Thursday, August 30, 2007

Doctors Loaning Money To Patients

Lending to patients happens all sorts of ways in the medical profession. It looks like now the insurance companies are getting in on the act. I doubt they'll do it for no interest as most docs do, though. For most treatment, a doctor will offer no interest because they truly believe the patient needs the care--so much so they'll delay payment to themselves.

Insurers, on the other hand, are in it for one thing only: the money. And they are examining the "credit-worthiness" of the patient. So are some doctors and dentists:

The zero-interest plans are not for everyone. In fact, they are available only to the creditworthy — meaning they offer no help to those among the nation’s 47 million uninsured who are in difficult financial situations.

And creditworthiness is starting to be judged even more stringently, in light of the subprime mortgage crisis’s impact on the debt markets, according to David Robertson, publisher of The Nilson Report, a newsletter for the credit card industry.

Even for those who can get credit approval, the plans make sense only if users are able to make payments on time and close the loan on schedule, typically within 12 months. Otherwise, the loans after defaults can carry interest rates of 20 percent or more — similar to the default penalty on a typical credit card.

“We are very careful to tell patients upfront, ‘Be sure you can make your payments,’ ” said Dr. Richard J. Mercurio, a dentist in Lincroft, N.J. He arranges patient financing through the CareCredit unit of G.E., the leader in consumer medical financing.

Dr. Mercurio says he knows of at least two patients who missed payments and received monthly bills charging high interest rates. “They were not happy,” he said.

We have never done this with a patient. In fact, it strikes me as just wrong. What's to say the doctor isn't recommending care for purely financial reasons?

As for the 47 million who don't qualify? Sliding scale, free clinics, free health-care, they have it all. They might not be getting free Lasik surgery, boob jobs or laser-whitening, but those are rather elective procedures.

Back to loaning to patients. Should doctors be banks charging interest should a loan go unpaid?

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