pierce, a spokesman for the Department of Health and Human Services, which administers HIPAA. “You should ask patients what they think,” he says. “Would they like their information just given willy-nilly, or would they prefer the option of being asked? We knew this would have an impact on groups in the health-care arena, and we did our best to mitigate that impact, but ultimately we kept our focus on providing greater control and protection for the patient.”

Development officers insist that they cherish patients’ privacy. Still, they see in the new HIPAA strictures nothing but administrative headaches and increased administrative costs. “We’ve had many institutions say they need two full-time people to handle all the new paperwork,” says Bill McGinly, CEO of the Association for Healthcare Philanthropy in Falls Church, Virginia. McGinly points out that the $8 billion raised by his member institutions in 2001 tumbled to $5.6 billion in 2002—and that was pre-HIPAA. “If HIPAA did nothing except increase our expenses, the hit would be huge,” he says.

“Things are bad enough with the economy and fund-raising,” says Susan Kind. “People like donating money to their hospital and to their doctors. It makes them feel better. But if we can’t get to them, they’ll give to someone else.”


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