WASHINGTON — Awash in red ink, U.S. Catholic hospitals are navigating a daunting health-care environment roiled by the 2010 health-care reform legislation and other potential threats to their religious mission and ethical practices.

The shifting scene has further complicated the relationship between Catholic health-care institutions and the bishops charged with securing their adherence to the moral teachings of the Church, as outlined in the U.S. Conference of Catholic Bishops’ “Ethical and Religious Directives” (ERDs). Critics and whistleblowers previously raised concerns about routine sterilizations, contraceptive services and even abortions at some hospitals.

But in the wake of the explosive dispute between Phoenix Bishop Thomas Olmsted and the administration of St. Joseph’s Hospital and Medical Center in Phoenix, many are calling for stronger action to secure adherence to the ERDs.

John Brehany, executive director of the Catholic Medical Association, which defended the conscience rights of physicians in the recent health-care overhaul debate, contends that Catholic health-care ministries should take their cue from the federal government’s aggressive anti-fraud regulations for Medicare and Medicaid.

“It isn’t enough for U.S. hospitals to say, ‘We don’t commit fraud.’ Federal regulations require them to identify areas where abuse might take place and develop an action plan to prevent it,” Brehany noted. “Why not take the same approach to ensure the Catholic identity of our hospitals?”

Catholic health-care networks navigate a complex minefield: They answer to Church authorities but also operate in a politicized environment that can misrepresent the Church’s countercultural stance as anti-women, or even anti-life.

Bishop Olmsted alluded to the danger of Catholic health-care networks relying on the judgments of theologians who may justify immoral but profitable action — and not recognizing their bishop’s moral authority in the matter.

In a Nov. 22 letter to Lloyd Dean, president of Catholic Healthcare West, the parent company of St. Joseph’s Hospital, Bishop Olmsted said it was he, as ordinary of the diocese, who had the authority to interpret Catholic moral teachings and the “Ethical and Religious Directives” governing Catholic health-care institutions in his diocese.

“Until this point in time, you have not acknowledged my authority to settle this question, but have only provided opinions of ethicists that agree with your own opinion and disagree with mine,” the bishop wrote. “As the diocesan bishop, it is my duty and obligation to authoritatively teach and interpret the moral law for Catholics in the Diocese of Phoenix.”

Indeed, the recent national debate ignited by Bishop Olmsted’s decision provides a case study of the competing constituencies and interest groups that keep large hospital networks like Catholic Healthcare West on the defensive.

“Religiously affiliated hospitals are not exempt from federal laws that protect a patient’s right to receive emergency care and cannot invoke their religious status to jeopardize the health and lives of pregnant women,” charged Alexa Kolbi-Molinas, staff attorney with the American Civil Liberties Union’s Reproductive Freedom Project.

Last spring, the ACLU had already registered similar concerns regarding Catholic “emergency reproductive care” with the Centers for Medicare and Medicaid Services.

Newspaper editorials and media pundits echoed the ACLU’s position. “No one has suggested that Catholic hospitals should be required to perform non-emergency abortions,” stated a Dec. 23 editorial in The New York Times. “But, as St. Joseph’s recognized, the need to accommodate religious doctrine does not give health providers serving the general public license to jeopardize women’s lives.”

Bishop Olmsted confirmed that his decision capped a seven-year evaluation of the hospital’s practices; he noted that “many other violations of the ‘Ethical and Religious Directives’ have been taking place at Catholic Healthcare West facilities in Arizona throughout my seven years as bishop of Phoenix and far longer.”

Sister Carol Keehan

Nevertheless, Sister Carol Keehan, president and CEO of the Catholic Health Association, a trade group, further amplified the drumbeat of attacks against the bishop when she issued a statement asserting that St. Joseph’s Hospital had “correctly applied” the ERDs in the direct abortion case.

Sister Carol had already become well known for her support of the health-care reform bill, in spite of the U.S. bishops’ concerns that the bill would open the door to mandatory taxpayer funding of abortions.

In a recent exchange of letters with Archbishop Timothy Dolan, Sister Carol affirmed that the local bishop is the “authoritative interpreter” of the “Ethical and Religious Directives” that guide Catholic health care. Her organization, she wrote in a letter dated Jan. 18 and made public on Jan. 31, “has a sincere desire to work with the Church and individual bishops to understand as clearly as possible clinical issues and bring the majesty of the Church’s teaching to that.”

Archbishop George Niederauer of San Francisco — the city where Catholic Healthcare West is headquartered — has vowed to initiate a “dialogue” with the leadership of the health-care network. The archbishop did not elaborate on how that dialogue would be structured or whether he would seek to establish a deadline or a mechanism to secure adherence to the ERDs.

“The controversy has raised the level of discussion between the bishops and hospital CEOs to a new level,” acknowledged Bishop Robert Vasa of Baker, Ore., who recently revoked the right of St. Charles Medical Center — a “stand-alone” hospital governed by a lay board — to call itself Catholic after learning it routinely provided tubal ligations and had no intention of discontinuing this policy.

Pope Benedict XVI Jan. 24 named Bishop Vasa coadjutor bishop of Santa Rosa, Calif. There are several Catholic hospitals in the diocese.

A New ‘Safe Environment’?

In a world of increased transparency, the scope of the problem is becoming increasingly apparent — much to the chagrin of some bishops. In 2008, for example, Wikileaks released files confirming that Catholic hospitals in the Diocese of Tyler, Texas, regularly performed tubal ligations.

Initially, the hospitals said they were in compliance with the ERDs. Later, Jesuit Bishop Alvaro Corrada of Tyler acknowledged that “subsequent investigation reveals that there had been a serious misinterpretation of the ERDs and that, in fact, many direct sterilizations had been done and continued to be done.”

The bishop’s public admission of his “failure to provide adequate oversight of the Catholic hospitals as regards their protection of the sacred dignity of each human person” began to fuel the search for solutions, though some experts question whether a one-size-fits-all approach can work.

“Some bishops sit on boards of the local [health-care] ministry; some chair those boards; some have delegates. There are a variety of ways that collaboration can occur,” observed Marie Hilliard, director of bioethics and public policy at the National Catholic Bioethics Center.

She spoke generally about the issue of episcopal oversight and could not comment about the Catholic Healthcare West controversy.

One promising approach, Hilliard suggested, is to appoint a member of the clergy to chair the ethics committee in the hospital and submit an annual report on adherence to the ERDs. “That seems to be a very effective way of assuring that there is no misunderstanding regarding the application of the ERDs,” she said.

Is the USCCB likely to create a mechanism for overseeing hospital practices, just as they developed a safe environment framework? Would it work?

Bishop Vasa suggested that the first step is for bishops to move beyond formal discussions and initiate a deeper engagement with hospital administrators that specifically targets their practical interpretation of the ERDs.

“Instead of asking, ‘Are you observing the ERDs?’” said Bishop Vasa, “bishops have the obligation to ask, ‘Are you doing tubal ligations, and under what circumstances?’ As churchmen, we are trained to be forgiving and compassionate, trained to accept that people will tell us the truth. We need to be more vigilant in our evaluations of individuals operating Catholic hospitals.”

CNS contributed to this story. Joan Frawley Desmond writes from Chevy Chase, Maryland.