HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Tuesday, November 27, 2007

Financing Health Care - Consumer Debt

Frank Pasquale at Concurring Opinions has another interesting piece on who opposes universal health care coverage.  He writes,

Businessweek has been covering the medical debt industry in depth, and this week's installment newly demonstrates how eager financial interests are to advance "the transformation of medical bills into consumer debt:"

The pool of self-pay patients is mammoth: Some are among the nation's 47 million uninsured; others are among the 16 million whose plans offer scant coverage or have deductibles as high as $10,000. . . . .General Electric's powerful financial arm markets its CareCredit card to dentists, plastic surgeons, and some hospitals, with loan volume expected to hit $5 billion this year, up 40% from 2006. . . . "Everybody is saying [medical finance] is the next horizon—whether it is lines of credit or credit cards," says June St. John, a senior vice-president at Wachovia. . . .


Below the fold: a hidden TILA issue?:

At Spectrum Health, a nonprofit group of seven hospitals in Grand Rapids, Mich., self-pay patients who can write a check within 30 days receive a 20% discount; those who pay within six months get 10% off. Patients who charge their debts to CarePayment get no discount. Referring to CarePayment, Kathleen Engel, an associate professor at Cleveland-Marshall College of Law, asserts: "This is a markup, not a markdown." Engel, a consumer law expert, says that because hospitals effectively charge more when patients use CarePayment, the hospitals should disclose the price difference as the equivalent of an interest rate under the federal Truth in Lending Act.

Joseph Fifer, Spectrum's vice-president of finance, said its disclosure is legally sufficient. Steven M. Wright, Aequitas' senior managing director for health markets, agreed. Wright said Aequitas complies with the law by disclosing its payment terms when it sends CarePayment charge cards to new customers.

I guess so long as it's all disclosed, they may as well open payday lending branches in ERs. But here's a last word from the chief financial officer of Methodist Le Bonheur Healthcare:

"If we heal somebody medically, but we break them financially, have we really done what is in the best interest of the patient?"

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